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331 U.S. 256 67 S.Ct. 1287 91 L.Ed. 1474 UNITED STATESv.FULLARD-LEO et al. No. 429. Argued Feb. 12, 1947. Decided May 12, 1947. [Syllabus from pages 256-258 intentionally omitted] Mr. Frederick Bernays Wiener, of Providence, R.I., for petitioner. Mr. A. G. M. Robertson, of Honolulu, Hawaii, for respondents. Mr. Justice REED delivered the opinion of the Court. 1 This writ of certiorari was allowed to review a decree of the United States Circuit Court of Appeals for the Ninth Circuit 156 F.2d 756, affirming a decree of the District Court of the United States for the District of Hawaii, 66 F.Supp. 782. 329 U.S. 697, 67 S.Ct. 100. The United States began the present proceedings by a petition, filed in the District Court, to quiet title in it to a group of islets in the Pacific, long known as Palmyra Island. Palmyra was annexed to the Kingdom of Hawaii on February 26, 1862, and the United States claims that it remained a part of the governmental lands of Hawaii and passed to the United States by the Joint Resolution of Congress of July 7, 1898, 30 Stat. 750, which annexed Hawaii to the United States and accepted for the United States all public, Government or Crown lands and all other public property then belonging to the Republic of Hawaii.1 The lands and sovereignty of the Kingdom of Hawaii previously had passed & be placed under the Hawaiian Flag directly to the Republic of Hawaii, through the intervening Provisional Government. 2 Palmyra Island is around one thousand miles south of the main Hawaiian group. It is the first considerable body of land in that direction and lies between the Hawaiian Islands and Samoa. The Palmyra group is a coral covered atoll of about fifty islets, some with trees, and extends—reefs, intervening water and land—5 2/3 sea miles in an easterly and westerly direction and 1 1/3 sea miles northwardly and southwardly. The observation spot for the map in the case is Latitude 5 52 18 N., Longitude 162 05 55 W. The British islands of Washington, Fanning and Christmas lie within a 500 mile radius to the southeast of Palmyra. Use of the islands by the respondents and their predecessors in the title was intermittent. The question of title became important in 1939 when Congress authorized the construction at Palmyra of naval aviation facilities and appropriated $1,100,000 for their construction. 53 Stat. 590. Negotiations with these respondents, as owners, were undertaken in 1938 by the Navy Department for a lease of the property but were not completed. This suit was filed in 1939. 3 There have been two trials of this case. The records of both are before us, as the record of the first trial was made a part of the second. Certain contemporaneous written evidence of the early transactions was produced. 4 The findings of fact in the first trial show that two Hawaiian citizens, Johnson Wilkinson and Zenas Bent, made a representation concerning Palmyra Island to the King and the Cabinet Council. The minutes of a meeting of the Council which took place at Honolulu on February 26, 1862, are extant. The 'representation' has not been found. The Council minutes show the following: 5 'P. Kamehameha read a Representation from Z Bent & Mr. Wilkinson, about the Island Palmyra, requesting that the Island should be considered a Hawaiian possession 6 'After some discussion it pleased the King to direct the Minister of the Interior, to grant what the Petitioners apply for, following the precedent of the Resolution regarding the Island Cornwallis & without exceeding the same.' 7 The action of the Council was communicated to Wilkinson and Bent through a letter by the Minister of the Interior on March 1, 1862. In the letter it was said that the Hawaian Govern ment consented to the taking possession of Palmyra 'for the purpose of increasing the trade and Commerce of this Kingdom, as well as offering protection to the interests of its subjects.' Accompanying the letter was a commission empowering Bent 'to take possession in our name of Palmyra Island.' Explicit directions were contained in the commission that Bent was to sign a declaration and leave it in a bottle buried at the foot of a pole wrapped with the Hawaiian flag. The commission was signed jointly by the King and the Minister of Interior. On June 16, 1862, Bent reported that he had carried out the commission and left a paper as directed. In the same report Bent told of the trees on the island and the kind of vegetables that would grow. He said that he had erected a dwelling house on the island and a curing house for biche de mer, a kind of edible sea slug that is prized in the Orient. It also said that he had left five men on the island and proposed to return in about ten days. Thereupon the Minister of the Interior duly issued a proclamation on June 18, as follows: 8 'Whereas, On the 15th day of April, 1862, Palmyra Island, in latitude 5 50 North, and longitude 161 53 West, was taken possession of, with the usual formalities, by Captain Zenas Bent, he being duly authorized to do so, in the name of Kamehameha IV, King of the Hawaiian Islands. Therefore, This is to give notice, that the said island, so taken possession of, is henceforth to be considered and respected as part of the Domain of the King of the Hawaiian Islands.' 9 A finding was made that certain comments on the expedition were published in the Honolulu papers between the representation to the Council and the proclamation which was only important in the present litigation as showing a contemporaneous understanding that possession was being taken of an island as part of the Domain of the King of the Hawaiian Islands. 10 As shown by the minutes of the Cabinet Council, the Minister of the Interior was directed to grant the application of Bent and Wilkinson 'following the precedent of the Resolution regarding the Island Cornwallis & without exceeding the same.' The meaning of these words is not made clear by the record. The United States contends that the words limit any rights of Bent in Palmyra 'to a five year contract to take guano,' and that he never was 'granted or intended to be granted a fee simple title.' The trial court thought that the purpose of the Council might reasonably have been to limit the authority of Bent and Wilkinson to islands that were 'not in possession of any other government or any other people.' The reason for this supposition lies in the fact that the commission of May 31, 1858, to Samuel Clesson Allen, who discovered Cornwallis Island for Hawaii, to take possession of the island contained the words just quoted. On the same day that the commission was issued, a contract was made with Edward P. Adams for him to take guano for five years from any islands acquired for Hawaii by Allen in the schooner, 'Kalama.' Adams' request for the grant of a fee to a 7/8 interest in any island discovered, so far as shown by the record, was not acted upon by the Hawaiian legislative body. 11 Allen took possession of Cornwallis Island and submitted a report of his expedition on July 12, 1858, to the Minister of the Interior. Thereupon at a meeting of the Privy Council on July 27, 1858, the following resolution was passed: 12 'Resolved that Corwallis Island in latitude 16.43 North, and longitude 169.33 west from Greenwich, and Kalama Island, in latitude 16.44 North and longitude 169.21 west, having been taken possession of, with the usual formalities, on the 14th and 19th of June 1858, by Samuel C. Allen Esquire, in the name of Kamehameha IV, the said Islands are to be considered as part of His Majesty's Domain.' 13 It will be noted that this resolution is substantially in the form of the later proclamation in regard to Palmyra. 14 The annexation of Cornwallis Island faled becaus e of prior discovery by the United States and later, on October 16, 1858, the Minister of the Interior cancelled the contract which had been made with Adams. 15 Thus it will be seen that the meaning of the minutes concerning the acquisition of Palmyra, following the precedent of Cornwallis, is uncertain. The resolution annexing Cornwallis is substantially the same as the proclamation concerning Palmyra. The commission authorizing Bent to take possession of Palmyra is substantially the same as the commission to Allen that resulted in the discovery of Cornwallis. There is no evidence of a contract with Bent and Wilkinson similar to the guano contract made with Adams. We conclude that there is nothing in the requirement that the Palmyra acquisition should follow the precedent of the Cornwallis resolution to indicate anything more than that the sovereignty over Palmyra was to be acquired for Hawaii, as stated in the proclamation of possession. There is nothing to lead us to disagree with the trial court's finding as to Palmyra, as follows: 16 'The words used in the formality of annexation and proclamation need not and likely would not have been different whether it was the intention that the act of annexion should constitute the vesting of a fee simple title to the lands in the King, or merely extend sovereignty over the domain annexed.' 17 We find no evidence of a consistent plan or custom of the Kingdom of Hawaii relating to title to lands on islands when possession was taken for the Kingdom. The instructions to Wilkinson and Bent were: 18 'I am authorized to State on the part of his Majesty's government that they consent to the taking possession of the island of Palmyra, situated in longitude 161 53 West and in latitude 6 4 North as described by you in said memorial; for the purpose of increasing the trade and Commerce of this Kingdom, as well as offering protection to the interests of its subjects—' The trial court, United States v. Fullard-Leo, D.C., 66 F.Supp. 774, 782, ended its findings of fact and conclusions of law on the first trial in these words: 19 'My controlling finding is, that the sovereignty of the United States was extended over Palmyra Island by Annexation, but the Republic of Hawaii did not in fact or in form assert fee simple title to this land at the time of annexation, or at any other time, and it is sufficient to say, only, as a 20 'Conclusion 21 'I am decidedly of opinion that petitioner (The United States) does not exhibit a title which can be sustained in the Courts of the United States and, therefore, is not entitled to any relief prayed for.' 22 On appeal, the Court of Appeals reversed. United States v. Fullard-Leo, 9 Cir., 133 F.2d 743. It concluded that the commission to Bent, heretofore referred to, 'makes it abundantly clear that Bent was merely acting as agent of the King. Under the principles of international law, the taking of possession by Bent perfected the title of the King. 1 Hyde, International Law, 167 § 100; 1 Oppenheim, International Law, 276—278, §§ 221-224; Martin v. Waddell ('s Lessee,) 16 Pet. 367, 409, 41 U.S. 367, 409, 10 L.Ed. 997. Nothing in the resolution or the letter referred to is contrary to that view.' 133 F.2d at page 747. It said there was no proof of subsequent alienation by any sovereign and that the evidence would not support a finding of a lost grant. 23 On remand of this case on the first appeal, the trial court entered further findings of fact and conclusions of law. It held 66 F.Supp. 786: 24 'I believe and so hold that the evidence in this case is not only entirely consistent with but can reasonably and logically be accounted for only upon the presumption that a grant issued to Bent and Wilkinson by which the Hawaiian government parted with its title.' 25 This can only mean that in the trial court's opinion, the Kingdom of Hawaii acquired sovereignty over Palmyra and Bent and Wilkinson obtained the private ownership of the islets. This holding was affirmed on a ppeal. United States v. Fullard-Leo, 9 Cir., 156 F.2d 756. Although only one of the questions presented on certiorari, our determination that the action of the Circuit Court of Appeals is correct disposes of the entire case. 26 Hawaii has been a territory of the United States since the Joint Resolution of Annexation of July 7, 1898. 30 Stat. 750. Before that the islands composing the present Territory of Hawaii had existed independent from the rest of the world and sovereign as far back as history and local tradition reaches.2 When American Christian missionaries arrived at the Islands in 1820, the Hawaiian civilization merged with that of the rest of the known world. At that time the principal islands of the present Territory had been united a few years before into a monarchy under a strong leader, Kamehameha I. Notwithstanding his death, a short time before the coming of the missionaries, the kingdom welded by him from the several island communities continued as a recognized monarchy under his successors until its fall in 1893. A Provisional Government succeeded the monarchy and was in turn followed by the Republic of Hawaii, the foreign governmental authority mentioned in the Congressional Resolution of Annexation as ceding Hawaii to the United States. From Kamehameha I to annexation, Hawaii made steady advances in conforming its laws and economy to the manner of life of the other civilized nations of the world. 27 At the time of the annexation of Palmyra Island by the Kingdom of Hawaii, April 15, 1862, that monarchy possessed a system of land ownership and land laws that were adequate to establish titles and maintain a proper record thereof in accordance with the contemporaneous practices of Anglo-American law. The earlier nineteenth century laws of the Kingdom had been codified into a Civil Code in 1859. In this code the Minister of the Interior was given supervision of the public lands with power to dispose of them with the authority of the King in Cabinet Council. Civil Code of the Hawaiian Islands, 1859, c. VII, Art. I. By c. XXVI, Art. LI, a Bureau of Conveyances with books of registry was required and by c. XXV, Art. L, §§ 1241—48, provision was made for probate and administration. Under treaties with foreign nations, Hawaii permitted the sale of local lands of deceased aliens and the withdrawal of the proceeds by his heirs. Id., pp. 461 and 471. 28 Kamehameha I, as King and Conqueror, was recognized by Hawaiian law as the sole owner of all the soil of the Islands. Through a system of feudal tenures, not too clearly defined, large portions of the royal domains were divided among the chiefs by Kamehameha I and his successors and this process of infeudation continued to the lowest class of tenants. This system of tenures created dissatisfaction among the chiefs and people because of the burdens of service and produce that the inferior owed to the superior. Consequently by a series of royal and legislative steps, the King and the House of Nobles and Representatives, provided for a land system which finally resulted in a separation of the lands into lands of the Government, the Crown and the People.3 This purpose finally was manifested by the Act of June 7, 1848.4 By this act, much of the land of Hawaii was allocated between the Crown and the Government. This division of lands became known as 'The Great Mahele.'5 Nothing has been called toour attention limiting the power of the King to grant Crown Lands6 prior to the Act of January 3, 1865. Compare Jover y Costas v. Insular Government, of the Philippine Islands, 221 U.S. 623, 633, 31 S.Ct. 664, 667, 55 L.Ed. 884. The requirement that the Minister of the Interior maintain a record of all royal grants refers only to those for government land. Civil Code, 1859, § 44. By enactment of the King and the Legislative Assembly in 1865, the Crown Lands became inalienable except by futue legislat ive action. See 'Crown Lands,' Revised Laws of Hawaii, 1905, pp. 1226—30. The private lands of the King or Crown Lands, confirmed to him by the Act of June 7, 1848, were taken over by the Government in 1895 and thus became government lands, also. 29 In order to establish private title to lands in the former tenants, a Board of Commissioners to Quiet Land Titles was created in 1846.7 This Commission adopted 'Principles' for adjudication of claims. These were approved by the Legislative Council the same year and throw strong light on the Hawaiian land system shortly before the annexation of Palmyra.8 This Commission dealt not only with lands included in the Great Mahele but also with lands that were not mentioned in that act and established titles for such lands. It apparently continued until March 31, 1855.9 After the end of the Commission's work, the Minister of the Interior and the King in Cabinet Council were charged May 17, 1859, with responsibility for government lands and the maintenance of records for all royal conveyances.10 This summary of the Hawaiian land laws at the time of the annexation of Palmyra brings before us the pattern of land ownership and the system of recordation of titles, both those stemming from royal grants of government lands and from private transactions. The claim of respondents to Palmyra must be adjudicated with this situation in mind. We are not dealing with an explorer's claim of title to lands of a savage tribe or that of a discoverer of a hitherto unknown islet. 30 Whether we distinguish between Crown and Government lands however seems immaterial. No record appears of any conveyance from King or Minister to any land on Palmyra. We assume the law required a public record for any such conveyance from either from the time possession was taken for Hawaii. It is clear that both the King and the Minister of the Interior with the authority of the King in the Cabinet Council had power to convey the lands to private citizens. Civil Code, 1859, §§ 39-48; Act of January 3, 1865, Rev.Laws, Hawaii, 1905, p. 1226, § 3. We assume further that the formal claim to Palmyra for the Hawaiian Kingdom made by Bent, pursuant to his commission, gave Hawaii not only sovereignty over Palmyra but also the power to grant the lands of the newly annexed islets as part of its public lands to private ownes. 31 In the circumstances heretofore described, were the district and circuit courts justified in quieting title to Palmyra in respondents on the theory of a lost grant? We take judicial notice of the laws of Hawaii prior to its annexation as a part of our domestic laws.11 The rules under which the Hawaiian people lived under the monarchy or republic define, for the sovereign of today, the rights acquired during those periods. While in matters of local law the federal courts defer to the decisions of the territorial courts,12 we are dealing here with a problem of federal law—the United States seeks to quiet its title to land now claimed by virtue of Hawaiian cession. The federal rights are partly dependent upon the Hawaiian law prior to annexation. Therefore while the Hawaiian law, as it existed before the annexation of the Territory, is controlling on rights in land that are claimed to have had their beginnings then the federal courts construe that law for themselves. The federal courts cannot be foreclosed by determinations of the Hawaiian law by the Hawaiian courts. They will lean heavily upon the Hawaiian decisions as to the Hawaiian law but they are not bound to follow those decisions where a claimed title to public lands of the United States is involved.13 The roots of respondents' claim spring from Hawaiian law. As their claim to Palmyra continued after the United States acquired in 1898 whatever rights Hawaii then had, the validity of respondents' claim must be judged, also, in the light of the public land law of the United States. 32 The presumption of a lost grant to land has received recognition as an appropriate means to quiet long possession. It recognizes that lapse of time may cure the neglect or failure to secure the proper muniments of title, even though the lost grant may not have been in fact executed.14 The doctrine first appeared in the field of incorporeal hereditaments but has been extended to realty.15 The rule applies to claims to land held adversely to the sovereign.16 The case from this Court most often cited is United States v. Chaves, 159 U.S. 452, 16 S.Ct. 57, 40 L.Ed. 215. In that case there was evidence of the prior existence of the lost grant. The title of the claimants was upheld but this Court then stated, 159 U.S. at page 464, 16 S.Ct. at page 62, 40 L.Ed. 215, conformable to Fletcher v. Fuller, supra: 33 'Without going at length into the subject, it may be safely said that by the weight of authority, as well as the preponderance of opinion, it is the general rule of American law that a grant will be presumed upon proof of an adverse, exclusive, and uninterrupted possession for 20 years, and that such rule will be applied as a presumptio juris et de jure, wherever, by possibility, a right may be acquired in any manner known to the law.' 34 See United States v. Pendell, 185 U.S. 189, 200-201, 22 S.Ct. 624, 628, 629, 46 L.Ed. 866. 35 A few years later in United States v. Chavez, 175 U.S. 509, 20 S.Ct. 159, 44 L.Ed. 255, the problem of the lost grant again arose. In this case, as to one tract, case No. 38, 175 U.S. at page 516, 20 S.Ct. at page 161, the existence of the grant to Joaquin Sedillo was not shown except by a statement of January 11, 1734, that the tract conveyed 'was acquired by his (affiant's) father in part by grant in the name of His Majesty (The King of Spain) * * *' 175 U.S. at page 514, 20 S.Ct. at page 160. In referring to the recognition of title in the private owners, this Court said, 175 U.S. at page 520, 20 S.Ct. at page 163: 36 'Succeeding to the power and obligations of those governments, must the United States do so? This is insisted by their counsel, and yet they have felt and expressed the equities which arise from the circumstances of the case. Whence arise those equities? That which establishes them may establish title. Upon a long and uninterrupted possession, the law bases presumptions as sufficient for legal judgment, in the absence of rebutting circumstances, as formal instruments, or records, or articulate testimony. Not that formal instruments or records are unnecessary, but it will be presumed that they once existed and have been lost. The inquiry then recurs, Do such presumptions arise in this case, and do they solve its questions?' Thereafter the Court, 175 U.S. at page 524, 20 S.Ct. at page 164, referred to the long possession and sustained the claimants in their title. 37 Carin o v. Insular Government, of Philippine Islands, 212 U.S. 449, 29 S.Ct. 334, 53 L.Ed. 594, was decided on a writ of error to the Supreme Court of the Philippine Islands. An Igorot chieftain sought to register his land in Benguet Province, long held by his family. Under claim of succession to the Spanish rights by the Treaty of Paris, 30 Stat. 1754, and an exception in the Act of July 1, 1902, providing for temporary administration of civil government in the Philippines,17 the land had been taken for public purposes by the United States and the Philippine Government. Objection was made by the two governments and sustained by the Supreme Court of the Philippines on the ground that the applicant did not show a grant from any sovereign. This Court thought it unjust, in the circumstances, to require a native to have a paper title. 38 'It might, perhaps, be proper and sufficient to say that when, as far back as testimony or memory goes, the land has been held by individuals under a claim of private ownership, it will be presumed to have been held in the same way from before the Spanish conquest, and never to have been public land.' 212 U.S. at page 460, 29 S.Ct. at page 336, 53 L.Ed. 594. 39 The Philippine judgment was reversed. 40 The law of the Territory of Hawaii recognizes and has applied the doctrine of the lost grant in controversies between a claimant to Government land and the Territory. In re Title of Kioloku, 1920, 25 Haw. 357. The tract involved in that litigation had been hld in 'act ual, open, continuous and uninterrupted possession' since 1870. No record or evidence of a grant by any governmental authority was produced. After a discussion of several of the cases just referred to and others, it was held that the doctrine of the lost grant, in claims to land against the state, was the 'law of the land' in Hawaii. On appeal the holding was affirmed by the Circuit Court of Appeals for the Ninth Circuit. That court said: 41 'Under the rule of law applicable to the case, as we find it, it was not necessary that the appellee should prove the probability that a grant did in fact issue to one of its predecessors in interest. It was enough to show, as we think it was shown, that there was a legal possibility of a grant.' Territory of Hawaii v. Hutchinson Sugar Plantation Co., 9 Cir., 272 F. 856, 860. 42 We are therefore of the opinion that where, as here, there was power in the King or the officials of the Kingdom of Hawaii to convey a title to Palmyra18 during the years immediately following its annexation to the Kingdom of Hawaii and prior to many of the private conveyances hereinafter referred to, the doctrine of a lost grant may be applied, in suitable circumstances, and its existence presumed in favor of the predecessors in title of these respondents. In order for the doctrine of a lost grant to be applicable, the possession must be under a claim of right, actual, open and exclusive.19 A chain of conveyances is important. So is the payment of taxes.20 A claim for government lands stands upon no different principle in theory so long as authority exists in government officials to execute the patent, grant or conveyance. As a practical matter it requires a higher degree of proof because of the difficulty for a state to protect its lands from use by those without right. We turn then to the circumstances relied upon by the lower courts as sustaining respondents' contentions in respect to their claim to and occupation of Palmyra. 43 In the earlier part of this opinion, we have set out in detail the existing governmental record of the proceedings leading up to the annexation of Palmyra by the Kingdom of Hawaii in 1862. No positive evidence was produced as to any grant of Palmyra by Hawaii prior to the latter's annexation by the United States in 1898. Nor does the record show the exercise of any direct governmental authority over Palmyra. In 1905, upon a request of the Governor for an opinion concerning the jurisdiction of Hawaii over islands to the northwest of Kauai, the Attorney General answered that Hawaii had power to lease them. It will be noted from the short opinion in the margin that Palmyra, though over 1000 miles to the southeast of Kauai, was included. Nothing appears as to any former or subsequent exercise by Hawaii of a power to lease Palmyra.21 No taxes were collected from those who claimed to be owners prior to 1885 when the Pacific Navigation Company paid taxes to Hawaii on Palmyra for three years. Assessments have been made annually since 1911 and taxes have been paid regularly since then by the claimants to the property. At the time of annexation by the United States, provision was made for commissioners to recommend to Congress legislation concerning the Hawaiian Islands. 30 Stat. 750. A full report was made which was transmitted to Congress y the Pres ident on December 6, 1898. U.S. Senate Document No. 16, 55th Cong., 3d Sess. It dealt with the Public Domain and shows that the Crown Lands had been taken over by the Hawaiian Government in 1894, p. 4 et seq. In 1894, the Crown Lands were in area 971,463 acres. There were no Crown Lands shown on the smaller islands. P. 102. An appendix shows the Government lands as of September 30, 1897, and lists in acres and values those of the principal islands of the group. Pp. 47—51. They amounted, in acres, to 1,744,713. In the recapitulation, though not included in the lists of public lands, there is an item that may include Palmyra. It reads, 'Laysan, etc., islands, Acres —-, Value $40,000.' At another point, p. 4, under 'Area and Population' appears the only reference to Palmyra. The reference in its setting appears in the margin.22 44 Respondents' claim of title exists in a consistent series of transactions beginning in 1862 with a deed to Wilkinson from Bent. The deed was recorded in the Registry of Conveyances of Hawaii in 1885. It conveyed all Bent's 'right title and interest in and to all the property of whatever description now lying or situated on Palmyra Island in the Pacific Ocean which island by a proclamation of His Majesty Kamehameha IV at present belongs to the Hawaiian Kingdom. And also all my right, title and interest in and to any partnership property that I may have an interest in as Copartner with the said Johnson Wilkinson.' The language, we think, is consistent with an intention to convey a claimed interest in the realty 'lying and situated on Palmyra Island' as well as 'any partnership personal property.' Thereafter Wilkinson died in New Zealand in 1866 and left a will devising to his wife, Kalama: 45 'And also all my landed freehold and leasehold estates in the Province of Auckland aforesaid, at Honolulu in the Sandwich Islands, and the Island of Palmyra in the South Sea Islands and wheresoever the same may be situated and whether in the said Colony of New Zealand or elsewhere. To hold such real and personal estate unto the said Kalama, absolutely and forever.' 46 The will was proven and registered in New Zealand and was later admitted to probate in Hawaii in 1898. In 1885, after the death of Kalama, two of her heirs transferred all their 'right, title and interest as heirs at law of the said Kalama or otherwise, in and to the Island of Palmyra' to one Wilcox, who conveyed to the Pacific Navigation Company. By a series of some four mesne conveyances between 1888 and 1911 the interest of Pacific Navigation Company in the island was eventually transferred to one Henry Cooper. A third heir of Kalama's transferred his rights in the island to one Ringer, whose children transferred their rights in the island to Henry Cooper in 1912. Ringer's widow in 1912 sold all her right, title, and interest in the island to Maui and Clarke. 47 In 1912 Cooper petitioned the Land Court of Hawaii to confirm title in him. Maui and Clarke contested the petition, claiming to own a dower interest in an 'undivided one-third of the Island.' Through its Attorney General, the Territory of Hawaii answered the petition and disclaimed 'any interest in, to or concerning' Palmyra. The court decreed that Cooper was the owner in fee simple of the island subject to the dower interest of Annie Ringer held by Maui and Clarke.23 In 1920, Cooper leased the Island to Meng and White who assigned the lease to the Palmyra Copra Company. In 1922 Cooper sold for $15,000.00 all but two of the islets to Mr. and Mrs. Fullard-Leo, respondents here, who had taken over the lease. From the foregoing, it will be apparent that from 1862 to the breakdown of negotiations a paper title existed in respondents and their predecessors in title, except for the grant from the Kingdom, and that there has been a record of the conveyances in Hawaii since 1885. There was, during these years, a claim of right to exclusive possession. 48 That claim of right was manifested not only by transfers of paper title but also by actual user of the property. The sufficiency of actual and open possession of property is to be judged in the light of its character and location.24 It is hard to conceive of a more isolated piece of land than Palmyra, one of which possession need by less continuous to form the basis of a claim. This tiny atoll in the Pacific, however, far removed from any other lands and claimed by no sovereignty until 1862 was not wholly valueless, commercially, prior to the establishment of air-ways over the ocean. 49 From time to time, men thought there might be something gained from its exploitation. Bent's 'representation' in 1862 for annexation was preceded by an acquaintance with the locality for a number of years. When he went to take possession he planted vegetables and melons, built a house and sought sea products. The Pacific Navigation Company had men on the island during 1885 and 1886. Cooper visited the island in 1913 and 1914. He was then the owner of record. In 1912, at Cooper's suggestion, the then Governor of Hawaii requested the Secretary of the Interior of the United States to send an American vessel to Palmyra to confirm American sovereignty. The Governor stated that Mr. Cooper was then the owner and that the private title to Palmyra had been in citizens of Hawaii since 1862. In 1920 and 1921 the Palmyra Copra Company was actively engaged on the island under a lease from Cooper. The Fullard-Leos, who acquired title to all but two of the islands from Cooper, visited the island in 1924 and again in 1935. On many occasions during the interim, they gave permission to various persons to visit the island. 50 From these evidences of claim of title and possession were the District Court and the Circuit Court of Appeals justified in entering a decree that the fee simple title to Palmyra is vested in respondents? The dissent in the Circuit Court of Appeals points out that our cases applying the lost grant doctrine required 'uninterrupted and long continuing possession of a kind indicating the ownership of the fee.' (156 F.2d 766.) This is the rule. But, as we have indicated above, uninterrupted and long continued possession does not require a constant, actual occupancy where the character of the property does not lend itself to such use.25 No other private owner claims any rights in Palmyra. From theevidence o f title and possession shown in this record, we cannot say that the decrees below are incorrect. 51 Judgment affirmed. 52 Mr. Justice RUTLEDGE, with whom The CHIEF JUSTICE, Mr. Justice BLACK and Mr. Justice MURPHY concur, dissenting. 53 I agree with the dissenting judges in the Circuit Court of Appeals that the possession shown on behalf of respondents is not sufficient to establish the presumption of a lost grant, even if title can be acquired from the Government in that manner. According to my understanding, the possession, to have that effect, must be actual, open, notorious, adverse and continuous from the time when the grant is presumed to have taken place.1 Here for long periods the possession was constructive at the most, not actual. By the same token it was not continuous.2 I do not think this Court should expand the established basis for acquiring title to government lands so as to include acquisition by adverse possession, as in effect the Court's opinion does. Accordingly, I dissent. 1 Territory of Hawaii v. Mankichi, 190 U.S. 197, 23 S.Ct. 787, 47 L.Ed. 1016. 2 Territory of Hawaii v. Mankichi, 190 U.S. 197, 216, 23 S.Ct. 787, 790, 47 L.Ed. 1016. 3 Declaration of Rights, 1839. Act to Organize Executive Departments and Joint Resolution, April 27, 1846, Hawaii, Statute Laws, 1845—46, vol. I, pp. 99, 277. 4 Revised Laws of Hawaii, 1905, p. 1197 et seq. 5 Thurston v. Bishop, 7 Haw. 421, at dissent, note at page 454. 6 The domain covered by the term seems to be not only the lands declared to be the private lands of the King by the Act of June 7, 1848, but also other unassigned lands later declared by legislative authority to be Crown Lands. Rev. Laws, Hawaii, 1905, p. 1227; Act of November 14, 1890, Laws, Hawaii, 1890, c. 75; Rev. Laws, Hawaii, 1905, p. 1229. 7 Hawaii, Statute Laws, 1845-6, vol. I, p. 107. 8 Hawaii, Statute Laws, 1847, vol. II, pp. 81—94; Revised Laws, Hawaii, 1905, p. 1164 et seq. 9 Thurston v. Bishop, 7 Haw. 421, at pages 429, 437. 'The Commission was authorized to consider possession of land acquired by oral gift of Kamehameha I., or one of his high chiefs, as sufficient evidence of title to authorize an award therefor to the claimant. This we must consider as the foundation of all titles to land in this Kingdom, except such as come from the King, to any part of his reserved lands, and excepting also the lists of Government and Fort lands reserved. The land in dispute in this case is not one of those specifically reserved by the King, Kamehameha III., to himself and his successors, and not being in the lists of lands specially set apart as Government or Fort lands, must be one of those over which the Land Commission had jurisdiction to award to the claimant.' 7 Haw. at page 429. 10 Haw. Civil Code, 1859, p. 14 et seq. 11 United States v. Perot, 98 U.S. 428, 430, 25 L.Ed. 251; United States v. Chaves, 159 U.S. 452, 459, 16 S.Ct. 57, 60, 40 L.Ed. 215. 12 De Castro v. Board of Comm'rs of San Juan, 322 U.S. 451, 459, 64 S.Ct. 1121, 1125, 88 L.Ed. 1384; Christy v. Pridgeon, 4 Wall. 196, 18 L.Ed. 322. 13 Appleby v. City of New York, 271 U.S. 364, 380, 46 S.Ct. 569, 573, 70 L.Ed. 992; compare Clearfield Trust Co. v. United States, 318 U.S. 363, 366, 63 S.Ct. 573, 574, 87 L.Ed. 838; United States v. Allegheny County, 322 U.S. 174, 183, 64 S.Ct. 908, 913, 88 L.Ed. 1209; S.R.A., Inc. v. Minnesota, 327 U.S. 558, 564, 66 S.Ct. 749, 753, 90 L.Ed. 851. 14 Fletcher v. Fuller, 120 U.S. 534, 545, 547, 7 S.Ct. 667, 673, 674, 30 L.Ed. 759; United States v. Chavez, 175 U.S. 509, 520, 20 S.Ct. 159, 162, 163, 44 L.Ed. 255. 15 Ricard v. Williams, 7 Wheat. 59, 109, 5 L.Ed. 398. See Holdsworth, A History of English Law, vol. VII, p. 343, et seq.; Greenleaf, Evidence (12th Ed.), § 17. 16 Greenleaf, Evidence (16th Ed.), § 45a: 'Thus, also, though lapse of time does not, of itself, furnish a conclusive legal bar to the title of the sovereign, agreeably to the maxim, 'nullum tempus occurrit regi'; yet, if the adverse claim could have had a legal commencement, juries are instructed or advised to presume such commencement, after many years of uninterrupted adverse possession or enjoyment. Accordingly, royal grants have been thus found by the jury, after an indefinitely long-continued peaceable enjoyment, accompanied by the usual acts of ownership. So, after less than forty years' possession of a tract of land, ad proof of a prior order of council for the survey of the lot, and of an actual survey thereof accordingly, it was held that the jury were properly instructed to presume that a patent had been duly issued. In regard, however, to crown or public grants, a longer lapse of time has generally been deemed necessary, in order to justify this presumption, than is considered sufficient to authorize the like presumption in the case of grants from private persons.' 17 32 Stat. 691, § 12. 18 Greenleaf, Evidence (16th Ed.), § 45a. 19 Fletcher v. Fuller, supra, 120 U.S. at page 551, 7 S.Ct. at page 676, 30 L.Ed. 759; United States v. Chaves, supra, 159 U.S. at page 464, 16 S.Ct. at page 62, 40 L.Ed. 215; United States v. Chavez, supra, 175 U.S. at page 520, 20 S.Ct. at pages 162, 163, 44 L.Ed. 255. 20 Fletcher v. Fuller, supra, 120 U.S. at page 552, 7 S.Ct. at page 676, 30 L.Ed. 759; Whitney v. United States, 167 U.S. 529, 546, 17 S.Ct. 857, 863, 42 L.Ed. 263; Jover y Costas v. Insular Government of the Philippine Islands, supra, 221 U.S. at page 633, 31 S.Ct. at page 667, 55 L.Ed. 884. 21 'Opinion Book 'Attorney General's Department 'Pages 598—600 'Opinion No. 18 'Honolulu, T.H., Feb. 11, 1905 'To His Excellency Geo. R. Carter, 'Governor of the Territory of Hawaii, 'Honolulu, T.H. 'Sir: 'In answer to your request of December 15th, 1904, for an opinion as to the jurisdiction of the Territory of Hawaii over the various small guano islands to the north-west of Kauai, I would reply as follows: 'After a careful investigation of the records in the office of the Secretary of the Territory, formerly the Foreign Office, and from other sources of information, I find that the authority of the Territory of Hawaii over these islands is as follows: 'It appears in the report of J. A. King, Minister of the Interior, dated the 2nd day of June, 1894, to Sanford B. Dole, President of the Republic of Hawaii, that formal possession was taken of Necker Island by the said J. A. King, representing the Republic of Hawaii, on May 22, 1894; it also appears by that report that the government of the Hawaiian Islands had sent Captain John Paty to take possession of said island about 1857; it also appears that he did take such possession at that time. 'Palmyra Island, seems to have been acquired during the reign of Kamehameha IV, by a proclamation signed by him, dated the 15th day of June, 1862. 'Lisiansky Island was taken by the government of the Hawaiian Islands through Capt. John Paty on the 10th day of May, 1857. 'Morell Island and Patrocinio or Byer Island were both taken for the Republic of Hawaii in 1898, by G. N. Wilcox, a Commissioner for that purpose appointed. 'While I was unable to find any official records of the acquisition of the other islands, the government has, for many years, assumed jurisdiction over them. The following leases have been made, from time to time, and have been undisputed: 'Lease of Necker Island, dated the 2nd day of June, 1904, to A. H. C. Lovekin, at $25.00 per annum, term twenty-five years. 'Lease of J. A. King, Minister of the Interior, to the North Pacific Phosphate & Fertilizer Co. of Morell, Ocean, Pearl and Hermes reef, Midway and French Frigate Shoals, twenty-five years from the 15th day of February, 1894. 'Laysan and Lisiansky Islands to G. D. Freeth, April 17th, 1893. 'While it is to be regretted that the records of our foreign office are not more complete, possibly a more exhaustive search might find other documents which, in the present state of the old foreign office, it was impossible for me to find. I believe that from these records the government's right to lease the islands, or any privileges thereon, is clear; also to lease the same, as suggested in your letter. The fact of making such leases, and the lessees taking possession thereunder, recognizing the Territory of Hawaii as the landlord would be prima facie evidence in international law of our right to the same and would be the best evidence the government could make of its claim to the various islands in question. 'Yours truly, '(sgd) Lorrin Andrews 'Attorney General.' 22 S.Doc.No.16, 55th Cong., 3d Sess., p. 4: 'The Hawaiian group numbers seven inhabited islands and eleven or twelve small rocky or sandy shoals or refs, with a total area of 6,740 square miles. They are described as follows: 23 The United States questions the effect on any title of the United States to Palmyra of the disclaimer of interest in Palmyra by Hawaii. The United States asserts that all public lands of Hawaii passed to the United States by the Joint Resolution of July 7, 1898, and the Resolution of the Senate of Hawaii of September 9, 1897. Rev. Laws, Hawaii, 1905, pp. 36, 40. Thereafter, in 1900, it is said, that Congress made provision for the disposition of such lands. Hawaiian Organic Act, 31 Stat. 141, § 73 of the Organic Act, as amended in 1910, § 5, 36 Stat. 444, 48 U.S.C.A. §§ 663—677; § 2432, Rev.Laws, Haw., 1905. The position of the United States is that there was no power in Hawaii to disclaim any interest that the United States might have in Palmyra in 1912. We need no resolve t his issue. The Land Court record is referred to as another instance of the claims of respondent to Palmyra adverse to the claim of ownership of the United States and its predecessors in title to the public lands of Hawaii. 24 A statement of this Court in United States v. Pendell, 185 U.S. at page 197, 22 S.Ct. at page 627, 46 L.Ed. 866, is pertinent: 'There are no adverse claimants to the land in question, and the proof of possession, exclusive in its nature, has been satisfactory to the court below. What constitutes such possession of a large tract of land depends to some extent upon circumstances, the fact varying with different conditions, such as the general state of the surrounding country, whether similar land is customarily devoted to pasturage or to the raising of crops, to the growth of timber or to mining, or other purposes. That which might show substantial possession, exclusive in its character, where the land was devoted to the grazing of numerous cattle, might be insufficient to show the same kind of possession where the land was situated in the midst of a large population, and the country devoted, for instance, to manufacturing purposes. Personal familiarity with the general character of the country and of its lands, and also knowledge of the nature and manner of the use to which most of the lands in the same vicinity are put, have given the judges of the court below unusual readiness for correctly judging and appreciating the weight and value to be accorded evidence upon the subject of possession of such lands as are here involved.' 25 See Fletcher v. Fuller, 120 U.S. 534, 543, 7 S.Ct. 667, 672, 30 L.Ed. 759. 1 'And hence, as a general rule, it is only where the possession has been actual, open, and exclusive for the period prescribed by the statute of limitations to bar an action for the recovery of land, that the presumption of a deed can be invoked.' (Emphasis added.) Fletcher v. Fuller, 120 U.S. 534, 551, 7 S.Ct. 667, 676, 30 L.Ed. 759. 'The possession must be adverse, exclusive, and uninterrupted, and inconsistent with the existence of title in another.' (Emphasis added.) Peabody v. United States, 175 U.S. 546, 550, 20 S.Ct. 219, 221, 44 L.Ed. 267. The statement in the authorities that the possession must be uninterrupted has been qualified only to the extent that 'This presumption may * * *, in some instances, be properly invoked where a proprietary right has long been exercised, although the exclusive possession of the whole property to which the right is asserted may have been occasionally interrupted during the period necessary to create a title by adverse possession, if in addition to the actual possession, there were other open acts of ownership.' (Emphasis added.) Fletcher v. Fuller, supra, 120 U.S. at page 552, 7 S.Ct. at page 677, 30 L.Ed. 759. And the presumption of continuing possession which exists 'in the absence of evidence to the contrary,' Lazarus v. Phelps, 156 U.S. 202, 204, 15 S.Ct. 271, 272, 39 L.Ed. 397, even if competent to furnish the basis for the further presumption of a lost grant, is here rebutted by the evidence which has been introduced. See note 2. 2 The following summary of the island's history was given, with supporting record references, in note 3 of the dissenting opinion, 9 Cir., 156 F.2d 756, 760, 765, filed by Denman, C.J., with whom Bone, J., agreed, in the Circuit Court of Appeals: 'Zenas Bent visited the island in April, 1862, and left five men there. * * * In June annexation was formally proclaimed. * * * It does not appear how long the five men remained on the island but in December of the same year Bent transferred all his interest to Wilkinson. * * * Wilkinson died in 1866 and his will was probated in New Zealand giving his rights in Palmyra to his wife, Kalama * * *. Nothing further occurred until 1885 when the supposed title was transferred to the Pacific Navigation Company, a conveyance being executed by two of Kalama's heirs and Bent's deed being acknowledged, 23 years after its execution * * *. Thus, except for the five men left on the island by Bent in order to make the annexation effective, there is no indication that there was any possession or even visits to the island for the 23 years following annexation. On the contrary, the fact that Bent's deed was not acknowledged until 1885, after conveyance by Kalama's heirs, clearly indicates that, in the meantime, no claim of title or possession was asserted by anyone. 'Employees of the Pacific Navigation Company occupied the island for approximately a yea in 1885 a nd 1886 * * * and the company paid taxes in 1885, 1886, and 1887 * * *, not to the United States but to the Territory. (The claimant placed the lands on the tax rolls and in many cases taxes were paid on public lands * * *.) This company's project apparently failed and there followed another long period when the island was vacant. Some time between 1889 and 1897 a British vessel visited the island and finding it uninhabited, claimed it for that country * * *. In 1912 at the instigation of Henry Cooper who had just acquired the supposed title and whose Land Court proceeding to register it was pending, a vessel of the United States Navy visited the island in order to confirm this country's claim to it * * *. No occupants were found on the island * * *. In 1913 and 1914 Cooper made short visits of two or three weeks to the island and built a house thereon * * *. However, the island was not permanently occupied and in 1914 evidence was found that since the 1913 visit Japanese bird poachers had been there * * *. 'In 1920 another attempt was made to commercially develop the island. It was leased by Cooper; a corporation, The Island of Palmyra Copra Company, was organized; and a 'settlement group' was sent to the island * * *. This project was not successful and its activities terminated after about a year * * *. The Fullard-Leos bought Cooper's rights in 1922 but only visited the island twice, once in 1924 for twelve days and again in 1935 for one day * * *. Between 1922 and the time this suit was commenced, no one lived on the island. It was most frequently visited by United States Navy or Coast Guard vessels which were in the neighborhood * * *. In fact, Fullard-Leo went on the Coast Guard vessel 'Itasca' when he visited the island in 1935 * * *. Occasionally, vacationists or scientists made short visits to the island * * *. During this period an unnamed man lived there for two or three months * * *. On another other occasion (1936) a party from Tahiti went there in an attempt to find a cargo of button shells which were rumored to have been jettisoned by an unseaworthy boat * * *. By 1938, the house which Cooper built in 1913 had collapsed and all the various visitors testified they did not see any evidence of occupation in recent times * * *.' From these facts the dissenting judges concluded: 'In the 77 years from the royal proclamation of taking in 1862 to the filing of the instant case in 1939, the occupancy of the island has been less than two and one-half years. Of this a year was in the years 1885—86 and a year in 1920. In the interim, from 1862 to 1939, there was no one residing there under a claim of possession—the occasional visitors' brief stays being for other purposes.' 9 Cir., 156 F.2d 756, 765; and see Id., note 3.
910
331 U.S. 432 67 S.Ct. 1283 91 L.Ed. 1585 UNITED STATESv.WALSH. No. 718. Argued April 29, 1947. Decided May 19, 1947. On appeal from the District Court of the United States for the Southern District of California. Mr. Robert S. Erdahl, of Washington, D.C., for appellant. Mr. Eugene W. Miller, of San Diego, Cal., for appellee. Mr. Justice MURPHY, delivered the opinion of the Court. 1 This appeal brings before us § 301(h) of the Federal Food, Drug and Cosmetic Act of 1938, 52 Stat. 1040, 1042, 21 U.S.C. § 331(h), 21 U.S.C.A. § 331(h), which prohibits the giving of a false guaranty that any food, drug, device or cosmetic is not adulterated or misbranded within the meaning of the Act. 2 Appellee does business in San Diego, California, under the name of Kelp Laboratories. An information has been filed, charging appellee with having given a false guaranty in violation of § 301(h). The following facts have been alleged: In February, 1943, appellee gave a continuing guaranty to Richard Harrison Products, of Hollywood, California, stating that no products thereafter shipped to the latter would be adulterated or misbranded within the meaning of the Act. On February 24, 1945, while the guaranty was in full force and effect, appellee consigned to Richard Harrison Products, at Holywood, a shipment of vitamin products which were allegedly adulterated and misbranded—thereby making the guaranty false in respect of that shipment. Prior and subsequent to the date of the shipment, Richard Harrison Products was engaged in the business of introducing and delivering for introduction into interstate commerce quantities of the vitamin product supplied by appellee. 3 Appellee moved to dismiss the information on the ground that it did not state an offense. The argument was that § 301(h) applies only to a guaranty that is false relative to an interstate shipment, whereas the alleged shipment here was to a consignee within California, the state of origin, and there was no allegation that the consignee purchased the order for some one outside California or that it intended to sell the products in its interstate rather than its intrastate business. The District Court gave an oral opinion sustaining appellee's contention and granting the motion to dismiss. The case is here on direct appeal by the United States. 4 The Federal Food, Drug, and Cosmetic Act rests upon the constitutional power resident in Congress to regulate interstate commerce. Article 1, § 8, cl. 3. To the end that the public health and safety might be advanced, it seeks to keep interstate channels free from deleterious, adulterated and misbranded articles of the specified types. United States v. Dotterweich, 320 U.S. 277, 280, 64 S.Ct. 134, 88 L.Ed. 48. It is in that interstate setting that the various sections of the Act must be viewed. 5 But § 301(h), with which we are concerned, does not speak specifically in interstate terms. It prohibits the 'giving of a guaranty or undertaking referred to in section 303(c)(2), which guaranty or undertaking is false,' the only exception being as to a false guaranty given by a person who, in turn, relied upon a similar guaranty given by the person from whom he received in good faith the adulterated or misbranded article.1 Nothing on the face of the section limits its application to guaranties relating to articles introduced or delivered for introduction into interstate commerce. From all that appears, its proscription plainly extends to the giving of any false statutory guaranty, without regard to the interstate or intrastate character of the shipment in question, to those who are engaged in the business of making interstate shipments. 6 Nor do we find any interstate limitation of the type which appellee proposes in the reference made in § 301(h) to § 303(c)(2).2 That reference is made simply to define the type of guaranty or undertaking the falsification of which is prohibited by § 301(h). Instead of spelling out the matter, § 301(h) adopts the reference in § 303(c)(2) to 'a guaranty or undertaking signed by, and containing the name and address of, the person residing in the United States from whom he received in good faith the article, to the effect * * * that such article is not adulterated or misbranded, within the meaning of this Act, designating this Act.' The fact that § 303(c)(2) relieves a holder of such a guaranty from the criminal penalties provided by § 303(a) for violating § 301(a) does not carry over the interstate limitation of § 301(a) to § 301(h). Section 301(a) prohibits the introduction or delivery for introduction into interstate commerce of illicit articles,3 and § 303(c)(2) relieves one from the liabilities of such introduction if one has a guaranty or undertaking as therein described. Section 301(h)has adopted that description for the entirely different purpose of informing persons what kind of a guaranty or undertaking may not be given falsely. In other words, s 301(a) is directed to illegal interstate shipments, while § 301(h) is directed to the giving of false guaranties. Guaranties as described in § 303(c)(2) may be used by interstate dealers in connection with either interstate or intrastate shipments and those guaranties that are false are outlawed by § 301(h). 7 It is true, of course, that the guaranty referred to in § 303(c)(2) is one given for the purpose of protecting the dealer 'in case of an alleged violation of section 301(a),' thereby relieving him of liability if he reships adulterated or misbranded goods in interstate commerce. But where such a guaranty, as in this case, is given to a dealer regularly engaged in making interstate shipments and who may therefore have need of the guaranty, § 301(h) imposes liability on the guarantor if that guaranty turns out to be false. And that liability attaches even where the particular shipment which renders the guaranty false is not alleged to have been an interstate one. 8 It is significant that § 301(h) had no counterpart in the predecessor statute, the Food and Drugs Act of 1906, 34 Stat. 768, 21 U.S.C.A. § 1 et seq. Under § 9 of that Act, a dealer could not be prosecuted for shipping adulterated or misbranded articles in interstate commerce if he had a guaranty of a type similar to that referred to in the present statute. If there were such a guaranty, the guarantor was subject to the penalties which would otherwise attach to the dealer. The result was that the guarantor was not liable on account of a false guaranty unless the dealer had shipped the prohibited article in interstate commerce. Steinhardt Bros. & Co. v. United States, 2 Cir., 191 F. 798, 800; United States v. Charles L. Heinle Specialty Co., D.C., 175 F. 299, 300, 301. There was no liability for issuing a false guaranty as such to one engaged in an interstate business. But in the 1938 Act, Congress added a new liability in the form of § 301(h), making the guarantor liable for giving a false guaranty of the type referred to in § 303(c)(2). We find it impossible to say that the framers of the 1938 Act added § 301(h) for the useless purpose of achieving the same result as had been reached under the 1906 Act without such a provision. 9 We thus conclude that § 301(h) definitely proscribes the giving of a false guaranty to one engaged wholly or partly in an interstate business irrespective of whether that guaranty leads in any particular instance to an illegal shipment in interstate commerce. Such a construction is entirely consistent with the interstate setting of the Act. A manufacturer or processor ordinarily has no way of knowing whether a dealer, whose business includes making interstate sales, will redistribute a particular shipment in interstate or intrastate commerce. But if he guarantees that his product is not adulterated or misbranded within the meaning of the Act, he clearly intends to assure the dealer that the latter may redistribute the product in interstate commerce without ncurring a ny of the liabilities of the Act. And the dealer is thereby more likely to engage in interstate distribution without making an independent check of the product. The possibility that a false guaranty may give rise to an illegal interstate shipment by such a dealer is strong enough to make reasonable the prohibition of all false guaranties to him, even though some of them may actually result only in intrastate distribution. By this means, some of the evils which Congress sought to eliminate are cut down at their source and the effectiveness of the Act's enforcement is greatly enhanced. 10 So construed, § 301(h) raises no constitutional difficulties. The commerce clause of the Constitution is not to be interpreted so as to deny to Congress the power to make effective its regulation of interstate commerce. Where that effectiveness depends upon a regulation or prohibition attaching regardless of whether the particular transaction in issue is interstate or intrastate in character, a transaction that concerns a business generally engaged in interstate commerce, Congress may act. Such is this case. 11 The judgment of the District Court is accordingly reversed. 12 Reversed. 13 Mr. Justice JACKSON (dissenting). 14 Stretch the Food and Drugs Act as we will, I cannot make it cover this charge as a crime. The statutory scheme is to make a crime of 'The introduction or delivery for introduction into interstate commerce' of adulterated or misbranded goods. 52 Stat. 1042, 21 U.S.C. § 331(a) and (d), 21 U.S.C.A. § 331(a, d). 15 But since many shippers buy goods of others and do not know their precise ingredients, Congress allowed an escape for the violator, provided he acted in good faith and could trace the responsibility to another. This he must do by producing a signed guaranty or undertaking, and the statute requires that it shall be conditioned 'to the effect, in case of an alleged violation of § 331(a), that such article is not adulterated or misbranded * * * or to the effect, in case of an alleged violation of § 331(d), that such article is not an article' forbidden shipment by stated paragraphs of the Act. (Emphasis added.) 52 Stat. 1043, 21 U.S.C. § 333(c), 21 U.S.C.A. § 333(c). 16 It will be noticed that Congress not only provided but repeated that the statutory bond required is 'in case of an alleged violation' by introducing or delivering for introduction of goods in interstate commerce. No such violation has been alleged here; these goods were never introduced or delivered for introduction into interstate commerce. But the Court seems to think it is enough that there are some grounds for expecting that this crime possibly, or probably, or perhaps pretty certainly, would eventually be committed. 17 Of course, if the assured had committed this offense and had fallen back on the guarantor, the statute which reached the assured would not be sufficient. To punish the responsible person, it was made a crime to give a false guaranty 'referred to in' the statute. 52 Stat. 1042, 21 U.S.C. § 331(h), 21 U.S.C.A. § 331(h). 18 The Government now seeks to exact criminal responsibility on a guarantee, expressly conditioned only 'in case of violation,' in a case of no violation. Until a violation is alleged, the guaranty plays no statutory role at all. It might afford a cause of action if false, but that is quite different from making it a crime. For it is no guaranty at all for criminal prosecution purposes if violation of neither § 331(a) nor § 331(d) is alleged. The statute requires such violation to be alleged only, not proved, in order to put the guarantor rather than the assured to the proof. This is the only instance I recall where the guarantor is liable when there is no breach of the condition of the bond. The whole plan was to have a substituted liability in case the violator of the Act became such in good faith. This decision makes a new, independent and original liability where there has been no alleged violation by moving the goods in interstatecommerce. 19 I do not think we should take such liberties in expanding criminal statutes in which the sovereign once was considered under a duty to be explicit and the subject entitled to the doubt. 1 Section 301(h) prohibits 'The giving of a guaranty or undertaking referred to in section 303(c)(2), which guaranty or undertaking is false, except by a person who relied upon a guaranty or undertaking to the same effect signed by, and containing the name and address of, the person residing in the United States from whom he received in good faith the food, drug, device, or cosmetic; or the giving of a guaranty or undertaking referred to in section 303(c)(3), which guaranty or undertaking is false.' 2 Section 303(c)(2) provides that no person shall be subject to the penalties of § 303(a) 'for having violated section 301(a) or (d), if he establishes a guaranty or undertaking signed by, and containing the name and address of, the person residing in the United States from whom he received in good faith the article, to the effect, in case of an alleged violation of section 301(a), that such article is not adulterated or misbranded, within the meaning of this Act, designating this Act, or to the effect, in case of an alleged violation of section 301(d), that such article is not an article which may not, under the provisions of section 404 or 505, be introduced into interstate commerce.' 3 Section 301(a) prohibits 'The introduction or delivery for introduction into interstate commerce of any food, drug, device, or cosmetic that is adulterated or misbranded.'
78
331 U.S. 367 67 S.Ct. 1249 91 L.Ed. 1546 CRAIG et al.v.HARNEY. No. 241. Argued Jan. 9, 1947. Decided May 19, 1947. Mandate Conformed to Oct. 15, 1947. See Tex.Cr.App., 204 S.W.2d 842. Messrs. Ireland Graves, of Austin, Tex., and Marcellus G. Eckhardt, of Corpus Christi, Tex., for petitioners. Mr. Jerry D'Unger, of Corpus Christi, Tex., for respondent. Mr. Justice DOUGLAS delivered the opinion of the Court. 1 Petitioners were adjudged guilty of constructive criminal contempt by the County Court of Neuces County, Texas, and sentenced to jail for three days. They sought to challenge the legality of their confinement by applying to the Court of Criminal Appeals for a writ of habeas corpus.1 That court by a divided vote denied the writ and remanded petitioners to the custody of the county sheriff. Ex parte Craig, Tex.Cr.App., 193 S.W.2d 178. The case is here on a petition for a writ of certiorari which we granted because of the importance of the problem and because the ruling of the Texas court raised doubts whether it conformed to the principles announced in Bridges v. State of California, 314 U.S. 252, 62 S.Ct. 190, 86 L.Ed. 192, 159 A.L.R. 1346, and Pennekamp v. State of Florida, 328 U.S. 331, 66 S.Ct. 1029. 2 Petitioners are a publisher, an editorial writer, and a news reporter of newspapers published in Corpus Christi, Texas. The County Court had before it a forcible detainer case, Jackson v. Mayes, whereby Jackson sought to regain possession from Mayes of a business building in Corpus Christi which Mayes (who was at the time in the armed services and whose affairs were being handled by an agent, one Burchard) claimed under a lease. That case turned on whether Mayes' lease was forfeited because of non-payment of rent. At the close of the testimony each side moved for an instructed verdict. The judge instructed the jury to return a verdict for Jackson. That was on May 26, 1945. The jury returned with a verdict for Mayes. The judge refused to accept it and again instructed the jury to return a verdict for Jackson. The jury returned a second time with a verdict for Mayes. Once more the judge refused to accept it and repeated his prior instruction. It being the evening of May 26th and the jury not having complied, the judge recessed the court until the morning of May 27th. Again the jury balked at returning the instructed verdict. But finally it complied, stating that it acted under coercion of the court and against its conscience. 3 On May 29th Mayes moved for a new trial. That motion was enied on J une 6th. On June 4th an officer of the County Court filed with that court a complaint charging petitioners with contempt by publication. The publications referred to were an editorial and news stories published on May 26, 27, 28, 30, and 31 in the newspapers with which petitioners are connected. We have set forth the relevant parts of the publications in the appendix to this opinion. Browning, the judge, who is a layman and who holds an elective office, was criticised for taking the case from the jury. That ruling was called 'arbitrary action' and a 'travesty on justice.' It was deplored that a layman, rather than a lawyer, sat as judge. Groups of local citizens were reported as petitioning the judge to grant Mayes a new trial and it was said that one group had labeled the judge's ruling as a 'gross miscarriage of justice.' It was also said that the judge's behavior had properly brought down 'the wrath of public opinion upon his head,' that the people were aroused because a service man 'seems to be getting a raw deal,' and that there was 'no way of knowing whether justice was done, because the first rule of justice, giving both sides an opportunity to be heard, was repudiated.' And the fact that there could be no appeal from the judge's ruling to a court 'familiar with proper procedure and able to interpret and weigh motion and arguments by opposing counsel' was deplored. 4 The trial judge concluded that the reports and editorials were designed falsely to represent to the public the nature of the proceedings and to prejudice and influence the court in its ruling on the motion for a new trial then pending. Petitioners contended at the hearing that all that was reported did no more than to create the same impression that would have been created upon the mind of an average intelligent layman who sat through the trial. They disclaimed any purpose to impute unworthy motives to the judge or to advise him how the case should be decided or to bring the court into disrepute. The purpose was to 'quicken the conscience of the judge' and to 'make him more careful in discharging his duty.' 5 The Court of Criminal Appeals, in denying the writ of habeas corpus, stated that the 'issue before us' is 'whether the publications * * * were reasonably calculated to interfere with the due administration of justice' in the pending case. 193 S.W.2d at page 186. It was held that 'there is no escape from the conclusion that it was the purpose and intent of the publishers * * * to force, compel, and coerce Judge Browning to grant Mayes a new trial. The only reason or motive for so doing was because the publishers did not agree with Judge Browning's decision or conduct of the case. According to their viewpoint, Judge Browning was wrong and they took it upon themselves to make him change his decision.' Id., 193 S.W.2d at pages 188, 189. The court went on to say that 'It is hard to conceive how the public press could have been more forcibly or substantially used or applied to make, force, and compel a judge to change a ruling or decision in a case pending before him than was here done.' Id., 193 S.W.2d at page 189. The court distinguished the Bridges case, noting that there the published statements carried threats of future adverse criticism and action on the part of the publisher if the pending matter was not disposed of in accordance with the views of the publisher, that the views of the publisher in the matter were already wellknown, and that the Bridges case was not private litigation but a suit in the outcome of which the public had an interest. Id., 193 S.W.2d at page 188. It concluded that the facts of this case satisfied the 'clear and present danger' rule of the Bridges case. That test was, in the view of the court, satisfied 'because the publications and their purpose were to impress upon Judge Browning (a) that unless he granted the motion for a new trial he would be subjected to suspicion as to his integrity and fairness and to odium and hatred in the publi mind; (b) that the safe and secure course to avoid the criticism of the press and public opinion would be to grant the motion and disqualify himself from again presiding at the trial of the case; and (c) that if he overruled the motion for a new trial, there would be produced in the public mind such a disregard for the court over which he presided as to give rise to a purpose in practice to refuse to respect and obey any order, judgment, or decree which he might render in conflict with the views of the public press.' Id., 193 S.W.2d at page 189. 6 The court's statement of the issue before it and the reasons it gave for holding that the 'clear and present danger' test was satisfied have a striking resemblance to the findings which the Court in Toledo Newspaper Co. v. United States, 247 U.S. 402, 38 S.Ct. 560, 62 L.Ed. 1186 held adequate to sustain an adjudication of contempt by publication.2 That case held that comment on a pending case in a federal court was punishable by contempt if it had a 'reasonable tendency' to obstruct the administration of justice. We revisited that case in Nye v. United States, 313 U.S. 33, 52, 61 S.Ct. 810, 817, 85 L.Ed. 1172, and disapproved it. And in Bridges v. State of California, supra, we held that the compulsion of the First Amendment, made applicable to the States by the Fourteenth (Schneider v. State of New Jersey, Town of Irvington, 308 U.S. 147, 60 S.Ct. 146, 84 L.Ed. 155; Murdock v. Commonwealth of Pennsylvania, 319 U.S. 105, 108, 63 S.Ct. 870, 872, 891, 87 L.Ed. 1292, 146 A.L.R. 81) forbade the punishment by contempt for comment on pending cases in absence of a showing that the utterances created a 'clear and present danger' to the administration of justice. 314 U.S. at pages 260 264, 62 S.Ct. at pages 192—194, 86 L.Ed. 192, 159 A.L.R. 1346. We reaffirmed and reapplied that standard in Pennekamp v. State of Florida, supra, which also involved comment on matters pending before the court. We stated, 328 U.S. at page 347, 66 S.Ct. at page 1037: 'Courts must have power to protect the interests of prisoners and litigants before them from unseemly efforts to pervert judicial action. In the borderline instances where it is difficult to say upon which side the alleged offense falls, we think the specific freedom of public comment should weigh heavily against a possible tendency to influence pending cases. Freedom of discussion should be given the widest range compatible with the essential requirement of the fair and orderly administration of justice.' 7 Neither those cases nor the present one raises questions concerning the full reach of the power of the state to protect the administration of justice by its courts. The problem presented is only a narrow, albeit important, phase of that problem—the power of a court promptly and without a jury trial to punish for comment on cases pending before it and awaiting disposition. The history of the power to punish for contempt (see Nye v. United States, supra; Bridges v. State of California, supra) and the unequivocal command of the First Amendment serve as constant reminders that freedom of speech and of the press should not be impaired through the exercise of that power, unless there is no doubt that the utterances in question are a serious and imminent threat to the administration of justice. 8 In a case where it is asserted that a person has been deprived by a State court of a fundamental right secured by the Constitution, an independent examination of the facts by this Court is often required to be made. See Norris v. State of Alabama, 294 U.S. 587, 590, 55 S.Ct. 579, 580, 79 L.Ed. 1074; Pierre v. State of Louisiana, 306 U.S. 354, 358, 59 S.Ct. 536, 538, 539, 83 L.Ed. 757; Chambers v. State of Florida, 309 U.S. 227, 228, 229, 60 S.Ct. 472, 473, 474, 84 L.Ed. 716; Lisenba v. People of State of California, 314 U.S. 219, 237, 238, 62 S.Ct. 280, 290, 291, 86 L.Ed. 166; Ashcraft v. State of Tennessee, 322 U.S. 143, 147, 148, 64 S.Ct. 921, 923, 88 L.Ed. 1192. This is such a case. 9 We start with the news articles. A trial is a public event. What transpires in the court room is public property. If a transcript of the court proceedings had been published, we suppose none would claim that the judge could punish the publisher for contempt. And we can see no difference though the conduct of the attorneys, of the jury, or even of the judge himself, may have reflected on the court. Those who see and hear what transpired can report it with impunity. There is no special perquisite of the judiciary which enables it, as distinguished from other institutions of democratic government, to suppress, edit, or censor events which transpire in proceedings before it. 10 The articles of May 26, 27, and 28 were partial reports of what transpired at the trial. They did not reflect good reporting, for they failed to reveal the precise issue before the judge. They said that Mayes, the tenant, had tendered a rental check. They did not disclose that the rental check was post-dated and hence, in the opinion of the judge, not a valid tender. In that sense the news articles were by any standard an unfair report of what transpired.3 But inaccuracies in reporting are commonplace. Certainly a reporter could not be laid by the heels for contempt because he missed the essential point in a trial or failed to summarize the issues to accord with the views of the judge who sat on the case. Conceivable, a plan of reporting on a case could be so designed and executed as to poison the public mind, to cause a march on the court house, or otherwise so disturb the delicate balance in a highly wrought situation as to imperil the fair and orderly functioning of the judicial process. But it takes more imagination than we possess to find in this rather sketchy and one-sided report of a case any imminent or serious threat to a judge of reasonable fortitude. See Pennekamp v. State of Florida, supra. 11 The accounts of May 30 and 31 dealt with the news of what certain groups of citizens proposed to do about the judge's ruling in the case. So far as we are advised, it was a fact that they planned to take the proposed action. The episodes were community events of legitimate interest. Whatever might be the responsibility of the group which took the action, those who reported it stand in a different position. Even if the former were guilty of contempt, freedom of the press may not be denied a newspaper which brings their conduct to the public eye. 12 The only substantial question raised pertains to the editorial. It called the judge's refusal to hear both sides 'high handed,' a 'travesty on justice,' and the reason that public opinion was 'outraged.' It said that his ruling properly 'brought down the wrath of public opinion upon his head' since a service man 'seems to be getting a raw deal.' The fact that there was no appeal from his decision to a 'judge who is familiar with proper procedure and able to interpret and weigh motions and arguments by opposing counsel and to make his decisions accordingly' was a 'tragedy.' It deplored the fact that the judge was a 'layman' and not a 'competent attorney.' It concluded that the 'first rule of justice' was to give both sides an opportunity to be heard and when that rule was 'repudiated,' there was 'no way of knowing whether justice was done.' 13 This was strong language, intemperate language, and, we assume, an unfair criticism. But a judge may not hold in contempt one 'who ventures to pubish anything that tends to make him unpopular or to belittle him * * *.' See Craig v. Hecht, 263 U.S. 255, 281, 44 S.Ct. 103, 108, 68 L.Ed. 293, Mr. Justice Holmes dissenting. The vehemence of the language used is not alone the measure of the power to punish for contempt. The fires which it kindles must constitute an imminent, not merely a likely, threat to the administration of justice. The danger must not be remote or even probable; it must immediately imperil. 14 We agree with the court below that the editorial must be appraised in the setting of the news articles which both preceded and followed it. It must also be appraised in light of the community environment which prevailed at that time. The fact that the jury was recalcitrant and balked, the fact that it acted under coercion and contrary to its conscience and said so were some index of popular opinion. A judge who is part of such a dramatic episode can hardly help but know that his decision is apt to be unpopular. But the law of contempt is not made for the protection of judges who may be sensitive to the winds of public opinion. Judges are supposed to be men of fortitude, able to thrive in a hardy climate. Conceivably a campaign could be so managed and so aimed at the sensibilities of a particular judge and the matter pending before him as to cross the forbidden line. But the episodes we have here do not fall in that category. Nor can we assume that the trial judge was not a man of fortitude. 15 The editorial's complaint was twofold. One objection or criticism was that a layman rather than a lawyer sat on the bench. That is legitimate comment; and its relevancy could hardly be denied at least where judges are elected. In the circumstances of the present case, it amounts at the very most to an intimation that come the next election the newspaper in question will not support the incumbent. But it contained no threat to oppose him in the campaign if the decision on the merits was not overruled, nor any implied reward if it was changed. Judges who stand for reelection run on their records. That may be a rugged envronment. C riticism is expected. Discussion of their conduct is appropriate, if not necessary. The fact that the discussion at this particular point of time was not in good taste falls far short of meeting the clear and present danger test. 16 The other complaint of the editorial was directed at the court's procedure—its failure to hear both sides before the case was decided. There was no attempt to pass on the merits of the case. The editorial, indeed, stated that there was no way of knowing whether justice was done. That criticism of the court's procedure—that it decided the case without giving both sides a chance to be heard—reduces the salient point of the case to a narrow issue. If the point had been made in a petition for rehearing, and reduced to lawyer's language, it would be of trifling consequence. The fact that it was put in layman's language, colorfully phrased for popular consumption, and printed in a newspaper does not seem to us to elevate it to the criminal level. It might well have a tendency to lower the standing of the judge in the public eye. But it is hard to see on these facts how it could obstruct the course of justice in the case before the court. The only demand was for a hearing. There was no demand that the judge reverse his position—or else. 17 'Legal trials are not like elections, to be won through the use of the meeting-hall, the radio, and the newspaper.' Bridges v. State of California, supra, 314 U.S. at page 271, 62 S.Ct. at page 197, 86 L.Ed. 192, 159 A.L.R. 1346. But there was here no threat or menance to the integrity of the trial. The editorial challenge the propriety of the court's procedure, not the merits of its ruling. Any such challenge, whether made prior or subsequent to the final disposition of a case, would likely reflect on the competence of the judge in handling cases. But as we have said, the power to punish for contempt depends on a more substantial showing. Giving the editorial all of the vehemence which the court below found in it we fail to see how it could in any realistic sense create an imminent and serious threat to the ability of the court to give fair consideration to the motion for rehearing. 18 There is a suggestion that the case is different from Bridges v. State of California, supra, in that we have here only private litigation, while in the Bridges case labor controversies were involved, some of them being criminal cases. The thought apparently is that the range of permissible comment is greater where the pending case generates a public concern. The nature of the case may, of course, be relevant in determining whether the clear and present danger test is satisfied. But, the rule of the Bridges and Pennekamp cases is fashioned to serve the needs of all litigation, not merely select types of pending cases. 19 Reversed. 20 Appendix. 21 On May 26, 1945, a news item stated: 'Burchard further claimed that although he had not known of the option clause, when he learned of it he had immediately proffered a check for $275 rental.' On May 27, 1945, there was a news item which stated: 22 'At 7 p.m., Browning, without listening to argument from counsel for either side on a plaintiff's motion, presented by Dudley Tarlton for Jackson, and without giving the six-man jury opportunity to weigh the evidence, instructed the jury to find against Mayes. 23 'Walter M. Lewright, Mayes' attorney, protested that the court's arbitrary action had ruled that Tarlton's 'one-page motion' did not need supporting argument and citation of authorities.' 24 On May 28, 1945, an article said: 'Browning accepted Tarlton's one-page motion and, without permitting argument or citation of authorities to support the motion, ruled that it be granted. The effect of this ruling was that Browning took the matter from the jury.' 25 That article also included the following statement made by Mayes' attorney to the jury on May 27, 1945: 26 'However, I now advise you that under the law, Judge Browning has the right to compel you, even against the dictates of your conscience, to sign the verdict he has ordered. 27 'As a matter of fact, it is probable that he has the power to put you in jail until such time as you do sign it, and I rather imagine, from what has heretofore taken place in this trial, that unless you do sign the verdict, he will cause you to be put in jail. 28 'As I and my clients feel that you have done all in your power to register your protest and revulsion of feeling at the effect of this decision reached by Judge Browning; as you are helpless to do anything further; and as making you suffer by remaining locked up will not do us a bit of good, I suggest that you sign the verdict and return to your homes with a clear conscience of having done all that you could to protect the rights of a man whom I feel, and evidently you feel, has been done a gross injustice. 29 'While we have no appeal from the court's decision in this case, we do have the right again to appeal to his conscience by presenting a motion for new trial in this action—and which motion we will file and argue strenuously with the hope that in the meantime, he will see the error committed and will rectify the same. 30 'There cannot be any doubt but that the action of you men in registering your protest against this decision, as you have done, will affect him. At least I can only hope that it will. I sincerely thank you.' On May 30, 1945, an editorial stated: 31 'Browning's behavior and attitude has brought down the wrath of public opinion upon his head, properly so. Emotions have been aggravated. American people simply don't like the idea of such goings on, especially when a man in the service of his country seems to be getting a raw deal. * * * Then the plaintiff's counsel offered a motion for an instructed verdict for his client. It was granted immediately, without having him cite his authority or without giving the defendant's attorney a chance to argue against it. 32 'That was the travesty on justice, the judge's refusal to hear both sides. That's where a legal background would have served him in good stead. It is difficult to believe that any lawyer, even a hack, would have followed such high handed procedure in instructing a jury. It's no wonder that the jury balked and public opinion is outraged. 33 'The fact that a serviceman is involved lends drama to the event. But it could have happened to anyone, it can happen to anyone, with a layman sitting as judge in a case where fine points of law are involved. True, the idea that only lawyers are qualified to occupy most public offices has been run into the ground, and in most instances a competent layman would be better qualified, but the county judge's office is an exception. He should be a competent attorney as well as a competent businessman. 34 'It's the tragedy in a case of this sort that the court where the controversial decision was handed down is the court of last resort. It's too bad that appeal can't be made to a district court and heard by a judge who is familiar with proper procedure and able to interpret and weigh motions and arguments by opposing counsel and to make his decisions accordingly. * * * There is no way of knowing whether justice was done, because the first rule of justice, giving both sides an opportunity to be heard, was repudiated.' 35 On May 30, 1945, there appeared a report of a resolution passed by the Sailor's and Soldier's Advisory Council of Corpus Christi 'labeling County Judge Joe D. Browning's order for a directed verdict against Mayes a 'gross miscarriage of justice." That article further stated: 36 'The council's resolution called on Browning to grant Mayes a new trial on the grounds that he had committed an error in instructing the jury to find for the plaintiff. The petition asked that Browning, upon granting the new trial, should disqualify himself to further sit as judge in the trial, and should permit the trial to be retried before another judge and jury. * * * The trial reached a climax Saturday night when rowning, o n motion of Dudley Tarlton Jackson's counsel, and without argument or citation of authority, instructed the six-man County Court jury to find for Jackson. The jury twice refused, both times bringing in verdicts in favor of Mayes and against Jackson. 37 'Browning had the jury confined to the courthouse jury room all Saturday night. Sunday morning, when the court convened, the jury reported that it still had not signed the verdict in favor of Jackson.DP 'Browning announced that he would lock the jury up again until Monday morning. However, Walter M. Lewright advised the jurymen that they should not continue to 'suffer' any longer and should sign the verdict since Browning had the legal right to force them to do so. The jury signed the verdict but appended a statement asserting that they did so under pressure.' On May 31, 1945, a news story said: 38 'Three local groups were reported last night to be preparing petitions requesting County Judge Joe D. Browning to grant Pvt. Joe L. Mayes a new trial in the Playboy Cafe ouster suit. 39 'One petition is reported being drawn by a parents and teachers' group, another by a service mothers' group, and the third is being drawn for independent circulation among parents of men in service. 40 'The new petitions are said to follow the general outline of a petition adopted by the Corpus Christi Soldier's and Sailor's Advisory Council Tuesday night. This petition called on Browning to grant a new trial and upon doing so to disqualify himself and permit the trial to go on under another judge and jury. Action on the petitions is expected shortly. 41 'The council's petition, drawn up by five veterans' organizations with a membership of more than 1,000, followed by a few hours the filing of a motion for a new trial by Walter M. Lewright and LeGrand Woods, Mayes' counsels * * *. It came to a climax Sunday when Browning Saturday night accepted without argument or citation of authority a motion by Dudley Tarlton Jackson's lawyer, for an instructed verdict * * *. The jury was kept Saturday night in the Court House. Sunday morning, following a threat by Browning to keep the jury together until they did sign, the juryman signed the verdict, appending a statement that they did so against the dictates of their conscience.' 42 Mr. Justice MURPHY (concurring). 43 While joining in the opinion of the Court, I believe that the importance of the problem raised by this case cannot be overemphasized. A free press lies at the heart of our democracy and its preservation is essential to the survival of liberty. Any inroad made upon the constitutional protection of a free press tends to undermine the freedom of all men to print and to read the truth. 44 In my view, the Constitution forbids a judge from summarily punishing a newspaper editor for printing an unjust attack upon him or his method of dispensing justice. The only possible exception is in the rare instance where the attack might reasonably cause a real impediment to the administration of justice. Unscrupulous and vindictive criticism of the judiciary is regrettable. But judges must not retaliate by a summary suppression of such criticism for they are bound by the command of the First Amendment. Any summary suppression of unjust criticism carries with it an ominous threat of summary suppression of all criticism. It is to avoid that threat that the First Amendment, as I view it, outlaws the summary contempt methods of suppression. 45 Silence and a steady devotion to duty are the best answers to irresponsible criticism; and those judges who feel the need for giving a more visible demonstration of their feelings may take advantage of various laws passed for that purpose which do not impinge upon a free press. The liberties guaranteed by the First Amendment, however, are too highly prized to be subjected to the hazards of summary contempt procedure. 46 Mr. Justice FRANKFURTER, with whom The CHIEF JUSTICE concurs (dissenting). 47 Today's decision, in efect though not in terms, holds unconstitutional a power the possession of which by the States this Court has heretofore deemed axiomatic. 48 It cannot be repeated too often that the freedom of the press so indispensable to our democratic society presupposes an independent judiciary which will, when occasion demands, protect that freedom. To help achieve such an independent judiciary and to protect its members in their independence, the States of the Union, from the very beginning and throughout our history, have provided for prompt suppression and punishment of interference with the impartial exercise of the judicial process in an active litigation. Interference was punished not by the ordinary criminal process of trial before a jury, but through a distinctive proceeding, summary in character in the sense that a judge without a jury might impose punishment. Such protective measures against publications seriously calculated to agitate the disinterested operation of the judicial process in a litigation awaiting disposition have been deemed part of the constitutional authority of the States to establish courts to do justice as between man and man and beween man and society. 49 The opinion of the Court reviews the Texas Court as though we were merely reviewing the judgment of a court lower in the judiciary hierarchy. Formally, no doubt, we have before us the correctness of a decision of the Court of Criminal Appeals of Texas. But that decision is challenged as offending the Due Process Clause of the Fourteenth Amendment. We are not, therefore, merely reviewing a decision of the Texas Court; we are passing upon the power of the State of Texas. 'The question before us must be considered in the light of the total power the State possesses * * *.' Skiriotes v. State of Florida, 313 U.S. 69, 79, 61 S.Ct. 924, 930, 85 L.Ed. 1193. To paraphrase what was said in Rippey v. State of Texas, 193 U.S. 504, 509, 24 S.Ct. 516, 517, 48 L.Ed. 767, the question for us is this: if Texas had expressly provided in its Constitution that publications in the circumstances here found by the Texas Court shall constitute contempt of court, would this Court hold that such finding by the Texas Court and such a provision in the Texas Constitution collide with the Constitution of the United States? 50 Texas, speaking through its authoritative judicial voice, says: 'When the several publications in the instant case are considered together and in their chronological order of appearance, there is no escape from the conclusion that it was the purpose and intent of the publishers thereof to force, compel, and coerce Judge Browning to grant Mayes a new trial. The only reason or motive for so doing was because the publishers did not agree with Judge Browning's decision or conduct of the case. According to their viewpoint, Judge Browning was wrong and they took it upon themselves to make him change his decision.' Tex.Cr.App., 193 S.W.2d 178, 188, 189. 51 After a painstaking examination of the series of publications in the setting of the circumstances of the case, and an extended hearing, all of which comprises a record here of more than 400 pages, the Court below reached this conclusion: 'It is hard to conceive how the public press could have been more forcibly or substantially used or applied to make, force, and compel a judge to change a ruling or decision in a case pending before him than was here done. The publications were not only reasonably calculated to accomplish that purpose but there was also a 'clear and present danger' that they would and the likelihood that such result would follow was 'extremely serious' and the degree of 'imminence extremely high." Tex.Cr.App., 193 S.W.2d at page 189. It must be emphasized that the publications in question were made after it was notorious that a motion for a new trial had already been made and would shortly be heard. In the light of this crucial fact—that the trial judge would shortly be called upon to reconsider his instruction to the jury t find for the plaintiff—the court below found that 'the publications and their purpose were to impress upon Judge Browning (a) that unless he granted the motion for a new trial he would be subjected to suspicion as to his integrity and fairness and to odium and hatred in the public mind; (b) that the safe and secure course to avoid the criticism of the press and public opinion would be to grant the motion and disqualify himself from again presiding at the trial of the case; and (c) that if he overruled the motion for a new trial, there would be produced in the public mind such a disregard for the court over which he presided as to give rise to a purpose in practice to refuse to respect and obey any order, judgment, or decree which he might render in conflict with the views of the public press.' Tex.Cr.App., 193 S.W.2d at page 189. 52 The Court minimizes these findings by pointing to a likeness between them and those that were made in Toledo Newspaper Co. v. United States, 247 U.S. 402, 38 S.Ct. 560, 62 L.Ed. 1186, and found inadequate by Mr. Justice Holmes' dissent, an inadequacy subsequently supported by our decision in Nye v. United States, 313 U.S. 33, 61 S.Ct. 810, 85 L.Ed. 1172. The Court also draws on Craig v. Hecht, 263 U.S. 255, 44 S.Ct. 103, 68 L.Ed. 293, as though what was said there applies here. But those three case involved only the construction of the federal statute. Congress decided to allow the power to punish for contempt theretofore vested in the lower federal courts, when invoked against misbehavior not in the presence of the court, only when such misbehavior was 'so near' the presence of the court 'as to obstruct the administration of justice.' Act of March 2, 1831, 4 Stat. 487, § 268 of the Judicial Code, 28 U.S.C. § 385, 28 U.S.C.A. § 385; Nye v. United States, supra. Texas, however, has seen fit not to restrict the power of its courts to punish for contempt as does the federal statute. The power to punish for contempt which the Texas legislature granted to its courts more than 100 years ago is not restricted as Congress restricted the contempt power of the lower federal courts. See Acts 1846, p. 200, Vernon's Texas Statutes, Art. 1955. It is an inadmissible jump from finding that conduct is not contempt within the federal Act, to finding that an exertion of State power offended the Fourteenth Amendment. Yet the Court now finds that Texas has transgressed the implications of the Due Process Clause by punishing conduct which this Court in the Toledo case thought was within the scope even of the federal Act—a construction which it occurred to no member of the Court to question on constitutional grounds. 53 The difference between the issue before us and that raised by the Toledo and Craig cases is basic. In those cases the Court had before it, and Mr. Justice Holmes was concerned only with, the proper application of a federal statute setting a narrowly confined scope to the power to punish for contempt. The Court was not concerned with the Constitutional power of the States to enforce a broader contempt policy. Such a power, in fact, had been assumed to be beyond doubt. 'When a case is finished courts are subject to the same criticism as other people; but the propriety and necessity of preventing interference with the course of justice by premature statement, argument, or intimidation hardly can be denied.' So wrote Mr. Justice Holmes for this Court. Patterson v. State of Colorado, 205 U.S. 454, 463, 27 S.Ct. 556, 558, 51 L.Ed. 879, 10 Ann.Cas. 689. To be sure, he wrote this 40 years ago, and on several occasions thereafter, as part of the formulation of his profound tolerance for freedom of expression, he spoke out against misuse of the power to punish for contempt. But nothing that that great judge ever wrote qualified in the slightest his conviction that the theory of our system of justice is 'that the conclusions to be reached in a case will be induced only by evidence and argument in open court, and not by any outside influene, whether of private talk or public print.' Patterson v. State of Colorado, supra, 205 U.S. at page 462, 27 S.Ct. at page 558, 51 L.Ed. 879, 10 Ann.Cas. 689. Mr. Justice Holmes had no tolerance whatever for any special claim by judges to immunity from criticism. He was against anything that smacked of summary proceeding for what was known as 'scandalizing the court,' that is, speaking ill of a court as an institution and thereby argumentatively bringing it into disrepute. He would allow summary punishment of conduct calculated to affect a judge in the discharge of his duty only as to matters 'pending' before him in the active sense of that term. 'It is not enough that somebody may hereafter move to have something done.' So he wrote, dissenting, in Craig v. Hecht, supra, 263 U.S. at page 281, 44 S.Ct. at page 108, 68 L.Ed. 293. And in his misapplied dissent in the Toledo case he expressed his impatience with federal judges who take notice of newspaper comments to which a judge should be indifferent. But his opinion in that case conveys not a doubt as to the power of States to enforce a policy for the punishment of contempt in relation to a pending case, though the State policy be not limited as Congress limited the power of the federal courts to punish for contempt. There is not a breath of a suggestion in the opinion in the Nye case that the restricted geographic meaning which the Court gave to the Act of Congress designed to limit the power of the lower federal courts was required by constitutional considerations. The opinions of Mr. Justice Holmes contain not the remotest hint that the Due Process Clause withdrew from the States the power to base a finding of contempt on publication aimed at a particular outcome of a matter awaiting adjudication. And it is worthy of note that in the very opinion in which the phrase 'clear and present danger' was first used by Mr. Justice Holmes, he referred to his opinion in the Patterson case, and not with disapproval. See Schenck v. United States, 279 U.S. 47, 51, 52, 39 S.Ct. 247, 248, 249, 63 L.Ed. 470. 54 We are not dealing here with criticisms whether temperate or unbridled, of action in a case after a judge is through with it, or of his judicial qualifications, or of his conduct in general. Comment on what a judge has done—criticism of the judicial process in a particular case after it has exhausted itself—no matter how ill-informed or irresponsible or misrepresentative, is part of the precious right of the free play of opinion. Whatever violence there may be to truth in such utterances must be left to the correction of truth. 55 The publications now in question did not constitute merely a narrative of a judge's conduct in a particular case nor a general commentary upon his competence or his philosophy. Nor were they a plea for reform of the Texas legal system to the end that county court judges should be learned in the law and that a judgment in a suit of forcible detainer may be appealable. The thrust of the articles was directed to what the judge should do on a matter immediately before him, namely to grant a motion for a new trial. So the Texas Court found. And it found this not in the abstract but on the particular stage of the happenings and in the circumstances disclosed by the record. The Texas Court made its findings with reference to the locality where the events took place and in circumstances which may easily impart significance to the Texas Court but may elude full appreciation here. 56 Corpus Christi, the locale of the drama, had a population of less than 60,000 at the last census, and Nueces County about 92,000. The three papers which published the articles complained of are under common control and are the only papers of general circulation in the area. It can hardly be a compelling presumption that such papers so controlled had no influence at a time when patriotic fervor was running high, in stirring up sentiment of powerful groups in a small community in favor of a veteran to whom, it wascharged, a great wrong had been done. It would seem a natural inference, as the court below in effect found, that these newspapers whipped up public opinion against the judge to secure reversal of his action and then professed merely to report public opinion. We cannot say that the Texas Court could not properly find that these newspapers asked of the judge, and instigated powerful sections of the community to ask of the judge, that which no one has any business to ask of a judge, except the parties and their counsel in open court, namely, that he should decide one way rather than another. Only if we can say that the Texas Court had no basis in reason to find what it did find, can we deny that the purpose of the articles in their setting was to induce the judge to grant a new trial. Surely a jury could reach such a conclusion on these facts. We ought not to allow less leeway to the Texas Court in drawing inferences than we would to a jury. Because it is a question of degree, the field in which a court, like a jury, may 'exercise its judgment is necessarily a wide one.' Mr. Justice Brandeis in Schaefer v. United States, 251 U.S. 466, 483, 40 S.Ct. 259, 265, 64 L.Ed. 360. Of course, the findings by a State court of what are usually deemed facts cannot foreclose our scrutiny of them if a constitutional right depends on a fair appraisal of those facts. But it would be novel doctrine indeed to say that we may consider the record as it comes before us from a State court as though it were our duty or right to ascertain the facts in the first instance. A State cannot by torturing facts preclude us from considering whether it has thereby denied a constitutional right. Neither can this Court find a violation of a constitutional right by denying to a State its right to a fair appraisal of facts and circumstances peculiarly its concern. Otherwise, in every case coming here from a State court this Court might make independent examination of the facts, because every right claimed under the Constitution is a fundamental right. The 'most respectful attention' which we have been told is due to a State would then be merely an empty profession. See Pennekamp v. State of Florida, 328 U.S. 331, 335, 66 S.Ct. 1029. 57 If under all the circumstances the Texas Court here was not justified in finding that these publications created 'a clear and present danger' of the substantive evil that Texas had a right to prevent, namely the purposeful exertion of extraneous influence in having the motion for a new trial granted, 'clear and present danger' becomes merely a phrase for covering up a novel, iron constitutional doctrine. Hereafter the States cannot deal with direct attempts to influence the disposition of a pending controversy by a summary proceeding, except when the misbehavior physically prevents proceedings from going on in court, or occurs in its immediate proximity. Only the pungent pen of Mr. Justice Holmes could adequately comment on such a perversion of the purpose of his phrase. 58 Changes are rung on the remark of Mr. Justice Holmes in the Toledo case that 'a judge of the United States is expected to be a man of ordinary firmness of character.' 247 U.S. at page 424, 38 S.Ct. at page 565, 62 L.Ed. 1186. But it is pertinent to observe that that was said by an Olympian who was so remote from the common currents of life that he did not read newspapers. Even a conscientious judge not a layman, and not merely one serving under a short judicial tenure, may find himself in a dilemma when subjected to a barrage pressing a particular result in a case immediately before him. He may not unnaturally be moved to do what is urged, or he may be impelled to display his independence and not give to the arguments on behalf of the motion for a new trial that serene and undisturbed consideration which often leads judges to grant such a motion. It has not been unknown that judges persist in error to avoid giving the appearance of weakness and vacillation. Thus, one or another of the litgants befo re the Court may have been denied that disinterested exercise of judgment which is of the essence of the judicial process. The demands found to have been made upon the judge by these papers may agitate even a conscientious judge. He may himself be unaware of the extent to which his powers of reason have not the sway they would otherwise have. Or a judge, proud of his independence, may unconsciously have his back stiffened, and thereby his mind, when hearing the motion for a new trial and passing on its validity. Judges are not merely the habitations of bloodless categories of the law which pursue their predestined ends. 59 The fact that it cannot be demonstrated how the delicate balance of an adjudication was tampered with, or whether it was, does not prove that it was not tampered with. To rely on the assumption that judges are men of fortitude and that no judge 'worthy of the name' would be influenced in his decision by a publication directed toward a particular disposition of a pending litigation, is to say in effect that the Due Process Clause precludes a State from believing that there may be such a psychological danger, short of the fantastic situation where a judge confesses that he decided as he did because of newspaper pressure, or avows that he came awfully close to being derelict in his judicial duty because of such pressure. In Bridges v. State of California, 314 U.S. 252, 62 S.Ct. 190, 86 L.Ed. 192, 159 A.L.R. 1346, this Court did not profess to make a constitutional dogma of so questionable a psychological assumption. It did not condemn outright the power of a State summarily to punish for contempt a publication uttered outside of court but brought to bear upon a pending case. The opinion of the Texas Court gives every indication of scrupulous obedience to the requirements of the Bridges case. Nor did the dissenting judge find conflict with the Bridges case. If we accord 'most respectful attention' to what the State court has decided, I am unable to find any ground for rejecting the application which the Texas Court made to the circumstances of this case of the principles which it drew from the Bridges case. 60 Is it conceivable that even the most doctrinaire libertarian would think it consonant with the impartiality which adjudication presupposes to publish a poll regarding the outcome desired by a community in a pending case? How can the insertion into the scales of justice of a newspaper's own notion of the desire of a community for a particular result in a pending case be more permissible than the report of public feeling as ascertained by a public poll? Again, suppose the newspaper articles here in controversy had been enclosed in a letter to the judge urging, on the basis of these articles, a new trial. Would the Constitution of the United States forbid a State to deal with such conduct through the corrective process of contempt? But a denial of this power to the States where newspapers carry the same articles directed to the same end can only be on the basis that private correspondence has less constitutional protection than have newspapers. 61 To agree with a principle in principle only to depart from it in practice has not been so fruitful of good in the world of diplomacy as to suggest its importation into the judicial process. If it be deemed that the Due Process Clause put an end to the historic power of States to allow summary proceedings for contempt by interference with an actually pending controversy, or even if it be deemed offensive to due process for the judge whose conduct is called in question to sit in judgment upon the contemnor because self-interest is too great, see Tumey v. State of Ohio, 273 U.S. 510, 47 S.Ct. 437, 71 L.Ed. 749, 50 A.L.R. 1243, and Cooke v. United States, 267 U.S. 517, 539, 45 S.Ct. 390, 396, 69 L.Ed. 767, such a break with the past had best be completely candid. It may well be the deeper wisdom to treat with intelligent neglect paragraphs that are calculated and intended to influenc the dispo sition of litigation. But the wisdom of such wisdom is not the measure of the constitutional power of the several States to deal with extraneous influence designed to affect the outcome of a particular case. 62 We think the judgment should be affirmed. 63 Mr. Justice JACKSON (dissenting). 64 This is one of those cases in which the reasons we give for our decision are more important to the development of the law than the decision itself. 65 It seems to me that the Court is assigning two untenable, if not harmful reasons for its action. The first is that this newspaper publisher has done no wrong. I take it that we could not deny the right of the state to punish him if he had done wrong and I do not suppose we could say that the traditional remedy was an unconstitutional one. 66 The right of the people to have a free press is a vital one, but so is the right to have a calm and fair trial free from outside pressures and influences. Every other right, including the right of a free press itself, may depend on the ability to get a judicial hearing as dispassionate and impartial as the weakness inherent in men will permit. I think this publisher passed beyond the legitimate use of press freedom and infringed the citizen's right to a calm and impartial trial. I do not think we can say that it is beyond the power of the state to exert safeguards against such interference with the course of trial as we have here. 67 This was a private lawsuit between individuals. It involved an issue of no greater public importance than which of two claimants should be the tenant of the 'Playboy Cafe.' The public interest in the litigation was that dispassionate justice be done by the court and that it appear to be done. 68 The publisher had a complete monopoly of newspaper publicity in that locality. For reasons that are not apparent, the papers took an unusual interest in the proceeding. They first made what the court agrees was a 'rather sketchy and one-sided report of a case.' This is not overstatement. The former tenant had tendered a check and the newspaper report represented it as a payment of rent; it made no reference to that fact that the check was postdated and was therefore no payment at all. Reports played up the fact that its favorite among the litigants was a veteran. The community became aroused. Then the newspaper published editorials which attacked the judge while a motion for retrial was pending with what the prevailing opinion concedes was 'strong language, intemperate language, and, we assume, an unfair criticism.' The object of the publicity appears to have been to get the judge to reverse himself and to grant a new trial. 69 The fact that he did not yield to it does not prove that the attack was not an effective interference with the administration of justice. The judge was put in a position in which he either must appear to yield his judgment to public clamor or to defy public sentiment. The consequence of attacks may differ with the temperament of the judge. Some judges may take fright and yield while others become more set in their course if only to make clear that they will not be bullied. This judge was evidently of the latter type. He was diverted from the calm consideration of the litigation before him by what he regarded as a duty to institute a contempt proceeding of his own against his tormentors. 70 For this Court to imply that this kind of attack during a pending case is all right seems to me to compound the wrong. The press of the country may rightfully take the decision of this Court to mean indifference toward, if not approval of, such attacks upon courts during pending cases. I think this opinion conveys a wrong impression of the responsibilities of a free press for the calm and dispassionate administration of justice and that we should not hesitate to condemn what has been done here. 71 But even worse is that this Court appears to sponsor the myth that judges are not as other men are, and that therefore newspaper attacks on the are negli gible because they do not penetrate the judicial armor. Says the opinion: 'But the law of contempt is not made for the protection of judges who may be sensitive to the winds of public opinion. Judges are supposed to be men of fortitude, able to thrive in a hardy climate.' With due respect to those who think otherwise, to me this is an illfounded opinion, and to inform the press that it may be irresponsible in attacking judges because they have so much fortitude is ill-advised, or worse. I do not know whether it is the view of the Court that a judge must be thickskinned or just thickheaded, but nothing in my experience or observation confirms the idea that he is insensitive to publicity. Who does not prefer good to ill report of his work? And if fame—a good public name—is, as Milton said, the 'last infirmity of noble mind,' it is frequently the first infirmity of a mediocre one. 72 From our sheltered position, fortified by life tenure and other defenses to judicial independence, it is easy to say that this local judge ought to have shown more fortitude in the face of criticism. But he had no such protection. He was an elective judge, who held for a short term. I do not take it that an ambition of a judge to remain a judge is either unusual or dishonorable. Moreover, he was not a lawyer, and I regard this as a matter of some consequence. A lawyer may gain courage to render a decision that temporarily is unpopular because he has confidence that his profession over the years will approve it, despite its unpopular reception, as has been the case with many great decisions. But this judge had no anchor in professional opinion. Of course, the blasts of these little papers in this small community do not jolt us, but I am not so confident that we would be indifferent if a news monopoly in our entire jurisdiction should perpetrate this kind of an attack on us. 73 It is doubtful if the press itself regards judges as so insulated from public opinion. In this very case the American Newspaper Publishers Association filed a brief amicus curiae on the merits after we granted certiorari. Of course, it does not cite a single authority that was not available to counsel for the publisher involved, and does not tell us a single new fact except this one: 'This membership embraces more than 700 newspaper publishers whose publications represent in excess of eighty per cent of the total daily and Sunday circulation of newspapers published in this country. The Association is vitally interested in the issue presented in this case, namely, the right of newspapers to publish news stories and editorials on cases pending in the courts.' 74 This might be a good occasion to demonstrate the fortitude of the judiciary. 1 That appears to be the appropriate remedy in Texas in this type of case. Ex parte Miller, 91 Tex.Cr.App. 607, 240 S.W. 944. As to the Texas procedure where there is an adjudication of contempt for violating an order in a civil cause, see Thomas v. Collins, 323 U.S. 516, 65 S.Ct. 315, 89 L.Ed. 430. 2 The findings which the Court in that case sustained were as follows: '(a) Because * * * their manifest purpose was to create the impression on the mind of the court that it could not decide in the matter before it in any but the one way without giving rise to such a state of suspicion as to the integrity or fairness of its purpose and motives as might engender a shrinking from so doing. (b) Because the publications directly tended to incite to such a condition of the public mind as would leave no room for doubt that if the court acting according to its convictions awarded relief, it would be subject to such odium and hatred as to restrain it from doing so. (c) Because the publications also obviously were intended to produce the impression that any order which might be rendered by the court in the discharge of its duty if not in accord with the conceptions which the publications were sustaining, would be disregarded and cause a shrinking from performing duty to avoid the turmoil and violence which the publications, it may be only by covert insinuation, but none the less assuredly invited. And (d) because the publications were of a character, not merely because of their intemperance but because of their general tendency, to produce in the popular mind a condition which would give rise to a purpose in practice to refuse to respect any order which the court might render if it conflicted with the supposed rights of the city espoused by the publications.' 247 U.S. t pages 41 4, 415, 38 S.Ct. at page 562, 62 L.Ed. 1186. 3 The charge against petitioners also set forth other allegedly false statements: (1) that Mayes was not an exinsurance man but in the insurance business at the time; (2) that terms of the contract on which Jackson sued were not disclosed; (3) that the arrangements under which the premises had been operated for some months before Mayes was inducted into the armed services were not disclosed; (4) that the articles failed to state the legal grounds on which Jackson's motion for an instructed verdict was argued and granted; (5) that much materia evidence was omitted which would have enabled the public to form a fair estimate of the nature of the controversy; (6) that the principal plaintiffs who were highly respected business and professional men of Corpus Christi were not named. These omissions, though reflecting on the quality of the reporting, do not seem to us to be of importance here.
23
331 U.S. 398 67 S.Ct. 1265 91 L.Ed. 1563 NATIONAL LABOR RELATIONS BOARDv.E. C. ATKINS & CO. No. 419. Argued March 7—10, 1947. Decided May 19, 1947. Rehearing Denied June 16, 1947. See 331 U.S. 868, 67 S.Ct. 1725. Ruth Weyand, of Washington, D.C., for petitioner. Mr. Frederic D. Anderson, of Indianapolis, Ind., for respondent. Mr. Justice MURPHY delivered the opinion of the Court. 1 The problem posed by this case is whether private plant guards, who are required to be civilian auxiliaries to the military police of the United States Army, are employees within the meaning of § 2(3) of the National Labor Relations Act, 29 U.S.C. § 152(3), 29 U.S.C.A. § 152(3). 2 At all material times, the respondent corporation was engaged in the manufacture of saws, tools and armor plate. It employed more than 1,200 production and maintenance employees at its two plants at Indianapolis, Indiana. Before it began to produce armor plate for defense and war purposes, respondent employed about six watchmen or guards. When it entered upon war production, however, the War Department required that an auxiliary military police force of sixty-four members be established to guard the plants. 3 In1943, afte r the necessary additional guards had been recruited, a union1 petitioned the National Labor Relations Board for investigation and certification of representatives pursuant to § 9(c) of the Act, 29 U.S.C.A. § 159(c). It was alleged that the union represented the sixty-four plant guards employed by respondent at its two plants. The respondent moved to dismiss the petition on the ground that it was not the employer of the guards within the meaning of § 2(2) and that the guards were not employees as defined by § 2(3). A hearing was thereupon held and evidence concerning the status of the guards was introduced. 4 On October 19, 1943, the Board concluded from the evidence thus submitted that these plant guards were employees within the meaning of § 2(3) despite their status as civilian auxiliaries to the military police. 52 N.L.R.B. 1470. It held that all the plant guards at respondent's two plants, excluding the chief guards, lieutenants and all other supervisory employees with authority to hire, promote, discharge, discipline, or otherwise effect changes in the status of employees, or effectively recommend such action, constituted a unit appropriate for collective bargaining. An election was therefore directed to be held, which resulted in the union in question being chosen as bargaining representative. The union was certified by the Board as the exclusive representative of the plant guards. 5 Subsequently, the union filed charges that the respondent had refused to bargain collectively. A complaint was issued by the Board, followed by a hearing at which evidence regarding that refusal was introduced. The Board, on May 30, 1944, issued its decision in which it concluded that the guards were employees of respondent and that the latter had committed unfair labor practices in refusing to bargain with the union. 56 N.L.R.B. 1056. 6 The Board accordingly issued an order requiring respondent to cease and desist from refusing to bargain collectively with the union, and commanding it to bargain with the union, upon request, in respect to rates of pay, wages, hours of employment and other conditions of employment. The Seventh Circuit Court of Appeals declined to enforce the Board's order, holding (1) that the guards were not employees of the respondent within the meaning of § 2(3) of the Act since they were militarized, and (2) that even if the militarized guards were to be considered as employees of respondent, enforcement of the Board's order should not be allowed because to do so would be or would likely be inimical to the public welfare. 147 F.2d 730. 7 In filing a petition in this Court for a writ of certiorari, the Board noted that the guard forces at respondent's plants had been demilitarized early in 1944, but urged that the case was not thereby rendered moot. We granted certiorari, vacated the judgment below and remanded the case to the Circuit Court of Appeals 'for further consideration of the alleged changed circumstances with respect to the demilitarization of the employees involved, and the effect thereof on the Board's orders.' 325 U.S. 838, 65 S.Ct. 1413, 89 L.Ed. 1965. 8 The Board and the respondent entered into a stipulation relative to the dates and circumstances of the demilitarization of the guards. The stipulation noted that most of the guards had been released from service and that only eleven of them had been retained as watchmen by respondent as of February 23, 1946; and those eleven had been 'sworn in as Deputy Policemen by the City of Indianapolis.' The Board then filed a motion in the Circuit Court of Appeals for a decree enforcing its order. This motion was denied and the prior holding was reaffirmed, the court stating that the demilitaization was irrevelant to the issue of whether the plant guards were employees at the time when the respondent refused to bargain with the union. 7 Cir., 155 F.2d 567. The importance of the problem raised by the case, together with a conflict over the answer to this problem between the court below and the Sixth Circuit Court of Appeals, National Labor Relations Board v. Jones & Laughlin Steel Corp., 146 F.2d 718, prompted us to grant a further review of the case. 9 We agree with the Circuit Court of Appeals that the demilitarization of the guards did not render the case moot and that it had no effect upon the prime issue in the case. The Board's order was based upon a holding that the respondent committed an unfair labor practice by refusing to recognize and bargain with the union selected by the militarized guards. And that refusal occurred at a time when the guards were still militarized. A determination that the respondent had a statutory duty to bargain with the union at that time is therefore essential to the validity of the Board's order. The fact that the guards were subsequently demilitarized did not affect their status as employees at this crucial juncture; nor did it relieve respondent of any duty to bargain that it might otherwise have had at that point. 10 The Board's order, moreover, was a continuing direction to bargain collectively with the union designated by the guards. Demilitarization has not dispensed with whatever duty respondent may have now or in the future to comply with that order. If the guards were employees of respondent entitled to the benefits of the Act during the period of militarization, a fortiori they are employees now that all connections with the Army have been severed; and their statutory rights continue to be entitled to full respect. Respondent's guard force still remains in existence, although considerably reduced in size, and the union presumably continues to be the representative of the guards. Under such circumstances, the case is not moot. National Labor Relations Board v. Pennsylvania Greyhound Lines, 303 U.S. 261, 271, 58 S.Ct. 571, 576, 82 L.Ed. 831, 115 A.L.R. 307; J.I. Case Co. v. National Labor Relations Board, 321 U.S. 332, 334, 64 S.Ct. 576, 578, 88 L.Ed. 762. See also Federal Trade Commission v. Goodyear Tire & Rubber Co., 304 U.S. 257, 260, 58 S.Ct. 863, 864, 82 L.Ed. 1326. 11 As to the merits, it is elementary that the Board has the duty of determining in the first instance who is an employee for purposes of the National Labor Relations Act and that the Board's determination must be accepted by reviewing courts if it has a reasonable basis in the evidence and is not inconsistent with the law. National Labor Relations Board v. Hearst Publications, 322 U.S. 111, 64 S.Ct. 851, 88 L.Ed. 1170. Realizing that labor disputes and industrial strife are not confined to those who fall within ordinary legal classifications. Congress has not attempted to spell out a detailed or rigid definition of an employee or of an employer. The relevant portion of § 2(3) simply provides that 'The term 'employee' shall include any employee, * * *.' In contrast, § 2(2) states that 'The term 'employer' includes any person acting in the interest of an employer, directly or indirectly, * * *.' As we recognized in the Hearst case, the terms 'employee' and 'employer' in this statute carry with them more than the technical and traditional common law definitions. They also draw substance from the policy and purposes of the Act, the circumstances and background of particular employment relationships, and all the hard facts of industrial life. 12 And so the Board, in performing its delegated function of defining and applying these terms, must bring to its task an appreciation of economic realities, as well as a recognition of the aims which Congress sought to achieve by this statute. This does not mean that it should disregard the technical and traditional concepts of 'employee' and 'employer.' But it is not confined to thos concepts. It is free to take account of the more relevant economic and statutory considerations. And a determination by the Board based in whole or in part upon those considerations is entitled to great respect by a reviewing court, due to the Board's familiarity with the problems and its experience in the administration of the Act. 13 Laying aside for the moment the matter of militarization, we cannot say in this case that the Board would be legally unjustified in holding that the rank and file plant guards are employees within the meaning of the Act. They bear essentially the same relation to management as maintenance and production employees. In fact, they are indistinguishable from ordinary watchmen, gatemen, patrolmen, firemen and guards—persons who have universally been regarded and treated as employees for purposes of union membership and employee benefits. They perform such duties as inspecting persons, packages and vehicles, carrying cash to various parts of the plant, and generally surveying the premises to detect fires, suspicious circumstances and sabotage. Moreover, the guards in question are not supervisors; they possess no power to affect the working conditions of other employees. Without collective bargaining, they are subject to the unilateral determination by the employer of their wages, hours, seniority, tenure and other conditions of work. Individually, they suffer from inequality of bargaining power and their need for collective action parallels that of other employees. From any economic or statutory standpoint, the Board would be warranted in treating them as employees. Even under conventional standards, they are controlled by management to an extent sufficient to justify designating them as employees. 14 Nor can we say, as a matter of law, that permitting plant guards to be considered as employees entitled to the benefits of the Act would make them any less loyal to their employer in carrying out their designated tasks. In guarding the plant and personnel against physical danger, they represent the management's legitimate interest in plant protection. But that function is not necessarily inconsistent with organizing and bargaining with the employer on matters affecting their own wages, hours and working conditions. They do not lose the right to serve themselves in these respects merely because in other respects they represent a separate and independent interest of management. As in the case of foremen, we see no basis in the Act whatever for denying plant guards the benefits of the statute when they take collective action to protect their collective interests. Packard Motor Car Co. v. National Labor Relations Board, 330 U.S. 485, 67 S.Ct. 789. 15 We cannot assume, moreover, that labor organizations will make demands upon plant guard members or extract concessions from employers so as to decrease the loyalty and efficiency of the guards in the performance of their obligations to the employers. There is always that possibility, but it does not qualify as a legal basis for taking away from the guards all their statutory rights. In other words, unionism and collective bargaining are capable of adjustments to accommodate the special functions of plant guards. 16 The crucial problem in this case, however, is whether the militarization of the plant guards changed their status as employees as a matter of law so as to prohibit the Board from extending to them the benefits of the Act which they would otherwise have. The short answer to that problem is that militarization as such does not necessarily change the status of plant guards. It may or may not bring about a change, depending upon the particular circumstances. The militarization may be a qualified one; the employer may retain power to fix wages, hours and other conditions of work; the need and desirability for collective action on the part of the guards may exist as to the matters over which the employer retains control; and a recognition of the statutory rights of the guars may be e ntirely consistent with their military obligations. If that is the case, the guards remain employees for purposes of the Act. But if the militarization is such as to transfer to the Army all the matters over which the employer would normally have control, matters which would form the basis for collective bargaining as contemplated by the Act, the guards may lose their status as private employees within the purview of the statute. 17 The Board's determination that the militarization of the guards in respondent's plants was of a type that did not alter their status as employees under the Act must therefore be tested by the applicable War Department regulations and by the evidence introduced at the hearing before the Board. If such a result is consistent with the regulations and has a reasonable basis in the other evidence, the Board's order must be sustained. 18 The plant guards in this case were enrolled as civilian auxiliaries to the military police under War Department regulations issued pursuant to Executive Order No. 8972, dated December 12, 1941. That order authorized the Secretary of War to establish and maintain military guards and patrols, and to take other appropriate measures, to protect certain strategic premises, materials and utilities from injury and destruction. The Secretary of War accordingly directed the military organization of plant guard forces as auxiliary military police at plants important to the prosecution of the war, the directive to that effect being issued by the Adjutant General on July 2, 1942. Supplementary regulations were contained in Circular No. 15, issued on March 17, 1943, by Headquarters, Army Service Forces.2 19 As stated by these regulations, the purpose of the military organization of the plant guards was 'to increase the authority, efficiency, and responsibility of guard forces at plants important to the prosecution of the war, and through military training to provide auxiliary forces throughout the United States to supplement the Army in wartime emergency situations.'3 It was made clear, however, that plant managements were not relieved of their responsibility 'for providing adequate protection at all times against all hazards.'4 In other words, employers who wished to obtain government contracts for the production of war materials were required to provide 'adequate protection' for their plants where the material was to be produced; if the existing plant protection forces were inadequate, additional guards were to be recruited by the employers. But all the original and additional guards were to be enrolled as civilian auxiliaries to the military police. 20 The military authorities reserved the right to veto the hiring or firing of any plant guard where such action by the employer might impair the efficiency of the guard force.5 And the military plant guard officers were authorized to take appropriate action 'through the plant management' to correct conditions which might result in 'defective or inadequate performance by the guard forces of its ordinary protective duties.'6 21 The functions of these civilian auxiliaries to the military police were stated to be twofold: '(1) To provide internal and external protection of the plant against sabotage, espionage, and natural hazards. (2) To serve with the army in providing protection to the plant and its environs in emergency situations.'7 They were subject to call for military service even where emergencies arose at places other than the plants where they normally worked. To these ends, militay plant gu ard officers were authorized to exercise direct control over the guard forces 'only in matters relating to military instruction and duties as Auxiliary Military Police.'8 But such orders 'will be issued only after consultation with and, if possible, concurrence by the plant management. * * * Control, therefore, will be exercised as heretofore through the plant management except at drill and except in emergency situations. Although the plant guard officers will be in command at all times, they will not supplant the civilian guard officers, and unless expediency demands otherwise will exercise their authority through the chain of command established by the plant management.'9 The regulations also provided that the military drill of the guard forces should not exceed one hour per week 'except with the approval of the plant management.'10 22 As to the employer's relations with the guard force, the regulations were explicit in recognizing that those relations remained essentially the same as if there were no militarization. According to Circular No. 15: 'Basically, the militarization of plant guard forces does not change the existing systems of hiring, compensation, and dismissal; all remain primarily a matter between the guards and the plant managements. Guards in the employ of a private employer may, as heretofore, he dismissed by that employer.'11 A veto power over employment and dismissal, of course, was retained by the military. It was further provided: 'The status of the employer in respect to the employee benefits for the guard force is not changed. For example, social security, workmen's compensation, and employer's liability provisions remain unaffected.'12 And the employer was expected to train the guard forces in their ordinary protective duties and was required to furnish them with uniforms and weapons.13 23 The right of the plant guards to bargain collectively was recognized by Circular No. 15, paragraph 6h(2) of which provided: 'Auxiliary Military Police are permitted to bargain collectively, but no such activity will be tolerated which will interfere with their obligations as members of the Auxiliary Military Police. In view of recent decisions by the National Labor Relations Board (see In re Lord Mfg. Co. & United Rubber Workers of America, CIO, Case No. R—4826, February 1943) (Lord Manufacturing Co., 47 N.L.R.B. 1032), the Auxiliary Military Police should be represented in collective bargaining with the management by a bargaining unit other than that composed of the production and maintenance workers, although both bargaining units may be affiliated with the same labor organization. Where the guards are not now included in the same bargaining unit, this is mandatory; where the guards are included in such unit, serious consideration will be given to effect a change to conform to the foregoing policies.' Provision was also made that collective bargaining agreements covering plant guards who were civilian auxiliaries should include a clause recognizing that nothing in the collective bargaining relationship should interfere with the duties imposed upon the guards as auxiliary military police.14 24 The guards were required to sign agreements with the United States.15 Each agreement stated that the individual, who had been or was about to be employed by the particular company as a guard at its plant, agreed that he would support and defend the Constitution, bear true faith and allegiance to the Constitution, and faithfully discharge his duties as a civilian auxiliary to the military police. He also acknowledged in this agreement that appropriate Articles of War had been read and explained to him and that he was subject to military law during his employment. The applicable regulations then provided that he could be court martialed where no other effective form of punishment would be effective. But 'Unlike the court-martial punishment of a person in military service, a court martial cannot punish a member of the Auxiliary Military Police by reduction in military grade or by forfeiture of pay and allowances. Analogous punishments might be imposed, such as reduction in grade in the guard organization or temporary suspension from duty. A fine, as distinguished from forfeiture, is regarded as an appropriate form of punishment.'16 In all other respects, the guards remained subject to the civil courts. 25 The evidence and testimony submitted to the Board confirmed the fact that the plant guards in respondent's two plants were militarized in accordance with the foregoing regulations. The guards at each plant were under the direct supervision of a chief guard and several lieutenants—all of whom were civilians recruited by the respondent like the rank and file guards. The military superior of the chief guards was the District Plant Guard Officer stationed at the Continuous Security District Office of the War Department, Cincinnati, Ohio, an officer who also had charge of guard forces at other plants in the district. A general directive issued by this office repeated many of the provisions of Circular No. 15.17 It also provided that orders and regulations for the auxiliary military police would be issued in the name of the Chief of the District 'after plant management has indicated its concurrence by signing the guard order in the lower left hand corner.' But the only guard orders received by the chief guards at respondent's plants were three general ones signed by the District Plant Guard Officer, orders that were applicable to all militarized guards in the district. All the specific orders that were ever issued emanated from the chief guards. About the only direct contact between the military authorities and these guards occurred during the weekly drill period. 26 Respondent recruited the necessary additional guards through its ordinary employment channels and it had the power to initiate dismissals from the force. Such actions, however, were subject to the approval of the military. Respondent at all times carried the guards on its regular pay rolls, determined their rate of compensation and paid their wages after making appropriate deductions. And since it did not operate on a cost-plus basis, respondent actually bore the cost of the guards' wages.18 Respondent did not attempt to give orders to the guards, merely making suggestions to the chief guards. The latter worked in close cooperation with respondent's personnel manager and no friction developed. Respondent delegated to the chief guards its power to determine the guards' working hours and the promotion policies in regard to them. Finally, respondent maintained its liability as to the guards on matters of social security and workmen's compensation and was obliged to obey all minimum wage and maximum hour requirements. 27 From the foregoing, an ample basis is evident to support the Board's determination that militarization did not destroy the employee status of the guards in respondent's plants. The War Department regulations and the actual practice in these plants were based upon the explicit assumption that the guards were the private employees of respondent rather than employees or soldiers of the United States. The regulations made it unmistakable that the normal, private employer-employee relationship was to remain substantially intact. Especially clear was the fact that the right of the guards to join unions and to bargain collectively was to be respected. The military authorities took over from respondent only those attributes of control which were necessary to effectuate the rather limited military program, many aspects of that transferred power being exercisable by the Army only in the gravest emergencies. 28 We cannot say that the Board was without warrant in law or in fact in concluding that respondent retained 'a sufficient residual measure of control over the terms and conditions of employment of the guards' so that they might fairly be described as employees of respondent.19 The most important incidents of the employee-employees relationship—wages, hours and promotion—remained matters to be determined by respondent rather than by the Army. Respondent could settle those vital matters unilaterally or by agreement with the guards. And the guards were free to negotiate and bargain individually or collectively on these items. It is precisely such a situation to which the National Labor Relations Act is applicable. It is a situation where collective bargaining may be appropriate and where statutory objectives may be achieved despite the limitations imposed by militarization. Under such circumstances, the Board may properly find that an employee status exists for purposes of the Act. 29 In this setting, it matters not that respondent was deprived of some of the usual powers of an employer, such as the absolute power to hire and fire the guards and the absolute power to control their physical activities in the performance of their service. Those are relevant but not exclusive indicia of an employer-employee relationship under this statute. As we have seen, judgment as to the existence of such a relationship for purposes of this Act must be made with more than the common law concepts in mind. That relationship may spring as readily from the power to determine the wages and hours of another, coupled with the obligation to bear the financial burden of those wages and the receipt of the benefits of the hours worked, as from the absolute power to hire and fire or the power to control all the activities of the worker. In other words, where the conditions of the relation are such that the process of collective bargaining may appropriately by utilized as contemplated by the Act, the necessary relationship may be found to be present. National Labor Relations Board v. Hearst Publcations, § upra, 322 U.S. at page 129, 64 S.Ct. at page 859, 88 L.Ed. 1170. 30 The Board's determination that there was a relationship in this case deserving of statutory protection does not reflect an isolated or careless reconciliation of the rights guaranteed by the Act with the important wartime duties of plant protection employees. In the course of its administration of the Act during the war, the Board was faced with this problem many times.20 It was well acquainted with the important and complex considerations inherent in the situation. The responsibility of representing the public interest in such matters and of reaching a judgment after giving due weight to all the relevant factors lay primarily with the Board. See Southern Steamship Co. v. National Labor Relations Board, 316 U.S. 31, 47, 62 S.Ct. 886, 894, 86 L.Ed. 1246. In the absence of some compelling evidence that the Board has failed to measure up to its responsibility, courts should be reluctant to overturn the considered judgment of the Board and to substitute their own ideas of the public interest. We find no such evidence in this case. 31 Here we have the Board's considered and consistent judgment that militarized plant guards may safely be permitted to join unions and bargain collectively and that their military duties and obligations do not suffer thereby. In agreement with that viewpoint has been the War Department, the agency most directly concerned with the military aspects of the problem. Its regulations and directives have clearly acknowledged the feasibility of recognizing collective bargaining rights of these guards during wartime, provided only that no encroachment is made upon military necessities. This policy of the Board, moreover, has been confirmed by experience. The Board states that it has certified bargaining representatives for units of militarized guards in more than 105 cases, in none of which has any danger to the public interest or to the war effort resulted. 32 Under such circumstances, it would be folly on our part to disregard or to upset the policy the Board has applied in this case.21 Since the Board's order is in accord with the law and has substantial roots in the evidence, it should have been enforced by the Circuit Court of Appeals. Respondent's objections to the language and scope of the order are either without merit or have been removed by the demilitarization of the guards. And any issues concerning the subsequent deputization of the guards as policemen are answered by our decision in National Labor Relations Board v. Jones & Laughlin Steel Corp., 331 U.S. 416, 67 S.Ct. 1274. The judgment below is accordingly reversed. 33 Reversed. 34 THE CHIEF JUSTICE, Mr. Justice FRANKFURTER, and Mr. Justice JACKSON dissent substantially for the reasons set forth in the opinion of the court below, 155 F.2d 567. 1 Local 1683 of the International Association of Machinists, District 90. This union did not represent any of the maintenance or production employees in respondent's plants, but it did admit to membership plant protection employees of other employers as well as those of respondent. 2 Circular No. 15 was not introduced into evidence in the proceeding before the Board. But it was issued by military authorities pursuant to the power vested in the Secretary of War by Executive Order No. 8972 and we may take judicial notice of it. Standard Oil Co. of California v. Johnson, 316 U.S. 481, 483, 484, 62 S.Ct. 1168, 1169, 86 L.Ed. 1611. 3 Circular No. 15, par. 1a. 4 Id. par. 1b. 5 Id. par. 6b(2). 6 Id. par. 1b. 7 Id. par. 2a. 8 Id. par. 5a(2). 9 Id. pars. 5c(2) and 6a(1). 10 Id. par. 7g(1). 11 Id. par. 6b(1). 12 Id. par. 6f. 13 The guards were required to salute Army officers and had the right to arrest anyone in the plants. They carried identification cards issued by the War Department and wore arm bands on which appeared the words 'Auxiliary Military Police.' Id. par. 7. 14 Id. par. 6h(1). 15 If a guard refused to sign this agreement, he might be, but need not be, temporarily retained with the understanding that he would be dismissed as soon as he could be replaced, and in any event within a reasonable time. Id. par. 5b(1). 16 Id. par. 8d. 17 This directive, however, omitted par. 6h(2) of Circular No. 15, dealing with the right of guards to bargain collectively. 18 Respondent argues that it was forced to pay the guards because of the War Department's action in requiring additional plant protection. But respondent was not forced to enter into its war production contracts with the Government. It did so voluntarily and with the understanding that it would comply with any terms and conditions the Government saw fit to impose. One of these condition was that respondent expand its peacetime guard force of six men to a wartime complement of sixty-four. So far as these additional guards being respondent's employees is concerned, it is no different from a requirement that respondent employ more chemists or other production experts to facilitate execution of the contracts. 19 The Board's conclusion in this respect is confirmed by the results reached under other statutes. Militarized guards have been treated as private employees for purposes of the Fair Labor Standards Act, 29 U.S.C.A. § 201 et seq. Walling v. Lum, 7 Wage Hour Rep. 570. And they have consistently been treated as such by the National War Labor Board. Detroit Steel Products Co., 6 War Lab.Rep. 495; Brewster Aeronautical Corp., 11 War Lab.Rep. 286, 15 War Lab.Rep. 239, 240—243; Great American Industries, 11 War Lab.Rep. 287; Youngstown Sheet & Tube Co., 15 War Lab.Rep. 500, 19 War Lab.Rep. 813; General Motors Corp., 18 War Lab.Rep. 541. And see National Labor Relations 20 See, e.g., Chrysler Corporation, 44 N.L.R.B. 881; Budd Wheel Co., 52 N.L.R.B. 666; Dravo Corporation, 52 N.L.R.B. 322. See also National Labor Relations Board, Seventh Annual Report (1943), p. 63; Eighth Annual Report (1943), p. 57. 21 In adopting the War Labor Disputes Act, 57 Stat. 163, 50 U.S.C.A.Appendix, § 1501 et seq., Congress provided in § 7(a)(2) that all actions of the National War Labor Board must conform to the provisions of the National Labor Relations Act—an indication that Congress deemed the preservation of the right to collective bargaining to be essential in war industries.
67
331 U.S. 416 67 S.Ct. 1274 91 L.Ed. 1575 NATIONAL LABOR RELATIONS BOARDv.JONES & LAUGHLIN STEEL CORPORATION. No. 418. Argued March 7, 1947. Decided May 19, 1947. Rehearing Denied June 16, 1947. See 331 U.S. 868, 67 S.Ct. 1725. Ruth Weyand, of Washington, D.C., for petitioner. Mr. John C. Bane, Jr., of Pittsburgh, Pa., for respondent. [Argument of Counsel from page 417 intentionally omitted] Mr. Justice MURPHY delivered the opinion of the Court. 1 Like National Labor Relations Board v. Atkins & Co., 331 U.S. 398, 67 S.Ct. 165, this c ase involves the rights of militarized plant guards under the National Labor Relations Act, 29 U.S.C. § 151 et seq., 29 U.S.C.A. § 151 et seq. But certain problems are raised here which are not present in the Atkins case. 2 Respondent owns and operates several large steel manufacturing works and was engaged in the production of war materials during the recent war. At respondent's Otis works at Cleveland, Ohio, about 4,700 individuals are employed. Production and maintenance employees constitute the great bulk of these workers. But there is also included in the total a group of guards and watchmen, numbering about sixty men normally. 3 A union affiliated with the United Steelworkers of America, C.I.O., has been the exclusive bargaining agent for the production and maintenance employees. Under a contract made with respondent late in 1942, this union disclaimed any representation of 'Foremen or Assistant Foremen in charge of any classes of labor, watchmen, salaried employees and nurses.' On March 15, 1943, this union filed a petition for investigation and certification of representatives pursuant to § 9(c) of the Act, in which it sought to be certified as the collective bargaining representative of the guard force. A hearing was then held. Respondent claimed that a unit composed of these guards was inappropriate because they 'perform certain assigned work that is strictly representative of management.' Respondent also claimed that any allegation by the union that a unit including watchmen is appropriate was 'a direct contravention' of the 1942 contract. And it was further alleged that any unionization of watchmen or guards was particularly inappropriate during a time of war, that their duties 'do not differ greatly from the duties performed by members of a city, county or state police force' and that these guards had been sworn in as auxiliary military police of the United States Army. 4 The testimony at the hearing showed that there were currently 72 plant protection employees. Of these, 58 were patrolmen whose sole duty was to protect and guard the Otis Works; there were 2 firemen to maintain the fire equipment; 2 dump laborers were assigned to work at a refuse dump while watching that section of the plant; and there were 8 lieutenants and 2 fire captains supervising the others. All of them were carried on respondent's payroll and were under respondent's control as to pay, benefits and conditions of employment. And, as respondent had alleged, they had been sworn in as civilian auxiliaries to the military police of the United States Army, in the same manner and under the same conditions as detailed in the Takins case. 5 On May 3, 1943, the Board issued its decision and direction of election. 49 N.L.R.B. 390. It found that 'all patrolmen, watchmen, and firemen, including dump laborers, employed by the Company at its Otis Works, but excluding lieutenants, captains and supervisors' constituted an appropriate unit and that an election should be held by the employees in this unit to determine if they desired to be represented by the Steelworkers union. It rejected all of respondent's contentions, pointing out among other things that the union, while representing production and maintenance employees, intended to bargain for the plant guards and watchmen as a separate unit. 6 The election resulted in the selection of the Steelworkers union as the bargaining representative of the unit in question. The union was certified as the exclusive representative of the unit, respondent refused to bargain with the union and the Board issued its complaint based upon that refusal. On December 2, 1943, the Board reaffirmed the appropriateness of the unit and found that respondent had committed unfair labor practices in refusing to bargain. The usual order was entered. 53 N.L.R.B. 1046. 7 The Sixth Circuit Court of Appeals denied the Board's petition for a decree enforcing its order. 146 F.2d 718. While upholding the Board's determination that the militarizedguard forc es were employees within the meaning of the National Labor Relations Act, the court felt that the unit selected for bargaining purposes was inappropriate and reflected a disregard by the Board of the national welfare. In the eyes of that court, the Board's fatal error was its authorizing the militarized guards to join the same union which represented the production and maintenance employees because 'when they were inducted into the Unions and became subject to their orders, rules and decisions, the plant protection employees assumed obligations to the Unions and their fellow workers, which might well in given circumstances bring them in conflict with their obligation to their employers, and with their paramount duty as militarized police of the United States Government.' 146 F.2d at page 722. 8 The Board filed a petition in this Court for a writ of certiorari. As in the Atkins case, the Board pointed out that the plant protection employees had been demilitarized at a date (May 29, 1944) subsequent to the refusals to bargain, but urged that this fact did not make the case moot. We granted the writ of certiorari at the same time as we granted the writ in the Atkins case, vacated the judgment below and remanded the cause to the Circuit Court of Appeals 'for further consideration of the alleged changed circumstances with respect to the demilitarization of the employees involved, and the effect thereof on the Board's orders.' 325 U.S. 838, 65 S.Ct. 1413, 89 L.Ed. 1965. 9 The Board and the respondent then entered into a stipulation relative to the dates and circumstances of the demilitarization of the guards. From this stipulation it appeared that the qualifications, strength, functions and duties of the guards continued to be the same after demilitarization as before. Also included in the stipulation were facts showing that both before and after the period of militarization, August 5, 1942, to May 29, 1944, the guards were commissioned, sworn and bonded as private policemen of the City of Cleveland and exercised 'the legal powers of peace officers in their work as plant guards.' It was further stipulated that because of 'the magnitude and other characteristics of the Otis Works, its police protection by the ordinary police of the City of Cleveland is not practical or feasible; and, as a result, for a great many years, the police protection of the Works and the enforcement of law, peace and good order therein has been delegated wholly to the plant guard force. For similar reasons, the work of preventing and extinguishing fires has been in large part the responsibility of the guard force, rather than that of the municipal fire department.' 10 The Board filed a motion in the Circuit Court of Appeals for a decree enforcing its order. That court denied the motion and held that the facts concerning both the demilitarization and deputization were to be considered as though they had been presented at the hearing before the Board; on that basis, the court reaffirmed its belief that the guards were employees within the meaning of the Act, but concluded that in view of the 'drastic police powers' exercised by the guards, it was 'improper for the Board to permit their organization by the same union which represents the production employees.' 6 Cir., 154 F.2d 932, 934. 11 Our decision in the Atkins case makes clear that the demilitarization of the guards did not render this case moot. The order was a continuing command which may be effectuated in the future. But unless the order was valid when it was issued, there is no basis whatever for it and no court can decree its enforcement in the future. Hence its validity must be judged as of the time when it was issued, a time when the guards were still militarized. This is not to say, however, that events subsequent to demilitarization are irrelevant in deciding whether the order should be enforced. All that we hold is that demilitarization in and of itself is not enough to render the order or the case moot. 12 The Atk ins decision likewise disposes of any issues relating to the effect of militarization upon the status of the guards as employees within the meaning of § 2(3) of the National Labor Relations Act. To that extent, the Board's order here was plainly valid. Unanswered by the Atkins decision, however, is the question whether the militarization of the plant guards precluded the Board from grouping the guards in a separate unit and permitting them to choose as their bargaining representative a union which also represented production and maintenance employees. To that issue, which is the primary one raised by this case, we now turn. 13 The Board, of course, has wide discretion in performing its statutory function under § 9(b) of deciding 'the unit appropriate for the purposes of collective bargaining.' Pittsburgh Plate Glass Co. v. National Labor Relations Board, 313 U.S. 146, 61 S.Ct. 908, 85 L.Ed. 1251. It likewise has discretion to place appropriate limitations on the choice of bargaining representatives should it find that public or statutory policies so dictate. Its determinations in these respects are binding upon reviewing courts if grounded in reasonableness. May Dept. Stores Co. v. National Labor Relations Board, 326 U.S. 376, 380, 66 S.Ct. 203, 206, 90 L.Ed. 145. A proper determination as to any of these matters, of course, necessarily implies that the Board has given due consideration to all the relevant factors and that it has correlated the policies of the Act with whatever public or private interests may allegedly or actually be in conflict. 14 Thus, in determining the proper unit for militarized guards and in deciding whether they should be permitted to choose the same union that represents production and maintenance employees, the Board must be guided not alone by the wishes of the guards or the union or by what is appropriate in the case of non-militarized guards. It must also give due consideration to the military duties and obligations of the guards and their possible relationships to a union representing other employees; it must consider what limitations, if any, on the normal freedom to choose whatever representative the guards may desire are necessitated by the war effort. 15 It is clear that the Board has given these matters due consideration. It has not acted in this case in disregard of the national welfare. Sanctioning the creation of a separate unit of respondent's guards and permitting them to select a union of their own choosing, a union which happened to be the representative of the production and maintenance employees, are indicative of a considered, mature judgment on the Board's part. The problem has been raised in many cases before the Board and its conclusion is in accord with that reached by the War Department. 16 In Chrysler Corp., 44 N.L.R.B. 881, Dravo Corp., 52 N.L.R.B. 322, and Armour and Co., 63 N.L.R.B. 1200, the Board has spelled out the various considerations that have led it to adopt the policy applied in this case. Those cases reveal the Board's belief that freedom to choose a bargaining agent includes the right to select an agent which represents other employees in a different bargaining unit. This principle may safely be applied to militarized guards, in the Board's opinion, since the collective bargaining process is flexible enough to allow for the increased responsibilities placed upon the militarized guards. And the Board has concluded that the remedy for inefficiency or wilful disregard or neglect of duty on the part of such guards lies in the power of the employer to discipline or discharge them and in the power of the military authorities to take whatever steps may be necessary to protect the public interest. Moreover, the Board has discovered no serious question as to any conflict between loyalties to the Army and to the union, the Board finding no basis to assume that membership in a union tends to undermine the patriotism of militarized guards or that loyalty to the United States would e secondar y in their minds to loyalty to the union. But one restriction is placed upon the statutory freedom of the militarized guards. The Board insists that they be placed in separate bargaining units so that they may be better able to function within the military sphere and so that the military authorities may be able to exercise greater control over them. 17 This policy of the Board coincides with that expressed in the regulations of the War Department. As we pointed out in the Atkins case, supra, the military authorities have given full sanction to collective bargaining on the part of militarized guards, provided only that such action does not interfere with their military obligations. Paragraph 6h(2) of Circular No. 15, issued on March 17, 1943, by Headquarters, Army Service Forces, acknowledges with approval the Board's policy of permitting miliitarized guards to be represented in collective bargaining with the management by a bargaining unit other than that composed of the production and maintenance workers, even though both bargaining units may be affiliated with the same labor organization. A clarifying memorandum of the War Department, dated July 10, 1943, reiterates the War Department attitude still further: 'In the event that plant guards enrolled as Auxiliary Military Police desire to be represented in collective bargaining with the management, they should be represented by a bargaining unit other than that representing the production and maintenance workers. However, in such event, both bargaining units may be affiliated with the same trade-union local, provided they are, in fact, separate bargaining units.' 18 We are unable to say that the policy formulated by the Board is without reason. When the employer retains unfettered power to fix the wages, hours or other working conditions of militarized guards, the guards stand in the same relation to the employer regarding those matters as do production and maintenance employees. In disputes with the employer over those matters, they suffer from the same inequality of bargaining power as suffered by other unorganized employees; the appropriateness and need of collective bargaining on their part through freely chosen representatives are equally as great. But to prevent them from choosing a union which also represents production and maintenance employees is to make the collective bargaining rights of the guards distinctly second-class. Such a union may be the only one willing and able to deal with the employer. Its experience and acquaintance with the employer and the plant may make it specially qualified to bargain for the guards. The guards might thus be deprived of effective bargaining rights if they are denied the right to choose such a union. Freedom to choose, in this statutory setting, must mean complete freedom to choose any qualified representative unless limited by a valid contrary policy adopted by the Board. 19 After deliberation, the Board has concluded that this freedom can safely be recognized to the fullest extent as to militarized guards, provided only that they be placed in separate bargaining units. We cannot say that this conclusion is one so lacking in an appreciation of the military necessities of the situation that we should voice our disapproval and substitute our own views of public policy. It is significant that the Board, in weighing the military requirements against the normal policies of the Act, has arrived at a result which coincides with that reached by the War Department. The latter agency has been satisfied that militarized guards can safely join and choose unions representing other employees without impairing their loyalty to the United States or their ability to perform their military duties satisfactorily. We assume that attitude was adopted after a full consideration of all the military necessities, matters which are peculiarly within the competence and knowledge of the War Department. In light of that fact, it is impossible to say that a civilian agenc erred in failing to insist upon what the military experts found to be unnecessary. To prohibit militarized guards from joining or choosing unions representing production and maintenance workers on grounds of military necessity is to erect limitations which not even those most familiar with the military situation thought essential or desirable. And in this nation, the statutory rights of citizens are not to be readily cut down on pleas of military necessity, especially pleas that are unsupported by military authorities. Certainly it would take more than the speculation and theories advanced by the court below to undermine the foundation of the policy adopted in this respect by the Board. 20 Moreover, the experience of the Board has revealed none of the dire consequences which the court below feared might flow from the application of the policy in question. 6 Cir., 146 F.2d at pages 722, 723. In its brief before us, the Board has stated that it has certified bargaining representatives for units of militarized guards in more than 105 cases; in more than 80 of these cases, the certified union also represented a separate bargaining unit of other employees of the same employer. Employer recognition of the unions, collective bargaining and contractual relations have resulted in many instances. Yet the Board states that it has received 'no indication from any source that the dangers to the public interest and particularly to the war effort which the courts below thought to inhere in that policy have in fact materialized in any case.' 21 One final matter remains. After the Board's order was issued and after the guards at respondent's Otis Works were demilitarized, the guards were deputized by the police authorities of the City of Cleveland. The Board claims that since this matter was not raised before it, the court below was precluded by § 10(e) of the Act from considering the effect of the deputization upon the properiety of enforcing the Board's order. National Labor Relations Board v. Newport News Co., 308 U.S. 241, 249, 250, 60 S.Ct. 203, 207, 208, 84 L.Ed. 219; Marshall Field & Co. v. National Labor Relations Board, 318 U.S. 253, 63 S.Ct. 585, 87 L.Ed. 744; National Labor Relations Board v. Cheney Lumber Co., 327 U.S. 385, 66 S.Ct. 553, 90 L.Ed. 739. 22 But the provision of § 10[e], that 'No objection that has not been urged before the Board, its member, agent or agency, shall be considered by the court, unless the failure or neglect to urge such objection shall be excused because of extraordinary circumstances,' quite obviously refers to objections that might have been but were not raised in the original proceeding before the Board. In this case, however, the deputization of the guards occurred after the Board had concluded its hearing and issued its order and after the court below had refused the first time to enforce the order. It was thus a matter which could not have been raised before the Board. And the failure of respondent to raise the then non-existent issue before the Board could not deprive the court below of power to consider the issue once it did come into existence. See National Labor Relations Board v. Blanton Co., 8 Cir., 121 F.2d 564, 571. 23 When circumstances do arise after the Board's order has been issued which may affect the propriety of enforcement of the order, the reviewing court has discretion to decide the matter itself or to remand it to the Board for further consideration. For example, where the order obviously has become moot, the court can deny enforcement without further ado; but where the matter is one involving complicated or disputed facts or questions of statutory policy, a remand to the Board is ordinarily in order. In this case, however, the Board and the respondent have stipulated the facts concerning the deputization of the guards. The only issue is whether the deputization is so inconsistent with the policies of the Act that the statutory guarantees must be denied to the guards and the enforcement of the Boar's order r efused. That issue is one normally to be determined by the Board in the first instance, it being the function of the Board rather than the courts initially to correlate the policies of the Act with conflicting interests. But we do not believe that a remand is necessary under the special circumstances of this case. 24 The Board has frequently considered the status of plant guards who have been deputized as deputy sheriffs or special police. Where the private employer retains the right to fix the wages, hours or other working conditions of such guards, the Board's uniform conclusion has been that they are employees of the private employer and that they retain their rights under the National Labor Relations Act. See e.g., Luckenbach Steamship Co., 2 N.L.R.B. 181, 189; American-Hawaiian Steamship Co., 10 N.L.R.B. 1355, 1363-1364; American Brass Co., 41 N.L.R.B. 783, 785; Bethlehem-Fairfield Shipyard, Inc., 61 N.L.R.B. 901, 905-906; Standard Steel Spring Co., 62 N.L.R.B. 660, 662-663. As in the case of militarized guards, the Board has found no evidence that when deputized guards join unions or engage in collective bargaining through freely chosen representatives their honesty, their loyalty to police authorities, or their competence to execute their police duties satisfactorily is undermined. It is sufficient, in the Board's judgment, to protect the special status of these guards by segregating them in separate bargaining units. 25 We find it impossible to say that the Board is wrong in adopting this policy as to deputized guards. It is a common practice in this country for private watchmen or guards to be vested with the powers of policemen, sheriffs or peace officers to protect the private property of their private employers. And when they are performing their police functions, they are acting as public officers and assume all the powers and liabilities attaching thereto. Thornton v. Missouri Pacific R. Co., 42 Mo.App. 58; Dempsey v. New York Central & Hudson River R. Co., 146 N.Y. 290, 40 N.E. 867; McKain v. Baltimore & Ohio R. Co., 65 W.Va. 233, 64 S.E. 18, 23 L.R.A., N.S., 289, 131 Am.St.Rep. 964, 17 Ann.Cas. 634; Neallus v. Hutchinson Amusement Co., 126 Me. 469, 139 A. 671, 55 A.L.R. 1191. But it has never been assumed that such deputized guards thereby cease to be employees of the company concerned or that they become municipal employees for all purposes. See Chicago & N.W.R. Co. v. McKenna, 8 Cir., 74 F.2d 155. Wages, hours, benefits and various other conditions of work normally remain subject to determination by the private employers. At least as to those matters, the deputized guards remain employees of the private employers. See Walling v. Merchants Police Service, D.C., 59 F.Supp. 873. Hence they may be held to be employees within the meaning of § 2(3) of the National Labor Relations Act. National Labor Relations Board v. Hearst Publications, 322 U.S. 111, 64 S.Ct. 851, 88 L.Ed. 1170. 26 Deputized guards bear the same relationship to management that non-deputized guards bear, a relationship that we discussed in the Atkins case, supra, and that we found to be adequate for the Board to find the existence of an employer-employee status. Likewise, their relationship to police or municipal authorities is not one that is necessarily inconsistent with their status as employees under the Act. Union membership and collective bargaining are capable of being molded to fit the special responsibilities of deputized plant guards and we cannot assume, as a proposition of law, that they will not be so molded. If there is any danger that particular deputized guards may not faithfully perform their obligations to the public, the remedy is to be found other than in the wholesale denial to all deputized guards of their statutory right to join unions and to choose freely their bargaining agents. The state and municipal authorities, in short, have adequate means of punishing infidelity and assuring full police protection. 27 We find nothing in the intant case which would make inapplicable the Board's policy with respect to deputized guards, and the Board has so argued before us. The stipulated facts reveal that the guards at respondent's Otis Works were commissioned as private policemen of the City of Cleveland under § 188 of the Cleveland Municipal Code (1924), and as such are members of the municipal police force and exercise the legal powers of peace officers in their work as plant guards. They are under the control of a police captain and his lieutenants, the police captain being directly responsible to respondent's director of plant security at Pittsburgh and to respondent's executive officer in general charge of the Otis Works. The police captain is also a deputy sheriff of Cuyahoga County, Ohio. It is not denied that the guards continue to be paid by respondent and that their hours, benefits and other conditions of work remain the responsibility of respondent. 28 The court below pointed out that the Ohio law on the status and duties of special policemen is in accord with the general rule which we have noted. In other words, special policemen are public officers when performing their public duties. New York, Chicago & St. Louis R. Co. v. Fieback, 87 Ohio St. 254, 100 N.E. 889, 43 L.R.A., N.S. 1164; Pennsylvania R. Co. v. Deal, 116 Ohio St. 408, 156 N.E. 502. But none of the Ohio cases attempts to say that the public status of special policemen destroys completely their private status as employees of individual companies. Nor is there any basis for the intimation that their public duties are such as to render incompatible the recognition of rights under the National Labor Relations Act. 29 We therefore conclude that the facts and the law are sufficiently clear to justify a determination that the guards at respondent's Otis Works are employees within the meaning of the Act despite their deputization as municipal policemen. And they have as much right to select as their bargaining agent a union which represents production and maintenance workers as have militarized guards, the same considerations being applicable. It is obvious that the Board would apply such a policy to this case, thereby making a remand to the Board a mere formality and a needless addition to an already over-prolonged proceeding. Under such circumstances, a remand to the Board is unnecessary. 30 It follows that the court below should have enforced the Board's order. 31 Reversed. 32 The CHIEF JUSTICE, Mr. Justice FRANKFURTER, Mr. Justice JACKSON and Mr. Justice BURTON dissent substantially for the reasons set forth in the opinion of the court below, 6 Cir., 154 F.2d 932.
89
331 U.S. 461 67 S.Ct. 1340 91 L.Ed. 1602 COPEv.ANDERSON. ANDERSON v. HELMERS et al. Nos. 593, 656. Argued April 28, 1947. Decided June 2, 1947. Mr. Harold Evans, of Philadelphia, Pa., for Francis R. Cope, jr. Mr. Robert S. Marx, of Cincinnati, Ohio, for A. M. Anderson. Mr. Murray Seasongood, of Cincinnati, Ohio, for respondents Lawrence Helmers and others. [Argument of Counsel from page 462 intentionally omitted] Mr. Justice BLACK delivered the opinion of the Court. 1 In Anderson v. Abbott, 321 U.S. 349, 64 S.Ct. 531, 88 L.Ed. 793, 151 A.L.R. 1146, we held that the shareholders of BancoKentucky Company, a bank-stockholding company, were liable under 12 U.S.C. §§ 63, 64, 12 U.S.C.A. §§ 63, 64, for an assessment on shares on an insolvent national bank held in the portfolio of the holding company. That suit was brought in Kentucky District Court against Banco stockholders residing in that District. These suits in equity were brought in Federal District Courts in Ohio and Pennsylvania to enforce assessments against Ohio and Pennsylvania stockholders of Banco. In No. 656 the District Court in Ohio overruled a motion to dismiss made on the ground, among others, that the bill showed on its face that the action was barred by an Ohio statute of limitations.1 The Sixth Circuit of Appeals reversed. 156 F.2d 47. In No. 593 the Third Circuit Court of Appeals reversed the decision of the District Court in Pennsylvania which had held the action there barred by the Pennsylvania statute of limitations. 156 F.2d 972. We granted certiorari to consider both cases. 329 U.S. 707, 67 S.Ct. 354, 67 S.Ct. 356. 2 There is no federal statute of limitations fixing the period within which suits must be brought to enforce the statutory double liability of shareholders of insolvent national banks. For this reason we look to Ohio and Pennsylvania law to determine the period in which these suits may be brought. McDonald v. Thompson, 184 U.S. 71, 22 S.t. 297, 46 L.Ed. 437; McClaine v. Rankin, 197 U.S. 154, 158, 25 S.Ct. 410, 411, 49 L.Ed. 702, 3 Ann.Cas. 500; Rawlings v. Ray, 312 U.S. 96, 97, 61 S.Ct. 473, 474, 85 L.Ed. 605. Even though these suits are in equity, the states' statutes of limitations apply. For it is only the scope of the relief sought and the multitude of parties sued which gives equity concurrent jurisdiction to enforce the legal obligation here asserted. And equity will withhold its relief in such a case where the applicable statute of limitations would bar the concurrent legal remedy. Russell v. Todd, 309 U.S. 280, 289, 60 S.Ct. 527, 532, 84 L.Ed. 754 and cases cited. See also Guaranty Trust Co. v. York, 326 U.S. 99, 65 S.Ct. 1464, 89 L.Ed. 2079, 160 A.L.R. 1231; Holmberg v. Armbrecht, 327 U.S. 392, 395, 396, 66 S.Ct. 582, 584, 585, 90 L.Ed. 743, 162 A.L.R. 719. 3 But even though the period in which suit must be brought is governed by state limitations statutes, we have previously decided that the question of when the applicable state statute of limitations begins to run depends upon when, under federal law, the Comptroller of the Currency, or his authorized agent, is empowered by federal law to bring suit. And the Comptroller's agent, the Receiver here, could not bring these actions until the date for payment fixed by the Comptroller. Rawlings v. Ray, supra, 312 U.S. at pages 98, 99, 61 S.Ct. at pages 474, 475, 85 L.Ed. 605; Fisher v. Whiton, 317 U.S. 217, 220, 221, 602, 63 S.Ct. 175, 176, 177, 87 L.Ed. 223. The date for payment fixed by the Comptroller in this instance was April 1, 1931. These actions were instituted more than five but less than six years after the payments became due under the Comptroller's assessment order. 4 With regard to No. 656, the Ohio proceeding, the Ohio statute of limitations provides that suit 'upon a liability created by statute other than a forfeiture or penalty, shall be brought within six years after the cause thereof accrued.' Ohio Gen.Code (Page, 1939) § 11222. This statute describes the liability sued on here, and if applicable does not bar this suit. But the scope of this general provision is narrowed by another known as the 'borrowing statute' which reads: 5 'If the laws of any state or country where the cause of action arose limits the time for the commencement of the action to a less number of years than do the statutes of this state in like causes of action then said cause of action shall be barred in this state at the expiration of said lesser number of years.' Ohio Gen.Code (Page, 1939) § 11234. 6 If the cause of action arose in Kentucky, the 'borrowing statute' applies Kentucky's statute of limitations, and this suit is barred. For Kentucky's law requires that an 'action upon a liability created by statute * * * shall be commenced within five years after the cause of action accrued.' Ky.Rev.Stat. (Baldwin, 1943) § 413.120. 7 The Receiver contends that the Ohio borrowing statute's language 'the laws of any state or country where the cause of action arose' has reference to 'a system of jurisprudence other than Ohio's,' and does not refer 'necessarily to territorial limits' within which events occurred giving rise to enforceable obligation. The place where the events giving rise to a cause of action occur is said to be 'important only insofar as the laws of that place are controlling.' Under this argument, the cause of action here could not have 'arisen' in any state since the statutory obligations of shareholders was not imposed or controlled by state law. Hence, the argument runs, the Ohio law did not contemplate borrowing any state statute of limitations in a case where liability is governed by federal law. And no federal statute of limitations could be borrowed in this case for none existed. Therefore, it is argued, only Ohio's general six-year statute of limitations applies. 8 The consequence of accepting this contention would be that the Ohio borrowing statute would have no effect at all as to suits brought in Ohio statecourts to enforce actions authorized by federal law. For, of course, Ohio courts could never borrow a non-existent federal statute of limitations. And if there were a federal statute of limitations governing a federally created right, that statute would control of its own force. Herget v. Central National Bank & Trust Co., 324 U.S. 4, 65 S.Ct. 505, 89 L.Ed. 656. We have been cited to no decision by any Ohio court which would lead us to believe that its borrowing statute should be given such a sterilizing interpretation. Cf. Townsend v. Eichelberger, 51 Ohio, St. 213, 216, 38 N.E. 207, 208. 9 We find it unnecessary to our decision to discuss the contentions made here concerning differences between a 'cause of action' and a 'liability.' The Ohio Supreme Court has itself said that a 'cause of action is the fact or combination of facts which gives rise to a right of action, the existence of which affords a party a right to judicial interference in his behalf.' Baltimore & O.R. Co. v. Larwill, 83 Ohio St. 108, 115, 116, 93 N.E. 619, 621, 34 L.R.A., N.S., 1195. We have been referred to nothing in Ohio statutes or decisions which indicates that it used 'cause of action' in any different sense in its borrowing statute. The purpose of the state's borrowing statute2 as those of other states,3 was apparently to require its courts to bar suits against an Ohio resident if the right to sue him had already expired in another state where the combination of circumstances giving rise to the right to sue had taken place. Moreover, limitations on federally created rights to sue have similarly been considered to be governed by the limitations law of the state where the crucial combination of events transpired. Seaboard Terminals Corporation v. Standard Oil Co. of New Jersey, D.C., 24 F.Supp. 1018, Id., 2 Cir., 104 F.2d 659; Bluefields S.S. Co. v. United Fruit Co., 3 Cir., 243 F. 1, 19, 20. See Campbell v. City of Haverhill, 155 U.S. 610, 15 S.Ct. 217, 39 L.Ed. 280; Chattanooga Foundry & Pipe Works v. City of Atlanta, 203 U.S. 390, 397, 27 S.Ct. 65, 66, 51 L.Ed. 241. 10 Our appraisal of the Ohio borrowing statute, the opinions of the courts of that state and the circumstances leading to this suit, persuade us that the cause of action 'arose' in Kentucky within the meaning of the Ohio borrowing statute. The bank was authorized to do its banking business in Louisville and did business in no other place. See 12 U.S.C. § 81, 12 U.S.C.A. § 81. Nor was this bank's business any the less local, because its shares were held in the portfolio of a Delaware corporation. Many provisions of federal law make national banks, in important aspects peculiarly local institutions. See 12 U.S.C. §§ 30, 33, 34a, 36, 51, 62, 72, 12 U.S.C.A. §§ 30, 33, 34a, 36, 51, 62, 72. For jurisdictional purposes, a national bank is a 'citizen' of the state in which it is established or located, 28 U.S.C. § 41(16), 28 U.S.C.A. § 41(16), and in that district alone can it be sued. 12 U.S.C. § 94, 12 U.S.C.A. § 94. True, when insolvency occurs, there is a shift in bank management, but the bank's activities are still necessarily rooted in its local habitat. In this case the Receiver's office was located in Louisville, the home of the bank; payment of assessments, like other obligations due the bank, could have been made there, and, in fact, shareholders were notified by the Receiver to pay at his office in Louisville.4 Liquidation of a local bank, like its daily operations, must from necessity and in the interest of good business be carried on, in the main, in the community where the bank did business with its depositors and other customers. Practically everything that preceded the final fixing of liability of shareholders derived from Kentucky transactions. We have been referred to no Ohio decisions, and have been unable to find any, which contradict our conclusion that events whichculminated in this suit justify our holding that this 'cause of action' 'arose' in Kentucky within the meaning of the Ohio statute. See Hunter v. Niagara Fire Ins. Co., 73 Ohio St. 110, 76 N.E. 563, 3 L.R.A.,N.S., 1187, 112 Am.St.Rep. 699, 4 Ann.Cas. 146; Alropa Corporation v. Kirchwehm, 138 Ohio St. 30, 33 N.E.2d 655; Payne v. Kirchwehm, 141 Ohio St. 384, 48 N.E.2d 224, 149 A.L.R. 1217; Bowers v. Holabird, 51 Ohio App. 413, 1 N.E.2d 326; National Bondholders Corporation v. Stoddard, 8 Ohio Supp. 19. See also Hilliard v. Pennsylvania R. Co., 6 Cir., 73 F.2d 473, 475, 476; Note, 15 U. of Cin.L.Rev. 337 (1941); Note, 21 Ohio O. 107 (1941). Therefore the judgment in No. 656 is affirmed. 11 In No. 593, the Pennsylvania action, the same considerations are controlling. The general statute of limitations of that state which would be applicable to this action had it arisen in Pennsylvania, like Ohio's general statute, provides a six-year period in which this suit could be brought. 12 Pa. Stat. § 31 (Purdon, 1931). But Pennsylvania also has a 'borrowing statute' which provides: 'When a cause of action has been fully barred by the laws of the state or country in which it arose, such bar shall be a complete defense to an action thereon brought in any of the courts of this commonwealth.' 12 Pa.Stat. § 39 (Purdon, 1931). Our review of Pennsylvania decisions construing this statute persuades us that the borrowing statute is applicable to this case, that under that statute this cause of action 'arose' in Kentucky, and that the five year statute of Kentucky bars this action. See Mister v. Burkholder, 56 Pa.Super. 517; In re Fletcher's Estate, 45 Pa. Dist. & Co. R. 673, 674; Bell v. Brady, 346 Pa. 666, 31 A.2d 547; In re Shaffer's Estate, 228 Pa. 36, 40, 76 A. 716, 717. Cf. Rosenzweig v. Heller, 302 Pa. 279, 153 A. 346. See also Notes, 88 U. of Pa. L. Rev. 878 (1941), 4 U. of Pitt.L.Rev. 215 (1938). The judgment of the Circuit Court of Appeals in No. 593 is therefore reversed. 12 So ordered. 13 Affirmed in part and reversed in part. 14 The CHIEF JUSTICE took no part in the consideration or decision of these cases. 1 For convenience, the motion was made by only four defendants who are respondents here. The case was continued as to the others pending final disposition of the question concerning the statute of limitations, the only ground of the motion to dismiss upon which the District Court passed. 2 See 25 Ohio Jurisprudence (1932), 435—440. 3 See Note, 75 A.L.R. 203 (1931); Note, 35 Col.L.Rev. 762 (1935). 4 Whether notice by the Receiver to pay at a particular place could alter the conclusive situation as to where a cause of action might be considered to 'arise' under other circumstances is a question we need not decide.
89
331 U.S. 477 67 S.Ct. 1334 91 L.Ed. 1615 MYERSv.READING CO. No. 367. Argued Feb. 6, 1947. Decided June 2, 1947. Mr. B. Nathaniel Richter, of Philadelphia, Pa., for petitioner. Henry R. Heebner, of Philadelphia, Pa., for respondent. Mr. Justice BURTON delivered the opinion of the Court. 1 This action for damages alleged to have been caused to the petitioner by the respondent's use, in violation of the Safety Appliance Acts,1 of a railroad freight car not equipped with efficient hand brakes, presents the question whether the evidence at the trial, with the inferences that the jury justifiably could draw from it, was sufficient to support the verdict for the petitioner. We hold that it was. 2 The action was brought in the District Court of the United States for the Eastern District of Pennsylvania by the petitioner, John Myers, against his employer, the Reading Company. He claimed that he received personal injuries caused by the respondent's use in interstate commerce, in its railroad yards at Port Richmond, Philadelphia, of a freight car equipped with a defective hand brake in violation of the Safety Appliance Acts requiring such cars to be equipped with 'efficient hand brakes.'2 At the close of the evidence, respondent moved for a directed verdict. The motion was not granted, and the jury returned a verdict for $5,000 in favor of the petitioner. The respondent then moved to have the verdict set aside and to have judgment entered in its favor.3 On December 28, 1945, this motion was granted and judgment was so entered. D.C., 63 F.Supp. 817. On May 20, 1946, the Circuit Court of Appeals for the Third Circuit affirmed the judgment, per curiam. 155 F.2d 523. We granted certiorari in order to review this procedure, in a case based upon a violation of the Safety Appliance Acts, in the light of our decision rendered on March 25, 1946, in Lavender v. Kurn, 327 U.S. 645, 66 S.Ct. 740, 90 L.Ed. 421, subsequent to the trial of this case. The petitioner testified to the following: 3 On June 11, 1944, he was working for the respondent as a freight conductor in charge of a crew consisting of an engineer, a fireman and two brakemen. He had been employed by the respondent for six or seven years, rising from the rank of crossing watchman to that of conductor and, for five or six months immediately preceding June 11, he had worked practically every day in the job in which he was engaged when injured. At about nine o'clock that evening his crew moved a string of seven coal cars on to a yard track where the crew coupled those cars to three others. One of the brakemen, new on the job that day, made the coupling and the petitioner directed him 'to tie the hand-brakes on'—that is, to tighten them so as to insure against further movements of the cars on the slightly graded track. The brakeman did this, but before the petitioner left the cars he checked them over and saw that the brakes were not all on, because one brake chain, instead of being wrapped around the shaft, was hanging loose. He climbed up on the brake platform, eight feet above the ground, on the car where the hand brake was not set, and tried to set it by turning the brake wheel. While doing this, he carried his signaling lantern on his left arm with his hand through the handle. As to the condition and operation of the brake he testified: 4 'A. I was tightening the brake—it was kind of stiff and sticking—it was pretty hard to signal with the one hand and to get the brake on. 5 'Q. With the ordinary brake wheel, do you have the difficulty that you had with this wheel? A. Not ordinarily. 6 'Q. What was the difference between this wheel and the ordinary wheel? A. It was kind of stiff, and like a spring—like a shoe kicking back. 7 'Q. And you started to try to set it? A. That is right. 8 'A. As I was tightening the brake—just that quick—I felt something like the slack being run out, getting ready to uncouple. 9 'Q. What did you feel on your car? A. A quick jar, and I took this hand to signal 'stop.' (Indicating.) 10 'Q. What did you signal? A. I signaled 'stop' the best I could and hold on, but I went down; I lost my hold and down I went. 11 'Q. What happened to the wheel on the handbrake while you were holding the wheel? A. That kicked back. 12 'Q. What do you mean by that? A. I was putting it on this way (indicating), and it kicked right back off. 13 'Q. Could you hold it? A. No. I couldn't. 14 'Q. Was it pulled all the way on? A. Oh, no. 15 'Q. What happened to you? A. Down I went.'4 16 The jury found, in a special verdict, that the brake was not an efficient brake; that its inefficiency contributed to or caused injuries to the petitioner; that the train did not move after the seven shifted cars were coupled to the three standing cars; ad that the petitioner was not thrown from a moving train.5 The jury thus reached factual conclusions supporting its general verdict for the petitioner, and reducing the legal basis for recovery to the respondent's use of a car not equipped with efficient hand brakes. 17 The only question before us is whether there was sufficient probative evidence, with the inferences that the jury could draw from it, to support the verdict for the petitioner. 18 There was an absolute and unqualified prohibition against the respondent's using or permitting to be used, on its line, any car not equipped with 'efficient hand brakes.'6 In speaking of a like prohibition, imposed by the same Section of the Safety Appliance Acts, against the use of any car not equipped with 'secure hand holds or grab irons,' Mr. Chief Justice Hughes said: 19 'This final question must be determined in the light of the nature of the obligation resting upon the carrier in relation to the use of a defective car. The statutory liability is not based upon the carrier's negligence. The duty imposed is an absolute one, and the carrier is not excused by any showing of care, however assiduous.' Brady v. Terminal R. Ass'n, 303 U.S. 10, 15, 58 S.Ct. 426, 429, 82 L.Ed. 614, and cases there cited. 20 See also, Atlantic City R. Co. v. Parker, 242 U.S. 56, 59, 37 S.Ct. 69, 70, 61 L.Ed. 150 (automatic couplers required by 27 Stat. 531, 45 U.S.C. § 2, 45 U.S.C.A. § 2); Great Northern R. Co. v. Otos, 239 U.S. 349, 351, 26 S.Ct. 124, 125, 60 L.Ed. 322 (couplers); Chicago B. & Q.R. Co. v. United States, 220 U.S. 559, 574, 575, 31 S.Ct. 612, 615, 616, 55 L.Ed. 582; St. Louis, Iron Mountain & S.R. Co. v. Taylor, 210 U.S. 281, 294, 295, 28 S.Ct. 616, 620, 621, 52 L.Ed. 1061 (couplers and drawbars); Spotts v. Baltimore & O.R. Co., 7 Cir., 102 F.2d 160, 162 (hand brakes). 21 This simplifies the issue beyond that presented in the ordinary case under the Federal Employers' Liability Act where the plaintiff must establish the negligence of his employer. Here it is not necessary to find negligence. A railroad subject to the Safety Appliance Acts may be found liable if the jury reasonably can infer from the evidence merely that the hand brake which caused the injuries was on a car which the railroad was then using on its line, in interstate commerce, and that the brake was not an 'efficient' hand brake. Furthermore— 22 'There are two recognized methods of showing the inefficiency of hand brakes equipment. Evidence may be adduced to establish some particular defect, or the same inefficiency may be established by showing a failure to function, when operated with due care, in the normal, natural, and usual manner.' Didinger v. Pennsylvania R. Co., 6 Cir., 39 F.2d 798, 799. 23 'Proof of an actual break or visible defect in a coupling appliance is not a prerequisite to a finding that the statute has been violated. Where a jury finds that there is a violation, it will be sustained, if there is proof that the mechanism failed to work efficiently and properly even though it worked efficiently both before and after the occasion in question. The test in fact is the erformance of the applicance. Philadelphia & R.R. Co. v. Auchenbach, 3 Cir., 16 F.2d 550. Efficient means adequate in performance; producing properly a desired effect. Inefficient means not producing or not capable of producing the desired effect; incapable; incompetent; inadequate. 24 '* * * the testimony of plaintiff that the brake was used in the normal and usual manner and failed to work efficiently but did so inefficiently, throwing him to the ground, is such substantial evidence of inefficiency as to make an issue for the jury. Detroit, T. & I.R. Co. v. Hahn, 6 Cir., 47 F.2d 59. In other words, we cannot say as a matter of law that any and all inferences which the jury might reasonably draw from the evidence would support only a verdict for defendant and not one for plaintiff.' Spotts v. Baltimore & O.R. Co., supra, 102 F.2d at page 162. 25 See also, Wild v. Pitcairn, 347 Mo. 915, 149 S.W.2d 800; and Newkirk v. Los Angeles Junction R. Co., 21 Cal.2d 308, 131 P.2d 535. 26 The inefficiency of the brake in this case may have consisted of its defective condition or its defective functional operation resulting, in either case, in its knocking from the brake platform an experienced railroad man attempting to tighten or set the brake in the customary manner described in his testimony. That testimony was not descriptive of precise mechanical defects in the structure of the brake. It was, however, simple and direct testimony from which a jury reasonably might infer the brake's defectiveness and its inefficiency in the sense necessary to establish a violation of the Safety Appliance Acts. After a brakeman had attempted to set all of the brakes, the chain on this brake still hung loose, indicating that it was not set. When the brake was partially tightened by an experienced freight conductor familiar with that kind of an operation, he found that it differed from the ordinary brake. He found that 'it was kind of stiff, and like a spring—like a shoe kicking back.' While he was holding the wheel, before it was 'pulled all the way on,' it 'kicked back,' he couldn't hold it, and 'down' he went. This resulted in serious injuries to his hand and back. While different conclusions might be possible, the jury, which heard the testimony and saw the petitioner's illustrations of his handling of the brake, reasonably could infer from that evidence that the condition of this brake and its action were not those of an efficient hand brake. 27 The questions at issue were questions of fact. The jury was entitled to draw inferences from the evidence. From the evidence presented, the jury reasonably could find, as it did in its special verdict, (1) that the brake was not an efficient brake, and (2) that the fact that the brake was not an efficient brake contributed to or caused injury to the petitioner. In the face of this, the trial court erred in entering a judgment for the respondent in accordance with the motion for a directed verdict. 28 The respondent is not subject, as has been suggested, to an absolute liability to its employees comparable to that established by a workmen's compensation law.7 As an interstate common carrier, however, it is subject to liability for injuries to its employees resulting from its violation of its absolute duty to comply with the Safety Appliance Acts. The evidence here was sufficient to support the verdict for the petitioner, whether tested by the formula used by this Court in Improvement Co. v. Munson, 14 Wall. 442; Slocum v. New York Life Ins. Co., 228 U.S. 364, 33 S.Ct. 523, 57 L.Ed. 879, Ann.Cas.1914D, 1029; Tennant v. Peoria & P.U.R. Co., 321 U.S. 29, 64 S.Ct. 409, 88 L.Ed. 520; or Lavender v. Kurn, supra. The requirement is for probative facts capable of supporting, with reason, the conclusion expressed in the verdict. 29 'Petitioner was required to present probative facts from which the negligence and the causal relation could reasonably be inferred. 'The essentil requirem ent is that mere speculation be not allowed to do duty for probative facts after making due allowance for all reasonably possible inferences favoring the party whose case is attacked.' Galloway v. United States, 319 U.S. 372, 395, 63 S.Ct. 1077, 1089, 87 L.Ed. 1458; * * *.' Tennant v. Peoria & P.U.R. Co., supra, 321 U.S. at pages 32, 33, 64 S.Ct. at page 411, 88 L.Ed. 520. 30 See also, Blair v. Baltimore & O.R. Co., 323 U.S. 600, 65 S.Ct. 545, 89 L.Ed. 490; Brady v. Southern R. Co., 320 U.S. 476, 64 S.Ct. 232, 88 L.Ed. 239; Pennsylvania R. Co. v. Chamberlain, 288 U.S. 333, 343, 53 S.Ct. 391, 395, 77 L.Ed. 819; Western & A.R. Co. v. Hughes, 278 U.S. 496, 49 S.Ct. 231, 73 L.Ed. 473; and Baltimore & O.R. Co. v. Groeger, 266 U.S. 521, 524, 45 S.Ct. 169, 170, 69 L.Ed. 419. 31 'Only when there is a complete absence of probative facts to support the conclusion reached does a reversible error appear. But where, as here, there is an evidentiary basis for the jury's verdict, the jury is free to discard or disbelieve whatever facts are inconsistent with its conclusion. And the appellate court's function is exhausted when that evidentiary basis becomes apparent, it being immaterial that the court might draw a contrary inference or feel that another conclusion is more reasonable.' Lavender v. Kurn, supra, 327 U.S. at page 653, 66 S.Ct. at page 744, 90 L.Ed. 421. 32 We believe that the evidence given at the trial, with the inferences that the jury justifiably could draw from it, was sufficient to support the verdict originally rendered for the petitioner. Accordingly, the judgment of the Circuit Court of Appeals sustaining the judgment entered for the respondent by the District Court is hereby reversed. 33 Reversed. 1 'Sec. 2. * * *, it shall be unlawful for any common carrier subject to the provisions of this Act (of April 14, 1910) to haul, or permit to be hauled or used on its line, any car subject to the provisions of this Act not equipped with appliances provided for in this Act, to wit: All cars must be equipped with secure sill steps and efficient hand brakes; all cars requiring secure ladders and secure running boards shall be equipped with such ladders and running boards, and all cars having ladders shall also be equipped with secure hand holds or grab irons on their roofs at the tops of such ladders: * * *.' (Italics supplied.) 36 Stat. 298, 45 U.S.C. § 11, 45 U.S.C.A. § 11. 2 See note 1, supra. 3 'Rule 50. Motion for a Directed Verdit. '(b) Reservation of Decision on Motion. * * * Within 10 days after the reception of a verdict, a party who has moved for a directed verdict may move to have the verdict and any judgment entered thereon set aside and to have judgment entered in accordance with his motion for a directed verdict; * * *. If a verdict was returned the court may allow the judgment to stand or may reopen the judgment and either order a new trial or direct the entry of judgment as if the requested verdict had been directed. * * *' Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c. 4 Further testimony stated that his injuries were due to this fall. Other testimony supported the petitioner's claim, under the Federal Employers' Liability Act, 35 Stat. 65, 53 Stat. 1404, 45 U.S.C. § 51, 45 U.S.C.A. § 51, that the respondent was negligent in moving the train while the petitioner was trying to tighten the brake and without any direction from him. This charge, however, was disposed of by the special verdict of the jury, stating that the train did not move, thus strengthening the probative force of the testimony that the petitioner's fall was caused by the stiffness and kickback of the brake. 5 The special verdict was as follows: '1. Was the brake in question an efficient brake? Answer 'yes' or 'no.' (Answer) No '2. If you find that the brake in question was not an efficient brake, did that fact contribute to or cause any injuries to the plaintiff? Answer 'yes' or 'no.' (Answer) Yes '3. Did the train move after the seven shifted cars were coupled to the three standing cars? Answer 'yes' or 'no.' (Answer) No '4. If you find that the train moved after the cars were coupled, did that fact contribute to or cause any injuries sustained by the plaintiff? Answer 'yes' or 'No.' (Answer) No '5. Was the plaintiff thrown from a moving train? Answer 'yes' or 'no.' (Answer) No '6. Did the plaintiff become ill while walking on the ground, without having been thrown from the train? Answer 'yes' or 'no.' (Answer) No' 6 See note 1, supra. 7 See Griswold v. Gardner, 7 Cir., 155 F.2d 333, 334, 337.
78
331 U.S. 469 67 S.Ct. 1330 91 L.Ed. 1610 UNITED STATESv.SMITH et al. No. 498. Argued March 11, 1947. Decided June 2, 1947. Rehearing Denied Oct. 13, 1947. See 68 S.Ct. 28. Mr. Douglas W. McGregor, of Washington, D.C., for petitioner. Mr. Robert T. McCracken, of Philadelphia, Pa., for respondent, John Memolo. No appearance for Hon. William F. Smith, District Judge. Mr. Justice JACKSON delivered the opinion of the Court. 1 The United States in this case sought writs of mandamus and prohibition from the Court of Appeals directed to the judges of the District Court for the Middle District of Pennsylvania to require that an order by which a new trial was granted to one John Memolo be vacated. 2 Memolo was convicted of tax evasion after jury trial before Judge William F. Smith. Three days later Memolo filed a motion for new trial wnd was given leave to file reasons in its support. He filed 54 reasons such as the trial court's denial of continuance of motion to quash the indictment, of motion for a bill of particulars, and of motion for a directed verdict. He complained also of the court's action in discharging some of the petit jurors, in admission and exclusion of evidence, in instructing the jury, and in conduct toward defendant and his counsel said to have been prejudicial. On the same day Judge Smith denied the motion and sentenced Memolo to three years imprisonment and fines. 3 Memolo appealed, assigned as errors all of the motion grounds and, in addition, the denial of the motion for new trial. The Court of Appeals for the Third Circuit affirmed with a per curiam opinion declaring that it could perceive no substantial error in the proceedings. United States v. Memolo, 3 Cir., 152 F.2d 759. Petition for certiorari was denied by this Court, Memolo v. United States, 327 U.S. 800, 66 S.t. 902, 90 L.Ed. 1025. Therefore, the Court of Appeals issued its mandate of affirmance and in the conventional form commanded that 'such execution and further proceeding be had in said cause, as according to right and justice, and the laws of the United States ought to be had, the said appeal notwithstanding.' Memolo was then taken into custody and on April 8, 1946, imprisoned in a federal penitentiary. 4 The following day the Clerk of the District Court received from Judge Smith an order dated April 8th 'that judgment heretofore entered be vacated and that the verdict heretofore returned be set aside, and that a new trial be granted the defendant.' It was accompanied by a 'memorandum' reciting the history of the case and that 'This Court, while the appeal was pending, reconsidered the grounds urged by the defendant in support of his motion for a new trial. It is our opinion upon this reconsideration that in the interest of justice a new trial should be granted the defendant.' It assigned no more particular ground for the order. Memolo was thereupon released from the penitentiary on bail. 5 On the Government's petition to the Court of Appeals for writs directing that the order be vacated, Memolo was allowed to intervene. Judge Smith also answered asserting that his order 'was in accordance with the mandate of this Court and was authorized by the Rules of Criminal Procedure of 1946, effective March 21, 1946, particularly Rule 33 thereof.' He referred to his memorandum but did not further elucidate his reasons for granting a new trial. On consideration, the court below sitting en banc denied the petition for writs of mandamus and prohibition. 3 Cir., 156 F.2d 642. Two of the five judges dissented. 6 The mandate which the appellate court returned to the District Court was in the conventional and long-used form adapted to all appealed causes and contained no special directions peculiar to this case. It was neutral on the issues here raised and nothing in its terms either expressly authorized or prohibited the order for new trial. The power of the District Court to make such an order turns entirely on the Rules of Criminal Procedure cited and relied upon by Judge Smith. 7 Rule 33 provides: 'New Trial. The court may grant a new trial to a defendant if required in the interest of justice. If trial was by the court without a jury the court may vacate the judgment if entered, take additional testimony and direct the entry of a new judgment. A motion for a new trial based on the ground of newly discovered evidence may be made only before or within two years after final judgment, but if an appeal is pending the court may grant the motion only on remand of the case. A motion for a new trial based on any other grounds shall be made within 5 days after verdict or finding of guilty or within such further time as the court may fix during the 5-day period.' 18 U.S.C.A. following section 687. 8 The first sentence of this rule is declaratory of the power to grant a new trial 'in the interest of justice' instead of for reasons catelogued as they might have been.1 The generality of the reasons assigned by Judge Smith for the order in question is all that is required. But this sentence says nothing of the time within which the court must act or of the effect of an intervening appeal and affirmance on the power. Such time provisions as there are relate to filing of motions by the defendant. 9 The last sentence of the rule which puts a five-day limit on motions for new trial on any ground other than newly-discovered evidence was suggested by the law as it stood before adoption of the New Rules. Generally speaking, the power of a court over its judgments at common law expired with the term of Court. United States v. Mayer, 235 U.S. 55, 67—69, 35 S.Ct. 16, 18—20, 59 L.Ed. 129. There was, however, a three-day limitation on the right to move for a new trial. Rule 2, Criminal Appeals Rules of May 7, 1934, 292 U.S. 662, 18 U.S.C. § 688, 18 U.S.C.A. § 688. Rule 33, in its last sentence, extended that period to five days, and otherwise extended the time in which to move for new trial because of newly-discovered evidence. The limitation by expiration of the term was repealed by Rule 45(c). 10 It is now said that because the literal language of the Rule places the five-day limit only on the making of the motion, it does not limit the power of the court later to grant the motion, and the power survives affirmance of the judgment by appellate courts. Briefly, Judge Smith thought and intervenor argues that the rule prevents a defendant from asking the court to grant a new trial after the times specified, but that it permits the judge to order retrial without request and at any time. The result, in view of annulment of the term limitation,2 would be that the power of the trial court to grant new trials on its own motions lingers on indefinitely. There are several reasons why this construction of the Rules is not acceptable. 11 It is not the function of appellate courts to review tentative decisions of trial courts. The Circuit Court of Appeals had no jurisdiction to review the denial of the motion for a new trial unless the denial was 'final.' Judicial Code, § 128(a), 28 U.S.C. § 225(a), 28 U.S.C.A. § 225(a). Question of finality would be raised if the trial court, while formally denying the motion for new trial on the record, reserves the right to change its mind after the opinion of an appellate court has been elicited. In this case the Court of Appeals reviewed 54 specifications of error and found none to warrant reversal. All of this was but vain if the trial court was to act as its own reviewing body or if it had not reached a conclusive determination of the orders being appealed. Such a practice would authorize the appellate process to be exercised in an advisory capacity while the trial court, regardless of appellate decision, could set aside all that was the basis of appeal. 12 Moreover, it would be a strange rule which deprived a judge of power to do what was asked when request was made by the person most concerned, and yet allowed him to act without petition. If a condition of the power is that request for its exercise be not made, serious constitutional issues would be raised. For it is such request which obviates any later objection the defendnt might m ake on the ground of double jeopardy. Murphy v. Massachusetts, 177 U.S. 155, 160, 20 S.Ct. 639, 641, 44 L.Ed. 711; cf. Ex parte Lange, 18 Wall. 163, 21 L.Ed. 872. This intervenor, for example, has been tried, convicted and imprisoned and has served some, although little, time on the sentence of the court. After remand of his case, he made no further motion for a new trial and could make none. It is not necessary for us now to decide whether his retrial on the court's own motion would amount to double jeopardy.3 That a serious constitutional issue would be presented by such a procedure is enough to suggest that we avoid a construction that will raise such an issue. 13 For yet another reason, we would be reluctant to hold that the court has a continuing power on his own initiative to grant what the defendant has not the right to go into open court and ask. To approve the practice followed in this case would almost certainly subject trial judges to private appeals or application by counsel or friends of one convicted. We think that expiration of the time within which relief can openly be asked of the judge, terminates the time within which it can properly be granted on the court's own initiative. If the judge needs time for reflection as to the propriety of a new trial, he is at liberty to take it before denying a timely made motion therefor. 14 Support for the interpretation urged by respondent rises from fear of miscarriage of justice. New trials, however, may be granted for error occurring at the trial or for reasons which were not part of the court's knowledge at the time of judgment. For the latter, the Rules make adequate provision. Newly-dicovered evidence may be made ground for motion for new trial within two years after judgment. Rule 33. For the former, habeas corpus provides a remedy for jurisdictional and constitutional errors at the trial without limit of time. Johnson v. Zerbst, 304 U.S. 458, 58 S.Ct. 1019, 82 L.Ed. 1461, 146 A.L.R. 357; Walker v. Johnston, 312 U.S. 275, 61 S.Ct. 574, 85 L.Ed. 830; Waley v. Johnston, 316 U.S. 101, 62 S.Ct. 964, 86 L.Ed. 1302; Adams v. United States rx rel. McCann, 317 U.S. 269, 63 S.Ct. 236, 87 L.Ed. 268, 143 A.L.R. 435. Possibility of unredressed injustice therefore remains only in prejudicial happenings during trial.4 The trial judge is given power by the Rules to entertain motions for new trial within five days after verdict and may extend that time for so long as he thinks necessary for proper consideration of the course of the trial. But extension of that time indefinitely is no insurance of justice. On the contrary, as time passes, the peculiar ability which the trial judge has to pass on the fairness of the trial is dissipated as the incidents and nuances of the trial leave his mind to give way to immediate business. It is in the interest of justice that a decision on the propriety of a trial be reached as soon after it has ended as is possible, and that decision be not deferred until the trial's story has taken on the uncertainty and dimness of things long past. 15 A majority of the Court of Appeals thought it a shocking suggestion that on mature reflection a District Judge may not correct an injustice because his first reaction was different. We doubt if many cases will occur in which very shocking injustices will survive after the trial court denies a motion based on detailed recital of grounds for new trial and a Court of Appeals affirms. This possibility seems too remote to induce us to hold that a trial court's denial of a new trial, affirmed on appeal, has no finality and that a trial judge may, even after service of a sentence has begun, set the whole proceedings aside and start over—if indeed a new start would not also the forbidden.5 5 When the draftsmen of the Rules of Civil Procedure, adopted long before the Criminal Rules, wanted to give the trial judge power to grant a new trial on his own initiative, they did so in express words. Rule 59(d), Rules of Civil Procedure, 28 U.S.C.A. following section 723c. We hold that the Government was entitled to the relief sought. The judgment is accordingly reversed with direction that writs issue to effect vacation of the order for new trial. Judgment reversed. 1 Section 269 of the Judicial Code, 28 U.S.C. § 391, 28 U.S.C.A. § 391, provides less generally that 'All United States courts shall have power to grant new trials, in cases where there has been a trial by jury, for reasons for which new trials have usually been granted in the courts of law.' That section like Rule 33 does not expressly put a limit of time on the power granted, yet it was never suggested that it gave district courts power to grant a new trial at any time. It may be said that the term rule applied, but the first sentence of § 269 mightas readily have been interpreted as an exception to that rule as the first sentence of the present rule may be construed to be restricted by no period of time. It may be worthy of note that Rule 33 provides that a court may grant a new trial to a defendant, and does not say that the court may order a new trial. 2 Before the new Rules, there was no question that the power of the trial judge to grant a new trial was limited by the duration of the term. United States v. Mayer, supra. If the Rules had extended that power indefinitely, it would seem that considerable comment on this fundamental change would have been called forth. Yet hardly any one suggested that Rule 33 means what respondent contends it does. But cf. Stewart, Comments on Federal Rules of Criminal Procedure, 8 John Marshall L.Q. 296, 303. The Rules, in abolishing the term rule, did not substitute indefiniteness. On the contrary, precise times, independent of the term, were prescribed. The policy of the Rules was not to extend power indefinitely but to confine it within constant time periods. See Notes to Rules of Criminal Procedure, Rule 45. 3 Nor need we decide whether his intervention in this case in support of the trial judge's power amounts to a consent to a second trial. 4 Although this Court has reserved decision on whether the federal district courts are empowered to entertain proceedings in the nature of coram nobis 'to bring before the court that pronounced the judgment errors in matters of fact which had not been put in issue or passed upon, and were material to the validity and regularity of the legal proceeding itself. * * *' United States v. Mayer, 235 U.S. 55, 68, 35 S.Ct. 16, 19, 59 L.Ed. 129, it is difficult to conceive of a situation in a federal criminal case today where that remedy would be necessary or appropriate. Of course, the federal courts have power to investigate whether a judgment was obtained by fraud and make whatever modification is necessary, at any time. Universal Oil Products Co. v. Root Refining Co., 328 U.S. 575, 66S.Ct. 1176 , 90 L.Ed. 1447.
01
331 U.S. 586 67 S.Ct. 1355 91 L.Ed. 1687 ORDER OF UNITED COMMERCIAL TRAVELERS OF AMERICAv.WOLFE. No. 32. Reargued Nov. 12, 1946. Decided June 9, 1947. [Syllabus from pages 586-588 intentionally omitted] E. W. Dillon, of Columbus, Ohio, for petitioner. Hubbard F. Fellows, of Rapid City, S.D., for respondent. Mr. Justice BURTON delivered the opinion of the Court. 1 This is an action in a circuit court of the State of South Dakota, brought by an Ohio citizen against a fraternal benefit society incorporated in Ohio, to recover benefits claimed to have arisen under the constitution of that society as a result of the death of an insured member who had been a citizen of South Dakota throughout his membership. The case presents the question whether the full faith and creditclause of the Constitution of the United States1 required the court of the forum, South Dakota, to give effect to a provision of the constitution of the society prohibiting the bringing of an action on such a claim more than six months after the disallowance of the claim by the Supreme Executive Committee of the society,2 when that provision was valid under the law of the state of the society's incorporation, Ohio, but when the time prescribed generally by South Dakota for commencing actions on contracts was six years3 and when another statute of South Dakota declared that 'Every stipulation or condition in a contract, by which any party thereto is restricted from enforcing his rights under the contract by the usual legal proceedings in the ordinary tribunals, or which limits the time within which he may thus enforce his rights, is void.'4 2 We hold that, under such circumstances, South Dakota, as the state of the forum, was required, by the Constitution of the United States, to give full faith and credit to the public acts of Ohio under which the fraternal benefit society was incorporated, and that the claimant was bound by the six-month limitation upon bringing suit to recover death benefits based upon membership rights of a decedent under the constitution of the society. This has been the consistent view of this Court.5 3 The record in the present case well illustrates both the practical effect of such a limitation as that contained in the constitution of this society and the need for the application of the full faith and credit clause to membership obligations in fraternal benefit societies. 4 The petitioner, The Order of United Commercial Travelers of America, was incorporated in 1888, under the general corporation laws of Ohio.6 By 1920, when the decedent, Ford Shane, of Rapid City, South Dakota, became a member, this fraternal benefit society was in active operation in many states. Then, and at his death in 1931, it was regulated in detail by the General Code of Ohio. That Code included public acts of Ohio on such subjects as the following: § 9462, Fraternal benefit society defined;7 § 9463, Lodge system; § 9464, Representative form of government, including restrictions on amendments to its constitution; § 9465, Exemption from general insurance laws of the State; § 9466, Benefits; § 9467, To whom benefits shall be paid, stating limitations on the degrees of family relationship permitted to exist between a member and thse whom he may designate to receive benefits as a result of his death; § 9468, Age limits for admission to membership; § 9469, Certificate shall constitute agreement;8 § 9469-1, Exception as to commercial travelers;9 § 9470, Investment, disbursement and application of funds; § 9481, Laws of society shall be binding on members and beneficiaries, and the society may provide, as here, that no subordinate body, officers or members may waive any of the provisions of the laws and constitution of the society.10 These public acts have created and regulated the society and the rights and obligations of its members. They are reflected in its articles of incorporation, constitution and by-laws. They make possible uniformity of rights and obligations among all members throughout the country, provided full faith and credit are given also to the constitution and by-laws of the society insofar as they are valid under the law of the state of incorporation. If full faith and credit are not given to these provisions, the mutual rights and obligations of the members of such societies are left subject to the control of each state. They become unpredictable and almost inevitably unequal. 5 The principal office of this society has been continuously in Columbus, Ohio. The society has established subordinate councils in many states and, at all times involved in this case, has been licensed to do business in South Dakota as a foreign fraternal benefit society.11 In accordance with the requirements for maintaining such license in good standing, the society has kept on file, with the Commissioner of Insurance of South Dakota, a copy of the society's constitution, including § 11 of Article IV, here in controversy, limiting the time for bringing suits to recover claims for benefits based upon that Article. The state of the forum thus has been continuously in a position to revoke or refuse to renew the society's license to do business in that State if it had good reason to do so. There is no evidence that South Dakota has attempted or suggested such action. The favorable, rather than hostile, attitude of South Dakota towards such societies is evidenced by its own authorization of their incorporation in that State on terms identical word for word, with those prescribed in Ohio.12 6 The decedent, on July 31, 1920, applied for membership in the society through Rapid City Council No. 516, in Rapid City, South Dakota. He was 37 years old, a manager and salesman selling 'packing products' on the road, in good physical condition and employed in an occupation of precisely the type contemplated for membership in this society.13 He named his wife as his beneficiary in case of his death from accidental means. On August 19, 1920, he was accepted by the Supreme Council as an insured member of the society under 'Class A.' The certificate, No. 169655, evidencing this acceptance was executed at Columbus, Ohio, by the Supreme Counselor and Supreme Secretary. In 1922, following a brief suspension, he applied for reinstatement in what ws then Black Hills Council No. 516 in Rapid City, South Dakota, and, on December 21, 1922, was reinstated as an insured member of the society under 'Class A.' In his application for this renewal, he referred to himself as a traveling salesman, selling meat to dealers, and named his mother, Elizabeth Shane of Mt. Vernon, South Dakota, as his beneficiary.14 Thereafter, he remained in good standing and it is upon his membership, evidenced by this certificate, also executed in Ohio, that this action depends. On May 8, 1931, he visited a physician's office in Rapid City, South Dakota, to be examined for stricture. The doctor applied a local anesthetic preliminary to introducing an instrument known as a 'sound' for exploratory purposes. The local anesthetic was a drug known as 'butyn.' The record shows that butyn commonly was used by physicians for such a purpose; that it was properly administered in the usual and proper amount and was of the usual and proper strength; but that the decedent, unknown to any one, was subject to a rare idiosyncrasy, as a result of the presence of which he suffered convulsions immediately following the administration of the anesthetic and died within two minutes. 7 In accordance with the procedure prescribed in the constitution of the society, the decedent's beneficiary promptly mailed to the society a notice of her son's death. On June 8, 1931, the Supreme Executive Committee, in Columbus, Ohio, reviewed and disallowed her claim on its merits and mailed to her notice of such action. On June 16, she filed a complaint against the society in a circuit court for the State of South Dakota to recover death benefits, amounting to $6,300, claimed under Article IV of the constitution of the society. The case was removed to the United States District Court for South Dakota because of diversity of citizenship. On September 2 it was tried, without a jury, and, on December 15, 1931, judgment was rendered for the mother with findings of fact and conclusions of law dealing with the merits of the case. This judgment, on February 27, 1933, was reversed, on its merits, by the United States Circuit Court of Appeals for the Eighth Circuit and judgment for costs was entered against Elizabeth Shane. Order of United Commercial Travelers v. Shane, 64 F.2d 55.15 Upon remand of the case to it, the District Court, on April 18, 1933, ordered 'that the Judgment of the United States Circuit Court of Appeals in this matter be made the Judgment of this Court, and that all costs of this Court relating to such Mandate and Judgment, be taxed and allowed the defendant.' (Unreported.) Thus, within less than two years, the case had been completely presented and heard by the District Court and the Circuit Court of Appeals and disposed of, on its merits, in favor of the society, with full recognition of the diversity of citizenship of the parties and in compliance with the time limits prescribed by the constitution of the society. 8 The present proceeding, however, resulted from the fact that, pursuant to stipulation of the parties, the District Court, on January 18, 1934, dismissed the case without prejudice to the filing of another suit. On June 15, 1934, the decedent's mother assigned her claim to Edward C. Wolfe, the present respondent, a citizen of Ohio, as trustee, to enforce collection of the claim. On the same day, the present action was filed in a circuit court of the State of South Dakota. An answer was entered and a stipulation was made to use the testimony which had been taken in the District Court in the previous case. There the case rested for six years. On October 19, 1940, an amended answer was filed raising, among others, the defense that this second action was in violation of the following Section of the constitution of the society: 'Article IV. Insurance 9 'Waivers. 10 'Sec. 11. No suit or proceeding, either at law or in equity, shall be brought to recover any benefits under this Article after six (6) months from the date the claim for said benefits is disallowed by the Supreme Executive Committee. 11 'No Grand or Subordinate Council, officer, member or agent of any Subordinate, Grand, or the Supreme Council of the Order is authorized or permitted to waive any of the provisions of the Constitution of this Order, relating to insurance, as the same are now in force or may be hereafter enacted.' 12 It is not disputed that such provision has been in such constitution since before the decedent's first application for membership in the society, and that it was printed in full on the back of the certificate of membership originally issued to the decedent. It further was alleged that this provision was valid and binding upon the members of the society by and under the laws of Ohio; that the highest court of that State had held that a fratrnal benef it society, by its constitution and by-laws, could limit the time within which suit must be brought to recover for benefits promised to members; and that to deny the binding effect of that limitation on the plaintiff in such suit would be a violation of the full faith and credit clause of the Constitution of the United States, art. IV, § 1, and a violation of the society's rights thereunder. We decide that issue here in favor of the society. No claim is made here that the society is barred from this defense by any waiver purporting to have been made on its behalf in connection with the dismissal of the earlier action without prejudice to filing another. See Riddlesbarger v. Hartford Ins. Co., 7 Wall. 386, 19 L.Ed. 257. In this view of the case, it is not necessary to consider the other defenses. 13 In 1942, the case was presented before a judge of a circuit court of the State of South Dakota. Upon the death of that judge before a decision in the case, it was heard, in 1943, by another judge of that court, largely upon the record made, in 1931, in the United States District Court. The state court, on April 4, 1944, entered judgment in favor of the claimant, respondent herein. In 1945, the Supreme Court of the State of South Dakota, by a divided court, affirmed that judgment. 18 N.W.2d 755. Because of the constitutional issue presented and its relation to previous decisions of this Court, we granted certiorari. 326 U.S. 712, 66 S.Ct. 176, 90 L.Ed. 421. The case was argued here February 28, 1946. Later it was restored to the docket, assigned for reargument before a full bench and reargued here November 12, 1946. 14 This is a clear-cut case of a claim based solely upon membership rights and obligations contained in the constitution of an incorporated fraternal benefit society, the terms of which are subject to amendment through the processes of a representative form of government authorized by the law of the state of incorporation. There is no evidence in the records of the three trials, no suggestion in the opinions of the lower courts, and no claim in the arguments here that the decedent was not a bona fide active member of the society, or that the society was acting otherwise than as a fraternal benefit society. This case, therefore, is to be distinguished from a claim for death benefits under an ordinary contract of accident insurance, whether issued by a stock or a mutual insurance company. 15 We rely upon the character of the membership obligation sued upon. There is substantial evidence to support a contention that the contract of membership, including all insurance rights, was made in Ohio and that many acts in connection with the contract were required to be performed in Ohio and were so performed. However, we do not rely upon the place of concluding the contract of membership or upon the place prescribed for its performance. We rely, rather upon its character as something created, regulated and subject to change through a fraternal and representative form of intra-corporate government, dependent for its terms, continuity and unity upon public acts of Ohio creating and regulating fraternal benefit societies. 16 Although the respondent, suing as an Ohio citizen, has eliminated the South Dakota citizenship of the original beneficiary as a jurisdictional factor in this case, we do not hold that, for that reason, he may not urge the courts to consider the continuous South Dakota residence and citizenship of the decedent and of the named beneficiary in determining whether the public policy of South Dakota should yield to the full faith and credit clause of the constitution of the United States in giving recognition to the charter rights and obligations of the society as an Ohio corporation. 17 In order, however, to appreciate the nature of the obligation here relied upon, it is essential to see how completely its terms are interwoven with the enabling legislation authorizing the corporate charter and with the constitution and by-laws of th society, as well as with the member's application for and his certificate of membership in such society. 18 The enabling legislation, corporate charter and certificate of membership have been described. The application for membership contributes nothing further to the issue except to emphasize the integration which it demonstrates between the member and the articles of incorporation, constitution and by-laws of his society. There was no application for insurance separate from the application for membership. Benefits derived from membership flowed solely from the decedent's membership status. 19 There remain to be considered the constitution and by-laws of the society. These set forth the main body of the member's rights and obligations, including those of a fraternal and procedural nature as well as those relating to financial benefits and liabilities. The principal part of the record consists of printed copies of the charter, constitution and by-laws of the society, one as generally effective September 1, 1922, and the other as effective September 1, 1930. A comparison of these copies shows that many changes were made in the rights and obligations of members during the decedent's membership in the society.16 20 The 1930 constitution, in pamphlet form, filled 90 closely printed pages. Its subject matter is outlined in the margin.17 It is obvious how vital these terms, both in detail and as a whole, were to each member. The by-laws filled six pages. They consisted of 29 paragraphs dealing with the conduct of meetings of the Subordinate (or local) Councils, Grand (or regional) Councils and the Supreme (national or international) Council. Under such a constitution it is impossible to separate the member's insurance rights and obligations from his other rights and obligations. While the statute authorizing the incorporation of fraternal benefit societies calls for 'a lodge system with ritualistic form of work' and this is a natural expression of a close community of interest among members of a fraternal benefit society, yet it is not the formality of any ritual that is of primary significance from the legal point of view in this case. The more critical factors are that the society is a voluntary fraternal association 'organized and carried on solely for the mutual benefit of its members and their beneficiaries, and not for profit, and having a * * * representative form of government, and which shall make provision for the payment of benefits' in accordance with certain statutory requirements.18 Historically, many groups of people have been drawn together naturally into fraternal organizations for social and economic reasons. Some of these have developed into those forms of fraternal benefit societies now officially recognized by many states. The relationships between the members of such societies are contractual in that they are voluntarily undertaken in consideration of the like obligations of others. However, interwoven with their financial rights and obligations, they have other common interests incidental to their memberships, which give them a status toward one another that involves more mutuality of interest and more interdependence then arises from purely business and financial relationships. This creates 'The indivisible unity, between the members of a crporation of this kind in respect of the fund from which their rights are to be enforced and the consequence that their rights must be determined by a single law, * * *. The act of becoming a member is something more than a contract, it is entering into a complex and abiding relation, and as marriage looks to domicil, membership looks to and must be governed by the law of the State granting the incorporation.'19 21 The relationship thus established between a member and his fraternal benefit society differs from the ordinary contractual relationship between a policyholder and a separately owned corporate or 'stock' insurance company. It differs also from that between an insured member of the usual business form of a mutual insurance company and that company. The fact of membership in the Ohio fraternal benefit society is the controlling and central feature of the relationship. As long as he remains a member, the terms of his membership, including obligations and benefits relating to the insurance funds of the society, are subject to change without his individual consent. The control over those terms is vested by him and his fellow members in the elected representative government of their society as authorized and regulated by the law of Ohio. Upon that law the continued existence of the society depends. The foundation of the society is the law of Ohio. It provides the unifying control over the rights and obligations of its members. Sovereign Camp v. Bolin, 305 U.S. 66, 75, 59 S.Ct. 35, 37, 83 L.Ed. 45, 119 A.L.R. 478, discussed infra. It is this dependence of membership rights upon the public acts of the domiciliary state, supported by the requirement that full faith and credit shall be given in each state to those public acts, that has been recognized by this Court in the unbroken line of decisions reviewed in this opinion. 22 The decisions passing upon this comparatively narrow issue are to be distinguished from those which deal only with the well established principle ofconflict o f laws that 'If action is barred by the statute of limitations of the forum, no action can be maintained though action is not barred in the state where the cause of action arose.' Restatement, Conflict of Laws § 603 (1934). It is to that general principle that such early cases as Hawkins v. Barney's Lessee, 5 Pet. 457, 8 L.Ed. 190, and McElmoyle v. Cohen, 13 Pet. 312, 10 L.Ed. 177, have reference. The decisions here reviewed are to be distinguished, likewise, from those supporting the converse general principle that 'If action is not barred by the statute of limitations of the forum, an action can be maintained, though action is barred in the state where the cause of action arose.' Restatement, Conflict of Laws § 604 (1934). Neither of these general statements is here questioned. An obvious need for modification of the latter statement, however, has led many states to place a limitation upon it through the adoption of the so-called 'borrowing statutes' of limitations. The result is that today 'Statutes frequently provide that an action may not be maintained if it has been barred by the statute of limitations at the place where the action accrued or, in some cases, at the domicil of the defendant.' Id. § 604, comment b. These numerous 'borrowing statutes' demonstrate the general recognition of the sound public policy of limiting, under some circumstances, the application of the general statute of limitations of the state of the forum. The full faith and credit clause applied, as in the present case, is but another limitation voluntarily imposed, by the people of the United States, upon the sovereignty of their respective states in applying the law of the forum. See Broderick v. Rosner, 294 U.S. 629, 643, 55 S.Ct. 589, 592, 79 L.Ed. 1100, 100 A.L.R. 1133, and Milwaukee County v. White Co., 296 U.S. 268, 276, 277, 56 S.Ct. 229, 233, 234, 80 L.Ed. 220, discussed infra. 23 Even without the compelling force of statutory or constitutional provisions, the courts have recognized other restrictions on the law of the forum. For example, it is well established that, in the absence of a controlling statute to the contrary, a provision in a contract may validly limit, between the parties, the time for bringing an action on such contract to a period less than that prescribed in the general statute of limitations, provided that the shorter period itself shall be a reasonable period.20 Such shorter periods, written into private contracts, also have been held to be entitled to the constitutional protection of the Fourteenth Amendment under appropriate circumstances. See Home Ins. Co. v. Dick, 281 U.S. 397, 50 S.Ct. 338, 74 L.Ed. 926, 74 A.L.R. 701, and Hartford Accident & Indemnity Co. v. Delta Pine Land Co., 292 U.S. 143, 54 S.Ct. 634, 78 L.Ed. 1178, 92 A.L.R. 928, mentioned again infra. 24 The instant case presents additional facts which distinguish it from the cases governed by the foregoing general rules. The principal distinguishing feature of this case is the membership of the decedent in the Ohio fraternal benefit society, which South Dakota made available to him through the license issued to it to do business in South Dakota. Even conceding, for purposes of argument, that the decedent's membeship contr act was entered into in South Dakota, rather than where it was accepted at the society's home office in Ohio, it is the character of that fraternal benefit membership, created and defined by the laws of Ohio and fostered by the fraternal benefit laws of South Dakota, that is at issue. Conceding further that, as interpreted in this case by the Supreme Court of South Dakota, the provision of § 897 of the South Dakota Code (quoted near the beginning of this opinion), generally outlawing contractual time limits on the enforcement of contractual rights by legal proceedings, is an attempt to make void the time limit included in § 11 of Article IV of the constitution of this Ohio fraternal benefit society, we then are brought face to face with the full faith and credit clause of the Constituion of the United States. It is here that we reach the line of decisions of this Court, extending from Supreme Council of Royal Arcanum v. Green, 237 U.S. 531, 35 S.Ct. 724, 59 L.Ed. 1089, L.R.A.1916A, 771, to Pink v. A.A.A. Highway Express, 314 U.S. 201, 207, 208, 210, 211, 62 S.Ct. 241, 246, 247, 86 L.Ed. 152, 137 A.L.R. 957, discussed infra. These decisions are directly in point. Without questioning this Court's recognition of the common law principle of conflict of laws as to the control by each state over the application of its own statutes of limitations, this line of decisions demonstrates this Court's simultaneous recognition of the necessary scope of the full faith and credit clause in this field. These cases unwaveringly safeguard, in each state, the effectiveness of the public acts of every other state as expressed in the rights and obligations of members of fraternal benefit societies. Such societies exist by virtue of such state legislation, and the rights and obligations incident to membership therein are as much entitled to full faith and credit as the statutes upon which they depend. 25 The respondent's claim to benefits is based upon Item (12) of § 4 of Article IV of this constitution which specifies the death benefits derived from the membership of 'Class A' members. The prohibition limiting the time for suing on this claim, which is relied upon as the defense of the society, appears as § 11 of the same Article IV. Section 11 deals with the decedent's membership relationship to the society no less than does § 4. The limitation, resulting from § 4, on the amount of the benefit to be paid to beneficiaries and the limitation, resulting from § 11, on the time when litigation may be brought by beneficiaries, are of comparable character. To permit recovery here would be to permit recovery on a special and unauthorized type of membership more favorable to decedent than was available to other members. This would fail to give full faith and credit to the terms of membership authorized by Ohio by placing an additional liability on the society beyond that authorized by Ohio or accepted by the society. 26 Underlying the defense of the society is the requirement that § 11 be valid under the law of Ohio as the State of incorporation. Such validity was admitted by the Supreme Court of South Dakota in its opinion below. 18 N.W.2d 755, 756. 'The parties to a contract of insurance may, by a provision inserted in the policy, lawfully limit the time within which suit may be brought thereon, provided the period of limitation fixed be not unreasonable.' Appel v. Cooper Ins. Co., 76 Ohio St. 52 (Syllabus, No. 1, by the court), 80 N.E. 955, 10 L.R.A., N.S., 674, 10 Ann.Cas. 821. The court there enforced a clause in a fire insurance policy providing that no action for recovery of any claim shall be sustainable in any court unless commenced within six months after the fire itself, even though such actions were prohibited during most of the first three of those six months. In Bartley v. National Business Men's Ass'n, 109 Ohio St. 585, 143 N.E. 386, the Supreme Court of Ohio approved the Appel case and applied it to a two-year contractual limitation for suing an Ohio mtual prote ctive association on a claim for accidental death. See also, Modern Woodmen v. Myers, 99 Ohio St. 87, 124 N.E. 48, upholding a strict adherence to limitations stated in the by-laws of fraternal benefit societies; Portage County Mutual Fire Ins. Co. v. West, 6 Ohio St. 599, emphasizing the reasonableness of short periods for commencing suits on claims against mutual companies; Young v. Order of United Commercial Travelers, 142 Neb. 566, 7 N.W.2d 81, recognizing the validity in Ohio of the precise provision of the constitution of the society here at issue, and sustaining its effectiveness in Nebraska by force of the full faith and credit clause of the Constitution of the United States; and Roberts v. Modern Woodmen, 133 Mo.App. 207, 113 S.W. 726, sustaining, in Missouri, a one-year limitation in the insurance contract of an Illinois fraternal benefit society, in the face of a contrary local policy as to Missouri contracts limiting the time within which suits may be instituted. See, also, Riddlesbarger v. Hartford Ins. Co., 7 Wall. 386, 19 L.Ed. 257. 27 Starting with the recognized validity under the law of Ohio, of Article IV, § 11 of the constitution of the petitioning society, that society has a complete defense to the present action unless such § 11 is not enforcible in the courts of South Dakota because of a contrary public policy of that State. We examine first the claim that such a contrary policy exists, and then show why, on the principles established by this Court, the full faith and credit clause of the Constitution of the United States requires the courts of South Dakota to give effect to the public acts of Ohio as expressed in such § 11. 28 The general statutes of limitations which have been in effect in South Dakota throughout the period involved in this case have prescribed limits varying from 20 years to one year according to the subject of the action.21 'An action upon a contract, obligation, or liability, express or implied,' was required to be commenced within six years.22 On the other hand the State required the insertion in every health or accident policy issued in the State, a standard contractual provision limiting to two years the time for bringing an action upon it.23 Throughout this period, the South Dakota statutes, moreover, have expressed no hostility toward domestic or foreign fraternal benefit societies. In fact, they have provided for the incorporation, license and supervision of such societies in terms closely comparable to those of the statutes of Ohio.24 29 Both the alleged prohibition by South Dakota of such a contractual limitation as is contained in § 11 and the public policy of South Dakota against such limitations depend entirely upon its statute directed generally against contractual limitations upon rights to sue on contracts which is quoted, supra, from § 897 of the Revised Cde of Sout h Dakota, 1919.25 30 The public policy so declared is not directed specifically against fraternal benefit societies or their insurance membership requirements. In this very case, however, the Supreme Court of South Dakota, in its decision below, expressly held that this statute applies to and renders void in South Dakota § 11 of Article IV of this society's constitution. We thus are confronted with an inescapable issue as to the unconstitutionality of an attempt, through this statute, to declare void in South Dakota a provision of the constitution of an incorporated fraternal benefit society which comes within the authorization of a public act of the State of Ohio and is valid under the laws of that State. This is not a new issue in this Court. It falls squarely within a line of decisions consistently upholding the applicability of the full faith and credit clause in support of comparable provisions in the constitution of such a society. 31 In Supreme Council of Royal Arcanum v. Green, 237 U.S. 531, 35 S.Ct. 724, 59 L.Ed. 1089, L.R.A.1916A, 771, Mr. Chief Justice White, writing on behalf of a unanimous Court, pointed out that the full faith and credit clause there required the state of the forum (New York) to give effect to a law of the state of incorporation (Massachusetts) pursuant to which a fraternal benefit society had amended its constitution so as to increase the assessment rate upon the complaining members, although the trial court had found that their contract of membership was entered into, made and completed in the State of New York, and that under the law of that State, the member would not be bound by such increase. 206 N.Y. 591, 597, 100 N.E. 411. In terms which have not been overruled or modified by it in later decisions, this Court there explained why the full faith and credit clause requires controlling effect to be given to the law of the state of incorporation in interpreting and determining the enforcibility of the rights and obligations of members contained in the constitution and by-laws of such societies. It said: '* * *, as the charter was a Massachusetts charter and the constitution and by-laws were a part thereof, adopted in Massachusetts, having no other sanction than the laws of that state, it follows by the same token that those laws were integrally and necessarily the criterion to be resorted to for the purpose of ascertaining the significance of the constitution and by-laws. Indeed, the accuracy of this conclusion is irresistibly manifested by considering the intrinsic relation between each and all the members concerning their duty to pay assessments and the resulting indivisible unity between them in the fund from which their rights were to be enjoyed. The contradiction in terms is apparent which would rise from holding, on the one hand, that there was a collective and unified standard of duty and obligation on the part of the members themselves and the corporation, and saying, on the other hand, that the duty of members was to be tested isolatedly and individually by resorting not to one source of authority applicable to all, but by applying many divergent, variable, and conflicting criteria. In fact, their destructive effect has long since been recognized. Gaines v. Supreme Council of the Royal Arcanum, C.C., 140 F. 978; (Royal Arcanum) v. Brashears, 89 Md. 624, 43 A. 866. And from this it is certain that when reduced to their last analysis the contentions relied upon in effect destroy the rights which they are advanced to support, since an assessment which was one thing in one state and another in another, and a fund which was distributed by one rule in one state and by a different rue somewher e else, would in practical effect amount to no assessment and no substantial sum to be distributed. It was doubtless not only a recognition of the inherent unsoundness of the proposition here relied upon, but the manifest impossibility of its enforcement which has led courts of last resort of so many states in passing on questions involving the general authority of fraternal associations and their duties as to subjects of a general character concerning all their members to recognize the charter of the corporation and the laws of the state under which it was granted as the test and measure to be applied.' Id., at pages 542, 543 of 237 U.S., at pages 727, 728 of 35 S.Ct., 59 L.Ed. 1089, L.R.A.1916A, 771. 32 In Modern Woodmen v. Mixer, 267 U.S. 544, 45 S.Ct. 389, 69 L.Ed. 783, 41 A.L.R. 1384, this Court unanimously followed the same reasoning and Mr. Justice Holmes, in language previously quoted supra, emphasized the 'complex and abiding relation' of a membership in a fraternal benefit society. He said, 'as marriage looks to domicil, membership looks to and must be governed by the law of the State granting the incorporation.' Id., at page 551 of 267 U.S., at page 389 of 45 S.Ct., 69 L.Ed. 783, 41 A.L.R. 1384. In that case, the Court held that the full faith and credit clause required the state of the forum (Nebraska) to give effect to the law of the state of incorporation (Illinois) pursuant to which a by-law of the fraternal benefit society had been enacted requiring that the continued absence of any member, although unheard from for 10 years, should not give his beneficiary the right to recover death benefits until the full term of the member's expectancy of life had expired. This was so held in the face of a rule of law in the state of the forum that seven years of unexplained absence were sufficient to establish death for purposes of such a recovery. This Court stated that neither the public policy of the forum nor the opinion of the Supreme Court of that State that the by-law was unreasonable, nor the fact that the membership contract had been made in South Dakota, nor the fact that the by-law itself had been adopted several years after the membership relation had commenced, could affect this result. This Court said: 'We need not consider what other States may refuse to do, but we deem it established that they cannot attach to membership rights against the Company that are refused by the law of the domicil. It does not matter that the member joined in another State.' Id, at page 551 of 267 U.S., at page 389 of 45 S.Ct., 69 L.Ed. 783, 41 A.L.R. 1384. 33 In Broderick v. Rosner, 294 U.S. 629, 55 S.Ct. 589, 79 L.Ed. 1100, 100 A.L.R. 1133, this Court, with Mr. Justice Cardozo noting dissent, applied this principle to a suit brought in a New Jersey court against certain citizens of New Jersey to recover unpaid assessments levied upon them as stockholders in a bank incorporated under the laws of New York. A New Jersey statute sought to prohibit, in the courts of New Jersey, proceedings for the enforcement of any stockholder's statutory personal liability imposed by the laws of another state, except in suits for equitable accounting, to which the corporation, its legal representatives, and all of its creditors and stockholders were to be necessary parties. Practically, this amounted to an attempt to bar such suits from the New Jersey courts. This Court, however, said 'It is sufficient to decide, that since the New Jersey courts possess general jurisdiction of the subject-matter and the parties, and the subject-matter is not one as to which the alleged public policy of New Jersey could be controlling, the full faith and credit clause requires that this suit be entertained (without compliance with the special New Jersey statute).' Id., at page 647 of 294 U.S., at page 594 of 55 S.Ct., 79 L.Ed. 1100, 100 A.L.R. 1133. 34 Mr. Justice Brandeis, in stating the reasoning of the Court in the Broderick case, said: 35 '* * * the full faith and credit clause does not require the nforcement of every right which has ripened into a judgment of another state or has been conferred by its statutes. See Bradford Electric Light Co. v. Clapper, 286 U.S. 145, 160, 52 S.Ct. 571, (576) 76 L.Ed. 1026, 82 A.L.R. 696; Alaska Packers Ass'n v. Industrial Accident Comm'n, 294 U.S. 532 (at page 546), 55 S.Ct. 518, (at page 523,) 79 L.Ed. 1044. But the room left for the play of conflicting policies is a narrow one. * * * For the States of the Union, the constitutional limitation imposed by the full faith and credit clause abolished, in large measure, the general principle of international law by which local policy is permitted to dominate rules of comity. 36 'Here the nature of the cause of action brings it within the scope of the full faith and credit clause. The statutory liability sought to be enforced is contractual in character. The assessment is an incident of the incorporation. Thus the subject-matter is peculiarly within the regulatory power of New York, as the State of incorporation. 'So much so,' as was said in Converse v. Hamilton, 224 U.S. 343, 260, 32 S.Ct. 415, 419, 56 L.Ed. 749, (Ann.Cas.1913D, 1292,) 'that no other state property can be said to have any public policy thereon. * * *' * * * In respect to the determination of liability for an assessment, the New Jersey stockholders submitted themselves to the jurisdiction of New York. For 'the act of becoming a member (of a corporation) is something more than a contract, it is entering into a complex and abiding relation, and as marriage looks to domicil, membership looks to and must be governed by the law of the State granting the incorporation.' Modern Woodmen of America v. Mixer, 267 U.S. 544, 551, 45 S.Ct. 389, 69 L.Ed. 783, 41 A.L.R. 1384.'26 Id., at pages 642—644 of 294 U.S., at pages 592, 593 of 55 S.Ct., 79 L.Ed. 1100, 100 A.L.R. 1133. 37 In Milwaukee County v. White Co., 296 U.S. 268, 56 S.Ct. 229, 80 L.Ed. 220, Mr. Justice Stone, speaking for the Court, said: 'The very purpose of the full-faith and credit clause was to alter the status of the several states as independent foreign sovereignties, each free to ignore obligations created under the laws or by the judicial proceedings of the others, and to make them integral parts of a single nation throughout which a remedy upon a just obligation might be demanded as of right, irrespective of the state of its origin.' Id., at pages 276, 277 of 296 U.S., at page 234 of 56 S.Ct., 80 L.Ed. 220. 38 In Sovereign Camp v. Bolin, 305 U.S. 66, 59 S.Ct. 35, 83 L.Ed. 45, 119 A.L.R. 478, this Court unanimously approved the foregoing principles and authorities and applied them to a case that goes even beyond the issue presented by the instant case. In that case, Bolin joined a Missouri lodge of a fraternal benefit society incorporated in Nebraska. His certificate of membership was delivered to him in Missouri, and he paid his dues and assessments in Missouri. He was over 43 when he joined the society in June, 1896. At that time, one of its by-laws provided that a member joining at an age greater than 43 was entitled to life membership without payment of further dues or assessments after his certificate had been outstanding 20 years. On his certificate were endorsed the words 'Payments to cease after 20 years,' and it stated that, if in good standing, he would be entitled to participate in the beneficial fund up to $1,000 payable to his eneficiari es and to $100 for placing a monument at his grave. He paid his dues and assessments for the required 20 years but ceased doing so in July, 1916. Upon his death, his beneficiaries sued in a state court of Missouri to recover on his certificate. They were met by the defense that, in Trapp v. Sovereign Camp of the Woodmen of the World, 102 Neb. 562, 168 N.W. 191, the Supreme Court of Nebraska, in 1918, in a representative suit binding all members, had held that the by-law of the society, which had purported to authorize the 'payments to cease' certificates, was ultra vires and void. In the suit by Bolin's beneficiaries, the Supreme Court of Missouri then held that from 1889 to 1897, including the time when Bolin joined the society, there had been no Missouri statute providing for the registration and filing of reports in Missouri by foreign fraternal benefit societies and that there had been no provision exempting them from the operation of the general insurance laws of Missouri. The Supreme Court of Missouri, accordingly, applied what it considered to be the Missouri law and public policy. On this basis, it disregarded the special status of the claim as one derived from the decedent's membership in a Nebraska fraternal benefit society and disregarded the Nebraska law, as interpreted by the Supreme Court of Nebraska, which had held the decedent's purported exemption from payments after 1916 to be ultra vires and void. The Missouri court treated his membership as a Missouri contract, subject to the general insurance laws of Missouri, interpreted his certificate as an ordinary Missouri contract, not ultra vires under the law of Missouri, and held the society liable upon it. This Court, however, reversed that judgment on the ground that, under the full faith and credit clause, the Missouri courts were required to accept the Nebraska law as to the validity of the corporate by-law. 39 Mr. Justice Roberts, writing for the Court said: 40 'We hold that the judgment denied full faith and credit to the public acts, records, and judicial proceedings of the State of Nebraska. 41 '* * * The beneficiary certificate was not a mere contract to be construed and enforced according to the laws of the state where it was delivered. Entry into membership of an incorporated beneficiary society is more than a contract; it is entering into a complex and abiding relation and the rights of membership are governed by the law of the state of incorporation. Another state, wherein the certificate of membership ws issued, cannot attach to membership rights against the society which are refused by the law of the domicile. 42 'The court below was not at liberty to disregard the fundamental law of the petitioner and turn a membership beneficiary certificate into an old line policy to be construed and enforced according to the law of the forum. The decision that the principle of ultra vires contracts was to be applied as if the petitioner were a Missouri old line life insurance company was erroneous in the light of the decisions of this court which have uniformly held that the rights of members of such associations are governed by the definition of the society's powers by the courts of its domicile. 43 'Under our uniform holdings the court below failed to give full faith and credit to the petitioner's charter embodied in the statutes of Nebraska as interpreted by its highest court.' Id., at pages 75, 78, 79, of 305 U.S., at pages 38, 39, of 59 S.Ct., 83 L.Ed. 45, 119 A.L.R. 478 (citing Modern Woodmen v. Mixer, supra, and Supreme Council of Royal Arcanum v. Green, supra). 44 This pronouncement as to the uniform holdings of this Court has not been repudiated or modified. In the present case, the decisions relied upon by the court below, in reaching a contrary result, deal with related but distinguishable situations. 45 In Pink v. A.A.A. Highway Express, 314 U.S. 201, 62 S.Ct. 241, 86 L.Ed. 152, 137 A.L.R. 957, this Court, in a unanimous opinion written by Mr. Chief Justice Stone,held that the full faith and credit clause does not apply to an action brought in the courts of Georgia to collect assessments against an alleged member of an insolvent mutual insurance company, according to the terms of his contract of membership, unless such membership first be proved. The Court, however, recognized that corporate procedure in conformity with the statutes of the state of incorporation is entitled to full faith and credit so far as the necessity and amount of the assessment of stockholders' liability is concerned, and said at pages 207, 208 of 314 U.S., at page 245 of 62 S.Ct., 86 L.Ed. 152, 137 A.L.R. 957: 'The like principle has been consistently applied to mutual insurance associations, where the fact that the policyholders were members was not contested,' citing Supreme Council of Royal Arcanum v. Green, 237 U.S. 531, 35 S.Ct. 724, 59 L.Ed. 1089, L.R.A.1916A, 771; Modern Woodmen v. Mixer, 267 U.S. 544, 45 S.Ct. 389, 69 L.Ed. 783, 41 A.L.R. 1384. And further: 'Where a resident of one state has by stipulation or stock ownership become a member of a corporation or association of another, the state of his residence may have no such domestic interest in preventing him from fulfilling the obligations of membership as would admit of a restricted application of the full faith and credit clause. But it does have a legitimate interest in determining whether its residents have assented to membership obligations sought to be imposed on them by extrastate law to which they are not otherwise subject.' Id., at pages 210, 211 of 314 U.S., at page 247 of 62 S.Ct., 86 L.Ed. 152, 137 A.L.R. 957. 46 These recent references to the principle which is involved in the instant case constitute a significant recognition of its consistency with the decisions of this Court in related but distinguishable situations. The Pink case appropriately emphasized the distinction between, on the one hand, a sound local public policy which closely scrutinizes the proof of the entry into a certain relationship and, on the other hand, a local public policy which, in the face of the full faith and credit clause, would seek to eliminate important terms from that relationship after it has been entered into. 47 Contemporaneously with this development of the policy of this Court, applying the full faith and credit clause in support of membership obligations in fraternal benefit societies, it has considered the same clause in several related situations. For example, it has applied it in requiring the Minnesota courts to recognize the obligation of members of the safety fund department of a Connecticut life insurance company to meet assessments levied upon them pursuant to a mutual assessment plan valid under the laws of Connecticut. Hartford Life Ins. Co. v. Ibs, 237 U.S. 662, 35 S.Ct. 692, 59 L.Ed. 1165, L.R.A.1916A, 765. This was a unanimous opinion written by Mr. Justice J. R. Lamar. In another unanimous opinion in Hartford Life Ins. Co. v. Barber, 245 U.S. 146, at page 150, 38 S.Ct. 54, 55, 62 L.Ed. 208, Mr. Justice Holmes said, 'The powers given by the Connecticut charter are entitled to the same credit elsewhere as the judgment of the Connecticut court. Supreme Council of the Royal Arcanum v. Green, 237 U.S. 531, 542, 35 S.Ct. 724, 727, 59 L.Ed. 1089, L.R.A.1916A, 771.' See also, John Hancock Ins. Co. v. Yates, 299 U.S. 178, 182, 183, 57 S.Ct. 129, 131, 132, 81 L.Ed. 106. 48 Without reliance upon the full faith and credit clause, a somewhat similar result has been recognized in the protective effect of the Fourteenth Amendment of the Constitution of the United States, prohibiting the deprivation of any person of his property without due process of law. A like policy underlies § 10 of Article I of the Constitution, prohibiting a state from passing any law impairing the obligation of contracts. Accordingly, in Home Ins. Co. v. Dick, 281 U.S. 397, 50 S.Ct. 338, 74 L.Ed. 926, 74 A.L.R. 701, in an opinion by Mr. Justice Brandeis, this Court relied upon the Fourteenth Amendmen in dealin g with ordinary insurance policies. It upheld unanimously the effectiveness of a contractual one-year limitation upon the right to sue for recovery of a loss under a marine fire insurance policy, where such limitation was good in Mexico (in which country the insurance was written and was to be performed), as against a two-year general statute of limitations of the state of the forum (Texas). In Hartford Accident & Indemnity Co. v. Delta & Pine Land Co., 292 U.S. 143, 54 S.Ct. 634, 78 L.Ed. 1178, 92 A.L.R. 928, in an opinion by Mr. Justice Roberts, the Court again relied upon the Fourteenth Amendment. There it upheld unanimously a 15-month contractual limitation upon the right to sue upon a fidelity bond. This limitation was valid in Tennessee, where such bond was entered into, and it was here unheld against the local policy of the state of the forum (Mississippi). 49 In a related but readily distinguishable series of cases dealing with conflicting claims arising under Workmen's Compensation Acs, emphasis has been placed upon the rule stated by Mr. Justice Stone, for a unanimous Court, in Alaska Packers Ass'n v. Comm'n, 294 U.S. 532, 547, 55 S.Ct. 518, 523, 524, 79 L.Ed. 1044. He there said: '* * * the conflict is to be resolved, not by giving automatic effect to the full faith and credit clause, compelling the courts of each state to subordinate its own statutes to those of the other, but by appraising the governmental interests of each jurisdiction, and turning the scale of decision according to their weight.' 50 In Pacific Employers Ins. Co. v. Industrial Accident Comm'n, 306 U.S. 493, at page 502, 59 S.Ct. 629, at page 633, 83 L.Ed. 940, again speaking for the Court, he added: 'And in the case of statutes, the extra-state effect of which Congress has not prescribed, as it may under the constitutional provision, we think the conclusion is unavoidable that the full faith and credit clause does not require one state to substitute for its own statute, applicable to persons and events within it, the conflicting statute of another state, even though that statute is of controlling force in the courts of the state of its enactment with respect to the same persons and events.' See also, Magnolia Petroleum Co. v. Hunt, 320 U.S. 430, 64 S.Ct. 208, 88 L.Ed. 149, 150 A.L.R. 413, in which, as Chief Justice, he upheld the controlling effect of the full faith and credit clause as against the law of the forum. 51 The language quoted from the Pacific Ins. Co. case, supra, also was quoted with approval in Williams v. North Carolina, 317 U.S. 287, at page 296, 63 S.Ct. 207, at page 212, 87 L.Ed. 279, 143 A.L.R. 1273. In the latter case, on the basis of the full faith and credit clause, this Court gave effect to the law of the domicil in upholding the validity of a divorce, as against the law of the forum. 52 We find no conflict between the position taken in the instant case and that taken in the foregoing cases or in Griffin v. McCoach, 313 U.S. 498, 61 S.Ct. 1023, 85 L.Ed. 1481, 134 A.L.R. 1462, Hoopeston Canning Co. v. Cullen, 318 U.S. 313, 63 S.Ct. 602, 87 L.Ed. 1722, 145 A.L.R. 1113, or in other decisions of this Court upon which reliance has been placed to support an opposite conclusion. 53 Accepting the view, expressed in these related cases, that this Court should not give what Mr. Justice Stone called a mere 'automatic effect to the full faith and credit clause,'27 this Court consistently has upheld, on the basis of evaluated public policy, the law of the state of incorporation of a fraternal benefit society as the law that should control the validity of the terms of membership in that corporation. The weight of public policy behind the general statute of South Dakota, which seeks to avoid certain provisions in ordinary contracts, does not equal that which makes necessary the recognition of the same terms of membership for members of fraternal benefit societies wherever their beneficiaries may be. This is especially obvious where the state of he forum, with full information as to those terms of membership, has permitted such societies to do business and secure members within its borders. There would be little sound public policy in permitting the courts of South Dakota to recognize an action to collect the full benefits to be derived from a membership in the petitioner society, while, at the same time, nullifying other integral terms of that same membership which limit certain rights of beneficiaries to enforce collection of such benefits. It is of the essence of the full faith and credit clause that, if a state gives some faith and credit to the public acts of another state by permitting its own citizens to become members of, and benefit from, fraternal benefit societies organized by such other state, then it must give full faith and credit to those public acts and must recognize the burdens and limitations which are inherent in such memberships. In this case, the state of the forum has licensed the society to do business within its borders. It is concerned as much with the validity and fairness of the obligations to be enforced by assessments against its citizens who become members of the society as it is with the benefits to be claimed by those who become its beneficiaries. In this case, the full faith and credit clause, therefore, requires that effect be given to the six-month limit, prescribed by the society and authorized by Ohio, upon the right to commence this action. Such limit expired before this action was commenced and the judgment of the Supreme Court of South Dakota in favor of the respondent accordingly is reversed. 54 Reversed. 55 Mr. Justice BLACK, with whom Mr. Justice DOUGLAS, Mr. Justice MURPHY, and Mr. Justice RUTLEDGE join (dissenting). 56 The Order of United Commercial Travelers is a corporation chartered under the laws of Ohio with power to do a fraternal insurance business. It sells contracts of insurance in Ohio. South Dakota has licensed the corporation to sell fraternal insurance policies in that state. Under this permission, the corporation has an office, called a local council, in Black Hills, South Dakota, vested with power to administer 'the business and fraternal affairs of the Order.' 57 The insured, a citizen and resident of South Dakota, applied to the Black Hill's office for membership and an insurance policy. After the application had been accepted and an insurance certificate signed at the petitioner's home office in Ohio, it was 'forwarded by the defendant corporation to South Dakota for delivery to the insured.' From then until his death in South Dakota, the insured paid his premiums to the corporation's Black Hills office. During all that period his beneficiary lived in that state. This action was brought in a court of that state on behalf of the beneficiary after the corporation had refused to pay the claim. 58 The association denied liability because this suit had not been commenced within six months after the association had disallowed the beneficiary's claim. This is required by the corporation's constitution which is incorporated by reference into its contracts of insurance. And in a series of cases, cited in the Court's opinion, the Supreme Court of Ohio has held that suits brought in Ohio courts on mutual, stock company, or fraternal insurance contracts, may be barred by contractual arrangements between the parties which require that suit be brought within a shorter period than that provided by the Ohio limitations statutes. 59 But the South Dakota Supreme Court has held that a statute of that state which provides that 'every provision in a contract restricting a party from enforcing his rights under it by usual legal proceedings in ordinary tribunals or limiting his time to do so, is void,' S.D.Code 1939, § 10.0705, renders the limitation provision in this contract unenforceable in her courts. This Court today reverses the South Dakota decision on the ground that its refusal to enforce the private contract is a denial of full faith and credit to the 'public Acts, Records, and Judicial Proceedings' of Ohio. U.S.Const. art. IV, § 1. 60 First. More than 100 years ago this Court said that to require a state to apply the 'limitation laws' of another state rather than its own would reduce it 'to a state of vassalage,' presenting the anomaly 'of a sovereign state governed by the laws of another sovereign.' Hawkins v. Barney's Lessee, 5 Pet. 457, 466, 467, 8 L.Ed. 190. A few years later the Court was asked to hold that the full faith and credit clause barred a state from applying its own statute of limitations in a suit brought on a cause of action which had arisen in another state. On that question the Court did not 'entertain a doubt'; the holding was that it could not 'be even plausibly inferred' that the state in which the suit was brought was denied that power by the full faith and credit clause. McElmoyle v. Cohen, 13 Pet. 312, 324, 328, 10 L.Ed. 177. While the case then under consideration involved a suit on a judgment rendered in another state, the broad ruling was that, so far as the full faith and credit clause is concerned, a state has power to apply its own statute of limitations in every kind of action and without regard to where the cause of action arose. 61 The constitutional force of the McElmoyle refusal to require a forum state to give full faith and credit to a foreign state's statute of limitations is not weakened in the slightest by the fact that some states have seen fit to adopt 'borrowing statutees.' See Anderson v. Helmers, 331 U.S. 461, 67 S.Ct. 1340, 1343, at note 3. For other states, notably South Dakota here, have adopted statutes with purposes quite opposite to that of borrowing statutes. And under the McElmoyle rule, whichever limitations policy a forum state chooses to follow—to borrow or to refuse to borrow—it is free, so far as the full faith and credit clause is concerned, to do so. 62 The plain effect of today's decision is to overrule the McElmoyle case. And it does so, despite the fact that the holding of that case has never before been cited with disapproval; in fact, that holding has been repeatedly approved and reaffirmed throughout the years since it was decided.1 The Court distinguishes the McElmoyle rule, and in fact relies generally for its decision upon the line of decisions in which Modern Woodmen of America v. Mixer, 267 U.S. 544, 45 S.Ct. 389, 69 L.Ed. 783, 41 A.L.R. 1384, is the leading case. But the statute of limitations was not in issue in the Mixer case, the case on which it relied, or the cases which have since relied on it. The McElmoyle case was not even cited in the Court's Mixer opinion; nor does anything said in it detract from the rule of the McElmoyle case that states can, despite the full faith and credit clause, apply their own statutes of limitation.2 Yet the Court now treats the Mixer case as controlling, and holds that the full faith and credit clause deprives South Dakota of power to apply its own statute of limitations.3 63 But more than that, the 'state of vassalage' to which the Court's decision here reduces South Dakota is not even in subordination to the laws of another state. The Court's opinion means that South Dakota must yield to a 'law' adopted by the members of an Ohio-created private fraternal insurance association. That 'law,' appearing only in the private association's constitution, provides in the same kind of language that legislatures ordinarily use in their statutes of limitation that 'No suit or proceeding, either at law or in equity, shall be brought to recover any benefits under this Article after six (6) months from the date of the claim for said benefits is disallowed by the Supreme Executive Committee.' 64 The nearest that this private association's 'law' comes to being a law of Ohio is that Ohio permits but does not require it. Because the private association's constitution was incorporated by reference in the policy contract, including the constitution's 'statute of limitations,' the Court now holds that this corporate 'statute of limitations' prohibits application of South Dakota's statute of limitations. Thus the Court's holding is that an Ohio private corporation's laws have a higher constitutional standing than an Ohio law or judgment would have—unless, as seems to be true, McElmoyle v. Cohen, supra, and subsequent cases approving it are now being overruled. It would be quite a radical departure from this Court's previous authorities to hold that the full faith and credit clause bars a government from applying its own statutes of limitations to suits brought in its courts, a power which, this Court said in its McElmoyle decision, governments have exercised since remote antiquity. Id. at page 327, of 13 Pet. It is a far greater departure to hold that a state's limitation statute must take second place to the limitations rules adopted by a privately operated corporation. 65 It should come as quite a surprise to Ohio that its state policy can supplant South Dakota's statute of limitations, since Ohio's highest Court follows the McElmoyle rule tha 'Statutes of limitation relate to the remedy, and are, and must be, governed by the law of the forum; for it is conceded that a court which has power to say when its doors shall be opened has also power to say when they shall be closed.' Kerper v. Wood, 48 Ohio St. 613, 622, 29 N.E. 501, 502, 15 L.R.A. 656. And the principle there announced was followed by the Ohio Supreme Court as late as 1943. Payne v. Kirchwehm, 141 Ohio St. 384, 48 N.E.2d 224, 149 A.L.R. 1217; cf. Anderson v. Helmers, supra. 66 Second. Leaving aside the sui generis features of a forum state's power over limitations of actions in its courts, the present holding violates other established rules concerning a state's power to govern its own local affairs and to protect from overreaching contracts persons in whom the state has a legitimate interest. See Griffin v. McCoach, 313 U.S. 498, 61 S.Ct. 1023, 85 L.Ed. 1481, 134 A.L.R. 1462; Pink v. A.A.A. Highway Express, 314 U.S. 201, 62 S.Ct. 241, 86 L.Ed. 152, 137 A.L.R. 957. I had considered it well settled that if an insurance company does business at all in a state, its contracts are 'subject to such valid regulations as the state may choose to adopt.' See Whitfield v. Aetna Life Ins. Co., 205 U.S. 489, 495, 27 S.Ct. 578, 579, 51 L.Ed. 895; Knights Templars' & Masons Life Indemnity Co. v. Jarman, 187 U.S. 197, 202, 23 S.Ct. 108, 110, 47 L.Ed. 139; Hancock Mutual Life Ins. Co. v. Warren, 181 U.S. 73, 75, 21 S.Ct. 535, 536, 45 L.Ed. 755. This conception of broad state power has not been limited to particular kinds of laws or particular kinds of contracts of special kinds of insurance companies. Thus in regard to a mutual insurance company, the Court has held the terms of a policy governed by the law of Missouri where the contract was made in the face of a contract stipulation that they were to be governed by the laws of New York, the mutual company's domicil. New York Life Ins. Co. v. Cravens, 178 U.S. 389, 20 S.Ct. 962, 44 L.Ed. 1116. For this Court concluded from inferences it found in the Missouri Court's opinion that compliance with Missouri law 'was a condition upon the right of insurance companies to do business in the state.' Id., at page 395 of 178 U.S., at page 965 of 20 S.Ct., 44 L.Ed. 1116. It further held that Missouri had the same continuing power to regulate the business contracts of a foreign corporation permitted to do business there as it had over the contracts of domestic corporations. Id., at pages 400, 401 of 178 U.S., at page 967 of 20 S.Ct., 44 L.Ed. 1116. And when a foreign building and loan association which did business with its members only4 sought to avoid Mississippi usury laws by specifying that a loan contract with a Mississippi member was made in New York where the interest charged was not usurious, this Court held that Mississippi law governed and voided the contract. National Mutual Bldg. & Loan Ass'n v. Brahan, 193 U.S. 635, 24 S.Ct. 532, 48 L.Ed. 823. The Court approved the conclusion of the Supreme Court of Mississippi that the association, by qualifying to do business in Mississippi, 'had become 'localized' in the state, had accepted the laws of the state as a condition of doing business there, and could not, nor could (the Mississippi member) 'abrogate, by attempted contract stipulations,' those laws. See Hancock Mutual Life Ins. Co. v. Warren, 181 U.S. 73, 21 S.Ct. 535, 45 L.Ed. 755.' Id., at page 650 of 193 U.S., at page 536 of 24 S.Ct., 48 L.Ed. 823. Because the contract was thus controlled by Mississippi rather than New York law, the Court held that 'there is no foundation for the contention that full faith and credit were not given to the public acts and records of New York.' Id., at page 647 of 193 U.S., at page 535 of 24 S.Ct., 48 L.Ed. 823. 67 The Court's opinion in the present case is apparently inconsistent with the foregoing cases which have established that state courts have a continuing authority to execute the public policy of the state by refusing to enforce contract provisions of foreign corporations permitted by the state to do business there even though those corporations do business with members only. Today's opinion does imply, however, that South Dakota officials could have excluded this corporation from doing business in the state or could have revoked its license upon discovery of the foreign corporation's violation of the laws of the state. I cannot believe that the full faith and credit clause stays the hands of the state courts as instruments of state power in private litigation any more than it could forestall state authorities from revoking the association's license for persisting in making unlawful contracts. 68 Third. Another handle of South Dakota's power over this corporation derives, not from the corporation's acceptance of South Dakota law as a continuing condition of doing business, but from the number and importance of the incidents involved in the making and the performance of the specific contract here which occurred in South Dakota. Unless the Court's decision overrules5 the long line of cases cited in the margin6 this insurance contract was 'made' and to be performed in South Dakota, and its validity is governed by the law of that state. Thus in Hartford A. & I. Co. v. Delta & Pine Land Co., 292 U.S. 143, 150, 54 S.Ct. 634, 636, 78 L.Ed. 1178, 92 A.L.R. 928, Mississippi was required to enforce an insurance contract, unlawful in that state, although both the parties did business there, and although the suit on the contract was brought there, because the contract was valid in Tennessee, the state where the contract was held to have been made and which had the major connection with the whole transaction. For, said the Court, Mississippi 'cannot extend the effect of its laws beyond its borders so as to destroy or impair the right of citizens of other states to make a contract not operative within its jurisdiction, and lawful where made.' Id. at page 149 of 292 U.S., at page 636 of 54 S.Ct., 78 L.Ed. 1178, 92 A.L.R. 928. 69 Before today, contentions that the full faith and credit clause overcomes the power of a state over a contract made and operative there have been flatly rejected by this Court. Thus in American Fire Ins. Co. v. King Lbr. & Mfg. Co., 250 U.S. 2, 39 S.Ct. 431, 63 L.Ed. 810, an insurance company was authorized by Pennsylvania, the state of its incorporation, to write fire insurance on property outside that state. It was not licensed to do business by Florida, but accepted insurance applications through independent brokers there. Under the law of Pennsylvania where the applications were accepted and the policies written, brokers were apparently not authorized to waive contract provisions. But under Florda law the brokers were deemed agents of the Pennsylvania company with power to bind it by waivers. In answer to the contention that the Florida ruling denied full faith and credit to the law of Pennsylvania, this Court said that the case does not '* * * present an attempt of the Florida law to intrude itself into * * * Pennsylvania and control transactions there; it presents simply a Pennsylvania corporation having the permission of that state to underwrite policies on property outside of the state and the exercise of the right in Florida. And necessarily it had to be exercised in accordance with the laws of Florida. There was no law of Pennsylvania to the contrary—no law of Pennsylvania, would have power to the contrary. There is no foundation, therefore, for the contention that full faith was not given to a law of Pennsylvania * * *.' Id., at page 10 of 250 U.S., at page 433 of 39 S.Ct., 63 L.Ed. 810. 70 Fourth. In interpreting the full faith and credit clause this Court has repeatedly insisted that it would weigh all the interests of each state involved before holding that the full faith and credit clause qualified one state's power to govern its own affairs. See Pink v. A.A.A. Highway Express, supra, 314 U.S. at pages 210, 211, 62 S.Ct. at pages 246, 247, 86 L.Ed. 152, 137 A.L.R. 957, and cases there cited; Magnolia Petroleum Company v. Hunt, 320 U.S. 430, 436, 437, 64 S.Ct. 208, 212, 88 L.Ed. 149, 150 A.L.R. 413. I have recited the many bases for South Dakota's legitimate interest. What is the interest of Ohio to which the Court holds South Dakota must give full faith and credit? 71 It may be that the Court's view is that Ohio has an interest in securing uniformity of rights and obligations among all the policyholder-members throughout the country. For, says the Court, 'If full faith and credit are not given * * *, the mutual rights and obligations of the members of such societies are left subject to the control of each state. They become unpredictable and almost inevitably unequal.' It is true that in situations involving the liability of stockholders for assessment obligations imposed by a corporate charter or the laws of a chartering state, the assessment obligation has been held to be governed by the laws of the chartering state. Converse v. Hamilton, 224 U.S. 243, 32 S.Ct. 415, 56 L.Ed. 749, Ann.Cas.1913D, 1292; Broderick v. Rosner, 294 U.S. 629, 55 S.Ct. 589, 79 L.Ed. 1100, 100 A.L.R. 1133. And assessments against fraternal as well as mutual insurance policyholders based on ownership rights and obligations which their insurance policies, like stock holdings, represent, have been similarly held to be controlled by the law of the state of the corporation's domicil. Supreme Council of Royal Arcanum v. Green, 237 U.S. 531, 35 S.Ct. 724, 59 L.Ed. 1089, L.R.A.1916A, 771; Hartford Life Ins. Co. v. Barber, 245 U.S. 146, 38 S.Ct. 54, 62 L.Ed. 208; Hartford Life Ins. Co. v. Ibs, 237 U.S. 662, 35 S.Ct. 692, 59 L.Ed. 1165, L.R.A.1916A, 765. For insofar as a mutual or fraternal insurance policyholder assumes the assessment obligation which a stockholder may bear in other companies, he underwrites the risk that the corporation of which he is an owner might become insolvent. And that insolvency, particularly of an insurance company, would occur and generally become a responsibility of the chartering state where the principal business is conducted. The contingency of insolvency has been thought to give the chartering state greater and more direct interest in the extraterritorial collection of assessments against stockholders of corporations, than a state has in the day-to-day business transactions in which a corporation chartered by it engages in other states.7 72 This line of distinction has been clearly marked by the contrary result this Court has reached in cases concerning day-to-day business contracts made by foreign non-fraternal mutual insurance and membership loan companies with their policyholders and member-borrowers. In New York Life Ins. Co. v. Cravens, supra, 178 U.S. at page 400, 20 S.Ct. at page 967, 44 L.Ed. 1116, it was urged that the fact that the mutual insurance company there was "the administrator of a fund collected from the policyholders in different states and countries for their benefit," demonstrated 'the necessity of a uniform law to be stipulated by the parties exempt from the interference or the prohibition of the state where the insurance company is doing business.' This contention was emphatically rejected. And in National Mutual Bldg. & Loan Ass'n v. Brahan, supra, 193 U.S. at pages 636, 650, 24 S.Ct. at pages 532, 536, 48 L.Ed. 823, this Court, placing considerable reliance upon its previous Craven decision, held that contracts of a membership loan association whose controlling and central purpose, like the distinguishing 'feature' relied upon by the Court here, was 'to make loans only to its members and for * * * accumulating a fund to be returned to its members,' were, despite the full faith and credit clause, subject to the law of a state in which the association was doing business as a foreign corporation. 73 It seems apparent from these authorities that Ohio's interest in uniform administration of a corporation's contract obligations for the funds of a company created under its laws is not entitled to full faith and credit merely because of the communal interest of policyholder-members in that fund. And the fact, so heavily stressed by the Court, that the corporation was incorporated under the laws of Ohio so that its continued existence depends upon that law is plainly insufficient basis for a contention that, therefore, Ohio's interest demands full faith and credit for this contract provision. 74 Actually, it is not Ohio's interest in the uniform administration of the company's funds to which the Court gives full faith and credit. For otherwise, I should think, the opinion would cite and distinguish these cases which establish that this interest is not one entitled to full faith and credit. It is the limitations 'law' of the corporate constitution enacted to protect its own interest, not the statutes of Ohio, which are held to bar this suit because it was not filed within six months. Thus it seems manifest that the Court is giving full faith and credit to the 'laws' and the interest of the Ohio corporation. And the Court does this on the theory that the fraternal corporation's constitution which governs the terms of its contracts is 'subject to amendment through the processes of a representative form of government authorized by the law of the state of incorporation.' Apparently, it is felt that the individual South Dakota policyholder-member can protect himself from overreaching contracts within the framework of this 'representative' intracorporate government which is subject to whatever regulation Ohio chooses to impose. Until today I had never conceived of the Federal Constitution as requiring the 48 states to give full faith and credit to the laws of private corporations on the theory that a policyholder-member's ability to protect himself through intra-corporate politics makes state protection of him unnecessary and unconstitutional. It is a naive assumption that a policyholder-member of a fraternal corporation like this does not need protection from his stat. Moreover , if valid, this assumption would apply with equal logic to immunize these fraternal corporations from the laws of their domicils. 75 The conclusion reached by the Court that fraternal insurance companies are entitled to unique constitutional protection is not justified by the language of the Constitution nor by the nature of their enterprise. And our previous decisions concerning fraternal insurance companies do not support the conclusion which the Court draws from the superficial distinguishing characteristics which these companies possess. 76 As I have pointed out, those cases which hold that assessments against fraternal policyholders in their capacity as stockholders are governed by the law of the company's domicil, have no relation to a fraternal company's obligation to a beneficiary of an insurance contract. Moreover, in Sovereign Camp W.O.W. v. Bolin, 305 U.S. 66, 59 S.Ct. 35, 83 L.Ed. 45, 119 A.L.R. 478, heavily relied on by the Court, the fraternal association was freed from liability in a state in which it was not authorized to do business because a judgment of the highest court of the state which had chartered the association had declared, in a class suit to which the claimant had been, in effect, a party, that the policy sued on had been issued ultra vires. Thus the Bolin case is merely a familiar example of enforcement of res judicata under the full faith and credit clause. A judgment of any state, whether chartering state or not, would be entitled to the same respect. Here, of course, there is no judgment to which the claimant was a party which is entitled to full faith and credit. And the power of the Ohio corporation, so far as Ohio law is concerned, to make a contract consistent with South Dakota policy is unquestioned. 77 The other case relied on heavily by this Court is Modern Woodmen of America v. Mixer, supra. In that case, Mixer the beneficiary, lived in Nebraska. While the record was not wholly clear, the insured had apparently previously lived in South Dakota, and the certificate seems to have been 'issued' there. A by-law of the Woodmen, an Illinois association, provided that its certificate should insure against death but that 'long continued absence of any member unheard of shall not * * * give any right to recover on any benefit certificate.' Nebraska, where Mixer brought the suit, but in which state the contract had not been made, had a rule of evidence that a presumption of death arises from seven years unexplained absence. Apparently considering the by-law 'unreasonable,' the Supreme Court of Nebraska enforced its long-continued absence rule of evidence and held the association liable. The Supreme Court of Illinois, where the association was chartered, had held the by-law reasonable in that it merely showed a purpose of the association to limit its insurance to death rather than to extend it to long-continued absences. Steen v. Modern Woodmen of America, 296 Ill. 104, 129 N.E. 546, 17 A.L.R. 406. It was on this record that this Court reversed the Nebraska court's decision in the Mixer case. 78 This reversal can be justified on the facts of the Mixer case, which are clearly different from the facts in the case before us. There was no conflict in Mixer between the policy of the state where the contract was made, and Illinois, the state of the association's domicil. For the contract apparently had been made in a third state, South Dakota, consistently with the laws of that state. Nor does it appear from the record of that case that the association had been licensed to do business to as to accept either the law of the state where the contract was made, or that of Nebraska where the suit was brought. Finally, as I have already indicated, no statute of limitations, was involved in the Mixer case. 79 But it is said that language of the Mixer case means that the obligations of a fraternal insurance corporation are to be governed by the law of its domicil. If this language means that such an association is privileged to live above the law of the state where it does business, makes contracts, and is sued, I think that language should be repudiated. The purported differences between fraternal insurance companies and other reciprocal, co-operative and mutual insurers, are too fragmentary and inconsequential to justify any Constitutional difference in treatment. Cf. Hoopeston Canning Co. v. Cullen, 318 U.S. 313, 63 S.Ct. 602, 87 L.Ed. 1722, 145 A.L.R. 1113. 80 Neither in the Mixer case nor in the present one does the Court attempt to demonstrate, and I seriously question that a demonstration is possible, that the insurance business of a fraternal company is conducted differently in any important way from that of a mutual, reciprocal, or joint stock company. The insurance phase of this company is set apart from the fraternal phase after election to membership, even though payment of assessments levied for insurance purposes is made compulsory. The provisions of its constitution show that insurance terms and conditions are precisely like those of non-fraternal companies. Insurance funds are administered on a business basis, and they cannot be used for fraternal purposes. In short, the insurance program and activities reveal that this is an insurance company, run like other insurance companies. The only non-paper difference is that insurance is sold only to members of the fraternity. 81 Nor is it apparent to me that an individual policyholder-member in a remote community exercises any significant influence on the technical insurance aspects of a fraternal company's business. Certainly, he can no more control the policy contract provisions than could a mutual policyholder or a member of a membership loan association. And the individual member would share as much and no more in the fraternal company's gains from overreaching contracts as would participants in these indistinguishable associations. 82 That fraternal-order insurance businesses such as petitioner's are of a magnitude to move each state to regulate them so as to protect its citizens can hardly be doubted. The best information obtainable shows that in 1944 fraternal life insurance businesses in the United States had aggregate assets of almost $1,500,000,000; income of $255,600,000; $6,794,300,000 insurance in force; and 7,582,000 outstanding certificates. During 1944 they spent $43,300,000 for agents and management.8 There is, thus, every reason for giving the same force and effect to state regulation of fraternal insurance companies as is given regulation of all other insurance businesses. 83 Fifth. I fear that it may be significant that the Court has conspicuously refrained from stating in unmistakable terms that its new doctrine applies only to fraternal insurance companies. If, as the Court holds, the interest of Ohio or of its corporate creature does outweigh the interest of every state in which that creature does business, I see no sound basis in the facts or in the authorities cited by the Court for declining to apply this formula to almost every type of business corporation created in one state and doing business in another. 84 The effect of such a doctrine on the rights of states to govern themselves is graphically demonstrated by the insurance business. The five largest legal reserve life insurance companies in the United States, with total assets of approximately $15,000,000,000, have their home offices in or near New York and Connecticut. United States v. South-Eastern Underwriters Ass'n, 322 U.S. 533, 541, 64 S.Ct. 1162, 1167, 88 L.Ed. 1440. The result of the Court's opinion, if later carried to its logical conclusion, would be that the policy obligations of all of these companies, in whatever state assumed, would be governed by New York or Connecticut law or that of nearby states, and that all of the other states would be deprived of power to pass legislation believed by them to be necessary to potect thei r own citizens against unconscionable contracts. By permitting its insurance corporations, particularly mutual companies, to make contracts barring an insured's access to state courts. New York, for example, could thus render all the other states helpless to provide a judicial haven for their own wronged citizens. 85 Such a doctrine is not only novel; it is revolutionary. I think the doctrine violates the very Constitution that it is our duty to interpret. For the Court today, in part, nullifies a great purpose of the original Constitution, as later expressed in the Tenth Amendment, to leave the several states free to govern themselves in their domestic affairs. Hereafter, if today's doctrine should be carried to its logical end, the state in which the most powerful corporations are concentrated, or those corporations themselves, might well be able to pass laws which would govern contracts made by the people in all of the other states. 86 I would affirm this judgment. 1 'Full Faith and Credit shall be given in each State to the public Acts, Records, and Judicial Proceedings of every other State. And the Congress may by general Laws prescribe the Manner in which such Acts, Records and Proceedings shall be proved, and the Effect thereof.' U.S. Const. Art. IV, § 1. See also, Act of May 26, 1790, 1 Stat. 122, Act of Mar. 27, 1804, 2 Stat. 298, Rev.Stat. §§ 905, 906, 28 U.S.C. §§ 687, 688, 28 U.S.C.A. §§ 687, 688. 2 'No suit or proceeding, either at law or in equity, shall be brought to recover any benefits under this Article after six (6) months from the date the claim for said benefits is disallowed by the Supreme Executive Committee.' From § 11 of Article IV, 'Insurance,' of the constitution of The Order of United Commercial Travelers of America, as printed on the back of the original certificate of membership issued to decedent August 19, 1920, and as in effect at the filing of this action June 15, 1934. 3 § 2298, S.D.Rev.Code 1919. 4 § 897, S.D.Rev.Code 1919. 5 Supreme Council of Royal Arcanum v. Green, 237 U.S. 531, 35 S.Ct. 724, 59 L.Ed. 1089, L.R.A.1916A, 771; Modern Woodmen v. Mixer, 267 U.S. 544, 45 S.Ct. 389, 69 L.Ed. 783, 41 A.L.R. 1384; Broderick v. Rosner, 294 U.S. 629, 55 S.Ct. 589, 79 L.Ed. 1100, 100 A.L.R. 1384; Sovereign Camp v. Bolin, 305 U.S. 66, 59 S.Ct. 35, 83 L.Ed. 45, 119 A.L.R. 478. See also, Pink v. A.A.A. Highway Express, 314 U.S. 201, 207, 210, 211, 62 S.Ct. 241, 246, 247, 86 L.Ed. 152, 137 A.L.R. 957. 6 As in effect September 1, 1930, and presumably at the member's death, May 8, 1931, the articles of incorporation contained only the following provisions: 'Witnesseth: That we, the undersigned, all of whom are citizens of the State of Ohio, desiring to form a corporation, not for profit, under the general corporation laws of said State, do hereby certify: 'First. The name of said corporation shall be The Order of United Commercial Travelers of America. 'Second. Said corporation shall be located, and its principal business transacted at Columbus, in Franklin County, Ohio. 'Third. The purpose for which said corporation is formed is: '1st. To unite fraternally all Commercial Travelers, Wholesale Salesmen and such other persons of good moral character as are now or may hereafter become eligible to membership, under the provisions of the Constitution of the Order. '2d. To give all moral and material aid in its power to its members and those dependent upon them. Also to assist the widows and orphans of deceased members. '3d. To establish funds to indemnify its members for disability or death resulting from accidental means. '4th. To secure just and equitable favors for Commercial Travelers and Wholesale Salesmen as a class. '5th. To elevate the moral and social standing of its members. '6th. Said corporation shall be a secret Order. '7th. To establish a Widows' and Orphans' Reserve Fund.' This society is strikingly similar in form to the 'fraternal beneficiary association,' incorporated in Massachusetts in 1877 and described in the leading case on this subject, Supreme Council of Royal Arcanum v. Green, 237 U.S. 531, 35 S.Ct. 724, 59 L.Ed. 1089, L.R.A.1916A, 771. As to that association it was said by the Supreme Court of Massachusetts that: 'The fraternal plan, with mutuality and without profit, distinguishes the work of such an association from a commercial enterprise. It is a charitable and benevolent organization, with a limitation of membership to a special class, and a limitation upon the choice of beneficiaries.' Reynolds v. Royal Arcanum, 192 Mass. 150, 155, 78 N.E. 129, 131, 7 L.R.A.,N.S., 1154, 7 Ann.Cas. 776. 7 'Sec. 9462. Any corporation, society, order, or voluntary association, without capital stock, organized and carried on solely for the mutual benefit of its members and their beneficiaries, and not for profit, and having a lodge system with ritualistic form of work and representative form of government, and which shall make provision for the payment of benefits in accordance with section 5 (G.C. § 9466) hereof, is hereby declared to be a fraternal benefit society.' Ohio Gen.Code 1931. 8 'Sec. 9469. Every certificate issued by any such society shall specify the amount of benefit provided thereby, and shall provide that the certificate, the charer or arti cles of incorporation, of, if a voluntary association, the articles of association, the constitution and laws of the society and the application for membership and medical examination, signed by the applicant, and all amendments to each thereof, shall constitute the agreement between the society and the member, and copies of the same certified by the secretary of the society, or corresponding officer, shall be received in evidence of the terms and conditions thereof, and any changes, additions or amendments to such charter or articles of incorporation, or articles of association, if a voluntary association, constitution or laws duly made or enacted subsequent to the issuance of the benefit certificate shall bind the members and his beneficiaries, and shall govern and control the agreement in all respects the same as though such changes, additions or amendments had been made prior to and were in force at the time of the application for membership.' Ohio Gen.Code 1931. 9 'Sec. 9469-1. The provisions of section ninety-four hundred and sixty-nine of the General Code, requiring the certificate to specify the maximum amount of benefit provided thereby and the conditions governing the payment thereof, shall not apply to the certificates of a fraternal beneficiary association organized under the laws of Ohio, whose membership consists of commercial travelers and which does not obligate itself to pay stipulated amounts of benefits in case of natural death.' Ohio Gen.Code 1930. 10 'Sec. 9481. The constitution and laws of the society may provide that no subordinate body, nor any of its subordinate officers or members shall have the power or authority to waive any of the provisions of the laws and constitution of the society, and the same shall be binding on the society and each and every member thereof and on all beneficiaries of members.' Ohio Gen.Code 1931. 11 S.D.L.1919, c. 232, § 16, authorized the issuance of such a license—'upon filing with the Commissioner a duly certified copy of its charter or articles of association; a copy of its constitution and laws, certified by its secretary or corresponding officers; a power of attorney to the Commissioner (to accept service of process) * * *; a statement of its business under oath of its president and secretary, or corresponding officers, in the form required by the Commissioner, duly verified by an examination made by the supervising insurance official of its home State or other State satisfactory to the Commissioner of Insurance of this State; a certificate from the proper official in its home State, province or country, that the society is legally organized; a copy of its contract, which must show that benefits are provided for by periodical, or other payments by persons holding similar contracts; and upon furnishing the Commissioner such other information as he may deem necessary to a proper exhibt of its b usiness and plan of working, and upon showing that its assets are invested in accordance with the laws of the State, territory, district, province or country where it is organized, he shall issue a license to such society to do business in this State until the first day of the succeeding March, and such license shall, upon compliance with the provisions of this Act, be renewed annually, but in all cases to terminate on the first day of the succeeding March; provided, however, that license shall continue in full force and effect until the new license be issued or specifically refused. Any foreign society desiring admission to this State, shall have the qualifications required of domestic societies organized under this Act, upon a valuation by any one of the standards authorized in Section 23a of this Act, and have its assets invested as required by the laws of the State, territory, district, country, or province where it is organized. For each such license or renewal the society shall pay the Commissioner Two ($2.00) Dollars. When the Commissioner refuses to license any society, or revokes its authority to do business in this State, he shall reduce his ruling, order or decision to writing and file the same in his office, and shall furnish a copy thereof, together with a statement of his reason, to the officers of the society, upon request, and the action of the Commissioner shall be reviewable by proper proceedings in any court of competent jurisdiction within the State, * * *.' See also, §§ 31.2124—31.2126, 31.2139, S.D.Code of 1939. The State of Ohio has similar provisions in its Code. § 9477, Ohio Gen.Code 1931. 12 'An Act Providing for the Regulation and Control of All Fraternal Benefit Societies,' approved Mar. 11, 1919, S.D.L.1919, c. 232, pp. 240—253. For example, § 1 defines them as follows: 'Any corporation, society, order, or voluntary association, without capital stock, organized and carried on solely for the mutual benefit of its members and their beneficiaries, and not for profit, and having a lodge system with ritualistic form of work and representative form of government, and which shall make provision for the payment of benefits in accordance with Section 5 hereof, is hereby declared to be a Fraternal Benefit Society.' See also, c. 31.21, 'Fraternal Benefit Societies,' S.D.Code of 1939, and cf. with Ohio definition in note 6, supra. 13 'Sec. 2. Any white male citizen of the United States or British possessions in North America of good moral character and good general health, not under eighteen (18) and not over sixty (60) years of age, who has been actively and actually engaged for a term of not less than six months immediately preceding the date of his application as a commercial traveler, city salesman, wholesale house salesman, sales manager or merchandise broker, selling goods at wholesale or selling office, store, factory, railroad, mill or municipal equipment, for a manufacturer or wholesale dealer, or one who has had at least six months experience in either of the occupations named herein, and is thus engaged at the date of filing the application, and who is in good mental and physical condition may become a member of this Order if found acceptable.' Art. II, constitution of the society, 1922. 169655, then issued to him, and which is the primary basis for the respondent's claim, is as follows: 'Incorporated Under the General Laws of the State of Ohio (Continued on p. 594) Class A Insurance Certificate The Order of United Commercial Travelers of America Columbus, Ohio 'An Association incorporated under the laws of the state of Ohio, hereby certifies that Ford Shane, a member of The Order of United Commercial Travelers of America, in consideration of the statements contained in his application for insurance and the application fee paid by him, is hereby accepted as an Insured Member of said Order under 'Class A,' beginning at twelve (12) o'clock, noon, Standard time, on the day this certificate is dated, and is entitled to all the rights and benefits which may be provided for such 'Class A' Insured Members in and by the Constitution of said Order in force and effect at the time any accident occurs subsequent to said time and date. 'This Certificate, the Constitution, By-Laws and Articles of Incorporation of said Order, together with the application for insurance signed by said Insured Member, shall constitute the contract between said Order and said Insured Member and shall govern the payment of benefits, and any changes, additions or amendments to said Constitution, By-Laws or Articles of Incorporation, hereafter duly made, shall bind said Order and said Insured Member and his beneficiary or beneficiaries, and shall govern and control the contract in all respects. 'In Witness Whereof, we have affixed our signatures and the seal of the Supreme Council, at Columbus, Ohio, this 21st day of December A.D. 1922. 'This certificate supersedes all insurance certificates issued of a prior date bearing this number. 's/ Frank J. Rosser 'Supreme Counselor. 's/ Walter D. Murphy 'Supreme Secretary.' Seal 14 The certificate, No. 15 The Circuit Court of Appeals evidently relied, in part, on Article IV, § 7, of the constitution of the society which stated 'Nor shall benefits under this Article be payable unless external, violent and accidental means, producing bodily injury, is the proximate, sole and only cause of death, disability or loss' and said: 'There were no accidental means, but simply an unexpected or accidental result. The administration of the drug did not cause the idiosyncrasy, and, if the bodily injury which resulted in death was produced by the idiosyncrasy as a cause or means, then the administration of the drug was not the sole cause, and there would be no liability under the policy.' 64 F.2d 55, 59. Relating to a provision in the same section that 'This Order shall not be liable to any person for any benefit for any death, * * * resulting from * * * medical, mechanical or surgical treatment (except where the surgical treatment is made necessary by the accident), the intentional taking of medicine or drugs'; the Circuit Court of Appeals said: 'We think the administering of the drug must be placed in the category of medical or surgical treatment. 'If the administering of the drug in the case at bar did not constitute medical or surgical treatment, we should be at a loss how to classify such act.' Id., at pages 59, 60 of 64 F.2d. 16 Typical of these changes were those relating to the distribution, on a changed percentage basis, of funds raised by calls to meet insurance and other needs; changes in the classification of employments to be treated as hazardous enough to require the lowering of rates of disability benefits to be paid to members employed in them; and a new provision expressly recognizing the rights of uninsured members to continue as members of the society, although disqualified physically from taking advantage of insurance benefits. There also was a change in the procedure governing future amendments. 17 The 1930 constitution dealt with the following subjects and it is in them, as amended from time to time, that there can be found the rights and obligations of the members: Article I. Name, Objects, Provision for Subordinate Councils, Grand Councils and The Supreme Council. Article II. Subordinate Councils, Membership, Withdrawals, Transfer Cards, Delinquency, Suspensions, Reinstatement, Uninsured Membership, Officers and Elections, Duties of Officers, Vacancies in Office, Honorary Titles, Meetings and Quorum, Special Sessions, Reports, Per Capita Tax to Council having control and jurisdiction over the Subordinate Council, and Representation of Subordinate Councils in the Grand Council. Article III. Funds, Provision for Widows' and Orphans' Fund, Assessment Fund, Distribution of Assessment Fund, Death Fund, Disability Fund, General Expense Fund and Reserve Funds. The Assessment Fund is created by assessments on insured members, in good standing, to provide a basis for meeting assessment calls. When calls are made upon such members, the proceeds are apportioned 30% to the Death Fund, 40% to the Disability Fund, 5% to the Reserve Funds and 25% to the General Expense Fund. Article IV. Insurance. Members in good standing are subject to regular quarterly calls of $3 per insured member and the Supreme Counselor has the right to make as many calls, in an amount not to exceed $3 each, as may be required to pay in full all valid claims, together with expenses incurred in maintaining the society and conducting its business. Based on their physical condition, members become insured members of Class A or Class B. Those providing the poorer risk are out in Class B and are entitled to benefits of but one-half the amount of those provided for Class A members. The benefits are in the nature of indemnities against the result of bodily injuries 'effected through external, violent and accidental means, * * * which shall be occasioned by the said accident alone and independent of all other causes.' There are many limitations upon this liability and, in case of certain changes in the occupation or physical condition of a member, his right to benefits may be reduced or canceled. There are double indemnities for injuries resulting from accidents on passenger trains, etc., and the coverage generally is related to risks normally encountered by commercial travelers. Specific exemptions are made of injuries resulting from engaging in certain hazardous sports or from being under the influence of liquor, etc. Those who may be named as beneficiaries are limited to specified degrees of family relationship. (The form of application makes express reference to the limitations as to beneficiaries contained in the statutes of Ohio.) Provision is made for notices and proofs of claims, for surgical examinations, etc. There is a strict prohibition in § 11 (quoted supra) against the waiver of provisions of the constitution and, in the same Section, there appears the six-month limitation, here in controversy, upon the time within which to bring suits to recover benefits after a claim has been disallowed by the Supreme Executive Committee. Article V. Grand Councils, Charters for Subordinate Councils, Per Capita Tax payable to Grand Councils and detailed provisions for the operation of Grand Councils. Article VI. Supreme Council, Charters for Grand Councils, Officers and Elections and detailed provisions for the conduct of the business of the Supreme Council, including the establishment of the Supreme Executive Committee. This committee is to consist of seven members, including the Supreme Counselor, Supreme Secretary, SupremeTreasurer and four specially elected members. It has large powers over the business and activities of the society. Among these provisions are those of examining insurance claims, deciding upon their validity and adjusting them. Article VII. Prohibition of the use of malt or spirituous liquors in connection with meetings of the society. Article VIII. Memorial Day in honor of the society's first Supreme Secretary. Article IX. Special duty of every member to report the name of any member who is an extra hazardous, physical or moral risk. Article X. Prohibition against donations of funds of the society. Articles XI, XII and XIII. Trials, Penalties and Appeals relating to violations of the Constitution, By-Laws and Rules, and the divulging of secrets of the society or conduct unbecoming a gentleman. 'Article XIV. Amendments. Section 1. Proposed amendments to this Constitution, By-Laws and Articles of Incorporation shall be submitted in writing and filed with the Supreme Secretary of the Order at least six (6) months before the convening of the annual session of the Supreme Council. 'The Supreme Secretary of the Order shall, at least four (4) months before the convening of such annual session, forward to all Grand and Subordinate Councils a copy of the proposed amendments. 'Sec. 2. No amendment to the Constitution, By-Laws or Articles of Incorporation shall be adopted unless it receives the affirmative vote of at least two-thirds (2-3) (2/3) of the members of the Supreme Council present, entitled to vote, at the session when such amendment is voted upon. 'Sec. 3. All amendments to this Constitution, By-Laws and Articles of Incorporation shall take effect on the first day of September following the session of the Supreme Council at which they were adopted, unless the date for becoming effective is otherwise specified by the Supreme Council. 'Sec. 4. All recommendations or resolutions adopted by the Supreme Council which adds (add) to or conflict with this Constitution or By-Laws shall be presented to the Supreme Council at its next annual session as an amendment to the Constitution or By-Laws and shall not become effective until such amendments have been approved by a two-thirds vote of the members present entitled to vote.' (Section 4 was added between 1922 and 1931.) 18 See note 7, supra. 19 Modern Woodmen v. Mixer, 267 U.S. 544, 551, 45 S.Ct. 389, 69 L.Ed. 783, 41 A.L.R. 1384. 20 'The policy of these statutes (of limitation) is to encourage promptitude in the prosecution of remedies. They prescribe what is supposed to be a reasonable period for this purpose, but there is nothing in their language or object which inhibits parties from stipulating for a shorter period within which to assert their respective claims.' Riddlesbarger v. Hartford Ins. Co., 7 Wall. 386, 390, 19 L.Ed. 257; approved, Thompson v. Phenix Ins. Co., 136 U.S. 287, 298, 10 S.Ct. 1019, 1023, 34 L.Ed. 408. See also, Appel v. Cooper Ins. Co. infra; Bartley v. National Business Men's Assn, infra; Young v. Order of United Commercial Travelers, infra; Burlew v. Fidelity & Casualty Co. of N.Y., 276 Ky. 132, 122 S.W.2d 990, see note, 121 A.L.R. 758; 29 Am.Jur. 1039. 21 §§ 2294—2305, S.D.Rev.Code 1919, § 33.0232, S.D.Code of 1939. 22 § 2298, S.D.Rev.Code, 1919, § 33.0232(4), S.D.Code of 1939. 23 'No action at law or in equity shall be brought to recover on this policy prior to the expiration of sixty days after proof of loss has been filed in accordance with the requirements of this policy, nor shall such action be brought at all unless brought within two years from the expiration of the time within which proof of loss is required by the policy.' § 3(14), c. 229, S.D.L. 1919, at page 235. See also, § 31.1702(14), S.D.Code of 1939. This section is indicative of a state policy approving the shortening of the general statute as applied to accident policies, but it does not apply directly to or affect transactions of fraternal benefit societies because they are excluded from the general insurance statutes and are placed under the licensing provisions quoted in note 10, supra. The petitioner's constitution, filed under that requirement, fully disclosed its provision on this subject. § 12(3), c. 229, S.D.L. 1919, § 31.1708(3), S.D.Code of 1939. 24 Notes 11 and 12, supra. 25 The present counterpart of that statute appears in § 10.0705 of the South Dakota Code of 1939: '10.0705. Restraint of legal proceedings; void. Every provision in a contract restricting a party from enforcing his rights under it by usual legal proceedings in ordinary tribunals or limiting his time to do so, is void.' 26 Citing also for comparison, Supreme Council of Royal Arcanum v. Green, 237 U.S. 531, 35 S.Ct. 724, 59 L.Ed. 1089, L.R.A.1916A, 771; Hancock National Bank v. Farnum, 176 U.S. 640, 20 S.Ct. 506, 44 L.Ed. 619; McDermott v. Woodhouse, 87 N.J.Eq. 615, 618, 619, 101 A. 375; and for reference, Canada Southern R Co. v. Gebhard, 109 U.S. 527, 537, 538, 3 S.Ct. 363, 369, 370, 27 L.Ed. 1020; Hawkins v. Glenn, 131 U.S. 319, 329, 9 S.Ct. 739, 742, 33 L.Ed. 184; Nashua Savings Bank v. Anglo-American Co., 189 U.S. 221, 229, 230, 23 S.Ct. 517, 518, 47 L.Ed. 782; Harrigan v. Bergdoll, 270 U.S. 560, 564, 46 S.Ct. 413, 414, 70 L.Ed. 733. 27 Alaska Packers Ass'n v. Industrial Acc. Comm., supra, 294 U.S. at page 547, 55 S.Ct. at page 524, 79 L.Ed. 1044. 1 Townsend v. Jemison, 9 How. 407, 410, 13 L.Ed. 194; President and Directors of the Bank of Alabama v. Dalton, 9 How. 522, 528, 13 L.Ed. 242; Bacon v. Howard, 20 How. 22, 25, 15 L.Ed. 811; Christmas v. Russell, 5 Wall. 290, 300, 18 L.Ed. 475; Amy v. Dubuque, 98 U.S. 470, 471, 25 L.Ed. 228; Campbell v. Holt, 115 U.S. 620, 626, 6 S.Ct. 209, 212, 29 L.Ed. 483; Campbell v. Haverhill, 155 U.S. 610, 618, 15 S.Ct. 217, 220, 39 L.Ed. 280. See also Chase Securities Corp. v. Donaldson, 325 U.S. 304, 65 S.Ct. 1137, 89 L.Ed. 1628; Michigan Ins. Bank v. Eldred, 130 U.S. 693, 9 S.Ct. 690, 32 L.Ed. 1080; Bank of United States v. Donnally, 8 Pet. 361, 8 L.Ed. 974; McCluny v. Silliman, 3 Pet. 270, 7 L.Ed. 676. 2 The Court also refers to Hartford A. & I. Co. v. Delta & Pine Land Co., 292 U.S. 143, 54 S.Ct. 634, 78 L.Ed. 1178, 92 A.L.R. 928, and ome Ins. C o. v. Dick, 281 U.S. 397, 50 S.Ct. 338, 74 L.Ed. 926, 74 A.L.R. 701. The Court does not rest its decision on the due process clause. But the decisions in those cases went on the due process clause, and, far from supporting the holdings here, are actually inconsistent with it. If they are to be followed they stand for the propositions that a state which has no interest at all, or only a minor interest in the transaction sued on, cannot, because of the mere accident of supplying the judicial forum, apply its own statute of limitations so as to defeat the terms of a contract valid in the jurisdiction where the obligation was initiated, negotiated, and completed. The two cases cast considerable doubt on Ohio's power to have applied its limitation statute had this suit been filed there; conversely, they provide rather persuasive argument to support a contention that South Dakota's statute should control liability here in view of that state's considerable interest, even beyond that of providing the forum of this action. 3 The Court takes the view that it is well established that a contract provision limiting the time within which suit can be brought may override a state's statute of limitations providing a longer period. For this proposition it cites Riddlesbarger v. Hartford Ins. Co., 7 Wall. 386, 19 L.Ed. 257. That case came from a Federal Circuit Court in Missouri where the sole problem posed or decided was whether under Missouri law or general federal law a contract limitation violated the policy of Missouri expressed in its statute of limitations. But see Guaranty Trust Co. v. York, 326 U.S. 99, 65 S.Ct. 1464, 89 L.Ed. 2079, 160 A.L.R. 1231. There was no full faith and credit question, due process question, or any other constitutional question. McElmoyle v. Cohen, supra, was not cited in the Riddlesbarger case. Nor was it relevant because no foreign law was put forward which might require Missouri to give full faith and credit to it. 4 'The purpose of the association is to make loans only to its members, and for the further purpose of accumulating a fund to be returned to its members who do not receive advances on their shares.' National Mutual Bldg. & Loan Ass'n v. Brahan, 193 .S. 635, 6 36, 24 S.Ct. 532, 48 L.Ed. 823. 5 The Court purports not to overrule these cases for it states: '* * * (W)e do not rely upon the place of concluding the contract of membership or upon the place prescribed for its performance.' 6 Hoopeston Canning Co. v. Cullen, 318 U.S. 313, 63 S.Ct. 602, 87 L.Ed. 1722, 145 A.L.R. 1113; Osborn v. Ozlin, 310 U.S. 53, 60 S.Ct. 758, 84 L.Ed. 1074; Mutual Life Ins. Co. v. Johnson, 293 U.S. 335, 339, 55 S.Ct. 154, 156, 79 L.Ed. 398; Northwestern Mutual Life Ins. Co. v. McCue, 223 U.S. 234, 246—248, 32 S.Ct. 220 222, 56 L.Ed. 419, 38 L.R.A.,N.S., 57; Whitfield v. Aetna Life Ins. Co., supra, 205 U.S. at page 495, 27 S.Ct. at page 579, 51 L.Ed. 895; Knights Templars' and Masons' Life Indemnity Co. v. Jarman, supra; Chattanooga National Bldg. & Loan Ass'n v. Denson, 189 U.S. 408, 23 S.Ct. 630, 47 L.Ed. 870; National Bldg. & Loan Ass'n v. Brahan, supra; Wall v. Equitable Life Ins. Co., 8 Cir., 32 F. 273, affirmed sub nom, Equitable Life Society v. Clements, 140 U.S. 226, 11 S.Ct. 822, 35 L.Ed. 497. 7 This contrast is dramatized by the consequences to Ohio's interest in the injury which would flow from South Dakota's disregard for this contract limitation which violates South Dakota's public policy. It is certainly a tenuous thread which would link South Dakota's refusal to enforce this and similar limitaions to th e undue depletion of the corporate funds. For it is unlikely that in calculating rates and risks, actuaries took into account the chance that the company might escape paying just claims because of company-imposed limitations on the time for bringing suit. On the other hand recovery of insurance claims often saves insurance beneficiaries from becoming public charges of the state of their residence. 8 Statistical Abstract of the United States, Dept. of Commerce, Bureau of the Census (1946) 442.
1011
331 U.S. 543 67 S.Ct. 1428 91 L.Ed. 1662 GOSPEL ARMYv.CITY OF LOS ANGELES et al. No. 103. Argued Feb. 6, 7, 1947. Decided June 9, 1947. Appeal from the Supreme Court of the State of California. Mr. Robert H. Wallis, of Los Angeles, Cal., for appellant. Mr. John L. Bland, of Los Angeles, Cal., for appellees. Mr. Justice RUTLEDGE delivered the opinion of the Court. 1 This is a companion case to Rescue Army v. Municipal Court of the City of Los Angeles, 331 U.S. 549, 67 S.Ct. 1409, decided today. Because we dismiss the appeal in this cause for jurisdictional reasons, the facts may be shortly stated. 2 The Gospel Army is an incorporated religious organization. The trial court found that it is 'engaged exclusively in the promulgation, by literature and word of mouth, of its religious beliefs, by and through its auxiliaries and in the procuring of donations in the form of money and articles of value in the prosecution and furtherance of its religious activities.' More particularly, its activities consist of conducting a mission, distributing religious books without charge, giving aid to the poor. It collects salvage which it either sells in a secondhand goods store,1 distributes directly to the poor, or sends to a salvage mill.2 3 The Gospel Army instituted this suit to enjoin the enforcement of certain ordinances of the City of Los Angeles on the ground that they violate its religious liberty under the Constitutions of California and the United States.3 4 After trial the Superior Court of Los Angeles County broadly concluded: 5 'That a permanent injunction should issue herein restraining and enjoining the Defendants and each of them and any and all persons, associations, departments under whom said Defendants or any of them may be employed or acting and any and all persons, associations or departments who may be acting or claiming by, through or under said Defendants, or any of them from the further interference and threatened acts, which would in any way prevent the free exercise of a religious liberty of said Plaintiff.' 6 From this decision an appeal was taken to the District Court of Appeal of the Second Appellate Division, Division Two, and the cause was then transferred to the Supreme Court of California. That court held, three judges dissenting, that the Superior Court's action in granting the injunction was erroneous. 27 Cal.2d 232, 163 P.2d 704. Some, if not all, of the ordinances in suit were sustained as constitutional. On appeal to this Court determination of jurisdiction was postponed to the merits. 66 S.Ct. 1352. 7 The jurisdictional difficulties arise from the form of the California Supreme Court's judgment. That court ended its opinion with the statement, 'The judgment is reversed.' Its judgment was in the same form: 'It is Ordered, Adjudged and Decreed by the Court that the Judgment of the Superior Court in and for the County of Los Angeles in the above entitled cause, be and the same is hereby reversed.' In California an unqualified reversal, 'that is to say, without direction to the trial court,' is effective to remand the case 'for a new trial and places the parties in the same position as if the case had never been tried.' Erlin v. National Union Fire Ins. Co., 7 Cal.2d 547, 549, 61 P.2d 756, 757; Stearns v. Aguirre, 7 Cal. 443, 448; Central Sav. Bank of Oakland v. Lake, 201 Cal. 438, 443, 257 P. 521; Richfield Oil Corporation v. State Board of Equalization, 329 U.S. 69, 72, 67 S.Ct. 156; 2 Cal.Jur. § 590. 8 Under § 237 of the Judicial Code, 28 U.S.C. § 344, 28 U.S.C.A. § 344, only 'final judgments' of state courts may be appealed to this Court. And it frequently has been said that for a judgment of an appellate court to be final and reviewable for this purpose it must end the litigation by fully determining the rights of the parties, so that nothing remains to be done by the trial court 'except the ministerial act of entering the judgment which the appellate court * * * directed.' Department of Banking, State of Nebraska, v. Pink, 317 U.S. 264, 267, 63 S.Ct. 233, 235, 87 L.Ed. 254. Thus, where the effect of the state court's direction is to grant a new trial, the judgment will not be final. 9 Increasingly this Court has become less formal in the matter of final judgments. It is no longer the rule that the face of the judgment is determinative of whether it is final.4 Today 'the test is not whether under local rules of practice the judgment is denominated final * * * but rather whether the record shows that the order of the appellate court has in fact fully adjudicated rights and that that adjudication is not subject to further review by a state court. * * *' Department of Banking, State of Nebraska, v. Pink, 317 U.S. at page 268, 63 S.Ct. at page 235, 87 L.Ed. 254. 10 Thus, this term in Richfield Oil Corporation v. State Board of Equalization, supra, despite the fact that the Supreme Court of California had reversed a judgment without directions, we determined on the entire record and upon an independent investigation of California law that the judgment was final for the purposes of § 237. In the first place, the facts had been stipulated and, so far as appeared, the stipulation would have been available and controlling upon a second trial. In the second place, the suit was one for a refund of a tax and under California law only those grounds presented in the prior claim for refund could be urged in the suit. The opinion stated: 'Since the facts have been stipulated and the Supreme Court of California has passed on the issues which control the litigation, we take it that there is nothing more to be decided.' 329 U.S. at pages 73, 74, 67 S.Ct. at page 159. 11 In this case, however, the facts have not been stipulated, nor are there any special procedural restrictions. Thus, under California law, the Gospel Army on the second trial to which it is entitled may amend its complaint and present new facts. 'Such a reversal remands the case for a new trial and places the parties in the same position as if the case had never been tried. * * * Of course, upon a retrial the decision of the appellate court becomes the law of the case upon the facts as then presented. But that law must be applied by the trial court to the evidence presented upon the second trial. 'It is settled beyond controversy that a decision of this Court on appeal, as (to) a matter of fact, does not become the law of the case." Erlin v. National Union Fire Ins. Co., 7 Cal.2d at page 549, 61 P.2d at page 757. 12 We cannot assume that the Supreme Court of California would hold the ordinances in question constitutional no matter what facts might be presented upon a second trial. Indeed, experience demonstrates that particularly in constitutional cases issues turn upon factual presentation. 13 Accordingly, the case does not fall within the specific holding of the Richfield Oil case, for, although the modern rule is that in determining whether the state court's remand is for a new trial this Court will examine both the judgment and the opinion as well as other circumstances which may be pertinent, Department of Banking v. Pink, supra; Richfield Oil Corporation v. State Board of Equalization, supra, this does not mean that in the ordinary case we will disregard the effect of the judgment under the local law. In this case, for example, the effect of the judgment under state practice is to remand the case for a new trial. Nothing in the opinion of the court is to the contrary. We cannot assume that the state court made an error in its judgment, clerical or otherwise. If the parties had thought so, they could have moved to have it amended. Indeed, that course may still be open to them. 14 The appeal is dismissed. 1 The money received from the sales is used to meet the cost of operating the store, including compensation paid to the manager and to those who solicit contributions. Whatever remains goes into the corporate treasury. 2 Ninety per cent of the money received for the goods sent to the salvage mill is paid to the driers of tru cks used by the Gospel Army to collect the salvage. The other ten per cent goes into the treasury. 3 It is unnecessary to consider precisely what ordinances were involved in this case or were sustained by the California Supreme Court. See Rescue Army v. Municipal Court, 331 U.S. 549, 67 S.Ct. 1409. 4 For cases incorporating the old 'face of the judgment' rule, see, e.g., Bruce v. Tobin, 245 U.S. 18, 38 S.Ct. 7, 62 L.Ed. 123; Schlosser v. Hemphill, 198 U.. 173, 25 S.Ct. 654, 49 L.Ed. 1000; Haseltine v. Central National Bank, 183 U.S. 130, 22 S.Ct. 50, 46 L.Ed. 117. There was strong dissent to the abandonment of the rule. See the separate opinion of McReynolds, J., in Clark v. Williard, 292 U.S. 112, 129, 54 S.Ct. 615, 622, 78 L.Ed. 1160. And for general discussion, cf. Boskey, Finality of State Court Judgments under the Federal Judicial Code (1943) 43 Col.L.Rev. 1002, 1003—1008; Robertson and Kirkham, Jurisdiction of the Supreme Court of the United States (1936) 54—57.
89
331 U.S. 519 67 S.Ct. 1387 91 L.Ed. 1646 BROTHERHOOD OF RAILROAD TRAINMENv.BALTIMORE & O.R. CO. et al. No. 970. Argued May 6, 1947. Decided June 9, 1947. On Appeal from the District Court of the United States for the Northern District of Illinois, Eastern Division. Mr. Burke Williamson, of Chicago, Ill., for appellant. Mr. Ernest S. Ballard, of Chicago, Ill., for appellees. Mr. Justice MURPHY delivered the opinion of the Court. 1 Our concern here is with the intervention rights of representatives of railroad employees in a suit brought against the railroad under § 16(12) of the Interstate Commerce Act, 49 U.S.C. § 16(12), 49 U.S.C.A. § 16(12). 2 The origin of this suit is to be found in an order issued by the Interstate Commerce Commission on May 16, 1922. Chicago Junction Case, 71 I.C.C. 631. See also Chicago Junction Case, 264 U.S. 258, 44 S.Ct. 317, 68 L.Ed. 667. The Commission there approved the purchase by the New York Central Railroad Co. (Central) of all the capital stock of the Chicago River & Indiana Railroad Co. (River Road); it also authorized the leasing to River Road of all the properties of the Chicago Junction Railway Co. (Junction) for 99 years and thereafter, at the lessee's option, in perpetuity. Among the properties in question were trackage and switching facilities at the Union Stock Yards, Chicago, Illinois, connecting with various trunk lines. Prior to the Commission order, the practice had been for the trunk line railroads to use their own power and crews to move their empty and loaded livestock cars over these tracks to and from the loading places in the Union Stock Yards. For the privilege of so moving their cars, the railroads were charged $1.00 per car, loaded or empty. 3 The Commission made various conditions to its approval of the proposed transactions. The third condition provided: 'The present traffic and operating relationships existing between the Junction and River Road and all carriers operating in Chicago shall be continued, in so far as such matters are within the control of the Central.' 71 I.C.C. at 639. This condition is still in effect, the Commission's decision and order having been found to be valid and binding on all parties in a proceeding in the District Court in 1929.1 4 The trunk line railroads have continued to use their own power and crews in moving their livestock cars over the trackage operated by River Road and have paid River Road the amount of $1.00 per car. But on January 25, 1946, Central and River Road notified the railroads that on and after February 1, 1946, the cars would be moved over this trackage by means of the power and crews of River Road and that the handling charge would be $12.96 per outbound loaded car. Soon after this new practice went into effect, the trunk line railroads (appellees herein) brought this suit for preliminary and permanent injunctions under § 16(12) of the Interstate Commerce Act against Central, River Road and Junction. They claimed that the new practice was in violation of the third condition of the 922 Commis sion order. They accordingly sought to enjoin the defendants and 'their respective officers, agents, representatives, servants, employees and successors,' from disobeying the order, especially the third condition thereof, and to force the defendants to permit them to move their cars with their own power and crews. The Commission was allowed to intervene as a party plaintiff; its intervening complaint also prayed for an injunction against the alleged violation of the third condition by the defendants and their employees.2 5 A stipulation of facts was then filed. After describing the change in handling the cars, it pointed out that this change resulted from a settlement between the River Road and the Brotherhood of Railroad Trainmen of a labor dispute over the work involved in these livestock car movements. The Brotherhood was the bargaining agent under the Railway Labor Act, 45 U.S.C.A. § 151 et seq., for the River Road trainmen. It made a demand, based upon its contract with River Road, that these trainmen be given the work of moving and switching the livestock cars over the River Road trackage. The Brotherhood threatened to call a strike unless this demand was met before 10:30 p.m., January 23, 1946, a threat that was backed by an almost unanimous strike vote of the trainmen. Under this threat, River Road made an agreement with the Brotherhood shortly before the scheduled strike hour, as a result of which the River Road trainmen were to be permitted to move and switch the cars. The notice to the trunk line railroads of this change in practice subsequently followed. 6 The District Court thereupon issued a preliminary injunction as requested. Central, River Road and Junction, and 'their respective officers, agents, representatives, employees and successors,' were restrained from disobeying the 1922 Commission order and from violating the third condition of that order and were commanded to permit the trunk line railroads to move their cars over the River Road line with their own power and crews. The court concluded, as a matter of law, that the facts relative to the labor dispute between the Brotherhood and River Road were 'irrelevant and immaterial.'3 7 Three days after the preliminary injunction became effective, the Brotherhood asked leave to file its special appearance for the purpose of moving to vacate the injunction and to dismiss the proceedings for failure to join the Brotherhood and its members as indispensable parties. This motion was denied. River Road then filed its answer to the original complaint, pointing out that the changed arrangement resulted from the labor dispute with the Brotherhood and contending that this new practice did not violate the 1922 Commission order. The Brotherhood thereafter filed its motion to intervene generally as a party defendant, alleging that the primary purpose of the suit was to nullify its agreement with River Road and to deprive the Brotherhood members of the work they were performing under that agreement and that the Brotherhood members were therefore indispensable parties. The contention was made that the Brotherhood had an unconditional right to intervene by virtue of § 17(11) of the Interstate Commerce Act4 and Rule 24(a)(2) of the Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c; and 28 U.S.C. § 45a, 28 U.S.C.A. § 45a, was later added in support of this contention But the m otion to intervene was denied by order, without opinion. 8 The District Court then allowed an appeal to this Court from its order denying intervention. The appellee railroads moved to dismiss the appeal on the ground that such an order was not final and hence was not appealable, the Brotherhood not being entitled to intervene as a matter of right. We postponed further consideration of the question of our jurisdiction to review the order to the hearing of the appeal upon the merits. 67 S.Ct. 870. 9 Ordinarily, in the absence of an abuse of discretion, no appeal lies from an order denying leave to intervene where intervention is a permissive matter within the discretion of the court. United States v. California Co-op. Canneries, 279 U.S. 553, 556, 49 S.Ct. 423, 424, 73 L.Ed. 838.5 The permissive nature of such intervention necessarily implies that, if intervention is denied, the applicant is not legally bound or prejudiced by any judgment that might be entered in the case. He is at liberty to assert and protect his interests in some more appropriate proceeding. Having no adverse effect upon the applicant, the order denying intervention accordingly falls below the level of appealability. But where a statute or the practical necessities grant the applicant an absolute right to intervene, the order denying intervention becomes appealable. Then it may fairly be said that the applicant is adversely affected by the denial, there being no other way in which he can better assert the particular interest which warrants intervention in this instance. And since he cannot appeal from any subsequent order or judgment in the proceeding unless he does intervene, the order denying intervention has the degree of definitiveness which supports an appeal therefrom. See Missouri-Kansas Pipe Line Co. v. United States, 312 U.S. 502, 508, 61 S.Ct. 666, 668, 85 L.Ed. 975. 10 Our jurisdiction to consider an appeal from an order denying intervention thus depends upon the nature of the applicant's right to intervene. If the right is absolute, the order is appealable and we may judge it on its merits. But if the matter is one within the discretion of the trial court and if there is no abuse of discretion, the order is not appealable and we lack power to review it. In other words, our jurisdiction is identified by the necessary incidents of the right to intervene in each particular instance. We must therefore determine the question of our jurisdiction in this case by examining the character of the Brotherhood's right to intervene in the proceeding brought under § 16(12) of the Interstate Commerce Act. 11 We start with Rule 24(a) and (b) of the Federal Rules of Civil Procedure, applicable to a civil proceeding of this type. Rule 24(a) deals with intervention of right and provides in pertinent part: 'Upon timely application anyone shall be permitted to intervene in an action: (1) when a statute of the United States confers an unconditional right to intervene; or (2) when the representation of the applicant's interest by existing parties is or may be inadequate and the applicant is or may be bound by a judgment in the action; * * *.' In contrast, Rule 24(b) is concerned with permissive intervention and reads as follows: 'Upon timely application anyone may be permitted to intervene in an action: (1) when a statute of the United States confers a condititional right to intervene; or (2) when an applicant's claim or defense and the main action have a question o law or fa ct in common. In exercising its discretion the court shall consider whether the intervention will unduly delay or prejudice the adjudication of the rights of the original parties.' 12 The Brotherhood claims that as a consequence of either of two federal statutes—s 17(11) of the Interstate Commerce Act or 28 U.S.C. § 45a, 28 U.S.C.A. § 45a—it has an absolute right to intervene within the meaning of Rule 24(a)(1). It also alleges that it possesses an absolute right within the contemplation of Rule 24(a)(2), the representation of its interest by existing parties being inadequate and the possibility that it may be bound by a judgment in the action being a real one. No claim to permissive intervention under Rule 24(b) is made; nor is there a contention that the District Court abused any discretion it might have had. 13 In our view, § 17(11) of the Interstate Commerce Act does give the Brotherhood an absolute right to intervene in the instant proceeding within the meaning of Rule 24(a)(1). As set forth in 54 Stat. 916,6 this portion of the Act reads: 'Representatives of employees of a carrier, duly designated as such, may intervene and be heard in any proceeding arising under this Act affecting such employees.' The following considerations make obvious the fact that the Brotherhood meets all the requirements of this provision: 14 First. It is unquestioned that the Brotherhood is the duly designated representative of the River Road trainmen. 15 Second. The right of intervention granted to such a representative by § 17(11) applies to a court proceeding under § 16(12) of the Act, the plain language of § 17(11) extending its reach to 'any proceeding arising under this Act.' On this point, however, the appellee railroads contend that § 17(11) must be confined to proceedings before the Interstate Commerce Commission, to the exclusion of court proceedings. In support of this contention, they point to the fact that § 17 as a whole is primarily concerned with Commission procedure and organization. That fact is emphasized by the heading of § 17 as it appears in the Statutes at Large, 54 Stat. 913, and the United States Code, 49 U.S.C. § 17, 49 U.S.C.A. § 17, a heading that reads: 'Commission procedure; delegation of duties; rehearings.' The inference is then made that paragraph (11), with which we are concerned, must be limited by that heading and by the general context of § 17 as a whole. The result of the contention is that the phrase 'any proceeding arising under this Act,' as found in paragraph (11), is rewritten by construction to refer only to 'any proceeding before the Commission arising under this section.' 16 We cannot sanction such a construction of these words. It is true, of course, that § 17 is concerned primarily with the organization of the Commission and ts subdivi sions and with the administrative disposition of matters coming within that agency's jurisdiction. At least ten of the twelve paragraphs of § 17 deal with those matters. And before § 17 was cast into its present form in 1940, all five of its paragraphs related exclusively to those matters. Congress rewrote the section when it enacted the Transportation Act of 1940, 54 Stat. 898, continuing and modifying previous provisions and consolidating and including matters which had formerly been scattered throughout the Act.7 At the same time, however, it was expressly recognized that certain paragraphs were being added which were entirely new, paragraphs which went beyond purely administrative matters. Thus the pertinent committee reports stated8 that 'A new paragraph (9) is included providing that orders of a division, an individual Commissioner, or a board shall be subject to judicial review as in the case of full Commission orders, after an application for rehearing has been made and acted upon.' And as to paragraph (11), it was said9 that 'A new paragraph is added at the end of section 17 providing that representatives of employees of a carrier may intervene and be heard in any proceedings arising under part I affecting such employees.' By such language in their reports, the framers of § 17 recognized the obvious fact that certain provisions of that section deal with something more than might be indicated by the heading. 17 That the heading of § 17 fails to refer to all the matters which the framers of that section wrote into the text is not an unusual fact. That heading is but a short-hand reference to the general subject matter involved. While accurately referring to the subjects of Commission procedure and organization, it neglects to reveal that § 17 also deals with judicial review of administrative orders and with intervention by employee representatives. But headings and titles are not meant to take the place of the detailed provisions of the text. Nor are they necessarily designed to be a reference guide or a synopsis. Where the text is complicated and prolific, headings and titles can do no more than indicate the provisions in a most genral manner; to attempt to refer to each specific provision would often be ungainly as well as useless. As a result, matters in the text which deviate from those falling within the general pattern are frequently unreflected in the headings and titles. Factors of this type have led to the wise rule that the title of a statute and the heading of a section cannot limit the plain meaning of the text. United States v. Fisher, 2 Cranch 358, 386, 2 L.Ed. 304; Cornell v. Coyne, 192 U.S. 418, 430, 24 S.Ct. 383, 385, 386, 48 L.Ed. 504; Strathearn S.S. Co. v. Dillon, 252 U.S. 348, 354, 40 S.Ct. 350, 351, 64 L.Ed. 607. For interpretative purposes, they are of use only when they shed light on some ambiguous word or phrase. They are but tools available for the resolution of a doubt. But they cannot undo or limit that which the text makes plain. 18 Here the meaning of § 17(11) is unmistakable on its face. There is a simple unambiguous reference to 'any proceeding arising under this Act' or, as the House committee paraphrased it,10 to 'any proceedings arising under part I.' There is not a word which would warrant limiting this reference so as to allow intervention only in proceedings arising under § 17 or in proceedings before the Commission. The proceedings mentioned are those which arise under this Act, an Act under which both judicial and administrative proceedings may arise.11 The instant case is a ready illustration of a judicial proceeding arising under this Act; a suit of this nature is authorized solely by § 16(12) of the Act.12 Hence it is a proceeding towhich the right of intervention may attach by virtue of § 17(11). 19 Nor do we perceive any reason of statutory policy why the framers of § 17(11) should have wished to confine the right of intervention by employee representatives to proceedings before the Commission. Occasions may arise, as in this case, where the employee representatives have no interest in intervening in the original administrative proceeding, but where they have a very definite interest in intervening in a subsequent judicial proceeding arising under the Act. When the framers have used language which covers both types of proceedings, we would be unjustified in formulating some policy which they did not see fit to express to limit that language in any way. 20 Third. This is a proceeding arising under the Act which affects the employees represented by the Brotherhood. Nothing could make this plainer than the fact that direct injunctive relief was sought and obtained against these employees. The appellee railroads sued to enjoin River Road and its employees from disobeying the third condition of the 1922 Commission order. It was alleged that this condition required River Road and its employees to permit the railroads to use their own power and crews in moving cars over the River Road line. Yet that was precisely the subject matter of the conflict between River Road and the Brotherhood, resulting in the insertion of important provisions in the contract between them. If the Commission order did require the River Road employees to forego operating the livestock cars, their contract rights with River Road were affected in a very real sense. Acts done by the employees in performance of this contract obviously prompted this suit; and any such acts performed after the issuance of an injunction might give rise to contempt action. It is thus impossible to say that this proceeding is not one 'affecting such employees' within the meaning of § 17(11). 21 Since all the conditions of § 17(11) have been satisfied in this case, the only question that remains is whether the Brotherhood is thereby accorded a permissive or an absolute right to intervene. The language of § 17(11) is in terms of 'may intervene and be heard,' which might be construed as giving only a discretionary right. But our view, as we have indicated, is that once the requirements of § 17(11) have been met, the employees' representative acquires an absolute right of intervention. 22 Some statutes speak of intervention 'as of right.' Thus where suit is brought by or against the United States to enforce or set aside a Commission order, the Commission or the parties in interest to the proceeding before the Commission 'may appear as parties thereto * * * as of right.' 28 U.S.C. § 45a, 28 U.S.C.A. § 45a. In such a case, the right to intervene is absolute and unconditional. Sprunt & Son v. United States, 281 U.S. 249, 255, 50 S.Ct. 315, 317, 318, 74 L.Ed. 832. 23 No less absolute or unconditional is the right to intervene under § 17(11), which permits intervention where the employees are affected by the proceeding. To be sufficiently affected within the meaning of this provision requires that the employees be prejudiced or bound by any judgment that might be entered in the case, as is the situation relative to the River Road employees. Once it is clear that an effect of that degree is present, however, there is no room for the operation o a court's discretion. Whether the employees' interests should be asserted or defended in a proceeding where those interests are at stake is a question to be decided by the employees' representative, not by the court. The statutory term 'may intervene' thus means 'may intervene if the employees' representative so chooses' rather than 'may intervene in the discretion of the court.' And if the representative does choose to intervene, it may do so as a matter of right within the meaning of Rule 24(a)(1) of the Federal Rules of Civil Procedure. Such is this case. 24 We thus conclude that § 17(11) gives the Brotherhood an absolute right to intervene in this proceeding, making it unnecessary to discuss whether, and to what extent, the Brotherhood would have had such a right apart from § 17(11). It follows that we have jurisdiction to consider the appeal on its merits. And in the exercise of that jurisdiction, we reverse the judgment of the District Court denying leave to the Brotherhood to intervene. 25 Reversed. 1 Baltimore & O.R. Co. v. United States (unreported), United States District Court for the Northern District of Illinois, Eastern Division, Equity No. 3427, January 15, 1929. The court approved the Commission order as amended in 150 I.C.C. 32. That amendment is not germane to this case. 2 The Commission based its complaint upon § 5(8) of the Interstate Commerce Act, 49 U.S.C. § 5(8), 49 U.S.C.A. § 5(8), which authorizes the Commission to seek, and grants jurisdiction to the federal district courts to issue, injunctive or mandatory relief to restrain violation of or compel obedience to an order issued under § 5. 3 On appeal by Junction, the Seventh Circuit Court of Appeals reversed the decree as to Junction, holding that Junction had no control over and nothing to do with the acts complained of by the appellees. Baltimore & O.R. Co. v. Chicago Junction R. Co., 156 F.2d 357. 4 54 Stat. 916, 49 U.S.C. § 17(11), 49 U.S.C.A. § 17(11). 5 See also Ex parte Cutting, 94 U.S. 14, 24 L.Ed. 49; Credits Commutation Co. v. United States, 177 U.S. 311, 20 S.Ct. 636, 44 L.Ed. 782; Ex parte Leaf Tobacco Board of Trade, 222 U.S. 578, 32 S.Ct. 833, 56 L.Ed. 323; In re Engelhard & Sons Co., 231 U.S. 646, 34 S.Ct. 258, 58 L.Ed. 416; City of New York v. Consolidated Gas Co., 253 U.S. 219, 40 S.Ct. 511, 64 L.Ed. 870; New York City v. New York Telephone Co., 261 U.S. 312, 43 S.Ct. 372, 67 L.Ed. 673. 6 As it appears in the United States Code, 49 U.S.C. § 17(11), 49 U.S.C.A. § 17(11), this paragraph reads: 'Representatives of employees of a carrier, duly designated as such, may intervene and be heard in any proceeding arising under this chapter and chapters 8 and 12 of this title affecting such employees.' The words 'this chapter' refer to Part I of the Interstate Commerce Act, 49 U.S.C.A. § 1 et seq., which embodies the original statute known by that name prior to its division into parts. Chapter 8 relates to Part II of the Interstate Commerce Act, originally known as the Motor Carrier Act of 1935, 49 U.S.C.A. § 301 et seq. Section 305(h) of Part II is a cross-reference to § 17 of Part I: 'All the provisions of section 17 of this title shall apply to all proceedings under this chapter.' Chapter 12 is the equivalent of Part III of the Interstate Commerce Act, which deals with water carriers. 49 U.S.C.A. § 901 et seq. Section 916(a) is also a cross-reference to § 17 of Part I: 'The provisions of section 12 and section 17 of chapter 1 of this title and sections 46—48 of this title shall apply with full force and effect in the administration and enforcement of this chapter.' 7 H.Rep.No.1217, 76th Cong., 1st Sess., p. 13; H.Rep.No.2832, 76th Cong., 3d Sess., p. 72. 8 H.Rep.No.2016, 76th Cong., 3d Sess., p. 67; H.Rep.No.2832, 76th Cong., 3d Sess., p. 72. 9 H.Rep.No.1217, 76th Cong., 1st Sess., p. 15. 10 H.Rep.No.1217, 76th Cong., 1st Sess., p. 15. 11 Section 17(11), by referring to proceedings arising under 'this Act,' also affects judicial and administrative proceedings arising under Parts II and III of the Act. See note 6, surpa. 12 Section 16(12) is labeled 'Proceedings to enforce orders other than for payment of money.' 49 U.S.C. § 16(12), 49 U.S.C.A. § 16(12). It provides that if any carrier fails to obey a Commission order other than for the payment of money, the Commission, any injured party or the United States may apply to a federal district court for the enforcement of the order.
67
331 U.S. 486 67 S.Ct. 1400 91 L.Ed. 1621 GREENOUGH et al.v.TAX ASSESSORS OF CITY OF NEWPORT et al. No. 461. Argued March 7, 1947. Decided June 9, 1947. Rehearing Denied Oct. 13, 1947. See 68 S.Ct. 28. Appeal from the Superior Court of the County of Newport, State of Rhode Island. Messrs. William Greenough, of New York City, and William R. Harvey, of Newport, R.I., for appellants. Mr. John C. Burke, of Newport, R.I., for appellees. [Argument of Counsel from page 487 intentionally omitted] Mr. Justice REED delivered the opinion of the Court. 1 Appellants are testamentary trustees of George H. Wrren, who died a resident of New York. His will was duly probated in that state and letters testamentary issued to appellants as executors. A duly authenticated copy of said will was filed and recorded in Rhode Island and there letters testamentary were also issued. Letters of trusteeship were granted to appellants by a surrogate's court in New York. None were needed or asked for or granted by Rhode Island. At all times pertinent to this appeal, appellants, as trustees under the will, held intangible personalty for the benefit of Constance W. Warren for her life and then to certain as yet undetermined future beneficiaries. 2 The evidences of the intangible property in the estate of George H. Warren and in the trust in question were at all times in New York. The life beneficiary and one of the trustees are residents of New York. The other trustee resides in Rhode Island. During the period in question, he did not, however, exercise his powers, as trustee, in Rhode Island. 3 A personal property tax of $50 was assessed by the City of Newport, Rhode Island, against the resident trustee upon one-half of the value of the corpus of the trust. The applicable assessment statute for ad valorem taxes appears in the margin.1 At the time of this assessment, the property consisted of 500 shares of the capital stock of Standard Oil Company of New Jersey. The tax was paid by the trustees and this suit instituted, under appropriate state procedure, in the Superior Court of the County of Newport to recover the tax from the city. The Superior Court by decision denied the petition. A bill of exceptions was prosecuted by these petitioners to the Supreme Court of Rhode Island which overruled the exceptions and remitted the case to the superior court.2 Thereupon judgment was entered for the appellees and an appeal allowed to this Court. All questions of state procedure and of the applicability of the state statute to the resident trustee in the circumstances of this case were foreclosed for us by the rulings of the Supreme Court of Rhode Island.3 4 The appellants' contention throughout has been that the Rhode Island statute, under which the assessment was made, if applicable to the resident trustee, was unconstitutional under the due process clause of the Fourteenth Amendment to the Constitution of the United States. Their objection in the state courts and here is that Rhode Island cannot tax the resident trustee's proportionate part of these trust intangibles merely because that trustee resides in Rhode Island. Such a tax, they urge, is unconstitutional under the due process clause because it exacts payment measured by the value of property wholly beyond the reach of Rhode Island's power and to which that state does not give protection or benefit. Appellants specifically disclaim reliance upon the argument that the Rhode Island tax exposes them to the danger of other ad valorem taxes in another state.4 The same concession was made in the Supreme Court of Rhode Island.5 We therefore restrict our discussion and determination to the issue presented by appellants' insistence that Rhode Island cannot constitutionally collect this tax because the state rendered no equivalent for its exaction in protection of or benefit to the trust fund. 5 For the purpose of the taxation of those resident within her borders, Rhode Island has sovereign power unembarrassed by any restriction except those that emerge from the Constitution. Whether that power is exercised wisely or unwisely is the problem of each state. It may well be that sound fiscal policy would be promoted by a tax upon trust intangibles levied only by the state that is the seat of a testamentary trust.6 Or, it may be that the actual domicile of the trustee should be preferred for a single tax. Utilization by the states of modern reciprocal statutory tax provisions may more fairly distribute tax benefits and burdens, although the danger of competitive inducements for obtaining a settlor's favor are obvious.7 But our question here is whether or not a provision of the Constitution forbids this tax. Neither the expediency of the levy nor its economic effect on the economy of the taxing state is for our consideration.8 We are dealing with the totality of a state's authority in the exercise of its revenue raising powers. 6 The Fourteenth Amendment has been held to place a limit on a state's power to lay an ad valorem tax on its residents.9 Previous decisions of this Court have held that mere power over a resident does not permit a state to exact from him a property tax on his tangible property permanently located outside the jurisdiction of the taxing state.10 Such an exaction, the cases teach, would violate the due process clause of the Fourteenth Amendment, because no benefit or protection, adequate to support a tax exaction, is furnished by the state of residence.11 The domiciliary state of the owner of tangibles permanently located in another state, however, may require its resident to contribute to the government under which he lives by an income tax in which the income from the out-of-state property is an item of the taxpayer's gross income. It is immaterial, in such a case, that the property producting the income is located in another state. People of State of New York ex rel. Cohn v. Graves, 300 U.S. 308, 57 S.Ct. 466, 81 L.Ed. 666, 108 A.L.R. 721. And, where the tangible property of a corporation has no taxable situs outside the domiciliary state, that state may tax the tangibles because the corporation exists under the law of its domicile. Southern Pacific Co. v. Commonwealth of Kentucky, 222 U.S. 63, 32 S.Ct. 13, 56 L.Ed. 96.12 7 The precedents, holding it unconstitutional for a state to tax tangibles of a resident that are permanently beyond its boundaries, have not been applied to intangibles where the documents of owner interest are beyond the confines of the taxing jurisdiction or where the choses in action are mere promises of a nonresident without documents.13 One reason that state taxation of a resident on his intangibles is justified is that when the taxpayer's wealth is represented by intangibles, the tax gatherer has difficulty in locating them and there is uncertainty as to which taxing district affords benefits or protection to the actual property that the intangibles represent. There may be no 'papers.' If the assessment is not made at the residence of the owner, intangibles may be overlooked easily by other assessors of taxes. A state is dependent upon its citizens for revenue. Wealth has long been accepted as a fair measure of a tax assessment. As a practical mode of collecting reenue, the states unrestricted by the federal Constitution have been accustomed to assess property taxes upon intangibles 'wherever held or deposited,' belonging to their citizens and regardless of the location of the debtor.14 So long as a state chooses to tax the value of intangibles as a part of a taxpayer's wealth, the location of the evidences of ownership is immaterial. If the location of the documents was controlling, their transfer to another jurisdiction would defeat the tax of the domiciliary state. As a matter of fact, there is more reason for the domiciliary state of the owner of the intangibles than for any other taxing jurisdiction to collect a property tax on the intangibles. Since the intangibles themselves have no real situs, the domicile of the owner is the nearest approximation, although other taxing jurisdictions may also have power to tax the same intangibles.15 Normally the intangibles are subject to the immediate control of the owner. This close relationship between the intangibles and the owner furnishes an adequate basis for the tax on the owner by the state of his residence as against any attack for violation of the Fourteenth Amendment. The state of the owner's residence supplies the owner with the benefits and protection inherent in the existence of an organized government. He may choose to expand his activities beyond its borders but the state of his residence is his base of operations. It is the place where he exercises certain privileges of citizenship and enjoys the protection of his domiciliary government. Does a similar relationship exist between a trustee and the intangibles of a trust? 8 The trustee of today moves freely from state to state. The settlor's residence may be one state, the seat of a trust another state and the trustee or trustees may live in still another jurisdiction or may constantly change their residence.16 The official life of a trustee is, of course, different from his personal. A trust, this Court has said, is 'an abstraction.' In federal income tax purposes it is sometimes dealt with as though it had a separate existence. Anderson v. Wilson, 289 U.S. 20, 27, 53 S.Ct. 417, 420, 77 L.Ed. 1004. This is because Congress has seen fit so to deal with the trust. This entity, the trust, from another point of view consists of separate interests, the equitable interest in the res of the beneficiary17 and the legal interest of the trustee. The legal interest of the trustee in the res is a distinct right. It enables a settlor to protect his beneficiaries from the burdens of ownership, while the beneficiary retained the right, through equity, to compel the legal owner to act in accordance with his trust obligations. The trustee as the owner of this legal interest in the res may incur obligatins in the administration of the trust enforceable against him, personally.18 Nothing else appearing, the trustee is personally liable at law for contracts for the trust.19 This is the rule in Rhode Island.20 Specific performance may be decreed against him.21 Of course, the trustee when acting within his powers for the trust is entitled to exoneration or reimbursement22 and the trust res may be pursued in equity by the creditor for payment.23 9 The Supreme Court of Rhode Island considered the argument that the laws of the state afforded no benefit or protection to the resident trustee. Although nothing appeared as to any specific benefit or protection which the trustee had actually received, it concluded that the state was 'ready, willing and capable' of furnishing either 'if requested.' A resident trustee of a foreign trust would be entitled to the same advantages from Rhode Island laws as would any natural person there resident. Greenough v. Tax Assessors of City of Newport, supra, 71 R.I. 488, 47 A.2d 631. There may be matters of trust administration which can be litigated only in the courts of the state that is the seat of the trust. For example, in the case of a testamentary trust, the appointment of trustees, settlement, termination and distribution under the provisions of the trust are to be carried out, normally, in the courts of decedent's domicile. See Harrison v. Commissioner of Corporations and Taxation, 272 Mass. 422, 427, 172 N.E. 605, 71 A.L.R. 677. But when testamentary trustees reside outside of the jurisdiction of the courts of the state of the seat of the trust, third parties dealing with the trustee on trust matters or beneficiaries may need to proceed directly against the trustee as an individual for matters arising out of his relation to the trust. Or the resident trustee may need the benefit of the Rhode Island law to enforce trust claims against a Rhode Island resident. As the trustee is a citizen of Rhode Island, the federal courts would not be open to the trustee for such causes of action where the federal jurisdiction depended upon diversity. The citizenship of the trustee and not the seat of the trust or the residence of the beneficiary is the controlling factor.24 The trustee is suable like any other obligor. There is no provision of the federal Constituton which f orbids suits in state courts against a resident trustee of a trust created under the laws of a sister state. Consequently, we must conclude that Rhode Island does offer benefit and protection through its law to the resident trustee as the onwer of intangibles. And, while it may logically be urged that these benefits and protection are no more than is offered a resident owner of land or chattels, permanently out of the state, the same reasons, hereinbefore stated, 67 S.Ct. 1403, apply that permit state property taxation of a resident owner of intangibles which denying a state power to tax similarly the resident's out-of-state realty. 10 No precedent from this Court called to our attention indicates that the federal Constitution contains provisions that forbid taxation by a state of intangibles in the hands of a resident testamentary trustee. In Brooke v. City of Norfolk, 277 U.S. 27, 48 S.Ct. 422, 72 L.Ed. 767, the state property tax there invalidated, evidently as violative of the Fourteenth Amendment, was assessed to a life beneficiary, on a res, composed of intangibles, when both the testator and the trustee were residents of another state where the trust was administered. Safe Deposit and Trust Company of Baltimore, Md., v. Commonwealth of Virginia, 280 U.S. 83, 50 S.Ct. 59, 74 L.Ed. 180, 67 A.L.R. 386, held invalid a state's tax on a trust's intangibles, actually in the hands of the nonresident trustee and not subject to the control of the equitable owner, because it was an attempt to tax the trust res, intangibles actually in the hands of a nonresident trustee. This was said to conflict with the Fourteenth Amendment as a tax on a thing beyond the jurisdiction of the taxing state.25 See also Graves v. Schmidlapp, 315 U.S. 657, 663, 62 S.Ct. 870, 874, 86 L.Ed. 1097, 141 A.L.R. 948, where the sovereign power of taxation was held to extend to a state resident who by will disposed of intangibles held by him as trustee with power of testamentary disposition under a nonresident trust. Nothing in these cases leads to the conclusion that a state may not tax intangibles in the hands of a resident trustee of an out-of-state trust.26 11 State courts construe their statutes according to their understanding of state policy and apply them to such situations as their interpretation of the statutory language requires. In so adjudging, they are the final judicial authority upon the meaning of their state law. It is only in circumstances where their judgments collide with rights secured by the federal Constitution that we have power to protect or enforce the federal rights. In adjudging the taxability under state law of a resident trustee's ownership of intangibles, without reliance upon the residence of settlor or beneficiary or the location of the intangibles, various conclusions have been reached under state law and without regard to the Constitution of the United States. They are pertinent to our problem only as illustrations of the different viewpoints of state law.27 12 Nor do we think it constitutionally significant that the Rhode Island trustee is not the sole trustee of the New York trust. The assessment, as the statute in question required, was only upon his proportionate interest, as a trustee, in the res. Whatever may have been the character of his title to the intangibles28 or the limitations on his sole administrative power over the trust,29 the resident trustee was the possessor of an interest in the intangibles, sufficient, as we have explained, to support a proportional tax for the benefit and protection afforded to that interest by Rhode Island.30 13 Affirmed. 14 Mr. Justice FRANKFURTER, concurring. 15 In view of the dissents elicited by the Court's opinion, I should like to state why I join it. 16 Rhode Island taxes its permanent residents in proportion to the value of their property. The State imposes the tax whether its residents own property outright or own it, legally speaking, in a fiduciary capacity. It is not questioned that the intangible assets in controversy could be included in the measure of the tax against the person of this trustee if he owned them outright. The doctrine that the power of taxation does not extend to chattels permanently situated outside a State though the owner was within it, Union Refrigerator Transit Co. v. Commonwealth of Kentucky, 199 U.S. 194, 26 S.Ct. 36, 50 L.Ed. 150, 4 Ann.Cas. 493; Frick v. Commonwealth of Pennsylvania, 268 U.S. 473, 45 S.Ct. 603, 69 L.Ed. 1058, 42 A.L.R. 316, is inapplicable. The tax is challenged, as wanting in 'due process,' because the Rhode Island resident is merely trustee of these intangibles and the pieces of paper that evidence them are kept outside the State. 17 Rhode Island's system of taxing its residents—subjecting them to the same measure for ascertaining their ability to pay whether they hold property for themselves or for others—long antedated the Fourteenth Amendment. Rhode Island has imposed this tax, 'it may be presumed, for the general advantages of living within the jurisdiction.' Fidelity & Columbia Trust Co. v. City of Louisville, 245 U.S. 54, 58, 38 S.Ct. 40, 62 L.Ed. 145, L.R.A.1918C, 124. It can hardly be deemed irrational to say, as Rhode Island apparently has said for a hundred years, that those advantages may be roughly measured, for fiscal purposes, by the wealth which a person controls, whatever his ultimate beneficial interest in the property. 'The Fourteent Amendment , itself a historical product, did not destroy history for the States and substitute mechanical compartments of law all exactly alike.' Jackman v. Rosenbaum Co., 260 U.S. 22, 31, 43 S.Ct. 9, 67 L.Ed. 107. 18 In any event, Rhode Island could in terms tax its residents for acting as trustees, and determine the amount of the tax as though a trustee owned his trust estate outright. Rhode Island has, in effect, done so by treating all Rhode Island residents alike in relation to their property holdings, regardless of their beneficial interests. That is the practical operation of the statute. It is that which controls constitutionality, and not the form in which a State has cast a tax. Lawrence v. State Tax Commission, 286 U.S. 276, 280, 52 S.Ct. 556, 557, 76 L.Ed. 1102, 87 A.L.R. 374; State of Wisconsin v. J. C. Penney Co., 311 U.S. 435, 443 et seq., 61 S.Ct. 246, 249, 85 L.Ed. 267, 130 A.L.R. 1229. Whether a Rhode Island trustee can go against his trust estate for the amount of the tax which Rhode Island exacts from him is of no concern to Rhode Island. Rhode Island's power to tax its residents is not contingent upon it. A trusteeship is a free undertaking. 19 Mr. Justice JACKSON, dissenting. 20 If Rhode Island had laid a tax on one of its citizens individually, I should think it unassailable even if the basis for taxing him was that he held this trusteeship, and perhaps the tax on him could be measured by the value of the trust estate. In that case the state would tax only its own citizen. One is pretty much at the mercy of his own state as to the events or relationship for which it will tax him. If it wants to make the holding of a trusteeship taxable, I know of no federal grounds of objection. But that is not what is being done, nor what this decision authorizes. 21 If Rhode Island had taxed the individual, he might have sought reimbursement from the estate. Whether the estate was chargeable would be left to determination by the courts of the state supervising the trust. They might consider the nature of the tax to be a personal charge, as an income tax would doubtless be. Or they might find it to be an expense of administration, such as a transfer tax, and properly to be borne by the fund. But here no such decision is left to the courts which control the fund—the tax is laid on the trustee as such—the estate is the taxpayer. 22 Rhode Island claims the power to tax the estate solely because one of its trustees resides in that state. No property is in Rhode Island and its courts are not supervising administration of the trust. The estate is wholly located in New York and the trustees derive their authority, powers and title from its courts and to them must account. 23 I had not supposed that a trust fund became taxable in every state in which one of its trustees may reside. Of course, in this instance it is proposed to tax only one-half of the estate as only one of the two trustees is resident in Rhode Island. But this seems to be an act of grace if there is a right to tax at all. The trustee has no power over, or title to, any fraction of the trust property that he does not have over all of it. If mere residence of a trustee is such a conductor of state authority that through him it reaches the estate, I see no reason why it should stop at a part, nor indeed why a trustee subject to the taxing power of several states, Cf. State of Texas v. State of Florida, 306 U.S. 398, 59 S.Ct. 563, 830, 83 L.Ed. 817, 121 A.L.R. 1179, may not also subject the trust fund to several state taxes by merely moving about. 24 The decision is a hard blow to the practice of naming individual trustees. It seems to me that there is no power in the state to lay the tax on the trust funds, despite unquestionable authority to tax its own citizen-trustee individually. 25 Mr. Justice MURPHY joins in this opinion. 26 Mr. Justice RUTLEDGE with whom THE CHIEF JUSTICE concurs, dissenting. 27 I am in agreement with the views expressed by Mr. Justice JACKSON, except that I intimte no opin ion concerning whether Rhode Island could lay a tax upon one of its residents for the privilege of acting as one of two or more trustees, when the state's only connection with the trust arises from the fact of his residence. This is not such a case. 28 Whether or not due process under the Fourteenth Amendment forbids state taxation of acts, transactions, events or property is essentially a practical matter and one of degree, depending upon the existence of sufficient factual connections, having economic and legal effects, between the taxing state and the subject of the tax. I do not think the mere fact that one of a number of trustees resides in a state, without more, is a sufficiently substantial connection to justify a levy by that state upon the trust corpus, by an ad valorem tax either fractional or on the entirety of the res. 29 It may become necessary for claimants, beneficiaries or others to sue the trustee in Rhode Island or perhaps for him to join with other trustees in suing third persons there about trust matters. To that extent benefit and protection may be conferred upon the trust. But those needs may arise in connection with any sort of business or activity, trust or other, located and conducted outside the state as largely as this trust's affairs. I had not supposed that merely keeping open the state's courts to such claims would furnish a sufficient basis for bringing within its taxing grasp all property affected by the claims' assertion. That the trust res here consists of intangibles does not seem to me a sufficiently substantial factor, in the circumstances presented, to justify so wide a reach of the state's taxing arm. 30 Mobilia sequuntur personam has its appropriate uses for sustaining the states' taxing powers affecting residents and their extrastate interests. But when it is applied to the split ownership of a trust, not only as between trustee and beneficiary but also as among several trustees, to bring the trust res within the several states' powers of taxation, merely by virtue of the residence in each of one trustee and nothing more, the fiction I think is carried too far. Something more than affording a domiciliary basis for service of process, coupled with the split and qualified representative ownership of such a trustee, should be required to sustain the state's power to tax the trust res, whether for all or only a fraction of its value. 31 Finally, whatever might be true of a single trustee or of several residing in a single state, I should doubt the thesis that the interest of one of two or more trustees in a trust is more substantial than that of a beneficiary or receives greater protection or benefit from the state of his residence. And if the beneficiary's residence alone is insufficient to sustain a state's power to tax the corpus of the trust, cf. Brooke v. City of Norfolk, 277 U.S. 27, 48 S.Ct. 422, 72 L.Ed. 767,1 it would seem that the mere residence of one of a number of trustees hardly would supply a firmer foundation. 1 General Laws of Rhode Island 1938, c. 30, § 9: 'Fifth. Intangible personal property held in trust by any executor, administrator, or trustee, whether under an express or implied trust, the income of which is to be paid to any other person, shall be taxed to such executor, administrator, or trustee in the town where such other person resides; but if such other person resides out of the state, then in the town where the executor, administrator, or trustee resides; and if there be more than one such execuor, administrator, or trustee, then in equal proportions to each of such executors, administrators, and trustees in the towns where they respectively reside.' 2 General Laws of Rhode Island 1938, c. 31, § 14; c. 545, § 6, as amended by c. 941, Public Laws of Rhode Island 1940; Greenough v. Tax Assessors of City of Newport, 71 R.I. 477, 47 A.2d 625. 3 Chase Securities Corporation v. Donaldson, 325 U.S. 304, 311, 65 S.Ct. 1137, 1141, 89 L.Ed. 1628; see Huddleston v. Dwyer, 322 U.S. 232, 237, 64 S.Ct. 1015, 1018, 88 L.Ed. 1246; American Federation of Labor v. Watson, 327 U.S. 582, 595, 66 S.Ct. 761, 767, 90 L.Ed. 873. 4 See McKinney's Consolidated Laws of New York, c. 60, Tax Law, §§ 3, 350(7), 365, 369, 377. Fidelity & Columbia Trust Co. v. City of Louisville, 245 U.S. 54, 38 S.Ct. 40, 62 L.Ed. 145, L.R.A.1918C, 124. Compare Blackstone v. Miller, 188 U.S. 189, 23 S.Ct. 277, 47 L.Ed. 439; Curry v. McCanless, 307 U.S. 357, 363, 59 S.Ct. 900, 903, 83 L.Ed. 1339, 123 A.L.R. 162; Graves v. Elliott, 307 U.S. 383, 59 S.Ct. 913, 83 L.Ed. 1356; Graves v. Schmidlapp, 315 U.S. 657, 62 S.Ct. 870, 86 L.Ed. 1097, 141 A.L.R. 948; State Tax Commission of Utah v. Aldrich, 316 U.S. 174, 177, 62 S.Ct. 1008, 1010, 86 L.Ed. 1358, 139 A.L.R. 1436, with Farmers Loan & Trust Co. v. State of Minnesota, 280 U.S. 204, 50 S.Ct. 98, 74 L.Ed. 371, 65 A.L.R. 1000; First National Bank of Boston, Me., v. State of Maine, 284 U.S. 312, 52 S.Ct. 174, 76 L.Ed. 313, 77 A.L.R. 1401. 5 Greenough v. Tax Assessors, of City of Newport, 71 R.I. 477, 488, 47 A.2d 625. 6 Compare Harrison v. Commissioner of Corporations and Taxation, 272 Mass. 422, 172 N.E. 605, 71 A.L.R. 677. 7 Compare Mr. Justice Holmes' dissent, Baldwin v. Missouri, 281 U.. 586, 50 S.Ct. 436, 74 L.Ed. 1056, 72 A.L.R. 1303. 8 State Tax Commission of Utah v. Aldrich, 316 U.S. 174, 181, 62 S.Ct. 1008, 1011, 86 L.Ed. 1358, 139 A.L.R. 1436. 9 See Lawrence v. State Tax Commission, 286 U.S. 276, 279, 52 S.Ct. 556, 557, 76 L.Ed. 1102, 87 A.L.R. 374. Art. I, § 10, cl. 2 and 3, contain limitations on a state's power to levy import or export or tonnage duties. 10 Union Refrigerator Transit Co. v. Commonwealth of Kentucky, 199 U.S. 194, 202, 26 S.Ct. 36, 37, 50 L.Ed. 150, 4 Ann.Cas. 493; Frick v. Commonwealth of Pennsylvania, 268 U.S. 473, 488, 45 S.Ct. 603, 604, 69 L.Ed. 1058, 42 A.L.R. 316; Cream of Wheat Co. v. Grand Forks County, N.D., 253 U.S. 325, 328, 329, 40 S.Ct. 558, 559, 64 L.Ed. 931; Curry v. McCanless, 307 U.S. 357, 363—365, and note 3, 59 S.Ct. 900, 903, 904, 83 L.Ed. 1339, 123 A.L.R. 162; see State of Wisconsin v. J. C. Penney Co., 311 U.S. 435, 444, 61 S.Ct. 246, 249, 85 L.Ed. 267, 130 A.L.R. 1229; State Tax Commission v. Aldrich, 316 U.S. 174, 178, 62 S.Ct. 1008, 1010, 86 L.Ed. 1358, 139 A.L.R. 1436. 11 Even where our cases have spoken of power over the person as though it alone might be a sufficient justification for ad valorem taxation of a resident on tangibles outside the taxing jurisdiction, the language was used in instances where there were other bases for the tax. State Tax on Foreign-Held Bonds, 15 Wall. 300, 319, 21 L.Ed. 179; Southern Pacific Co. v. Commonwealth of Kentucky, 222 U.S. 63, 76, 32 S.Ct. 13, 18, 56 L.Ed. 96; Pearson v. McGraw, 308 U.S. 313, 318, 60 S.Ct. 211, 213, 84 L.Ed. 293. 12 See discussion in Northwest Airlines v. Minnesota, 322 U.S. 292, 64 S.Ct. 950, 88 L.Ed. 1283, 153 A.L.R. 245. 13 Kirtland v. Hotchkiss, 100 U.S. 491, 25 L.Ed. 558; Fidelity & Columbia Trust Co. v. City of Louisville, 245 U.S. 54, 38 S.Ct. 40, 62 L.Ed. 145, L.R.A.1918C, 124; compare Blodgett v. Silberman, 277 U.S. 1, 8—12, 48 S.Ct. 410, 72 L.Ed. 749; Maguire v. Trefry, 253 U.S. 12, 40 S.Ct. 417, 64 L.Ed. 739; Curry v. McCanless, 307 U.S. 357, 365—368, 59 S.Ct. 900, 904—906, 83 L.Ed. 1339, 123 A.L.R. 162; State of Wisconsin v. J. C. Penney Co., 311 U.S. 435, 444, 61 S.Ct. 246, 249, 85 L.Ed. 267, 130 A.L.R. 1229; State Tax Commission of Utah v. Aldrich, 316 U.S. 174, 180, 62 S.Ct. 1008, 1011, 86 L.Ed. 1358, 139 A.L.R. 1436. 14 Kirtland v. Hotchkiss, 100 U.S. 491, 25 L.Ed. 558. Compare People of State of New York ex rel. Cohn v. Graves, 300 U.S. 308, 57 S.Ct. 466, 81 L.Ed. 666, 108 A.L.R. 721. 15 See Curry v. McCanless, 307 U.S. 357, 365—368, 59 S.Ct. 900, 904—906, 83 L.Ed. 1339, 123 A.L.R. 162; Wheeling Steel Corp. v. Fox, 298 U.S. 193, 56 S.Ct. 773, 80 L.Ed. 1143. Certain evidences of indebtedness have been held sufficient in themselves to justify a state's imposition of a succession tax upon their nonresident owner. Wheeler v. Comptroller of State of New York, 233 U.S. 434, 34 S.Ct. 607, 58 L.Ed. 1030. 16 See Hutchison v. Ross, 262 N.Y. 381, 393, 187 N.E. 65, 89 A.L.R. 1007. 17 Brown v. Fletcher, 235 U.S. 589, 598—600, 35 S.Ct. 154, 157, 59 L.Ed. 374; Blair v. Commissioner of Internal Revenue, 300 U.S. 5, 13, 57 S.Ct. 330, 333, 81 L.Ed. 465. 18 Scott, Trusts (1939) 487, 1469 et seq.; Williston, Contracts (1936) § 312; 1 Bogert, Trusts and Trustees (1935), § 146. 19 Duvall v. Craig, 2 Wheat. 45, 56, 4 L.Ed. 180; Taylor v. Davis, 110 U.S. 330, 335, 4 S.Ct. 147, 150, 28 L.Ed. 163: 'A trustee may be defined generally as a person in whom some estate interest or power in or affecting property is vested for the benefit of another. When an agent contracts in the name of his principal, the principal contracts, and is bound, but the agent is not. When a trustee contracts as such, unless he is bound, no one is bound, for he has no principal. The trust estate cannot promise; the contract is therefore the personal undertaking of the trustee. As a trustee holds the estate, although only with the power and for the purpose of managing it, he is personally bound by the contracts he makes as trustee, even when designating himself as such.' Lazenby v. Codman, D.C., 28 F.Supp. 949; Prudential Ins. Co. of America v. Land Estates, D.C., 31 F.Supp. 845; Peyser v. American Security & Trust Co., 70 App.D.C. 349, 107 F.2d 625. 20 Roger Williams Nat. Bank v. Groton Manufacturing Co., 16 R.I. 504, 17 A. 170. 21 Warren v. Goodloe's Ex'r, 230 Ky. 514, 520, 20 S.W.2d 278. 22 Scott, Trusts, § 244 et seq. and § 268. 23 Scott, Trusts, § 267 et seq. See Ballentine v. Eaton, 297 Mass. 389, 8 N.E.2d 808; O'Brien v. Jackson, 167 N.Y. 31, 60 N.E. 238. 24 Bullard v. City of Cisco, 290 U.S. 179, 190, 54 S.Ct. 177, 181, 78 L.Ed. 254, 93 A.L.R. 141. See Memphis Street R. Co. v. Moore, 243 U.S. 299, 37 S.Ct. 273, 61 L.Ed. 733. 25 The power of a state to tax the equitable interest of a beneficiary in such circumstances was not presented. Id., 280 U.S. at pages 92 and 95, 50 S.Ct. at pages 60 and 61, 74 L.Ed. 180, 67 A.L.R. 386, 26 Goodsite v. Lane, 6 Cir., 139 F. 593, 2 Ann.Cas. 849, holds that a state property tax on a trustee's intangibles for the sole reason that he resides in the taxing state in invalid. It would seem this was so decided because of the Fourteenth Amendment. We do not think this case gives proper recognition to the state's power to tax the owner of the legal title to the res. 27 The state statute taxing property to trustee validly applies to the resident trustee: Welch v. City of Boston, 221 Mass. 155, 109 N.E. 174, Ann.Cas.1917D, 946; Harvard Trust Co. v. Commissioner of Corporations and Taxation, 284 Mass. 225, 20, 187 N.E . 596; Mackay v. San Francisco, 128 Cal. 678, 61 P. 382; Millsaps v. City of Jackson, 78 Miss. 537, 30 So. 756; McLellan v. City of Concord, 78 N.H. 89, 97 A. 552; State of Florida v. Beardsley, 77 Fla. 803, 82 So. 794. The state tax statute is inapplicable to the resident trustee: In re Dorrance's Estate, 333 Pa. 162, 3 A.2d 682, 127 A.L.R. 366; Commonwealth v. Peebles, 134 Ky. 121, 135, 119 S.W. 774, 23 L.R.A.,N.S., 1130, 20 Ann.Cas. 724; People ex rel. City and County of Darrow v. Coleman, 119 N.Y. 137, 23 N.E. 488, 7 L.R.A. 407; Rnad v. Town of Pittsfield, 70 N.H. 530, 49 A. 88. Newsomb v. Paige, 224 Mass. 516, 113 N.E. 458, and Harrison v. Commissioner, 272 Mass. 422, 428, 429, 172 N.E. 605, 71 A.L.R. 677, declined taxation on the ground of comity and thus distinguished Welch v. City of Boston, supra. 28 Scott, Trusts, §§ 88.1, 103; 1 Bogert, Trusts and Trustees, § 145. 29 Scott, Trusts, § 194; Brennan v. Willson, 71 N.Y. 502; Fritz v. City Trust Co., 72 App.Div. 532, 76 N.Y.S 625, affirmed 173 N.Y. 622, 66 N.E. 1109; In re Campbell's Estate, 171 Misc. 750, 13 N.Y.S.2d 773. 30 The state courts have reached varying conclusions under their statutes: See People ex rel. Beaman v. Feitner, 168 N.Y. 360, 61 N.E. 280; Mackay v. City and County of San Francisco, 128 Cal. 678, 61 P. 382; McLellan v. City of Concord, 78 N.H. 89, 97 A. 552; In re Dorrance's Estate, 333 Pa. 162, 3 A.2d 682, 127 A.L.R. 366; Newcomb v. Paige, 224 Mass. 516, 113 N.E. 458; Harrison v. Commissioner, 272 Mass. 422, 430, 431, 172 N.E. 605, 71 A.L.R. 677. 1 But cf. Holmes, J., dissenting in Safe Deposit & Trust Co. of Baltimore, Md., v. Commonwealth of Virginia, 280 U.S. 83, 96, 50 S.Ct. 59, 62, 74 L.Ed. 180, 67 A.L.R. 386.
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331 U.S. 532 67 S.Ct. 1394 91 L.Ed. 1654 UNITED STATESv.BAYER et al. No. 606. Argued April 2, 1947. Decided June 9, 1947. Rehearing Denied Oct. 13, 1947. See 68 S.Ct. 29. Mr. Frederick Bernays Wiener, of Washington, D.C., for petitioner. Mr. Charles H. Tuttle, of New York City, for respondents, Samuel Bayer and others. Mr. Roger Robb, of Washington, D.C., for respondent, Walter V. Radovich. Mr. Justice JACKSON delivered the opinion of the Court. 1 This is a sordid three-sided case. The Government charged all of the defendants with conspiring to defraud by depriving it of the faithful services of an Army officer. 18 U.S.C. § 88, 18 U.S.C.A. § 88, 35 Stat. 1096. The defendant Radovich, the officer in question, admits receipt of money from the other defendants and admits the questioned actions but denies the conspiracy, claiming the others induced him to accept a bribe. The defendants Bayer admit payment of the money but claim they were victims of extortion by Radovich. The jury found all guilty but recommended 'the highest degree of clemency for all three defendants.' The Court of Appeals for the Second Circuit reversed.1 We granted the Government's petition for certiorari.2 2 The principal facts are admitted and it is contested inferences which are decisive of the issue of guilt. None of the defendants testified. It would serve no purpose to review the evidence in detail. It justifies finding as follows: 3 The Bayer brothers were manufacturers of yarn and thread and bore good names in their circle. Samuel had three sons in the service. One of them, Martin, with Melvin Usdan, a nephew of both Bayers, was involved in this case. Martin's health had not been robust. These two boys enlisted in the Air Corps on the day which Samuel had learned was the last on which a volunteer could select the branch in which to serve. They were almost immediately assigned as file clerks at Mitchel Field, Long Island. In January 1943, at a night club, Elias Bayer picked up the acquaintance of two officers stationed there. They were interested in obtaining uniforms at wholesale. The Bayers eventually aided them and others to obtain uniforms and paid for them though they claim to have understood that the officers were to pay for them. The acquaintance extended to other officers, and there was considerable entertainment. In April 1943 replacement of men in clerical positions by Women's Army Corps personnel was impending and one Col. Jacobson requested a transfer of these two boys with the effect, as Samuel understood it, of assuring them a year's assignment at Mitchel Field. Jacobson was given a dinner at the Waldorf and presented with four new automobile tires. 4 This transfer placed the two boys under command of Radovich. By July there were rumors that the officers were receiving gifts from the Bayers and Radovich old Samuel that the boys would have to be transferred. Samuel wanted them kept at Mitchel Field. Radovich made a transfer from his unit to the medical detachment at the same field, which at first was disapproved and then he accomplished it by an exchange of personnel. After the transfer was made, Samuel paid Radovich some $1,900 or $2,000. 5 In August 1943 the boys were again transferred, to a unit of airborne engineers for overseas duty. Both Bayers were greatly concerned about this and besought their friends among the officers to prevent it. Radovich had gone. He had joined an Air Commando group with high priority on personnel. But he several times talked with Captain Pepper, in charge of personnel, about transferring these boys from the overseas service to Air Transport Command for service only in continental United States. This could not be done. Then Radovich proposed to use his unit's higher priority to requisition the boys for it, to drop them as surplus, and thereupon to have them transferred to the Air Transport Command for domestic service. Pepper agreed this might be done. Radovich told Pepper it was 'worth his while' to get it done and he would see that doing it was worth Pepper's while. 6 On November 22, 1943, Radovich requisitioned the transfer of the boys to his unit, to report November 25. Almost at once he also requested that they be transferred out of his unit and to Air Transport Command. This was effected shortly. Elias Bayer and one of name unknown to the record then delivered $5,000 to Radovich, who sent Pepper $500. Pepper testified that he destroyed the check. 7 The Government from these facts and other evidence draws, as did the jury, the inference of conspiracy. The Bayers say they were victims of extortion and there is evidence that Radovich used the transfer to his own unit, one of extremely dangerous mission for which these boys had neither training nor aptitude, to force money out of the Bayers. Radovich denies the conspiracy and pleads certain courtmartial proceedings as a bar. 8 The issue as to whether the Bayers tempted Radovich with a bribe or Radovich coerced them with threats is one with evidence and inferences both ways. Radovich was a gallant and skillful flier and explained his conduct thus: 'I was going overseas on a very hot job and didn't expect to come back, had the wife and the baby, figured I might just as well take care of them.' The Bayers were persons of some means, thoroughly frightened at the prospect of service for these boys in combat areas, and ready to use their means to foster the boys' safety. Whether they were victims of extortion or voluntary conspirators was for the jury to say, and the reversal does not rest on any inadequacy of proof. The grounds of reversal by the Court of Appeals raise for our consideration four questions of law. 9 1. The Bayers assigned as error the trial judge's charge as to conspiracy. The Court of Appeals unanimously said, 'There is no question but that this charge was an accurate, albeit brief, statement of the law.' But a majority thought that 'the statement was so cryptic as to be difficult to understand, if not to be actually misleading to a jury to laymen,' while one Judge thought it 'a welcome relief from much judicial verbosity.'3 We are not certain whether a reversal as to the Bayers would have been rested on this criticism of the charge alone. We do not consider objection to the charge to amount to reversible error. Once the judge has made an accurate and correct charge, the extent of its amplification must rest largely in his discretion. The trial judge in the light of the whole trial and with the jury before him may feel that to repeat the same words would make them no more clear, and to indulge in variations of statement might well confuse. How far any charge on technical questions of law is really understood by those of lay background would be difficult to ascertain, but it is certainly more evident in the living scene han in a c old record. In this case the jury asked a rereading of the charge on conspiracy. After repeating his instruction, the court inquired of the jury whether anything about it was not clear, or whether there was anything which they desired to have amplified. Nothing was suggested, although inquiry was made as to other matters. While many judges would have made a more extended charge, we think the trial court was within its area of discretion in his brevity. 10 2. The Bayers won reversal on another ground. After the jury had been out about four hours, it returned for instructions and asked to have parts of the summations of counsel read. The court declined to read parts. It was at this point that counsel for the Bayers asked to reopen the case and to put in evidence a long distance call slip from telephone company records. It was the memorandum of a call on November 24, 1943, from one we assume to be Radovich, spelled on the ticket 'Ravish,' from Arlington, Virginia, to Bayer's number in New York. The ticket tended to corroborate Samuel Bayer's secretary who testified to receiving such a call and who was the Bayers' chief witness on the subject of extortion. It also tended to contradict a Government witness. The matter had become of importance because of the District Attorney's argument that the Bayers' witness falsified her story. The court had already, at respondents' request, after the jury had been instructed, told them that a check of the Bayers' records showed a collect-call from Washington that day, but on request of counsel for Radovich the court had also stated that the record did not show who made the call. We will assume that the proffered evidence was relevant, corroborative of the Bayers' contentions, and had the offer been timely and properly verified, its exclusion would have been prejudicial error. 11 But the item of evidence was disputed. The District Attorney had not seen the slip and did not admit the interpretation Bayer's counsel put upon it. Counsel for Radovich objected. To have admitted it over his objection might well have been prejudicial to him. The trial court had already, as he admitted, and as Radovich's counsel charged, given the Bayers the benefit of an irregular conveyance of information to the jury about the call which had not been regularly proved. Moreover, defendants offered no witness to authenticate the slip. As the trial court pointed out to counsel, his proposal was merely to hand to the jury 'an unverified memorandum from the telephone company.' Even during the trial such an offer, with no foundation in testimony and against objection, would have been inadequate. To have admitted it with no witness to identify or support it, would have cut off all cross-examination by both the Government and Radovich, and cross-examination would not have been unreasonable concerning a slip in which the Bayers wished Arlington to be taken as equivalent to Washington, and 'Ravish' to identify Radovich. The evidence, if put in after four hours of deliberation by the jury, would likely be of distorted importance. It surely would have been prejudicial to the Government for the District Attorney would then have had no chance to comment on it, summation having been closed. It also would have been prejudicial to the other defendant, Radovich, who, with no chance to cross-examine or to comment would be confronted with a new item of evidence against him. The court seems to have faced a dilemma, either to grant a mistrial and start the whole case over again or to deny the Bayers' request. Certainly a defendant who seeks thus to destroy a trial must bring his demand within the rules of proof and do something to excuse its untimeliness. 12 Not only was the proffer of the evidence technically deficient, but no excuse for the untimeliness of the offer appeared. It is true, no doubt, that counsel was surprised at the argument made by the District Attorney which would have been less effective had this evidene been in. But Miss Solomon, an employee of defendants and, hence, an interested witness, was left to carry the burden of proving extortion without the corroboration of the testimony of her employer-defendants. This was defendants' right, but it should have been apparent that every bolster to her credibility would be important. It is well known that the telephone companies keep such records and they seem to have been easily obtained when asked for. We do not consider it reversible error to refuse to let this unsworn, unverified slip be put into evidence four hours after the case had been submitted to the jury. The judgment of reversal as to the Bayers was, in our opinion, erroneous. 13 3. Radovich's case raises additional questions. The first concerns the receipt in evidence of his confession of March 15 and 17, 1945. In absence of the jury, the Court heard testimony before admitting it and thereafter most of it was repeated before the jury. The proof against Radovich largely rested on the confession. 14 After service of distinction in Burma, Radovich, then 24 years of age, was ordered to report to Mitchel Field. Upon arrival on August 9, 1944, he was placed under arrest and confined in the psychopathic ward in the station hospital. Here, for some time, he was denied callers, communication, comforts and facilities which it is needless to detail. Charges for court-martial were not promptly served on him as said to be required by the 70th Article of War, 10 U.S.C.A. § 1542, nor was he taken before a magistrate for arraignment on any charges preferred by civil authorities. Military charges were finally served on May 30, 1945. Meanwhile, under such restraint, he made a first confession on September 5 or 6, 1944. Without more, we will assume this confession to be inadmissible under the rule laid down in McNabb v. United States, 318 U.S. 332, 63 S.Ct. 608, 87 L.Ed. 819, and Anderson v. United States, 318 U.S. 350, 63 S.Ct. 599, 87 L.Ed. 829. But this confession was neither offered nor received in evidence. 15 A second confession made to Agent Flynn of the Federal Bureau of Investigation on March 15 and 17, 1945, was received, however, and the Court of Appeals has held it to be 'patently the fruit of the earlier one'4 and equally inadmissible, citing Silverthorne Lumber Co. v. United States, 251 U.S. 385, 40 S.Ct. 182, 64 L.Ed. 319, 24 A.L.R. 1426; Nardone v. United States, 308 U.S. 338, 60 S.Ct. 266, 84 L.Ed. 307. 16 At the time of this confession, Radovich was still at Mitchel Field but only under 'administrative restrictions,' which meant that he could not depart the limits of the base without leave. Flynn testified that Radovich had a number of conversations with F.B.I. agents. He had volunteered some facts not in the original statement and the meeting of March was to incorporate the whole story in one statement. Flynn warned him his statement might be used against him. Radovich requested the original statement and read it before making the second. The March statement is labeled a 'supplementary' statement and is 'basically' the same as the earlier one but went into more detail. The District Attorney refused to produce the first statement, which was not offered in evidence, and the court sustained him, having examined the statement and found no material conflict between them. 17 Of course, after an accused has once let the cat out of the bag by confessing, no matter what the inducement, he is never thereafter free of the psychological and practical disadvantages of having confessed. He can never get the cat back in the bag. The secret is out for good. In such a sense, a later confession always may be looked upon as fruit of the first. But this Court has never gone so far as to hold that making a confession under circumstances which preclude its use, perpetually disables the confessor from making a usable one after those conditions have been removed. The Silverthorne and Nardone cases, relied on by the Court of Appeals, dd not deal with confessions but with evidence of a quite different category and do not control this question. The second confession in this case was made six months after the first. The only restraint under which Radovich labored was that he could not leave the base limits without permission. Certainly such a limitation on the freedom of one in the Army and subject to military discipline is not enough to make a confession voluntarily given after fair warning invalid as evidence against him. We hold the admission of the confession was not error. Cf. Lyons v. Oklahoma, 322 U.S. 596, 64 S.Ct. 1208, 88 L.Ed. 1481. 18 4. Lastly, we must consider whether the court-martial proceedings instituted against Radovich bar this prosecution on the ground of double jeopardy. Radovich was tried and, on June 29, 1945, convicted by court-martial of violating the 95th and 96th Articles of War, 10 U.S.C. §§ 1567, 1568, 10 U.S.C.A. §§ 1567, 1568, 41 Stat. 806—807. The offense charged and found was that of conduct unbecoming an officer and gentleman, and of conduct to the prejudice of good order and military discipline and of a nature to bring discredit upon the military service. As to each offense, the specifications set forth receipt of the same payments of money from the Bayers for effecting the same transfers that are involved in this indictment. Radovich's plea in bar was overruled by the trial court upon the ground that the conspiracy charged in the indictment was not the same offense as that under the Articles of War. The Court of Appeals disapproved this ground but left the issue of double jeopardy to be decided after retrial because of doubt meanwhile raised about the status of the military judgment. 19 The Court of Appeals thought the identity of the specifications in the court-martial proceedings and the offense charged in the indictment, and the likelihood that the military court did not distinguish carefully between the passing of the money and the arrangement to that end, required the plea in bar to be sustained under Grafton v. United States, 206 U.S. 333, 27 S.Ct. 749, 51 L.Ed. 1084, 11 Ann.Cas. 640. In that case a soldier on guard duty in the Philippines shot and killed two Filipinos. He was tried by court-martial on charge of homicide and acquitted. A prosecuting attorney of the Islands then filed in Provincial Court a charge of 'assassination' on identical facts. This Court found not merely the evidence but the offense charged to be identical in everything but name and held retrial of the same offense in Philippine Courts to constitute double jeopardy. 20 But here we think the District Court correctly ruled that the two charges did not accuse of identical offenses. The indictment is for conspiring and we have but recently reviewed the nature of that offense. Pinkerton v. United States, 328 U.S. 640, 66 S.Ct. 1180, 90 L.Ed. 1489. Its essence is in the agreement or confederation to commit a crime, and that is what is punishable as a conspiracy, if any overt act is taken in pursuit of it. The agreement is punishable whether or not the contemplated crime is consummated. But the same overt acts charged in a conspiracy count may also be charged and proved as substantive offenses, for the agreement to do the act is distinct from the act itself. Pinkerton v. United States, 328 U.S. 640, 644, 66 S.Ct. 1180, 1182, 90 L.Ed. 1489. In the court-martial proceedings, Radovich alone was accused. No conspiracy was alleged and the specification was confined to Radovich's receipt of money for effecting transfers. This was a substantive offense on his part under the Articles of War. The agreement with others to commit it constituted a separate offense, although among the overt acts proved to establish the conspiracy were the same payments and transfers. Both offenses could be charged and conviction had on each. The plea in bar was properly overruled. 21 This conclusion makes it unnecessary to decide whether the disapproval of the court-martial judgment for errors in trialand withou t ordering retrial creates a status for the military judgment such that in no event would it be available to bar this prosecution. 22 The judgment of the Circuit Court of Appeals is reversed and that of the District Court is affirmed. 23 Mr. Justice FRANKFURTER would affirm the decision of the Circuit Court of Appeals substantially for the reasons set forth below by Judge Clark in reversing the conviction of the Bayers, which, under a charge of conspiracy, carries with it a reversal as to Radovich. 156 F.2d 964, at pages 967—968. 24 Mr. Justice RUTLEDGE is of the view that the judgment of the Circuit Court of Appeals should be affirmed insofar as it relates to the respondent Radovich, for the reasons stated in that court's opinion. 156 F.2d 964, at pages 968—970. 1 United States v. Bayer, 156 F.2d 964. 2 329 U.S. 706, 67 S.Ct. 354. 3 156 F.2d at page 967. 4 156 F.2d at page 970.
12
331 U.S. 503 67 S.Ct. 1431 91 L.Ed. 1633 CLARKv.ALLEN et al. No. 626. Argued April 11, 1947. Decided June 9, 1947. [Syllabus from pages 503-505 intentionally omitted] Harry Leroy Jones, of Washington, D.C., for petitioner. S. C. Masterson, of Richmond, Cal., for respondents. Everett W. Mattoon, of Los Angeles, Cal., for the State of California, as amicus curiae by special leave of Court. Mr. Justice DOUGLAS delivered the opinion of the Court. 1 Alvina Wagner, a resident of California, died in 1942, leaving real and personl property situate there. By a will dated December 23, 1941, and admitted to probate in a California court in 1942, she bequeathed her entire estate to four relatives who are nationals and residents of Germany. Six heirs-at-law, residents of California, filed a petition for determination of heirship in the probate proceedings claiming that the German nationals were ineligible as legatees under California law.1 2 There has never been a hearing on that petition. For in 1943 the Alien Property Custodian, to whose functions the Attorney General has recently succeeded,2 vested in himself all right, title and interest of the German nationals in the estate of this decedent.3 He thereupon instituted this action in the District Court against the executor under the will and the California heirs-at-law for a determination that they have no interest in the estate and that he was entitled to the entire net estate, after payment of administration and other expenses. The District Court granted judgment for the Custodian on the pleadings. Crowley v. Allen, 52 F.Supp. 850. The Circuit Court of Appeals reversed holding that the District Court was without jurisdiction of the subject matter. Allen v. Markham, 9 Cir., 147 F.2d 136. The case came here on certiorari. We held that the District Court had jurisdiction of the suit and remanded the cause to the Circuit Court of Appeals for consideration of the merits. Markham v. Allen, 326 U.S. 490, 66 S.Ct. 296, 90 L.Ed. 256. The Circuit Court of Appeals thereupon held for respondents. Allen v. Markham, 9 Cir., 156 F.2d 653. The case is here again on a petition for a writ of certiorari which we granted becuase the issues raised are of national importance. 3 First. Our problem starts with the Treaty of Friendship, Commerce and Consular Rights with Germany, signed December 8, 1923, and proclaimed October 14, 1925. 44 Stat. 2132. It has different provisons governing the testamentary disposition of realty and personalty, which we will treat separately. The one pertaining to realty, contained in Article IV, reads as follows: 'Where, on the death of any person holding real or other immovable property or interests therein within the territories of one High Contracting Party, such property or interests therein wuld, by th e laws of the country or by a testamentary disposition, descend or pass to a national of the other High Contracting Party, whether resident or non-resident, were he not disqualified by the laws of the country where such property or interests therein is or are situated, such national shall be allowed a term of three years in which to sell the same, this term to be reasonably prolonged if circumstances render it necessary, and withdraw the proceeds thereof, without restraint or interference, and exempt from any succession, probate or administrative duties or charges other than those which may be imposed in like cases upon the nationals of the country from which such proceeds may be drawn.' 4 The rights secured are in terms a right to sell within a specified time plus a right to withdraw the proceeds and an exemption from discriminatory taxation. It is plain that those rights extend to the German heirs of 'any person' holding realty in the United States. And though they are not expressed in terms of ownership or the right to inherit, that is their import and meaning. Techt v. Hughes, 229 N.Y. 222, 240, 128 N.E. 185, 191, 11 A.L.R. 166; Ahrens v. Ahrens, 144 Iowa, 486, 489, 123 N.W. 164, 166, Ann.Cas.1912A, 1098. And see People ex rel. Atty. Gen. v. Gerke, 5 Cal. 381; Scharpf v. Schmidt, 172 Ill. 255, 50 N.E. 182; Colson v. Carlson, 116 Kan. 593, 227 P. 360; Goos v. Brocks, 117 Neb. 750, 223 N.W. 13. 5 If, therefore, the provisions of the treaty have not been superseded or abrogated they prevail over any requirements of California law which conflict with them. Hauenstein v. Lynham, 100 U.S. 483, 488—490, 25 L.Ed. 628. 6 Second. The Circuit Court of Appeals concluded that these provisions of the treaty had been abrogated. It relied for that conclusion on the Trading with the Enemy Act, 40 Stat. 411, 50 U.S.C.App. § 1 et seq., 50 U.S.C.A.Appendix, § 1 et seq., as amended by the First War Powers Act, 55 Stat. 839, 50 U.S.C.App.Supp. 1, § 5, 50 U.S.C.A.Appendix, § 5, and the Treaty of Berlin, 42 Stat.1939. 7 We start from the premise that the outbreak of war does not necessarily suspend or abrogate treaty provisions. Society for the Propagation of the Gospel in Foreign Parts v. Town of New Haven, 8 Wheat. 464, 494, 495, 5 L.Ed. 662. There may of course be such an incompatibility between a particular treaty provision and the maintenance of a state of war as to make clear that it should not be enforced. Karnuth v. United States, 279 U.S. 231, 49 S.Ct. 274, 73 L.Ed. 677. Or the Chief Executive or the Congress may have formulated a national policy quite inconsistent with the enforcement of a treaty in whole or in part. This was the view stated in Techt v. Hughes, supra, and we believe it to be the correct one. That case concerned the right of a resident alien enemy to inherit real property in New York. Under New York law, as it then stood, an alien enemy had no such right. The question was whether the right was granted by a reciprocal inheritance provision in a treaty with Austria which was conched in terms practically identical with those we have here. The court found nothing incompatible with national policy in permitting the resident alien enemy to have the right of inheritance granted by the treaty. Cardozo, J., speaking for the court, stated the applicable principles as follows: 'The question is not what states may do after was has supervened, and this without breach of their duty as members of the society of nations. The question is what courts are to presume that they have done. * * * President and Senate may denounce the treaty, and thus terminate its life. Congress may enact an inconsistent rule, which will control the action of the courts (Fong Yue Ting v. United States, 149 U.S. 698, 13 S.Ct. 1016, 37 L.Ed. 905). The treaty of peace itself may set up new relations, and terminate earlier compacts, either tacitly or expressly. * * * But until some one of these things is done, until some one of these events occurs, while war is still lagrant, a nd the will of the political departments of the government unrevealed, the courts, as I view their function, play a humbler and more cautious part. It is not for them to denounce treaties generally, en bloc. Their part it is, as one provision or another is involved in some actual controversy before them, to determine whether, alone, or by force of connection with an inseparable scheme, the provision is inconsistent with the policy or safety of the nation in the emergency of war, and hence presumably intended to be limited to times of peace. The mere fact that other portions of the treaty are suspended, or even abrogated, is not conclusive. The treaty does not fall in its entirety unless it has the character of an indivisible act.' 229 N.Y. at pages 242—243, 128 N.E. at page 192, 11 A.L.R. 166. 8 To the same effect see Goos v. Brocks, supra; State ex rel. v. Reardon, 120 Kan. 614, 245 P. 158, 47 A.L.R. 452.4 9 We do not think that the national policy expressed in the Trading with the Enemy Act, as amended, is incompatible with the right of inheritance granted German aliens under Article IV of the treaty. It is true that since the declaration of war on December 11, 1941, 55 Stat. 796, 50 U.S.C.A. note preceding section 1, the Act see Lenoir, The Effect of War on have prohibited the entry of German nationals into this country,5 have outlawed communications or transactions of a commercial character with them,6 and have precluded the removal of money or property from this country for their use or account.7 We assume that these provisions abrogate the parts of Article IV of the treaty dealing with the liquidation of the inheritance and the withdrawal of the proceeds, even though the Act provides that the prohibited activities and transactions may be licensed.8 But the Act and the Executive Orders do not evince such hostility to ownership of property by alien enemies as to imply that its acquisition conflicts with the national policy. There is, indeed, tacit recognition that acquisition of property by inheritance is compatible with the scheme of the Act. For the custodian is expressly empowered to represent the alien enemy heir in all legal proceedings, including those incident to succession.9 Much reliance for the contrary view is placed on the power to vest alien property in an agency of the United States.10 But the power to vest, i.e., to take away, what may be owned or acquired does not reveal a policy at odds with the reciprocal right to inherit granted by Article IV of the treaty. For the power to vest is discretionary not mandatory. The loss of the inheritance by vesting is, therefore, not inevitable. But more important, vesting does not necessarily deprive the alien enemy of all the benefits of his inheritance. If he owes money to American creditors, the property will be applied to the payment of his debts.11 10 To give the power to vest the effect which respondents urge would, indeed, prove too much. That power is not restricted to property of alien enemies. It extends to the property of nationals of any foreign country, friend or enemy.12 Provisions comprable to that contained in Article IV of the present treaty are found in existing treaties with friendly nations.13 We will not readily asume that when Congress enacted § 5(b) and authorized the vesting of property, it had a purpose to abrogate all such treaty clauses. Cf. Cook v. United States, 288 U.S. 102, 120, 53 S.Ct. 305, 311, 77 L.Ed. 641. Yet if the power to vest is inconsistent with the right of inheritance of an alien enemy, it is difficult to see why it is any less so when other aliens are involved. Finally, there is a distinction between the acquisition of property and the use thereof which § 5(b) itself recognizes. That section not only grants the President the power to vest; it likewise grants him authority under the same circumstances to 'prevent or prohibit, any acquisition * * * of * * * any property in which any foreign country or a national thereof has any interest.' § 5(b)(1)(B). No action has been taken to prevent or prohibit the acquisition of property by inheritance on the part of enemy aliens. The grant of express power to cut off, inter alia, the right of inheritance and the non-exercise of the power lend support to the view that the Trading with the Enemy Act, as amended, did not without more suspend or abrogate Article IV of the present treaty. This conclusion squares with the general rule stated in Karnuth v. United States, 279 U.S. supra, page 237, 49 S.Ct. at page 276, 73 L.Ed. 677, that treaty provisions 'giving the right to citizens of subjects of one of the high contracting powers to continue to hold and transmit land in the territory of the other' survive the outbreak of war. 11 The argument based on the Treaty of Berlin is inconclusive. The Joint Resolution of July 2, 1921, 42 Stat. 105, 106, declared that property of German nationals held by the United States should be retained and no disposition made of it, except as specifically provided by law, until the German government made suitable provision for the satisfaction of claims of American nationals against it. Thus absolute title to the property in question became vested in the United States. Cummings v. Deutsche Bank, 300 U.S. 115, 57 S.Ct. 359, 81 L.Ed. 545. The Treaty of Berlin accorded the United States all rights and advantages specified in the resolution. But the Treaty of 1828 with Prussia contained a provision substantially similar to Article IV of the present treaty. 8 Stat. 378, 384, art. XIV. Hence it is argued that if the Treaty of 1828 survived the outbreak of was and thus guaranteed property rights in German nationals by way of inheritance during that war, it would not have been necessary to have negotiated a new convention covering the same ground in 1923. And it is also argued that if the provision in the earlier treaty did not survive the war, it is unlikely that the same parties would intend like provisions in the later treaty to have a different effect. 12 The attitude of the State Department has varied. In 1918 Secretary Lansing expressed the view that such treaty provisions were not in force during the war with Germany and Austria.14 Today the Department apparently takes the other view.15 We have no reliable evidence of the intention of the high contracting parties outside the words of the present treaty. The attitude and conduct under earlier treaties, reflecting as they did numerous contingencies and conditions, leave no sure guide to the construction of the present treaty. Where the relevant historical source and the i nstrument itself give no plain indication that it is to become inoperative in whole or in part on the outbreak of war, we are left to determine, as Techt v. Hughes, supra, indicates, whether the provision under which rights are asserted is incompatible with national policy in time of war. So far as the right of inheritance of realty under Article IV of the present treaty is concerned, we find no incompatibility with national policy, for reasons already given. 13 It is argued, however, that the Treaty of 1923 with Germany must be held to have failed to survive the war, since Germany, as a result of its defeat and the occupation by the Allies, has ceased to exist as an independent national or international community. But the question whether a state is in a position to perform its treaty obligations is essentially a political question. Terlinden v. Ames, 184 U.S. 270, 288, 22 S.Ct. 484, 491, 46 L.Ed. 534. We find no evidence that the political departments have considered the collapse and surrender of Germany as putting an end to such provisions of the treaty as survived the outbreak of the war or the obligation of either party in respect to them. The Allied Control Counsel has, indeed, assumed control of Germany's foreign affairs and treaty obligations16—a policy and course of conduct by the political departments wholly consistent with the maintenance and enforcement, rather than the repudiation, of pre-existing treaties. 16 The Axis in Defeat, State Dept. Pub. No. 2423, pp. 71, 72, 77. 14 Third. The problem of the personalty raises distinct questions. Article IV of the treaty contains the following provision pertaining to it: 'Nationals of either High Contracting Party may have full power to dispose of their personal property of every kind within the territories of the other, by testament, donation, or otherwise, and their heirs, legatees and donees, of whatsoever nationality, whether resident or non-resident, shall succeed to such personal property, and may take possession thereof, either by themselves or by others acting for them, and retain or dispose of the same at their pleasure subject to the payment of such duties or charges only as the nationals of the High Contracting Party within whose territories such property may be or belong shall be liable to pay in like cases.' 15 A practically identical provision of the Treaty of 1844 with Wurttemburg, art. III, 8 Stat. 588, 590, was before the Court in Frederickson v. State of Louisiana, 23 How. 445, 16 L.Ed. 577. In that case the testator was a citizen of the United States, his legatees being citizens and residents of Wurttemberg. Louisiana, where the testator was domiciled, levied a succession tax of 10 per cent on legatees not comiciled in the United States. The Court held that the treaty did not cover the 'case of a citizen or subject of the respective countries residing at home, and disposing of property there in favor of a citizen or subject of the other * * *' 23 How. at pages 447, 448. That decision was made in 1860. In 1917 the Court followed it in cases involving three other treaties. Petersen v. State of Iowa, 245 U.S. 170, 38 S.Ct. 109, 62 L.Ed. 225; Duus v. Brown, 245 U.S. 176, 38 S.Ct. 111, 62 L.Ed. 228; Skarderud v. Tax Commission, 245 U.S. 633, 38 S.Ct. 133, 62 L.Ed. 522. 16 The construction adopted by those cases is, to say the least, permissible when the syntax of the sentences dealing with realty and personalty is considered. So far as realty is concerned, the testator includes 'any person'; and the property covered is that within the territory of either of the high contracting parties. In case of personalty, the provision governs the right of 'nationals' of either contractig party to dispose of their property within the territory of the 'other' contracting party; and it is 'such personal property' that the 'heirs, legatees and donees' are entitled to take. 17 Petitioner, however, presents a detailed account of the history of the clause which was not before the Court in Frederickson v. State of Louisiana, supra, and which bears out the construction that it grants the foreign heir the right to succeed to his inheritance or the proceeds thereof. But we do not stop to review that history. For the consistent judicial construction of the language since 1860 has given it a character which the treaty-making agencies have not seen fit to alter. And that construction is entirely consistent with the plain language of the treaty. We therefore do not deem it appropriate to change that construction at this late date, even though as an original matter the other view might have much to commend it. 18 We accordingly hold that Article IV of the treaty does not cover personalty located in this country and which an American citizen undertakes to leave to German nationals. We do not know from the present record the nationality of Alvina Wagner. But since the issue arises on the Government's motion for judgment on the pleadings, we proceed on the assumption less favorable to it, viz., that she was an American citizen. 19 Fourth. It is argued, however, that even though the provision of the treaty is inapplicable, the personalty may not be disposed of pursuant to the California statute because that statute is unconstitutional. Issues under the Fourteenth Amendment are not raised as in Terrace v. Thompson, 263 U.S. 197, 44 S.Ct. 15, 68 L.Ed. 255. The challenge to the statute is that it is an extension of state power into the field of foreign affairs, which is exclusively reserved by the Constitution to the Federal Government. That argument is based on the fact that under the statute the right of non-resident aliens to take by succession or testamentary disposition is dependent upon the existence of a reciprocal right on the part of citizens of the United States to take personalty on the same terms and conditions as residents and citizens of the other nation.17 The argument is that by this method California seeks to promite the right of American citizens to inherit abroad by offering to aliens reciprocal rights of inheritance in California. Such an offer of reciprocal arrangements is said to be a matter for settlement by the Federal Government on a nation-wide basis. 20 In Blythe v. Hinckley, 180 U.S. 333, 21 S.Ct. 390, 45 L.Ed. 557, California had granted aliens an unqualified right to inherit property within its borders. The alien claimant was a citizen of Great Britain with whom the United States had no treaty providing for inheritance by aliens in this country. The argument was that a grant of rights to aliens by a State was, in absence of a treaty, a forbidden entry into foreign affairs. The court rejected the argument as being an extraordinary one. The objection to the present statute is equally far fetched. 21 Rights of succession to property are determined by local law. See Lyeth v. Hoey, 305 U.S. 188, 193, 59 S.Ct. 155, 158, 83 L.Ed. 119, 119 A.L.R. 410; Irving Trust Co. v. Day, 314 U.S. 556, 562, 62 S.Ct. 398, 401, 86 L.Ed. 1734, 137 A.L.R. 1093. Those rights may be affected by an overriding federal policy, as where a treaty makes different or conflicting arrangements. Hauenstein v. lynham, supra. Then the state policy must give way. Cf. Hines v. Davidowitz, 312 U.S. 52, 61 S.Ct. 399, 85 L.Ed. 581. But here there is no treaty governing the rights of succession to the personal property. Nor has California entered the forbidden domain of negotiating with a foreign country, United States v. Curtiss-Wright Export Corp., 299 U.S. 304, 316, 317, 57 S.Ct. 216, 219, 81 L.Ed. 255, or making a compact with it contrary to the prohibition of Article I, Section 10 of the Constitution. What California has done wil have some incidental or indirect effect in foreign countries. But that is true of many state laws which none would claim cross the forbidden line. 22 In summary, we hold that disposition of the realty is governed by Article IV of the treaty. Disposition of the personalty, however, is not governed by the treaty unless it is determined that Alvina Wagner was a German national. If she was an American citizen, disposition of the personalty is governed by California law. Whether there are other requirements of the California statute which would bar the California heirs-at-law is a question on which we intimate no opinion. 23 The judgment is reversed in part and affirmed in part, and the cause is remanded to the District Court for proceedings in conformity with this opinion. 24 So ordered. 25 Affirmed in part and reversed in part. 26 Mr. Justice RUTLEDGE (concurring in part). 27 I join in the Court's opinion insofar as it relates to the real estate. But, as to the personal property, I think the cause should be remanded to the District Court for determination of Alvina Wagner's nationality, without expression of opinion here upon the constitutionality of the California statute. 28 The decision now made on that issue, by virtue of the Court's hypothesizing that she was an American citizen, will be rendered both moot and advisory in character if it is found, as it may well be in the District Court's further proceedings, that she was a German national. This Court has consistently declined to decide constitutional questions on hypothetical presentations. Rescue Army v. Municipal Court, 331 U.S. 549, 67 S.Ct. 1409. The practice should be followed in this case, even though conceivably another appeal might be saved by indulging the presumption which the Court makes. It is more important that constitutional decisions be reserved until the issues calling for them are squarely and inescapably presented, factually as well as legally, than it is to expedite the termination of litigation or the procedural convenience of the parties. 1 Section 259, California Probate Code, in 1942 provided: 'The rights of aliens not residing within the United States or its territories to take either real or personal property or the proceeds thereof in this State by succession or testamentary disposition, upon the same terms and conditions as residents and citizens of the United States is dependent in each case upon the existence of a reciprocal right upon the part of ditizens of the United States to take real and personal property and the proceeds thereof upon the same terms and conditions as residents and citizens of the respective countries of which such aliens are inhabitants and citizens and upon the rights of citizens of the United States to receive by payment to them within the United States or its territories money originating from the estates of persons dying within such foreign countries.' Section 259.2 provided: 'If such reciprocal rights are not found to exist and if no heirs other than such aliens are found eligible to take such property, the property shall be disposed of as escheated property.' The condition with respect to receipt of moneys in the United States was repealed in 1945, while this case was pending. Cal.Stats.1945, c. 1160, § 1, effective September 15, 1945. Under the original act, the non-resident aliens had the burden of establishing the fact of existence of the reciprocal rights. § 259.1. By the 1945 amendment the burden of establishing the non-existence of such reciprocal right was placed on him who challenged the right of the non-resident aliens to take. Section 259.2 was repealed. 2 Executive Order No. 9788, Oct. 14, 1946, 50 U.S.C.A.Appendix, § 6 note, 11 Fed.Reg. 11981. 3 Vesting Order No. 762, 8 Fed.Reg. 1252. 4 For a recent review of the authorities see Lenior, The Effect of War on Bilateral Treaties, 34 Geo.L.J. 129. 5 § 3(b). 6 § 3(a). 7 § 7(c); § 5(b), as amended; Executive Order No. 8785, 12 U.S.C.A. § 95a note, 3 C.F.R.Cum.Supp. 948. 8 § 5(a). 9 Executive Order No. 9193, Par. 5, 50 U.S.C.A.Appendix, § 6 note, 3 C.F.R.Cum.Supp. 1174, 1176. 10 Section 5(b)(1), as amended, provides in part: 'During the time of war or during any other period of national emergency declared by the President * * * any property or interest of any foreign country or national thereof shall vest, when, as, and upon the terms, directed by the President, in such agency or person as may be disignated from time to time by the President, and upon such terms and conditions as the President may prescribe such interest or property shall be held, used, administered, liquidated, sold, or otherwise dealt with in the interest of and for the benefit of the United States, and such designated agency or person may perform any and all acts incident to the accomplishment or furtherance of these purposes * * *.' 11 Pul.L.o.671, 79t h Cong., 2d Sess., adding § 34 to the Trading with the Enemy Act, 50 U.S.C.A.Appendix, § 34. 12 See note 10, supra. 13 Treaty with Great Britain, arts, I, II, March 2, 1899, 31 Stat. 1939. Treaty with Norway, art. IV, June 5, 1928, 47 Stat. 2135, 2138. 14 U.S. Foreign Rel.; 1918 Supp. 2, p. 309 (Dept. State 1933); VI Hackworth, Digest of International Law (1943) p. 327. 15 Letter to the Attorney General from Acting Secretary of State, Joseph C. Grew, dated May 21, 1945, commenting on the Government's position in the present litigation. 17 See note 1, supra.
12
331 U.S. 549 67 S.Ct. 1409 91 L.Ed. 1666 RESCUE ARMY et al.v.MUNICIPAL COURT OF CITY OF LOS ANGELES. No. 574. Argued Feb. 6, 7, 1947. Decided June 9, 1947. Appeal from the Supreme Court of the State of California. Mr. Robert H. Wallis, of Los Angeles, Cal., for appellants. Mr. John L. Bland, of Los Angeles, Cal., for appellees. Mr. Justice RUTLEDGE delivered the opinion of the Court. 1 On the merits this appeal presents substantial questions concerning the constitutional validity of ordinances of the City of Los Angeles governing the solicitation of contributions for charity. First and Fourteenth Amendment grounds are urged as nullifying them chiefly in the view that they impose prior restraints upon and unduly abridge appellants' rights in the free exrcise of t heir religion. Those rights, as claimed, are to engage in soliciting donations for charity as a part of their religion free from the ordinances' restrictions. 2 Similar, but also distinct, questions were involved in Gospel Army v. City of Los Angeles, dismissed today for jurisdictional reasons. 331 U.S. 543, 67 S.Ct. 1428. This case, however, arose procedurally in a different fashion, so that it is not subject to the same jurisdictional defect. And the procedural difference is important, not merely for our jurisdiction but also for determining the propriety of exercising it in the special circumstances presented by this appeal. 3 The California Supreme Court heard and determined the Gospel Army case several months in advance of this one. It sustained the regulations in both instances, filing separate opinions in each case. 27 Cal.2d 232, 163 P.2d 704; 28 Cal.2d 460, 171 P.2d 8. But the attack upon the city ordinances in the Gospel Army case covered a much wider range than here, and the court's principal opinion was rendered in that cause. Hence in this case it disposed of overlapping issues merely by reference a fortiori to its 'approval' of the challenged provisions in the Gospel Army opinion. 4 As will more fully appear, this mode of treatment, together with interlacing relationships between provisions involved here and others in the Gospel Army case, has combined with the necessitated dismissal of that appeal to create for us difficult problems in determining exactly how much of the regulatory scheme approved in the Gospel Army opinion, and hence also how much of that decision, must be taken as having been incorporated in the disposition of this cause. By virtue of the California court's method of decision, we are largely without benefit of its judgment upon these matters, including possible questions of severability. Consequently, this fact, together with the different jurisdictional postures in which the cases reach this Court, would force us to determine those questions independently before undertaking any decision on the merits. 5 That necessity and the difficulties tendered by the extricating problem raise substantial questions concerning the disposition appropriate, in the unusual situation, to be made of this appeal. In order to present the problem with a fair degree of precision, it is necessary to state in some detail the nature of the two proceedings, their relationships to each other, and their procedural as well as jurisdictional differences. I. 6 This suit is one for a writ of prohibition. The appeal is from the California Supreme Court's judgment denying appellants' application for such a writ. 28 Cal.2d 460, 171 P.2d 8. They instituted the suit in the District Court of Appeal, Second Appellate District, Division Three, of California. Its object was to test the jurisdiction of the respondent Municipal Court of Los Angeles to proceed with a pending criminal prosecution against Murdock, who is an officer of the Rescue Army. In that court he had been charged with violating three provisions of the city ordinances, had been twice convicted, and twice the convictions had been reversed by the Superior Court of Los Angeles County.1 7 While the case was pending in the Municipal Court after the second reversal, appellants filed their petition in this cause in the District Court of Appeal. Alleging that the Municipal Court was threatening to proceed with a third trial on the same charges, they set forth grounds held sufficient under the state procedure to present for adjudication the question of the Municipal Court's jurisdiction. 28 Cal.2d at pages 462—467, 171 P.2d 8. 8 The District Court of Appeal denied the writ. Thereupon the state Supreme Court trnsferred t he cause to its own docket and issued an alternative writ of prohibition pending determination there. As in the Gospel Army case, the Supreme Court, with three of the seven justices dissenting, decided the issues on the merits against the appellants. It therefore denied the writ, at the same time discharging the alternative writ. In short effect the ordinances, insofar as they were involved, were sustained as against the constitutional and other objections raised concerning them. Probable jurisdiction was duly noted here, and the cause was assigned for argument immediately following the Gospel Army case. 67 S.Ct. 130. 9 Apparently Murdock was charged in the Municipal Court with violating three sections of the Municipal Code. These were §§ 44.09(a), 44.09(b), and 44.12 of Article 4, Chapter IV.2 Sections 44.09(a) and (b) formed the basis for the first count against Murdock.3 Colloquially speaking, § 44.09 is a 'tin-cup' ordinance. In summary, its two subdivisions, (a) and (b), prohibit solicitations in the specified public places or adjacent areas 'by means of any box or receptacle' except, under (a), 'by the express written permission of the Board (of Social Service Commissioners)'; under (b), 'without first filing with the Department (of Social Service) a 'notice of intention' as required by Sec. 44.05' and, literally, obeying the further command that 'every person so soliciting must in all other respects comply with the provisions of this Article.'4 The full text of the section is set forth in the margin.5 10 The second count charged violation of § 44.12 by soliciting without exhibiting or reading to the persons solicited an information card issued by the Los Angeles Board of Social Service Commissioners. Section 44.12 is more general than § 44.09 as to place and manner of solicitation. It is in the fllowing wo rds: 11 'No person shall solicit any contributions unless he exhibits an Information Card provided for in Sec. 44.03 of this Article and reads it to the person solicited or presents it to said person for his perusal, allowing him sufficient opportunity to read same, before accepting any contribution so solicited.' 12 Obviously neither § 44.09(b) nor § 44.12 is self-contained. Each incorporates by reference other sections of the code. Thus, it is necessary to take into account, under § 44.09(b), the provisions of § 44.05 requiring the filing of the 'notice of intention' as well as the omnibus requirement of compliance 'in all other respects * * * with the provisions of this Article'; under § 44.12, the requirements of § 44.03 concerning issuance of the information card. Enforcement of § 44.09(a), which does not refer specifically to other sections, necessarily involves consideration of whatever requirements may relate to securing the board's written permission. 13 The issue of the Municipal Court's jurisdiction therefore, insofar as it concerns us, turns upon the validity of §§ 44.09(a), 44.09(b) and 44.12, together with the other provisions necessarily incorporated in them by reference; and, upon this appeal, their validity not only is relative solely to the effect of the federal constitutional prohibitions, but must be determined in light of the California Supreme Court's interpretation, including the extent to which other provisions have been incorporated. Moreover the jurisdictional question arises substantially as upon demurrer to the charges, since trial has not been had and the issue concerns only the Municipal Court's power to proceed with the criminal cause. Hence only the validity of the provisions on their face, not as applied to proven circumstances, is called in question.6 14 The Gospel Army case, on the other hand, was an injunction suit, in which attack was projected on a broad front against the ordinances and the scheme of regulation they embody as a whole. For some reason § 44.09(a) was not attacked in that suit. But § 44.09(b) was involved indirectly through its relation to § 44.05 and § 44.12 directly, as well as numerous other provisions both of Article 4, Chapter IV, and outside it. That article, as we have noted above, consists of Code §§ 44.01-44.19, entitled 'Charities and Relief,' and thus includes all of the sections involved here as well as many others which were in issue in the Gospel Army case. 15 It is this setting of dovetailed legislative enactments and judicial decisions which creates the primary problem for our disposition. Those interrelations, of the cases and of the ordinances they involve, will be better understood in the setting of a summary of the general scheme. II. 16 The Municipal Code regulates both charitable and other solicitations, as well as pawnbrokers, secondhand dealers, junk dealers, etc. The regulations affecting those dealers lie outside Article 4 and became pertinent in the Gospel Army case because of that organization's activities in collecting, repairing, selling and giving away used articles.7 None of those regulations, however, appears to be involved here.8 The Municipal Court charges, so far as we can now ascertain, relate exclusively to charitable solicitations and consequently are comprehended within Article 4.9 We therefore are relieved of the necessity for taking account of any of the code provisions outside that article. 17 Article 4, however, comprehends numerous interrelated sections and subdivisions. They provide a broad and general, though also highly detailed and integrated, plan for regulating solicitations in Los Angeles. The sections here in question are integral parts of that plan. 18 It is designed primarily, though not exclusively, to secure a maximum of information and publicity for the public. It seeks to make available to all persons solicited detailed information concerning the persons soliciting, the causes or organizations on behalf of which they act, and the uses to which the donations will be put. The plan also undertakes, in other ways, to assure responsibility, both moral and financial, on the part of soliciting individuals and agencies; and to see to it that the funds collected are applied to their appropriate purposes. 19 Machinery for executing the scheme is created through the establishment of a Department of Social Service and a Board of Social Service Commissioners, each with specified administrative powers.10 Comprehensive and detailed definitions of activities affected and correlative prohibitions are prescribed, together with various provisions for exemption. Violation of the prohibitions, which generally require compliance with one or more other regulations, is made punishable by criminal sanctions. 20 More narrowly, insofar as the plan is relevant here, any person or association desiring to solicit contributions for a charitable purpose11 must file with the department, at least ten days before beginning to solicit, a written 'Notice of Intention.' § 44.05. This is, in substance, an application for the 'Information Card' provided for in § 44.03(d). It will be recalled that § 44.09(b), in issue here, expressly requires the filing of this notice. And § 44.12, also directly in issue, requires exhibition of the card before solicitation may lawfully take place. 21 The notice must be filed on a form furnished by the department and must contain the 'complete information' specified in the margin.12 § 44.05. The department is authorized, among other things, to investigate the statements contained in the notice and to issue information cards 'to all solicitors.'13 § 44.03. Those cards must show the detailed matters specified below.14 Ibid. The board is empowered to publish the results of the investigations provided for in § 44.0315 and to exercise other powers, such as endorsing a soliciting association, waiving specified requirements, and recalling the information cards for correction.16 §§ 44.02, 44.03. A fee of four cents per card is charged, when issued, unless more than twenty-five are issued at one time for the same solicitation. In that event the fee becomes one cent per card. 22 The foregoing regulations apply, on the face of the ordinance, to charitable solicitations as requirements in the nature of conditions precedent, compliance with which is necessary before solicitation may be lawfully made. There are also other requirements which become applicable during and after the act of solicitation. One is that of § 44.15, which commands persons soliciting for charity to tender to each contributor a written receipt containing specified detailed information.17 And by s 44.14 every such solicitor must file with the department, within thirty days after 'the close of any such solicitation' or demand, a report showing the contributions secured and 'exactly for what uses and in what manner' they 'were or are to be disbursed.' 23 Article 4, moreover, classifies persons soliciting into three groups, two of which are primary, namely, 'promoters' and 'solicitors.' 'Solicitors,' as will appear, are subdivided into two classes. The regulations bearing upon promoters are more onerous than those touching solicitors and are contained in § 44.19, which itself includes numerous subdivisions.18 24 The exact definitive distinction between solicitors and promoters, who may be either institutions or individuals, is not clear from the definitions given in the ordinance,19 or indeed from the opinions filed in the state court.20 But, so far as we can gather, the promoter differs from the solicitor, generally at any rate, as being one who engages in solicitation as a business or by exercising a managerial or supervisory capacity over other persons acting as paid solicitors under his direction or pursuant to a program in his charge.21 25 Section 44.19 also regulates the relations between promoters and paid solicitors associated with them. A promoter is forbidden by § 44.19(9)(a) to cause or permit any person for compensation 'to solicit or receive on his behalf or at his instigation, under his direction or control or in his employment, any contribution unless such person shall be registered as a solicitor by the Board.' And the next subsection requires the registered solicitor to prove his good moral character and reputation for honesty, to file a $500 bond, and to pay a $1.00 registration fee. § 44.19(9)(b), (d). 26 Section 44.19 thus apparently is effective to create two classes of solicitors, namely, registered and unregistered, as well as the distinction between promoters and solicitors; and establishes special and more burdensome conditions for lawful solicitation by registered solicitors, as well as by promoters, than are created for solicitors not required to be registered. 27 Finally, without detailed elaboration, numerous regulations in addition to or interwoven with those relating to solicitors of both types and to promoters govern the organizations or charities on whose behalf the solicitations are made.22 28 The foregoing summary is perhaps more than sufficient to show the comprehensive nature of the plan and the intricately interlacing relationships of the numerous provisions of Article 4 making up the general scheme in which §§ 44.09(a), (b) and 44.12 find their context and setting. Some no doubt could be applied independently, perhaps for example § 44.09(a).23 But others are interwoven with one or more istinct pr ovisions to specify essential constituent elements. And in many instances the provisions so imported require or suggest still further reference to additional ones. The article is in fact a web of intricately dovetailing references and cross-references. 29 Thus, with respect to the sections involved here, § 44.12 requires exhibition of the information card provided for in § 44.03. This in turn forces reference to § 44.05, which specifies the conditions for securing the card. And fulfillment of those conditions may compel resort to still other provisions. The same process must be gone through with respect to § 44.09(b). For while that section differs verbally from § 44.12 in that it specifically requires only the filing of the notice of intention, not issuance or exhibition of the information card, not only is the procedure for filing the notice highly detailed and largely set forth in other sections. It is also highly doubtful, in view of the California Supreme Court's decision, whether persons so complying and filing the notice would be authorized by that act alone to proceed with lawful solicitation under s 44.09(b), without waiting the specified ten-day period (§ 44.05) and undergoing the investigations prescribed by § 44.03 or perhaps actually procuring the card.24 30 It is necessary, in order to complete the environment of the problem presented by the appeal, to set forth somewhat more fully the manner in which the California Supreme Court dealt with §§ 44.09(a), 44.09(b) and 44.12, and related provisions. This, however, may best be deferred at this point, in order to state the legal principles which we think are controlling of our disposition. III. 31 The Gospel Army case we have dismissed for the technical, nevertheless important, reason that under California law the state Supreme Court's reversal, without more, contemplates further proceedings in the trial court. Consequently that judgment is not final for the purposes of our jurisdiction on appeal, within the meaning of § 237(a) of the Judicial Code, 28 U.S.C. § 344(a), 28 U.S.C.A. § 344(a). 331 U.S. 543, 67 S.Ct. 1428. 32 On the other hand, this appeal is not subject to that particular infirmity. The effect of the California Supreme Court's judgment, of course, will be to permit further proceedings by the Municipal Court. But under the rule of Bandini Petroleum Co. v. Superior Court, 284 U.S. 8, 52 S.Ct. 103, 76 L.Ed. 136, 78 A.L.R. 826, this prohibition proceeding would be an independent suit, in relation to that criminal prosecution, 'and the judgment finally disposing of it,' as did the state Supreme Court's judgment, 'is a final judgment within the meaning of section 237(a) of the Judicial Code.' 284 U.S. at page 14, 52 S.Ct. at page 105, 76 L.Ed. 136, 78 A.L.R. 826.25 33 The Bandini case, like this one, was a prohibition proceeding brought in a California District Court of Appeal. Its object was to determine the jurisdiction of a state Superior Court in an equity cause. That suit had been brought by the state Director of Natural Resources to enjoin alleged unreasonable waste of natural gas, pursuant to the Oil and Gas Conservation Act of California. A preliminary injunction issued in the Superior Court. Thereupon the writ of prohibition was sought to restrain the enforcement of the order, and of the Act, which was attacked under the Fourteenth Amendment on due process and equal protection grounds. The writ was denied, as was hearing by the California Supreme Court. Upon appeal here this Court sustained its jurisdiction and determined the constitutional issues presented upon the face of the statute,26 affecting the Superior Court's jurisdiction, adversely to the appellants' contentions. 34 The Bandini ruling is well settled.27 Apparently, however, it has been applied to a proceeding in prohibition relating to a criminal prosecution in but a single case, Plessy v. Ferguson, 163 U.S. 537, 16 S.Ct. 1138, 41 L.Ed. 256, without discussion. On the other hand, a close, indeed it would seem a complete, analogy is to be found in Bryant, People of State of New York ex rel. v. Zimmerman, 278 U.S. 63, 49 S.Ct. 61, 73 L.Ed. 184, 62 A.L.R. 785. In that case Bryant had been charged criminally in the courts of New York with violating that state's so-called anti-secret organization statute, and was held in custody for trial pursuant to that charge. He instituted habeas corpus proceedings in the state courts, on the ground that 'the warrant under which he was arrested and detained was issued without any jurisdiction, in that the statute which he was charged with violating was unconstitutional.' 278 U.S. at page 65, 49 S.Ct. at page 62, 73 L.Ed. 184, 62 A.L.R. 785. Upon appeal from the state court's denial of the writ, this Court with one justice dissenting entertained the appeal and held the statute valid. 35 Although the jurisdictional inquiry, in the state courts and here, was conducted in the separate proceeding on habeas corpus, unlike the Bandini case it related to a criminal cause, as does this case. And for the purposes of our jurisdiction under § 237(a) of the Judicial Code, a distinction would seem to be wholly verbal between such an inquiry and its disposition made under the state procedure of habeas corpus and a similar one made in a state proceeding for a writ of prohibition.28 Those procedures, of course, have their historic differences, both in availability and in specific function, at the common law. But wen they ar e utilized, under state authorization, substantially for the identical purpose of questioning the validity of state statutes under the federal constitution, as determinative of the jurisdiction of state courts to proceed with criminal prosecutions based on those acts, it would seem difficult to find any substantial difference between them relative to this Court's jurisdiction to review their determinations. This assumes, of course, that the judgment reviewed under one name or the other would be such as finally disposes of the proceeding. 36 While therefore we are unable to conclude that there is no jurisdiction in this cause, nevertheless compelling reasons exist for not exercising it. 37 From Hayburn's Case, 2 Dall. 409, 1 L.Ed. 436, to Alma Motor Co. v. Timken-Detroit Axle Co. and the Hatch Act case decided this term,29 this Court has followed a policy of strict necessity in disposing of constitutional issues. The earliest exemplifications, too well known for repeating the history here, arose in the Court's refusal to render advisory opinions and in applications of the related jurisdictional policy drawn from the case and controversy limitation. U.S.Const. Art. III. The same policy has been reflected continuously not only in decisions but also in rules of court and in statutes made appliable to jurisdictional matters including the necessity for reasonable clarity and definiteness, as well as for timeliness, in raising and presenting constitutional questions.30 Indeed perhaps the most effective implement for making the policy effective has been the certiorari jurisdiction conferred upon this Court by Congress. E.g., Judicial Code, §§ 237, 240, 28 U.S.C.A. §§ 344, 347. 38 The policy, however, has not been limited to jurisdictional determinations. For, in addition, 'the Court (has) developed, for its own governance in the cases confessedly within its jurisdiction, a series of rules under which it has avoided passing upon a large part of all the constitutional questions pressed upon it for decision.'31 Thus, as those rules were listed in support of the statement quoted, constitutional issues affecting legislation will not be determined in friendly, nonadversary proceedings; in advance of the necessity of deciding them; in broader terms than are required by the precise facts to which the ruling is to be applied; if the record presents some other ground upon which the case may be disposed of; at the instance of one who fails to show that he is injured by the statute's operation, or who has availed himself of its benefits; or if a construction of the statute is fairly possible by which the question may be avoided.32 39 Some, if not indeed all, of these rules have found 'most varied applications.'33 And every application has been an instance of reluctance, indeed of refusal, to undertake the most important and the most delicate of the Court's functions, notwithstanding conceded jurisdiction, until necessity compels it in the performance of constitutional duty. 40 Moreover the policy is neither merely procedural nor in its essence dependent for applicability upon the diversities of jurisdiction and procedure, whether of the state courts, the inferior federal courts, or this Court. Rather it is one of substance,34 grounded in considerations which transcend all such particular limitations. Like the case and controversy limitation itself and the policy against entertaining political questions,35 it is one of the rules basic to the federal system and this Court's appropriate place within that structure.36 41 Indeed in origin andin practic al effects, though not in technical function, it is a corollary offshoot of the case and controversy rule. And often the line between applying the policy or the rule is very thin.37 They work, within their respective and technically distinct areas, to achieve the same practical purposes for the process of constitutional adjudication, and upon closely related considerations. 42 The policy's ultimate foundations, some if not all of which also sustain the jurisdictional limitation, lie in all that goes to make up the unique place and character, in our scheme, of judicial review of governmental action for constitutionality. They are found in the delicacy of that function, particularly in view of possible consequences for others stemming also from constitutional roots; the comparative finality of those consequences; the consideration due to the judgment of other repositories of constitutional power concerning the scope of their authority; the necessity, if government is to function constitutionally, for each to keep within its power, including the courts; the inherent limitations of the judicial process, arising especially from its largely negative character and limited resources of enforcement; withal in the paramount importance of constitutional adjudication in our system. 43 All these considerations and perhaps others, transcending specific procedures, have united to form and sustain the policy. Its execution has involved a continuous choice between the obvious advantages it produces for the functioning of government in all its coordinate parts and the very real disadvantages, for the assurance of rights, which deferring decision very often entails. On the other hand it is not altogether speculative that a contrary policy, of accelerated decision, might do equal or greater harm for the security of private rights, without attaining any of the benefits of tolerance and harmony for the functioning of the various authorities in our scheme. For premature and relatively abstract decision, which such a policy would be most likely to promote, have their part too in rendering rights uncertain and insecure. 44 As with the case and controversy limitation, however, the choice has been made long since. Time and experience have given it sanction. They also have verified for both that the choice was wisely made. Any other indeed might have put an end to or seriously impaired the distinctively American institution of judicial review.38 And on the whole, in spite of inevitable exceptions, the policy has worked not only for finding the appropriate place and function of the judicial institution in our governmental system but also for the preservation of individual rights. 45 Most recently both phases of its operation have been exemplified in declaratory judgment proceedings.39 Despite some seemingly widespread misconceptions,40 the general introduction of that procedure in both state and federal spheres has not reversed or modified the policy's general direction or effects.41 46 One aspect of the policy's application, it has been noted, has been by virtue of the presence of other grounds for decision. But when such alternatives are absent, as in this case, application must rest upon considerations relative to the manner in which the constitutional issue itself is shaped and presented. 47 These cannot be reduced to any precise formula or complete catalogue. But in general, as we have said, they are of the same nature as those which make the case and controversy limitation applicable, differing only in degree. To the more usual considerations of timeliness and maturity, of concreteness, definiteness, certainty, and of adversity of interests affected, are to be added in cases coming from state courts involving state legislation those arising when questions of construction, essentially matters of state law, remain unresolved or highly ambiguous. They include, of course, questions of incorporation by reference and severability, such as this case involves. Necessarily whether decision of the constitutional issue will be made must depend upon the degree to which uncertainty exists in these respects. And this inevitably will vary with particular causes and their varying presentations. 48 Accordingly the policy's applicability can be determined only by an exercise of judgment relative to the particular presentation, though relative also to the policy generally and to the degree in which the specific factors rendering it applicable are exemplified in the particular case. It is largely a question of enough or not enough, the sort of thing precisionists abhor but constitutional adjudication nevertheless constantly requires. And it is this kind of question that the declaratory judgments procedure has facilitated in presentation, a consequence which dictates the greatest care in seeing that it be not utilized so as to become a means for nullifying the policy. 49 Much the same thing may be said for the state procedure in prohibition as it has been followed in this case. Indeed, in all but name the two procedures are substantially identical, for the purposes of our jurisdiction and function in review. Here relief is neiter sought nor needed beyond adjudication of the jurisdictional issue. The suit seeks only, in substance, a judicial declaration that jurisdiction does not exist in the Municipal Court. But for a variety of reasons the shape in which the underlying constitutional issues have reached this Court presents, we think, insuperable obstacles to any exercise of jurisdiction to determine them. 50 Those reasons comprise not only obstacles of prematurity and comparative abstractness arising from the nature of the proceeding in prohibition and the manner in which the parties have utilized it for presenting the constitutional questions. They also include related considerations growing out of uncertainties resulting from the volume of legislative provisions possibly involved, their intricate interlacing not only with each other on their face but also in the California Supreme Court's disposition of them, and especially from its treatment of this case by reference in considerable part to the Gospel Army case, difficulties all accentuated for us of course by the necessity for dismissal of that cause here. Because the application of the policy must be relative to the factors specifically dictating such action, a statement of our particular reasons follows. IV. 51 In the first place, the constitutional issues come to us in highly abstract form. Although raised technically in the separate proceeding in prohibition, they arise substantially as upon demurrer to the charges against Murdock in the criminal proceeding. The record presents only bare allegations that he was charged criminally with violating §§ 44.09(a), 44.09(b) and 44.12, and that those sections are unconstitutional, on various assignments, as applied to his alleged solicitations. We are therefore without benefit of the precision which would be afforded by proof of conduct made upon trial. Moreover, we do not have the benefit on this record of even the literal text of the charges.42 Indeed, the summarized statement of the pleadings leaves us in doubt whether there were only two or, on the other hand, three distinct offenses charged.43 52 The pleadings seem to allege that Murdock was charged with violation of three different provisions of Article 4, namely, §§ 44.09(a), 44.09(b) and 44.12. Yet they allege equally clearly that there were only two counts. The second rested, as we have said, on § 44.12. But from the state of the pleadings we cannot be sure whether the first was grounded on § 44.09(a), on § 44.09(b), or on both and, if the latter, whether conjunctively or alternatively. 53 The California Supreme Court's decision purported to deal with both. But the opinion did not discuss the anomaly of including two distinct charges in a single count. Nor did it decide whether that count was intended to charge two such offenses independently, one under each subdivision, or only commission of those offenses alternatively, that is, either an offense under § 44.09(a) or one under § 44.09(b) in order, possibly, to anticipate contingencies of proof. 54 We might assume either one construction or the other, of course, and make our disposition accordingly. Perhaps the more tenable assumption would be that Murdock was charged conjunctively under both subdivisions, rather than that he was confronted with an alternative allegation. But the doubt raised concerning this, by conjunction of the charges in a single count, is substantial; the matter is, for present purposes, entirely one of state procedure and state law; and therefore is one for the state court of last resort to resolve. In these circumstances we areunwilling to undertake clarifying the ambiguity. To do so would be directly contrary to the policy of avoiding constitutional decisions until the issues are presented with clarity, precision and certainty. 55 The two subdivisions, while complementary in regulating solicitation by receptacles, are entirely distinct not only in the places where the regulations apply, but also in the conditions prescribed to be fulfilled before lawful solicitation may take place. Those differences are substantial, not merely nominal or technical.44 With the possibility presented by the record that only one or the other provision may be involved in the final disposition of the criminal proceeding, as a matter of pleading and proof and not simply of the jury's action, it is entirely too speculative whether one sort of regulation or the other actually will be utilized to secure Murdock's conviction for us to express opinion at this stage on the constitutionality of either. For the same reason we are unwilling to determine the validity of both, notwithstanding the California court has held each valid. That decision on our part, consistently with the policy, should await the determination which necessarily will be made in the further proceedings in the Municipal Court, whether Murdock has been charged independently or alternatively under the two subsections in the first count. 56 Other reasons relating particularly to § 44.09(b) sustain this conclusion. In the first place, the California court's opinions give us no guide concerning the effect of that section's concluding omnibus clause, requiring compliance 'in all other respects * * * with the provisions of this Article.' Whether or not that court, treating the section independently as we must do,45 would regard it as effective to incorporate all or only some of the many provisions of Article 4, and in the latter event how many, are matters upon which we are altogether without light. And those questions, being matters of state law, are essentially for the state court's determination, not ours. 57 They are moreover substantial. As we have shown, the requirements of Article 4 concerning lawful solicitation are many and varied. Presumably, though by no means certainly, the special ones of § 44.19, relating to promoters and registered solicitors, would not become applicable under a general charge made pursuant to § 44.09(b). But a literal application of the concluding language of § 44.09(b) would make them so, upon proof of violation. And, in that event, Murdock conceivably could be convicted upon proof of his failure to pay the substantial license fees, give the bonds, or otherwise comply with the more burdensome provisions of § 44.19, even though he had fulfilled the explicit command of § 44.09(b) for filing the notice of intention as required by § 44.05 and, indeed, all other requirements of Article 4 outside § 44.19. 58 Whether the charge under § 44.09(b) comprehends failure to comply with all of the conditions of Article 4 or only some of them, and if the latter which ones, depends on whether the omnibus clause is to be literally applied, disregarded entirely,46 or possibly construed in some modified way involving neither of these extremes. This Court certainly has no proper function to undertake such a task of interpretation. Apart from invading the state court's function, the problem of extricating the applicable provisions from such a mass, together with matters of severability likely to arise, would be formidable. And when discharged the result might be merely that we had performed it and determined the constitutional issus so prese nted, only to find that in the further proceedings to be had in the Municipal Court our interpretation had been put aside in favor of another. 59 Moreover that cause hardly can proceed to final decision without clarification of the charge, or making clarification unnecessary. Murdock's rights thus can be assured of protection even though at the trouble and expense of undergoing another trial. Those inconveniences, concededly substantial, do not outweigh the strong considerations relative to this Court's functions dictating that it should not undertake a task at once so speculative and so foreign to them. 60 Somewhat less obviously, similar difficulties are presented for dealing with the more specific requirement of § 44.09(b) for filing the notice of intention and the related one of § 44.12 for procuring and exhibiting the information card.47 Simply upon the face of the ordinance (Article 4), we would construe these provisions as excluding all reference to the licensing requirements of § 44.19, as well as the regulations relating to dealers in used articles, junk, etc.,48 as indeed the California Supreme Court's opinion seems to exclude them. In such a view the charges under § 44.09(b) (without reference to the omnibus concluding clause) and § 44.12 would be restricted to failure to comply with whatever provisions of §§ 44.01—44.18 may be incorporated by reference in those two sections. Presumably also, within that range, would be excluded all requirements applicable only after the act of solicitation, such as those for keeping records and making reports of the receipt and disposition of contributions received, §§ 44.09, 44.14, cf. also § 44,08, and perhaps though not at all certainly (as to the charge under § 44.12)49 the tendering at the time of solicitation of the receipt required by § 44.15. Possibly therefore a fair construction of the charges under §§ 44.09(b) and 44.12 would be that they are limited, so far as concerns incorporation of other provisions, to including the licensing requirements of §§ 44.05 and 44.03, themselves extensive and highly detailed, which so far as we can gather from the California court's treatment of them, was the effect of its decision. 61 Apart, however, from the difficulties created by the necessity of adding construction of the California court's opinions to construction of so many possibly applicable provisions of the ordinance, other problems have arisen from its disposition. In particular, its opinions do not enlighten us concerning the character and effects of the licensing requirements specified in §§ 44.05 and 44.03. With reference to them it said in its Gospel Army opinion: 62 'The information cards, which are in effect permits to solicit, are issued automatically upon the filing of the required information and the payment of the four cents for each card. The department is given no authority to withhold such cards when these requirements are met, and we cannot assume that it will abuse its authority in order to withhold them. * * * 'If this petitioner had applied for a permit under the requirement (of § 44.05), * * * and been either whimsically or arbitrarily refused such permit, he might then * * * have had recourse to the courts for relief from such unjust and arbitrary action." 27 Cal.2d at pages 238, 239, 163 P.2d at page 709. 63 So construing the licensing provisions and asserting that they are 'designed primarily to secure information that will assist the public in judging the nature and worthiness of he cause * * * and to insure the presentation of such information to prospective donors,' the California court concluded: 'We find nothing unduly burdensome or unreasonable in any of these provisions.' 27 Cal.2d at page 237, 163 P.2d at page 708. 64 Nevertheless, the construction given is, to say the least, ambiguous. For, despite the language indicating that the cards are to be issued 'automatically upon the filing of the required information and the payment of the four cents for each card,' the opinion expressly asserted that the department 'may investigate the statements in the notice of intention.' 27 Cal.2d at page 239, 163 P.2d at page 709. And at another point it said: 'The board may not disallow a proposed solicitation but it may investigate the statements in the notice of intention and the methods of making or conducting the solicitation; it may inspect the records of the persons in charge of the solicitation and the association for whom it is made, and it may give such publicity to its findings as it deems best to reach the general public and persons interested.'50 Ibid. 65 These qualifications make it highly questionable that the court, by using 'automatically' in the quoted context, meant to rule that on the mere filing of the required information, without more, solicitation would become lawful under § 44.09(b) or that the information cards would issue so as to make solicitation legal under § 44.12. Rather, the intended holding would seem to have been that, upon full compliance with the numerous conditions specified for issuance of the card, the board would be without authority 'either whimsically or arbitrarily' to withhold it from the applicant; but his failure in any substantial respect to meet those conditions, including perhaps waiting for the ten-day period and the outcome of the authorized investigations, would be good and sufficient cause for the board to exercise its discretion to refuse the card and for prosecution if he should undertake to solicit without it. 66 That this probably was the court's intended construction appears not only from its apparent unwillingness to dispense with the necessity for meeting any of the conditions specified in the ordinance, but also from the manner in which it disposed of the provisions relating to promoters and to solicitors required to be registered under § 44.19. In this connection it said, also in the Gospel Army opinion: 67 'The board has no discretion to withhold a license if the applicant's good character and reputation and his financial responsibility are established and the required bond is filed. The board is not free to deny licenses, but must act reasonably in the light of the evidence presented.' 27 Cal.2d at page 249, 163 P.2d at page 714.51 68 There is, of course, a very substantial differene between the two possible views of the court's construction of the ordinances, for constitutional as well as other purposes. For in the one conception the provisions would be more nearly akin to a 'mere identification' requirement such as the First Amendment has been said not to forbid; in the other, they would comprehend a much broader exercise of administrative discretion than simply receiving and filing identifying information.52 Obviously it would be one thing to sustain the licensing provisions if they are to be taken as of the 'automatic mere identification' type, and quite another if they involve the very considerable degree of discretion upon the part of administrative officials which the clearly applicable provisions of the ordinance seem to require by their terms and indeed by the state court's ruling. 69 But we express no opinion concerning their validity in either conception. For we do not undertake to resolve the doubt which necessarily exists concerning the court's meaning, whether with reference to § 44.09(b) or § 44.12. On the contrary that doubt only adds to the reasons we have stated, the sum of which in this case goes to preclude the exercise of jurisdiction. That doubt also should be resolved, with the other uncertainties in this cause, before this Court undertakes to pronounce judgment on the constitutional questions. They may be removed in the Municipal Court proceedings yet to take place. 70 We are not unmindful that our ruling will subject the petitioner Murdock to the burden of undergoing a third trial or that this burden is substantial.53 Were the uncertainties confronting us in relation to this Court's historic policy less in number, and resolving them not so far from our appropriate function in cases coming from state courts, the inconvenience of undergoing trial another time might justify exercising jurisdiction in this cause. But, consistently with the policy, jurisdiction here should be exerted only when the jurisdictional question presented by the proceeding in prohibition tenders the underlying constitutional issues in clean-cut and concrete form, unclouded by any serious problem of construction relating either to the terms of the questioned legislation or to its interpretation by the stte courts. 71 Our decision of course should be without prejudice to any rights which may arise upon final determination of the Municipal Court proceeding, relative to review in this Court of that determination. With that reservation we think the only course consistent, upon this record, at once with preservation of appellants' rights and with adherence to our long-observed policy, is to decline to exercise jurisdiction in this cause. 72 Accordingly, the appeal is dismissed, without prejudice to the determination in the future of any issues arising under the Federal Constitution from further proceedings in the Municipal Court. 73 Mr. Justice BLACK concurs in the result. 74 Mr. Justice MURPHY, with whom Mr. Justice DOUGLAS concurs dissenting. 75 It is difficult for me to believe that the opinion of the Supreme Court of California is so ambiguous that the precise constitutional issues in this case have become too blurred for our powers of discernment. 76 The courts below and the parties involved have all acted on the assumption that the appellant Murdock was charged with having violated §§ 44.09(a) and 44.12 of the Los Angeles Municipal Code. Now it is true that various other parts of the Code are interconnected with those sections and serve to complicate the picture somewhat. But the constitutional issues thereby raised seem clear to me. Simply stated, they are: (1) Does it violate the constitutional guarantee of freedom of religion to prohibit solicitors of religious charities from using boxes or receptacles in public places except by written permission of city officials? (2) Is that guarantee infringed by a requirement that such solicitors display an information card issued by city officials? 77 Those issues were properly raised below and the courts necessarily passed upon them. The time is thus ripe for this Court to supply the definitive judicial answers. Its failure to do so in this case forces me to register this dissent. 1 The grounds for reversal in each instance were such as did not determine the cause finally, but resulted in remanding it for further trial. The first reversal was for reception of incompetent evidence; the second, for insufficiency of the evidence to prove violations of the ordinances in question. 2 Appellants refer to the code as Ordinance No. 77,000. According to appellee's brief, Ordinance No. 77,000 consists of a 'revision and codification of the regulatory and penal ordinances of the City of Los Angeles, to be known as the Los Angeles Municipal Code,' and contains nine chapters, I—IX, subdivided into articles, divisions and sections, the latter numbering in excess of 2000. The brief further states: 'The portion of the Los Angeles Municipal Code involved in this proceeding is Article 4 (Charities and Relief) in Chapter IV (Public Welfare) and consists of nineteen sections numbered 44.01 to 44.19, inclusive. However, not all or any considerable number of such sections are actually involved herein, although a complete treatment of the sections primarily involved may require some mention * * * of most if not all of the other sections.' Appellants' view, however, is that substantially all of the provisions of §§ 44.01 to 44.19 are incorporated by reference into §§ 44.09 and 44.12 for purposes of determining their constitutional validity. 3 It is not clear whether the charges under §§ 44.09(a) and (b) were made in the alternative or conjunctively. See text infra, Part IV, following note 43; see also note 42. 4 The article is Article 4 of Chapter IV. See note 2. 5 Section 44.09. '(a) No person shall solicit any contribution for any purpose by means of any box or receptacle, upon any public street, sidewalk or way, or in any public park or in any publicly owned or controlled place, except by the express written permission of the Board. '(b) No person shall solicit any charitable contribution, or any contribution for any real or purported charitable purpose, by means of any box or receptacle in any place immediately abutting upon any public sidewalk or way, or in any place of business open to the public, or in any room, hallway, corridor, lobby or entranceway, or other place open to or accessible to the public, or in any place of public resort, without first filing with the Department a 'notice of intention' as required by Sec. 44.05, and every person so soliciting must in all other respects comply with the provisions of this Article.' 6 The California Supreme Court said at the end of its opinion, in relation to appellants' contention that the ordinances are being unconstitutionally applied to them: 'The allegations relied upon in support of this contention, however, are denied by the answer and the issues of fact thus presented will not be determined by us in this proceeding.' 28 Cal.2d 460, 473, 171 P.2d 8, 16. See Bandini Petroleum Co. v. Superior Court, 284 U.S. 8, 14, 52 S.Ct. 103, 105, 76 L.Ed. 136, 78 A.L.R. 826; cf. note 26 infra. 7 These operations were performed through the Gspel Army' § so-called industrial department. For details see the California Supreme Court's opinion, 27 Cal.2d 232, 163 P.2d 704. 8 No charges in the Municipal Court purported expressly to be grounded upon the provisions of the ordinance dealing with pawnbrokers, secondhand dealers and junk dealers; and §§ 44.09(a), (b) and 44.12 do not relate explicitly or, it would seem, by necessary implication, upon their face, to such activities. 9 Not only are §§ 44.09(a), (b) and 44.12 located within that article but other provisions of the ordinance which they expressly purport to incorporate are so placed. 10 See notes 13, 16, and text infra. 11 Section 44.01 defines 'charitable' to 'include the words philanthropic, social service, benevolent, patriotic, either actual or purported.' 'Contribution' is defined to 'include the words alms, food, clothing, money, property or donations under the guise of a loan of money or property.' 'Solicitation' is broadly defined to include oral or written requests, and requests made by distributing, mailing or publishing 'any handbill,' by press announcement, radio, telephone concerning specified types of events, the offering to sell or selling any advertising, book, card, chance, etc., in connection with charitable appeals. 12 '(a) The purpose of the solicitation and use of the contribution to be solicited; '(b) A specific statement, supported by reasons and, if available, figures, showing the need for the contribution proposed to be solicited; '(c) The character of such solicitation and how it will be made or conducted; '(d) The expenses of the solicitation, including salaries and other items, if any, regardless of from what funds such expenses are payable; '(e) What portion of the contributions collected as a result of the solicitation will remain available for application to the specific purposes declared in the Notice of Intention as the object of the solicitation; '(f) A specific statement of all contributions collected or received by such person or association within the calendar year immediately preceding the filing of such Notice of Intention. The expenditures or use made of such contributions, together with the names and addresses of all persons or associations receiving salaries, wages, compensation, commissions or emoluments from such contributions, and the respective amounts thereof; '(g) The names and addresses of the officers and directors of any such association for which the solicitation is proposed to be made; '(h) A copy of the resolution, if any, of any such association authorizing such solicitation, certified to as a true copy of the original of such resolution by the officer of such association having charge of the records thereof; '(i) A statement that the signers of such Notice have read and are familiar with the provisions of this Article and will require all solicitors engaged in such solicitation to read and be familiar with all sections of this Article prior to making any such solicitation.' § 44.05. 13 The department's powers are specified in § 44.03 as follows: '(a) To investigate the allegations of Notice of Intention, or any statement or reports; '(b) To have access to and inspect and make copies of all books, records and papers of such person, by or on whose behalf any solicitation is made; '(c) To investigate at any time the methods of making or conducting any such solicitation; '(d) To issue to all solicitors Information Cards which cards shall show' the matters set forth below in note 14. 14 '(1) That same is issued as information for the public and is not an endorsement; '(2) The Board may, pursuant to Ordinance No. 34982, omit above provision and state that they endorse such charitable association; '(3) The pertinent facts set forth in Notice of Intention required under Section 44.05 of this Article; (See note 12 supra.) '(4) Any additional information obtained as shall in the opinion of the Board be of assistance to the public to determine the nature and worthiness of the purpose for which the solicitation is made.' 15 See note 13. 16 The board's power to endorse charitable associations is conferred by § 44.02. The powers given by § 44.02 are as follows, except for subsection (e) which for brevity is summarized: '(a) To publish results of any investigation provided for or authorized in Section 44.03, subdivisions (a), (b) and (c) of this Article; '(b) To give such publicity to any such results by such means as may be deemed best to reach the general public and persons interested; '(c) To waive the whole or part of any provisions of Sections 44.03, 44,05, 44.06, 44.10, 44.11, 44.12, 44.13, 44.15, and 44.02 excepting this sub-section, of this Article for the purpose of meeting any extraordinary emergency or calamity; '(d) To request return of Information Cards to the Department upon completion of solicitation for which they are issued or at the expiration of the period for which they are valid; '(Subsection (e) authorizes the board to recall and amend or correct the information cards on receiving additional information which, in its opinion, renders inaccurate any statement contained in it.) '(f) To waive all conditions of this Article upon application of person filing Notice of Intention, in respect to Inforation Card § and filing copies of written authorization when a campaign or drive for raising funds for any charitable purpose is given general publicity through the press or otherwise, and when more than twenty-five (25) persons serve as solicitors without compensation, if it shall be proved to the satisfaction of the Board that the publicity concerning the solicitation fully informs the general public and the persons to be solicited as to the facts required to be set forth on the Information Card.' 17 In addition to 'the amount and kind of the contribution,' the receipt must show 'substantially' the name of the association aided; a statement whether the contribution is to be applied to its 'general purposes' or to special ones and, if the latter, 'the nature thereof * * * clearly stated'; that the information card was presented for perusal prior to the making of the contribution. But tender of the receipt is not required if the donation is made, in money, by placing it in a locked receptacle previously approved by the board. 18 The regulations governing promoters require a license from the Board distinct from or additional to the information card which solicitors must secure, § 44.19(1); the payment of an $25.00 license fee, § 44.19(4); the filing of a bond in the sum of $2000 conditioned as specified in § 44.19(3); and proof to satisfy the board that the applicant is 'of good character and reputation' and has 'sufficient financial responsibility to carry out the obligations incident to any solicitation such applicant may make.' § 44.19(5). The ordinary solicitor, on the other hand, must secure only the information card, which is in effect a permit; pay the cost of the card; and generally, it would seem, comply with the other requirements heretofore outlined for securing the card. 19 Section 44.01 defines 'promoter' to mean 'any person who for pecuniary compensation or consideration received or to be received, solicits or is engaged in the business of or holds himself out to the public as engaged in the business of soliciting contributions for or on behalf of any other person or any charitable association, corporation, or institution, or conducts, manages or carries on or agrees to conduct, manage or carry on or is engaged in the business of or holds himself out as engaged in the business of conducting, managing or carryig on any d rive or campaign for any such purpose. * * *' (Emphasis added.) Section 44.01, entitled 'Definitions,' contains no definition of 'solicitor,' but defines 'solicitation' broadly, as we have indicated in note 11 supra. The meaning of 'solicitor' apparently is left therefore to be gathered definitively from the definition of 'solicitation' and the use of 'solicit' or 'solicitor' in the special context of other sections as they become pertinent. It should be noted that the definition of 'promoter' in § 44.01, by including the word 'solicits,' italicized above, would seem literally broad enough to include any paid solicitor of contributions 'for or on behalf of any other person' or charitable organization, and thus to include all solicitors except wholly voluntary ones. This seems to have been Justice Carter's view as expressed in his dissent in the Gospel Army case, 27 Cal.2d 232, 266, 163 P.2d 704. However, other sections indicate that solicitors may be paid as well as voluntary without becoming promoters. See § 44.19(9). And see note 20. Murdock apparently receives compensation for his services as an officer of the Rescue Army. 20 In the Gospel Army case the record shows that all the solicitors were paid upon a percentage basis. Nevertheless, the court dealt in its opinion with the provisions governing solicitors as well as promoters, thus indicating apparently that in its view the difference was other than that solicitors are voluntary workers and promoters are paid. The ordinance and the state court's opinions, more especially in the Gospel Army case, appear to treat the two groups as distinct and not merely overlapping in relation to persons themselves engaged in direct solicitation. 21 See notes 19 and 20. 22 Specific and highly detailed records and reports must be made of contributions received, of expenditures, and of other matters. §§ 44.08, 44.14. Written and corporately authenticated authorizations must be issued. §§ 44.10, 44.11. Indeed compliance with such requirements as those relating to filing the notice of intention under § 44.05 and procuring the information card under § 44.03 for use by persons acting for the charity forces organizational conformity as much as individual. And by departmental regulation, apparently, fifty per cent of all contributions received must be applied to the charitable purpose rather than to expenses of collection or promotion. 23 The subsection is one of the few not referring to other provisions of the article or the code. None of them contains any specification of conditions for securing the board's written permission. Cf. note 5. The California Supreme Court, however, supplied them in the following language: 'We conclude, therefore, that if subdivision (a) of section 44.09 is read, as it must be, in light of the purpose and context of the entire ordinance, on the one hand, and the peculiar circumstances attendant upon collections by means of receptacles in public places, on the other hand, that the denial of a permit is warranted only if the information furnished to the board discloses fraud or if the solicitation as planned would interfere with the public convenience and safety.' 28 Cal.2d at pages 471, 472, 171 P.2d at page 16. It becomes unnecessary, however, to consider the validity of possible independent application of § 44.09(a), for reasons to be stated. See text infra Part IV, following note 43. 24 See text infra Part IV, circa note 50. 25 The following authorities were cited and relied upon: Weston v. City Council of Charleston, 2 Pet. 449, 464, 7 L.Ed. 481; Mt. Vernon-Woodberry Cotton Co. v. Alabama Interstate Power Co., 240 U.S. 30, 31, 36 .Ct 234, 2 35, 60 L.Ed. 507; State of Missouri ex rel. St. Louis, B. & M.R. Co. v. Taylor, 266 U.S. 200, 206, 45 S.Ct. 47, 48, 69 L.Ed. 247, 42 A.L.R. 1232; Michigan Central R. Co. v. Mix, 278 U.S. 492, 494, 49 S.Ct. 207, 208, 73 L.Ed. 470. 26 Referring to the state court's denial of the writ, the Bandini opinion stated: 'That judgment, however, merely dealt with the jurisdiction of the Superior Court of the suit for injunction, and the only question before us is whether the District Court of Appeal erred in deciding the federal questions as to the validity of the statute upon which that jurisdiction was based. Moreover, with all questions of fact, or with questions of law which would appropriately be raised upon the facts adduced in the trial of the case in the Superior Court, as a court competent to entertain the suit, we are not concerned on this appeal.' 284 U.S. at page 14, 52 S.Ct. at page 105, 76 L.Ed. 136, 78 A.L.R. 826. '* * * the District Court of Appeal must be regarded, as its opinion imports, as having determined merely that the statute was valid upon its face so that the Superior Court had jurisdiction to entertain the injunction suit. It is that determination alone that we can now consider.' 284 U.S. at pages 15, 16, 52 S.Ct. at page 106, 76 L.Ed. 136, 78 A.L.R. 826. 27 See the authorities cited in notes 25 and 28. 28 In Holmes v. Jennison, 14 Pet. 540, 10 L.Ed. 579, the Court held that an order of a state court of last resort refusing to discharge a prisoner upon habeas corpus was a final judgment subject to review. In reaching that conclusion Taney, C.J., relied upon Weston v. City Council of Charleston, 2 Pet. 449, 7 L.Ed. 481, as 'decisive.' That decision, rendered by Marshall, C.J., held for the first time that the denial of a writ of prohibition was a final judgment. See also Largent v. State of Texas, 318 U.S. 418, 63 S.Ct. 667, 87 L.Ed. 873, where the Court cites both Bandini Petroleum Co. v. Superior Court, 284 U.S. 8, 52 S.Ct. 103, 76 L.Ed. 136, 78 A.L.R. 826, and Bryant, People of State of New York ex rel., v. Zimmerman, 278 U.S. 63, 49 S.Ct. 61, 73 L.Ed. 184, 62 A.L.R. 785. 29 Alma Motor Co. v. Timken-Detroit Axle Co., 329 U.S. 129, 67 S.Ct. 231; United Public Workers v. Mitchell, 330 U.S. 75, 67 S.Ct. 556, 18 U.S.C.A. §§ 61 et seq., 61h, 61o. 30 See, e.g., as to appeals from state courts, § 237(a) of the Judicial Code, 28 U.S.C. § 344(a), 28 U.S.C.A. § 344(a), Rule 12(1) of the Revised Rules of the Supreme Court of the United States, 28 U.S.C.A. following section 354; Honeyman v. Hanan, 300 U.S. 14, 57 S.Ct. 350, 81 L.Ed. 476. 31 Brandeis, J., with whom Stone, Roberts and Cardozo, JJ., concurred, in Ashwander v. Tennessee Valley Auhority, 29 7 U.S. 288, concurring opinion at 346, 56 S.Ct. 466, 482, 80 L.Ed. 688. 32 Id., 297 U.S. at pages 346—348, 56 S.Ct. at pages 482—484, 80 L.Ed. 688, and authorities cited. See also Coffman v. Breeze Corporation, 323 U.S. 316, 324, 325, 65 S.Ct. 298, 302, 303, 89 L.Ed. 264. 33 For example, with reference to the rule forbidding decision of properly presented constitutional questions, if the case may be disposed of on another ground: 'Thus, if a case can be decided on either of two grounds, one involving a constitutional question, the other a question of statutory construction or general law, the Court will decide only the latter. Siler v. Louisville & Nashville R. Co., 213 U.S. 175, 191, 29 S.Ct. 451 (454), 455, 53 L.Ed. 753; Light v. United States, 220 U.S. 523, 538, 31 S.Ct. 485 (488) 55 L.Ed. 570. Appeals from the highest court of a state challenging its decision of a question under the Federal Constitution are frequently dismissed because the judgment can be sustained on an independent state ground. Berea College v. Commonwealth of Kentucky, 211 U.S. 45, 53, 29 S.Ct. 33 (34), 53 L.Ed. 81.' 297 U.S. at page 347, 56 S.Ct. at page 483, 80 L.Ed. 688. 34 'If there is one doctrine more deeply rooted than any other in the process of constitutional adjudication, it is that we ought not to pass on questions of constitutionality * * * unless such adjudication is unavoidable.' Spector Motor Service v. McLaughlin, 323 U.S. 101, 105, 65 S.Ct. 152, 154, 89 L.Ed. 101. It has long been the Court's 'considered practice not to decide abstract, hypothetical or contingent questions * * * or to decide any constitutional question in advance of the necessity for its decision * * * or to formulate a rule of constitutional law broader than is required by the precise facts to which it is to be applied * * * or to decide any constitutional question except with reference to the particular facts to which it is to be applied * * *.' Alabama State Federation of Labor v. McAdory, 325 U.S. 450, 461, 65 S.Ct. 1384, 1389, 89 L.Ed. 1725. 'It is not the habit of the court to decide questions of a constitutional nature unless absolutely necessary to a decision of the case.' Burton v. United States, 196 U.S. 283, 295, 25 S.Ct. 243, 245, 49 L.Ed. 482. 35 Which has had application in appeals and on writs of error, as well as in cases arising under the certiorari jurisdiction. See Luther v. Borden, 7 How. 1, 12 L.Ed. 581; Pacific States Tel. & Tel. Co. v. State of Oregon, 223 U.S. 118, 32 S.Ct. 224, 56 L.Ed. 377; State of Ohio ex rel. Davis v. Hildebrant, 241 U.S. 565, 36 S.Ct. 708, 60 L.Ed. 1172; opinion of Frankfurter, J., in Colegrove v. Green, 328 U.S. 549, 66 S.Ct. 1198, 90 L.Ed. 1432. 36 Like the policy about political matters, although not going to jurisdiction as that policy does, it is a rule 'which cannot be met by verbal fencing about 'jurisdiction.' It must be resolved by considerations on the basis of which this Court, from time to time, has refused to intervene in controversies.' Opinion of Frankfurter, J., in Colegrove v. Green, 328 U.S. 549, 552, 66 S.Ct. 1198, 1199, 90 L.Ed. 1432. 37 Indeed more than once the policy has been applied in order to avoid the necessity of deciding the 'case or controversy' jurisdictional question, when constitutional issues were at stake on the merits, e.g., recently in declaratory judgment proceedings. See American Federation of Labor, Metal Trades Dept. v. Watson, 327 U.S. 582, 66 S.Ct. 761, 90 L.Ed. 873; United Public Workers v. Mitchell, 330 U.S. 75, 67 S.Ct. 556. Compare Alabama State Federation of Labor v. McAdory, 325 U.S. 450, 65 S.Ct. 1384, 89 L.Ed. 1725, and Congress of Industrial Organizations v. McAdory, 325 U.S. 472, 65 S.Ct. 1395, 89 L.Ed. 1741, which arose under state declaratory judgment acts. 38 It is not without significance for the policy's validity that the periods when the power has been exercised most readily and broadly have been the ones in which this Court and the institution of judicial review have had their stormiest experiences. See e.g., Brant, Storm Over the Constitution (1936). 39 See the authorities cited in note 37 supra. Cf. Coffman v. Breeze Corporation, 323 U.S. 316, 324, 65 S.Ct. 298, 302, 89 L.Ed. 264. 40 As the cases cited in note 37 illustrate, the procedure has been utilized to bring for decision challenges to an entire array of statutory provisions alleged to violate rights secured by an almost equal array of constitutional provisions. The strategic conception seems to have been that the declaratory judgment suit furnishes a ready vehicle for presenting and securing decision of constitutional matters, solely upon the pleadings, in highly abstract or premature, if not hypothetical states of fact, and en masse. Such a notion of course is essentially contradictory of the policy and, if accepted, would go far toward nullifying it. 41 By dispensing with the necessity of asking for specific relief beyond that afforded by adjudication itself, it is true, the occasions for applying the policy through grounding decision upon failure to satisfy remedial limitations have been avoided. But, as sloughing off those limitations has not, and of course could not, overcome the case and controversy requirement, no more was this intended to discard the corollary policy effective within the limits of conceded jurisdiction. Indeed the discretionary element characteristic of declaratory jurisdiction, and imported perhaps from equity jurisdiction and practice without the remedial phase, offers a convenient instrument for making the policy effective, quite to the contrary effect of the conception discussed in note 40 above. But that element, for application of the policy, is only one of convenience, not one of necessity. No more is application dependent upon it, essentially, than upon the similar element in other types of suit, as for example in suits for injunctive relief. Cf. Spector Motor Service v. McLaughlin, 323 U.S. 101, 65 S.Ct. 152, 89 L.Ed. 101. 42 It is alleged in the petition for the writ of prohibition that Murdock was charged with having violated §§ 44.09 and 44.12 of the Municipal Code 'in that, as it is charged in said complaint, Court (sic) I thereof, said Murdock solicited contributions, and in Court (sic) II thereof, that said Murdock had no permit or Information Card, and failed to show the same to a person solicited by said Murdock. * * *' 43 See note 3 supra. 44 See note 5 supra. 45 That is, independently of the entire scheme considered as a valid plan of regulation in all its parts, as the California court substantially considered it in the Gospel Army case. Dismissal of that appeal, of course, forbids expression by us of any opinion upon the merits of the issues as involved in that presentation, aside from those necessarily incorporated in the decision of this cause. 46 Under the familiar but not invariably applied rule of ejusdem generis. See, e.g., City of Los Angeles v. Superior Court, 2 Cal.2d 138, 140, 39 P.2d 401; Pasadena University v. Los Angeles County, 190 Cal. 786, 790, 214 P. 868; In re Johnson, 167 Cal. 142, 145, 138 P. 740. 47 See note 5 supra and § 44.12 as quoted above in the text, Part I. 48 See text supra Part II. 49 The receipt requirement apparently is not applicable to solicitations by receptacle under §§ 44.09(a) and (b). See note 17 supra. 50 The last quoted matter was followed by the statement: 'The association for whom the solicitation is made must maintain an accounting system recording the entry of all donations and disbursements. (§ 44.08)' This provision relates apparently to the further requirements for filing post-solicitation reports. 51 The quoted sentences were preceded by the following: 'The requirement that promoters and the solicitors working under them submit proof of their good character and reputation does not discriminate against plaintiff or other religious organizations or censor their religious beliefs, nor does the regulation vest arbitrary power in the administrative board in authorizing it to withhold a license if it is not satisfied that the applicant is of good character and reputation. Such a requirement is common in statutes regulating admission to professions and occupations involving duties of a fiduciary character. * * * The filing of a bond is also a common requirement in the regulation of occupations or activities involving the handling of entrusted funds. * * * The license fee is a reasonable one, covering the expenses of investigations and administration.' 27 Cal.2d 232, at pages 248, 249, 163 P.2d at page 714. 52 See Thomas v. Collins, 323 U.S. 516, 538, 539, 65 S.Ct. 315, 326, 89 L.Ed. 430: 'How far the State can require previous identification by one who undertakes to exercise the rights secured by the First Amendment has been largely undetermined. It has arisen here chiefly, though only tangentally, in connection with license requirements involving the solicitation of funds, Cantwell v. (State of) Connecticut, 310 U.S. 296, 60 S.Ct. 900, 84 L.Ed. 1213, 128 A.L.R. 1352; cf. Schneider v. State, 308 U.S. 147, 60 S.Ct. 146, 84 L.Ed. 155; Largent v. State of Texas, 318 U.S. 418, 63 S.Ct. 667, 87 L.Ed. 873, and other activities upon the public streets or in public places, cf. Lovell v. (City of) Griffin, 303 U.S. 444, 58 S.Ct. 666, 82 L.Ed. 949; Hague v. C.I.O., 307 U.S. 496, 59 S.Ct. 954, 83 L.Ed. 1423, or house-to-house canvassing, cf. Schneider v. State, supra. In these cases, however, the license requirements were for more than mere identification or previous registration and were held invalid because they vested discretion in the issuing authorities to censor the activity involved. Nevertheless, it was indicated by the dictum in Cantwell v. (State of) Connecticut, 310 U.S. 296, 306, 60 S.Ct. 900, 904, 84 L.Ed. 1213, 128 A.L.R. 1352, that a statute going no further than merely to require previous identification would be sustained in respect to the activities mentioned.' The dictum referred to is the statement: 'Without doubt a state may protect its citizens from fraudulent solicitation by requiring a stranger in the community, before permitting him publicly to solicit funds for any purpose, to establish his identity and his authority to act for the cause which he purports to represent.' Cantwell v. State of Connecticut, supra (310 U.S. 296, 60 S.Ct. 904). 53 The Rescue Army, so far as appears, was not a party to the Municipal Court suit. No issue was made here concerning its appearance as a party in the prohibition proceedings in the state courts or on this appeal. Accordingly, we express no opinion in this respect. Cf. Independent Warehouses v. Scheele, Recorder of Township of Saddle River, 331 U.S. 70, 67 S.Ct. 1062.
89
331 U.S. 731 67 S.Ct. 1440 91 L.Ed. 1779 MEXICAN LIGHT & POWER CO., Limited,v.TEXAS MEXICAN RY. CO. No. 404. Argued Feb. 6, 1947. Decided June 16, 1947. Mr. Charles W. Bell, of Houston, Tex., for petitioner. Mr. John P. Bullington, of Houston, Tex., for respondent. Mr. Justice FRANKFURTER delivered the opinion of the Court. 1 This is an action to recover damages for injury to goods in the course of an export shipment by rail. The Westinghouse Electric and Manufacturing Company delivered to the Pennsylvania Railroad Company in Sharon, Pennsylvania, goods ultimately destined for the Mexican Light and Power Company. According to the bill of lading issued by the Pennsylvania Railroad the goods were consigned to 2 The Mexican Light & Power Co. Ltd., c/o Fausto Trevino, Customs Agent, (National Railways of Mexico). 3 The destination was Laredo, Texas, with the further notation. 4 'For Export to: El Oro, Mexico, Estado de Mexico via Acambaro via laredo.' 5 The Transportation charges were prepaid at the export rate, less than the domestic, and they covered shipment not merely into Laredo but up to the international boundary. 6 The Texas-Mexican Railway was the last of the series of connecting carriers over which the machinery was routed by the Pennsylvania. The latter, having received the shipment at Alice, Texas, continued the carriage to its yards at Laredo. At Laredo, there was issued to Fausto Trevino, the agent, what formally appears to be a bill of lading consigning the shipment to petitioner at El Oro. The record is silent as to the circumstances that brought this document into existence, but it is admitted that the respondent received no payment for transporting the goods other than its share in the export rate prepaid to the Pennsylvania under the Sharon bill of lading. Trevino did use the second bill of lading for clearing he shipmen t with the Mexican customs, but there is no showing that the first bill of lading would not have served as documentation for this purpose. The respondent railroad then moved the goods, still in the original cars, from its yards to the international boundary. There, the shipment passed to the National Railways of Mexico and it was on its lines, in Mexico, that the machinery was injured. 7 Petitioner brought this suit in one of the district courts of Texas. Judgment went for the railroad. The Texas Court of Civil Appeals reversed, 190 S.W.2d 838, but was in turn reversed by the Supreme Court of Texas. 193 S.W.2d 964. We granted certiorari, 329 U.S. 697, 67 S.Ct. 97, because important issues affecting the carrier's liability under the Interstate Commerce Act were pressed upon us. 8 On full consideration of the case if falls within a very narrow compass. The goods consigned to Laredo moved on the bill of lading issued at Sharon with the indicated connections, including the Texas-Mexican. By virtue of the Carmack Amendment, 34 Stat. 584, amended, 38 Stat. 1196, 49 U.S.C.A. § 20(11), that bill of lading determines the rights of the consignee. While each connecting carrier is, of course, liable for damage occurring on its line, only the initial carrier is liable for damage on any of the connections. Unless, therefore, the Texas-Mexican Railway was an initial carrier with reference to the Mexican Railroad it cannot be responsible for injuries on that road. And it did not become an initial carrier merely by force of what purported to be a bill of lading issued at Laredo unless the so-called second bill of lading represents the initiation of a new shipment on the Texas-Mexican. 9 We agree with the Texas Supreme Court that nothing happened at Laredo to displace the duty which was created at Sharon for the carriage of the goods by the Texas-Mexican to the international boundary, or to modify the terms of its undertaking when, at Alice, it received the goods under the Sharon bill of lading. 10 What was said of the shipment of cattle in Missouri, Kansas & Texas R. Co. v. Ward, 244 U.S. 383, 387, 37 S.Ct. 617, 619, 61 L.Ed. 1213, is precisely applicable to the shipment of machinery in this case: 11 'The terms of the original bill of lading were not altered by the second, issued by the connecting carrier. As appellants were already bound to transport the cattle at the rate and upon the terms named in the original bill of lading, the acceptance by the shipper of the second bill was without consideration and was void.' 12 No matter what the convenience which a consignee may derive from a bill of lading issued by a connecting carrier on a through shipment, unless the connecting carrier has received a consideration for the bill of lading in addition to that which flowed under the bill of lading issued by the initiating carrier, the Carmack Amendment makes such second bill of lading void. It can neither enlarge the liability of the connecting carrier not contract that of the initiating carrier. That is what was meant when the Ward case said that the purpose of the Carmack Amendment was 'to create in the initial carrier unity of responsibility for the transportation to destination.' Missouri, Kansas & Texas R. Co. of Texas v. Ward, supra, 244 U.S. at page 386, 37 S.Ct. 619, 61 L.Ed. 1213. This is an even stronger case for the application of this principle. For in the Ward case the Court found the second bill of lading void for lack of consideration although it was 'alleged to have been issued in consideration of a special reduced rate theretofore duly filed with the Interstate Commerce Commission' because there was 'nothing to indicate that that special rate affected the through rate already agreed upon in the original bill of lading.' 244 U.S. at pages 385, 386, 37 S.Ct. 618, 619, 61 L.Ed. 1213. 13 Properly finding that the so-called bill of lading did not evidence any new and independent undertaking, when judged by the rigid requirements by which bill of lading are valid under the Carmack Amendment, the Texas Supreme Court was right in holding that the shipment over the Texas-Mexican legally moved only under the original bill of lading, that the Pennsylvania was never displaced as the initial carrier, and that therefore the Texas-Mexican was not liable for damage that occurred on the Mexican Railroad. 14 Judgment affirmed. 15 Mr. Justice REED, with whom Mr. Chief Justice VINSON joins, dissenting. 16 We are of the opinion that the respondent, The Texas Mexican Railway Company, is the initial carrier under the bill of lading issued by it at Laredo for carriage of the articles to El Oro, Mexico. The bill of lading issued by the Pennsylvania Railroad was for carriage from Sharon, Pennsylvania, to Laredo, Texas. Accepting the interpretation of the Court, that this Pennsylvania bill required the delivery of the shipment by the respondent at the International Boundary in Laredo, there remains the necessity of causing the shipment to cross the boundary line and proceed upon its journey into Mexico. As the Court concedes, the bill of lading, sued upon here, was used to clear 'the shipment with the Mexican customs.' It is also plain that it was this latter bill that caused the shipment to cross the line. Without it, the respondent could not have made delivery to the Mexican railway system. The Pennsylvania bill of lading called for delivery to the consignee's agent in Laredo, Fausto Trevino. The consideration to respondent for its issue would be a similar service for northbound shipments from the Mexican Railways or promotion of respondent's export business. 17 The Ward case, 244 U.S. 383, 37 S.Ct. 617, 61 L.Ed. 1213, is not an authority for the Court's holding. There the suit was brought on a through bill from a Texas point to an Oklahoma point. The defense was that a new contract had been made with a connecting carrier. It was said, 244 U.S. 387, 37 S.Ct. 619: 18 'The bill of lading required to be issued by the initial carrier upon an interstate shipment governs the entire transportation. The terms of the original bill of lading were not altered by the second issued by the connecting carrier. As appellants were already bound to transport the cattle at the rate and upon the terms named in the original bill of lading, the acceptance by the shipper of the second bill was without consideration and was void.' 19 The facts of this case seem to us entirely different and to require that the respondent railway accept responsibility as the initial carrier.
78
331 U.S. 642 67 S.Ct. 1443 91 L.Ed. 1718 WILLIAMS et al.v.AUSTRIAN et al. No. 850. Argued April 10, 11, 1947. Decided June 16, 1947. Mr. Milton Pollack, of New York City, for petitioners. Mr. Carl J. Austrian, of New York City, for respondents. [Argument of Counsel from page 643 intentionally omitted] Mr. Chief Justice VINSON delivered the opinion of the Court. 1 Section 2, sub. a, of the Bankruptcy Act1 confers upon all bankruptcy courts 'such jurisdiction at law and in equity as will enable them to exercise original jurisdiction in proceedings under this Act * * * to * * * (7) Cause the estates of bankrupts to be collected, reduced to money and distributed, and determine controversies in relation thereto, except as herein otherwise provided. * * *' The exception has reference to § 23, sub. b, which requires that 'Suits by the receiver and the trustee shall be brought or prosecuted only in the courts where the bankrupt might have brought or prosecuted them if proceedings under this Act had not been instituted, unless by consent of the defendant, except as provided in sections 60, 67 and 70 of this Act.'2 Congress, however, in the Chandler Act of 1938 declared the inapplicability of § 23 in reorganization proceedings under Chapter X; and it is upon the significance of this action to the jurisdiction of the federal courts that this case turns.3 2 Respondents were appointed trustees for the Central States Electric Corporation, a Virginia Corporation in reorganization in the District Court of the United States for the Eastern District of Virginia. Following an investigation under § 1674 of the Act, respondents were authorized to institute suit against petitioners, who are past and present officers and directors of the debtor and others having connection therewith. This suit was then filed against petitioners in the District Court of the United States for the Southern District of New York, alleging a conspiracy to misappropriate corporate assets and asking an accounting and other relief. There was no allegation of diversity and jurisdiction was rested upon 'the Constitution of the United States (Article I, Section 8, Clause 4, and Article III, Section 2), the Act of Congress relating to Bankruptcies (U.S.Code Title 11, 11 U.S.C.A.), and * * * the provisions of Section 24(1), (19) of the Judicial Code (28 U.S.C.A. § 41 (1, 19)). * * *' 3 The District Court dismissed for lack of jurisdiction;5 but the Circuit Court of Appeals reversed, holding that since the governing provisions of § 23, to which the 'except' clause of § 2, sub. a(7) refers, were suspended in Chapter X proceedings, jurisdiction to hear this plenary suit could be rested upon the general language of § 2. Other alleged grounds for jurisdiction were not considered. 2 Cir., 1946, 159 F.2d 67. 4 1. Petitioners construe 'proceedings under this Act,' within which the jurisdictional grant contained in § 2 is confined, as extending only to matters proper for summary disposition,6 and interpret the suspension of § 23 in Chapter X cases, without providing a substitute therefor, as removing from the Act an affirmative grant to federal courts of jurisdiction to hear plenary suits, rather than as an action aimed at expanding that jurisdiction.7 But these views rest, in the main, upon what we think is an erroneous appraisal of the history of §§ 2 and 23. 5 Section 2 is substantially idenical with § 1 of the Bankruptcy Act of 1867,8 Babbitt v. Dutcher, 1910, 216 U.S. 102, 107, 30 S.Ct. 372, 374, 54 L.Ed. 402, 17 Ann.Cas. 969; and cases dealing with that Act, while recognizing that certain suits brought by bankruptcy assignees should proceed in plenary, rather than summary, fashion, held that § 1 gave jurisdiction to the bankruptcy courts to proceed in both ways.9 And although certain aspects of a bankruptcy proceeding could be handled only by the court in which the adjudication was had, § 1 conferred upon all bankruptcy courts jurisdiction to hear plenary suits brought by bankruptcy assigneees against adverse claimants or against debtors of the bankrupt.10 6 Lathrop v. Drake, 1875, 91 U.S. 516, 23 L.Ed. 414, viewed the jurisdiction of the district courts in this manner and, we think, contrary to the statements later made in Bardes v. Hawarden Bank, 1900, 178 U.S. 524, 20 S.Ct. 1000, 44 L.Ed. 1175, and Schumacher v. Beeler, 1934, 293 U.S. 367, 55 S.Ct. 230, 79 L.Ed. 433, upon which petitioners rely, considered the jurisdiction of the district courts over plenary suits to rest upon § 1 of the 1867 Act.11 7 Section 2 of the Bankruptcy Act of 1898 substantially repeated the broad grant of jurisdiction contained in § 1 of the 1867 Act. The bankruptcy courts were given 'such jurisdiction at law and in equity as will enable them to exercise original jurisdiction in bankruptcy proceedings * * *.'12 But § 2, sub. a(7), while granting to all bankruptcy courts jurisdiction to collect and to hear controversies relating to the estate of the bankrupt, appended the words 'except as herein otherwise provided.' The exception had reference to § 23,13 which, in the clause applicable to the district courts, provided that, unless by the consent of the defendant, suits by the bankruptcy trustee should be brought only in the courts where the bankrupt might have brought them if bankruptcy proceedings had not been instituted. In sharp contrast to the broad language of § 2, sub. a(7), and to the practice under the 1867 Act,14 § 23, in the interest of litigants and witnesses, deliberately directed to the state courts most of a bankruptcy trustee's plenary suits.15 8 Some lower federal courts, however, immediately held that § 23 did not apply to suits brought to recover certain transfers of the bankrupt's property and, relying upon § 2, upheld the jurisdiction of federal courts.16 Bardes v. Hawarden Bank, supra, checked this trend and gave full scope to the language of § 23. Suits to recover fraudulent transfers, like other plenary suits, were to be tried in the state courts. It was in the Bardes case unnecessary to explore the scope of § 2; for whatever the grant of jurisdiction there made, the interpretation given § 23 would have required the result reached. In any event, the construction of § 2, standing alone and without regard for the influence of § 23, as being confined to summary matters rested to a great extent upon a reading of Lathrop v. Drake, supra, with which, as has been indicated, we cannot agree. 9 Congressional reaction to the Bardes case was almost immediate. Wishing to allow the trustee to resort to federal courts in recovering fraudulent transfers and preferences, Congress in 1903 created exceptions to § 23 in favor of suits brought under §§ 60, sub. b, and 67, sub. e;17 and, being doubly cautious, Congress also inserted in §§ 60 sub. b and 67 sub. e clauses giving any bankruptcy court jurisdiction to hear plenary suits brought under those sections.18 It was explained at the time by the House judiciary committee that § 2, sub. a (7) would probably have been ample basis for the jurisdiction of the bankruptcy courts, and that it was only to remove all doubt that §§ 60, sub. b and 67, sub. e, had also been amended.19 10 Where §§ 60, sub. b, 67, sub. e, and 70, sub. e were not involved, the Bardes rule continued to be applied where plenary proceedings were required, as in cases relating to property adversely held20 and suits upon choses in action belonging to the bankrupt's estate.21 Left for summary disposition under § 2 were those proceedings in which the controversy related to property in the possession or constructive possession of the court or to property held by those asserting no truly adverse claim.22 11 From its inception § 23 contained a clause seemingly mitigating the rigors of the jurisdictional requirements imposed. A trustee, 'unless by consent of the proposed defendant,' could bring suit only in courts where the bankrupt could have sued. Subsequent to the Bardes case some lower federal courts held that even with the consent of a defendant, some independent ground for federal jurisdiction must be present.23 The conflict was resolved in Schumacher v. Beeler, supra. It was held that in § 23 Congress had exercised its bankruptcy powers to confer upon federal courts jurisdiction conditioned upon a defendant's consent24 and that, given consent, no independent ground for federal jurisdiction was required. The case turned upon the meaning of the consent clause in § 23. The remarks offered concerning § 2 were unnecessary and, in any event, were based upon the similar statements made in Bardes v. Hawarden Bank, supra. 12 The Beeler decision, like that in the Bardes case, does not direct a conclusion that § 2, in the absence of § 23, confers only a summary jurisdiction; for it was because of the limitations of § 23 that plenary suits had been excluded from the otherwise broad scope of § 2.25 Cases construing the latter in the presence of the overriding prohibitions of s 23 are not persuasive in a situation where, for the first time, § 23 has been declared inoperative. 13 2. To accept petitioner's reading of § 2 would produce consequences affording peculiar explanations for the express elimination of § 23 in Chapter X cases. For one thing, there would be destroyed the consent basis for federal jurisdiction of plenary suits brought by a trustee;26 and, for another, diversity jurisdiction would depend upon the citizenship of the trustee rather than upon that of the debtor. The latter is a formal change of no obvious value, and the former puts a greater limitation upon the jurisdiction of a Chapter X court than has been placed upon an equity receivership, 77B, or ordinary bankruptcy court, a result in obvious contrast to discernible trends in reorganization law. 14 The committee reports and Congressional debates do not elaborate upon the decision to eliminate § 23,27 and the hearings reveal only that § 23 was one of several sections which the National Bankruptcy Conference desired to eliminate, and which migt be held applicable if not expressly deleted.28 However, the action occurred in the process of developing a workable reorganization technique and should be viewed in that context. While an equity receivership court had dependent jurisdiction, regardless of diversity or other independent grounds for federal jurisdiction, to hear plenary suits related to the estate of the debtor,29 under § 77B, which made reorganization of nonrailroad corporations a part of the bankruptcy scheme, it was believed in some quarters that § 23 would have its traditional effect upon the jurisdiction of federal courts to hear plenary suits, even though the reorganization court was given the 'powers' of an equity receivership court.30 Other commentators, thinking that § 77B should not provide a less efficient procedure than the equity receivership, considered § 23 inapplicable to 77B cases and regarded the reorganization courts as having jurisdiction to hear plenary suits.31 The controversy had not been settled when Congressional committees were considering the bill which became the Chandler Act of 1938, and such a background for the suspension of § 23 in Chapter X cases obviously raises no inference of a desire to restrict, rather than to expand, the jurisdiction of the federal courts. 15 To interpret the elimination of § 23 in Chapter X cases as restricting the access of the trustee to the federal courts would not be in harmony with other provisions contemporaneously written into Chapter X and defining anew the position and functions of the reorganization trustee. The appointment of a disinterested trustee was made mandatory in appropriate cases,32 his qualifications were prescribed,33 and upon him were devolved functions aimed at eliminating the abuses of previous reorganization schemes.34 It was his duty to prepare the reorganization plan,35 and there were conferred upon him investigative powers and duties36 which not only contemplated the discovery of wrongs done the debtor by its former management, but also insured the 'prosecution of all causes of action' which might 'add to the assets of corporations in reorganization.'37 These provisions were 'of paramount importance in the revision of § 77B,'38 and are hardly indicative of a Congressional desire to restrict the trustee's choice of a forum in which to litigate plenary suits. On the contrary the conclusion more in accord with the purposes of Chapter X and with the pivotal position in which the trustee was placed39 is that Congress intended by the elimination of § 23 to establish the jurisdiction of federal courts to hear plenary suits brought by a reorganization trustee, even though diversity or other usual ground for federal jurisdiction is lacking. 16 The decision of the Circuit Court of Appeals is in entire harmony with the foregoing considerations. The language of § 2, in its ordinary sense and no longer limited by § 23, easily comprehends the present type of suit; and so to hold directly and effectivelysubserves Congressional desires as revealed in the plain policy of Chapter X and in the express elimination of § 23, which has, since its enactment in 1898, been viewed as a sharp restriction upon the jurisdiction theretofore exercised by bankruptcy courts and as a strong preference for state courts.40 Since all reorganization courts are the objects of the jurisdiction conferred by § 2,41 the District Court for the Southern District of New York has jurisdiction to hear the present suit, which is brought by reorganization trustees and which charges misappropriation of the assets of a Chapter X debtor.42 'This seems to be the only logical conclusion to be derived from the fact that § 23 has no application under Chapter X.'43 17 3. Respondents in the alternative argue that the equity receivership powers conferred by § 11544 include jurisdiction to hear plenary suits and that all reorganization courts may exercise the jurisdiction so conferred. Petitioners would, in any event, confine the effects of § 115 to the reorganization court in which the reorganization petition has been approved. We need not pass on these contentions; for, assuming that § 115 is jurisdictional45 and that it extends only to the primary court, jurisdiction in the present case may still be rested upon § 2. That section, in the absence of § 23, supports the jurisdiction of all district courts to hear plenary suits brought by a reorganization trustee, a result conistent wit h the aims of Chapter X and with the elimination of a section which is itself applicable to all district courts. Congress could have carved out of § 23 only a narrow exception in favor of the court in which the reorganization proceedings are pending and thereby left unchanged the jurisdiction of other courts over a trustee's plenary suits. Limited exceptions are familiar in the history of § 23. But Congress went further and eliminated § 23 entirely in Chapter X proceedings. Because of the countrywide ramifications of corporate debtors placed in Chapter X reorganization, it is as usual as not for the trustee to resort to foreign jurisdictions for the disposition of plenary suits. Allowing the primary court to hear these suits will not change this situation, if it is true that the process of a reorganization court does not run nationwide in plenary cases.46 Congressional policy would receive only limited recognition if the suspension of § 23 is interpreted as allowing the trustee access to only the appointing court and as restricting his access to all other district courts.47 18 4. Our holding is, of course, that Congress in 1938 extended the jurisdiction of the reorganization courts beyond that exercised by ordinary bankruptcy courts. Section 2 of the 1898 Act contaned the br oad language borrowed from § 1 of the Act of 1867. But the exception to § 2, sub. a(7) acknowledged the overriding limitations of § 23, which was the embodiment of Congressional policy to exclude from the bankruptcy courts many of the trustee's plenary suits. That same meaningful section was expressly eliminated in 1938 in the process of perfecting a chapter of the Bankruptcy Act dealing with the distinctive and special proceedings in corporate reorganization. Cf. Continental Illinois Nat. Bank & Trust Co. of Chicago v. Chicago Rock Island & P.R. Co., 1935, 294 U.S. 648, 676, 55 S.Ct. 595, 606, 79 L.Ed. 1110. This negation of long-standing policy should be given effect consistent with the aims of Chapter X and should not be hedged by judge-made principles not in accord with those aims. Congress need not document its specific actions in elaborate fashion in order to direct this Court's attention to statutory policy and purpose. The failure to provide appropriate fanfare for the suspension of § 23 in Chapter X cases, and for the consequent expansion of federal jurisdiction, hardly invites our opinion as to the advisability of the action which Congress has taken. Judicial drives to limit the jurisdiction of federal courts should not lead to decision falling short of complete effectuation of statutory scheme. With the limitations of § 23 suspended, § 2 confers jurisdiction upon all reorganization courts to hear plenary suits brought by a Chapter X trustee. 19 5. Petitioners insist that certain consequences, which they term undesirable, will flow from this decision. It is said, for example, that the state courts will automatically be deprived of jurisdiction to hear a trustee's plenary suits. But whether or not this and other suggested consequences will follow we leave for consideration in cases presenting such issues for decision. 20 The decision of the Circuit Court of Appeals is affirmed. 21 Affirmed. 22 Mr. Justice FRANKFURTER, whom Mr. Justice JACKSON joins, dissenting. 23 On the surface this appears to be merely a bankruptcy case raising technical questions of federal jurisdiction. But the answers to these questions have far-reaching import. They involve the distribution of judicial power as between United States and State courts, and thus concern federal-state relations generally. More immediately, inasmuch as the allowable scope of the business of the federal courts is in controversy, a proper disposition of the case bears upon the quality of the work of those courts and of this Court in particular. 24 The Court makes a shift in the distribution of judicial power between State and federal courts which has prevailed for half a century. Such a break with the past is not required by what Congress has written nor by any inference drawn from disclosed Congressional policies. On the contrary, I believe that the result reached is repelled by every consideration relevant to the proper construction of the statutory materials by which the jurisdiction of the federal courts is to be determined. 25 In 1867 Congress granted jurisdiction to the then lower federal courts over suits on claims owing to one whose estate was administered in bankruptcy, though the claims were based wholly on local law and were devoid of any federal aspect which would give a federal court jurisdiction were the creditor not in bankruptcy. This was another one of those enactments of the Reconstruction period when the influences toward expansion of federal jurisdiction were at flood-tide. As part of the recession from this Reconstruction tendency Congress, in the Bankruptcy Act of 1898, withdrew from the federal courts suits what rested solely on local law even though they involved claims asserted on behalf of one whose estate was being administered in the bankruptcy court. By a tenuous process of implication the Court now concludes that Congress, through the Chandler Act of 1938, enlarged federal jurisdiction in one aspect of the bankruptcy law, though neither the terms of thelegislatio n, nor its context, nor its legislative history, nor considerations of policy heretofore suggested, call for such construction, while the history and structure of the legislation, its judicial interpretation, regard for congruity in finding meaning, and the larger claims of the federal judicial system, support a different reading of the statute. The large assumptions of the decision are that by indirection and without manifested design Congress reversed its prevailing policy of limiting federal jurisdiction and preserving a proper balance between federal and State courts; that Congress deviated from a principle of our federalism especially respected in recent times, according to which claims arising under State law shall be tried under local trial procedure in the local courts; that Congress has departed from a settled policy of fifty years uniformly applicable in bankruptcy proceedings and which now continues as to all other proceedings in bankruptcy, although this established policy of leaving local claims to the State courts does not at all interfere with those aims for effective reorganization through use of the bankruptcy power which gave rise to Chapter X. 26 1. The facts in this case are not in dispute. The Central States Electric Corporation filed in the District Court for the Eastern District of Virginia a voluntary petition for reorganization under Chapter X of the Bankruptcy Act. With the consent of the reorganization court, respondents, as trustees, brought this suit in the District Court for the Southern District of New York on behalf of the Corporation for an accounting and damages against its officers and directors for alleged fraud and mismanagement. The District Court found want of jurisdiction, but was reversed by the Circuit Court of Appeals for the Second Circuit. 159 F.2d 67. This Court now affirms the Circuit Court of Appeals and holds that a Chapter X trustee may bring this plenary suit in personam in a federal district court not the reorganization court, although neither diversity of citizenship nor other ground of federal jurisdiction exists. 27 No doubt Congress could authorize such a suit. See Schumacher v. Beeler, 293 U.S. 367, 374, 55 S.Ct. 230, 233, 79 L.Ed. 433. Nor is there any doubt that Congress has not conferred upon the district courts the power to entertain such a suit by an ordinary bankruptcy trustee. Section 23 of the Bankruptcy Act specifically limits plenary jurisdiction to a few enumerated cases (of which this is not one), or where defendant consents. The Court finds, however, that Congress, by making § 23 inapplicable to Chapter X proceedings, opened all the federal courts to plenary suits by a Chapter X trustee. To determine the significance of the inapplicability of § 23 to Chapter X proceedings it is necessary to consider the affiliations between the Bankruptcy Act of 1898 and the Chandler Act. That in turn makes it necessary to examine the Act of 1898 in relation to its predecessor, the Act of 1867. These three enactments—the Bankruptcy Act of 1867, the Bankruptcy Act of 1898, and the Bankruptcy Act of 1938—are an interrelated process of legislation. The role of § 23 cannot be properly assessed merely by a textual reading, or by ascertaining its presence or absence in these three Acts. It must be placed in the context of the history of the Act of 1867 and of the Act of 1898, and the relation of that history to the aims of the Chandler Act. 28 2. To understand the full import of the Act of 1867, so far as now relevant, it will bear repetition that it reflected the expansionist trend in federal jurisdiction after the Civil War. Statute after statute gave to the federal courts jurisdiction over cases which had previously been left entirely to State tribunals, and this Court gave a broad construction to such statutes. The Bankruptcy Act of 1867 gave to all district and circuit courts concurrent jurisdiction over suits 'by the assignee in bankruptcy against any person claiming an adverse interest' n the esta te. Section 2 of the Act of March 2, 1867, 14 Stat. 517, 518. This provision was construed in Lathrop v. Drake, 91 U.S. 516, 23 L.Ed. 414. Mr. Justice Bradley, with characteristic clarity, distinguished between 'jurisdiction as a court of bankruptcy over the proceedings in bankruptcy * * * (and) jurisdiction, as an ordinary court, of suits at law or in equity brought by or against the assignee in reference to alleged property of the bankrupt, or to claims alleged to be due from or to him.' 91 U.S. at 517. But the terms of the Act were read to confer the latter jurisdiction on the lower federal courts. It is worth noting that Mr. Justice Bradley was a well-known exponent of expansive federal jurisdiction. See, e.g., his dissenting opinion in Murdock v. City of Memphis, 20 Wall. 590, 639, 22 L.Ed. 429. 29 3. The business which this broad construction of the Act of 1867 brought to the federal courts, together with that from other sources, led to the overburdening of their dockets, and inevitably of the dockets of this Court, and gave rise to the various movements for their relief. The history of the federal courts is to a considerable measure a history of the rise and fall of the scope of the jurisdiction given to them by Congress. Not to take account of these underlying factors in the construction of judiciary acts is to leave out the meaning in the interstices of the words of enactments. The Act of 1898 explicitly reveals the important shift in emphasis that had taken place within thirty years in the distribution between State and federal courts of the judicial power at the disposal of Congress. By 1898 the expansionist trend in federal jurisdiction had receded. The movement was toward a curtailment for an overburdened judiciary. The new Bankruptcy Act also showed the recession. 30 The Act of 1898 was not an amendment of the Act of 1867. The latter had been repealed by the Act of June 7, 1878, 20 Stat. 99, and for twenty years there was no federal bankruptcy Act. Accordingly, the 1898 Act is not to be read as a modification of an existing system. It established a scheme of bankruptcy administration where there was none. Its framers, of course, drew on history. They borrowed heavily from the Act of 1867. But a comparison of the jurisdictional sections of the 1898 Act with those of its predecessor reveals the great change in the attitude of Congress regarding the withdrawal of essentially local litigation from the State courts. 31 4. The shift in jurisdictional direction was duly respected when the Act of 1898 first came here for construction. Speaking for a unanimous Court, Mr. Justice Gray pointed out the marked structural differences between the Act of 1898 and that of 1867. The latter granted summary jurisdiction to the district court in § 1; plenary jurisdiction was conferred by § 2 on district and circuit courts concurrently of 'suits at law or in equity, between the assignee in bankruptcy and an adverse claimant.' The Act of 1898 took over § 1 of the Act of 1867, and discarded § 2. Section 2 of the Act of 1898, derived from § 1 of the 1867 Act, confers only summary jurisdiction. Plenary jurisdiction was not conferred by the Act of 1898 on either the district or circuit courts except to the very limited extent granted by § 23. 32 Such was the construction of the Act of 1898 made almost contemporaneously with its enactment. Bardes v. First National Bank of Hawarden, 178 U.S. 524, 20 S.Ct. 1000, 1005, 44 L.Ed. 1175. This construction was reaffirmed thirty-four years later by a unanimous Court, speaking through Mr. Chief Justice Hughes. Schumacher v. Beeler, supra. 33 5. This recognition of the drastic difference between the two Acts was not drawn merely from the inert words of the statutes. The words expressed the great differences of outlook, to which reference has been made, in regard to the transfer to the federal courts of what is essentially State litigation. This Court found the accent of the Act of 1867 to be on enforcement through national t ribunals.' The matter was put quite plainly by Mr. Justice Bradley. 'The State courts may undoubtedly be resorted to in cases of ordinary suits for the possession of property or the collection of debts; and it is not to be presumed that embarrassments would be encountered in those courts in the way of a prompt and fair administration of justice. But a uniform system of bankruptcy, national in its character, ought to be capable of execution in the national tribunals, without dependence upon those of the States in which it is possible that embarrassments might arise.' Lathrop v. Drake, supra, 91 U.S. at page 518, 23 L.Ed. 414. 34 The outlook of the Act of 1898 as to proceedings not in bankruptcy 'properly so called,' Bardes v. First National Bank of Hawarden, 178 U.S. 524, 533, 20 S.Ct. 1000, 1004, 44 L.Ed. 1175, was precisely the opposite. The emphasis was not on uniform enforcement through 'national tribunals.' Concern was with 'the greater economy and convenience of litigants and witnesses' by leaving the determination of what intrinsically are merely local questions to the 'local courts of the state.' Bardes v. First National Bank of Hawarden, supra, 178 U.S. at page 538, 20 S.Ct. at page 1006, 44 L.Ed. 1175. The Court again referred to this purpose of the 1898 Act when it gave full reconsideration to the legislation in Schumacher v. Beeler, supra, 293 U.S. at page 374, 55 S.Ct. at page 233, 79 L.Ed. 433. Emphasis was placed on the importance of ready accessibility to litigants afforded by local courts as against the inconvenience often entailed in bringing suitors to the federal courts, particularly in Western States. By reference to an earlier decision in which that consideration was treated as a controlling factor, the Court indicated a guiding principle in deciding questions of doubtful jurisdiction. See Shoshone Mining Company v. Rutter, 177 U.S. 505, 511, 513, 20 S.Ct. 726, 728, 729, 44 L.Ed. 864, cited in Bardes v. First National Bank of Hawarden, 178 U.S. at page 538, 20 S.Ct. at page 1006, 44 L.Ed. 1175. 35 6. But we are now told that the Bardes and Schumacher cases misconstrued the Act of 1898 and its relation to that of 1867. The opinions of Mr. Justice Gray and Mr. Chief Justice Hughes were, according to this view, the products of misreading of judicial history and of a faulty analysis of the Act of 1898. Indeed, the foundation of the decision of the court below and of the argument at the bar of this Court is the claim that the construction placed upon the jurisdictional Act of 1898 by the Bardes and Schumacher cases was erroneous and to be rejected without compunction because, after all, merely the expression of erroneous dicta. Whether the discussion of the whole structure of an Act in order to find meaning for a particular part more immediately in litigation constitutes dicta, in the technical sense, is a nice exercise in legal dialectics. The fact of the matter is that it was rationally relevant to the problem calling for adjudication in the Bardes cases to consider comprehensively the relation of the Act of 1898 to that of 1867. The view that was taken had the strength that comes not only from a unanimous Court but one contemporaneous with the legislation under scrutiny. And when the construction so placed upon an Act is reaffirmed thirty-four years later by a Court particularly strong in justices who had had extensive experience in commercial law, it seems pretty late in the day to suggest that such weighty constructions by this Court are now to be found wrong.1 The court below was driven to this drastic undertaking. For if § 2 of the Act of 1898 is the source solely of summary proceedings in bankruptcy, and jurisdiction for plenary suits, to a limited extent, was granted solely by § 23, the elimination of § 23 for purposes of Chapter X cannot serve to put into § 2 a plenary jurisdiction which was never there. 36 7. To reexamine the ground covered in the Bardes and Schumacher cases would, as it seems to me, be a work of supererogation. And so I will content myself with some observations pertinent to a proper view of the Act of 1898 as an entirety. The different features of an organic statute are not discrete parts. They cast light upon each other and illumine the whole. The Act of 1898 was read as it was by this Court because it established a comprehensive bankruptcy scheme. Sections 2 and 23 were read in combination, for they drew a sharp line between 'proceedings in bankruptcy' and plenary '(suits) at law or in equity.' For fifty years it has been the policy of Congress that a bankruptcy trustee bringing an action like that before us should sue in a State court. (This, of course, includes a federal court sitting in the State where there is diversity of citizenship. Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, 114 A.L.R. 1487; Guaranty Trust Company v. York, 326 U.S. 99, 65 S.Ct. 1464, 89 L.Ed. 2079, 160 A.L.R. 1231.) Howsoever any section of the Act of 1898 might have been read had it existed by itself, on a view of the Act as an entirety it was settled that summary proceedings may be brought in any federal court, whereas plenary suits at law and in equity, distinguished as such from proceedings in bankruptcy, can be brought only where they could have been brought between the bankrupt and the opposing party had there been no bankruptcy. Section 2 had an intrinsically limited scope in its setting with § 23. The scope continues so limited and does not automatically expand because § 23 is pro tanto eliminated. 37 This jurisdictional differentiation was not a matter of Congressional whim or judicial technicality. It was easy for this Court to discern that the object of Congress 'may well have been to leave such controversies to be tried and determined, for the most part, in the local courts of the State, to the greater economy and convenience of litigants and witnesses.' Bardes v. First National Bank of Hawarden, supra, 178 U.S. at page 538, 20 S.Ct. at page 1006, 44 L.Ed. 1175; Schumacher v. Beeler, supra, 293 U.S. at page 374, 55 S.Ct. at page 233, 79 L.Ed. 433. Congress saw good reason for not infringing on the ordinary jurisdiction of State courts where a suit is not really part of the bankruptcy proceedings. It chose to leave such litigation to the appropriate local practice and local rules concerning jury trial in the local court, and at the same time to relieve thereby an overworked federal judiciary. 38 8. These important considerations touching the interplay of State and federal courts as well as the effective administration of justice in the federal courts have not lost force with time. Congress has continued to recognize their validity. As to bankruptcy trustees generally, the Act of 1938 continues to require that local suits like the present by brought in local courts. And in preparing for the Judiciary Committee of the House of Representatives an analysis of a predecessor bill introduced by Mr. Chandler, the National Bankruptcy Conference indicated that the considerations relevant to a proper distribution ofbusiness a § between State and federal courts which underlay the restrictive policy of the Act of 1898 were more than ever applicable: 39 'In Taubel-Scott-Kitzmiller Co. v. Fox, 264 U.S. 426 (44 S.Ct. 396, 68 L.Ed. 770), Mr. Justice Brandeis declared obiter that Congress had power to confer on a bankruptcy court jurisdiction to adjudicate the rights of trustees to property not in possession of the bankruptcy court, either actually or constructively, but adversely held by a third person; but that Congress had not as yet exercised that power, or conferred such jurisdiction under any of the provisions of the Bankruptcy Act. 40 'The proceedings of Congress prior to the enactment of the Bankruptcy Law of 1898 show that the exercise of that power was deliberately withheld, because of the fear of flooding the federal courts with a large volume of new litigation. That motive is even stronger today (1936) than it was in 1898, and for that reason we do not consider it wise to enlarge the jurisdiction at this time; except as indicated to include receivers and so-called 'debtor proceedings." (Analysis of H.R. 12889, 74th Cong., 2d Sess., Committee Print p. 134.) The indicated exceptions do not touch the jurisdiction here asserted. Yet the Court now concludes that as to Chapter X trustees Congress implied an exception so as to allow the trustee to sue in any federal district court in the country. If this be so, I see no escape from the conclusion that not only have the federal courts jurisdiction but the State courts no longer have it. Consideration of so destructive a consequence ought not to be postponed as though it were not immediately relevant to the proper construction of the legislation before us. If such suits are 'bankruptcy proceedings'2 within the jurisdictional grant of § 2 for it is necessary to find in some language an explicit grant of jurisdiction, and only § 2 is invoked—how can the bankruptcy aspect of the proceeding evaporate when it comes to 'matters and proceedings in bankruptcy' as to which 'The jurisdiction vested in the courts of the United States * * * shall be exclusive of the courts of the several States'? Rev.Stat. § 711, Judicial Code, § 256, 28 U.S.C. § 371, 28 U.S.C.A. § 371. No support can be found for this shifting attribution of meaning to the same concept in the history of proceedings under the Act of 1867. To be sure, it was held under that Act that the State courts were not deprived of jurisdiction of such plenary suits. But that was so far the conclusive reason that the provision making federal jurisdiction exclusive in bankruptcy proceedings came into the law much later than the Act of 1867. Federal exclusiveness as to bankruptcy proceedings formally so-called was brought in by § 711 of the Revised Statutes of 1874. During the few years within which the Bankruptcy Act of 1867 coexisted with the requirement of exclusiveness of jurisdiction in the federal courts, the occasion did not arise for applying the provision excluding the State courts. But this Court was well aware of the problem and carefully put it to one side. See Claflin v. Houseman, 93 U.S. 130, 133, 23 L.Ed. 833, and Wilson v. Goodrich, 154 U.S. 640, 14 S.Ct. 1186, 25 L.Ed. 111. Intrinsically, that question now presses for decision. If plenary suits are 'bankruptcy proceedings' within § 2 of the Act of 1898, as the Court holds, how do they cease to be 'proceedings in bankruptcy' as to which the federal courts have jurisdiction 'exclusive' of the jurisdiction of the several States?3 Only a forced disharmony can avoid the grievous consequences of a construction equally forced as to the relations between §§ 2 and 23 of the Act of 1898. 41 9. The Court finds a reversal in the policy of contraction of federal juisdiction which began with the end of the Reconstruction era, found expression in cases culminating in Gully v. First National Bank, 299 U.S. 109, 57 S.Ct. 96, 81 L.Ed. 70, and undoubtedly furnished the momentum for the radical reversal of historic policy initiated by Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, 114 A.L.R. 1487. The Court extends the jurisdiction of the federal courts and, I cannot escape concluding, withdraws it from the State courts. It resolves whatever ambiguity may be found in § 102 of Chapter X by interpolating an exception which effects a break with the past and creates difficulties for the future. One would naturally expect that such an innovation in a matter of vital concern to the scope of federal jurisdiction, with its resulting effect upon the relations between the State and federal courts, would be explicitly stated and not depend for discovery upon intricate exegesis. One would suppose that some indication at least of Congressional awareness of the problem could be found. Diligence of counsel has not unearthed the remotest hint that such shift in jurisdiction was contemplated or that the need for it was asserted. Our own investigation has been equally fruitless. There is nothing in Chapter X, in its terms, its antecedents, its history, its advocacy, that gives the remotest hint of a purpose calling for a different policy for reorganization trustees in this respect from other trustees in bankruptcy, or any intimation that the district courts, other than the particular reorganization court, would play a special role as to plenary suits in reorganization proceedings. Nor do the purposes of the Chandler Act bear upon this aspect of jurisdiction. Chapter X provided new facilities for reorganization of bankrupt estates and extended the scope of reorganizations. But it is hardly relevant to the purpose of easier and more comprehensive methods of reorganization to establish a claim through the federal courts rather than the State courts when the basis of recovery is State law, calling for application of State law and procedure. The Court draws support for its conclusion from the fact that other powers are conferred upon the Chapter X trustee which were not possessed by other bankruptcy trustees. But the powers to which attention is called are all explicitly conferred and are not derived by roundabout inference. And unlike the extension of jurisdiction here claimed, the additional powers conferred on the trustee all bear directly upon the very process of reorganization and the purposes for which Chapter X was designed. 42 The result has been spun largely out of words in the Act of 1898 by disregarding the controlling facts of its history and its long judicial and practical construction. The other source from which the argument is spun is the provision making § 23 inapplicable to proceedings under Chapter X. As we have seen, our decisions ruled that § 23 was not an exception to § 2 but an emphasis of the limited scope of § 2, together with a grant, of little importance, of consent jurisdiction.4 If § 2 did not grant jurisdiction to the district courts over a plenary suit like the one before us, merely eliminating § 23 could add no new head of jurisdiction to § 2. And yet the Court finds that the purpose of making § 23 inapplicable to Chapter X was to throw all the federal courts open to plenary suits in Chapter X proceedings, although, as we have seen, not a clear expression either of such purpose, or an assessment of its consequences, is to be found in all the literature on this subject prior to this litigation. If a perfectly reasonable explanation can be given to the elimination of § 23 from Chapter X proceedings, we ought not lightly to attribute to Congress a radical change affecting the jurisdiction of the federal courts, without even an indirect mention of the need or desirability for such a change in the thousands of pages of legislative hearings, debates, and reports on the various bills leadingup to the Chandler Act. 43 10. There is an adequate explanation for the provision making § 23 inapplicable that amply accounts for it, without using it as a springboard for a wholly unforeseen result out of harmony with established jurisdictional considerations. 44 The provision to make § 23 inapplicable did not appear in the earlier drafts of Chapter X and was not in the bill as it came from the House. It came into the Act through amendments proposed before the Judiciary Committee of the Senate by the National Bankruptcy Conference through its spokesman, Mr. John Gerdes. His statement is all we have by way of legislative history for the amendment.5 It will be noted that Mr. Gerdes intimated nothing regarding the need for extending federal jurisdiction, nothing of the desirability of granting plenary jurisdiction to all federal courts, nothing to the effect that a Chapter X trustee needed such greater freedom, nothing to indicate that the plan of that Chapter required a different rule as to ordinary plenary suits from that which was reaffirmed as to suits by other bankruptcy trustees. Yet the court below seemed to find in his statement warrant for its result. And it sought to reenforce its conclusion by appeal to an article by Mr. Gerdes elucidating the Chandler Act after its passage. Gerdes, Corporate Reorganizations: Changes Effected by Chapter X of the Reorganization Act, 52 Harv.L.Rev. 1, 21. 45 The Circuit Court of Appeals, it seems to me, finds in Mr. Gerdes' observations what he did not put into them. Nowhere is there the remotest suggestion that in this roundabout and undisclosed way he sought to throw all litigation by or against a reorganization trustee into federal courts, other than the reorganization court, because the federal courts might be a more convenient forum. He was concerned with various provisions, of which § 23 was one, which either were intrinsically in conflict with the new provisions of Chapter X or might be deemed to be in conflict with them. He used the terms 'inconsistent' and 'not applicable' interchangeably. He was concerned with removing all limitations in the existing Bankruptcy Act that were inconsistent with provisions in Chapter X, limitations which might impair the new scheme for bankruptcy reorganization. While Mr. Gerdes was not explicit as to possible inconsistency between § 23 and Chapter X, a controversy which had arisen in regard to § 23 prior to the Chandler Act, and with which he was thoroughly familiar, fully explains why Mr. Gerdes deemed it desirable that § 23 be made inapplicable to Chapter X. 46 The matter in controversy was this. Section 77B(a) granted the reorganization court the power possessed by an equity court with regard to equity receiverships. The question arose whether a 77B trustee could bring a plenary suit in the reorganization court without regard to diversity citizenship, as could an equity receiver in his home court. White v. Ewing, 159 U.S. 36, 15 S.Ct. 1018, 40 L.Ed. 67. That the reorganization court had such jurisdiction and that § 23 was no bar, was Mr. Gerdes' view. But other bankruptcy specialists and some lower federal courts were of opinion that § 23 precluded such suits. Compare 2 Gerdes, Corporate Reorganizations, 1478, with Finletter, Principles of Corporate Reorganization, 186—87; and see In re Standard Gas & Electric Co., 3 Cir., 119 F.2d 658; Tilton v. Model Taxi Corp., 2 Cir., 112 F.2d 86; In re Prima Co., 7 Cir., 98 F.2d 952. 47 To remove doubt as to this effect of § 23, namely its possible limitation upon the power of the reorganization trustee to sue in his home court, is the full purpose and scope of its elimination from Chapter X. It was not to give the reorganization trustee roving authority for plenary suits in all federal courts that § 23 was made inapplicable. It was a desire to remove the danger that § 23 might be deemed to deprive a reorganization trustee of the power which he ought to have in his reorganization court, that was implicit in the short statement of Mr. Gerdes on behalf of the National Bankruptcy Conference. It is this purpose that prevailed and it is this purpose that should be enforced, and not a radical departure upsetting the distribution of jurisdiction between State and federal courts, for which there is not a vestige of a claim by anybody in the history that led up to the legislation. The article of Mr. Gerdes to which the court below refers seems to leave no doubt as to the limited purpose of making s 23 inapplicable. 'The bankruptcy provision restricting plenary jurisdiction,' he wrote, 'has been expressly excluded from application so that the equity receivership jurisdiction over plenary actions which are ancillary to the main proceedings is still available, even though the controversy involves less than $3,000 and even though there is no diversity of citizenship.' 52 Harv.L.Rev. 1, 21.6 Section 23 ws eliminat ed, then, to make clear that when in § 115 of the Act of 1938 Congress gave to the reorganization court equity powers like those which had been conferred in § 77B(a), it authorized the trustee-receiver to bring plenary suits in his home court. Such also is the view of another important witness in the hearings on the Chandler Bill, see Weinstein, The Bankruptcy Law of 1938, pp. 63—64, 193—94. Compare the analysis of the Chandler Act in 11 U.S.C.A. p. xxx. 48 This construction gives scope to the provision making § 23 inapplicable in Chapter X proceedings. It is consistent with the policy of the whole Bankruptcy Act, and gives effect to the grant of equity powers to the reorganization court. On the other hand, nothing in the policy of the Chandler Act, in its language, in its history, or in any other factor relevant to its construction, justifies a finding that Congress, by implication and indirection, without comment or discussion, changed the meaning which this Court had given to its legislation for fifty years, and expanded a federal jurisdiction which is already overburdened and which Congress has tended to contract; that it upset the relation between federal and State courts which demands that, even in bankruptcy, claims created by State law be litigated in local courts, applying local law under local rules of procedure and trial practice, 'to the greater economy and convenience of litigants and witnesses.' 49 11. This decision overturns the analysis which has guided the Court in construing the distribution of jurisdiction between the federal and State courts which Congress devised by the Bankruptcy Act of 1898, and attributes to the Act of 1938 a big change in this distribution, although there is not a glimmer of a hint in its entire legislatve history that Congress was aware that it was doing so. Important shifts in jurisdiction ought to be the product of something more persuasive than what is made to appear as a fit of Congressional absentmindedness. It ought not to be deemed natural that Congress took from the State courts long-established jurisdiction and transferred it to the federal courts, when there is nothing to indicate that Congress wanted to do so or knew that it was doing it. 50 When Congress has not, by plain language, extended the jurisdiction of the district courts which are the feeders of the Circuit Courts of Appeals and of this Court, an unexpressed purpose to swell the dockets of the federal judiciary ought not to be attributed to Congress by considering in isolation the desirability of allowing a particular class of litigation to be brought in a federal court. Any advantage of giving jurisdiction to the federal courts must be balanced against the disadvantages of taking away from the State courts causes of action rooted in State law. And in considering the advantages of absorption by the federal courts of jurisdiction theretofore vested in the State courts, it should be our special concern to be mindful that the district courts are part of a single judicial system. Increase in the scope of the business of te district courts inevitably reflects itself in the business of the Circuit Courts of Appeals and of this Court. It is a truism, but vital to keep in mind, that increase in the quantity of the Court's business affects the quality of its work.7 51 Where Congress has clearly enlarged the jurisdiction of the district courts, it cannot be withheld no matter what the effect upon the dockets. But where Congress has not manifested its purpose with clarity—more particularly, where such purpose is derived by way of elaborate argumentation—resolution of jurisdictional doubts properly takes into account the strong policy of Congress, expressed through a series of judiciary acts, not to cast burdens upon the federal courts which interfere with the effective discharge of their functions. See, for instance, American Security and Trust Co. v. District of Columbia, 224 U.S. 491, 32 S.Ct. 553, 56 L.Ed. 856, and Phillips v. United States, 312 U.S. 246, 250, 251, 61 S.Ct. 480, 483, 85 L.Ed. 800. These are considerations that will seem far afield to the issues of this case only if its decision is not related to the workings of the federal judiciary in the light of its history. 1 The Chandler Act of 1938, 52 Stat. 840, generally revised the Bnkruptcy A ct of 1898, 30 Stat. 544, as amended, 11 U.S.C.A. § 1 et seq. Section 2 in its original form was substantially as set out in the text except that jurisdiction was conferred 'in bankruptcy proceedings,' instead of '(in) proceedings under this Act.' The change in language was made in 1938. 2 Section 23 in full provides as follows: 'Jurisdiction of United States and State Courts.—a. The United States district courts shall have jurisdiction of all controversies at law and in equity, as distinguished from proceedings under this Act, between receivers and trustees as such and adverse claimants, concerning the property acquired or claimed by the receivers or trustees, in the same manner and to the same extent as though such proceedings had not been instituted and such controversies had been between the bankrupts and such adverse claimants. 'b. Suits by the receiver and the trustee shall be brought or prosecuted only in the courts where the bankrupt might have brought or prosecuted them if proceedings under this Act had not been instituted, unless by consent of the defendant, except as provided in sections 60, 67 and 70 of this Act.' Section 23, sub. a, as originally enacted, related to the circuit courts, which were abolished in 1911 by § 289 of the Judicial Code, 36 Stat. 1167, 28 U.S.C.A. § 431 note. Formal amendment to § 23, sub. a, was made in 1926, 44 Stat. 664. 3 Chapter X, containing the reorganization provisions, superseded § 77B. Section 102 of Chapter X provides: 'The provisions of chapters I to VII, inclusive, of this Act shall, insofar as they are not inconsistent or in conflict with the provisions of this chapter, apply in proceedings under this chapter: Provided, however, That section 23, subdivisions h and n of section 57, section 64, and subdivision f of section 70, shall not apply in such proceedings unless an order shall be entered directing that bankruptcy be proceeded with pursuant to the provisions of chapters I to VII, inclusive. For the purposes of such application, provisions relating to 'bankrupts' shall be deemed to relate also to 'debtors', and 'bankruptcy proceedings' or 'proceedings in bankruptcy' shall be deemed to include proceedings under this chapter.' 4 The investigation was made pursuant to the decision in Committee for Holders, etc., v. Kent, 4 Cir., 1944, 143 F.2d 684. 5 Petitioners also based their motion to dismiss on the applicable statute of limitations; but the District Court indicated that if there had been jurisdiction to proceed, the motion to dismiss would otherwise have been denied, because of factual issues which irst requi red determination. 6 'Proceedings under this chapter,' referred to in §§ 101 and 102 of Chapter X, is similarly construed. 7 According to this view there would, in Chapter X cases, be no provisions in the Bankruptcy Act conferring jurisdiction upon federal courts to hear plenary suits other than in §§ 60, 67, and 70. A reorganization trustee would be left, where he could, to take advantage of the ordinary grounds for federal jurisdiction. 8 14 Stat. 517. Section 1 gave the bankruptcy courts original jurisdiction 'in all matters and proceedings in bankruptcy' which extended 'to all cases and controversies arising between the bankrupt and any creditor or creditors who shall claim any debt or demand under the bankruptcy; to the collection of all the assets of the bankrupt * * *.' 9 Sherman v. Bingham, 1872, 21 Fed.Cas. 1270, No. 12,762; Goodall v. Tuttle, 1872, 10 Fed.Cas. 579, No. 5,533. The requirement of plenary proceedings, though not expressly appearing in the Act, was well recognized. Marshall v. Knox, 1872, 16 Wall. 551, 21 L.Ed. 481; Smith v. Mason, 1871, 14 Wall. 419, 20 L.Ed. 748. 10 Sherman v. Bingham, 1872, 21 Fed.Cas. 1270, No. 12,762; Goodall v. Tuttle, 1872, 10 Fed.Cas. 579, No. 5,533. 11 The references to the Act contained in the discussion of the jurisdiction of the district courts obviously referred to § 1; and Sherman v. Bingham, 1872, 21 Fed.Cas. 1270, No. 12,762, which expressly based upon § 1 the jurisdiction of the district courts to hear plenary suits was cited with unreserved approval. The pertinent passage in the Lathrop case is as follows: 'The language conferring this jurisdiction of the district courts is very broad and general. It is, that they shall have original jurisdiction in their respective districts in all matters and proceedings in bankruptcy. The various branches of this jurisdiction are afterwards specified; resulting, however, in the two general classes before mentioned. * * * Each court within its own district may exercise the powers conferred; but those powers extend to all matters of bankruptcy, without limitation. * * * But the exclusion of other district courts from jurisdiction over these proceedings does not prevent them from exercising jurisdiction in matters growing out f or conne cted with that identical bankruptcy, so far as it does not trench upon or conflict with the jurisdiction of the court in which the case is pending. Proceedings ancillary to and in aid of the proceedings in bankruptcy may be necessary in other districts where the principal court cannot exercise jurisdiction; and it may be necessary for the assignee to institute suits in other districts for the recovery of assets of the bankrupt. That the courts of such other districts may exercise jurisdiction in such cases would seem to be the necessary result of the general jurisdiction conferred upon them, and is in harmony with the scope and design of the Act. The State courts may undoubtedly be resorted to in cases of ordinary suits for the possession of property or the collection of debts; and it is not to be presumed that embarrassments would be encountered in those courts in the way of a prompt and fair administration of justice. But a uniform system of bankruptcy, national in its character, ought to be capable of execution in the national tribunals, without dependence upon those of the States in which it is possible that embarrassments might arise. The question has been quite fully and satisfactorily discussed by a member of this court in the first circuit, in the case of Shearman v. Bingham, Fed.Cas. No.12,762, 7 N.B.R. 490; and we concur in the opinion there expressed, that the several district courts have jurisdiction of suits brought by assignees appointed by other district courts in cases of bankruptcy.' 91 U.S. 516, 517, 518, 23 L.Ed. 414. 12 Section 2 created the courts of bankruptcy and invested them 'with such jurisdiction at law and in equity as will enable them to exercise original jurisdiction in bankruptcy proceedings * * * to * * * (7) cause the estates of bankrupts to be collected, reduced to money and distributed, and determine controversies in relation thereto, except as herein otherwise provided.' 13 First Nat. Bank of Chicago v. Chicago Title & Trust Co., 1905, 198 U.S. 280, 289, 25 S.Ct. 693, 695, 49 L.Ed. 1051; Bryan v. Bernheimer, 1901, 181 U.S. 188, 189, 194, 21 S.Ct. 557, 559, 45 L.Ed. 814; Bardes v. Hawarden Bank, 1900, 178 U.S. 524, 535, 20 S.Ct. 1000, 1004, 44 L.Ed. 1175. Section 23, sub. b, as originally enacted, provided: 'Suits by the trustee shall only be brought or prosecuted in the courts where the bankrupt, whose estate is being administered by such trustee, might have brought or prosecuted them if proceedings in bankruptcy had not been instituted, unless by consent of the proposed defendant.' 14 'A construction of the statute of 1898 which would deprive the federal courts of jurisdiction of the suits in question (trustee's suit to recover property) would make the act of 1898 unprecedented among bankrupt acts.' In re Hammond, D.C.1899, 98 F. 845, 853. 15 When S. 1035, which eventually became the Act of 1898, reached the House, the judiciary committee ecommended striking out all after the enacting clause and substituting the committee's own bill. Section 23 of the House version, 31 Cong.Rec. 1781 (1898), survived both debate and conference action and became § 23 of the Act of 1898. In reviewing the bill preliminary to debate, the chairman of the House judiciary committee explained: 'The jurisdiction of State courts to try controversies between the trustees of bankrupt estates and parties claiming adverse interest is not in any way interfered with. 'Suits by the trustee shall only be brought in the courts where the bankrupt might have brought them except for the misfortune of his bankruptcy, unless by the consent of the proposed defendant. 'Under the last bankruptcy law the litigation incident to the settlement of estates was conducted almost wholly in United States courts. The result was great inconvenience and much expense to a majority of the people interested in such litigation as principals, witnesses, and attorneys. Such will not be the effect under this bill. It is proper that such should not be the case, speaking generally, in behalf of the administration of justice.' 31 Cong.Rec.1785 (1898). 16 In re Woodbury, D.C.1900, 98 F. 833; In re Hammond, D.C.1899, 98 F. 845; Louisville Trust Co. v. Marx, D.C. 1899, 98 F. 456. 17 32 Stat. 798, 799. 18 Id. at pages 799, 800. Congress likewise amended § 70, sub. e, but by an oversight the exceptions made to § 23 were not correspondingly extended. The omission was corrected in 1910, 36 Stat. 840. See H.Rep.No.511, 61st Cong., 2d Sess. 6 (1910). 19 'Section 9: Under the law of 1867, the Federal and State courts had concurrent jurisdiction of suits to recover property fraudulently or preferentially transferred. Bardes v. Bank of Hawarden (Iowa), 178 U.S. 524, (20 S.Ct. 1000, 44 L.Ed. 1175), has so construed section 23 (sub.) b, of the law as to deny such jurisdiction to the district courts, save with the consent of the proposed defendant. In commercial centers this amounts to a denial of justice, the calendars of the State courts being years behindhand; while, growing out of Bardes v. Bank, have come decisions which have crippled the administration of the law to a marked degree. (See In re Ward (Mass.) (104 F. 985), 5 A.B.R. 215; Mueller v. Nugent (6 Cir.) 105 F. 581; this latter, however, recently reversed by the Supreme Court.) There is a very gneral dema nd for a return to the policy of the law of 1867. Were it not for section 23 (sub.) b, section 2 (sub. a) (7) would probably confer ample jurisdiction on the district courts. The change in section 23 (sub.) b, proposed by the bill simply excepts from the operation of it all suits which can, under the specific words of the law, be brought to recover property, and this merely by referring to the three sections under which alone such suits can be brought. To remove all doubt, also sections 13 and 16 of the bill confer concurrent jurisdiction of all such suits on the State courts and the Federal district courts, by adding appropriate words to each of the three sections, section 60 (sub.) b, section 67 (sub.) e, and section 70 (sub.) e.' H.Rep.No.1698, 57th Cong., 1st Sess. 7 (1902). (Italics added.) Substantially the same explanation was given on the floor of the House by Representative George W. Ray, chairman of the judiciary committee. 35 Cong.Rec. 6941, 6942 (1902). Representative Ray, we note, was second ranking member of the judiciary committee at the time of the passage of the 1898 Act. It was that committee which drafted §§ 2 and 23 in substantially the form appearing in the 1898 Act. See note 15, supra. Representative Ray was also a member of the House conference committee, and it was in conference that the Act of 1898 was finally drafted and the serious differences between the House and Senate were resolved. 20 Harris v. First Nat. Bank, 1910, 216 U.S. 382, 30 S.Ct 296, 54 L.Ed. 528. 21 Kelly v. Gill, 1917, 245 U.S. 116, 38 S.Ct. 38, 62 L.Ed. 185; In re Roman, 2 Cir., 1928, 23 F.2d 556; Lynch v. Bronson, D.C.1910, 177 F. 605. 22 Whitney v. Wenman, 1905, 198 U.S. 539, 25 S.Ct. 778, 49 L.Ed. 1157; Mueller v. Nugent, 1902, 184 U.S. 1, 22 S.Ct. 269, 46 L.Ed. 405; Bryan v. Bernheimer, 1901, 181 U.S. 188, 189, 21 S.Ct. 557, 45 L.Ed. 814; White v. Schloerb, 1900, 178 U.S. 542, 20 S.Ct. 1007, 44 L.Ed. 1183. 'But in no case where it lacked possession, could the bankruptcy court * * * adjudicate in a summary proceeding the validity of a substantial adverse claim. In the absence of possession, there was under the Bankruptcy Act of 1898, as originally passed, no jurisdiction, without consent, to adjudicate the controversy even by a plenary suit.' Taubel-Scott-Kitzmiller Co. v. Fox, 1924, 264 U.S. 426, 433, 434, 44 S.Ct. 396, 399, 68 L.Ed. 770. 23 Matthew v. Coppin, 9 Cir., 1929, 32 F.2d 100, 101; see Stiefel v. 14th Street & Broadway Realty Corp., 2 Cir., 1931, 48 F.2d 1041, 1043; Coyle v. Duncan SpanglerCoal Co., D.C.1923, 288 F. 897, 901; Operators' Piano Co. v. First Wisconsin Trust Co., 7 Cir., 1922, 283 F. 904, 906; De Friece v. Bryant, D.C. 1916, 232 F. 233, 236; McEldowney v. Card, C.C.1911, 193 F. 475, 479. Contra: Beeler v. Schumacher, 6 Cir., 1934, 71 F.2d 831; Toledo Fence & Post Co. v. Lyons, 6 Cir., 1923, 290 F. 637, 645. 24 'The Congress, by virtue of its constitutional authority over bankruptcies, could confer or withhold jurisdiction to entertain such suits and could prescribe the conditions upon which the federal courts should have jurisdiction. * * * Exercising that power, the Congress prescribed in § 23b the condition of consent on the part of the defendant sued by the trustee.' Schumacher v. Beeler, 1934, 293 U.S. 367, 374, 55 S.Ct. 230, 234, 79 L.Ed. 433. 25 The cases decided under the 1867 Act and referred to in notes 10—11, supra, recognized the broad scope of language similar to that of § 2; and cases arising under the 1898 Act and decided before Bardes v. Hawarden Bank, 1900, 178 U.S. 524, 20 S.Ct. 1000, 44 L.Ed. 1175, based upon § 2 the jurisdiction of the federal courts to entertain plenary suits to recover property adversely held. See note 16, supra. Later cases have recognized the overriding consequence of § 23. 'Section 2, clause 7, confers upon the court of bankruptcy jurisdiction to 'cause the estates of bankrupts to be collected, reduced to money and distributed, and determine controversies in relation thereto, except as herein otherwise provided.' But § 23-b prohibits the trustee (with exceptions not here applicable) from prosecuting, without the consent of the proposed defendant, a suit in a court other than that in which the bankrupt might have brought it, had bankruptcy not intervened.' Kelley v. Gill, 1917, 245 U.S. 116, 119, 38 S.Ct. 38, 62 L.Ed. 185. 'There is plainly a controversy in relation to the estate of a bankrupt, and subdivision 7 of section 2 would confer jurisdiction if it were not for the limiting words, 'except as herein otherwise provided." Lynch v. Bronson, D.C. 1908, 160 F. 139, 140. See also Lowenstein v. Reikes, 2 Cir., 1931, 54 F.2d 481, 485 (dissenting opinion), and the analysis of the interplay of §§ 2 and 23 in Ross, Federal Jurisdiction in Suits by Trustees in Bankruptcy, 20 Iowa L.Rev. 565 (1935), which was written after the Beeler decision. 26 Schumacher v. Beeler, 1934, 293 U.S. 367, 55 S.Ct. 230, 79 L.Ed. 433. See p. 10 and note 24, supra. In Tilton v. Model Taxi Corp., 2 Cir., 1940, 112 F.2d 86, a 77B case, the jurisdiction of the district court to entertain a plenary suit was based upon consent. 27 The Senate report said in regard to the committee's suggested amendments to § 102: 'The proposed amendment amplifies the provision with reference to applicability so as to leave no doubt that the provisions of Chapters I to VII are alone to be deemed applicable, except where inconsistent or in conflict with the provisions of the chapter.' S.Rep.No.1916, 75th Cong., 3d Sess. 6 (1938). The amendments to § 102 were agreed to without comment on the floor of the Senate, and were similarly accepted by the House. 83 Cong.Rec. 8697, 9103, 9107, 9110 (1938). 28 The recommendation was made by Mr. John Gerdes. See Hearings before Subcommittee of the Committee on the Judiciary, U.S. Senate, on H.R. 8046, 75th Cong., 2d Sess. 77 (1938). Mr. Gerdes did not at this time explain the reasons for the suggested suspension of § 23. He stated as follows: 'Chapter X is not intended to be self-sufficient. All provisions of the general bankruptcy act are applicable to proceedings under chapter X, except such provisions are inconsistent with express provisions in chapter X. Some provisions of the general act are clearly inconsistent with the corporate reorganization provisions and are therefore inapplicable. Other provisions are clearly applicable. However, there are certain sections which by their nature permit of doubt as to whether or not they are applicable. Section 64 of the general bankruptcy act, for example, provides for a fixed priority in the payment of claims. This section deals solely with unsecured claims, only unsecured claims being affected by bankruptcy. To apply it in corporate reorganizations—where secured as well as unsecured claims are dealt with—would cause great confusion. To make it clear that section 64 does not apply, we propose this amendment which expressly provides that 64 shall not be applicable to chapter X. The priorities under chapter X would therefore be those used in equity receiverships. That is the present practice under 77B, which expressly provides that section 64 shall not be applicable. When we adopt the same provision here we merely adopt the practice which is already in existence under section 77B. 'In this enumeration of sections and subsections which are not applicable, we include only those as to which there may be reasonable doubt. The sections which we enumerate are 23, 57(h), 57(n), 64, and 70(f). We propose that section 102 be amended to provide that these sections and subsections shall not be applicable to proceedings under chapter X.' A representative of the Association of the Bar of the City of New York also listed § 23 among those sections which 'have no applicability to a reorganization procedure.' Id. at 37. And the spokesman fr the Philadelphia Court Plan Committee suggested amending § 23 to give ordinary bankruptcy courts more effective powers to deal with fraudulently transferred or concealed assets. Id. at 26. 29 White v. Ewing, 1895, 159 U.S. 36, 15 S.Ct. 1018, 40 L.Ed. 67; see Riehle v. Margolies, 1929, 279 U.S. 218, 223, 49 S.Ct. 310, 312, 73 L.Ed. 669. 30 Finletter, Principles of Corporate Reorganization 185—87 (1937). 31 2 Gerdes, Corporate Reorganizations 1465 (1936). The courts had not been squarely faced with the problem at the time Congress was considering the 1938 revision of the Bankruptcy Act. Matter of United Sportwear Co., 28 Am.B.R. (N.S.) 456 (1935), had suggested that § 23 was applicable, while the contrary intimation is evident in Thomas v. Winslow, D.C.1935, 11 F.Supp. 839. See also Note, 49 Harv.L.Rev. 797 (1936). 32 § 156. The requirement of a disinterested trustee was one of the major substantive additions which Chapter X made to § 77B. S.Rep.No.1916, 75th Cong., 1st Sess. 19 (1938). 33 §§ 156 and 158. 34 The important defects of 77B reorganizations and the remedy provided in Chapter X are analyzed in S.Rep.No.2084, 75th Cong., 3d Sess. 1—3 (1938). 35 §§ 167(6) and 169. 36 Section 167 in part provides: 'The trustee upon his appointment and qualification— '(1) shall, if the judge shall so direct, forthwith investigate the acts, conduct, property, liabilities, and financial condition of the debtor, the operation of its business and the desirability of the continuance thereof, and any other matter relevant to the proceedings or to the formulation of a plan, and report thereon to the judge; '(2) may, if the judge shall so direct, examine the directors and officers of the debtor and any other witnesses concerning the foregoing matters or any of them; '(3) shall report to the judge any facts ascertained by him pertaining to fraud, misconduct, mismanagement and irregularities, and to any causes of action available to the estate.' 37 S.Rep.No.1916, 75th Cong., 3d Sess. 29 (1938). 38 Ibid. 39 'These functions of the trustee appointed in the larger cases are difficult to overemphasize * * *. Investors must be afforded a 'focal point' for reorganization.' H.Rep.No.1409, 75th Cong., 1st Sess. 43 (1937). 40 'The bankruptcy act of 1898, in respect to the matters now under consideration, was a radical departure from the act of 1867, in the evident purpose of Congress to limit the jurisdiction of the United States courts in respect to controversies which did not come simply within the jurisdiction of the Federal courts as bankruptcy courts, and to preserve, to a greater extent than the former act, the jurisdiction of the state courts over actions which were not distinctly matters and proceedings in bankruptcy.' Bush v. Elliott, 1906, 202 U.S. 477, 479, 480, 26 S.Ct. 668, 670, 50 L.Ed. 1114. And see pp. 6 and 7, notes 14—15, supra. 41 Section 1(10) defines the courts of bankruptcy as follows: "Courts of bankruptcy' shall include the district courts of the United States and of the Territories and possessions to which this Act is or may hereafter be applicable, and the District Court of the United States for the District of Columbia'; Babbitt v. Dutcher, 1910, 216 U.S. 102, 30 S.Ct. 372, 54 L.Ed. 402, 17 Ann.Cas. 969. And see § 2, sub. a(20) of the Bankruptcy Act. 42 Our conclusion is not changed by the language of § 23, sub. a, which as drawn in 1898, 30 Stat. 544, 552, was designed to grant a limited jurisdiction to circuit courts over 'controversies at law and in equity,' as distinguished from proceedings in bankruptcy,' and which seems only to have recognized the rule existing under the 1867 Act that certain bankruptcy matters were the exclusive concern of the bankruptcy court. If 'proceedings' as used in § 23, sub. a denoted those instances in which summary jurisdiction was proper, to find that 'proceedings' in § 2 has no such precise meaning simply exemplifies the variety of ways in which 'proceedings' has been employed in the bankruptcy statute. Section 11, sub. e authorizes trustees to institute 'proceedings in behalf of the estate upon any claim' and refers to 'any proceeding, judicial or otherwise.' And § 60, sub. b, 67, sub. e and 70, sub. e speak of 'proceedings' in connection with plenary. In Chapter X itself, §§ 101 and 102 refer to 'proceedings under this chapter.' This term must extend to plenary suits, for otherwise § 23, which deals only with plenary suits, would not be suspended at all. Significant too is that 'bankruptcy proceedings' in § 2 was in 1938 changed to 'proceedings under this Act' in order that the jurisdiction granted by § 2 would extend to 'proceedings' under the new debtor relief chapters, including Chapter X. 43 6 Collier on Bankruptcy § 673 (14th ed. 1947). 44 Section 115 provides: 'Upon the approval of a petition, the court shall have any may, in addition to the jurisdiction, powers, and duties hereinabove and elsewhere in this chapter conferred and imposed upon it, exercise all the powers, not inconsistent with the provision of this chapter, which a court of the United States would have if it had appointed a receiver in equity of the property of the debtor on the ground of insolvency or inability to meet its debts as they mature.' 45 The similar 'powers' provision in § 77B has been viewed as non-jurisdictional. In re Standard Gas & Electric Co., 3 Cir., 1941, 119 F.2d 658, 662; see In re Prima Co., 7 Cir., 1938, 98 F.2d 952, 958. These cases were decided after the passage of the Chandler Act and considered § 23 fully applicable in pending 77B proceedings. In Tilton v. Model Taxi Corp., 2 Cir., 1940, 112 F.2d 86, § 23 was considered applicable in § 77B proceedings so as to permit jurisdiction of the district court to be based upon a defendant's consent. And see Thompson v. Terminal Shares, 8 Cir., 1939, 104 F.2d 1, for a treatment of a similar provision contained in § 77. On the other hand, § 115 has been interpreted as jurisdictional. In re Cuyahoga Finance Co., 6 Cir., 1943, 136 F.2d 18; see Warder v. Brady, 4 Cir., 1940, 115 F.2d 89, 93, 94. Other courts have thought the suspension of § 23 in Chapter X cases would give the reorganization court jurisdiction to hear plenary suits. See Clarke v. Fitch, CCH Bankr.Law Ser. 53,805 (1942); Tilton v. Model Taxi Corp., supra, 112 F.2d at page 88. 46 It has been so held. In re Standard Gas & Electric Co., 3 Cir., 1941, 119 F.2d 658; Bovay v. H. M. Byllesby & Co., 5 Cir., 1937, 88 F.2d 990; United States v. Tacoma Oriental S.S. Co., 9 Cir., 1936, 86 F.2d 363; Clarke v. Fitch, CCH Bankr.Law Ser. 53,805 (1942). 47 The Chapter X cases cited in note 45, supra, did not reach the question of whether courts other than the primary court would have jurisdiction to hear plenary suits where the latter had jurisdiction of such a suit but could not exercise it because of personal service or venue difficulties. Nor did Mr. Gerdes, who construed the suspension of § 23 as establishing, by way of § 115, the jurisdiction of the reorganization court to hear plenary suits. Gerdes, Corporate Reorganizations: Changes Effected by Chapter X of the Bankruptcy Act, 52 Harv.L.Rev. 1, 21 (1938). But it was his opinion even under § 77B, where the applicability of § 23 was left in doubt, that all reorganization courts, not just the domiciliary court, had jurisdiction to hear plenary suits brought by the trustee, even though the usual grounds for federal jurisdiction were lacking. 2 Gerdes, Corporate Reorganizations 1480, 1513—14, 1525—26 (1936). 1 In view of his extensive commercial experience on matters of bankruptcy, any observation by Mr. JusticeBrandeis c arries great weight. But neither in Kelley v. Gill, 245 U.S. 116, 38 S.Ct. 38, 62 L.Ed. 185, nor elsewhere, did he state that § 2 of the Bankruptcy Act was a grant of plenary jurisdiction to all the courts and that § 23 merely operated as a curtailment of such grant. What is significant is that when, in Schumacher v. Beeler, supra, upon a full dress consideration of the problem, a contrary analysis was made, Mr. Justice Brandeis joined in it. In another bankruptcy case, this Court said: 'Only compelling language in the statute itself would warrant the rejection of a construction so long and so generally accepted, especially where overturning the established practice would have such far reaching consequences as in the present instance.' Maynard v. Elliott, 283 U.S. 273, 277, 51 S.Ct. 390, 391, 75 L.Ed. 1028. 2 The Act of 1938 substituted 'proceedings under this Act.' 3 Note that with regard to the exceptions to s23 Congress deemed it necessary to confer jurisdiction on the State courts explicitly. See §§ 60, sub. b, 67, sub. e, and 70, sub. e (3). 4 If the provisions rendering § 23 inapplicable to Chapter X proceedings also withdrew jurisdiction by consent, it is not an important matter. In resolving what is at best a jurisdictional ambiguity a result which closes the doors of the federal courts to consenting parties is of minor consequence compared with opening wide the door to a jurisdiction theretofore barred to the federal courts, when Congress manifested no consciousness of such a new grant of jurisdiction. 5 See hearings before a subcommittee of the Senate Committee on the Judiciary, on H.R. 8046, 75th Cong., 2d Sess., p. 77: 'Chapter X is not intended to be self-sufficient. All provisions of the general bankruptcy act are applicable to proceedings under chapter X, except such provisions are inconsistent with express provisions in chapter X. Some provisions of the general act are clearly inconsistent with the corporate reorganization provisions and are therefore inapplicable. Other provisions are clearly applicable. However, there are certain sections which by their nature permit of doubt as to whether or not they are applicable. Section 64 of the general bankruptcy act, for example, provides for a fixed priority in the payment of claims. This section deals solely with unsecured claims, only unsecured claims being affected by bankruptcy. To apply it in corporate reorganizations—where secured as well as unsecured claims are dealt with—would cause great confusion. To make it clear that section 64 does not apply, we propose this amendment which expressly provides that 64 shall not be applicable to chapter X. The priorities under chapter X would therefore be those used in equity receiverships. That is the present practice under 77B, which expressly provides that section 64 shall not be applicable. When we adopt the same provision here we merely adopt the practice which is already in existence under section 77B. 'In this enumeration of sections and subsections which are not applicable, we include only those as to which there may be reasonable doubt. The sections which we are 23, 57(h), 57(n), 64, and 70(f). We propose that section 102 be amended to provide that these sections and subsections shall not be applicable to proceedings under chapter X.' Another amendment, proposed to the Committee by Mr. Heuston, representing the Special Committee on Bankruptcy of the Association of the Bar of the City of New York, would have made inapplicable to Chapter X some thirty sections of the Act, among them § 23. 'The proposed amendment excludes from a reorganization procedure all sections now epressly ex cluded by § 77B, subdivision (k), as well as many additional sections which have no applicability to a reorganization procedure.' The statement makes no reference to plenary suits. 'The sections excluded by the proposed amendment, include those which would permit ancillary receiverships, the appointment of receivers before the approval of the petition * * * the bankruptcy provisions relating to priorities, etc.' Hearings on H.R. 8046, before a subcommittee of the Senate Judiciary Committee, 75th Cong., 2d Sess., p. 37. 6 The discussion in bankruptcy literature of the effect of the provision eliminating § 23 is not only meager but ambiguous. Conflicting arguments can be drawn by giving variant meanings to language susceptible of them, but this only serves to indicate that on such tenuous materials ought not to be based a reversal of jurisdictional policy of far-reaching import. It is worthy of note that Mr. Gerdes in his article cites as the effect of the elimination of § 23 only the clarification of the jurisdiction of the reorganization court itself over plenary suits. He does not note any expansion of the jurisdiction of the other district courts although, under § 77B, when § 23 was not made expressly inapplicable, it had been his view that other district courts would have plenary jurisdiction as ancillary to the receivership jurisdiction of the reorganization court. See 2 Gerdes, Corporate Reorganization, 1480, 1513—14. 7 If the Court works under too much pressure, because of the excessive volume of its business, the process of study and reflection indispensable for wise judgment is bound to suffer. Before he became its head, but speaking from close acquaintance with the work of the Court, Chief Justice Taft gave warning that if this Court's business 'is to increase with the growth of the country, it will be swamped with its burden, the work which it does will, because of haste, not be of the high quality that it ought to have. . . .' Taft, Attacks on the Courts and Legal Procedure (1916) 5 Ky.L.J. No. 1, p. 18. As is well known, it was largely through the leadership of Chief Justice Taft that the Judiciary Act of February 13, 1925, 43 Stat. 936, was passed to enable the Court to keep its business within manageable limits by cutting off the flow of litigation at its various sources. The total number of petitions for certiorari is the most significant index of the Court's business. In the 1927 Term, the first Term during which the influence of the Act of 1925 was fully operative, the total number of such petitions was 587. In the 1946 Term, through June 9, 1947, 1,144 such petitions were considered. Since most of the petitions come from the lower federal courts, any enlargement of their jurisdiction is inevitably reflected in attempts to review those courts here. If it be suggested that the volume of business that will flow from the new head of jurisdiction established by this decision is in itself not likely to be very heavy, it is pertinent to say that it is true of the Court's business also that many a mickle makes a muckle.
78
331 U.S. 694 67 S.Ct. 1477 91 L.Ed. 1750 McWILLIAMSv.COMMISSIONER OF INTERNAL REVENUE. McWILLIAMS' ESTATE et al. v. SAME. McWILLIAMS v. SAME. Nos. 945 to 947. Argued May 8, 1947. Decided June 16, 1947. Mr. John A. Hadden, of Cleveland, Ohio, for petitioners. Mr. Arnold Raum, of Washington, D.C., for respondent. Mr. Chief Justice VINSON delivered the opinion of the Court. 1 The facts of these cases are not in dispute. John P. McWilliams, petitioner in No. 945, had for a number of years managed the large independent estate of his wife, petitioner in No. 947, as well as his own. On several occasins in 1940 and 1941 he ordered his broker to sell certain stock for the account of one of the two, and to buy the same number of shares of the same stock for the other, at as nearly the same price as possible. He told the broker that his purpose was to establish tax losses. On each occasion the sale and purchase were promptly negotiated through the Stock Exchange, and the identity of the persons buying from the selling spouse and of the persons selling to the buying spouse was never known. Invariably, however, the buying spouse received stock certificates different from those which the other had sold. Petitioners filed separate income tax returns for these years, and claimed the losses which he or she sustained on the sales as deductions from gross income. 2 The Commissioner disallowed these deductions on the authority of § 24(b) of the Internal Revenue Code, 26 U.S.C.A. Int.Rev.Code, § 24(b),1 which prohibits deductions for losses from 'sales or exchanges of property, directly or indirectly * * * between members of a family,' and between certain other closely related individuals and corporations. 3 On the taxpayers' applications to the Tax Court, it held § 24(b) inapplicable, following its own decision in Ickelheimer v. Commissioner,2 and expunged the Commissioner's deficiency assessments.3 The Circuit Court of Appeals reversed the Tax Court4 and we granted certiorari5 because of a conflict between circuits6 and the importance of the question involved. 4 Petitioners contend that Congress could not have intended to disallow losses on transactions like those described aove, which , having been made through a public market, were undoubtedly bona fide sales, both in the sense that title to property was actually transferred, and also in the sense that a fair consideration was paid in exchange. They contend that the disallowance of such losses would amount, pro tanto, to treating husband and wife as a single individual for tax purposes. 5 In support of this contention, they call our attention to the pre-1934 rule, which applied to all sales regardless of the relationship of seller and buyer, and made the deductibility of the resultant loss turn on the 'good faith' of the sale, i.e., whether the seller actually parted with title and control.7 They point out that in the case of the usual intra-family sale, the evidence material to this issue was peculiarly within the knowledge and even the control of the taxpayer and those amenable to his wishes, and inaccessible to the Government.8 They maintain that the only purpose of the provisions of the 1934 and 1937 Revenue Acts—the forerunners of § 24(b)9—was to overcome these evidentiary difficulties by disallowing losses on such sales irrespective of good faith. It seems to be petitioners' belief that the evidentiary difficulties so contemplated were only those relating to proof of the parties' observance of the formalities of a sale and of the fairness of the price, and consequently that the legislative remedy applied only to sales made immediately from one member of a family to another, or mediately through a controlled intermediary. 6 We are not persuaded that Congress had so limited an appreciation of this type of tax avoidance problem. Even assuming that the problem was thought to arise solely out of the taxpayer's inherent advantage in a contest concerning the good or bad faith of an intra-family sale, deception could obviously be practiced by a buying spouse's agreement or tacit readiness to hold the property sold at the disposal of a selling spouse, rather more easily than by a pretense of a sale where none actually occurred, or by an unfair price. The difficulty of determining the finality of an intrafamily transfer was one with which the courts wrestled under the pre-1934 law,10 and which Congress undoubtedly meant to overcome by enacting the provisions of § 24(b).11 7 It is clear, however, that this difficulty is one which arises out of the close relationship of the parties, and would be met whenever, by prearrangement, one spouse sells and another buys the same property at a common price regardless of the mechanics of the transaction. Indeed, if the property is fungible, the possibility that a sale and purchase may be rendered nugatory by the buying spouse's agreement to hold for the benefit of the selling spouse, and the difficulty of proving that fact against the taxpayer, are equally great when the units of the property which the one buys are not the identical units which the other sells. 8 Securities transactions have been the most common vehicle for the creation of intra-family losses. Even if we should accept petitioners' prmise that the only purpose of § 24(b) was to meet an evidentiary problem, we could agree that Congress did not mean to reach the transactions in this case only if we thought it completely indifferent to the effectuality of its solution. 9 Moreover, we think the evidentiary problem was not the only one which Congress intended to meet. Section 24(b) states an absolute prohibition—not a presumption—against the allowance of losses on any sales between the members of certain designated groups. The one common characteristic of these groups is that their members, although distinct legal entities, generally have a nearidentity of economic interest.12 It is a fair inference that even legally genuine intra-group transfers were not thought to result, usually, in economically genuine realizations of loss, and accordingly that Congress did not deem them to be appropriate occasions for the allowance of deductions. 10 The pertinent legislative history lends support to this inference. The Congressional Committees, in reporting the provisions enacted in 1934, merely stated that 'the practice of creating losses through transactions between members of a family and close corporations has been frequently utilized for avoiding the income tax,' and that these provisions were proposed to 'deny losses to be taken in the case of (such) sales' and 'to close this loophole of tax avoidance.'13 Similar language was used in reporting the 1937 provisions.14 Chairman Doughton of the Ways and Means Committee, in explaining the 1937 provisions to the House, spoke of 'the artificial taking and establishment of losses where property was shuffled black and forth between various legal entities owned by the same persons or person,' and stated that 'these transactions seem to occur at moments remarkably opportune to the real party in interest in reducing his tax liability but, at the same time allowing him to keep substantial control of the assets being traded or exchanged.'15 11 We conclude that the purpose of § 24[b] was to put an end to the right of taxpayers to choose, by intra-family transfers and other designated devices, their own time for realizing tax losses on investments which, for most practical purposes, are continued uninterrupted. 12 We are clear as to this purpose, too, that its effectuation obviously had to be made independent of the manner in which an intra-group transfer was accomplished. Congress, with such purpose in mind, could not have intended to include within the scope of § 24(b) only simple transfers made directly or through a dummy, or to exclude transfers of securities effected through the medium of the Stock Exchange, unless it wanted to leave a loophole almost as large as the one it had set out to close. 13 Petitioners suggest that Congress, if it truly intended to disallow losses on intrafamily transactions through the market, would probably have done so by an amendment to the wash sales provisions,16 making them applicable where the seller and buyer were members of the same family, as well as where they were one and the same individual. This extension of the wash sales provisions, however, would bar only one particular means of accomplishing the evil at which § 24(b) was aimed, and the necessity for a comprehensive remedy would have remained. 14 Nor can we agree that Congress' omission from § 24[b] of any prescribed time interval, comparable in function to that in the wash sales provisions, indicates that § 24(b) was not intended to apply to intra-family transfers through the Exchange. Petitioners' argument is predicated on the difficulty which courts may have in determining whether the elapse of certain periods of time between one spouse's sale and the other's purchase of like securities on the Exchange is of great enough importance in itself to break the continuity of the investment and make § 24(b) inapplicable. 15 Precisely the same difficulty may arise, however, in the case of an intra-family transfer through an individual intermediatry, who, by pre-arrangement, buys from one spouse at the market price and a short time later sells the identical certificates to the other at the price prevailing at the time of sale. The omission of a prescribed time interval negates the applicability of § 24(b) to the former type of transfer no more than it does to the latter. But if we should hold that it negated both, we would have converted the section into a mere trap for the unwary.17 16 Petitioners also urge that, whatever may have been Congress' intent, its designation in § 24(b) of sales 'between' members of a family is not adequate to comprehend the transactions in this case, which consisted only of a sale of stock by one of the petitioners to an unknown stranger, and the purchase of different certificates of stock by the other petitioner, presumably from another stranger. 17 We can understand how this phraseology, if construed literally and out of context, might be thought to mean only direct intrafamily transfers. But petitioners concede that the express statutory reference to sales made 'directly or indirectly' precludes that construction. Moreover, we can discover in this language no implication whatsoever that an indirect intra-family sale of fungibles is outside the statute unless the units sold by one spouse and those bought by the other are identical. Indeed, if we accepted petit ioners' construction of the statute, we think we would be reading into it a crippling exception which is not there. 18 Finally, we must reject petitioners' assertion that the Dobson rule18 controls this case. The Tax Court found the facts as we stated them, and then overruled the Commissioner's determination because it thought that § 24(b) had no application to a taxpayer's sale of securities on the Exchange to an unknown purchaser, regardless of what other circumstances accompanied the sale. We have decide otherwise, and on our construction of the statute, and the conceded facts, the Tax Court could not have reached a result contrary to our own.19 19 Affirmed. 20 Mr. Justice BURTON took no part in the consideration or decision of these cases. 1 The material parts of § 24(b) are as follows: '(b) Losses from sales or exchanges of property. '(1) Losses disallowed. In computing net income no deduction shall in any case be allowed in respect of losses from sales or exchanges of property, directly or indirectly— '(A) Between members of a family, as defined in paragraph (2)(D); '(B) Except in the case of distributions in liquidation, between an individual and a corporation more than 50 per centum in value of the outstanding stock of which is owned, directly or indirectly, by or for such individual; '(C) Except in the case of distributions in liquidation, between two corporations more than 50 per centum in value of the outstanding stock of each of which is owned, directly or indirectly, by or for the same individual, if either one of such corporations, with respect to the taxable year of the corporation preceding the date of the sale or exchange was, under the law applicable to such taxable year, a personal holding company or a foreign personal holding company; '(D) Between a grantor and a fiduciary of any trust; '(E) Between the fiduciary of a trust and the fiduciary of another trust, if the same person is a grantor with respect to each trust; or '(F) Between a fiduciary of a trust and a beneficiary of such trust.' Section 24(b)(2)(D) defines the family of an individual to include 'only his brothers and sisters (whether by the whole or half blood), spouse, ancestors, and lineal descendants; * * *.' 2 45 B.T.A. 478, affirmed, 2 Cir., 132 F.2d 660, 145 A.L.R. 556. 3 5 T.C. 623. 4 6 Cir., 158 F.2d 637. 5 330 U.S. 814, 67 S.Ct. 868, 869. In No. 946, the petition for certiorari of the Estate of Susan P. McWilliams, the deceased mother of John P. McWilliams, was granted at the same time as the petitions in Nos. 945 and 947, and the three cases were consolidated in this Court. As all three present the same material facts and raise precisely the same issues, no further reference will be made to the several cases separately. 6 The decision of the Circuit Court of Appeals for the Second Circuit in Commissioner v. Ickelheimer, supra, note 2, is in conflict on this point with the decision of the Circuit Court of Appeals for the Sixth Circuit in the present case, and also with that of the Circuit Court of Appeals for the Fourth Circuit in Commissioner v. Kohn, 158 F.2d 32. 7 Commissioner v. Hale, 1 Cir., 67 F.2d 561; Zimmerman v. Commissioner, 36 B.T.A. 279, reversed on other grounds, 3 Cir., 100 F.2d 1023; Uihlein v. Commissioner, 30 B.T.A. 399, affirmed 7 Cir., 82 F.2d 944. 8 See H.Rep.No.1546, 75th Cong., 1st Sess., p. 26 (1939—1 Cum.Bull. (Part 2) 704, 722—723). See also cases cited in note 7, supra. 9 The provisions of § 24(b)(1)(A) and (B) of the Internal Revenue Code originated in § 24(a)(6) of the Revenue Act of 1934, 48 Stat. 680, 691. These provisions were reenacted without change as § 24(a)(6) of the Revenue Act of 1936, 49 Stat. 1648, 1662, and the provisions of § 24(b)(1)(C), (D), (E), and (F) of the Code were added by § 301 of the 1937 Act, 50 Stat. 813, 827. 10 Cf. Shoenberg v. Commissioner, 8 Cir., 77 F.2d 446; Cole v. Helburn, D.C., 4 F.Supp. 230; Zimmerman v. Commissioner, supra, note 7. 11 See H.Rep.No.1546, 75th Cong., 1st Sess., p. 26, supra, note 8. 12 See the text of § 24(b)(1), quoted in note 1. 13 H.Rep.No.704, 73d Cong., 2d Sess., p. 23 (1939—1 Cum.Bull. (Part 2) 554, 571); S.Rep.No.558, 73d Cong., 2d Sess., p. 27 (1939 1 Cum.Bull. (Part 2) 586, 607). 14 The type of situations to which these provisions applied was described as being that 'in which due to family relationships or friendly control, artificial losses might be created for tax purposes.' H.Rep.No.1546, 75th Cong., 1st Sess., p. 28 (1939—1 Cum.Bull. (Part 2) 704, 724). 15 81 Cong.Rec. 9019. Representative Hill, chairman of a House subcommittee on the income-tax laws, explained to the House with reference to the 1934 provisions that the Committee had 'provided in this bill that transfers between members of the family for the purposes of creating a loss to be offset against ordinary income shall not be recognized for such deduction purposes.' 78 Cong.Rec. 2662. 16 Sec. 118 of the Internal Revenue Code, 26 U.S.C.A. Int.Rev.Code, § 118, which first appeared in its present form as § 118 of the Revenue Act of 1932, 47 Stat. 169, 208, provides in part as follows: § 118. Loss from wash sales of stock or securities '(a) In the case of any loss claimed to have been sustained from any sale or other disposition of shares of stock or securities where it appears that, with in a period beginning 30 days before the date of such sale or disposition and ending 30 days after such date, the taxpayer has acquired (by purchase or by an exchange upon which the entire amount of gain or loss was recognized by law), or has entered into a contract or option so to acquire, substantially identical stock or securities, then no deduction for the loss shall be allowed under section 23(e)(2); nor shall such deduction be allowed under section 23(f) unless the claim is made by a corporation, a dealer in stocks or securities, and with respect to a transaction made in the ordinary course of its business.' 17 We have noted petitioners' suggestion that a taxpayer is assured, under the wash sales provisions, of the right to deduct the loss incurred on a sale of securities, even though he himself buys similar securities thirty-one days later; and that he should certainly not be precluded by § 24(b) from claiming a similar loss if the taxpayer's spouse, instead of the taxpayer, makes the purchase under the same circumstances. We do not feel impelled to comment on these propositions, however, in a case in which the sale and purchase were practically simultaneous and the net consideration received by one spouse and that paid by the other differed only in the amount of brokers' commissions and excise taxes. 18 Dobson v. Commissioner, 320 U.S. 489, 64 S.Ct. 239, 88 L.Ed. 248. 19 Cf. Trust of Bingham v. Commissioner, 325 U.S. 365, 65 S.Ct. 1232, 89 L.Ed. 1670.
1112
331 U.S. 704 67 S.Ct. 1463 91 L.Ed. 1757 UNITED STATESv.SILK et al. HARRISON v. GREYVAN LINES, Inc. Nos. 312 and 673. Argued March 10, 11, 1947. Decided June 16, 1947. Mr. Robert L. Stern, of Washington, D.C., for petitioner. Ralph F. Glenn, of Topeka, Kan., for respondent Silk. Wilbur E. Benoy, of Columbus, Ohio, for respondent Greyvan Lines. Mr. Justice REED delivered the opinion of the Court. 1 We consider together the above two cases. Both involve suits to recover sums exacted from businesses by the Commissioner of Internal Revenue as employment taxes on employers under the Social Security Act.1 In both instances the taxes were collected on assessments made administratively by the Commissioner because he concluded the persons here involved were employees of the taxpayers. Both cases turn on a determination as to whether the workers involved were employees under that Act or whether they were independent contractors. Writs of certiorari were granted, United States v. Silk, 329 U.S. 702, 67 S.Ct. 111 and Harrison v. Greyvan Lines, 329 U.S. 709, 67 S.Ct. 369, because of the general importance in the collection of social security axes of de ciding what are the applicable standards for the determination of employees under the Act. Varying standards have been applied in the federal courts.2 2 Respondent in No. 312, Albert Silk, doing business as the Albert Silk Coal Co., sued the United States, petitioner, to recover taxes alleged to have been illegally assessed and collected from respondent for the years 1936 through 1939 under the Social Security Act. The taxes were levied on respondent as an employer of certain workmen some of whom were engaged in unloading railway coal cars and the others in making retail deliveries of coal by truck. 3 Respondent sells coal at retail in the city of Topeka, Kansas. His coalyard consists of two buildings, one for an office and the other a gathering place for workers, railroad tracks upon which carloads of coal are delivered by the railroad, and bins for the different types of coal. Respondent pays those who work as unloaders an agreed price per ton to unload coal from the railroad cars. These men come to the yard when and as they please and are assigned a car to unload and a place to put the coal. They furnish their own tools, work when they wish and work for others at will. One of these unloaders testified that he worked as regularly 'as a man has to when he has to eat' but there was also testimony that some of the unloaders were floaters who came to the yard only intermittently. 4 Respondent owns no trucks himself but contracts with workers who own their own trucks to deliver coal at a uniform price per ton. This is paid to the trucker by the respondent out of the price he receives for the coal from the customer. When an order for coal is taken in the company office, a bell is rung which rings in the building used by the truckers. The truckers have voluntarily adopted a call list upon which their names come up in turn, and the top man on the list has an opportunity to deliver the coal ordered. The truckers are not instructed how to do their jobs, but are merely given a ticket telling them where the coal is to be delivered and whether the charge is to be collected or not. Any damage caused by them is paid for by the company. The District Court found that the truckers could and often did refuse to make a delivery without penalty. Further, the court found that the truckers may come and go as they please and frequently did leave the premises without permission. They may and did haul for others when they pleased. They pay all the expenses of operating their trucks, and furnish extra help necessary to the delivery of the coal and all equipment except the yard storage bins. No record is kept of their time. They are paid after each trip, at the end of the day or at the end of the week, as they request. 5 The Collector ruled that the unloaders and truckers were employees of the respondent during the years 1936 through 1939 within the meaning of the Social Security Act and he accordingly assessed additional taxes under Titles VIII and IX ofthe Social Security Act and Subchapters A and C of Chapter 9 of the Internal Revenue Code. Respondent filed a claim for a refund which was denied. He then brought this action. Both the District Court and the Circuit Court of Appeals3 thought that the truckers and unloaders were independent contractors and allowed the recovery. 6 Respondent in No. 673, Greyvan Lines, Inc., a common carrier by motor truck, sued the petitioner, a Collecter of Internal Revenue, to recover employment taxes alleged to have been illegally assessed and collected from it under similar provisions of the Social Security Act involved in Silk's case for the years or parts of years 1937 through the first quarter of 1942. From a holding for the respondent in the District Court petitioner appealed. The Circuit Court of Appeals affirmed. The chief question in this case is whether truckmen who perform the actual service of carrying the goods shipped by the public are employees of the respondent. Both the District Court and the Circuit Court of Appeals4 thought that the truckmen were independent contractors. 7 The respondent operates its trucking business under a permit issued by the Interstate Commerce Commission under the 'grandfather clause' of the Motor Carrier Act 49 U.S.C.A. § 301 et seq. 32 M.C.C. 719, 723. It operates throughout thirty-eight states and parts of Canada, carrying largely household furniture. While its principal office is in Chicago, it maintains agencies to solicit business in many of the larger cities of the areas it serves, from which it contracts to move goods. As early as 1930, before the passage of the Social Security Act, the respondent adopted the system of relations with the truckmen here concerned, which gives rise to the present issue. The system was based on contracts with the truckmen under which the truckmen were required to haul exclusively for the respondent and to furnish their own trucks and all equipment and labor necessary to pick up, handle and deliver shipments, to pay all expenses of operation, to furnish all fire, theft, and collision insurance which the respondent might specify, to pay for all loss or damage to shipments and to indemnify the company for any loss caused it by the acts of the truckmen, their servants and employees, to paint the designation 'Greyvan Lines' on their trucks, to collect all money due the company from shippers or consignees, and to turn in such moneys at the office to which they report after delivering a shipment, to post bonds with the company in the amount of $1,000 and cash deposits of $250 pending final settlement of accounts, to personally drive their trucks at all times or be present on the truck when a competent relief driver was driving (except in emergencies, when a substitute might be employed with the approval of the company), and to follow all rules, regulations, and instructions of the company. All contracts or bills of lading for the shipment of goods were to be between the respondent and the shipper. The company's instructions covered directions to the truckmen as to where and when to load freight. If freight was tendered the truckmen, they were under obligation to notify the company so that it could complete the contract for shipment in its own name. As remuneration, the truckmen were to receive from the company a percentage of the tariff charged by the company varying between 50 and 52% and a bonus up to 3% for satisfactory performance of the service. The contract was terminable at any time by either party. These truckmen were required to take a short course of instruction in the company's methods of doing business before carrying out their contractual obligations to haul. The company maintained a staff of dispatchers who issued orders for the truckmen's movements, although not the routes to be used, and to which the truckmen, at intervals, reported their positions. Cargo insurance was carried by the company. All permits, certificats and fran chises 'necessary to the operation of the vehicle in the service of the company as a motor carrier under any Federal or State Law' were to be obtained at the company's expense. 8 The record shows the following additional undisputed facts, not contained in the findings. A manual of instructions, given by the respondent to the truckmen, and a contract between the company and Local No. 711 of the International Brotherhood of Teamsters, Chauffeurs, Stablemen and Helpers of America were introduced in evidence. It suffices to say that the manual purported to regulate in detail the conduct of the truckmen in the performance of their duties, and that the agreement with the Union provided that any truckman must first be a member of the union, and that grievances would be referred to representatives of the company and the union. A company official testified that the manual was impractical and that no attempt was made to enforce it. We understand the union contract was in effect. The company had some trucks driven by truckmen who were admittedly company employees. Operations by the company under the two systems were carried out in the same manner. The insurance required by the company was carried under a blanket company policy for which the truckmen were charged proportionately. 9 The Social Security Act of 1935 was the result of long consideration by the President and Congress of the evil of the burdens that rest upon large numbers of our people because of the insecurities of modern life, particularly old age and unemployment. It was enacted in an effort to coordinate the forces of government and industry for solving the problems.5 The principal method adopted by Congress to advance its purposes was to provide for periodic payments in the nature of annuities to the elderly and compensation to workers during periods of unemployment. Employment taxes, such as we are here considering, are necessary to produce the revenue for federal participation in the program of alleviation. Employers do not pay taxes on certain groups of employees, such as agricultural or domestic workers but none of these exceptions are applicable to these cases. §§ 811 and 907. Taxes are laid as excises on a percentage of wages paid the nonexempt employees. §§ 804 and 901; I.R.C. §§ 1410, 1600. 'Wages' means all remuneration for the employment that is covered by the Act, cash or otherwise. §§ 811, 907; I.R.C. §§ 1426(a), 1607(b). 'Employment' means 'any service, of whatever nature, performed * * * by an employee for his employer, except * * * agricultural labor et cetera.' §§ 811(b), 907(c); I.R.C. §§ 1426(b), 1607(c). As a corollary to the coverage of employees whose wages are the basis for the employment taxes under the tax sections of the social security legislation, rights to benefit payments under federal old age insurance depend upon the receipt of wages as employees under the same sections. 53 Stat. 1360, §§ 202, 209(a), (b), (g), 205(c), (1), 42 U.S.C.A. §§ 402, 409(a, b, g), 405(c)(1). See Social Security Board v. Nierotko, 327 U.S. 358, 66 S.Ct. 637, 90 L.Ed. 718, 162 A.L.R. 1445. This relationship between the tax sections and the benefit sections emphasizes the underlying purpose of the legislation—the protection of its beneficiaries from some of the hardships of existence. Helvering v. Davis, supra, 301 U.S. at page 640, 57 S.Ct. at page 908, 81 L.Ed. 1307, 109 A.L.R. 1319. No definition of employer or employee applicable to these cases occurs in the Act. See § 907(a) and I.R.C. § 1607(h). Compare, as to carrier employment, I.R.C. § 1532(d), as amended by P.L. 572, 79th Cong., 2d Sess., § 1. Nothing that is helpful in determining the scope of the coverage of the tax sections of the Social Security Act has come to our attention in the legislative history of the passage of the Act or amendments thereto. 10 Since Congress has made clear by its many exemptions, such as, for example, the broad categories of agricultural labor and domestic service, 53 Stat. 1384, 1393, that it was not its purpose to make the Act cover the whole field of service to every business enterprise, the sections in question are to be read with the exemptions in mind. The very specificity of the exemptions, however, and the generality of the employment definitions6 indicates that the terms 'employment' and 'employee,' are to be construed to accomplish the purposes of the legislation. As the federal social security legislation is an attack on recognized evils in our national economy, a constricted interpretation of the phrasing by the courts would not comport with its purpose. Such an interpretation would only make for a continuance, to a considerable degree, of the difficulties for which the remedy was devised and would invite adroit schemes by some employers and employees to avoid the immediate burdens at the expense of the benefits sought by the legislation.7 These considerations have heretofore guided our construction of the Act. Buckstaff Bath House Co. v. McKinley, 308 U.S. 358, 60 S.Ct. 279, 84 L.Ed. 322; Social Security Board v. Nierotko, 327 U.S. 358, 66 S.Ct. 637, 90 L.Ed. 718, 162 A.L.R. 1445. 11 Of course, this does not mean that all who render service to an industry are employees. Compare Metcalf & Eddy v. Mitchell, 269 U.S. 514, 520, 46 S.Ct. 172, 173, 70 L.Ed. 384. Obviously the private contractor who undertakes to build at a fixed price or on cost-plus a new plant on specifications is not an employee of the industry thus served nor are his employees. The distributor who undertakes to market at his own risk the product of another, or the producer who agrees so to manufacture for another ordinarily cannot be said to have the employer-employee relationship. Production and distribution are different segments of business. The purposes of the legislation are not frustrated because the Government collects employment taxes from the distributor instead of the producer or the other way around. 12 The problem of differentiating between employee and an independent contractor or between an agent and an independent contractor has given difficulty through the years before social legislation multiplied its importance. When the matter arose in the administration of the National Labor Relations Act, 29 U.S.C.A. § 151 et seq., we pointed out that the legal standards to fix responsibility for acts of servants, employees or agents had not been reduced to such certainty that it could be said there was 'some simple, uniform and easily applicable test.' The word 'employee,' we said, was not there used as a word of art, and its content in its context was a federal problem to be construed "in the light of the mischief to be corrected and the end to be attained." We concluded that, since that end was the elimination of labor disputes and industrial strife, 'employees' included workers who were such as a matter of economic reality. The aim of the Act was to remedy the inequality of bargaining power in controversies over wages, hours and working condiions. We r ejected the test of the "technical concepts pertinent to an employer's legal responsibility to third persons for the acts of his servants." This is often referred to as power of control, whether exercised or not, over the manner of performing service to the industry. Restatement of the Law, Agency, § 220. We approved the statement of the National Labor Relations Board that "the primary consideration in the determination of the applicability of the statutory definition is whether effectuation of the declared policy and purposes of the Act comprehend securing to the individual the rights guaranteed and protection afforded by the Act." National Labor Relations Board v. Hearst Publications, 322 U.S. 111, 120, 123, 124, 128, 131, 64 S.Ct. 851, 855, 856, 857, 859, 860, 88 L.Ed. 1170. 13 Application of the social security legislation should follow the same rule that we applied to the National Labor Relations Act in the Hearst case. This, of course, does not leave courts free to determine the employer-employee relationship without regard to the provisions of the Act. The taxpayer must be an 'employer' and the man who receives wages an 'employee.' There is no indication that Congress intended to change normal business relationships through which one business organization obtained the services of another to perform a portion of production or distribution. Few businesses are so completely integrated that they can themselves produce the raw material, manufacture and distribute the finished product to the ultimate consumer without assistance from independent contractors. The Social Security Act was drawn with this industrial situation as a part of the surroundings in which it was to be enforced. Where a part of an industrial process is in the hands of independent contractors, they are the ones who should pay the social security taxes. 14 The long-standing regulations of the Treasury and the Federal Security Agency (H. Doc. 595, 79th Cong., 2d Sess.) recognize that independent contractors exist under the Act. The pertinent portions are set out in the margin.8 Certainly the industry's right to control how 'work shall be done' is a factor in the determination of whether the worker is an employee or independent contractor. The Government points out that the regulations were construed by the Commissioner of Internal Revenue to cover the circumstances here presented. This is shown by his additional tax assessments. Other instances of such administrative determinations are called to our attention.9 15 So far as the regulations refer to the effect of contracts, we think their statement of the law cannot be challenged successfully. Contracts, however 'skillfully devised,' Lucas v. Earl, 281 U.S. 111, 115, 50 S.Ct. 241, 74 L.Ed. 731, should not be permitted to shift tax liability as definitely fixed by the statutes.10 16 Probably it is quite impossible to extract from the statute a rule of thumb to define the limits of the employer-employer relationship. The Social Security Agency and the courts will find that degrees of control, opportunities for profit or loss, investment in facilities, permanency of relation and skill required in the claimed independent operation are important for decision. No one is controlling nor is the list complete. These unloaders and truckers and their assistants are from one standpoint an integral part of the businesses of retailing coal or transporting freight. Their energy, care and judgment may conserve their equipment or increase their earnings but Greyvan and Silk are the directors of their businesses. On the other hand, the truckmen hire their own assistants, own their trucks, pay their own expenses, with minor exceptions, and depend upon their own initiative, judgment and energy for a large part of their success. 17 Both lower courts in both cases have determined that these workers are independent contractors. These inferences were drawn by the courts from facts concerning which there is no real dispute. The excerpts from the opinions below show the reasons for their conclusions.11 18 Giving full consideration to the concurrence of the two lower courts in a contrary result, we cannot agree that the unloaders in the Silk case were independent contractors.12 They provided only picks and shovels. They had no opportunity to gain or lose except from the work of their hands and these simple tools. That the unloaders did not work regularly is not significant. They did work in the course of the employer's trade or business. This brings them under the coverage of the Act.13 They are of the group that the Social Security Act was intended to aid. Silk was in a position to exercise all necessary supervision over their simple tasks. Unloaders have often been held to be employees in tort cases.14 19 There are cases, too, where driver-owners of trucks or wagons have been held employees15 in accident suits at tort or under workmen's compensation laws. But we agree with the decisions below in Silk and Greyvan that where the arrangements leave the driver-owners so much responsibility the investment and management as here, they must be held to beindependen t contractors.16 These driver-owners are small businessmen. They own their own trucks. They hire their own helpers. In one instance they haul for a single business, in the other for any customer. The distinction, though important, is not controlling. It is the total situation, including the risk undertaken, the control exercised, the opportunity for profit from sound management, that marks these driver-owners as independent contractors. 20 No. 312, United States v. Silk, is affirmed in part and reversed in part. 21 No. 673, Harrison v. Greyvan Lines, Inc., is affirmed. 22 Mr. Justice BLACK, Mr. Justice DOUGLAS and Mr. Justice MURPHY are of the view that the applicable principles of law, stated by the Court and with which they agree, require reversal of both judgments in their entirety. 23 Mr. Justice RUTLEDGE. 24 I join in the Court's opinion and in the result insofar as the principles stated are applied to the unloaders in the Silk case. But I think a different disposition should be made in application of those principles to the truckers in that case and in the Greyvan case. 25 So far as the truckers are concerned, both are borderline cases.1 That would be true, I think, even if the socalled 'common law control' test were conclusive,2 as the District Court and the Circuit Court of Appeals in each case seem to have regarded it.3 It is even more true under the broader and more factual approach the Court holds should be applied. 26 I agree with the Court's views in adopting this approach and that the balance in close cases should be cast in favor of rather than against coverage, in order to fulfill the statute's broad and beneficent objects. A narrow, constricted construction in doubtful cases only goes, as indeed the opinion recognizes, to defeat the Act's policy and purposes pro tanto. 27 But I do not think it necessary or perhaps in harmony with sound practice, considering the nature of this Court's functions and those of the district courts, for us to undertake drawing the final conclusion generally in these borderline cases. Having declared the applicable principles of law to be applied, our function is sufficiently discharged by seeing to it that they are observed. And when this has been done, drawing the final conclusion, in matters so largely factual as the end result must be in close cases, is more properly the business of the district courts than ours. 28 Here the District Court and the Circuit Courts of Appeals determined the cases largely if not indeed exclusively by applying the so-called 'common law control' test as the criterion. This was clearly wrong, in view of the Court's present ruling. But for its action in drawing the ultimate and largely factual conclusion on that basis, the error would require remanding the causes to the District Courts in order for them to exercise that function in the light of the present decision. 29 I would follow that course, so far as the truckers are concerned. 1 Titles VIII and IX, Social Security Act, 49 Stat. 636 and 639, 42 U.S.C.A. §§ 1001 et seq., 1101 et seq., as repealed in part 53 Stat. 1. See Internal Revenue Code, chap. 9, subchap. A and C, 26 U.S.C.A. Int. Rev. Code, §§ 1400 et seq., 1600 et seq. 2 Texas Co. v. Higgins, 2 Cir., 118 F.2d 636; Jones v. Goodson, 10 Cir., 121 F.2d 176; Deecy Products Co. v. Welch, 1 Cir., 124 F.2d 592, 139 A.L.R. 916; American Oil Co. v. Fly, 5 Cir., 135 F.2d 491, 147 A.L.R. 824; Glenn v. Beard, 6 Cir., 141 F.2d 376; Magruder v. Yellow Cab Co., 4 Cir., 141 F.2d 324, 152 A.L.R. 516; United States v. Mutual Trucking Co., 6 Cir., 141 F.2d 655; Glenn v. Standard Oil Co., 6 Cir., 148 F.2d 51, 53; McGowan v. Lazeroff, 2 Cir., 148 F.2d 512; United States v. Wholesale Oil Co., 10 Cir., 154 F.2d 745; United States v. Vogue, Inc., 4 Cir., 145 F.2d 609, 612; United States v. Aberdeen Aerie, No. 24, 9 Cir., 148 F.2d 655, 658; Grace v. Magruder, App.D.C., 148 F.2d 679, 680—681; Nevins, Inc. v. Rothensies, 3 Cir., 151 F.2d 189. 3 10 Cir., 155 F.2d 356. 4 7 Cir., 156 F.2d 412. 5 Message of the President, January 17, 1935, and Report of the Committee on Economic Security, H.Doc.No.81, 74th Cong., 1st Sess.; S.Rep.No.628, 74th Cong., 1s Sess.; S. Rep.No.734, 76th Cong., 1st Sess.; H.Rep.No.615, 74th Cong., 1st Sess.; H.Rep.No.728, 76th Cong., 1st Sess. Steward Machine Co. v. Davis, 301 U.S. 548, 57 S.Ct. 883, 81 L.Ed. 1279, 109 A.L.R. 1293; Helvering v. Davis, 301 U.S. 619, 57 S.Ct. 904, 81 L.Ed. 1307, 109 A.L.R. 1319. 6 See 53 Stat. 1384, 1393, 26 U.S.C.A. Int.Rev.Code, §§ 1426(b), 1607(c), 'The term 'employment' means any service performed prior to January 1, 1940, which was employment as defined in this section prior to such date, and any service, of whatever nature, performed after December 31, 1939, within the United States by an employee for the person employing him, irrespective of the citizenship or residence of either, except—.' Compare 49 Stat. 639 and 643, 42 U.S.C.A. §§ 1011(b), 1107(b). 7 Nothing to suggest tax avoidance appears in these records. 8 Treasury Regulation 90, promulgated under Title IX of the Social Security Act, Art. 205: 'Generally the relationship exists when the person for whom services are performed has the right to control and direct the individual who performs the services, not only as to the result to be accomplished by the work but also as to the details and means by which that result is accomplished. That is, an employee is subject to the will and control of the employer not only as to what shall be done but how it shall be done. * * * The right to discharge is also an important factor indicating that the person possessing that right is an employer. Other factors characteristic of an employer are the furnishing of tools and the furnishing of a place to work, to the individual who performs the services. In general, if an individual is subject to the control or direction of another merely as to the result to be accomplished by the work and not as to the means and methods for accomplishing the result, he is an independent contractor, not an employee. 'If the relationship of employer and employee exists, the designation or description of the relationship by the parties as anything other than that of employer and employee is immaterial. Thus, if two individuals in fact stand in the relation of employer and employee to each other, it is of no consequence that the employee is designated as a partner, coadventurer, agent, or independent contractor. 'The measurement, mthod, or d esignation of compensation is also immaterial, if the relationship of employer and employee in fact exists. 'Individuals performing services as independent contractors are not employees. Generally, physicians, lawyers, dentists, veterinarians, contractors, subcontractors, public stenographers, auctioneers, and others who follow an independent trade, business, or profession, in which they offer their services to the public, are independent contractors and not employees.' 26 C.F.R. § 400.205. See also Treasury Regulation 91, 26 C.F.R. § 401.3. 9 The citation of these cases does not imply approval or disapproval of the results. The cases do show the construction of the regulation by the agency. United States v. Mutual Trucking Co., 6 Cir., 141 F.2d 655; Jones v. Goodson, 10 Cir., 121 F.2d 176; Magruder v. Yellow Cab Co., 4 Cir., 141 F.2d 324, 152 A.L.R. 516; Texas Co. v. Higgins, 2 Cir., 118 F.2d 636; American Oil Co. v. Fly, 5 Cir., 135 F.2d 491, 147 A.L.R. 824; Glenn v. Standard Oil Co., 6 Cir., 148 F.2d 51. See also note 2. 10 Gregory v. Helvering, 293 U.S. 465, 55 S.Ct. 266, 79 L.Ed. 596, 97 A.L.R. 1355; Griffiths v. Helvering, 308 U.S. 355, 60 S.Ct. 277, 84 L.Ed. 319; Higgins v. Smith, 308 U.S. 473, 60 S.Ct. 355, 84 L.Ed. 406; Helvering v. Clifford, 309 U.S. 331, 60 S.Ct. 554, 84 L.Ed. 788. 11 United States v. Silk, 10 Cir., 155 F.2d 356, 358—359: 'But even while they work for appellee they are not subject to his control as to the method or manner in which they are to do their work. The undisputed evidence is that the only supervision or control ever exercised or that could be exercised over the haulers was to give them the sales ticket if they were willing to take it, and let them deliver the coal. They were free to choose any route in going to or returning. They were not required even to take the coal for delivery. 'We think that the relationship between appellee and the unloaders is not materially different from that between him and the haulers. In response to a question on cross examination, appellee did testify that the unloaders did what his superintendent at the coal yard told them to do, but when considered in the light of all his testimony, all that this answer meant was that they unloaded the car assigned to them into the designated bin. * * * 'The undisputed facts fail to establish such reasonable measure of direction and control over the method and means of performing the services performed by these workrs as is n ecessary to establish a legal relationship of employer and employee between appellee and the workers in question.' Greyvan Lines v. Harrison, 7 Cir., 156 F.2d 412, 414—416. After stating the trial court's finding that the truckmen were not employees, the appellate court noted: 'Appellant contends that in determining these facts the court failed to give effect to important provisions of the contracts which it asserts clearly show the reservation of the right to control over the truckmen and their helpers as to the methods and means of their operations which, it is agreed, furnish the test for determining the relationship here in question. * * *' (Continued on p. 717) It then discussed the manual and concluded: 'While it is true that many provisions of the manual, if strictly enforced, would go far to establish an employer-employee relationship between the Company and its truckmen, we agree with appellee that there was evidence to justify the court's disregarding of it. It was not prepared until April, 1940, although the tax period involved was from November, 1937, through March, 1942, and there was no evidence to show any change or tightening of controls after its adoption and distribution; one driver testified that he was never instructed to follow the rules therein provided; an officer of the Company testified that it had been prepared by a group of three men no longer in their employ, and that it had been impractical and was not adhered to.' After a discussion of the helper problem, this statement appears: '* * * the Company cannot be held liable for employment taxes on the wages of persons over whom it exerts no control, and of whose employment it has no knowledge. And this element of control of the truckmen over their own helpers goes far to prevent the employer-employee relationship from arising between them and the Company. While many factors in this case indicate such control as to give rise to that relationship, we think the most vital one is missing because of the complete control of the truckmen as to how many, if any, and what helpers they make use of in their operations. * * *' 12 Cf. Grace v. Magruder, App.D.C., 148 F.2d 679. 13 I.R.C., chap. 9, subchap. A, § 1426(b): 'The term 'employment' means any service performed * * * by an employee for the person employing him * * * except— '(3) Casual labor not in the course of the employer's trade or business; * * *'. 14 Swift & Co. v. Alston, 48 Ga.App. 649, 173 S.E. 741; Holmes v. Tennessee Coal. Iron & Railroad Co., 49 La.Ann. 1465, 22 So. 403; Muncie Foundry & Machine Co. v. Thompson, 70 Ind.App. 157, 123 N.E. 196; Chicago, R.I. & P.R. Co. v. Bennett, 36 Okl. 358, 128 P. 705, 20 A.L.R. 678; Murray's Case, 130 Me. 181, 154 A. 352, 75 A.L.R. 720; Decatur R. & Light Co. v. Industrial Board, 276 Ill. 472, 114 N.E. 915; Benjamin v. Davidson-Gulfport Fertilizer Co., 169 Miss. 162, 152 So. 839. 15 Western Express Co. v. Smeltzer, 6 Cir., 88 F.2d 94, 112 A.L.R. 74; Industrial Commission v. Bonfils, 78 Colo. 306, 241 P. 735; Coppes Bros. & Zook v. Pontius, 76 Ind.App. 298, 131 N.E. 845; Burruss v. B. M. C. Logging Co., 38 N.M. 254, 31 P.2d 263; Bradley v. Republic Creosoting Co., 281 Mich. 177, 274 N.W. 754; Rouse v. Town of Bird Island, 169 Minn. 367, 211 N.W. 327; Industrial Commission v. Hammond, 77 Colo. 414, 236 P. 1006; Kirk v. Yarmouth Lime Co. and Insurance Co., 137 Me. 73, 15 A.2d 184; Showers v. Lund, 123 Neb. 56, 242 N.W. 258; Burt v. Davis-Wood Lumber Co., 157 La. 111, 102 So. 87; Dunn v. Reeves Coal Yards Co., Inc., 150 Minn. 282, 184 N.W. 1027; Waters v. Pioneer Fuel Co., 52 Minn. 474, 55 N.W. 52, 38 Am.St.Rep. 564; Warner v. Fullerton-Powell Hardwood Lumber Co., 231 Mich. 328, 204 N.W. 107; Frost v. Blue Ridge Timber Corp., 158 Tenn. 18, 11 S.W.2d 860; Lee v. Mark H. Brown Lumber Co., 15 La.App. 294, 131 So. 697. See particularly Singer Manufacturing Co. v. Rahn, 132 U.S. 518, 10 S.Ct. 175, 33 L.Ed. 440. 16 Compare United States v. Mutual Trucking Co., 6 Cir., 141 F.2d 655; Glenn v. Standard Oil Co., 6 Cir., 148 F.2d 51. 1 The opinion of the Circuit Court of Appeals in the Greyvan case stated, after referring to United States v. Mutual Trucking Co., 6 Cir., 141 F.2d 655: 'It is true that the facts there do not present as close a question as in the case at bar.' And see note 3. 2 It is not at all certain that either Silk or Greyvan Lines would not be held liable in tort, under application of the common law test, for injuries negligently inflicted upon persons or property of others by their truckers, respectively, in the course of operating the trucks in connection with their businesses. Indeed this result would seem to be clearly indicated, in the case of Greyvan particularly, in view of the fact that the trucks bore its name, in addition to other factors including a large degree of control exercised over the trucking operations. For federal cases in point see Silent Automatic Sales Corp. v. Stayton, 8 Cir., 45 F.2d 471 (applying Missouri law); Falstaff Brewing Corp. v. Thompson, 8 Cir., 101 F.2d 301 (applying Nebraska law); Young v. Wilky Carrier Corp., D.C., 54 F.Supp. 912, affirmed 3 Cir., 150 F.2d 764 (applying Pennsylvania law). And see for a general collection of state cases, 9 Blashfield, Cyclopedia of Automobile Law and Practice, Perm.Ed., 1941, § 6056. Certainly the question of coverage under the statute, as an employee, should not be determined more narowly than that of employee status for purposes of imposing vicarious liability in tort upon an employer, whether by application of the control test exclusively or of the Court's broader ruling. 3 In the Silk case formal findings of fact and conclusions of law by the District Court do not appear in the record. But a 'Statement by the Court' recites details of the arrangements with the truckers and unloaders in the focus of whether Silk exercised control over them and concludes he did not; hence, there was no employer-employee relation. The opinion of the Circuit Court of Appeals, though recognizing the necessity for liberal construction of the Act, treats the facts found in the same focus of control. The court was influenced by the regulations promulgated under the Act (Reg. 90, Art. 205) and also by the Bureau of Internal Revenue (Reg. 91, Art. 3). The opinion concludes: 'The undisputed facts fail to establish such reasonable measure of direction and control over the method and means of performing the services * * * as is necessary' to create the employer-employee relation. 10 Cir., 155 F.2d 356, 359. In the Greyvan case formal findings and conclusions were filed. The Circuit Court of Appeals, accepting the findings, concluded they did not show 'change or tightening of controls' after the company's adoption of a manual in 1940, although its provisions 'if strictly enforced, would go far to establish an employer-employee relationship * * *.' 7 Cir., 156 F.2d 412, 415. However, it found another factor conclusive: 'While many factors in this case indicate such control as to give rise to that relationship, we think the most vital one is missing because of the complete control of the truckmen as to how many, if any, and what helpers they (may) make use of in their operations.' 7 Cir., 156 F.2d at page 416. Apparently not control of the method of performing the work in general but absence of expressly reserved right of control in a single feature became the criterion used.
1112
331 U.S. 682 67 S.Ct. 1482 91 L.Ed. 1742 INTERSTATE NATURAL GAS CO., Inc.,v.FEDERAL POWER COMMISSION et al. No. 733. Argued May 2, 1947. Decided June 16, 1947. Rehearing Denied Oct. 13, 1947. See 68 S.Ct. 30. Mr. William A. Dougherty, of New York City, for petitioner. Mr. James D. Smullen, of Austin, Tex., for State of Texas et al., amici curiae, by Special leave of Court. Mr. Charles E. McGee, of Washington, D.C., for respondent Federal Power Commission. Mr. Chief Justice VINSON delivered the opinion of the Court. 1 This case originated in proceedings before the Federal Power Commission initiated pursuant to § 5(a) of the Natural Gas Act of 1938.1 After overruling objections to its jurisdiction, the Commission entered an order requiring the petitioner to effect substantial rate reductions in certain of its sales of natural gas and to file new schedules of rates and charges.2 Petitioner in seeking review of the order in the Circuit Court of Appeals, denied the jurisdiction of the Commission to set rates for the sales in issue in this case and asserted that the rates so established were confiscatory. That Court, one judge dissenting, denied the petition for review.3 We granted certiorari limited to the question of the Commission's jurisdiction. 300 U.S. 852, 67 S.Ct. 674. 2 Petitioner owns and operates 110 natural gas wells and owns or controls over 56,000 acres in the Monroe field of northern Louisiana. Petitioner's main pipe line transports gas southward from the Monroe field through a part of Mississippi and back into Louisiana where at Baton Rouge sales are made to various distributing companies and industrial consumers. Petitioner concedes that with respect to these operations it is a natural gas company within the meaning of § 2(6)4 of the Act and that the Commission has jurisdiction to regulate the rates of sales connected therewith. 3 The issue of this case involves the jurisdiction of the Federal Power Commission to regulate sales made in the field by petitioner to three pipe-line companies each of which transports the gas so purchased to markets in States other than Louisiana.5 Gas produced from petitioner's wells flows into petitioner's system of field pipe lines, moving first into branch lines, then into trunk lines, and finally, into the main trunk lines from which delivery is made to the three purchasing companies. During the course of this movement petitioner purchases gas from other producers in the field which gas is introduced into petitioner's system at designated points and is there commingled with the gas moving from petitioner's own wells. By far the larger part of the gas o purchase d by petitioner has been gathered from various wells of the selling companies before delivery to petitioner is made.6 The gas moves through petitioner's system at well pressure. Shortly after the sales in question are completed, the gas is directed through the compressor stations of the purchasing companies and is there subjected to increased pressure in order that it may be moved to markets as far distant as Illinois. The entire movement of the gas from the wells to the purchasing companies through the compressor pumps and across the state lines is a continuous process without interruption for storage, processing or for any other purpose.7 All the gas sold in these transactions is destined for ultimate public consumption in States other than Louisiana. 4 It appears that petitioner supplies only a part of the gas purchased by the three pipeline companies in the Monroe field.8 Counsel for petitioner conceded before the Commission that the prices charged the three pipe-line companies were, by agreement, identical with those being charged by other producers in the field. The Commission found that petitioner was an affiliate of one of the three purchasing companies. It was the conclusion of the Commission that the rates charged by petitioner in these sales were 'unjust, unreasonable and unlawful' and ordered rate reductions amounting to $596,320 per year as applied to the volume of gas sold in the test year of 1941. 5 Petitioner has at no time contended that regulation of its sales to the three purchasing companies is beyond the constitutional powers of Congress. Petitioner has vigorously asserted, however, that Congress did not exercise its full powers in the National Gas Act and that in § 1(b) of the Act the jurisdiction of the Federal Power Commission is so limited as to preclude valid regulation of the sales by that agency. Section 1(b) provides: 6 'The provisions of this Act shall apply to the transportation of natural gas in interstate commerce, to the sale in interstate commerce of natural gas for resale for ultimate public consumption for domestic, commercial, industrial, or any other use, and to natural-gas companies engaged in such transportation or sale, but shall not apply to any other transportation or sale of natural gas or to the local distribution of natural gas or to the facilities used for such distribution or to the production or gathering of natural gas.' 7 It is not denied that the transactions in question were sales of natural gas for resale for ultimate public consumption. 8 Petitioner has raised two issues: First, it is contended, the sales are not 'in interstate commerce.' Second, the sales are a part of 'production or gathering' and hence not within the Commission's power of regulation. 9 We have no doubt that the sales are in interstate commerce. Ideed, peti tioner did not contest that position before the Commission, but, so far as the record reveals, raised the issue for the first time in its petition for rehearing in the Circuit Court of Appeals.9 The Federal Power Commission found that the gas sold to the three pipe line companies moves '* * * in a constant flow from the mouths of the wells from which it is produced through pipe lines belonging to Interstate to the compressor station of the respective purchaser, and thence through said compressor stations into the pipe line of said respective purchaser and thus into and through states other than Louisiana * * *, all without interruption, and said gas is so destined from the moment of its production.' The Commission further found that 'The gas transported and sold by Interstate to these three pipe line Companies continues its flow in interstate commerce and, as an established course of business well known to Interstate, is destined for resale for ultimate public consumption in * * * markets outside Louisiana.' 10 Under the circumstances described by the Commission, it is clear that the sales in question were quite as much in interstate commerce as they would have been had the pipes of the petitioner crossed the state line before reaching the points of sale.10 Thus in Public Utilities Commission of Rhode Island v. Attleboro Steam & Electric Co., 1927, 273 U.S. 83, 47 S.Ct. 294, 71 L.Ed. 549, a sale of electrical energy at the state line was held to be in interstate commerce. Commenting on that case, this Court in Jersey Central Power & Light Co. v. Federal Power Commission, 1943, 319 U.S. 61, 69, 63 S.Ct. 953, 957, 87 L.Ed. 1258 stated: 'We see no distinction between a sale at or before reaching the state line.' There is nothing in the terms of the Act or in its legislative history to indicate that Congress intended that a more restricted meaning be attributed to the phrase 'in interstate commerce' than that which theretofore had been given to it in the opinions of this Court.11 Section 2(7) of the Act defines 'interstate commerce' as '* * * commerce between any point in a State and any point outside thereof, or between points within the same State but through any place outside thereof, * * *.' Clearly the sales in question were a part of commerce being carried on between points in Louisiana and points in other States. There is nothing in that language to suggest that Congress intended that sales consummated before the gas crosses a state line should not be regarded as being 'in' such commerce. 11 Nor are we impressed with the suggestion that the interstate movement of the gas should be regarded as beginning when the gas, theretofore moving through petitioner's pipe line system at well pressure, is subjected to increased pressure in the compressor stations of the purchasing companies in order that the gas may be moved to the distant markets. Long before the gas reaches the compressor pumps it has been committed to its interstate journey which follows without interruption or deviation. Under such circumstances, the increase of pressure in the compressor stations must be regarded as merely an incident in the interstate commerce rather than as its origin.12 12 The Company contends, however, that regardless of whether the sales in question are in interstate commerce, those transactions fall within the clause of § 1(b) specifically excepting from the Commission's jurisdiction regulation of '* * * the production or gathering of natural gas.' In evaluating that contention we should not lose sight of the objectives sought to be accomplished by Congress in passing the Natural Gas Act. 13 In a series of decisions announced prior to the passage of the Act, this Court had held that although Congress had not acted, the regulation of wholesale rates of gas and electrical energy moving in interstate commerce is beyond the constitutional powers of the States.13 Petitioner, relying in part upon the principles established by those cases, has successfully avoided regulation by the Louisiana Public Service Commission.14 As was stated in the House Committee report, the 'basic purpose' of Congress in passing the Natural Gas Act was 'to occupy this field in which the Supreme Court has held that the States may not act.'15 In denying the Federal Power Commission jurisdiction to regulate the production or gathering of natural gas, it was not the purpose of Congress to free companies such as petitioner from effective public control. The purpose of that restriction was, rather to preserve in the States powers of regulation in areas in which the States are constitutionally competent to act. Thus the House Committee Report states: 'The bill takes no authority from State Commissions, and is so drawn as to complement and in no manner usurp State regulatory authority. * * *'16 Clearly, among the powers thus reserved to the States is the power to regulate the physical production and gathering of natural gas in the interests of conservation or of any other consideration of legitimate local concern.17 It was the intention of Congress to give the States full freedom in these matters. Thus, where sales, though technically consummated in interstate commerce, are made during the course of production and gathering and are so closely connected with the local incidents of that process as to render rate regulation by the Federal Power Commission inconsistent or a substantial interference with the exercise by the State of its regulatory functions, the jurisdiction of the Federal Power Commission does not attach.18 But such conflict must be clearly shown. Exceptions to the primary grant of jurisdiction in the section are to be strictly construed. It is not sufficient to defeat the Commission's jurisdiction over sales for resale in interstate commerce to assert that in the exercise of the power of rate regulation in such cases, local interests may in some degree be affected.19 14 There is nothing in the record to indicate that the regulation in question is in any way inconsistent with the exercise by Louisiana of the powers over production and gathering of natural gas reserved to it by Congress in § 1(b) of the Act. The State in a series of enactments has made elaborate provision for the conservation of its natural gas resources and has established various rules and regulations relating to the production and gathering process.20 Most of those provisions presumably, are applicable to petitioner's field operations.21 The record is devoid of any suggestion that Louisiana has ever opposed the jurisdiction of the Federal Power Commission in this case or has ever urged that federal regulation of the sales in question would interfere with the exercise by the State of its regulatory functions.22 We do not suggest that the jurisdiction of the Commission in any case is to be determined by the resistance or lack of resistance on the part of the State to federal regulation. But in evaluating the Company's contention that the State's powers have been invaded, we regard it a matter of some significance that although the State has freely exercised its regulatory powers over the production and gathering of natural gas, there is no evidence of any conflict, present or threatened, in the performing of those functions by the State with the exercise of the jurisdiction of the Federal Power Commission in this case. 15 It is not contended that the Commission is precluded from regulating the sales in question by reason of the exception from the Commission's jurisdiction relating to the production of natural gas. Petitioner asserts, however, that the sales to the three pipe line companies are a part of the gathering process and consequently not within the Commission's power of regulation. This basic contention has given rise to a great many subsidiary questions such as whether the sales were made from petitioner's 'gathering' lines or from petitioner's 'transmission' lines and whether the gathering process continued to the points of sale or was, as the Commission found, completed at some point prior to surrender of custody and passage of title. We have found it unnecessary to resolve those issues. The gas moved by petitioner to the points of sale consisted of gas produced from petitioner's wells commingled with that produced and gathered by other companies and introduced into petitioner's pipe line system during the course of the movement. By the time the sales are consummated, nothing further in thegathering process remains to be done. We have held that these sales are in interstate commerce. It cannot be doubted that their regulation is predominately a matter of national, as contrasted to local concern. All the gas sold in these transactions is destined for consumption in States other than Louisiana. Unreasonable charges exacted at this stage of the interstate movement become perpetuated in large part in fixed items of costs which must be covered by rates charged subsequent purchasers of the gas including the ultimate consumer.23 It was to avoid such situations that the Natural Gas Act was passed. 16 For reasons stated above we have concluded that the Federal Power Commission in this case has not exceeded the jurisdiction conferred upon it by Congress in § 1(b) of the Natural Gas Act. 17 Affirmed. 1 52 Stat. 821, 56 Stat. 83, 15 U.S.C. § 717 et seq., 15 U.S.C.A. § 717 et seq. 2 3 F.P.C. 416. 3 5 Cir., 1946, 156 F.2d 949. 4 Section 2(6) provides: "Natural-gas company' means a person engaged in the transportation of natural gas in interstate commerce, or the sale in interstate commerce of such gas for resale.' 5 The three companies include the Mississippi River Fuel Corporation, Southern Natural Gas Company, and the United Gas Pipe Line Company to which gas is sold for the account of the Memphis Natural Gas Company. 6 Petitioner produced and purchased a total of 51,659,799 Mcf of gas in the Monroe field during 1941. Of this total, petitioner produced from its own wells 28,819,814 Mcf. Of the 22,839,985 Mcf purchased, 95% was gathered by the producers before delivery to petitioner; the remaining 5% was purchased by petitioner directly at the well heads. Petitioner sold 21,863,278 Mcf to the three purchasing companies in the transactions in question. 7 Gas in the Monroe field is 'dry' gas and consequently is not subjected to any extraction processing. Before moving into the compressor pumps the gas is run through a series of 'scrubbers' which remove dirt and foreign particles. This is accomplished, however, without interruption in the movement. 8 The transactions in question supply the Mississippi Fuel Corp. with 22% of its requirements, 24% of the requirements of the Memphis Natural Gas Co., and 16.61% of the requirements of Southern Natural Gas Co. 9 In its complaint filed in the District Court for the Eastern District of Louisiana invoking the equity powers of the Court to restrain the Louisiana Public Service Commission from conducting an investigation into petitioner's rates and charges, petitioner specifically asserted that the sales in question are in interstate commerce and thus beyond the jurisdiction of the state commission. The District Court granted the requested relief. Interstate Natural Gas Co. v. Public Service Commission, D.C.1940, 33 F.Supp. 50; Id., D.C.1940, 34 F.Supp. 980. 10 Shafer v. Farmers' Grain Co., 1925, 268 U.S. 189, 45 S.Ct. 481, 69 L.Ed. 909; Lemke v. Farmers' Grain Co., 1922, 258 U.S. 50, 42 S.Ct. 244, 66 L.Ed. 458; Dahnke-Walker Milling Co. v. Bondurant, 1921, 257 U.S. 282, 42 S.Ct. 106, 66 L.Ed. 239. And see Illinois Natural Gas Co. v. Central Illinois Public Service Co., 1942, 314 U.S. 498, 503, 504, 62 S.Ct. 384, 385, 386, 86 L.Ed. 371; Currin v. Wallace, 1939, 306 U.S. 1, 10, 59 S.Ct. 379, 384, 83 L.Ed. 441; People's Natural Gas Co. v. Public Service Comm., 1926, 270 U.S. 550, 554, 46 S.Ct. 371, 372, 70 L.Ed. 726; Illinois Central R. Co. v. De Fuentes (Railroad Comm.), 1915, 236 U.S. 157, 163, 35 S.Ct. 275, 276, 59 L.Ed. 517. Cf. Milk Control Board of Pennsylvania v. Eisenberg Farm Products, 1939, 306 U.S. 346, 59 S.Ct. 528, 83 L.Ed. 752. 11 Illinois Natural Gas Co. v. Central Illinois Public Service Co., 1942, 314 U.S. 498, 508, 62 S.Ct. 384, 388, 86 L.Ed. 371; Peples Natur al Gas Co. v. Federal Power Comm., 1942, 75 U.S.App.D.C. 235, 127 F.2d 153. Cf. Jersey Central Power & Light Co. v. Federal Power Comm., 1943, 319 U.S. 61, 70, 71, 63 S.Ct. 953, 958, 87 L.Ed. 1258. 12 Cf. Illinois Natural Gas Co. v. Central Illinois Public Service Co., supra, 314 U.S. at pages 504, 505, 62 S.Ct. at page 386, 86 L.Ed. 371; State Tax Comm. of Mississippi v. Interstate Natural Gas Co., 1931, 284 U.S. 41, 44, 52 S.Ct. 62, 63, 76 L.Ed. 156. 13 State of Missouri ex rel. Barrett v. Kansas Natural Gas Co., 1924, 265 U.S. 298, 44 S.t. 544, 68 L.Ed. 1027; Public Utilities Comm. of Rhode Island v. Attleboro Steam & Electric Co., 1927, 273 U.S. 83, 47 S.Ct. 294, 71 L.Ed. 549; State Corp. Comm. of Kansas v. Wichita Gas Co., 1934, 290 U.S. 561, 54 S.Ct. 321, 78 L.Ed. 500. 14 See note 9, supra. 15 H.R.Rep.No.709, 75th Cong., 1st Sess., 2. 16 Ibid. 17 Colorado Interstate Gas Co. v. Federal Power Comm., 1945, 324 U.S. 581, 602, 603, 65 S.Ct. 829, 839, 89 L.Ed. 1206. 18 The Federal Power Commission has not asserted jurisdiction over all sales taking place in the natural gas fields even though in interstate commerce for resale for ultimate public consumption. In the Matter of Columbia Fuel Corp., 2 F.P.C. 200; In the Matter of Billings Co., 2 F.P.C. 228. We express no opinion as to the validity of the jurisdictional tests employed by the Commission in these cases. 19 Cf. Colorado Interstate Gas Co. v. Federal Power Comm., supra, 324 U.S. at page 603, 65 S.Ct. at page 839, 89 L.Ed. 1206; Federal Power Comm. v. Hope Natural Gas Co., 1944, 320 U.S. 591, 607—612, 64 S.Ct. 281, 290—292, 88 L.Ed. 333. 20 La.Gen.Stat. §§ 4766—4826.2. 21 The record contains testimony by counsel for petitioner to the effect that these provisions apply to petitioner and that petitioner's operations have conformed with their requirements. 22 Counsel for the Louisiana Public Service Commission and for two Louisiana municipalities participated in the proceedings before the Federal Power Commission. 23 A number of cases in this Court have held that the reasonableness of cost items such as that incurred by a purchasing pipe-line company in acquiring gas for transportation may be inquired into during the course of subsequent regulation when buyer and seller are affiliated corporations and there is evidence that the sales were not made at arms length. The Commission found affiliation to exist between petitioner and only one of the three purchasing companies, the Mississippi River Fuel Corporation. There was a finding of 'close contractual and operating arrangements' between petitioner and another of the purchasing companies. Natural Gas Pipeline Co. v. America v. Slattery, 1937, 302 U.S. 300, 58 S.Ct. 199, 82 L.Ed. 276; Columbus Gas & Fuel Co. v. Public Utilities Comm., 1934, 292 U.S. 398, 54 S.Ct. 763, 78 L.Ed. 1327, 91 A.L.R. 1403; Dayton Power & Light Co. v. Public Utilities Comm., 1934, 292 U.S. 290, 54 S.Ct. 647, 78 L.Ed. 1267; Western Distributing Co. v. Public Service Comm., 1932, 285 U.S. 119, 52 S.Ct. 283, 76 L.Ed. 655; Smith v. Illinois Bell Telephone Co., 1930, 282 U.S. 133, 51 S.Ct. 65, 75 L.Ed. 255; United Fuel Gas Co. v. Railroad Comm., 1929, 278 U.S. 300, 49 S.Ct. 150, 73 L.Ed. 390.
78
331 U.S. 737 67 S.Ct. 1489 91 L.Ed. 1782 BAZLEYv.COMMISSIONER OF INTERNAL REVENUE. ADAMS v. SAME. Nos. 287 and 209. Argued Jan. 9, 10, 1947. Decided June 16, 1947. As Amended on Denial of Rehearing Oct. 13, 1947. Mr. Henry S. Drinker, of Philadelphia, Pa., for petitioner bazley. Mr. Sydney A. Gutkin, of Newark, N.J., for petitioner Adams. Mr. J. Louis Monarch, of Washington, D.C., for respondent. Mr. Justice FRANKFURTER delivered the opinion of the Court. 1 The proper construction of provisions of the Internal Revenue Code relating to corporate reorganizations is involved in both these cases. Their importance to the Treasury as well as to corporate enterprise led us to grant certiorari, 329 U.S. 695, 67 S.Ct. 62; 329 U.S. 701, 67 S.Ct. 77. While there are differences in detail to which we shall refer, the two cases may be disposed of in one opinion. 2 In the Bazley case, No. 287, the Commissioner of Internal Revenue assessed an income tax deficiency against the taxpayer for the year 1939. Its validity depends on the legal significance of the recapitalization in that year of a family corporation in which the taxpayer and his wife owned all but one of the Company's one thousand shares. These had a par value of $100. Under the plan of reorganization the taxpayer, his wife, and the holder of the additional share were to turn in their old shares and receive in exchange for each old share five new shares of no par value, but of a stated value of $60, and new debenture bonds, having a total face value of $400,000, payable in ten years but callable at any time. Accordingly, the taxpayer received 3,990 shares of the new stock for the 798 shares of his old holding and debentures in the amount of $319,200. At the time of these transactions the earned surplus of the corporation was $855,783.82. 3 The Commissioner charged to the taxpayer as income the full value of the debentures. Th Tax Court affirmed the Commissioner's determination, against the taxpayer's contention that as a 'recapitalization' the transaction was a tax-free 'reorganization' and that the debentures were 'securities in a corporation a party to a reorganization,' 'exchanged solely for stock or securities in such corporation' 'in pursuance of a plan of recognization,' and as such no gain is recognized for income tax purposes. Internal Revenue Code, §§ 112(g)(1)(E) and 112(b)(3), 26 U.S.C.A.Int.Rev.Code § 112(g)(1)(E), (b)(3). The Tax Court found that the recapitalization had 'no legitimate corporate business purpose' and was therefore not a 'reorganization' within the statute. The distribution of debentures, it concluded, was a desguised dividend, taxable as earned income under §§ 22(a) and 115(a) and (g). 4 T.C. 897. The Circuit Court of Appeals for the Third Circuit, sitting en banc, affirmed, two judges dissenting. 155 F.2d 237. 4 Unless a transaction is a reorganization contemplated by § 112(g), any exchange of 'stock or securities' in connection with such transaction, cannot be 'in pursuance of the plan of reorganization' under § 112(b)(3). While § 112(g) informs us that 'reorganization' means, among other things, 'a recapitalization,' it does not inform us what 'recapitalization' means. 'Recapitalization' in connection with the income tax has been part of the revenue laws since 1921. 42 Stat. 227, 230, § 202(c)(2). Congress has never defined it and the Treasury Regulations shed only limited light. Treas. Reg. 103, § 19.112(g). One thing is certain. Congress did not incorporate some technical concept, whether that of accountants or of other specialists, into § 112(g), assuming that there is agreement among specialists as to the meaning of recapitalization. And so, recapitalization as used in § 112(g) must draw its meaning from its function in that section. It is one of the forms of reorganization which obtains the privileges afforded by § 112(g). Therefore, 'recapitalization' must be construed with reference to the presuppositions and purpose of § 112(g). It was not the purpose of the reorganization provision to exempt from payment of a tax what as a practical matter is realized gain. Normally, a distribution by a corporation, whatever form it takes, is a definite and rather unambiguous event. It furnishes the proper occasion for the determination and taxation of gain. But there are circumstances where a formal distribution, directly or through exchange of securities, represents merely a new form of the previous participation in an enterprise, involving no change of substance in the rights and relations of the interested parties one to another or to the corporate assets. As to these, Congress has said that they are not to be deemed significant occasions for determining taxable gain. 5 These considerations underlie § 112(g) and they should dominate the scope to be given to the various sections, all of which converge toward a common purpose. Application of the language of such a revenue provision is not an exercise in framing abstract definitions. In a series of cases this Court has withheld the benefits of the reorganization provision in situations which might have satisfied provisions of the section treated as inert language, because they were not reorganizations of the kind with which § 112, in its purpose and particulars, concerns itself. See Pinellas Ice & Cold Storage Co. v. Commissioner, 287 U.S. 462, 53 S.Ct. 257, 77 L.Ed. 428; Gregory v. Helvering, 293 U.S. 465, 55 S.Ct. 266, 79 L.Ed. 596, 97 A.L.R. 1355; Le Tulle v. Scefield, 308 U.S. 415, 60 S.Ct. 313, 84 L.Ed. 355. 6 Congress has not attempted a definition of what is recapitalization and we shall follow its example. The search for relevant meaning is often satisfied not by a futile attempt at abstract definition but by pricking a line through concrete applications. Meaning frequently is built up by assured recognition of what does not come within a concept the content of which is in controvery. Since a recapitalization within the scope of § 112 is an aspect of reorganization, nothing can be a recapitalization for this purpose unless it partakes of those characteristics of a reorganization which underlie the purpose of Congress in postponing the tax liability. 7 No doubt there was a recaptilization of the Bazley corporation in the sense that the symbols that represented its capital were changed, so that the fiscal basis of its operations would appear very differently on its books. But the form of a transaction as reflected by correct corporate accounting opens questions as to the proper application of a taxing statute; it does not close them. Corporate accounting may represent that correspondence between change in the form of capital structure and essential identity in fact which is of the essence of a transaction relieved from taxation as a reorganization. What is controlling is that a new arrangement intrinsically partake of the elements of reorganization which underlie the Congressional exemption and not merely give the appearance of it to accomplish a distribution of earnings. In the case of a corporation which has undistributed earnings, the creation of new corporate obligations which are transferred to stockholders in relation to their former holdings, so as to produce, for all practical purposes, the same result as a distribution of cash earnings of equivalent value, cannot obtain tax immunity because cast in the form of a recapitalization-reorganization. The governing legal rule can hardly be stated more narrowly. To attempt to do so would only challenge astuteness in evading it. And so it is hard to escape the conclusion that whether in a particular case a paper recapitalization is no more than an admissible attempt to avoid the consequences of an outright distribution of earnings turns on details of corporate affairs, judgment on which must be left to the Tax Court. See Dobson v. Commissioner, 320 U.S. 489, 64 S.Ct. 239, 88 L.Ed. 248. 8 What have we here? No doubt, if the Bazley corporation had issued the debentures to Bazley and his wife without any recapitalization, it would have made a taxable distribution. Instead, these debentures were issued as part of a family arrangement, the only additional ingredient being an unrelated modification of the capital account. The debentures were found to be worth at least their principal amount, and they were virtually cash because they were callable at the will of the corporation which in this case was the will of the taxpayer. One does not have to pursue the motives behind actions, even in the more ascertainable forms of purpose, to find, as did the Tax Court, that the whole arrangement took this form instead of an outright distribution of cash or debentures, because the latter would undoubtedly have been taxable income whereas what was done could, with a show of reason, claim the sheller of the immunity of a recapitalization-reorganization. 9 The Commission, the Tax Court and the Circuit Court of Appeals agree that nothing was accomplished that would not have been accomplished by an outright debenture dividend. And since we find no misconception of law on the part of the Tax Court and the Circuit Court of Appeals, whatever may have been their choice of phrasing, their application of the law to the facts of this case must stand. A 'reorganization' which is merely a vehicle, however elaborate or elegant, for conveying earnings from accumulations to the stockholders is not a reorganization under § 112. This disposes of the case as a matter of law, since the facts as found by the Tax Court bring them within it. And even if this transaction were deemed a reorganization, the facts would equally sustain the imposition of the tax on the debentures under Sec. 112(c)(1) and (2). Commissioner v. Estate of Bedford, 325 U.S. 283, 65 S.Ct. 1157, 89 L.Ed. 1611. 10 In the Adams case, No. 209, the taxpayer owned all but a few of the 5914 shares of stock outstanding out of an authorized 6000, par alue $100. By a plan of reorganization, the authorized capital was reduced by half, to $295,700, divided into 5914 shares of no par value but having a stated value of $50 per share. The 5914 old shares were cancelled and the corporation issued in exchange therefor 5914 shares of the new no-par common stock and 6 per cent 20 year debenture bonds in the principal amount of $295,700. The exchange was made on the basis of one new share of stock and one $50 bond for each old share. The old capital account was debited in the sum of $591,400, a new no-par capital account was credited with $295,700, and the balance of $295,700 was credited to a 'Debenture Payable' account. The corporation at this time had accumulated earnings available for distribution in a sum not less than $164,514.82, and this account was left unchanged. At the time of the exchange, the debentures had a value not less than $164,208.82. 11 The Commissioner determined an income tax deficiency by treating the debenture bonds as a distribution of the corporation's accumulated earnings. The Tax Court sustained the Commissioner's determination, 5 T.C. 351, and the Circuit Court of Appeals affirmed. 155 F.2d 246. The case is governed by our treatment of the Bazley case. The finding by the Tax Court that the reorganization had no purpose other than to achieve the distribution of the earnings, is unaffected by the bookkeeping detail of leaving the surplus account unaffected. See § 115(b), and Commissioner v. Wheeler, 324 U.S. 542, 546, 65 S.Ct. 799, 801, 89 L.Ed. 1166. 12 Other claims raised have been considered but their rejection does not call for discussion. 13 Judgments affirmed. 14 Mr. Justice DOUGLAS and Mr. Justice BURTON dissent in both cases for the reasons stated in the joint dissent of Judges Maris and Goodrich in the court below. Bazley v. Commissioner, 3 Cir., 155 F.2d 237, 244.
1112
331 U.S. 745 67 S.Ct. 1382 91 L.Ed. 1789 UNITED STATESv.DICKINSON. SAME v. WITHROW. Nos. 77 and 78. Argued Dec. 13, 1946. Decided June 16, 1947. Mr. Ralph S. Boyd, of Washington, D.C., for petitioner. Mr. Ernest K. James, of Charleston, W. Va., for respondents. Mr. Justice FRANKFURTER delivered the opinion of the Court. 1 These are two suits brought under the Tucker Act, Judicial Code, § 24(20), 28 U.S.C. § 41(20), 28 U.S.C.A. § 41(20), to recover the value of property claimed to have been taken by the Government. The suits were consolidated for purposes of the trial and though they present minor differentiating factors they may here, as below, be disposed of by a single opinion. 2 In order to imrpove the navigability of the Kanawha River, West Virginia, Congress authorized construction of the Winfield Dam, South Charleston. Act of August 30, 1935, 49 Stat. 1028, 1035, in connection with H.Doc.No.31, 73d Cong., 1st Sess., pp. 2-4. The water above the dam was to be impounded to create a deeper channel and to raise the river pool level in that area. Notice of the proposed pool elevation was given to abutting landowners on July 1, 1936, and the dam was completed and officially accepted by the United States on August 20, 1937. The river was to be raised by successive stages from 554.65 feet to 566 feet above sea level. That level was not reached until September 22, 1938. As a result of the raising of the river the land belonging to the respondents was permanently flooded. In addition, erosion attributable to the improvement damaged the land which formed the new bank of the pool. 3 Respondents recovered judgment for the value of an easement taken by the United States to flood permanently land belonging to them. Damages were also awarded for the erosion, based on the cost of protective measures which the landowners might have taken to prevent the loss. In addition, the court found that the United States had also acquired an easement for intermittent flooding of part of the land belonging to the defendants, and allowed judgment for the value of such an easement. The Circuit Court of Appeals affirmed the District Court's judgment. 4 Cir., 152 F.2d 865. We granted certiorari, 328 U.S. 828, 66 S.Ct. 1023, 90 L.Ed. 1606, because important questions were raised relevant to the determination of just compensation for the taking of private property by the Government. 4 First. The principal attack by the United States against the judgments is that both actions were outlawed. The applicable statute of limitations is six years. The complaints were filed on April 1, 1943. The Government argues that the statute began to run on October 21, 1936, when the dam began to impound water. In any event, it maintains that the six years began to run not later than on May 30, 1937, when the dam was fully capable of operation, the water was raised above its former level, and the property of the respondents was patially sub merged for the first time. While on the latter view the time for taking had not run under the statute, Dickinson's claim would be barred because he acquired the land after that date. 5 The Government could, of course, have taken appropriate proceedings, to condemn as early as it chose, both land and flowage easements. By such proceedings it could have fixed the time when the property was 'taken.' The Government chose not to do so. It left the taking to physical events, thereby putting on the owner the onus of determining the decisive moment in the process of acquisition by the United States when the fact of taking could no longer be in controversy. These suits against the Government are authorized by the Tucker Act either as claims 'founded upon the Constitution of the United States' or as arising upon implied contracts with the Government. (See the discussion of jurisdiction both in the opinion of the Court and in the concurring opinion in United States v. Lynah, 188 U.S. 445, 23 S.Ct. 349, 47 L.Ed. 539, and in Temple v. United States, 248 U.S. 121, 39 S.Ct. 56, 63 L.Ed. 162.) But whether the theory of these suits be that there was a taking under the Fifth Amendment, and that therefore the Tucker Act may be invoked because it is a claim founded upon the Constitution, or that there was an implied promise by the Government to pay for it, is immaterial. In either event, the claim traces back to the prohibition of the Fifth Amendment, 'nor shall private property be taken for public use, without just compensation.' The Constitution is 'intended to preserve practical and substantial rights, not to maintain theories.' Davis v. Mills, 194 U.S. 451, 457, 24 S.Ct. 692, 695, 48 L.Ed. 1067. One of the most theory-ridden of legal concepts is a 'cause of action.' This Court has recognized its 'shifting meanings' and the danger of determining rights based upon definitions of 'a cause of action' unrelated to the function which the concept serves in a particular situation. United States v. Memphis Cotton Oil Co., 288 U.S. 62, 67 et seq., 53 S.Ct. 278, 280, 77 L.Ed. 619. 6 Property is taken in the constitutional sense when inroads are made upon an owner's use of it to an extent that, as between private parties, a servitude has been acquired either by agreement or in course of time. The Fifth Amendment expresses a principle of fairness and not a technical rule of procedure enshrining old or new niceties regarding 'causes of action'—when they are born, whether they proliferate, and when they die. We are not now called upon to decide whether in a situation like this a landowner might be allowed to bring suit as soon as inundation threatens. Assuming that such an action would be sustained, it is not a good enough reason why he must sue then or have, from that moment, the statute of limitations run against him. If suit must be brought, lest he jeopardize his rights, as soon as his land is invaded, other contingencies would be running against him—for instance, the uncertainty of the damage and the risk of res judicata against recovering later for damage as yet uncertain. The source of the entire claim—the overflow due to rises in the level of the river—is not a single event; it is continuous. And as there is nothing in reason, so there is nothing in legal doctrine, to preclude the law from meeting such a process by postponing suit until the situation becomes stabilized. An owner of land flooded by the Government would not unnaturally postpone bringing a suit against the Government for the flooding until the consequences of inundation have so manifested themselves that a final account may be struck. 7 When dealing with a problem which arises under such diverse circumstances procedural rigidities should be avoided. All that we are here holding is that when the Government chooses not to condemn land but to bring about a taking by a continuing process of physical events, the owner is not required to resort either to piecemeal or to premature litigation to asertain the just compensation for what is really 'taken.' Accordingly, we find that the taking which was the basis of these suits was not complete six years prior to April 1, 1943, nor at a time preceding Dickinson's ownership. In this conclusion we are fortified by the fact that the two lower courts reached the same conclusion on what is after all a practical matter and not a technical rule of law. 8 Nothing heretofore ruled by the Court runs counter to what we have said. The Government finds comfort in Portsmouth Harbor Land & Hotel Co. v. United States, 260 U.S. 327, 43 S.Ct. 135, 67 L.Ed. 287. But in that case the problem was whether by putting a gun battery into permanent position with a view to converting an area, for all practical purposes, into an artillery range, the Government inevitably took an easement in the land over which the guns were to be fired. The issue was not when a suit must be brought on a claim in respect to land taken by the United States, which is the issue before us, but whether there had been a taking at all. 9 Second. The Government challenges the compensation awarded for damage to the land due to erosion. It regards this damage as consequential, to be borne without any right to compensation. Peabody v. United States, 231 U.S. 530, 539, 34 S.Ct. 159, 160, 58 L.Ed. 351. Of course, payment need only be made for what is taken, but for all that the Government takes it must pay. When it takes property by flooding, it takes the land which it permanently floods as well as that which inevitably washes away as a result of that flooding. The mere fact that all the United States needs and physically appropriates is the land up to the new level of the river, does not determine what in nature it has taken. If the Government cannot take the acreage it wants without also washing away more, that more becomes part of the taking. This falls under a principle that in other aspects has frequently been recognized by this Court. It was thus put in Bauman v. Ross, 167 U.S. 548, 574, 17 S.Ct. 966, 976, 42 L.Ed. 270: 'when part only of a parcel of land is taken for a highway, the value of that part is not the sole measure of the compensation or damages to be paid to the owner; but the incidental injury or benefit to the part not taken is also to be considered. When the part not taken is left in such shape or condition as to be in itself of less value than before, the owner is entitled to additional damages on that account.' So, also, United States v. Welch, 217 U.S. 333, 30 S.Ct. 527, 54 L.Ed. 787, 28 L.R.A.,N.S., 385, 19 Ann.Cas. 680; United States v. Grizzard, 219 U.S. 180, 31 S.Ct. 162, 55 L.Ed. 165, 31 L.R.A.,N.S., 1135. Compare Sharp v. United States, 191 U.S. 341, 355, 24 S.Ct. 114, 118, 48 L.Ed. 211; Campbell v. United States, 266 U.S. 368, 45 S.Ct. 115, 69 L.Ed. 328. Congress has recognized that damage to the owner is assessed not only for the value of the part taken but also 'for any injury to the part not taken.' See § 6 of the Act of July 18, 1918, 40 Stat. 911, 33 U.S.C. § 595, 33 U.S.C.A. § 595. If the resulting erosion which, as a practical matter, constituted part of the taking was in fact preventable by prudent measures, the cost of that prevention is a proper basis for determining the damage, as the courts below held. 10 Third. At considerable expense, and with the consent of the War Department, Dickinson reclaimed most of his land which the Government originally took by flooding. The Government claims that this disentitled him to be paid for the original taking. The courts below properly rejected this defense. When the property was flooded the United States acquired the land and it became part of the river. By his reclamation, Dickinson appropriated part of what belonged to the United States. Whether the War Department could legally authorize Dickinson's reclamation or whether it was in fact a trespass however innocent, is not before us. But no use to which Dickinson could subsequently put the property by his reclamation eforts chan ged the fact that the land was taken when it was taken and an obligation to pay for it then arose. 11 Fourth. Judgment was also allowed against the United States for taking an easement for intermittent flooding of land above the new permanent level, and a value for such easements was assessed. We find nothing in this record to justify our setting aside these concurrent findings by two courts. United States v. O'Donnell, 303 U.S. 501, 508, 58 S.Ct. 708, 713, 82 L.Ed. 980; Allen v. Trust Co. of Georgia, 326 U.S. 630, 636, 66 S.Ct. 389, 392, 90 L.Ed. 367. 12 Judgments affirmed.
34
331 U.S. 722 67 S.Ct. 1473 91 L.Ed. 1772 RUTHERFORD FOOD CORPORATION et al.v.McCOMB. No. 562. Argued April 9, 10, 1947. Decided June 16, 1947. Rehearing Denied Oct. 13, 1947. See 68 S.Ct. 29. Mr. E. R. Morrison, of Kansas City, Mo., for petitioners. Miss Bessie Margolin, of Washington, D.C., for respondent. Mr. Justice REED delivered the opinion of the Court. 1 The Administrator of the Wage and Hour Division of the Department of Labor brought this action o enjoin t he Rutherford Food Corporation and the Kaiser Packing Company from further violating the Fair Labor Standards Act.1 The Administrator alleged that the defendants had repeatedly failed to keep proper records and to pay certain of its employees overtime as required by § 7 of the Act.2 The District Court refused to grant the injunction. The Circuit Court of Appeals reversed on appeal, and directed the entry of the judgment substantially as prayed for. Walling v. Rutherford Food Corporation, 10 Cir., 156 F.2d 513. We brought the case here because of the importance of the issues presented by the petition for certiorari to the administration of the Act. 2 The Fair Labor Standards Act of 1938, enacted June 25, 1938, is a part of the social legislation of the 1930's of the same general character as the National Labor Relations Act of July 5, 1935, 49 Stat. 449, 29 U.S.C.A. § 151 et seq., and the Social Security Act of August 14, 1935, 49 Stat. 620, 42 U.S.C.A. § 301 et seq. Decisions that define the coverage of the employer-Employee relationship under the Labor and Social Security acts are persuasive in the consideration of a similar coverage under the Fair Labor Standards Act. See National Labor Relations Board v. Hearst Publications, 322 U.S. 111, 64 S.Ct. 851, 88 L.Ed. 1170; United States v. Silk, 331 U.S. 704, 67 S.Ct. 1463. 3 The petitioners are corporations of Missouri authorized to do business in Kansas. The slaughterhouse of the Kaiser Packing Company, the place of the alleged violations with which we are concerned, and the principal place of business of that company, is in Kansas City, Kansas, from which it ships meat in interstate commerce. Since 1942 most of its product has been boned beef. The petitioner, Rutherford Food Corporation, has its principal place of business and its plant for processing meat products in Kansas City, Missouri. In 1943, Rutherford bought 51% of the stock of Kaiser in order to assure itself of a constant supply of boned beef for contracts it had with the U.S. Army. Kaiser had been operating and continued to operate at a loss, and Rutherford advanced more than $50,000 to Kaiser between March, when Rutherford bought the Kaiser stock, and July 1943. To assure itself of a continued supply of meat, Rutherford leased Kaiser's facilities and took over operation of the slaughterhouse in July. In May, 1944, the lease was terminated and Rutherford's stock interest in Kaiser sold, so that Kaiser might qualify for subsidies granted by the Defense Supplies Corporation to unaffiliated nonprocessing slaughterers under its Regulation No. 3.3 4 Prior to 1942 Kaiser had one hourly paid employee who acted as a combined butcher, beef boner and order filler. During 1942, in order to be able to furnish beef boned to Army specifications to the Army under contract, Kaiser entered into a written contract with one Reed, an experienced boner, which provided that Reed should assemble a group of skilled boners to do the boning at the slaughterhouse. The terms of the contract were that Reed should be paid for the work of boning an amount per hundredweight of boned beef, that he would have complete control over the other boners, who would be his employees, that Kaiser would furnish a room in its plant for the work, known as the boning vestibule, into which the carcasses of cattle slaughtered by Kaiser would be moved on overhead rails by Kaiser employees, that Kaiser would also furnish barrels for the boned meat which would be washed and moved out of the vestibule by Kaiser's employees. Reed abandoned the work in February, 1943, and the work was taken over under an oral contract by one of the boners who had worked with him. This boner, Schindel, also abandoned the work in May, 1944, and an oral contract was then made by the company with Hooper and Deere, who had worked with Schindel. After a few onths Deer e left, at which time Hooper entered into a written contract substantially like the one between Kaiser and Reed, save that it provided for rent to be paid by Hooper for the boning room, although as a matter of fact no rent was ever paid. The District Court found that since the boning work had started in 1942, the money paid by Kaiser had been shared equally among all the boners, except for a short time after Hooper took over the work when he paid some of the boners by the hour. It was stipulated further that the boners owned their own tools, although these consisted merely of a hook to hold the meat, a knife to cut it, a sharpener for the knife, and a leather belt (apron). Although the C.I.O. union which was the representative of the workers of the company insisted that the boners be members, and although the written contracts provided that they should join, it was stipulated that the union dues of the boners were not checked off and that the boners were not subject to the authority of the union steward at the plant. 5 The slaughterhouse operations, of which the boning is a part, are carried on in a series of interdependent steps. The cattle are slaughtered, skinned and dressed in the killing room, and the carcasses are moved thence on overhead rails into an overnight cooler by employees of Kaiser. The next day they are moved into another cooler and then into the boning vestibule, on the same overhead rail. They move around the boning room on the rail, each boner cutting off a section for boning. The boneless meat is put into barrels, or passed to a trimmer, an employee of Kaiser, who trims waste matter from the boned meat. Waste is put into other barrels. The barrels are moved from the boning room by employees of Kaiser into another room, called the dock, where the meat is weighed and put on trucks. Kaiser has never attempted to control the hours of the boners, but they must 'keep the work current and the hours they work depend in large measure upon the number of cattle slaughtered.' 10 Cir., 156 F.2d 513, 515. It is undisputed that the president and manager of Kaiser goes through the boning vestibule many times a day and 'is after the boners frequently about their failure to cut all of the meat off the bones.' 6 The Administrator thought these facts brought the boners within the classification of employees, as that term is used in the Act. But the District Court thought that they were independent contractors, and denied the injunction sought by the Administrator. The Circuit Court of Appeals, however, said: 'The operations at the slaughterhouse constitute an integrated economic unit devoted primarily to the production of boneless beef. Practically all of the work entering into the unit is done at one place and under one roof. * * * The boners work alongside admitted employees of the plant operator at their tasks. The task of each is performed in its natural order as a contribution to the accomplishment of a common objective.' In its view the test for determining who was an employee under the Act was not the common law test of control, 'as the Act concerns itself with the correction of economic evils through remedies which were unknown at common law * * *.' It concluded that the 'underlying economic realities * * * lead to the conclusion that the boners were and are employees of Kaiser * * *.' 10 Cir., 156 F.2d 513, 516, 517. 7 The Fair Labor Standards Act was passed by Congress to lessen, so far as seemed then practicable, the distribution in commerce of goods produced under subnormal labor conditions. An effort to eliminate low wages and long hours was the method chosen to free commerce from the interferences arising from production of goods under conditions that were detrimental to the health and well-being of workers. It was sought to accomplish this purpose by the minimum pay and maximum hour provisions and the requirement that records of employees' services be kept by the employer.4 To make the method effective, the Act contais a sectio n granting to the district courts of the United States jurisdiction to enjoin certain violations of the Act here involved, relating to the keeping of records of employment and the paying of overtime.5 Whether or not the acts charged in this complaint violate the Act depends, so far as the meat boners are concerned, upon a determination as to whether either of both respondents are employers of the boners. As our conclusion requires further action in the trial court to frame the injunction, we shall treat only the question of the relationship of the boners to the alleged employers. We shall not in our consideration undertake to reach any conclusion as to the appropriate form of an injunction. We pass only upon the question whether the boners were employees of the operator of the Kansas plant under the Fair Labor Standards Act. 8 As in the National Labor Relations Act and the Social Security Act, there is in the Fair Labor Standards Act no definition that solves problems as to the limits of the employer-employee relationship under the Act. Provisions which have some bearing appear in the margin.6 The definition of 'employ' is broad. It evidently derives from the child labor statutes and it should be noted that this definition applies to the child labor provisions of this Act, § 12.7 We have decided that it is not so broad as to include those 'who, without any express or implied compensation agreement, might work for their own advantage on the premises of another.' Walling v. Portland Terminal Co., 330 U.S. 148, 67 S.Ct. 639, 641. In the same opinion, however, we pointed out that 'This Act contains its own definitions, comprehensive enough to require its application to many persons and working relationships, which prior to this Act, were not deemed to fall within an employer-employee category.' 330 U.S. 150, 67 S.Ct. 640. We have said that the Act included those who are compensated on a piece rate basis. United States v. Rosenwasser, 323 U.S. 360, 65 S.Ct. 295, 89 L.Ed. 301. We have accepted a stipulation that station 'red-caps' were railroad employees. Williams v. Jacksonville Terminal Co., 315 U.S. 386, 391, 62 S.Ct. 659, 663, 86 L.Ed. 914. There may be independent contractors who take part in production or distribution who would alone be responsible for the wages and hours of their own employees. See United States v. Silk, supra; compare Roland Electrical Co. v. Walling, 326 U.S. 657, 66 S.Ct. 413, 90 L.Ed. 383; Martino v. Michigan Window Cleaning Co., 327 U.S. 173, 66 S.Ct. 379, 90 L.Ed. 603. We conclude, however, that these meat boners are not independent contractors. We agree with the Circuit Court of Appeals, quoted above, in its characterization of their work as a part of the integrated unit of production under such circumstances that the workers performing the task were employees of the establishment. Where the work done, in its essence, follows the usual path of an employee, putting on an 'independent contractor' label does not take the worker from the protection of the Act.8 The District Court was of the view that: 9 'The right to contract is not only an inherent right but a constitutional right, and independent contracts, as a method of quantity production of boned beef, have not been uncommon in the packing business, generally. * * * The plan under which boners share equally in the boning money is commonly employed in Kansas City and elsewhere, and most of the boners who have worked in the Kaiser plant have worked at various times and in various plants under independent contractors. There is nothing inequitable in the sharing method under which compensation is divided equally among the group. It gives each man an interest in the amount of work being done by the other members of the group. It also gives no advantage to the man who is boning the fleshier parts of the carcass. Under this plan beginners and casual boners can be equitably taken care of by payment on an hourly basis out of the boning money.' 10 We think, however, that the determination of the relationship does not depend on such isolated factors but rather upon the circumstances of the whole activity. Viewed in this way, the workers did a specialty job on the production line. The responsibility under the boning contracts without material changes passed from one boner to another. The premises and equipment of Kaiser were used for the work. The group had no business organization that could or did shift as a unit from one slaughter-house to another. The managing official of the plant kept close touch on the operation. While profits to the boners depended upon the efficiency of their work, it was more like piecework than an enterprise that actually depended for success upon the initiative, judgment or foresight of the typical independent contractor. Upon the whole, we must conclude that these meat boners were employees of the slaughtering plant under the Fair Labor Standards Act. 11 We therefore affirm the conclusion to that effect of the Circuit Court of Appeals and modify the direction of the judgment of that court 'for the entry of a judgment substantially as prayed,' so as to leave the District Court free to frame its decree in accordance with this decision. It is so ordered. 12 Modified and affirmed. 1 52 Stat. 1060, 29 U.S.C.A. § 201 et seq. 2 29 U.S.C. § 207, 29 U.S.C.A. § 207. 3 8 F.R. 10826; 8 F.R. 14641; 9 F.R. 1820. 4 52 Stat. 1060, §§ 2, 6, 7, 11(c). United States v. Darby, 312 U.S. 100, 125, 657, 61 S.Ct. 451, 462, 85 L.Ed. 609, 132 A.L.R. 1430; Overnight Motor Transp. Co. v. Missel, 316 U.S. 572, 577, 578, 62 S.Ct. 1216, 1219, 1220, 86 L.Ed. 1682. 5 52 Stat. 1060, §§ 17, 15, 7(a), 11(c). 6 52 Stat. 1060, § 3: 'As used in this Act— '(d) 'Employer' includes any person acting directly or indirectly in the interest of an employer in relation to an employee * * * '(e) 'Employee' includes any individual employed by an employer. * * * '(g) 'Employ' includes to suffer or permit to work.' 7 Note 11 in the brief for the United States summarizes the relevant data: 'At the time of the enactment of the Fair Labor Standards Act, the phrase 'employed, permitted or suffered to work' was contained in the child labor statutes of thirty-two States and the District of Columbia. The same phraseology appeared in the Uniform Child Labor Laws recommeded in 191 1 and in 1930 by the National Conference of Commissioners on Uniform State Laws (Child Labor Bulletin, Vol. I, No. 2, August 1912; Proceedings of the National Conference, 1930), in the Standard Child Labor Law recommended in the Child Labor Legislation Handbook compiled by Josephine C. Goldmark (See e.g., issue of 1904, p. 11), and in the Standards Recommended for Child Labor Legislation by the International Association of Governmental Labor Officials. The phrase 'employed or permitted to work' was found in seventeen State statutes as well as in the Federal statutes held unconstitutional in Hammer v. Dagenhart, 247 U.S. 251, 38 S.Ct. 529, 62 L.Ed. 1101, 3 A.L.R. 649, Ann.Cas.1918E, 724, and Child Labor Tax Case, Bailey v. Drexel Furniture Co., 259 U.S. 20, 42 S.Ct. 449, 66 L.Ed. 817, 21 A.L.R. 1432. The statutes are cited in the Appendix to this brief, infra, pp. 58—60.' 8 See Walling v. American Needlecrafts, 6 Cir., 139 F.2d 60; United States v. Vogue, Inc., 4 Cir., 145 F.2d 609; Walling v. Twyeffort, Inc., 2 Cir., 158 F.2d 944.
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331 U.S. 752 67 S.Ct. 1493 91 L.Ed. 1796 AIRCRAFT & DIESEL EQUIPMENT CORPORATIONv.HIRSCH et al. No. 95. Argued Jan. 15, 1947. Decided June 16, 1947. As Amended on Denial of Rehearing Oct. 13, 1947. Appeal from the District Court of the United States for the District of Columbia. [Syllabus from pages 752-754 intentionally omitted] Mr. Arthur R. Hall, of Chicago, Ill., for appellants. Mr. Robert L. Stern, of Washington, D.C., for appellees. Mr. Justice RUTLEDGE delivered the opinion of the Court. 1 This case is the fourth in a series seeking here a determination of the invalidity, on constitutional grounds, of the First and Second Renegotiation Acts1 and allied legislation. 2 In Coffman v. Breeze Corporations, 323 U.S. 316, 65 S.Ct. 298, 89 L.Ed. 264, and in Alma Motor Co. v. Timken-Detroit Axle Co., 329 U.S. 129, 67 S.Ct. 231, the Royalty Adjustment Act2 was attacked. The Alma Motor case was remanded to the Circuit Court of Appeals for a determination of the Act's applicability. The suit in the Coffman case was by a patent owner to restrain his licensees from paying accrued royalties to the Government pursuant to the Act's provisions. We held that the complaint had been rightly dismissed for want of equity jurisdiction, since the plaintiff had an adequate remedy at law by suit against its licensees, and also for want of a justiciable case or controversy. 3 In Mine Safety Appliances Co. v. Forrestal, 326 U.S. 371, 66 S.Ct. 219, 90 L.Ed. 140, a government contractor challenged the Renegotiation Acts.3 The complaint sought to enjoin the Secretary of the Navy from taking action 'which would stop payment by the government of money lawfully in the United Sttes Treasuery to satisfy the government's and not the Secretary's debt to the appellant.' 326 U.S. at page 374, 66 S.Ct. at page 221, 90 L.Ed. 140. Accordingly we held that the Government was an indispensable party. Since it neither had been joined in the suit nor had consented to be sued in such a proceeding, it followed that the complaint had been properly dismissed. 4 In one other case, Macauley v. Waterman S.S. Corporation, 327 U.S. 540, 66 S.Ct. 712, 90 L.Ed. 839, constitutionality was not involved, but coverage of the Renegotiation Acts was put in issue. The suit was brought in a District Court for a declaratory judgment and to restrain further renegotiation proceedings affecting the specified contracts. The contractor had not sought a decision on coverage from the Tax Court. We held that the Tax Court has power to decide such questions in the proceedings authorized by § 403(e)(1) of the Second Renegotiation Act. Hence, under the authority of Myers v. Bethlehem Shipbuilding Corporation, 303 U.S. 41, 58 S.Ct. 459, 82 L.Ed. 638, the complaint in the Waterman case also was held rightly to have been dismissed, in this instance for the plaintiff's failure to exhaust its administrative remedy. 5 Now the Aircraft & Diesel Equipment Corporation seeks a declaratory judgment that the First and Second Renegotiation Acts are unconstitutional on various grounds. Injunctive relief also is asked. And, in addition to the constitutional questions, determination is sought of issues of coverage and other matters. 6 The defendants, appellees here, consist of the members of the War Contracts Price Adjustment Board, the Secretary of War, and the Under Secretary of War.4 Pursuant to the statutory requirement, 50 Stat. 751, 752, 28 U.S.C. § 380a, 28 U.S.C.A. § 380a, a district court of three judges was especially convened. After hearing, the complaint was dismissed.5 One ground for this action was that the suit is premature, since proceedings were pending and undetermined in the Tax Court, pursuant to appellant's applications, for redetermination of its allegedly excessive profits for 1942 and 1943.6 The court also held that it was without jurisdiction in equity, since in its view adequate remedy at law was available to Aircraft. Probable jurisdiction of the appeal was duly noted here.7 66 S.Ct. 1346. 7 We think the District Court correctly dismissed the complaint, and for the reasons stated as grounding its action. The issues expansively include almost all comprehended in the causes previously determined here. But the case reaches this Court in a posture differing in some substantial respects from that characterizing any of those proceedings. Hence it becomes necessary to set forth with some particularity the facts and controlling issues. I. 8 Appellant is in the business of manufacturing diesel fuel injection equipment and precision parts, and aircraft precision parts. Its manufacturing activities, insofar as material,8 were carried on under subcontracts with government contractors. The contractor in turn furnished the completed aircraft or engines t the Unite d States. 9 Pursuant to the First Renegotiation Act, the Secretary of War, acting though his delegate the Under Secretary of War, determined on October 27, 1943, that during the fiscal year ended November 30, 1942, appellant had realized excessive profits (less tax credits) amounting to $204,000. On April 29, 1944, the Under Secretary directed appellant's customers to withhold this sum from appellant. Thereafter it filed a petition with the Tax Court9 for a redetermination of the alleged excessive profits. Nevertheless, on July 19, 1944, the Under Secretary further directed appellant's customers to pay the $204,000 into the Treasury of the United States, and this direction was obeyed.10 10 Following the fiscal year ended November 30, 1943, renegotiation proceedings were instituted under the Second Renegotiation Act. On January 11, 1945, the Under Secretary of War, as delegate of the War Contracts Price Adjustment Board, entered an order determining that appellant had realized excessive profits of $1,265,000. Deduction of tax credits reduced this amount to approximately $270,000. Appellant again filed a petition for redetermination with the Tax Court.11 Then followed this suit. 11 The amended complaint is too lengthy for detailed summarization in this opinion. Apart from allegations going to constitutionality and coverage, including asserted defects in the renegotiation procedures followed,12 the complaint sought to establish jurisdiction in the District Court, equitable in character, by showing the inadequacy of all available legal or other remedies. These included the pending Tax Court proceedings, possible suit in the Court of Claims following completion of the Tax Court's determination, and actions at law against appellant's customers, contractors with the Government to recover the amounts said to be due under their varios contract s. 12 In particular it was alleged that, notwithstanding the pendency of the Tax Court proceedings, the Board and the Secretary, or his delegates, were taking steps to prevent Aircraft's customers from paying over to it moneys owing on contracts, aggregating $270,000, and claimed to be due the Government as excessive profits. The complaint alleged further that the Board and the Secretary were threatening to direct Aircraft's customers to pay these sums into the Treasury13 and that, unless they were restrained, such payment would be made, to appellant's irreparable injury.14 No direct relief was asked, by way of judgment or decree, for refund of the $204,000 collected by the Government from appellant's customers, pursuant to the First Renegotiation Act, as excessive profits realized in 1942. It was suggested, however, that if that Act should be found invalid and the Second Act sustained,15 the Government should be permitted to collect only the difference between $270,000, the amount determined to be excessive profits for 1943, and the $204,000 collected for 1942. The suggestion, of course, if formally made, would be substantially a claim against the Government by way of setoff of the latter amount. Cf. Mine Safety Appliances Co. v. Forrestal, supra. 13 The Government has contested each of appellant's claims. But its primary contentions have been aimed at Aircraft's jurisdictional showing. It argues that the suit in substance and legal effect is one against the United States, to which there has been no governmental consent, cf. Mine Safety Appliances Co. v. Forrestal, supra; that the suit is premature, because the Tax Court proceedings have not been completed and until this has been done Aircraft will not have exhausted its administrative remedy, cf. Macauley v. Waterman S.S. Corporation, supra; that the Tax Court has been given exclusive jurisdiction in renegotiation matters; and that, in any event, there is no jurisdiction of an equitable character in the District Court, to afford the relief appellant seeks, since it has an adequate remedy at law by suit upon its contracts to recover any amounts due from its customers, in which all questions of constitutionality may be determined. Cf. Coffman v. Breeze Corporation, supra. 14 In the latter connection appellee Hirsch, as chairman of the Board, has filed an affidavit admitting that he and the other appellees, unless restrained, will take steps, as appellant alleges, to prevent payment of the $270,000 by its customers to it, and also to secure payment of that sum into the Treasury. The affidavit sets forth, however, that direction for payment will not be required or made as to more than two or three of appellant's customers and, in the event this does not result in payment of the full amount, the Government will proceed to collect whatever may remain by suit against appellant. 15 Aircraft, on the other hand, both in the amended complaint and by the supporting affidavit of its president, alleged that no such sum as $270,000 was owing to it from, or could be collected by direction to, any two or three of its customers. Rather it was set forth that collection of any such amount could be made only by direction to some sixteen or more customers. And on the same basis it is asserted that Aircraft's remedy by suit against its customers would require institution of numerous actions in different jurisdictions, resulting in expense and delay, as well as loss of good will and incurring the continued risk of the customers' solvency.16 Accordingly Aircraft claims that jurisdiction in equity is conferred upon the District Court both by reason of the multiplicity of suits involved in asserting the legal remedy by actions against its customers and because of the injurious consequences which would follow from pursuing that course. II. 16 We do not find it necessary to undertake determining the threshold question whether the suit is one against the United States. Were the issue squarely presented as a rofmal claim for refund or setoff concerning the $204,000 collected by the Government for 1942, the case in that aspect would be very close to Mine Safety Appliances Co. v. Forrestal, supra.17 17 We do not tarry, however, to consider further this feature of the case since the absence of formal and specific claim in the nature of setoff or otherwise indicates, we think, a strategic decision to avoid the difficulties which would follow upon its definite and unequivocal assertion, on the score of the nature of the suit as being one in fact and function against the Government. Something more than a mere suggestion of claim or relief is required to bring into play judicial power of affording remedy, especially when it appears there may be good reason deliberately accepted for going no further. This is reinforced when the suggestion, if acted on, would involve the Court in decision of serious constitutional questions. They are not to be entertained upon dubious presentations or, most certainly, when the presentation reasonably may be taken as not intended to put them forward squarely and inescapably. Cf. Rescue Army v. Municipal Court, 331 U.S. 549, 67 S.Ct. 1409; Alma Motor Co. v. Timken-Detroit Axle Co., 329 U.S. 129, 67 S.Ct. 231. Accordingly we put to one side the lengthy allegations concerning the 1942 determination, and confine our consideration to the issues relating to the redetermination made for the fiscal year of 1943. 18 These also, the Government urges, substantially are effective to make the suit one against the Government, to which it has not consented. And for this view, likewise, it relies upon the Mine Safety decision, as well as others.18 Appellant undertakes to distinguish the cases upon the basis that in the Mine Safety case the official action sought to be enjoined was conduct effective to stop the payment of funds out of the Treasury, whereas here the analogous conduct affects no funds in the Government's actual possession but seeks only to touch moneys held by third persons for appellant's or the Government's account. The difference, it is urged, is between action affecting only the withholding of government moneys and action effective to bring about collection from third persons of moneys claimed to be due to the Government. 19 That difference indeed may be substantial. But we do not decide whether it is sufficient to enable the appellant to avoid the difficulty presented of foreclosing the Government's claim by a suit brought only against its officials, essentially as trespassers,19 without joining the Government itself. In other words we do not determine whether the suit is, in legal effect, one against the Government, since in our opinion the other grounds going to the District Court's jurisdiction are adequate to sustain its dismissal of the cause. 20 Ordinarily of course issues relating to exhaustion of administrative remedies, as a condition precedent to securing judicial relief, and to the existence of jurisdiction in equity are either separate or separable matters, to be treated as entirely or substantially distinct. The one generally speaking is simply a condition to be performed prior to invoking an exercise of jurisdiction by the courts. The other goes to the existence of judicial power in the basic jurisdictional sense. In this case, however, the exhaustion problem and that of equity jurisdiction are closely, indeed inseparably related. And both are colored by the relevant specific provisions of the Renegotiation Acts, more particularly the Second since it alone provides for Tax Court redetermination.20 21 In Macauley v. Waterman S.S. Corporation, supra, we were called upon to consider the relation between the Tax Court proceedings, as provided by § 403(e)(1), and judicial proceedings instituted in the district or other courts of the United States in regard to renegotiation matters. Section 403(e)(1) authorizes 'any contractor or subcontractor aggrieved by an order of the Board determining the amount of excessive profits received or accrued by' him, to file a petition for redetermination with the Tax Court within ninety days after notice of the order is mailed.21 The section then provides: 22 'Upon such filing such court shall have exclusive jurisdiction, by order, to finally determine the amount, if any, of such excessive profits received or accrued by the contractor or subcontractor, and such determination shall not be reviewed or redetermined by any court or agency.' 23 The section expressly states that the proceeding 'shall not be treated as a proceeding to review the determination of the Board,22 but shall be treated as a proceeding de novo.' And the Tax Court is given the same powers and duties, 'insofar as applicable,' respecting 'the contractor, the subcontractor, the Board and the Secretary, and the respect of the attendance of witnesses and the production of papers,' together with other procedural matters, as the court has under specified sections of the Internal Revenue Code in redetermining a deficiency in taxes. Moreover, § 403(e)(1) commands: 'The filing of a petition under this subsection shall not operate to stay the execution of the order of the Board under subsection (c)(2).' 24 In the Waterman case, taking account of these provisions, we said: 'The legislative history of the Renegotiation Act, moreover, shows that Congress intended the Tax Court to have exclusive jurisdiction to decide questions of fact and law,23 which latter include the issue raised here of whether the contracts in question are subject to the Act.' 327 U.S. at page 544, 66 S.Ct. at page 714, 90 L.Ed. 839. 'To grant the injunction sought,' the opinion continued, 'the District Court would have to decide this issue in the first instance. Whether it ever can do so or not, it cannot not now decide questions of coverage when the administrative agencies24 authorized to do so have not yet made their determination. Here, just as in the Myers case, the administrative process, far from being exhausted, had hardly begun. The District Court consequently was correct in holding that t lacked j urisdiction to act.' Id., 327 U.S. at pages 544, 545, 66 S.Ct. at page 714, 90 L.Ed. 839. 25 The Waterman case differed from this one in three respects. There the appellant had 'hardly begun' the administrative process, while here Aircraft has done all that it can do. The Waterman Corporation had contracted directly with a government agency, the Maritime Commission. Here the appellant is a subcontractor, a difference of some importance in the matter of jurisdiction in equity later to be noted. The Waterman case, as we have said, raised only questions of coverage, not issues of constitutionality. Here both types of question are presented. On the other hand, the cases are substantially identical in the nature of the relief sought. Each complaint asked for a declaratory judgment upon the legal issues and for injunctive relief restraining further action looking toward application of the Act's provisions. 26 We do not think the differences mentioned are sufficient to distinguish the cases for purposes of applying the exhaustion rule. Certainly no such effect can be derived from the fact that in the Waterman case the plaintiff had not begun the administrative process, while here Aircraft has gone as far as it can. The doctrine, wherever applicable, does not require merely the initiation of prescribed administrative procedures. It is one of exhausting them, that is, of pursuing them to their appropriate conclusion and, correlatively, of awaiting their final outcome before seeking judicial intervention. 27 The very purpose of providing either an exclusive or an initial and preliminary administrative determination is to secure the administrative judgment either, in the one case, in substitution for judicial decision or, in the other, as foundation for or perchance to make unnecessary later judicial proceedings. Where Congress has clearly commanded that administrative judgment be taken initially or exclusively, the courts have no lawful function to anticipate the administrative decision with their own, whether or not when it has been rendered they may intervene either in presumed accordance with Congress' will or because, for constitutional reasons, its will to exclude them has been exerted in an invalid manner. To do this not only would contravene the will of Congress as a matter of restricting or deferring judicial action. It would nullify the congressional objects in providing the administrative determination. In this case these include securing uniformity of administrative policy and disposition,25 expertness of judgment, and finality in determination, at least of those things which Congress intended to and could commit to such agencies for final decision. 28 There can be no doubt whatever, in view of the legislative history, that Congress had each of these ends on view when it provided for the Tax Court proceedings, as well as for action by the Board prior to that stage. Indeed the Board was created in large part to bring under a single aegis the last stage of informal renegotiation before the Tax Court action, in order thus to secure as nearly as possible uniform policy and administration of renegotiation problems.26 This policy was followed and reinforced in the provision for Tax Court redetermination. And that procedure was chosen deliberately in preference to judicial review in the Court of Claims or elsewhere, primarily because of the Tax Court's27 expertness in fiscal matters analogous to those arising in connection with renegotiation problems,28 as well as its essentially judicial procedures and exerience.29 29 It is equally clear that Congress intended to endow the Tax Court's decisions with a very large degree of finality, as appears from the very terms of § 403(e)(1), from the whole structure of the Act, and from the legislative history.30 The express command of § 403(e)(1) is not simply that the Tax Court shall have 'exclusive jurisdiction, by order, to finally determine' the amount of excessive profits, if any. It is also that the determination 'shall not be reviewed or redetermined by any court or agency.' This is buttressed by the prohibition that filing the petition shall not operate to stay execution of the Board's order under § 403(c)(2).31 And not irrelevant to the statute's general policy of finality are the provisions making the Board's determinations final, if the petition for Tax Court redetermination is not filed in the specified time, and those of the Secretary or his delegates final if similar action is not taken to secure redetermination by the Board. § 403(c) (1). 30 True, the statute expressly confers rights to follow through the various stages of the procedure to the end of the Tax Court phase. Nevertheless its entire structure indicates the congressional purpose to have matters of renegotiation promptly and expeditiously settled; and to accomplish this as far as possible both by informal negotiations and by introducing the compulsion of finality at every stage unless each succeeding one is taken as commanded. 31 At the height of the war Congress recognized, as did the procuring agencies,32 that speed in procurement, and consequently in production of war materials, outweighed all other considerations normally applicable. And while renegotiation was a product of that necessity rather than a cause, the problems it raised were time consuming and closely related to pricing difficulties.33 Often they worked to hinder and delay the process of procurement. Congess theref ore sought, so far as possible, to relieve the interrelated processes from the tedious burden of litigation. It did this by writing the policy of finality into the Act's provisions at east successive procedural stage, although saving the right of resort eventually to the Tax Court to those acting promptly in the prescribed way. 32 We do not express any opinion, indeed we explicitly reserve decision, upon the question of the finality of Tas Court decisions in these matters. But we cannot infer from a statute so conditioned in background, purpose, terms and compulsion derived from the inevitable circumstances of its application that Congress intended to allow skirting the procedures devised altogether or partially, more particularly in any case where following them could result in no greater loss than the delay and inconvenience which would flow from inability to seek some other remedy not dependent upon their completion. 33 We are not forced in this case, however, to decide whether Congress intended to give the Tax Court the last word upon all questions of fact and law, or whether it could do so if that were surely its purpose. Nor need we become involved in an attempt to decide what particular questions it might have left, or did leave, for that body's final and conclusive disposition. For it seems obvious, in view of the Act's terms, history, objects and the policies incorporated, that Congress clearly and at the very least intended the Tax Court's functions not only to be put in motion but to be fully performed, before judicial intervention should take place at the instance of one in appellant's position. 34 This indeed was the ruling of the Waterman case. And we do not think the effect of that ruling is exhausted simply because constitutional questions were not raised there, but have been put forward in this cause. Nor is it overcome, in our judgment, by the showing which has been made on this record of irreparable injury and of the need as well as the power of equity to forestall the complete operation of the congressionally prescribed procedure. 35 On the contrary, whatever may be true of other situations,34 in this case the very fact that constitutional issues are put forward constitutes a strong reason for not allowing this suit either to anticipate or to take the place of the Tax Court's final performance of its function. When that has been done, it is possible that nothing will be left of appellant's claim, asserted both in that proceeding and in this cause, concerning which it will have basis for complaint. 36 The Tax Court may decide entirely in appellant's favor. Indeed, if it can sustain there the claims and issues it offers to support here, that possibility is not an unlikely one. For, apart from the questions of constitutionality and of the Tax Court's power to decide them finally or otherwise,35 appellant has put forward, in both proceedings,36 claims of exemption and noncoverage relating to contracts involving much arger amou nts than the aggregate sums affected by renegotiation, after deduction of tax credits.37 And if those claims are well founded, as to which of course we express no opinion, the Tax Court's determination of these matters of coverage, which we held in the Waterman case are initially at least for its disposition, well might render consideration of the constitutional questions by it unnecessary and this cause moot. 37 Certainly that possible outcome should not be anticipated, either here or by the District Court, through a decision in this case on the constitutional issues. Rescue Army v. Municipal Court, 331 U.S. 549, 67 S.Ct. 1409. No more should it be forestalled by decision upon the matters of coverage. Macauley v. Waterman S.S. Corporation, supra. 38 It is true that the presence of constitutional questions, coupled with a sufficient showing of inadequacy of prescribed administrative relief and of threatened or impending irreparable injury flowing from delay incident to following the prescribed procedure, has been held sufficient to dispense with exhausting the administrative process before instituting judicial intervention.38 But, without going into a detailed analysis of the decisions, this rule is not one of mere convenience or ready application. Where the intent of Congress is clear to require administrative determination, either to the exclusion of judicial action or in advance of it, a strong showing is required, both the inadequacy of the prescribed procedure and of impending harm, to permit short-circuiting the administrative process. Congress' commands for judicial restraint in this respect are not lightly to be disregarded. 39 Mor especiall y is that true with legislation, of this type, adopted during and to meet the emergency of war and resting, at least in part, upon war powers. For, in such cases, 'only if we could say in advance of resort to the statutory procedure that it is incapable of affording due process to petitioners could we conclude that they have shown any legal excuse for their failure to resort to it or that their constitutional rights have been or will be infringed,' Yakus v. United States, 321 U.S. 414, 435, 64 S.Ct. 660, 672, 88 L.Ed. 834, a statement implicitly requiring exhaustion, not merely initiation, of the statutory procedure. 40 We need not decide in this case, however, whether mere doubt concerning the adequacy of administrative or other relief would be sufficient for allowing anticipation of the administrative determination. For that course is not to be followed if there is another remedy, not inconsistent with the congressional command, and of certain character, even though it be neither so expeditiious or convenient as some other sought to be substituted which circumvents that command. To this of course should be added the further qualification that following the prescribed remedy, upon the showing made, will not certainly or probably result in the loss or destruction of substantive rights. 41 This brings us to consideration of the showing made here in support of equity's intervention. That showing, we think when considered in the light of the foregoing principles and of the statute's clear purpose and intent, is not sufficient. 42 Whatever may be the scope allowed generally for equity to intervene upon the ground of inadequacy of legal remedies, where no explicit congressional command exists for following a prescribed procedure, the problem when such a mandate is present is entirely different from one tendered in its absence. The very fact that Congress has made the direction must be cast into the scales as against the factors which, without that fact, would or might be of sufficient weight to turn the balance in favor of allowing utilization of equity's resources. That fact itself may be of such weight as to turn the scales the other way, even in situations much more doubtful than the present one. In short, the so-called general principles government the exercise of jurisdiction in equity are not to be taken in such a case as isolated from all effect of the legislative mandate or necessarily or even readily as overriding it. 43 In the first place, there can be no doubt of the availability or indeed of the certainty and effectiveness of appellant's remedy at law by suit upon its contracts against its customers claimed to owe it money under those agreements. Suits of that character are not forbidden, either expressly or impliedly by the Renegotiation Acts. Nor are they made dependent upon completion of the Tax Court proceedings.39 Moreover we know of no reason why every question of constitutionality which has been raised in this suit could not be presented and determined in such a suit. 44 In addition, there is special reason in the statutory provisions why that course should be followed rather than allowing the present suit. Appellant is, as we have pointed out, a subcontractor, not a contractor with the Government. While its suit could be instituted directly only against the contractor with whom it had dealt, nevertheless it is hardly conceivable that the Government would permit the suit to go to final judgment without intervention by it, or, at the least, undertaking the responsibility for making the defense. For by § 403(c)(2)40 it is expressly provided: 'Each contractor and subcontractor is hereby indemnified by the United States against all claims by any subcontractor on account of amounts withheld from such subcontractor pursuant to this paragraph.' 45 In the face of this indemnity, the contractor becomes substantially a stakeholder as between the Government and the subcontractor, and the latter's suit against the contractor, if terminated favorably to the complainant, would obligate the Government to indemnify or reimburse the contractor for the liability thus incurred. In effect, the Government has consented to suit by the contractor in the Court of Claims on account of any liability the contractor incurs by virtue of lawful payment of the subcontractor's claims. 46 Accordingly, there would seem to be no substantial reason for regarding the suit against the contractor as inherently inadequate or ineffective for the protection of any rights of the appellant, including constitutional ones. In this respect the case stands identically with Coffman v. Breeze Corporations, supra.41 If any such inadequacy exists, it must be by virtue of factors extraneous to the nature of the suit itself and not present in the Coffman case. 47 These appellant seeks to establish in its showing relating to multiplicity of suits and irreparable injury. Apart from multiplicity, the showing concerning injury certainly would not be sufficient to justify eliminating the Tax Court proceeding.42 Boiled down, the allegations come to appellant's assuming, for the period necessary to secure either the Tax Court's decision or final judgment in suits against its customers directed to withhold, the continued risk of their solvency, without specific allegation that any of them is seriously so threatened or facts to support such a claim; and to deprivation, for the same period, of the use of $270,000 directed to be withheld.43 We do not think this showing alone without regard to multiplicity, approaches what would be required to sustain the intervention of a court of equity, particularly in order to avoid or anticipate the congressionally authorized proceeding. 48 Nor, in the facts of this case, is the showing made concerning multiplicity of suits sufficient for that purpose. Appellant's case as made in this feature is that it would be forced to sue some sixteen 'or more' customers, in various and scattered jurisdictions, with consequent expense of litigation and 'resulant ill-feeling and irreparable injury' to good will and appellant's business. On the other hand stands the affidavit of appellee Hirsch that direction for withholding and payment into the Treasury will not be needed or given in more than two or three instances, and in case any balance should remain it will be collected through suit instituted by the Government. 49 Whether the District Court accepted one version of the facts or the other, it found there was no sufficient basis in the claim of multiplicity to sustain equity's assumption of jurisdiction. We would not be disposed to override that judgment of the trial court, turning as much as it may upon questions of fact.44 50 Moreover, it is not apparent, at any rate from the allegations, why it would be necessary for appellant to sue all of the sixteen customers or indeed perhaps more than one of them in order to secure a determination of its constitutional rights or preserve its rights. A single test suit would serve the former purpose fully, and there are no allegations of fact sufficient to show that appellant's rights of recourse against others probably would be lost by awaiting the outcome of such a suit, either legally through the operation of statutes of limitations or practically, as we have said, through any probable incidence of insolvency. 51 In the absence of either kind of showing, the injury appellant seeks to avoid by the argument of multiplicity actually comes down, as we have said, to deprivation of the use of the amount withheld for the period required for completion of the Tax Court proceedings or a test suit against a customer. Whether or not there will be any injury in this limited respect depends of course, first, on the outcome of the Tax Court proceedings, particularly in relation to the matters of coverage; second, on whether, upon the assumption that those proceedings sustain the Government's claim as to all or part of the $270,000, the amount thus found due is finally held, in authorized litigation, to be due and owing to the appellant or to the Government. And, as we have also said, if that result should favor the appellant, the Government's obligation to indemnify the contractor would be, in effect, indirectly available to appellant to indemnify it for any loss of the use of the moneys withheld.45 52 Whatever might be true in other circumstances, this showing as to the necessity for suing many customers is hardly sufficient to justify the substitution of equity's extraordinary relief for what in all the conditions of this case appears to be a full, adequate and completely available remedy at law. Coffman v. Breeze Corporations, supra; Macauley v. Waterman S.S. Corporation, supra. 53 Indeed the argument of multiplicity, with others, was expressly advanced and rejected in the Waterman case, as ground for not applying the Myers rule and for sustaining declaratory and equitable intervention to circumvent it. After noting the company's claim, with others, that 'it would be subjected to a multiplicity of suits in order to recover the money due on the contracts,' we there said: 'Even if one or all of these things might possibly occur in the future, that possibility does not affect the application of the rule requiring exhaustion of administrative remedies. The District Court had no power to determine in this proceeding and at this time issues that might arise because of these future contingencies.' 327 U.S. at page 545, 66 S.Ct. at page 715, 90 L.Ed. 839. 54 This case is perhaps even stronger than the Waterman case for application of the Myers rule. For here the appellant is a subcontractor retaining what the contractor complainant did not have in the Waterman case, namely, a completely adequate remedy at law against its customers, buttressed by the Government's guaranty of indemnity to the contractor for all liability incurred by him on account of withholding funds allegedly due the appellant. 55 In view of that fact the further one that constitutional issues are included among those tendered in this case but were not presented in the Waterman case, becomes wholly immaterial. To countenance short-circuiting of the Tax Court proceedings here would be, under all the circumstances but more especially in view of Congress' policy and command with respect to those proceedings, a long overreaching of equity's strong arm. 56 The judgment is affirmed. 57 Affirmed. 58 Mr. Justice JACKSON concurs in the result. 59 Mr. Justice DOUGLAS dissents. 1 The First Renegotiation Act was contained in § 403 of the Sixth Supplemental National Defense Appropriation Act, 56 Stat. 226, 245, as amended 56 Stat. 798, 982, 57 Stat. 347, 57 Stat. 564. The Second Renegotiation Act appears in the 1943 Revenue Act. 58 Stat. 21, 78, as amended 59 Stat. 294, 50 U.S.C.A.Appendix, § 1191. 2 Of October 31, 1942, 56 Stat. 1013, 35 U.S.C. §§ 89—96, 35 U.S.C.A. §§ 89—96. 3 See note 1. 4 The War Contracts Price Adjustment Board is created by § 403(d)(1) of the Second Renegotiation Act, 50 U.S.C.App. § 1191(d)(1), 50 U.S.C.A.Appendix, § 1191(d)(1). The present appellees were substituted by an order of the District Court as successors in office of the original defendants. 5 D.C., 62 F.Supp. 520. 6 See note 9. The Tax Court proceedings remain pending and undetermined at the date of this decision. 7 On appellant's application the District Court enjoined the defendants, pending determination of the appeal, from taking further action to enforce the statutes, particularly by notifying or requiring appellant's customers to pay into the Treasury of the United States moneys alleged to be due Aircraft under contract provisions, but claimed by appellees to be payable to the Government as excessive profits pursuant to the Acts' terms. Cf. notes 10, 13 infra. 8 The amended complaint alleges that appellant supplied materials to the Department of the Navy under one contract made directly between it and the Government. But it is also alleged that appellant has been paid in full for these supplies. Apparently, therefore, the contract and the relation which it created between appellant and the Government have no bearing upon the issues in this cause. 9 The First Renegotiation Act did not provide for redetermination by the Tax Court as originally enacted; nor did it specifically provide for review, by any body, of the determination of excessive profits. See Steadman, A Further Legal Inquiry Into Renegotiation: 1 (1944) 43 Mich.L.Rev. 1, 12. But Tax Court redetermination was afforded by the Second Renegotiation Act and was made retroactive. 50 U.S.C.App. § 1191(e)(2), 50 U.S.C.A.Appendix, § 1191(e)(2), provides that it is available to 'Any contractor or subcontractor * * * aggrieved by a determination of the Secretary made prior to the date of the enactment of the Revenue Act of 1943, with respect to a fiscal year ending before July 1, 1943, as to the existence of excessive profits.' 10 The original Act, as amended, provided: 'Upon renegotiation, the Secretary is authorized and directed to eliminate any excessive profits under such contract or subcontract * * * (iii) by directing a contractor to withhold for the account of the United States, from amounts otherwise due to the subcontractor, any amount of such excessive profits under the subcontract * * *.' 56 Stat. at page 983. See also note 13. 11 An earlier petition was dismissed on motion of the United States because it was filed during the time when the War Contracts Price Adjustment Board might have initiated a review. Cf. Macauley v. Waterman S.S. Corporation, 327 U.S. 540, 66 S.Ct. 712, 90 L.Ed. 839. After dismissal of the earlier petition and before filing of the later one, appellant had sought redetermination, pursuant to § 403(e)(1) of the Second Renegotiation Act, by the War Contracts Price Adjustment Board. The Board denied review and adopted the Under Secretary's redetermination as its own. 12 For example, in addition to contentions that the Renegotiation Acts as a matter of substantive law violate Article I, § 1, of the Constitution in that they constitute unlawful delegations of legislative power as well as contravene the due process and just compensation provisions of the Fifth Amendment, the jury trial provision of the Seventh Amendment, and the Tenth Amendment, it is said that the order under the Second Renegotiation Act was based in part at least on information said to have been obtained from 'governmental and other reliable sources' which the appellant has had no opportunity to examine or rebut. 13 Section 403(c)(2) of the Second Renegotiation Act, 50 U.S.C.App. § 1191(c) (2), 50 U.S.C.A.Appendix, § 1191(c)(2), provides: 'Upon the making of an agreement, or the entry of an order, under paragraph (1) by the Board, or the entry of an order under subsection (e) by The Tax Court of the United States, determining excessive profits, the Board shall forthwith authorize and direct the Secretaries or any of them to eliminate such excessive profits (A) by reductions in the amounts otherwise payable to the contractor under contracts with the Departments, or by other revision of their terms; or (B) by withholding from amounts otherwise due to the contractor any amount of such excessive profits; or (C) by directing a contractor to withhold for the account of the United States, from amounts otherwise due to a subcontractor, any amount of such excessive profits of such subcontractor; or (D) by recovery from the contractor, through repayment, credit, or suit any amount of such excessive profits actually paid to him; or (E) by any combination of these methods, as in deemed desirable. * * *' 14 The allegations included the following: 'Notwithstanding the fact that the plaintiff has filed its petition for redetermination in The Tax Court of the United States whereby it seeks an orderly determination of the amount, if any, it may owe to the United States of America, as excessive profits for its fiscal year ending November 30, 1943, the War Contracts Price Adjustment Board, purporting to act under the provisions of Section 403(c)(2) of the Renegotiation Act, purposes to direct the defendant Henry L. Stimson, Secretary of War, or his delegates, to direct contractors, customers of the plaintiff, to withhold moneys due to the plaintiff by such contractors for the account of the United States, in amounts determined by it, the War Contracts Price Adjustment Board, to be due as excessive profits, and Henry L. Stimson, Secretary of War, or his delegates purposes to follow such directions of the War Contracts Price Adjustment Board and further to direct such contractors to pay such sms of mone y into the Treasury of the United States, in accordance with the procedure adopted by Henry L. Stimson, Secretary of War, acting through his delegate, Robert P. Patterson, in respect of excessive profits found by him to be due for the fiscal year of the plaintiff ending November 30, 1942, as heretofore, recited in this complaint, before The Tax Court of the United States of America shall have made or shall have had opportunity to make any determination of the plaintiff's petition for a redetermination of its excessive profits, if any, for its fiscal year ending 1943.' See also note 42. 15 The omission from the First Act of various provisions contained in the Second, see, e.g., note 9 supra, is alleged to afford basis for invalidating the former even though the latter may be held constitutional. 16 See note 42 infra. 17 Although asserted by way of equitable setoff, the effect of allowing such a claim would be, as we said in the Mine Safety case, to prevent the Secretary from taking certain action which, though it would not 'stop payment by the government of money lawfully i the Unite d States Treasury to satisfy the government's and not the Secretary's debt to the appellant,' nevertheless would amount to 'an indirect effort to collect a debt allegedly owed by the government in a proceeding to which the government has not consented,' 326 U.S. at pages 374, 375, 66 S.Ct. at page 221, 90 L.Ed. 140, and to which, as in that case, it has not been made formally a party. 18 Especially State of Louisiana v. McAdoo, 234 U.S. 627, 34 S.Ct. 938, 58 L.Ed. 1506; Belknap v. Schild, 161 U.S. 10, 16 S.Ct. 443, 40 L.Ed. 599; In re Ayers, 123 U.S. 443, 8 S.Ct. 164, 31 L.Ed. 216. 19 Appellant's claim is that ordering its customers not only to withhold funds due to it under the contracts but also to pay them into the Treasury would be, in effect, a 'trespass upon its property' within the rule of United States v. Lee, 106 U.S. 196, 1 S.Ct. 240, 27 L.Ed. 171; cf. Land v. Dollar, 330 U.S. 731, 67 S.Ct. 1009, and that execution of such orders would deprive it of vested property rights, contrary to various constitutional provisions. Since a decision of the constitutional issues would determine the Government's right to the funds, in any event, the case, like Land v. Dollar, supra, would seem to be one 'where the question of jurisdiction (as involving the Government's immunity to suit) is dependent on decision of the merits.' 330 U.S. at page 735, 67 S.Ct. at pag e 1011. 20 The provision, however, applies to determinations made prior to the Act's effective date. See note 9 supra. 21 Otherwise the Board's order becomes final. § 403(c)(1). The provision reads: 'In the absence of the filing of a petition with The Tax Court of the United States under the provisions of and within the time limit prescribed in subsection (e)(1), such order shall be final and conclusive and shall not be subject to review or redetermination by any court or other agency.' Similarly, a limitation of one year is placed upon 'all liabilities of the contractor or subcontractor for excessive profits received or accrued' during each fiscal year. See § 403(c)(3). 22 See note 11 supra. 23 Citing, at 90 Cong.Rec. 1355, the statement of a sponsor in the House that the Tax Court could decide 'all questions of fact and law. * * *' See also notes 30, 35 infra. 24 The Waterman S.S. Corporation not only had failed to file a petition with the Tax Court but also had refused to attend renegotiation conferences with the Board or to supply information sought by it. 25 See note 26 infra. 26 See 89 Cong.Rec. 9928—9929. Previously the governmental departments concerned with renegotiation had set up a central board to effect a 'more uniform policy in the determination of excessive profits,' H.Rep. 871, 1st Sess., 75, but there was dissatisfaction with the board thus voluntarily established, see 89 Cong.Rec. 9934, and 'insistence in Congress that coordination between the departments having renegotiating authority under the prior act be not a matter of voluntary cooperation but one of statutory necessity.' Steadman, A Further Legal Inquiry Into Renegotiation: I (1944) 43 Mich.L.Rev. 1, 6. 27 See 53 Stat. 158, as amended by 56 Stat. 957, 26 U.S.C. § 1100, 26 U.S.C.A. Int.Rev.Code, § 1100: 'The Board of Tax Appeals (hereinafter referred to as the 'Board') shall be continued as an independent agency in the Executive Branch of the Government. The Board shall be known as The Tax Court of the United States and the members thereof shall be known as the presiding judge and the judges of The Tax Court of the United States.' 28 See H.Rep. 871, 78th Cong., 1st Sess., 77; Steadman, A Further Legal Inquiry Into Renegotiation: II (1944) 43 Mich.L.Rev. 235, 270; cf. S.Rep. 627, 78th Cong., 1st Sess., 109; H.Rep. 1079, 78th Cong., 2d Sess., 83. 29 Dobson v. Commissioner, 320 U.S. 489, 498, 64 S.Ct. 239, 245, 88 L.Ed. 248; cf. note 27. 30 'That court will have exclusive jurisdiction, by an order, to make a final determination as to whether excessive profits have been received or accrued, or whether a fair price has been determined, and The Tax Court's determination may not be reviewed or redetermined by any other court or agency.' H.Rep. 871, 78th Cong., 1st Sess., 77. See also 89 Cong.Rec. 9930: 'The committee has provided that any contractor aggrieved by a determination of excessive profits under the old law, whether he was cooperative and signed a closing agreement or not, may have a review of that determination in the Tax Court of the United States and in the review have all issues, constitutional and otherwise, decided by the court.' 31 See note 13 supra. 32 The record contains an affidavit made by Robert P. Patterson when Under Secretary of War which reads in part: 'Wartime procurement for the military establishment differs radically from procurement in times of peace. Speed in production at once becomes all-important. * * *' '* * * the war procuring agencies cannot use normal methods of procurement. The pressing need for speed requires the abandonment of drawn-out negotiation and the careful surveys of all relevant factors which sound purchasing would otherwise require. Competition necessarily wanes and no longer offers an adequate guide to the prices which should be paid. Above all, the forecasting of costs of production becomes, in large measure, a matter of informed guessing rather than of real cost analysis.' 33 The Second Renegotiation Act separated the repricing authority from renegotiation. See 58 Stat. 92, 50 U.S.C.App. § 1192, 50 U.S.C.A.Appendix, § 1192. See also S.Rep. 627, 78th Cong., 1st Sess., 37—38. 34 See note 38 infra. 35 See notes 23, 30 supra; cf. Helvering v. Independent Life Ins. Co., 292 U.S. 371, 58 S.Ct. 154, 82 L.Ed. 224, reversing Commissioner v. Independent Life Ins. Co., 6 Cir., 67 F.2d 470, affirming 17 B.T.A. 757; Stein Bros. Mfg. Co. v. Secretary of War, 7 T.C. 863. 36 A copy of the petition for redetermination filed in the Tax Court by appellant has been attached as an exhibit to the complaint. 37 Appellant in its complaint alleged, for example, that although for the fiscal year ending November 30, 1943, its total sales amounting to $3,548,845.50 were renegotiated, 'only $2,207,574.95, in any event, were subject to renegotiation; that $1,312,250.07 of its total sales were of 'Standard Commercial Articles' as defined in the Renegotiation Act; were articles sold under competitive conditions affecting the sale thereof in a manner which reasonably protected the Government against excessive prices, and, as such, were not subject to renegotiation; that $29,020.48 of its total sales were not sold for the ultimate use of the United States of America or any department, agency or instrumentality thereof, but were made and sold for civilian use, and, as such, were not subject to renegotiation.' 38 Thus, the Court has permitted resort to a federal court of equity where a state was enforcing confiscatory rates and by its law precluded a stay or supersedeas until the state courts 'acting in a legislative capacity' had taken final action. Oklahoma Natural Gas Co. v. Russell, 261 U.S. 290, 43 S.Ct. 353, 67 L.Ed. 659; Pacific Telephone & Telegraph Co. v. Kuykendall, 265 U.S. 196, 44 S.Ct. 553, 68 L.Ed. 975; Porter v. Investors Syndicate, 286 U.S. 461, 52 S.Ct. 617, 76 L.Ed. 1226. For other decisions holding that a federal court may exercise its equitable jurisdiction where there is an inadequate state remedy to correct a constitutional wrong, see Hillsborough v. Cromwell, 326 U.S. 620, 66 S.Ct. 445, 90 L.Ed. 358; Wallace v. Hines, 253 U.S. 66, 40 S.Ct. 435, 64 L.Ed. 782. The rule has been applied most frequently in respect to state rather than federal administrative action, though of course it is not inapplicable to the latter, notwithstanding the power of Congress to regulate the jurisdiction and procedure of the federal courts may present obstacles to its application not present in state cases. 39 It is unnecessary to consider whether in such a suit a district court should find it proper to defer its final decision until after the Tax Court had made it final redetermination, in order possibly to avoid the necessity of deciding the constitutional questions. Cf. American Federation of Labor v. Watson, 327 U.S. 582, 599, 66 S.Ct. 761, 90 L.Ed. 873, and cases cited. For, even in the event of such action, the court would have power to preserve, pending the administrative decision, the status quo and all rights of the appellant. The provision in § 403(e)(1) that the filing of a petition with the Tax Court 'shall not operate to stay the execution of the order of the (War Contracts Price Adjustment) Board' under § 403(c)(2) does not mean that the courts are deprived of their power to grant stays where necessary. 'Where Congress wished to deprive the courts of this historic power, it knew how to use apt words * * *.' Scripps-Howard Rapid v. Federal Communications Commission,316 U.S. 4 , 17, 62 S.Ct. 875, 883, 86 L.Ed. 1229. It did so in the Emergency Price Control Act of 1942, 56 Stat. 23, 50 U.S.C.A.Appendix, § 901 et seq.; see Yakus v. United States, 321 U.S. 414, 429, 437, 64 S.Ct. 660, 669, 673, 88 L.Ed. 834, using very explicit language. Here the provision literally at any rate appears to mean only that there shall be no automatice stay by virtue of filing the petition in the Tax Court. 40 The paragraph covers withholding payment pursuant to direction by the Board to the contractor, for the account of the United States. See note 13 supra. 41 The situation of the licensor in the Coffman case, with reference to the remedy by suit against its licensees was exactly the same as appellant's situation here in respect to suit against its customers, the contractors with the Government. We said, as to the adequacy of that remedy: 'But whether the provisions of the Act be valid or invalid appellants show no ground for equitable relief. If valid they would be a defense, and appellant would be entitled to no relief other than that afforded by the suit against the Government authorized by § 2 of the Act. If invalid, appellant's right to recover remains unimpaired. The sufficiency of the defense may be as readily tested in a suit at law to recover the royalties as by the present suit in equity, to enjoin payment of the royalties into the Treasury. In either case appellant would receive all the relief to which it shows itself entitled.' 323 U.S. at page 323, 65 S.Ct. at page 302, 89 L.Ed. 264. The Coffman decision stood squarely upon the grounding of the adequacy of the remedy by suit against the licensees, although it rested also upon the alternative ruling that there was no case or controversy. This was for the reason that the appellant asserted no right to recover the royalties, but asked only a determination that the Royalty Adjustment Act was unconstitutional 'and, if so found, that compliance with the Act be enjoined, an issue which appellee * * * declines to contest.' This, we said, made the prayer of the bill 'but a request for an advisory opinion as to the validity of a defense to a suit for recovery of the royalties.' 323 U.S. at pages 323, 324, 65 S.Ct. at page 30, 89 L.Ed. 264. 42 It is alleged that appellant, unless allowed to maintain this suit, will be caused unnecessarily to run the risk of impaired credit or insolvency of customers directed to withhold funds; that its working capital essential to carrying out its obligations with contractors and subcontractors would be reduced; that its operations 'will be hampered and its functions irreparably damaged by the reduction of its working capital'; and that it will be forced either to continue supplying customers directed to withhold payment, impairing its assets and the interests of stockholders or, in the alternative, to refuse making such shipments with the asserted consequence of being unable to continue in business, 'inasmuch as a substantial portion of its market for its products presently is prime contractors with the United States and subcontractors thereof.' 43 Appellant also alleges that it 'could not recover interest for the use of its money' in a suit against the United States in the Court of Claims, which on other counts it asserts is both unavailable and inadequate. There is no allegation, however, concerning interest as not being recoverable in suits against its customers. And, as we have pointed out above, the statutory indemnity provided for such contractors is in sufficiently broad terms to cover interest as well as any other liability incurred by them through authorized withholding, a guaranty which certainly would not preclude recovery of interest by the suit against the contractors if terminated on the merits in appellant's favor. 44 It is perhaps of some significance in this respect that the complaint contains allegations, though not made in this connection, relating to both the fiscal years 1942 and 1943 to the effect that over 80 per cent of the dollar value of appellant's total shipments were made to three private concerns, Fairchild Engine and Airplane Corporation, General Motors Corporation, Woodward Governor Company, and the United States Navy. Concerning the shipments to the Navy, see note 8. 45 See note 43 supra.
89
332 U.S. 234 67 S.Ct. 1599 91 L.Ed. 2022 UNITED STATESv.MUNSEY TRUST CO. OF WASHINGTON, D.C. No. 847. Argued May 6, 1947. Decided June 23, 1947. [Syllabus from pages 234-236 intentionally omitted] Mr. Philip Elman, of Washington, D.C., for petitioner. Messrs. W. B. Dew, of Hartford, Conn., and Alexander M. Heron, of Washington, D.C., for respondent. Mr. Justice JACKSON delivered the opinion of the Court. 1 This case presents a problem arising out of contracts for public building construction and repair. The rights inter sese of contractor, surety, assignees and government have been productive of much litigation, but we have not heretofore had to decide whether percentages retained pursuant to contract by the United States may be subjected to its set-off claims despite the claims of a surety who has paid laborers and materialmen. 2 In May and July, 1940, six contracts were made between the United States and the Federal Contracting Corporation, in which the corporate contractor agreed to paint and repair certain federal buildings. Each contract conformed to the requirements of statute, 49 Stat. 793, 40 U.S.C. § 270a et seq., 40 U.S.C.A. § 270a et seq., by providing for two surety bonds, one conditioned on the completion of the work within the contract period, and the other on the payment of those furnishing labor and material to the contractor. The Aetna Casualty and Surety Company signed those bonds, each of which assigned to it the contractor's claims against the government for sums due on the contracts whenever the surety should be compelled by default of the contractor to fulfill its obligations.1 The work was completed by the contractor apparently in 1940, and accepted by the government. The surety therefore was not called upon to make good the promise of the performance bonds. But the contractor did not pay $13,065.93 owed to persons who had supplied labor and material for performance of five of the six contracts. This indebtedness the surety paid between April and September, 1941 as the payment bonds obliged it to do. 3 Under the customary terms of its contracts, the government had retained percentages of the progress payments due to the contractor. This retained money, on acceptance of the work, amounted to $12,445.03, but it was not disbursed. On October 18, 1940, the Federal Contracting Corporation submitted a bid to the United States for another painting job, in St. Louis. That bid was accepted, but the contractor then failed to enter into contract for the work. Another contractor painted the building for a price which left the government considerably more out-of-pocket than it would have been had Federal undertaken performance at its bid price. It is undisputed that $6,731.50 is the amount of damages sustained by the government after it had applied the contractor's deposit of $415.00 in reduction. 4 Almost inevitably, court process was begun to untangle claims to the money the United States still owed on the six contracts. A stockholder of Federal asked the United States District Court for the District of Columbia to appoint a receiver2 to collect the money. The Aetna Casualty and Surety Company was made a party to that action. Respondent here, the Munsey Trust Company, was appointed receiver with directions to demand and authority to receive from the United States the proceeds of the six contracts. The order of appointment also recited that 'the proceeds of all collections made by the Receiver pursuant to this order shall be held for the reimbursement of the defendant The Aetna Casualty and Surety Company for expenditures made by it in the payment of furnishers of labor and material under the several contracts of the Federal Contracting Corporation.' 5 On demand by the receiver for the amounts due, the General Accounting Office deducted the government's claim of $6,731.50 and paid over $5,713.53. Aetna, by letter to the Comptroller General, protested the government's settlement by set-off and asserted its right to an additional $3,568.23.3 The receiver also protested the set-off and demanded $3,143.23 for reimbursement of the surety. It relied upon Maryland Casualty Co. v. United States, 100 Ct.Cl. 513; Id., Ct.Cl., 53 F.Supp. 436. The Acting Comptroller General declined to follow the opinion of the Court of Claims, in the absence of ruling by this Court, and rejected the protests. When the receiver reported its efforts to the district court, it was ordered to turn over to the surety the money collected, less $500. That sum was for prosecution of suit in the Court of Claims for the recovery of whatever other moneys 'may be due under the contracts of the Federal Contracting Corporation.' This action was begun, and the Court of Claims gave judgment for $3,568.23 to respondent. 67 F.Supp. 976. We granted the government's petition for certiorari because of the importance and novelty of the question and the cumulative effect of Maryland Casualty Co. v. United States, supra, and the decision below. 330 .S. 814, 6 7 S.Ct. 863. 6 In these cases, it is usual for the rights relied upon to be largely derivative or subrogated ones. Decision will be attended with unnecessary confusion and difficulty if it is not clear whose rights are being asserted and who claims them. The Court of Claims treated this case as though the surety were plaintiff. But the district court directed the receiver to bring the suit. Its order of appointment made it the representative of Federal Contracting Corporation, although the sums it was to collect were to be held for the reimbursement of Aetna. The second order authorized this action to collect whatever other money might be held to be due under the six contracts which the government would not voluntarily pay. Certainly, the receiver sued at least in the right of Federal, but since its efforts were directed to be for the benefit of Aetna, it might assert the surety's rights also. Samuel Olson & Co. v. Voorhees, 3 Cir., 292 F. 113, 115. 7 If the right of the United States to make the set-off were opposed only by the claims of the contractor, this case would present no difficulty. The government has the same right 'which belongs to every creditor, to apply the unappropriated moneys of his debtor, in his hands, in extinguishment of the debts due to him.' Gratiot v. United States, 15 Pet. 336, 370, 10 L.Ed. 759; McKnight v. United States, 98 U.S. 179, 186, 25 L.Ed. 115. More than that, federal statute gives jurisdiction to the Court of Claims to hear and determine 'All set-offs, counterclaims, claims for damages, whether liquidated or unliquidated, or other demands whatsoever on the part of the Government of the United States against any claimant against the Government in said court * * *.' Judicial Code § 145, 28 U.S.C. § 250 (2), 28 U.S.C.A. § 250(2). This power given to the Court of Claims to strike a balance between the debts and credits of the government, by logical implication gives power to the Comptroller General to do the same, subject to review by that court. Insofar as the suitor in the Court of Claims asserted the contractor's title to the sum in dispute, that court was under statutory duty to recognize the undisputed claim for damages of the United States. Cherry Cotton Mills, Inc., v. United States, 327 U.S. 536, 66 S.Ct. 729, 90 L.Ed. 835. 8 But the surety urges that it is subrogated also to the rights of laborers and materialmen whom it paid and of the United States. From Prairie State Nat. Bank of Chicago v. United States, 164 U.S. 227, 17 S.Ct. 142, 41 L.Ed. 412, to American Surety Co. v. Sampsell, 327 U.S. 269, 66 S.Ct. 571, 90 L.Ed. 663, we have recognized the peculiarly equitable claim of those responsible for the physical completion of building contracts to be paid from available moneys ahead of others whose claims come from the advance of money. But in all those cases, the owner was a mere stakeholder and had no rights of its own to assert. Respondent tells us that here the United States is in the same position and that as a general creditor, it has no more right to the money which it holds than does any other general creditor of the contractor. 9 At the time demand for payment was made by the receiver, the claim of the United States on the St. Louis contract was extant for some time. The disbursing officers, therefore, did not concede that they held the entire amount of the retained percentages for distribution to the contractor or others. And one whose own appropriation and payment of money is necessary to create a fund for general creditors is not a general creditor. He is not compelled to lessen his own chance of recovering what is due him by setting up a fund undiminished by his claim, so that others may share it with him. In fact, he is the best secure of credit ors; his security is his own justified refusal to pay what he owes until he is paid what is due him. 10 But the infirmity in respondent's case goes deeper. If the United States were obligated to pay laborers and materialmen unpaid by a contractor, the surety who discharged that obligation could claim subrogation. But nothing is more clear than that laborers and materialmen do not have enforceable rights against the United States for their compensation. Cf. H. Herfurth, Jr., Inc., v. United States, 89 Ct.Cl. 122; see Schmoll v. United States, 63 F.Supp. 753, 105 Ct.Cl. 415, 455; Maryland Casualty Co. v. United States, Ct.Cl., 53 F.Supp. 436, 440. They cannot acquire a lien on public buildings, United States, for Use of Hill, v. American Surety Co., 200 U.S. 197, 203, 26 S.Ct. 168, 170, 50 L.Ed. 437; Equitable Surety Co. v. United States, to Use of W. McMillan & Son, 234 U.S. 448, 455, 34 S.Ct. 803, 805, 58 L.Ed. 1394, and as a substitute for that more customary protection, the various statutes were passed which require that a surety guarantee their payment. Of these, the last and the one now in force is the Miller Act under which the bonds here were drawn. 11 The surety says, nevertheless, that the laborers and materialmen may have a lien, or something in the nature of a lien on the retained percentages. Its argument runs into logical difficulties. For it asserts that the moneys are retained by the government as much for assurance that the contractor will perform his contract by paying the laborers and materialmen as by completing the work on time. It is said to follow that so long as they remain unpaid, the contractor may not demand payment and the government would be justified in refusing to disburse the retained percentages.4 In that case, how may the laborers and materialmen have a lien upon money which the United States may legally keep? Surely it is not intended that the laborers and materialmen may claim payment of that which is not due to the contractor. We are aware that the laborers and materialmen have been paid, so that by no interpretation of the contracts between government and contractor can there be restrictions on paying out the money retained. It is said that it was the surety's payment of those claims which released the asserted contract restrictions. In relying on the rights of the laborers and materialmen, however, the surety must establish that those rights existed before their claims were paid. For it is elementary that one cannot acquire by subrogation what another whose rights he claims did not have. Once the laborers and materialmen have been paid, either by contractor or surety, they have no rights in any fund. If before they are paid, the fund to which they are said to be entitled to look is unavailable for the very reason that they are unpaid, the surety relies on nothing when it relies on those nonexistent 'rights.' One who rests on subrogation stands in the place of one whose claim he has paid, as if the payment giving rise to the subrogation had not been made. See Aetna Life Insurance Co. v. Town of Middleport, 124 U.S. 534, 548, 8 S.Ct. 625, 629, 31 L.Ed. 537. He cannot jump back and forth in time and present himself at once as the unpaid claimant and again, under the conditions as they have changed because payment was made. 12 We need not decide whether laborers and materialmen would have any claim to the retained percentages, if both contractor and surety failed to pay them. Even if they do, certainly those would be rights to which the surety could not be subrogated for by hypothesis it would have done nothing to earn subrogation. 13 The surety has yet another party whose rights it would claim, if it cannot prevail by substitution or contractor or laborers and materialmen. This contention too was sustained by the Court of Claims when it said that the rights of the United States devolved upon the surety, because of its payments. We are told that the United States retained the money to assure performance of all the obligations of the contractor, and that the surety is entitled to apply that security to indemnify itself for performing one of those obligations. This is by analogy to the rule that an obligee, as against a surety, may not apply security in satisfaction of debts other than the one it secures. See 4 Pomeroy, Equity Jurisprudence, 5th Ed., 1075. But although we have assumed, for the purposes of another argument, that assurance that laborers and materialmen will be paid is one of the reasons for retaining the money, it seems more likely that completion of the work on time is the only motive. California Bank v. United States Fidelity & Guaranty Co., 9 Cir., 129 F.2d 751; see Schmoll v. United States, 63 F.Supp. 753, 105 Ct.Cl. 415, 455; Maryland Casualty Co. v. United States, supra, 53 F.Supp. at page 439. It is hardly reasonable to withhold money in order to assure payments which perhaps can be made only from the money earned. In any event, we are not prepared to apply law relating to security to unappropriated sums which exist only as a claim. 14 Finally, the surety by reference to the Maryland Casualty case, supra, suggests that it has rights of its own in the money which the government retained. It argues that the implication of the several contracts among government, contractor and surety was that the moneys earned under the repair contracts would be available to pay claims arising under each job. However, if statute did not require a surety, there could be no question that the government would have the right of set-off. Respondent's contention then comes to this: that by requiring the contractor to furnish assurances that he will perform his obligations to laborers and materialmen, the government has deliberately decreased the ordinary safeguards it would have had to enforce the contractor's obligations to it. We see nothing in the words of the contract or the statute to lead us to this conclusion. On the contrary, the statutory provisions requiring a separate bond for payment of laborers and materialmen were enacted for their benefit, not to the detriment of the government. It is the surety who is required to take risk. We have no warrant to increase risks of the government. 15 Respondent argues that if the work had not been completed, and the surety chose not to complete it, the surety would be liable only for the amount necessary to complete, less the retained money. Moreover, if the surety did complete the job, it would be entitled to the retained moneys in addition to progress payments. The situation here is said to be similar. But when a job is incomplete, the government must expend funds to get the work done, and is entitled to claim damages only in the amount of the excess which it pays for the job over what it would have paid had the contractor not defaulted. Therefore, a surety would rarely undertake to complete a job if it incurred the risk that by completing it might lose more than if it had allowed the government to proceed. When laborers and materialmen, however, are unpaid and the work is complete, the government suffers no damage. The work has been done at the contract price. The government cannot suffer damage because it is under no legal obligation to pay the laborers and materialmen. In the case of the laborers' bond, the surety has promised that they will be paid, not as in the case of performance bond, that work will be done at a certain price. The law of damages is therefore not pertinent to the payment bond. 16 We hold that the government properly used its right to set off its independent claim and the judgment below must be reversed. 17 Reversed. 18 Mr. Justice BURTON dissents. 19 Mr. Justice DOUGLAS took no part in the consideration or ecision of this case. 1 These assignments were of course invalid against the United States, R.S. § 3477, 31 U.S.C. § 203, 31 U.S.C.A. § 203; Martin v. National Surety Co., 300 U.S. 588, 57 S.Ct. 531, 81 L.Ed. 822, but they enable the surety to prevail over the contractor if there is contest between them. 2 Such proceedings to appoint a receiver in the District of Columbia are for the purpose of taking possession of a fund or property and to prevent its loss or dissipation. Insolvency is not a necessary allegation, Houston v. Ormes, 252 U.S. 469, 40 S.Ct. 369, 64 L.Ed. 667, and there is no claim in this case that the contractor is insolvent. 3 The surety did not and could not claim the whole amount retained by the government. The payments for which it was liable and which it paid, on two of the contracts exceeded, and, on the other four, were less than, the amounts retained on each particular contract. 4 If the money is retained only to assure performance of the work, then the contractor might compel payment when the work is accepted. In that case, the surety's argument falls, since obviously, before paying, the government might set off claims against the contractor.
78
332 U.S. 134 67 S.Ct. 1716 91 L.Ed. 1955 FOSTER et al.v.PEOPLE OF STATE OF ILLINOIS. No. 540. Argued May 8, 1947. Decided June 23, 1947. Mr. Charles Kaufman, of Chicago, Ill., for petitioners. Mr. William C. Wines, of Chicago, Ill., for respondent. Mr. Justice FRANKFURTER delivered the opinionof the Cou rt. 1 This is an original proceeding in the Supreme Court of Illinois by way of writ of error to test the validity of sentences of imprisonment following pleas of guilty. The Supreme Court of Illinois having denied the writ, 394 Ill. 194, 68 N.E.2d 252, we brought the case here, 329 U.S. 712, 67 S.Ct. 630, because of the importance of reviewing convictions where solid doubt is raised whether the requirements of due process have been observed. 2 On February 22, 1935, the petitioners were sentenced to confinement in the Illinois State Penitentiary, under the Illinois State indeterminate sentence law, after pleading guilty to an indictment charging them with burglary and larceny. Cahill's Ill.Rev.Stats. (1933) c. 38, §§ 65, 796, Ill.Rev.Stat.1933, c. 38, §§ 84, 802. Since the controversy turns on the legal significance of the circumstances under which the pleas of guilty were accepted, it is important to state them according to the record which, for purposes of this proceeding, is binding upon the Illinois Supreme Court and therefore upon this Court. According to the 'Minutes from the Judges Docket,' the defendants Foster and Payne (petitioners here), 'having been furnished with a copy of the Indictment and a list of the Jurors and Peoples Witnesses and are advised of their rights of Trial and of the consequences of an entry of a plea of guilty and being arraigned in open Court for plea to the Indictment says, each for himself That he is guilty of burglary and larceny as charged in the indictment and thereupon the Court advises and admonishes each of said defendants of the consequences of entering such pleas of guilty, and Thereafter each of said defendants still persist in such pleas of guilty * * * Whereupon said pleas of guilty are received and entered of record.' 3 'The Court finds the ages of said defendants to be as follows, respectively, Nelson Foster 34 years old, George Payne, alias Elijah Jefferson 48 years. * * *' 4 Eleven years later, on February 7, 1946, the petitioners asked the Supreme Court of Illinois for their discharge. Various state grounds were urged and rejected. Our sole concern is with the claim 'that the record in this case fails to show' a compliance with the Fourteenth Amendment insofar as the Due Process Clause of that Amendment requires an accused to have the benefit of counsel. 5 The considerations that guide the disposition of this case have been canvassed here in a series of recent opinions. The 'due process of law' which the Fourteenth Amendment exacts from the States is a conception of fundamental justice. See Hebert v. Louisiana, 272 U.S. 312, 316, 47 S.Ct. 103, 104, 71 L.Ed. 270, 48 A.L.R. 1102; Palko v. Connecticut, 302 U.S. 319, 325, 58 S.Ct. 149, 151, 152, 82 L.Ed. 288. It is not satisfied by merely formal procedural correctness, nor is it confined by any absolute rule such as that which the Sixth Amendment contains in securing to an accused 'the Assistance of counsel for his defence.' By virtue of that provision, counsel must be furnished to an indigent defendant prosecuted in a federal court in every case, whatever the circumstances. See Palko v. Connecticut, supra, 302 U.S. at page 327, 58 S.Ct. at page 152, 82 L.Ed. 288; Johnson v. Zerbst, 304 U.S. 458, 58 S.Ct. 1019, 82 L.Ed. 1461, 146 A.L.R. 357; Betts v. Brady, 316 U.S. 455, 464—465, 62 S.Ct. 1252, 1257, 86 L.Ed. 1595. Prosecutions in State courts are not subject to this fixed requirement. So we have held upon fullest consideration. Betts v. Brady, supra. But process of law in order to be 'due' does require that a State give a defendant ample opportunity to meet an accusation. And so, in the circumstances of a 'particular situation,' assignment of counsel may be 'essential to the substance of a hearing' as part of the due process which the Fourteenth Amendment exacts from a State which imposes sentence. Palko v. Connecticut, supra, 302 U.S. at page 327, 58 S.Ct. at page 152, 82 L.Ed. 288. Such need may exist whether an accused contests a charge agaist him or pleads guilty. 6 The rationale of this application of due process was first expounded in Powell v. Alabama, 287 U.S. 45, 53 S.Ct. 55, 77 L.Ed. 158, 84 A.L.R. 527. In following that case our recent decisions have spoken of 'the rule of Powell v. Alabama,' or 'the requirements of Powell v. Alabama,' thereby indicating the essential scope of the doctrine. See Williams v. Kaiser, 323 U.S. 471, 476—477, 65 S.Ct. 363, 366, 89 L.Ed. 398; Tomkins v. Missouri, 323 U.S. 485, 488, 65 L.Ed. 370, 372, 89 L.Ed. 407. And so, in every case in which this doctrine was invoked and due process was found wanting, the prisoner sustained the burden of proving, or was prepared to prove but was denied opportunity, that for want of benefit of counsel an ingredient of unfairness actively operated in the process that resulted in his confinement. See Powell v. Alabama, supra, 287 U.S. at pages 51, 53, 56, 57—58, 53 S.Ct. at pages 57, 58, 59, 60, 77 L.Ed. 158, 84 A.L.R. 527; Smith v. O'Grady, 312 U.S. 329, 334, 61 S.Ct. 572, 574, 85 L.Ed. 859; Williams v. Kaiser, supra, 323 U.S. at pages 472, 473, 474, 476, 477, 65 S.Ct. at pages 364, 365, 366, 89 L.Ed. 398; Tomkins v. Missouri, supra, 323 U.S. at pages 486—487, 65 S.Ct. at page 371, 89 L.Ed. 407; House v. Mayo, 324 U.S. 42, 45—46, 65 S.Ct. 517, 519, 520, 89 L.Ed. 739; White v. Ragen, 324 U.S. 760, 762 763, 65 S.Ct. 978, 979, 980, 89 L.Ed. 1348; Rice v. Olson, 324 U.S. 786, 788—789, 65 S.Ct. 989, 990, 991, 89 L.Ed. 1367. Only the other day in a case concerning a charge of first-degree murder against a seventeen-year old defendant, in which we found a deprivation 'of rights essential to a fair hearing,' we took pains to point out that 'The court did not explain the consequences of the plea of guilty, and the record indicates considerable confusion in petitioner's mind at the time of the arraignment as to the effect of such a plea.' De Meerleer v. Michigan, 329 U.S. 663, 664, 67 S.Ct. 596, 597. 7 In this case there is neither proof nor uncontradicted allegation of any such miscarriage of justice in accepting pleas of guilty. The record of the proceeding plainly imports an observance of due process. In the contemporaneous language of the trial court, the defendants 'are advised of their rights of Trial and of the consequences of an entry of a plea of guilty,' the court 'advises and admonishes each of said defendants of the consequences of entering such pleas of guilty,' and the defendants thereafter still persisting, their pleas 'are received and entered of record.' There was nothing in the common-law record, on the basis of which the Supreme Court of Illinois rendered its decision, to contradict this account of the proceedings in 1935. We thus have in effect the bald claim that, merely because the record does not disclose an offer of counsel to a defendant upon a plea of guilty, although the court before accepting the plea duly advised him of his 'rights of Trial' and of the consequences of such a plea, he is 'deprived of rights essential to a fair hearing under the Federal Constitution.' De Meerleer v. Michigan, supra, 329 U.S. at page 665, 67 S.Ct. at page 597. 8 We reject such a claim. Most incarcerations are upon pleas of guilty, and probably most such pleas have been made without the felt need of counsel. It is not for us to suggest that it might be desirable to offer to every accused who desires to plead guilty the opportunities for counsel and to enter with formality upon the record the deliberate disclaimer of his need for counsel because of a full appreciation of the meaning of a plea of guilty as expounded by responsible judges. Our duty does not go beyond safeguarding 'rights essential to a fair hearing' by the States. After all, due process, 'itself a historical product,' Jackman v. Rosenbaum Co., 260 U.S. 22, 31, 43 S.Ct. 9, 67 L.Ed. 107, is not to be turned into a destructive dogma in the administration of systems of criminal justice under which the States have lived not only before the Fourteenth Amendment butfor the ei ghty years since its adoption. It does not militate against respect for the deeply rooted systems of criminal justice in the States that such an abrupt innovation as recognition of the constitutional claim here made implies, would furnish opportunities hitherto uncontemplated for opening wide the prison doors of the land. 9 Insofar as the sentences in this case are attacked on claims which were not open for consideration on the common-law record which alone was before the Illinois court, see 394 Ill. 194, 68 N.E.2d 252, they are not open here. Carter v. Illinois, 329 U.S. 173, 67 S.Ct. 216. They must be raised by whatever procedure Illinois may provide, or, in default of relief by appropriate Illinois proceedings, by a new claim of denial of due process for want of such relief. See Mooney v. Holohan, 294 U.S. 103, 55 S.Ct. 340, 79 L.Ed. 791, 98 A.L.R. 406. 10 Affirmed. 11 Mr. Justice BLACK, with whom Mr. Justice DOUGLAS, Mr. Justice MURPHY and Mr. Justice RUTLEDGE join, dissenting. 12 In Adamson v. California, this day decided, 332 U.S. 46, 67 S.Ct. 1672, the Court waters down the Fourteenth Amendment's application to the States of the Bill of Rights guarantee against self-incrimination so as to make it compatible with the Court's standards of decency and a fair trial. In this case the Court similarly waters down the Bill of Rights guarantee of counsel in criminal cases. In both cases, the Court refuses to strike down convictions obtained in disregard of Bill of Rights guarantees, assuming all the while that identical convictions obtained in federal courts would violate the Bill of Rights. For the Court, in the instant case, concedes that, by virtue of the Sixth Amendment, 'counsel must be furnished to an indigent defendant prosecuted in a federal court in every case, whatever the circumstances.' This, of course, relates to convictions following both pleas of not guilty and pleas of guilty. Williams v. Kaiser, 323 U.S. 471, 65 S.Ct. 363, 89 L.Ed. 398; Tomkins v. Missouri, 323 U.S. 485, 65 S.Ct. 370, 89 L.Ed. 407. 13 In the Adamson case, I have voiced my objections to dilution of constitutional protections against self-incrimination in state courts. This decision is another example of the consequences which can be produced by substitution of this Court's day-to-day opinion of what kind of trial is fair and decent for the kind of trial which the Bill of Rights guarantees. This time it is the right of counsel. We cannot know what Bill of Rights provision will next be attenuated by the Court. We can at least be sure that there will be more, so long as the Court adheres to the doctrine of this and the Adamson case. 14 The Court's decision relies heavily on Betts v. Brady, 316 U.S. 455, 62 S.Ct. 1252, 86 L.Ed. 1595. In that case, a man on relief, too poor to hire a lawyer, and whose request for the appointment of a lawyer was denied, was compelled to act as his own lawyer on a charge of robbery. Conviction followed. That case is precedent for this one. But it is the kind of precedent that I had hoped this Court would not perpetuate. 15 One thing more. The Court seems to fear that protecting these defendants' right to counsel to the full extent defined in the Bill of Rights would furnish 'opportunities hitherto uncontemplated for opening wide the prison doors of the land,' because presumably, there are many people like Betts, Foster and Payne behind those doors after trials without having had the benefit of counsel. I do not believe that such a reason is even relevant to a determination that we should decline to enforce the Bill of Rights. 16 Mr. Justice RUTLEDGE, with whom Mr. Justice BLACK, Mr. Justice DOUGLAS, and Mr. Justice MURPHY concur, dissenting. 17 I think the Sixth Amendment's guaranty of the right to counsel in criminal causes is applicable to such proceedings as this in state courts. 18 Apart from that view and upon the Court's basis that the Fourteenth Amendment by its own force independently prescribes a partial similar guaranty, cf. Palkov. Connect icut, 302 U.S. 319, 327, 58 S.Ct. 149, 152, 82 L.Ed. 288; Betts v. Brady, 316 U.S. 455, 62 S.Ct. 1252, 86 L.Ed. 1595; Powell v. Alabama, 287 U.S. 45, 53 S.Ct. 55, 77 L.Ed. 158, 84 A.L.R. 527, I am unable to accept its conclusion in this case. Of course if the so-called presumption of regularity is to be effective to sustain the denial of counsel in circumstances as bald as those presented in Gayes v. New York, 332 U.S. 145, 67 S.Ct. 1711, decided today, that presumption must work the same denial in the somewhat less startling facts of this case. 19 But when a record discloses as much as the record here shows, I do not think any presumption of regularity should be permitted to overcome the substance of the violated constitutional right. Such a presumption indeed, if valid by mere force of the fact that a judgment has been rendered, may always be indulged. Cf. Williams v. Kaiser, 323 U.S. 471, 65 S.Ct. 363, 89 L.Ed. 398; Tomkins v. Missouri, 323 U.S. 485, 65 S.Ct. 370, 89 L.Ed. 407; De Meerleer v. Michigan, 329 U.S. 663, 67 S.Ct. 596. And the consequences of such a course of action here, for the observance and preservation of constitutional rights, more especially of the indigent and ignorant who are unable to employ counsel from their own resources and do not know their rights, must be, not merely a denial of the basic right of counsel, but also a denial of the equal protection of the laws in sweeping application. Poverty or wealth will make all the difference in securing the substance or only the shadow of constitutional protections. 20 Here petitioners were charged with the serious crimes of burglary and larceny, handed a copy of the indictment, and arraigned. Every lawyer knows the difficulties of pleading to such charges, including the technicalities of the applicable statutes and especially of the practice relating to included or lesser offenses. The crimes charged involved penalties of imprisonment for from one year to life, the penalty actually imposed upon these petitioners. 21 On the very day the indictment was handed down, petitioners were arraigned, their pleas of guilty were accepted, and they were sentenced. At no time were they offered counsel or advised of their right to counsel, nor did they receive any assistance from counsel. The record, it is true, recites that they were 'advised of their rights of Trial and of the consequences of an entry of a plea of guilty,' notwithstanding which each said that he was guilty, whereupon the court 'advises and admonishes each of said defendants of the consequences of entering such pleas of guilty,' despite which each persisted in his plea. 22 However this vague and formal recital might be taken in other circumstances, it cannot be regarded in this case as meaning that petitioners were either offered counsel or informed of any right to counsel. Indeed the recital must be taken as having deliberately avoided including statements in either respect. And, upon the record as a whole, we are required not only to read it in this light but to conclude that the recital and the intentional omission of statements concerning the right to counsel were effective to establish that the petitioners were in fact denied that right. 23 The Court does not point out, but it is the very heart of this case, that under Illinois law these petitioners were, in effect, denied the right to have counsel tendered or appointed by the court. It was under no duty imposed by state law to tender counsel, to inquire into the need for counsel, or to inform the defendants of any right to counsel. Indeed, under the law of the state, it seems, the court would have exceeded its powers by taking action in any of these respects. 24 We are not only entitled, we are required, to read the record of the state's proceedings in the light of the state's law applicable to them. In Illinois by statute it is only in capital cases that the court is under an affirmative duty, when it appears that a defendant is indigent, to tender appointment of counsel.1 In non capital cases the following statute applies: 25 '* * * Every person charged with crime shall be allowed counsel, and when he shall state upon oath that he is unable to procure counsel, the court shall assign him competent counsel, who shall conduct his defense.' Ill.Rev.Stat. (1945) c. 38, par. 730. 26 The Illinois Supreme Court consistently has construed this statute as requiring appointment of counsel only when a defendant requests counsel and states on oath that he cannot procure counsel. It is expressly held that the provision 'does not place upon the court the duty to proffer the services of counsel, * * *.' People v. Lavendowski, 326 Ill. 173, 176, 157 N.E.193, 194, nor does it require advising defendants of their right to counsel. People v. Corrie, 387 Ill. 587, 589, 590, 56 N.E.2d 767. See also People v. Corbett, 387 Ill. 41, 55 N.E.2d 74; People v. Childers, 386 Ill. 312, 53 N.E.2d 878; People v. Fuhs, 390 Ill. 67, 60 N.E.2d 205. And the failure of the defendant to state his need and inability to procure counsel under oath is taken apparently as a waiver of the right. Cf. People v. Stubblefield, 391 Ill. 609, 610, 63 N.E.2d 762.2 27 Finally, the opinion of the Illinois court in this case shows that petitioners were denied relief on the basis of these rules.3 28 In the light of the Illinois statutes and decisions, therefore, the present record can be taken to sustain no presumption that the trial court offered counsel to petitioners, inquired concerning their need for counsel or ability to secure such aid, or advised them in any way of their right to have that assistance. The only tenable presumption is that the court refrained deliberately, in accordance with the state law, from taking action in any of these respects. 29 Moreover, when men appear in court for trial or plea, obviously without counsel or so far as appears the means of securing such aid, under serious charges such as were made here involving penalties of the character imposed, it is altogether inconsistent with their federal constitutional right for the court to shut its eyes to their apparently helpless condition without so much as an inquiry concerning its cause. A system so callous of the rights of men, not only in their personal freedom but in their rights to trial comporting with any conception of fairness, as to tolerate such action, is in my opinion wholly contrary to the scheme of things the nation's charter establishes. Courts and judges, under that plan, owe something more than the negative duty to sit silent and blind while men go on their way to prison, for all that appears, for want of any hint of their rights. 30 Adding to this blindness a 'presumption of regularity' to sustain what has thus been done makes a mockery of judicial proceedings in any sense of the administration of justice and a snare and a delusion of constitutional rights for all unable to pay the cost of securing their observance. 1 'Whenever it shall appear to the court that a defendant or defendants indicted in a capital case, is or are indigent and unable to pay counsel for his or her defense, it shall be the duty of the court to appoint one or more competent counsel for said defendant or defendants, who shall receive a reasonable sum for services * * *.' Ill.Rev.Stat. (1945) c. 38, par. 730. 2 And see note 3. 3 'It is first contended by plaintiffs in error that they did not have counsel appointed to represent and protect their rights. It is not shown by the record that the defendants informed the court or in any way indicated that they desired counsel. We have repeatedly held that the right to be represented by counsel is a personal right which a defendant may waive or claim as he himself may determine. People v. Fuhs, 390 Ill. 67, 60 N.E.2d 205. This contention is without merit.' 394 Ill. 194, 195, 68 N.E.2d 252, 253.
01
332 U.S. 1 67 S.Ct. 1538 91 L.Ed. 1877 UNITED STATESv.PETRILLO. No. 954. Argued May 5, 6, 1947. Decided June 23, 1947. [Syllabus from pages 1-3 intentionally omitted] Appeal from the District Court of the United States for the Northern District of Illinois. Messrs. Douglas W. McGregor, Asst. to the Atty. Gen., and Robert L. Stern, of Washington, D.C., for appellant. Messrs. Henry Kaiser and Joseph A. Padway, both of Washington, D.C., for appellee. Mr. Justice BLACK delivered the opinion of the Court. 1 The District Court dismissed a criminal information filed against the respondent, James C. Petrillo, on the ground that the statute on which the information was founded was unconstitutional. 68 F.Supp. 845. The case is here on direct appeal by the Government as authorized by the Criminal Appeals Act. 18 U.S.C., Supp. V, § 682, 18 U.S.C.A. § 682. The information charged a violation of the Communications Act of 1934, 48 Stat. 1064, 1102, as amended by an Act of April 16, 1946. 60 Stat. 89. 47 U.S.C.A. § 506. The specific provisions of the Amendment charged to have been violated read: 2 'Sec. 506. (a) It shall be unlawful, by the use or express or implied threat of the use of force, violence, intimidation, or duress, or by the use or express or implied threat of the use of other means, to coerce, compel or constrain or attempt to coerce, compel, or constrain a licensee— 3 '(1) to employ or agree to employ, in connection with the conduct of the broadcasting business of such licensee, any person or persons in excess of the number of employees needed by such licensee to perform actual services; or 4 '(d) Whoever willfully violates any provision of subsection (a) or (b) of this section shall, upon conviction thereof, be punished by imprisonment for not more than one year or by a fine of not more than $1,000, or both.' Pub.L.No.344, 79th Cong., 2d Sess. 5 The information alleged that a radio broadcasting company, holding a federal license, had, for several years immediately preceding, employed 'certain persons who were sufficient and adequate in number to perform all of the actual services needed * * * in connection with the conduct of its broadcasting business.' The information further charged that the respondent, Petrillo, 'wilfully, by the use of force, intimidation, duress and by the use of other means, did attempt to coerce, compel and constrain said licensee to employ and agree to employ, in connection with the conduct of its radio broadcasting business, three additional persons not needed by said licensee to perform actual services * * *.' 6 The coercion was allegedly accmplished i n the following manner: 7 '(1) By directing and causing three musicians, members of the Chicago Federation of Musicians, theretofore employed by the said licensee in connection with the conduct of its broadcasting business, to discontinue their employment with said licensee; 8 '(2) By directing and causing said three employees and other persons, members of the Chicago Federation of Musicians, not to accept employment by said licensee; and 9 '(3) By placing and causing to be placed a person as a picket in front of the place of business of said licensee.' 10 The only challenge to the information was a motion to dismiss on the ground that the Act on which the information was based (a) abridges freedom of speech in contravention of the First Amendment; (b) is repugnant to the Fifth Amendment because it defines a crime in terms that are excessively vague, and denies equal protection of the law and liberty of contract; (c) imposes involuntary servitude in violation of the Thirteenth Amendment.1 The District Court dismissed the information, holding that the 1946 Amendment on which it was based violates the First, Fifth, and Thirteenth Amendments. 11 Two general principles which concern our disposition of appeals involving constitutional questions have special application to this case: We have consistently refrained from passing on the constitutionality of a statute until a case involving it has reached a stage where the decision of a precise constitutional issue is a necessity. The reasons underlying this principle and illustrations of the strictness with which it has been applied appear in the opinion of the Court in the Rescue Army v. Municipal Court, 67 S.Ct. 130, and cases there collected. And in reviewing a direct appeal from a District Court under the Criminal Appeals Act, supra, our review is limited to the validity or construction of the contested statute. For 'The Government's appeal does not open the whole case.' United States v. Borden Co., 308 U.S. 188, 193, 60 S.Ct. 182, 186, 84 L.Ed. 181. 12 First. One holding of the District Court was that, as contended here, the statute is repugnant to the due process clause of the Fifth Amendment because its words, 'number of employees needed by such licensee,' are so vague, indefinite and uncertain that'persons of ordinary intelligence cannot in advance tell whether a certain action or course of action would be within its prohibition * * *' The information here, up to the place where it specifically charges the particular means used to coerce the licensee, substantially employs this statutory language. And the motion to dismiss on the ground of vagueness and indefiniteness squarely raises the question of whether the section invoked in the indictment is void in toto, barring all further actions under it, in this, and every other case. Cf. United States v. Thompson, 251 U.S. 407, 412, 40 S.Ct. 289, 291, 64 L.Ed. 333. Many questions of a statute's constitutionality as applied can best await the refinement of the issues by pleading, construction of the challenged statute and pleadings, and, sometimes, proof. Rescue Army v. Municipal Court, supra; Watson v. Buck, 313 U.S. 387, 402, 61 S.Ct. 962, 967, 85 L.Ed. 1416. Borden's Farm Products Company v. Baldwin, 293 U.S. 194, 204, 210, and concurring opinion at page 213, 55 S.Ct. 187, 189, 192, at page 193, 79 L.Ed. 281. But no refinement or clarification of issues which we can reasonably anticipate would bring into better focus the question of whether the contested section is written so vaguely and indefinitely that one whose conduct it affected could only guess what it meant. Consequently, since this phase of the appeal raises a question of validity of a statute within our jurisdiction under the Criminal Appeals Act, supra, and is ripe for our decision, we turn to the merits of the contention. 13 We could not susain this p rovision of the Act if we agreed with the contention that persons of ordinary intelligence would be unable to know when their compulsive actions would force a person against his will to hire employees he did not need. Connally v. General Construction Co., 269 U.S. 385, 391, 46 S.Ct. 126, 127, 70 L.Ed. 322; Lanzetta v. State of New Jersey, 306 U.S. 451, 59 S.Ct. 618, 83 L.Ed. 888. But we do not agree. Of course, as respondent points out, there are many factors that might be considered in determining how many employees are needed on a job. But the same thing may be said about most questions which must be submitted to a fact-finding tribunal in order to enforce statutes. Certainly, an employer's statements as to the number of employees 'needed' is not conclusive as to that question. It, like the alleged wilfullness of a defendant, must be decided in the light of all the evidence. 14 Clearer and more precise language might have been framed by Congress to express what it meant by 'number of employees needed.' But none occurs to us, nor has any better language been suggested, effectively to carry out what appears to have been the Congressional purpose. The argument really seems to be that it is impossible for a jury or court ever to determine how many employees a business needs, and that, therefore, no statutory language could meet the problem Congress had in mind. If this argument should be accepted, the result would be that no legislature could make it an offense for a person to compel another to hire employees, no matter how unnecessary they were, and however desirable a legislature might consider suppression of the practice to be. 15 The Constitution presents no such insuperable obstacle to legislation. We think that the language Congress used provides an adequate warning as to what conduct falls under its ban, and marks boundaries sufficiently distinct for judges and juries fairly to administer the law in accordance with the will of Congress. That there may be marginal cases in which it is difficult to determine the side of the line on which a particular fact situation falls is no sufficient reason to hold the language too ambiguous to define a criminal offense. Robinson v. United States, 324 U.S. 282, 285, 286, 65 S.Ct. 666, 668, 669, 89 L.Ed. 944. It would strain the requirement for certainty in criminal law standards too near the breaking point to say that it was impossible judicially to determine whether a person knew when he was wilfully attempting to compel another to hire unneeded employees. See Screws v. United States, 325 U.S. 91, 65 S.Ct. 1031, 89 L.Ed. 1495, 162 A.L.R. 1330; United States v. Ragen, 314 U.S. 513, 522, 524, 525, 62 S.Ct. 374, 377, 378, 379, 86 L.Ed. 383. The Constitution has erected procedural safeguards to protect against conviction for crime except for violation of laws which have clearly defined conduct thereafter to be punished; but the Constitution does not require impossible standards. The language here challenged conveys sufficiently definite warning as to the proscribed conduct when measured by common understanding and practices. The Constitution requires no more. 16 Second. It is contended that the statute denies equal protection of the laws to radio-broadcasting employees as a class, and, for this reason, violates the due process clause of the Fifth Amendment. This contention, raised by the motion to dismiss, and sustained by the District Court as a ground for holding the statute unconstitutional as written, is properly before us, and we reach this equal protection ground, for the same reason that we decided the question of whether the section was unconstitutionally vague and indefinite. 17 In support of this contention it is first argued that if Congress concluded that employment by broadcasting companies of unneeded workers was detrimental to interstate commerce, in order to be consistent, it should have provided for the punishment of employers, as well as employees, who violate that policy.2 Secondly it is arg ued, the Act violates due process because it singles out broadcasting employees for regulation while leaving other classes of employees free to engage in the very practices forbidden to radio workers. But it is not within our province to say that because Congress has prohibited some practices within its power to prohibit, it must prohibit all within its power. Consequently, if Congress believes that there are employee practices in the radio industry which injuriously affect interstate commerce, and directs its prohibitions against those practices, we could not set aside its legislation even if we were persuaded that employer practices also required regulation. See National Labor Relations Board v. Jones & Laughlin Steel Corporation, 301 U.S. 1, 46, 57 S.Ct. 615, 628, 81 L.Ed. 893, 108 A.L.R. 1352. Nor could we strike down such legislation, even if we believed that as a matter of policy it would have been wiser not to enact the legislation or to extend the prohibitions over a wider or narrower area. Here Congress aimed its law directly against one practice—compelling a boradcasting company to hire unneeded workers. There is nothing novel about laws to prohibit some persons from compelling other persons to act contrary to their desires. Whatever may be the limits of the power of Congress that do not apply equally to all classes, groups, and persons, see Steward Machine Co. v. Davis, 301 U.S. 548, 584, 57 S.Ct. 883, 889, 81 L.Ed. 1279, 109 A.L.R. 1293, we are satisfied that Congress has not transgressed those limits in the provisions of this statute which are here attacked. 18 Third. Respondent contends here, and the District Court has held, that the statute abridges freedom of speech by making peaceful picketing a crime. It is important to note that the statute does not mention picketing, peaceful or violent. The proposed application of the statute to picketing, therefore, does not derive from any specific prohibition written into the statute against peaceful picketing. Rather it comes from the information's charge that respondent attempted to compel the licensee to hire unneeded employees by placing 'a picket in front of the place of business of (the) * * * licensee.' Yet the respondent's motion to dismiss was made only on the ground that the statute, as written, contravenes the First Amendment. In ruling on this motion, the District Court assumed that because 'there was no charge of violence * * * the placing of a picket must be regarded * * * as peaceful picketing.' From this assumption, it concluded that 'the application (of the statute) here sought to be made violates the First Amendment by its restriction upon freedom of speech by peaceful picketing.' Thus, rather than holding the statute as written to be an unconstitutional violation of the First Amendment, the District Court ruled on the statute as it was proposed to be applied by the information as it then read. 19 We consider it inappropriate to reach the merits of this constitutional question now. As we have pointed out, we have consistently said that we would refrain from passing on the constitutionality of statutes in advance of the necessity to do so. And the provisions for direct appeal from District Courts of certain criminal cases do not require us to pass on constitutional questions prematurely decided by a district court's dismissal of an information. 20 The information, here, up to the place where it alleges the use of particular coercive means, charges in substantially the language of the statute that respondent coerced the licensee. The information's charges up to this point constitute a sufficient basis for a challenge to the statute on the ground that it contravenes the Constitution. Whether this part of the information or the information as a whole, was adequate definitely to inform the respondent of the nature of the charge against him is another question. See Unted States v. Lepowitch, 318 U.S. 702, 704, 63 S.Ct. 914, 916, 87 L.Ed. 1091; Potter v. United States, 155 U.S. 438, 15 S.Ct. 144, 39 L.Ed. 214; cf. United States v. Hess, 124 U.S. 483, 8 S.Ct. 571, 31 L.Ed. 516. Had the District Court postponed ruling on the First Amendment question raised by the motion to dismiss, or had it denied the motion, respondent could have sought a bill of particulars, apart from attacking the constitutionality of the Act. See Husty v. United States, 282 U.S. 694, 702, 51 S.Ct. 240, 242, 75 L.Ed. 629, 74 A.L.R. 1407; Bartell v. United States, 227 U.S. 427, 433, 434, 33 S.Ct. 383, 384, 385, 57 L.Ed. 583; Dunbar v. United States, 156 U.S. 185, 192, 15 S.Ct. 325, 328, 39 L.Ed. 390. So also, if the additional allegations describing the means used to accomplish the proscribed purpose were not definite enough for the court to determine whether they were sufficient in law to charge an offense, and if such allegations were not mere surplusage, see United States v. Socony-Vacuum Oil Company, 310 U.S. 150, 222, 60 S.Ct. 811, 843, 844, 84 L.Ed. 1129, a challenge could have been made to the information, see United States v. Hess, supra, 124 U.S. at pages 487, 488, 8 S.Ct. at pages 573, 574, 31 L.Ed. 516, as distinguished from a challenge to the statute on which it rested. In that event, and upon a holding of insufficiency of the information, appeal by the United States would have properly gone, under the Criminal Appeals Act supra, to the Circuit Court of Appeals, and if inappropriately brought here, that Act, as amended, 56 Stat. 271, would have required us to transfer the cause to the Circuit Court of Appeals. But no such challenge was made to the information. 21 We therefore have a situation in which we are urged to strike down a statute as violative of the constitutional guarantees of frer speech when the statute has not been, and might never be, applied in such manner as to raise the question respondent asks us to decide. For the gist of the offense here charged in the statute and in the information is that respondent 'wilfully, by the use of force, intimidation, duress and by the use of other means, did attempt to coerce, compel and constrain'3 the licensee to hire unneeded employees. If the allegations that this prohibited result was attempted to be accomplished by picketing are so broad as to include action which either is not coercive, compelling or constraining, within the statute's meaning, or could not be constitutionally held to be, the trial court would be free, on motion of the respondent, to strike the particular allegations if they are surplusage. Rules of Criminal Procedure, § 7(d), 18 U.S.C.A. following section 687. Or the Government might amend the information 'at any time before verdict or finding if no additional or different offense is charged and if substantial rights of the defendant are not prejudiced.' Ibid. § 7(e). 22 The foregoing analysis shows that we are asked to rule on constitutional questions that are not yet precisely in issue. The question as it was decided by the District Court, was not the question raised by the motion to dismiss whether the statute is invalid on its face—but whether it is invalid as it is proposed to be applied. And even if our decision could be evoked upon a showing that the statute certainly, but for our intervention, would have punished respondent for peaceful picketing, there is no such certainty here. No final issue had been drawn. The information was still subject to amendment to fit, within the permissible area of amendments, the type of coercive means developed by further pleading or proof. See Borden's Co. v. Baldwin, supra, 293 U.S. at page 213, 55 S.Ct. at page 193, 79 L.Ed. 281. Further pleadings and proof might well draw the issues into sharper focus making it unnecessary for us to decide questions not relevant to determination of the constitutionality of the statute as actually applied. Thus this case had not reached a stage where the decisin of a pre cise constitutional issue was a necessity. Consequently, we refrain from considering any constitutional questions except those concerning the Act as written. We do not decide whether the allegations of the information, whatever shape they might eventually take, would constitute an application of the statute in such manner as to contravene the First Amendment. We only pass on the statute on its face; it is not in conflict with the First Amendment. 23 Fourth. The District Court held, and it is argued here, that the statute, as sought to be applied in the information, violates the Thirteenth Amendment which prohibits slavery and involuntary servitude. This contention is also rooted in that part of the information which particularizes the means by which respondent attempted to compel action by the licensee, i.e., by causing three musicians to discontinue, and three musicians not to accept, employment. The argument is that employees have a constitutional right to leave employment singly, see Pollock v. Williams, 322 U.S. 4, 17, 18, 64 S.Ct. 792, 799, 800, 88 L.Ed. 1095, or in concert, and consequently that respondent cannot be guilty of a crime for directing or causing them to do so. For the reasons given with reference to the picketing specification, therefore, we consider the Thirteenth Amendment question only with reference to the statute on its face. Thus considered, it plainly does not violate the Thirteenth Amendment. Whether some possible attempted application of it to particular persons in particular sets of circumstances would violate the Thirteenth Amendment is a question we shall not pass upon until it is appropriately presented. 24 Reversed and remanded. 25 Mr. Justice DOUGLAS took no part in the consideration or decision of this case. 26 Mr. Justice FRANKFURTER, concurring. 27 I agree with the Court's judgment and opinion because it holds that the Lea Act is not beyond the power of Congress to regulate commerce. I desire, however, to add a few words. 28 The constitutional basis for the legislation is the same as that upon which the validity of the Sherman Anti-Trust Law, 15 U.S.C.A. §§ 1—7, 15 note, rests. It is too late in the day to require argument or citation of cases in support of the right of Congress to free interstate commerce from obstruction that the exertion of monopolistic power may entail or from interference that may reasonably be deemed to promote monopoly. Equally clear is it that Congress may direct its legislation specifically towards a disclosed evil, without generalizing its prohibition, when in its judgment like evils have not disclosed themselves elsewhere. It would be a usurpation of the legislative authority for us to find that there was no basis in reason for the judgment of Congress that the public interest called for legislation to deal with what is colloquially called 'featherbedding' in connection with the broadcasting business. Beyond that, it is not our province to go. 29 The District Court took a different view, and on defendant's motion dismissed this information on the ground that the statute is unconstitutional. 68 F.Supp. 845. Since the Court now holds that the statute is constitutional, the case goes back to the District Court. 30 The Court conjures up difficulties which I do not share. The case is here under the Criminal Appeals Act of 1907, 34 Stat. 1246, as amended by the Act of May 9, 1942, 56 Stat. 271, 18 U.S.C., Supp. V, § 682, 18 U.S.C.A. § 682, whereby a direct review can be had of a district court judgment setting aside an indictment or information, if the decision of the district court is based 'upon the invalidity or construction of the statute upon which the indictment or information is founded.' Our decisions have construed this to mean that review can be had here only if a district court's decision was based exclusively upon the invalidity or construction of a statute. A criminal case cannot be reviewed here if questions of criminal pleading—defects not arising from the statute uner conside ration—enter into a decision sought to be reviewed. See United States v. Hastings, 296 U.S. 188, 192, 194, 56 S.Ct. 218, 219, 220, 80 L.Ed. 148; United States v. Borden Co., 308 U.S. 188, 193, 60 S.Ct. 182, 186, 84 L.Ed. 181; United States v. Swift & Co., 318 U.S. 442, 63 S.Ct. 684, 87 L.Ed. 889. If both the sufficiency of criminal pleading and the validity or construction of the underlying statute were in issue before the District Court, and views as to both were interwoven in the court's decision, this Court has no jurisdiction to entertain the appeal. Under the Act of May 9, 1942, it must remand the cause to the appropriate circuit court of appeals. On the other hand, if the question of constitutional construction was the isolated ground of decision by district court dismissing a federal prosecution, that is the only question to be considered here and it must be considered within the scope given it by the district court. Other questions may be imbedded in the case which may eventually come to the surface. But they are not to be brought to the surface here under the limited, specific review given by the Criminal Appeals Act. It is to such implicit questions of pleading, and to statutory or constitutional questions not passed upon by a district court, that Mr. Chief Justice Hughes had reference when he said, 'The Government's appeal does not open the whole case.' United States v. Borden Co., supra, 308 U.S. at page 193, 60 S.Ct. at page 186, 84 L.Ed. 181. 31 There is no complication in the record before us to an exercise of our jurisdiction under the Criminal Appeals Act. The District Judge's decision is wholly free from any ruling involving criminal pleading. He stated precisely what he deemed to be the sole issue before him and which alone he decided: 'The only question before the court is the constitutional aspect of this statute as it was written by Congress. On this question the court is of the opinion that this statute is unconstitutional for the reasons above stated.' 68 F.Supp. at page 850. 32 We, therefore, have no acknowledgment or intimation by the District Judge that he had any difficulty with the information as a matter of pleading, or that it carried any ambiguities which he resolved one way rather than another. If that were so, we would have no jurisdiction to review his decision. The District Court found constitutional defects in the statute 'as it was written by Congress.' We find the contrary. Therefore, the information should go back to the District Court for disposition. Just as we cannot go behind a district court's determination regarding the sufficiency of the indictment as a matter of pleading as a preliminary to passing on statutory validity, so, when a naked question of validity is presented to us, it is not for us to scrutinize the charge and hypothesize possibilities whereby new questions may arise of a statutory or constitutional nature. 33 Mr. Justice REED, dissenting. 34 I dissent from the opinion and judgment of the Court. My reason for disagreement is that § 506(a)(1) of the Communications Act is too indefinite in its description of the prohibited acts to support an information or indictment for violation of its provisions. My objection is not to the words in the first paragraph of § 506 that made unlawful in labor matters the use of threats, force, violence, intimidation or duress against an employer. There is a background of experience and common understanding that ordinarily gives such words, when used in criminal statutes, sufficient definiteness to acquaint the public with the limits of the proscribed acts. When such words are used, they place upon those affected the risk of estimating incorrectly the sort of action that may ultimately be held to violate the statutes. Nash v. United States, 229 U.S. 373, 33 S.Ct. 780, 57 L.Ed. 1232. 35 My objection is to the indefiniteness of the statutory description of the thing for which force must not be used—that is, 'to compel' a licensee under the Communications Act 'to emply * * * an y person or persons in excess of the number of employees needed by such licensee to perform actual services.' 36 This criminal statute is the product of legislation directed at the control of acts deemed evil by Congress. It is one of the many regulatory acts that legislative bodies have passed in recent years to make unlawful certain practices in the field of economics that seemed contrary to the public interest.1 These statutes made new crimes. Deeds theretofore not subject to punishment fall within the general scope of their prohibition. Common experience has not created a general understanding of their criminality. Consequently, in order to adequately inform the public of the limitations on conduct, a more precise definition of the crime is necessary to meet constitutional requirements.2 37 Anglo-American law does not punish citizens for violations of vague and uncertain statutes. There is no place in our criminal law for acts defined as detrimental to the interests of the state. A statute is invalid when 'so vague that men of common intelligence must necessarily guess at its meaning.' 269 U.S. 385, at page 391, 46 S.Ct. 126, at page 127, 70 L.Ed. 322. It seems to me that this vice exists in this section of the challenged act. How can a man or a jury possibly know how many men are 'needed' 'to perform actual services' in broadcasting? What must the quality of the program be? How skillful are the employees in the performance of the their task? Does one weigh the capacity of the employee or the managerial ability of the employer? Is the desirability of short hours to spread the work to be evaluated? Or is the standard the advantage in take-home pay for overtime work? 38 The Government seeks to avoid the difficulty by interpreting the section. Their brief says, after considering the legislative history, 'the bill was not intended to apply to mere differences of opinion as to whether men were overworked; it only fits deliverate demands for payment to additional employees made in complete disregard for the employer's need and without any justification from the viewpoint of actually getting the employer's business done. * * * If Paragraph (1) is read in its context, along with the succeeding paragraphs, it is clear what Congress was driving at when it characterized the Act as one to prevent extortion, as distinct from bona fide demands relating to conditions of employment.' This interpretation seems to me to fly in the face of § 506(1). There is another subsection to which the language might apply.3 This clearly defines the prohibited acts. If the Congress wishes to fix the maximum number of employees that a licensee may employ in stations of various sizes, it may, of course, be done. Or, if it is impractical for Congress to act because of the varying situations, the number may be left to regulations of the Federal Communications Commission or other regulatory body. 39 This is a criminal statute. The principle that such statutes must be so written that intelligent men may know what acts of theirs will jeopardize their life, liberty or property is of importance to all. That principle requires, I think, a determination that this section of the Communications Act is invalid. 40 Mr. Justice MURPHY and Mr. Justice RUTLEDGE join in this dissent. 1 Another ground, not argued here, was that the Act represents an exercise of power by Congress not delegated to the United States. 2 The Act does not prohibit radio broadcasters from voluntarily hiring more employees than they need. 3 Italics supplied. 1 Emergency Price Control Act, 56 Stat. 33, § 205(b), 50 U.S.C.App. § 925(b), 50 U.S.C.A.Appendix, § 925(b); Fair Labor Standards Act, 52 Stat. 1069, § 16(a), 29 U.S.C. § 216(a), 29 U.S.C.A. § 216(a); National Labor Relations Act, 49 Stat. 456, § 12, 29 U.S.C. § 162, 29 U.S.C.A. § 162; Federal Corrupt Practices Act, as amended, 57 Stat. 167, § 9, 50 U.S.C.App. § 1509, 50 U.S.C.A.Appendix, § 1509. 2 United States v. Cohen Grocery Co., 255 U.S. 81, 41 S.Ct. 298, 65 L.Ed. 516, 14 A.L.R. 1045; Cline v. Frink Dairy Co., 274 U.S. 445, 47 S.Ct. 681, 71 L.Ed. 1146; International Harvester Co. of America v. Commonwealth of Kentucky, 234 U.S. 216, 34 S.Ct. 853, 58 L.Ed. 1284; Connally v. General Construction Co., 269 U.S. 385, 46 S.Ct. 126, 70 L.Ed. 322. See Gorin v. United States, 312 U.S. 19, 26, 61 S.Ct. 429, 433, 85 L.Ed. 488. 3 Pub. No. 344, 79th Cong., 2d Sess., 47 U.S.C. § 506(a)(4), 47 U.S.C.A. § 506(a)(4): 'to pay or give or agree to pay or give any money or other thing of value for services, in connection with the conduct of the broadcasting business of suchlicensee, which are not to be performed;'
23
332 U.S. 168 67 S.Ct. 1584 91 L.Ed. 1977 ATLANTIC COAST LINE R. CO.v.PHILLIPS, State Revenue Com'r. No. 385. Argued April 9, 1947. Decided June 23, 1947. Appeal from the Supreme Court of the State of Georgia. Messrs. Carl H. Davis, of Wilmington, N.C., and T.M. Cunningham, of Savannah, Ga., for appellant. Messrs. Claude Shaw, Jr., and Victor Davidson, both of Atlanta, Ga., for appellee. Mr. Justice FRANKFURTER delivered the opinion of the Court. 1 This was a proceeding in the courts of Georgia to declare invalid an assessment by the State Revenue Commissioner against the Atlantic Coast Line Railroad Company on the ground that the tax as applied to the appellant impairs the obligation of contracts. United States Constitution, art. I, Sec. 10. 2 To encourage railroad development, the State of Georgia in 1833 chartered the Georgia Railroad Company (which later became the Georgia Railroad and Banking Company), and gave the railroadcertain im munity from taxation. Georgia's increasing need of tapping new sources of revenue has not unnaturally brought to the courts the scope of this immunity. Its construction in relation to the claim of Georgia, that despite the charter of 1833 the appellant is subject to its corporate income tax, is the sole issue before us. 3 The case is this. Georgia, in 1931, imposed a tax of 5 1/2 per cent. on the net income of all domestic and foreign corporations. Acts 1931, Extra.Sess. pp. 24, 26, amended, Acts 1937, pp. 109, 117, Ga.Ann. Code § 92-3102. No claim under this corporate income tax was made against the Atlantic Coast Line, one of the lessees of the Georgia Railroad, until 1941. For the calendar years 1941, 1942, 1943, the State Revenue Commissioner assessed against the appellant deficiency taxes on the basis of its net income from the road, computed at the 5 1/2 per cent. rate paid by all corporations. It is this assessment that is contested. The appellant resisted on the ground that the attempt of Georgia to impose this tax is in disregard of the obligation assumed by Georgia through § 15 of the Charter of 1833. The Supreme Court of Georgia sustained the assessment, holding that the tax exemption of the charter related merely to the limits to which a tax on the railroad property could be levied, such a property tax to be measured so as not to exceed one-half per cent. of the net earning power of the properties. 200 Ga. 856, 38 S.E.2d 774. The exemption, so the State Supreme Court found, was not concerned with what we now know as a corporate net income tax and therefore did not bargain away the power of the legislature to impose such a tax. 4 A claim that a State statute impairs the obligation of contract is an appeal to the United States Constitution, and cannot be foreclosed by a State court's determination whether there was a contract or what were its obligations. But while it is true that we are not bound by the construction of local statutes by the local courts in deciding the Constitutional question, 'yet when we are dealing with a matter of local policy, like a system of taxation, we should be slow to depart from their judgment, if there was no real oppression or manifest wrong in the result.' People of State of New York ex rel. Clyde v. Gilchrist, 262 U.S. 94, 97, 43 S.Ct. 501, 502, 67 L.Ed. 883. 5 The Georgia Supreme Court had to construe the following Georgia language: 'The stock of said company and its branches shall be exempt from taxation for and during the term of seven years from and after the completion of said railroads or any one of them: and after that, shall be subject to a tax not exceeding one half per cent. per annum on the net proceeds of their investments.' § 15, Act of December 21, 1833, Acts 1833, p. 256, 263—64. 6 It is not for us to read such a local law with independent but innocent eyes, heedless of a construction placed upon it by the local court. Such a tax provision is not a collocation of abstract words. In seeking the meaning conveyed by a local enactment it must be viewed as part of the whole texture of local laws and of the economy to which they apply. The language draws to itself presuppositions not always articulated, and even what is expressed in words may carry meaning to insiders which is not within the sure discernment of those viewing the law from a distance. And so we are not prepared to say that the Supreme Court of Georgia was 'manifestly wrong,' Hale v. Iowa State Board of Assessment and Review, 302 U.S. 95, 101, 58 S.Ct. 102, 103, 82 L.Ed. 72, in construing the exemption as limiting merely the right to impose property taxes. Our search is for something other than the meaning which the tax specialists may today find in the words. 'It is for the meaning that at a particular time and place and in the setting of a particular statute might reasonably have acceptance by men of common understanding.' Hale v. Iowa State Board of Assessment and Review, supra. We should reject the construction wich the Georgia Supreme Court has placed upon what the Georgia Legislature of 1833 wrote only if we can be confident that the Georgia Legislature of 1833, by the words it used, could not have expressed the meaning thus attributed to it. A fair regard for the place of income taxes, as now commonly conceived, in the thought and practice concerning fiscal matters prevalent in 1833 precludes the rejection of the interpretation by the Georgia Court of the exemption of 1833. 7 There were, to be sure, so-called 'faculty taxes' in Colonial times which had some of the characteristics of our present income taxes in that ability to pay was an ingredient. But even these taxes, hardly income taxes as we now know them, had by 1833 generally ceased to be, and perhaps even to be remembered. See, e.g., Seligman, The Income Tax (2d Ed.) Part II, c. I, pp. 367 et seq.; compare Hylton v. United States, 3 Dall. 171, 1 L.Ed. 556. In Georgia, the only imposition even remotely classifiable as an income tax because presumably based on ability to pay is that illustrated by a levy of 'The sum of four dollars on all professors of law and physic, and the sum of fifty dollars on all billiard tables.' Law No. 590, 1797, Watkins Digest of the Laws of Georgia 1755—1799, pp. 646, 648. Not until the Civil War did Georgia, like the Federal Government, resort to what was indisputably an income tax. On the other hand, to read as the Georgia Supreme Court read the exemption provision of the Charter of 1833, as dealing with a tax on property, fairly reflects a practice, not unknown in the earlier days, of assessing property for tax purposes not by its exchange value but by its earning power. See, e.g., Seligman, The Income Tax (2d Ed.) pp. 382, 383; Report of Special Commission on Taxation, Connecticut 1887, p. 9, with comments thereon in Kennan, Income Taxation p. 207. 8 In this setting, it would savor of dogmatism to infuse into the 1833 exemption the income tax atmosphere of our own day. It does not seem inadmissible for the Supreme Court of Georgia to have found that what the Georgia Legislature of 1833 sought was to measure the commonplace property tax of the time not by a flat sum, or on the basis of a value abstractly ascertained, but in accordance with the fruits of the property, modestly limited. 9 To sanction such a restricted reading of the exemption is to respect a rule deeply rooted in history and policy, according to which contracts of tax exemption are to be read 'narrowly and strictly.' Hale v. Iowa State Board of Assessment and Review, supra, 302 U.S. at page 109, 58 S.Ct. at page 107, 82 L.Ed. 72. To recognize that more than a hundred years ago the Georgia Legislature did not forever bargain away the wholly untapped domain of income taxation is to recognize the governing consideration that 'The power of taxation is never to be regarded as surrendered or bargained away if there is room for rational doubt as to the purpose.' This was said when an earlier controversy affecting this charter was here. Wright v. Georgia Railroad & Banking Co., 216 U.S. 420, 438, 30 S.Ct. 242, 249, 54 L.Ed. 544. As to the astuteness of taxpayers in ordering their affairs so as to minimize taxes we have said that 'the very meaning of a line in the law is that you intentionally may go as close to it as you can if you do not pass it.' Superior Oil Co. v. State of Mississippi, 280 U.S. 390, 395, 396, 50 S.Ct. 169, 170, 74 L.Ed. 504. This is so because 'nobody owes any public duty to pay more than the law demands: taxes are enforced exactions, not voluntary contributions.' Learned Hand, C.J., dissenting in Commissioner of Internal Revenue v. Newman, 2 Cir., 159 F.2d 848, 851. Conversely, the State, insofar as it may limit its basic power to tax to enable government to go on, can sail as closely as astuteness permits to the line of an immunity from such exaction. This is an old canon of judicial construction. The policy on which it rests antedates the charter before us, and it forms the setting i which the exemption is to be read. See, e.g., Proprietors of Charles River Bridge v. Proprietors of Warren Bridge, 1830, 7 Pick., Mass., 344, affirmed, 1837, 11 Pet. 420, 9 L.Ed. 773. This requirement in the construction of legislative grants, especially tax exemptions, is merely an aspect of respecting legislative purpose. A legislature is not to be presumed to have relinquished its power of taxation beyond the narrowest rational reading of an exemption. The potential need of all governmental powers, and fairness in the distribution of burdens or in the enjoyment of privileges, preclude such an assumption. 10 We have carefully considered the earlier cases in which the scope of this exemption came before this Court. Central Railroad & Banking Co. v. State of Georgia, 92 U.S. 665, 23 L.Ed. 757; Wright v. Georgia Railroad & Banking Co., supra; Wright v. Central of Georgia R. Co., 236 U.S. 674, 35 S.Ct. 471, 59 L.Ed. 781; Wright v. Louisville and Nashville R. Co., 236 U.S. 687, 35 S.Ct. 675, 59 L.Ed. 788; Central of Georgia R. Co. v. Wright, 248 U.S. 525, 39 S.Ct. 181, 63 L.Ed. 401; Central of Georgia R. Co. v. Wright, 250 U.S. 519, 40 S.Ct. 1, 63 L.Ed. 1123. It is needless to rehearse the issues they involved. Suffice it to say that the prior taxes found to have been barred by the exemption were all taxes on the railroad property. Now for the first time we are called upon to examine a candid, conventional income tax. Passing reference to 'income' when the Court's mind was not focused upon the validity of an income tax as such must not be torn from the context of discussion of property taxes. In any event, these phrases leave untouched our duty to respect the judgment of a State court as to the fair intendment of an exemption. 11 Judgment affirmed. 12 Mr. Justice RUTLEDGE, agreeing with the Court's conclusions concerning the meaning of the Georgia statute, concurs in the result.
78
332 U.S. 319 67 S.Ct. 1634 91 L.Ed. 2077 UNITED STATESv.NATIONAL LEAD CO. et al. NATIONAL LEAD CO. et al. v. UNITED STATES. E. I. DU PONT DE NEMOURS & CO. v. SAME. Nos. 89, 90, 91. Argued Feb. 3, 4, 5, 1947. Decided June 23, 1947. As Amended Oct. 13, 1947. [Statement of Case from pages 319-323 intentionally omitted] Messrs. Wendell Berge, Asst. Atty. Gen., and William C. Dixon, of Cleveland, Ohio, for the United States. Mr. William Dwight Whitney, of New York City, for the E. I. du Pont Co. Mr. Bethuel M. Webster, of New York City, for National Lead Co. and Titan Co., Inc. Mr. Justice BURTON delivered the opinion of the Court. 1 This action was brought by The United States of America, June 24, 1944, in the District Court of the United States for the Southern District of New York, against National Lead Company (a New Jersey corporation, here called National Lead or NL), its wholly owned subsidiary, Titan Company, Inc. (a Delaware corporation, here called Titan Inc. or Tinc) and E. I. du Pont de Nemours and Company (a Delaware corporation, here called due Pont or DP). It is a proceeding in equity instituted under § 4 of the Sherman Anti-Trust Act, 26 Stat. 209, 36 Stat. 1167, 15 U.S.C. § 4, 15 U.S.C.A. § 4, to prevent and restrain alleged violations of §§ 1 and 2 of that Act, 26 Stat. 209, 50 Stat. 693, 15 U.S.C. §§ 1 and 2, 15 U.S.C.A. §§ 1, 2. The trial was conducted by Judge Simon H. Rifkind of that court. It began December 4, 1944, and ended March 14, 1945. His opinion was filed July 5, 1945. His 96 findings of fact and two conclusions of law were entered October 2, 1945. After extended consideration of its terms, by the court and by counsel for all parties, the decree was entered October 11, 1945. The opinion and decree are reported in 63 F.Supp. 513—535. The findings of fact, conclusions of law and much of the detailed discussion of the decree are in the record. Separate appeals were filed in this Court, in case No. 89 by the United States, in case No. 90 by National Lead and Titan Inc. and in case No. 91 by du Pont. The three companies are sometimes referred to as 'the appellant companies.' We noted probable jurisdiction in each appeal, May 20, 1946, and the three appeals were argued together February 3—5, 1947. A partial stay of the decree had been granted by Mr. Justice REED, on January 2, 1946, pending determination of the appeals. Reference is made to the opinion of the District Court for a recital of the complex facts which it had to consider in order to reach its conclusion that National Lead, Titan Inc. and du Pont each violated § 1 of the Sherman Act,1 although it found a marked difference between the conduct of National Lead and of its subsidiary, Titan Inc., on the one hand, and that of du Pont on the other. This Court affirms the judgment of the District Court, except as to the original effective dates of certain of its provisions, and our discussion will relate largely to the assignments of error as to the terms of the decree. 2 I. The first issue presented to the District Court was that of the participation of National Lead and Titan Inc. in a so-called 'INTERNATIONAL CARTEL' DATING BACK TO 1920, and constituting a combination or conspiracy in restraint of trade and commerce in titanium pigments and compounds, among the several states of the United States and with foreign nations, which combination, after 1933, was alleged to include de Pont. The District Court found such participation.2 In their brief on appeal in No. 90, National Lead and Titan Inc. said: 3 'The Government's case was based on a series of closely related agreements made between 1920 and 1944. The agreements have been cancelled and continuation or renewal has been enjoined. The appeals are greatly simplified by the fact that we accept the cancellation and the injunction against continuation or renewal. We submit, however, that the court went too far in forbidding normal and usual contractual arrangements.' 4 Accordingly, the finding of the District Court, as to the participation of National Lead and Titan Inc. in the violation of § 1 of the Sherman Act, is accepted here without further discussion. 5 II. The second issue was that of the participation of du Pont in such combination after 1933. The District Court found that du Pont 'joined the conspiracy found herein to exist between, NL and its foreign associates. DP's status rights and obligations were different from those of the other members of the combination. DP did not thereafter withdraw.' Finding of Fact 73. The District Court, in its opinion, also stated that— 6 'At least then as to territorial delimitations of the titanium pigment business, DP joined the combination. 7 'My general summary of the evidence on this issue is that DP was a member of the combination—true, a special member, with a status, rights and obligations, different from that of the other members, but a member nonetheless.' 63 F.Supp. at pages 530, 531, and see the preamble to the decree at page 532.3 8 This finding is contested vigorously by du Pont and is the principal subject matter of its appeal in No. 91. After careful consideration, we agree with the following conclusion of the District Court: 9 'In sharp contrast with NL, DP exhibited, from the very beginning of its interest in titanium, an alert consciousness of the anti-trust laws and moved cautiously and under the guidance of trained anittrust lawyers. The question is whether it succeeded in avoiding not only the form but also the substance of transgression. I have concluded that it has not; * * *.' Id., 63 F.Supp. at page 527. 10 It would serve no beneficial purpose to review here the evidence upon which that court based its conclusion. Its opinion analyzes the facts (Id., 63 F.Supp. at pages 527—531) and, in the light of the record § a whole, we find in those facts the support necessary for the conclusion reached. 11 III. Related to these issues was a third. This was whether the contract between National Lead and du Pont was offensive to the antitrust laws apart from the relation of that contract, and of the parties thereto, to the foreign producers. The District Court found that it was and also related it to the international situation. It found that— 12 'The defendants NL, DP and Tinc have utilized their patents which relate to the manufacture and use of titanium pigments to control and regulate the manufacture and sale of titanium pigments and compounds in the United States; and NL and Tinc with the co-operation of DP have done so throughout the rest of the world.' Finding of Fact 95, subparagraph 9. 13 In its opinion the District Court emphasized also 'the great power they acquired' (Id., 63 F.Supp. at page 531) and indicated criticism of limitations originally inserted in certain important licenses, although later removed from them. Id., 63 F.Supp. at page 532. Added together, the control of the patents covered by this agreement gave to National Lead and du Pont 'domination and control over the titanium pigment business in the U.S.' Finding of Fact 79. The District Court referred to the 'proliferation of patents' as another 'inevitable consequence' of the agreement. Id., 63 F.Supp. at page 532. This was explained to mean the great multiplication of related patents, resulting in increasing the difficulty of an attack upon them. The validity of none of the hundreds of patents involved has been litigated. 14 'These patents, through the agreements in which they are enmeshed and the manner in which they have been used, have, in fact, been forged into instruments of domination of an entire industry. The net effect is that a business, originally founded upon patents which have long since expired, is today less accessible to free enterprise than when it was first launched.' Id., 63 F.Supp. at page 532. 15 Referring to the exchange of patents between National Lead and du Pont, the District Court added: 16 '. . . in the context of the present case, . . . this exchange between two corporations, who between them controlled the entire market, becomes an instrument of restraint, available for use and used, to continue the mastery of the market which NL and DP achieved by means of the illegal international agreement.' Id., 63 F.Supp. at page 532. 17 These facts are important not only in affirming, as we do, the finding that National Lead, Titan Inc. and du Pont each has violated § 1 of the Sherman Anti-Trust Act, but also in passing upon the terms of the decree entered in order to prevent future violations of that Act by them. 18 IV. The remaining issues relate to the terms of the decree. The entire decree, exclusive of its Appendix, is reported at 63 F.Supp. 532—535, and, for reference purposes, is here reprinted in the margin, as there reported.4 19 This decree represents a careful attempt to fit the remedy to the needs of this case. The record upon which it is based consists of two large volumes of testimony and four larger volumes of exhibits, representing a total of over 5,500 pages, reflecting more than three months f trial. I t demonstrates a commendable procedure. Proposed findings of fact and conclusions of law were submitted on behalf of the respective parties and a form of decree was submitted on behalf of the Government to the District Court immediately following the trial. The opinion of the District Court, when filed, formed the basis of further consultation and argument. After the District Court's findings of fact and conclusions of law were entered, further conferences were held with counsel and full opportunity was given to them to propose changes in the findings of fact and the decree. Much of this discussion was reported in the record and has been of benefit to this Court in reviewing the decree. 20 In our opinion, the provisions of this decree, to a large extent, are matters lying within the discretion of the District Court as a court of equity whose duty it was to make the remedy as effective as possible. The District Court was confronted with an obligation to give effect to the provisions, on the one hand, of the patent laws granting certain valuable rights in the nature of monopolies to the patentees and their licensees, and also to give effect, on the other hand, to the provisions of the Sherman Anti-Trust Act prohibiting any combination or conspiracy in restraint of trade among the several states or with foreign nations. We believe that the District Court has not exceeded its discretion in the provisions of this decree but has employed its discretion with commendable fairness having especial regard to the needs of this case. It has succeeded in keeping within the lines of precedent thus far established, although, in this field, such lines cannot be much more than guides. The essential consideration is that the remedy shall be as effective and fair as possible in preventing continued or future violations of the Anti-Trust Act in the light of the facts of the particular case. 21 The issues are presented by the assignments of error in the three appeals. They will be considered separately in conjunction with their supporting arguments. In each instance we sustain the present decree. 22 A Request to omit the requirement of the granting of compulsory, nonexclusive licenses at uniform, reasonable royalties and to substitute for that requirement, either a perpetual injunction against the enforcement of the titanium patents presently owned or controlled by the respective appellant companies, or a provision for compulsory licenses to be issued under those patents, free of royalties. 23 This is the major legal issue in this case. 24 The material provisions in the present decree are as follows: 25 '4. The term 'patents as herein defined' shall mean United States letters patent and applications as follows: (a) the letters patent and patent applications listed in Appendix A hereof; (b) all divisions, continuations or reissues of any of the foregoing patents and applications; (c) all patents issued upon such applications; (d) all patents which cover any titanium pigments or any process for the manufacture of titanium pigments issued to any of the defendants within five years from the date of this decree; and all such patents which any of the defendants acquires within such five years; and all such patents of which any of the defendants becomes the exclusive licensee within such five years with power to sublicense. 26 '7. Each of the defendants is ordered to grant to any applicant therefor, including any defendant or co-conspirator, a nonexclusive license under any or all of the patents as herein defined at a uniform, reasonable royalty. Such grant may, at the option of the licensor, be conditioned upon the reciprocal grant of a license by the applicant, at a reasonable royalty, under any and all patents covering titanium pigments or their manufacture, now issued or pending, or issued within five years from the date of this decree, if any, owned or controlled by such applicant. Such license or reciprocal license may, at the opion of eit her party, contain a provision for the inspection of the books and records of the licensee by an independent auditor who shall report to the licensor only the amount of royalty due and payable and no other information. During a period of three years from the date of this decree such license or reciprocal license may at the option of either party contain a provision for the imparting in writing, at a reasonable charge, by the licensor to the licensee, of the methods and processes used by the former at the date of the license in its commercial practice under the licensed patents in connection with the production of titanium pigments. The Court reserves jurisdiction to pass upon the reasonableness of any royalty or charge herein directed to be reasonable. Defendants are restrained from attempting to enforce any rights under any foreign patents owned by them or under which they are the exclusive licensees to prevent the exportation of titanium pigments from the United States to any foreign country.' 27 The assignment of error originally made by the Government, in No. 89, as to this point was as follows: 28 '1. The court erred in failing to require each defendant to license its existing titanium pigment patents free of royalty until the court shall have determined, on application by any defendant, that the effects of the defendants' illegal combination, as set forth in the court's findings of fact and conclusions of law, have been fully dissipated.' 29 Later the Government moved to amend this assignment of error so that it would read as follows: 30 'The court erred in failing to enter an injunction perpetually enjoining the defendants from enforcing the titanium patents presently owned or controlled by them.' 31 This Court postponed consideration of the above motion to the hearing of the case on its merits. On oral argument, the Government supported its second proposal but indicated that, if that proposal were not satisfactory, it would prefer its original request to the provision for uniform, reasonable royalties now in the decree. The Government's motion to amend its assignment of errors accordingly is granted. National Lead, in its assignments of error in No. 90, however, assigns the orders contained in paragraph 7 of the decree on this subject as error and, in its briefs, argues that 'The court erred in refusing to order royalty-free licensing of all patents as defined in the judgment.' Accordingly, both proposals have been considered. 32 While it has been contended that, because of the decision of this Court in Hartford-Empire Co. v. United States, 323 U.S. 386, 65 S.Ct. 373, 89 L.Ed. 322, the District Court was not free in the present case to require the issuance of royalty-free licenses, we feel that, without reaching the question whether royalty-free licensing or a perpetual injunction against the enforcement of a patent is permissible as a matter of law in any case, the present decree represents an exercise of sound judicial discretion. 33 This is a civil, not a criminal, proceeding. The purpose of the decree, therefore, is effective and fair enforcement, not punishment. An understanding of the findings of fact is essential to an appreciation of the reasons for the decree. 34 Pure titanium pigment and its compounds represent a product of comparatively recent development but of major commercial value. The District Court found that— 35 'Titanium pigments are possessed of great opacity, hiding power and chemical inertness, and are largely displacing other pigments such as lithopone and white lead. Titanium pigments are used in the manufacture of paints and are also used in the manufacture of rubber, glass, paper, vitreous enamels, and many other products. * * * 36 'In and before 1920 there was no substantial trade or commerce in, and no commercial manufacture of, titanium pigments for use in paint, paper, rubber, or other products; * * *.' Finding of Fact 33. 37 'The production of titanium pigments in the United States has risen from 100 tons (on the basis of pure Ti2 content) in 1920 to approximately 110,000 tons in 1943 with a peak production of approximately 128,000 tons in the United States in 1941. The total production of titanium pigments and compounds outside of the United States has shown less growth, the estimated foreign production of titanium pigments and compounds being approximately 1,1000 tons in 1920 and approximately 23,000 tons in 1938.' Finding of Fact 35. 38 There are four producers of titanium products in the United States—National Lead, du Pont, American Zirconium (here called Zirconium), which is a subsidiary of Glidden Company, and Virginia Chemical Company (here called Virginia Chemical), which is a subsidiary of American Cyanamid Company. National Lead and du Pont have cross-licensed each other under their respective patents. Zirconium entered the field in 1935 with licenses from National Lead and du Pont, but the National Lead license has been canceled. Virginia Chemical entered the field in 1937 with a license from du Pont. Finding of Fact 42. 39 National Lead has assets of over $100,000,000 and is the largest manufacturer of titanium pigments and compounds not only in the United States but in the world. In 1943 it manufactured and sold 76.5% of composite pigments and 46.4% of pure TiO2 made in the United States. Finding of Fact 3. Du Pont is one of the largest chemical companies in the United States with assets of over $1,000,000,000. It is one of the largest manufacturers of titanium pigments in the United States. In 1943 it manufactured and sold approximately 23.5% of the composite pigments and 45.1% of pure TiO2 made in the United States. Finding of Fact 9. 40 National Lead took an early lead in promoting the commercial manufacture and use of titanium pigments. In 1920 it acquired an interest in The Titanium Pigment Company, Inc., which had been organized by the Titanium Alloy Manufacturing Company at Niagara Falls, New York. It made use of a patented process developed by Barton and Rossi. At about that time, a Norwegian chemist, Gustav Jebsen, made similar investigations but along different lines in Norway. He and his associates perfected a patented means for producing relatively pure titanium dioxide by a process much less costly than that in use at Niagara Falls. These associates had not, however, perfected processes for the manufacture of composite pigments. Finding of Fact 33. In about 1922, Joseph Blumenfeld, a chemist and managing director of a French company, obtained patents relating to the manufacture of titanium compounds. Finding of Fact 34. 41 On July 30, 1920, The Titanium Pigment Company, Inc., (affiliated with National Lead) and Titan Co. A/S (representing the Jebsen interests) entered into an agreement which is still uncanceled. Its principles became the basis for more than 60 subsequent agreements and for an international cartel5 in titanium pigments. The essential features of this agreement are stated in Finding of Fact 44 and in the opinion of the District Court, 63 F.Supp. at pages 517, 518. 42 Briefly stated, it applied to a licensed field, defined as including all substances containing above 2% of titanium unless containing by weight more than 5% of a metal other than titanium in its purely metallic form. It applied to all apparatus, methods and processes useful in obtaining or manufacturing such substances both in the titanium and in the titanium compound field. 43 Both parties agreed to grant and accept a license, exclusive of all others including the licensor, under all 'existing or future' patents of the licensing party. They divided the globe territorially. The American company was to have the North American continent. The Norwegian company was to have the rest of the world, except that reciprocal, nonexclusive rights of sale were reserved for both companies in South America. 44 Detailed provision was made for exchange of copies of applications for patents filed by the parties or their other licensees. Neither party was ever to question or contest the validity of any patent of the other under which it was licensed within the field described. 45 The American company became the exclusive agent for the Norweigian company in North America and vice versa outside of North and South America. Sales were to be at prices and on terms determined by the agent. Notwithstanding these agencies, however, importations of 'finished articles'—that is, paint, paper, rubber, glass, etc.—containing titanium products of the principal, its licensees or sublicensees, would be permitted provided such products did not constitute such an important part of such finished articles that sales within the agent's territory would interfere substantially with the agent's sales of its own titanium products. 46 Each party would impart semiannually to the other information in detail as to knowledge obtained in and applicable to the 'licensed field,' and would permit the other to inspect and study operations in its plants (exclusive of research laboratories). The reciprocal grants of exclusive licenses would extend to December 31, 1936, and thereafter for periods of ten years each, with provision for termination by notice to be given at least five years before the end of any such period. In particular, so long as each company held an exclusive license from the other under this agreement, it would have the right to grant licenses under its own patents, and sublicenses under the other's patents, on the condition, nevertheless, that every such licensee or sublicensee would grant to the party to the 1920 agreement (other than its licensor), its patent rights in the 'licensed field' identical in character, territorial scope, and duration to those given by its licensor to such other party under the 1920 agreement, and would impart technical information to such other party in the same manner and to the same extent as its licensor. 47 In 1929, the obligations of Titan Co. A/S under this agreement were assumed by Titan Inc. and, in 1936, the obligations, of The Titanium Pigment Company, Inc., were assumed by National Lead. 48 Other companies throughout the world joined in carrying out this program to restrain international commerce and to establish an international combination or conspiracy in restraint of trade. The complaint in the present case lists many of these foreign companies as co-conspirators with National Lead, Titan Inc. and du Pont, but it does not attempt to make such co-conspirators parties defendant. The District Court recognized that it did not have jurisdiction over such co-conspirators and found in that circumstance one of its difficulties in effectively restraining National Lead, Titan Inc. and du Pont from further violations of the Sherman Anti-Trust Act, pursuan to this i nternational as well as domestic program. To accomplish this purpose, the District Court has adjudged these agreements to be unlawful and it has canceled them. In addition, it has enjoined all three defendants, National Lead, Titan Inc. and du Pont, from further performance of any of the provisions of such agreements and of any agreements amendatory thereof or supplemental thereto. Pars. 5 and 6 of the decree, 63 F.Supp. at pages 533, 534. 49 National Lead acquired an 87% interest in Titan Co. A/S, Jebsen retaining 13%. The District Court found that 'The intended purpose of the acquisition of control of TAS by NL was to utilize TAS and the contract of 1920 to further control competition in the manufacture of titanium pigments and compounds in all markets of the world including the United States.' Finding of Fact 47.6 While this combination and conspiracy in restraint of interstate and foreign commerce thus was developing from 1920 to 1931, with National Lead and Titan Inc. at its center, du Pont was unconnected with it. Du Pont had initiated independent, but unsuccessful, efforts to develop, through research, a new and patentiable commercially feasible process in this field. It became convinced that if it were to undertake the manufacture and sale of titanium pigments as a development of its white pigment business, it would be necessary to enter the field as promptly as possible through the acquisition of the patents and of the going business of Commercial Pigments Company. That company had been formed by Commercial Solvents Corporation in 1928 and had acquired the Blumenfeld and other patents in the United States relating to the manufacture and sale of titanium pigments and compounds. It was operating a plant in Baltimore, Maryland, where it manufactured pure TiO2 pigment only and sold it in competition with the The Titanium Pigment Company, Inc. (the affiliate of National Lead). In July, 1931, du Pont, through its subsidiary, Krebs Pigment & Color Corporation, acquired all of the assets and assumed some of the obligations of Commercial Pigments Company. It thus continued and, in fact, increased its competition in the titanium pigment field against National Lead. Findings of Fact 70, 12, 10 and 71. 50 'Both NL and DP in good faith claimed that each infringed certain of the other's titanium pigment patents and both in good faith denied such infringement caiming, am ong other things, that the patents alleged to be infringed were of doubtful validity. NL and DP agreed in October, 1932, that the validity of the patents claimed to be infringed should not be questioned except as a last resort and that they should try to arrive at a general understanding.' Finding of Fact 72. 51 Finally, in 1933, the Titanium Pigment Company, Inc. (by that time a 100% subsidiary of National Lead), and Krebs Pigment & Color Corporation (subsidiary of du Pont) were the only producers of titanium pigments in the United States. The 1920 agreement, however, prevented The Titanium Pigment Company, Inc. (National Lead), from entering into a contract with Krebs Pigment & Color Corporation (du Pont) unless the latter subscribed to the provisions of the 1920 agreement. Such a subscription would have required an agreement by Krebs (du Pont) not to export into the territories of National Lead's foreign associates, and an agreement to grant to National Lead's foreign associates exclusive licenses under all of Krebs' (du Pont's) present and future patents for titanium pigments and compounds in the territories of the foreign associates. Finding of Fact 73. After extensive negotiations, National Lead and du Pont formulated an agreement in writing, dated as of January 1, 1933, which was executed August 28, 1933. It is summarized in Finding of Fact 73 and in the opinion of the lower court, 63 F.Supp. at pages 520, 521. By its terms, it provided for cross-licensing but did not provide for the exclusive licensing and restrictive territorial and agency agreements specified in the 1920 program. Certain foreign associates of National Lead, particularly Interessengemeinschaft Farbenindustrie Aktiengesellschaft (usually referred to as I.G. Farbenindustrie), insisted upon some such commitment from du Pont or its subsidiary. This insistence never was abandoned. After further negotiations and an exchange of letters, all as set forth in full in Finding of Fact 73 and in the opinion of the District Court, 63 F.Supp. at pages 528, 529, some understanding was reached as to the future conduct of du Pont, or of its subsidiary. On the strength of this, I.G. Farbenindustrie agreed to the situation. On the basis of all the evidence, the District Court found that— 52 'DP, through Rupprecht (President of Krebs Pigment & Color Corporation) and Krebs (the corporation), by these assurances and Exhibit E (the agreement dated as of January 1, 1933), joined the conspiracy found herein to exist between, NL and its foreign associates. DP's status rights and obligations were different from those of the other members of the combination. DP did not thereafter withdraw.' Finding of Fact 73. 53 That finding, which we accept, throws important light upon the conditions to which the decree is to be applied. Furthermore, although National Lead and du Pont exchanged technical information relating to the manufacturing or use of titanium pigments or compounds from about April, 1932, until April, 1940, this exchange was discontinued May 1, 1940. The agreement of 1933 between The Titanium Pigment Company, Inc., and Krebs Pigment & Color Corporation which then had been assumed by National Lead and du Pont, respectively, was amended on January 1, 1941, to eliminate provisions for the exchange of technical information. Finding of Fact 75. It was further amended to include extender pigments, which theretofore had been included by implication and practice. Finding of Fact 76. After January 1, 1941, patent applications were to be available between National Lead and du Pont only after six months from the date of their filing, instead of immediately. Finding of Fact 77. 54 'From 1933 on there was active competition between NL and DP for customers. There has been a vast increase in sales; and repeated reductions in the price of titanium pigments have taken place and a very few increases. DP entered the titanium pigment business in 1931 and since that date it has made frequent plant expansions for the manufactureof pure an d composite TiO2 and its production increased from 20,027 tons in 1935 to 50,674 tons in 1941 and then decreased to 42,843 tons in 1943. 55 'NL and DP have endeavored to match each other's titanium products; but each also manufactures certain titanium pigments having special applications not manufactured by the other. 56 'There is no allocation of territory or customers between NL and DP; and each maintains a large, highly trained technical sales force engaged in endeavoring to sell titanium pigments. To a very large extent the salesmen of the two companies are chemists whose contact with consumers (that is, manufacturers of paint, rubber, glass, etc.) consists in endeavoring to demonstrate that their products merit acceptance on the basis of technical superiority. The buyers of titanium pigments are mainly well-in-formed, experienced purchasing agents. NL and DP sell for identical prices; there is no evidence that such price identity is the product of agreement or collusion.' Finding of Fact 78. 57 These findings disclose the special conditions which confronted the District Court in framing its decree. They disclose a vigorous, comparatively young, but comparatively large, world-wide industry in which two great companies, National Lead and du Pont, now control approximately 90% of the domestic production in substantially equal shares. The balance of that production is in the hands of two smaller companies. Each of these is affiliated with larger organizations, not parties to this case. The findings show vigorous and apparently profitable competition on the part of each of the four producers, including an intimation that the smaller companies are gaining ground rather than losing it. Keen competition has existed both before and after the elimination, by the 1933 agreement and understanding, of certain patent advantages from among the weapons of competition. The competition between National Lead and du Pont has been carried into this Court where today National Lead supports the Government's proposal for royalty-free licenses, while du Pont argues strongly for a complete dismissal of the proceedings and contends that, in any event, if there are to be compulsory licenses they at least should require payment of uniform, reasonable royalties as provided in the present decree. 58 Assuming, as is justified, that violation of the Sherman Act in this case has consisted primarily of the misuse of patent rights placing restraint upon interstate and foreign commerce, that conduct is not before this Court for punishment. It is brought before this Court in order to secure an order for its immediate discontinuance and for its future prevention. That will be accomplished largely through the strict prohibition of further performance of the provisions of the unlawful agreements. Further assurance against continued illegal restraints upon interstate and foreign commerce through misuse of these patent rights is provided through the compulsory granting to any applicant therefor of licenses at uniform, reasonable royalties under any or all patents defined in the decree. Such patents include not only the patents and patent applications listed in the appendix to the decree, but also, among others, all patents which cover any titanium pigments or any process for the manufacture of such pigments issued to, or acquired by, any of the appellant companies within five years from the date of the decree. It applies also to all such patents of which any of the appellant companies shall become the exclusive licensee within such five years with power to sublicense. 59 On the facts before us, neither the issuance of such licenses on a royalty-free basis nor the issuance of a permanent injunction prohibiting the patentees and licensees from enforcing those patents has been shown to be necessary in order to enforce effectively the Anti-Trust Act. We do not, in this case, face the issue of the constitutionality of such an order. That issue would arise only in a case where the order would be more necessary an appropria te to the enforcement of the Anti-Trust Act than here. In the absence of a showing to the contrary, it is obvious that some patents should entitle their owners to receive higher royalties than others. Also, it is clear that several patents, each of equal value, ordinarily should entitle their owners to a larger total return in royalties than would one of them alone. It follows that to reduce all royalties automatically to a total of zero, regardless of their nature and regardless of their number, appears, on its face, to be inequitable without special proof to support such a conclusion. On the other hand, it may well be that uniform, reasonable royalties computed on some patents will be found to be but nominal in value. Such royalties might be set at zero or at a nominal rate. The conclusion, however, would depend on the facts of each case. 60 Recognizing the difficulty of computing a reasonable royalty,7 nevertheless, that conception is one that already has been recognized both by Congress and by this Court.8 The term frequently has been employed in Sherman Anti-trust case consent decrees.9 In the present case, the royalties charged to and paid by Zirconium and Virginia Chemical provide enough guidance to indicate that the reasonableness of future royalties may be determined in this case with less difficulty than often might confront a court faced with such a task. Cf. Sinclair Refining Co. v. Jenkins Petroleum Process Co., 289 U.S. 689, 697, 698, 53 S.Ct. 736, 739, 77 L.Ed. 1449, 88 A.L.R. 496. The growing strength of those two royalty-paying licensees has demonstrated that royalty-free licenses have not been essential to such progress even under past conditions. Finally, the District Court, under paragraphs 7 and 13 of the decree, will retain sufficient jurisdiction to enable it to vacate or modify its orders fixing reasonable royalty rates if it finds such action to be necessary or appropriate. We hold, therefore, that paragraphs 4 and 7 of the decree should not be modified either so as to provide for compulsory royalty-free licenses or so as to enjoin the patentees or licensees from enforcing the terms of the patents involved. 61 B. Request to add a provision requiring National Lead and du Pont each to submit, within a year, a plan for the divestiture by it of one of its two principal titanium pigment plants, together with the related physical property. This request is urged by the Government in No. 89. It is strongly opposed both by National Lead and du Pont. The issue was discussed at length by the parties and the District Court in the reported conferences as to the form of the decree. 62 We believe there is neither precedent nor good reason for such a requirement. The violation of the Sherman Act is found in these cases in the patent pooling and in the related agreements restraining interstate and foreign commerce. There is neither allegation in the complaint nor finding of fact by the District Court that the physical properties of either National Lead or du Pont have been acquired or used in a manner violative of the Sherman Act, except as such acquisition or use may have been incidental or related to the agreements above mentioned. The cancellation of such agreements and the injunction against the performance of them by the appellant companies eliminate them. Paragraph 8 of the decree goes further. It requires National Lead and it subsidiary, Titan Inc., to present, within one year, a plan for divesting themselves of their stockholdings and other financial interests in certain foreign corporations, or for the purchase of the entire stockholdings and other financial interests, direct or indirect, in such corporations or any of them. Such a plan, which was required also to provide for its completion within two years from the date of the decree, will go as far toward divestiture as the findings of fact indicate should be necessary to make the decree effective. 63 There is no finding of fact, and apparently no evidence, showing that the respective principal titanium plants of National Lead or du Pont were acquired in violation of law, that they ever were separately owned or operated, or that they are adapted to such operation. Presumably, the requested divestiture would be for the purpose of providing four instead of two independent major competing plants in the titanium pigment industry. However, there is no showing whether or not the two licensees, Zirconium (subsidiary of Glidden Company) and Virginia Chemical (subsidiary of American Cyanamid Company), may not be able to develop, under the decree, even more substantial competition against National Lead and du Pont than would new concerns operating the divested plants. No comparable precedents have been presented. 64 There is no showing that four major competing units would be preferable to two, or, including Zirconium and Virginia Chemical, that six would be better than four. Likewise, there is no showing of the necessity for this divestiture of plants or of its practicality and fairness. The findings of fact have shown vigorous and effective competition between National Lead and du Pont in this field. The general manager of the pigments of department of du Pont characterized the competition with Zirconium and Virginia Chemical as 'tough' and that with National Lead as 'plenty tough.' Such competition suggests that the District Court would do well to remove unlawful handicaps from it but demnstrates n o sufficient basis for weakening its force by divesting each of the two largest competitors of one of its principal plants. It is not for the courts to realign and redirect effective and lawful competition where it already exists and needs only to be released from restraints that violate the antitrust laws. To separate the operating units of going concerns without more supporting evidence than has been presented here to establish either the need for, or the feasibility of, such separation would amount to an abuse of discretion. 65 C. Request to add a provision requiring National Lead and du Pont to furnish to any applicant, at a reasonable charge, during a period of three years, technical information desired by the applicant relating to the methods and processes for manufacturing titanium pigments. This would supersede the provision now in the decree which, during a period of three years, makes available to a licensee certain information in writing, at a reasonable charge, as to the methods and processes used by his licensor at the date of the license. This is urged by the Government in No. 89 and opposed by National Lead and du Pont. Du Pont, in No. 91, goes further and urged the omission of all requirements compelling it to furnish technical information. 66 The request by du Pont to eliminate this requirement altogether is based, in part, upon the experience of the appellant companies. Du Pont emphasizes the fact that the titanium pigment industry has matured and that, since about May 1, 1940, the exchange of technical information between National Lead and du Pont has ceased. Also, the agreement between them which called for the exchange of technical information was amended January 1, 1941, to eliminate the provisions requiring such exchange. Finding of Fact 75. Du Pont argues that neither Zirconium, which entered the industry in 1934, nor Virginia Chemical, which entered the industry in 1935, ever exchanged technical information with du Pont or received any from du Pont. However, finding of fact 84 shows that, as to National Lead in 1935—'* * * NL and Zirconium cross licensed each other under all patents in the titanium pigment field, then owned or thereafter acquired, and both parties agreed to exchange technical information and experience. * * * 67 NL did render some engineering assistance to Zirconium in connection with the installation and use of its processes and imparted some technical information but frequently it refused to convey such technology to Zirconium on the ground that it was prevented by other agreements from so doing. 68 'On occasions before 1940 there was exchange of information between DP and NL relative to Zirconium's production.' Virginia Chemical was not licensed under National Lead's patents and apparently did not receive technical information from National Lead. 69 Finding of Fact 95, subparagraph 8, contains a further material finding, although this is disputed by du Pont: 70 'The defendants NL and DP secured a monopoly on technical information relating to the manufacture and use of titanium pigments and certain apparatus and equipment necessary to the manufacture of certain titanium pigments to the exclusion and detriment of other producers now engaged in the titanium pigment business in the United States; when NL and DP ceased exchanging technical information, the titanium pigment business was a mature industry.' The requirement for the exchange of technical knowledge under the present decree is merely that included in paragraph 7, which is as follows: 71 'During a period of three years from the date of this decree such license or reciprocal license may at the option of either party contain a provision for the imparting in writing at a reasonable charge, by the licensor to the licensee, of the methods and processes used by the former at the date of the license in its commercial practice under the licensed patents in connection with the production of titanium pigments.' 72 The limited scope of this access to technical information is apprent. On t he other hand, there is reason to believe that the knowledge which thus can be secured may be vital in giving value to the compulsory licenses which are a central feature of the decree. The information is put upon a basis comparable to that of a license. Just as a licensee is required to pay a uniform, reasonable royalty for the privilege of operating under the patent, so, also, he is required to pay a reasonable charge for the information as to methods and processes which may be important to him in his commercial practice under the licensed patents. 73 The need for technical information to accompany patent licenses in this field, at least where desired by a newcomer, is testified to repeatedly. If there be such a need, the reasonableness of this limited availability of it as stated in the decree is hard to deny. Findings of fact evidencing the importance of such information include the following: 74 'NL wished to pool with DP all their patents and technical information relating to the manufacture or use of titanium pigments in the United States in order to settle its patent controversies with DP and to obtain access to DP's patents and technical facilities and jointly to control and dominate the manufacture and sale of titanium pigments and compounds; * * *. Both TP and Krebs began to exchange extensively technical information relating to the manufacture and use of titanium pigments in 1932 and the information so exchanged related to much more than any alleged claims of patent infringement by either company. Blemenfeld and his foreign associates furnished technical aid and assistance to Krebs at its instance from August 1931 until the approximate date at which TP and Krebs commenced the exchange of technical information in 1932.' Finding of Fact 72. 75 'DP and NL exchanged technical information relating in any manner to the manufacturing or use of titanium pigments or compounds from about April, 1932, until April, 1940.' Finding of Fact 75. 76 'In entering into the agreement, Ex. E (the agreement of July 1, 1933), NL had several purposes: 77 '1) For about a year prior to the making of Ex. E. officials of NL had been concerned by the early expiration dates of many of the patents upon which NL relied. By exchanging patents and technology with DP, a large and powerful corporation, possessed of great research facilities, NL expected to strengthen the patent monopoly of NL and DP jointly, as against newcomers in the titanium pigment business. 78 'DP's purpose in entering into the agreement Ex. E were: 79 '3) To obtain access to NL's technical experience and patents in the titanium pigment field as well as the patents and the experience of NL's foreign associates. 80 'The necessary effects of the agreement Ex. E and of DP assurances have been 81 '1) The achievement of NL purposes. 82 '2) The achievement of DP's purposes. 83 '3) To give NL and DP together domination and control over the titanium pigment business in the U.S.' Finding of Fact 79. 84 National Lead on this point now takes a middle ground. Apparently it supports the present provision in the decree and opposes its expansion as proposed by the Government. It expressly endorses the present provisions if the decree is amended so as to put the compulsory licenses on a royalty-free basis. If it approves this grant of access to technical information on that basis, it hardly can object to it in connection with licenses on a uniform, reasonable royalty basis. 85 The fact that this Court eliminated without discussion, paragraph 24(c) from the Hartford-Empire decree is not controlling here. Hartford-Empire Co. v. United States, supra, 323 U.S. at pages 413, 418, 65 S.Ct. at pages 387, 389, 89 L.Ed. 322. The fact that the violations of the Anti-trust Act may have been more reprehensible in that case than here is not persuasive because this provision is not and should not be punitive. The justification for the compulsory imparting of methods and processes rests upon its appropriateness and upon the necessity for it in providing n effectiv e decree. In the Hartford-Empire decree, paragraph 24(c) proposed to make available, to any licensee under paragraph 24(a) (without royalties), or under paragraph 24(b) (with reasonable royalties), at cost, plus a reasonable profit, 'all drawings and patterns 'relating to the machinery or methods used in the manufacture of glass-ware' embodied in the licensed inventions * * *.' Id. 323 U.S. at pages 413, 414, 65 S.Ct. at page 387, 89 L.Ed. 322. This Court, in that case, modified paragraphs 24(a) and 24(b) and deleted paragraph 24(c). In the absence of a statement of this Court's reasons for the deletion of paragraph 24(c), it cannot be assumed that, by such deletion, it announced its disapproval, in all future decrees, of provisions requiring the supplying of technical information to licensees at a reasonable charge. 86 It may well be that the District Court, in the present case, took into consideration the argument made by National Lead that, in this field, 'The product claims cover practically all such improved titanium pigments: thus, of 23 different grades of titanium pigments (i.e. different products) sold by NL, 21 are covered by unexpired patents.' Finding of Fact 37. Therefore, the imparting to the newcomer of methods and processes covered by the decree might be particularly important to him in entering this industry where substantially all the commercial products are covered either by process or product patents. 87 Du Pont has presented a strong case against compelling it to make further disclosure of its technical information to its leading competitor, National Lead, in this comparatively mature technical industry, especially since the agreement of 1941 between these companies expressly terminated their pre-existing agreement to supply such information. This argument does not apply, however, with comparable force, to the many other situations toward which this provision is directed. Under all the circumstances and in view of the narrow limits written into the provision by the District Court, we believe that it represents a permissible exercise of judicial discretion. It is to be judged from the point of view of the public interest as well as that of the private interests concerned. That public interest requires that the court be permitted to produce the most effective and generally fair decree that it can devise to give effect simultaneously to the antitrust laws and the patent laws. 88 This decision relies also on the permissible breadth of the District Court's discretion over the conditions under which technical information shall be required to be shared with the world. The attempt of the Government to throw the field of technical knowledge in the titanium pigment industry wide-open would reduce the competitive value of the independent research of the parties. It would discourage rather than encourage competitive research. It would be contrary to, rather than in conformity with, the policy of the patent laws now in force. Changes in the underlying policies of the patent laws frequently have been presented to Congress,10 but Congress, by its failure to accept those changes, has added to, rather than detracted from, the strength of the present and traditional patent policies. 89 D. Request to omit the provision that National Lead and du Pont, respectively, may make the grant of any license by either of them to an applicant under the decree, conditioned upon the reciprocal grant of a license by the applicant at a reasonable royalty, under certain described patents owned or controlled by such applicant. This is urged by the Government in No. 89 nd opposed by the appellant companies. 90 The District Court, during the conferences on the terms of the decree, summarized the need for this provision by a concrete illustration of what it suggested might happen without it. It said: 'Otherwise you will arrive at a situation conceivably where Virginia Chemical would simply change places with du Pont in becoming the dominating factor in the industry under this extraordinary advantage of being able to take everything for itself and keeping everything that it has.' 91 The District Court distinguished the present case from the Hartford-Empire case by showing that, in the latter, there had not been a similar reason for inserting the reciprocal requirement. In that case, the court was dealing with a licensor organization which had no use for patents except for the resulting control over licensing and, consequently, it would have derived no benefit from cross-licenses. The reciprocal clause includes an appropriate reference to future patents. As a five-year limit is put on the patents which will be subject to the compulsory license clause, under paragraphs 4 and 7 of the decree, so also the reciprocal licenses are limited by paragraph 7 to 'patents covering titanium pigments or their manufacture, now issued or pending, or issued within five years from the date of this decree. * * *' 92 Here again, the provision is well within the discretion of the District Court in seeking means to fit the relief it grants to the needs of the particular case, always with due regard to the underlying public interest that is inherent in the antitrust and patent laws.11 93 E. Request to omit the six-months' time limit imposed by the decree upon the options of American Zirconium Corporation and Virginia Chemical Corporation, respectively, to secure certain licenses under the decree. This is urged by the Government in No. 89. It is not discussed here in the briefs of the other parties. The effective date of the decree of October 11, 1945, was stayed an suspended, by the order of Mr. Justice Reed entered January 2, 1946, pending determination of the present appeals to this Court, so that more than six months already have passed since the original date of the decree without prejudicing the rights of the parties affected. In view of such suspension and of the new effective date to be given to the decree, pursuant to the order of this Court, there will be ample time for the exercise of this option under its terms. 94 F. Request to modify the language of the decree so as to eliminate language which, it is claimed, enjoins normal and usual business arrangements between the appellant companies and other producers of titanium products. This is urged by National Lead in No. 90 and is opposed by the Government. The precise request is to strike from paragraphs 5 and 6 of the decree certain language shown in the margin of this text in italics and to insert in paragraph 6 the word 'producer' at the point there shown in capital letters.12 National Lead contends that the cancellation of the agreements, as ordered in paragraph 5, and the injunction, as ordered in paragraphs 5 and 6, against the further performance or the continuation or renewal of the unlawful provisions thereof (namely, division of sales or manufacturing territory, allocation of markets, limitation of imports or exports, restrictions on use, etc.) will insure complete and effective relief without subjecting National Lead or du Pont to undue hardship and losses. Accordingly, National Lead states that it asks for the changes here indicated in the interest of promoting trade and competition in titanium pigments. 95 We agree, however, with the Government's interpretation that paragraph 5 deals solely with the future enforceability of existing contracts and that the deletion of the words requested by National Lead is not necessary in order to remove barriers to future contracts. Paragraph 6 deals with future contracts. Clause (a) enjoins the parties from entering into or adhering to any agreement, plan or program 'which has as its purpose or effect the continuing or renewing of any of the agreements listed in paragraph 5 * * *.' Since such agreements have been found to violate the Sherman Act, this provision imposes no unjustified restriction on National Lead's power to contract. We find also no sufficient basis for inserting the word 'producer' as requested in paragraph 6. If National Lead later can demonstrate that its right of contract has been unduly restricted, it may, under the terms of the decree, apply to the District Court for a modification of the judgment. 96 G. Request to omit the requirement that National Lead and Titan Inc. within one year, shall present to the District Court, for its approval, a plan for divesting themselves of their stockholdings and other financial interests in certain foreign companies or for the purchase of the entire stockholdings and interests, direct or indirect, in such companies or any of them. To accomplish this, National Lead and Titan Inc., in No. 90, urge the deletion of paragraph 8 from the decree.13 The Government opposes such deletion. The requirement imposed by paragraph 8 is merely that certain parties shall present to the District Court, within one year, a plan subject to its approval. That court, during the conferences on the terms of the decree, said: 'In other words, the stock acquisitions were part and parcel of the territorial allocation agreements, and probably were a necessary element in the establishment of the territorial arrangement.' We find ample reasons in the record for the action of the District Court in inserting paragraph 8 in the decree. It is related directly to the injunction against further performance of any of the provisions of the agreements listed in the decree as being i violation of the Sherman Act. 97 In thus disposing of the points relied upon in the respective appeals, the decree will remain as originally entered by the District Court, excepting only that, as a result of the dissolution of the stay and suspension of certain provisions of the decree contained in paragraphs 5, 8, 9, 10 and 11 thereof, which were granted pending determination of these appeals to this Court, the decree shall be deemed, for the purposes of those paragraphs and for the running of time thereunder, to take effect on the effective date of the mandate to be issued by this Court. 98 For the reasons set forth, the motion of the United States to amend its assignments of error is granted and the judgment of the District Court is affirmed. 99 Affirmed. 100 Mr. Justice BLACK and Mr. Justice JACKSON took no part in the consideration or decision of these cases. 101 Mr. Justice DOUGLAS, with whom Mr. Justice MURPHY and Mr. Justice RUTLEDGE concur, dissenting in part. 102 I cannot agree that royalties should be charged on patents whose misuse has been so flagrant as to persuade us to approve compulsory licensing of all who desire to use the inventions. Nor do I think that the failure to provide for royalty free licensing may be sustained as an exercise of the judicial discretion of the District Court. That would be the case if the District Court had been free to frame its decree unembarrassed by the ruling in Hartford-Empire Co. v. United States, 323 U.S. 386, 65 S.Ct. 373, 89 L.Ed. 322; Id., 324 U.S. 570, 65 S.Ct. 815, 89 L.Ed. 1198. In that case this Court modified an anti-trust decree so as to permit 'reasonable' royalties on patents which had been ordered licensed without charge to all applicants. The language there used well might lead a court to the conclusion that royalty-free licensing is a remedy unacceptable as a matter of law.1 In these circumstances it is fair to assume that the action of the district judge in the present case was in deference to the Hartford-Empire rule rather than a reflection of his own judgment.2 103 The Hartford-Empire case presented the first instance, so far as I am aware, of the incorporation of a royalty free licensing provision in an antitrust decree. Since the question is one of the greatest importance in the administration of the antitrust laws, and was not considered by the full Court,3 I think it remains an open one, except as applied to the Hartford-Empire case, and we are free to consider whether that case should be followed under the facts and circumstances here presented. 104 In the Hartford-Empire case the Court stressed the fact that Congress had notspecifical ly authorized forfeiture of patents in antitrust actions. It thought that 'if, as we must assume on this record, a defendant owns valid patents, it is difficult to say that, however much in the past such defendant has abused the rights thereby conferred, it must now dedicate them to the public.' 323 U.S. at page 415, 65 S.Ct. at page 387, 89 L.Ed. 322. The difficulty with that argument is that it proves too much. For the Court was at the same time sanctioning compulsory licensing, a most serious inroad on patent rights. The patent law gives to the patentee or his assignee the 'exclusive right to make, use, and vend the invention or discovery * * *.' R.S. § 4884, 35 U.S.C. § 40, 35 U.S.C.A. § 40. If the antitrust court could not interfere with patent rights, then it could not order licensing on any terms, for mandatory licensing is hardly consistent with exclusive rights. Again, if the failure of Congress specifically so to provide prevents a court from directing royalty free licensing, then by the same token the failure to provide for compulsory licensing is a bar to that relief also. 105 It is thus clear that the criterion for choosing the appropriate antitrust remedies cannot be found in Congressional silence. The task of putting an end to monopoistic practices and restoring competition is one of magnitude and complexity; Congress has authorized use of the broadest powers of equity to cope with it. Under a statute providing more detailed remedies than do the antitrust laws, we have held that an equity court may mould additional ones. See Porter v. Warner Holding Co., 328 U.S. 395, 66 S.Ct. 1086, 90 L.Ed. 1332. And its powers under the antitrust laws, though not specifically enumerated, are ample to thwart the plans of those who would build illegal empires, no matter how imaginative their undertakings or subtle their techniques. The power of the court is not limited to the restraint of future transgressions. The impairment of property rights is no barrier to the fashioning of a decree which will grant effective relief. United States v. Union Pacific R. Co., 226 U.S. 470, 476, 477, 33 S.Ct. 162, 165, 57 L.Ed. 306. Divestiture or dissolution may be ordered in spite of hardship, inconvenience, or loss. United States v. Crescent Amusement Co., 323 U.S. 173, 189, 65 S.Ct. 254, 262, 89 L.Ed. 160. Devices or instrumentalities which may be used for legitimate ends may nevertheless be outlawed entirely where they have been employed to build then monopoly or to create the restraint of trade. United States v. Crescent Amusement Co., supra, 323 U.S. at pages 187, 188, 65 S.Ct. at page 261, 89 L.Ed. 160. For the aim of the decree is not only to prevent a repetition of the unlawful practice but to undo what was done, to neutralize power unlawfully acquired, to prevent the defendants from acquiring any of the fruits of the condemned project. Standard Oil Co. of New Jersey v. United States, 221 U.S. 1, 78, 31 S.Ct. 502, 523, 55 L.Ed. 619, 34 L.R.A.,N.S., 834, Ann.Cas.1912D, 734. 106 If that is to be done here, I think we must do more than forbid further expansion of the existing monopolistic situation. The defendants have unlawfully acquired control and domination over this industry to the exclusion of competitors. This control was obtained in part through the unlawful acquisition and use of patents. As stated by the District Court, 'These patents, through the agreements in which they are enmeshed and the manner in which they have been used, have, in fact, been forged into instruments of domination of an entire industry. The net effect is that a business, originally founded upon patents which have long since expired, is today less accessible to free enterprise than when it was first launched.' 63 F.Supp. 513, 532. If defendants are allowed royalties on those patents, they do, indeed, reap dividends from their unlawful activities. As stated in a dissent in the Hartford-Empire case, 'Every dollar hereafter, as well as heretofore, secured from licenses on the patents illegally aggregated in he combina tion's hands is money to which the participants are not entitled by virtue of the patent laws or others. It is the immediate product of the conspiracy.' 323 U.S. at page 443, 65 S.Ct. at page 400, 89 L.Ed. 322. 107 But beyond that is the effect on the industry. Here defendants have been in a commanding and impregnable position. They have dominated the field and suppressed competition. If competition is to be restored strong measures must be adopted to provide the maximum opportunity for new ventures to compete with the established giants of the industry. It is here that the major vice of permitting royalties on the licensed patents becomes apparent. Each dollar of royalty adds a dollar to the costs of the new competitor and gives the established licensor another dollar with which to fight that competition. As stated by National Lead in its brief before this Court: 108 'National and du Pont not only compete with their licensees but dominate the titanium industry. A requirement of uniform, reasonable royalties in no way frees competition because, no matter what the royalty may be in this industry a licensee required to pay more than its licensor will be at a competitive disadvantage.' 109 'Compulsory licensing alone would not be enough to restore the industry to a healthy, competitive condition. If National and du Pont are permitted to receive royalties on their existing patents, they will still be in position to dominate the industry.' 110 If National Lead, the world's largest producer of titanium pigments, expects to find itself at a competitive disadvantage as a result of reasonable royalty licenses, what can be the probable fate of newcomers or existing independents of small statute?4 111 The decree approved by the Court stops short of granting effective relief. Divestiture is refused. Compulsory licensing is ordered, but only to those who are willing reciprocally to license use by the defendants of their patents. In this additional respect the decree will enable the large established companies to strengthen their dominant position. To get the benefits of the decree an independent must give up one of his few competitive advantages—the exclusive right to use such patents as he may possess. These provisions, plus the additional requirement of royalties on the misused patents, even though those royalties be 'reasonable,' greatly increase the odds against restoration of competition in this industry. 112 Except as to the matters mentioned, I join in the opinion of the Court. 1 'Section 1. Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal: ** * Every person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a misdemeanor, and, on conviction thereof, shall be punished by fine not exceeding $5,000, or by imprisonment not exceeding one year, or by both said punishments, in the discretion of the court.' 50 Stat. 693, 694, 15 U.S.C. § 1, 15 U.S.C.A. § 1. 2 The conclusions of law of the District Court were as follows: '1. Beginning on or about July 30, 1920, NL and co-conspirator TAS (Titan Co. A/S to which Titan Inc. became a successor in interest) and on various dates thereafter Tinc, DP and the others found herein to be co-conspirators continuing at all times thereafter to the date of these findings have been continuously engaged in a combination and conspiracy in restraint of trade and commerce in titanium pigments and compounds among the several states of the United States and with foreign nations and have been and are now parties to contracts, agreements and understandings in restraint of such trade and commerce. '2. Plaintiff is entitled to a decree.' See also, United States v. National Lead Co., D.C., 63 F.Supp. 513, 527, 531, 532. 3 See note 4, infra. 4 'This cause came on to be heard upon the complaint and the answers thereto upon the evidence and upon argument of counsel. The Court having thereafter pendered and filed its opinion and having made and entered findings of fact and conclusions of law wherein the defendants have been found to have been engaged in a combination in restraint of trade and commerce in titanium pigments among the several states of the United States and of foreign nations, and that the defendants have been and now are parties to contracts, agreements, and understandings in restraint of such trade and commerce in violation of Section 1 of the Sherman Act, 26 Stat. 209, 15 U.S.C.A. § 1; 'Now, therefore, upon motion of plaintiff by Wendell Berge, Assistant Attorney General, Herbert Berman and William C. Dixon, Special Assistants to the Attorney General, Julian Caplan and Ephraim Jacobs, Special Attorneys, and John F. X. McGohey, United States Attorney, for relief in accordance with the prayer of the complaint, and the defendants having severally appeared by counsel, it is ordered, adjudged and decree as follow s: '1. The term 'titanium pigments' as used herein shall mean any product containing two percent (2%) or more of the element titanium in a chemically, mechanically or physically combined state and mixtures thereof which can be used as pigments, whether or not adapted for other uses, and also extenders to be used in conjunction with any such product. '2. The term 'defendants' shall mean the corporations hereinafter listed who may be identified by the designated abbreviations: NL National Lead Company Tinc Titan Company, Inc. DP E.I. du Pont de Nemours and Company '3. The term 'co-conspirators' shall mean the corporations hereinafter listed, who may be identified by the designated abbreviations: TP The Titanium Pigment Company, Inc. Krebs Krebs Pigment & Color Corporation TAS Titan Co. A/S IG Interessengemeinschaft Farbenindustrie Aktiengesellschaft TG Titangesellschaft m.b.H. SIT Societe Industrielle du Titane ICI Imperial Chemical Industries, Ltd. GW Goodlass Wall and Lead Industries, Ltd. ISC Imperial Smelting Corporation, Ltd. BTP British Titan Products Company, Ltd. NTP or National Titanium Pigments, Ltd. Laporte CIL Canadian Industries, Ltd. CTP Canadian Titanium Pigments, Ltd. Kokusan Kokusan Kogyo or KK Kabushiki Kaisha TK Titan Kogyo Kabushiki Kaisha Terres Rares Societe des Produits Chimiques des Terres Rares Thann Fabriques des Produits Chimiques de Thann et de Mulhouse Montecatini Societa Anonima Titanium Aussig Verein fur Chemische und Metallurgische Produktion '4. The term 'patents as herein defined' shall mean United States letters patent and applications as follows: (a) the letters patent and patent applications listed in Appendix A hereof; (b) all divisions, continuations or reissues of any of the foregoing patents and applications; (c) all patents issued upon such applications; (d) all patents which cover any titanium pigments or any process for the manufacture of titanium pigments issued to any of the defendants within five years from the date of this decree; and all such patents which any of the defendants acquires within such five years; and all such patents of which any of the defendants becomes the exclusive licensee within such five years with power to sublicense. '5. The following agreements are hereby adjudged to be unlawful under Section 1 of the Sherman Act and each of them is hereby cancelled and the defendants and each of them and all persons acting or claiming to act through, for or under them and all successors and subsidiaries of any of the defendants are hereby enjoined and restrained from the further performance of any of the provisions of said agreements and of any agreements amendatory thereof or supplemental thereto: 'Agreement dated July 30, 1920, between TP and TAS (Exhibit A); 'Agreement between TP and Krebs dated January 1, 1933, as amended January 1, 1941 (Exhibits E and E—3); 'Agreements dated July 30, 1920, between NL, TP, The Titanium Alloy Manufacturing Company and TAS (Exhibits A—1 and A—2); 'Agreement between TAS and SIT dated March 3, 1927 (Exhibit B); 'Agreement between TAS and IG dated October 3 and 20, 1927 (Exhibit C); 'Agreement between TAS and IG signed June 24 and October 20, 1927 (Exhibit C—1); 'Agreement between TAS and TG signed October 3 and 20, 1927 (Exhibit C—3); 'Agreement between TG and TAS dated October 3 and 20, 1927 (Exhibit C—7); 'Agreement between TG and TAS dated October 3 and 20, 1927 (Exhibit C—8); 'Agreement dated February 16, 1933 between ICI, ISC, GW and TINC (Exhibit F); 'Agreements between TINC, SIT, TERRES RARES, and Thann dated June 5 and 17, 1935 (Exhibits G—1 and G—2); 'Agreements between TINC, TERRES RARES, and IG, and between TINC, Terres Rares, IG, TG, Thann, and Doitsu (Doitsu Senryo Gomei Kaisha, Kobe/Japan) both dated January 18, 1936 (Exhibits J and J—2); 'Agreement between NL an CIL dated January 1, 1937 (Exhibit K); 'Agreement between NL and CTP dated January 1, 1937, as amended February 27, 1939 (Exhibits K—1 and K—5); 'Agreements between DP and TINC dated July 27, 1937, June 20, 1938, April 21, 1939, May 10, 1940, and June 23, 1941 (Exhibits M, N, Q, R and S), and the 'License Field Extender' agreements to which NL or TINC were parties, including the agreement between NL and TINC dated March 28, 1939 (Exhibit O); provided, however, that the provisions of this paragraph with respect to the agreements between TP and Krebs dated January 1, 1933, as amended January 1, 1941 (Exhibits E and E—3) shall not go into effect until the expiration of nine months from the date of this decree. '6. Each of the defendants and each of their directors, officers, agents, employees, successors and subsidiaries and all persons acting, or claiming to act under, through or for them or any of them are hereby enjoined and restrained (a) from entering into, adhering to, maintaining or furthering, directly or indirectly, or claiming any rights under any contract, agreement, understanding, plan or program among themselves, the co-conspirators, or with any other person, partnership or corporation, which has as its purpose or effect the continuing or renewing of any of the agreements listed in paragraph 5 hereof; (b) from entering into, adhering to, maintaining or furthering, directly or indirectly, any contract, agreement, undertaking, plan or program with any other producer or dealer relating to titanium pigments which has as its purpose or effect (1) to divide sales or manufacturing territories, (2) to allocate markets, (3) to limit or prevent United States imports or exports, (4) to grant to any third party any market as its exclusive territory, (5) to keep any third party out of any market; provided, however, that nothing contained in this subdivision (b) of this paragraph 6 shall prohibit any normal and usual arrangements between any defendant and its directors, officers, employees, agents, subsidiaries, or any dealer or distributor, whether or not a co-conspirator; (c) from restricting any purchaser of titanium pigments in the use thereof. '7. Each of the defendants is ordered to grant to any applicant therefor, including any defendant or co-conspirator, a non-exclusive license under any or all of the patents as herein defined at a nuiform, reasonable royalty. Such grant may, at the option of the licensor, be conditioned upon the reciprocal grant of a license by the applicant, at a reasonable royalty, under any and all patents covering titanium pigments or their manufacture, now issued or pending, or issued within five years from the date of this decree, if any, owned or controlled by such applicant. Such license or reciprocal license may, at the option of either party, contain a provision for the inspection of the books and records of the licensee by an independent auditor who shall report to the licensor only the amount of royalty due and payable and no other information. During a period of three years from the date of this decree such license or reciprocal license may at the option of either party contain a provision for the imparting in writing, at a reasonable charge, by the licensor to the licensee, of the methods and processes used by the former at the date of the license in its commercial practice under the licensed patents in connection with the production of titanium pigments. The Court reserves jurisdiction to pass upon the reasonableness of any royalty or charge herein directed to be reasonable. Defendants are restrained from attempting to enforce any rights under any foreign patents owned by them or under which they are the exclusive licensees to prevent the exportation of titanium pigments from the United States to any foreign country. '8. Within one year from the date of this decree, defendants NL and Tinc shall present to the Court for its approval a plan for divesting themselves of their stock holdings and other financial interest, direct and indirect, in BTP, CTP, TG and TK, or for the purchase of the entire stock holdings and other financial interests, direct and indirect, in said companies or any of them. Such plan of sale shall not provide for the transfer of such stock or interest to any other defendant or to any corporation in which any defendant will, upon consummation of the plan, have any interest, provided that this provision shall not preclude transfer of said defendants' stock holdings in BTP to ISC, GW, and ICI, or any of them, or preclude transfer of said defendants' stock holdings in CTP to CIL. The plan shall provide for its completion within two years from the date of this decree. '9. Either American Zirconium Corporation or Virginia Chemical Corporation, their successors or assigns, may at their option, if exercised within six months from the date of this decree, apply for licenses from DP under the provisions of paragraph 7. In the event American Zirconium Corporation. Virginia Chemical Corporation or their respective successors or assigns exercise the foregoing option, DP is enjoined from collecting royalties under any existing license agreement relating to titanium pigments between it and the person exercising the option in respect of any period subsequent to such exercise. Defendants NL, Tinc and DP are hereby enjoined from bringing, or threatening to bring, any action against any person or corporation for the alleged infringement prior to the date of this decree of any patent as herein defined. '10. The Attorney General of the United States or his proper representative shall, for the purpose of securing compliance with this decree, be permitted (1) access, during the office hours of the defendants, to all books, ledgers, accounts, correspondence, memoranda, and other records and documents in the possession or under the control of the defendants, relating to any matters contained in this decree, (2) subject to any legally recognized privilege, without restraint or interference from the defendants, to interview officers or employees of the defendants, who may have counsel present, regarding any such matters; provided, however, that information obtained by the means permitted in this paragraph shall not be divulged by any representative of the Department of Justice to any person other than a duly authorized representative of the Department of Justice except in the course of legal proceedings for the purpose of securing compliance with this decree in which the United States is a party or as otherwise required by law. '11. Judgment is entered against the defendants for all costs to be taxed in this proceeding. '12. The cancellation, injunctions and all executory action provided for under this decree shall not become effective or operative until ninety days from the date of this decree. '13. Jurisdiction of this cause, and of the parties hereto, is retained by the Court for the purpose of enabling any of the parties to this decree, or any other person or corporation that may hereafter become bound, in whole or in part, thereby to apply to the Court at any time for such further orders, modifications, vacations or directions as may be necessary or appropriate. '(1) for the construction or carrying out of this decree, and '(2) for the enforcement of compliance therewith and the punishment of violations thereof.' 'Appendix A' consists only of the identification of National Lead's 82 patents and 20 applications for patents; Titan Inc.'s 19 patents and 1 application; Titan Co. A/S's 2 patents; I.G. Farbenindustrie's 22 patents; Titangesellschaft's 2 patents; and du Pont's 175 patents and 30 applications. The references in the decree to Exhibits refer to such exhibits as they are identified in the record of this case in the District Court. 5 'Cartels have been defined by two of the foremost members and advocates of such bodies. In the words of Sir Alfred Mond, organizer of Imperial Chemical Industries: "I use the word cartel to include fusion, pooling arrangement, quota arrangement and price convention, because a cartel is protean in its form. * * * In an ultratechnical way, a cartel might be defined as a combination of producers for the purpose of regulating, as a rule, production, and, frequently, prices. * * *' 'In the words of Sir Felix J. C. Pole, chairman of Associated Electrical Industries, Ltd.: "A cartel or association usually means as association by agreement of companies or sections of companies having common interests. It is designed to prevent extreme or unfair competition and allocate markets, and it may also extend to interchange of knowledge resulting from scientific and technical research, exchange of patent rights, standardization of products, etc. Competition is not eliminated, but it is reguated. Comp etition in quality, efficiency, and service takes the place of the crude method of price cutting." Monograph No. 1, Subcommittee on War Mobilization of the Committee on Military Affairs, U.S. Senate, 78th Cong., 2d Sess., Part I, p. 1. Quoted also in United States v. National Lead Co., D.C., 63 F.Supp. 513, 523, note 5. 6 'This purpose was accomplished. The defendant NL and TAS agreed to have TAS and subsequently defendant Tinc form in each of the important industrial countries of the world, in association with a local corporation or firm which contemplated the manufacture and sale of titanium pigments and compounds or which could contribute to the technical or commercial development or which threatened to be a serious competitor of NL and TAS, a new company in which NL or TAS were to have a part interest. Any new company so formed was to be given certain territory in which it would have the exclusive right to manufacture and sell titanium pigments and compounds free from any exports into said territory by NL. The new company so organized was to refrain from competing with NL in its territory (the United States and other countries of North America) or in the territory of any other company associated with NL. TAS and subsequently defendant Tinc were to make said contracts providing for the formation of the new companies and NL was to be bound to adhere to all of the territorial restrictions placed on TAS and subsequently defendant Tinc in such contracts by virtue of contract Exhibit A. (The agreement of July 30, 1920.) All the present and future patents belonging to NL or TAS or any of the companies associated with either in the formation of such new companies, as well as those of the new companies to be organized, were to be licensed exclusively to NL for North America and to the new companies to be organized for their respective exclusive territories and to TAS and subsequently defendant Tinc for the rest of the world.' Finding of Fact 48. 7 Hearings before Committee on Patents on H.R.23,417, 62d Cong., 2d Sess. (1912), Part XII, pp. 10—11; H.R.Rep.1161, 62d Cong., 2d Sess. (1912), Part 2, p. 8; Report of Subcommittee of the American Bar Association appointed to consider the King Bill, S. 383, 74th Cong. 1935), p. 38. 8 A recent recognition of a reasonable royalty test is contained in Chapter 726 of the 79th Congress, 2d Session: '* * * upon a judgment being rendered in any case for an infringement the complainant shall be entitled to recover general damages which shall be due compensation for making, using, or selling the invention, not less than a reasonable royalty therefor, together with such costs, and interest, as may be fixed by the court. * * *' (Italics supplied.) R.S. § 4921, as amended August 1, 1946, 60 Stat. 778, 35 U.S.C.A. § 70, relating to the power of courts to grant injunctions and estimate damages. The most recent and outstanding example of its recognition is in Hartford-Empire Co. v. United States, 323 U.S. 386, 413—417, 65 S.Ct. 373, 387, 388, 89 L.Ed. 322. In patent accounting suits, where the profits or damages cannot be ascertained and no standard of comparison is available, the court may allow a reasonable royalty. 'But, as the patent had been kept a close monopoly, there was no established royalty. In that situation it was permissible to show the value by proving what would have been a reasonable royalty, considering the nature of the invention. its utility and advantages, and the extent of the use involved. Not improbably such proof was more difficult to produce, but it was quite as admissible as that of an established royalty.' Dowagiac Mfg. Co. v. Minnesota Moline Plow Co., 235 U.S. 641, 648, 35 S.Ct. 221, 224, 59 L.Ed. 398. See also, Sheldon v. Metro-Goldwyn Pictures Corp., 309 U.S. 390, 404, 60 S.Ct. 681, 686, 84 L.E. 825; Suf folk Co. v. Hayden, 3 Wall. 315, 320, 18 L.Ed. 76; 3 Walker on Patents § 833 (Deller's ed. 1937) (Id. 1945 pocket supp.); 56 Yale L.J. 77. 9 United States v. Owens-Ill. Glass Co., CCH Trade Reg.Serv. 57,498 (D.C.N.D.Calif.1946); United States v. American Air Filter Co., CCH Trade Reg.Serv. 57,492 (D.C.W.D.Ky.1946); United States v. Libbey-Owens-Ford Glass Co., CCH Trade Reg.Serv. 57,489 (D.C.N.D.Ohio 1946); United States v. Diamond Match Co., CCH Trade Reg.Serv. 57,456 (D.C.S.D.N.Y.1946); United States v. General Elec. Co., CCH Trade Reg.Serv. 57,448 (D.C.N.J.1946); United States v. Bendix Aviation Corp., CCH Trade Reg.Serv. 57,444 (D.C.N.J.1946); Crosby Steam Gage & Valve Co. v. Manning, Maxwell & Moore, CCH Trade Reg.Serv. 57,336 (D.C.Mass.1945). 10 H.R.20,388, 60th Cong., 1st Sess. (1908); H.R.11,796, 61st Cong., 1st Sess. (1909); H.R. 2930, 62d Cong., 1st Sess. (1911); H.R. 16,828, 62d Cong., 2d Sess. (1912); H.R. 23,417, as amended, 62d Cong., 2d Sess. (1912); H.R. 1700, 63d Cong., 1st Sess. (1913); H.R. 14,865, 63d Cong., 2d Sess. (1914); S. 2783, 70th Cong., 1st Sess. (1928): S. 2491, 77th Cong., 2d Sess. (1942). 11 Provisions for reciprocal licensing have been incorporated in consent decrees. See United States v. General Elec. Co., CCH Trade Reg.Serv. 52.777 (D.C.N.J.1942); United States v. American Bosch Corp., CCH Trade Reg.Serv. 52,888 (D.C.S.D.N.Y.1942). 12 "5. The following agreements are hereaby adjudged to be unlawful under Section 1 of the Sherman Act and each of them i hereby ca ncelled and the defendants and each of them and all persons acting or claiming to act through, for or under them and all successors and subsidiaries of any of the defendants are hereby enjoined and restrained from the further performance of any of the provisions of said agreements and of any agreements amendatory thereof or supplemental thereto: (followed by a list of the canceled agreements) "6. Each of the defendants and each of their directors, officers, agents, employees, successors and subsidiaries and all persons acting, or claiming to act under, through or for them or any of them are hereby enjoined and restrained (a) from entering into, adhering to, maintaining or furthering, directly or indirectly, or claiming any rights under any contract, agreement, understanding, plan or program amony themselves, the co-conspirators, or with any other person, partnership or corporation, which has as its purpose or effect the continuing or renewing of any of the agreements listed in paragraph 5 hereof; (b) from entering into, adhering to, maintaining or furthering, directly or indirectly, any contract, agreement, undertaking, plan or program with any other producer or dealer relating to titanium pigments which has as its purpose or effect (1) to divide sales or manufacturing territories, (2) to allocate markets, (3) to limit or prevent United States imports or exports, (4) to grant to any third party any market as its exclusive territory, (5) to keep any third party out of any market; provided, however, that nothing contained in this subdivision (b) of this paragraph 6 shall prohibit any normal and usual arrangements between any defendant and its directors, officers, employees, agents, subsidiaries, or any PRODUCER, dealer or distributor, whether or not a co-conspirator; (c) from restricting any purchaser of titanium pigments in the use thereof." 13 For paragraph 8, see note 4, supra. 1 'That a patent is property, protected against appropriation boty by individuals and by government, has long been settled. In recognition of this quality of a patent the courts, in enjoining violations of the Sherman Act arising from the use of patent licenses, agreements, and leases, have abstained from action which amounted to a forfeiture of the patents. 'The Government urges that such forfeiture is justified by our recent decisions * * *. But those cases merely apply the doctrine that, so long as the patent owner is using his patent in violation of the antitrust laws, he cannot restrain infringement of it by others. We were not there concerned with the problem whether, when a violation of the antitrust laws was to be restrained and discontinued, the court could, as part of the relief, forfeit the patents of those who had been guilty of the violation. Lower federal courts have rightly refused to extend the doctrine of those cases to antitrust decrees by inserting forfeiture provisions.' 323 U.S. at pages 415, 416, 65 S.Ct. at page 388, 89 L.Ed. 322. 2 He, indeed, stated on argument of a motion to determine reasonable royalties: 'I would have liked to go along on the question of royalty-free patents, but I felt that I hadn't been given the green light on that.' 3 The Hartford-Empire decision was four to two on this point. 4 It must be remembered that one of the consequences of the unhealthy monopolistic condition in the industry has been a dearth of the ordinary patent litigation. The burden of testing potentially invalid patents will thus be placed on the first enterprise unwilling to pay the royalties.
78
332 U.S. 218 67 S.Ct. 1560 91 L.Ed. 2010 UNITED STATESv.YELLOW CAB CO. et al. No. 1035. Argued May 7, 1947. Decided June 23, 1947. A complaint, alleging a conspiracy to control principal taxicab operating companies in Chicago and to exclude others from engaging in the transportation of interstate train passengers between their homes and railroad stations in normal course of their independent local service, did not allege a cause of action under the Sherman Anti-Trust Act because not related to transportation in 'interstate commerce'. Sherman Anti-Trust Act, §§ 1, 2, 4, 15 U.S.C.A. §§ 1, 2, 4. [Syllabus from page 219 intentionally omitted] Mr.Charles H. Weston, of Washington, D.C., for appellant. Mr. Samuel H. Kaufman, of New York City, for appellees. Mr. Justice MURPHY delivered the opinion of the Court. 1 The United States filed a complaint in the federal district court below pursuant to § 4 of the Sherman Anti-Trust Act, 26 Stat. 209, as amended, 15 U.S.C.A. § 4, to prevent and restrain the appellees from violating §§ 1 and 2 of the Act, 15 U.S.C.A. §§ 1, 2. The complaint alleged that the appellees have been and are engaged in a combination and conspiracy to restrain and to monopolize interstate trade and commerce (1) in the sale of motor vehicles for use as taxicabs to the principal cab operating companies in Chicago, Pittsburgh, New York City and Minneapolis, and (2) in the business of furnishing cab services for hire in Chicago and vicinit. The appe llees moved to dismiss the complaint for failure to state a claim upon which relief might be granted. That motion was sustained. D.C., 69 F.Supp. 170. The case is now here on direct appeal by the United States. 67 S.Ct. 980. 2 The alleged facts, as set forth in the complaint, may be summarized briefly. In January, 1929, one Morris Markin and others commenced negotiations to merge the more important cab operating companies in Chicago, New York and other cities. Markin was then president and general manager, as well as the controlling stockholder, of the Checker Cab Manufacturing Corporation (CCM). That company was engaged in the business of manufacturing taxicabs at its factory in Kalamazoo, Michigan, and shipping them to purchasers in various states. 3 Parmelee Transportation Company (Parmelee) was organized in April, 1929, with 62% of its stock being owned by CCM. It promptly took over the business of operating special unlicensed cabs to transport passengers and their luggage between railroad stations in Chicago, pursuant to contracts with railroads and railroad terminal associations. It then acquired a controlling interest in the Chicago Yellow Cab Company, Inc. (Chicago Yellow). This latter company holds all the capital stock of Yellow Cab Company (Yellow), the owner and operator of 'Yellow' cabs in Chicago and vicinity. Yellow presently holds 53% of the taxicab licenses outstanding in Chicago. In addition, Parmelee acquired or organized subsidiary companies which now hold 100% of the taxicab licenses outstanding in Pittsburgh, 58% of those in Minneapolis, and 15% of those in New York City.1 4 In January, 1930, Cab Sales and Parts Corporation (Cab Sales) was incorporated. At all times, Markin has been the active manager of this company; since 1934, he has been the sole stockholder. It now owns and operates the 'Checker' cabs in Chicago and vicinity, using licenses held in the name of Checker Taxi Company (Checker).2 Checker presently has no employees and no property other than 1,000 Chicago taxicab licenses, or one-third of the total outstanding, which it leases to Cab Sales; nearly all of its stock is owned by associates of Markin.3 5 Markin also obtained a substantial interest in the DeLuxe Motor Cab Company, which was the third largest cab operating company in Chicago in 1929 with its 400 licenses. He caused all of its stock to be sold to Parmelee. It was then consolidated into a new company; in 1932, Cab Sals bought a controlling interest in this consolidated concern and caused it to suspend operations. Thus, by the end of 1932, Markin had gained control of the three largest taxicab companies operating in Chicago and, through Parmelee, had substantial footholds in the taxicab business in New York City, Pittsburgh and Minneapolis. 6 Yellow and Checker have consistently held a vast majority of the Chicago taxicab licenses. There were 5,289 licenses outstanding in January, 1929, of which Yellow held 2,335 (44%) and Checker 1,750 (33%). In September, 1929, the City of Chicago adopted an ordinance to the effect that no more licenses should be issued, except for renewals, unless it should be found that the public convenience and necessity required otherwise. The substance of this provision was repeated in an ordinance adopted in May, 1934. Yellow and Checker subsequently made agreements to reduce the number of cabs in operation and to induce the city to lower the number of licenses outstanding to $3,000, of which Yellow would hold 1,500 and Checker 1,000. 7 On December 22, 1937, the City of Chicago passed an ordinance providing for a method of voluntary surrender by licensees of a sufficient number of their licenses to reduce the number outstanding to 3,000. It was also provided that if the number of authorized licenses should later be increased above the 3,000 figure, such additional licenses should first be issued to the original licensees in proportion to, and up to, the number which they had surrendered. Yellow and Checker then made an agreement to implement this ordinance; Yellow agreed to surrender 571 licenses (leaving it with 1,595) and Checker agreed to surrender 500 (leaving it with 1,000); both parties promised to attempt to secure for Yellow 60% and for Checker 40% of any licenses in excess of 3,000 which the city might later issue. As a result, 3,000 licenses were left outstanding. 8 On January 16, 1946, the city authorized the issuance of 250 licenses to war veterans. Yellow was notified that 234 of its licenses, representing that number of cabs which had not been in operation, would be canceled. Checker was given a similar notice as to 87 licenses. Yellow and Checker then brought suit in an Illinois court to enjoin the city from issuing the new licenses and from canceling any of the ones issued to them; they claimed that economic conditions prevented them from procuring taxicabs to replace those which had become inoperable. The Illinois courts held that the 1937 ordinance created a contract between the city and the licensees and that the city could not issue licenses to the war veterans without first replacing the licenses which Yellow and Checker had surrendered; it was further held that no monopoly existed, since the number of licenses and the rights of the licensees were subject to the control of the city. Yellow Cab Co. v. City of Chicago, 396 Ill. 388, 71 N.E.2d 652. 9 Such is the nature of the facts set forth in the complaint. Those facts allegedly give rise to a combination and conspiracy on the part of the appellees (Yellow, Chicago Yellow, Parmelee, Cab Sales, Checker, CCM and Markin) in violation of the Sherman Act. The problems thereby raised can best be considered in relation to the purported terms of this combination and conspiracy. For present purposes, of course, we must assume, without deciding or implying, that the various facts and allegations in the complaint are true. I. 10 It is said that the appellees have agreed to control the operation and purchase of taxicabs by the principal operating companies in Chicago, New York City, Pittsburgh and Minneapolis, insisting that they purchase their cabs exclusively from CCM. This excludes all other manufacturers of taxicabs from 86% of the Chicago market, 15% of the New York City market, 100% of the Pittsburgh market and 58% of the Minneapolis market. At the same time, the trade of the controlled cab companies is restrained since they are prevented from purchasing cabs from manfacturers other than CCM. The result allegedly is that these companies must pay more for cabs than they would otherwise pay, their other expenditures are increased unnecessarily, and the public is charged high rates for the transportation services rendered. 11 The commerce which is asserted to be restrained in this manner has a character that is undeniably interstate. The various cab operating companies do business in Illinois, New York, Pennsylvania and Minnesota. By virtue of the conspiracy, they must purchase all of their cabs from CCM. Since CCM's factory is located in Michigan, interstate sales and shipments are inevitable if the conspiracy is to be effectuated. The conspiracy also prevents those operating companies from purchasing cabs from other manufacturers, thus precluding all interstate sales and shipments between each individual cab operating company and manufacturers (other than CCM) located in other states. Interstate trade, in short, is of the very essence of this aspect of the conspiracy. 12 But the amount of interstate trade thus affected by the conspiracy is immaterial in determining whether a violation of the Sherman Act has been charged in the complaint. Section 1 of the Act outlaws unreasonable restraints on interstate commerce, regardless of the amount of the commerce affected. United States v. Socony-Vacuum Oil Co., 310 U.S. 150, note 59, page 225, 60 S.Ct. 811, 846, 84 L.Ed. 1129; Apex Hosiery Co. v. Leader, 310 U.S. 469, 485, 60 S.Ct.982, 987, 84 L.Ed. 1311, 128 A.L.R. 1044. And § 2 of the Act makes it unlawful to conspire to monopolize 'any part' of interstate commerce, without specifying how large a part must be affected. Hence it is enough if some appreciable part of interstate commerce is the subject of a monopoly, a restraint or a conspiracy. The complaint in this case deals with interstate purchases of replacements of some 5,000 licensed taxicabs in four cities.4 That is an appreciable amount of commerce under any standard. See Montague & Co. v. Lowry, 193 U.S. 38, 24 S.Ct. 307, 48 L.Ed. 608. 13 Likewise irrelevant is the importance of the interstate commerce affected in relation to the entire amount of that type of commerce in the United States. The Sherman Act is concerned with more than the large, nation-wide obstacles in the channels of interstate trade. It is designed to sweep away all appreciable obstructions so that the statutory policy of free trade might be effectively achieved. As this Court stated in Indiana Farmer's Guide Pub. Co. v. Prairie Farmer Pub. Co., 293 U.S. 268, 279, 55 S.Ct. 182, 185, 79 L.Ed. 356, 'The provisions of §§ 1 and 2 have both a geographical and distributive significance and apply to any part of the United States as distinguished from the whole and to any part of the classes of things forming a part of interstate commerce.' It follows that the complaint in this case is not defective for failure to allege that CCM has a monopoly with reference to the total number of taxicabs manufactured and sold in the United States. Its relative position in the field of cab production has no necessary relation to the ability of the appellees to conspire to monopolize or restrain, in violation of the Act, an appreciable segment of interstate cab sales. An allegation that such a segment has been or may be monopolized or restrained is sufficient. 14 Nor can it be doubted that combinations and conspiracies of the type alleged in this case fall within the ban of the Sherman Act. By excluding all cab manufacturers other than CCM from that part of the market represented by the cab operating companies under their control, the appellees effectively limit the outlets through which cabs may be sold in interstate commerce. Limitations of that nature have been condemned time and again as violative of the Act. Associated Press v. United States, 326 U.S. 1, 18, 19, 65 S.Ct. 1416, 1423, 1424, 89 L.d. 2013, a nd cases cited. In addition, by preventing the cab operating companies under their control from purchasing cabs from manufacturers other than CCM, the appellees deny those companies the opportunity to purchase cabs in a free, competitive market.5 The Sherman Act has never been thought to sanction such a conspiracy to restrain the free purchase of goods in interstate commerce. See Montague & Co. v. Lowry, supra; Binderup v. Pathe Exchange, 263 U.S. 291, 44 S.Ct. 96, 68 L.Ed. 308. 15 The fact that these restraints occur in a setting described by the appellees as a vertically integrated enterprise does not necessarily remove the ban of the Sherman Act. The test of illegality under the Act is the presence or absence of an unreasonable restraint on interstate commerce. Such a restraint may result as readily from a conspiracy among those who are affiliated or integrated under common ownership as from a conspiracy among those who are otherwise independent. Similarly, any affiliation or integration flowing from an illegal conspiracy cannot insulate the conspirators from the sanctions which Congress has imposed. The corporate interrelationships of the conspirators, in other words, are not determinative of the applicability of the Sherman Act. That statute is aimed at substance rather than form. See Appalachian Coals, Inc., v. United States, 228 U.S. 344, 360, 361, 376, 377, 53 S.Ct. 471, 474, 480, 77 L.Ed. 825. 16 And so in this case, the common ownership and control of the various corporate appellees are impotent to liberate the alleged combination and conspiracy from the impact of the Act. The complaint charges that the restraint of interstate trade was not only effected by the combination of the appellees but was the primary object of the combination. The theory of the complaint, to borrow language from United States v. Reading Co., 253 U.S. 26, 57, 40 S.Ct. 425, 432, 64 L.Ed. 760, is that 'dominating power' over the cab operating companies 'was not obtained by normal expansion to meet the demands of a business growing as a result of superior and enterprising management, but by deliberate, calculated purchase for control.' If that theory is borne out in this case by the evidence, coupled with proof of an undue restraint of interstate trade, a plain violation of the Act has occurred. Cf. United States v. Crescent Amusement Co., 323 U.S. 173, 189, 65 S.Ct. 254, 262, 89 L.Ed. 160. II. 17 It is said that the appellees have agreed that Yellow and Cab Sales will not compete with Parmelee for contracts with railroads or railroad terminal associations to transport passengers and their luggage between railroad stations in Chicago. The complaint points out the well-known fact that Chicago is the terminus of a large number of railroads engaged in interstate passenger traffic and that a great majority of the persons making interstate railroad trips which carry them through Chicago must disembark from a train at one railroad station, travel from that station to another some two blocks to two miles distant, and board another train at the latter station. The railroads often contract with the passengers to supply between-station transportation in Chicago. Parmelee then contracts with the railroads and the railroad terminal associations to provide this transportation by special cabs carrying seven to ten passengers. Parmelee's contracts are exclusive in nature. 18 The transportation of such passengers and their luggage between stations in Chicago is clearly a part of the stream of interstate commerce. When persons or goods move from a point of origin in one state to a point of destination in another, the fact that a part of that journey consists of transportation by an independent agency solely within the boundaries of one state does not make that portion of the trip any less interstate in character. The Daniel Ball , 10 Wall. 557, 565, 19 L.Ed. 999. That portion must be viewed in its relation to the entire journey rather than in isolation. So viewed, it is an integral step in the interstate movement. See Stafford v. Wallace, 258 U.S. 495, 42 S.Ct. 397, 66 L.Ed. 735, 23 A.L.R. 229. 19 Any attempt to monopolize or to impose an undue restraint on such a constituent part of interstate commerce brings the Sherman Act into operation. Here there is an alleged conspiracy to bring nearly all the Chicago taxicab companies under common control and to eliminate competition among them relative to contracts for supplying transportation for this transfer in the midst of interstate journeys. Only Parmelee is free to attempt to procure such contracts; Yellow and Cab Sales are forbidden to compete for such contracts, despite the fact that they conceivably might provide the same transportation service at lower cost to the railroads.6 The complaint accordingly states a violation of the Sherman Act in this respect. See Addyston Pipe & Steel Co. v. United States, 175 U.S. 211, 20 S.Ct. 96, 44 L.Ed. 136. 20 It is true, of course, that exclusive contracts for the transportation service in question are not illegal. Donovan v. Pennsylvania Co., 199 U.S. 279, 26 S.Ct. 91, 50 L.Ed. 192. But a conspiracy to eliminate competition in obtaining those exclusive contracts is what is alleged in this case and it is a conspiracy of that type that runs afoul of the Sherman Act. Moreover, the fact that the competition restrained is that between affiliated corporations cannot serve to negative the statutory violation where, as here, the affiliation is assertedly one of the means of effectuating the illegal conspiracy not to compete. III. 21 Finally, it is said that the appellees have conspired to control the principal taxicab operating companies in Chicago and to exclude others from engaging in the transportation of interstate travelers to and from Chicago railroad stations. To that end, they have conspired to induce the City of Chicago to limit the number of licensed taxicabs to 3,000, to hold 2,595 (or 86%) of these licenses themselves, to obtain for Yellow and Checker any licenses above 3,000 which the city might later issue, and to prevent new operators from entering the cab business in Chicago by having Yellow and Checker annually renew licenses for cabs which they do not operate and have no intention of operating. 22 The interstate commerce toward which this aspect of the conspiracy is directed is claimed to arise out of the following facts. Many persons are said to embark upon interstate journeys from their homes, offices and hotels in Chicago by using taxicabs to transport themselves and their luggage to railroad stations in Chicago. Conversely, in making journeys from other states to homes, offices and hotels in Chicago, many persons are said to complete such trips by using taxicabs to transport themselves and their luggage from railroad stations in Chicago to said homes, offices and hotels. Such transportation of persons and their luggage is intermingled with the admittedly local operations of the Chicago taxicabs. But it is that allegedly interstate part of the business upon which rests the validity of the complaint in this particular. 23 We hold, however, that such transportation is too unrelated to interstate commerce to constitute a part thereof within the meaning of the Sherman Act. These taxicabs, in transporting passengers and their luggage to and from Chicago railroad stations, admittedly cross no state lines; by ordinance, their service is confined to transportation 'between any two points within the corporate limits of the City.' Non of them § erves only railroad passengers, all of them being required to serve 'every person' within the limits of Chicago. They have no contractual or other arrangement with the interstate railroads. Nor are their fares paid or collected as part of the railroad fares. In short, their relationship to interstate transit is only casual and incidental. 24 In a sense, of course, a traveler starts an interstate journey when he boards a conveyance near his home, office or hotel to travel to the railroad station, from which the journey is continued by train; and such a journey ends when he alights from a conveyance near the home, office or hotel which constitutes his ultimate destination. Indeed, the terminal points of an interstate journey may be traced even further to the moment when the traveler leaves or enters his room or office and descends or ascends the building by elevator. 25 But interstate commerce is an intensely practical concept drawn from the normal and accepted course of business. Swift & Co. v. United States, 196 U.S. 375, 398, 25 S.Ct. 276, 280, 49 L.Ed. 518; North American Co. v. Securities & Exchange Comm., 327 U.S. 686, 705, 66 S.Ct. 785, 796, 90 L.Ed. 945. And interstate journeys are to be measured by 'the commonly accepted sense of the transportation concept.' United States v. Capital Transit Co., 325 U.S. 357, 363, 65 S.Ct. 1176, 1179, 89 L.Ed. 1663. Moreover, what may fairly be said to be the limits of an interstate shipment of goods and chattels may not necessarily be the commonly accepted limits of an individual's interstate journey. We must accordingly mark the beginning and end of a particular kind of interstate commerce by its own practical considerations. 26 Here we believe that the common understanding is that a traveler intending to make an interstate rail journey begins his interstate movement when he boards the train at the station and that his journey ends when he disembarks at the station in the city of destination. What happens prior or subsequent to that rail journey, at least in the absence of some special arrangement, is not a constituent part of the interstate movement. The traveler has complete freedom to arrive at or leave the station by taxicab, trolley, bus, subway, elevated train, private automobile, his own two legs, or various other means of conveyance. Taxicab service is thus but one of many that may be used. It is contracted for independently of the railroad journey and may be utilized whenever the traveler so desires. From the standpoints of time and continuity, the taxicab trip may be quite distinct and separate from the interstate journey. To the taxicab driver, it is just another local fare. 27 Pennsylvania R. Co. v. Knight, 192 U.S. 21, 24 S.Ct. 202, 48 L.Ed. 325, demonstrates this common understanding. The Court there held that the Pennsylvania Railroad Company was subject to a state franchise tax by reason of the fact that it maintained a cab service within the boundaries of New York City for the sole benefit of its rail passengers. Its cabs transported the passengers between its ferry station and their residences and hotels. The Court stated that this cab service was an independent local service, preliminary or subsequent to any interstate transportation and not included in the contract of railroad carriage. Hence it was subject to state taxation. It is true that this ruling as to the extent of a state's taxing power is not conclusive as to the boundaries of interstate commerce for federal purposes. Bacon v. People of State of Illinois, 227 U.S. 504, 516, 33 S.Ct. 299, 303, 57 L.Ed. 615; Binderup v. Pathe Exchange, supra, 263 U.S. at page 311, 44 S.Ct. at page 100, 68 L.Ed. 308. But it does illustrate the normal and accepted concept of the outer limits of this type of interstate journey. And it is that concept that is determinative here. 28 We do not mean to establish any absolute rule that local taxicab service to and from railroad stations is completely beyond the reach of federal power or even beyond the scope of the Sherman Act. In Stafford v. Wallace, supra, 258 U.S. at page 528, 42 S.Ct. at page 406, 66 L.Ed. 735, 23 A.L.R. 229, the Court made plain that nothing in the Knight case was authority for the proposition that 'if such an agency (local cab service) could be and were used in a conspiracy unduly and constantly to monopolize interstate passenger traffic, it might not be brought within federal restraint.' Likewise, we are not to be understood in this case as deciding that all conspiracies among local cab drivers are so unrelated to interstate commerce as to fall outside the federal ken. A conspiracy to burden or eliminate transportation of passengers to and from a railroad station where interstate journeys begin and end might have sufficient effect upon interstate commerce to justify the imposition of the Sherman Act or other federal laws resting on the commerce power of Congress. 29 All that we hold here is that when local taxicabs merely convey interstate train passengers between their homes and the railroad station in the normal course of their independent local service, that service is not an integral part of interstate transportation. And a restraint on or monopoly of that general local service, without more, is not proscribed by the Sherman Act. 30 It follows that the complaint, insofar as it is based on such local taxicab service, fails to state a cause of action under the Sherman Act. It thus becomes unnecessary to discuss the points raised as to the substance of that part of the alleged conspiracy relating to this local service. Our conclusion in this respect, however, does not lead to an affirmance of the District Court's dismissal of the complaint. For the reasons set forth in Parts I and II of this opinion, the complaint does state a cause of action under the Act, entitling the United States to a trial on the merits. Since the portion of the complaint dealt with in Part III of this opinion is defective, appropriate steps should be taken to delete the charges in relation thereto. With that understanding, we reverse the judgment of the District Court and remand the case for further proceedings consistent with this opinion. 31 Reversed. 32 Mr. Justice BLACK and Mr. Justice RUTLEDGE agree with Parts I and II of this opinion but dissent from the holding in Part III. 33 Mr. Justice BURTON concurs in Part III of this opinion. However, he believes that the complaint as a whole fails to state a cause of action and that, therefore, the judgment of the District Court dismissing it should be affirmed. 34 Mr. Justice DOUGLAS took no part in the consideration or decision of this case. 1 Between October, 1929, and June, 1930, Parmelee acquired all the taxicab companies operating in Pittsburgh; it now operates the cabs through two wholly owned subsidiaries. Early in 1931, Parmelee formed a company to operate cabs in Minneapolis; a wholly owned subsidiary now operates 125 of the 214 cabs licensed in that city. Beginning early in 1929, Parmelee acquired certain companies operating cabs in New York City; it later consolidated them in a wholly owned subsidiary now holding 2,000 of the 13,000 licenses outstanding in that city. 2 Checker originally was a cooperative company, the stockholders of which were the various owners of 'Checker' cabs. In February, 1930, as part of a settlement of litigation between it and CCM, Checker agreed that its drivers would purchase all of their taxicabs from Cab Sales for a period of five years at $2,350 per cab. At the same time, CCM appointed Cab Sales as exclusive agent for these sales and agreed to sell its cabs to Cab Sales at $1,906 per cab. During the five-year life of this agreement, Checker drivers bought a large number of cabs from Cab Sales at prices about $400 above those at which Cab Sales bought them from CCM. As these drivers defaulted in their payments from time to time, Cab Sales would foreclose and take over the ownership and operation of the cabs. Since 1941, it has owned and operated all of these cabs. 3 By 1932, Cab Sales had acquired over 97% of the stock of Checker. Markin caused this stock to be sold to certain of his associates in 1942. 4 2,595 licenses in Chicago, 2,000 in New York City, 125 in Minneapolis, and an estimated 280 in Pittsburgh. 5 To the extent that the controlled operating companies are charged higher than the open market prices, they are injured. 6 The District Court thought that Parmelee's equipment and services are so totally different from the taxicab business of Yellow and Cab Sales as to make competition for the contracts impractical and unlikely. But that is a matter for determination at the trial on the merits and does not negative the sufficiency of the complaint.
78
332 U.S. 174 67 S.Ct. 1588 91 L.Ed. 1982 SUNALv.LARGE. ALEXANDER v. UNITED STATES ex rel. KULICK. Nos. 535, 840. Argued April 11, 1947. Decided June 23, 1947. Rehearing Denied Oct. 13, 1947. See 68 S.Ct. 29. Mr. Irving S. Shapiro, of Washington, D.C., for Myrl Alexander and David R. Large. Mr. Hayden Covington, of Brooklyn, N.Y., for John Myron Kulick and Theodore Martin Sunal. Mr. Justice DOUGLAS delivered the opinion of the Court. 1 Sunal and Kulick registered under the Selective Training and Service Act of 1940, 54 Stat. 885, 57 Stat. 597, 50 U.S.C.App. § 301 et seq., 50 U.S.C.A. Appendix, § 301 et seq. Each is a Jehovah's Witness and each claimed the exemption granted by Congress to regular or duly ordained ministers of religion.1 § 5(d). The local boards, after proceedings unnecessary to relate here, denied the claimed exemptions and classified these registrants as I—A. They exhausted their administrative remedies but were unable to effect a change in their classifications. Thereafter they were ordered to report for induction Sunal on October 25, 1944, Kulick on November 9, 1944. Each reported but refused to submit to induction. Each was thereupon indicted, tried and convicted under § 11 of the Act for refusing to submit to induction. Sunal was sentenced on March 22, 1945, Kulick on May 7, 1945, each to imprisonment for a term of years. Neither appealed. 2 At the trial each offered evidence to show that his selective service classification was invalid. The trial courts held, however, that such evidence was inadmissible, that the classification was final and not open to attack in the criminal trial. On February 4, 1946, we decided Estep v. United States and Smith v. Unitd States, 327 U.S. 114, 66 S.Ct. 423, 90 L.Ed. 567. These cases2 held on comparable facts that a registrant, who had exhausted his administrative remedies and thus obviated the rule of Falbo v. United States, 320 U.S. 549, 64 S.Ct. 346, 88 L.Ed. 305, was entitled, when tried under § 11, to defend on the ground that his local board exceeded its jurisdiction in making the classification—for example, that it had no basis in fact. 327 U.S. at pages 122, 123, 66 S.Ct. at page 427, 90 L.Ed. 567. 3 It is plain, therefore, that the trial courts erred in denying Sunal and Kulick the defense which they tendered. Shortly after the Estep and Smith cases were decided, petitions for writs of habeas corpus were filed on behalf of Sunal and Kulick. In each case it was held that habeas corpus was an available remedy. In Sunal's case the Circuit Court of Appeals for the Fourth Circuit held that there was a basis in fact for the classification and affirmed a judgment discharging the writ. 157 F.2d 165. In Kulick's case the Circuit Court of Appeals for the Second Circuit reversed a District Court holding that there was evidence to support the classification, 66 F.Supp. 183, and ruled, without examining the evidence, that since Kulick had been deprived of the defense he should be discharged from custody without prejudice to further prosecution. 2 Cir., 157 F.2d 811. The cases are here on petitions for writs of certiorari, which we granted because of the importance of the questions presented. 4 The normal and customary method of correcting errors of the trial is by appeal. Appeals could have been taken in these cases,3 but they were not. It cannot be said that absence of counsel made the appeals unavailable as a practical matter. See Johnson v. Zerbst, 304 U.S. 458, 467, 58 S.Ct. 1019, 1024, 82 L.Ed. 1461, 146 A.L.R. 357. Defendants had counsel. Nor was there any other barrier to the perfection of their appeals. Cf. Cochran v. State of Kansas, 316 U.S. 255, 62 S.Ct. 1068, 86 L.Ed. 1453. Moreover, this is not a situation where the facts relied on were dehors the record and therefore not open to consideration and review on appeal. See Waley v. Johnston, 316 U.S. 101, 104, 62 S.Ct. 964, 965, 86 L.Ed. 1302; United States ex rel. McCann v. Adams, 320 U.S. 220, 221, 64 S.Ct. 14, 88 L.Ed. 4. And see Adams v. United States ex rel. McCann, 317 U.S. 269, 274, 275, 63 S.Ct. 236, 239, 240, 87 L.Ed. 268, 143 A.L.R. 435. The error was of record in each case. It is said, however, that the failure to appeal was excusable, since under the decisions as they then stood—March 22, 1945, and May 7, 1945—the lower courts had consistently ruled that the selective service classification could not be attacked in a prosecution under § 11. See Estep v. United States, supra, 327 U.S. at page 123, note 15, 66 S.Ct. at page 428, 90 L.Ed. 567. It is also pointed out that on April 30, 1945, we had denied certiorari in a case which sought to raise the same point,4 and that Estep v. United States, supra, and Smith v. United States, supra, were brought here5 and decided after Sunal's and Kulick's time for appeal had passed. The argument is that since the state of the law made the appeals seem futile, it would be unfair to those registrants to conclude them by their failure to appeal. 5 We put to one side comparable problems respecting the use of habeas corpus in the federal courts to challenge convictions obtained in the state courts. See People of State of New York v. Eno, 155 U.S. 89, 15 S.Ct. 30, 39 L.Ed. 80; Tinsley v. Anderson, 171 U.S. 101, 104—105, 18 S.Ct. 805, 807, 43 L.Ed. 91; United States ex rel. Kennedy v. Tyler, 269 U.S. 13, 46 S.Ct. 1, 70 L.Ed. 138; Ex parte Hawk, 321 U.S. 114, 116, 117, 64 S.Ct. 448, 449, 450, 88 L.Ed. 572. So far as convictions obtained in the federal courts are concerned, the general rule is that the writ of habeas corpus will not be allowed to do service for an appeal. Adams v. United States ex rel. McCann, supra, 317 U.S. at page 274, 63 S.Ct. at page 239, 87 L.Ed. 268, 143 A.L.R. 435. There have been, however, some exceptions. That is to say, the writ has at times been entertained either without consideration of the adequacy of relief by the appellate route or where an appeal would have afforded an adequate remedy. Illustrative are those instances where the conviction was under a federal statute alleged to be unconstitutional,6 where there was a conviction by a federal court whose jurisdiction over the person or the offense was challenged,7 where the trial or sentence by a federal court violated specific constitutional guaranties.8 It is plain, however, that the writ is not designed for collateral review of errors of law committed by the trial court—the existence of any evidence to support the conviction,9 irregularities in the grand jury procedure,10 departure from a statutory grant of time in which to prepare for trial,11 and other errors in trial procedure which do not cross the jurisdictional line. Cf. Craig v. Hecht, 263 U.S. 255, 44 S.Ct. 103, 68 L.Ed. 293. 6 Yet the latter rule is not an absolute one; and the situations in which habeas corpus has done service for an appeal re the exc eptions. Thus where the jurisdiction of the federal court which tried the case is challenged or where the constitutionality of the federal statute under which conviction was had is attacked habeas corpus is increasingly denied in case an appellate procedure was available for correction of the error.12 Yet, on the other hand, where the error was flagrant and there was no other remedy available for its correction, relief by habeas corpus has sometimes been granted.13 As stated by Chief Justice Hughes in Bowen v. Johnston, 306 U.S. 19, 27, 59 S.Ct. 442, 446, 83 L.Ed. 455, the rule which requires resort to appellate procedure for the correction of errors 'is not one defining power but one which relates to the appropriate exercise of power.' That rule is, therefore, 'not so inflexible that it may not yield to exceptional circumstances where the need for the remedy afforded by the writ of habeas corpus is apparent.' Id., 306 U.S. at page 27, 59 S.Ct. at page 446. That case was deemed to involve 'exceptional circumstances' by reason of the fact that it indicated 'a conflict between state and federal authorities on a question of law involving concerns of large importance affecting their respective jurisdictions.' Id., 306 U.S. at page 27, 59 S.Ct. at page 446. The Court accordingly entertained the writ to examine into the jurisdiction of the court to render the judgment of conviction. 7 The same course was followed in Ex parte Hudgings, 249 U.S. 378, 39 S.Ct. 337, 63 L.Ed. 656, 11 A.L.R. 333, where petitioner was adjudged guilty of contempt for committing perjury. The Court did not require the petitioner to pursue any appellate route but issued an original writ and discharged him, holding that perjury without more was not punishable as a contempt. That situation was deemed exceptional in view of 'the nature of the case, of the relation which the question which it involves bears generally to the power and duty of courts in the performance of their functions, of the dangerous effect on the liberty of the citizen when called upon as a witness in a court which might result if the erroneous doctrine upon which the order under review was based were not promptly corrected * * *.' Id., 249 U.S. at page 384, 39 S.Ct. at page 340. Cf. Craig v. Hecht, supra. 8 The Circuit Court of Appeals thought that the facts of the present cases likewise presented exceptional circumstances which justified resort to habeas corpus though no appeals were taken. In their view the failure to appeal was excusable, since relief by that route seemed quite futile. 9 But denial of certiorari by this Court in the earlier case imported no expression of opinion on the merits. House v. Mayo, 324 U.S. 42, 48, 65 S.Ct. 517, 521, 89 L.Ed. 739, and cases cited. The same chief counsel represented the defendants in the present casesand those in the Estep and Smith cases. At the time these defendants were convicted the Estep and Smith cases were pending before the appellate courts. The petition in the Smith case was, indeed, filed here about two weeks before Kulick's conviction and about a month after Sunal's conviction. The same road was open to Sunal and Kulick as the one Smith and Estep took. Why the legal strategy counseled taking appeals in the Smith and Estep cases and not in these we do not know. Perhaps it was based on the facts of these two cases. For the question of law had not been decided by the Court; and counsel was pressing for a decision here. The case, therefore, is not one where the law was changed after the time for appeal had expired. Cf. Warring v. Colpoys, 74 App.D.C. 303, 122 F.2d 642, 136 A.L.R. 1025. It is rather a situation where at the time of the convictions the definitive ruling on the question of law had not crystallized. Of course, if Sunal and Kulick had pursued the appellate course and failed, their cases would be quite different. But since they chose not to pursue the remedy which they had, we do not think they should now be allowed to justify their failure by saying they deemed any appeal futile. 10 We are dealing here with a problem which has radiations far beyond the present cases. The courts which tried the defendants had jurisdiction over their persons and over the offense. They committed an error of law in excluding the defense which was tendered. That error did not go to the jurisdiction of the trial court. Congress, moreover, has provided a regular, orderly method for correction of all such errors by granting an appeal to the Circuit Courts of Appeals and by vesting us with certiorari jurisdiction. It is not uncommon after a trial is ended and the time for appeal has passed to discover that a shift in the law or the impact of a new decision has given increased relevance to a point made at the trial but not pursued on appeal. Cf. Warring v. Colpoys, supra. If in such circumstances, habeas corpus could be used to correct the error, the writ would become a delayed motion for a new trial, renewed from time to time as the legal climate changed. Error which was not deemed sufficiently adequate to warrant an appeal would acquire new implications. Every error is potentially reversible error; and many rulings of the trial court spell the difference between conviction and acquittal. If defendants who accept the judgment of conviction and do not appeal can later renew their attack on the judgment by habeas corpus, litigation in these criminal cases will be interminable. Wise judicial administration of the federal courts counsels against such course, at least where the error does not trench on any constitutional rights of defendants nor involve the jurisdiction of the trial court. 11 An endeavor is made to magnify the error in these trials to constitutional proportions by asserting that the refusal of the proffered evidence robbed the trial of vitality by depriving defendants of their only real defense. But as much might be said of many rulings during a criminal trial. Defendants received throughout an opportunity to be heard and enjoyed all procedural guaranties granted by the Constitution. Error in ruling on the question of law did not infect the trial with lack of procedural due process. As stated by Mr. Justice Cardozo in Escoe v. Zerbst, 295 U.S. 490, 494, 55 S.Ct. 818, 820, 79 L.Ed. 1566, 'When a hearing is allowed but there is error in conducting it or in limiting its scope, the remedy is by appeal. When an opportunity to be heard is denied altogether, the ensuing mandate of the court is void, and the prisoner confined thereunder may have recourse to habeas corpus to put an end to the restraint.' 12 It is said that the contrary position was indicated by the following statement in Estep v. United States, supra, 327 U.S. at pages 124, 125, 66 S.Ct. a page 428, 90 L.Ed. 567. 13 'But if we now hold that a registrant could not defend at his tral on the ground that the local board had no jurisdiction in the premises, it would seem that the way would then be open to him to challenge the jurisdiction of the local board after conviction by habeas corpus. The court would then be sending men to jail today when it was apparent that they would have to be released tomorrow.' 14 We were there examining the alternative pressed on us—that the classification could not be attacked at the trial. If we denied the defense, we concluded that habeas corpus would lie the moment after conviction. For one convicted of violating an illegal order of a selective service board, like one convicted of violating an unconstitutional statute, should be afforded an opportunity at some stage to establish the fact. And where no other opportunity existed, habeas corpus would be the appropriate remedy.14 But that was an additional reason for allowing the defense in the criminal trial, not a statement that defendants prosecuted under § 11 had an alternative of defending at the trial on the basis of an illegal classification or resorting to habeas corpus after conviction. These registrants had available a method of obtaining the right to defend their prosecutions under § 11 on that ground. They did not use it. And since we find no exceptional circumstances which excuse their failure, habeas corpus may not now be used as a substitute. 15 Accordingly Sunal v. Large will be affirmed and Alexander v. Kulick will be reversed. Affirmed in one case; reversed in another. 16 So ordered. 17 Mr. Justice BURTON concurs in the result. 18 Mr. Justice FRANKFURTHER (dissenting). 19 That habeas corpus cannot be made to do service for an appeal is a well-worn formula. But this generalization should not dispose of these two cases, if their actualities are viewed in the light of our decisions. 20 The First Judiciary Act empowered the courts of the United States to issue writs of habeas corpus. Section 14 of the Act of September 24, 1789, 1 Stat. 73, 81, 28 U.S.C.A. § 451 et seq. Since the scope of the writ was not defined by Congress, it carried its common-law implications. The writ was greatly enlarged after the Civil War by the Act of February 5, 1867. 14 Stat. 385. (For legislation dealing with habeas corpus see Note in 18 F. 68.) It was no longer limited to searching the face of a judgment of a court of competent jurisdiction. It was available to cut through forms and go 'to the very tissue of the structure,' Mr. Justice Holmes in Frank v. Mangum, 237 U.S. 309, 345, 346, 35 S.Ct. 582, 595, 59 L.Ed. 969, though it was certainly not to be invoked merely as a substitute for an available appeal. But what is 'form' and what is the 'tissue of the structure,' and when is a writ sought in fact as a substitute for an appeal in a practical view of the administration of justice, are questions to which our decisions give dubious and confused answers. I think it is fair to say that the scope of habeas corpus in the federal courts is an untidy area of our law that calls for much more systematic consideration than it has thus far received. 21 The extent to which this Court has left itself unhampered, by not drawing sharp jurisdictional lines, is indicated by the following very tentative classification of categories in which habeas corpus has not been deemed beyond the power of federal courts to entertain: 22 (1) Conviction by a federal court which had no jurisdiction either over the person or of the offense. See Ex parte Watkins, 3 Pet. 193, 203, 7 L.Ed. 650; Ex parte Parks, 93 U.S. 18, 23, 23 L.Ed. 787. But the writ is discretionary and may not issue even though if an opportunity were allowed such want of jurisdiction might be established. See Toy Toy v. Hopkins, 212 U.S. 542, 29 S.Ct. 416, 53 L.Ed. 644, and Rodman v. Pothier, 264 U.S. 399, 44 S.Ct. 360, 8 L.Ed. 75 9. And compare In re Mayfield, 141 U.S. 107, 11 S.Ct. 939, 35 L.Ed. 635, with In re Blackbird, C.C., 66 F. 541. 23 (2) Conviction under unconstitutional statute. Ex parte State of Virginia, 100 U.S. 339, 343, 25 L.Ed. 676; Ex parte Siebold, 100 U.S. 371, 25 L.Ed. 717; Ex parte Curtis, 106 U.S. 371, 1 S.Ct. 381, 27 L.Ed. 232; Ex parte Yarbrough, 110 U.S. 651, 4 S.Ct. 152, 28 L.Ed. 274. The writ was denied in each case, but the Court passed on the constitutionality of the statute. Here too the availability of the writ will depend on the circumstances of the case, particularly the stage in the criminal proceedings at which the writ is sought. Johnson v. Hoy, 227 U.S. 245, 33 S.Ct. 240, 57 L.Ed. 497; Henry v. Henkel, 235 U.S. 219, 35 S.Ct. 54, 59 L.Ed. 203. Compare Glasgow v. Moyer, 225 U.S. 420, 32 S.Ct. 753, 56 L.Ed. 1147 with Matter of Gregory, 219 U.S. 210, 31 S.Ct. 143, 55 L.Ed. 184. See also In re Lincoln, 202 U.S. 178, 26 S.Ct. 602, 50 L.Ed. 984. 24 (3) Violation by federal courts of specific constitutional rights: (a) double jeopardy. Compare Ex parte Bigelow, 113 U.S. 328, 5 S.Ct. 542, 28 L.Ed. 1005 with In re Snow, 120 U.S. 274, 7 S.Ct. 556, 30 L.Ed. 658, and Ex parte Nielsen, Petitioner, 131 U.S. 176, 9 S.Ct. 672, 33 L.Ed. 118; (b) self-incrimination. Writ granted as to a witness held in contempt, though apparently not as to a defendant restrained on charge of crime. Compare Counselman v. Hitchcock, 142 U.S. 547, 12 S.Ct. 195, 35 L.Ed. 1110 and Ex parte Irvine, C.C., 74 F. 954 (Taft, Circuit Judge), with Matter of Moran, 203 U.S. 96, 27 S.Ct. 25, 51 L.Ed. 105; (c) no indictment by grand jury. Ex parte Wilson, 114 U.S. 417, 5 S.Ct. 935, 29 L.Ed. 89. Also Ex parte Bain, 121 U.S. 1, 7 S.Ct. 781, 30 L.Ed. 849. As to denial of constitutional rights in State courts, Moore v. Dempsey, 261 U.S. 86, 43 S.Ct. 265, 67 L.Ed. 543. 25 (4) Due regard for harmonious Nation-State relations, need to avoid friction and maintain balance. See Ex parte Rowland, 104 U.S. 604, 26 L.Ed. 861; In re Ayers, 123 U.S. 443, 8 S.Ct. 164, 31 L.Ed. 216; In re Sawyer, 124 U.S. 200, 8 S.Ct. 482, 31 L.Ed. 402; Bowen v. Johnston, 306 U.S. 19, 59 S.Ct. 442, 83 L.Ed. 455. Compare In re Tyler, 149 U.S. 164, 13 S.Ct. 785, 37 L.Ed. 689; In re Swan, 150 U.S. 637, 14 S.Ct. 225, 37 L.Ed. 1207; Ex parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714, 13 L.R.A.,N.S., 932, 14 Ann.Cas. 764. Availability of other remedies is here an important factor. Similarly as to State interference with federal officers, prompt relief may be deemed necessary. State of Ohio v. Thomas, 173 U.S. 276, 19 S.Ct. 453, 43 L.Ed. 699. See also In re Neagle, 135 U.S. 1, 10 S.Ct. 658, 34 L.Ed. 55; Hunter v. Wood, 209 U.S. 205, 28 S.Ct. 472, 52 L.Ed. 747. 26 (5) Insufficiency of indictments is not open on habeas corpus; it may be in removal cases, in view of the hardship to the individual and the inadequacy of other remedies. Compare Tinsley v. Treat, 205 U.S. 20, 27 S.Ct. 430, 51 L.Ed. 689; also Hyde v. Shine, 199 U.S. 62, 25 S.Ct. 760, 50 L.Ed. 90. Compare also the extradition cases. Benson v. McMahon, 127 U.S. 457, 8 S.Ct. 1240, 32 L.Ed. 234; Ornelas v. Ruiz, 161 U.S. 502, 16 S.Ct. 689, 40 L.Ed. 787; Bryant v. United States, 167 U.S. 104, 17 S.Ct. 744, 42 L.Ed. 94. 27 (6) Defects in jury panel, in trial procedure, exclusion or insufficiency of evidence, are rarely held ground for relief on habeas corpus. But when no other remedy was available and the error appeared flagrant, there have been instances of relief. See Tinsley v. Treat, 205 U.S. 20, 27 S.Ct. 430, 51 L.Ed. 689. Compare Ex parte Bain, 121 U.S. 1, 7 S.Ct. 781, 30 L.Ed. 849. 28 (7) Legality of sentence or conditions of confinement. Ex parte Lange, 18 Wall. 163, 21 L.Ed. 872; In re Bonner, 151 U.S. 242, 14 S.Ct. 323, 38 L.Ed. 149. 29 (8) Contempt cases. Ex parte Hudgings, 249 U.S. 378, 384, 39 S.Ct. 337, 340, 63 L.Ed. 656, 11 A.L.R. 333. Compare, Ex parte Savin, Petitioner, 131 U.S. 267, 9 S.Ct. 699, 33 L.Ed. 150, and Ex parte Cuddy, Petitioner, 131 U.S. 280, 9 S.Ct. 703 33 L.Ed. 154. But when appeal is sufficient remedy, see Craig v. Hecht, 263 U.S. 255, 44 S.Ct. 103, 68 L.Ed. 293, and Judge Learned Hand's dissenting opinion in the Craig case, Ex parte Craig, 2 Cir., 282 F. 138, 155. 30 Perhaps it is well that a writ the historic purpose of which is to furnish 'a swift and imperative remedy in all cases of illegal restraint,' see Lord Birkenhead, L.C., Secretary of State for Home Affairs v. O'Brien, (1923) A.C. 603, 609, should be left fluid and free from the definiteness appropriate to ordinary jurisdictional doctrines. But if we are to leave the law pertaining to habeas corpus in the unsystematized condition in which we find it, then I believe it is true of both cases what Judge Learned Hand said of the Kulick case, that the writ is necessary 'to prevent a complete miscarriage of justice.' 2 Cir., 157 F.2d 811, 813. If the justification need be no more definite than the existence of 'exceptional circumstances,' Bowen v. Johnston, 306 U.S. 19, 27, 59 S.Ct. 442, 446, 83 L.Ed. 455, the reasons for allowing the writs in these cases are more compelling than were those in Bowen v. Johnston, where there merely appeared 'to be uncertainty and confusion * * * whether offenses within the * * * National Park are triable in the state or federal courts.' For the reasons set forth in Judge Hand's opinion, it 'would pass all fair demands upon Kulick's diligence to conclude him because of his failure to appeal.' 2 Cir., 157 F.2d at page 813. 31 I agree with both Circuit Courts of Appeals that habeas corpus was available as a remedy in the circumstances of these cases, but since the Court does not consider the merits, I shall abstain from doing so. 32 Mr. Justice RUTLEDGE (dissenting). 33 I am in agreement with Mr. Justice FRANKFURTER in the result and substantially in the views he expresses. I would modify them by making definite and certain his tentatively expressed conclusion that the great writ of habeas corpus should not be confined by rigidities characterizing ordinary jurisdictional doctrines. And I agree with Judge Learned Hand, in the view stated for the Circuit Court of Appeals in Kulick's case, that upon the sum of our decisions,1 regardless of the variety of statement in the opinions, no more definite rule is to be drawn out than that 'the writ is available, not only to determine points of jurisdiction, stricti juris, and constitutional questions; but whenever else resort to it is necessary to prevent a complete miscarriage of justice.' 2 Cir., 157 F.2d 811, 813. 34 In my opinion not only is this the law, measured by the sum of the decisions and the applicable statute,2 but the aggregate of the results demonstrates it should be the law. 35 Confusion in the opinions there is, in quantity. But it arises in part from the effort to pin down what by its nature cannot be confined in special, all-inclusive categories, unless the office of the writ is to be diluted or destroyed where that should not happen. And so limitation in assertion gives way tothe necess ity for achieving the writ's historic purpose when the two collide. Admirable as may be the effort toward system, this last resort for human liberty cannot yield when the choice is between tolerating its wrongful deprivation and maintaining the systematist's art. 36 The writ should be available whenever there clearly has been a fundamental miscarriage of justice for which no other adequate remedy is presently available. Beside executing its great object, which is the preservation of personal liberty and assurance against its wrongful deprivation, considerations of economy of judicial time and procedures, important as they undoubtedly are, become comparatively insignificant.3 This applies to situations involving the past existence of a remedy presently foreclosed, as well as to others where no such remedy has ever been afforded. 37 In the prevailing state of our criminal law, federal and state, there are few errors, either fundamental or of lesser gravity, which cannot be corrected by appeal timely taken, unless the facts disclosing or constituting them arise after the time has expired. If the existence of a remedy by appeal at some stage of the criminal proceedings is to be taken for the criterion, then in very few instances, far less than the number comprehended by our decisions, will the writ be available. Taken literally, the formula so often repeated, that the writ is not a substitute for appeal, is thus in conflict with every case where the ground upon which the writ has been allowed either was or might have been asserted on appeal.4 The formula has obvious validity in the sense that the writ is not readily to be used for overturning determinations made on appeal or for securing review where no specification has been made or no appeal has been taken of matters not going to make the conviction a gross miscarriage of justice. 38 But any effort to shut off the writ's functioning merely because appeal has not been taken in a situation where, but for that fact alone, the writ would issue, seems to meto prescri be a system of forfeitures in the last area where such a system should prevail. Certainly a basic miscarriage of justice is no less great or harmful, either to the individual or to the general cause of personal liberty, merely because appeal has not been taken, than where appeal is taken but relief is wrongfully denied. 39 These considerations apply with special force, though not exclusively, where good reason existed, as I think did here, for failure to note the appeal in the brief time allowed.5 Whether or not the inferior federal courts were justified in taking the Falbo decision6 for more than its specific ruling, the fact remains that their broadly prevailing view was that that case had cut off all right to make such defenses as Sunal and Kulick tendered.7 40 In that prevailing climate of opinion in those courts, there was hardly any chance that appeal to the federal circuit courts of appeals would bring relief by their action.8 The chances for reversal therefore hung almost exclusively upon the doubtful, not to say slender,9 chance that this Court in the exercise of its discretionary power would grant certiorari. 41 The deprivation here was of the right to make any substantial defense.10 I do not think a trial which forecloses the basic right to defend, upon the only valid ground available for that purpose, is any less unfair or conclusive as against the office of habeas corpus than one which takes place when the court is without jurisdiction to try the offense, as when the charge is made under an unconstitutional statute or for other reason sets forth no lawfully prescribed offense, or when the court loses jurisdiction by depriving the accused of his constitutional right to counsel. That right is no more and no less than an important segment of the right to have any valid defense advanced and considered. It becomes almost meaningless if the larger right to defend is itself cut off.11 42 With Mr. Justice FRANKFURTER since the Court reaches only the question of the availability of habeas corpus, I do not consider others. 43 Mr. Justice MURPHY joins in this dissent. He believes that today's decision unduly narrows the point at which due process may be accorded those accused or convicted of violating the Selective Training and Service Act of 1940. Cf. his dissenting opinion in Falbo v. United States, 320 U.S. 549, 555, 64 S.Ct. 346, 349, 88 L.Ed. 305, and his concurring opinion in Estep v. United States, 327 U.S. 114, 125, 66 S.Ct. 423, 428, 90 L.Ed. 567. 1 Sunal in 1942 was classified as a conscientious objector and ordered to report for work of national importance. On his failure to do so he was convicted under the Act and a fine and term of imprisonment were imposed. The events with which we are now concerned relate to his classification after his discharge from prison. 2 The Smith case was decided by the Circuit Court of Appeals on April 4, 1945, 4 Cir., 148 F.2d 288; the petition for certiorari was filed April 25, 1945, and granted May 28, 1945. 325 U.S. 846, 65 S.Ct. 1406, 89 L.Ed. 1969. The Estep case was decided by the Circuit Court of Appeals on July 6, 1945, 3 Cir., 150 F.2d 768; the petition for certiorari was filed August 3, 1945, and granted October 8, 1945. 326 U.S. 703, 66 S.Ct. 52, 90 L.Ed. 414. 3 We therefore lay to one side cases such as Bridges v. Wixon, 326 U.S. 135, 65 S.Ct. 1443, 89 L.Ed. 2103; Duncan v. Kahanamoku, 327 U.S. 304, 66 S.Ct. 606, 90 L.Ed. 688, and Eagles v. United States ex rel. Samuels, 329 U.S. 304, 67 S.Ct. 313, where the order of theagency und er which petitioner was detained was not subject to judicial review. 4 Rinko v. United States, 325 U.S. 851, 65 S.Ct. 1086, 89 L.Ed. 1971. We also denied certiorari in Flakowicz v. United States, 325 U.S. 851, 65 S.Ct. 1086, 89 L.Ed. 1971, but it, like Falbo v. United States, supra, was one where the administrative remedies had not been exhausted, there being an additional examination which the registrant had not taken. See Gibson v. United States, 329 U.S. 338, 67 S.Ct. 301. 5 See note 2, supra. 6 Ex parte Siebold, 100 U.S. 371, 25 L.Ed. 717; Ex parte Curtis, 106 U.S. 371, 1 S.Ct. 381, 27 L.Ed. 232; Ex parte Yarbrough, 110 U.S. 651, 4 S.Ct. 152, 28 L.Ed. 274; In re Coy, 127 U.S. 731, 8 S.Ct. 1263, 32 L.Ed. 274; Matter of Heff, 197 U.S. 488, 25 S.Ct. 506, 49 L.Ed. 848. Matter of Gregory, 219 U.S. 210, 31 S.Ct. 143, 55 L.Ed. 84; Baender v. Barnett, 255 U.S. 224, 41 S.Ct. 271, 65 L.Ed. 597. 7 Ex parte Watkins, 3 Pet. 193, 7 L.Ed. 650; Ex parte Parks, 93 U.S. 18, 23 L.Ed. 787; Bowen v. Johnston, 306 U.S. 19, 59 S.Ct. 442, 83 L.Ed. 455. 8 Ex parte Lange, 18 Wall. 163, 21 L.Ed. 872 (double jeopardy); In re Snow, 120 U.S. 274, 7 S.Ct. 556, 30 L.Ed. 658 (same); In re Nielsen, 131 U.S. 176, 9 S.Ct. 672, 33 L.Ed. 118 (same); Counselman v. Hitchcock, 142 U.S. 547, 12 S.Ct. 195, 35 L.Ed. 1110 (self-incrimination); Ex parte Wilson, 114 U.S. 417, 5 S.Ct. 935, 29 L.Ed. 89 (requirement of indictment); Ex parte Bain, 121 U.S. 1, 7 S.Ct. 781, 30 L.Ed. 849 (same); Callan v. Wilson, 127 U.S. 540, 8 S.Ct. 1301, 32 L.Ed. 223 (jury trial); Johnson v. Zerbst, supra (right to counsel); Walker v. Johnston, 312 U.S. 275, 61 S.Ct. 574, 85 L.Ed. 830 (same); Waley v. Johnston, supra, (coerced plea of guilty). 9 Harlan v. McGourin, 218 U.S. 442, 31 S.Ct. 44, 54 L.Ed. 1101, 21 Ann.Cas. 849. 10 Ex parte Harding, 120 U.S. 782, 7 S.Ct. 780, 30 L.Ed. 824; Kaizo v. Henry, 211 U.S. 146, 29 S.Ct. 41, 53 L.Ed. 125. 11 McMicking v. Schields, 238 U.S. 99, 35 S.Ct. 665, 59 L.Ed. 1220. The rule is even more strict where habeas corpus is sought before trial. See Johnson v. Hoy, 227 U.S. 245, 33 S.Ct. 240, 57 L.Ed. 497. 12 In re Lincoln, 202 U.S. 178, 26 S.Ct. 602, 50 L.Ed. 984; Toy Toy v. Hopkins, 212 U.S. 542, 29 S.Ct. 416, 53 L.Ed. 644; Glasgow v. Moyer, 225 U.S. 420, 32 S.Ct. 753, 56 L.Ed. 1147. 13 Tinsley v. Treat, 205 U.S. 20, 27 S.Ct. 430, 51 L.Ed. 689 (removal case). In removal cases habeas corpus is available not to weigh the evidence to support the accusation but to determine whether there is an entire lack of evidence to support it. Hyde v. Shine, 199 U.S. 62, 84, 25 S.Ct. 760, 764, 50 L.Ed. 90. It is also available to determine whether removal to the district in question violates a constitutional right of the accused, Haas v. Henkel, 216 U.S. 462, 30 S.Ct. 249, 54 L.Ed. 569, 17 Ann.Cas. 1112, or whether the court before which it is proposed to take and try the accused has jurisdiction over the offense. Salinger v. Loisel, 265 U.S. 224, 44 S.Ct. 519, 68 L.Ed. 989. But habeas corpus will not be entertained to pass on the question of jurisdiction where it involves consideration of many facts and seriously controverted questions of law. Rodman v. Pothier, 264 U.S. 399, 44 S.Ct. 360, 68 L.Ed. 759; Henry v. Henkel, 235 U.S. 219, 35 S.Ct. 54, 59 L.Ed. 203. 14 The remedy of habeas corpus extends to a case where a person 'is in custody in violation of the Constitution or of a law * * * of the United States * * *.' R.S. § 753, 28 U.S.C. § 453, 28 U.S.C.A. § 453. 1 Including those cited in the Court's opinion and that of Mr. Justice FRANKFURTER. See also dissenting opinion, Ex parte Craig, 2 Cir., 282 F. 138, 155—159, affirmed in Craig v. Hecht, 263 U.S. 255, 44 S.Ct. 103, 68 L.Ed. 293. The Writ of Habeas Corpus in the Federal Courts (1935) 35 Col.L.Rev. 404. 2 Rev.Stat. § 761, 28 U.S.C. § 461, 28 U.S.C.A. § 461, which commands the court, after hearing to 'dispose of the party as law and justice require.' Cf. Frank v. Mangum, 237 U.S. 309, 330, 331, 35 S.Ct. 582, 588, 59 L.Ed. 969, and dissenting opinion of Mr. Justice Holmes, 237 U.S. at page 345 ff., 35 S.Ct. at page 594, concurred in by Mr. Justice Hughes, who afterward as Chief Justice wrote the Court's opinion in Bowen v. Johnston, 306 U.S. 19, 59 S.Ct. 442, 83 L.Ed. 455. See note 4. Pertinently the statute applies to prisoners 'in custody in violation of the Constitution or of a law or treaty of the United States.' Rev.Stat. § 753, 28 U.S.C. § 453, 28 U.S.C.A. § 453. 3 It is for this reason that the doctrine of res judicata does not apply to habeas corpus determinations, Waley v. Johnston, 316 U.S. 101, 105, 62 S.Ct. 964, 966, 86 L.Ed. 1302, although a prior refusal to discharge the prisoner on a like application may be given weight. Salinger v. Loisel, 265 U.S. 224, 231, 44 S.Ct. 519, 521, 68 L.Ed. 989, for obvious reasons of judicial administration. 4 In the following cases the Court either passed upon the substance of the contentions presented in the petition for writ of habeas corpus or held that the petitioner was entitled to a hearing, although, so far as appears, at the time the petition was filed the time to appeal had expired, e.g., Bowen v. Johnston, 306 U.S. 19, 59 S.Ct. 442, 83 L.Ed. 455; Walker v. Johnston, 312 U.S. 275, 61 S.Ct. 574, 85 L.Ed. 830; Johnson v. Zerbst, 304 U.S. 458, 58 S.Ct. 1019, 82 L.Ed. 1461, 146 A.L.R. 357; see The Writ of Habeas Corpus in the Federal Courts (1935) 35 Col.L.Rev. 404, 414, n. 66; an appeal had already been taken, Moore v. Dempsey, 261 U.S. 86, 43 S.Ct. 265, 67 L.Ed. 543; or the time to appeal had not expired, Hunter v. Wood, 209 U.S. 205, 28 S.Ct. 472, 52 L.Ed. 747; Ex parte Sawyer, 124 U.S. 200, 8 S.Ct. 482, 31 L.Ed. 402; Wo Lee v. Hopkins, 118 U.S. 356, 6 S.Ct. 1064, 30 L.Ed. 220, discussed in The Writ of Habeas Corpus in the Federal Courts, supra, at 414, n. 60. See also Appleyard v. State of Massachusetts, 203 U.S. 222, 225, 226, 27 S.Ct. 122, 123, 51 L.Ed. 161, 7 Ann.Cas. 1073; Ex parte Bridges, Fed.Cas.No.1,862, 2 Woods 428, 430, approved in Ex parte Royall, 117 U.S. 241, 6 S.Ct. 734, 29 L.Ed. 868. In his dissenting opinion in Ex parte Craig, supra note 1, Judge Learned Hand, reviewing the authorities, said: 'The appellant's attempt rigidly to classify these exceptions appears to me more definite than the books warrant. A safer rule is to say somewhat vaguely that must they be occasions of pressing necessity.' 2 Cir., 282 F. at page 156. 5 The opinion of the Circuit Court of Appeals in the Kulick case, after stating the summarized effect of our decisions as quoted in the text above, said concerning this case: 'The occasion at bar is such; certainly the reasons for allowing it are more compelling than were those in Bowen v. Johnston (see notes 3, 4, supra), where there merely appeared 'to be uncertainty and confusion * * * whether offenses within' a national park 'are triable in the state or federal courts.' It would pass all fair demands upon Kulick's diligence to conclude him because of his failure to appeal. Not only had there not been any glimmer of a positive chance of success, but there had been an unusual consensus of judicial opinion against it in the lower courts. Moreover, although a number of the decisions could be explained upon the ground that those inducted had not wholly exhausted their administrative remedies; in a number of others they had done so; and no distinction had been established between the two. Indeed, in United States v. Flakowicz, supra (2 Cir., 146 F.2d 874), which had been one of these, the Supreme Court denied certiorari only a fortnight before May 12th,' the date of Kulick's conviction. 2 Cir., 157 F.2d at pages 813, 814. See note 9 infra. 6 Falbo v. United States, 320 U.S. 549, 64 S.Ct. 346, 88 L.Ed. 305. The opinion, though containing language emphasizing the failure of Congress to provide expressly for judicial review of selective service boards' classifications, explicitly pointed out that 'a board order to report is no more than a necessary intermediate step in a united and continuous process designed to raise an army speedily and efficiently' and that, if there were a constitutional requirement for judicial review, 'Congress was not required to provide for judicial intervention before final acceptance of an individual for national service.' 320 U.S. at pages 553, 554, 64 S.Ct. at page 348. The opinion also stated: 'Surely if Congress had intended to authorize interference with that process by intermediate challenges of orders to report, it would have said so.' 320 U.S. at page 554, 64 S.Ct. at page 349. (Emphasis added.) 7 See note 5 supra, and the cases cited in Mr. Justice Frankfurter's opinion in Estep v. United States, 327 U.S. 114, 139, 66 S.Ct. 423, 435, 90 L.Ed. 567. 8 In reference to Kulick's case the chance was practically nil, since the Circuit Court of Appeals for the Second Circuit previously had ruled the question adversely to the validity of the defenses in United States v. Flakowicz, 2 Cir., 146 F.2d 874, and certiorari had been denied here. 325 U.S. 851, 65 S.Ct. 1086, 89 L.Ed. 1971. See note 5. Smith v. United States, 4 Cir., 148 F.2d 288, afterwards reversed here, 327 U.S. 114, 66 S.Ct. 423, 90 L.Ed. 567, apparently was the first in which the Circuit Court of Appeals for the Fourth Circuit decided the question. The decision was rendered April 4, 1945. Sunal was convicted on March 22, 1945. 9 Although denial of certiorari is not to be taken as expression of opinion in any case, it would be idle to claim that it has no actual or reasonable influence upon the practical judgment of lawyers whether appeal should be noted and taken upon the chance that in a case substantially identical this Court's discretion would be exercised, in the absence of conflict, in a contrary manner at the stage of application for certiorari. 10 Under the rule applied in the district courts and the circuit courts of appeals the only defenses open would have been that the defendants had not refused to take the oaths. No defense relating to the validity of the statute, the regulations, or their application in the particular cases was available. 11 Cf. Yakus v. United States, 321 U.S. 414, 64 S.Ct. 660, 88 L.Ed. 834, dissenting opinion, 321 U.S. at page 460 ff., 64 S.Ct. at page 684.
23
332 U.S. 301 67 S.Ct. 1604 91 L.Ed. 2067 UNITED STATESv.STANDARD OIL CO. OF CALIFORNIA et al. No. 235. Argued April 8, 9, 1947. Decided June 23, 1947. Mr. Frederick Bernays Wiener, of Providence, R.I., for petitioner. Mr. Frank B. Belcher, of Los Angeles, Cal., for respondents. Mr. Justice RUTLEDGE delivered the opinion of the Court. 1 Not often since the decision in Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, 114 A.L.R. 1487, is this Court asked to create a new substantive legal liability without legislative aid and as at the common law. This case of first impression here seeks such a result. It arises from the following circumstances. 2 Early one morning in February, 1944, John Etzel, a soldier, was hit and injured by a truck of the Standard Oil Company of California at a street intersection in Los Angeles. The vehicle was driven by Boone, an employee of the company. At the Government's expense of $123.45 Etzel was hospitalized, and his soldier's pay of $69.31 was continued during his disability. Upon the payment of $300 Etzel released the company and Boone 'from any and all claims which I now have or may hereafter have on account of or arising out of' the accident.1 3 From these facts the novel question springs whether the Government is entitled to recover from the respondents as tort-feasors the amounts expended for hospitalization and soldier's pay, as for loss of Etzel's services. A jury being waived, the District Court made findings of fact and conclusions of law in the Government's favor upon all the issues, including those of negligence and contributory negligence. Judgment was rendered accordingly. D.C., 60 F.Supp. 807. This the Circuit Court of Appeals reversed, 9 Cir., 153 F.2d 958, and we granted certiorari because of the novelty and importance of the principal question.2 329 U.S. 696, 67 S.Ct. 670. 4 As the case reaches us, a number of issues contested in the District Court and the Circuit Court of Appeals have been eliminated.3 Remaining is the basic question of respondents' liability for interference with the government-soldier relation and consequent loss to the United States, together with questions whether this issue is to be determined by federal or state law4 and concerning the effect of the release.5 In the view we take of the case it is not necessary to consider the questions relating to the release,6 for we have reached the conclusion that respondents are not liable for the injuries inflicted upon the Government. 5 We agree with the Government's view that the creation or negation of such a liability is not a matter to be determined by state law. The case in this aspect is governed by the rule of Clearfield Trust Co. v. United States, 318 U.S. 363, 63 S.Ct. 573, 87 L.Ed. 838, and National Metropolitan Bank v. United States, 323 U.S. 454, 65 S.Ct. 354, 89 L.Ed. 383, rather than that of Erie R. Co. v. Tompkins, supra. In the Clearfield case, involving liabilities arising out of a forged indorsement of a check issued by the United States, the Court said: 'The authority to issue the check had its origin in the Constitution and the statutes of the United States and was in no way dependent on the laws of Pensylvania or of any other state. Cf. Board of Commissioners (of Jackson County) v. United States, 308 U.S. 343, 60 S.Ct. 285, 84 L.Ed. 313; Royal Indemnity Co. v. United States, 313 U.S. 289, 61 S.Ct. 995, 85 L.Ed. 1361. The duties imposed upon the United States and the rights acquired by it as a result of the issuance find their roots in the same federal sources. Cf. Deitrick v. Greaney, 309 U.S. 190, 60 S.Ct. 480, 84 L.Ed. 694; D'Oench, Duhme & Co. v. Federal Deposit Ins. Corporation, 315 U.S. 447, 62 S.Ct. 676, 86 L.Ed. 956. In the absence of an applicable Act of Congress it is for the federal courts to fashion the governing rule of law according to their own standards.' 318 U.S. at pages 366, 367, 63 S.Ct. at page 575, 87 L.Ed. 838. 6 Although the Clearfield case applied these principles to a situation involving contractual relations of the Government, they are equally applicable in the facts of this case where the relations affected are non-contractual or tortious in character. 7 Perhaps no relation between the Government and a citizen is more distinctively federal in character than that between it and members of its armed forces. To whatever extent state law may apply to govern the relations between soldiers or others in the armed forces and persons outside them or nonfederal governmental agencies, the scope, nature, legal incidents and consequences of the relation between persons in service and the Government are fundamentally derived from federal sources and governed by federal authority. See Tarble's Case (In re Tarble), 13 Wall. 397, 20 L.Ed. 597; Kurtz v. Moffitt, 115 U.S. 487, 6 S.Ct. 148, 29 L.Ed. 458. So also we think are interferences with that relationship such as the facts of this case involve. For, as the Federal Government has the exclusive power to establish and define the relationship by virtue of its military and other powers,7 equally clearly it has power in execution of the same functions to protect the relation once formed from harms inflicted by others.8 8 Since also the Government's purse is affected, as well as its power to protect the relationship, its fiscal powers, to the extent that they are available to protect it against financial injury, add their weight to the military basis for excluding state intrusion. Indeed, in this aspect the case is not greatly different from the Clearfield case or from one involving the Government's paramount power of control over its own property, both to prevent its unauthorized use or destruction and to secure indemnity for those injuries.9 9 As in the Clearfield case, moreover, quite apart from any positive action by Congress, the matter in issue is neither primarily one of state interest nor exclusively for determination by state law within the spirit and purpose of the Erie decsion. The great object of the Erie case was to secure in the federal courts, in diversity cases, the application of the same substantive law as would control if the suit were brought in the courts of the state where the federal court sits. It was the so-called 'federal common law' utilized as a substitute for state power, to create and enforce legal relationships in the area set apart in our scheme for state rather than for federal control, that the Erie decision threw out. Its object and effect were thus to bring federal judicial power under subjection to state authority in matters essentially of local interest and state control. 10 Conversely there was no purpose or effect for broadening state power over matters essentially of federal character or for determining whether issues are of that nature. The diversity jurisdiction had not created special problems of that sort. Accordingly the Erie decision, which related only to the law to be applied in exercise of that jurisdiction, had no effect, and was intended to have none, to bring within the governance of state law matters exclusively federal, because made so by constitutional or valid congressional command, or others so vitally affecting interests, powers and relations of the Federal Government as to require uniform national disposition rather than diversified state rulings. Cf. Clearfield Trust Co. v. United States, 318 U.S. at pages 366—368, 63 S.Ct. at pages 574—576, 87 L.Ed. 838. Hence, although federal judicial power to deal with common-law problems was cut down in the realm of liability or its absence governable by state law, that power remained unimpaired for dealing independently, wherever necessary or appropriate, with essentially federal matters, even though Congress has not acted affirmatively about the specific question. 11 In this sense therefore there remains what may be termed, for want of a better label, an area of 'federal common law' or perhaps more accurately 'law of independent federal judicial decision,' outside the constitutional realm, untouched by the Erie decision. As the Government points out, this has been demonstrated broadly not only by the Clearfield and National Metropolitan Bank cases, but also by other decisions rendered here since the Erie case went down,10 whether or not the Government is also correct in saying the fact was foreshadowed the same day by Hinderlider v. La Plata River & Cherry Creek Ditch Co., 304 U.S. 92, 110, 58 S.Ct. 803, 811, 82 L.Ed. 1202, in a unanimous opinion delivered likewise by Mr. Justice Brandeis.11 12 It is true, of course, that in many situations, and apart from any supposed influence of the Erie decision, rights, interests and legal relations of the United States are determined by application of state law, where Congress has not acted specifically. 'In our choice of the applicable federal rule we have occasionally selected state law.' Clearfield Trust Co. v. United States 318 U.S. at page 367, 63 S.Ct. at page 575, 87 L.Ed. 838. The Government, for instance, may place itself in a position where its rights necessarily are determinable by state law, as when it purchases real estate from one whose title is invalid by that law in relation to another's claim. Cf. United States v. Fox, 94 U.S. 315, 24 L.Ed. 192.12 In other situations it may fairly be taken that Congress has consented to application of state law, when acting partially in relation to federal interests and functions, through failure to make other provision concerning matters ordinarily so governed.13 And in still others state law may furnish convenient solutions in no way inconsistent with adequate protection of the federal interest. 13 But we do not undertake to delimit or categorize the instances where it is properly to be applied outside the Erie aegis. It is enough for present purposes to point out that they exist, cover a variety of situations, and generally involve matters in which application of local law not only affords a convenient and fair mode of disposition, but also is either inescapable, as in the illustration given above, or does not result in substantially diversified treatment where uniformity is indicated as more appropriate, in view of the nature of the subject matter and the specific issues affecting the Government's interest. 14 Whether or not, therefore, state law is to control in such a case as this is not at all a matter to be decided by application of the Erie rule. For, except where the Government has simply substituted itself for others as successor to rights governed by state law, the question is one of federal policy, affecting not merely the federal judicial establishment and the groundings of its action, but also the Government's legal interests and relations, a factor not controlling in the types of cases producing and governed by the Erie ruling. And the answer to be given necessarily is dependent upon a variety of considerations always relevant to the nature of the specific governmental interests and to the effects upon them of applying state law. These include not only considerations of federal supremacy in the performance of federal functions, but of the need for uniformity and, in some instances, inferences properly to be drawn from the fact that Congress, though cognizant of the particular problem, has taken no action to change long-settled ways of handling it. 15 Leaving out of account, therefore, any supposed effect of the Erie decision, we nevertheless are of opinion that state law should not be selected as the federal rule for governing the matter in issue. Not only is the government-soldier relation distinctively and exclusively a creation of federal law, but we know of no good reason why the Government's right to be indemnified in these circumstances, or the lack of such a right, should vary in accordance with the different rulings of the several states, simply because the soldier marches or today perhaps as often flies across state lines. 16 Furthermore, the liability sought is not essential or even relevant to protection of the state's citizens against tortious harms, nor indeed for the soldier's personal indemnity or security, except in the remotest sense,14 since his personal rights against the wrongdoer may be fully protected without reference to any indemnity for the Government's loss.15 It is rather a liability the principal, if not the only, effect of which would be to make whole the federal treasury for financial losses sstained, f lowing from the injuries inflicted and the Government's obligations to the soldier. The question, therefore, is chiefly one of federal fiscal policy, not of special or peculiar concern to the states or their citizens. And because those matters ordinarily are appropriate for uniform national treatment rather than diversified local disposition, as well where Congress has not acted affirmatively as where it has, they are more fittingly determinable by independent federal judicial decision than by reference to varying state policies. 17 We turn, finally, to consideration of the policy properly to be applied concerning the wrongdoer, whether of liability or of continued immunity as in the past. Here the Government puts forward interesting views to support its claim of responsibility. It appeals first to the great principle that the law can never be wholly static. Growth, it urges, is the life of the law as it is of all living things. And in this expansive and creative living process, we are further reminded, the judicial institution has had and must continue to have a large and pliant, if also a restrained and steady, hand. Moreover, the special problem here has roots in the ancient soil of tort law, wherein the chief plowman has been the judge, notwithstanding his furrow may be covered up or widened by legislation. 18 Bringing the argument down to special point, counsel has favored us with scholarly discussion of the origins and foundations of liabilities considered analogous and of their later expansion to include relations not originally comprehended. These embrace particularly the liabilities created by the common law, arising from tortious injuries inflicted upon persons standing in various special legal relationships, and causing harm not only to the injured person but also, as for loss of services and assimilated injuries, to the person to whom he is bound by the relation's tie. Such, for obvious examples, are the master's rights of recovery for loss of the services of his servant or apprentice;16 the husband's similar action for interference with the marital relation, including loss of consortium as well as the wife's services; and the parent's right to indemnity for loss of a child's services, including his action for a daughter's seduction.17 19 Starting with these long-established instances, illustrating the creative powers and functions of courts, the argument leads on in an effort to show that the government-soldier relation is, if not identical, still strongly analogous;18 that the analogies are not destroyed by any of the variations, some highly anomalous,19 characterizing one or more of the settled types of liability; and that an exertion of creative judicial power to bring the government-soldier relation under the same legal protection against tortious interferences by strangers would be only a further and a proper exemplification of the law's capacity to catch up with the times. Further elaboration of the argument's details would be interesting, for the law has no more attractive scene of action than in the broad field compendously labe led the law of torts, and within it perhaps none more engrossing than those areas dealing with these essentially human and highly personal relations. 20 But we forego the tendered opportunity. For we think the argument ignores factors of controlling importance distinguishing the present problem from those with which the Government seeks to bring it into companionate disposition. These are centered in the very fact that it is the Government's interests and relations that are involved, rather than the highly personal relations out of which the assertedly comparable liabilities arose; and in the narrower scope, as compared with that allowed courts of general common-law jurisdiction, for the action of federal courts in such matters. 21 We would not deny the Government's basic premise of the law's capacity for growth, or that it must include the creative work of judges. Soon all law would become antiquated strait jacket and then dead letter, if that power were lacking. And the judicial hand would stiffen in mortmain if it had no part in the work of creation. But in the federal scheme our part in that work, and the part of the other federal courts, outside the constitutional area is more modest than that of state courts, particularly in the freedom to create new common-law liabilities, as Erie R. Co. v. Tompkins itself witnesses. See also United States v. Hudson, 7 Cranch 32, 3 L.Ed. 259. 22 Moreover, as the Government recognizes for one phase of the argument but ignores for the other,20 we have not here simply a question of creating a new liability in the nature of a tort.21 For grounded though the argument is in analogies drawn from that field, the issue comes down in final consequence to a question of federal fiscal policy, coupled with considerations concerning the need for and the appropriateness of means to be used in executing the policy sought to be established. The tort law analogy is brought forth, indeed, not to secure a new step forward in expanding the recognized area for applying settled principles of that law as such, or for creating new ones. It is advanced rather as the instrument for determining and establishing the federal fiscal and regulatory policies which the Government's executive arm thinks should prevail in a situation not covered by traditionally established liabilities. 23 Whatever the merits of the policy, itsconversion into law is a proper subject for congressional action, not for any creative power of ours. Congress, not this Court or the other federal courts, is the custodian of the national purse. By the same token it is the primary and most often the exclusive arbiter of federal fiscal affairs. And these comprehend, as we have said, securing the treasury or the government against financial losses however inflicted, including requiring reimbursement for injuries creating them, as well as filling the treasury itself. 24 Moreover Congress without doubt has been conscious throughout most of its history that the Government constantly sustains losses through the tortious or even criminal conduct of persons interfering with federal funds, property and relationships. We cannot assume that it has been ignorant that losses long have arisen from injuries inflicted on soldiers such as occurred here. The case therefore is not one in which, as the Government argues, all that is involved is application of 'a well-settled concept of legal liability to a new situation, where that new situation is in every respect similar to the old situation that originally gave rise to the concept. * * *' Among others, one trouble with this is that the situation is not new, at any rate not so new that Congress can be presumed not to have known of it or to have acted in the light of that knowledge. 25 When Congress has thought it necessary to take steps to prevent interference with federal funds, property or relations, it has taken positive action to that end.22 We think it would have done so here, if that had been its desire. This it still may do, if or when it so wishes. 26 In view of these considerations, exercise of judicial power to establish the new liability not only would be intruding within a field properly within Congress' control and as to a matter concerning which it has seen fit to take no action. To accept the challenge, making the liability effective in this case, also would involve a possible element of surprise, in view of the settled contrary practice, which action by Congress would avoid,23 not only here but in the many other cases we are told may be governed by the decision. 27 Finally, if the common-law precedents relied on were more pertinent than they are to the total problem, particularly in view of its federal and especially its fiscal aspects, in none of the situations to which they apply was the question of liaility or n o liability within the power of one of the parties to the litigation to determine. In them the courts stood as arbiters between citizens, neither of whom could determine the outcome or the policy properly to be followed. Here the United States is the party plaintiff to the suit. And the United States has power at any time to create the liability. The only question is which organ of the Government is to make the determination that liability exists. That decision, for the reasons we have stated, is in this instance for the Congress, not for the courts. Until it acts to establish the liability, this Court and others should withhold creative touch. 28 The judgment is affirmed. 29 Affirmed. 30 Mr. Justice FRANKFURTER concurs in the result. 31 Mr. Justice JACKSON, dissenting. 32 If the defendant in this case had been held liable for negligently inflicting personal injuries on a civilian, it would have been obliged to pay, among other items of damage, the reasonable cost of resulting care by his doctor, hospital and nurse, and the earnings lost during the period of disability. If the civilian bore this cost himself, it would be part of his own damage; if the civilian were a wife and the expense fell upon her husband, he would be entitled to recover it; if the civilian were a child, it would be recoverable by the parent. The long-established law is that a wrongdoer who commits a tort against a civilian must make good to somebody these elements of the costs resulting from his wrongdoing. 33 What the Court now holds is that if the victim of negligence is a soldier, the wrongdoer does not have to make good these items of expense to the one who bears them. The United States is under the duty to furnish medical services, hospitalization and nursing to a soldier and loses his services while his pay goes on. These costs, which essentially fall upon the United States by reason of the sovereign-soldier relationship, the Court holds cannot be recovered by the United States from the wrongdoer as the parent can in the case of a child or the husband can in the case of a wife. As a matter of justice, I see no reason why taxpayers of the United States should relieve a wrongdoer of part of his normal liability for personal injury when the victim of negligence happens to be a soldier. And I cannot see why the principles of tort law that allow a husband or parent to recover do not logically sustain the right of the United States to recover in this case. 34 But the Court has qualms about applying these well-known principles of tort law to this novel state of facts, unless directed to do so by Congress. The law of torts has been developed almost exclusively by the judiciary in England and this country by common law methods. With few exceptions, tort liability does not depend upon legislation. If there is one function which I should think we would feel free to exercise under a Constitution which vests in us judicial power, it would be to apply well established common law principles to a case whose only novelty is in facts. The courts of England, whose scruples against legislating are at least as sensitive as ours normally are, have not hesitated to say that His Majesty's Treasury may recover outlay to cure a British soldier from injury by negligent wrongdoer and the wages he was meanwhile paid. Attorney General v. Valle-Jones (1935) 2 K.B. 209. I think we could hold as much without being suspected of trying to usurp legislative function. 1 The instrument of release recited that the payment 'is not, and is not to be construed as' an admission of liability. 2 The Government's petition for certiorari asserted that 'upwards of 450 instances of negligently inflicted injuries upon soldiers of the United States, requiring hospitalization at Government expense, and the payment of compensation during incapacitation, have been reported by the War Department to the Department of Justice in the past three years,' and that additional instances were being reported to the War Department at the rate of approximately 40 a month. The suit also was said to be representative of a number already commenced, e.g., United States v. Atlantic Coast Line R. Co., D.C.E.D.N.C., 64 F.Supp. 289, dismissed on the ground that no master-servant relationship existed, and United States v. Klein, 8 Cir., 153 F.2d 55, an action to recover hospital and medical expenses incurred as a result of an injury to a Civilian Conservation Corps employee, dismissed for the reason that the United States Employees' Compensation Act, 5 U.S.C. § 751 et seq., 5 U.S.C.A. § 751 et seq., was held to afford the Government a method of recoupment, concededly not available here. 3 Including the issues of negligence and contributory negligence, as to which a stipulation of record on the appeal to the Circuit Court of Appeals states that evidence other than that set forth in the stipulation is omitted 'for the reason that appellants are not making any point on appeal as to the insufficiency of the evidence either to prove negligence or the absence of contributory negligence.' Although the District Court refused to find that Etzel as a soldier was 'as such, a servant of the plaintiff,' respondents designated as the points on appeal on which they intended to rely: That the United States had no cause of action or right to recover for the compensation paid Etzel or for the medical and hospital expenditures; that he 'was not an employee of the plaintiff nor was plaintiff his master nor did the relation of employer or employee exist between them'; and that his release was effective to end 'all right to recover for lost wages or medical or hospital expenses.' 4 The Circuit Court of Appeals, considering that at the outset it was 'confronted with the problem of what law should apply,' said: 'Aside from any federal legislation conferring a right of subrogation or indemnification upon the United States, it would seem that the state rules of substantive common law would govern an action brought by the United States in the role of a private litigant. Erie R. Co. v. Tompkins, 304 U.S. 64, 71, 78, 58 S.Ct. 817, 819, 822, 82 L.Ed. 1188, 114 A.L.R. 1487; United States v. Moscow-Idaho Seed Co., supra, 9 Cir., 92 F.2d 170, at pages 173, 174.' 153 F.2d at page 960. The court then indicated agreement with appellant that California's statutory law, namely, § 49 of the Civil Code, was controlling and concluded that the Government's case 'must fail for two reasons: first, because the government-soldier relation is not within the scope of § 49 of the Code, and, second, because the government is not a 'master' and the soldier is not a 'servant' within the meaning of the Code section.' 153 F.2d at page 961. The court further concluded, however, that Etzel's release 'covered his lost wages and medical expenses as elements of damage,' and therefore was effective to discharge all liability, including any right of subrogation in the United States 'without statutory authority.' Finally the opinion stated: '* * * it seems clear that Congress did not intend that for tortious injuries to a soldier in time of war, the government should be subrogated to the soldier's claims for damages.' 153 F.2d at page 963. 5 See note 3. The Government's claim, of course, is not one for subrogation. It is rather for an independent liability owing directly to itself as for deprivation of the soldier's services and 'indemnity' for losses caused in discharging its duty to care for him consequent upon the injuries inflicted by appellants. See Robert Mary's Case, 9 Co. at 113 a. It is, in effect, for tortious interference by a third person with the relation between the Government and the soldier and consequent harm to the Government's interest, rights and obligations in that relation, not simply to subrogation to the soldier's rights against the tort-feasors. 6 We may assume that the release was not effective to discharge any liability owing independently to the Government, cf. note 5, although fully effective as against any claim by the soldier. Only if such an independent liability were found to exist would any issue concerning the release be reached. 7 Including the powers of Congress to 'provide for the common Defense,' 'raise and support Armies,' and 'make Rules for the Government and Regulation of the land and naval Forces,' U.S. Const., Art. I, § 8, as well as 'To declare War' and 'To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers * * *.' Ibid. 8 The decision of the Circuit Court of Appeals seems to have been predicated upon the assumption that Congress could override any contrary rule of state law and that the California law governs only in the absence of Congress' affirmative action. See note 4 supra. 9 See U.S. Const., Art. IV, § 3, cl. 2: 'The Congress shall have Power to dispose of and make all needful Rules and Regulations respecting the Territory or other Property belonging to the United States * * *'; Camfield v. United States, 167 U.S. 518, 524, 17 S.Ct. 864, 866, 42 L.Ed. 260: '* * * the government has, with respect to its own lands, the rights of an ordinary proprietor, to maintain its possession and to prosecute trespassers'; United States v. Walter, 263 U.S. 15, 17, 44 S.Ct. 10, 11, 68 L.Ed. 137: 'The United States can protect its property by criminal laws * * *.' 10 Board of Commissioners of Jackson County v. United States, 308 U.S. 343, 60 S.Ct. 285, 84 L.Ed. 313; Deitrick v. Greaney, 309 U.S. 190, 60 S.Ct. 480, 84 L.Ed. 694; Royal Indemnity Co. v. United States, 313 U.S. 289, 61 S.Ct. 995, 85 L.Ed. 1361; D'Oench Duhme & Co. v. Federal Deposit Ins. Corporation, 315 U.S. 447, 62 S.Ct. 676, 86 L.Ed. 956; United States v. Allegheny County, 322 U.S. 174, 64 S.Ct. 908, 88 L.Ed. 1209; Holmberg v. Armbrecht, 327 U.S. 392, 66 S.Ct. 582, 90 L.Ed. 743, 162 A.L.R. 719. See also discussion in Notes, Federal Common Law in Government Action for Tort (1946) 41 Ill.L.Rev. 551; Exceptions to Erie v. Tompkins: The Survival of Federal Common Law (1946) 59 Harv.L.Rev. 966. 11 If the ruling followed, that the waters of an interstate stream must be equitably apportioned among the states through which it flows in the arid regions of the West, is not properly to be characterized as merely one of 'federal common law,' it marks off at any rate another area for federal judicial decision not dependent on application of state law or, indeed, upon the existence of federal legislation. 12 The problem of the Government's immunity to suit is different, of course, from that of the nature of the substantive rights it may acquire, for example, by the purchase of property as against claims of others for which there may or may not be available a legal remedy against it. 13 See Blair v. Commissioner, 300 U.S. 5, 57 S.Ct. 330, 81 L.Ed. 465; Reconstruction Finance Corporation v. Beaver County, 328 U.S. 204, 66 S.Ct. 992, 90 L.Ed. 1172. 14 That is, if potential added liability ever can be considered as having effect to deter the commission of negligent torts, the imposition of liability to indemnify the Government in addition to indemnifying the solider conceivably could be thought to furnish some additional incentive for avoiding such harms. 15 See note 5 supra. 16 As to the ancient action for loss of services, existent in Braction's day, see Wigmore, Interference With Social Relations (1887) 21 Amer.L.Rev. 764; VIII Holdsworth, A History of English Law (2d ed., 1937) 427—430; II Id., 459—464; IV Id., 379—387; Pollock, The Law of Torts (13th ed.) 234—239; Clerk & Lindsell on Torts (8th ed.) 201—212. 17 Extension of the action per quod servitium amisit to domestic relations, upon a fictional basis, took place as early as 1653. Norton v. Jason, Style 398; see Winfield, Textbook of the Law of Tort (2d ed.) 257. 18 Analogies are drawn concerning the nature of the relation both on the basis of status, underlying the earlier forms of liability, and on that of its asserted contractual character, in the latter instance to the rather far-fetched extent of regarding the drafted soldier as having entered into a 'contract implied in law.' 19 E.g., in the fiction of loss of services involved in the father's action for a daughter's seduction and in the husband's action for loss of consortium. Compare Serjeant Manning's oft-quoted statement that 'the quasi fiction of servitium amisit affords protection to the rich man whose daughter occasionally makes his tea, but leaves without ledress the poor man whose child is sent unprotected to earn her bread amongst strangers.' Note to Grinnell v. Wells, 7 Man. & Gr. at p. 1044. 20 That is, in the phase stressing that the question is not to be determined by applying state law, the emphasis is put upon the federal aspect of the case, but in that advancing the thesis of liability for acceptance as the federal rule, stress goes to the tort grounding of the argument. 21 The Government does not contend that the liability sought has existed heretofore. It frankly urges the creation of a new one. The only decision determining the matter, which has come to our attention, in addition to the cases cited above in note 2, is that of the High Court of Australia in Commonwealth v. Quince, 68 Comm.L.Rep. 227, aff'g, (1943) Q.S.R. 199, denying liability. See also Attorney General v. Valle-Jones (1935) 2 K.B. 209, reaching a contrary result, in which however the principal issue apparently went by concession. 22 See, e.g., 35 Stat. 1097, 18 U.S.C. § 94, 18 U.S.C.A. § 94, (enticing desertion from the military or naval service); 35 Stat. 1097, 18 U.S.C. § 95, 18 U.S.C.A. § 95, (enticing workmen from arsenals or armories); 35 Stat. 1097, 18 U.S.C. § 99, 18 U.S.C.A. § 99 (robbery of personal property belonging to the United States); 35 Stat. 1097, 18 U.S.C. § 100, 18 U.S.C.A. § 100 (embezzlement of property belonging to the United States). Of course it has not been necessary for Congress to pass statutes imposing civil liability in those situations where it has been understood since the days of the common law that the sovereign is protected from tortious interference. Thus, trespass on land belonging to the United States is a civil wrong to be remedied in the courts. Cotton v. United States, 11 How. 229, 13 L.Ed. 675. 23 Necessarily such an element or effect often, if not always, exists whenever a new liability is created, as at common law, in the nature of responsibility for tort. This, however, could not be made an invariably controlling consideration in cases presenting common-law issues concerning such liabilities to tribunals whose business it is primarily to decide them, for to do this would forestall all growth in the law except by legislative action. The factor, however, is one generally to be taken into account and weighed against the social need dictating the new responsibility, in cases squarely presenting those issues and not complicated, as this case is, by considerations arising from distributions of power in the federal system.
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332 U.S. 245 67 S.Ct. 1552 91 L.Ed. 2030 FAHEY et al.v.MALLONEE et al. No. 687. Argued and Submitted April 30, 1947. Decided June 23, 1947. Appeal from the District Court of the United States for the Southern District of California. Oscar H. Davis, of Washington, D.C., for appellants. Wyckoff Westover, of Los Angeles, Cal., for appellees Paul Mallonee et al. Charles K. Chapman, of Long Beach, Cal., for appellee Long Beach Federal Savings & Loan Ass'n. Everett W. Mattoon, of Los Angeles, Cal., for State of California, as amicus curiae, by special leave of Court. [Argument of Counsel from page 246 intentionally omitted] Louis W. Myers, Pierce Works, and Richard Fitzpatrick, all of Los Angeles, Cal., for appellee Federal Home Loan Bank of Los Angeles. Robert H. Wallis, pro se, and Raymond Tremaine, of Los Angeles, Cal., for appellee, Robert H. Wallis. Harry O. Wallace, of Long Beach, Cal., for appellee Title Service Co. Mr. Justice JACKSON delivered the opinion of the Court. 1 A specially constituted three-judge District Court has summarily, without trial, entered final judgment ousting a Conservator who, on orders of the Federal Home Loan Bank Commissioner, had taken pssession o f the Long Beach Federal Savings and Loan Association. It granted this and other relief on the principal ground that § 5(d) of the Home Owners' Loan Act of 1933, as amended, 12 U.S.C.A. § 1464(d), violates Article I, §§ 1 and 8 of the Constitution. 2 The Federal Home Loan Administration on May 20, 1946, without notice or hearing, appointed Ammann conservator for the Association and he at once entered into possession. The grounds assigned were that the Association was conducting its affairs in an unlawful, unauthorized and unsafe manner, that its management was unfit and unsafe, that it was pursuing a course injurious to, and jeopardizing the interests of, its members, creditors and the public. Plaintiffs at once commenced this class action in the right of the Association against the Conservator and Fahey, Chairman of the Federal Home Loan Bank Board, the Association as a nominal defendant, and several others not important to the issue here. The complaint alleged that the Conservator and the Chairman had seized the property without due process of law, motivated by malice and ill will, and that the seizure for various reasons was in violation of the Constitution. It asked return of the Association to its former management, permanent injunction against further interference, and other relief. Other parties in interest intervened. Temporary restraining orders issued and a three-judge court was duly convened. 3 Personal service was secured upon Ammann, the Conservator, but Fahey, the Federal Home Loan Bank Commissioner officially an inhabitant of the District of Columbia, could not be served in California. A motion for substituted service, therefore, was granted and process was served upon him in the District of Columbia. It was believed that this was authorized by Judicial Code, § 57, 28 U.S.C. § 118, 28 U.S.C.A. § 118. Ammann moved to dismiss the complaint on the ground that it failed to state a cause of action. Fahey appeared specially to move dismissal or quashing return of service on him upon the ground that he could not, in his official capacity, be sued in California and had not been served properly with process. Neither had answered the complaint, nor had their time to do so expired, when final judgment was granted against them. 4 The three-judge court set a variety of pending motions for argument and, after argument mainly on the constitutionality of § 5(d), with only pleadings and motion papers before it, held the section unconstitutional, ordered removal of the Conservator, permanently enjoined the authorities from holding an administrative hearing on the matter, permanently enjoined an apprehended merger, restored the institution to its former management, ordered the Conservator to account and enjoined these authorities 'from ever asserting any claims, right, title or interest' in or to the Association's property. The case is here on direct appeal. 50 Stat. 752—753, 28 U.S.C. §§ 349a, 380a, 28 U.S.C.A. §§ 349a, 380a. 5 It is manifest that whatever merit there may be in various subsidiary and collateral questions, this drastic decree can stand only if the section, as applied here, is unconstitutional. 6 Its defect is said to consist of delegation of legislative functions to the supervising authority without adequate standards of action or guides to policy. Section 5(d) of the Act gives to the Board 'full power to provide in the rules and regulations herein authorized for the reorganization, consolidation, merger, or liquidation of such associations, including the power to appoint a conservator or a receiver to take charge of the affairs of any such association, and to require an equitable readjustment of the capital structure of the same; and to release any such association from such control and permit its further operation.' 48 Stat. 133, 12 U.S.C. § 1464(d), 12 U.S.C.A. § 1464(d). This, the District Court held, was unconstitutional delegation of the congressional function. It relied on Panama Refining Co. v. Ryan, 293 U.S. 388, 5 S.Ct. 24 1, 79 L.Ed. 446, and Schechter Poultry Corporation v. United States, 295 U.S. 495, 55 S.Ct. 837, 79 L.Ed. 1570, 97 A.L.R. 947. 7 Both cited cases dealt with delegation of a power to make federal crimes of acts that never had been such before and to devise novel rules of law in a field in which there had been no settled law or custom. The latter case also involved delegation to private groups as well as to public authorities. Chief Justice Hughes emphasized these features, saying that the Act under examination was not merely to deal with practices 'which offend against existing law, and could be the subject of judicial condemnation without further legislation, or to create administrative machinery for the application of established principles of law to particular instances of violation. Rather, the purpose is clearly disclosed to authorize new and controlling prohibitions through codes of laws which would embrace what the formulators would propose, and what the President would approve or prescribe, as wise and beneficent measures for the government of trades and industries in order to bring about their rehabilitation, correction, and development, according to the general declaration of policy in section one.' Schechter Poultry Corporation v. United States, 295 U.S. 495, 535, 55 S.Ct. 837, 845, 79 L.Ed. 1570, 97 A.L.R. 947. 8 The savings and loan associations with which § 5(d) deals, on the other hand, are created, insured and aided by the federal government. It may be that explicit standards in the Home Owners' Loan Act would have been a desirable assurance of responsible administration. But the provisions of the statute under attack are not penal provisions as in the case of Lanzetta v. State of New Jersey, 306 U.S. 451, 59 S.Ct. 618, 83 L.Ed. 888, or United States v. Cohen Grocery Co., 255 U.S. 81, 41 S.Ct. 298, 65 L.Ed. 516, 14 A.L.R. 1045. The provisions are regulatory. They do not deal with unprecedented economic problems of varied industries. They deal with a single type of enterprise and with the problems of insecurity and mismanagement which are as old as banking enterprise. The remedies which are authorized are not new ones unknown to existing law to be invented by the Board in exercise of a lawless range of power. Banking is one of the longest regulated and most closely supervised of public callings. , it is one in which accumulated experience of supervisors, acting for many states under various statutes, has established well-defined practices for the appointment of conservators, receivers and liquidators. Corporate management is a field, too, in which courts have experience and many precedents have crystallized into well-known and generally acceptable standards. A discretion to make regulations to guide supervisory action in such matters may be constitutionally permissible while it might not be allowable to authorize creation of new crimes in uncharted fields. 9 The Board adopted rules and regulations governing appointment of conservators. They provided the grounds upon which a conservator might be named,1 and they are the usual and conventional grounds found in most state and federal banking statutes.2 They are sufficiently explicit, against the background of custom, to be adequate for proper administration and for judicial review if there should be a proper occasion for it. 10 It is complained that these regulations provide for hearing after the conservator takes possession instead of before. This is a drastic procedure. But the delicate nature of the institution and the impossibility of preserving credit during an investigation has made it an almost invariable custom to apply supervisory authority in this summary manner. It is a heavy responsibility to be exercised with disinterestedness and restraint, but in the light of the history and customs of banking we cannot say it is unconstitutional.3 11 In this case an administrative hearing was demanded and specifications were asked as to the charges against the management of the Association. The hearing was granted and a statement of complaints against the management was furnished. 12 The causes for the appointment of a conservator as therein set forth by the Board included withdrawals by the president without proper voucher therefor; payment of salaries and fees not commensurate with services rendered; a director's unlawful removal of a cashier's check in the amount of $50,000 during an examination by Federal Home Loan Bank examiners; leasing properties of the Association for a twenty-year period on terms which would not provide adequate consideration to the Association; use of the Association for personal gain of one or more officers and directors; failure to maintain proper accounts and to make proper reports; and falsification of records. It also charged certain manipulations of the affairs of another institution by te presiden t of this institution. 13 The plaintiffs nevertheless demanded and obtained an injunction to prevent the administrative hearing and they have therefore cut off the making of record as to whether these charges are well-founded. Nor did the trial court take evidence on the subject. We must assume that the supervising authorities would be able to sustain the statements of fact and to justify the conclusions in their charges for the purpose of determining the case without trial. We are therefore unable to agree with the court below that the section is invalid and hence that regardless of the charges the management was free to go on undisciplined and unchecked. 14 But even if the section were defective, which we think it is not in a constitutional sense, another obstacle stands in the way of ousting this conservator. 15 The Long Beach Federal Savings and Loan Association was organized in 1934 under § 5 of the Home Owners' Loan Act of 1933, subsection (d) of which is now sought to be declared unconstitutional. The present management obtained a charter which provided that the Association 'shall at all times be subject to the Home Owners' Loan Act of 1933, providing for Federal savings and loan associations, and to any amendments thereof, and to valid rules and regulations made thereunder as the same may be amended from time to time,' and that it might be 'liquidated, merged, consolidated, or reorganized, as is provided in the rules and regulations for Federal savings and loan associations.' In 1937, upon the Association's request, an amended charter was issued which likewise provided that the Association was to exercise its powers subject to the Home Owners' Loan Act and regulations issued thereunder. 16 This is a stockholder's derivative action in which plaintiffs sue only in the right of the Association. It is an elementary rule of constitutional law that one may not 'retain the benefits of the Act while attacking the constitutionality of one of its important conditions.' United States v. City and County of San Francisco, 310 U.S. 16, 29, 60 S.Ct. 749, 756, 84 L.Ed. 1050. As formulated by Mr. Justice Brandeis, concurring in Ashwander v. Tennessee Valley Authority, 297 U.S. 288, 348, 56 S.Ct. 466, 483, 80 L.Ed. 688, 'The Court will not pass upon the constitutionality of a statute at the instance of one who has availed himself of its benefits.' 17 It the name and right of the Association it is now being asked that the Act under which it has its existence be struck down in important particulars, hardly severable from those provisions which grant its right to exist. Plaintiffs challenge the constitutional validity of the only provision under which proceedings may be taken to liquidate or conserve the Association for the protection of its members and the public. If it can hold the charter that it obtained under this Act and strike down the provision for terminating its powers or conserving its assets, it may perpetually go on, notwithstanding any abuses which its management may perpetrate. It would be intolerable that the Congress should endow an Association with the right to conduct a public banking business on certain limitations and that the Court at the behest of those who took advantage from the privilege should remove the limitations intended for public protection. It would be difficult to imagine a more appropriate situation in which to apply the doctrine that one who utilizes an Act to gain advantages of corporate existence is estopped from questioning the validity of its vital conditions. We hold that plaintiffs are estopped, as the Association would be, from challenging the provisions of the Act which authorize the Board to prescribe the terms and conditions upon which a conservator may be named. 18 There are other important and difficult questions raised in the case which it becomes unnecessary to decide. 19 Objection is made to the administrative hearing upon the ground that it is before the same authority which has preferred the chrges and t hat it cannot be expected, therefore, to be fair and impartial and that the Act does not provide for judicial review of the Board's determination on the hearing. We cannot agree that courts should assume in advance that an administrative hearing may not be fairly conducted. We do not now decide whether the determination of the Board in such proceeding is subject to any manner of judicial review. The absence from the statute of a provision for court review has sometimes been held not to foreclose review. Stark v. Wickard, 321 U.S. 288, 64 S.Ct. 559, 88 L.Ed. 733; Board of Governors of Federal Reserve System v. Agnew, 329 U.S. 441, 67 S.Ct. 411; Administrative Procedure Act, § 10, 5 U.S.C.A. § 1009. Nor do we mean to be understood that if supervising authorities maliciously, wantonly and without cause destroy the credit of a financial institution, there are not remedies. 20 One of the allegations of the complaint is that it was intended that this institution would be merged with other institutions to the injury of its shareholders. The allegation seems to be based on the fact that a different institution with which the management of the Long Beach institution was connected was merged by the authorities in a way that was highly objectionable to some of the shareholders and aroused concern of the public authorities. We find no explicit threat to merge the Long Beach institution and there is no such finding by the court below. The Government has assured us at the bar that there is no plan for such a merger in contemplation. Nevertheless, such a merger was enjoined. In view of the absence of a finding of the threat or of evidence to sustain one, we accept the Government's assurance that merger will not follow and, hence, we do not consider it necessary to discuss the legality of hypothetical mergers. 21 Since the judgment that has been rendered against the Conservator, who was duly served with process, must be reversed, we find it unnecessary to decide whether Fahey was an indispensable party or was properly brought into the case by substituted service. 22 It is obvious that there is more to this litigation than meets the eye on the pleadings. The plaintiffs' charges that ill will and malice actuated the supervising authorities, as well as the charges of the defendants that the institution has been mismanaged and that the management is unfit, are alike undetermined by the courts below, and we make no determination or intimation concerning the merits of these issues or as to other remedies or relief than that in the judgment before us. 23 Our decision is that it was error in the court below to hold the section unconstitutional, to oust the Conservator or to enjoin any of his proceedings or to enjoin the administrative hearing, and this without prejudice to any other administrative or judicial proceedings which may be warranted by law. The judgment is reversed. 24 Reversed. 25 Mr. Justice DOUGLAS concurs in the result. 26 Mr. Justice RUTLEDGE concurs in the result and in the Court's opinion insofar as it rests upon the ground that the controlling statute, § 5(d) of the Home Owners' Loan Act of 1933, is not unconstitutional. 1 The Rules and Regulations for the Federal Savings and Loan System provide in part as follows: Part 206. Appointment of Conservator or Receiver. § 206.1. Receiver or conservator; appointment. (a) Whenever, in the opinion of the Federal Home Loan Bank Administration, any Federal savings and loan association: Footnote 1. - Continued. (1) Is conducting its business in an unlawful, unauthorized, or unsafe manner; (2) Is in an unsound or unsafe condition, or has a management which is unsafe or unfit to manage a Federal savings and loan association; (3) Cannot with safety continue in business; (4) Is impaired in that its assets donot have a n aggregate value (in the judgment of the Federal Home Loan Bank Administration) at least equal to the aggregate amount of its liabilities to its creditors, members, and all other persons; (5) Is in imminent danger of becoming impaired; (6) Is pursuing a course that is jeopardizing or injurious to the interests of its members, creditors, or the public; (7) Has suspended payment of its obligations; (8) Has refused to submit its books, papers, records, or affairs for inspection to any examiner or lawful agent appointed by the Federal Home Loan Bank Administration; (9) Has refused by the refusal of any of its officers, directors, or employees to be examined upon oath by the Federal Home Loan Bank Administration or its representative concerning its affairs; or (10) Has refused or failed to observe a lawful order of the Federal Home Loan Bank Administration, the Federal Home Loan Bank Administration may appoint the Federal Savings and Loan Insurance Corporation receiver for such Federal association, which appointment shall be for the purpose of liquidation, or the Federal Home Loan Bank Administration may appoint a conservator for such Federal association to conserve the assets of the association pending further disposition of its affairs. The appointment shall be by order, which order shall state on which of the above causes the appointment is based. Any conservator so appointed shall furnish bond for himself and his employees, in form and amount and with surety acceptable to the Governor of the Federal Home Loan Bank System, or any Deputy or Assistant Governor, but no bond shall be required of the Federal Savings and Loan Insurance Corporation as receiver. The conservator or receiver shall forthwith upon appointment take possession of the association and, at the time such conservator or receiver shall demand possession, such conservator or receiver shall notify the officer or employee of the association, if any, who shall be in the home office of the association and appear to be in charge of such office, of the action of the Federal Home Loan Bank Administration. The Secretary of the Federal Footnote 1. - Continued. Home Loan Bank Administration shall, forthwith upon adoption thereof, mail a certified copy of the order of appointment to the address of the association as it shall appear on the records of the Federal Home Loan Bank Administration and to each director of the association, known by the Secretary to be such, at the last address of each as the same shall appear on the records of the Federal Home Loan Bank Administration. If such certified copy of the order appointing the conservator or receiver is received at the offices of the association after the taking of possession by the conservator or receiver, such conservator or receiver shall hand the same to any officer or director of the association who may make demand therefor. § 206.2. Hearing on appointment. Within fourteen days (Sundays and holidays included) after the appointment of a conservator or receiver for a Federal association not at the time of such appointment in the hands of a conservator, such Federal association, which has not, by its board of directors, consented to or requested the appointment of a conservator or receiver, may file an answer and serve a written demand for a hearing, authorized by its board of directors, which demand shall state the address to which notice of hearing shall be sent. Upon receipt of such answer and written demand for a hearing the Federal Home Loan Bank Administration shall issue and serve a notice of hearing upon the institution by mailing a copy of the order of hearing to the address stated in the demand therefor and shall conduct a hearing, at which time and place the Federal association may appear and show cause why the conservator or receiver should not have been appointed and why an order should be entered by the Federal Home Loan Bank Administration discharging the conservator or receiver. Such hearing shall be held either in the district of the Federal Home Loan Bank of which such Federal association § a member or in Washington, D.C., as the Federal Home Loan Bank Administration shall determine, unless the association otherwise consents in writing. Such hearing may be held before the Federal Home Loan Bank Commissioner or before a trial examiner or hearing officer, as the Federal Home Loan Bank Administration shall determine. Such Federal association, which has not, by its board of directors, consented to or requested the appointment of a conservator or receiver, may, within seven days (Sundays and holidays included) of such appointment, serve a written or telegraphic demand, authorized by its board of directors, upon the Federal Home Loan Bank Administration for a more definite statement of the cause or causes for the action. The time of service upon the Federal Home Loan Bank Administration for the purposes of this Section shall be the time of receipt by the Secretary of the Federal Home Loan Bank Administration. § 206.4. Discharge of conservator or receiver. An order of the Federal Home Loan Bank Administration discharging a conservator and returning the association to its management shall restore to such Federal association all its rights, powers and privileges and shall restore the rights, powers and privileges of its officers and directors, all as of the time specified in such order, except as such order may otherwise provide. An order of the Federal Home Loan Bank Administration discharging a receiver and returning the association to its mangagement shall be operation of law and without any conveyance or other instrument, act or deed, restore to such Federal association all its rights, powers and privileges, revest in such Federal association the title to all its property, and restore the rights, powers and privileges of its officers and directors, all as of the time specified in such order, except as such order may otherwise provide. 24 C.F.R. Cum. Supp. § 206.1 et seq., as amended, 24 C.F.R. 1943 Supp. § 206.1. 2 Bank Conservation Act of March 9, 1933, § 203, 48 Stat. 2 3, 12 U.S.C. § 203, 12 U.S.C.A. § 203; Banking Act of 1933, § 31, 48 Stat. 194, 12 U.S.C. § 71a, 12 U.S.C.A. § 71a; National Housing Act, § 406, 48 Stat. 1259—1260, 12 U.S.C. § 1729, 12 U.S.C.A. § 1729; E.g., New York Banking Laws, § 606, 4 McKinney's Consolidated Laws of New York, c. 2; Page's Ohio General Code Ann. § 687; 1 Deering's California General Laws, Act 986, § 13.11; Massachusetts Laws Ann. c. 167, § 22; c. 170B, § 4; Jones Illinois Stat.Ann., § 14.40, Ill.Rev.Stat. 1945, c. 32, § 250. 3 See note 2.
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332 U.S. 145 67 S.Ct. 1711 91 L.Ed. 1962 GAYESv.STATE OF NEW YORK. No. 405. Argued May 2, 1947. Decided June 23, 1947. Rehearing Denied Oct. 13, 1947. See 68 S.Ct. 27. Mr. Herbert Wechsler, of New York City, for petitioner. Mr. Harry L. Rosenthal, of Rochester, N.Y., for respondent. Mr. Justice FRANKFURTER announced the judgment of the Court in an opinion in which the CHIEF JUSTICE, Mr. Justice REED and Mr. Justice JACKSON join. 1 This is another case in which release is sought from confinement under a sentence by a State court following a plea of guilty, on a claim of a denial of due process of law through want of benefit of counsel. 2 The circumstances are these. On July 15, 1938, Gayes, then a lad of 16, was arraigned in the County Court of Monroe County, New York, upon an indictment charging burglary in the third degree and petty larceny. According to the record of conviction, he was asked, in accordance with the requirement of § 308 of the New York Code of Criminal Procedure, whether 'he desired the aid of counsel,' and he answered 'No.'1 Imposition of sentence was postponed to July 28. When on that day Gayes appeared for judgment, he was asked, again according to the requirements of New York law, whether 'he had any legal cause to show, why judgment should not be pronounced against him.' New York Code of Criminal Procedure, § 480. And 'No sufficient cause appearing,' the record continues, Gayes was committed to a New York State Vocational School to be dealt with there according to law. It appears from the facts before us that Gayes did not stay at this correctional institution as long as New York law would have authorized his detention. See New York Penal Law, Consol.Laws, c. 40, §§ 2184—a and 2189, in connection with § 407. For on October 14, 1941, he pleaded guilty, in the County Court of Schenectady, New York, to a new charge of burglary in the third degree. The record of this latter proceeding does not indicate whether this time he was or was not represented by counsel. But no claim is made that this plea of guilty, or the sentence under it, has any infirmity Penal Law, Consol.Laws, c. 40, §§ 2184-a is that he was sentenced as a second offender by the inclusion of the improper sentence to the vocational school in 1938. 3 In accordance with New York procedure, Gayes, pro se, filed in the County Court of Monroe County, New York, an application to vacate the judgment rendered against him in that court on July 28, 1938. He claimed that in the proceedings which led to that judgment he had not been informed of his 'Constitutional Rights of Assistance of Counsel,' that he 'could not have understood his rights to Counsel' and that 'youths of the age of 16 years cannot Intelligently and Competently waive their rights.' Since, according to this claim, the first sentence was void, he challenged the validity of the sentence in 1941 because the length of the second sentence was partly based upon the 1938 conviction. 4 Upon this record, the county court denied the motion without opinion. As New York law then stood, no review could there be had of this determination. See People v. Gersewitz, 294 N.Y. 163, 61 N.E.2d 427. This made the county court the highest court of the State of New York for purposes of our review. Canizio v. New York, 327 U.S. 82, 85, 66 S.Ct. 452, 453, 90 L.Ed. 545. But see Chapter 706 of the New York Laws of 1947, amending Code Cr.Proc. § 517. We brought the case here, 329 U.S. 710, 67 S.Ct. 365, as one of a series, for further consideration of the circumstances under which the requirements of due process imply a duty to supply counsel to defendants in State prosecutions. 5 The guiding principles bearing on the general problem have been set forth in the opinion in Foster v. Illinois, 332 U.S. 134, 67 S.Ct. 1716, just decided. Insofar as the facts of this case present a particular variant, they are controlled by our decision in Canizio v. New York, supra. We there held that whatever doubts may arise from the circumstances of a plea of guilty, if, before sentence is imposed, the opportunities required by the Constitution for meeting the legal implications of the plea are satisfied, the sentence must stand. And so, the questions that may be raised regarding the circumstances attending the imposition of Gayes' commitment to the vocational institution in 1938 are not now open. Gayes is complaining of his sentence following his plea of guilty in 1941.2 What he wants is to be relieved of his imprisonment under that sentence. That sentence, to be sure, partly took into account his earlier sentence in 1938. But upon his subsequent sentence, as a second offender, in 1941, he had full opportunity, so far as appears, to contest whatever infirmity he may have claimed in the earlier sentence when the fact of that sentence was included in the sentence which he is now serving.3 Since the process leading up to the second sentence is not challenged he cannot now, so far as the United States Constitution is concerned, by a flank attack, challenge the sentence of 1938. 6 Judgment affirmed. 7 Mr. Justice BURTON concurs in the result. 8 Mr. Justice RUTLEDGE, with whom Mr. Justice BLACK, Mr. Justice DOUGLAS, and Mr. Justice MURPHY concur, dissenting. 9 A 16 year old boy, indigent and alone, without relatives, friends, money or counsel to aid him and, according to the undenied allegations of the petition, without knowledge of his constitutional rights,1 pleaded guilty in 1938, under an indictment specifying two highly technical and distinct charges,2 to the crime of burglary in the third degree.3 The property he was charged with intending to steal4 consisted of cigarettes of the value of 75 cents, two flashlights worth $1.00, and $3.00 in currency. The sentence imposed on that plea has been served.5 He is now confined as a second offender under sentence for another offense of similar character imposed in 1941,6 when he was 19 and also without relatives, friends or counsel so far as appears.7 10 One part of the opinion announced in this case, as I understand, takes the view that because Gayes did not attack the 1938 sentence in 1941, when he was sentenced as a second offender, he is forever foreclosed from doing so on the facts and issues presented on this record, although as a second offender he is now suffering the consequences of the 1938 sentence.8 For this conclusion reliance is placed upon no New York authorities; indeed, as I read the state cases, the Court's decision is made in the face of their rulings that the procedure petitioner has followed is the appropriate one for raising the issues he presents.9 11 I am unwilling to subscribe to such a doctrine of forfeitures concerning constitutional rights, which in the extreme circumstances of this case seems to me shocking. 12 Under all of the New York decisions which have passed upon the question,10 the proper and apparently the necessary procedure, see People v. Keller, Gen.Sess.N.Y. County, 37 N.Y.S.2d 61, 62, for attacking a sentence as second offender, upon the ground that the former conviction was invalid, is first by motion in the court imposing the initial sentence to vacate it, after which if the motion is successful the sentence for the second offense may be attacked and vacated.11 In other words, the second offender, situated as is petitioner, must first overturn his first conviction in the court where it was obtained, before he can attack the second sentence founded in part upon that conviction. 13 This procedure in my opinion is a reasonable one within the power of a state to require, at least where both offenses have taken place within its jurisdiction. And I know of no reason why this Court should disregard or override it. Much less is it within our province to invert the state procedure, if that is the effect of the dubious suggestion that petitioner's rights perhaps may be saved upon some other record 'that discloses circumstances other than those before us,' presumably if at all by motion before the court which imposed the 1941 sentence to vacate it.12 14 No state decisions are cited or, it would seem in view of the contrary authorities cited above,13 can be cited to support such a view. Nor is it required by anything said or done in Canizio v. New York, 327 U.S. 82, 66 S.Ct. 452, 90 L.Ed. 545, if indeed such a matter could ever be within our function. The Canizio decision has no relevance to this case, either for prescribing the state procedure or for the constitutional issue. It held only that where a defendant had counsel at the time of his sentence and could then have moved to withdraw his prior plea of guilty, he was not prejudiced by the convicting court's previous failure to inform him of his right to counsel. 15 That case had nothing to do with the state procedure open to one convicted as a second offender for challenging his sentence on the ground that the first conviction was invalid for federal constitutional reasons. And the facts, on the merits, were very different from those presented here. Whereas, among other things, in that case the petitioner did have counsel before his sentence was imposed, here not only was Gayes denied counsel altogether in the first trial, but so far as the record discloses he had none in the trial for the second offense. I do not think the Canizio decision can be held to cover such a wholly different situation as this. It did not rule that, if a convicted person has never had counsel, the fact that in a later proceeding he conceivably might have had such aid if he had applied for it cures the denial, more particularly when so far as appears he was treated no better during his trial for the second offense than during the first, and when moreover his present attack is made as a preliminary one required by state law to showing the second sentence invalid. 16 In my judgment it is for the state, not this Court, to say whether the attack upon the first sentence as increasing the second shall be made on the flank or frontally, or perchance in either way. Indeed, under the law of New York, which is controlling on us, the so-called 'flank' attack is apparently the only one now open to petitioner. In the face of so clear a violation of constitutional right as this case presents, we should neither foreclose that avenue nor substitute for it another dubiously available one of our own manufacture. 17 The judgment should be reversed. 1 Subsequent to the proceedings before the County Court of Monroe now under review, the minutes of the original proceedings against Gayes came to light. By stipulation of counsel these minutes are here. According to them, the precise question put to Gayes by the Assistant District Attorney in the presence of the Judge was, 'Do you need a lawyer before you enter a plea of guilty or not guilty to this indictment?' To which Gayes replied, 'No, sir.' It may be inconclusively debated whether if Gayes was asked 'if he desired the aid of counsel,' as stated in the entry in the record of conviction, he was better informed of his rights, than if he was asked, 'Do you need a lawyer?' In view of our disposition, the difference in significance becomes immaterial, and it is also immaterial whether, if there were a difference, we could consider, even in a case involving belated release from State detention, a matter not before the court whose judgment is here for review. But the differences that may exist between formal entry in the minutes of an acceptance of a plea and what was actually said contemporaneously lends foce to the caution frequently expressed that every intendment must be made in support of the due observance of law in the rendering of judgments which are collaterally attacked, often after a considerable passage of time. 2 Gayes is detained under the 1941 sentence imposed by the County Court of Schenectady. A motion attacking that sentence would, under New York law, have to be made in that court. What he is asking is the invalidation of the prior sentence, underlying as it were the Schenectady sentence, presumably as a first step in getting relief from detention under the latter sentence. We are treating this proceeding, for our purposes, as one seeking, in effect, relief from the 1941 sentence without regard to formal distinctions which might otherwise be relevant. 3 According to the State, Gayes could have raised the claim he now makes against the 1938 conviction at the time he was sentenced in 1941, and from a denial of relief could have appealed to the higher courts. This was not contradicted by the petitioner and is not brought into question in any opinion of the higher courts of New York. It has been ruled in courts of very limited authority that a second offender cannot apply for resentenceon a claim that there was a defect in the first sentence imposed by another court. See People v. Keller, 37 N.Y.S.2d 61 (Gen.Sess.N.Y.County), and People v. Paterno, 182 Misc. 491, 50 N.Y.S.2d 713 (Chatauqua County Court). Neither case, however, presented the claim that a violation of the United States Constitution vitiated the first sentence, and neither case raised the power of the court at the time of sentencing to consider such a claim. It is certainly within the power of a duly advised defendant, before pleading guilty as a second offender, to raise the constitutional invalidity of the first sentence so as to secure opportunity appropriately to challenge such invalidity. Nothing that is herein decided precludes petitioner from raising a denial of his constitutional right upon a record that discloses circumstances other than those before us. An order on such a motion is now reviewable by the New York Supreme Court and in certain instances by the New York Court of Appeals. 1 No answer was filed to the petition and the trial court determined the issues on the pleadings without hearing or appearance of petitioner in court, in person or by counsel. The allegation of petitioner that when asked whether he 'desired counsel,' he answered 'no' in the belief that he would have to pay the lawyer's fee, and was not informed to the contrary is, of course, to be taken as true in the absence of denial and of contrary evidence which might have been tendered on a hearing. 2 The first count charged that petitioner 'broke and entered the building and garage of Francis Marolow * * * with intent to commit therein the crime of larceny'; the second count charged petit larceny of the property described in the text above. 3 The sentence was to confinement in the New York State Vocational Institute, which when imposed for an unspecified term under New York Penal Law, § 2184-a carried a maximum of 10 years, which is the maximum for burglary in the third degree as a first offense. N.Y.Penal Law, § 407(3). 4 Under the second count, for petit larceny or theft, being also presumably the property with respect to which it was charged in the first count that petitioner broke and entered with intent to commit larceny. 5 Petitioner was held under the first sentence, see note 3, until December 14, 1943, when the New York Board of Parole directed that service of the sentence as second offender begin. The date of termination of the latter sentence, see note 6, was correspondingly postponed. 6 The sentence of 10 to 20 years as second offender is mandatory. N.Y.Penal Law § 1941. Had petitioner been sentenced in 1941 as a first rather than a second offender, the maximum sentence allowed would have been 5 to 10 years, N.Y.Penal Law, §§ 2189, 407, and he might have been sent to a reformatory rather than prison. N.Y.Penal Law § 2185. 7 The 'Record of Conviction' in the trial for the second offense, contained in the record here, discloses that petitioner, having been charged and arraigned, first pleaded not guilty, then ithdrew th at plea and entered one of guilty. It is then recited that petitioner appeared for judgment and, 'having been asked by the clerk whether he had any legal cause to show why judgment should not be pronounced against him, and no legal cause having been shown' or appearing to the court, judgment and sentence were thereupon pronounced. There is no recital that petitioner was represented by counsel, was informed of his rights in any manner, or admonished of the consequences of his plea. 8 See notes 3, 5, 6 supra. See also note 12 infra and text. 9 See note 11 infra. 10 In the absence of determination by a state's highest tribunal the rule announced and applied by other state courts is to be taken by us as determining questions of state law. Cf. West v. A.T. & T. Co., 311 U.S. 223, 61 S.Ct. 179, 85 L.Ed. 139, 132 A.L.R. 956. 11 If the 1938 conviction is held void, under state law petitioner then may move to vacate the 1941 sentence in the court which imposed it, and for resentencing according to state law. See People ex rel. Sloane v. Lawes, 255 N.Y. 112, 174 N.E. 80; People ex rel. Carollo v. Brophy, 294 N.Y. 540, 63 N.E.2d 95; People v. Keller, Gen.Sess.N.Y.County, 37 N.Y.S.2d 61. And the proper forum for attacking the 1938 conviction, as a preliminary to attack on that of 1941, is the one where the former was obtained, by the motion to vacate which petitioner has employed. People v. Bernoff, Misc., 61 N.Y.S.2d 46; People v. Foster, 182 Misc. 73, 42 N.Y.S.2d 831; People v. Paterno, 187 Misc. 56, 60 N.Y.S.2d 813, with which compare People v. Paterno, 182 Misc. 491, 50 N.Y.S.2d 713; cf. People v. Gersewitz, 294 N.Y. 163, 167, 61 N.E.2d 427, 428, 429; People v. Keller, supra, Gen. Sess.N.Y.County, 37 N.Y.S.2d 61 at page 63. 12 The opinion announced in conjunction with the Court's judgment seems to suggest that the decisions establishing the state procedure followed in this case are not controlling for our disposition, on what basis I am unable to understand, see note 10 supra, unless upon the untenable one that state rulings upon criminal procedures and the proper forum for utilizing them are not binding for federal determinations to the same extent as are such rulings in civil matters. Only upon some such basis is the dubious suggestion justified that petitioner should have raised the question of the validity of his first sentence at the time of his sentencing as a second offender and in that forum. Not only is this contrary to the established state procedure, see note 11, but it is expressly qualified by the further suggestion that petitioner's rights may possibly be saved 'upon a record that discloses circumstances other than those before us,' and it seems to be contradicted by the further statement that 'the questions that may be raised regarding the circumstances attending the imposition of Gayes' commitment * * * in 1938 are not now open.' It is pertinent to inquire whether Gayes is to have another chance, through a local procedure prescribed by this Court alone, or whether the constitutional questions now presented are foreclosed by his failure to follow a procedure not prescribed or, so far as appears, permitted by the state. 13 See note 11.
01
332 U.S. 155 67 S.Ct. 1569 91 L.Ed. 1968 CALDAROLAv.ECKERT et al. No. 625. Argued March 31, April 1, 1947. Decided June 23, 1947. Rehearing Denied Oct. 13, 1947. See 68 S.Ct. 30. Mr. Abraham M. Fisch, Isidor Enselman and Sidney Schiffman, all of New York City, for petitioner. Mr. Raymond Parmer, of New York City, for respondents. Mr. Justice FRANKFURTER delivered the opinion of the Court. 1 The S. S. Everagra is owned by the United States and managed in its behalf by the respondents as General Agents. (For the relevant portions of the contract and for full consideration of it in relation to issues other than those here involved, reference is made to Hust v. Moore-McCormack Lines, 328 U.S. 707, 66 S.Ct. 1218, 90 L.Ed. 1534.) On January 27, 1944, the Everagra, docked in the North River, New York City, was being unloaded by a stevedoring concern, the Jarka Company. Jarka did the unloading under a contract with the United States, negotiated through the War Shipping Administration. One of its provisions was that 'the Administrator shall furnish and maintain in good working order all' necessary equipment. Caldarola, the petitioner, was an employee of Jarka. In the course of his work on the vessel he was injured. He brought this action in the New York courts against the respodents, cla iming that his injury was caused by a defective boom and that they were liable for failing in their duty as Agents to maintain it in sound condition. 2 The New York Court of Appeals, affirming the Appellate Division in setting aside a verdict for the petitioner, 270 App.Div. 563, 61 N.Y.S.2d 164, held that under New York law the relation which the Agents bore to the vessel did not make them responsible to a third person for its condition. 295 N.Y. 463, 466, 68 N.E.2d 444. Because of claimed conflict in the decisions, particularly between this ruling and Hust v. Moore-McCormack Lines, 328 U.S. 707, 66 S.Ct. 1218, 90 L.Ed. 1534, we granted certiorari. 329 U.S. 704, 67 S.Ct. 195. 3 No doubt petitioner could have sued the United States in Admiralty. Section 2 of the Suits in Admiralty Act, 41 Stat. 525, 46 U.S.C. § 742, 46 U.S.C.A. § 742. He chose not to do so. Presumably to obtain the benefit of trial by jury, he asked for relief from New York. There is no question that the injury of which Caldarola complains is a maritime tort. As such it is suable in the State courts by virtue of § 9 of the Judiciary Act of 1789 which saves 'to suitors in all cases the right of a common-law remedy where the common law is competent to give it.' 1 Stat. 76-77, 28 U.S.C.A. § 371, subd. 3. Whether Congress thereby recognized that there were common law rights in the States as to matters also congnizable in admiralty, or whether it was concerning only with 'saving' to the States the power to use their courts to vindicate rights deriving from the maritime law to the extent that their common law remedies may be available, is a question on which the authorities do not speak with clarity. Compare Waring v. Clarke, 5 How. 441, 460, 461, 12 L.Ed. 226; Taylor v. Carryl, 20 How. 583, 598, 599, 15 L.Ed. 1028; 3 Story on the Constitution (1st ed.) 533, n. 3, with Schoonmaker v. Gilmore, 102 U.S. 118, 26 L.Ed. 95; The Hamilton, 207 U.S. 398, 28 S.Ct. 133, 52 L.Ed. 264; Chelentis v. Luckenbach S.S. Co., 247 U.S. 372, 38 S.Ct. 501, 62 L.Ed. 1171; C. J. Hendry Co. v. Moore, 318 U.S. 133, 63 S.Ct. 499, 87 L.Ed. 663; Seas Shipping Co. v. Sieracki, 328 U.S. 85, 88, 89, 66 S.Ct. 872, 874, 90 L.Ed. 1099. In any event, whether New York is the source of the right or merely affords the means for enforcing it, her determination is decisive that there is no remedy in its courts for such a business invitee against one who has no control and possession of premises. Compare Douglas v. New York, New Haven & Hartford R. Co., 279 U.S. 377, 49 S.Ct. 355, 73 L.Ed. 747, and Testa v. Katt, 330 U.S. 386, 67 S.Ct. 810. 4 The New York Court of Appeals authoritatively determines who is liable, in New York, for such an occurrence as that of which Caldarola complainant. Insofar as the issues in this case exclusively concern New York law, that court had the final say in holding that one in the relation of the respondents to the petitioner is not liable for the tort of which the latter complains. But to the extent that the determination of tort liability in New York is entangled with the construction of the contract between the Agents and the United States, the interpretation of that contract is a matter of federal concern and is not concluded by the meaning which the State court may find in it. 5 We agree that if, on a fair reading of the contract, the control which the Agents had over the vessel is the kind of control which New York requires as a basis of liability to third persons, the New York courts cannot so read the contract as to deny the right which New York recognizes. It is not claimed that an injured party has rights under the agency contract, or that it created duties to third persons. Robins Dry Dock & Repair Co. v. Flint, 275 U.S. 303, 48 S.Ct. 134, 72 L.Ed. 290. And so the narrow question is whether the Agents were in possession and control of the Everagra. This is the crucial issue, because liability in tort by the Agents for Caldarola's injury would only arise in New York when there is such possessio and contr ol of premises on which injury occurs, due to negligence in their maintenance. Cullings v. Goetz, 256 N.Y. 287, 176 N.E. 397. The United States, as amicus curiae, submitted what we deem to be conclusive considerations against reading the contract so as to find the Agents to be owners pro hac vice in possession and control of the vessel. The consequences, to both the national and international interests of the United States, of such a construction would be too far-reaching to warrant such a forced reading merely in order to have a basis on which to build liability under the law of New York. Serious issues affecting the immunity of Government vessels in foreign ports as well as immunity from regulation and taxation by local governments would needlessly be raised. After all, the question is not whether petitioner may be compensated for his injury. Congress has made provision for that. Petitioner insists, in order to enable him to sue in the courts of New York, that the Agents are to be deemed, as a matter of federal law, owners of the vessel pro hac vice and, therefore, as a matter of State law, subject to the duties of such ownership under New York law toward business invitees. We reject this construction. 6 Our previous decisions do not require it. Hust v. Moore-McCormack Lines, supra, arose under the Jones Act. Act of March 4, 1915, 38 Stat. 1185, as amended, June 5, 1920, 41 Stat. 1007, 46 U.S.C.A. § 688. We there held that under the Agency contract the Agent was the 'employer' of an injured seaman as that term is used in the Jones Act, and a seaman could therefore bring the statutory action against such an 'employer.' The Court did not hold that the Agency contract made the Agent for all practical purposes the owner of the vessel. It did not hold that it imposed upon him, as a matter of federal law, duties of care to third persons, more particularly to a stevedore under employment of a concern unloading the vessel pursuant to a contract with the United States. Brady v. Roosevelt Steamship Co., 317 U.S. 575, 63 S.Ct. 425, 87 L.Ed. 471, is likewise remote from the issues decisive of this case. It merely held that the Suits in Admiralty Act, by furnishing an in personam remedy against the United States, did not free the Agent from liability for his own torts. The Brady case did not reach the 'different question' whether 'a cause of action' against the Agent had been established. 317 U.S. at page 585, 63 S.Ct. at page 430, 87 L.Ed. 471. That is the precise question here, and more particularly, whether the contract created a relationship from which, under New York law, liability as to business invitees followed. 7 Judgment affirmed. 8 Mr. Justice DOUGLAS, with whom Mr. Justice BLACK and Mr. Justice MURPHY concur, dissenting. 9 For the reasons stated in my separate opinion in Hust v. Moore-McCormack Lines, 328 U.S. 707, 734, 66 S.Ct. 1218, 1231, 90 L.Ed. 1534, I think that respondents were owners pro hac vice of the vessel since the business of managing and operating it was their business. They were, therefore, principals and liable to petitioner, a longshoreman who was injured while working on the deck of the vessel by reason of the breaking of a cargo boom, part of the ship's gear. 10 The Circuit Court of Appeals for the Second Circuit has reached the same result in a case decided since Hust v. Moore-McCormack Lines. In Militano v. United States, 2 Cir., 156 F.2d 599, that court held that the agent under the same form of operating agreement as we have here was owner pro hac vice. Swan, J., speaking for the court, said in reference to the Hust case, 156 F.2d at page 602, 'If the agent remains the employer sufficiently to be liable to members of the crew under the Jones Act, we think it cannot escape the duties of an owner pro hac vice in other respects. Thus it has the duty to furnish stevedores with a safe place to work, a duty which is analogous to that owed by a landowner to a business visitor.' The Court does not essay to answer that argument; nor does it address itself to the facts which I reviewed in the Hust case and which establish that the business of managing and operating the vessel was the business of the agent. It avoids analysis of the actual arrangement by viewing with alarm the consequences to the Government of such a holding as applied in other situations. But we are here concerned with private rights which press for recognition. It is no answer to the legal argument on which those private rights rest that the Government might be inconvenienced if they were recognized. It is plain under this operating agreement that the United States is merely the underwriter of the financial risks of the venture while the private operator performs the managerial functions in the usual way. To call that government operation is to ignore the realities of the relationship. Whatever the consequences in other situations, it is shocking to find private operators getting immunity in this manner from their traditional liability for tort claims. 11 Mr. Justice RUTLEDGE, dissenting. 12 I agree with respondents' counsel and the Court that Hust v. Moore-McCormack Lines, 328 U.S. 707, 66 S.Ct. 1218, 90 L.Ed. 1534, does not rule this case. Nevertheless I cannot agree with the Court's view that either New York law of the so-called 'agency contract,' identical with that involved in the Hust case, immunizes respondents from the consequences of their negligence causing petitioner's injury. 13 The Hust case involved the rights of seamen, not of longshoremen.1 Also it arose under the Jones Act, 46 U.S.C. § 688, 46 U.S.C.A. § 688, whereas here liability is grounded upon maritime tort. And the Hust decision rested in part upon the effects of the so-called Clarification Act of 1943, 50 U.S.C.App. § 1291, 50 U.S.C.A.Appendix, § 1291, which has no bearing in this case, since seamen are not involved. 14 The Hust decision flatly rejected the view that the events there in question2 had been effective to strip the seaman of his various preexisting remedies, replacing them with the single remedy of suit provided by the Suits in Admiralty Act.3 46 U.S.C. § 742, 46 U.S.C.A. § 742. The necessary result was to preserve not merely the seaman's rights under the Jones Act but also his other preexisting ones.4 For if the conjunction of events put forward in the Hust case as having made the Suits in Admiralty Act remedy the only one available to the seaman was thus effective, the Jones Act remedy as well as others was thereby excluded. And if it was not excluded, neither were those others long possessed by seamen.5 The Hust decision was therefore not merely a construction of the Jones Act. That Act was simply a specific fulcrum for turning the broader issue presented. 15 But seamen's rights are not longshoremen's rights and the events combining to present the question concerning seamen's rights in the Hust case were not conclusive upon longshoremen's rights. This is true although in some instances longshoremen, through legislation or by virtue of their succession to seamen occasioned by the industry's evolution in some phases of ship and shore duty, have been held entitled to similar protections. Seas Shipping Co. v. Sieracki, 328 U.S. 85, 66 S.Ct. 872, 90 L.Ed. 1099; Atlantic Transport Co. v. Imbrovek, 234 U.S. 52, 34 S.Ct. 733, 58 L.Ed. 1208, 51 L.R.A.,N.S., 1157. The question in this case therefore is not one necessarily governed by the same considerations as applied in the cases of seamen covered by the Hust decision. 16 But, as the Court recognizes, it is one of maritime tort, although longshoremen rather than seamen are involved; and is moreover 'suable in the State courts by virtue of § 9 of the Judiciary Act of 1789 which saves 'to suitors, in all cases, the right of a common law remedy, where the common law is competent to give it." Notwithstanding the characterization as maritime tort, the Court skirts the question whether the source of the right is New York law or, on the contrary, is federal law for which New York, pursuant to § 9, merely supplies a means for enforcement. For in either event, it says, '(New York's) determination is decisive that there is no remedy in its courts for such a business invitee against one who has no control and possession of (the) premises.' From this conclusion I disagree. For, if the liability here is founded in federal law, as creating the maritime tort, then New York law has nothing to do with creating or nullifying the substantive right. Its sole function is to supply the remedy commanded by § 9 of the Judiciary Act. Testa v. Katt, 330 U.S. 386, 67 S.Ct. 810. And in my judgment the liability here, since it arises from a maritime tort, is a creature of federal law in its entirety, not of state law.6 I therefore do not agree that any substantive issues in the case 'exclusively concern New York law' or that in any respect that state's Court of Appeals 'had the final say in holding that one in the relation of the respondents to the petitioner is not liable for the tort of which the latter complains.' I do not understand how the Court can leave open the question whether New York law has a hand in creating the right sued on or one only in supplying a forum and remedy, and at the same time can rely on New York law as having any part in creating the right or nullifying it, as it seems to do. The result does not simply entangle state law with federal law in the substantive phase of the case. It entangles hypothetically applicable state law in one phase with federal law in another. 17 Regarding the case, as I do, as being controlled in its substantive aspect altogether by federal law, I do not think that law requires or should permit the result the Court reaches. Regardless of whether the so-called 'agency' contract makes the operating company an 'agent,' an 'owner pro hac vice,' or technically something else in relation to the United States, the federal maritime law in my opinion well might hold responsible to an injured longshoreman one who has knowledge that such persons will come aboard and who undertakes to keep the vessel and its equipment in safe condition for their use.7 More especially should such a rule apply when the person so undertaking is the only one constantly on board to observe the creation of hazardous risks in the vessel's daily routines and, in addition, has such a degree of control over their creation as the 'agent' did here. 18 But, in any event, the same result should be reached on the basis of construction of the contract. Whether this is put upon the ground stated in the opinion of Mr. Justice DOUGLAS, that the 'agent' became owner pro hac vice, or in the view of the contract taken in the Hust case, with reference to application of the Jones Act, is largely immaterial, perhaps only a matter of words.8 19 That view, incorporating the rule of the Hearst case,9 we have only recently extended to apply in cases of coverae of the § ocial Security Act, 42 U.S.C.A. § 301 et seq., and the Fair Labor Standards Act, 29 U.S.C.A. § 201 et seq. United States v. Silk (Harrison v. Greyvan Lines), 331 U.S. 704, 67 S.Ct. 1463; Rutherford Food Corp. v. McComb, 331 U.S. 722, 67 S.Ct. 1473. While the liability here is not legislative in origin, nevertheless as in the Hust case, application of the common-law 'control' test to defeat the longshoreman's remedy under the state procedure, as provided by § 9 of the Judiciary Act of 1789, cannot 'be justified in this temporary situation unless by inversion of that wisdom which teaches that 'the letter killeth, but the spirit giveth life." 328 U.S. at page 725, 66 S.Ct. at page 1227, 90 L.Ed. 1534. 20 Finally, in my opinion, the terms of the agreement in its provisions for indemnity confirm the conclusion that liability of the 'agent' in such a case as this was contemplated. Not only is there broad indemnity 'for all expenditures of every kind made by it in performing, procuring or supplying the services, facilities, stores, supplies or equipment as required hereunder,' with specified exceptions not covering such liabilities as are now in question. The indemnity also expressly provided: 'To the extent not recovered from insurance, the United States shall also reimburse the General Agent for all crew expenditures (accruing during the term hereof) in connection with the vessels hereunder, including, without limitation, all disbursements for or on account of wages, extra compensation, overtime, bonuses, penalties, subsistence, repatriation, travel expense, loss or personal effects, maintenance, cure, vacation allowances, damages or compensation for death or personal injury or illness, and insurance premiums, required to be paid by law, custom, or by the terms of the ship's articles or labor agreements * * *.' (Emphasis added.) 21 as well as for payments made to pension funds and for social security taxes. This clause specifically contemplated that the 'agent' should be responsible for paying claims not only for maintenance and cure but also for 'damages or compensation for death or personal injury or illness,' and should be indemnified for such payment. A narrow construction, of course, would limit the provisions for payment and indemnity to payments made without resort to suit. On the other hand, even a literal interpretation would cover payments made by the 'agent' upon judgments recovered against it on claims of the character specified. I know of no good reason why the narrow view should be accepted or why the Government by its contract should desire to uproot seamen and others, including longshoremen insofar as they have acquired seamen's rights aboard ship, from their normally applicable remedies, in the absence of either explicit statutory command or express contractual provision to that effect. Moreover, in view of the scope of the indemnity provided, I see no possible harm that could be inflicted on the 'agent' from interpreting the contract so as to allow the normally applicable remedies to apply. 22 Accordingly, I would reverse the judgment of the Court of Appeals. 1 Congress and the President, in the legislative and executive action taken in connection with the Merchant Marine and pertinent in the Hust case, were concerned with the rights of seamen, not primarily or perhaps even incidentally with those of longshoremen. 2 In the Hust case, after noting the disruptive consequences for seamen's longsettled rights flowing from the view that they had been reduced for assertion to the single remedy provided by the Suits in Admiralty Act, we said: 'We may assume that Congress could authorize so vast a disturbance to settled rights by clear and unequivocal command. It is not permissible to find one by implication. Brady v. Roosevelt S.S. Co., supra, 317 U.S. (575), at page 580, 63 S.Ct. (425), at page 428, 87 L.Ed. 471. Here the disruption, if it has occurred, has done so only as an implied result of the conjunction of the Suits in Admiralty Act's provisions with the Government's emergency action in taking over the shipping industry for war purposes.' 328 U.S. at page 722, 66 S.Ct. at page 1225, 90 L.Ed. 1534. No such intent, we said, could be found in any action of Congress, or of that body and the President, in exercising their powers to bring the industry under governmenta control; or in the Suits in Admiralty Act or the Jones Act as applied to the relation created by the 'agency' contract. 3 See note 2. 4 Confirmation of the conclusions summarized in note 2, supra, was found in the legislative history of the Clarification Act of 1943, 50 U.S.C.App. § 1291, 50 U.S.C.A.Appendix, § 1291, and particularly in the provision for election of remedies given by § 1, as to injuries accruing on or after October 1, 1941, and before March 24, 1943, the Act's effective date. Opinion was expressly reserved as to the effect of that Act concerning injuries occurring after its effective date. 328 U.S. at page 727, 66 S.Ct. at page 1228, 90 L.Ed. 1534. 5 In the Hust case we said of the argument that the Suits in Admiralty Act remedy had become exclusively available for asserting seamen's rights that, with specified exceptions, 'the various rights of seamen, enforceable by various proceedings in admiralty and at law, in state and federal courts, are swept into one hopper, the suit against the Government * * *.' 328 U.S. at page 720, 66 S.Ct. at page 1224, 90 L.Ed. 1534. 6 28 U.S.C. § 371, 28 U.S.C.A. § 371, derived from § 9 of the Judiciary Act of 1789, is a recognitio by Congre §§ that the states may exercise whatever jurisdiction the common law had concurrently with admiralty. See Waring v. Clarke, 5 How. 441, 460, 461, 12 L.Ed. 226. However, since 'It is not a remedy in the common-law courts which is saved, but a common-law remedy,' The Moses Taylor, 4 Wall. 411, 431, 18 L.Ed. 397, it has been held that where suit is brought under the saving clause the right to be enforced is that 'recognized by the law of the sea.' Chelentis v. Luckenbach S.S. Co., 247 U.S. 372, 384, 38 S.Ct. 501, 504, 62 L.Ed. 1171. 'The general rules of the maritime law apply whether the proceeding be instituted in an admiralty or common-law court.' Carlisle Packing Co. v. Sandanger, 259 U.S. 255, 259, 42 S.Ct. 475, 477, 66 L.Ed. 927. The commentators recognize this to be the rule now, 1 Benedict on Admiralty (6th ed.) 53—55; Stumberg, Maritime Cases in Common-law Courts (1925) 3 Tex.L.Rev. 246; Mole and Wilson, A Study of Comparative Negligence (1932) 27 Corn.L.Q. 333, 353—355, though the matter seems not to have been decided prior to the Chelentis case. Cf. The Hamilton, 207 U.S. 398, 404, 28 S.Ct. 133, 134, 52 L.Ed. 264. 7 'One who does an act or carries on an activity upon land on behalf of the possessor thereof, is subject to the same liability, and enjoys the same immunity from liability, for bodily harm caused thereby to others within and outside the land as though he were the possessor of the land.' Restatement, Torts, § 383. 'An agent who has the custody of land or chattels and who should realize that there is an undue risk that their condition will cause harm to the person, land, or chattels of others is subject to liability for such harm caused, during the continuance of his custody, by his failure to use care to take such reasonable precautions as he is authorized to take.' Restatement, Agency, § 355. 8 In that case, assuming that the agreement made Hust, the injured seaman, an employee of the United States for purposes of ultimate control, in spite of the meticulous character of the differences between it and the Maritime Commission's standard contract, we said: 'But it does not follow from the fact that Hust was technically the Government's employee that he lost all remedies against the operating 'agent' for such injuries as he incurred. This case, like National Labor Relations Board v. Hearst Publications, 322 U.S. 111, 64 S.Ct. 851, 88 L.Ed. 1170, involves something more than mere application to the facts of the common-law test for ascertaining the vicarious responsibilities of a private employer for tortious conduct of an employee.' 328 U.S. at page 724, 66 S.Ct. at page 1226, 90 L.Ed. 1534. 9 National Labor Relations Board v. Hearst Publications, 322 U.S. 111, 64 S.Ct. 851, 88 L.Ed. 1170.
78
332 U.S. 194 67 S.Ct. 1575 91 L.Ed. 1995 SECURITIES AND EXCHANGE COMMISSIONv.CHENERY CORPORATION et al. SAME v. FEDERAL WATER & GAS CORPORATION. Nos. 81 and 82. Argued Dec. 13—16, 1946. Decided June 23, 1947. Rehearing Denied Oct. 13, 1947. See 68 S.Ct. 26. Mr. Roger S. Foster, of Philadelphia, Pa., for petitioner. [Argument of Counsel from page 195 intentionally omitted] Mr. Spencer Gordon, of Washington, D.C., for Chenery Corporation and others. Mr. Allen S. Hubbard, of New York City, for Federal Water & Gas Corporation. Mr. Justice MURPHY delivered the opinion of the Court. 1 This case is here for the second time. In S.E.C. v. Chenery Corporation, 318 U.S. 80, 63 S.Ct. 454, 87 L.Ed. 626, we held that an order of the Scurities a nd Exchange Commission could not be sustained on the grounds upon which that agency acted. We therefore directed that the case be remanded to the Commission for such further proceedings as might be appropriate. On remand, the Commission reexamined the problem, recast its rationale and reached the same result. The issue now is whether the Commission's action is proper in light of the principles established in our prior decision. 2 When the case was first here, we emphasized a simple but fundamental rule of administrative law. That rule is to the effect that a reviewing court, in dealing with a determination or judgment which an administrative agency alone is authorized to make, must judge the propriety of such action solely by the grounds invoked by the agency. If those grounds are inadequate or improper, the court is powerless to affirm the administrative action by substituting what it considers to be a more adequate or proper basis. To do so would propel the court into the domain which Congress has set aside exclusively for the administrative agency. 3 We also emphasized in our prior decision an important corollary of the foregoing rule. If the administrative action is to be tested by the basis upon which it purports to rest, that basis must be set forth with such clarity as to be understandable. It will not do for a court to be compelled to guess at the theory underlying the agency's action; nor can a court be expected to chisel that which must be precise from what the agency has left vague and indecisive. In other words, 'We must know what a decision means before the duty becomes ours to say whether it is right or wrong.' United States v. Chicago, M., St. P. & P.R. Co., 294 U.S. 499, 511, 55 S.Ct. 462, 467, 79 L.Ed. 1023. 4 Applying this rule and its corollary, the Court was unable to sustain the Commission's original action. The Commission had been dealing with the reorganization of the Federal Water Service Corporation (Federal), a holding company registered under the Public Utility Holding Company Act of 1935, 49 Stat. 803, 15 U.S.C.A. § 79 et seq. During the period when successive reorganization plans proposed by the management were before the Commission, the officers, directors and controlling stockholders of Federal purchased a substantial amount of Federal's preferred stock on the over-the-counter market. Under the fourth reorganization plan, this preferred stock was to be converted into common stock of a new corporation; on the basis of the purchases of preferred stock, the management would have received more than 10% of this new common stock. It was frankly admitted that the management's purpose in buying the preferred stock was to protect its interest in the new company. It was also plain that there was no fraud or lack of disclosure in making these purchases. 5 But the Commission would not approve the fourth plan so long as the preferred stock purchased by the management was to be treated on a parity with the other preferred stock. It felt that the officers and directors of a holding company in process of reorganization under the Act were fiduciaries and were under a duty not to trade in the securities of that company during the reorganization period. 8 S.E.C. 893, 915-921. And so the plan was amended to provide that the preferred stock acquired by the management, unlike that held by others, was not to be converted into the new common stock; instead, it was to be surrendered at cost plus dividends accumulated since the purchase dates. As amended, the plan was approved by the Commission over the management's objections. 10 S.E.C. 200. 6 The Court interpreted the Commission's order approving this amended plan as grounded solely upon judicial authority. The Commission appeared to have treated the preferred stock acquired by the management in accordance with what it thought were standards theretofore recognized by courts. If it intended to create new standards growing out of its experience in effectuating the legislative poliy, it fail ed to express itself with sufficient clarity and precision to be so understood. Hence the order was judged by the only standards clearly invoked by the Commission. On that basis, the order could not stand. The opinion pointed out that courts do not impose upon officers and directors of a corporation any fiduciary duty to its stockholders which precludes them merely because they are officers and directors, from buying and selling the corporation's stock. Nor was it felt that the cases upon which the Commission relied established any principles of law or equity which in themselves would be sufficient to justify this order. 7 The opinion further noted that neither Congress nor the Commission had promulgated any general rule proscribing such action as the purchase of preferred stock by Federal's management. And the only judge-made rule of equity which might have justified the Commission's order related to fraud or mismanagement of the reorganization by the officers and directors, matters which were admittedly absent in this situation. 8 After the case was remanded to the Commission, Federal Water and Gas Corp. (Federal Water), the surviving corporation under the reorganization plan, made an application for approval of an amendment to the plan to provide for the issuance of now common stock of the reorganized company. This stock was to be distributed to the members of Federal's management on the basis of the shares of the old preferred stock which they had acquired during the period of reorganization, thereby placing them in the same position as the public holders of the old preferred stock. The intervening members of Federal's management joined in this request. The Commission denied the application in an order issued on February 7, 1945. Holding Company Act Release No. 5584. That order was reversed by the Court of Appeals, 154 F.2d 6, which felt that our prior decision precluded such action by the Commission. 9 The latest order of the Commission definitely avoids the fatal error of relying on judicial precedents which do not sustain it. This time, after a thorough reexamination of the problem in light of the purposes and standards of the Holding Company Act, the Commission has concluded that the proposed transaction is inconsistent with the standards of §§ 7 and 11 of the Act. It has drawn heavily upon its accumulated experience in dealing with utility reorganizations. And it has expressed its reasons with a clarity and thoroughness that admit of no doubt as to the underlying basis of its order. 10 The argument is pressed upon us, however, that the Commission was foreclosed from taking such a step following our prior decision. It is said that, in the absence of findings of conscious wrongdoing on the part of Federal's management, the Commission could not determine by an order in this particular case that it was inconsistent with the statutory standards to permit Federal's management to realize a profit through the reorganization purchases. All that it could do was to enter an order allowing an amendment to the plan so that the proposed transaction could be consummated. Under this view, the Commission would be free only to promulgate a general rule outlawing such profits in future utility reorganizations; but such a rule would have to be prospective in nature and have no retroactive effect upon the instant situation. 11 We reject this contention, for it grows out of a misapprehension of our prior decision and of the Commission's statutory duties. We held no more and no less than that the Commission's first order was unsupportable for the reasons supplied by that agency. But when the case left this Court, the problem whether Federal's management should be treated equally with other preferred stockholders still lacked a final and complete answer. It was clear that the Commission could not give a negative answer by resort to prior judicial declarations. And it was also clear that the Commission was not bound by settled judicial precedents in asituation of this nature. 318 U.S. at page 89, 63 S.Ct. at page 460, 87 L.Ed. 626. Still unsettled, however, was the answer the Commission might give were it to bring to bear on the facts the proper administrative and statutory considerations, a function which belongs exclusively to the Commission in the first instance. The administrative process had taken an erroneous rather than a final turn. Hence we carefully refrained from expressing any views as to the propriety of an order rooted in the proper and relevant considerations. See Siegel v. Federal Trade Commission, 327 U.S. 608, 613, 614, 66 S.Ct. 758, 760, 761, 90 L.Ed. 888. 12 When the case was directed to be remanded to the Commission for such further proceedings as might be appropriate, it was with the thought that the Commission would give full effect to its duties in harmony with the views we had expressed. Ford Motor Co. v. National Labor Relations Board, 305 U.S. 364, 374, 59 S.Ct. 301, 307, 83 L.Ed. 221; Federal Radio Commission v. Nelson Bros. Bond & Mortgage Co., 289 U.S. 266, 278, 53 S.Ct. 627, 633, 77 L.Ed. 1166, 89 A.L.R. 406. This obviously meant something more than the entry of a perfunctory order giving parity treatment to the management holdings of preferred stock. The fact that the Commission had committed a legal error in its first disposition of the case certainly gave Federal's management no vested right to receive the benefits of such an order. See Federal Communications Commission v. Pottsville Broadcasting Co., 309 U.S. 134, 145, 60 S.Ct. 437, 442, 84 L.Ed. 656. After the remand was made, therefore, the Commission was bound to deal with the problem afresh, performing the function delegated to it by Congress. It was again charged with the duty of measuring the proposed treatment of the management's preferred stock holdings by relevant and proper standards. Only in that way could the legislative policies embodied in the Act be effectuated. 13 The absence of a general rule or regulation governing management trading during reorganization did not affect the Commission's duties in relation to the particular proposal before it. The Commission was asked to grant or deny effectiveness to a proposed amendment to Federal's reorganization plan whereby the management would be accorded parity treatment on its holdings. It could do that only in the form of an order, entered after a due consideration of the particular facts in light of the relevant and proper standards. That was true regardless of whether those standards previously had been spelled out in a general rule or regulation. Indeed, if the Commission rightly felt that the proposed amendment was inconsistent with those standards, an order giving effect to the amendment merely because there was no general rule or regulation covering the matter would be unjustified. 14 It is true that our prior decision explicitly recognized the possibility that the Commission might have promulgated a general rule dealing with this problem under its statutory rule-making powers, in which case the issue for our consideration would have been entirely different from that which did confront us. 318 U.S. at pages 92, 93, 63 S.Ct. at pages 461, 462, 87 L.Ed. 626. But we did not mean to imply thereby that the failure of the Commission to anticipate this problem and to promulgate a general rule withdrew all power from that agency to perform its statutory duty in this case. To hold that the Commission had no alternative in this proceeding but to approve the proposed transaction, while formulating any general rules it might desire for use in future cases of this nature, would be to stultify the administrative process. That we refuse to do. 15 Since the Commission, unlike a court, does have the ability to make new law prospectively through the exercise of its rule-making powers, it has less reason to rely upon ad hoc adjudication to formulate new standards of conduct within the framework of the Holding Company Act. The function of filling in the interstics of the A ct should be performed, as much as possible, through this quasi-legislative promulgation of rules to be applied in the future. But any rigid requirement to that effect would make the administrative process inflexible and incapable of dealing with many of the specialized problems which arise. See Report of the Attorney General's Committee on Administrative Procedure in Government Agencies, S. Doc. No. 8, 77th Cong., 1st Sess., p. 29. Not every principle essential to the effective administration of a statute can or should be cast immediately into the mold of a general rule. Some principles must await their own development, while others must be adjusted to meet particular, unforeseeable situations. In performing its important functions in these respects, therefore, an administrative agency must be equipped to act either by general rule or by individual order. To insist upon one form of action to the exclusion of the other is to exalt form over necessity. 16 In other words, problems may arise in a case which the administrative agency could not reasonably foresee, problems which must be solved despite the absence of a relevant general rule. Or the agency may not have had sufficient experience with a particular problem to warrant rigidifying its tentative judgment into a hard and fast rule. Or the problem may be so specialized and varying in nature as to be impossible of capture within the boundaries of a general rule. In those situations, the agency must retain power to deal with the problems on a case-to-case basis if the administrative process is to be effective. There is thus a very definite place for the case-by-case evolution of statutory standards. And the choice made between proceeding by general rule or by individual, ad hoc litigation is one that lies primarily in the informed discretion of the administrative agency. See Columbia Broadcasting System v. United States, 316 U.S. 407, 421, 62 S.Ct. 1194, 1202, 86 L.Ed. 1563. 17 Hence we refuse to say that the Commission, which had not previously been confronted with the problem of management trading during reorganization, was forbidden from utilizing this particular proceeding for announcing and applying a new standard of conduct. Cf. Federal Trade Commission v. R. F. Keppel & Bro., 291 U.S. 304, 54 S.Ct. 423, 78 L.Ed. 814. That such action might have a retroactive effect was not necessarily fatal to its validity. Every case of first impression has a retroactive effect, whether the new principle is announced by a court or by an administrative agency. But such retroactivity must be balanced against the mischief of producing a result which is contrary to a statutory design or to legal and equitable principles. If that mischief is greater than the ill effect of the retroactive application of a new standard, it is not the type of retroactivity which is condemned by law. See Addison v. Holly Hill Co., 322 U.S. 607, 620, 64 S.Ct. 1215, 1222, 88 L.Ed. 1488, 153 A.L.R. 1007. 18 And so in this case, the fact that the Commission's order might retroactively prevent Federal's management from securing the profits and control which were the objects of the preferred stock purchases may well be outweighed by the dangers inherent in such purchases from the statutory standpoint. If that is true, the argument of retroactivity becomes nothing more than a claim that the Commission lacks power to enforce the standards of the Act in this proceeding. Such a claim deserves rejection. 19 The problem in this case thus resolves itself into a determination of whether the Commission's action in denying effectiveness to the proposed amendment to the Federal reorganization plan can be justified on the basis upon which it clearly rests. As we have noted, the Commission avoided placing its sole reliance on inapplicable judicial precedents. Rather it has derived its conclusions from the particular facts in the case, its general experience in reorganization matters and its informed view of statutory requirements. It is hose matters which are the guide for our review. 20 The Commission concluded that it could not find that the reorganization plan, if amended as proposed, would be 'fair and equitable to the persons affected (thereby)' within the meaning of § 11(e) of the Act, under which the reorganization was taking place. Its view was that the amended plan would involve the issuance of securities on terms 'detrimental to the public interest or the interest of investors' contrary to §§ 7(d)(6) and 7(e), and would result in an 'unfair or inequitable distribution of voting power' among the Federal security holders within the meaning of § 7(e). It was led to this result 'not by proof that the interveners (Federal's management) committed acts of conscious wrongdoing but by the character of the conflicting interests created by the interveners' program of stock purchases carried out while plans for reorganization were under consideration.' 21 The Commission noted that Federal's management controlled a large multi-state utility system and that its influence permeated down to the lowest tier of operating companies. The financial, operational and accounting policies of the parent and its subsidiaries were therefore under the management's strict control. The broad range of business judgments vested in Federal's management multiplied opportunities for affecting the market price of Federal's outstanding securities and made the exercise of judgment on any matter a subject of greatest significance to investors. Added to these normal managerial powers, the Commission pointed out that a holding company management obtains special powers in the course of a voluntary reorganization under § 11(e) of the Holding Company Act. The management represents the stockholders in such a reorganization, initiates the proceeding, draws up and files the plan, and can file amendments thereto at any time. These additional powers may introduce conflicts between the management's normal interests and its responsibilities to the various classes of stockholders which it represents in the reorganization. Moreover, because of its representative status, the management has special opportunities to obtain advance information of the attitude of the Commission. 22 Drawing upon its experience, the Commission indicated that all these normal and special powers of the holding company management during the course of a § 11(e) reorganization placed in the management's command 'a formidable battery of devices that would enable it, if it should choose to use them selfishly, to affect in material degree the ultimate allocation of new securities among the various existing classes, to influence the market for its own gain and to manipulate or obstruct the reorganization required by the mandate of the statute.' In that setting, the Commission felt that a management program of stock purchase would give rise to the temptation and the opportunity to shape the reorganization proceeding so as to encourage public selling on the market at low prices. No management could engage in such a program without raising serious questions as to whether its personal interests had not opposed its duties 'to exercise disinterested judgment in matters pertaining to subsidiaries' accounting, budgetary and dividend policies, to present publicly an unprejudiced financial picture of the enterprise, and to effectuate a fair and feasible plan expeditiously.' 23 The Commission further felt that its answer should be the same even where proof of intentional wrongdoing on the management's part is lacking. Assuming a conflict of interests, the Commission thought that the absence of actual misconduct is immaterial; injury to the public investors and to the corporation may result just as readily. 'Questionable transactions may be explained away, and an abuse of investors and the administrative process may be perpetrated without evil intent, yet the injury will remain.' Moreover, the Commission was of the view that the delays and the difficulties involved in pobing the mental processes and personal integrity of corporate officials do not warrant any distinction on the basis of evil intent, the plain fact being 'that an absence of unfairness or detriment in cases of this sort would be practically impossible to establish by proof.' 24 Turning to the facts in this case, the Commission noted the salient fact that the primary object of Federal's management in buying the preferred stock was admittedly to obtain the voting power that was accruing to that stock through the reorganization and to profit from the investment therein. That stock had been purchased in the market at prices that were depressed in relation to what the management anticipated would be, and what in fact was, the earning and asset value of its reorganization equivalent. The Commission admitted that the good faith and personal integrity of this management were not in question; but as to the management's justification of its motives, the Commission concluded that it was merely trying to 'deny that they made selfish use of their powers during the period when their conflict of interest, vis-a-vis public investors was in existence owing to their purchase program.' Federal's management had thus placed itself in a position where it was 'peculiarly susceptible to temptation to conduct the reorganization for personal gain rather than the public good' and where its desire to make advantageous purchases of stock could have an important influence, even though subconsciously, upon many of the decisions to be made in the course of the reorganization. Accordingly, the Commission felt that all of its general considerations of the problem were applicable to this case. 25 The scope of our review of an administrative order wherein a new principle is announced and applied is no different from that which pertains to ordinary administrative action. The wisdom of the principle adopted is none of our concern. See Board of Trade of Kansas City, Mo. v. United States, 314 U.S. 534, 548, 62 S.Ct. 366, 373, 86 L.Ed. 432. Our duty is at an end when it becomes evident that the Commission's action is based upon substantial evidence and is consistent with the authority granted by Congress. See National Broadcasting Co. v. United States, 319 U.S. 190, 224, 63 S.Ct. 997, 1013, 87 L.Ed. 1344. 26 We are unable to say in this case that the Commission erred in reaching the result it did. The facts being undisputed, we are free to disturb the Commission's conclusion only if it lacks any rational and statutory foundation. In that connection, the Commission has made a thorough examination of the problem, utilizing statutory standards and its own accumulated experience with reorganization matters. In essence, it has made what we indicated in our prior opinion would be an informed, expert judgment on the problem. It has taken into account 'those more subtle factors in the marketing of utility company securities that gave rise to the very grave evils which the Public Utility Holding Company Act of 1935 was designed to correct' and has relied upon the fact that 'Abuse of corporate position, influence, and access to information may raise questions so subtle that the law can deal with them effectively only by prohibitions not concerned with the fairness of a particular transaction.' 318 U.S. at page 92, 63 S.Ct. at page 461, 87 L.Ed. 626. 27 Such factors may properly be considered by the Commission in determining whether to approve a plan of reorganization of a utility holding company, or an amendment to such a plan. The 'fair and equitable' rule of § 11(e) and the standard of what is 'detrimental to the public interest or the interest of investors or consumers' under § 7(d)(6) and § 7(e) were inserted by the framers of the Act in order that the Commission might have broad powers to protect the various interests at stake. 318 U.S. at pages 90, 91, 63 S.Ct. at pages 460, 461, 87 L.Ed. 626. The application of those critera, whether in the form of a particular order or a general regulaton, necess arily requires the use of informal discretion by the Commission. The very breath of the statutory language precludes a reversal of the Commission's judgment save where it has plainly abused its discretion in these matters. See United States v. Lowden, 308 U.S. 225, 60 S.Ct. 248, 84 L.Ed. 208; I.C.C. v. Railway Labor Executives Ass'n, 315 U.S. 373, 62 S.Ct. 717, 86 L.Ed. 904. Such an abuse is not present in this case. 28 The purchase by a holding company management of that company's securities during the course of a reorganization may well be thought to be so fraught with danger as to warrant a denial of the benefits and profits accruing to the management. The possibility that such a stock purchase program will result in detriment to the public investors is not a fanciful one. The influence that program may have upon the important decisions to be made by the management during reorganization is not inconsequential. Since the officers and directors occupy fiduciary positions during this period, their actions are to be held to a higher standard than that imposed upon the general investing public. There is thus a reasonable basis for a value judgment that the benefits and profits accruing to the management from the stock purchases should be prohibited, regardless of the good faith involved. And it is a judgment that can justifiably be reached in terms of fairness and equitableness, to the end that the interests of the public, the investors and the consumers might be protected. But it is a judgment based upon public policy, a judgment which Congress has indicated is of the type for the Commission to make. 29 The Commission's conclusion here rests squarely in that area where administrative judgments are entitled to the greatest amount of weight by appellate courts. It is the product of administrative experience, appreciation of the complexities of the problem, realization of the statutory policies, and responsible treatment of the uncontested facts. It is the type of judgment which administrative agencies are best equipped to make and which justifies the use of the administrative process. See Republic Aviation Corporation v. National Labor Relations Board, 324 U.S. 793, 800, 65 S.Ct. 982, 986, 89 L.Ed. 1372, 157 A.L.R. 1081. Whether we agree or disagree with the result reached, it is an allowable judgment which we cannot disturb. 30 Reversed. 31 Mr. Justice BURTON concurs in the result. 32 The CHIEF JUSTICE and Mr. Justice DOUGLAS took no part in the consideration or decision of this case. 33 Mr. Justice FRANKFURTER and Mr. Justice JACKSON dissent, but there is not now opportunity for a response adequate to the issues raised by the Court's opinion. These concern the rule of law in its application to the administrative process and the function of this Court in reviewing administrative action. Accordingly, the detailed grounds for dissent will be filed in due course. 34 For dissenting opinion of Mr. Justice JACKSON, see 332 U.S. 194, 67 S.Ct. 1760. 35 Mr. Justice JACKSON, dissenting. 36 The Court by this present decision sustains the identical administrative order which only recently it held invalid. Securities and Exchange Commission v. Chenery Corp., 318 U.S. 80, 63 S.Ct. 454, 87 L.Ed. 626. As the Court correctly notes, the Commission has only 'recast its rationale and reached the same result.' (Par. 1.)1 There being no change in the order, no additional evidence in the record and no amendment of relevant legislation, it is clear that there has been a shift in attitude between that of the controlling membership of the Court when the case was first here and that of those who have the power of decision on this second review. 37 Mr. Justice JACKSON announced that he has filed an opinion, in which Mr. Justice FRANKFURTER joins, setting forth the detailed grounds for his dissent from the opinion and judgment of the Court entered June 23, 1947, in these cases. 38 I feel constrained to disagree with the reasoning offered to rationalize this shift. It makes judicial review of administrative orders a hopeless formality for the litigant, even where granted to him by Congress. It reduces the judicial process in such cases to a mere feint. While the opinion does not have the adherence of a majority of the full Court, if its pronouncements should become governing principles they would, in practice, put most administrative orders over and above the law. I. 39 The essential facts are few and are not in dispute.2 This corporation filed with the Securities and Exchange Commission a voluntary plan of reorganization. While the reorganization proceedings were pending sixteen officers and directors bought on the open market about 7 1/2% of the corporation's preferred stock. Both the Commission and the Court admit that these purchases were not forbidden by any law, judicial precedent, regulation or rule of the Commission. Nevertheless, the Commission has ordered these individuals to surrender their shares to the corporation at cost, plus 4% interest, and the Court now approves that order. 40 It is helpful, before considering whether this order is authorized by law, to reflect on what it is and what it is not. It is not conceivably a discharge of the Commission's duty to determine whether a proposed plan of reorganization would be 'fair and equitable.' It has nothing to do with the corporate structure, or the classes and amounts of stock, or voting rights or dividend preferences. It does not remotely affect the impersonal financial or legal factors of the plan. It is a personal deprivation denying particular persons the right to cntinue to own their stock and to exercise its privileges. Other persons who bought at the same time and price in the open market would be allowed to keep and convert their stock. Thus, the order is in no sense an exercise of the function of control over the terms and relations of the corporate securities. 41 Neither is the order one merely to regulate the future use of property. It literally takes valuable property away from its lawful owners for the benefit of other private parties without full compensation and the Court expressly approves the taking. It says that the stock owned by these persons is denied conversion along with similar stock owned by others; 'instead, it was to be surrendered at cost plus dividends accumulated since the purchase dates.' (Par. 5.) It should be noted that this formula was subsequently altered to read 'cost plus 4% interest.' That this basis was less than its value is recognized, for the Court says 'That stock had been purchased in the market at prices that were depressed in relation to what the management anticipated would be, and what in fact was, the earning and asset value of its reorganization equivalent.' (Par. 24.) Admittedly, the value above cost, and interest on it, simply is taken from the owners, without compensation. No such power has ever been confirmed in any administrative body. 42 It should also be noted that neither the Court nor the Commission purports to adjudge a forfeiture of this property as a consequence of sharp dealing or breach of trust. The Court says, 'The Commission admitted that the good faith and personal integrity of this management were not in question; * * *.' (Par. 24.) And again, 'It was frankly admitted that the management's purpose in buying the preferred stock was to protect its interest in the new company. It was also plain that there was no fraud or lack of disclosure in making these purchases.' (Par. 4.) II. 43 The reversal of the position of this Court is due to a fundamental change in prevailing philosophy. The basic assumption of the earlier opinion as therein stated was, 'But before transactions otherwise legal can be outlawed or denied their usual business consequences, they must fall under the ban of some standards of conduct prescribed by an agency of government authorized to prescribe such standards.' Securities and Exchange Commission v. Chenery Corp., 318 U.S. 80, 92, 93, 63 S.Ct. 454, 461, 87 L.Ed. 626. The basic assumption of the present opinion is stated thus: 'The absence of a general rule or regulation governing management trading during reorganization did not affect the Commission's duties in relation to the particular proposal before it.' (Par. 13.) This puts in juxtaposition the two conflicting philosophies which produce opposite results in the same case and on the same facts. The difference between the first and the latest decision of the Court is thus simply the difference between holding that administrative orders must have a basis in law and a holding that absence of a legal basis is no ground on which courts may annul them. 44 As there admittedly is no law or regulation to support this order we peruse the Court's opinion diligently to find on what grounds it is now held that the Court of Appeals, on pain of being reversed for error, was required to stamp this order with its approval. We find but one. That is the principle of judicial deference to administrative experience. That argument is five times stressed in as many different contexts, and I quote just enough to identify the instances: 'The Commission,' it says, 'has drawn heavily upon its accumulated experience in dealing with utility reorganizations.' (Par. 9.) 'Rather it has derived its conclusions from the particular facts in the case, its general experience in reorganization matters and its informed view of statutory requirements.' (Par. 19.) 'Drawing upon its experience, the Commission indicated * * *,' etc. (Par. 22.) '* * * the Commission has made a thorough examination of the problem, utilzing statu tory standards and its own accumulated experience with reorganization matters.' (Par. 26.) And finally, of the order the Court says, 'It is the product of administrative experience,' etc. (Par. 29.) 45 What are we to make of this reiterated deference to 'administrative experience' when in another context the Court says, 'Hence we refuse to say that the Commission, which had not previously been confronted with the problem of management trading during reorganization, was forbidden from utilizing this particular proceeding for announcing and applying a new standard of conduct.'? (Par. 17.) (Emphasis supplied.) 46 The Court's reasoning adds up to this: The Commission must be sustained because of its accumulated experience in solving a problem with which it had never before been confronted! 47 Of course, thus to uphold the Commission by professing to find that it has enunciated a 'new standard of conduct,' brings the Court squarely against the invalidity of retroactive law-making. But the Court does not falter. 'That such action might have a retroactive effect was not necessarily fatal to its validity.' (Par. 17.) 'But such retroactivity must be balanced against the mischief of producing a result which is contrary to a statutory design or to legal and equitable principles.' (Par. 17.) Of course, if what these parties did really was condemned by 'statutory design' or 'legal and equitable principles,' it could be stopped without resort to a new rule and there would be no retroactivity to condone. But if it had been the Court's view that some law already prohibited the purchases, it would hardly have been necessary three sentences earlier to hold that the Commission was not prohibited 'from utilizing this particular proceeding for announcing and applying a new standard of conduct.' (Par. 17.) (Emphasis supplied.) 48 I give up. Now I realize fully what Mark Twain meant when he said, 'The more you explain it, the more I don't understand it.' III. 49 But one does not need to comprehend the processes by which other minds reach a given result in order to estimate the practical consequences of their pronouncement upon judicial review of administrative orders. 50 If it is of no consequence that no rule of law be existent to support an administrative order, and the Court of Appeals is obliged to defer to administrative experience and to sustain a Commission's power merely because it has been asserted and exercised, of what use is it to print a record or briefs in the case, or to hear argument? Administrative experience always is present, at least to the degree that it is here, and would always dictate a like deference by this Court to an assertion of administrative power. Must the reviewing court, as this Court does in this opinion, support the order on a presumptive or imputed experience even though the Court is obliged to discredit such experience in the very same opinion? Is fictitious experience to be conclusive in matters of law and particularly in the interpretation of statutes, as the Court's opinion now intimates, or just in fact finding which has been the function which the Court has heretofore sustained upon the argument of administrative experience? 51 I suggest that administrative experience is of weight in judicial review only to this point—it is a persuasive reason for deference to the Commission in the exercise of its discretionary powers under and within the law. It cannot be invoked to support action outside of the law. And what action is, and what is not within the law must be determined by courts, when authorized to review, no matter how much deference is due to the agency's fact finding. Surely an administrative agency is not a law unto itself, but the Court does not really face up to the fact that this is the justification it is offering for sustaining the Commission action. 52 Even if the Commission had, as the Court says, utilized this case to announce a new legal standard of conduct, there would be hurdles to be cleared, but we need not dwell on them now. Because to promulgate a general rule of law, either by regulation or by case law, is something the Commission expressly declined to do. It did not previously promulgate, and it does not by this order profess to promulgate, any rule or regulation to prohibit such purchases absolutely or under stated conditions. On the other hand, its position is that no such rule or standard would be fair and equitable in all cases.3 IV. 53 Whether, as matter of policy, corporate managers during reorganization should be prohibited from buying or selling its stock, is not a question for us to decide. But it is for us to decide whether, so long as no law or regulation prohibits them from buying, their purchases may be forfeited, or not, in the discretion of the Commission. If such a power exists in words of the statute or in their implication, it would be possible to point it out and thus end the case. Instead, the Court admits that there was no law prohibiting these purchases when they were made, or at any time thereafter. And, except for this decision, there is none now. 54 The truth is that in this decision the Court approves the Commission's assertion of power to govern the matter without law, power to force surrender of stock so purchased whenever it will, and power also to overlook such acquisitions if it so chooses. The reasons which will lead it to take one course as against the other remain locked in its own breast, and it has not and apparently does not intend to commit them to any rule or regulation. This administrative authoritarianism, this power to decide without law, is what the Court seems to approve in so many words: 'The absence of a general rule or regulation governing management trading during reorganization did not affect the Commission's duties * * *' (Par. 13). This seems to me to undervalue and to belittle the place of law, even in the system of administrative justice. It calls to mind Mr. Justice Cardozo's statement that 'Law as a guide to conduct is reduced to the level of mere futility if it is unknown and unknowable.'4 V. 55 The Court's averment concerning this order that 'It is the type of judgment which administrative agencies are best equipped to make and which justifies the use of the administrative process,' (Par. 29) is the first instance in which the administrative process is sustained by reliance on that disregard of law which enemies of the process have always alleged to be its principal evil. It is the first encouragement this Court has given to conscious lawlessness as a permissible rule of administrative action. This decision is an ominous one to those who believe that men should be governed by laws that they may ascertain and abide by, and which will guide the action of those in authoity as wel l as of those who are subject to authority.5 56 I have long urged, and still believe, that the administrative process deserves fostering in our system as an expeditious and nontechnical method of applying law in specialized fields.6 I can not agree that it be used, and I think its continued effectiveness is endangered when it is used, as a method of dispensing with law in those fields. 57 Mr. Justice FRANKFURTER joins in this opinion. 1 For convenience of reference, I have numbered consecutively the paragraphs of the Court's opinion (67 S.Ct. 1575), and cite quotations accordingly. 2 The facts and the law of the case generally are fully set forth in the first opinion of Mr. Chief Justice Groner of the Court of Appeals which reversed the Commission's order (75 U.S.App.D.C. 374, 128 F.2d 303) and in his second opinion (80 U.S.App.D.C. 365, 154 F.2d 6) again reversing the Commission's order after it had 'recast its rationale.' 3 The Commission, speaking of such a rule appends the following note to its opinion: 'Without flexibility the rule might itself operate unfairly. Limitation to cost appears appropriate here, but would be inappropriate in a case where the cost of the security purchased was in excess of its reorganization value, and in some instances cash payment by the company would not be feasible. In addition, special treatment of any sort might be inappropriate for incidental purchases not made as part of a program in contemplation of reorganization benefits. In this connection, we wish to emphasize that our concern here is not primarily with the normal corporate powers which make it possible for officers and directors to influence the market for their own gain, in the absence of reorganization, by a choice of dividend policies, accounting practices, published reports, and the like. The questions of fairness and detriment here presented arise before us in the context of a capital readjustment. At that point our scrutiny is called for, and that our scrutiny is to be vigilant cannot be doubted. See Appendix to Sen. Rep. No. 621 (74th Cong., 1st Sess.) on S. 2796, at p. 58, quoted supra.' 4 The Growth of the Law, P. 3. 5 On the same day the Court denied its own authority to recognize and enforce without Congressional action, an unlegislated liability much less novel than the one imposed here, and that in the field of tort law which traditionally has developed by decisional rather than by legislative process. The result is to confirm in an executive agency a discretion to act outside of established law that goes beyond any judicial discretion as well as beyond any legislative delegation. Compare United States v. Standard Oil Co., 332 U.S. 301, 67 S.Ct. 1604. 6 See statement before House of Delegates, American Bar Association, 1939. (1939 Proceedings, House of Delegates, XXXV A.B.A. Journal 95.) Also see Report as Attorney General to President Roosevelt recommending veto of Walter-Logan Bill—made part of veto message, Vol. 86, Part 12, Congressional Record, 76th Congress, 3d Session, p. 13943.
78
332 U.S. 258 67 S.Ct. 1558 91 L.Ed. 2041 Ex parte FAHEY et al. No. 133, Misc. Argued on Return to Rule to Show Cause April 30, 1947. Decided June 23, 1947. Mr. Oscar H. Davis, of Washington, D.C., for petitioners on support of the motion for leave to file. Messrs. Welburn Mayock, of Los Angeles, Cal., and Charles K. Chapman, of Long Beach, Cal., for respondent Peirson M. Hall, Judge, in opposition thereto. Mr. Justice JACKSON delivered the opinion of the Court. 1 This petition by John H. Fahey, individually and as Federal Home Loan Bank Commissioner, and A. V. Amman, individually and as Conservator for the Long Beach Federal Savings and Loan Association, invokes the original jurisdiction of this Court. They ask leave to file petition fr a writ o f 'mandamus and/or prohibition and/or injunction' against Judge Peirson M. Hall of the United States District Court for the Southern District of California to vacate his order allowing fees to counsel in Fahey v. Mallonee, 332 U.S. 245, 67 S.Ct. 1552, to prohibit any further allowance therein, and to enjoin any payments heretofore allowed. 2 While an appeal in the principal case was pending in this Court, application was made by various counsel for the plaintiffs and associated interests therein for allowance of fees aggregating some $125,000. The District Court allowed counsel for plaintiffs $50,000 as a partial payment on account of services, but withheld action on other applications. Certain costs and expenses of the plaintiffs in the amount of $17,295.13 were also ordered reimbursed. 3 The petition involves serious questions of law and of fact. Whether, because of the pendency of the appeal and the stay order granted therein, the District Court had power to entertain the application, whether before the final outcome of the case could be known an allowance was premature, whether the source of the fund on deposit with the court was so related to the services as to be subject to disbursement for their compensation, and whether one judge can make allowances in a case before a three-judge court, are, with other questions, much contested. We do not decide any question as to the merits. 4 Mandamus, prohibition and injunction against judges are drastic and extraordinary remedies. We do not doubt power in a proper case to issue such writs. But they have the unfortunate consequence of making the judge a litigant, obliged to obtain personal counsel or to leave his defense to one of the litigants before him. These remedies should be resorted to only where appeal is a clearly inadequate remedy. We are unwilling to utilize them as a substitute for appeal. As extraordinary remedies, they are reserved for really extraordinary causes. 5 We find nothing in this case to warrant their use. An allowance of $50,000 will hardly destroy a twenty-six million dollar association during the time it would take to prosecute an appeal. The status of one of the applicants in the principal case is now settled so that he has standing to take all authorized appeals. We hold that the applicants' grievance is one to be pursued by appeal at the proper time and to the appropriate court, rather than by resort to our original jurisdiction for extraordinary writs. 6 The petition is denied. 7 Petition denied.
89
332 U.S. 261 67 S.Ct. 1613 91 L.Ed. 2043 FAYv.PEOPLE OF STATE OF NEW YORK. BOVE v. SAME. Nos. 377 and 452. Argued and Submitted April 3, 1947. Decided June 23, 1947. Rehearing Denied Oct. 13, 1947. See 68 S.Ct. 27. [Syllabus from pages 261-263 intentionally omitted] Mr. Harold R. Medina, of New York City, for petitioner Fay. Messrs. Moses Polakoff and Samuel Mezansky, both of New York City, for petitioner Bove. Mr. Whitman Kanpp, of New York City, for respondent. Mr. Justice JACKSON delivered the opinion of the Court. 1 These cases present the same issue, a challenge to the constitutionality of the special or so-called 'blue ribbon' jury as used by state courts in the State and County of New York. 2 Such a jury found Fay and Bove guilty of conspiracy to extort and of extortion. Bove was Vice-President of the International Hod Carriers, Building and Common Laborers' Union of America. Fay was Vice-President of the International Union of Operating Engineers. The City of New York awarded contracts for construction of an extensive project known as the Delaware Water Supply system to several large construction concerns. It was not denied that Fay and Bove collected from these contractors upwards of $300,000. But it was denied that payment was induced by threats to do unlawful injury to person or property. The defense claimed that the payments were voluntary bribes, perhaps, but no extortion—that these men were paid merely for undertaking to assist the contractors to avoid labor trouble, to prevent jurisdiction or unauthorized strikes, and to 'handle the labor situation,' and that Fay and Bove rendered service as agreed. 3 The indictment charged the crimes in seven counts. One was dismissed by the court; the remaining six were submitted to the jury. The jury acquitted the defendants on three of the counts, disagreed on another, and convicted on two counts. The convictions were affirmed on appeal by the Appellate Division of the Supreme Court,1 which reviews both law and fact,2 and by the Court of Appeals.3 No federal question is raised as to the merits of the finding of guilt and we are to assume that the convictions were warranted by the evidence and, except for questions as to the special jury, were regular. While there was challenge to the panel from which this jury was drawn, on ground of denial of federal due process and equal protection, each individual juror was accepted by the defendants without challenge for cause. The challenge to the special jury panel was not discussed by either of the appellate courts of the State but the federal questions were sufficiently and timely raised throughout and were overruled by all state courts. A dual system of juries present easy possibilities of violation of the Fourteenth Amendment and we took these cases by certiorari to examine the charges of unconstitutionality. 329 U.S. 697, 67 S.Ct. 92. 4 The question is whether a warranted conviction by a jury individually accepted as fair and unbiased should be set aside on the ground that the make-up of the panel from which they were drawn unfairly narrows the choice of jurors and denies defendants due process of law or equal protection of the laws in violation of the Fourteenth Amendment to the Federal Constitution. If answered in the affirmative, it means that no conviction by these special juries is constitutionally valid, and all would be set aside if the question had been properly raised at or before trial. 5 The defendants raise no question as to the constitutionality of the general statutes of New York which prescribe the qualifications, disqualifications and exemptions for ordinary jury service. Neither is any question raised as to the administration of these general statutes by which the population of New York County, numbering some 1,800,000, is sifted to produce a general jury panel of about 60,000, unless it be that there is discrimination against women.4 It is from this panel that defendants insist, apart from any objection they may have as to improper exclusion of women even from the general panel, they had a constitutional right to have their trial jury drawn. The statutes advanced as a standard may be roughly summarized: 6 To qualify as a juror, a person must be an American citizen and a resident of the county; not less than 21 nor more than 70 years old; the owner or spouse of an owner of property of the value of $250; in possession of his or her natural faculties and not infirm or decrepit; not convicted of a felony or a misdemeanor involving moral turpitude; intelligent; of sound mind and good character; well-informed; able to read and write the English language understandingly.5 From those qualified the following classes are exempt from service; clergymen, physicians, dentists, pharmacists, embalmers, optometrists, attorneys, members of the Army, Navy or Marine Corps, or of the National Guard or Naval Militia, firemen, policemen, ship's officers, pilots editors, editorial writers, sub-editors, reporters and copy readers.6 7 Women are equally qualified with men,7 but as they also are granted exemption,8 a woman drawn may serve or not, as she chooses. 8 The attack is focused upon the statutes and sifting procedures which shrink the general panel to the special or 'blue ribbon' panel of about 3,000. 9 Special jurors are selected from those accepted for the general panel by the county clerk, but only after each has been subpoenaed for personal appearance and has testified under oath as to his qualification and fitness.9 The statute prescribes standards for their selection by declaring ineligible and directing elimination of these classes: (1) All who have been disqualified or who claim and are allowed exemption from general service. (2) All who have been convicted of a criminal offense, or found guilty of fraud or misconduct by judgment of any civil court. (3) All who possess such conscientious opinions with regard to the death penalty as would preclude their finding a defendant guilty if the crime charged by punishable with death. (4) All who doubt their ability to lay aside an opinion or impression formed from newspaper reading or otherwise, or to render an impartial verdict upon the evidence uninfluenced by any such opinion on impression or whose opinion of circumstantial evidence is such as would prevent their finding a verdict of guilty upon such evidence, or who avow such a prejudice against any law of the State as would preclude finding a defendant guilty of a violation of such law, or who avow such a prejudice against any particular defense to a criminal charge as would prevent giving a fair and impartial trial upon the merits of such defense, or who avow that they cannot in all cases give to a defendant who fails to testify as a witness in his own behalf the full benefit of the statutory provision that such defendants' neglect or refusal to testify as a witness in his own behalf shall not create any presumption against him.10 10 The special jury panel is not one brought into existence for this particular case nor for any special class of offenses or type of accused. It is part of the regular machinery of trial in counties of one million or more inhabitants. In its sound discretion the court may order trial by special jury on application of either party in a civil action and by either the prosecution or defense in criminal cases. The motion may be granted only on a showing that 'by reason of the importance or intricacy of the case, a special jury is required' or 'the issue to be tried has been so widely commented upon * * * that an ordinary jury cannot withou delay and difficulty be obtained' or that for any other reason 'the due, efficient and impartial administration of justice in the particular case would be advanced by the trial of such an issue by a special jury.'11 11 This special jury statute is not recent nor is the practice under it novel. The progenitor of this statute, like it in all pertinent respects, was enacted in 1896 but was repealed and simultaneously reenacted in substantially its present form in 1901.12 It was soon attacked as on its face violating the State Constitution. The claim of one convicted by a special jury that it was an unconstitutional body because its restrictive composition denied due process of law, was rejected by the Court of Appeals in a well-considered opinion. People v. Dunn, 1899, 157 N.Y. 528, 52 N.E. 572, 43 L.R.A. 247. The attack then was made from the opposite direction. One convicted by an ordinary jury claimed that it was an unconstitutional body. This claim that the special panel had withdrawn twenty-five hundred 'men of presumably superior intelligence,' 162 N.Y. at page 362, 56 N.E. at page 759, too, was rejected by the Court of Appeals. People v. Meyer, 1900, 162 N.Y. 357, 56 N.E. 758. 12 Then, in 1901, an attack on the constitutionality of the statute was rejected by this Court. One Hall had been convicted of murder by a special jury and sentenced to death. He sued out a writ of habeas corpus which was denied below. He challenged the special panel and claimed that his conviction by its verdict was a denial of due process of law and of equal protection of the laws in violation of the Fourteenth Amendment because the jury was 'taken from a particular body of citizens and not from the general body of the county as was provided in all cases wherein such special jury was not drawn.' This Court affirmed, Hall v. Johnson, 186 U.S. 480, 22 S.Ct. 943, 46 L.Ed. 1259, citing among other authorities Brown v. State of New Jersey, 175 U.S. 172, 20 S.Ct. 77, 44 L.Ed. 119, which upheld a state statute for a 'struck jury.'13 13 Since these decision, the special jury has been in continuous use in New York County in important cases. The District Attorney cites over one hundred murder convictions, on verdict of the special jury, considered by the Court of Appeals which affirmed judgments of death. We are asked, however, to reconsider the question and, in the light of more recent trends of decision and of particular facts about the present operation of the jury system not advanced in support of the argument in earlier case, to disapprove the special jury system. 14 We fail to perceive on its face any constitutional offense in the statutory standards prescribed for the special panel. The Act does not exclude, or authorize the clerk to exclude, any person or class because of race, creed, color or occupation. It imposes no qualification of an economic nature beyond that imposed by the concededly valid general panel statute. Each of the grounds of elimination is reasonably and closely related to the juror's suitability for the kind of service the special panel requires or to his fitness to judge the kind of cases for which it is most frequently utilized. Not all of the grounds of elimintion would appear relevant to the issues of the present case. But we know of no right of defendants to have a specially constituted panel which would include all persons who might be fitted to hear their particular and unique case. This panel is for service in a wide variety of cases and its eliminations must be judged in that light. We cannot overlook that one of the features which has tended to discredit jury trials is interminable examination and rejection of prospective jurors. In a metropolis with notoriously congested court calendars we cannot find it constitutionally forbidden to set up administrative procedures in advance of trial to eliminate from the panel those who, in a large proportion of cases, would be rejected by the court after its time had been taken in examination to ascertain the disqualifications. Many of the standards of elimination which the clerk is directed to apply in choice of the panel are those the court would have to apply to excuse a juror on challenge for cause. 15 These are matters with which local authority must and does have considerable latitude to cope, for they affect the administration of justice which is a local responsibility. For example, in this case the time of the trial court and its entire retinue of attendants was taken while eighty-nine prospective jurors were examined. How many more would have been examined if the clerk had not already eliminated those who admit that they would not give defendants benefit of the rule that their neglect or refusal to testify in their own behalf would not create a presumption against them? Neither of these defendants saw fit to take the witness stand. The defendants themselves have complained of the exceptional publicity given to the charges in the case. How many more jurors would have been examined if the clerk had not already eliminated those who felt themselves subject to influence by publicity? These are practical matters in administering justice in which we will take care not to hamstring local authority by artificial or doctrinaire requirements. 16 It has consistently been held that a jury is not rendered constitutionally invalid by failure of the statute to set forth any standards for selection. Murray v. State of Louisiana, 163 U.S. 101, 108, 16 S.Ct. 990, 992, 41 L.Ed. 87; Franklin v. State of South Carolina, 218 U.S. 161, 167, 168, 30 S.Ct. 640, 642, 54 L.Ed. 980; Akins v. State of Texas, 325 U.S. 398, 403, 65 S.Ct. 1276, 1279, 89 L.Ed. 1692; see also Ex parte Commonwealth of Virginia, 100 U.S. 339, 348, 25 L.Ed. 676. We find nothing in the standards New York has prescribed which, on its face, is prohibited by the Constitution. There remain, however, more serious questions as to whether the special jury Act has been so administered as to deny due process to the defendants and whether the dual system of jury panels as administered denied equal protection of the laws. 17 As to the actual results of application of the statute, the litigants are in controversy. The New York courts, doubtless influenced by the fact that long ago they had upheld similar statutes, made no findings of fact and wrote no opinion on the subject. It is to be regretted that we must deal with questions of fact without aid of findings by the courts whose experience with the system and proximity to the local conditions with which the special jury customs are so interwoven would entitle their findings to very great weight. We would, in any case, be obliged on a constitutional question to reach our own conclusions, after full allowance of weight to findings of the state courts, and in this case must examine the evidence. Norris v. State of Alabama, 294 U.S. 587, 590, 55 S.Ct. 579, 580, 79 L.Ed. 1074; Lisenba v. People of State of California, 314 U.S. 219, 237, 238, 62 S.Ct. 280, 290, 86 L.Ed. 166; Ashcraft v. State of Tennessee, 322 U.S. 143, 148, 64 S.Ct. 921, 923, 88 L.Ed. 1192. 18 The allegations of fact upon which defendants ask us to hold these special panels unconstitutional come to three (1) That laborers, operatives, craftsmen, foremen and service employees were systematically, intentionally and deliberately excluded from the panel. (2) That women were in the same way excluded. (3) That the special panel is so composed as to be more prone to convict than the general panel. 19 (1) The proof that laborers and such were excluded consists of a tabulation of occupations as listed in the questionnaires filed with the clerk. The table received in evidence is set out in the margin.14 It is said in criticism of this list that it shows the industry in which these persons work rather than whether they are laborers or craftsmen; that is, 'mechanics' may be and probably are also laborers; 'bankers' may be clerks. Certainly the tabulation does not show the relation of these jurors to the industry in which they were classified, as, for example, whether they were owners or financially interested, or merely employees. It does not show absence or exclusion of wage earners or of union members, although none listed themselves as 'laborers,' for several of these classes are obviously of the employee rather than the entrepreneur character. One of petitioners' tables showed that 38% of the special panel were 'clerical, sales, and kindred workers.' Three of those examined as jurors in this case were members of labor unions. Two were peremptorily challenged by the People and the one accepted by the prosecution was challenged by the defense. 20 It is sought to give significance to this exhibit showing the breakdown into occupations of some 2,700 special jurors, however, by reference to a tabulation of occupations of some 920,000 employees and persons seeking employment in Manhattan. The comparison is said to show a great disparity between the percentage of jurors of each occupation represented on the jury list of 1945 and the occupational distribution of the number of employed persons or experienced persons seeking employment in Manhattan in 1940. This table was not put in evidence but is reproduced in the margin.15 Apart from the discrepancy of five years in the dates of the data and the differences in classification of occupations, the two tables do not afford statistical proof that the jury percentages are the result of discrimination. Such a coclusion wo uld be justified only if we knew whether the application of the proper jury standards would affect all occupations alike, of which there is no evidence and which we regard as improbable. The percentage of persons employed or seeking employment in each occupation does not establish even an approximate ratio for those of each occupation that should appear in a fairly selected jury panel. The former is not limited, as the latter must be, to those over 21 or under 70 years of age. It is common knowledge that many employed and seekers of employment in New York are not, as jurors must be, citizens of the United States. How many could not meet the property qualifications? How many could not read and write the English language understandingly? It is only after effect is given to these admittedly constitutional requirements that we would have any figures which determined or even suggested the effect of the additional disqualifications imposed on special jurors. 21 An occupational comparison of the special panel with the general panel might afford some ground for an opinion on the effect of the particular practices complained of in the composition of the special panel. But no such comparison is offered. Petitioners' only statement as to the comparative make-up of the general and special panels is as follows: 'While the defect of discrimination against women, particularly those who are not members of so-called 'civic conscious' organizations, permeates both the general and special juries, there is no evidence whatever that laborers, operatives, service employees, craftsmen, and foremen, are excluded from the general jury panel.' What is more to the point is that petitioners adduced no evidence whatever that the occupational composition of the general panel is substantially different from that of the special. If they are the same, then petitioner's assertion that Question 23, referred to below, somehow separates the rich from the poor is obviously without merit. It is not unlikely that the requirements of citizenship, property and literacy disqualify a greater proportion of laborers, craftsmen and service employees than of some other classes. Those who are illiterate or, if literate in their own, are unable to speak or write the English language, naturally find employment chiefly in manual work. It is impossible from the defendants' evidence in this case to find that the distribution of the jury panel among occupations is not the result of the application of legitimate standards of disqualification. 22 On the other hand, the evidence that there has been no discrimination as to occupation in selection of the panel, while from interested witnesses, whose duty it was to administer the law, is clear and positive and is neither contradicted nor improbable. The testimony of those in charge of the selection, offered by the defendants themselves, is that without occupational discrimination they applied the standards of the statute to all whom they examined. We are unable to find that this evidence is untrue. 23 (2) As to the exclusion of women, it will be remembered that the law of New York gives to women the privilege to serve but does not impose service as a duty. It is said to have been found impractical to compel large numbers of women, who have an absolute exemption, to come to the clerk's office for examination since they so generally assert their exemption. Hence, only those who volunteer or are suggested as willing to serve by other women or by organizations, including the League of Women Voters, are subpoenaed for examination. Some effort is made by the officials also to induce women to volunteer. But the evidence does not show that women are excluded from the special jury. In this case three women talesmen were examined. One was pronounced 'satisfactory' by both sides and served on the jury. 24 As to both women and men, it is complained that eliminations resulted unfairly from use of a questionnaire, which asked, 'What months of the year between October 1 and June 30 would you prefer to serve (Name two or more months).' Those who stated a preference, and they were many, were excluded from the special panel although they continued eligible for the general panel. The reason given for this is that service on the general panel can be adjusted to such preferences while the special panel, because of the nature of the cases tried before it, may require service at any time and for long periods. We think the phrasing of this question is less than candid in view of this purpose. But we find no evidence that it operates more misleadingly on women than on men, or on one occupation or class than on others. While it does not commend itself, it appears to be an administrative ineptitude of no constitutional significance and of no prejudice to these defendants. 25 (3) A more serious allegation against the special jury panel is that it is more inclined than the general panel to convict. Extensive studies have been made by the New York State Judicial Council which is under the duty of continuous study o the proce dures of the courts and of making recommendations for improvement to the Legislature.16 It is on studies and criticisms by this official body that petitioners base their charge here that the special jury is a convicting jury in an unconstitutional sense. 26 In 1937 the Council recommended abolition of struck juries,17 foreign juries18 and special juries.19 It said that, 'A well-administered ordinary jury system should produce jurors of as high calibre for every action as the special jury system attempts to provide in exceptional cases.'20 The recommendation was followed by the Legislature except as to special juries. In 1938 the Judicial Council renewed its recommendation as to these. It summarized that its data 'indicate that special juries are prone to convict.'21 In a study of certain types of homicide cases, it found that in 1933 and 1934, special juries convicted in eighty-three percent and eighty-two percent of the cases while ordinary juries those years convicted in forty-three percent and thirty-seven percent respectively. It reported that, 'The Judicial Council believes that every petit jury should be of uniformily high calibre and capable of giving a fair trial in all cases. To attain this goal, the ordinary jury, as now provided, may be in need of improvement. It is, however, unjust and should be unnecessary to select supconvictions indicated a too great readiness to convict on the part of special juries or a too great readiness to acquit on the part of ordinary juries, or whether the disparity reflected a difference between the ordinary case and those selected for special jury trial, rather than a reflection of an attitude on the part of either panel. It may result from the greater attention and better counsel which the prosecution gives to these important cases. 27 These defendants were convicted March 15, 1945, when the statistics offered here as to relative propensity of the two juries to convict were more than ten years old, and when the conditions which may have produced the discrepancy in ratio of convictions had long since been corrected. 28 The evidence in support of these objections may well, as the Judicial Council thought, warrant a political or social judgment that this special panel in 1945 was 'unnecessary and undesirable' and that the Legislature should abolish it. But it is quite another matter to say that this Federal Court has a mandate from the Constitution to disable the special jury by setting aside its convictions. The great disparity between a legislative policy or a political judgment on the one hand and a constitutional or legal judgment on the other, finds striking illustration in the position taken by the highest judicial personages in New York State who joined in the recommendation to abolish the special jury. 29 Two members26 of the Council who joined in proposing legislation to abolish the dual system sat in this case and abstained from putting their legislative recommendation into a court decision—they sustained as constitutional the system they would abolish as matter of policy. Our function concerns only constitutionality and we turn to the bearing of federal constitutional provisions on the legal issues. 30 It is not easy, and it should not be easy, for defendants to have proceedings set aside and held for naught on constitutional grounds when they have accepted as satisfactory all of the individual jurors who sat in their case, the jury exercised such discriminating and dispassionate judgment as to acquit them on three of the five counts submitted, and their conviction on a full judicial review of the facts and law has been found justified. This Court has long dealt and must continue to deal with these controversies from state courts with self-imposed restraints intended to protect itself and the state against irresponsible exercise of its unappealable power. 31 While this case does not involve any question as to exclusion of Negroes or any other race, the defendants rely largely upon a series of decisions in which this Court has set aside state court convictions of Negroes because Negroes were purposefully and completely excluded from the jury. However, because of the long history of unhappy relations between the two races, Congress has put these cases in a class by them selves. The Fourteenth Amendment, in addition to due process and equal protection clauses, declares that 'The Congress shall have power to enforce, by appropriate legislation, the provisions of this article.' So empowered, the Congress on March 1, 1875, enacted that 'no citizen possessing all other qualifications which are or may be prescribed by law shall be disqualified for service as grand or petit juror in any court of the United States, or of any State on account of race, color, or previous condition of servitude;' and made it a crime for any officer to exclude any citizen on those grounds. 18 Stat. 336—37, 8 U.S.C. § 44, 8 U.S.C.A. § 44. For us the majestic generalities of theFourteenth Amendment are thus reduced to a concrete statutory command when cases involve race or color which is wanting in every other case of alleged discrimination. This statute was a factor so decisive in establishing the Negro case precedents that the Court even hinted that there might be no judicial power to intervene except in matters authorized by Acts of Congress. Referring to the provision empowering Congress to enforce the Fourteenth Amendment, it said that 'All of the amendments derive much of their force from this latter provision. It is not said the judicial power of the general government shall extend to enforcing the prohibitions and to protecting the rights and immunities guaranteed. It is not said that branch of the government shall be authorized to declare void any action of a State in violation of the prohibitions. It is the power of Congress which has been enlarged. Congress is authorized to enforce the prohibitions by appropriate legislation.' (Italics in original.) Ex parte Commonwealth of Virginia, 100 U.S. 339, 345, 25 L.Ed. 676. 32 It is significant that this Court never has interfered with the composition of state court juries except in cases where this guidance of Congress was applicable. In an opinion by Mr. Justice Holmes it unanimously made short work of rejecting a claim that the Fourteenth Amendment prohibits the state from excluding from the jury certain occupational groups such as lawyers, preachers, ministers, doctors, dentists, and engineers and firemen of railroad trains. Rawlins v. State of Georgia, 201 U.S. 638, 26 S.Ct. 560, 50 L.Ed. 899, 5 Ann.Cas. 783. Cf. Brown v. New Jersey, 175 U.S. 172, 20 S.Ct. 77, 44 L.Ed. 119. 33 We do not mean that no case of discrimination in jury drawing except those involving race or color can carry such unjust consequences as to amount to a denial of equal protection or due process of law. But we do say that since Congress has considered the specific application of this Amendment to the State jury systems and has found only these discriminations to deserve general legislative condemnation, one who would have the judiciary intervene on grounds not covered by statute must comply with the exacting requirements of proving clearly that in his own case the procedure has gone so far afield that its results are a denial of equal protection or due process.27 34 These rules to confine our use of power to responsible limits have been formulated and applied even in cases where the federal race and color statute applied. Certainly they should apply with equal, if not greater, rigor in cases that are outside the statute. 35 It is fundamental in questioning the composition of a jury that a mere showing that a class was not represented in a particular jury is not enough; there must be a clear showing that its bsence was caused by discrimiantion, and in nearly all cases it has been shown to have persisted over many years.28 State of Virginia v. Rives, 100 U.S. 313, 322, 323, 25 L.Ed. 667; Martin v. State of Texas, 200 U.S. 316, 320, 321, 26 S.Ct. 338, 339, 50 L.Ed. 497; Thomas v. State of Texas, 212 U.S. 278, 282, 29 S.Ct. 393, 394, 53 L.Ed. 512; Smith v. State of Texas, 311 U.S. 128, 61 S.Ct. 164, 85 L.Ed. 84; Hill v. State of Texas, 316 U.S. 400, 62 S.Ct. 1159, 86 L.Ed. 1559; Akins v. State of Texas, supra. Also, when discrimination of an unconstitutional kind is alleged, the burden of proving it purposeful and intentional is on the defendant. Tarrance v. State of Florida, 188 U.S. 519, 23 S.Ct. 402, 47 L.Ed. 572; Martin v. State of Texas, 200 U.S. 316, 26 S.Ct. 338, 50 L.Ed. 497; Norris v. State of Alabama, 294 U.S. 587, 55 S.Ct. 579, 79 L.Ed. 1074; Snowden v. Hughes, 321 U.S. 1, 8, 9, 64 S.Ct. 397, 401, 88 L.Ed. 497; Akins v. State of Texas, 325 U.S. 398, 400, 65 S.Ct. 1276 1277, 89 L.Ed. 1692. 36 Our only source of power or guidance for interfering in this case with the state court jury system is found in the cryptic words of the Fourteenth Amendment, unaided by any word from Congress or any governing precedent in this Court. We consider first the clause which forbids a state to 'deny to any person within its jurisdiction the equal protection of the laws.' This prohibits prejudicial disparities before the law. Under it a system which might be constitutionally unobjectionable, if applied to all, may be brought within the prohibition if some have more favorable treatment. The inquiry under this clause involves defendants' standing before the law relative to that of others accused. 37 If it were proved that in 1945 an inequality between the special jury's record of convictions and that of the ordinary jury continued as it was found by the Judicial Council to have prevailed in 1933—34, some foundation would be laid for a claim of unequal treatment. No defendant has a right to escape an existing mechanism of trial merely on the ground that some other could be devised which would give him a better chance of acquittal. But in this case an alternative system actually was provided by the state to other defendants. A state is not required to try all classes of offenses in the same forum. But a discretion, even if vested in the court, to shunt a defendant before a jury so chosen as greatly to lessen his chances while others accused of a like offense are tried by a jury so drawn as to be more favorable to them, would hardly be 'equal protection of the laws.' Perhaps it could be shown that the difference in percentages of convictions was not due to a difference in attitude of the jurors but to a difference in the cases that were selected for special jury trial, or to a more intensive preparation and effort by the prosecution in cases singled out for such trial. But a ratio of conviction so disparate, if it continued until 1945, might, in absence of explanation, be taken to indicate that the special jury was, in contrast to its alternate, organized to convict. A defendant could complain of this inequality even if it were shown that a special jury court never had convicted any defendant who did not deserve conviction. 38 But the defendants have failed to show by any evidence whatever that this disparity in ratio of conviction existed in 1945 when they were tried. They show that it ever existed only by the studies and conclusions of the Judicial Council. The same source shows that it was corrected before these defendants were tried. As we have pointed out, this official body challenged the fairness of this dual system as formerly constituted and as early as 1937 declared that 'A well-considered jury system will insure an impartial cross-secion of the community on every petit jury,'29 and set out means to achieve it. We know of no reason why we should ignore or discredit their assurance that by administrative improvements in the selection of the ordinary juries they became the substantial equivalent of the special jury before these trials took place. 39 We hold, therefore, that defendants have not carried the burden of showing that the method of their trial denied them equal protection of the law. 40 The defendants' other objection is grounded on that clause of the Fourteenth Amendment which provides, 'nor shall any State deprive any person of life, liberty, or property, without due process of law.' It comprises objections which might be urged against any jury made up as the special jury was, even if it were the only jury in use in the state. It does not depend upon comparison with the jury facilities afforded other defendants. 41 This Court, however, has never entertained a defendant's objections to exclusions from the jury except when he was a member of the excluded class. Rawlins v. State of Georgia, 201 U.S. 638, 640, 26 S.Ct. 560, 50 L.Ed. 899, 5 Ann.Cas. 783. Cf. Strauder v. State of West Virginia, 100 U.S. 303, 25 L.Ed. 664. Relief has been held unavailable to a negro who objected that all white persons were purposely excluded from the grand jury that indicted him. Haraway v. State, 203 Ark. 912, 159 S.W.2d 733. Nevertheless, we need not here decide whether lack of identity with an excluded group would alone defeat an otherwise well-established case under the Amendment. 42 These defendants rely heavily on arguments drawn from our decisions in Glasser v. United States, 315 U.S. 60, 62 S.Ct. 457, 86 L.Ed. 680; Thiel v. Southern Pacific Co., 328 U.S. 217, 66 S.Ct. 984, 90 L.Ed. 1181, 166 A.L.R. 1412, and Ballard v. United States, 329 U.S. 187, 67 S.Ct. 261. The facts in the present case are distinguishable in vital and obvious particulars from those in any of these cases. But those decisions were not constrained by any duty of deference to the authority of the State over local administration of justice. They dealt only with juries in federal courts. Over federal proceedings we may exert a supervisory power with greater freedom to reflect our notions of good policy than we may constitutionally exert over proceedings in state courts, and these expressions of policy are not necessarily embodied in the concept of due process. 43 The due process clause is one of comprehensive generality, and in reducing it to apply in concrete cases there are different schools of thought. One is that its content on any subject is to be determined by the content of certain relevant other Amendments in the Bill of Rights which originally imposed restraints on only the federal Government but which the Fourteenth Amendment deflected against the states. The other theory is that the clause has an independent content apart from, and in addition to, any and all other Amendments. This meaning is derived from the history, evolution and present nature of our institutions and is to be spelled out from time to time in specific cases by the judiciary. 44 To treat first of the former doctrine, it steadily has been ruled that the commandments of the Sixth and Seventh Amendments, which require jury trial in criminal and certain civil cases, are not picked up by the due process clause of the Fourteenth so as to become limitations on the states. 'This court has ruled that consistently with those amendments trial by jury may be modified by a state or abolished altogether.' Palko v. State of Connecticut, 302 U.S. 319, 324, 58 S.Ct. 149, 151, 82 L.Ed. 288, and cases there cited. Unless we are now so to change our interpretation as to withdraw from the states the power so lately conceded to be theirs, this would end the matter under the view that the force of the due process clause is exhausted when it has applied the principles of othe relevant Amendments. 45 But this Court has construed it to be inherent in the independent concept of due process that condemnation shall be rendered only after a trial, in which the hearing is a real one, not a sham or pretense. Palko v. State of Connecticut, 302 U.S. 319, 327, 58 S.Ct. 149, 153, 82 L.Ed. 288; Mooney v. Holohan, 294 U.S. 103, 55 S.Ct. 340, 79 L.Ed. 791, 98 A.L.R. 406; Moore v. Dempsey, 261 U.S. 86, 43 S.Ct. 265, 67 L.Ed. 543. Trial must be held before a tribunal not biased by interest in the event. Tumey v. State of Ohio, 273 U.S. 510, 47 S.Ct. 437, 71 L.Ed. 749, 50 A.L.R. 1243. Undoubtedly a system of exclusions could be so manipulated as to call a jury before which defendants would have so little chance of a decision on the evidence that it would constitute a denial of due process. A verdict on the evidence, however, is all an accused can claim; he is not entitled to a set-up that will give a chance of escape after he is properly proven guilty. Society also has a right to a fair trial. The defendant's right is a neutral jury. He has no constitutional right to friends on the jury. 46 To establish the unfairness of this tribunal and the lack of due process afforded to one who is being tried before it, the defendants assert two defects in its composition: first, that it unconstitutionally excluded women, and second, that it unconstitutionally excluded laborers, craftsmen, service employees, and others of like occupation, amounting in sum to the exclusion of an economic class. 47 Assuming that defendants, not being women, have standing to complain of exclusion of women from the general and special jury panels, we are unable to sustain their objection. Approximately 7,000 women were on the general panel of 60,000 and 30 were on the special panel. One served on the jury which convicted the petitioners. The proportion of women on the jury panels did not equal their proportion of the population. There may be no logical reason for this, but there is an historical one. Until recently, and for nearly a half-century after the Fourteenth Amendment was adopted, it was universal practice in the United States to allow only men to sit on juries. The first state to permit women jurors was Washington, and it did not do so until 1911.30 In 1942 only 28 states permitted women to serve on juries and they were still disqualified in the other 20. Moreover, in 15 of the 28 states which permitted women to serve, they might claim exemption because of their sex.31 It would, in the light of this history, take something more than a judicial interpretation to spell out of the Constitution a command to set aside verdicts rendered by juries unleavened by feminine influence. The contention that women should be on the jury is not based on the Constitution, it is based on a changing view of the rights and responsibilities of women in our public life, which has progressed in all phases of life, including jury duty, but has achieved constitutional compulsion on the states only in the grant of the franchise by the Nineteenth Amendment. We may insist on their inclusion on federal juries where by state law they are eligible32 but woman jury service has not so become a part of the textual or customary law of the land that one convicted of crime must be set free by this Court if his state has lagged behind what we personally may regard as the most desirable practice in recognizing the rights and obligations of womanhood. 48 The other objection which petitioners urge under the due process clause is that the special jury panel was invalidated by exclusion of an economic group comprising such specified classifications as laborers, craftsmen and service employees. They argue that the jury panel was chosen 'with a purpose to obtain persons of conservative views, persons of the upper economic and social stratum in New York County, persons having a tendency to convict defendants accused of crime, and to exclude those who might understand the point of view of the laboring man.' As we have pointed out, there is no proof of exclusion of these.33 At most, the proof shows lack of proportional representation and there is an utter deficiency of proof that this was the result of a purpose to discriminate against this group as such. The uncontradicted evidence is that no person was excluded because of his occupation or economic status. All were subjected to the same tests of intelligence, citizenship and understanding of English. The state's right to apply these tests is not open to doubt even though they disqualify, especially in the conditions that prevail in New York, a disproportionate number of manual workers. A fair application of literacy, intelligence and other tests would hardly act with proportional equality on all levels of life. The most that the evidence does is to raise, rather than answer, the question whether there was an unlawful disproportionate representation of lower income groups on the special jury. 49 Even in the Negro cases this Court has never undertaken to say that a want of proportionate representation of groups, which is not proved to be deliberate and intentional, is sufficient to violate the Constitution. Akins v. State of Texas, 325 U.S. 398, 65 S.Ct. 1276, 89 L.Ed. 1692. If the Court has hesitated to require proportional representation where but two groups need be considered and identification of each group is fairly clear, how much more imprudent would it be to require proportional representation of economic classes. The occupations which are said to comprise the economic class allegedly excluded from the special panel are separated by such uncertain lines that the defendants' two exhibits are based on different classifications which are numerous and overlapping. 50 No significant difference in viewpoint between those allegedly excluded and those permitted to serve has been proved and nothing in our experience permits us to assume it.34 It would require large assumptions to say that one's present economic status, in a society as fluid as ours, determines his outlook in the trial of cases in general or of this one in particular. There is of course legitimate conflict of interest among economic groups, but they are so many and so overlie each other that not all can be significant. There is entrepreneur and wage-earner, consumer and producer, taxpayer and civil servant, foreman and laborer, white-collar worker and manual laborer. But we are not ready to assume that these differences of function degenerate into a hostility such that one cannot expect justice at the hands of occupations and groups other than his own. Were this true, an extremely rich man could rarely have a fair trial, for his class is not often found sitting on juries.35 51 Nor is there any such persuasive reason for dealing with purposeful occupational or economic discriminations if they do exist as presumptive constitutional violations, as would be the case with regard to purposeful discriminations because of race or color. We do not need to find prejudice in these latter exclusions, but cf. Strauder v. State of West Virginia, 100 U.S. 303, 306—309, 25 L.Ed. 664, for Congress has forbidden them, and a tribunal set up in defiance of its command is an unlawful one whether we think it unfair or not. But as to other exclusions, we must find them such as to deny a fair trial before they can be labeled as unconstitutional. 52 There may be special cases where exclusion of laborers would indicate that those sitting were prejudiced against labor defendants, as where a labor leader is on trial on charges growing out of a labor dispute. The situation would be similar to that of a Negro who confronts a jury on which no Negro is allowed to sit. He might very well say that a community which purposely discriminates against all Negroes discriminates against him. But it is quite different if we assume that 'persons of conservative views' do predominate on the special jury. Does it follow that 'liberals' would be more favorably disposed toward a defense that nominal labor leaders were hiring out to employers to 'handle' their labor problems? Does it follow that a jury from the 'upper economic and social stratum' would be more disposed to convict those who so undertake to serve two masters than 'those who might understand the point of view of the laboring man'? We should think it might be the other way about and defendants offer nothing but assertion to convince us. Our attention, moreover, is called to federal court records which show that Fay reported a net taxable income of over $65,000 for the years 1940 to 1942, while Bove reported over $39,000 for a similar period, both of them exclusive of the sums received from the contractors and involved in these charges. These earnings do not identify them very closely with the viewpoint of the depressed classes. The group with which they might be most closely identified is organized labor. But it cannot be claimed that union members were excluded from this special panel since three union members were called for examination on this particular jury, two being rejected by the People and one by the defendants themselves. The defendants have shown no intentional and purposeful exclusion of any class, and they have shown none that was prejudicial to them. They have had a fair trial, and no reason appears why they should escape its results. 53 The function of this federal Court under the Fourteenth Amendment in reference to state juries is not to prescribe procedures but is essentially to protect the integrity of the trial process by whatever method the state sees fit to employ. No device, whether conventional or newly devised, can be set up by which the judicial process is reduced t a sham an d courts are organized to convict. They must be organized to hear, try and determine on the evidence and the law. But beyond requiring conformity to standards of fundamental fairness that have won legal recognition, this Court always has been careful not so to interpret this Amendment as to impose uniform procedures upon the several states whose legal systems stem from diverse sources of law and reflect different historical influences.36 54 We adhere to this policy of self-restraint and will not use this great centralizing Amendment to standardize administration of justice and stagnate local variations in practice. The jury system is one which has undergone great modifications in its long history, see People v. Dunn, 157 N.Y. 528, 52 N.E. 572, 43 L.R.A. 247, and it is still undergoing revision and adaptation to adjust it to the tensions of time and locality. In no place are American institutions put to greater strain than in the City of New York with its some seven and a half million inhabitants gathered from the four corners of the earth and a daily transient flow of two million, with all that this implies of difficulty in law enforcement. The citizen there, as in other jurisdictions, has been called for jury service to perform a variety of functions—the grand jury, the petit jury, the sheriff's jury, the coroner's jury, the foreign jury, the struck jury, and the special jury. The states have had different and constantly changing tests of eligibility for service. Evolution of the jury continues even now, and many experiments are under way that were strange to the common law. Some states have taken measures to restrict its use; others, where jury service is a hardship, diminish the required number of jurors. Some states no longer require theunanimous verdict; others add alternate or substitute jurors to avoid mistrial in case of sickness or death. Some states have abolished the general verdict and require answers to specific questions.37 Well has it been said of our power to limit state action that 'To stay experimentation in things social and economic is a grave responsibility. Denial of the right to experiment may be fraught with serious consequences to the nation. It is one of the happy incidents of the federal system that a single courageous state may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country.' Mr. Justice Brandeis, dissenting in New State Ice Co. v. Liebmann, 285 U.S. 262, 311, 52 S.Ct. 371, 386, 76 L.Ed. 747. 55 As there is no violation of a federal statute alleged, the challenge to this judgment under the due process clause must stand or fall on a showing that these defendants have had a trial so unfair as to amount to a taking of their liberty without due process of law. On this record we think that showing has not been made. 56 Affirmed. 57 Mr. Justice MURPHY, dissenting. 58 The equal protection clause of the Fourteenth Amendment prohibits a state from convicting any person by use of a jury which is not impartially drawn from a cross-section of the community. That means that juries must be chosen without systematic and intentional exclusion of any otherwise qualified group of individuals. Smith v. State of Texas, 311 U.S. 128, 61 S.Ct. 164, 85 L.Ed. 84. Only in that way can the democratic traditions of the jury system be preserved. Thiel v. Southern Pacific Co., 328 U.S. 217, 220, 66 S.Ct. 984, 985, 90 L.Ed. 1181, 166 A.L.R. 1412; Glasser v. United States, 315 U.S. 60, 85, 62 S.Ct. 457, 471, 86 L.Ed. 680. It is because I believe that this constitutional standard of jury selection has been ignored in the creation of the so-called 'blue ribbon' jury panel in this case that I am forced to dissent. 59 Preliminarily, it should be noted that legislation by Congress prohibiting the particular kind of inequality here involved is unnecessary to enable us to strike it down under the Constitution. While Congress has the power to enforce by appropriate legislation the provisions of the Fourteenth Amendment, and has done so relative to discrimination in jury selection on the basis of race or color, its failure to legislate as to economic or other discrimination in jury selection does not permit us to stand idly by. We have consistently interfered with state procedure and state legislation when we felt that they were inconsistent with the Fourteenth Amendment or with the federal commerce power despite Congressional silence on the matter involved. See, e.g., West Virginia State Board of Education v. Barnette, 319 U.S. 624, 63 S.Ct. 1178, 87 L.Ed. 1628, 147 A.L.R. 674; Nippert v. Richmond, 327 U.S. 416, 66 S.Ct. 586, 90 L.Ed. 760, 162 A.L.R. 844; 60 The constitutional vice inherent in the type of 'blue ribbon' jury panel here involved is that it rests upon intentional and systematic exclusion of certain classes of people who are admittedly qualified to serve on the general jury panel. Whatever may be the standards erected by jury officials for distinguishing between those eligible for such a 'blue ribbon' panel and those who are not, the distinction itself is an invalid one. It denies the defendant his constitutional right to be tried by a jury fairly drawn from a cross-section of the community. It forces upon him a jury drawn from a panel chosen in a manner which tends to obliterate the representative basis of the jury. 61 The selection of the 'blue ribbon' panel in this case rests upon the 'degree of intelligence as revealed by the questionnaire'sent to pr ospective jurors, augmented by personal interviews. The questionnaire, however, does not purport to be a test of native intelligence, nor does it appear to offer any sound basis for distinguishing the intelligence of one person from another. The undeniable result has been to permit the jury officials to formulate whatever standards they desire, whether in terms of 'intelligence' or some other factor, to eliminate persons from the 'blue ribbon' panel, even though they admittedly are qualified for general jury service. That fact is strikingly borne out by the statistics compiled in this case as to the personnel of the 'blue ribbon' panel. Certain classes of individuals are totally unrepresented on the panel despite their general qualifications and despite the fact that high intelligence is to be found in such classes. Percentage of Percentage of 62 total experienced representation on 63 labor forces in "blue ribbon" 64 Manhattan. panel. 65 Professional and semi-professional. 12.1 18.8 66 Proprietors, managers and officials. 9.3 43 67 Clerical, sales and kindred workers. 21.3 38 Craftsmen, foremen and kindred 68 workers...................... 7.7. 0.2 Operatives and kindred workers. 17. 0 Service workers.............. 27.6. 0 Laborers...................... 4.9. 0 69 Farmers....................... 0.1. 0 Such statistics can only mean that the jury officials have evolved some standard other than that of 'intelligence' to exclude certain persons from the 'blue ribbon' panel. And that standard is apparently of an economic or social nature, unjustified by the democratic principles of the jury system. 70 The Court points out some of the difficulties involved in comparing the personnel of the panel with 1940 census figures. But we are dealing here with a very subtle and sophisticated form of discrimination which does not lend itself to easy or precise proof. The proof here is adequate enough to demonstrate that this panel like every discriminatorily selected 'blue ribbon' panel, suffers from a constitutional infirmity. That infirmity is the denial of equal protection to those who are tried by a jury drawn from a 'blue ribbon' panel. Such a panel is narrower and different from that used in forming juries to try the vast majority of other accused persons. To the extent of that difference, therefore, the persons tried by 'blue ribbon' juries receive unequal protection. 71 In addition, as illustrated in this case, the distinction that is drawn in fact between 'blue ribbon' jurors and general jurors is often of such a character as to destroy the representative nature of the 'blue ribbon' panel. There is no constitutional right to a jury drawn from a group of uneducated and unintelligent persons. Nor is there any right to a jury chosen solely from those at the lower end of the economic and social scale. But there is a constitutional right to a jury drawn from a group which represents a cross-section of the community. And a cross-section of the community includes persons with varying degrees of training and intelligence and with varyig economic and social positions. Under our Constitution, the jury is not to be made the representative of the most intelligent, the most wealthy or the most successful, nor of the least intelligent, the least wealthy or the least successful. It is a democratic institution, representative of all qualified classes of people. Smith v. State of Texas, supra. To the extent that a 'blue ribbon' panel fails to reflect this democratic principle, it is constitutionally defective. 72 The Court demonstrates rather convincingly that it is difficult to prove that the particular petitioners were prejudiced by the discrimination practiced in this case. Yet that should not excuse the failure to comply with the constitutional standard of jury selection. We can never measure accurately the prejudice that results from the exclusion of certain types of qualified people from a jury panel. Such prejudice is sosubtle, so intangible, that it escapes the ordinary methods of proof. It may be absent in one case and present in another; it may gradually and silently erode the jury system before it becomes evident. But it is no less real or meaningful for our purposes. If the constitutional right to a jury impartially drawn from a cross-section of the community has been violated, we should vindicate that right even though the effect of the violation has not yet put in a tangible appearance. Otherwise that right may be irretrievably lost in a welter of evidentiary rules. 73 Since this 'blue ribbon' panel falls short of the constitutional standard of jury selection, the judgments below should be reversed. 74 Mr. Justice BLACK, Mr. Justice DOUGLAS and Mr. Justice RUTLEDGE join in this dissent. 1 270 App.Div. 261, 59 N.Y.S.2d 127. 2 Code of Criminal Procedure, §§ 520, 543-a, 66 McKinney's Consolidated Laws of New York, part 2, 328, 329, 429. 3 296 N.Y. 510, 68 N.E.2d 453. 4 But 7,000 of the 60,000 on the general jury panel, or 11%, are women. It is almost frivolous to assertthat there is a bias against their inclusion on juries. Cf. Akins v. State of Texas, 325 U.S. 398, 403, 65 S.Ct. 1276, 1279, 89 L.Ed. 1692. 5 Judiciary Law, Consol.Laws, c. 30, § 596, 29 McKinney's Consolidated Laws of New York (pocket part) 131, 132. 6 Judiciary Law, § 599, 29 McKinney's Consolidated Laws of New York (pocket part) 133, 134. 7 Judiciary Law, § 596, supra. 8 Judiciary Law, § 599, supra. 9 Judiciary Law, § 749-aa3, 29 McKinney's Consolidated Laws of New York 512, 513. 10 Judiciary Law, § 749-aa2, 29 McKinney's Consolidated Laws of New York 512. 11 Judiciary Law, § 749-aa4, 29 McKinney's Consolidated Laws of New York 513, 514. 12 N.Y.Laws 1896, c. 378; N.Y.Laws 1901, c. 602. 13 The other cases cited in the per curiam affirmance were Storti v. Commonwealth of Massachusetts, 183 U.S. 138, 141, 22 S.Ct. 72, 73, 46 L.Ed. 120, and Andrews v. Swartz, 156 U.S. 272, 15 S.Ct. 389, 39 L.Ed. 422, both of which disapprove the use of habeas corpus as a substitute for writ of error. It is not clear, therefore, how much the affirmance of the Hall case depended on that procedural ground rather than on a disposition of the merits. Moreover, the grounds urged against the special jury in that case related to its selection from a panel which was only a segment of the general panel and did not assert the exclusion of particular groups. 14 The table was prepared at the request of petitioners' counsel by an attorney who testified that he 'found various occupations listed' and 'tried to classify them to groups, making them not too numerous.' Total number of special jurors on file in New York County Clerk's Office. 2,911 Total number with classifiable occupations.................... 2,743 Auditors and accountants.......... 166 Bankers........................... 170 Manufacturers..................... 106 Real Estate Brokers............... 117 Retired............................ 62 Architects and engineers.......... 229 Educators, teachers, librarians.... 27 Executives, managers of industrial enterprises...................... 470 Stock brokers..................... 185 Salesmen, promoters of business enterprises and advertising men.. 438 Newspaper men, editorial writers and others engaged in the dissemination of information................... 148 Mechanics........................... 5 Insurance men..................... 166 Travel agency men.................. 10 Civil service employees............ 21 Office clerks...................... 94 Retail merchants.................. 144 Entertainers....................... 26 Building and construction superintendents................... 70 Chemists and physicists............ 66 Attorneys........................... 5 Laborers None Labor union representatives......... 1 Housewives......................... 20 —There are only about 30 women on the entire special jury list— Petitioners' attorneys requested the Bureau of Labor Statistics of the United States Department of Labor to conform the classifications of the above table to the Census classifications. In the table thus prepared, twenty-one persons are classed as civil service employees and a note cautions that 'Some members of this group undoubtedly belong elsewhere, as under service trades, or laborers.' One hundred and sixty-five persons are listed as unclassifiable in the Bureau's table. 15 Occupations of Employed Persons (Except on Public Emergency Work) and of Experienced Workers Seeking Work, Residing in Manhattan in the week of March 24 to 30, 1940, compared with Occupations of Special Jurors on File in New York County Clerk's Office. January 31, 1945. Experienced Labor Force(a) Total Occupation Seeking Employed work, Total(c) experienced A B C Total(b)......................... 921,183 778,202 142,981 Professional and semiprofessional.................. 111,600 98,343 13,257 Proprietors, managers and officials...................... 85,969 81,234 4,735 Clerical, sales and kindred workers............... 196,037 169,066 26,971 Craftsmen, foremen and kindred workers............... 70,497 54,217 16,280 Operatives and kindred workers..... 156,581 128,253 28,328 Service workers.................... 254,595 216,992 37,603 Laborers, except farm farm......... 45,375 29,869 15,506 Farmers, farm managers, farm laborers........... 529 228 301 Percent Total............................. 100.0 100.0 100.0 Professional and semiprofessional.................. 12.1 12.6 9.3 Proprietors, managers and officials............ 9.3 10.4 3.3 Clerical, sales and kindred workers............... 21.3 21.7 18.9 Craftsmen, foremen and kindred workers............... 7.7 7.0 11.4 Operatives and kindred workers................... 17.0 16.5 19.8 Service workers.................... 27.6 27.9 26.3 Laborers, except farm.............. 4.9 3.8 10.8 Farmers, farm managers, farm laborers...................... 0.1(d) 0.2 Page 275 TABLE CONTINUED Experienced Labor Force(a) Males Special Jurors Seeking Employed work, Total(c) experienced D E F G Total[b] ..589,431 .489,618 99,813 2,664 Professional and semiprofessional 61,191 53,416 7,775 501 Proprietors, managers and officials 73,732 69,509 4,223 1,146 Clerical, sales and kindred workers.....112,316 .95,853 16,463 1,012 Craftsmen, foremen and kindred workers......67,504 .51,618 15,886 5 Operatives and kindred workers 98,493 79,562 18,931 ------- Service workers.131,112 .110,157 20,955 ------- Laborers, except farm.44,578 29,293 15,285 ------- Farmers, farm managers, farm laborers...505 .210 .295 ------- Percent Total.........100.0 .100.0 100.0 100.0 Professional and semiprofessional 10.4 10.9 7.8 18.8 Proprietors, managers and officials 12.5 14.2 4.2 43.0 Clerical, sales and kindred workers 19.1 19.6 16.5 38.0 Craftsmen, foremen and kindred workers.11.4 .10.5 15.9 0.2 Operatives and kindred workers 16.7 16.2 19.0 ------- Service workers.22.2 .22.5 21.0 ------- Laborers, except farm.7.6 6.0 15.3 ------- Farmers, farm managers, farm laborers...0.1 .(d) 0.3 ------- (a) Includes the employed (except those on public emergency work) and experienced workers seeking work. Source: U. S. Bureau of the Census. Sixteenth Census of the United States, 1940, Population, v. III, part 4, New York State Table 10a, pp. 363-365. (b) Omitting the unclassified, as well as housewives, retired persons, and others not in the labor force. (c) Except on public emergency work. (d) Less than one-tenth of one percent. 16 Judiciary Law, §§ 40—48, 29 McKinney's Consolidated Laws of New York 58—62, (pocket part), 17. 17 To obtain a struck jury, the commissioner of jurors or the county clerk, in the presence of the parties, selected from the general jury list the names of forty-eight persons whom he deemed most indifferent between the parties and best qualified to try the case. The parties then alternately would each strike off twelve names from the list. The jury was chosen from the remaining twenty-four names. 18 The foreign jury was chosen from a county adjoining that where the trial was to be held, in cases which it was thought a more impartial jury would thus be had. It lost its usefulness because of the ease with which a change of venue might be obtained. Code of Criminal Procedure, § 344.2, 66 McKinney's Consolidated Laws of New York, part 1, 622. 19 Third Annual Report of the Judicial Council of the State of New York (1937) 123—28. 20 Id. at 127. 21 Fourth Annual Report of the Judicial Council of the State of New York (1938) 46. *[280] posedly special juries in specific cases.'22 The Council next year reported that the general panel had not been considered adequate, largely because in its selection the standards of the statute had not been followed, and that a complete reexamination of the general panel was undertaken.23 From time to time the Council renewed its recommendation. In 1945 it proposed that the special jury 'be abolished as unnecessary and undesirable.' It said, 'It is undisputed that the revised jury system for New York City recommended by the Judicial Council and in operation since 1940 has succeeded in improving the quality of jurors generally by applying to all jurors the high standards which formerly were required only of special jurors. Thus, the necessity for special jurors no longer exists.'24 While the Judicial Council has pointed out and investigated the different conviction ratios, it has at no time suggested that the special jury has been inclined to convict except where conviction was warranted. New York extends an appeal on law and fact as matter of right.25 If there were a tendency to convict improperly, the Judicial Council, which includes the Chief Judge of the Court of Appeals and the Presiding Justice of the Appellate Division, which courts review these cases, would know it. Despite the Council's desire to abolish this jury, no such reasons wre ever as signed. No statistics are produced to show that special juries have been more often reversed on the facts than ordinary ones. Of course, it would be impossible for us to say even were we to examine the cases in detail whether the difference in percentage of 22 Id. at 47. 23 Fifth Annual Report of the Judicial Council of the State of New York (1939) 42—43. 24 Eleventh Annual Report of the Judicial Council of the State of New York (1945) 49—50. 25 See note 2, supra. 26 Loughran, Ch. J., New York Court of Appeals, and Martin, P.J., App.Div. (1st Dep't). 27 It is unnecessary to decide whether the equal protection clause of the Fourteenth Amendment might of its own force prohibit discrimination on account of race in the selection of jurors, so that such discrimination would violate the due process clause of the same Amendment. Nor need we decide whether the due process clause alone outlaws such discrimination. Cf. Hill v. State of Texas, 316 U.S. 400, 406, 62 S.Ct. 1159, 1162, 86 L.Ed. 1559: 'But no state is at liberty to impose upon one charged with crime a discrimination in its trial procedure which the Constitution, and an Act of Congress passed pursuant to the Constitution, alike forbid * * * it is our duty as well as the state's to see to it that throughout the procedure for bringing him to justice he shall enjoy the protection which the Constitution guarantees. Where, as in this case, timely objection has laid bare a discrimination in the selection of grand jurors, the conviction cannot stand because the Constitution prohibits the procedure by which it was obtained. Equal protection of the laws is something more than an abstract right. It is a command which the state must respect, the benefits of which every person may demand.' 28 Official records of the New York county clerk show that in the five-year period, 1940—44, 2407 new jurors were put on the special panel which is maintained at about 3,000, and 2,692 persons were removed from the list. 29 Third Annual Report of the Judicial Council of the State of New York (1937) 123. 30 1911 Laws of Washington, c. 57. See Carson, Women Jurors (1928). 31 Report to the Judicial Conference of the Committee on Selection of Jurors (1942) 23. A later bulletin of the Women's Bureau of the United States Department of Labor showed that in 1945, 31 States permitted jury service by women, exemption being allowed in 15 of them. But 17 States still withheld their approval of women on juries. A pamphlet of the Women's Bureau, as yet unpublished, shows that at this time four more states find women acceptable as jurors. 32 See udicial Co de, §§ 275, 276, 28 U.S.C. §§ 411, 412, 28 U.S.C.A. §§ 411, 412; Ballard v. United States, 329 U.S. 187, 67 S.Ct. 261. 33 It is worth comment that the annual reports of the Judicial Council, on which petitioners heavily rely, although they urge strongly and persistently that the special jury be abolished, do not give as one of the reasons the social make-up of the panel. This is odd, if that reason were valid, since the Council obviously was interested in urging all good reasons which would support it strong disapproval and its reiterated recommendation. 34 Cf. Rawlins v. State of Georgia, 201 U.S. 638, 640, 26 S.Ct. 560, 50 L.Ed. 899, 5 Ann.Cas. 783: 'The nature of the classes excluded was not such as was likely to affect the conduct of the members as jurymen, or to make them act otherwise than those who were drawn would act.' 35 We are unable to say that mere exclusion of jurors of one's occupation renders a jury unconstitutional, even though the occupation tends to give those who practice it a particular and distinctive viewpoint. New York has some 20,000 policemen presumably otherwise qualified for jury service. It is not unknown that a defendant is a policeman. Can he not be constitutionally tried if policemen are exempt from service or even excluded from the panel? There is some discretion left in the states to say that some occupations are more needed at their work than on jury duty and, perhaps, that some have occupational attitudes that make it appropriate to leave them off the list so long as an unexceptionable list remains on call. Cf. Rawlins v. State of Georgia, 201 U.S. 638, 26 S.Ct. 560, 50 L.Ed. 899, 5 Ann.Cas. 783. See Knox, Selection of Federal Jurors, 31 Journal of the American Judicature Society 9, 11. 36 While English common law is the source from which it often is assumed a uniform system was derived by the States of the United States, it must not be overlooked that many of them have been deeply influenced by Roman and civil law to which their history exposed them. None of the territory west of the Alleghenies was more than briefly or casually subject to common law before the Revolution. French civil law prevailed in most of the Ohio and Mississippi Valleys from their settlement until Wolfe's decisive victory before Quebec in 1763. Its ascendancy in the north then was broken, and in 1803, the Louisiana Purchase ended French sovereignty in the rest of the Mississippi area. Louisiana continues, however, a system of law based on the Code Napoleon. The Southwest and Florida once were Spanish. See Colvin, Participation of the United States of America with the Republics of Latin America in the Common Heritage of Roman and Civil Law, 10 Proceedings of the Eighth American Scientific Congress 467. Even among the early seaboard States, the English common law had rivals. The Swedes on the banks of the Delaware held one of the earliest jury trials on this continent. The Governor followed Swedish law and custom in calling to his aid in judging 'assistants' who were selected from among 'the principal and wisest inhabitants' and were both judges and jurors and sometimes witnesses. See 1 Johnson, The Swedish Settlements on the Delaware (1911) 450 et seq. In New York, there was a deep and persistent influence from Roman Dutch law. Upon capitulation of New Amsterdam, it was stipulated that certain Dutch law, and judgments and customs should be respected. But even beyond this, in the organization of the courts the Dutch rule persisted although contrary to the 'Duke's Laws' enacted by the conqueror. The history of the early Dutch influence in New York court procedure was preserved by the diligence and foresight of Judge Daly. 1 E. D. Smith's Reports (New York Common Pleas) xvii, xxxiv, xxxvii. The Roman-Dutch element in New York law is recognized by its courts, e.g., Dunham v. Williams, 37 N.Y. 251, 253; Van Giessen v. Bridgford, 83 N.Y. 348, 356; Smith v. Rentz, 131 N.Y. 169, 175, 30 N.E. 54, 15 L.R.A. 138. 37 See 8 Encyclopedia of the Social U.S. 373, 66 S.Ct. 1050, 90 L.Ed. 1317, 165 A.L.R. 574. And so in this case we are entitled to judge the action of New York by constitutional standards without regard to the absence of relevant federal legislation.
01
332 U.S. 126 67 S.Ct. 1547 91 L.Ed. 1947 BARTELS et al.v.BIRMINGHAM et al. GEER et al. v. BIRMINGHAM. Nos. 731 and 732. Argued April 3, 1947. Decided June 23, 1947. Messrs. Thomas B. Roberts and Clyde B. Charlton, both of Des Moines, Iowa, for petitioners. Mr. Robert L. Stern, of Washington, D.C., for respondent Birmingham Collectors. Mr. Robert A. Wilson, of Washington, D.C., for respondents Williams et al. Mr. Justice REED delivered the opinion of the Court. 1 Petitioners, operators of public dance halls, brought these actions, which were consolidated for trial, against the respondent Collector of Internal Revenue to recover taxes paid under the Social Security Act, Titles VIII and IX, 42 U.S.C.A. §§ 1001 et seq., 1101 et seq., and I.R.C., c. 9, subchaps. A and C, 26 U.S.C.A. Int.Rev.Code, §§ 1400 et seq., 1600 et seq. Recovery depends on whether petitioners' arrangements for bands to play at the dance halls made the band leaders and other members of the bands employees of the petitioners or whether, despite the arrangements, the leaders were independent contractors and therefore themselves the employers of the other members. Several band leaders were allowed to intervene in the Bartels case as defendants to protect their own interests. After a recovery in the District Court, 59 F.Supp. 84, was reversed by the Circuit Court of Appeals, Birmingham v. Bartels, 8 Cir., 157 F.2d 295, they sought certiorari which we granted because of the importance of the issue to the administration of the Act. 329 U.S. 711, 67 S.Ct. 494. See United States v. Silk and Harrison v. Greyvan Lines, 331 U.S. 704, 67 S.Ct. 1463. 2 These cases are not concerned with musicians hired by petitioners to play regularly for their dance halls but with 'name bands' hired to play for limited engagements at their establishments. These bands are built around a leader whose name, and distinctive style in the presentation and rendition of dance music, is intended to give each band a marked individuality. The leader contracts with different ballroom operators to play at their establishments for a contract price. Almost all of the engagements here involved were one-night stands, some few being for several successive nights. The trial court found, and there is no real dispute, that the leader exercises complete control over the orchestra. He fixes the salaries of the musicians, pays them, and tells them what and how to play. He provides the sheet music and arrangements, the public address system, and the uniforms. He employs and discharges the musicians, and he pays agents' commissions, transportation and other expenses out of the sum received from the dance hall operators. Any excess is his profit and any deficit his personal loss. The operators of the dance halls furnish the piano but not the other instruments. 3 The American Federation of Musicians, of which the leaders and the musicians are members, adopted a standard contract known as 'Form B.' The terms of this contract create the difficulties in the determination of this case. As compensation to the bands, some contracts call for a guaranteed sum, with the privilege to the bands to take a percentage of the gross. Other contracts are for a fixed sum, only, and others for a percentage of gross, not to exceed a fixed sum. The contract states that the ballroom operator is the employer of the musicians and their leader, and 'shall have complete control of the services which the employees will render under the specifications ofthis contr act.' The form paragraph, so far as pertinent, is set out in the margin.1 The District Court found that the contract was adopted by the Union in order to shift the incidence of the social security taxes from the leader to the ballroom operator, and that it had no practical effect on the relations between the musicians, leader, and operator. The District Court held that the question of employment under the Act was one of fact, and that the contract was only one factor to be considered. Since the District Court believed that the contract was not entered into 'by fair negotiation' and that its purpose was to protect the leaders from taxes as employers, it concluded that the contract was of no effect and that the leader was an independent contractor employing the musicians. 4 The Circuit Court of Appeals thought otherwise. It concluded that the test of employment was the common law test of control, i.e., that one was an employer if he had the 'right' to direct what should be done and how it should be done. It concluded that the contract between the parties gave the ballroom operators the 'right' to control the musicians and the leader, whether or not the control was actually exercised. While the majority thought that such a contract was not binding on the Government, they thought it was binding on the parties and would control liability for employment taxes if the Bureau of Internal Revenue chose to accept the arrangement as valid. Birmingham v. Bartels, supra, 157 F.2d at page 300. 5 The Government here relies entirely on the contract, conceding that otherwise the bandleaders are independent contractors employing the musicians. On the other hand, the bandleaders involved contend also that though the contract be thought inconclusive, the leaders and musicians are employees of the operators. They rely upon the dependence of the orchestra members upon the ballroom operators judged in the light of the purposes of the Act. 6 In United States v. Silk, supra, we held that the relationship of employer-employee, which determines the liability for employment taxes under the Social Security Act was not to be determined solely by the idea of control which an alleged employer may or could exercise over the details of the service rendered to his business by the worker or workers. Obviously control is characteristically associated with the employer-employee relationship but in the application of social legislation employees are those who as a matter of economic reality are dependent upon the business to which they render service. In Silk, we pointed out that permanency of the relation, the skill required, the investment if the facilities for work and opportunities for profit or loss from the activities were also factors that should enter into judcial deter mination as to the coverage of the Social Security Act. It is the total stiuation that controls. These standards are as important in the entertainment field as we have just said, in Silk, that they were in that of distribution and transportation. 7 Consideration of the regulations of the Treasury and the Federal Security Agency, quoted in Silk at note 8, is necessary here. I.R.C., chap. 9, §§ 1429, 1609, 26 U.S.C.A. Int.Rev.Code, §§ 1429, 1609. Under those regulations, the Government successfully resisted the effort of a leader of a 'name' band, like those here involved, to recover social security taxes paid on the wages of the members of his organization. Williams v. United States, 7 Cir., 126 F.2d 129. The contract in that case was not 'Form B' and did not contain any corresponding control clause. Two years later, the Commissioner of Internal Revenue issued mimeographs 5638, 1944—5—11651, and 5767, 1944—22 11889, C.B. 1944, pp. 547—48. They were directed at the status of musicians and variety entertainers appearing in theatres, night clubs, restaurants and similar establishments. Collectors and others were therein advised that a 'Form B' or similar contract with the entertainers made operators of amusement places liable as employers under the Social Security Act. In the absence of such a contract, that is, in reality, the absence of the control clause of 'Form B,' the entertainers, 'with short-term engagements for a number of different operators' of amusement places, would be considered 'independent contractors.' The argument of respondents to support the administrative interpretation of the regulations is that the Government may accept the voluntary contractual arrangements of the amusement operators and entertainers to shift the tax burden from the band leaders to the operators.2 Cases are cited to support this position.3 All of these cases, however, involve the problem of corporate or association entity. They are not pertinent upon the question of contracts to shift tax liability from one taxpayer to another wholly distinct and disconnected corporation or individual. We do not think that such a contractual shift authorizes the Commissioner to collect taxes from one not covered by the taxing statute. The interpretive rulings on the Regulations, referred to in this paragraph do not have the force and effect of Treasury Decisions.4 We are of the opinion that such administrative action goes beyond routine and exceeds the statutory power of the Commissioner. Social Security Board v. Nierotko, 327 U.S. 358, 369, 370, 66 S.Ct. 637, 643, 90 L.Ed. 718, 162 A.L.R. 1445. 8 This brings us then to a determination of whether the members of a 'name band' under the circumstances heretofore detailed are employees of the operator of the dance hall or of the leader. If the operator is the employer, the leader is also his employee. 9 We are of the opinion that the elements of employment mark the band leader as the employer in these cases. The leader organizes an trains th e band. He selects the members. It is his musical skill and showmanship that determines the success or failure of the organization. The relations between him and the other members are permanent; those between the band and the operator are transient. Maintenance costs are a charge against the price received for the performance. He bears the loss or gains the profit after payment of the members' wages and the other band expenses. 10 The judgments of the Circuit Court of Appeals are reversed and those of the District Court are affirmed. 11 Reversed. 12 Mr. Justice DOUGLAS, with whom Mr. Justice BLACK and Mr. Justice MURPHY concur, dissenting. 13 As the opinion of the Court points out, the Form B contract involved in the present case was adopted, with the approval of the Commissioner of Internal Revenue, after it had been held under an earlier form of contract that members of the orchestra were employees of the band leader. On the face of the present contract the dance hall proprietor is the employer even under traditional concepts of master and servant. For he has all of the conventional earmarks of the entrepreneur ownership, profit, loss, and control—if the provisions of the contract alone are considered. Then the requirements of the Social Security Acts are satisfied. And to hold the dance hall proprietor liable for the tax is not to contract the coverage contemplated by the statutory scheme. 14 I think the tax collector should be entitled to take such private arrangements at their face. In other situations a taxpayer may not escape the tax consequences of the business arrangements which he makes on the grounds that they are fictional. The Government may 'sustain or disregard the effect of the fiction as best serves the purposes of the tax statute.' Higgins v. Smith, 308 U.S. 473, 477, 60 S.Ct. 355, 358, 84 L.Ed. 406. That rule is not restricted in its application to the use by taxpayers of corporate or related devices to obtain tax advantages. It was applied in Gray v. Powell, 314 U.S. 402, 62 S.Ct. 326, 86 L.Ed. 301, where a railroad sought exemption from the Bituminous Coal Act, 15 U.S.C.A. § 828 et seq., by contending that the operations of one who appeared to be an independent contractor were in fact its operations. The Court in rejecting the contention said that 'The choice of disregarding a deliberately chosen arrangement for conducting business affairs does not lie with the creator of the plan.' Id., 314 U.S. at page 414, 62 S.Ct. at page 334, 86 L.Ed. 301. I see no reason for creating an exception to that rule here. If the Government chooses to accept the contract on its face, the parties should be barred from showing that it conceals the real arrangement. Tax administration should not be so easily embarrassed. 1 'Witnesseth, That the employer employs the personal services of the employees, as musicians severally, and the employees severally, through their representative, agree to render collectively to the employer services as musicians in the orchestra under the leadership of Griff Williams, according to the following terms and conditions: 'The employer shall at all times have conplete control of the services which the employees will render under the specifications of this contract. On behalf of the employer the Leader will distribute the amount received from the employer to the employees, including himself, as indicated on the opposite side of this contract, or in place thereof on separate memorandum supplied to the employer at or before the commencement of the employment hereunder and take and turn over to the employer receipts therefor from each employee, including himself. The amount paid to the Leader includes the cost of transportation, which will be reported by the Leader to the employer. The employer hereby authorizes the Leader on his behalf to replace any employee who by illness, absence, or for any other reason does not perform any or all of the services provided for under this contract. * * *' 2 There is a contention that the contracts were coerced because the operators could not secure these musicians under other arrangements. We do not find it necessary to rely or pass upon that contention. 3 Edwards v. Chile Copper Co., 270 U.S. 452, 456, 46 S.Ct. 345, 346, 70 L.Ed. 678; Burnet v. Commonwealth Improvement Co., 287 U.S. 415, 53 S.Ct. 198, 77 L.Ed. 399; New Colonial Ice Co. v. Helvering, 292 U.S. 435, 54 S.Ct. 788, 78 L.Ed. 1348; Helvering v. Coleman-Gilbert Associates, 296 U.S. 369, 374, 56 S.Ct. 285, 287, 80 L.Ed. 278; Higgins v. Smith, 308 U.S. 473, 477, 60 S.Ct. 355, 357, 84 L.Ed. 406; Gray v. Powell, 314 U.S. 402, 62 S.Ct. 326, 86 L.Ed. 301; Moline Properties, Inc., v. Commissioner, 319 U.S. 436, 439, 63 S.Ct. 1132, 1134, 87 L.Ed. 1499; Interstate Transit Lines v. Commissioner, 319 U.S. 590, 63 S.Ct. 1279, 87 L.Ed. 1607; Schenley Distillers Corp. v. United States, 326 U.S. 432, 437, 66 S.Ct. 247, 249, 90 L.Ed. 181. 4 See Cum. Bull. (1944), notice, p. I.
1112
332 U.S. 46 67 S.Ct. 1672 91 L.Ed. 1903 ADAMSONv.PEOPLE OF STATE OF CALIFORNIA. No. 102. Argued Jan. 15, 16, 1947. Decided June 23, 1947. Rehearing Denied Oct. 13, 1947. See 68 S.Ct. 27. Appeal from the Supreme Court of the State of California. Mr. Morris Lavine, of Los Angeles, Cal., for appellant. Mr. Walter L. Bowers, of Los Angeles, Cal., for appellee. Mr. Justice REED delivered the opinion of the Court. 1 The appellant, Adamson, a citizen of the United States, was convicted, without recommendation for mercy, by a jury in a Superior Court of the State of California of murder in the first degree.1 After considering the same objections to the conviction that are pressed here, the sentence of death was affirmed by the Supreme Court of the state. 27 Cal.2d 478, 165 P.2d 3. Review of that judgment by this Court was sought and allowed under Judicial Code § 237, 28 U.S.C. § 344, 28 U.S.C.A. § 344.2 The provisions of California law which were challenged in the state proceedings as invalid under the Fourteenth Amendment to the Federal Constitution are those of the state constitution and penal code in the margin. They permit the failure of a defendant to explain or to deny evidence against him to be commented upon by court and by counsel and to be considered by court and jury.3 The defendant did not testify. As the trial court gave its instructions and the District Attorney argued the case in accordance with the constitutional and statutory provisions just referred to, we have for decision the question of their constitutionality in these circumstances under the limitations of § 1 of the Fourteenth Amendment.4 2 The appellant was charged in the information with former convictions for burglary, larceny and robbery and pursuant to § 1025, California Penal Code, answered that he had suffered the previous convictions. This answer barred allusion to these charges of convictions on the trial.5 Under California's interpretation of § 1025 of the Penal Code and § 2051 of the Code of Civil Procedure, however, if the defendant, after answering affirmatively charges alleging prior convictions, takes the witness stand to deny or explain away other evidence that has been introduced 'the commission of these crimes could have been revealed to the jury on cross-examination to impeach his testimony.' People v. Adamson, 27 Cal.2d 478, 494, 165 P.2d 3, 11; People v. Braun, 14 Cal.2d 1, 6, 92 P.2d 402. This forces an accused who is a repeated offender to choose between the risk of having his prior offenses disclosed to the jury or of having it draw harmful inferences from uncontradicted evidence that can only be denied or explained by the defendant. 3 In the first place, appellant urges that the provision of the Fifth Amendment that no person 'shall be compelled in any criminal case to be a witness against himself' is a fundamental national privilege or immunity protected against state abridgment by the Fourteenth Amendment or a privilege or immunity secured, through the Fourteenth Amendment, against deprivation by state action because it is a personal right, enumerated in the federal Bill of Rights. 4 Secondly, appellant relies upon the due process of law clause of the Fourteenth Amendment to invalidate the provisions of the California law, set out in note 3 supra, and as applied (a) because comment on failure to testify is permitted, (b) because appellant was forced to forego testimony in person because of danger of disclosure of his past convictions through cross-examnation and (c) because the presumption of innocence was infringed by the shifting of the burden of proof to appellant in permitting comment on his failure to testify. 5 We shall assume, but without any intention thereby of ruling upon the issue,6 that state permission by law to the court, counsel and jury to comment upon and consider the failure of defendant 'to explain or to deny by his testimony any evidence or facts in the case against him' would infringe defendant's privilege against self-incrimination under the Fifth Amendment if this were a trial in a court of the United States under a similar law. Such an assumption does not determine appellant's rights under the Fourteenth Amendment. It is settled law that the clause of the Fifth Amendment, protecting a person against being compelled to be a witness against himself, is not made effective by the Fourteenth Amendment as a protection against state action on the ground that freedom from testimonial compulsion is a right of national citizenship, or because it is a personal privilege or immunity secured by the Federal Constitution as one of the rights of man that are listed in the Bill of Rights. 6 The reasoning that leads to those conclusions starts with the unquestioned premise that the Bill of Rights, when adopted, was for the protection of the individual against the federal government and its provisions were inapplicable to similar actions done by the states. Barron v. Baltimore, 7 Pet. 243, 8 L.Ed. 672; Feldman v. United States, 322 U.S. 487, 490, 64 S.Ct. 1082, 1283, 88 L.Ed. 1408, 154 A.L.R. 982. With the adoption of the Fourteenth Amendment, it was suggested that the dual citizenship recognized by its first sentence,7 secured for citizens federal protection for their elemental provileges and immunities of state citizenship. The Slaughter-House Cases8 decided, contrary to the suggestion, that these rights, as privileges and immunities of state citizenship, remained under the sole protection of the state governments. This Court, without the expression of a contrary view upon that phase of the issues before the Court, has approved this determination. Maxwell v. Bugbee, 250 U.S. 525, 537, 40 S.Ct. 2, 5, 63 L.Ed. 1124; Hamilton v. Regents, 293 U.S. 245, 261, 55 S.Ct. 197, 203, 79 L.Ed. 343. The power to free defendants in state trials from self-incrimination was specifically determined to be beyond the scope of the privileges and immunities clause of the Fourteenth Amendment in Twining v. New Jersey, 211 U.S. 78, 91—98, 29 S.Ct. 14, 16—19, 53 L.Ed. 97. 'The privilege against self-incrimination may be withdrawn and the accused put upon the stand as a witness for the state.'9 The Twining case likewise disposed of the contention that freedom from testimonial compulsion, being specifically granted by the Bill of Rights, is a federal privilege or immunity that is protected by the Fourteenth Amendment against state invasion. This Court held that the inclusion in the Bill of Rights of this protction agai nst the power of the national government did not make the privilege a federal privilege or immunity secured to citizens by the Constitution against state action. Twining v. New Jersey, supra, 211 U.S. at pages, 98, 99, 29 S.Ct. at page 19, 53 L.Ed. 97; Palko v. Connecticut, supra, 302 U.S. at page 328, 58 S.Ct. at page 153, 82 L.Ed. 288. After declaring that state and national citizenship co-exist in the same person, the Fourteenth Amendment forbids a state from abridging the privileges and immunities of citizens of the United States. As a matter of words, this leaves a state free to abridge, within the limits of the due process clause, the privileges and immunities flowing from state citizenship. This reading of the Federal Constitution has heretofore found favor with the majority of this Court as a natural and logical interpretation. It accords with the constitutional doctrine of federalism by leaving to the states the responsibility of dealing with the privileges and immunities of their citizens except those inherent in national citizenship.10 It is the construction placed upon the amendment by justices whose own experience had given them contemporaneous knowledge of the purposes that led to the adoption of the Fourteenth Amendment. This construction has become embedded in our federal system as a functioning element in preserving the balance between national and state power. We reaffirm the conclusion of the Twining and Palko cases that protection against self-incrimination is not a privilege or immunity of national citizenship. 7 Appellant secondly contends that if the privilege against self-incrimination is not a right protected by the privileges and immunities clause of the Fourteenth Amendment against state action, this privilege, to its full scope under the Fifth Amendment, inheres in the right to a fair trial. A right to a fair trial is a right admittedly protected by the due process clause of the Fourteenth Amendment.11 Therefore, appellant argues, the due process clause of the Fourteenth Amendment protects his privilege agaist self-in crimination. The due process clause of the Fourteenth Amendment, however, does not draw all the rights of the federal Bill of Rights under its protection. That contention was made and rejected in Palko v. Connecticut, 302 U.S. 319, 323, 58 S.Ct. 149, 150, 82 L.Ed. 288. It was rejected with citation of the cases excluding several of the rights, protected by the Bill of Rights, against infringement by the National Government. Nothing has been called to our attention that either the framers of the Fourteenth Amendment or the states that adopted intended its due process clause to draw within its scope the earlier amendments to the Constitution. Palko held that such provisions of the Bill of Rights as were 'implicit in the concept of ordered liberty,' 302 U.S. at page 325, 58 S.Ct. at pages 151, 152, became secure from state interference by the clause. But it held nothing more. 8 Specifically, the due process clause does not protect, by virtue of its mere existence the accused's freedom from giving testimony by compulsion in state trials that is secured to him against federal interference by the Fifth Amendment. Twining v. New Jersey, 211 U.S. 78, 99—114, 29 S.Ct. 14, 19—26, 53 L.Ed. 97; Palko v. Connecticut, supra, 302 U.S. at page 323, 58 S.Ct. at page 150, 82 L.Ed. 288. For a state to require testimony from an accused is not necessarily a breach of a state's obligation to give a fair trial. Therefore, we must examine the effect of the California law applied in this trial to see whether the comment on failure to testify violates the protection against state action that the due process clause does grant to an accused. The due process clause forbids compulsion to testify by fear of hurt, torture or exhaustion.12 It forbids any other type of coercion that falls within the scope of due process.13 California follows Anglo-American legal tradition in excusing defendants in criminal prosecutions from compulsory testimony. Cf. Wigmore (3d Ed.) § 2252. That is a matter of legal policy and not because of the requirements of due process under the Fourteenth Amendment.14 So our inquiry is directed, not at the broad question of the constitutionality of compulsory testimony from the accused under the due process clause, but to the constitutionality of the provision of the California law that permits comment upon his failure to testify. It is, of course, logically possible that while an accused might be required, under appropriate penalties, to submit himself as a witness without a violation of due process, comment by judge or jury on inferences to be drawn from his failure to testify, in jurisdictions where an accused's privilege against self-incrimination is protected, might deny due process. For example, a statute might declare that a permitted refusal to testify would compel an acceptance of the truth of the prosecution's evidence. 9 Generally, comment on the failure of an accused to testify is forbidden in American jurisdictions.15 This arises from state constitutional or statutory provisions similar in character to the federal provisions. Fifth Amendment and 28 U.S.C. § 632, 28 U.S.C.A. § 632. California, however, is one of a few states that permit limited comment upon a defendant's failure to testify.16 That permission is narrow. The California law is set out in note 3 and authorizes comment by court and counsel upon the 'failure of the defendant to explain or to deny by his testimony any evidence or facts in the case against him.' This does not involve any presumption, rebuttable or irrebuttable, either of guilt or of the truth of any fact, that is offered in evidence. Compare Tot v. United States, 319 U.S. 463, 470, 63 S.Ct. 1241, 1246, 87 L.Ed. 1519. It allows inferences to be drawn from proven facts. Because of this clause, the court can direct the jury's attention to whatever evidence there may be that a defendant could deny and the prosecution can argue as to inferences that may be drawn from the accused's failure to testify. Compare Caminetti v. United States, 242 U.S. 470, 492—495, 37 S.Ct. 192, 197, 198, 61 L.Ed. 442, L.R.A.1917F, 502, Ann.Cas.1917B, 1168; Raffel v. United States, 271 U.S. 494, 497, 46 S.Ct. 566, 567, 70 L.Ed. 1054. There is here no lack of power in the trial court to adjudge and no denial of a hearing. California has prescribed a method for advising the jury in the search for truth. However sound may be the legislative conclusion that an accused should not be compelled in any criminal case to be a witness against himself, we see no reason why comment should not be made upon his silence. It seems quite natural that when a defendant has opportunity to deny or explain facts and determines not to do so, the prosecution should bring out the strength of the evidence by commenting upon defendant's failure to explain or deny it. The prosecution evidence may be of facts that may be beyond the knowledge of the accused. If so, his failure to testify would have little if any weight. But the facts may be such as are necessarily in the knowledge of the accused. In that case a failure to explain would point to an inability to explain. 10 Appellant sets out the circumstances of this case, however, to show coercion and unfairness in permitting comment. The guilty person was not seen at the place and time of the crime. There was evidence, however, that entrance to the place or room where the crime was committed might have been obtained through a small door. It was freshly broken. Evidence showed that six fingerprints on the door were petitioner's. Certain diamond rings were missing from the deceased's possession. There was evidence that appellant, some time after the crime, asked an unidentified person whether the latter would be interested in purchasing a diamond ring. As has been stated, the information charged other crimes to appellant and he admitted them. His argument here is that he could not take the stand to deny the evidence against him because he would be subjected to a cross-examination as to former crimes to impeach his veracity and the evidence so produced might well bring about his conviction. Such cross-examination is allowable in California. People v. Adamson, supra, 27 Cal.2d 44, 165 P.2 d 3. Therefore, appellant contends the California statute permitting comment denies him due process. 11 It is true that if comment were forbidden, an accused in this situation could remain silent and avoid evidence of former crimes and comment upon his failure to testify. We are of the view, however, that a state may control such a situation in accordance with its own ideas of the most efficient administration of criminal justice. The purpose of due process is not to protect an accused against a proper conviction but against an unfair conviction. When evidence is before a jury that threatens conviction, it does not seem unfair to require him to choose between leaving the adverse evidence unexplained and subjecting himself to impeachment through disclosure of former crimes. Indeed, this is a dilemma with which any defendant may be faced. If facts, adverse to the defendant, are proven by the prosecution, there may be no way to explain them favorably to the accused except by a witness who may be vulnerable to impeachment on cross-examination. The defendant must then decide whether or not to use such a witness. The fact that the witness may also be the defendant makes the choice more difficult but a denial of due process does not emerge from the circumstances.17 12 There is no basis in the California law for appellant's objection on due process or other grounds that the statutory authorization to comment on the failure to explain or deny adverse testimony shifts the burden of proof or the duty to go forward with the evidence. Failure of the accused to testify is not an admission of the truth of the adverse evidence. Instructions told the jury that the burden of proof remained upon the state and the presumption of innocence with the accused. Comment on failure to deny proven facts does not in California tend to supply any missing element of proof of guilt. People v. Adamson, supra, 27 Cal.2d 489—495, 165 P.2d 3. It only directs attention to the strength of the evidence for the prosecution or to the weakness of that for the defense. The Supreme Court of California called attention to the fact that the prosecutor's argument approached the borderline in a statement that might have been construed as asserting 'that the jury should infer guilt solely from defendant's silence.' That court felt that it was improbable the jury was misled into such an understanding of their power. We shall not interfere with such a conclusion. People v. Adamson, supra, 27 Cal.2d 494, 495, 165 P.2d 3, 12. 13 Finally, appellant contends that due process of law was denied him by the introduction as evidence of tops of women's stockings that were found in his room. The claim is made that such evidence inflamed the jury. The lower part of a woman's stocking was found under the victim's body. The top was not found. The corpse was barelegged. The tops from defendant's room did not match the lower part found under the dead body. The California court held that the tops were admissible as evidence because this 'interest in women's stocking tops is a circumstance that tends to identify defendant' as the perpetrator of the crime. We do not think the introduction of this evidence violated any federal constitutional right. 14 We find no other error that gives ground for our intervention in California's administration of criminal justice. 15 Affirmed. 16 Mr. Justice FRANKFURTER (concurring). 17 Less than 10 years ago, Mr. Justice Cardozo announced as settled constitutional law that while the Fifth Amendment, 'which is not directed to the States, but solely to the federal government,' provides that no person shall be compelled in any criminal case to be a witnss against himself, the process of law assured by the Fourteenth Amendment does not require such immunity from self-crimination: 'in prosecutions by a state, the exemption will fail if the state elects to end it.' Palko v. Connecticut, 302 U.S. 319, 322, 324, 58 S.Ct. 149, 150, 151, 82 L.Ed. 288. Mr. Justice Cardozo spoke for the Court, consisting of Mr. Chief Justice Hughes, and McReynolds, Brandeis, Sutherland, Stone, Roberts, Black, JJ. (Mr. Justice Butler dissented.) The matter no longer called for discussion; a reference to Twining v. New Jersey, 211 U.S. 78, 29 S.Ct. 14, 53 L.Ed. 97, decided 30 years before the Palko case, sufficed. 18 Decisions of this Court do not have equal intrinsic authority. The Twining case shows the judicial process at its best comprehensive briefs and powerful arguments on both sides, followed by long deliberation, resulting in an opinion by Mr. Justice Moody which at once gained and has ever since retained recognition as one of the outstanding opinions in the history of the Court. After enjoying unquestioned prestige for 40 years, the Twining case should not now be diluted, even unwittingly, either in its judicial philosophy or in its particulars. As the surest way of keeping the Twining case intact, I would affirm this case on its authority. 19 The circumstances of this case present a minor variant from what was before the Court in Twining v. United States, supra. The attempt to inflate the difference into constitutional significance was adequately dealt with by Mr. Justice Traynor in the court below. People v. Adamson, 27 Cal.2d 478, 165 P.2d 3. The matter lies within a very narrow compass. The point is made that a defendant who has a vulnerable record would, by taking the stand, subject himself to having his credibility impeached thereby. See Raffel v. United States, 271 U.S. 494, 496, 497, 46 S.Ct. 566, 567, 70 L.Ed. 1054. Accordingly, under California law, he is confronted with the dilemma, whether to testify and perchance have his bad record prejudice him in the minds of the jury, or to subject himself to the unfavorable inference which the jury might draw from his silence. And so, it is argued, if he chooses the latter alternative, the jury ought not to be allowed to attribute his silence to a consciousness of guilt when it might be due merely to a desire to escape damaging cross-examination. 20 This does not create an issue different from that settled in the Twining case (211 U.S. 78, 29 S.Ct. 20). Only a technical rule of law would exclude from consideration that which is relevant, as a matter of fair reasoning, to the solution of a problem. Sensible and justminded men, in important affairs of life, deem it significant that a man remains silent when confronted with serious and responsible evidence against himself which it is within his power to contradict. The notion that to allow jurors to do that which sensible and rightminded men do every day violates the 'immutable principles of justice' as conceived by a civilized society is to trivialize the importance of 'due process.' Nor does it make any difference in drawing significance from silence under such circumstances that an accused may deem it more advantageous to remain silent than to speak, on the nice calculation that by taking the witness stand he may expose himself to having his credibility impugned by reason of his criminal record. Silence under such circumstances is still significant. A person in that situation may express to the jury, through appropriate requests to charge, why he prefers to keep silent. A man who has done one wrong may prove his innocence on a totally different charge. To deny that the jury can be trusted to make such discrimination is to show little confidence in the jury system. The prosecution is frequently compelled to rely on the testimony of shady characters whose credibility is bound to be the chief target of the defense. It is a common practice in criminal trials to draw out of a vulnerable witness' mouth his vulnerability, ad then con vince the jury that nevertheless he is telling the truth in this particular case. This is also a common experience for defendants. 21 For historical reasons a limited immunity from the common duty to testify was written into the Federal Bill of Rights, and I am prepared to agree that, as part of that immunity, comment on the failure of an accused to take the witness stand is forbidden in federal prosecutions. It is so, of course, by explicit act of Congress. 20 Stat. 30, 28 U.S.C.A. § 632; see Bruno v. United States, 308 U.S. 287, 60 S.Ct. 198, 84 L.Ed. 257. But to suggest that such a limitation can be drawn out of 'due process' in its protection of ultimate decency in a civilized society is to suggest that the Due Process Clause fastened fetters of unreason upon the States. This opinion is concerned solely with a discussion of the Due Process Clause of the Fourteenth Amendment. I put to one side the Privileges or Immunities Clause of that Amendment. For the mischievous uses to which that clause would lend itself if its scope were not confined to that given it by all but one of the decisions beginning with the Slaughter-House Cases, 16 Wall 36, 21 L.Ed. 394, see the deviation in Colgate v. Harvey, 296 U.S. 404, 56 S.Ct. 252, 80 L.Ed. 299, 102 A.L.R. 54, overruled by Madden v. Kentucky, 309 U.S. 83, 60 S.Ct. 406, 84 L.Ed. 590, 125 A.L.R. 1383. 22 Between the incorporation of the Fourteenth Amendment into the Constitution and the beginning of the present membership of the Court—a period of 70 years—the scope of that Amendment was passed upon by 43 judges. Of all these judges, only one, who may respectfully be called an eccentric exception, ever indicated the belief that the Fourteenth Amendment was a shorthand summary of the first eight Amendments theretofore limiting only the Federal Government, and that due process incorporated those eight Amendments as restrictions upon the powers of the States. Among these judges were not only those who would have to be included among the greatest in the history of the Court, but—it is especially relevant to note—they included those whose services in the cause of human rights and the spirit of freedom are the most conspicuous in our history. It is not invidious to single out Miller, Davis, Bradley, Waite, Matthews, Gray, Fuller, Holmes, Brandeis, Stone and Cardozo (to speak only of the dead) as judges who were alert in safeguarding and promoting the interests of liberty and human dignity through law. But they were also judges mindful of the relation of our federal system to a propgressively democratic society and therefore duly regardful of the scope of authority that was left to the States even after the Civil War. And so they did not find that the Fourteenth Amendment, concerned as it was with matters fundamental to the pursuit of justice, fastened upon the States procedural arrangements which, in the language of Mr. Justice Cardozo, only those who are 'narrow or provincial' would deem essential to 'a fair and enlightened system of justice.' Palko v. Connecticut, 302 U.S. 319, 325, 58 S.Ct. 149, 151, 152, 82 L.Ed. 288. To suggest that it is inconsistent with a truly free society to begin prosecutions without an indictment, to try petty civil cases without the paraphernalia of a common law jury, to take into consideration that one who has full opportunity to make a defense remains silent is, in de Tocqueville's phrase, to confound the familiar with the necessary. 23 The short answer to the suggestion that the provision of the Fourteenth Amendment, which ordains 'nor shall any State deprive any person of life, liberty, or property, without due process of law,' was a way of saying that every State must thereafter initiate prosecutions through indictment by a grand jury, must have a trial by a jury of 12 in criminal cases, and must have trial by such a jury in common law suits where the amount in controversy exceeds $20, is that it is a strange way of saying it. It would be extraordinarily strange for a Consttution to convey such specific commands in such a roundabout and inexplicit way. After all, an amendment to the Constitution should be read in a "sense most obvious to the common understanding at the time of its adoption.' * * * For it was for public adoption that it was proposed.' See Mr. Justice Holmes in Eisner v. Macomber, 252 U.S. 189, 220, 40 S.Ct. 189, 197, 64 L.Ed. 521, 9 A.L.R. 1570. Those reading the Engligh language with the meaning which it ordinarily conveys, those conversant with the political and legal history of the concept of due process, those sensitive to the relations of the States to the central government as well as the relation of some of the provisions of the Bill of Rights to the process of justice, would hardly recognize the Fourteenth Amendment as a cover for the various explicit provisions of the first eight Amendments. Some of these are enduring reflections of experience with human nature, while some express the restricted views of Eighteenth-Century England regarding the best methods for the ascertainment of facts. The notion that the Fourteenth Amendment was a covert way of imposing upon the States all the rules which it seemed important to Eighteenth Century statesmen to write into the Federal Amendments, was rejected by judges who were themselves witnesses of the process by which the Fourteenth Amendment became part of the Constitution. Arguments that may now be adduced to prove that the first eight Amendments were concealed within the historic phrasing1 of the Fourteenth Amendment were not unknown at the time of its adoption. A surer estimate of their bearing was possible for judges at the time than distorting distance is likely to vouchsafe. Any evidence of design or purpose not contemporaneously known could hardly have influenced those who ratified the Amendment. Remarks of a particular proponent of the Amendment, no matter how influential, are not to be deemed part of the Amendment. What was submitted for ratification was his proposal, not his speech. Thus, at the time of the ratification of the Fourteenth Amendment the constitutions of nearly half of the ratifying States did not have the rigorous requirements of the Fifth Amendment for instituting criminal proceedings through a grand jury. It could hardly have occurred to these States that by ratifying the Amendment they uprooted their established methods for prosecuting crime and fastened upon themselves a new prosecutorial system. 24 Indeed, the suggestion that the Fourteenth Amendment incorporates the first eight Amendments as such is not unambiguously urged. Even the boldest innovator would shrink from suggesting to more than half the States that they may no longer initiate prosecutions without indictment by grand jury, or that thereafter all the States of the Union must furnish a jury of 12 for every case involving a claim above $20. There is suggested merely a selective incorporation of the first eight Amendments into the Fourteenth Amendment. Some are in and some are out, but we are left in the dark as to which are in and which are out. Nor are we given the calculus for determining which go in and which stay out. If the basis of selection is merely that those provisions of the first eight Amendments are incorporated which commend themselves to individual justices as indispensable to the dignity and happiness of a free man, we are thrown back to a merely subjective test. The protection against unreasonable search and seizure might have primacy for one judge, while trial by a jury of 12 for every claim above $20 might appear to aother as a n ultimate need in a free society. In the history of thought 'natural law' has a much longer and much better founded meaning and justification than such subjective selection of the first eight Amendments for incorporation into the Fourteenth. If all that is meant is that due process contains within itself certain minimal standards which are 'of the very essence of a scheme of ordered liberty,' Palko v. Connecticut, 302 U.S. 319, 325, 58 S.Ct. 149, 151, 152, 82 L.Ed. 288, putting upon this Court the duty of applying these standards from time to time, then we have merely arrived at the insight which our predecessors long ago expressed. We are called upon to apply to the difficult issues of our own day the wisdom afforded by the great opinions in this field, such as those in Davidson v. New Orleans, 96 U.S. 97, 24 L.Ed. 616; Missouri v. Lewis, 101 U.S. 22, 25 L.Ed. 989; Hurtado v. California, 110 U.S. 516, 4 S.Ct. 111, 292, 28 L.Ed. 232; Holden v. Hardy, 169 U.S. 366, 18 S.Ct. 383, 42 L.Ed. 780; Twining v. New Jersey, 211 U.S. 78, 29 S.Ct. 14, 53 L.Ed. 97, and Palko v. Connecticut, 302 U.S. 319, 58 S.Ct. 149, 82 L.Ed. 288. This guidance bids us to be duly mindful of the heritage of the past, with its great lessons of how liberties are won and how they are lost. As judges charged with the delicate task of subjecting the government of a continent to the Rule of Law we must be particularly mindful that it is 'a constitution we are expounding,' so that it should not be imprisoned in what are merely legal forms even though they have the sanction of the Eighteenth Century. 25 It may not be amiss to restate the pervasive function of the Fourteenth Amendment in exacting from the States observance of basic liberties. See Malinski v. New York, 324 U.S. 401, 412 et seq., 65 S.Ct. 781, 786, 89 L.Ed. 1029; Louisiana v. Resweber, 329 U.S. 459, 466 et seq., 67 S.Ct. 374, 377. The Amendment neither comprehends the specific provisions by which the founders deemed it appropriate to restrict the federal government nor is it confined to them. The Due Process Clause of the Fourteenth Amendment has an independent potency, precisely as does the Due Procee Clause of the Fifth Amendment in relation to the Federal Government. It ought not to require argument to reject the notion that due process of law meant one thing in the Fifth Amendment and another in the Fourteenth. The Fifth Amendment specifically prohibits prosecution of an 'infamous crime' except upon indictment; it forbids double jeopardy; it bars compelling a person to be a witness against himself in any criminal case; it precludes deprivation of 'life, liberty, or property, without due process of law.' Are Madison and his contemporaries in the framing of the Bill of Rights to be charged with writing into it a meaningless clause? To consider 'due process of law' as merely a shorthand statement of other specific clauses in the same amendment is to attribute to the authors and proponents of this Amendment ignorance of, or indifference to, a historic conception which was one of the great instruments in the arsenal of constitutional freedom which the Bill of Rights was to protect and strengthen. 26 A construction which gives to due process no independent function but turns it into a summary of the specific provisions of the Bill of Rights would, as has been noted, tear up by the roots much of the fabric of law in the several States, and would deprive the States of opportunity for reforms in legal process designed for extending the area of freedom. It would assume that no other abuses would reveal themselves in the course of time than those which had become manifest in 1791. Such a view not only disregards the historic meaning of 'due process.' It leads inevitably to a warped construction of specific provisions of the Bill of Rights to bring within their scope conduct clearly condemned by due process but not easily fitting into the pigeon-holes of the specific provisions. It seems pretty late in the day to suggest tat a phras e so laden with historic meaning should be given an improvised content consisting of some but not all of the provisions of the first eight Amendments, selected on an undefined basis, with improvisation of content for the provisions so selected. 27 And so, when, as in a case like the present, a conviction in a State court is here for review under a claim that a right protected by the Due Process Clause of the Fourteenth Amendment has been denied, the issue is not whether an infraction of one of the specific provisions of the first eight Amendments is disclosed by the record. The relevant question is whether the criminal proceedings which resulted in conviction deprived the accused of the due process of law to which the United States Constitution entitled him. Judicial review of that guaranty of the Fourteenth Amendment inescapably imposes upon this Court an exercise of judgment upon the whole course of the proceedings in order to ascertain whether they offend those canons of decency and fairness which express the notions of justice of English-speaking peoples even toward those charged with the most heinous offenses. These standards of justice are not authoritatively formulated anywhere as though they were prescriptions in a pharmacopoeia. But neither does the application of the Due Process Clause imply that judges are wholly at large. The judicial judgment in applying the Due Process Clause must move within the limits of accepted notions of justice and is not to be based upon the idiosyncrasies of a merely personal judgment. The fact that judges among themselves may differ whether in a particular case a trial offends accepted notions of justice is not disproof that general rather than idiosyncratic standards are applied. An important safeguard against such merely individual judgment is an alert deference to the judgment of the State court under review. 28 Mr. Justice BLACK, dissenting. 29 The appellant was tried for murder in a California state court. He did not take the stand as a witness in his own behalf. The prosecuting attorney, under purported authority of a California statute, Cal.Penal Code, § 1323 (Hillyer-Lake 1945), argued to the jury that an inference of guilt could be drawn because of appellant's failure to deny evidence offered against him. The appellant's contention in the state court and here has been that the statute denies him a right guaranteed by the Federal Constitution. The argument is that (1) permitting comment upon his failure to testify has the effect of compelling him to testify so as to violate that provision of the Bill of Rights contained in the Fifth Amendment that 'No person * * * shall be compelled in any criminal case to be a witness against himself'; and (2) although this provision of the Fifth Amendment originally applied only as a restraint upon federal courts, Barron v. Baltimore, 7 Pet. 243, 8 L.Ed. 672, the Fourteenth Amendment was intended to, and did make the prohibition against compelled testimony applicable to trials in state courts. 30 The Court refuses to meet and decide the appellant's first contention. But while the Court's opinion, as I read it, strongly implies that the Fifth Amendment does not, of itself, bar comment upon failure to testify in federal courts, the Court nevertheless assumes that it does in order to reach the second constitutional question involved in appellant's case. I must consider the case on the same assumption that the Court does. For the discussion of the second contention turns out to be a decision which reaches far beyond the relatively narrow issues on which this case might have turned. 31 This decision reasserts a constitutional theory spelled out in Twining v. New Jersey, 211 U.S. 78, 29 S.Ct. 14, 53 L.Ed. 97, that this Court is endowed by the Constitution with boundless power under 'natural law' periodically to expand and contract constitutional standards to conform to the Court's conception of what at a particular time constitutes 'civilized decency' and 'fundamental principles of liberty and justice.'1 Invoking this Twining rule, the Court concludes that although comment upon testimony in a federal court would violate the Fifth Amendment, identical comment in a state court does not violate today's fashion in civilized decency and fundamentals and is therefore not prohibited by the Federal Constitution as amended. 32 The Twining case was the first, as it isthe only d ecision of this Court, which has squarely held that states were free, notwithstanding to Fifth and Fourteenth Amendments, to extort evidence from one accused of crime.2 I agree that if Twining be reaffirmed, the result reached might appropriately follow. But I would not reaffirm the Twining decision. I think that decision and the 'natural law' theory of the Constitution upon which it relies, degrade the constitutional safeguards of the Bill of Rights and simultaneously appropriate for this Court a broad power which we are not authorized by the Constitution to exercise. Furthermore, the Twining decision rested on previous cases and broad hypotheses which have been undercut by intervening decisions of this Court. See Corwin, The Supreme Court's Construction of the Self-Incrimination Clause, 29 Mich.L.Rev. 1, 191, 202. My reasons for believing that the Twining decision should not be revitalized can best be understood by reference to the constitutional, judicial, and general history that preceded and followed the case. That reference must be abbreviated far more than is justified but for the necessary limitations of opinion-writing. 33 The first 10 amendments were proposed and adopted largely because of fear that Government might unduly interfere with prized individual liberties. The people wanted and demanded a Bill of Rights written into their Constitution. The amendments embodying the Bill of Rights were intended to curb all branches of the Federal Government in the fields touched by the amendments Legislative, Executive, and Judicial. The Fifth, Sixth, and Eighth Amendments were pointedly aimed at confining exercise of power by courts and judges within precise boundaries, particularly in the procedure used for the trial of criminal cases.3 Past history provided strong reasons for the apprehensions which brought these procedural amendments into being and attest the wisdom of their adoption. For the fears of arbitrary court action sprang largely from the past use of courts in the imposition of criminal punishments to suppress speech, press, and religion. Hence the constitutional limitations of courts' powers were, in the view of the Founders, essential supplements to the First Amendment, which was itself designed to protect the widest scope for all people to believe and to express the most divergent political, religious, and other views. 34 But these limitations were not expressly imposed upon state court action. In 1833, Barron v. Baltimore, supra, was decided by this Court. It specifically held inapplicable to the states that provision of the Fifth Amendment which declares: 'nor shall private property be taken for public use, without just compensation.' In deciding the particular point raised, the Court there said that it could not hold that the first eight amendments applied to the states. This was the controlling constitutional rule whenthe Fourte enth Amendment was proposed in 1866.4 35 My study of the historical events that culminated in the Fourteenth Amendment, and the expressions of those who sponsored and favored, as well as those who opposed its submission and passage, persuades me that one of the chief objects that the provisions of the Amendment's first section, separately, and as a whole, were intended to accomplish was to make the Bill of Rights, applicable to the states.5 With full knowledge of the import of the Barron decision, the framers and backers of the Fourteenth Amendment proclaimed its purpose to be to overturn the constitutional rule that case had announced. This historical purpose has never received full consideration or exposition in any opinion of this Court interpreting the Amendment. 36 In construing other constitutional provisions, this Court has almost uniformly followed the precept of Ex parte Bain, 121 U.S. 1, 12, 7 S.Ct. 781, 787, 30 L.Ed. 849, that 'It is never to be forgotten that in the construction of the language of the Constitution * * *, as indeed in all other instances where construction becomes necessary, we are to place ourselves as nearly as possible in the condition of the men who framed that instrument.' See also Everson v. Board of Education, 330 U.S. 1, 67 S.Ct. 504; Thornhill v. Alabama, 310 U.S. 88, 95, 102, 60 S.Ct. 736, 740, 744, 84 L.Ed. 1093; Knowlton v. Moore, 178 U.S. 41, 89, 106, 20 S.Ct. 747, 766, 772, 44 L.Ed. 969; Reynolds v. United States, 98 U.S. 145, 162, 25 L.Ed. 244; Barron v. Baltimore, supra, 7 Pet. at pages 250, 251, 8 L.Ed. 672; Cohens v. Virginia, 6 Wheat. 264, 416—420, 5 L.Ed. 257. 37 Investigation of the cases relied upon in Twining v. New Jersey to support the conclusion there reached that neither the Fifth Amendment's prohibition of compelled testimony, nor any of the Bill of Rights, applies to the States, reveals an unexplained departure from this salutary practice. Neither the briefs nor opinions in any of these cases, except Maxwell v. Dow, 176 U.S. 581, 20 S.Ct. 448, 44 L.Ed. 597, make reference to the legislative and contemporary history for the purpose of demonstrating that those who conceived, shaped, and brought about the adoption of the Fourteenth Amendment intended it to nullify this Court's decision in Barron v. Baltimore, supra, and thereby to make the Bill of Rights applicable to the States. In Maxwell v. Dow, supra, the issue turned on whether the Bill of Rights guarantee of a jury trial was, by the Fourteenth Amendment, extended to trials in state courts. In that case counsel for appellant did cite from the speech of Senator Howard, Appendix, infra, 332 U.S. 104, 67 S.Ct. 1702, which so emphatically stated the understanding of the framers of the Amendment—the Committee on Reconstruction for which he spoke—that the Bill of Rights was to be made applicable to the states by the Amendment's first section. The Court's opinion in Maxwell v. Dow, supra, 176 U.S. 601, 20 S.Ct. 456, 44 L.Ed. 597, acknowledged that counsel had 'cited from the speech of one of the Senators,' but indicated that it was not advised what other speeches were made in the Senate or in the House. The Court considered, moreover, that'What indi vidual Senators or Representatives may have urged in debate, in regard to the meaning to be given to a proposed constitutional amendment, or bill, or resolution, does not furnish a firm ground for its proper construction, nor is it important as explanatory of the grounds upon which the members voted in adopting it.' 176 U.S. at pages 601, 602, 20 S.Ct. at page 456, 44 L.Ed. 597. 38 In the Twining case itself, the Court was cited to a then recent book, Guthrie, Fourteenth Amendment to the Constitution (1898). A few pages of that work recited some of the legislative background of the Amendment, emphasizing the speech of Senator Howard. But Guthrie did not emphasize the speeches of Congressman Bingham, nor the part he played in the framing and adoption of the first section of the Fourteenth Amendment. Yet Congressman Bingham may, without extravagance, be called the Madison of the first section of the Fourteenth Amendment. In the Twining opinion the Court explicitly declined to give weight to the historical demonstration that the first section of the Amendment was intended to apply to the states the several protections of the Bill of Rights. It held that that question was 'no longer open' because of previous decisions of this Court which, however, had not appraised the historical evidence on that subject. 211 U.S. at page 98, 29 S.Ct. at page 19, 53 L.Ed. 97. The Court admitted that its action had resulted in giving 'much less effect to the 14th Amendment than some of the public men active in framing it' had intended it to have. 211 U.S. at page 96, 29 S.Ct. at page 18. With particular reference to the guarantee against compelled testimony, the Court stated that 'Much might be said in favor of the view that the privilege was guaranteed against state impairment as a privilege and immunity of national citizenship, but, as has been shown, the decisions of this court have foreclosed that view.' 211 U.S. at page 113, 29 S.Ct. at page 25. Thus the Court declined and again today declines, to appraise the relevant historical evidence of the intended scope of the first section of the Amendment. Instead it relied upon previous cases, none of which had analyzed the evidence showing that one purpose of those who framed, advocated, and adopted the Amendment had been to make the Bill of Rights applicable to the States. None of the cases relied upon by the Court today made such an analysis. 39 For this reason, I am attaching to this dissent, an appendix which contains a resume , by no means complete, of the Amendment's history. In my judgment that history conclusively demonstrates that the language of the first section of the Fourteenth Amendment, taken as a whole, was thought by those responsible for its submission to the people, and by those who opposed its submission, sufficiently explicit to guarantee that thereafter no state could deprive its citizens of the privileges and protections of the Bill of Rights. Whether this Court ever will, or whether it now should, in the light of past decisions, give full effect to what the Amendment was intended to accomplish is not necessarily essential to a decision here. However that may be, our prior decisions, including Twining, do not prevent our carrying out that purpose, at least to the extent of making applicable to the states, not a mere part, as the Court has, but the full protection of the Fifth Amendment's provision against compelling evidence from an accused to convict him of crime. And I further contend that the 'natural law' formula which the Court uses to reach its conclusion in this case should be abandoned as an incongruous excrescence on our Constitution. I believe that formula to be itself a violation of our Constitution, in that it subtly conveys to courts, at the expense of legislatures, ultimate power over public policies in fields where no specific provision of the Constitution limits legislative power. And my belief seems to be in accord with the views expressed by this Court, at least for the firs two decad es after the Fourteenth Amendment was adopted. 40 In 1872, four years after the Amendment was adopted, the Slaughter-House cases came to this Court. 16 Wall. 36, 21 L.Ed. 394. The Court was not presented in that case with the evidence which showed that the special sponsors of the Amendment in the House and Senate had expressly explained one of its principal purposes to be to change the Constitution as construed in Barron v. Baltimore, supra, and make the Bill of Rights applicable to the states.6 Nor was there reason to do so. For the state law under consideration in the Slaughter-House cases was only challenged as one which authorized a monopoly, and the brief for the challenger properly conceded that there was 'no direct constitutional provision against a monopoly.'7 The argument did not invoke any specific provision of the Bill of Rights, but urged that the state monopoly statute violated 'the natural right of a person' to do business and engage in his trade or vocation. On this basis, it was contended that 'bulwarks that have been erected around the investments of capital are impregnable against state legislation.' These natural law arguments, so suggestive of the premises on which the present due process formula rest, were flatly rejected by a majority of the Court in the Slaughter-House cases. What the Court did hold was that the privileges and immunities clause of the Fourteenth Amendment only protected from state invasion such rights as a person has because he is a citizen of the United States. The Court enumerated some, but refused to enumerate all of these national rights. The majority of the Court emphatically declined the invitation of counsel to hold that the Fourteenth Amendment subjected all state regulatory legislation to continuous censorship by this Court in order for it to determine whether it collided with this Court's opinion of 'natural' right and justice. In effect, the Slaughter-House cases rejected the very natural justice formula the Court today embraces. The Court did not meet the question of whether the safeguards of the Bill of Rights were protected against state invasion by the Fourteenth Amendment. And it specifically did not say as the Court now does, that particular provisions of the Bill of Rights could be breached by states in part, but not breached in other respects, according to this Court's notions of 'civilized standards,' 'canons of decency,' and 'fundamental justice.' 41 Later, but prior to the Twining case, this Court decided that the following were not 'privileges or immunities' of national citizenship, so as to make them immune against state invasion: the Eighth Amendment's prohibition against cruel and unusual punishment, In re Kemmler, 136 U.S. 436, 10 S.Ct. 930, 34 L.Ed. 519; the Seventh Amendment's guarantee of a jury trial in civil cases, Walker v. Sauvinet, 92 U.S. 90, 23 L.Ed. 678; the Second Amendment's 'right of the people to keep and bear arms * * *,' Presser v. Illinois, 116 U.S. 252, 6 S.Ct. 580, 584, 29 L.Ed. 615; the Fifth and Sixth Amendments' requirements for indictment in capital or other infamous crimes, and for trial by jury in criminal prosecutions, Maxwell v. Dow, 176 U.S. 581, 20 S.Ct. 448, 44 L.Ed. 597. While it can be argued that these cases implied that no one of the provisions of the Bill of Rights was made applicable to the states as attributes of national citizenship, no one of them expressly so decided. In fact, the Court in Maxwell v. Dow, supra, 176 U.S. at pages 597, 598, 20 S.Ct. at page 455, concluded no more than that 'the privileges and immunities of citizens of the United States do not necessarily include all the rights protected by the first eight amendments to the Federal Constitution against the powers of the Federal government.' Cf. Palko v. Connecticut, 302 U.S. 319, 329, 58 S.Ct. 149, 153, 82 L.Ed. 288. 42 After the Slaughter-House decision, the Court also said that states could, despite the 'due process' clause of the Fourteenth Amendment, take private property without just compensation, Davidson v. New Orleans, 96 U.S. 97, 105, 24 L.Ed. 616; Pumpelly v. Green Bay & Mississippi Canal Co., 13 Wall. 166, 176, 177, 20 L.Ed. 557; abridge th freedom o f assembly guaranteed by the First Amendment, United States v. Cruikshank, 92 U.S. 542, 23 L.Ed. 588; see also Prudential Ins. Co. v. Cheek, 259 U.S. 530, 543, 42 S.Ct. 516, 522, 66 L.Ed. 1044, 27 A.L.R. 27; Patterson v. Colorado, 205 U.S. 454, 27 S.Ct. 556, 51 L.Ed. 879, 10 Ann.Cas. 689; cf. Gitlow v. New York, 268 U.S. 652, 666, 45 S.Ct. 625, 629, 69 L.Ed. 1138 (freedom of speech); prosecute for crime by information rather than indictment, Hurtado v. People of California, 110 U.S. 516, 4 S.Ct. 111, 292, 28 L.Ed. 232; regulate the price for storage of grain in warehouses and elevators, Munn v. Illinois, 94 U.S. 113, 24 L.Ed. 77. But this Court also held in a number of cases that colored people must, because of the Fourteenth Amendment, be accorded equal protection of the laws. See, e.g., Strauder v. West Virginia, 100 U.S. 303, 25 L.Ed. 664; cf. Virginia v. Rives, 100 U.S. 313, 25 L.Ed. 667; see also Yick Wo. v. Hopkins, 118 U.S. 356, 6 S.Ct. 1064, 30 L.Ed. 220. 43 Thus, up to and for some years after 1873, when Munn v. Illinois, supra, was decided, this Court steadfastly declined to invalidate states' legislative regulation of property rights or business practices under the Fourteenth Amendment unless there were racial discrimination involved in the state law challenged. The first significant breach in this policy came in 1889, in Chicago, M. & St. P.R. Co. v. Minnesota, 134 U.S. 418, 10 S.Ct. 462, 702, 33 L.Ed. 970.8 A state's railroad rate regulatory statute was there stricken as violative of the due process clause of the Fourteenth Amendment. This was accomplished by reference to a due process formula which did not necessarily operate so as to protect the Bill of Rights' personal liberty safeguards, but which gave a new and hitherto undiscovered scope for the Court's use of the due process clause to protect property rights under natural law concepts. And in 1896, in Chicago, B. & Q.R. Co. v. Chicago, 166 U.S. 226, 17 S.Ct. 581, 41 L.Ed. 979, this Court, in effect, overruled Davidson v. New Orleans, supra, by holding, under the new due process-natural law formula, that the Fourteenth Amendment forbade a state from taking private property for public use without payment of just compensation.9 44 Following the pattern of the new doctrine formalized in the foregoing decisions, the Court in 1896 applied the due process clause to strike down a state statute which had forbidden certain types of contracts. Allgeyer v. Louisiana, 165 U.S. 578, 17 S.Ct. 427, 41 L.Ed. 832 Cf. Hoope ston Canning Co. v. Cullen, 318 U.S. 313, 316, 318, 319, 63 S.Ct. 602, 604, 605, 606, 87 L.Ed. 1722, 145 A.L.R. 1113. In doing so, it substantially adopted the rejected argument of counsel in the Slaughter-House cases, that the Fourteenth Amendment guarantees the liberty of all persons under 'natural law' to engage in their chosen business or vocation. In the Allgeyer opinion, 165 U.S. at page 589, 17 S.Ct. at page 431, 41 L.Ed. 832, the Court quoted with approval the concurring opinion of Mr. Justice Bradley in a second Slaughter-House case; Butchers' Unions Co. v. Crescent City Co., 111 U.S. 746, 762, 764, 765, 4 S.Ct. 652, 656, 657, 658, 28 L.Ed. 585, which closely followed one phase of the argument of his dissent in the original Slaughter-House cases—not that phase which argued that the Bill of Rights was applicable to the States. And in 1905, three years before the Twining case, Lochner v. New York, 198 U.S. 45, 25 S.Ct. 539, 49 L.Ed. 937, 3 Ann.Cas. 1133, followed the argument used in Allgeyer to hold that the due process clause was violated by a state statute which limited the employment of bakery workers to 60 hours per week and 10 hours per day. 45 The foregoing constitutional doctrine, judicially created and adopted by expanding the previously accepted meaning of 'due process,' marked a complete departure from the Slaughter-House philosophy of judicial tolerance of state regulation of business activities. Conversely, the new formula contracted the effectiveness of the Fourteenth Amendment as a protection from state infringement of individual liberties enumerated in the Bill of Rights. Thus the Court's second-thought interpretation of the Amendment was an about face from the Slaughter-House interpretation and represented a failure to carry out the avowed purpose of the Amendment's sponsors.10 This reversal is dramatized by the fact that the Hurtado case, which had rejected the due process clause as an instrument for preserving Bill of Rights liberties and privileges, was cited as authority for expanding the scope of that clause so as to permit this Court to invalidate all state regulatory legislation it believed to be contrary to 'fundamental' principles. 46 The Twining decision, rejecting the compelled testimony clause of the Fifth Amendment, and indeed rejecting all the Bill of Rights, is the end product of one phase of this philosophy. At the same time, that decision consolidated the power of the Court assumed in past cases by laying broader foundations for the Court to invalidate state and even federal regulatory legislation. For the Twining decision, giving separate consideration to 'due process' and 'privileges or immunities,' went all the way to say that the 'privileges or immunities' clause of the Fourteenth Amendment 'did not forbid the states to abridge the personal rights enumerated in the first eight Amendments * * *.' Twining v. New Jersey, supra, 211 U.S. at page 99, 29 S.Ct. at page 19, 53 L.Ed. 97. And in order to be certain, so far as possible, to leave this Court wholly free to reject all the Bill of Rights as specific restraints upon state actions, the decision declared that even if this Court should decide that the due process clause forbids the states to infringe personal liberties guaranteed by the Bill of Rights, it would do so, not 'because those rights are enumerated in the first eight Amendments, but because they are of such a nature that they are included in the conception of due process of law.' 211 U.S. 78, 29 S.Ct. 14, 20, 53 L.Ed. 97. 47 At the same time that the Twining decision held that the states need not conform to the specific provisions of the Bill of Rights, it consolidated the power that the Court had assumed under the due process clause by laying even broader foundations for the Court to invalidate state and even federal regulatory legislation. For under the Twining formula, which includes nonregard for the first eight amendments, what are 'fundamental rights' and in accord with 'canons of decency,' as the Court said in Twining, and today reaffirms, is to be independently 'ascertained from time to time by judicial action * * *.' 211 U.S. at page 101, 29 S.Ct. at page 20, 53 L.Ed. 97; 'what is due process of law depends on circumstances.' Moyer v. Peabody, 212 U.S. 78, 84, 29 S.Ct. 235, 236, 53 L.Ed. 410. Thus the power of legislatures became what this Court would declare it to be at a particular time independently of the specific guarantees of the Bill of Rights such as the right to freedom of speech, religion and assembly, the right to just compensation for property taken for a public purpose, the right to jury trial or the right to be secure against unreasonable searches and seizures. Neither the contraction of the Bill of Rights safeguards11 nor the invalidation of regulatory laws12 by this Court's appraisal of 'circumstances' would readily be classified as the most satisfactory contribution of this Court to the nation. In 1912, four years after the Twining case was decided, a book written by Mr. Charles Wallace Collins gave the history of this Court's interpretation and application of the Fourteenth Amendment up to that time. It is not necessary for one fully to agree with all he said in order to appreciate the sentiment of the following comment concerning the disappointments caused by this Court's interpretation of the Amendment. '* * * It was aimed at restraining and checking the powers of wealth and privilege. It was to be a charter of liberty for human rights against property rights. The transformation has been rapid and complete. It operates today to protect the rights of property to the detriment of the rights of man. It has become the Magna Charta of accumulated and organized capital.' Collins, The Fourteenth Amendment and the States, (1912) 137, 138. That this feeling was shared, at least in part, by members of this Court is revealed by the vigorous dissents that have been written in almost every case where the Twining and Hurtado doctrines have been applied to invalidate state regulatory laws.13 48 Later decisions of this Court have completely undermined the phase of the Twining doctrine which broadly precluded reliance on the Bill of Rights to determine what is and what is not a 'fundamental' right. Later cases have also made the Hurtado case an inadequate support for this phase of the Twining formula. For despite Hurtado and Twining, this Court has now held that the Fourteenth Amendment protects from state invasion the following 'fundamental' rights safeguarded by the Bill of Rights: right to counsel in criminal cases, Powell v. Alabama, 287 U.S. 45, 67, 53 S.Ct. 55, 63, 77 L.Ed. 158, 84 A.L.R. 527, limiting the Hurtado case; see also Betts v. Brady, 316 U.S. 455, 62 S.Ct. 1252, 86 L.Ed. 1595, and De Meerleer v. Michigan, 329 U.S. 663, 67 S.Ct. 596; freedom of assembly, De Jonge v. Oregon, 299 U.S. 353, 364, 57 S.Ct. 255, 259, 81 L.Ed. 278; at the very least, certain types of cruel and unusual punishment and former jeopardy, State of Louisiana ex rel. Francis v. Resweber, 329 U.S. 459, 67 S.Ct. 374; the right of an accused in a criminal case to be informed of the charge against him, see Snyder v. Massachusetts, 291 U.S. 97, 105, 54 S.Ct. 330, 332, 78 L.Ed. 674, 90 A.L.R. 575; the right to receive just compensation on account of taking private property for public use, Chicago, B. & Q.R. Co. v. Chicago, 166 U.S. 226, 17 S.Ct. 581, 41 L.Ed. 979. And the Court has now through the Fourteenth Amendment literally and emphatically applied the First Amendment to the States in its very terms. Everson v. Board of Education, 330 U.S. 1, 67 S.Ct. 504; West Virginia State Board of Education v. Barnette, 319 U.S. 624, 639, 63 S.Ct. 1178, 1186, 87 L.Ed. 1628, 147 A.L.R. 674; Bridges v. California, 314 U.S. 252, 268, 62 S.Ct. 190, 196, 86 L.Ed. 192, 159 A.L.R. 1346. 49 In Palko v. Connecticut, supra, a case which involved former jeopardy only, this Court re-examined the path it had traveled in interpreting the Fourteenth Amendment since the Twining opinion was written. In Twining the Court had declared that none of the rights enumerated in the first eight amendments were protected against state invasion because they were incorporated in the Bill of Rights. But the Court in Palko, supra, 302 U.S. at page 323, 58 S.Ct. at pages 150, 151, 82 L.Ed. 288, answered a contention that all eight applied with the more guarded statement, similar to that the Court had used in Maxwell v. Dow, supra, 176 U.S. at page 597, 20 S.Ct. at page 455, 44 L.Ed. 597, that 'there is no such general rule.' Implicit in this statement, and in the cases decided in the interim between Twining and Palko and since, is the understanding that some of the eight amendments do apply by their very terms. Thus the Court said in the Palko case that the Fourteenth Amendment may make it unlawful for a state to abridge by its statutes the 'freedom of speech which the First Amendment safeguards against encroachment by the Congress * * * or the like freedom of the press * * *or the free exercise of religion * * *, or the right of peaceable assembly * * * or the right of one accused of crime to the benefit of counsel * * *. In these and other situations immunities that are valid as against the federal government by force of the specific pledges of particular amendments have been found to e implicit in the concept of ordered liberty, and thus, through the Fourteenth Amendment, become valid as against the states.' 302 U.S. at pages 324, 325, 58 S.Ct. at pages 151, 152, 82 L.Ed. 288. The Court went on to describe the Amendments made applicable to the States as 'the privileges and immunities that have been taken over from the earlier articles of the Federal Bill of Rights and brought within the Fourteenth Amendment by a process of absorption.' 302 U.S. at page 326, 58 S.Ct. at page 152, 82 L.Ed. 288. In the Twining case fundamental liberties were things apart from the Bill of Rights. Now it appears that at least some of the provisions of the Bill of Rights in their very terms satisfy the Court as sound and meaningful expressions of fundamental liberty. If the Fifth Amendment's protection against self-incrimination be such an expression of fundamental liberty, I ask, and have not found a satisfactory answer, why the Court today should consider that it should be 'absorbed' in part but not in full? Cf. Warren, The New Liberty under the Fourteenth Amendment, 39 Harv.L.Rev. 431, 458—461 (1925). Nothing in the Palko opinion requires that when the Court decides that a Bill of Rights' provision is to be applied to the States, it is to be applied piecemeal. Nothing in the Palko opinion recommends that the Court apply part of an amendment's established meaning and discard that part which does not suit the current style of fundamentals. 50 The Court's opinion in Twining, and the dissent in that case, made it clear that the Court intended to leave the states wholly free to compel confessions, so far as the Federal Constitution is concerned. Twining v. New Jersey, supra, see particularly 211 U.S. at pages 111—114, 125, 126, 29 S.Ct. at pages 24—26, 30, 53 L.Ed. 97. Yet in a series of cases since Twining this Court has held that the Fourteenth Amendment does bar all American courts, state or federal, from convicting people of crime on coerced confessions. Chambers v. Florida, 309 U.S. 227, 60 S.Ct. 472, 84 L.Ed. 716; Ashcraft v. Tennessee, 322 U.S. 143, 154, 155, 64 S.Ct. 921, 926, 927, 88 L.Ed. 1192, and cases cited. Federal courts cannot do so because of the Fifth Amendment. Bram v. United States, 168 U.S. 532, 542, 562, 563, 18 S.Ct. 183, 186, 194, 42 L.Ed. 568. And state courts cannot do so because the principles of the Fifth Amendment are made applicable to the States through the Fourteenth by one formula or another. And taking note of these cases, the Court is careful to point out in its decision today that coerced confessions violate the Federal Constitution if secured 'by fear of hurt, torture or exhaustion.' Nor can a state, according to today's decision, constitutionally compel an accused to testify against himself by 'any other type of coercion that falls within the scope of due process.' Thus the Court itself destroys or at least drastically curtails the very Twining decision it purports to reaffirm. It repudiates the foundation of that opinion, which presented much argument to show that compelling a man to testify against himself does not 'violate' a 'fundamental' right or privilege. 51 It seems rather plain to me why the Court today does not attempt to justify all of the broad Twining discussion. That opinion carries its own refutation on what may be called the factual issue the Court resolved. The opinion itself shows, without resort to the powerful argument in the dissent of Mr. Justice Harlan, that outside of Star Chamber practices and influences, the 'English-speaking' peoples have for centuries abhorred and feared the practice of compelling people to convict themselves of crime. I shall not attempt to narrate the reasons. They are well known and those interested can read them in both the majority and dissenting opinions in the Twining case, in Boyd v. United States, 116 U.S. 616, 6 S.Ct. 524, 29 L.Ed. 746, and in the cases cited in notes 8, 9, 10, and 11 of Ashcraft v. Tennessee, supra. Nor does the history of the practice of compellig testimon y in this country, relied on in the Twining opinion support the degraded rank which that opinion gave the Fifth Amendment's privilege against compulsory self-incrimination. I think the history there recited by the Court belies its conclusion. 52 The Court in Twining evidently was forced to resort for its degradation of the privilege to the fact that Governor Winthrop in trying Mrs. Ann Hutchison in 1637 was evidently 'not aware of any privilege against self-incrimination or conscious of any duty to respect it.' 211 U.S. at pages 103, 104, 29 S.Ct. at page 21, 53 L.Ed. 97. Of course not.14 Mrs. Hutchison was tried, if trial it can be called, for holding unorthodox religious views.15 People with a consuming belief that their religious convictions must be forced on others rarely ever believe that the unorthodox have any rights which should or can be rightfully respected. As a result of her trial and compelled admissions, Mrs. Hutchison was found guilty of unorthodoxy and banished from Massachusetts. The lamentable experience of Mrs. Hutchison and others, contributed to the overwhelming sentiment that demanded adoption of a Constitutional Bill of Rights. The founders of this Government wanted no more such 'trials' and punishments as Mrs. Hutchison had to undergo. They wanted to erect barriers that would bar legislators from passing laws that encroached on the domain of belief, and that would, among other things, strip courts and all public officers of a power to compel people to testify against themselves. See Pittman, supra at 789. 53 I cannot consider the Bill of Rights to be an outworn 18th Century 'strait jacket' as the Twining opinion did. Its provisions may be thought outdated abstractions by some. And it is true that they were designed to meet ancient evils. But they are the same kind of human evils that have emerged from century to century wherever excessive power is sought by the few at the expense of the many. In my judgment the people of no nation can lose their liberty so long as a Bill of Rights like ours survives and its basic purposes are conscientiously interpreted, enforced and respected so as to afford continuous protection against old, as well as new, devices and practices which might thwart those purposes. I fear to see the consequences of the Court's practice of substituting its own concepts of decency and fundamental justice for the language of the Bill of Rights as its point of departure in interpreting and enforcing that Bill of Rights. If the choice must be between the selective process of the Palk decision applying some of the Bill of Rights to the States, or the Twining rule applying none of them, I would choose the Palko selective process. But rather than accept either of these choices. I would follow what I believe was the original purpose of the Fourteenth Amendment—to extend to all the people of the nation the complete protection of the Bill of Rights. To hold that this Court can determine what, if any, provisions of the Bill of Rights will be enforced, and if so to what degree, is to frustrate the great design of a written Constitution. 54 Conceding the possibility that this Court is now wise enough to improve on the Bill of Rights by substituting natural law concepts for the Bill of Rights. I think the possibility is entirely too speculative to agree to take that course. I would therefore hold in this case that the full protection of the Fifth Amendment's proscription against compelled testimony must be afforded by California. This I would do because of reliance upon the original purpose of the Fourteenth Amendment. 55 It is an illusory apprehension that literal application of some or all of the provisions of the Bill of Rights to the States would unwisely increase the sum total of the powers of this Court to invalidate state legislation. The Federal Government has not been harmfully burdened by the requirement that enforcement of federal laws affecting civil liberty comform literally to the Bill of Rights. Who would advocate its repeal? It must be conceded, of course, that the natural-law-due-process formula, which the Court today reaffirms, has been interpreted to limit substantially this Court's power to prevent state violations of the individual civil liberties guaranteed by the Bill of Rights.16 But this formula also has been used in the past and can be used in the future, to license this Court, in considering regulatory legislation, to roam at large in the broad expanses of policy an morals and to trespass, all too freely, on the legislative domain of the States as well as the Federal Government. 56 Since Marbury v. Madison, 1 Cranch 137, 2 L.Ed. 60, was decided, the practice has been firmly established for better or worse, that courts can strike down legislative enactments which violate the Constitution. This process, of course, involves interpretation, and since words can have many meanings, interpretation obviously may result in contraction or extension of the original purpose of a constitutional provision thereby affecting policy. But to pass upon the constitutionality of statutes by looking to the particular standards enumerated in the Bill of Rights and other parts of the Constitution is one thing;17 to invalidate statutes because of application of 'natural law' deemed to be above and undefined by the Constitution is another.18 'In the one instance, courts proceeding within clearly marked constitutional boundaries seek to execute policies written into the Constitution; in the other they roam at will in the limitless area of their own beliefs as to reasonableness and actually select policies, a responsibility which the Constitution entrusts to the legislative representatives of the people.' Federal Power Commission v. Natural Gas Pipeline Co., 315 U.S. 575, 599, 601, n. 4, 62 S.Ct. 736, 749, 750, 86 L.Ed. 1037. 57 Mr. Justice DOUGLAS joins in this opinion. 58 APPENDIX. 59 I. The legislative origin of the first section of the Fourteenth Amendment seems to have been in the Joint Committee on Reconstruction. That Committee had been appointed by a concurrent resolution of the House and Senate with authority to report 'by bill or otherwise' whether the former Confederate States 'are entitled to be represented in either House of Congress.' Cong. Globe, 39th Cong., 1st Sess. (1865) 6, 30. The broad mission of that Committee was revealed by its very first action of sending a delegation to President Johnson requesting him to 'defer all further executive action in regard to reconstruction until this committee shall have taken action on that subject.' Journal of the Joint Committee on Reconstruction, 39th Cong., 1st Sess. (1866), reprinted as Sen.Doc. No. 711, 63d Cong., 3d Sess. (1915) 6. It immediately set about the business of drafting constitutional amendments which would outline the plan of reconstruction which it would recommend to Congress. Some of those proposed amendments related to suffrage and representation in the South. Journal, 7. On January 12, 1866, a subcommittee, consisting of Senators Fessenden (Chairman of the Reconstruction Committee) and Howard, and Congressmen Stevens, Bingham and Conkling, was appointed to consider those suffrage proposals. Journal, 9. There was at the same time referred to this Committee a 'proposed amendment to the Constitution' submitted by Mr. Bingham that: 60 'The Congress shall have power to make all laws necessary and proper to secure to all persons in every State within this Union equal protection in their rights of life, liberty, and property.' Journal, 9. Another proposed amendment that 'All laws, State or national, shall operate impartially and equally on all persons without regard to race or color,'1 was also referred to the Committee. Journal, 9. On January 24, 1866, the subcommittee reported back a combnation of these two proposals which was not accepted by the full Committee. Journal, 13, 14. Thereupon the proposals were referred to a 'select committee of three,' Bingham, Boutwell and Rogers. Journal, 14. On January 27, 1866, Mr. Bingham on behalf of the select committee, presented this recommended amendment to the full committee: 61 'Congress shall have power to make all laws which shall be necessary and proper to secure all persons in every State full protection in the enjoyment of life, liberty and property; and to all citizens of the United States, in any State, the same immunities and also equal political rights and privileges.' Journal, 14. This was not accepted. But on February 3, 1866, Mr. Bingham submitted an amended version: 'The Congress shall have power to make all laws which shall be necessary and proper to secure to the citizens of each State all privileges and immunities of citizens in the several States (art. 4, sec. 2); and to all persons in the several States equal protection in the rights of life, liberty, and property (5th amendment).' This won committee approval, Journal, 17, and was presented by Mr. Bingham to the House on behalf of the Committee on February 13, 1866. Cong. Globe, supra, 813. 62 II. When, on February 26, the proposed amendment came up for debate, Mr. Bingham stated that 'by order * * * of the committee * * * I propose adoption of this amendment.' In support of it he said: 63 '* * * The amendment proposed stands in the very words of the Constitution of the United States as it came to us from the hands of its illustrious framers. Every word of the proposed amendment is to-day in the Constitution of our country, save the words conferring the express grant of power upon the Congress of the United States. The residue of the resolution, as the House will see by a reference to the Constitution, is the language of the second section of the fourth article, and of a portion of the fifth amendment adopted by the First Congress in 1789, and made part of the Constitution of the country. * * * 64 'Sir, it has been the want of the Republic that there was not an express grant of power in the Constitution to enable the whole people of every State, by congressional enactment, to enforce obedience to these requirements of the Constitution. Nothing can be plainer to thoughtful men than that if the grant of power had been originally conferred upon the Congress of the nation and legislation had been upon your statute-books to enforce these requirements of the Constitution in every State, that rebellion, which has scarred and blasted the land, would have been an impossibility. * * * 65 'And, sir, it is equally clear by every construction of the Constitution, its contemporaneous construction, its continued construction, legislative, executive, and judicial, that these great provisions of the Constitution, this immortal bill of rights embodied in the Constitution, rested for its execution and enforcement hitherto upon the fidelity of the States. * * *' Cong.Globe, supra, 1033, 1034. 66 Opposition speakers emphasized that the Amendment would destroy state's rights and empower Congress to legislate on matters of purely local concern. Cong.Globe, supra, 1054, 1057, 1063-1065, 1083, 1085-1087. See also id. at 1082. Some took the position that the Amendment was unnecessary because the Bill of Rights were already secured against state violation. Id. at 1059, 1066, 1088. Mr. Bingham joined issue on this contention: 67 'The gentleman seemed to think that all persons could have remedies for all violations of their rights of 'life, liberty, and property' in the Federal courts. 68 'I ventured to ask him yesterday when any action of that sort was ever maintained in any of the Federal courts of the United States to redress the great wrong which has ben practice d, and which is being practiced now in more States than one of the Union under the authority of State laws, denying to citizens therein equal protection or any protection in the rights of life, liberty, and property. 69 '* * * A gentleman on the other side interrupted me and wanted to know if I could cite a decision showing that the power of the Federal Government to enforce in the United States courts the bill of rights under the articles of amendment to the Constitution had been denied. I answered that I was prepared to introduce such decisions; and that is exactly what makes plain the necessity of adopting this amendment. 70 'Mr. Speaker, on this subject I refer the House and the country to a decision of the Supreme Court, to be found in 7 Pet., at page 247, 8 L.Ed. 672, in the case of Barron v. The Mayor and City Council of Baltimore, involving the question whether the provisions of the fifth article of the amendments to the Constitution are binding upon the State of Maryland and to be enforced in the Federal courts. The Chief Justice says: 71 "The people of the United States framed such a Government for the United States as they supposed best adapted to their situation and best calculated to promote their interests. The powers they conferred on this Government were to be exercised by itself; and the limitations of power, if expressed in general terms, are naturally, and we think necessarily, applicable to the Government created by the instrument. They are limitations of power granted in the instrument itself, not of distinct governments, framed by different persons and for different purposes. 72 "If these propositions be correct, the fifth amendment must be understood as restraining the power of the General Government, not as applicable to the States.' 73 'I read one further decision on this subject—the case of the Lessee of Livingston v. Moore and others, 7 Pet., 469, at page 551, 8 L.Ed. 751. The court, in delivering its opinion, says: 74 "As to the Amendments of the Constitution of the United States, they must be put out of the case, since it is now settled that those amendments do not extend to the States; and this observation disposes of the next exception, which relies on the seventh article of those amendments.' 75 'The question is simply whether you will give by this amendment to the people of the United States the power, by legislative enactment, to punish officials of States for violation of oaths enjoined upon them by their Constitution? * * * Is the Bill of Rights to stand in our Constitution hereafter, as in the past five years within eleven States, a mere dead letter? It is absolutely essential to the safety of the people that it should be enforced. 76 'Mr. Speaker, it appears to me that this very provision of the bill of rights brought in question this day, upon this trial before the House, more than any other provision of the Constitution, makes that unity of government which constitutes us one people, by which and through which American nationality came to be, and only by the enforcement of which can American nationality continue to be. 77 'What more could have been added to that instrument to secure the enforcement of these provisions of the bill of rights in every State, other than the additional grant of power which we ask this day? * * * 78 'As slaves were not protected by the Constitution, there might be some color of excuse for the slave States in their disregard for the requirement of the bill of rights as to slaves in refusing them protection in life or property. * * * 79 'But, sir, there never was even colorable excuse, much less apology, for any man North or South claiming that any State Legislature or State court, or State Executive, has any right to deny protection to any free citizen of the United States within their limits in the rights of life, liberty, and property. Gentlemen who oppose this amendment oppose the grant of power to enforce the bill of rights. Gentlemen who oppose this amendment simply delare to th ese rebel States, 'Go on with your confiscation statutes, your statutes of banishment, your statutes of unjust imprisonment, your statutes of murder and death against men because of their loyalty to the Constitution and Government of the United States." Id. at 1089—1091. 80 '* * * Where is the power in Congress, unless this or some similar amendment be adopted, to prevent the reenactment of those infernal statutes * * *? Let some man answer. Why, sir, the gentleman from New York (Mr. Hale) * * * yesterday gave up the argument on this point. He said that the citizens must rely upon the State for their protection. I admit that such is the rule under the Constitution as it now stands.' Id. at 1093. 81 As one important writer on the adoption of the Fourteenth Amendment has observed, 'Mr. Bingham's speech in defense and advocacy of his amendment comprehends practically everything that was said in the press or on the floor of the House in favor of the resolution. * * *' Kendrick, Journal of the Joint Committee on Reconstruction (1914) 217. A reading of the debates indicates that no member except Mr. Hale had contradicted Mr. Bingham's argument that without this Amendment the states had power to deprive persons of the rights guaranteed by the first eight amendments. Mr. Hale had conceded that he did not 'know of a case where it has ever been decided that the United States Constitution is sufficient for the protection of the liberties of the citizen.' Cong.Globe, supra, at 1064. But he was apparently unaware of the decision of this Court in Barron v. Baltimore, supra. For he thought that the protections of the Bill of Rights had already been 'thrown over us in some way, whether with or without the sanction of a judicial decision * * *' And in any event, he insisted, '* * * the American people have not yet found that their State governments are insufficient to protect the rights and liberties of the citizen.' He further objected, as had most of the other opponents to the proposal, that the Amendment authorized the Congress to 'arrogate' to itself vast powers over all kinds of affairs which should properly be left to the States. Cong.Globe, supra, 1064, 1065. 82 When Mr. Hotchkiss suggested that the amendment should be couched in terms of a prohibition against the States in addition to authorizing Congress to legislate against state deprivations of privileges and immunities, debate on the amendment was postponed until April 2, 1866. Cong.Globe, supra, 1095. 83 III. Important events which apparently affected the evolution of the Fourteenth Amendment transpired during the period during which discussion of it was postponed. The Freedman's Bureau Bill which made deprivation of certain civil rights of negroes an offense punishable by military tribunals had been passed. It applied, not to the entire country, but only to the South. On February 19, 1866, President Johnson had vetoed the bill principally on the ground that it was unconstitutional. Cong.Globe, supra, 915. Forthwith, a companion proposal known as the Civil Rights Bill empowering federal courts to punish those who deprived any person anywhere in the country of certain defined civil rights was pressed to passage. Senator Trumbull, Chairman of the Senate Judiciary Committee, who offered the bill in the Senate on behalf of that Committee, had stated that 'the late slaveholding States' had enacted laws '* * * depriving persons of African descent of privileges which are essential to freemen. * * * (S)tatutes of Mississippi * * * provide that if any person of African descent residing in that State travels from one county to another without having a pass or a certificate of his freedom, he is liable to be committed to jail and to be dealt with as a person who is in the State without authority. Other provisions of the statute prohibit any negro or mulatto from having fire-arms; and one provision of the statute declares that for 'exercising the functions of a minister of the Gospel free negroes * * * on onviction, may be punished by * * * lashes. * * *' Other provisions * * * prohibit a free negro * * * from keeping a house of entertainment, and subject him to trial before two justices of the peace and five slaveholders for violating * * * this law. The statutes of South Carolina make it a highly penal offense for any person, white or colored, to teach slaves; and similar provisions are to be found running through all the statutes of the late slaveholding States. * * * The purpose of the bill * * * is to destroy all these discriminations. * * *' Cong.Globe, supra, 474. 84 In the House, after Mr. Bingham's original proposal for a constitutional amendment had been rejected, the suggestion was also advanced that the bill secured for all 'the right to speech, * * * transit, * * * domicil, * * * the right to sue, the writ of habeas corpus, and the right of petition.' Cong.Globe., supra, 1263. And an opponent of the measure, Mr. Raymond, conceded that it would guarantee to the negro 'the right of free passage * * *. He has a defined status * * * a right to defend himself * * * to bear arms * * * to testify in the Federal courts * * *.' Cong.Globe, supra, 1266, 1267. But opponents took the position that without a constitutional amendment such as that proposed by Mr. Bingham, the Civil Rights Bill would be unconstitutional. Cong.Globe, supra, 1154, 1155, 1263. 85 Mr. Bingham himself vigorously opposed and voted against the Bill. His objection was two fold: First, insofar as it extended the protections of the Bill of Rights as against state invasion, he believed the measure to be unconstitutional because of the Supreme Court's holding in Barron v. Baltimore, supra. While favoring the extension of the Bill of Rights guarantees as against state invasion, he thought this could be done only by passage of his amendment. His second objection to the Bill was that in his view it would go beyond his objective of making the states observe the Bill of Rights and would actually strip the states of power to govern, centralizing all power in the Federal Government. To this he was opposed. His views are in part reflected by his own remarks and the answers to him by Mr. Wilson. Mr. Bingham said, in part: '* * * I do not oppose any legislation which is authorized by the Constitution of my country to enforce in its letter and its spirit the bill of rights as embodied in that Constitution. I know that the enforcement of the bill of rights is the want of the Republic. I know if it had been enforced in good faith in every State of the Union the calamities and conflicts and crimes and sacrifices of the past five years would have been impossible. 86 'But I feel that I am justified in saying, in view of the text of the Constitution of my country, in view of all its past interpretations, in view of the manifest and declared intent of the men who framed it, the enforcement of the Bill of Rights, touching the life, liberty, and property of every citizen of the Republic within every organized State of the Union, is of the reserve powers of the States to be enforced by State tribunals. * * * 87 '* * * I am with him in an earnest desire to have the bill of rights in your Constitution enforced everywhere. But I ask that it be enforced in accordance with the Constitution of my country. 88 '* * * I submit that the term 'civil rights' includes every right that pertains to the citizen under the Constitution, laws, the Government of this country. * * * 89 '* * * The law in every State should be just; it should be no respecter of persons. It is otherwise now, and it has been otherwise for many years in many of the States of the Union. I should remedy that not by an arbitrary assumption of power, but by amending the Constitution of the United States, expressly prohibiting the States from any such abuse of power in the future. * * *' 90 'If the bill of rights, as has been solemnly ruled by the Supreme Court of the United States, does not limit the powers of the States and prohibit such gross njustice b y States, it does limit the power of Congress to prohibit any such legislation by Congress. 91 '* * * (T)he care of the property, the liberty, and the life of the citizen, under the solemn sanction of an oath imposed by your Federal Constitution, is in the States, and not in the Federal Government. I have sought to effect no change in that respect in the Constitution of the country. I have advocated here an amendment which would arm Congress with the power to compel obedience to the oath, and punish all violations by State officers of the bill of rights, but leaving those officers to discharge the duties enjoined upon them as citizens of the United States by that oath and by that Constitution. * * *' Cong. Globe, supra, 1291, 1292. 92 Mr. Wilson, House sponsor of the Civil Rights Bill, answered Mr. Bingham's objections to it with these remarks: 93 'The gentleman from Ohio tells the House that civil rights involve all the rights that citizens have under the Government; that in the terms are embraced those rights which belong to the citizen of the United States as such, and those which belong to a citizen of a State as such; and that this bill is not intended merely to enforce equality of rights, so far as they relate to citizens of the United States but invades the States to enforce equality of rights in respect to those things which properly and rightfully depend on State regulations and laws. * * * 94 '* * * I find in the bill of rights which the gentleman desires to have enforced by an amendment to the Constitution that 'no person shall be deprived of life, liberty, or property without due process of law.' I understand that these constitute the civil rights belonging to the citizens in connection with those which are necessary for the protection and maintenance and perfect enjoyment of the rights thus specifically named, and these are the rights to which this bill relates, having nothing to do with subjects submitted to the control of the several States.' Cong. Globe, supra at 1294. 95 In vetoing the Civil Rights Bill, President Johnson said among other things that the bill was unconstitutional for many of the same reasons advanced by Mr. Bingham: 96 'Hitherto every subject embraced in the enumeration of rights contained in this bill has been considered as exclusively belonging to the States. * * * As respects the Territories, they come within the power of Congress, for as to them, the lawmaking power is the federal power; but as to the States no similar provisions exist, vesting in Congress the power 'to make rules and regulations' for them.' Cong. Globe, supra, 1679, 1680. 97 The bill, however, was passed over President Johnson's veto and in spite of the constitutional objections of Bingham and others. Cong. Globe, supra, 1809, 1861. 98 IV. Thereafter the scene changed back to the Committee on Reconstruction. There Mr. Stevens had proposed an amendment, § 1 of which provided 'No discrimination shall be made by any State, nor by the United States, as to the civil rights of persons because of race, color, or previous condition of servitude.' Journal 28. Mr. Bingham proposed an additional section providing that 'No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property without due process of law, nor deny to any person within its jurisdiction the equal protection of the laws.' Journal 30. After the Committee had twice declined to recommend Mr. Bingham's proposal, on April 28 it was accepted by the Committee, substantially in the form he had proposed it, as § 1 of the recommended Amendment. Journal 44. 99 V. In introducing the proposed Amendment to the House on May 8, 1866, Mr. Stevens speaking for the Committee said: 100 'The first section (of the proposed amendment) prohibits the States from abridging the privileges and immunities of citizens of the United States, or unlawfully deprivin them of l ife, liberty, or property, or of denying to any person within their jurisdiction the 'equal' protection of the laws. 101 'I can hardly believe that any person can be found who will not admit that every one of these provisions is just. They are all asserted, in some form or other, in our Declaration or organic law. But the Constitution limits only the action of Congress, and is not a limitation on the States. This amendment supplies that defect, and allows Congress to correct the unjust legislation of the States, so far that the law which operates upon one man shall operate equally upon all.' Cong. Globe, 2459.2 102 On May 23, 1866, Senator Howard introduced the proposed amendment to the Senate in the absence of Senator Fessenden who was sick. Senator Howard prefaced his remarks by stating: 103 'I * * * present to the Senate * * * the views and the motives (of the Reconstruction Committee). * * * One result of their investigation has been the joint resolution for the amendment of the Constitution of the United States now under consideration. * * * 104 'The first section of the amendment * * * submitted for the consideration of the two Houses, relates to the privileges and immunities of citizens of the several States, and to the rights and privileges of all persons, whether citizens or others, under the laws of the United States. * * * 105 'It will be observed that this is a general prohibition upon all the States, as such, from abridging the privileges and immunities of the citizens of the United States. That is its first clause, and I regard it as very important. It also prohibits each one of the States from depriving any person of life, liberty, or property without due process of law, or denying to any person within the jurisdiction of the State the equal protection of its laws. 106 'It would be a curious question to solve what are the privileges and immunities of citizens of each of the States in the several States. * * * I am not aware that the Supreme Court have ever undertaken to define either the nature or extent of the privileges and immunities thus guarantied. * * * But we may gather some intimation of what probably will be the opinion of the judiciary by referring to * * * Corfield v. Coryell (Fed.Cas. No. 3230) 4 Washington Circuit Court Reports, page 380. (Here Senator Howard quoted at length from that opinion.) 107 'Such is the character of the privileges and immunities spoken of in the second section of the fourth article of the Constitution. To these privileges and immunities, whatever they may be—for they are not and cannot be fully defined in their entire extent and precise nature—to these should be added the personal rights guarantied and secured by the first eight amendments of the Constitution; such as the freedom of speech and of the press; the right of the people peaceably to assemble and petition the Government for a redress of grievances, a right appertaining to each and all the people; the right to keep and to bear arms; the right to be exempted from the quartering of soldiers in a house without the consent of the owner; the right to be exempt from unreasonable searches and seizures, and from any search or seizure except by virtue of a warrant issued upon a formal oath or affidavit; the right of an accused person to be informed of the nature of the accusation against him, and his right to be tried by an impartial jury of the vicinage; and also the right to be secure against excessive bail and against cruel and unusual punishments. 108 'Now, sir, here is a mass of privileges, immunities, and rights, some of them secured by the second section of the fourth article of the Constitution, which I have recited, some by the first eight amendments of the Constitution; ad it is a fact well worthy of attention that the course of decision of our courts and the present settled doctrine is, that all these immunities, privileges, rights, thus guarantied by the Constitution, or recognized by it, are secured to the citizens solely as a citizen of the United States and as a party in their courts. They do not operate in the slightest degree as a restraint or a prohibition upon state legislation. States are not affected by them, and it has been repeatedly held that the restriction contained in the Constitution against the taking of private property for public use without just compensation is not a restriction upon State legislation, but applies only to the legislation of Congress. 109 'Now, sir, there is no power given in the Constitution to enforce and to carry out any of these guarantees. They are not powers granted by the Constitution to Congress, and of course do not come within the sweeping clause of the Constitution authorizing Congress to pass all laws necessary and proper for carrying out the foregoing or granted powers, but they stand simply as a bill of rights in the Constitution, without power on the part of Congress to give them full effect; while at the same time the States are not restrained from violating the principles embraced in them except by their own local constitutions, which may be altered from year to year. The great object of the first section of this amendment is, therefore, to restrain the power of the States any compel them at all times to respect these great fundamental guarantees.' Cong.Globe, supra, 2764. 110 Mr. Bingham had closed the debate in the House on the proposal prior to its consideration by the Senate. He said in part: 111 '* * * (M) any instances of State injustice and oppression have already occurred in the State legislation of this Union, of flagrant violations of the guarantied privileges of citizens of the United States, for which the national Government furnished and could furnish by law no remedy whatever. Contrary to the express letter of your Constitution, 'cruel and unusual punishments' have been inflicted under State laws within this Union upon citizens, not only for crimes committed, but for sacred duty done, for which and against which the Government of the United States had provided no remedy and could provide none. 112 'It was an approbrium to the Republic that for fidelity to the United States they could not by national law be protected against the degrading punishment inflicted on slaves and felons by State law. That great want of the citizen and stranger, protection by national law from unconstitutional State enactments, is supplied by the first section of this amendment.' Cong. Globe, supra, 2542, 2543. 113 Both proponents and opponents of § 1 of the amendment spoke of its relation to the Civil Rights Bill which had been previously passed over the President's veto. Some considered that the amendment settled any doubts there might be as to the constitutionality of the Civil Rights Bill. Cong. Globe, 2511, 2896. Others maintained that the Civil Rights Bill would be unconstitutional unless and until the amendment was adopted. Cong. Globe, 2461, 2502, 2506, 2513, 2961, 2513. Some thought that amendment was nothing but the Civil Rights 'in another shape.' Cong. Globe, 2459, 2462, 2465, 2467, 2498, 2502. One attitude of the opponents was epitomized by a statement by Mr. Shanklin that the amendment strikes 'down the reserved rights of the States, * * * declared by the framers of the Constitution to belong to the States exclusively and necessary for the protection of the property and liberty of the people. The first section of this proposed amendment * * * is to strike down those State rights and invest all power in General Government.' Cong. Globe, supra, 2500. See also Cong. Globe, supra, 2530, 2538. 114 Except for the addition of the first sentence of § 1 which defined citizenship, Cong. Globe, supra 2869, the amendment weathered the Senate debate without substantial change. Itis signifi cant that several references were made in the Senate debate to Mr. Bingham's great responsibility for § 1 of the amendment as passed by the House. See e.g. Cong. Globe, supra, 2896. 115 VI. Also just prior to the final votes in both Houses passing the resolution of adoption, the Report of the Joint Committee on Reconstruction, H.R.Rep.No.30, 39th Cong., 1st Sess. (1866); Sen.Rep.No.112, 39th Cong., 1st Sess. (1866), was submitted. Cong.Globe, supra, 3038, 3051. This report was apparently not distributed in time to influence the debates in Congress. But a student of the period reports that 150,000 copies of the Report and the testimony which it contained were printed in order that senators and representatives might distribute them among their constituents. Apparently the Report was widely reprinted in the press and used as a campaign document in the election of 1866. Kendrick, Journal of the Joint Committee on Reconstruction (1914) 265. According to Kendrick the Report was 'eagerly * * * perused' for information concerning 'conditions in the South.' Kendrick, supra, 265. 116 The Report of the Committee had said with reference to the necessity of amending the Constitution: 117 '* * * (T)he so-called Confederate States are not, at present, entitled to representation in the Congress of the United States; that, before allowing such representation, adequate security for future peace and safety should be required; that this can only be found in such changes of the organic law as shall determine the civil rights and privileges of all citizens in all parts of the republic. * * *' Report, supra, XXI. 118 Among the examples recited by the testimony were discrimination against negro churches and preachers by local officials and criminal punishment of those who attended objectionable church services. Report, Part II, 52. Testimony also cited recently enacted Louisiana laws which made it 'a highly penal offense for anyone to do anything that might be construed into encouraging the blacks to leave the persons with whom they had made contracts for labor * * *.' Report, Part III, p. 25.3 119 Flack, supra at 142, who canvassed newspaper coverage and speeches concerning the popular discussion of the adoption of the Fourteenth Amendment, indicates that Senator Howard's speech stating that one of the purposes of the first section was to give Congress power to enforce the Bill of Rights as well as extracts and digests of other speeches were published widely in the press. Flack summarizes his observation that 120 'The declarations and statements of newspapers, writers and speakers, * * * show very clearly, * * * the general opinion held in the North. That opinion, briefly stated, was that the Amendment embodied the Civil Rights Bill and gave Congress the power to define and secure the privileges of citizens of the United States. There does not seem to have been any statement at all as to whether the first eight Amendments were to be made applicable to the States or not, whether the privileges guaranteed by those Amendments were to be considered as privileges secured by the Amendment, but it may be inferred that this was recognized to be the logical result by those who thought that the freedom of speech and of the press as well as due process of law, including a jury trial, were secured by it.' Flack, supra, 153, 154. 121 VII. Formal statements subsequent to adoption of the Amendment by the congressional leaders who particiated in th e drafting and enactment of it are significant. In 1871 a bill was before the House which contemplated enforcement of the Fourteenth Amendment. Mr. Garfield, who had participated in the debates on the Fourteenth Amendment in 1866 said: 122 'I come now to consider * * * for it is the basis of the pending bill, the fourteenth amendment. I ask the attention of the House to the first section of that amendment, as to its scope and meaning. I hope gentlemen will bear in mind that this debate, in which so many have taken part, will become historical, as the earliest legislative construction given to this clause of the amendment. Not only the words which we put into the law, but what shall be said here in the way of defining and interpreting the meaning of the clause, may go far to settle its interpretation and its value to the country hereafter.' Cong. Globe, 42d Cong., 1st Sess. (App. 1871) 150. 123 'The next clause of the section under debate declares: 'Nor shall any state deprive any person of life, liberty, or property, without due process of law.' 124 'This is copied from the fifth article of amendments, with this difference: as it stood in the fifth article it operated only as a restraint upon Congress, while here it is a direct restraint upon the governments of the States. The addition is very valuable. It realizes the full force and effect of the clause in Magna Charta, from which it was borrowed; and there is now no power in either the State or the national Government to deprive any person of those great fundamental rights on which all true freedom rests, the rights of life, liberty, and property, except by due process of law; that is, by an impartial trial according to the laws of the land. * * *' Cong. Globe, supra, at 152, 153. 125 A few days earlier, in a debate on this same bill to enforce the Fourteenth Amendment, Mr. Bingham, still a member of Congress, had stated at length his understanding of the purpose of the Fourteenth Amendment as he had originally conceived it: 126 'Mr. Speaker, the Honorable Gentleman from Illinois (Mr. Farnsworth) did me unwittingly, great service, when he ventured to ask me why I changed the form of the first section of the fourteenth article of amendment from the form in which I reported it to the House in February, 1866, from the Committee on Reconstruction. I will answer the gentleman, sir, and answer him truthfully. I had the honor to frame the amendment as reported in February, 1866, and the first section, as it now stands, letter for letter, and syllable for syllable, in the fourteenth article of the amendments to the Constitution of the United States, save the introductory clause defining citizens. The clause defining citizens never came from the joint Committee on Reconstruction, but the residue of the first section of the fourteenth amendment did come from the committee precisely as I wrote it and offered it in the Committee on Reconstruction, and precisely as it now stands in the Constitution. * * * 127 'That is the grant of power. It is full and complete. The gentleman says that amendment differs from the amendment reported by me in February; differs from the provision introduced and written by me, now in the fourteenth article of amendments. It differs in this: that it is now, as it now stands in the Constitution, more comprehensive than as it was first proposed and reported in February, 1866. It embraces all and more than did the February proposition. 128 'The gentleman ventured upon saying that this amendment does not embrace all of the amendment prepared and reported by me with the consent of the committee in February, 1866. The amendment reported in February, to which the gentleman refers, is as follows: 'The Congress shall have power to make all laws which shall be necessary and proper to secure to the citizens of each State all the privileges and immunities of citizens in the several States, and to all persons in the several States equal protection in the rights of life, liberty, and property.' 129 'That i § the amendment, and the whole of it, as reported in February, 1866. That amendment never was rejected by the House or Senate. A motion was made to lay it on the table, which was a test vote on the merits of it, and the motion failed. * * * I consented to and voted for the motion to postpone it. * * * Afterward in the joint Committee on Reconstruction, I introduced this amendment, in the precise form, as I have stated, in which it was reported, and as it now stands in the Constitution of my country. * * * 130 'I answer the gentleman, how I came to change the form of February to the words now in the first section of the fourteenth article of amendments, as they stand, and I trust will forever stand, in the Constitution of my country. I had read—and that is what induced me to attempt to impose by constitutional amendments new limitations upon the power of the States—the great decision of Marshall in Barron v. The Mayor and City Council of Baltimore, wherein the Chief Justice said, in obedience to his official oath and the Constitution as it then was: 'The amendments (to the Constitution) contained no expression indicating an intention to apply them to the State governments. This court cannot so apply them.'—7 Pet. page 250, 8 L.Ed. 672. 131 'In this case the city had taken private property for public use, without compensation as alleged, and there was no redress for the wrong in the Supreme Court of the United States; and only for this reason, the first eight amendments were not limitations on the power of the States. 132 'And so afterward, in the case of the Lessee of Livingstone v. Moore * * * the court ruled, 'It is now settled that the amendments (to the Constitution) do not extend to the States.' They were but limitations upon Congress. Jefferson well said of the first eight articles of amendments to the Constitution of the United States, they constitute the American Bill of Rights. Those amendments secured the citizens against any deprivation of any essential rights of person by any act of Congress, and among other things thereby they were secured in their persons, houses, papers, and effects against unreasonable searches and seizures, in the inviolability of their homes in times of peace, by declaring that no soldier shall in time of peace be quartered in any house without the consent of the owner. They secured trial by jury; they secured the right to be informed of the nature and cause of accusation which might in any case be made against them; they secured compulsory process for witnesses and to be heard in defense by counsel. They secured, in short, all the rights dear to the American citizen. And yet it was decided, and rightfully, that these amendments defining and protecting the rights of men and citizens were only limitations on the power of Congress, not on the power of the States. 133 'In ree xamining that case of Barron, Mr. Speaker, after my struggle in the House in February 1866 to which the gentleman has alluded, I noted and apprehended as I never did before, certain words in that opinion of Marshall. Referring to the first eight articles of amendments to the Constitution of the United States, the Chief Justice said: 'Had the framers of these amendments intended them to be limitations on the power of the State governments they would have imitated the framers of the original Constitution, and have expressed that intention.' Barron v. The Mayor, &c., 7 Pet. 250, 8 L.Ed. 672. 134 'Acting upon this suggestion I did imitate the framers of the original Constitution. As they had said 'No state shall emit bills of credit, pass any bill of attainder, ex post facto law, or law impairing the obligations of contracts;' imitating their example and imitating it to the letter, I prepared the provision of the first section of the Fourteenth Amendment as it stands in the Constitution, as follows: 'No State shall make or enforce any law which shall abridge the privileges or immunities of the citizens of the United States, nor shall any State deprive any person, of life, liberty, or property without due process of law, nor deny to any person within its jurisdiction the equal protection of the laws.' 135 'I hope the gentleman now knows why I changed the form of the amendment of February, 1866. 136 'Mr. Speaker, that the scope and meaning of the limitations imposed by the first section, fourteenth amendment of the Constitution may be more fully understood, permit me to say that the privileges and immunities of citizens of the United States, as contradistinguished from citizens of a State, are chiefly defined in the first eight amendments to the Constitution of the United States. Those eight amendments are as follows: (Here Mr. Bingham recited verbatim the first eight articles.) 137 'These eight articles I have shown never were limitations upon the power of the States, until made so by the fourteenth amendment. The words of that amendment, 'no State shall make or enforce any law which shall abridge the privileges and immunities of citizens of the United States,' are an express prohibition upon every State of the Union, which may be enforced under existing laws of Congress, and such other laws for their better enforcement as Congress may make. 138 'Mr. Speaker, that decision in the fourth of Washington's Circuit Court Reports, to which my learned colleague * * * has referred is only a construction of the second section, fourth article of the original Constitution, to wit, 'The citizens of each State shall be entitled to all privileges and immunities of citizens in the several States.' In that case the court only held that in civil rights the State could not refuse to extend to citizens of other States the same general rights secured to its own. 139 'In the case of the United States v. Primrose, Mr. Webster said that—'For the purposes of trade, it is evidently not in the power of any State to impose any hindrance or embarrassment, etc., upon citizens of other States, or to place them, on coming there, upon a different footing from her own citizens.' 6 Webster's Works, 112. 140 'The learned Justice Story declared that—'The intention of the clause ('The citizens of each State shall be entitled to all privileges and immunities of citizens in the several States') was to confer on the citizens of each State a general citizenship, and communicated all the privileges and immunities which a citizen of the same State would be entitled to under the same circumstances.' Story on The Constitution, Vol. 2, page 605. 141 'Is it not clear that other and different privileges and immunities than those to which a citizen of a State was entitled are secured by the provisions of the fourteenth article, that no State shall abridge the privileges and immunities of citizens of the United States, which are defined in the eight articles of amendment, and which were not limitations on the power of the States before the fourteenth amendment made them limitations? 142 'Sir, before the ratification of the fourteenth amendment, the State could deny to any citizen the right of trial by jury, and it was done. Before that the State could abridge the freedom of the press, and it was so done in half the States of the Union. Before that a State, as in the case of the State of Illinois, could make it a crime punishable by fine and imprisonment for any citizen within her limits, in obedience to the injunction of our divine Master, to help a slave who was ready to perish; to give him shelter, or break with him his crust of bread. The validity of that State restriction upon the rights of conscience and the duty of life was affirmed, to the shame and disgrace of America, in the Supreme Court of the United States; but nevertheless affirmed in obedience to the requirements of the Constitution. * * * 143 'Under the Constitution as it is, not as it was, and by force of the fourteenth amendment, no State hereafter can imitate the bad example of Illinois, to which I have referred, nor can any State ever repeat the example of Georia and sen d men to the penitentiary, as did that State, for teaching the Indian to read the lesson of the New Testament, to know that new evangel, 'The pure in heart shall see God.' 144 '* * * You say it is centralized power to restrain by law unlawful combinations in States against the Constitution and citizens of the United States, to enforce the Constitution and the rights of United States citizen (sic.) by national law, and to disperse by force, if need be, combinations too powerful to be overcome by judicial process, engaged in trampling underfoot the life and liberty, or destroying the property of the citizen. 145 'The States never had the right, though they had the power, to inflict wrongs upon free citizens by denial of the full protection of the laws; because all State officials are by the Constitution required to be bound by oath or affirmation to support the Constitution. As I have already said, the States, did deny to citizens the equal protection of the laws, they did deny the rights of citizens under the Constitution, and except to the extent of the express limitations upon the States, as I have shown, the citizen had no remedy. They denied trial by jury, and he had no remedy. They took property without compensation, and he had no remedy. They restricted the freedom of the press, and he had no remedy. They restricted the freedom of speech, and he had no remedy. They restricted the rights of conscience, and he had no remedy. They bought and sold men who had no remedy. Who dare say, now that the Constitution has been amended, that the nation cannot by law provide against all such abuses and denials of right as these in States and by States, or combinations of persons? 146 'Mr. Speaker, I respectfully submit to the House and country that, by virtue of these amendments, it is competent for Congress today to provide by law that no man shall be held to answer in the tribunals of any State in this Union for any act made criminal by the laws of that state without a fair and impartial trial by jury. Congress never before has had the power to do it. It is also competent for Congress to provide that no citizen in any State shall be deprived of its property by State law or the judgment of a State court without just compensation therefor. Congress never before had the power so to declare. It is competent for the Congress of the United States to-day to declare that no State shall make or enforce any law which shall abridge the freedom of speech, the freedom of the press, or the right of the people peaceably to assemble together and petition for redress of grievances. For these are of the rights of citizens of the United States defined in the Constitution and guarantied by the fourteenth amendment, and to enforce which Congress is thereby expressly empowered. * * *' Cong.Globe, App. 1st Sess., 42d Cong., pp. 81, 83—85. 147 And the day after Mr. Garfield's address, Mr. Dawes, also a member of the 39th Congress, stated his understanding of the meaning of the Fourteenth Amendment: 148 'Sir, in the progress of constitutional liberty, when, in addition to those privileges and immunities (secured by the original Constitution), there were added from time to time, by amendments, others, and these were augmented, amplified, and secured and fortified in the buttresses of the Constitution itself, he hardly comprehended the full scope and measure of the phrase which appears in this bill. Let me read, one by one, these amendments, and ask the House to tell me when and where and by what chosen phrase has man been able to bring before the Congress of the country a broader sweep of legislation than my friend has in the bill here. In addition to the original rights secured to him in the first article of amendments, he had secured the free exercise of his religious belief, and freedom of speech and the press. Then he had secured to him the right to keep and bear arms in his defense. Then, after that, his home was secured in time of peace from the presence of a soldier; and,still furt her, sir, his house, his papers, and his effects were protected against unreasonable seizure. * * * 149 'Then, again, as if that were not enough, by another amendment he was secured against trial for any alleged offense except it be on the presentation of a grand jury, and he was protected against ever giving testimony against himself. (Italics supplied.) Then, sir, he was guarantied a speedy trial, and the right to confront every witness against him. Then in every controversy which should arise he had the right to have it decided by a jury of his peers. Then, sir, by another amendment, he was never to be required to give excessive bail, or be punished by cruel and unusual punishment. And still later, sir, after the bloody sacrifice of our four years' war, we gave the most grand of all these rights, privileges, and immunities, by one single amendment to the Constitution, to four millions of American citizens who sprang into being, as it were, by the wave of a magic wand. Still further, every person born on the soil was made a citizen and clothed with them all. 150 'It is all these, Mr. Speaker, which are compresended in the words 'American citizen,' and it is to protect and to secure him in these rights, privileges, and immunities this bill is before the House. And the question to be settled is, whether by the Constitution, in which these provisions are inserted, there is also power to guard, protect, and enforce these rights of the citizens; whether they are more, indeed, than a mere declaration of rights, carrying with it no power of enforcement. * * *' Cong.Globe, 42d Cong., 1st Sess. Part I (1871) 475, 476. 151 VIII. Hereafter appear statements in opinions of this Court rendered after adoption of the Fourteenth Amendment and prior to the Twining case which indicate a belief that the Fourteenth Amendment, and particularly its privileges and immunities clause, was plain application of the Bill of Rights to the states. See 332 U.S. 75, 67 S.Ct. 1688, note 6, supra. 152 In the Slaughter-House Cases, 16 Wall. 36, 83, 21 L.Ed. 394, the dissenting opinion of Mr. Justice Field emphasized that the Fourteenth Amendment made a 'citizen of a State * * * a citizen of the United States residing in that State.' 16 Wall. at page 95, 21 L.Ed. 394. But he enunciated a relatively limited number of privileges and immunities which he considered protected by national power from state interference by the Fourteenth Amendment. Apparently dissatisfied with the limited interpretation of Mr. Justice Field, Mr. Justice Bradley, although agreeing with all that Mr. Justice Field had said, wrote an additional dissent. 16 Wall. at page 111, 21 L.Ed. 394. In it he said: 153 'But we are not bound to resort to implication, or to the constitutional history of England, to find an authoritative declaration of some of the most important privileges and immunities of citizens of the United States. It is in the Constitution itself. The Constitution, it is true, as it stood prior to the recent amendments, specifies, in terms, only a few of the personal privileges and immunities of citizens, but they are very comprehensive in their character. The States were merely prohibited from passing bills of attainder, ex post facto laws, laws impairing the obligation of contracts, and perhaps one or two more. But others of the greatest consequence were enumerated, although they were only secured, in express terms, from invasion by the Federal Government; such as the right of habeas corpus, the right of trial by jury, of free exercise of religious worship, the right of free speech and a free press, the right peaceably to assemble for the discussion of public measures, the right to be secure against unreasonable searches and seizures, and above all, and including almost all the rest, the right of not being deprived of life, liberty, or property, without due process of law. These, and still others are specified in the original Constitution, or in the early amendments of it, as among the privilegesand immuni ties of citizens of the United States, or, what is still stronger for the force of the argument, the rights of all persons, whether citizens or not.' 16 Wall. at pages 118, 119, 21 L.Ed. 394; see also 16 Wall. at pages 120—122, 21 L.Ed. 394. 154 Mr. Justice Swayne joined in this opinion but added his own not inconsistent views. 16 Wall. at page 124, 21 L.Ed. 394. 155 But in Walker v. Sauvinet, 92 U.S. 90, 92, 23 L.Ed. 678, when a majority of the Court held that 'A trial by jury in suits at common law pending in the State courts is not * * * a privilege or immunity of national citizenship, which the States are forbidden by the Fourteenth Amendment to abridge,' Mr. Justice Field and Mr. Justice Clifford dissented from 'the opinion and judgment of the Court.' 92 U.S. at page 93, 23 L.Ed. 678. 156 In Spies v. Illinois, 123 U.S. 131, 8 S.Ct. 22, 31 L.Ed. 80, counsel for the petitioners, Mr. J. Randolph Tucker, after enumerating the protections of the Bill of Rights, took this position: 157 '* * * Though originally the first ten Amendments were adopted as limitations on Federal power, yet in so far as they secure and recognize fundamental rights—common law rights—of the man, they make them privileges and immunities of the man as citizen of the United States, and cannot now be abridged by a State under the Fourteenth Amendment. In other words, while the ten Amendments, as limitations on power, only apply to the Federal government, and not to the States, yet in so far as they declare or recognize rights of persons, these rights are theirs, as citizens of the United States, and the Fourteenth Amendment as to such rights limits state power, as the ten Amendments had limited Federal power. 158 '* * * the rights declared in the first ten amendments are to be regarded as privileges and immunities of citizens of the United States, which, as I insist, are protected as such by the Fourteenth Amendment.' 123 U.S. at pages 151, 152, 8 S.Ct. 22, 31 L.Ed. 80. 159 The constitutional issues raised by this argument were not reached by the Court which disposed of the case on jurisdictional grounds. 160 However, Mr. Justice Field in his dissenting opinion in O'Neil v. Vermont, 144 U.S. 323, 337, 361, 12 S.Ct. 693, 698, 707, 36 L.Ed. 450, stated that 'after much reflection' he had become persuaded that the definition of privileges and immunities given by Mr. Tucker in Spies v. Illinois, supra, 'is correct.' And Mr. Justice Field went on to say that 'While, therefore, the ten amendments as limitations on power, and, so far as they accomplish their purpose and find their fruition in such limitations, are applicable only to the federal government and not to the states, yet, so far as they declare or recognize the rights of persons they are rights belonging to them as citizens of the United States under the constitution; and the fourteenth amendment, as to all such rights, places a limit upon state power by ordaining that no state shall make or enforce any law which shall abridge them. If I am right in this view, then every citizen of the United States is protected from punishments which are cruel and unusual. It is an immunity which belongs to him, against both state and federal action. The state cannot apply to him, any more than the United States, the torture, the rack, or thumb-screw, or any cruel and unusual punishment, or any more than it can deny to him security in his house, papers, and effects against unreasonable searches and seizures, or compel him to be a witness against himself in a criminal prosecution. These rights, as those of citizens of the United States, find their recognition and guaranty against federal action in the constitution of the United States, and against state action in the fourteenth amendment. The inhibition by that amendment is not the less valuable and effective because of the prior and existing inhibition against such action in the constitutions of the several states. * * *' 144 U.S. at page 363, 12 S.Ct. at page 708, 36 L.Ed. 450. 161 Mr. Jusice Harlan , and apparently Mr. Justice Brewer, concurred in this phase of Mr. Justice Field's dissent. 144 U.S. at pages 366, 370, 371, 12 S.Ct. at pages 709, 711, 36 L.Ed. 450. 162 For further exposition of these views see also the vigorous dissenting opinions of Mr. Justice Harlan in Hurtado v. California, 110 U.S. 516, 538, 4 S.Ct. 111, 122, 292, 28 L.Ed. 232, and Maxwell v. Dow, 176 U.S. 581, 605, 20 S.Ct. 494, 44 L.Ed. 597, as well as his dissenting opinion in Twining v. New Jersey, 211 U.S. 78, 114, 29 S.Ct. 14, 26, 53 L.Ed. 97. 163 Mr. Justice MURPHY, with whom Mr. Justice RUTLEDGE concurs, dissenting. 164 While in substantial agreement with the views of Mr. Justice BLACK, I have one reservation and one addition to make. 165 I agree that the specific guarantees of the Bill of Rights should be carried over intact into the first section of the Fourteenth Amendment. But I am not prepared to say that the latter is entirely and necessarily limited by the Bill of Rights. Occasions may arise where a proceeding falls so far short of conforming to fundamental standards of procedure as to warrant constitutional condemnation in terms of a lack of due process despite the absence of a specific provision in the Bill of Rights. 166 That point, however, need not be pursued here inasmuch as the Fifth Amendment is explicit in its provision that no person shall be compelled in any criminal case to be a witness against himself. That provision, as Mr. Justice BLACK demonstrates, is a constitutent part of the Fourteenth Amendment. 167 Moreover, it is my belief that this guarantee against self-incrimination has been violated in this case. Under California law, the judge or prosecutor may comment on the failure of the defendant in a criminal trial to explain or deny any evidence or facts introduced against him. As interpreted and applied in this case, such a provision compels a defendant to be a witness against himself in one of two ways: 168 1. If he does not take the stand, his silence is used as the basis for drawing unfavorable inferences against him as to matters which he might reasonably be expected to explain. Thus he is compelled, through his silence, to testify against himself. And silence can be as effective in this situation as oral statements. 169 2. If he does take the stand, thereby opening himself to cross-examination, so as to overcome the effects of the provision in question, he is necessarily compelled to testify against himself. In that case, his testimony on cross-examination is the result of the coercive pressure of the provision rather than his own volition. 170 Much can be said pro and con as to the desiability of allowing comment on the failure of the accused to testify. But policy arguments are to no avail in the face of a clear constitutional command. This guarantee of freedom from self-incrimination is grounded on a deep respect for those who might prefer to remain silent before their accusers. To borrow language from Wilson v. United States, 149 U.S. 60, 66, 13 S.Ct. 765, 766, 37 L.Ed. 650: 'It is not every one who can safely venture on the witness stand, though entirely innocent of the charge against him. Excessive timidity, nervousness when facing others and attempting to explain transactions of a suspicious character, and offenses charged against him, will often confuse and embarrass him to such a degree as to increase rather than remove prejudices against him. It is not every one, however honest, who would therefore willingly be placed on the witness stand.' 171 We are obliged to give effect to the principle of freedom from self-incrimination. That principle is as applicable where the compelled testimony is in the form of silence as where it is composed of oral statements. Accordingly, I would reverse the judgment below. 1 There was also a conviction for first degee burglar y. This requires no discussion. 2 This section authorizes appeal to this Court from the final judgment of a state when the validity of a state statute is questioned on the ground of its being repugnant to the Constitution of the United States. The section has been applied so as to cover a state constitutional provision. Railway Express Agency, Inc. v. Virginia, 282 U.S. 440, 51 S.Ct. 201, 75 L.Ed. 450, 72 A.L.R. 102; King Mfg. Co. v. Augusta, 277 U.S. 100, 48 S.Ct. 489, 72 L.Ed. 801. 3 Constitution of California, art. 1, § 13: '* * * No person shall be twice put in jeopardy for the same offense; nor be compelled in any criminal case, to be a witness against himself; nor be deprived of life, liberty, or property without due process of law; but in any criminal case, whether the defendant testifies or not, his failure to explain or to deny by his testimony any evidence or facts in the case against him may be commented upon by the court and by counsel, and may be considered by the court or the jury. * * *' Penal Code of California, § 1323: 'A defendant in a criminal action or proceeding cannot be compelled to be a witness against himself; but if he offers himself as a witness, he may be cross-examined by the counsel for the people as to all matters about which he was examined in chief. The failure of the defendant to explain or to deny by his testimony any evidence or facts in the case against him may be commented upon by counsel.' 4 All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privilege or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.' 5 Penal Code of California, § 1025: '* * * In case the defendant pleads not guilty, and answers that he has suffered the previous conviction, the charge of the previous conviction must not be read to the jury, nor alluded to on the trial.' 6 The California law protects a defendant against compulsion to testify, though allowing comment upon his failure to meet evidence against him. The Fifth Amendment forbids compulsion on a defendant to testify. Boyd v. United States, 116 U.S. 616, 631, 632, 6 S.Ct. 524, 532, 533, 29 L.Ed. 746; cf. Davis v. United States, 328 U.S. 582, 587, 593, 66 S.Ct. 1256, 1258, 1261, 90 L.Ed. 1453. A federal statute that grew out of the extension of permissible witnesses to include those charged with offenses negatives a presumption against an accused for failure to avail himself of the right to testify in his own defense. 28 U.S.C. § 632, 28 U.S.C.A. § 632; Bruno v. United States, 308 U.S. 287, 60 S.Ct. 198, 84 L.Ed. 257. It was this statute which is interpreted to protect the defendant against comment for his claim of privilege. Wilson v. United States, 149 U.S. 60, 66, 13 S.Ct. 765, 766, 37 L.Ed. 650; Johnson v. United States, 318 U.S. 189, 199, 63 S.Ct. 549, 554, 87 L.Ed. 704. 7 'All persons born or naturalized in the United States and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside.' 8 16 Wall. 36, 21 L.Ed. 394. The brief of Mr. Fellows for the plaintiff in error set out the legislative history in an effort to show that the purpose of the first section of the Fourteenth Amendment was to put the 'Rights of Citizens' under the protection of the United States. It was pointed out, p. 12, that the Fourteenth Amendment was needed to accomplish that result. After quoting from the debates, the brief summarized the argument, as follows, p. 21: 'As the result of this examination, the only conclusion to be arrived at, as to the intention of Congress in proposing the amendments, and especially the first section of the Fourteenth Amendment, and the interpretation universally put upon it by every member of Congress, whether friend or foe, the interpretation in which all were agreed, was, in the words of Mr. Hale, 'that it was intended to apply to every State which has failed to apply equal protection to life, liberty and property;' or in the words of Mr. Bingham, 'that the protection given by the laws of the States shall be equal in respect to life, liberty and property to all persons;' or in the language of Mr. Sumner, that it abolished 'oligarchy, aristocracy, caste, or monopoly with peculiar privileges and powers." 9 Snyder v. Massachusetts, 291 U.S. 97, 105, 54 S.Ct. 330, 332, 78 L.Ed. 674, 90 A.L.R. 575; Palko v. Connecticut, 302 U.S. 319, 324, 58 S.Ct. 149, 151, 82 L.Ed. 288; Twining v. New Jersey, supra, 211 U.S. 114, 29 S.Ct. 26, 53 L.Ed. 97. 10 See Madden v. Kentucky, 309 U.S. 83, 90, 60 S.Ct. 406, 409, 84 L.Ed. 590, 125 A.L.R. 1383, and cases cited; and see the concurring opinions in Edwards v. California, 314 U.S. 160, 62 S.Ct. 164, 86 L.Ed. 119, and the opinion of Stone, J., in Hague v. C.I.O., 307 U.S. 496, 519, 59 S.Ct. 954, 965, 83 L.Ed. 1423. 11 Moore v. Dempsey, 261 U.S. 86, 91, 43 S.Ct. 265, 266, 67 L.Ed. 543; Chambers v. Florida, 309 U.S. 227, 238, 60 S.Ct. 472, 477, 84 L.Ed. 716; Buchalter v. New York, 319 U.S. 427, 63 S.Ct. 1129, 87 L.Ed. 1492. 12 White v. Texas, 310 U.S. 530, 60 S.Ct. 1032, 84 L.Ed. 1342; Brown v. Mississippi, 297 U.S. 278, 56 S.Ct. 461, 80 L.Ed. 682; Ashcraft v. Tennessee, 322 U.S. 143, 154, 64 S.Ct. 921, 926, 88 L.Ed. 1192; Ashcraft v. Tennessee, 327 U.S. 274, 66 S.Ct. 544, 90 L.Ed. 667. 13 See Malinski v. New York, 324 U.S. 401, concurring op. at 414, dissent at 438, 65 S.Ct. 781, 787, 798, 89 L.Ed. 1029; Buchalter v. New York, supra, 319 U.S. at page 429, 63 S.Ct. at page 1130, 87 L.Ed. 1492; Palko v. Connecticut, supra, 302 U.S. at page 325, 58 S.Ct. at pages 151, 152, 82 L.Ed. 288; Carter v. Illinois, 329 U.S. 173, 67 S.Ct. 216. State action must 'be consistent with the fundamental principles of liberty and justice which lie at the base of all our civil and political institutions and not infrequently are designated as 'law of the land." Hebert v. Louisiana, 272 U.S. 312, 316, 47 S.Ct. 103, 104, 71 L.Ed. 270, 48A.L.R. 110 2. 14 Twining v. New Jersey, supra, 211 U.S. at pages 110—112, 29 S.Ct. at pages 24, 25, 53 L.Ed. 97. 15 VIII Wigmore, supra, 412. 16 The cases and statutory references are collected in VIII Wigmore, supra, at pp. 413 et seq. New Jersey, Ohio and Vermont permit comment. The question of permitting comment upon the failure of an accused to testify has been a matter for consideration in recent years. See Reports of American Bar Association (1931) 137; Proceedings, American Law Institute, 1930 31, 202; Reeder, Comment Upon Failure of Accused to Testify, 31 Mich.L.Rev. 40; Bruce, the Right to Comment on the Failure of the Defendant to Testify, Id., 226. 17 Comment here did not follow a grant of privilege that carried immunity from comment. The choice between giving evidence and remaining silent was an open choice. There was no such possible misleading of the defendant as we condemned in Johnson v. United States, 318 U.S. 189, 195—199, 63 S.Ct. 549, 552—554, 87 L.Ed. 704. 1 'The prohibition against depriving the citizen or subject of his life, liberty, or property without due process of law, is not new in the constitutional history of the English race. It is not new in the constitutional history of this country, and it was not new in the Constitution of the United States when it became a part of the fourteenth amendment, in the year 1866.' Davidson v. New Orleans, 96 U.S. 97, 101, 24 L.Ed. 616. 1 The cases on which the Court relies seem to adopt these standards. Malinski v. New York, 324 U.S. 401, concurring opinion, 412—417, 65 S.Ct. 781, 786—789, 89 L.Ed. 1029; Buchalter v. New York, 319 U.S. 427, 429, 63 S.Ct. 1129, 1130, 87 L.Ed. 1492; Hebert v. Louisiana, 272 U.S. 312, 316, 47 S.Ct. 103, 104, 71 L.Ed. 270, 48 A.L.R. 1102. 2 'The question in the case at bar has been twice before us, and been left undecided, as the cases were disposed of on other grounds.' Twining v. New Jersey, supra, 211 U.S. at page 92, 29 S.Ct. at page 17, 53 L.Ed. 97. In Palko v. Connecticut, 302 U.S. 319, 58 S.Ct. 149, 82 L.Ed. 288, relied on by the Court, the issue was double jeopardy and not to enforced self-incrimination. 3 The Fifth Amendment requires indictment by a Grand Jury in many criminal trials, prohibits double jeopardy, self-incrimination, deprivation of life, liberty or property without due process of law or the taking of property for public use without just compensation. The Sixth Amendment guarantees to one accused of crime a speedy, public trial before an impartial jury of the district where the crime was allegedly committed; it requires that the accused be informed of the nature of the charge against him, confronted with the witnesses against him, have compulsory process to obtain witnesses in his favor, and assistance of counsel. The Eighth Amendment prohibits excessive bail, fines and cruel and unusual punishments. 4 See Appendix, infra, 332 U.S. 97, 67 S.Ct. 1699. 5 Another prime purpose was to make colored people citizens entitled to full equal rights as citizens despite what this Court decided in the Dred Scott case. Scott v. Sandford, 19 How. 393, 15 L.Ed. 691. A comprehensive analysis of the historical origins of the Fourteenth Amendment, Flack, The Adoption of the Fourteenth Amendment (1908) 94, concludes that 'Congress, the House and the Senate, had the following objects, and motives in view for submitting the first section of the Fourteenth Amendment to the States for ratification: '1. To make the Bill of Rights (the first eight amendments) binding upon or applicable to, the States. '2. To give validity to the Civil Rights Bill. '3. To declare who were citizens of the United States.' 6 It is noteworthy that before the Twining decision Justices Bradley, Field, Swayne, Harlan, and apparently Brewer, although they had not been presented with and did not rely upon a documented history of the Fourteenth Amendment such as is set out in the Appendix, infra, nevertheless dissented from the view that the Fourteenth Amendment did not make provisions of the Bill of Rights applicable to the states. In the attached Appendix (at pages 120—123 of 332 U.S., at pages 1709—1711 of 67 S.Ct.) I have referred to some cases evidencing their views, and set out some expressions of it. A contemporary comment illustrates that the Slaughter-House interpretation of the Fourteenth Amendment was made without full regard for the congressional purpose or popular understanding. 'It must be admitted that the construction put upon the language of the first section of this amendment by the majority of the court is not its primary and most obvious signification. Ninety nine out of every hundred educated men, upon reading this section over, would at first say that it forbade a state to make or enforce a law which abridged any privilege or immunity whatever of one who was a citizen of the United States; and it is only by an effort of ingenuity that any other sense can be discovered that it can be forced to bear. It is a little remarkable that, so far as the reports disclose, no one of the distinguished counsel who argued this great case (the Slaughter-House Cases), nor any one of the judges who sat in it, appears to hae thought it worth while to consult the proceedings of the Congress which proposed this amendment to ascertain what it was that they were seeking to accomplish. Nothing is more common than this. There is hardly a question raised as to the true meaning of a provision of the old, original Constitution that resort is not had to Elliott's Debates, to ascertain what the framers of the instrument declared at the time that they intended to accomplish. * * *' Royall, The Fourteenth Amendment: The Slaughter-House Cases, 4 So.L.Rev.(N.S.) 558, 563 (1879). For a collection of other comments on the Slaughter-House cases, see 2 Warren, The Supreme Court in United States History (1937) c. 32. 7 The case was not decided until over two years after it was submitted. In a short brief filed some two years after the first briefs, one of the counsel attacking the constitutionality of the state statute referred to and cited part of the history of the Fourteenth Amendment. The historical references made were directed only to an effort to show that a purpose of the Fourteenth Amendment was to protect freedom of contract against monopoly since monopolies interfered with the freedom of contract and the right to engage in business. Nonetheless some of these references would have supported the theory, had it been in question there, that a purpose of the Fourteenth Amendment was to make the Bill of Rights applicable to the states. For counsel quoted a statement by Congressman Bingham that '* * * it is * * * clear by every construction of the Constitution, its continued construction, legislative, executive and judicial, that these great provisions of the Constitution, this immortal bill of rights embodied in the Constitution, rested for its execution and enforcement hitherto upon the fidelity of the States. The House knows, the country knows * * *, that the legislative, executive and judicial officers of 11 States within this Union, within the last five years, have utterly disregarded the behest.' But since there was no contention that the Bill of Rights Amendment prohibited monopoly, this statement, in the context it was quoted, is hardly an indication that the Court was presented with documented argument on the question of whether the Fourteenth Amendment made the Bill of Rights applicable to the States. 8 See San Mateo County v. Southern P.R. Co., 116 U.S. 138, 6 S.Ct. 317, 29 L.Ed. 589; Santa Clara County v. Southern P.R. Co., 118 U.S. 394, 396, 6 S.Ct. 1132, 30 L.Ed. 118; Graham, The 'Conspiracy Theory' of the Fourteenth Amendment, 47 Yale, L.J. 371, 48 L.J. 171. 9 This case was decided after Hurtado but before Twining. It apparently was the first decision of this Court which brought in a Bill of Rights provision under the due process clause. In Davidson v. New Orleans, 96 U.S. 97, 105, 24 L.Ed. 616, the Court had refused to make such a holding, saying that 'it must be remembered that, when the Fourteenth Amendment was adopted, the provision on that subject (just compensation), in immediate juxtaposition in the fifth amendment with the one we are now construing (due process), was left out, and this (due process) was taken.' Not only was the just compensation clause left out, but it was deliberately left out. A Committee on Reconstruction framed the Fourteenth Amendment, and its Journal shows that on April 21, 1866, the Committee by a 7 to 5 vote rejected a proposal to incorporate the just compensation clause in the Fourteenth Amendment. Journal of the Joint Committee on Reconstruction, 39th Cong., 1st Sess. (1866), reprinted as Sen.Doc.No.711, 63d Cong., 3d Sess. (1915) 29. As shown by the history of the Amendment's passage, however, the Framers thought that in the language they had included this protection along with all the other protections of the Bill of Rights. See Appendix, infra. 10 One writer observed, 'That the Supreme Court has, on the one hand, refused to give this Amendment its evident meaning and purpose, thus completely defeating the intention of the Congress that framed it and the people who adopted it. But, on the other hand, the Court has put into it a meaning which had never been intended either by its framers or adopters, thus in effect adopting a new amendment and augmenting its power by constituting itself that 'perpetual censor upon all legislation of the state,' which Justice Miller was afraid the Court would become if the Fourteenth Amendment were interpreted according to its true meaning and given the full effect intended by the people when they adopted it.' 2 Boudin, Government by Judiciary (1932) 117. See also Haines, The Revival of Natural Law Concepts (1930) 143—165; Fairman, Mr. Justice Miller and the Supreme Court (193) c. VIII. 11 See cases collected p. 11 supra. Other constitutional rights left unprotected from state violation are, for example, right to counsel, Betts v. Brady, 316 U.S. 455, 62 S.Ct. 1252, 86 L.Ed. 1595; privilege against self-incrimination, Feldman v. United States, 322 U.S. 487, 490, 64 S.Ct. 1082, 1083, 88 L.Ed. 1408, 154 A.L.R. 982. 12 Examples of regulatory legislation invalidated are: state 10 hour law for baking employees, Lochner v. New York, 198 U.S. 45, 25 S.Ct. 539, 49 L.Ed. 937, 3 Ann.Cas. 1133; cf. Muller v. Oregon, 208 U.S. 412, 28 S.Ct. 324, 52 L.Ed. 551, 13 Ann.Cas. 957; District of Columbia minimum wage for women, Adkins v. Children's Hospital, 261 U.S. 525, 43 S.Ct. 394, 67 L.Ed. 785, 24 A.L.R. 1238; Morehead v. New York, 298 U.S. 587, 56 S.Ct. 918, 80 L.Ed. 1347, 103 A.L.R. 1445; but cf. West Coast Hotel Co. v. Parrish, 300 U.S. 379, 57 S.Ct. 578, 81 L.Ed. 703, 108 A.L.R. 1330; state law making it illegal to discharge employee for membership in a union, Coppage v. Kansas, 236 U.S. 1, 35 S.Ct. 240, 59 L.Ed. 441, L.R.A.1915C, 960;cf. Adair v. United States, 208 U.S. 161, 28 S.Ct. 277, 52 L.Ed. 436, 13 Ann.Cas. 764, state law fixing price of gasoline, Williams v. Standard Oil Co., 278 U.S. 235, 49 S.Ct. 115, 73 L.Ed. 287, 60 A.L.R. 596; state taxation of bonds, Baldwin v. Missouri, 281 U.S. 586, 50 S.Ct. 436, 74 L.Ed. 1056, 72 A.L.R. 1303; state law limiting amusement ticket brokerage, Ribnik v. McBride, 277 U.S. 350, 48 S.Ct. 545, 72 L.Ed. 913, 56 A.L.R. 1327; law fixing size of loaves of bread to prevent fraud on public, Jay Burns Baking Co. v. Bryan, 264 U.S. 504, 44 S.Ct. 412, 68 L.Ed. 813, 32 A.L.R. 661; cf. Schmidinger v. Chicago, 226 U.S. 578, 33 S.Ct. 182, 57 L.Ed. 364, Ann.Cas. 1914B, 284. 13 See particularly dissents in cases cited notes 11 and 12, supra. 14 Actually it appears that the practice of the Court of Star Chamber of compelling an accused to testify under oath in Lilburn's trial, 3 Howard State Trials 1315; 4 id., 1269, 1280, 1292, 1342, had helped bring to a head the popular opposition which brought about the demise of that engine of tyranny. 16 Car. I, cc. 10, 11. See 8 Wigmore, Evidence (1940) 292, 298; Pittman, The Colonial and Constitutional History of the Privilege Against Self-incrimination, 21 Va.L.Rev. 763, 774 (1935). Moreover, it has been pointed out that seven American state constitutions guaranteed a privilege against self-incrimination prior to 1789. Pittman, supra, 765; Md.Const. (1776), 1 Poore Constitutions (1878) 818; Mass.Const. (1780), id. at 958; N.C.Const. (1776), 2 id. at 1409; N.H.Const. (1784), id. at 1282; Pa.Const. (1776), id. at 1542; Vt.Const. (1777), id. at 1860; Va. Bill of Rights (1776), id. at 1909. By contrast it has been pointed out that freedom of speech was not protected by colonial or state constitutions prior to 1789 except for the right to speak freely in sessions of the legislatures. See Warren, The New Liberty under the Fourteenth Amendment, 39 Harv.L.Rev. 431, 461 (1926). 15 For accounts of the proceedings against Mrs. Hutchison, see I Hart, American History told by Contemporaries, 382 ff (1897); Beard, The Rise of American Civilization (1930) 57; 1 Andrews, The Colonial Period of American History, 485 (1934). 16 See, e.g., Betts v. Brady, 316 U.S. 455, 62 S.Ct. 1252, 86 L.Ed. 1595; Feldman v. United States, 322 U.S. 487, 64 S.Ct. 1082, 88 L.Ed. 1408, 154 A.L.R. 982. 17 See Chambers v. Florida, 309 U.S. 227, 60 S.Ct. 472, 84 L.Ed. 716; Polk Co. v. Glover, 305 U.S. 5, 12—19, 59 S.Ct. 15, 18 21, 83 L.Ed. 6; McCart v. Indianapolis Water Co., 302 U.S. 419, 423, 428, 58 S.Ct. 324, 325, 328, 82 L.Ed. 336; Milk Wagon Drivers v. Meadowmoor Dairies, 312 U.S. 287, 299, 301, 61 S.Ct. 552, 557, 558, 85 L.Ed. 836, 132 A.L.R. 1200; Betts v. Brady, 316 U.S. 455, 474, 62 S.Ct. 1252, 1262, 86 L.Ed. 1595; International Shoe Co. v. Washington, 326 U.S. 310, 322, 324—326, 66 S.Ct. 154, 161, 162, 163, 90 LEd. 95, 16 1 A.L.R. 1057; Feldman v. United States, 322 U.S. 487, 494, 495, 64 S.Ct. 1082, 1085, 88 L.Ed. 1408, 154 A.L.R. 982; Federal Power Commission v. Hope Nat'l. Gas Co., 320 U.S. 591, 619, 620, 64 S.Ct. 281, 295, 296, 88 L.Ed. 333; United Gas Public Service Co. v. Texas, 303 U.S. 123, 146, 153, 58 S.Ct. 483, 494, 497, 82 L.Ed. 702; Gibbs v. Buck, 307 U.S. 66, 79, 59 S.Ct. 725, 732, 83 L.Ed. 1111. 18 An early and prescient expose of the inconsistency of the natural law formula with our constitutional form of government appears in the concurring opinion of Mr. Justice Iredell in Calder v. Bull, 3 Dall. 386, 398, 399, 1 L.Ed. 648: 'If any act of Congress, or the Legislature of a state, violates * * * constitutional provisions, it is unquestionably void; though, I admit, that as the authority to declare it void is of a delicate and awful nature, the Court will never resort to that authority, but in a clear and urgent case. If, on the other hand, the Legislature of the Union, or the Legislature of any member of the Union, shall pass a law, within the general scope of thier constitutional power, the Court cannot pronounce it to be void, merely because it is, in their judgment, contrary to the principles of natural justice. The ideas of natural justice are regulated by no fixed standard: the ablest and the purest men have differed upon the subject; and all that the Court could properly say in such an event, would be, that the Legislature (possessed of an equal right of opinion) had passed an act which, in the opinion of the judges, was inconsistent with the abstract principles of natural justice.' See also Haines, The Law of Nature in State and Federal Decisions, 25 Yale L.J. 617 (1916); Judicial Review of Legislation in the United States and the Doctrines of Vested Rights and of Implied Limitations on Legislatures, 2 Tex.L.Rev. 257 (1924), 3 Tex.L.Rev. 1 (1924); The Revival of Natural Law Concepts (1930); The American Doctrine of Judicial Supremacy (1932); The Role of the Supreme Court in American Government and Politics (1944). 1 Mr. Bingham and Mr. Stevens had introduced these same proposed amendments in the House prior to the establishment of the Reconstruction Committee. Cong.Globe, 39th Cong., 1st Sess. (1865) 10, 14. 2 It has been said of Stevens' statement: 'He evidently had reference to the Bill of Rights, for it is in it that most of the privileges are enumerated, and besides it was not applicable to the States.' Flack, The Adoption of the Fourteenth Amendment (1908) 75. 3 In a widely publicized report to the President which was also submitted to the Congress, Carl Schurz had reviewed similar incidents and emphasized the fact that negroes had been denied the right to bear arms, own property, engage in business, to testify in Court, and that local authorities had arrested them without cause and tried them without juries. Sen.Exec.Doc.No.2, 39th Cong., 1st Sess. (1865) 23, 24, 26, 36. See also Report of Commissioner of Freedman's Bureau, Exec.Doc.No.70, 39th Cong., 1st Sess. (1866) 41, 47, 48, 233, 236, 265, 376.
01
332 U.S. 19 67 S.Ct. 1658 91 L.Ed. 1889 UNITED STATESv.STATE OF CALIFORNIA. No. 12, Original. Argued March 13, 14, 1947. Decided June 23, 1947. Rehearing Denied Oct. 13, 1947. See 68 S.Ct. 37. Order and Decree Oct. 27, 1947. See 68 S.Ct. 20. [Argument of Counsel from pages 19-21 intentionally omitted] Tom C. Clark, Atty. Gen., and Arnold Raum, of Washington, D.C., for complainant. Fred H. Howser, of San Francisco, Cal., and William W. Clary, of Los Angeles, Cal., for defendant. Leander I. Shelley, of New York City, for American Association of Port Authorities, as amicus curiae, by special leave of Court. Price Daniel, of Austin, Tex., for National Association of Attorneys General, as amicus curiae, by special leave of Court. Mr. Justice BLACK delivered the opinion of the Court. 1 The United States by its Attorney General and Solicitor General brought this suit against the State of California invoking our original jurisdiction under Article III, § 2, of the Constitution which provides that 'In all Cases * * * in which a State shall be Party, the supreme Court shall have original Jurisdiction.' The complaint alleges that the United States 'is the owner in fee simple f, or poss essed of paramount rights in and powers over, the lands, minerals and other things of value underlying the Pacific Ocean, lying seaward of the ordinary low water mark on the coast of California and outside of the inland waters of the State, extending seaward three nautical miles and bounded on the north and south, respectively, by the northern and southern boundaries of the State of California.' It is further alleged that California, acting pursuant to state statutes, but without authority from the United States, has negotiated and executed numerous leases with persons and corporations purporting to authorize them to enter upon the described ocean area to take pertroleum, gas, and other mineral deposits, and that the lessees have done so, paying to California large sums of money in rents and royalties for the petroleum products taken. The prayer is for a decree declaring the rights of the United States in the area as against California and enjoining California and all persons claiming under it from continuing to trespass upon the area in violation of the rights of the United States. 2 California has filed an answer to the complaint. It admits that persons holding leases from California, or those claiming under it, have been extracting petroleum products from the land under the three mile ocean belt immediately adjacent to California. The basis of California's asserted ownership is that a belt extending three English miles from low water mark lies within the original boundaries of the state, Cal. Const. 1849, Art. XII;1 that the original thirteen states acquired from the Crown of England title to all lands within their boundaries under navigable waters, including a three-mile belt in adjacent seas; and that since California was admitted as a state on an 'equal footing' with the original states, California at that time became vested with title to all such lands. The answer further sets up several 'affirmative' defenses. Among these are that California should be adjudged to have title under a doctrine of prescription; because of an alleged long existing Congressional policy of acquiescence in California's asserted ownership; because of estoppel or laches; and, finally, by application of the rule of res judicata.2 3 After California's answer was filed, the United States moved for judgment as prayed for in the complaint on the ground that the purported defenses were not sufficient in law. The legal issues thus raised have been exhaustively presented by counsel for the parties, both by brief and oral argument. Neither has suggested any necessity for the introduction of evidence, and we perceive no such necessity at this stage of the case. It is now ripe for determination of the basic legal issues presented by the motion. But before reaching the merits of these issues, we must first consider questions raised in California's brief and oral argument concerning the Government's right to an adjudication of its claim in this proceedig. 4 Fir st. It is contended that the pleadings present no case or controversy under Article III, § 2, of the Constitution. The contention rests in the first place on an argument that there is no case or controversy in a legal sense, but only a difference of opinion between federal and state officials. It is true that there is a difference of opinion between federal and state officers. But there is far more than that. The point of diffeence is as to who owns, or has paramount rights in and power over several thousand square miles of land under the ocean off the coast of California. The difference involves the confliciting claims of federal and state officials as to which government, state or federal, has a superior right to take or authorize the taking of the vast quantities of oil and gas underneath that land, much of which has already been, and more of which is about to be, taken by or under authority of the state. Such concrete conflicts as these constitute a controversy in the classic legal sense, and are the very kind of differences which can only be settled by agreement, arbitration, force, or judicial action. The case principally relied upon by California, United States v. State of West Virginia, 295 U.S. 463, 55 S.Ct. 789, 79 L.Ed. 1546, does not support its contention. For here there is a claim by the United States, admitted by California, that California has invaded the title or paramount right asserted by the United States to a large area of land and that California has converted to its own use oil which was extracted from that land. Cf. United States v. State of West Virginia, supra, 295 U.S. at page 471, 55 S.Ct. at page 792, 79 L.Ed. 1546. This alone would sufficiently establish the kind of concrete, actual conflict of which we have jurisdiction under Article III. The justiciability of this controversy rests therefore on conflicting claims of alleged invasions of interests in property and on conflicting claims of governmental powers to authorize its use. United States v. State of Texas, 143 U.S. 621, 646, 648, 12 S.Ct. 488, 494, 495, 36 L.Ed. 285; United States v. State of Minnesota, 270 U.S. 181, 194, 46 S.Ct. 298, 301, 70 L.Ed. 539; State of Nebraska v. State of Wyoming, 325 U.S. 589, 608, 65 S.Ct. 1332, 1346, 89 L.Ed. 1815. 5 Nor can we sustain that phase of the state's contention as to the absence of a case or controversy resting on the argument that it is impossible to identify the subject matter of the suit so as to render a proper decree. The land claimed by the Government, it is said, has not been sufficiently described in the complaint since the only shoreward boundary of some segments of the marginal belt is the line between that belt and the State's inland waters. And the Government includes in the term 'inland waters' ports, harbors, bays, rivers, and lakes. Pointing out the numerous difficulties in fixing the point where these inland waters end and the marginal sea begins, the state argues that the pleadings are therefore wholly devoid of a basis for a definite decree, the kind of decree essential to disposition of a case like this. Therefore, California concludes, all that is prayed for is an abstract declaration of rights concerning an unidentified three-mile belt, which could only be used as a basis for subsequent actions in which specific relief could be granted as to particular localities. 6 We may assume that location of the exact coastal line will involve many complexities and difficulties. But that does not make this any the less a justiciable controversy. Certainly demarcation of the boundary is not an impossibility. Despite difficulties this Court has previously adjudicated controversies concerning submerged land boundaries. See State of New Jersey v. State of Delaware, 291 U.S. 361, 54 S.Ct. 407, 78 L.Ed. 847, Id., 295 U.S. 694, 55 S.Ct. 907, 79 L.Ed. 1659; Borax Consolidated, Ltd. v. City of Los Angeles, 296 U.S. 10, 21—27, 56 S.Ct. 23, 28—31, 80 L.Ed. 9; State of Oklahoma v. State of Texas, 256 U.S. 70, 41 S.Ct. 420, 6 5 L.Ed. 831, Id., 256 U.S. 602, 41 S.Ct. 539, 65 L.Ed. 1115. And there is no reason why, after determining in general who owns the three-mile belt here involved, the Court might not later, if necessary, have more detailed hearings in order to determine with greater definiteness particular segments of the boundary. State of Oklahoma v. State of Texas, 258 U.S. 574, 582, 42 S.Ct. 406, 410, 66 L.Ed. 771. Such practice is commonplace in actions similar to this which are in the nature of equitable proceedings. See e.g. State of Oklahoma v. State of Texas, 256 U.S. at pages 608, 609, 41 S.Ct. at page 540, 541, 65 L.Ed. 1115, Id., 260 U.S. 606, 625, 43 S.Ct. 221, 222, 67 L.Ed. 428; Id., 261 U.S. 340, 43 S.Ct. 376, 67 L.Ed. 687. California's contention concerning the indefinitieness of the claim presents no insuperable obstacle to the exercise of the highly important jurisdiction conferred on us by Article III of the Constitution. 7 Second. It is contended that we should dismiss this action on the ground that the Attorney General has not been granted power either to file or to maintain it. It is not denied that Congress has given a very broad authority to the Attorney General to institute and conduct litigation in order to establish and safeguard government rights and properties.3 The argument is that Congress has for a long period of years acted in such a way as to manifest a clear policy to the effect that the states, not the Federal Government, have legal title to the land under the three-mile belt. Although Congress has not expressly declared such a policy, we are asked to imply it from certain conduct of Congress and other governmental agencies charged with responsibilities concerning the national domain. And, in effect, we are urged to infer that Congress has by implication amended its long-existing statutes which grant the Attorney General broad powers to institute and maintain court proceedings in order to safeguard national interests. 8 An Act passed by Congress and signed by the President could, of course, limit the power previously granted the Attorney General to prosecute claims for the Government. For Article IV, § 3, Cl. 2 of the Constitution vests in Congress 'Power to dispose of and make all needful Rules and Regulations respecting the Territory or other Property belonging to the United States.' We have said that the constitutional power of Congress in this respect is without limitation. United States v. City and County of San Francisco, 310 U.S. 16, 29, 30, 60 S.Ct. 749, 756, 757, 84 L.Ed. 1050. Thus neither the courts nor the executive agencies, could proceed contrary to an Act of Congress in this congressional area of national power. 9 But no Act of Congress has amended the statutes which impose on the Attorney General the authority and the duty to protect the Government's interests through the courts. See Ex parte Cooper, 143 U.S. 472, 502, 503, 12 S.Ct. 453, 460, 461, 36 L.Ed. 232. That Congress twice failed to grant the Attorney General specific authority to file suit against California,4 is not a sufficient basis upon which to rest a restriction of the Attorney General's statutory authority. And no more can we reach such a conclusion because both Houses of Congress passed a joint resolution quitclaiming to the adjacent states a three mile belt of all land situated under the ocean beyond the low water mark, exept those which the Government had previously acquired by purchase, condemnation, or donation.5 This joint resolution was vetoed by the President.6 His veto was sustained.7 Plainly, the resolution does not represent an exercise of the constitutional power of Congress to dispose of public property under Article IIv, § 3, Cl. 2. 10 Neither the matters to which we have specifically referred, nor any others relied on by California, afford support for a holding that Congress has either explicitly or by implication stripped the Attorney General of his statutorily granted power to invoke our jurisdiction in this federal-state controversy. This brings us to the merits of the case. 11 Third. The crucial question on the merits is not merely who owns the bare legal title to the lands under the marginal sea. The United States here asserts rights in two capacities transcending those of a mere property owner. In one capacity it asserts the right and responsibility to exercise whatever power and dominion are necessary to protect this country against dangers to the security and tranquility of its people incident to the fact that the United States is located immediately adjacent to the ocean. The Government also appears in its capacity as a member of the family of nations. In that capacity it is responsible for conducting United States relations with other nations. It asserts that proper exercise of these constitutional responsibilities requires that it have power, unencumbered by state commitments, always to determine what agreements will be made concerning the control and use of the marginal sea and the land under it. See McCulloch v. State of Maryland, 4 Wheat. 316, 403—408, 17 U.S. 316, 403—408, 4 L.Ed. 579; United States v. State of Minnesota, 270 U.S. 181, 194, 46 S.Ct. 298, 300, 301, 70 L.Ed. 539. In the light of the foregoing, our question is whether the state or the Federal Government has the paramount right and power to determine in the first instance when, how, and by what agencies, foreign or domestic, the oil and other resources of the soil of the marginal sea, known or hereafter discovered may be exploited. 12 California claims that it owns the resources of the soil under the three-mile marginal belt as an incident to those elements of sovereignty which it exercises in that water area. The state points out that its original Constitution, adopted in 1849 before that state was admitted to the Union, included within the state's boundary the water area extending three English miles from the shore. Cal.Const.1849, Art. XII, § 1; that the Enabling Act which admitted California to the Union ratified the territorial boundary thus defined; and that California was admitted 'on an equal footing with the original States in all respects whatever,' 9 Stat. 452. With these premises admitted California contends that its ownership follows from the rule originally announced in Pollard's Lessee v. Hagan, 3 How. 212, 44 U.S. 212, 11 L.Ed. 565; see also Martin v. Waddell, 16 Pet. 367, 410, 41 U.S. 367, 410, 10 L.Ed. 997. In the Pollard case it was held, in effect, that the original states owned in trust for their people the navigable tidewaters between high and low water mark within each state's boundaries, and the soil under them, as an inseparable attribute of state sovereignty. Consequently, it was decided that Alabama, because admitted into the Union on 'an equal footing' with the other states, had thereby become the owner of the tidelands within its boundaries. Thus the title of Alabama's tidelands grantee was sustained as valid against that of a claimant holding under a United States grant made subsequent to Alabama's admission as a state. 13 The Government does not deny that under the Pollard rule, as explained in later cases,8 California has a qualified ownership9 of lands under inland navigable waters such as rivers, harbors, and even tidelands down to the low water mark. It does question the validity of the rationale in the Pollard case that ownership of such water areas, any more than ownership of uplands, is a necessary incident of the state sovereignty contemplated by the 'equal footing' clause. Cf. United States v. State of Oregon, 295 U.S. 1, 14, 55 S.Ct. 610, 615, 79 L.Ed. 1267. For this reason, among others, it argues that the Pollard rule should not be extended so as to apply to lands under the ocean. It stresses that the thirteen original colonies did not own the marginal belt; that the Federal Government did not seriously assert its increasingly greater rights in this area until after the formation of the Union; that it has not bestowed any of these rights upon the states, but has retained them as appurtenances of national sovereignty. And the Government insists that no previous case in this Court has involved or decided conflicting claims of a state and the Federal Government to the three-mile belt in a way which requires our extension of the Pollard inland water rule to the ocean area. 14 It would unduly prolong our opinion to discuss in detail the multitude of references to which the able briefs of the parties have cited us with reference to the evolution of powers over marginal seas exercised by adjacent countries. From all the wealth of material supplied, however, we cannot say that the thirteen original colonies separately acquired ownership to the three-mile belt or the soil under it,10 even if they did acquire elements of the sovereignty of the English Crown by their revolution against it. Cf. United States v. Curtiss-Wright Export Corporation, 299 U.S. 304, 316, 57 S.Ct. 216, 219, 81 L.Ed. 255. 15 At the time this country won its independence from England there was no settled international custom or understanding among nations that each nation owned a three-mile water belt along its borders. Some countries, notably England, Spain, and Portugal, had, from time to time, made sweeping claims to a right of dominion over wide expanses of ocean. And controversies had arisen among nations about rights to fish in prescribed areas.11 But when this nation was formed, the idea of a three-mile belt over which a littoral nation could exercise rights of ownership was but a nebulous suggestion.12 Neither the English charters granted to this nation's settlers,13 nor the treaty of peace with England,14 nor any other document to which we have been referred, showed a purpose to set apart a three-mile ocean belt for colonial or state ownership.15 Those who settled this country were interested in lands upon which to live, and waters upon which to fish and sail. There is no substantial support in history for the idea that they wanted or claimed a right to block off the ocean's bottom for private ownership and use in the extraction of its wealth. 16 It did happen that shortly after we became a nation our statesmen became interested in establishing national dominion over a definite marginal zone to protect our neutrality.16 Largely as a result of their efforts, the idea of a definite three-mile belt in which an adjacent nation can, if it chooses, exercise broad, if not complete dominion, has apparently at last been generally accepted throughout the world,17 although as late as 1876 there was still considerable doubt in England about its scope and even its existence. See The Queen v. Keyn, L.R. 2 Exch.Div. 63. That the political agencies of this nation both claim and exercise broad dominion and control over our three-mile marginal belt is now a settled fact. Cunard Steamship Co. v. Mellon, 262 U.S. 100, 122—124, 43 S.Ct. 504, 506—508, 67 L.Ed. 894, 27 A.L.R. 1306.18 And this assertion of national dominion over the three-mile belt is binding upon this Court. See Jones v. United States, 137 U.S. 202, 212—214, 11 S.Ct. 80, 83, 84, 34 L.Ed. 691; Ex parte Cooper, 143 U.S. 472, 502, 503, 12 S.Ct. 453, 460, 461, 36 L.Ed. 232. 17 Not only has acquisition, as it were, of the three-mile belt, been accomplished by the national Government, but protection and control of it has ben and is a function of national external sovereignty. See Jones v. United States, 137 U.S. 202, 11 S.Ct. 80, 34 L.Ed. 691; Ex parte Cooper, 143 U.S. 472, 502, 12 S.Ct. 453, 460, 36 L.Ed. 232. The belief that local interests are so predominant as constitutionally to require state dominion over lands under its land-locked navigable waters finds some argument for its support. But such can hardly be said in favor of state control over any part of the ocean or the ocean's bottom. This country, throughout its existence has stood for freedom of the seas, a principle whose breach has precipitated wars among nations. The country's adoption of the three-mile belt is by no means incompatible with its traditional insistence upon freedom of the sea, at least so long as the national Government's power to exercise control consistently with whatever international undertakings or commitments it may see fit to assume in the national interest is unencumbered. See Hines v. Davidowitz, 312 U.S. 52, 62—64, 61 S.Ct. 399, 401—403, 85 L.Ed. 581; McCulloch v. State of Maryland, supra. The three-mile rule is but a recognition of the necessity that a government next to the sea must be able to protect itself from dangers incident to its location. It must have powers of dominion and regulation in the interest of its revenues, its health, and the security of its people from was waged on or too near its coasts. And insofar as the nation asserts its rights under international law, whatever of value may be discovered in the seas next to its shores and within its protective belt, will most naturally be appropriated for its use. But whatever any nation does in the open sea, which detracts from its common usefulness to nations, or which another nation may charge detracts from it,19 is a question for consideration among nations as such, and not their separate governmental units. What this Government does, or even what the states do, anywhere in the ocean, is a subject upon which the nation may enter into and assume treaty or similar international obligations. See United States v. Belmont, 301 U.S. 324, 331, 332, 57 S.Ct. 758, 761, 762, 81 L.Ed. 1134. The very oil about which the state and nation here contend might well become the subject of international dispute and settlement. 18 The ocean, even its three-mile belt, is thus of vital consequence to the nation in its desire to engage in commerce and to live in peace with the world; it also becomes of crucial importance should it ever again become impossible to preserve that peace. And as peace and world commerce are the paramount responsibilities of the nation, rather than an individual state, so, if wars come, they must be fought by the nation. See Chy Lung v. Freeman, 92 U.S. 275, 279, 23 L.Ed. 550. The state is not equipped in our constitutional system with the powers or the facilities for exercising the responsibilities which would be concomitant with the dominion which it seeks. Conceding that the state has been authorized to exercise local police power functions in the part of the marginal belt within its declared boundaries,20 these do not detract from the Federal Government's paramount rights in and power over this area. Consequently, we are not persuaded to transplant the Pollard rule of ownership as an incident of state sovereignty in relation to inland waters out into the soil beneath the ocean, so much more a matter of national concern. If this rationale of the Pollard case is a valid basis for a conclusion that paramount rights run to the states in inland waters to the shoreward of the low water mark, the same rationale leads to the conclusion that national interests responsibilities, and therefore national rights are paramount in waters lying to the seaward in the three-mile belt. Cf. United States v. Curtiss-Wright Export Corporation, 299 U.S. 304, 316, 57 S.Ct. 216, 219, 81 L.Ed. 255; United States v. Causby, 328 U.S. 256, 66 S.Ct. 1062, 90 L.Ed. 1206. 19 As previously stated this Court has followed and reasserted the basic doctrine of the Pollard case many times. And in doing so it has used language strong enough to indicate that the Court then believed that states not only owned tidelands and soil under navigable inland waters, but also owned soils under all navigable waters within their territorial jurisdiction, whether inland or not. All of these statements were, however, merely paraphrases or offshoots of the Pollard inland water rule, and were used, not as enunciation of a new ocean rule, but in explanation of the old inland water principle. Notwithstanding the fact that none of these cases either involved or decided the state-federal conflict presented here, we are urged to say that the language used and repeated in those cases forecloses the Government from the right to have this Court decide that question now that it is squarely presented for the first time. 20 There are three such cases whose language probably lends more weight to California's argument than any others. The first is Manchester v. Commonwealth of Massachusetts, 139 U.S. 240, 11 S.Ct. 559, 35 L.Ed. 159. That case involved only the power of Massachusetts to regulate fishing. Moreover, the illegal fishing charged was in Buzzards Bay, found to be within Massachusetts territory, and no question whatever was raised or decided as to title or paramount rights in the open sea. And the Court specifically laid to one side any queston as to t he rights of the Federal Government to regulate fishing there. The second case, State of Louisiana v. State of Mississippi, 202 U.S. 1, 52, 26 S.Ct. 408, 422, 50 L.Ed. 913, uses language about 'the sway of the riparian states' over 'maritime belts.' That was a case involving the boundary between Louisiana and Mississippi. It did not involve any dispute between the federal and state governments. And the Court there specifically laid aside questions concerning 'the breadth of the maritime belt or the extent of the sway of the riparian states * * *.' Id. 202 U.S. at page 52, 26 S.Ct. at page 422, 50 L.Ed. 913. The third case is The Abby Dodge, 223 U.S. 166, 32 S.Ct. 310, 56 L.Ed. 390. That was an action against a ship landing sponges at a Florida port in violation of an Act of Congress, 34 Stat. 313, which made it unlawful to 'land' sponges taken under certain conditions from the waters of the Gulf of Mexico. This Court construed the statute's prohibition as applying only to sponges outside the state's 'territorial limits' in the Gulf. It thus narrowed the scope of the statute because of a belief that the United States was without power to regulate the Florida traffic in sponges obtained from within Florida's territorial limits, presumably the three-mile belt. But the opinion in that case was concerned with the state's power to regulate and conserve within its territorial waters, not with its exercise of the right to use and deplete resources which might be of national and international importance. And there was no argument there, nor did this Court decide, whether the Federal Government owned or had paramount rights in the soil under the Gulf waters. That this question remained undecided is evidenced by Skiriotes v. State of Florida, 313 U.S. 69, 75, 61 S.Ct. 924, 928, 85 L.Ed. 1193, where we had occasion to speak of Florida's power over sponge fishing in its territorial waters. Through Mr. Chief Justice Hughes we said: 'It is also clear that Florida has an interest in the proper maintenance of the sponge fishery and that the (state) statute so far as applied to conduct within the territorial waters of Florida, in the absence of conflicting federal legislation, is within the police power of the State.' (Emphasis supplied.) 21 None of the foregoing cases, nor others which we have decided, are sufficient to require us to extend the Pollard inland water rule so as to declare that California owns or has paramount rights in or power over the three-mile belt under the ocean. The question of who owned the bed of the sea only became of great potential importance at the beginning of this century when oil was discovered there.21 As a consequence of this discovery, California passed an Act in 1921 authorizing the granting of permits to California residents to prospect for oil and gas on blocks of land off its coast under the ocean. Cal.Stats.1921, c. 303, p. 404. This state statute, and others which followed it, together with the leasing practices under them, have precipitated this extremely important controversy, and pointedly raised this state-federal conflict for the first time. Now that the question is here, we decide for the reasons we have stated that California is not the owner of the three-mile marginal belt along its coast, and that the Federal Government rather than the state has paramount rights in and power over that belt, an incident to which is full dominion over the resources of the soil under that water area, including oil. 22 Fourth. Nor can we agree with California that the federal Government's paramount rights have been lost by reason of the conduct of its agents. The state sets up such a defense, arguing that by this conduct the Government is barred from enforcing its rights by reason of principles similar to laches, estoppel or adverse possession. It would serve no useful purpose to recite the incidents in detail upon which the state relies for these defenses. Some of thm are undo ubtedly consistent with a a belief on the part of some Government agents at the time that California owned all, or at least a part of the three-mile belt. This belief was indicated in the substantial number of instances in which the Government acquired title from the states to lands located in the belt; some decisions of the Department of Interior have denied applications for federal oil and gas leases in the California coastal belt on the ground that California owned the lands. Outside of court decisions following the Pollard rule, the foregoing are the types of conduct most nearly indicative of waiver upon which the state relies to show that the Government has lost its paramount rights in the belt. Assuming that Government agents could by conduct, short of a congressional surrender of title or interest, preclude the Government from asserting its legal rights, we cannot say it has done so here. As a matter of fact, the record plainly demonstrates that until the California oil issue began to be pressed in the thirties, neither the states nor the Government had reason to focus attention on the question of which of them owned or had paramount rights in or power over the three-mile belt. And even assuming that Government agencies have been negligent in failing to recognize or assert the claims of the Government at an earlier date, the great interests of the Government in this ocean area are not to be forfeited as a result. The Government, which holds its interests here as elsewhere in trust for all the people, is not to be deprived of those interests by the ordinary court rules designed particularly for private disputes over individually owned pieces of property; and officers who have no authority at all to dispose of Government property cannot by their conduct cause the Government to lose its valuable rights by their acquiescence, laches, or failure to act.22 23 We have not overlooked California's argument, buttressed by earnest briefs on behalf of other states, that improvements have been made along and near the shores at great expense to public and private agencies. And we note the Government's suggestion that the aggregate value of all these improvements are small in comparison with the tremendous value of the entire three-mile belt here in controversey. But however this may be, we are faced with the issue as to whether state or nation has paramount rights in and power over this ocean belt, and that great national question is not dependent upon what expenses may have been incurred upon mistaken assumptions. Furthermore, we cannot know how many of these improvements are within and how many without the boundary of the marginal sea which can later be accurately defined. But beyond all this we cannot and do not assume that Congress, which has constitutional control over Government property, will execute its powers in such way as to bring about injustices to states, their subdivisions, or persons acting pursuant to their permission. See United States v. State of Texas, 162 U.S. 1, 89, 90, 16 S.Ct. 725, 754, 40 L.Ed. 867; Lee Wilson & Co. v. United States, 245 U.S. 24, 32, 38 S.Ct. 21, 23, 62 L.Ed. 128. 24 We hold that the United States is entitled to the relief prayed for. The parties, or either of them, may, before September 15, 1947, submit the form of decree to carry this opinion into effect, failing which the Court will prepare and enter an appropriate decree at the next term of Court. 25 It is so ordered. 26 Judgment for plaintiff. 27 Mr. Justice JACKSON took no part in the cnsideratio n or decision of this case. 28 Mr. Justice REED, dissenting. 29 In my view the controversy brought before this Court by the complaint of the United States against California seeks a judgment between State and Nation as to the ownership of the land underlying the Pacific Ocean, seaward of the ordinary low water mark, on the coast of California and within the three-mile limit. The ownership of that land carries with it, it seems to me, the ownership of any minerals or other valuables in the soil, as well as the right to extract them. 30 The determination as to the ownership of the land in controversy turns for me on the fact as to ownership in the original thirteen states of similar lands prior to the formation of the Union. If the original states owned the bed of the sea, adjacent to their coasts, to the three-mile limit, then I think California has the same title or ownership to the lands adjacent to her coast. The original states were sovereignties in their own right, possessed of so much of the land underneath the adjacent seas as was generally recognized to be under their jurisdiction. The scope of their jurisdiction and the boundaries of their lands were coterminous. Any part of that territory which had not passed from their ownership by existing valid grants were and remained public lands of the respective states. California, as is customary, was admitted into the Union 'on an equal footing with the original States in all respects whatever.' 9 Stat. 452. By § 3 of the Act of Admission, the public lands within its borders were reserved for disposition by the United States. 'Public lands' was there used in its usual sense of lands subject to sale under general laws. As was the rule, title to lands under navigable waters vested in Clifornia a § it had done in all other states. Pollard v. Hagan, 3 How. 212, 11 L.Ed. 565; Barney v. City of Keokuk, 94 U.S. 324, 338, 24 L.Ed. 224; Shively v. Bowlby, 152 U.S. 1, 49, 14 S.Ct. 548, 566, 38 L.Ed. 331; Mann v. Tacoma Land Co., 153 U.S. 273, 284, 14 S.Ct. 820, 38 L.Ed. 714; Borax Consolidated, Ltd. v. City of Los Angeles, 296 U.S. 10, 17, 56 S.Ct. 23, 27, 80 L.Ed. 9. 31 The authorities cited in the Court's opinion lead me to the conclusion that the original states owned the lands under the seas to the three-mile limit. There were, of course, as is shown by the citations, variations in the claims of sovereignty, jurisdiction or ownership among the nations of the world. As early as 1793, Jefferson as Secretary of State in a communication to the British Minister said that the territorial protection of the United States would be extended 'three geographical miles' and added: 32 'This distance can admit of no opposition, as it is recognized by treaties between some of the powers with whom we are connected in commerce and navigation, and is as little, or less, than is claimed by any of them on their own coasts.' H.Ex. Doc. No. 324, 42d Cong., 2d Sess., pp. 553, 554. 33 If the original states did claim, as I think they did, sovereignty and ownership to the three-mile limit, California has the same rights in the lands bordering its littoral. 34 This ownership in California would not interfere in any way with the needs or rights of the United States in war or peace. The power of the United States is plenary over these undersea lands precisely as it is over every river, farm, mine, and factory of the nation. While no square ruling of this Court has determined the ownership of those marginal lands, to me the tone of the decisions dealing with similar problems indicates that, without discussion, state ownership has been assumed. Pollard v. Hagan, supra; State of Louisiana v. State of Mississippi, 202 U.S. 1, 52, 26 S.Ct. 408, 422, 50 L.Ed. 913; The Abby Dodge, 223 U.S. 166, 32 S.Ct. 310, 56 L.Ed. 390; State of New Jersey v. State of Delaware, 291 U.S. 361, 54 S.Ct. 407, 78 L.Ed. 847; Id., 295 U.S. 694, 55 S.Ct. 907, 79 L.Ed. 1659. 35 Mr. Justice FRANKFURTER, dissenting. 36 By this original bill the United States prayed for a decree enjoining all persons, including those asserting a claim derived from the State of California, from trespassing upon the disputed area. An injunction against trespassers normally presupposes property rights. The Court, however, grants the prayer but does not do so by finding that the United States has proprietary interests in the area. To be sure it denies such proprietary rights in California. But even if we assume an absence of ownership or possessory interest on the part of California, that does not establish a proprietary interest in the United States. It is significant that the Court does not adopt the Government's elaborate argument, based on dubious and tenuous writings of publicists, see Schwarzenberger, Inductive Approach to International Law, 60 Harv.L.Rev. 539, 559, that this part of the open sea belongs, in a proprietary sense, to the United States. See American Banana Co. v. United Fruit Co., 213 U.S. 347, 351, 29 S.Ct. 511, 53 L.Ed. 826, 16 Ann.Cas. 1047. Instead, the Court finds trespass against the United States on the basis of what it calls the 'national dominion' by the United States over this area. 37 To speak of 'dominion' carries precisely those overtones in the law which relate to property and not to political authority. Dominion, from the Roman concept dominium, was concerned with property and ownership, as against imperium, which related to political sovereignty. One may choose to say, for example, that the United States has 'national dominion' over navigable streams. But the power to regulate commerce over these streams, and its continued exercise, do not change the imperium of the United States into dominium over the land below the waters. Of course the United States has 'paramount rights' in the sea belt of California—the rights that are implied by the power to regulate interstate and foreign commerce, the power of condemnation, the treaty-making power, the war power. We have not now before us the validity of the exercise of any of these paramount rights. Rights of ownership are here asserted—and rights of ownership are something else. Ownership implies acquisition in the various ways in which land is acquired by conquest, by discovery and claim, by cession, by prescription, by purchase, by condemnation. When and how did the United States acquire this land? 38 The fact that these oil deposits in the open sea may be vital to the national security, and important elements in the conduct of our foreign affairs, is no more relevant than is the existence of uranium deposits, wherever they may be, in determining questions of trespass to the land of which they form a part. This is not a situation where an exercise of national power is actively and presently interfered with. In such a case, the inherent power of a federal court of equity may be invoked to prevent or remove the obstruction. In re Debs, 158 U.S. 564, 15 S.Ct. 900, 39 L.Ed. 1092; Sanitary District of Chicago v. United States, 266 U.S. 405, 45 S.Ct. 176, 69 L.Ed. 352. Neither the bill, nor the opinion sustaining it, suggests that there is interference by California or the alleged trespassers with any authority which the Government presently seeks to exercise. It is beside the point to say that 'if wars come, they must be fought by the nation.' Nor is it relevant that 'The very oil about which the state and nation here contend might well become the subject of international dispute and settlement.' It is common knowledge that uranium has become 'the subject of international dispute' with a view to settlement. Compare State of Missouri v. Holland, 252 U.S. 416, 40 S.Ct. 382, 64 L.Ed. 641, 11 A.L.R. 984. 39 To declare that the Government has 'national dominion' is merely a way of saying that vis-a-vis all other nations the Government is the sovereign. If that is what the Court's decree means, it needs no pronouncemet by this Court to confer or declare such sovereignty. If it means more than that, it implies that the Government has some proprietary interest. That has not been remotely established except by sliding from absence of ownership by California to ownership by the United States. 40 Let us assume, for the present, that ownership by California cannot be proven. On a fair analysis of all the evidence bearing on ownership, then, this area is, I believe, to be deemed unclaimed land, and the determination to claim it on the part of the United States is a political decision not for this Court. The Constitution places vast authority for the conduct of foreign relations in the independent hands of the President. See United States v. Curtiss-Wright Export Corp., 299 U.S. 304, 57 S.Ct. 216, 81 L.Ed. 255. It is noteworthy that the Court does not treat the President's proclamation in regard to the disputed area as an assertion of ownership. See Exec.Proc. 2667 (Sept. 28, 1945), 10 F.R. 12303. If California is found to have no title, and this area is regarded as unclaimed land, I have no doubt that the President and the Congress between them could make it part of the national domain and thereby bring it under Article IV, Section 3, of the Constitution. The disposition of the area, the rights to be created in it, the rights heretofore claimed in it through usage that might be respected though it fall short of prescription, all raise appropriate questions of policy, questions of accommodation, for the determination of which Congress and not this Court is the appropriate agency. 41 Today this Court has decided that a new application even in the old field of torts should not be made by adjudication, where Congress has refrained from acting. United States v. Standard Oil Co., 332 U.S. 301, 67 S.Ct. 1604. Considerations of judicial self-restraint would seem to me far more compelling where there are obviously at stake claims that involve so many farreaching, complicated, historic interests, the proper adjustments of which are not readily resolved by the materials and methods to which this Court is confined. 42 This is a summary statement of views which it would serve no purpose to elaborate. I think that the bill should be dismissed without prejudice. 1 The Government complaint claims an area extending three nautical miles from shore; the California boundary purports to extend three English miles. One nautical mile equals 1.15 English miles, so that there is a difference of .45 of an English mile between the boundary of the area claimed by the Government, and the boundary of California. See Cal.Const.1879, Art. XXI, § 1. 2 The claim of res judicata rests on the following contention. The United States sued in ejectment for certain lands situated in San Francisco Bay. The defendant held the lands under a grant from California. This Court decided that the state grant was valid because the land under the Bay had passed to the state upon its admission to the Union. United States v. Mission Rock Co., 189 U.S. 391, 23 S.Ct. 606, 47 L.Ed. 865. There may be other reasons why the judgment in that case does not bar this litigation; but it is a sufficient reason that this case involves land under the open sea, and not land under the inland waters of San Francisco Bay. 3 5 U.S.C. §§ 291, 309, 5 U.S.C.A. §§ 291, 309; United States v. San Jacinto Tin Co., 125 U.S. 273, 279, 284, 8 S.Ct. 850, 854, 856, 31 L.Ed. 747; Kern River Co. v. United States, 257 U.S. 147, 154, 155, 42 S.Ct. 60, 62, 63, 66 L.Ed. 175; Sanitary District of Chicago v. United States, 266 U.S. 405, 425, 426, 45 S.Ct. 176, 178, 179, 69 L.Ed. 352; see also In re Debs, 158 U.S. 564, 584, 15 S.Ct. 900, 906, 39 L.Ed. 1092; United States v. State of Oregon, 295 U.S. 1, 24, 55 S.Ct. 610, 619, 79 L.Ed. 1267; United States v. State of Wyoming, 323 U.S. 669, 65 S.Ct. 34, 89 L.Ed. 543; 331 U.S. 440, 67 S.Ct. 1319. 4 S.J.Res.208, 75th Cong., 1st Sess. (1938); S.J.Res.83 and 92, 76th Cong., 1st Sess. (1939). S.J.Res.208 passed the Senate, 81 Cong.Rec.9326 (1938), was favorably reported by the House Judiciary Committee, H.R.Rep.2378, 75th Cong., 3d Sess. (1938), but was never acted on in the House. Hearings were held on S.J.Res.83 and 92 before the Senate Committee on Public Lands and Surveys, but no further action was taken. Hearings before the Senate Committee on Public Lands and Serveys an S.J.Res.83 and 92, 76th Cong., 1st Sess. (1939). In both hearings objections to the resolutions were repeatedly made on the ground that passage of the resolutions was unnecessary since the Attorney General already had statutory authority to institute the proceedings. See Hearings before the House Committee on the Judiciary on S.J.Res.208, 75th Cong., 3d Sess., 42—45, 59—61 (1938); Hearings on S.J.Res.83 and 92, supra, 27—30. 5 H.J.Res.225, 79th Cong., 2d Sess. (1946); 92 Cong.Rec.9642, 10316 (1946). 6 92 Cong.Rec.10660 (1946). 7 92 Cong.Rec.10745 (1946). 8 See e.g., Manchester v. Commonwealth of Massachusetts, 139 U.S. 240, 11 S.Ct. 559, 35 L.Ed. 159; State of Louisiana v. State of Mississippi, 202 U.S. 1, 26 S.Ct. 408, 50 L.Ed. 913; The Abby Dodge, 223 U.S. 166, 32 S.Ct. 310, 56 L.Ed. 390. See also United States v. Mission Rock Co., 189 U.S. 391, 23 S.Ct. 606, 47 L.Ed. 865; Borax, Consolidated, Ltd. v. City of Los Angeles, 296 U.S. 10, 56 S.Ct. 23, 80 L.Ed. 9. Although the Pollard case has thus been generally approved many times, the case of Shively v. Bowlby, 152 U.S. 1, 47, 48, 58, 14 S.Ct. 548, 565, 566, 570, 38 L.Ed. 331, held, contrary to implications of the Pollard opinion, that the United States could lawfully dispose of tidelands while holding a future state's land 'in trust' as a territory. 9 See United States v. Commodore Park, 324 U.S. 386, 390, 391, 65 S.Ct. 803, 805, 806, 89 L.Ed. 1017; Scranton v. Wheeler, 179 U.S. 141, 159, 160, 163, 21 S.Ct. 48, 55, 56, 57, 45 L.Ed. 126; Stockton v. Baltimore & N.Y.R. Co., C.C., 32 F. 9, 20; see also United States v. Chandler-Dunbar Water Power Co., 229 U.S. 53, 33 S.Ct. 667, 57 L.Ed. 1063. 10 A representative collection of official documents and scholarship on the subject is Crocker, The Extent of the Marginal Sea (1919). See also I azuni, Maritime Law of Europe (published 1806) c. II; Fulton, Sovereignty of the Sea (1911); Masterson, Jurisdictionin Margina l Seas (1929); Jessup, The Law of Territorial Waters and Maritime Jurisdiction (1927); Fraser, The Extent and Delimitation of Territorial Waters, 11 Corn.L.Q. 455 (1926); Irleland, Marginal Seas Around the States, 2 La.L.Rev. 252, 436 (1940); Comment, Conflicting State and Federal Claims of Title in Submerged Lands of the Continental Shelf, 56 Yale L.J. 356 (1947). 11 See, e.g., Fulton, op. cit. supra, 3—19, 144, 145; Jessup, op. cit. supra, 4. 12 Fulton, op. cit. supra, 21, says in fact that 'mainly through the action and practice of the United States of America and Great Britain since the end of the eighteenth century, the distance of three miles from shore was more or less formally adopted by most maritime states as * * * more definitely fixing the limits of their jurisdiction and rights for various purposes, and, in particular, for exclusive fishery.' 13 Collected in Thorpe, American Charters, Constitutions, and Organic Laws 1919. 14 Treaty of 1783, 8 Stat. 80. 15 The Continental Congress did for example authorize capture of neutral and even American ships carrying British goods, 'if found within three leagues (about nine miles) of the coasts.' Journ. of Cong. 185, 186, 187 (1781). Cf. Declaration of Panama of 1939, 1 Dept. of State Bull. 321 (1939), claiming the right of the American Republics to be free from a hostile act in a zone 300 miles from the American coasts. 16 Secretary of State Jefferson in a note to the British minister in 1793 pointed to the nebulous character of a nation's assertions of territorial rights in the marginal belt, and put forward the first official American claim for a three-mile zone which has since won general international acceptance.Reprinted in H.Ex.Doc.No. 324, 42d Cong., 2d Sess. (1872) 553—554. See also Secretary Jefferson's note to the French Minister, Genet, reprinted American State Papers, I Foreign Relations (1833), 183, 384; Act of June 5, 1794, 1 Stat. 381; 1 Kent, Commentaries, 14th Ed., 33—40. 17 See Jessup, op. cit. supra, 66; Research in International Law, 23 A.J.I.L. 249, 250 (Spec.Supp.1929). 18 See also Church v. Hubbart, 2 Cranch 187, 234, 2 L.Ed. 249. Congressional assertion of a territorial zone in the sea appears in statutes regulating seals, fishing, pollution of waters, etc. 36 Stat. 326, 328, 16 U.S.C.A. § 644 et seq.; 43 Stat. 604, 605, 33 U.S.C.A. § 431 et seq.; 37 Stat. 499, 501, 16 U.S.C.A. § 632 et seq. Under the National Prohibition Act territory including 'a marginal belt of the sea extending from low-water mark outward a marine league, or 3 geographical miles' constituting the 'territorial waters of the United States' was regulated. See U.S.Treas.Reg. 2, § 2201 (1931), Reprinted in Research in International Law, supra, 250; 41 Stat. 305, 27 U.S.C.A. § 1 et seq. Anti-smuggling treaties in which foreign nations agreed to permit the United States to pursue smugglers beyond the three-mile limit contained express stipulations that generally the three-mile limit constitutes 'the proper limits of territorial waters.' See e.g., 43 Stat. 1761, Pt. 2. There are innumerable executive declarations to the world of our national claims to the three-mile belt, and more recently to the whole continental shelf. For references to diplomatic correspondence making these assertions, see 1 Moore, International Law Digest (1906) 705, 706, 707; 1 Wharton, Digest of International Law (1886) 100. See also Hughes, Recent Questions and Negotiations, 18 A.J.I.L. 229 (1924). The latest and broadest claim in President Truman's recent proclamation that the United States 'regards the natural resources of the subsoil and sea bed of the continental shelf beneath the high seas but contiguous to the coasts of the United States as appertaining to the United States, subject to its jurisdiction and control. * * * .' Executive Proclamation No. 2667, Sept. 28, 1945, 10 F.R. 12303. 19 See Lord v. Steamship Co., 102 U.S. 541, 544, 26 L.Ed. 224. 20 See Utah Power & Light Co. v. United States, 243 U.S. 389, 404, 37 S.Ct. 387, 389, 61 L.Ed. 791; cf. The Abby Dodge, 223 U.S. 166, 32 S.Ct. 310, 56 L.Ed. 390 with Skiriotes v. State of Florida, 313 U.S. 74, 75, 61 S.Ct. 924, 928, 929, 85 L.Ed. 1193. 21 Bull.No.321, Dept. of Interior, Geological Survey. 22 United States v. City and County of San Francisco, 310 U.S. 16, 31, 32, 60 S.Ct. 749, 757, 84 L.Ed. 1050; State of Utah v. United States, 284 U.S. 534, 545, 546, 52 S.Ct. 232, 235, 76 L.Ed. 469; Lee Wilson & Co. v. United States, 245 U.S. 24, 32, 38 S.Ct. 21, 23, 63 L.Ed. 128; Utah Power & Light Co. v. United States, 243 U.S. 389, 409, 37 S.Ct. 387, 391, 61 L.Ed. 791; See also Sec'y of State for India v. Chelikani Rama Rao, L.R., 1916, 43 Indian App. 192, 204.
910
332 U.S. 371 68 S.Ct. 5 92 L.Ed. 3 RODGERSv.UNITED STATES. No. 58. Argued and Submitted Oct. 16, 1947. Decided Nov. 10, 1947. Mr. Stanley M. Silverberg, of Washington, D.C., for respondent. Mr. W. Clay Rodgers, pro se. Mr. Justice BLACK delivered the opinion of the Court. 1 In the years 1940, 1941, and 1942 the petitioner produced on his farms and sold more cotton than the quota allotted him under authority of Part IV of the Agricultural Adjustment Act of 1938 as amended. 52 Stat. 31, 55—60, 55 Stat. 203, 7 U.S.C. § 1281 et seq., 7 U.S.C.A. § 1281 et seq. The United States filed this suit against petitioner to recover money 'penalties' to which § 3481 of the Act makes non-cooperating farms 'subject' who market cotton from their farms in excess of their quota. The District Court rendered judgment for $7,039.52 in penalties plus interest at 6% from the various dates the penalties became due to the date of judgment. The Sixth Circuit Court of Appeals affirmed. 158 F.2d 835. The Fifth Circuit had previously decided that no interest is allowable on such penalties prior to judgment. United States v. West Texas Cottonoil Co., 155 F.2d 463. We therefore granted certiorari limited to this single question. 331 U.S. 799, 67 S.Ct. 1309. 2 Since penalties under the Agricultural Adjustment Act are imposed under an Act of Congress, they bear interest only if and to the extent such interest is required by federal law. Brooklyn Savings Bank v. O'Neil, 324 U.S. 697, 714—716, 65 S.Ct. 895, 905 907, 89 L.Ed. 1296; Royal Indemnity Co. v. United States, 313 U.S. 289, 295—297, 61 S.Ct. 995, 997, 998, 85 L.Ed. 1361. There is no language in the Agricultural Adjustment Act or in any other act of Congress which specifically allows or forbids interest on penalties such as these prior to judgment.2 But the failure to mention interest in statutes which create obligations has not been interpreted by this Court as manifesting an unequivocal congressional purpose that the obligation shall not bear interest. Billings v. United States, 232 U.S. 261, 284—288, 34 S.Ct. 421, 425—427, 58 L.Ed. 596. For in the absence of an unequivocal prohibition of interest on such obligations, this Court has fashioned rules which granted or denied interest on particular statutory obligations by an appraisal of the congressional purpose in imposing them and in the light of general principles deemed relevant by the Court. See, e.g., Royal Indemnity Co. v. United States, supra; Board of Com'rs of Jackson County in State of Kansas v. United States, 308 U.S. 343, 60 S.Ct. 285, 84 L.Ed. 313. 3 As our prior cases show, a persuasive consideration in determining whether such obligations shall bear interest is the relative equities between the beneficiaries of the obligation and those upon whom it has been imposed. And this Court has generally weighed these relative equities in accordance with the historic judicial principle that one for whose financial advantage an obligation was assumed or imposed, and who has suffered actual money damages by another's breach of that obligation, should be fairly compensated for the loss thereby sustained. See, e.g., Brooklyn Savings Bank v. O'Neil, supra; United States v. State of North Carolina, 136 U.S. 211, 216, 10 S.Ct. 920, 922, 34 L.Ed. 336; Funkhouser v. J. B. Preston Co., 290 U.S. 163, 168, 54 S.Ct. 134, 136, 78 L.Ed. 243. 4 The contention is hardly supportable that the Federal Government suffers money damages or loss, in the common law sense, to be compensated for by interest, when one convicted of a crime fails promptly to pay a money fine assessed against him. The underlying theory of that penalty is that it is a punishment or deterrent and not a revenue-raising device; unlike a tax, it does not rest on the basic necessity of the Government to collect a carefully estimated sum of money by a particular date in order to meet its anticipated expenditures. For the foregoing reasons this Court's holding that a criminal penalty does not bear interest, Pierce v. United States, 255 U.S. 398, 405, 406, 41 S.Ct. 365, 367, 368, 65 L.Ed. 697, is consistent with its holding that the Government does suffer recoverable damages if a taxpayer fails to pay taxes when due and is therefore equitably entitled to interest. Billings v. United States, supra. Furthermore, denial of interest on criminal penalties might well be rested on judicial unwillingness to expand punishment fixed for a criminal act beyond that which the plain language of the statute authorizes. 5 Viewed in light of these principles, we think that the question of interest on the penalties provided in the Agricultural Adjustment Act on non-cooperators should be governed by the rule previously applied by this Court to criminal fines. Although Congress neither wholly prohibited nor made it a crime for a farmer to market cotton in excess of his quota, still it imposed sanctions upon non-cooperators analogous to those of the criminal law. The purpose of Congress in requiring payment of penalties into the Federal Treasury for marketing above the allotted amount was not to raise revenue for the Government's financial advantage but to deter farmers from planting and marketing more than their quotas. In fact, the whole philosophy of the Agricultural Adjustment Act is based on the theory that the public will be benefited, not damaged, if farmers produce and market within these quotas, thereby avoiding the payment of penalties. The framework of the Act itself, both as originally passed and as amended, and the reports of the congressional committees that drafted it, show a prime purpose to limit national and individual farm production and marketing to the quotas allotted, and show that the penalties were solely intended to deter farmers from exceeding those quotas.3 After careful consideration the original 1938 Act was amended in 1941 for the express purpose of making the farmers' penalties higher, because the prior penalties had not in practice proved a severe enough sanction to reduce production the desired amount. The House committee said in its report on the 1941 amendment: 6 'As in the case of corn and wheat, it appears that the present rate of penalty (for cotton) is too low to result in the desired adjustment of the amount to be marketed during the marketing year.'4 And with reference to wheat and corn, the committee had reported: 7 'With the higher penalties, it is expected that growers generally will store the farm marketing excesses rather than pay the penalty and place the commodity on the market at the time when it is not needed.'5 In addition to these high penalties, the Act, as originally passed and as amended, wholly deprived non-cooperators like petitioner of substantial benefits authorized by the Soil Conservation Act, 16 U.S.C.A. § 590a et seq., and of a large part of the loan value provided by the Government for cotton farmers who did not exceed their quota.6 We are unable to say that it would be consistent with the congressional purpose for the courts to add interest to these very substantial penalties already imposed upon non-cooperating farmers.7 8 Reversed. 9 Mr. Justice BURTON, dissenting. 10 The sums due to the Government are fixed obligations with fixed times of payment. They are debts incidental to the lawful conduct of business and not penalties imposed for violations of law. Accordingly, the debtor should pay and the Government should collect interest on them, as on other debts to the Government, to compensate for delays in their payment. The Agricultural Adjustment Act expressly fixed the amount and time for payment of the sums in question although it did not expressly mention the accrual or denial of interest on delayed payments. However, the federal rule is well-established that, without express statutory reference to the subject of interest, interest is due to the Government on unpaid statutory debts after they have become due in fixed amounts as fixed times, such as those for customs duties and taxes. 11 'Thus, as to the necessity for a statute, it was long ago here decided, in view of the true conception of interest, that a statute was not necessary to compel its payment where, in accordance with the principles of equity and justice in the enforcement of an obligation, interest should be allowed.' Billings v. United States, 232 U.S. 261, 286, 34 S.Ct. 421, 426, 58 L.Ed. 596.1 12 This statement was made by Chief Justice White, speaking for the Court, in a case upholding the collection of interest on a tax payable to the United States, under a statute that contained no reference to the accrual of interest. 13 The requirement that interest be paid to the Government upon the debts due to it under the Agricultural Adjustment Act not only is 'in accordance with the principles of equity and justice' called for by the general rule just stated but the accrual of interest in favor of the Government under that Act also is thoroughly consistent with, and helpful to, the accomplishment of its purpose of price and crop control. The disallowance of such interest is equally inconsistent with, and a limitation upon, the accomplishment of that purpose. 14 The defaulted payments on which interest is claimed here became due because of the petitioner's sales of cotton in excess of his statutory quota and such payments are referred to in the Act as 'penalties.' However, the context shows that, instead of being criminal penalties imposed for violations of the law, they are 'marketing penalties' consisting of governmental charges added to the presale expenses of the seller, especially to help keep prices and sales in line with the economic program of the Government. Satisfaction of these charges is made a condition of the seller's legal right to sell his excess cotton at a particular time. They are the very opposite of penalties imposed for making illegal sales. They are lawful, 'ordinary and necessary' business expenses incidental to his sales. They are deductible from his taxable income, whereas criminal penalties are not deductible from taxable income.2 These 'marketing penalties' are also unlike criminal penalties in that they may be paid in advance, deposited in escrow or security given for their payment. When that is done, the seller may, in his usual manner, dispose of the excess-quota cotton to which the payments relate. Cotton marketing quota regulations, 1942—43, § 722.440(c), 7 Fed.Reg. 4369; id, § 722.453, 7 Fed.Reg. 4374. These debts are more comparable to customs duties than to criminal penalties.3 Apparently these charges are collectible by the Government only by civil proceedings and liability for them need not be established beyond a reasonable doubt. Usher v. United States, 4 Cir., 146 F.2d 369, 371. 15 The payments are imposed in part for revenue purposes although especially as a means of inducing cotton owners to control their sales of cotton in interstate and foreign commerce in accordance with the economic policies of the Government. During its consideration of the Agricultural Adjustment Act, Congress declined to adopt a proposal to treat such sales as in violation of law4 and adopted instead the policy recognizing such sales as lawful sales conditioned upon payment to the Government of the charges here being considered. Financial burdens which may be postponed without the payment of interest are much less burdensome than those that are not postponable or that are subject to the accrual of interest during their postponement. The omission of the usual interest charge on postponed marketing penalties therefore decreases the force of the Act as a deterring factor and runs counter to the special purpose of the Act. 16 For these reasons, the judgment of the Circuit Court of Appeals, affirming that of the District Court allowing interest from the date of default, should have been affirmed. 17 Mr. Justice RUTLEDGE joins in this dissent. 1 Section 348 of the 1938 Act reads as follows: 'Any farmer who, while farm marketing quotas are in effect, markets cotton in excess of the farm marketing quota for the marketing year for the farm on which such cotton was produced, shall be subject to the following penalties with respect to the excess so marketed: 2 cents per pound if marketed during the first marketing year when farm marketing quotas are in effect; and 3 cents per pound if marketed during any subsequent year, except that the penalty shall be 2 cents per pound if cotton of the crop subject to penalty in the first year is marketed subject to penalty in any subsequent year.' 52 Stat. 59, 7 U.S.C. § 1348, 7 U.S.C.A. § 1348. The 1941 amendment required computation of the penalty on the following basis: 'Notwithstanding the provisions of the Agricultural Adjustment Act of 1938, as amended (hereinafter referred to as the Act)— '(9) The marketing penalty for cotton and rice produced in the calendar year in which any marketing year begins (if beginning with or after the 1941—1942 marketing year) shall be at a rate equal to 50 per centum of the basic rate of the loan for cooperators for such marketing year under section 302 of the Act and this resolution.' 55 Stat. 203, 205, 7 U.S.C., Supp. V, § 1330(9), 7 U.S.C.A. § 1330(9). 2 28 U.S.C. § 811, 28 U.S.C.A. § 811, does allow interest on district court judgments in all civil cases where interest would be allowed by the law of the state in which the court is held. 3 Sen. Rep. No. 1295, 75th Cong., 2d Sess. 6 (1937); H.R. Rep. No. 1645, 75th Cong., 2d Sess. 1, 36 (1937); H.R. Rep. No. 1767, 75th Cong., 3d Sess. 90 (1938); H.R. Rep. No. 364, 77th Cong., 1st Sess. 3 (1941). 4 H. R. Rep. No. 364, 77th Cong., 1st Sess. 3 (1941). 5 Id. at 2. 6 §§ 302(c), 349 of the Agricultural Adjustment Act of 1938, 52 Stat. 43, 59, 7 U.S.C. § 1302(c), 1349, 7 U.S.C.A. §§ 1302(c), 1349. 7 See as to penalties in general, Helwig v. United States, 188 U.S. 605, 23 S.Ct. 427, 47 L.Ed. 614; United States v. Chouteau, 102 U.S. 603, 26 L.Ed. 246; Sunshine Anthracite Coal Co. v. Adkins, 310 U.S. 381, 401, 60 S.Ct. 907, 916, 84 L.Ed. 1263; Helvering v. Mitchell, 303 U.S. 391, 58 S.Ct. 630, 82 L.Ed. 917; United States v. Childs, 266 U.S. 304, 45 S.Ct. 110, 69 L.Ed. 299; Rodgers v. United States, 6 Cir., 138 F.2d 992. For decisions of state courts which grant interest on statutory obligations but disallow interest on statutory penalties, see cases collected in Note 27 Ann.Cas. 1913B, 853, 855, 856; Note 28 L.R.A., N.S., 1, 74, 75 (1910); 1 Sutherland, Damages, § 330 (1916). 1 'The conflict between the systems is pronounced and fundamental. In the one, the state rule, except as to contract; no interest without statute in the United States rule; interest in all cases were equitably due unless forbidden by statute. In one no suit for taxes as a debt without express statutory authority; in the other, the right to sue for taxes as for a debt in every case where not prohibited by statute. 'From this review it results that the doctrine as to nonliability to pay interest for taxes which have become due which prevails in the state courts is absolutely in conflict with the doctrine applied to the same subject in this court, and cannot now be made the rule without repudiating settled principles which have been here applied for many years in various aspects, and without in effect disregarding the sanction either expressly or impliedly given by Congress to such rules. * * * Under this condition we can see no ground for departing from the rule which the cases enforced, * * *.' Billings v. United States, supra, 232 U.S. at pages 287, 288, 34 S.Ct. at page 426, 58 L.Ed. 596. 2 'Although the amounts paid by the producer are designated as penalties in the statute and regulations referred to above, it appears that the purpose of the statute is to place a charge against the producer on the sale of the commodity which was produced in excess of the quota. The statute does not prohibit producers from producing the commodity, but merely places a charge on the excess of the quota produced and marketed. The so-called penalties are not paid for the violation of, or noncompliance with, a statute or regulation or for any illegal act, but are paid for the purpose of legalizing the marketing of the excess production, which with this condition the statute sanctions, and are, therefore, made in compliance with the statute. It is accordingly the view of this office that the so-called penalties are deductible from gross income under section 23(a) of the Internal Revenue Code in computing net income as ordinary and necessary expenses incurred in carrying on a trade or business.' I.T. 3530, 1942—1 Cum.Bull., 43, 45—46. Payments in the nature of penalties for the violation of federal or state statutes in the ordinary use of that term are not deductible. Commissioner of Internal Revenue v. Longhorn Portland Cement Co., 5 Cir., 148 F.2d 276; Burroughs Bldg. Material Co. v. Commissioner of Internal Revenue, 2 Cir., 47 F.2d 178; Great Northern R. Co. v. Commissioner of Internal Revenue, 8 Cir., 40 F.2d 372. 3 Customs duties are personal debts to the United States. Meredith v. United States, 13 Pet. 486, 493, 10 L.Ed. 258. Interest is collectible on the debt to the Government arising out of the imposition of customs duties. United States v. Mexican International R. Co., C.C., 154 F. 519. It is common knowledge that, while some customs duties or tariffs may have been levied 'for revenue only,' many have been enacted as 'protective tariffs' in which a primary interest of the Government was as under the Agricultural Adjustment Act, to restrict the flooding of the market with certain goods at a certain time. The collection of interest on delayed payments of customs duties would bear a similar relation of helpfulness to the Government's economic and financial policies as would the collection of interest on defaulted market penalties. The Government, under the Agricultural Adjustment Act, not only seeks to restrict excess-quota sales, but it also seeks to add to its current cash resources from which it proposes to make the loans to cooperating producers which are authorized by the Act. 4 § 33, H.R. 8505, 75th Cong., 2d Sess. (1937), as passed by the Senate but later rejected.
01
332 U.S. 388 68 S.Ct. 10 92 L.Ed. 17 DELGADILLOv.CARMICHAEL. No. 63. Argued Oct. 22, 1947. Decided Nov. 10, 1947. Mr. Fred Okrand, of Los Angeles, Cal., for petitioner. Mr. Robert W. Ginnane, of Washington, D.C., for respondent. Mr. Justice DOUGLAS delivered the opinion of the Court. 1 Petitioner is detained by respondent under a deportation order, the validity of which is challenged by a petition for a writ of habeas corpus. The District Court granted the petition and discharged petitioner. The Circuit Court of Appeals reversed. Del Guercio v. Delgadillo, 9 Cir., 159 F.2d 130. The case is here on a petition for a writ of certiorari which we granted because of the seeming conflict between the decision below and Di Pasquale v. Karnuth, 2 Cir., 158 F.2d 878, from the Second Circuit Court of Appeals. 2 Petitioner is a Mexican citizen who made legal entry into this country in 1923 and resided here continuously until 1942. In June of that year, when this nation was engaged in hostilities with Germany and Japan, he shipped out of Los Angeles on an intercoastal voyage to New York City as a member of the crew of an American merchant ship. The ship was torpedoed after passing through the Panama Canal on its way to New York City. Petitioner was rescued and taken to Havana, Cuba, where he was taken care of by the American Consul for about one week. On July 19, 1942, he was returned to the United States through Miami, Florida, and thereafter continued to serve as a seaman in the merchant fleet of this nation. In March 1944 he was convicted in California of seconddegree robbery and sentenced to imprisonment for a term of one year to life. While he was confined in the California prison, proceedings for deportation were commenced against him under § 19(a) of the Immigration Act of February 5, 1917, 39 Stat. 874, as amended 54 Stat. 671, 8 U.S.C. § 155(a), 8 U.S.C.A. § 155(a). 3 That section provides in part: '* * * any alien who is hereafter sentenced to imprisonment for a term of one year or more because of conviction in this country of a crime involving moral turpitude, committed within five years after the entry of the alien to the United States * * * shall, upon the warrant of the Attorney General, be taken into custody and deported. * * *' 4 Those requirements for deportation are satisfied if petitioner's passage from Havana, Cuba, to Miami, Florida, on July 19, 1942, was 'the entry of the alien to the United States' within the meaning of the Act. 5 In United States ex rel. Claussen v. Day, 279 U.S. 398, 49 S.Ct. 354, 73 L.Ed. 758; United States ex rel. Stapf v. Corsi, 287 U.S. 129, 53 S.Ct. 40, 77 L.Ed. 215, and United States ex rel. Volpe v. Smith, 289 U.S. 422, 53 S.Ct. 665, 77 L.Ed. 1298, there is language which taken from its context suggests that every return of an alien from a foreign country to the United States constitutes an 'entry' within the meaning of the Act. Thus in the Smith case it was stated, 289 U.S. at page 425, 53 S.Ct. at page 667, 77 L.Ed. 1298, that 'any coming of an alien from a foreign country into the United States whether such coming be the first or any subsequent one' is such an 'entry.' But those were cases where the alien plainly expected or planned to enter a foreign port or place. Here he was catapulted into the ocean, rescued, and taken to Cuba. He had no part in selecting the foreign port as his destination. His itinerary was forced on him by wholly fortuitous circumstances. If, nonetheless, his return to this country was an 'entry' into the United States within the meaning of the Act, the law has been given a capricious application as Di Pasquale v. Karnuth, supra, suggests. 6 In that case an alien traveled between Buffalo and Detroit on a railroad which, unknown to him passed through Canada. He was asleep during the time he was in transit through Canada and was quite unaware that he had left or returned to this country. The court refused to hold that the alien had made an 'entry,' for to do so would impute to Congress a purpose to subject aliens 'to the sport of chance.' 158 F.2d at page 879. In this case petitioner, of course, chose to return to this country, knowing he was in a foreign place. But the exigencies of war, not his voluntary act, put him on foreign soil.1 It would indeed be harsh to read the statute so as to add the peril of deportation to such perils of the sea. We might as well hold that if he had been kidnapped and taken to Cuba, he made a statutory 'entry' on his voluntary return. Respect for law does not thrive on captious interpretations. 7 Deportation can be the equivalent of banishment or exile. See Bridges v. Wixon, 326 U.S. 135, 147, 65 S.Ct. 1443, 1449, 89 L.Ed. 2103. The stakes are indeed high and momentous for the alien who has acquired his residence here. We will not attribute to Congress a purpose to make his right to remain here dependent on circumstances so fortuitous and capricious as those upon which the Immigration Service has here seized. The hazards to which we are now asked to subject the alien are too irrational to square with the statutory scheme. 8 Other grounds are now sought to be advanced for the first time in support of the deportation order. They are not open on the record before us. 9 Reversed. 1 If his intercoastal voyage had continued without interruption, it is clear that he would not have made an 'entry' when he landed at its termination. United States ex rel. Claussen v. Day, supra, 279 U.S. 398, 401, 49 S.Ct. 354, 355, 73 L.Ed. 758.
12
332 U.S. 392 68 S.Ct. 12 92 L.Ed. 20 INTERNATIONAL SALT CO., Inc.,v.UNITED STATES. No. 46. Argued Oct. 16, 1947. Decided Nov. 10, 1947. Appeal from the District Court of the United States for the Southern District of New York. Mr. Lemuel Skidmore, of New York City, for appellant. Mr. Robert L. Stern, of Washington, D.C., for appellee. Mr. Justice JACKSON delivered the opinion of the Court. 1 The Government brought this civil action to enjoin the International Salt Company, appellant here, from carrying out provisions of the leases of its patented machines to the effect that lessees would use therein only International's salt products. The restriction is alleged to violate § 1 of the Sherman Act,1 and § 3 of the Clayton Act.2 Upon appellant's answer and admissions of fact, the Government moved for summary judgment under Rule 56 of the Rules of Civil Procedure, 28 U.S.C.A. following section 723c, upon the ground that no issue as to a material fact was presented and that, on the admissions, judgment followed as matter of law. Neither party submitted affidavits. Judgment was granted3 and appeal was taken directly to this Court.4 2 It was established by pleadings or admissions that the International Salt Company is engaged in interstate commerce in salt, of which it is the country's largest producer for industrial uses. It also owns patents on two machines for utilization of salt products. One, the 'Lixator,' dissolves rock salt into a brine used in various industrial processes. The other, the 'Saltomat,' injects salt, in tablet form, into canned products during the canning process. The principal distribution of each of these machines is under leases which, among other things, require the lessees to purchase from appellant all unpatented salt and salt tablets consumed in the leased machines. 3 Appellant had outstanding 790 leases of an equal number of 'Lixators,' all of which leases were on appellant's standard form containing the tying clause5 and other standard provisions; of 50 other leases which somewhat varied the terms, all but 4 contained the tying clause. It also had in effect 73 leases of 96 'Saltomats,' all containing the restrictive clause.6 In 1944, appellant sold approximately 119,000 tons of salt, for about $500,000, for use in these machines. 4 The appellant's patents confer a limited monopoly of the invention they reward. From them appellant derives a right to restrain others from making, vending or using the patented machines. But the patents confer no right to restrain use of, or trade in, unpatented salt. By contracting to close this market for salt against competition, International has engaged in a restraint of trade for which its patents afford no immunity from the anti-trust laws. Morton Salt Co. v. G.S. Suppiger Co., 314 U.S. 488, 788, 62 S.Ct. 402, 86 L.Ed. 363; Mercoid Corporation v. Mid-Continent Investment Co., 320 U.S. 661, 64 S.Ct. 268, 88 L.Ed. 376; Mercoid Corporation v. Minneapolis-Honeywell Regulator Co., 320 U.S. 680, 64 S.Ct. 278, 88 L.Ed. 396. 5 Appellant contends, however, that summary judgment was unauthorized because it precluded trial of alleged issues of fact as to whether the restraint was unreasonable within the Sherman Act or substantially lessened competition or tended to create a monopoly in salt within the Clayton Act. We think the admitted facts left no genuine issue. Not only is price-fixing unreasonable, per se, United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 60 S.Ct. 811, 84 L.Ed. 1129; United States v. Trenton Potteries Co., 273 U.S. 392, 47 S.Ct. 377, 71 L.Ed. 700, 50 A.L.R. 989, but also it is unreasonable, per se, to foreclose competitors from any substantial market. Fashion Originators' Guild of America v. Federal Trade Commission, 2 Cir., 114 F.2d 80, affirmed, 312 U.S. 457, 668, 61 S.Ct. 703, 85 L.Ed. 949. The volume of business affected by these contracts cannot be said to be insignificant or insubstantial and the tendency of the arrangement to accomplishment of monopoly seems obvious. Under the law, agreements are forbidden which 'tend to create a monopoly,' and it is immaterial that the tendency is a creeping one rather than one that proceeds at full gallop; nor does the law await arrival at the goal before condemning the direction of the movement. 6 Appellant contends, however, that the 'Lixator' contracts are saved from unreasonableness and from the tendency to monopoly because they provided that if any competitor offered salt of equal grade at a lower price, the lessee should be free to buy in the open market, unless appellant would furnish the salt at an equal price; and the 'Saltomat' agreements provided that the lessee was entitled to the benefit of any general price reduction in lessor's salt tablets. The 'Lixator' provision does, of course, afford a measure of protection to the lessee, but it does not avoid the stifling effect of the agreement on competition. The appellant had at all times priority on the business at equal prices. A competitor would have to undercut appellant's price to have any hope of capturing the market, while appellant could hold that market by merely meeting competition. We do not think this concession relieves the contract of being a restraint of trade, albeit a less harsh one than would result in the absence of such a provision. The 'Saltomat' provision obviously has no effect of legal significance since it gives the lessee nothing more than a right to buy appellant's salt tablets at appellant's going price. All purchases must in any event be of appellant's product. 7 Appellant also urges that since under the leases it remained under an obligation to repair and maintain the machines, it was reasonable to confine their use to its own salt because its high quality assured satisfactory functioning and low maintenance cost. The appellant's rock salt is alleged to have an average sodium chloride content of 98.2%. Rock salt of other producers, it is said, 'does not run consistent in sodium chloride content and in many instances runs as low as 95% of sodium chloride.' This greater percentage of insoluble impurities allegedly disturbs the functioning of the 'Lixator' machine. A somewhat similar claim is pleaded as to the 'Saltomat.' 8 Of course, a lessor may impose on a lessee reasonable restrictions designed in good faith to minimize maintenance burdens and to assure satisfactory operation. We may assume, as matter of argument, that if the 'Lixator' functions best on rock salt of average sodium chloride content of 98.2%, the lessee might be required to use only salt meeting such a specification of quality. But it is not pleaded, nor is it argued, that the machine is allergic to salt of equal quality produced by any one except International. If others cannot produce salt equal to reasonable specifications for machine use, it is one thing; but it is admitted that, at times, at least, competitors do offer such a product. They are, however, shut out of the market by a provision that limits it, not in terms of quality, but in terms of a particular vendor. Rules for use of leased machinery must not be disguised restraints of free competition, though they may set reasonable standards which all suppliers must meet. Cf. International Business Machines Corporation v. United States, 298 U.S. 131, 56 S.Ct. 701, 80 L.Ed. 1085. 9 Appellant urges other objections to the summary judgment. The tying clause has not been insisted upon in all leases, nor has it always been enforced when it was included. But these facts do not justify the general use of the restriction which has been admitted here. 10 The appellant also strongly objects to the provisions of the sixth paragraph of the decree.7 Appellant denies the necessity for such provision and it is true that the record discloses no threat to discriminate after the judgment of the Court is pronounced. It also suggests that we modify the judgment to accept a proposed alternative provision8 similar to one it says it urged upon the District Court, which rejected it. The record does not show what proceedings were had between rendering of the court's opinion and signing of the decree. 11 The specific ground of objection raised by appellant to paragraph sixth is that International may find it necessary in some sections of the country to reduce the rental rates of the machines in order that its machines may compete with those of others. Of course, the Clayton Act itself9 permits one charged with price discrimination to show that he lowered his price in good faith to meet competition. Obviously, the District Court was not intending to prevent competition or to disable the appellant from meeting or offering it. The Government, too, says it would not oppose permitting a lower price to meet, in good faith, the equally low price of a competitor if the need arose. 12 The short of the contention is that since the company never has threatened to violate any decree entered in this case to restrain future use of the illegal leases, it feels that the provision invalidating the objectionable leases should end the matter and that, as to any additional provisions, appellant is entitled to stand before the court in the same position as one who has never violated the law at all—that the injunction should go no farther than the violation or threat of violation. We cannot agree that the consequences of proved violations are so limited. The fact is established that the appellant already has wedged itself into this salt market by methods forbidden by law. The District Court is not obliged to assume, contrary to common experience, that a violator of the antitrust laws will relinquish the fruits of his violation more completely than the court requires him to do. And advantages already in hand may be held by methods more subtle and informed, and more difficult to prove, than those which, in the first place, win a market. When the purpose to restrain trade appears from a clear violation of law, it is not necessary that all of the untraveled roads to that end be left open and that only the worn one be closed. The usual ways to the prohibited goal may be blocked against the proven transgressor and the burden put upon him to bring any proper claims for relief to the court's attention. And it is desirable, in the interests of the court and of both litigants, that the decree be as specific as possible, not only in the core of its relief, but in its outward limits, so that parties may known their duties and unintended contempts may not occur. 13 The framing of decrees should take place in the District rather than in Appellate Courts.10 They are invested with large discretion to model their judgments to fit the exigencies of the particular case. United States v. Crescent Amusement Co., 323 U.S. 173, 185, 65 S.Ct. 254, 260, 89 L.Ed. 650; United States v. National Lead Co., 332 U.S. 319, 67 S.Ct. 1634. In an equity suit, the end to be served is not punishment of past transgression, nor is it merely to end specific illegal practices. A public interest served by such civil suits is that they effectively pry open to competition a market that has been closed by defendants' illegal restraints. If this decree accomplishes less than that, the Government has won a lawsuit and lost a cause. 14 The District Court has retained jurisdiction, by the terms of its judgment, for the purpose of 'enabling any of the parties to apply to the court at any time for such further orders and directions as may be necessary or appropriate for the construction or carrying out of the judgment' and 'for the amendment, modification or termination of any of its provisions. * * *' We think it would not be good judicial administration to strike paragraph VI from the judgment to meet a hypothetical situation when the District Court has purposely left the way open to remedy any such situations if and when the need arises. The factual basis of the claim for modification should appear in evidentiary form before the District Court rather than in the argumentative form in which it is before us. Nor are we impressed that this will require a multitude of separate applications. Once the concrete problem is before the District Court it will no doubt be able to fashion a provision that will avoid repetitious applications which would be as vexatious to the Court as to the litigants. We leave the appellant to proper application to the court below and deny the relief here, upon the present state of the record, without prejudice. 15 Judgment affirmed. 16 Mr. Justice FRANKFURTER, whom Mr. Justice REED and Mr. Justice BURTON, join, dissenting in part. 17 Agreeing wholeheartedly with the Court's opinion on the main issue, I am left unpersuaded by its justification for retaining Paragraph VI1 in the judgment. 18 Inasmuch as the holder of patents on machines is not obliged to dispose of them to all comers or to do so at a uniform price, Paragraph VI in and of itself undoubtedly deprives appellant of a legal right. It is not merely a theoretical right. Practical considerations may make it important for appellant to act upon its legal right not to have a uniform price for all its customers. It was conceded at the bar that competition may require this. No doubt, when a court condemns practices as violative of the Sherman Law and the Clayton Act, it has the duty so to fashion its decree as to put an effective stop to that which is condemned. But the law also respects the wisdom of not burning even part of a house in order to roast a pig. Ordinarily, therefore, when acts are found to have been done in violation of antitrust legislation, restraint of such acts in the future is the adequate relief. See New York, New Haven & Hartford R. Co. v. Interstate Commerce Commission, 200 U.S. 361, 404, 26 S.Ct. 272, 282, 50 L.Ed. 515; Standard Oil Co. of New Jersey v. United States, 221 U.S. 1, 77, 31 S.Ct. 502, 522, 55 L.Ed. 619, 34 L.R.A.,N.S. 834, Ann.Cas.1912D, 734; National Labor Relations Board v. Express Publishing Company, 312 U.S. 426, 435—437, 61 S.Ct. 693, 699, 700, 85 L.Ed. 930. Reflecting the dictates of fairness, equity does not put under ban that which is intrinsically legitimate unless for all practical purposes it is tied with the illegitimate, or the circumstances of the case makes it reasonable to assume that pursuit of what is legitimate would be a cover for doing what is forbidden. 19 The Government argues, in effect, that to compel appellant to observe uniformity of price for its machines removes any temptation for more favorable treatment of a customer who buys its salt. But that is precisely the aim of the main decree—it prohibits extension of the patent for the machines by requiring as a condition of its acquisition the purchase of non-patented salt. The presupposition of Paragraph VI is that the appellant will disobey that which the court explicitly forbids, so that the withdrawal of an otherwise legal right to fix the purchase price of patented machines is employed as a precautionary screw to hold the appellant down from disobeying the court's decree. Surely a court of equity ought not to add to its prohibition of the illicit a prohibition of the licit unless the two are practically intertwined or there is some ground for believing that the licit will surreptitiously be misused in order to accomplish the illicit. There should be no such prohibition merely as a re-enforcement of the appropriate presupposition that a litigant, not shown to have ben recalcitrant or underhanded, will obey the court's decree. If he does, the power of contempt is there to enforce obedience. It is suggested that if the presupposition of obedience is to be entertained it is unnecessary to enjoin even illegal conduct. But, surely, it is one thing to decree prohibition of conduct found to be illegal and a wholly different thing to add thereto the prohibition of that which is otherwise legal on the theory that thereby any temptation to persist in the forbidden illegality is removed. 20 Upon the record before us there is nothing to suggest that the appellant is likely to disobey the decree not only of the District Court against a continuance of illegal leases, but what in effect, upon affirmance, becomes a decree of this Court. It must be remembered that the Government saw fit to move for judgment on the pleadings. It thereby raised a pure legal question as to the validity of the leases on their face. The Government chose not to try to lay bare, as is often done in Sherman Law cases, fair and unfair practices inextricably blended. In such a situation the lawful has to fall with the unlawful. Having invited judgment on the bare bones of the pleadings which merely raise the validity of the tying clauses, the Government is not entitled to remedies which go beyond the justification of the pleadings. The Government ought not to have it both ways. The Government is not entitled to a provision in the decree which can be justified only on some indication in the record, of which here there is none, that appellant's past shows a devious temper which needs to be hobbled by withdrawing a conceded legal right. 21 In comparable situations, where orders of the Federal Trade Commission come here for review, this Court has sought to protect otherwise legitimate rights even where a business has indulged in unfair methods of competition. The Commission is not authorized to make its order needlessly destructive. The baby is not to be thrown out with the bath. See Federal Trade Commission v. Royal Milling Co., 288 U.S. 212, 53 S.Ct. 335, 77 L.Ed. 706, and Jacob Siegel Co. v. Federal Trade Commission, 327 U.S. 608, 66 S.Ct. 758, 90 L.Ed. 888. Accordingly, if this were a review of an order of the Federal Trade Commission, I should remit the order for appropriate reconsideration by the Commission. Since this is a review of a lower federal court and the record presumably presents to us all that was before the District Court in support of Paragraph VI, we could dispose of the matter here. 22 But the molding of decrees in Sherman Law cases is normally the business of district courts. They have a scope of discretion which should not unduly be cut off by a recasting of the decree on appeal here. (It is worth nothing that the availability of the Federal Trade Commission in the role of a master in chancery to help mold decrees in suits under the anti-trust statutes apparently does not apply to a suit like the present, where judgment was asked on the pleadings and no testimony was taken. See § 7 of the Federal Trade Commission Act, 38 Stat. 717, 722, 15 U.S.C. § 47, 15 U.S.C.A. § 47.) And so I would remand the case to the District Court. It has been suggested that Paragraph VI is merely a roundabout way of saying that the appellant should not discriminate in the price of its patented machines in favor of a purchaser of its salt. If such was the intention of Paragraph VI, the District Court will want to convey such meaning less ambiguously.2 23 As the paragraph stands, I do not see how any lawyer would advise that the appellant could vary its prices among customers in different localities for a legitimate reason without each time going to the District Court for a modification of the decree. That is not a burden which, on this record, ought to be placed on the appellant. The undue sting of Paragraph VI is not saved by the fact that it is 'specific.' Of course it is in the interest of courts and of litigants that the terms of a decree be as specific as possible. But the desideratum of explicitness does not dispense with the requirement that remedies be appropriate to the condemned illegality. It does not draw the sting of undue prohibition of lawful conduct to make the prohibition specific. 1 26 Stat. 209, § 1, 15 U.S.C. § 1, 15 U.S.C.A. § 1. 2 38 Stat. 730, § 3, 15 U.S.C. § 14, 15 U.S.C.A. § 14. 3 6 F.R.D. 302. 4 Probable jurisdiction noted April 28, 1947. 5 'It is further mutually agreed that the said Lixate Process Dissolver shall be installed by and at the expense of said Lessee and shall be maintained and kept in repair during the term of this lease by and at the expense of said Lessee; that the said Lixate Process Dissolver shall be used for dissolving and converting into brine only those grades of rock salt purchased by the Lessee from the Lessor at prices and upon terms and conditions hereafter agreed upon, provided: 'If at any time during the term of this lease a general reduction in price of grade of salt suitable for use in the said Lixate Process Dissolver shall be made, said Lessee shall give said Lessor an opportunity to provide a competitive grade of salt at any such competitive price quoted, and in case said Lessor shall fail or be unable to do so, said Lessee, upon continued payments of the rental herein agreed upon, shall have the privilege of continued use of the said equipment with salt purchased in the open market, until such time as said Lessor shall furnish a suitable grade of salt at the said competitive price.' It further provides as follows: 'Should said Lessee fail to pay promptly the aforesaid rental, or shall at any time discontinue purchasing its requirement of salt from said Lessor, or otherwise breach any of the terms and conditions of this lease, said Lessor shall have the right, upon 30 days' written notice of intention to do so, to remove the said Lixate Process Dissolver from the possession of said Lessee.' 6 'It is further mutually agreed that the said Salt Tablet Depositor(s) shall be installed and maintained in good condition during the term of this lease; that the said Salt Tablet Depositor(s) shall be used only in conjunction with Salt Tablets sold or manufactured by the Lessor, and that the Lessee shall purchase from the Lessor or its agent, Salt Tablets for use in the Salt Tablet Depositor(s) at prices and upon terms and conditions hereinafter agreed upon, Provided: If at any time during the term of this lease, a general reduction in Lessor's price of Salt Tablets suitable for use in the Depositor(s) shall be made, said Lessor shall provide said Lessee with Salt Tablets at a like price.' The lease further provides: '* * * should Lessee fail to pay promptly the aforesaid rental, or at any time discontinue purchasing its requirements of Salt Tablets for said Salt Tablet Depositor(s) from said Lessor, or its agent, or otherwise breach any of the terms and conditions of this lease, said Lessor shall have the right, upon 10 days' written notice of intention to do so, to remove the said Salt Tablet Depositor(s) from the premises and/or possession of said Lessee.' 7 Defendant International Salt is directed to offer to lease or sell or license the use of the Lixator or Saltomat machines, or any other machine which is then being or about to be offered or shall have been offered by such defendant in the United States embodying inventions covered by any of the patents referred to in paragraph II hereof, to any applicant on non-discriminatory terms and conditions; provided that (a) A machine or machines is or are available for such purposes and (b) Defendant shall not be required to make such offer unless it is offering, about to offer, or has offered such machines for lease or sale or license within the United States and at any time the defendant may discontinue the business of renting or selling or licensing the use of such machines; and (c) Such sale or lease or license is not required to be made without cash payment or security to any person not having proper credit rating, and (d) The rental or sale price or license royalty may differ as to different types and sizes of machines and from time to time so long as the rental or sale price or royalty at any one time is uniform as to each size or type of machine. The terms of this paragraph shall apply to all future contracts and modifications of existing contracts. Any person with whom defendant International Salt now has a lease agreement relating to the Lixator or Saltomat machines may elect to retain his rights under the existing lease or to enter into a lease or sale or license contract with defendant International Salt in accordance with the provisions of this paragraph. 8 Defendant would be enjoined 'from refusing to sell, lease or license the use of any such machine to any person, firm or corporation, or from discriminating in the terms of any contract of sale, lease or license of any such machine with any person, firm or corporation, against the prospective buyer, lessee or licensee on the ground that he has used or dealt in, or intends or proposes to use or deal in, salt not manufactured or sold by the defendant International Salt.' 9 38 Stat. 730, 49 Stat. 1526, 15 U.S.C. § 13(b), 15 U.S.C.A. § 13(b). 10 That court is authorized, but not required, to call upon the Federal Trade Commission to assist in framing decrees in antitrust cases. § 7, Federal Trade Commission Act, 38 Stat. 722, 15 U.S.C.A. § 47. This would seem unnecessary if Congress intended a simple prohibition of the particular practice proved before the court. It indicates the Congress has intended decrees to deal with the future economic condition of the enterprise as well as past violations. 1 VI. Defendant International Salt is directed to offer to lease or sell or license the use of the Lixator or Saltomat Machines, or any other machine which is then being or about to be offered or shall have been offered by such defendant in the United States embodying inventions covered by any of the patents referred to in paragraph II hereof, to any applicant on non-discriminatory terms and conditions; provided that (a) A machine or machines is or are available for such purposes and (b) Defendant shall not be required to make such offer unless it is offering, about to offer, or has offered such machines for lease or sale or license within the United States and at any time the defendant may discontinue the business of renting or selling or licensing the use of such machines; and (c) Such sale or lease or license is not required to be made without cash payment or security to any person not having proper credit rating, and (d) The rental or sale price or license royalty may differ as to different types and sizes of machines and from time to time so long as the rental or sale price or royalty at any one time is uniform as to each size or type of machine. The terms of this paragraph shall apply to all future contracts and modifications of existing contracts. Any person with whom defendant International Salt now has a lease agreement relating to the Lixator or Saltomat machines may elect to retain his rights under the existing lease or to enter into a lease or sale or license contract with defendant International Salt in accordance with the provisions of this paragraph. 2 See the clause which the appellant proposed to the District Court, enjoining it 'from refusing to sell, lease or license the use of any such machine to any person, firm or corporation, or from discriminating in the terms of any contract of sale, lease or license of any such machine with any person, firm or corporation, against the prospective buyer, lessee or licensee on the ground that he has used or dealt in, or intends or proposes to use or deal in, salt not manufactured or sold by the defendant International Salt.'
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332 U.S. 380 68 S.Ct. 1 92 L.Ed. 10 FEDERAL CROP INS. CORPORATIONv.MERRILL et al. No. 45. Argued Oct. 16, 1947. Decided Nov. 10, 1947. Mr. Harry I. Rand, of Washington, D.C., for petitioner. A. A. Merrill, of Idaho Falls, Idaho, for respondents. Mr. Justice FRANKFURTER delivered the opinion of the Court. 1 We brought this case here because it involves a question of importance in the administration of the Federal Crop Insurance Act. 331 U.S. 798, 67 S.Ct. 1199. 2 The relevant facts may be briefly stated. Petitioner (hereinafter called the Corporation) is a wholly Government-owned enterprise, created by the Federal Crop Insurance Act, as an 'agency of and within the Department of Agriculture.' Sec. 503 of Chapter 30, Act of February 16, 1938, 52 Stat. 72, 7 U.S.C. § 1503, as amended, 7 U.S.C.A. § 1503. To carry out the purposes of the Act, the Corporation, 'Commencing with the wheat * * * crops planted for harvest in 1945' is empowered 'to insure, upon such terms and conditions not inconsistent with the provisions of this title as it may determine, producers of wheat * * * against loss in yields due to unavoidable causes, including drought * * *.' 52 Stat. 74, § 508(a), as amended, 55 Stat. 255, in turn amended by the Act of December 23, 1944, Chapter 713, 58 Stat. 918, 7 U.S.C.Supp. V, § 1508(a), 7 U.S.C.A. § 1508(a). In pursuance of its authority, the Corporation on February 5, 1945, promulgated its Wheat Crop Insurance Regulations, which were duly published in the Federal Register on February 7, 1945. 10 F.R. 1586. 3 On March 26, 1945, respondents applied locally for insurance under the Federal Crop Insurance Act to cover wheat farming operations in Bonneville County, Idaho. Respondents informed the Bonneville County Agricultural Conservation Committee, acting as agent for the Corporation, that they were planting 460 acres of spring wheat and that on 400 of these acres they were reseeding on winter wheat acreage. The Committee advised respondents that the entire crop was insurable, and recommended to the Corporation's Denver Branch Office acceptance of the application. (The formal application itself did not disclose that any part of the insured crop was reseeded.) On May 28, 1945, the Corporation accepted the application. 4 In July, 1945, most of the respondents' crop was destroyed by drought. Upon being notified, the Corporation, after discovering that the destroyed acreage had been reseeded, refused to pay the loss, and this litigation was appropriately begun in one of the lower courts of Idaho. The trial court rejected the Corporation's contention, presented by a demurrer to the complaint, that the Wheat Crop Insurance Regulations barred recovery as a matter of law. Evidence was thereupon permitted to go to the jury to the effect that the respondents had no actual knowledge of the Regulations, insofar as they precluded insurance for reseeded wheat, and that they had in fact been misled by petitioner's agent into believing that spring wheat reseeded on winter wheat acreage was insurable by the Corporation. The jury returned a verdict for the loss on all the 460 acres and the Supreme Court of Idaho affirmed the resulting judgment. 67 Idaho 196, 174 P.2d 834. That court in effect adopted the theory of the trial judge, that since the knowledge of the agent of a private insurance company, under the circumstances of this case, would be attributed to, and thereby bind, a private insurance company, the Corporation is equally bound. 5 The case no doubt presents phases of hardship. We take for granted that, on the basis of what they were told by the Corporation's local agent, the respondents reasonably believed that their entire crop was covered by petitioner's insurance. And so we assume that recovery could be had against a private insurance company. But the Corporation is not a private insurance company. It is too late in the day to urge that the Government is just another private litigant, for purposes of charging it with liability, whenever it takes over a business theretofore conducted by private enterprise or engages in competition with private ventures.1 Government is not partly public or partly private, depending upon the governmental pedigree of the type of a particular activity or the manner in which the Government conducts it. The Government may carry on its operations through conventional executive agencies or through corporate forms especially created for defined ends. See Keifer & Keifer v. Reconstruction Finance Corp., 306 U.S. 381, 390, 59 S.Ct. 516, 518, 83 L.Ed. 784. Whatever the form in which the Government functions, anyone entering into an arrangement with the Government takes the risk of having accurately ascertained that he who purports to act for the Government stays within the bounds of his authority. The scope of this authority may be explicitly defined by Congress or be limited by delegated legislation, properly exercised through the rule-making power. And this is so even though, as here, the agent himself may have been unaware of the limitations upon his authority. See, e.g., Utah Power & Light Co. v. United States, 243 U.S. 389, 409, 37 S.Ct. 387, 391, 61 L.Ed. 791; United States v. Stewart, 311 U.S. 60, 70, 61 S.Ct. 102, 108, 85 L.Ed. 40, and see, generally, In re Floyd Acceptances, 7 Wall. 666, 19 L.Ed. 169. 6 If the Federal Crop Insurance Act had by explicit language prohibited the insurance of spring wheat which is reseeded on winter wheat acreage, the ignorance of of such a restriction, either by the respondents or the Corporation's agent, would be immaterial and recovery could not be had against the Corporation for loss of such reseeded wheat. Congress could hardly define the multitudinous details appropriate for the business of crop insurance when the Government entered it. Inevitably 'the terms and conditions' upon which valid governmental insurance can be had must be defined by the agency acting for the Government. And so Congress has legislated in this instance, as in modern regulatory enactments it so often does by conferring the rule-making power upon the agency created for carrying out its policy. See § 516(b), 52 Stat. 72, 77, 7 U.S.C. § 1516(b), 7 U.S.C.A. § 1516(b). Just as everyone is charged with knowledge of the United States Statutes at Large, Congress has provided that the appearance of rules and regulations in the Federal Register gives legal notice of their contents. 49 Stat. 502, 44 U.S.C. § 307, 44 U.S.C.A. § 307. 7 Accordingly, the Wheat Crop Insurance Regulations were binding on all who sought to come within the Federal Crop Insurance Act, regardless of actual knowledge of what is in the Regulations or of the hardship resulting from innocent ignorance. The oft-quoted observation in Rock Island, Arkansas & Louisiana R. Co. v. United States, 254 U.S. 141, 143, 41 S.Ct. 55, 56, 65 L.Ed. 188, that 'Men must turn square corners when they deal with the Government,' does not reflect a callous outlook. It merely expresses the duty of all courts to observe the conditions defined by Congress for charging the public treasury. The 'terms and conditions' defined by the Corporation, under authority of Congress, for creating liability on the part of the Government preclude recovery for the loss of the reseeded wheat no matter with what good reason the respondents thought they had obtained insurance from the Government. Indeed, not only do the Wheat Regulations limit the liability of the Government as if they had been enacted by Congress directly, but they were in fact incorporated by reference in the application,2 as specifically required by the Regulations.3 8 We have thus far assumed, as did the parties here and the courts below, that the controlling regulation in fact precluded insurance coverage for spring wheat reseeded on winter wheat acreage. It explicitly states that the term 'wheat crop shall not include * * * winter wheat in the 1945 crop year, and spring wheat which has been reseeded on winter wheat acreage in the 1945 crop year.' Sec. 414.37(v) of Wheat Crop Insurance Regulations, 10 F.R. 1591. The circumstances of this case tempt one to read the regulation, since it is for us to read it, with charitable laxity. But not even the temptations of a hard case can elude the clear meaning of the regulation. It precludes recovery for 'spring wheat which has been reseeded on winter wheat acreage in the 1945 crop year.' Concerning the validity of the regulation, as 'not inconsistent with the provisions' of the Federal Crop Insurance Act, no question has been raised. 9 The judgment is reversed and the cause remanded for further proceedings not inconsistent with this opinion. 10 Reversed. 11 Mr. Justice BLACK, and Mr. Justice RUTLEDGE, dissent. 12 Mr. Justice JACKSON, dissenting. 13 I would affirm the decision of the court below. If crop insurance contracts made by agencies of the United States Government are to be judged by the law of the State in which they are written, I find no error in the court below. If, however, we are to hold them subject only to federal law and to declare what that law is, I can see no reason why we should not adopt a rule which recognizes the practicalities of the business. 14 It was early discovered that fair dealing in the insurance business required that the entire contract between the policyholder and the insurance company be embodied in the writings which passed between the parties, namely the written application, if any, and the policy issued. It may be well enough to make some types of contracts with the Government subject to long and involved regulations published in the Federal Register. To my mind, it is an absurdity to hold that every farmer who insures his crops knows what the Federal Register contains or even knows that there is such a publication. If he were to peruse this voluminous and dull publication as it is issued from time to time in order to make sure whether anything has been promulgated that affects his rights, he would never need crop insurance, for he would never get time to plant any crops. Nor am I convinced that a reading of technically-worded regulations would enlighten him much in any event. 15 In this case, the Government entered a field which required the issuance of large numbers of insurance policies to people engaged in agriculture. It could not expect them to be lawyers, except in rare instances, and one should not be expected to have to employ a lawyer to see whether his own Government is issuing him a policy which in case of loss would turn out to be no policy at all. There was no fraud or concealment, and those who represented the Government in taking on the risk apparently no more suspected the existence of a hidden regulation that would render the contract void than did the policyholder. It is very well to say that those who deal with the Government should turn square corners. But there is no reason why the square corners should constitute a one-way street. 16 The Government asks us to lift its policies out of the control of the States and to find or fashion a federal rule to govern them. I should respond to that request by laying down a federal rule that would hold these agencies to the same fundamental principles of fair dealing that have been found essential in progressive states to prevent insurance from being an investment in disappointment. 17 Mr. Justice DOUGLAS joins in this opinion. 1 Judging from the legislative history of the Act, the Government engaged in crop insurance as a pioneer. Private insurance companies apparently deemed all-risk crop insurance too great a commercial hazard. See Report and Recommendations of the President's Committee on Crop Insurance, H.Doc.No.150, 75th Cong., 1st Sess., pp. 2—4, 11—12; H.Rep.No.1479, 75th Cong., 1st Sess., p. 2; 81 Cong.Rec. 2866, 2867, 2887, 2891, 2893, 2895; Hearings before a Subcommittee of the Senate Committee on Agriculture and Forestry on S.1397, 75th Cong., 1st Sess., 125, 185. But this does not affect the legal issues. It merely underscores the fact that the undertaking by the Government is not an ordinary commercial undertaking, and thereby reenforces the conclusion that the rules of law whereby private insurance companies are rendered liable for the acts of their agents are not bodily applicable to a Government agency like the Corporation, unless Congress has so provided. 2 'H. Acceptance by the Federal Crop Insurance Corporation. It is understood and agreed that upon acceptance of the application by a duly authorized representative of the Corporation as evidenced by his approval below, the insurance contract shall be in effect, provided the application has been submitted in accordance with the provisions of the application and the applicable Wheat Crop Insurance Regulations. It is further understood and agreed that the accepted application and the applicable Wheat Crop Insurance Regulations, including any amendments thereto, constitute the contract between the Corporation and the insured.' 3 '§ 414.3. Acceptance of applications by the Corporation. (a) Upon acceptance of an application by a duly authorized representative of the Corporation, the insurance contract shall be in effect, provided such application is submitted in accordance with the provisions of the application and of these regulations, including any amendments thereto.' 10 F.R. 1586. The regulation defined 'insurance contract' as 'the contract of insurance entered into between the applicant and the Corporation by virtue of the application for insurance and these regulations and any amendments thereto.' 10 F.R. 1591.
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332 U.S. 407 68 S.Ct. 123 92 L.Ed. 32 PRIEBE & SONS, Inc.v.UNITED STATES. No. 16. Argued Oct. 13, 1947. Decided Nov. 17, 1947. Messrs. J. Arthur Miller, of Chicago, Ill., and Allen H. Gardner, of Washington, D.C., for petitioner. Mr. Philip Elman, of Washington, D.C., for respondent. Mr. Justice DOUGLAS delivered the opinion of the Court. 1 This case, here on certiorari to the Court of Claims, presents the question whether a provision in a government contract for 'liquidated damages,' as construed and applied, should be denied enforcement on the ground that it constitutes a 'penalty.' 2 Shortly after the enactment of the Lend-Lease Act of March 11, 1941, 55 Stat. 31, 22 U.S.C.Supp. V, § 411 et seq., 22 U.S.C.A. § 411 et seq., the United States acting through agencies of the Department of Agriculture embarked on a program of purchasing dried eggs for shipment to England and Russia. Petitioner agreed to furnish a quantity of dried eggs under that program to the Federal Surplus Commodities Corporation (FSCC). The contract called for 'May 18 (1942) delivery' which date, according to the contract, 'shall be the first day of a 10-day period within which the FSCC will accept delivery, the particular day within the period being at the FSCC's option,' Petitioner was also required to have the eggs inspected, delivery to be accompanied by inspection and weight certificates. 3 The ontract contained two provisions respecting 'liquidated damages.' One, contained in paragraph 9, was applicable to delays in delivery.1 It has no application here, for as we shall see, deliveries were timely. The provision for cliquidated damages' with which we are concerned is contained in paragraph 7 and is applicable to a totally different situation. It provides, with exceptions not material here, that 'failure to have specified quantities of dried egg products inspected and ready for delivery by the date specified in the offer' will be cause for payment of 'liquidated damages.'2 4 On May 18, 1942, petitioner had not made delivery nor had the eggs been inspected. Inspection was, however, completed and certificates issued by May 22, which was prior to the time when FSCC asked for delivery. For it was not until May 26 that FSCC gave the first of several written notices for the shipment of eggs involved in this litigation. Petitioner made timely shipments pursuant to those instructions. Subsequently FSCC ascertained that petitioner's inspection certificates had been issued after May 18 and accordingly deducted from the price 10 cents per pound on the theory that the failure to have the eggs inspected and ready for delivery by May 18 was a default which put into operation the 'liquidated damages' provision of the contract. 5 Petitioner brought this suit in the Court of Claims to recover the amounts withheld plus interest. The Court of Claims, being of the view that there had been a breach of contract for which the United States was entitled to 'liquidated damages,' dismissed the petition. 65 F.Supp. 457, 460. 6 We construe the contract to mean that the time for delivery by petitioner was not May 18, 1942 but the time or times chosen by the FSCC within the ten-day period which began on May 18. That is to say, performance by petitioner was not due until request was made and instructions given for delivery. That interpretation is in accord with the uncontested finding of the Court of Claims that petitioner promised delivery 'within a ten-day period commencing May 18, the precise date to be selected' by the FSCC. 7 The contract was drawn, however, to make the 'liquidated damages' provisions include so-called defaults of petitioner which antedated the time when delivery was due but which in no way interfered with or caused delay in that performance. As noted, 'liquidated damages' became payable on 'failure to have specified quantities of dried egg products inspected and ready for delivery by the date specified in the offer,' viz. by May 18, 1942. The Court of Claims held this provision enforceable even though petitioner had made prompt delivery of the eggs, because it felt that the provision enabled respondent t carry on its dried-egg program 'with assurance that it could count on the dried-egg products being ready on the specified date.' That position is amplified by respondent. The argument in short is that liability to pay 'liquidated damages' for failure to have goods ready for delivery even prior to the time when delivery is due gives assurance against tardy deliveries; that a prompt timetable of shipments was important here because of war conditions and the necessity of having goods ready for loading whenever shipping space was available; that delay in deliveries would cause unmeasurable damage; and that even though no damage were apparent in a particular case, the cliquidated damages' provision should be enforced as a deterrent of tardy deliveries in the whole class of contracts relating to this procurement program. 8 It is customary, where Congress has not adopted a different standard, to apply to the construction of government contracts the principles of general contract law. United States v. Standard Rice Co., 323 U.S. 106, 111, 65 S.Ct. 145, 147, 89 L.Ed. 104, and cases cited. That has been done in other cases where the Court has considered the enforceability of 'liquidated damages' provisions in government contracts. United States v. Bethlehem Steel Co., 205 U.S. 105, 120, 121, 27 S.Ct. 450, 455, 456, 51 L.Ed. 731; Wise v. United States, 249 U.S. 361, 365, 366, 39 S.Ct. 303, 304, 63 L.Ed. 647. We adhere to those decisions and follow the same course here. 9 Today the law does not look with disfavor upon 'liquidated damages' provisions in contracts. When they are fair and reasonable attempts to fix just compensation for anticipated loss caused by breach of contract, they are enforced. Wise v. United States, supra, 249 U.S. page 365, 39 S.Ct. page 304, 63 L.Ed. 647; Sun Printing & Publishing Ass'n v. Moore, 183 U.S. 642, 672—674, 22 S.Ct. 240, 252, 253, 46 L.Ed. 366; Restatement, Contracts § 339; Dunlop Pneumatic Tyre Co. v. New Garage & M. Co., (1915) A.C. 79. And see Kothe v. R. C. Taylor Trust, 280 U.S. 224 226, 50 S.Ct. 142, 143, 74 L.Ed. 382. They serve a particularly useful function when damages are uncertain in nature or amount or are unmeasurable, as is the case in many government contracts. United States v. Bethlehem Steel Co., supra, 205 U.S. page 121, 27 S.Ct. page 456, 51 L.Ed. 731. Clydebank Engineering & Shipbuilding Co. v. Castaneda, (1905) A.C. 6, 11—13, 20; United States v. Walkof, 2 Cir., 144 F.2d 75, 77, 154 A.L.R. 1250. And the fact that the damages suffered are shown to be less than the damages contracted for is not fatal. These provisions are to be judged as of the time of making the contract. United States v. Bethlehem Steel Co., supra, 205 U.S. page 121, 27 S.Ct. page 456, 51 L.Ed. 731. 10 Judged by these standards, the provision in question may not be sustained as an agreement for 'liquidated damages.' It does not cover delays in deliveries.3 It can apply only where there was prompt performance when delivery was requested but where prompt delivery could not have been made, due to the absence of the certificates, had the request come on the first day when delivery could have been asked. A different situation might be presented had the contract provided for notice to the Government when the certificates were ready. Then we might possibly infer that promptness in obtaining them served an important function in the preparation of timetables for overseas shipments. But the contract contains no such provision; and it is shown that FSCC had no knowledge that the certificates were not ready on May 18 until long after deliveries had been made. So, it is apparent that the certificates were only an essential of proper delivery under this contract. 11 It likewise is apparent that the only thing which could possibly injure the Government would be failure to get prompt performance when delivery was due. We have no doubt of the validity of the provision for 'liquidated damages' when applied under those circumstances. United States v. Bethlehem Steel Co., supra; Wise v. United States, supra. And see Maryland Dredging and Contracting Co. v. United States, 241 U.S. 184, 36 S.Ct. 545, 60 L.Ed. 945; Robinson v. United States, 261 U.S. 486, 43 S.Ct. 420, 67 L.Ed. 760. But under this procurement program delays of the contractors which did not interfere with prompt deliveries plainly would not occasion damage. That was as certain when the contract was made as it later proved to be. Yet that was the only situation to which the provision in question could ever apply. Under these circumstances this provision for 'liquidated damages' could not possibly be a reasonable forecast of just compensation for the damage caused by a breach of contract. It might, as respondent suggests, have an in terrorem effect of encouraging prompt preparation for delivery. But the argument is a tacit admission that the provision was included not to make a fair estimate of damages to be suffered but to serve only as an added spur to performance. It is well-settled contract law that courts do not give their imprimatur to such arrangements. See Kothe v. R. C. Taylor Trust, supra; Restatement, Contracts § 339. All provisions for damages are, of course, deterrents of default. But an exaction of punishment for a breach which could produce no possible damage has long been deemed oppressive and unjust. See Salmond & Williams on Contracts (2d Ed. 1945) § 202. 12 It is said, however, that a different rule should obtain here because of the broad procurement powers involved under the Lend-Lease Act. We are pointed, however, to no provision by which the Congress authorized the imposition of penalties as sanctions to that program; nor do we find any. We cannot infer such a power. The power to purchase on appropriate terms and conditions is, of course, inferred from every power to purchase. But if that is the source of Congressional authority to impose penalties, then any procurement officer, in war or in peace, could impose them. That is contrary to the premise underlying all our decisions on this question which involve government contracts. The rule which they announce has been applied both to the exigencies of war (United States v. Bethlehem Steel Co., supra) and of peace (Wise v. United States, supra). The other view is such a radical break with the past and so counter to the whole development of the law as to indicate that the Congressional purpose should be plain before we take the step. 13 Reversed. 14 Mr. Justice BLACK, with whom Mr. Justice MURPHY agrees, dissenting. 15 The Court today invokes elusive and uncertain principles of 'general contract law' to strike down a clause in a Government contract executed under the recognized congressional authority of the Lend-Lease Act. Without reliance upon any indication of congressional policy, the Court assumes that it can discover somewhere a 'general contract law,' and that it is empowered to apply this law to wartime contracts of the Federal Government. I regard the decisions of this Court since Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, 114 A.L.R. 1487, as having established that the construction and validity of all Government contracts are governed by federal law, whether executed under authority of the Lend-Lease Act or any other. National Metropolitan Bank v. United States, 323 U.S. 454, 456, 65 S.Ct. 354, 355, 89 L.Ed. 383; see United States v. Allegheny County, 322 U.S. 174, 183, 64 S.Ct. 908, 913, 88 L.Ed. 1209; Clearfield Trust Co. v. United States, 318 U.S. 363, 63 S.Ct. 573, 87 L.Ed. 838. And Congress has enacted many laws, both general and specific in nature, to guide all contracting agents of the Federal Government, 41 U.S.C. § 1 et seq., 41 U.S.C.A. § 1 et seq., as well as many detailed rules applicable solely to certain categories of contracts. See, e.g., Merchant Marine Act of 1936, 49 Stat. 1985, Tits. 5, 7, 8, 46 U.S.C.A. §§ 1151 et eq., 1191 et seq., 1211 et seq. But I can find no act of Congress which expressly or impliedly prohibits such generally authorized agents from making a contract containing a liquidated damage provision such as here involved. Nor has Congress ever intimated that contracts within the general powers of Government agents should be invalidated by this Court's invocation of a nebulous 'general contract law,' or because such contracts failed to harmonize with this Court's views of what is 'fair and reasonable.' I had not supposed that the federal courts were vested with such supervisory and revisory powers over the terms of contracts voluntarily and advisedly entered into by business groups with congressionally authorized Government agents. 16 The available indications of congressional policy point to the very opposite conclusion. Far from indicating a hostility to liquidated damage clauses, Congress has made it mandatory that such clauses to protect against delay in performance be inserted in all Government building contracts; and it has provided that such clauses 'shall be conclusive and binding upon all parties' without the necessity for the Government to prove 'actual or specific damages sustained * * * by reason of delays.' 32 Stat. 326, 40 U.S.C. § 269, 40 U.S.C.A. § 269. Surely this provision would not permit federal judges to ignore liquidated damage clauses in building contracts because actual damages were not proved and could not have been reasonably forecast. And in no other act of Congress is there a suggestion that liquidated damage provisions in other Government contracts are unenforceable because the courts believe no actual damages could be sustained from a breach. Yet the majority adopts such a principle today to invalidate a clause in this contract, and thereby, as I see it, embarks upon the very undesirable practice of supervising and revising the congressionally authorized conduct of federal contracting agents. This Court has previously refused to initiate such a practice in a case where the Government on most appealing grounds urged us to revise its agent's contract. United States v. Bethlehem Steel Corporation, 315 U.S. 289, 308, 309, 62 S.Ct. 581, 591, 86 L.Ed. 855. 17 In this case procurement officers of the Federal Government, admittedly acting within their authority, advertised for bids for the sale of dried eggs which the advertisement provided were to be ready for delivery to the Government on a date to be chosen by the bidder. Actual delivery of the eggs was to be made on the Government's demand any time within a ten-day period following the ready date named by the bidder. The advertisement also contained a provision for the assessment of liquidated damages for delay in delivering the eggs or in having them inspected, certified, and ready for delivery by the bidder's chosen date. 18 The efficient integration of a large scale procurement program, such as was here involved, made it highly advisable for the Government to exact assurances that goods would be ready for delivery in advance of selection of the date for actual delivery. Essential to the program was the coordinated movement of boxcars and ships, both of which were then scarce and in great demand. Each day's idleness of cars and ships might mean injuries to the Government of large but uncertain amounts. Under such circumstances it would have been a serious omission for Government agents to fail to check and double check, contract and double contract, in order to have goods ready for delivery to cars and ships with the least possible lost time in the use of transport facilities. And the Government had a right to depend on its contractors living up to their promise to have goods ready on the date they said they would so that the Government might thereafter select a delivery date with certainty that no transportation delays would occur. Failure to do so might well disrupt the Government's prearranged train and ship schedules, causing it cumulative difficulties not easily tran lated into money damages. And all of these damages might result from failure to have the goods ready as promised, even though the contractor might later be able to deliver when called for and thus escape the delivery liquidated damage provision. 19 This contract was made at arms' length. The petitioner knew of the necessity for faithful performance of its obligations. It undoubtedly gave consideration to this fact and fixed its price high enough to satisfy itself of its profits. I can think of no persuasive reason why it should now be relieved of the obligation it advisedly assumed which was, in effect, to charge less for its goods if they were not ready for delivery on the date it promised. I do not deny that this Court can fill gaps in statutes so as to execute broad congressional purposes and that courts generally have made large contributions to laws governing contracts. But I think that the Court here makes a law which frustrates congressional purposes and tends most unwisely to handicap Government purchasing agents in the performance of their authorized duties. I adhere to the belief that it is unwise for the courts to interfere with the making of contracts by Government agents in harmony with valid congressional authority. Perkins v. Lukens Steel Co., 310 U.S. 113, 127, 128, 131, 132, 60 S.Ct. 869, 876, 877, 878, 879, 84 L.Ed. 1108. I would affirm this judgment. 20 Mr. Justice FRANKFURTER, whom the CHIEF JUSTICE joins, dissenting. 21 Upon failure to perform the undertaking of a contract the law secures the money equivalent for the loss thereby incurred. In order to avoid the waste of controversy as to the extent of a loss, should it occur, and to save judges and juries from having to guess about it, parties naturally enough, often stipulate in advance the compensation for such loss, and courts in appropriate situations will enforce such a provision for liquidated damages. But exactions for a breach of contract not giving rise to damages and merely serving as added pressure to carry out punctiliously the terms of a contract, are not enforced by courts. In familiar language, penal provisions in a contract—those that concern defaults that bring no loss in their train—are not enforceable. I assume that the basic reason for this doctrine is that the infliction of punishment through courts is a function of society and should not insure to the benefit of individuals. So-called qui tam actions, suits for treble damages and the like, stand on a different footing. In such situations society makes individuals the representatives of the public for the purpose of enforcing a policy explicitly formulated by legislation. The essence of the law's remedy for breach of contract is that he who has suffered from a breach should be duly compensated for the loss incurred by non-performance. But one man's default should not lead to another man's unjust enrichment. 22 If the contract in controversy is to be treated as an ordinary commercial transaction, to be governed by the ordinary rules applicable also to Government contracts in ordinary times, I could not escape the conclusion that the provision for 'damages' merely for failure to secure inspection certificates without failure of delivery operates as a penalty to deter non-observance of this requirement. It is not a determination in advance of the money lost to the Government due to default. The Government wanted delivery of eggs. But failure of delivery or inability to deliver for want of certificates brings into operation the provisions for liquidated damages of paragraph 9. There is no money loss to the Government through failure of any of the intervening preparatory steps in the process leading to delivery. Of course a contractor is interested in having the steps leading to performance duly carried out. Exactions for any of the intervening steps would undoubtedly have a coercive influence in securing performance of that which is the real object of a contract. But if a contract is performed, the pr misee has suffered no loss even though some intervening step by the promisor has been delayed. And so, such a provision for default of an intervening step, when due delivery has been made, is plainly exaction of an amount for which the promisee has not been out of pocket. Accordingly, if this contract were an ordinary commercial contract subject to the ordinary rules of the law of contract, I should have to find against the Government. 23 But this is not an ordinary peace-time Government contract. The Government may certainly assure performance of contracts upon which the effective conduct of the war depended by tightening the consequence of non-performance of each stage in the ultimate process of delivery of essential goods to the extent of having a tariff of deductions for non-performance of each step in the ultimate goal of the contract. Congress certainly could specifically authorize such pressures on each step in the sequence of a contract-performance by provisions like that of paragraph 7. Congress did not do this. Instead of particularizing to that extent, such a provision would, as a matter of fair construction, also be authorized by Congress if it empowered an agency to procure 'under appropriate terms and conditions' essential war goods. I could not hold that an authority by Congress to a procurement agency to make contracts for carrying out the food program for the successful conduct of the war could not appropriately require of those who voluntarily enter into such contracts with the Government to incur a reasonable penalty for default for necessary certificates upon which delivery depended. And this would be so even though for reasons themselves relating to the war effort, the Government reserved a necessary margin of time within which to call for delivery and by a delayed call obtained delivery when required, though if the call had been previously made the failure of certification might have been serious. Congress did not add to its authorization for entering into the making of these was contracts the assumed provision 'with appropriate terms and conditions.' But I find the distinction between what Congress did and the indicated addition too thin for denying to the contracting officers of the Government the implied right, under the circumstances of the times. Congress authorized the President, through appropriate delegation, to 'procure * * * any defense article' deemed 'vital to the defense of the United States.' Section 3(a) of the Lend-Lease Act of 1941, 55 Stat. 31, 22 U.S.C.A. § 412(a). And so I conclude that the provisions of paragraph 7 were, on a fair reading of Congressional legislation, within the contracting powers of the President as much so as if Congress had in terms authorized such a provision. 24 It hardly needs to be added that neither formal logic nor practical judgment requires that authority to impose safeguards for preventing breaches short of ultimate default, similar to those contained in paragraph 7 of this contract for vital war products, be inferred from the ordinary implied powers of Government contracting officers in making ordinary contracts for the Government. 25 If one starts with the assumption that, in the absence of specific Congressional authority, a fixed rule of law precludes contracting officers from providing in a Government contract terms reasonably calculated to assure its performance even though there be no money loss through a particular default, there is no problem. But answers are not obtained by putting the wrong question and thereby begging the real one. It is misleading to ask: 'What remedies has Congress provided for breaches of contract?' The answer to that depends on the answer to the true question: 'With what scope has Congress presumably invested the Executive in order to carry out the duty, not defined with particularity, of assuring the necessary war supplies?' 26 The enforceability of a clause like that now in controversy regardless of whether it is fairly to be regarded as one for liquidated damages' or for a 'penalty,' is a matter of appropriate implications drawn from a total absence of expressed Congressional desire. Such implications do not rest on dogma. They derive from the considerations of policy underlying them. It is one thing to attribute to Congress the desire to confine the Government's remedies for breaches of its ordinary procurement contracts to the rules of law governing ordinary commercial contracts. It is quite another thing to infer that when in March, 1941, Congress gave the President, through the Lend-Lease Act, unrestricted power to 'procure' essential war materials, it meant to fetter the procurement agencies selected by the President, by forbidding them to include, among the terms of bids to be voluntarily accepted, conditions reasonably calculated to secure performance. 27 While Congress presumably wishes the ordinary rules of contract law to apply in ordinary times, the Lend-Lease Act was the most potent proof that the times were far from ordinary. The inclusion of paragraph 7 in contracts such as this was an appropriate regard by the Executive for the very emergency which impelled Congress to act and to give its agencies power to act. 1 That provision of the contract provided: 'Inasmuch as the failure of the vendor to deliver the quantity of the commodity or commodities specified in the contract in accordance with the terms of this announcement will, because of the urgent need for the commodity by the purchaser arising from the present emergent conditions, cause serious and substantial damages to the purchaser, and it will be difficult, if not impossible, to prove the amount of such damages, the vendor agrees to pay to the FSCC liquidated damages as stated in this paragraph. The sum is agreed upon as liquidated damages and not as a penalty, and shall be in the amount set forth below for each pound of dried egg product undelivered in accordance with the terms of this announcement. * * * The parties have computed, estimated, and agreed upon this sum as an attempt to make a reasonable forecast of probable actual loss because of the difficulty of estimating with exactness the damages which result.' The 'liquidated damages' ranged from 10 to 30 cents per pound dependent upon the elapsed time between the acceptance date and May 18, 1942. 2 The measure of 'liquidated damages' in this situation was the same as that for delays in delivery set forth in note 1, supra. 3 They are covered, as we have already noted, by the provision set forth in note 1, supra.
78
332 U.S. 422 68 S.Ct. 131 92 L.Ed. 44 MORRISv.McCOMB, Administrator of Wage and Hour Division, U.S. Department of Labor. No. 7. Argued Oct. 13, 1947. Decided Nov. 17, 1947. Mr. George S. Dixon, of Detroit, Mich., for petitioner. Mr. Harold Nystrom, of New York City, for respondent. Mr. Justice BURTON, delivered the opinion of the Court. 1 This case requires further application of the principles stated in Levinson v. Spector Motor Service, 330 U.S. 649, 67 S.Ct. 931, and Pyramid Motor Freight Corp. v. Ispass, 330 U.S. 695, 67 S.Ct. 954. The first question is whether the Interstate Commerce Commission has the power, under § 204 of the Motor Carrier Act, 1935,1 to establish qualifications and maximum hours of service with respect to drivers and mechanics employed full time, as such, by a common carrier by motor vehicle, when the services rendered, through such employees, by such carrier, in interstate commerce, are distributed generally throughout the year, constitute 3% to 4% of the carrier's total carrier services, and the performance of such services is shared indiscriminately among such employees and mingled with their performance of other like services for such carrier not in interstate commerce. The other question is whether, if the Commission has that power, the overtime requirements of § 7 of the Fair Labor Standards Act of 19382 apply to such employees in view of the exemption stated in § 13(b)(1) of that Act.3 We hold that the Commission has the power in question and that the overtime requirements of § 7 of the Fair Labor Standards Act therefore do not apply to such employees. 2 This action was brought March 26, 1942, in the United States District Court for the Eastern District of Michigan by the Administrator of the Wage and Hour Division, United States Department of Labor, under § 17 of the Fair Labor Standards Act,4 to enjoin the petitioner, James F. Morris, from violating § 15(a)(1) and (2) of that Act5 through failure to pay his employees compensation for overtime in accordance with § 7 of that Act.6 After a trial based on the pleadings and stipulated facts, the complaint was dismissed September 26, 1945. In its unreported conclusions of law the court stated that neither the petitioner nor his employees were engaged 'in the production of goods for commerce' within the meaning of the Fair Labor Standards Act and that, to the extent that they might be considered to be engaged 'in commerce' within the meaning of that Act, the requirements of its § 7, as to compensation for overtime, did not apply to them. The Circuit Court of Appeals for the Sixth Circuit reversed this judgment May 29, 1946, and remanded the case for further proceedings. Walling v. Morris, 155 F.2d 832. Because of its importance in interpreting the Motor Carrier Act and the Fair Labor Standards Act and because the question first stated above had not been passed upon in our decisions in the Levinson and Pyramid cases, supra, we granted certiorari, Morris v. Walling, 330 U.S. 817, 67 S.Ct. 1091, limited to the following question: 3 '2. Where such employees (i.e., those of a common carrier for hire who conducts a general cartage business) during a minority of their time are engaged in the transportation of interstate traffic are they exempt under the provisions of Section 13(b)(1) of the Act from the maximum hours provision of Section 7 of the Act as employees with respect to whom the Interstate Commerce Commission has power to establish qualifications and maximum hours of service pursuant to the provisions of Section 204 of the Motor Carrier Act 1935 (49 U.S.C. sec. 301, et seq., 49 U.S.C.A. § 301 et seq.)?' 4 In response to our invitation, the Interstate Commerce Commission filed a brief amicus curiae. 5 The material facts are treated by the parties as being those shown by the record to have been in effect when the complaint was filed in 1942. They may be summarized as follows: 6 The petitioner then was, and for the past 12 years had been, the sole owner and proprietor of the J. F. Morris Cartage Company which operated a general cartage business as a common carrier by motor vehicle in and about the metropolitan area of Detroit, Michigan, and all within three contiguous counties of that State. His operations were centralized at Ecorse, Michigan, at his garage and yard, used for a dispatching office, general maintenance and repair garage and storage space for equipment. 7 His principal business was the transportation of steel. In the regular course of his business, in 1941, he generally employed about 60 persons, 40 as truck drivers, 14 as mechanics, painters, washers and repairmen in the garage, three as dispatchers and three as general office workers. His equipment consisted of about 50 trucks or tractors and 60 trailers. 8 He was prepared to and did render general cartage service to the general shipping public. In 1941, he rendered such service to 47 consigning firms, but about 97% of his revenue came from the Great Lakes Steel Corporation and the Michigan Steel Corporation, both in Ecorse. His general cartage services, in 1941, were made up of three intermingled types of service, generally classifiable as follows on the basis of the revenue derived from them: (1) 35%: Transportation of steel largely within steel plants. This was transported for further processing in those plants and an unsegregated portion of its was shipped ultimately in interstate commerce. (2) 61%: Transportation between steel mills and industrial establishments. These shipments consisted principally of bumper stock, fender stock and other types of steel used in connection with the manufacture of automobiles, a substantial portion of which entered interstate commerce. (3) 4%: Transportation of miscellaneous freight directly in interstate commerce, either as part of continuous interstate movements or of interstate movements begun or terminated in metropolitan Detroit.7 9 Ever since § 7 of the Fair Labor Standards Act took effect, October 24, 1938, petitioner's employees, with the exception of his office workers, consistently worked enough hours to entitle them to additional compensation at the rate of one and one-half times their regular wages if such Section were applicable to them. They were, however, paid on the assumption that the Section did not apply to them and, therefore, for the most part, received only their regular rate of pay for such overtime. Accordingly, if it is found that § 7 is applicable to them, there is ground for an injunction against its further violation. No issue is presented here as to the office workers because there is no proof of overtime services having been rendered by them or being now in prospect. No issue is presented here as to the dispatchers. The Circuit Court of Appeals held that § 7 applies to them as employees engaged in the production of goods for interstate commerce and that they are not exempt as administrative employees. Those issues, however, are not within the limited grant of certiorari. As to the garagemen and laborers, including mechanics, painters, washers and repairmen, together with their superintendent of maintenance, there is no issue presented here, except to the extent that such classifications include mechanics doing the class of work defined as that of 'mechanics' in Ex Parte No. MC-2, 28 M.C.C. 125, 132, 133,8 including the making of mechanical repairs directly affecting the safe operation of motor vehicles. All of the garagemen and laborers, except their superintendent of maintenance, were paid for their overtime work at 'straight' or regular hourly rates. He was paid a weekly wage, and received no overtime pay, although he devoted approximately 25% of his time to the performance of routine physical tasks of the same general character as those of the employees working under his direction. The Circuit Court of Appeals held that the superintendent of maintenance was not exempt as an executive or administrative employee and should be classified in the same manner as the others in this group. There is nothing in the record showing the extent to which the respective garagemen and laborers devoted themselves to the several classes of work above mentioned and, if this were an action to recover overtime compensation for individual employees, it would be necessary to determine that fact. However, as this is an action only for an injunction relating to future practices, the situation can be met by limiting the injunction to the appropriate classifications of workers. On this basis, the injunction against violation of § 7 of the Fair Labor Standards Act may be issued as to those garagemen and laborers who are not 'mechanics' as defined by the Interstate Commerce Commission, and the issue before us is limited to the proper application of such an injunction to such 'mechanics.' 10 The drivers are full-time drivers of motor vehicles well within the definition of that class of work by the Commission if the work is done in interstate commerce.9 From October 24, 1938, to August 1, 1940, the drivers received their 'straight' or regular hourly rate of pay for all overtime work. Since August 1, 1940, their overtime work has been paid for in accordance with a collective bargaining agreement in force as to union drivers, throughout metropolitan Detroit, employed either in intrastate or interstate general cartage. From August 1, 1940, to August 1, 1941, these agreements required payment of overtime in excess of 52 hours a week at one and one-half times the regular rate. After August 1, 1941, as a concession to wartime conditions, this additional rate was applied only to overtime in excess of 54 hours a week. The statutory workweek which would be applicable under § 7 of the Fair Labor Standards Act at all times has been substantially shorter than those just mentioned.10 11 As to these drivers and these 'mechanics' whose work affects safety of transportation, the first question here, as in the Levinson case, is whether the Commission has the power, under § 204 of the Motor Carrier Act, to establish qualifications and maximum hours of service with respect to them. The special situation presented is that, on the average, only about 4% of their time and effort has been, or is likely to be, devoted to services in interstate commerce. The issue would appear in its simplest form if each driver were required, each day, to devote 24 minutes (i.e., 4% of his allowable daily aggregate of ten hours of driving time) to driving in interstate commerce. The question then would be whether the Commission has the power to establish his qualifications and maximum hours of service in view of the relation of this driving to safety of operation in interstate commerce. Under the tests of the Commission's power, as approved in both the majority and minority opinions in the Levinson case, and, under the analysis of that power developed by the Interstate Commerce Commission and cited in that case, it is 'the character of the activities rather than the proportion of either the employee's time or of his activities that determines the actual need for the Commission's power to establish reasonable requirements with respect to qualifications, maximum hours of service, safety of operation and equipment.'11 It is beyond question that, under such circumstances, § 204(a)(1) of the Motor Carrier Act12 has authorized the Commission to establish reasonable requirements with respect to qualifications and maximum hours of service of such drivers. The Fair Labor Standards Act, which was passed three years later, has recog ized and does not restrict the Commission's power over the safety of operation under the Motor Carrier Act. What is thus true for the driver is true also for the mechanic who repairs his truck. 12 In the record before us, instead of 4% of the driving time of each driver being devoted each day to interstate commerce without relation to what the driver does at other times, the parties present the actual experience of the petitioner and his drivers throughout 1941. The printed record, together with an unprinted exhibit filed with the Clerk, classifies all of the 19,786 trips taken in 1941 by the 43 drivers who respectively drove motor vehicles for the petitioner during not less than eight weeks in that year. Only the 'Pickup Trips' and 'Boat Dock Trips' are counted as being in 'interstate commerce.' These involved movements of goods to or from railroad freight houses, line haul motor carrier depots or the boat docks of the several steamship companies in Detroit. It was stipulated that the petitioner was 'engaged as a common carrier for hire in the local transportation of property by motor vehicle,' was 'engaged in a general cartage business and * * * (was) prepared to render such services to the general shipping public.' Each driver appears to have been a full-time driver during each week that he worked. The tables show 464 'Pickup Trips' and 260 'Boat Dock Trips,' or a total of 724 made in interstate commerce, when and as required by petitioner's consignors. These constituted 3.65% of the petitioner's total trips. They were not distributed equally to each driver nor on the basis of 4% of his time each day. However, apparently in the normal operation of the business, these strictly interstate commerce trips were distributed generally throughout the year and their performance was shared indiscriminately by the drivers and was mingled with the performance of other like driving services rendered by them otherwise than in interstate commerce. These trips were thus a natural, integral and apparently inseparable part of the common carrier service of the petitioner and of his drivers. 13 One or more such trips were taken by one or more drivers each week. The average number of drivers making one or more such trips in each week was nine drivers out of 37, or 24.4%. There were six weeks in which more than half of the drivers thus engaged directly in interstate commerce. The highest percentage of drivers making such trips in one week was 78.1%, when 25 drivers out of the 32 then on duty, did so. As to the distribution of such trips, throughout the year, among the total of 43 drivers, every driver, except two, made at least one such trip with interstate freight. Each of the two who failed to make any such trip was employed for only about one-half the year and that was during the months when the trips in interstate commerce were the less frequent. On the other hand, one driver made 97 such trips in interstate commerce. Another made 52 and the average per driver was over 16. The greatest number of such trips made by a single driver in a single week was seven out of nine. In several other weeks he made six such trips out of a total of seven in the week. The net result is a practical situation such as may confront any common carrier engaged in a general cartage business, and who is prepared and offering to serve the normal transportation demands of the shipping public in an industrial metropolitan center. From the point of view of safety in interstate co merce, the hazards are not distinguishable from those which would be presented if each driver drove 4% of his driving time each day in interstate commerce. In both cases there is the same essential need for the establishment of reasonable requirements with respect to qualifications and maximum hours of service of employees. If the common carrier is required, by virtue of that status, to take this interstate business he must perform the required service in accordance with the requirements established by the Commission. The Commission has made no exception in these qualifications and maximum hours of service that would exempt the drivers of the petitioner from them as a class. The applicability of the Commission's present requirements as to specific drivers during specific weeks is not the issue before us. We hold that the Commission has the power to establish qualifications and maximum hours of service, pursuant to the provisions of § 204 of the Motor Carrier Act, for the entire classification of petitioner's drivers and 'mechanics' and it is the existence of that power (rather than the precise terms of the requirements actually established by the Commission in the exercise of that power) that Congress has made the test as to whether or not § 7 of the Fair Labor Standards Act is applicable to these employees.13 Congress has gone out of its way to make this purpose clear in cases comparable to the one before us. It has done this by making the power of the Commission, under § 204 of the Motor Carrier Act, expressly applicable to motor vehicle pickup and delivery service within terminal areas14 to transportation in interstate commerce wholly within a metropolitan area,15 and to casual, occasional, or reciprocal transportation of property in interstate commerce by any person not engaged in transportation by motor vehicle as a regular occupation or business.16 It has made the Commission's power over safety requirements expressly applicable to these operations, even though, at the same time, Congress has exempted them from general regulatory control. 14 Congress furthermore has provided a special procedure by which, in an appropriate case, an intrastate motor carrier or any other party in interstate, may secure the general exemption of such a carrier from compliance with the Motor Carrier Act even though such carrier does perform some interstate transportation. Congress, however, expressly has authorized the Commission, and not the courts, to decide when the case is an appropriate one for such a general exemption.17 It does not appear that any such certificate of exemption has been obtained or sought as to this petitioner. 15 Having determined that the Commission has the power to establish qualifications and maximum hours of service for these drivers and 'mechanics' under § 204 of the Motor Carrier Act, the question recurs as to whether, in the face of the exemption stated in § 13(b)(1) of the Fair Labor Standards Act, the requirements of § 7 of that Act nevertheless apply to these employees. This issue as to the possible reconciliation of the language of these Acts so as to provide for concurrent jurisdiction was considered at length in the Levinson case and the conclusion was there reached that such a construction was not permissible. 16 This discussion has proceeded on the basis of the facts which were stipulated to exist in 1942. This treatment, however, should not be interpreted as necessity restricting the District Court to the present record if, for good cause, that court finds it advisable to consider additional evidence or to retry the case de novo. 17 For these reasons, the judgment of the Circuit Court of Appeals is vacated and the cause is remanded to the District Court for further proceedings consistent with the opinion of the Circuit Court of Appeals, as here modified. 18 Vacated and remanded. 19 It is so ordered. 20 Mr. Justice MURPHY, with whom Mr. Justice BLACK and Mr. Justice DOUGLAS concur, dissenting. 21 Apart from § 13(b)(1), it is clear that petitioner's truck drivers and mechanics are subject to the wage and hour provisions of the Fair Labor Standards Act. They spend virtually all of their time in transportation activities which are an integral part of the production of goods for interstate commerce. Walling v. Comet Carriers, 2 Cir., 151 F.2d 107. The issue thus becomes one of determining whether these employees are plainly and unmistakably within the terms and spirit of the § 13(b)(1) exemption, giving due regard to the rule that exemptions from the operation of humanitarian legislation are to be narrowly construed. Phillips Co. v. Walling, 324 U.S. 490, 493, 65 S.Ct. 807, 808, 89 L.Ed. 1095, 157 A.L.R. 876. 22 By a pedantically literal reading of § 13(b)(1), it is possible to say that these employees are among those as to whom the Interstate Commerce Commission has 'power' to establish qualifications and maximum hours of service. A sporadic and minute portion of their activities, approximating 3% to 4% of the total, affects the safety of operation of trucks in interstate commerce. The Commission's power under § 204(a) of the Motor Carrier Act is confined to regulation of transportation in interstate and foreign commerce; and its jurisdiction over employees' activities is limited to those which affect the safety of operation of motor vehicles engaged in such transportation. United States v. American Trucking Ass'ns, 310 U.S. 534, 60 S.Ct. 1059, 84 L.Ed. 1345. Hence the potential scope of the Commission's 'power' over petitioner's employees is extremely narrow. Approximately 97% of their activities are beyond the jurisdiction of the Commission. Yet it is by the slender thread of this 'power' that they fall within § 13(b)(1) and hence are deprived of the benefits of the Fair Labor Standards Act. 23 Due respect for the legislative purpose militates against such a result. We are dealing here with a statute that is dedicated to the proposition that laboring men are to be treated as something more than chattels. And their statutory rights are not to be discarded by adherence to formalistic dogmas of interpretation. Section 13(b)(1) is not just an exercise in grammar. It is part of the living fiber embodying the rights of those who labor for others. t must be read and interpreted in the light of reason and in the light of the aims which Congress sought to achieve. 24 When that is done, it becomes clear that when § 13(b)(1) speaks of those over whom the Interstate Commerce Commission has 'power' it means those who perform at least a substantial amount of activities within the Commission's jurisdiction. Congress was not concerned with insignificant conflicts between Fair Labor Standards Act regulations and Interstate Commerce Commission regulations. Nor was it desirous of leaving unregulated nearly all of the working time of those who are engaged in the production of goods for commerce but who spend infinitesimal amounts of time directly in interstate transportation. In other words, engaging in an occasional and microscopic amount of activities affecting safety of operation should no more exclude employees from the Act than sporadically shipping insubstantial amounts of goods in interstate commerce should bring those engaged in such shipments within the purview of the Act. See Mabee v. White Plains Pub. Co., 327 U.S. 178, 181, 66 S.Ct. 511, 512, 90 L.Ed. 607. That was implicitly recognized by the Court in Pyramid Motor Corp. v. Ispass, 330 U.S. 695, 708, 67 S.Ct. 954, 960, and I had not supposed until now that that case or Levinson v. Spector Motor Co., 330 U.S. 649, 67 S.Ct. 931, justified any other result. 25 Interpreting § 13(b)(1) in disregard of reality only acts as an open invitation to evade the Act and to destroy the statutory rights of those trucking concern employees who now perform no activities which affect the safety of operations. All that the employer need do to withdraw the benefits of the Act from these employees is to send them occasionally to a terminal to pick up or deliver a piece of interstate freight. They then fall into the 'power' of the Interstate Commerce Commission and automatically lose their rights under the Fair Labor Standards Act. I accordingly dissent. 26 Mr. Justice RUTLEDGE, dissenting. 27 But for this Court's decisions in the Levinson and Ispass cases, my views in this case would be in substantial accord with those expressed by Mr. Justice MURPHY. See Levinson v. Spector Motor Service, 330 U.S. 649, dissenting opinion at 685, 67 S.Ct. 931, 949; Pyramid Motor Freight Corp. v. Ispass, 330 U.S. 695, 67 S.Ct. 954. I thought the decisions in those cases foreshadowed the extreme result here, which goes so far as to exclude from the Fair Labor Standards Act's protection at least two employees who made no trips in what petitioner regards as the interstate phase of his business. While on the other hand one driver made 97 such trips, there were others who made only very occasional ones. 28 Although I regarded the Levinson and Ispass decisions as foreshadowing and perhaps concluding any situation where the employee's work would substantially affect safety in interstate operations, and thus as going to the extent of exempting from Fair Labor Standards Act coverage any employee whose work substantially affects such safety, I did not understand that all employees driving for a company engaged principally in intrastate commerce but doing a very small amount of interstate commerce would be lumped together, for purposes of the exclusion, on the basis of the proportionate amounts of work done by the company in those phases of its business. That I think is the effect of the present decision. To that extent, I also think the ruling constitutes an extension of the exemption beyond that sustained in the Levinson and Ispass cases. 29 On the basis of the decision last term in United States v. Yellow Cab Company, 332 U.S. 218, 67 S.Ct. 1560, I also have difficulty with the view that any of the carrier's services here were rendered in interstate commerce. That decision held that the transportation in Chicago of passengers and their luggage from their homes, offices, hotels, etc. to railroad stations for the purpose of boarding trains on interstate journeys, and conversely the like use of taxicabs in the reverse direction after leaving trains on arrival in Chicago following such journeys, were 'too unrelated to interstate commerce to constitute a part thereof within the meaning of the Sherman Act (15 U.S.C.A. §§ 1—7, 15 note).' 332 U.S. at page 230, 67 S.Ct. 1567. While I was not in agreement with the Yellow Cab decision, the same ruling, if applied to the facts here, would make the so-called 'interstate commerce,' i.e., the transportation of freight from petitioner's customers' places of business to shipping terminals, intrastate rather than interstate commerce.1 30 I am unable to agree with the Court's opinion. 1 'Sec. 204(a) It shall be the duty of the Commission— '(1) To regulate common carriers by motor vehicle as provided in this part, and to that end the Commission may establish reasonable requirements with respect to continuous and adequate service, transportation of baggage and express, uniform systems of accounts, records, and reports, preservation of records, qualifications and maximum hours of service of employees, and safety of operation and equipment. * * *' 49 Stat. 546, 49 U.S.C. § 304(a)(1), 49 U.S.C.A. § 304(a)(1). 2 'Sec. 7. (a) No employer shall, except as otherwise provided in this section, employ any of his employees who is engaged in commerce or in the production of goods for commerce— '(1) for a workweek longer than forty-four hours during the first year from the effective date of this section, '(2) for a workweek longer than forty-two hours during the second year from such date, or '(3) for a workweek longer than forty hours after the expiration of the second year from such date, unless such employee receives compensation for his employment in excess of the hours above specified at rate not less than one and one-half times the regular rate at which he is employed. * * *' 52 Stat. 1063, 29 U.S.C. § 207(a), 29 U.S.C.A. § 207(a). 3 'Sec. 13. * * * '(b) The provisions of section 7 shall not apply with respect to (1) any employee with respect to whom the Interstate Commerce Commission has power to establish qualifications and maximum hours of service pursuant to the provisions of section 204 of the Motor Carrier Act, 1935; * * *.' 52 Stat. 1068, 29 U.S.C. § 213(b)(1), 29 U.S.C.A. § 213(b)(1). 4 'Sec. 17. The district courts of the United States * * * shall have jurisdiction, for cause shown, and subject to the provisions of section 20 (relating to notice to opposite party) of the Act entitled 'An Act to supplement existing laws against unlawful restraints and monopolies, and for other purposes', approved October 15, 1914, as amended (U.S.C., 1934 edition, title 28, sec. 381), to restrain violations of section 15.' 52 Stat. 1069, 29 U.S.C. § 217, 29 U.S.C.A. § 217. 5 'Sec. 15. (a) * * *, it shall be unlawful for any person— '(1) to transport, offer for transportation, ship, deliver, or sell in commerce, or to ship, deliver, or sell with knowledge that shipment or delivery or sale thereof in commerce is intended, any goods in the production of which any employee was employed in violation of section 6 or section 7, or in violation of any regulation or order of the Administrator issued under section 14; except that no provision of this Act shall impose any liability upon any common carrier for the transportation in commerce in the regular course of its business of any goods not produced by such common carrier, and no provision of this Act shall excuse any common carrier from its obligation to accept any goods for transportation; '(2) to violate any of the provisions of section 6 or section 7, or any of the provisions of any regulation or order of the Administrator issued under section 14; * * *.' 52 Stat. 1068, 29 U.S.C. § 215, 29 U.S.C.A. § 215. 6 See note 2, supra. 7 This activity is described as follows: 'C. Approximately three (3) per cent of the defendant's operations consists of the transportation of freight between the plants of the Great Lakes Steel Corporation and the plants of the Michigan Steel Corporation on the one hand, and, on the other hand, interchange points, such as boat docks, railroad depots, freight terminals and truck terminals lying in the Detroit Metropolitan Area, wholly within the boundaries of the State of Michigan, involving the picking up of freight from or the delivery of freight to water carriers, railroad carriers and line haul motor carriers, which freight either has moved across the Michigan State lines or is about to move across the Michigan State lines in continuous transportation through connection between the defendant and such other interstate carriers. The defendant's compensation for his portion of the through transportation service is in some instances paid to him by the interstate carrier, the compensation representing a division of the through rates on the transportation movement, and other instances being compensated by the shipper.' 'E. Approximately one (1) per cent of the defendant's operations consists of the transportation of miscellaneous freight in general cartage service for hire and for shippers other than Great Lakes Steel Corporation or Michigan Steel Corporation. Cartage in this category is of the same physical character as that described in subparagraphs A, C, and D above, except that it is done on behalf of and for the account of shippers other than Great Lakes Steel Corporation and Michigan Steel Corporation.' 8 '(1) Mechanics and other garage workers.—The evidence is clear that carriers that do not operate approximately 10 motor vehicles or more cannot economically employ mechanics to do repair work, and they do not do so. * * * 'The larger carriers, however, do employ mechanics whose primary duties are to keep the motor vehicles in a good and safe working condition. They are required, for example, to keep the lights and brakes in such condition. They perform many other duties, of course, but these are sufficient to show clearly that the duties of these employees do affect safety of operation directly, as it is obvious that a large motor vehicle without the required lights or adequate brakes is a great potential hazard to highway safety. All witnesses testifying at the hearing agreed that the work of mechanics has such a direct and intimate relation to safety of operation, and no conflicting evidence was submitted. 'Our conclusion is that mechanics devote a large portion of their time to activities which directly affect the safety of operation of motor vehicles operated in interstate or foreign commerce, and hence tha we have power to establish qualifications and maximum hours of service for such employees under said section 204(a). 'There are other garage employees who do not perform work which affects safety of operation directly. Some carriers employ men who do nothing but paint vehicles. Others employ carpenters, and some few employ tarpaulin tailors. We find that the work done by none of these employees affects safety of operation. 'It is possible, although the record does not clearly establish the fact, that some of the larger carriers employ men whose sole duty is to see that the motor vehicles are properly supplied with oil, gas, and grease, or to wash the vehicles. In the majority of cases, undoubtedly, the mechanics perform this work. However, if there be employees who do nothing but oil, gas, grease, or wash the motor vehicles, we find that they do not perform duties which directly affect the safety of operation and are not subject to our jurisdiction. To make our finding in this regard entirely clear, it is that mechanics are the only garage workers we find subject to our jurisdiction.' Ex Parte No. MC—2, 28 M.C.C. 125, 132, 133. 9 Safety Regulations (Carriers by Motor Vehicle), 49 CFR Cum.Supp., Parts 190—193. 10 See note 2, supra. 11 Levinson v. Spector Motor Service, 330 U.S. 649, 674—675, 67 S.Ct. 931, 944. 'For, factually speaking, not the amount of time an employee spends in work affecting safety, but what he may do in the time thus spent whether it be large or small determines the effect on safety. Ten minutes of driving by an unqualified driver may do more harm on the highway than a month or a year of constant driving by a qualified one.' Id., dissenting opinion, at page 687 of 330 U.S., at page 950 of 67 S.Ct. 12 See note 1, supra. 13 'We recognize, as a practical matter, that private carriers transport property both in interstate and intrastate commerce. The same motor vehicle, operated by the same driver, on 1 or 2 days in a week may be engaged in transporting property in interstate commerce and the rest of the week may be engaged in intrastate commerce. In our opinion if a driver operates a motor vehicle in the transportation of interstate or foreign commerce on any day of a given week, such driver is subject to the weekly maximum herein prescribed. Likewise if a driver employed by a private carrier of property is engaged in interstate commerce during any one period of 24 consecutive hours, he is subject to the daily maximum herein prescribed. If such a driver does not drive or operate a truck in the transportation of property in interstate or foreign commerce for an entire week, he is not subject to the regulations herein prescribed during that week. We express no opinion as to whether or not during that week the driver is subject to the provisions of section 7 of the Fair Labor Standards Act.' (Italics supplied.) Ex parte No. MC—3, 23 M.C.C. 1, 39. The above statement demonstrates the Commission's opinion as to its power to establish qualifications and maximum hours of service in the field of mixed interstate and intrastate transportation. The rules that it has prescribed have not extended to its full power to make rules in this field. The fact that this statement was made in 1940, three years before the decision of this Court in Southland Gasoline Co. v. Bayley, 319 U.S. 44, 63 S.Ct. 917, 87 L.Ed. 1244, explains the express reservation made as to the Commission's opinion relating to the effect of the scope of its unexercised powers under § 204 of the Motor Carrier Act in relation to § 7 of the Fair Labor Standards Act. For the Commission's regulations of Hours of Service (Carriers by Motor Vehicle) see 49 CFR Cu .Supp., Part 191. 14 'Sec. 202. * * * '(c) Notwithstanding any provision of this section or of section 203, the provisions of this part, except the provisions of section 204 relative to qualifications and maximum hours of service of employees and safety of operation and equipment, shall not apply— '(1) to transportation by motor vehicle by a carrier by railroad subject to part I, or by a water carrier subject to part III, or by a freight forwarder subject to part IV, incidental to transportation or service subject to such parts, in the performance within terminal areas of transfer, collection, or delivery services; * * *.' § 202(c)(1), 49 Stat. 543, as amended by 56 Stat. 300, 49 U.S.C.Supp. V, § 302(c)(1), 49 U.S.C.A. § 302(c)(1). 15 'Sec. 203. * * * '(b) Nothing in this part, except the provisions of section 204 relative to qualifications and maximum hours of service of employees and safety of operation or standards of equipment shall be construed to include * * * (8) The transportation of passengers or property in interstate or foreign commerce wholly within a municipality or between contiguous municipalities or within a zone adjacent to and commercially a part of any such municipality or municipalities, except when such transportation is under a common control, management, or arrangement for a continuous carriage or shipment to or from a point without such municipality, municipalities, of zone, and provided that the motor carrier engaged in such transportation of passengers over regular or irregular route or routes in interstate commerce is also lawfully engaged in the intrastate transportation of passengers over the entire length of such interstate route or routes in accordance with the laws of each State having jurisdiction; or (9) the casual, occasional, or reciprocal transportation of passengers or property by motor vehicle in interstate or foreign commerce for compensation by any person not engaged in transportation by motor vehicle as a regular occupation or business.' 49 Stat. 545—546, 49 U.S.C. § 303(b)(8) and (9), 49 U.S.C.A. § 303(b)(8, 9). 16 See note 15, supra. 17 Sec. 204(a) It shall be the duty of the Commission— '(4a) To determine, upon its own motion, or upon application by a motor carrier, a State board, or any other party in interest, whether the transportation in interstate or foreign commerce performed by any motor carrier or class of motor carriers lawfully engaged in operation solely within a single State is in fact of such nature, character, or quantity as not substantially to affect or impair uniform regulation by the Commission of transportation by motor carriers engaged in interstate or foreign commerce in effectuating the national transportation policy declared in this Act. Upon so finding, the Commission shall issue a certificate of exemption to such motor carrier or class of motor carriers which, during the period such certificate shall remain effective and unrevoked, shall exempt such carrier or class of motor carriers from compliance with the provisions of this part, and shall attach to such certificate such reasonable terms and conditions as the public interstate may require. At any time after the issuance of any such certificate of exemption, the Commission may by order revoke all or any part thereof, if it shall find that the transportation in interstate or foreign commerce performed by the carrier or class of carriers designated in such certificate shall be, or shall have become, or is reasonably likely to become, of such nature, character, or quantity as in fact substantially to affect or impair uniform regulation by the Commission of interstate or foreign transportation by motor carriers in effectuating the national transportation policy declared in this Act. * * *' 49 Stat. 546, as amended by 54 Stat. 921, 49 U.S.C. § 304(a)(4a), 49 U.S.C.A. § 304(a)(4a). 1 I do not read the stipulation of facts in this case as showing that petitioner engaged in transportation from terminal to terminal.
67
332 U.S. 442 68 S.Ct. 115 92 L.Ed. 59 COXv.UNITED STATES. THOMPSON v. SAME. ROISUM v. SAME. Nos. 66 to 68. Argued Oct. 14, 15, 1947. Decided Nov. 24, 1947. Rehearing Denied Feb. 2, 1948. See 333 U.S. 830, 68 S.Ct. 449. Mr. Hayden C. Covington, of Brooklyn, N.Y., for petitioners. Mr. Irving S. Shapiro, of Washington, D.C., for respondent. Mr. Justice REED announced the judgment of the Court and delivered an opinion in which The CHIEF JUSTICE, Mr. Justice JACKSON, and Mr. Justice BURTON join. 1 These cases present the question of the scope of review of a selective service classification in a trial for absence without leave from a civilian public service camp. Petitioners are Jehovah's Witnesses who were classified as conscientious objectors despite their claim to classification as ministers of religion. Ministers are exempt from military and other service under the Act. All three petitioners exhausted their remedies in the selective service process and complied with the order of the local board directing them to report to camp. Cox and Thompson were indicted for leaving the camp without permission, and Roisum was indicted for failing to return after proper leave, in violation of § 11 of the Selective Training and Service Act of 1940. 54 Stat. 885, 57 Stat. 597, 50 U.S.C.Appendix, §§ 301—318, 50 U.S.C.A.Appendix, §§ 301—318. 2 On their trials petitioners requested directed verdicts, at appropriate times, because the selective service orders were invalid and requested the court to charge the jury that they acquit petitioners if they found that they were ministers of religion and therefore exempt from all service. The trial judge did not grant petitioners' requests, however, and instructed the juries that they were not to concern themselves with the validity of the classification orders. Petitioners were convicted, and on appeal to the Circuit Court of Appeals their convictions were affirmed. 157 F.2d 787. We granted certiorari in order to resolve questions concerning the submission to the jury of evidence, to wit, the files of the local board of the selective service system, as relevant to the charge of violation of selective service orders. 331 U.S. 801, 67 S.Ct. 1532. 3 Petitioner Cox registered under the Selective Training and Service Act on October 16, 1940, and in his questionnaire stated that he was 22 years old and had been employed as a truck driver since 1936. The local board classified him IV—F, as not physically fit for service, on January 31, 1941, and on Mar h 10, 1942, changed the classification to I—A. Ten days later Cox filed a request for reclassification as IV—E (conscientious objector), stating that he had become a Jehovah's Witness in January 1942. The board at first rejected the claim, but on June 12 of the same year granted him the requested classification. Ten days later petitioner first made his claim for total exemption from service, claiming to be a minister of religion; the local board refused the exemption and its action was sustained by the board of appeal. On May 18, 1944, the board ordered Cox to report to camp, and on May 26 he complied and then immediately left camp and did not return. 4 Upon trial Cox's selective service file was received in evidence. It contained an ordination certificate from the Watch Tower Bible and Tract Society stating that Cox was 'a duly ordained minister of the Gospel' and that his 'entire time' was devoted to missionary work. The file also contained an affidavit of a company servant, Cox's church superior, dated October 29, 1942, stating that Cox 'regularly and customarily serves as a minister by going from house to house and conducting Bible Studies and Bible Talks.' There was also an affidavit by Cox, dated October 28, 1942, stating that he was enrolled in the 'Pioneer service' on October 16 and that he was 'able to average 150 hours per month to my ministerial duties without secular work.' He added that 'my entire time will be devoted to preaching the Gospel as a pioneer.' Cox testified at the trial in October 1944 as to his duties as a minister that he preached from house to house, conducted funerals, and 'instructed the Bible' in homes. No evidence was introduced showing the total amount of time Cox had spent in religious activities since October 16, 1942. Nor was there evidence of the secular activities of Cox nor the time employed in them. Although the selective service file was introduced in evidence, and the trial court denied the motion for a directed verdict, it does not appear that the trial judge examined the file to determine whether the action of the local board was arbitrary and capricious or without basis in fact. At that time the lower federal courts interpreted Falbo v. United States, 320 U.S. 549, 64 S.Ct. 346, 88 L.Ed. 305, as meaning that no judicial review of any sort could be had of a selective service order. In Estep v. United States, 327 U.S. 114, 66 S.Ct. 423, 90 L.Ed. 567, we held that a limited review could be obtained if the registrant had exhausted his administrative remedies, and the Circuit Court of Appeals in accordance with that decision reviewed the file of Cox and found that the evidence was 'substantially in support' of the classification found by the board. 5 Petitioner Thompson also registered on October 16, 1940, claiming exemption as a minister. He stated in his questionnaire that he was 30 years old and that for the past 13 years he had operated a grocery store and had been a minister since August 1, 1940. At first the local board gave him a deferred classification because of dependency, but then changed his classification to IV E. Thompson appealed to the board of appeal on November 5, 1943, explaining his duties as a minister and presenting a full statement of his argument that as a colporteur he was within the exemption for ministers as interpreted by selective service regulations. He attached an affidavit from the company servant, which stated that Thompson during the preceding twelve months had devoted 519 1/2 hours to 'field service,' representing time spent in going from house to house, and making 'back-calls on the people of good will,' but not including time spent in conducting studies at the 'local Kingdom Hall.' Another affidavit from the company servant stated that Thompson was an ordained minister of the Gospel, that he was serving as assistant company servant, and that he was a 'School Instructor in a Course in Theocratic Ministry.' Thompson also attached three certificates from the national head uarters of the Watch Tower Bible and Tract Society which stated that Thompson had been associated with the Society since 1941, that he served as assistant company servant and Theocratic Ministry Instructor, and also as advertising servant and book study conductor. Unlike the other two petitioners, Thompson did not introduce an ordination certification from national headquarters stating that he devoted his entire time as a minister. Thompson also filed a statement signed by twelve Witnesses which stated that they regarded Thompson as an ordained minister of the gospel. No evidence was submitted indicating any change in Thompson's activities in operating his grocery store. The board of appeal sustained the local board in its classification, the board ordered Thompson to report to camp, and on April 18, 1944, he reported and immediately left. Thompson's trial followed the same pattern as Cox's, except that Thompson was not allowed to testify concerning his duties as a minister. 6 Petitioner Roisum also registered on the initial registration day, and filed a questionnaire stating that he was 22 years old, that he had worked for the past 15 years as a farmer, and that he was ordained as a minister in June 1940. Roisum made claim to a minister's exemption but at the same time submitted an affidavit signed by his father saying that petitioner was necessary to the operation of his father's farm. In June 1942 Roisum filed a conscientious objector's form claiming exemption from both combatant and non-combatant military service; this form was apparently filed under misapprehension, since Roisum did not abandon his contention that he should be classified as a minister. In the form he stated that he preached the gospel of the Kingdom at every opportunity. Roisum also enclosed a letter from national headquarters of the Society stating that Roisum had been affiliated with the Society since 1936, that he had been baptized in 1940 and 'was appointed direct representative of this organization to perform missionary and evangelistic service in organizing and establishing churches and generally preaching the Gospel of the Kingdom of God in definitely assigned territory in 1941' and that Roisum devoted his 'entire time' to missionary work and was a duly ordained minister. The local board classified Roisum as a conscientious objector to combat service (I—A—O), and Roisum appealed on June 30, 1943. Roisum attached an affidavit from his company servant stating that Roisum was an assistant company servant, a back call servant, and book study conductor, and that by performance of these duties Roisum had acquitted himself as a 'regular minister of the gospel.' The company servant submitted a schedule showing the number of hours which Roisum had spent in religious activities for six months from October 1942 to March 1943, ranging from as little as 11 hours per month to as many as 69, averaging about 40. The board of appeal changed the classification to IV—E and rejected Roisum's request that an appeal be taken to the President. Roisum was ordered to report to camp, disobeyed the order, and was arrested and indicted. The trial court declared a mistrial on Roisum's undertaking to obey the board's order and seek release on habeas corpus. Roisum subsequently failed to comply, apparently because of transportation difficulties, but finally reported to camp on May 23, 1944, as directed. He remained in camp for five days, left on a week-end pass, and never returned. 7 Upon trial Roisum made no effort to introduce new evidence showing the nature of his duties as a minister. He did request the court to charge that if the decision of the local board erroneously classified him in IV—E the order was void and after conviction he moved for a judgment of acquittal or a new trial on the ground that the evidence in his selective service file showed that the classification of the board was arbitrary and capricious. The trial judge examined the file and concluded that there was no ground to support Roisum's motion. 8 Petitioners are entitled to raise the question of the validity of their selective service classifications in this proceeding. They have exhausted their remedies in the selective service process, and whatever their position might be in attempting to raise the question by writs of habeas corpus against the camp custodian, they are entitled to raise the issue as a defense in a criminal prosecution for absence without leave. Gibson v. United States, 329 U.S. 338, 351-360, 67 S.Ct. 301, 307-312. The scope of review to which petitioners are entitled, however, is limited; as we said in Estep v. United States, 327 U.S. 114, 122, 123, 66 S.Ct. 423, 427, 90 L.Ed. 567: 'The provision making the decisions of the local boards 'final' means to us that Congress chose not to give administrative action under this Act the customary scope of judicial review which obtains under other statutes. It means that the courts are not to weigh the evidence to determine whether the classification made by the local boards was justified. The decisions of the local boards made in conformity with the regulations are final even though they may be erroneous. The question of jurisdiction of the local board is reached only if there is no basis in fact for the classification which it gave the registrant.' Compare Eagles v. United States ex rel. Samuels, 329 U.S. 304, 67 S.Ct. 313, and Eagles v. United States ex rel. Horowitz, 329 U.S. 317, 67 S.Ct. 320, in which a similar scope of review is enunciated in habeas corpus proceedings by registrants claiming to have been improperly inducted. 9 Section 5(d) of the Selective Training and Service Act provides that 'regular or duly ordained ministers of religion' shall be exempt from training and service under the Act, and § 622.44 of Selective Service Regulations defines the terms 'regular minister of religion' and 'duly ordained minister of religion.'1 In order to aid the local boards in applying the regulation, the Director of Selective Service issued Opinion No. 14 (amended) on November 2, 1942,2 which described the tests to be applied in determining whether Jehovah's Witnesses were entitled to exemption as ministers, regular or ordained. The opinion stated that Witnesses who were members of the Bethel Family (producers of religious supplies) or pioneers, devoting all or substantially all of their time to the work of teaching the tenets of their religion, generally were exempt, and appended a list of certain members of the Bethel Family and pioneers who were entitled to this exemption. None of these Witnesses were on the list. The opinion stated that members of the Bethel Family and pioneers whose names did not appear on the list, as well as all other Witnesses holding official titles in the organization, must be classified by the boards according to the facts in each case. The determining criteria were stated to be 'whether or not they devote their lives in the furtherance of the beliefs of Jehovah's Witnesses, whether or not they perform functions which are normally performed by regular or duly ordained ministers of other religions, and finally, whether or not they are regarded by other Jehovah's Witnesses in the same manner in which regular or duly ordained ministers of other religions are ordinarily regarded.' The opinion further stated that the local board should place in the registrant's file 'a record of all facts entering into its determination for the reason that it is legally necessary that the record show the basis of the local board's decision.' 10 It will be observed that § 622.44 of the regulation makes 'ordination' the only practical difference between a 'regular' and a 'duly ordained minister.' This seems consistent with § 5 of the Act. We are of the view that the regulation conforms to the Act and that it is valid under the rule making power conferred by § 10(a). We agree, also, that Opinion 14 furnishes a proper guide to the interpretation of the Act and Regulations. 11 Our examination of the facts, as stated herein in each case, convinces us that the board had adequate basis to deny to Cox, Thompson and Roisum classification as ministers, regular or ordained. We confine ourselves to the facts appearing in the selective service files of the three petitioners, although the only documents dealing with the petitioners' status as ministers were submitted by petitioners themselves. The documents show that Thompson and Roisum spent only a small portion of their time in religious activities, and this fact alone, without a far stronger showing than is contained in either of the files of the registrants' leadership in church activities and the dedication of their lives to the furtherance of religious work, is sufficient for the board to deny them a minister's classification. As for Cox, the documents suggest but do not prove that Cox spent full time as a 'pioneer' between October 1942 and May 1944 when he was ordered to camp. As he made claim of conscientious objector classification only after he was reclassified I—A from IV—F and still later claimed ministerial exemption, the board was justified in deciding from the available facts that Cox had not established his ministerial status. The board might have reasonably held that nothing less than definite evidence of his full devotion of his available time to religious leadership would suffice under these circumstances.3 Nor may Cox and Thompson complain that the district court failed to pass on the validity of the classification orders. If there was error of the district court in failing to examine the files of the board to determine whether or not there was basis for their classification, it was cured in the Circuit Court of Appeals by that court's examination. 12 Petitioners do not limit themselves to the claim that directed verdicts should have been entered in their favor because of the invalidity of their classifications as a matter of law; they claim that the issue should have been submitted with appropriate instructions to the jury.4 The charge requested by Roisum that he be acquitted if the jury found that he was 'erroneously' classified was improper. In Estep v. United States it was distinctly stated that mere error in a classification was insufficient grounds for attack. Cox and Thompson requested charges under which the jury would determine 'whether or not the defendant is a minister of religion' without considering the action of the local board. We hold that such a charge would also have been improper. Whether there was 'no basis in fact' for the classification is not a question to be determined by the jury on an independent consideration of the evidence. The concept of a jury passing independently on an issue previously determined by an administrative body or reviewing the action of an administrative body is contrary to settled federal administrative practice; the constitutional right to jury trial does not include the right to have a jury pass on the validity of an administrative order. Yakus v. United States, 321 U.S. 414, 64 S.Ct. 660, 88 L.Ed. 834. Although we held in Estep that Congress did not intend to cut off all judicial review of a selective service order, petitioners have full protection by having the issue submitted to the trial judge and the reviewing courts to determine whether there was any substantial basis for the classification order. When the judge determines that there was a basis in fact to support classification, the issue need not and should not be submitted to the jury. Perhaps a court or jury would reach a different result from the evidence but as the determination of classification is for selective service, its order is reviewable 'only if there is no basis in fact for the classification.' Estep v. United States, supra, 327 U.S. page 122, 66 S.Ct. page 427, 90 L.Ed. 567. Consequently when a court finds a basis in the file for the board's action that action is conclusive. The question of the preponderance of evidence is not for trial anew. It is not relevant to the issue of the guilt of the accused for disobedience of orders. Upon the judge's determination that the file supports the board, nothing in the file is pertinent to any issue proper for jury consideration.5 13 Petitioners also claim that they were denied the right to introduce new evidence at the trial to support their ontention that the orders were invalid. Roisum made no attempt to introduce such evidence, Cox was in fact allowed to testify as to his duties as a minister, and only Thompson was denied the opportunity so to testify. Thompson did not specify this point as error in his appeal to the Circuit Court of Appeals. Passing the possible waiver on the part of Thompson by failing to argue this point below, we hold that his contention is without merit. Petitioner claims that his status as a minister is a 'jurisdictional fact' which may be determined de novo (reexamination of the record of the former hearing with right to adduce additional evidence) in a criminal trial, and relies on Ng Fung Ho v. White, 259 U.S. 276, 42 S.Ct. 492, 66 L.Ed. 938, where we held that an alleged alien was entitled to a judicial trial on the issue of alienage in habeas corpus proceedings. But that case is different from this. The alien, there, claimed American citizenship. As such, this Court said, he had a right to a judicial hearing of his claim as a matter of due process. This he could not get before the Commissioner of Immigration. Therefore, since the deportation of a citizen may involve loss 'of all that makes life worth living,' this Court decided that the 'jurisdiction' of the Commissioner to try the alleged alien could be tested by habeas corpus. 259 U.S. page 284, 42 S.Ct. page 495, 66 L.Ed. 938. That gave the alleged alien a judicial hearing. In these cases judicial review of administrative action is allowed in the criminal trial. This assures judicial consideration of a registrant's rights. Petitioners' objection on this point is in essence that the review is limited to evidence that appeared in the administrative proceeding. It seems to us that it is quite in accord with justice to limit the evidence as to status in the criminal trial on review of administrative action to that upon which the board acted.6 As we have said elsewhere the board records were made by petitioners. It was open to them there to furnish full information as to their activities. It is that record upon which the board acted and upon which the registrants' violation of orders must be predicated. 14 We perceive no error to petitioners' prejudice in the records. 15 Affirmed. 16 Mr. Justice FRANKFURTER concurs in the result. 17 Mr. Justice DOUGLAS, with whom Mr. Justice BLACK concurs, dissenting. 18 I agree with the majority of the Court that we can reverse the judgments below only if there was no basis in fact for the classification. I also agree that that question is properly one of law for the Court. To that extent I join in the opinion of the Court. But I do not agree that the local boards had adequate basis to deny to petitioners the classification of ministers. My disagreement is required by what I conceive to be the mandate of Congress, that all who preach and teach their faith and are recognized as ministers within their religious group are entitled to the statutory exemption. 19 The exemption runs to 'regular or duly ordained ministers of religion.' There is no suggestion that only ministers of the more orthodox or conventional faiths are included. Nor did Congress make the availability of the exemption turn on the amount of time devoted to religious activity. It exempted all regular or duly ordained ministers. Hence, I think the Selective Service Regulations properly required that a 'regular' minister, as distinguished from a 'duly ordained' minister,1 only be one who 'customarily preaches and teaches the principles of religion of a recognized church, religious sect, or religious organization of which he is a member, without having been formally ordained as a minister of religion; and who is recognized by such church, sect or organization as a minister.' 32 C.F.R., Cum.Supp. § 622.44(b). 20 It is not disputed that Jehovah's Witnesses constitute a religious sect or organization. We have, moreover, recognized that its door-to-door evangelism is as much religious activity as 'worship in the churches and preaching from the pulpits.' Murdock v. Commonwealth of Pennsylvania, 319 U.S. 105, 109, 63 S.Ct. 870, 873, 87 L.Ed. 1292, 146 A.L.R. 81. The Selective Service files of these petitioners establish, I think, their status as ministers of that sect. Their claims to that status are supported by affidavits of their immediate superiors in the local group and by their national headquarters. And each of them was spending substantial time in the religious activity of preaching their faith. If a person is in fact engaging in the ministry, his motives for doing so are quite immaterial.2 21 To deny these claimants their statutory exemption is to disregard these facts or to adopt a definition of minister which contracts the classification provided by Congress. 22 The classification as a minister may not be denied because the registrant devotes but a part of his time to religious activity. It is not uncommon for ordained ministers of more orthodox religions to work a full day in secular occupations, especially in rural communities. They are nonetheless by the hours devoted to their parish but by their position as teachers of their faith. It should be no different when a religious organization such as Jehovah's Witnesses has part-time ministers. Financial needs may require that they devote a substantial portion of their time to lay occupations. And the use of part-time ministers may be dictated by a desire to disseminate more widely the religious views of the sect. Whatever the reason, these part-time ministers are vehicles for propagation of the faith; by practical as well as historical standards they are the apostles who perform the minister's function for this group. 23 Mr. Justice MURPHY, with whom Mr. Justice RUTLEDGE concurs, dissenting. 24 With certain limitations, this Court has recognized that a person on trial for an alleged violation of the Selective Training and Service Act has the right to prove that the prosecution is based upon an invalid draft board classification. But care must be taken to preclude the review of the classification by standards which allow the judge to do little more than give automatic approval to the draft board's action. Otherwise the right to prove the invalidity of the classification is drained of much of its substance and the trial becomes a mere formality. Such empty procedure has serious connotations, especially when we deal with those who claim they have been illegally denied exemptions relating to conscientious beliefs or ministerial status. 25 Specifically, I object to the standard of review whereby the draft board classification is to be sustained unless there is no evidence to support it. Less than a substantial amount of evidence is thus permitted to legalize the classification. Whatever merit this standard may have in other situations, I question the propriety of its use in t is particular setting. This differs from an ordinary civil proceeding to review a non-punitive order of an administrative agency, an order which is unrelated to freedom of conscience or religion. This is a criminal trial. It involves administrative action denying that the defendant has conscientious or religious scruples against war, or that he is a minister. His liberty and his reputation depend upon the validity of that action. If the draft board classification is held valid, he will be imprisoned or fined and will be branded as a violator of the nation's law; if that classification is unlawful, he is a free man. Moreover, he has had no previous opportunity to secure a judicial test of this administrative action, no chance to prove that he was denied his statutory rights. Everything is concentrated in the criminal proceeding. 26 These stakes are too high, in my opinion, to permit an inappreciable amount of supporting evidence to sanction a draft board classification. Since guilt or innocence centers on that classification, its validity should be established by something more forceful than a wisp of evidence or a speculative inference. Otherwise the defendant faces an almost impossible task in attempting to prove the illegality of the classification, the presence of a mere fragment of contrary evidence dooming his efforts. And such a scant foundation should not justify brushing aside bona fide claims of conscientious belief or ministerial status. If respect for human dignity means anything, only evidence of a substantial nature warrants approval of the draft board classification in a criminal proceeding. 27 It is needless to add that, from my point of view, the proof in these cases falls far short of justifying the conviction of the petitioners. There is no suggestion in the record that they were other than bona fide ministers. And the mere fact that they spent less than full time in ministerial activities affords no reasonable basis for implying a non-ministerial status. Congress must have intended to exempt from statutory duties those ministers who are forced to labor at secular jobs to earn a living as well as those who preach to more opulent congregations. Any other view would ascribe to Congress an intention to discriminate among religious denominations and ministers on the basis of wealth and necessity for secular work, an intention that I am unwilling to impute. Accordingly, in the absence of more convincing evidence, I cannot agree that the draft board classifications underlying petitioners' convictions are valid. 1 54 Stat. 885, 888: 'Sec. 5. * * * '(d) Regular or duly ordained ministers of religion, and students who are preparing for the ministry in theological or divinity schools recognized as such for more than one year prior to the date of enactment of this Act, shall be exempt from training and service (but not from registration) under this Act.' Selective Service Regulations, 32 C.F.R., 1941 Supp.: Section 622.44. 'Class IV—D: Minister of religion r divinity student. (a) In Class IV—D shall be placed any registrant who is a regular or duly ordained minister of religion or who is a student preparing for the ministry in a theological or divinity school which has been recognized as such for more than 1 year prior to the date of enactment of the Selective Training and Service Act (September 16, 1940). '(b) A 'regular minister of religion' is a man who customarily preaches and teaches the principles of religion of a recognized church, religious sect, or religious organization of which he is a member, without having been formally ordained as a minister of religion; and who is recognized by such church, sect, or organization as a minister. '(c) A 'duly ordained minister of religion' is a man who has been ordained in accordance with the ceremonial ritual or discipline of a recognized church, religious sect, or religious organization, to teach and preach its doctrines and to administer its rites and ceremonies in public worship; and who customarily performs those duties.' 2 Opinion 14 (amended) is on file at the Office of Selective Service Records, Washington, D.C. 3 For a similar conclusion under the same subdivision of the statute, giving exemption to regular and duly ordained ministers of religion and students, see Eagles v. United States ex rel. Samuels, 329 U.S. 304, 316, 317, 67 S.Ct. 313, 320: 'Nor can we say there was no evidence to support the final classification made by the board of appeal. Samuels' statement that he was best fitted to be a Hebrew school teacher and spiritual leader, the two year interruption in his education, his return to the day session of the seminary in the month when his selective service questionnaire was returned, and the fact that the seminary in question was apparently not preparing men exclusively for the rabbinate make questionable his claim that he was preparing in good faith for the rabbinate. A registrant might seek a theological school as a refuge for the duration of the war. Congress did not create the exemption in § 5(d) for him. There was some evidence that this was Samuels' plan; and that evidence, coupled with his demeanor and attitude, might have seemed more persuasive to the boards than it does in the cold record. Our inquiry is ended when we are unable to say that the board flouted the command of Congress in denying Samuels the exemption.' 4 The Circuit Court of Appeals on April 5, 1946, ordered the judgments in these cases reversed on the ground that the jury should have passed on petitioners' claims. Upon rehearing the opinion was withdrawn, and on October 4 the court handed down an opinion affirming the judgments. In Smith v. United States, 4 Cir., 157 F.2d 176, the Circuit Court of Appeals held that the submission of the issue of classification to the jury constituted reversible error. But cf. United States ex rel. Kulick v. Kennedy, 2 Cir., 157 F.2d 811. 5 For an analogous power of a judge as to admissibility, see Wigmore (3d ed.) § 2550; Steele v. United States No. 2, 267 U.S. 505, 510, 511, 45 S.Ct. 417, 419, 69 L.Ed. 761; Ford v. United States, 273 U.S. 593, 605, 47 S.Ct. 531, 535, 71 L.Ed. 793; Doe dem. Jenkins v. Davies, 10 Ad. & El.N.S., 314, 323—24; Phipson, Evidence (8th ed.), p. 9. 6 See Goff v. United States, 4 Cir., 135 F.2d 610, and United States v. Messersmith, 7 Cir., 138 F.2d 599. 1 A 'duly ordained' minister is defined as one 'who has been or ained in accordance with the ceremonial ritual or discipline of a recognized church, religious sect, or religious organization, to teach and preach its doctrines and to administer its rites and ceremonies in public worship; and who customarily performs those duties.' 32 C.F.R.Cum.Supp. § 622.44(c). The distinction between 'regular' and 'duly ordained' ministers is, I think, more than the ordination of the latter. The 'duly ordained' minister performs all the customary functions of a minister of a church. The concept of 'regular' minister more nearly fits those who, like Jehovah's Witnesses, follow less orthodox or conventional practices. 2 Eagles v. United States ex rel. Samuels, 329 U.S. 304, 67 S.Ct. 313, is not controlling here. It involved the exemption given students preparing for the ministry. Mere presence in a school not exclusively confined to preparing men for the rabbinate did not entitle the student to exemption.
23
332 U.S. 459 68 S.Ct. 140 92 L.Ed. 73 LILLIEv.THOMPSON. No. 206. On Petition for Certiorari Distributed Sept. 10, 1947. Decided Nov. 24, 1947. Messrs. N. Murray Edward, of St. Louis, Mo., and Grover N. McCormick, of Memphis, Tenn., for petitioner. No appearance for respondent. PER CURIAM. 1 Petitioner sued for damages under the Federal Employers' Liability Act.1 The essence of her claim was that she was injured as a result of the respondent's negligence in sending her to work in a place he knew to be unsafe without taking reasonable measures to protect her. 2 The district court dismissed the complaint for failure to state a cause of action and entered summary judgment for the respondent. The Circuit Court of Appeals affirmed without opinion. 6 Cir., 162 F.2d 716. 3 There is thus a single issue in the case: Could it be found from the facts alleged in the complaint, as supplemented by any uncontroverted allegations by the respondent, that petitioner's injuries resulted at least in part from respondent's negligence?2 4 Petitioner's allegations may be summarized as follows: Respondent required her, a 22 year jold telegraph operator, to work alone between 11:30 p.m. and 7:30 a.m. in a one-room frame building situated in an isolated part of respondent's railroad yards in Memphis. Though respondent had reason to know the yards were frequented by dangerous characters, he failed to exercise reasonable care to light the building and its surroundings or to guard or patrol it in any way. Petitioner's duties were to receive and deliver messages to men operating trains in the yard. In order for the trainmen to get the messages it was necessary for them to come to the building at irregular intervals throughout the night, and it was petitioner's duty to admit them when they knocked. Because there were no windows in the building's single door or on the side of the building in which the door was located, petitioner could identify persons seeking entrance only by unlocking and opening the door. About 1:30 a.m. on the night of her injury petitioner responded to a knock, thinking that some of respondent's trainmen were seeking admission. She opened the door, and before she could close it a man entered and beat her with a large piece of iron, seriously and permanently injuring her. 5 In support of his motion for summary judgment respondent alleged, and petitioner did not deny, that the assailant was not an employee of the respondent and that the attack was criminal. 6 The district court stated, in explanation of its action, that there would be no causal connection between the injury and respondent's failure to light or guard the premises, and that the law does not permit re overy 'for the intentional or criminal acts' of either a fellow-employee or an outsider.3 7 We are of the opinion that the allegations in the complaint, if supported by evidence, will warrant submission to a jury. Petitioner alleged in effect that respondent was aware of conditions which created a likelihood that a young woman performing the duties required of petitioner would suffer just such an injury as was in fact inflicted upon her. That the foreseeable danger was from intentional or criminal misconduct is irrelevant; respondent nonetheless had a duty to make reasonable provision against it.4 Breach of that duty would be negligence, and we cannot say as a matter of law that petitioner's injury did not result at least in part from such negligence. The cases cited by the district court,5 we believe, do not support the board proposition enunciated by it, and do not cover the fact situation set forth by the pleadings in this case. 8 Certiorari is granted, and the judgment is reversed and the case remanded to the district court. 9 Reversed. 1 45 U.S.C. § 51, 45 U.S.C.A. § 51. 2 'Every common carrier by railroad * * * shall be liable in damages to any person suffering injury while he is employed by such carrier * * * for such injury * * * resulting in whole or in part from the negligence of any of the officers, agents, or employees of such carrier * * *.' Ibid. It is not questioned that respondent was engaged in interstate commerce and that petitioner was injured while employed in such commerce. 3 The court cited Davis v. Green, 1922, 260 U.S. 349, 43 S.Ct. 123, 67 L.Ed. 299; St. Louis-San Francisco R. Co. v. Mills, 1926, 271 U.S. 344, 46 S.Ct. 520, 70 L.Ed. 979; Atlantic Coast Line R. Co. v. Southwell, 1927, 275 U.S. 64, 48 S.Ct. 25, 72 L.Ed. 157; and Atlantic & Charlotte Air Line R. Co. v. Green, 1929, 279 U.S. 821, 49 S.Ct. 350, 73 L.Ed. 976, reversing per curiam 151 S.C. 1, 148 S.E. 633. 4 See Restatement of Torts, § 302, comment n: 'n. The actor's conduct may create a situation which affords an opportunity or temptation to third persons to commit more serious forms of misconducts which may be of any of several kinds. (1) The third person may intend to bring about the very harm which the other sustains. * * * The actor is required to anticipate and provide against all of these misconducts under the following conditions in all of which it is immaterial to the actor's civil liability that the third person's misconduct is or is not criminal * * *: '8. Where he knows of peculiar conditions which create a strong likelihood of intentional or reckless misconduct (see Illustrations 21 and 22). 'Illustrations: '21. The employees of the X and Y Railroad Company are on a strike. They or their sympathizers have torn up tracks, misplaced switches and otherwise attempted to wreck trains. A train of the X and Y Company is wrecked by an unguarded switch so misplaced. A, a passenger, and B, a traveler upon a highway adjacent to the track sustain harm. The X and Y Company is liable to A and B because it did not guard the switch.' 5 See note 3, supra.
78
332 U.S. 469 68 S.Ct. 179 92 L.Ed. 81 SILESIAN AMERICAN CORPORATION et al.v.CLARK, Atty. Gen. No. 6. Reargued Nov. 12, 1947. Decided Dec. 8, 1947. [Syllabus from pages 469-471 intentionally omitted] Mr. Leonard P. Moore, of New York City, for petitioners. Mr. James L. Morrisson, of Washington, D.C., for respondent. Mr. Justice REED delivered the opinion of the Court. 1 The Alien Property Custodian on November 17, 1942, executed Vesting Order No. 370. This order was issued under the authority of the Trading with the Enemy Act, 40 Stat. 411, as amended, 50 U.S.C.A.Appendix, § 1 et seq., and Executive Order No. 9095, as amended, 50 U.S.C.A.Appendix, § 6 note, and in terms vested the property therein described in the Alien Property Custodian in the interest and for the benefit of the United States. The order found the property to belong to a national of Germany. The property covered by the order was two blocks of stock—one common, one preferred—in the Silesian American Corporation, a Delaware corporation, hereinafter called Silesian. The stock, prior to August 31, 1939, stood in the stock book of Silesian in the name of Non Ferrum Gesellschaft zur Finanzierung von Unternehmungen des Bergbaues and der Industrie der Nichteisenmetalle, Zurich, Switzerland, a Swiss corporation, hereinafter referred to as the Non Ferrum Company. Non Ferrum, it was determined by the Custodian's order, held the stock for the benefit of Bergwerksgesellschaft Georg von Giesche's Erben, a German corporation. The certificates, it is asserted, had been deposited as security for loans with a group of banks, all of which apparently were chartered by Switzerland and are hereinafter referred to as the Swiss Banks.1 2 To carry out the purpose of his vesting order, the Custodian directed Silesian to cancel on its books the outstanding Non Ferrum certificates, above referred to, and to issue in lieu thereof new certificates to the Custodian. This controversy revolves around the objection of Silesian so to act because the Custodian did not have physical possession of the pledged Non Ferrum certificates so as to be able to surrender them for cancellation, as the corporation's by-laws required. Silesian feared liability to the holders of the Non Ferrum certificates for issuing other certificates in such circumstances. 3 Silesian had been a debtor under Chapter X of the Bankruptcy Act, 11 U.S.C.A. § 501 et seq., since July 30, 1941. It therefore asked the Bankruptcy Court for instructions as to its compliance with the Custodian's direction. The other petitioner here, Silesian Holding Company, a Delaware corporation also, appeared and throughout has remained as a party to this litigation. It is the majority stockholder of Silesian but claims no different or other interest in the issue than Silesian. For the purpose of this case, it may and will be treated as having no more interest in the issue than Silesian has. The Swiss Banks asked the Reorganization Court to give instructions to the Debtor that no new shares be issued until the controversy between the Swiss Banks and the Custodian could be 'fully, firmly and finally adjudicated.' This prayer was based on a verified answer to Silesian's request for instruction, which answer alleged that the 'Swiss Banks were the owners of the 'Non Ferrum' stock.' The Swiss Banks notified Silesian that any issue of new certificates representing the Non Ferrum stock, with or without court direction, would be at Silesian's risk. Affidavits supporting the objection of the Swiss Banks to instructions to Silesian to issue the new certificates to the Custodian were filed with the District Court. These affidavits declared the Non Ferrum stock was pledged, prior to 1938, to groups of Swiss banks. It is not clear whether they are the same institutions that are named in the answer of the Swiss Banks to the Debtor's request for instructions. For the purpose of this case, we assume that the groups are identical. 4 The District Court instructed the debtor to issue new certificates to the Alien Property Custodian. The court said: 'The vesting order of the Custodian found that the stock was held for the benefit of an enemy. The statutory discharge from liability, § 5(b) or § 7(e), (Trading with the Enemy Act, 50 U.S.C.A.Appendix, §§ 5(b), 7(e)) protects the debtor corporation and relieves it of doubt in the premises.' 5 The court added: 'Whatever may be the interests or rights of the Swiss banks, they cannot be considered here. , hearsay statements, unsupported by documents, allege that these banks are pledgees of the stock. These statements create no issue for our consideration. The banks are parties herein only to the extent that they have been recognized in the reorganization proceeding as possible owners of a claimed interest which they have never been called upon to prove. They are not here because of any action taken against them or any recognition given them by the Custodian or even by reason of any established interest in the stock.' 6 No appeal to the Circuit Court of Appeals was taken by the Swiss Banks. They do not appear here as parties to this writ of certiorari or otherwise. We therefore express no opinion as to the effect of the order and decision of the District Court upon the claims of the Swiss Banks as pledgees of the Non Ferrum stock. See Silesian-American Corporation v. Markham, 156 F.2d 793, 795. 7 An appeal was taken to the Circuit Court of Appeals by Silesian. That court affirmed the order of the Bankruptcy Court. We first denied a petition for certiorari and then granted it so that this case might be considered in relation to other issues, thereafter presented here, in connection with the administration of the Trading with the Enemy Act. 329 U.S. 730, 67 S.Ct. 87 and 330 U.S. 852, 67 S.Ct. 769; Clark v. Uebersee Finanz-Korporation, 330 U.S. 813, 67 S.Ct. 772. 8 It was held by the Circuit Court of Appeals that Silesian had no 'standing vicariously' to assert the interests of its shareholders. We agree. Silesian has no legal interest in the issue as to the ownership of its stock. It follows that Silesian has no standing to represent the interests of the pledgees of the Non Ferrum shares, if that is the present position of those shares. See Anderson Nat. Bank v. Luckett, 321 U.S. 233, 242, 64 S.Ct. 599, 604, 88 L.Ed. 692, 151 A.L.R. 824. This reduces petitioners' objection to the order directing the issue of new certificates in favor of the Custodian for the Non Ferrum stock to the claim that the sections of the Trading with the Enemy Act under which the Custodian acted are invalid as applied to Silesian in these circumstances. If the provisions do not authorize the order and direction, Silesian, over its own objections, cannot be compelled to obey. 9 The Custodian vested the stock in himself by virtue of the Trading with the Enemy Act, as amended by the First War Powers Act of 1941, including, of course, § 5(b)(1),2 and Executive Order No. 9095, C.F.R. Cum.Supp. p. 1121, as amended, p. 1174. This property was vested during war. There is no doubt but that under the war power,3 as heretofore interpreted by this Court, the United States, acting under a statute, may vest in itself the property of a national of an enemy nation. Unquestionably to wage war successfully, the United States may confiscate enemy property. United States v. Chemical Foundation, 272 U.S. 1, 11, 47 S.Ct. 1, 4, 71 L.Ed. 131. Nor can there, we think, be any doubt that any property in this country of any alien may be summarily reduced to possession by the United States in furtherance of the war effort. Every resource within the ambit of sovereign power is subject to use for the national defense. This section was amended during war to cover the taking of alien property. It is limited to a war or a declared emergency period. While a natural hesitancy exists against so i terpreting the war power clause as to expand its scope to cover incidents not intimately connected with war, we think reasonable preparation for the storm of war is a proper exercise of the war power. This seizure of alien property, in a time of emergency, is of that character. We need not consider whether the general welfare clause could be a source of congressional power over alien property.4 This taking may be done as a means of avoiding the use of the property to draw earnings or wealth out of this country to territory where it may more likely be used to assist the enemy than if it remains in the hands of this government. Or the commandeered property of a friendly alien may be used to prosecute the war. The problems of compensation may await the judicial process. Central Union Trust Co. of New York v. Garvan, 254 U.S. 554, 567, 568, 41 S.Ct. 214, 215, 65 L.Ed. 403. War brooks no delay. The Constitution imposes none. 10 The section 5[b][1], and Executive Order under which the Custodian acted authorized the vesting in him by his order of the property of a foreign national. This description covered stock ownership of a foreign national in Silesian. The fact that the certificates did not come into the hands of the Custodian is immaterial. They are evidences of the property right of the foreign national in Silesian that is subject to be vested in the Custodian by the Act. See Great Northern R. Co. v. Sutherland, 273 U.S. 182, 47 S.Ct. 315, 71 L.Ed. 596. Section 5(b)(1) specifically states, 'and such designated agency or person may perform any and all acts incident to the accomplishment or furtherance of these purposes.' See note 2 above. Since the Custodian was authorized to vest and to sell the property by § 5, we think that the power to require the issue of new certificates was incidental to that authority. As one purpose of § 5(b)(1) was to authorize the seizure of the interests of foreign nationals in domestic corporations so that such interest could be used or sold, such authority to participate in management or to transfer the stock interests would be frustrated if customary evidences of the ownership could not be required from the corporation. The power of the Custodian to demand the certificates is plain. The correlative duty to obey the order equally so, if the effect of obedience does not do violence to other valid requirements of the statute or make Silesian liable to bona fide holders of the old stock. 11 Silesian in specific terms is protected from any liability to bona fide holders such as Non Ferrum or the Swiss Banks by reason of any infirmity in the Custodian's vesting order or his direction to Silesian to issue new certificates for the Non Ferrum stock. The applicable language of § 7(e) of the Trading with the Enemy Act, 40 Stat. 418, and § 5(b)(2), as amended, 55 Stat. 839, 840, are set out in the margin.5 But Silesian argues that protection cannot follow from an order contrary to the Trading with the Enemy Act. The order to issue the new certificates is said to be unauthorized because it allows the property of friendly alien pledgees, the Swiss Banks, to be taken contrary to § 8(a).6 Section 8(a) is said to be a limitation on the Custodian's power to seize property pledged to 'any person not an enemy or ally of enemy.' It is suggested that if § 7(e) or § 5(b)(2) is interpreted to require Silesian to carry out the Custodian's direction, even though this seizure is contrary to § 8(a), a way has been found to 'coerce an interested party (Silesian) into compliance with his (the Custodian's) unlawful actions.' The answer to this contention is made by the Circuit Court of Appeals. It makes unnecessary any discussion of the protection afforded Silesian by § 7(e) and § 5(b)(2) from the claims of a pledge of stock exempted by statute from seizure. 156 F.2d at page 797. When § 5(b)(1) was enacted as an amendment in the First War Powers Act of 1941, it authorized the taking of any property or interest therein of any foreign national. This broadening of the scope of the Custodian's power to vest so as to include interests of friendly aliens in property includes the power to vest the interest which friendly aliens have from pledges. As the Circuit Court of Appeals said, page 797 of 156 F.2d: 'Any other interpretation of the section would make the pledges of friendly aliens a wholly irrational exception to the general purpose to subject all alien interests to seizure.' 12 Therefore, as we hold that § 5(b)(1) rendered § 8(a) inapplicable to the property of friendly aliens, the order of the Custodian was valid and Silesian's objection disappears. 13 Finally there is the argument that Silesian cannot be compelled to issue the new certificates because the friendly aliens who claim interests in the Non Ferrum stock may not succeed in recovering the just compensation for the taking. See Russian Volunteer Fleet v. United States, 282 U.S. 481, 489, 51 S.Ct. 229, 231, 75 L.Ed. 473.7 The Constitution guarantees to friendly aliens the right to just compensation for the requisitioning of their property by the United States. Russian Volunteer Fleet v. United States, supra. We must assume that the United States will meet its obligations under the Constitution. Consequently, friendly aliens will be compensated for any property taken and Silesian is protected by the exculpatory clauses of the Act from any claim from its alien stockholders. 14 Judgment affirmed. 15 The Chief Justice took no part in the consideration or decision of this case. 1 They are Union Bank of Switzerland, LaRoche & Company Banque Cantonale de Berne, and Aktiengesellschaft Leu & Company. 2 Trading with the Enemy Act, 40 Stat. 411, as amended by the First War Powers Act of 1941, 55 Stat. 839, § 5(b)(1): 'During the time of war or during any other period of national emergency declared by the President, the President may, through any agency that he may designate, or otherwise, and under such rules and regulations as he may prescribe, by means of instructions, licenses, or otherwise—* * * '(B) investigate, regulate, direct and compel, nullify, void, prevent or prohibit, any acquisition holding, withholding, use, transfer, withdrawal, transportation, importation or exportation of, or dealing in, or exercising any right, power, or privilege with respect to, or transactions involving, any property in which any foreign country or a national thereof has any interest, by any person, or with respect to any property, subject to the jurisdiction of the United States; and any property or interest of any foreign country or national thereof shall vest, when, as, and upon the terms, directed by the President, in such agency or person as may be designated from time to time by the President, and upon such terms and conditions as the President may prescribe such interest or property shall be held, used, administered, liquidated, sold, or otherwise dealt with in the interest of and for the benefit of the United States, and such designated agency or person may perform any and all acts incident to the accomplishment or furtherance of these purposes; * * *.' 3 Art. 1, § 8, cl. 11. 4 Compare with the statement below: 'The power of Congress to seize and confiscate enemy property rests upon Art. 1, § 8 Clause 11 of the Constitution. Stoehr v. Wallace, supra, 255 U.S. (239), at page 242, 41 S.Ct. 293, 65 L.Ed. 404; United States v. Chemical Foundation, Inc., 272 U.S. 1, 11, 47 S.Ct. 1, (4), 71 L.Ed. 131. Whether it exists at international law may be doubted; but nobody contends that the war power of Congress includes the seizure of the property of friendly aliens. The amendment of § 5(b) must therefore rest upon some other power of Congress, not only for that reason, but because the amendment itself was expressly not limited to time of war (although it was in fact passed flagrante bello) but was to go into effect upon any 'national emergency declared.' It can rest upon Art. 1, § 8, Clause 1: i.e. upon the power 'to provide for the common Defence and general Welfare'; indeed, so far as we can see, the debtor does not challenge the power itself, but its exercise. It complains that the amendment delegates an unrestricted discretion to the President, and does not provide 'just compensation' for seizures.' 156 F.2d 793, 796. 5 40 Stat. 418, § 7(e): 'No person shall be held liable in any court for or in respect to anything done or omitted in pursuance of any order, rule, or regulation made by the President under the authority of this Act.' 55 Stat. 840, § 5(b)(2): 'Any payment, conveyance, transfer, assignment, or delivery of property or interest therein, made to or for the account of the United States, or as otherwise directed, pursuant to this subdivision or any rule, regulation, instruction, or direction issued hereunder shall to the extent thereof be a full acquitance and discharge for all purposes of the obligation of the person making the same; and no person shall be held liable in any court for or in respect to anything done or omitted in good faith in connection with the administration of, or in pursuance of and in reliance on, this subdivision, or any rule, regulation, instruction, or direction issued hereunder.' 6 40 Stat. 418, 419, § 8(a): 'That any person not an enemy or ally of enemy holding a lawful mortgage, pledge, or lien, or other right in the nature of security in property of an enemy or ally of enemy which, by law or by the terms of the instrument creating such mortgage, pledge, or lien, or right, may be disposed of on notice or presentation or demand * * * may continue to hold said property, and, after default, may dispose of the property * * *. Provided further, That if, on any such disposition of property, a surplus shall remain after the satisfaction of the mortgage, pledge, lien, or other right in the nature of security, notice of that fact shall be given to the President pursuant to such rules and regulations as he may prescribe, and such surplus shall be held subject to his further order.' 7 The Circuit Court of Appeals said: 'Thus it can be argued with much force that, unless some provision can be found by which he may secure compensation, § 5(b) is unconstitutional; and, if so, it would at best be doubtful whether the protection given by subsection (2) would be valid.' 156 F.2d 793, 797.
34
332 U.S. 463 68 S.Ct. 184 92 L.Ed. 76 PATTONv.STATE OF MISSISSIPPI. No. 122. Argued Nov. 21—24, 1947. Decided Dec. 8, 1947. Mandate Conformed to Jan. 26, 1948. See 33 So.2d 456. Mr. Thurgood Marshall, of New York City, for petitioner. Mr. George H. Ethridge, of Jackson, Miss., for respondent. Mr. Justice BLACK delivered the opinion of the Court. 1 The petitioner, a Negro, was indicted in the Circuit Court of Lauderdale County, Mississippi, by an all-white grand jury, charged with the murder of a white man. He was convicted by an all-white petit jury and sentenced to death by electrocution. He had filed a timely motion to quash the indictment alleging that, although there were Negroes in the county qualified for jury service, the venires for the term from which the grand and petit juries were selected did not contain the name of a single negro. Failure to have any Negroes on the venires, he alleged, was due to the fact that for a great number of years previously and during the then term of court there had been in the county a 'systematic, intentional, deliberate and invariable practice on the part of administrative officers to exclude Negroes from the jury lists, jury boxes and jury service, and that such practice has resulted and does now result in the denial of the equal protection of the laws to this defendant as guaranteed by the 14th amendment to the U.S. Constitution.' In support of his motion petitioner introduced evidence which showed without contradiction that no Negro had served on the grand or petit criminal court juries for thirty years or more. There was evidence that a single Negro had once been summoned during that period but for some undisclosed reason he had not served, nor had he even appeared. And there was a so evidence from one jury supervisor that he had, at some indefinite time, placed on the jury lists the names of 'two or three' unidentified Negroes. In 1940 the adult colored population of Lauderdale County, according to the United States Census, was 12,511 out of a total adult population of 34,821. 2 In the face of the foregoing the trial court overruled the motion to quash. The Supreme Court of Mississippi affirmed over petitioner's renewed insistence that he had been denied the equal protection of the laws by the deliberate exclusion of Negroes from the grand jury that indicted and the petit jury that convicted him. 29 So.2d 96. We granted certiorari to review this serious contention.1 331 U.S. 804, 67 S.Ct. 1757. 3 Sixty-seven years ago this Court held that state exclusion of Negroes from grand and petit juries solely because of their race denied Negro defendants in criminal cases the equal protection of the laws required by the Fourteenth Amendment. Strauder v. State of West Virginia, 1880, 100 U.S. 303, 25 L.Ed. 664. A long and unbroken line of our decisions since then has reiterated this principle, regardless of whether the discrimination was embodied in statute2 or was apparent from the administrative practices of state jury selection officials,3 and regardless of whether the system for depriving defendants of their rights was 'ingenious or ingenuous.'4 4 Whether there has been systematic racial discrimination by administrative officials in the selection of jurors is a question to be determined from the facts in each particular case. In this case the Mississippi Supreme Court concluded that petitioner had failed to prove systematic racial discrimination in the selection of jurors, but in so concluding it erroneously considered only the fact that no Negroes were on the particular venire lists from which the juries were drawn that indicted and convicted petitioner.5 It regarded as irrelevant the key fact that for thirty years or more no Negro had served on the grand and petit juries. This omission seriously detracts from the weight and respect that we would otherwise give to its conclusion in reviewing the facts, as we must in a constitutional question like this.6 5 It is to be noted at once that the indisputable fact that no Negro had served on a criminal court grand or petit jury for a period of thirty years created a very strong showing that during th t period Negroes were systematically excluded from jury service because of race.7 When such a showing was made, it became a duty of the State to try to justify such an exclusion as having been brought about for some reason other than racial discrimination. The Mississippi Supreme Court did not conclude, the State did not offer any evidence, and in fact did not make any claim, that its officials had abandoned their old jury selection practices. The State Supreme Court's conclusion of justification rested upon the following reasoning. Section 1762 of the Mississippi Code enumerates the qualifications for jury service, the most important of which apparently are that one must be a male citizen and 'a qualified elector.' Sections 241, 242, 243 and 244 of the state constitution set forth the prerequisites for qualified electors. Among other things these provisions require that each elector shall pay an annual poll tax, produce satisfactory proof of such payment, and be able to read any section of the state constitution, or to understand the same when read to him, or to give a reasonable interpretation thereof. The evidence showed that a very small number of Negro male citizens (the court estimated about 25) as compared with white male citizens, had met the requirements for qualified electors, and thereby become eligible to be considered under additional tests for jury service. On this subject the State Supreme Court said (29 So.2d 96, 98): 6 'Of the 25 qualified negro male electors there would be left, therefore, as those not exempt, 12 or 13 available male negro electors as compared with 5,500 to 6,000 male white electors as to whom, after deducting 500 to 1,000 exempt, would leave a proportion of 5,000 nonexempt white jurors to 12 or 13 nonexempt negro jurors, or about one-fourth of one per cent negro jurors, 400 to 1. * * * For the reasons already heretofore stated there was only a chance of 1 in 400 that a negro would appear on such a venire and as this venire was of 100 jurors, the sheriff, had he brought in a negro, would have had to discriminate against white jurors, not against negroes,—he could not be expected to bring in one-fourth of one negro.'8 7 The above statement of the Mississippi Supreme Court illustrates the unwisdom of attempting to disprove systematic racial discrimination in the selection of jurors by percentage calculations applied to the composition of a single venire.9 8 The petitioner here points out certain legislative record evidence10 of which it is claimed we can take judicial notice, and which it is asserted establishes that the reason why there are so few qualified Negro electors in Mississippi is because of discrimination against them in making up the registration lists. But we need not consider that question in this case. For it is clear from the evidence in the record that there were some Negroes in Lauderdale County on the registration list. In fact, in 1945, the circuit clerk of the county, who is himself charged with duties in administering the jury system, sent the names of eight Negroes to the jury commissioner of the Federal District Court as citizens of Lauderdale County qualified for federal jury service. Moreover, there was evidence that the names of from thirty to several hundred qualified Negro electors were on the registration lists. But whatever the precise number of qualified colored electors in the county, there w re some; and if it can possibly be conceived that all of them were disqualified for jury service by reason of the commission of crime, habitual drunkenness, gambling, inability to read and write or to meet any other or all of the statutory tests we do not doubt that the State could have proved it.11 9 We hold that the State wholly failed to meet the very strong evidence of purposeful racial discrimination made out by the petitioner upon the uncontradicted showing that for thirty years or more no Negro had served as a juror in the criminal courts of Lauderdale County. When a jury selection plan, whatever it is, operates in such way as always to result in the complete and long-continued exclusion of any representative at all from a large group of negroes, or any other racial group, indictments and verdicts returned against them by juries thus selected cannot stand. As we pointed out in Hill v. State of Texas, 316 U.S. 400, 406, 62 S.Ct. 1159, 1162, 86 L.Ed. 1559, our holding does not mean that a guilty defendant must go free. For indictments can be returned and convictions can be obtained by juries selected as the Constitution commands. 10 The judgment of the Mississippi Supreme Court is reversed and the case is remanded for proceedings not inconsistent with this opinion. 11 Reversed. 1 Petitioner also argued that his conviction was based solely on an extorted confession; that use of this extorted confession denied him due process of law; and that the case should be reversed for that reason. The view we take as to the systematic exclusion of negro jurors makes it unnecessary to pass on the alleged extorted confession. 2 Bush v. Commonwealth of Kentucky, 107 U.S. 110, 122, 1 S.Ct. 625, 635, 27 L.Ed. 354. 3 Ex parte Commonwealth of Virginia, 100 U.S. 339, 25 L.Ed. 676; Neal v. State of Delaware, 103 U.S. 370, 26 L.Ed. 567; Carter v. State of Texas, 177 U.S. 442, 20 S.Ct. 687, 44 L.Ed. 839; Rogers v. State of Alabama, 192 U.S. 226, 24 S.Ct. 257, 48 L.Ed. 417; Norris v. State of Alabama, 294 U.S. 587, 55 S.Ct. 579, 79 L.Ed. 1074; Hollins v. State of Oklahoma, 295 U.S. 394, 55 S.Ct. 784, 79 L.Ed. 1500; Hale v. Commonwealth of Kentucky, 303 U.S. 613, 58 S.Ct. 753, 82 L.Ed. 1050; Pierre v. State of Louisiana, 306 U.S. 354, 59 S.Ct. 536, 83 L.Ed. 757; Smith v. State of Texas, 311 U.S. 128, 61 S.Ct. 164, 85 L.Ed. 84; Hill v. State of Texas, 316 U.S. 400, 62 S.Ct. 1159, 86 L.Ed. 1559. 4 Smith v. State of Texas, 311 U.S. 128, 132, 61 S.Ct. 164, 166, 85 L.Ed. 84. 5 Akins v. State of Texas, 325 U.S. 398, 403, 65 S.Ct. 1276, 1279, 89 L.Ed. 1692. 6 Norris v. State of Alabama, 294 U.S. 587, 590, 55 S.Ct. 579, 580, 79 L.Ed. 1074; Pierre v. State of Louisiana, 306 U.S. 354, 358, 59 S.Ct. 536, 538, 83 L.Ed. 757; Akins v. State of Texas, 325 U.S. 398, 402, 65 S.Ct. 1276, 1278, 89 L.Ed. 1692; Fay v. People of State of New York, 332 U.S. 261, 272, 67 S.Ct. 1613, 1619. 7 Neal v. State of Delaware, 103 U.S. 370, 397, 26 L.Ed. 567; Norris v. State of Alabama, 294 U.S. 587, 591, 55 S.Ct. 579, 580, 79 L.Ed. 1074; Pierre v. State of Louisiana, 306 U.S. 354, 361, 59 S.Ct. 536, 540, 83 L.Ed. 757. 8 Although this latter statement was made with particular reference to the special venire from which the petit jury was drawn, the reasoning of the court applied also to its grounds for holding that there was no discrimination in excluding Negroes from the grand jury. 9 Akins v. State of Texas, 325 U.S. 398, 403, 65 S.Ct. 1276, 1279, 89 L.Ed. 1692. 10 Hearings before Special Committee to Investigate Senatorial Campaign Expenditures, 1946, 79th Cong., 2d Sess. (1947). 11 Hill v. State of Texas, 316 U.S. 400, 404, 405, 62 S.Ct. 1159, 1161, 1162, 86 L.Ed. 1559.
12
332 U.S. 480 68 S.Ct. 174 92 L.Ed. 88 CLARKv.UEBERSEE FINANZ-KORPORATION, A.G. No. 35. Reargued Nov. 12, 1947. Decided Dec. 8, 1947. Mr. M. S. Isenbergh, of Washington, D.C., for petitioner. Mr. Richard J. Connor, of Washington, D.C., for respondent. Mr. William Harvey Reeves, of New York City, for National Foreign Trade Council, Inc., amicus curiae. [Argument of Counsel from page 481 intentionally omitted] Mr. Justice DOUGLAS delivered the opinion of the Court. 1 Respondent brought this suit to reclaim property which the Alien Property Custodian,1 acting under § 5(b) of the Trading With the Enemy Act, 40 Stat. 411, 50 U.S.C.App. § 1 et seq., 50 U.S.C.A.Appendix, § 1 et seq., as amended by the First War Powers Act of 1941, § 301, 55 Stat. 839, 50 U.S.C.App. Supp. V, § 5(b), 50 U.S.C.A.Appendix, § 5(b), had vested in himself. Respondent is a corporation organized under the laws of Switzerland and having its principal place of business in that country. The property seized consisted of shares of stock in corporations organized under the laws of various States of this nation and of an interest in a contract between two such corporations. 2 The complaint alleges that respondent is not an enemy or ally of an enemy and that at no time at or since the vesting has the property in question been owned or controlled, directly or indirectly, in whole or in part, by an enemy, ally of an enemy, or a national of a designated enemy country. It also alleges that none of the property has been owing or belonging to or held on account of or for the benefit of any such person or interest. We construe these allegations to mean that the property is free of all enemy taint and particularly that the corporations whose shares have been seized, the corporations which have a contract in which respondent has an interest, and respondent itself, are companies in which no enemy, ally of an enemy, nor any national of either has any interest of any kind whatsoever, and that respondent has not done business in the territory of the enemy or any ally of an enemy. Those allegations, as so construed, are indeed taken as true for the purposes of the present ruling since petitioner's motion to dismiss is based solely on the fact that respondent is a national of a foreign country. 3 The District Court granted petitioner's motion to dismiss. The Court of Appeals reversed, one justice dissenting. Uebersee Finanz-Korporation, A.G. v. Markham, 81 U.S.App.D.C. 284, 158 F.2d 313. The case is here on petition for a writ of certiorari which we granted because of the importance of the question in the administration of the Act. 330 U.S. 813, 67 S.Ct. 772. 4 Under the Act as it read prior to the 1941 amendment respondent would have been able to maintain this suit on a showing, without more, that it was a corporation organized under the laws of a friendly nation and not doing business in the territory of an enemy nation or any of its allies. That result would be reached as follows: Sec. 7(c) permitted seizure by the Custodian only of property in which an enemy or ally of an enemy had an interest. Sec. 9(a) permitted 'any person not an enemy or ally of enemy' claiming an interest in any seized property to sue to reclaim it. And the Court held in Behn, Meyer & Co. v. Miller, 266 U.S. 457, 45 S.Ct. 165, 69 L.Ed. 374, that a corporation organized under the laws of a friendly nation and not doing business in the territory of an enemy nation or any of its allies.2 could maintain such a suit even though the corporation was enemy owned or controlled. , the scheme of the Act as it was then drawn was 'to seize the shares of stock when enemy owned rather than to take over the corporate property.' Hamburg-American Line Terminal & Navigation Co. v. United States, 277 U.S. 138, 140, 48 S.Ct. 470, 471, 72 L.Ed. 822. 5 That was at least one respect in which the Act had a 'rigidity and inflexibility' that was sought to be cured by the amendment to § 5(b) in 1941. See H.R. Rep. No. 1507, 77th Cong., 1st Sess., p. 3. It was notorious that Germany and her allies had developed numerous techniques for concealing enemy ownership or control of property which was ostensibly friendly or neutral. They had through numerous devices, including the corporation, acquired indirect control or ownership in industries in this country for the purposes of economic warfare.3 Sec. 5(b) was amended on the heels of the declaration of war to cope with that problem. Congress by that amendment granted the President the power to vest in an agency designated by him 'any property or interest of any foreign country or national thereof.'4 The property of all foreign interests was placed within reach of the vesting power not to appropriate friendly or neutral assets but to reach enemy interests which masqueraded under those innocent fronts. 6 Thus the President acquired new 'flexible powers' (H.R. Rep. No. 1507, supra, p. 3) to deal effectively with property interests which had either an open or concealed enemy taint. 7 While the scope of the President's power was broadened, there was no amendment restricting the scope of § 9(a). As we have noted, § 9(a) granted 'any person not an enemy or ally of e emy,' claiming an nterest in property seized, the right to reclaim it. So the provision reads today. Yet, as petitioner suggests, if Behn, Meyer & Co. v. Miller, supra, is applied despite the 1941 amendment, § 9(a) will undo much of the good which the 1941 amendment to § 5(b) was designed to accomplish. All a corporate claimant would need do to recover the property seized would be to show that it was organized in this country or in some friendly or neutral country and was not doing business within the territory of an enemy or any of its allies.5 The fact that it was owned or controlled by enemy interests and might sap the strength of this nation through economic warfare would be immaterial. We agree that a construction so destructive of the objectives of the 1941 amendment to § 5(b) must be rejected. 8 Petitioner therefore suggests that once the seizure is shown to be permissible under § 5(b), there is no remedy for the return of the property under § 9(a). It is said that § 9(a) was designed to provide an ultimate judicial determination of the question whether the property seized was within the vesting power defined in § 5(b) Central Union Trust Co. of New York v. Garvan, 254 U.S. 554, 567, 568, 41 S.Ct. 214, 215, 65 L.Ed. 403. The argument accordingly is that since § 5(b) allows seizure and vesting of 'any property or interest of any foreign country or national thereof,' a suit to reclaim it is defeated by a mere showing that the claimant is a corporation organized under the laws of another nation. 9 That is to make the right to sue run not to 'any person not an enemy or ally of enemy' as § 9(a) in terms provides but to 'any person not an enemy or ally of enemy or national of any foreign country.' That would wipe out all suits to reclaim property brought by any foreign interest, no matter how friendly. We stated in Markham v. Cabeil, 326 U.S. 404, 410, 411, 66 S.Ct. 193, 196, 90 L.Ed. 165, 'The right to sue, explicitly granted by § 9(a), should not be read out of the law unless it is clear that Congress by what it later did withdrew its earlier permission.' Such a drastic contraction, if not complete sterilization, of § 9(a) as petitioner suggests should therefore be made only if no other alternative is open. 10 There are several reasons which make us hesitate to take that course. In the first place, as we have suggested, the phase of the problem with which we are presently concerned and with which Congress was wrestling when it amended the Act in 1941 started and ended with property having an enemy taint. We find not the slightest suggestion that Congress was concerned under this Act with property owned or controlled by friendly or neutral powers and in no way utilized by the Axis. Those interests were not waging economic warfare against us. Secondly, we are dealing here with the power 'to affirmatively compel the use and application of foreign property in a manner consistent with the interests of the United States.'6 Sen. Rep. No. 911, 77th Cong., 1st Sess., p. 2. It is hard for us to assume that Congress adopted that drastic course in the case of friendly or neutral fireign interests whose investments in our economy were in no way infected with enemy ownership or control. Our hesitation is, moreover, increased when we note that § 7(c) makes the remedy under the Act the only one Congress has granted a claimant. It is not easy for us to assume that Congress treated all nonenemy nations, including our recent allies, in such a harsh manner, leaving them only with such remedy as they might have under the Fifth Amendment. 11 The problem is not without its difficulties whichever way we turn. But we think that we adhere more closely to the policy of both § 5(b) as amended and § 9(a), if we do not carry over into the amended Act the consequences of Behn, Meyer & Co. v. Miller, supra. 12 As we have observed, the scheme of the Act when Behn, meyer & Co. v. Miller was decided was to respect the corporate form, even though the enemy held all the stock of the corporate claimant. Hamburg-American Line Terminal & Navigation Co. v. United States, supra. The 1941 amendment to § 5(b) reflected a complete reversal in that policy. The power of seizure and vesting was extended to all property of any foreign country or national so that no innocent appearing device could become a Trojan horse. Congress did not, however, alter the definitions of enemy or of ally of enemy contained in § 2. They remain the same as they were at the time Behn, Meyer & Co. v. Miller was decided.7 13 Yet if the question were presented for the first time under the amended Act, we could not confine the statutory definitions of enemy or ally of enemy to the narrow categories indicated by Behn, Meyer & Co. v. Miller. To do so would be to run counter to the policy of the Act and be disrupive of its purpose. We are dealing with hasty legislation which Congress did not stop to perfect as an integrated whole. Our task is to give all of it—1917 to 1941 the most harmonious, comprehensive meaning possible. Markham v. Cabell, supra. So if the definitions contained in § 28 are to be harmonized with the policy underlying § 5(b) and § 9(a) of the amended Act, we would have to say that they are merely illustrative, not exclusionary. To do otherwise would be to impute to Congress a purpose to paralyze with one hand what it sought to promote with the other. 14 There is perhaps in logic some basis for saying that that should be the consequence since Congress did not amend § 2 when it revised the Act by its amendment of § 5(b). The argument is that the only change effected was in § 5(b) and that § 2 which stands unamended should be taken to mean what it meant before 1941. But the answer to our problem cannot be had by the use of logic alone. We are dealing here with conflict and confusion in the statute. Though neither § 2 nor § 9(a) was amended with § 5(b) in 1941, one of them must be read differently after than before that event. We believe it is more consonant with the functions sought to be served by the Act to apply § 2 differently than it was previously applied than to read § 9(a) more restrictively. We believe a more harmonious reading of § 2, § 5(b) and § 9(a) is had if the concept of enemy or ally of enemy is given a scope which helps the amendment of 1941 fulfill its mission and which does not make § 9(a) for the first time in its history and contrary to the normal connotation of its terms stand as a barrier to the recovery of property by foreign interests which have no possible connection with the enemy. 15 It is suggested, however, that this approach may produce results which are both absurd and uncertain. It is said that the entire property of a corporation would be jeopardized merely because a negligible stock interest, perhaps a single share, was directly or indirectly owned or controlled by an enemy or ally of an enemy. It is also pointed out that securities or interests other than stock might be held by an enemy or ally of an enemy and used effectively in economic warfare against this country. But what these interests are, the extent of holdings necessary to constitute an enemy taint, what part of a friendly alien corporation's property may be retained where only a fractional enemy ownership appears, are left undecided. Since we assume from the allegations of the complaint that respondent is free of enemy taint and therefore is not within the definition of enemy or ally of an enemy, those problems are not now before us. We recognize their importance; but they must await legislative9 or judicial clarification. 16 Affirmed. 17 The CHIEF JUSTICE took no part in the consideration or decision of this case. 1 The powers and functions of the Custodian were subsequently transferred to the Attorney General. Executive Order No. 9788, 50 U.S.C.A.Appendix, § 6 note, 11 Fed.Reg.11981, Oct. 14, 1946. 2 Sec. 2 provides: 'That the word 'enemy,' as used herein, shall be deemed to mean, for the purposes of such trading and of this Act— '(a) Any individual, partnership, or other body of individuals, of any nationality, resident within the territory (including that occupied by the military and naval forces) of any nation with which the United States is at war, or resident outside the United States and doing business within such territory, and any corporation incorporated within such territory of any nation with which the United States is at war or incorporated within any country other than the United States and doing business within such territory. '(b) The government of any nation with which the United States is at war, or any political or municipal subdivision thereof, or any officer, official, agent, or agency thereof. '(c) Such other individuals, or body or class of individuals, as may be natives, citizens, or subjects of any nation with which the United States is at war, other than citizens of the United States, wherever resident or wherever doing business, as the President, if he shall find the safety of the United States or the successful prosecution of the war shall so require, may, by proclamation, include within the term 'enemy.' 'The words, 'ally of enemy,' as used herein, shall be deemed to mean— '(a) Any individual, partnership, or other body of individuals, of any nationality, resident within the territory (including that occupied by the military and naval forces) of any nation which is an ally of a nation with which the United States is at war, or resident outside the United States and doing business within such territory, and any corporation incorporated within such territory of such ally nation, or incorporated within any country other than the United States and doing business within such territory. '(b) The government of any nation which is an ally of a nation with which the United States is at war, or any political or municipal subdivision of such ally nation, or any officer, official, agent, or agency thereof. '(c) Such other individuals, or body or class of individuals, as may be natives, citizens, or subjects of any nation which is an ally of a nation with which the United States is at war, other than citizens of the United States, wherever resident, or wherever doing business, as the President, if he shall find the safety of the United States or the successful prosecution of the war shall so require, may, by proclamation, include within the term 'ally of enemy." 3 Some of the uses of the corporation in promotion of these subversive projects are summarized in Administration of the Wartime Financial and Property Controls of the United States Government, Treasury Dept. (1942), pp. 29—30. It is pointed out that technical legal title 'to some of the most dangerous of the Axis-influenced enterprises may be Swiss, Dutch, Swedish or American.' It is also said that 'Actual ownership of business enterprises frequently runs through tangled mazes of holding companies. These holding companies were normally incorporated in neutral countries and the ownership of the holding companies themselves was normally represented by bearer shares, making it extremely difficult to negate a claim that the ownership of the corporation was coincident with the state of incorporation.' 4 Sec. 5(b)(1), as amended, also granted the President the power to 'investigate, regulate, direct and compel, nullify, void, prevent or prohibit, any acquisition holding, withholding, use, transfer, withdrawal, transportation, importation or exportation of, or dealing in, or exercising any right, power, or privilege with respect to, or transactions involving, any property in which any foreign country or a national thereof has any interest, by any person, or with respect to any property, subject to the jurisdiction of the United States * * *.' Sec. 5(b)(1), as amended, further provided as respects property which had been vested that 'upon such terms and conditions as the President may prescribe such interest or property shall be held, used, administered, liquidated, sold, or otherwise dealt with in the interest of and for the benefit of the United States * * *.' 5 See note 2, supra. 6 As to the powers of the custodian or other agency designated by the President over the property, see § 5(b)(1), supra note 4, and § 12. 7 See note 2, supra. 8 See note 2, supra. 9 See Pub.L. 322, 79th Cong., 2d Sess., adding § 32(a)(2)(E) to the Act.
34
332 U.S. 490 68 S.Ct. 188 92 L.Ed. 95 WILLIAMS et al.v.FANNING. No. 47. Argued Oct. 22, 1947. Decided Dec. 8, 1947. Mr. Richard L. North, of Los Angeles, Cal., for petitioners. Mr. Frederick Bernays Wiener, of Providence, R.I., for respondent. Mr. Justice DOUGLAS delivered the opinion of the Court. 1 This case, here on certiorari to resolve a conflict between the circuits,1 presents the question whether those against whom the Postmaster General has issued a postal fraud order may sue the local postmaster to enjoin him from carrying out the order or whether the Postmaster General is an indispensable party. 2 The Postmaster General, after a hearing in Washington, D.C., found that petitioners' weight-reducing enterprise was fraudulent. He accordingly issued a fraud order, R.S. §§ 3929, 4041, 39 U.S.C. §§ 259, 732, 39 U.S.C.A. §§ 259, 732, directing respondent, postmaster at Los Angeles, California (where petitioners do business) to refuse payment of any money order drawn to the order of petitioners, to advise the remitter of such money order that payment had been forbidden, and to stamp 'fraudulent' on all mail matter directed to petitioners and to return it to the senders. 3 Petitioners thereupon brought this suit in the District Court for the Southern District of California to enjoin respondent from carrying out the order,2 claiming that they had been deprived of the hearing to which they were entitled and that the fraud order was without the support of substantial evidence. On motion of respondent the District Court dismissed the complaint, holding in accord with the view of the Ninth Circuit Court of Appeals3 that the Postmaster General was an indispensable party. The Circuit Court of Appeals affirmed. 158 F.2d 95. 4 It was long assumed that the Postmaster General was not an indispensable party in those fraud order cases. Beginning at least with American School of Magnetic Healing v. McAnnulty, 187 U.S. 94, 23 S.Ct. 33, 47 L.Ed. 90, decided in 1902, the maintenance of the suit against the local postmaster alone was not challenged.4 5 Meanwhile, another line of cases was emerging. Warner Valley Stock Co. v. Smith, 165 U.S. 28, 17 S.Ct. 225, 41 L.Ed. 621, held that a suit against the Secretary of the Interior to compel him to issue patents to public lands abated on his resignation. As the purpose of the bill was 'to control the action of the secretary of the interior' (165 U.S. page 34, 17 S.Ct. page 228), he was held to be an indispensable party. Next came Gnerich v. Rutter, 265 U.S. 388, 44 S.Ct. 532, 68 L.Ed. 1068, which was a suit to enjoin a representative of the Commissioner of Internal Revenue from enforcing a restriction embodied in a permit issued under the National Prohibition Act, 27 U.S.C.A. § 1 et seq. The subordinate official, acting for the Commissioner, had refused to give plaintiffs the more liberal permit which they desired; and he had no power to grant the desired permit without revision of his delegated authority. The Commissioner was held to be an indispensable party. Webster v. Fall, 266 U.S. 507, 45 S.Ct. 148, 69 L.Ed. 411, followed. That was a suit brought by an Osage Indian to require payment to him of funds under an act of Congress. The power and responsibility of making the payments being in the Secretary of the Interior, he was held to be an indispensable party. 6 These cases evolved the principle that the superior officer is an indispensable party if the decree granting the relief sought will require him to take action, either by exercising directly a power lodged in him or by having a subordinate exercise it for him. 7 That principle was brought into clearer relief by State of Colorado v. Toll, 268 U.S. 228, 45 S.Ct. 505, 69 L.Ed. 927. There the director of national parks had issued regulations forbidding operation in the Rocky Mountain National Park of automobiles for hire. Toll was the superintendent of the park who was enforcing the regulation. A suit to enjoin him was allowed to be maintained without joining his superior, the director, who had promulgated the regulation. That result followed, 268 U.S. page 230, 45 S.Ct. page 506, by analogy to those cases which permit suit against a public official who invades a private right either by exceeding his authority or by carrying out a mandate of his superior. United States v. Lee, 106 U.S. 196, 1 S.Ct. 240, 27 L.Ed. 171; Philadelphia Co. v. Stimson, 223 U.S. 605, 619, 620, 32 S.Ct. 340, 344, 56 L.Ed. 570. In those situations relief against the offending officer could be granted without risk that the judgment awarded would 'expend itself on the public treasury or domain, or interfere with the public administration.' Land v. Dollar, 330 U.S. 731, 738, 67 S.Ct. 1009, 1012. 8 But the distinction we have noted between these two lines of cases apparently was not as clear to others as it seems to us. For a conflict among the circuits developed in these postal fraud cases.5 National Conference on Legalizing Lotteries v. Goldman, 2 Cir., 85 F.2d 66, which held that the Postmaster General must be made a party, suggested that if he were not, the local postmaster would be left under a command of his superior to do what the court has forbidden. But that seems to us immaterial if the decree which is entered will effectively grant the relief desired by expending itself on the subordinate official who is before the court. It seems plain in the present case that that will be the result even though the local postmaster alone is sued. It is he who refuses to pay money orders, who places the stamp 'fraudulent' on the mail, who returns the mail to the senders. If he desists in those acts, the matter is at an end. That is all the relie which petitioners seek. The decree in order to be effective need not require the Postmaster General to do a single thing—he need not be required to take new action either directly as in the Smith and Fall cases or indirectly through his subordinate as in the Rutter case. No concurrence on his part is necessary to make lawful the payment of the money orders and the release of the mail unstamped. Yet that is all the court is asked to command. 9 Reversed. 10 The CHIEF JUSTICE and Mr. Justice BURTON dissent. 1 The Circuit Court of Appeals in the instant case followed its earlier decisions holding that the Postmaster General was an indispensable party. Neher v. Harwood, 9 Cir., 128 F.2d 846, 158 A.L.R. 1116; Dolphin v. Starr, 9 Cir., 130 F.2d 868. Accord: National Conference on Legalizing Lotteries v. Goldman, 2 Cir., 85 F.2d 66. Contra: Jarvis v. Shackelton Inhaler Co., 6 Cir., 136 F.2d 116. For collection and review of the cases see 158 A.L.R. 1126. 2 Jurisdiction was invoked under § 24(6) of the Judicial Code, 28 U.S.C. § 41(6), 28 U.S.C.A. § 41(6). 3 See note 1, supra. 4 And see Public Clearing House v. Coyne, 194 U.S. 497, 24 S.Ct. 789, 48 L.Ed. 1092; Leach v. Carlile, 258 U.S. 138, 42 S.Ct. 227, 66 L.Ed. 511. 5 See note 1, supra.
89
332 U.S. 495 68 S.Ct. 167 92 L.Ed. 99 AERO MAYFLOWER TRANSIT CO.v.BOARD OF RAILROAD COM'RS OF STATE OF MONTANA et al. No. 39. Argued Oct. 15, 1947. Decided Dec. 8, 1947. Appeal from the Supreme Court of the State of Montana. Mr. Edmond G. Toomey, of Helena, Mont., for appellant. Mr. Clarence Hanley, of Helena, Mont., for appellees. Mr. Justice RUTLEDGE delivered the opinion of the Court. 1 Again we are asked to decide whether state taxes as applied to an interstate motor carrier run afoul of the commerce clause, Art. I, § 8, of the Federal Constitution. 2 Two distinct Montana levies are questioned. Both are imposed by that state's Motor Carriers Act, Rev.Codes Mont.(1935) §§ 3847.1—3847.28. One is a flat tax of $10 for each vehicle operated by a motor carrier over the state's highways, payable on issuance of a certificate or permit, which must be secured before operations begin, and annually thereafter. § 3847.16(a).1 The other is a quarterly fee of one-half of one per cent of the motor carrier's 'gross operating revenue,' but with a minimum annual fee of $15 per vehicle for class C carriers, in which group appellant falls. § 3847.27.2 Each tax is declared expressly to be laid 'in consideration of the use of the highways of this state' and to be 'in addition to all other licenses, fees and taxes imposed upon motor vehicles in this state.' 3 Prior to July 1, 1941, the fees collected pursuant to §§ 3847.16(a) and 3847.27 were paid into the state treasury and credited to 'the motor carrier fund.'3 After that date, by virtue of Mont.Laws, 1941, c. 14, § 2, they were allocated to the state's general fund. 4 Appellant is a Kentucky corporation, with its principal offices in Indianapolis, Indiana. Its business is exclusively interstate. It consists in transporting household goods and office furniture from points in one state to destinations in another. Appellant does no intrastate business in Montana. The volume of its interstate business there is continuous and substantial, not merely casual or occasional.4 It holds a certificate of convenience and necessity issued by the Interstate Commerce Commission, pursuant to which its business in Montana and elsewhere is conducted. 5 In 1935 appellant received a class C permit to operate over Montana highways, as required by state law.5 Until 1937, apparently, it complied with Montana requirements, including the payment of registration and license plate fees for its vehicles operating in Montana and of the 5¢ per gallon tax on gasoline purchased there.6 However, in 1937 and thereafter appellant refused to pay the flat $10 fee imposed by § 3847.16(a) and the $15 minimum 'gross revenue' tax laid by § 3847.27. In consequence, after hearing on order to show cause, the appellee board7 in 1939 revoked the 1935 permit and brought this suit in a state court to enjoin appellant from further operations in Montana. 6 Upon appellant's cross-complaint, the trial court issued an order restraining the board from enforcing the 'gross revenue' tax laid by § 3847.27. But at the same time it enjoined appellant from operating in Montana until it paid the fees imposed by § 3847.16(a). On appeal the state supreme court held both taxes applicable to interstate as well as intrastate motor carriers and construed the term 'gross operating revenue' in § 3847.27 to mean 'gross revenue derived from operations in Montana.'8 It then sustained both taxes as against appellant's constitutional objections, state and federal. Accordingly, it reversed the trial court's judgment insofar as the 'gross revenue' tax had been held invalid, but affirmed the decision relating to the flat $10 tax. Mont., 172 P.2d 452, 460. 7 We put aside at the start appellant's suggestion that the Supreme Court of Montana has misconstrued the state statutes and therefore that we should consider them, for purposes of our limited function, according to appellant's view of their literal import. The rule is too well settled to permit of question that this Court not only accepts but is bound by the construction given to state statutes by the state courts.9 Accordingly, we accept the state court's rulings, insofar as they are material, that the two sections apply alike to interstate and intrastate commerce and that 'gross operating revenue' as employed in § 3847.27 comprehends only such revenue derived from appellant's operations within Montana, not outside that state.10 8 Moreover, since Montana has not demanded or sought to enforce payment by appellant of more than the flat $15 minimum fee for class C carriers under § 3847.27,11 we limit our consideration of the so-called 'gross revenue' tax to that fee. This too is in accordance with the state supreme court's declaration: 'Even if it be admitted that the manner of arriving at a sound basis upon which the tax on gross revenue (should be calculated) is not provided by the statute, a c ntention to which we do not agree, no difficulty would arise in putting into effect the minimum fee of $15.00 required for each company vehicle operated within the state.'12 Although the state court did not concede that the statute comprehended no workable or sound basis for calculating the tax above the minimum, we take this statement as a clear declaration that it would sustain the minimum charge even if for some reason the amount of the tax above the minimum would have to fall. 9 With the issues thus narrowed, we have, in effect, two flat taxes, one for $10, the other for $15, payable annually upon each vehicle operated on Montana highways in the course of appellant's business, with each tax expressly declared to be in addition to all others and to be imposed 'in consideration of the use of the highways of this state.' 10 Neither exaction discriminates against interstate commerce. Each applies alike to local and interstate operations. Neither undertakes to tax traffic or movements taking place outside Montana or the gross returns from such movements or to use such returns as a measure of the amount of the tax. Both levies apply exclusively to operations wholly within the state or the proceeds of such operations, although those operations are interstate in character. 11 Moreover, it is not material to the validity of either tax that the state also imposes and collects the vehicle registration and license fee and the gallonage tax on gasoline purchased in Montana. The validity of those taxes neither is questioned nor well could be. Hendrick v. Maryland, 235 U.S. 610, 35 S.Ct. 140, 59 L.Ed. 385; Aero Transit Co. v. Georgia Commission, 295 U.S. 285, 55 S.Ct. 709, 79 L.Ed. 1439; Sonneborn Bros. v. Cureton, 262 U.S. 506, 43 S.Ct. 643, 67 L.Ed. 1095; Edelman v. Boeing Air Transport, 289 U.S. 249, 53 S.Ct. 591, 77 L.Ed. 1155. Nor does their exaction have any significant relationship to the imposition of the taxes now in question. Dixie Ohio Co. v. Commission, 306 U.S. 72, 78, 59 S.Ct. 435, 438, 83 L.Ed. 495; Interstate Busses Corporation v. Blodgett, 276 U.S. 245, 251, 48 S.Ct. 230, 231, 72 L.Ed. 551. They are imposed for distinct purposes and the proceeds, as appellant concedes, are devoted to different uses, namely, the policing of motor traffic and the maintenance of the state's highways.13 12 Concededly the proceeds of the two taxes presently involved are not allocated to those objects.14 Rather they now go into the state's general fund subject to appropriation for general state purposes.15 Indeed this fact, in appellant's view, is the vice of the statute. But in that view appellant of the exactions. It is far too late to question that a state, consistently with the commerce clause, may lay upon motor vehicles engaged exclusively in interstate commerce, or upon those who own and so operate them, a fair and reasonable, nondiscriminatory tax as compensation for the use of its highways. Hendrick v. Maryland, supra; Clark v. Poor, 274 U.S. 554, 47 S.Ct. 702, 71 L.Ed. 1199; Aero Transit Co. v. Georgia Commission, supra; Morf v. Bingaman, 298 U.S. 407, 56 S.Ct. 756, 80 L.Ed. 1245; Dixie Ohio Co. v. Commission, supra; Clark v. Paul Gray, Inc., 306 U.S. 583, 59 S.Ct. 744, 83 L.Ed. 1001; cf. South Carolina Highway Department v. Barnwell Bros., 303 U.S. 177, 58 S.Ct. 510, 82 L.Ed. 734. Moreover 'common carriers for hire, who make the highways their place of business, may properly be charged an extra tax for such use.' Clark v. Poor, supra, 274 U.S. at page 557, 47 S.Ct. at page 703, 71 L.Ed. 1199. 13 The present taxes on their face are exacted 'in consideration of the use of the highways of this state,' that is, they are laid for the privilege of using those highways. And the aggregate amount of the two taxes taken together is less than the amount of similar taxes this Court has heretofore sustained. Cf. Dixie Ohio Co. v. Commission, supra; Aero Transit Co. v. Georgia Commission, supra. The state builds the highways and owns them.16 Motor carriers for hire, and particularly truckers of heavy goods, like appellant, make especially arduous use of roadways, entailing wear and tear much beyond that resulting from general indiscriminate public use. Morf v. Bingaman, supra, 298 U.S. at page 411, 56 S.Ct. at page 758, 80 L.Ed. 1245. Although the state may not discriminate against or exclude such interstate traffic generally in the use of its highways, this does not mean that the state is required to furnish those facilities to it free of charge or indeed on equal terms with other traffic not inflicting similar destructive effects. Cf. Clark v. Poor, supra; Morf v. Bingaman, supra, 298 U.S. at page 411, 56 S.Ct. at page 758, 80 L.Ed. 1245. Interstate traffic equally with intrastate may be required to pay a fair share of the cost and maintenance reasonably related to the use made of the highways. 14 This does not mean, as appellant seems to assume, that the proceeds of all taxes levied for the privilege of using the highways must be allocated directly and exclusively to maintaining them. Clark v. Poor, supra, 274 U.S. at page 557, 47 S.Ct. at page 703, 71 L.Ed. 1199; Morf v. Bingaman, supra, 298 U.S. at page 412, 56 S.Ct. at page 758, 80 L.Ed. 1245. That is true, although this Court has held invalid, as forbidden by the commerce clause, certain state taxes on interstate motor carriers because laid 'not as compensation for the use of the highways, but for the privilege of doing the interstate bus business.' Interstate Transit, Inc., v. Lindsey, 283 U.S. 183, 186, 51 S.Ct. 380, 381, 75 L.Ed. 953; cf. McCarroll v. Dixie Lines, 309 U.S. 176, 179, 60 S.Ct. 504, 506, 84 L.Ed. 683. Those cases did not hold that all state exactions for the privilege of using the state's highways are valid only if their proceeds are required to go directly and exclusively for highway maintenance, policing and administration. Both before and after the Interstate Transit decision this Court has sustained state taxes expressly laid on the privilege of using the highways, as applied to interstate motor carriers, declaring in each instance that it is immaterial whether the proceeds are allocated to highway uses or others. Clark v. Poor, supra, 274 U.S. at page 557, 47 S.Ct. at page 703, 71 L.Ed. 1199; Morf v. Bingaman, supra, 298 U.S. at page 412, 56 S.Ct. at page 758, 80 L.Ed. 1245.17 15 Appellant therefore confuses a tax 'assessed for a proper purpose and * * * not objectionable in amount,' Clark v. Poor, supra, 274 U.S. at page 557, 47 S.Ct. at page 703, 71 L.Ed. 1199, that is, a tax affirmatively laid for the privilege of using the state's highways, with a tax not imposed on that privilege but upon some other such as the privilege of doing the interstate business. Though necessarily related, in view of the nature of interstate motor traffic, the two privileges are not identical, and it is useless to confuse them or to confound a tax for the privilege of using the highways with one the proceeds of which are necessarily devoted to maintaining them. Whether the proceeds of a tax are used or required to be used for highway maintenance 'may be of significance,' as the Court has said, 'when the point is otherwise in doubt, to show that the fee is in fact laid for that purpose and is thus a charge for the privilege of using the highways. Interstate Transit, Inc. v. Lindsey, supra. But where the manner of the levy, like that prescribed by the present statute, definitely identifies it as a fee charged for the grant of the privilege, it is immaterial whether the state places the fees collected in the pocket out of which it pays highway maintenance charges or in some other.' Morf v. Bingaman, supra, 298 U.S. at page 412, 56 S.Ct. at page 758, 80 L.Ed. 1245.18 16 The exactions in the present case fall clearly within the rule of Morf v. Bingaman and its predecessors in authority, and therefore, like that case, outside the decisions in the Interstate Transit and like cases. Both taxes are levied 'in consideration of the use of the highways of this state,' that is, as compensation for their use, and bear only on the privilege of using them, not on the privilege of doing the interstate business. Moreover, the flat $10 fee laid by § 3847.16(a) is further identified as one on the privilege of use by the fact that 'unlike the general tax in Interstate Transit, Inc., v. Lindsey, 283 U.S. 183, 51 S.Ct. 380, 75 L.Ed. 953, the levy of which was unrelated to the use of the highways, grant of the privilege of their use is by the present statute made conditional upon payment of the fee.' Morf v. Bingaman, supra, 298 U.S. at page 410, 56 S.Ct. at page 757, 80 L.Ed. 1245. 17 The minimum so-called 'gross revenue' fee, on the other hand, is technically conditioned on the receipt of such revenue from the operations within Montana. But the flat minimum of $15 annually, which is all we have before us in the shape the case has taken for the purposes of decision here, has none of the alleged vices characteristic of gross income taxes heretofore held to vitiate such taxes laid by the states on interstate commerce. And appellant has advanced no tenable basis in rebuttal of the legislative declaration that this tax too is exacted in consideration of the use of the state's highways, i.e., for the privilege of using them, not for that of doing the interstate business. Here, as in Morf v. Bingaman, 298 U.S. 407, 411, 56 S.Ct. 756, 758, 80 L.Ed. 1245, 'there is ample support for a legislative determination that the peculiar character of this traffic involves a special type of use of the highways,' with enhanced wear, tear and hazards laying heavier burdens on the state for maintenance and policing than other types of traffic create. It is to compensate for these burdens that the taxes are imposed and appellant has not sustained its burden. Clark v. Paul Gray, Inc., supra, 306 U.S. at page 599, 59 S.Ct. at page 753, 83 L.Ed. 1001, and authorities cited, of showing that the levies have no reasonable relation to that end.19 18 It is of no consequence that the state has seen fit to lay two exactions, substantially identical, rather than combine them into one, or that appellant pays other taxes which in fact are devoted to highway maintenance. For the state does not exceed its constitutional powers by imposing more than one form of tax. Interstate Busses Corporation v. Blodgett, supra; Dixie Ohio Co. v. Commission, supra. And, as we have said, the aggregate amount of both taxes combined is less than that of taxes heretofore sustained. In view of these facts there is not even semblance of substance to appellant's contention that the taxes are excessive. 19 Neither is there merit in its other arguments, which we have considered, including those urging due process and equal protection grounds for invalidating the levies. 20 The judgment of the Supreme Court of Montana is affirmed. 21 Affirmed. 1 The section was enacted originally as Mont.Laws, 1931, c. 184, § 16. Textually it is as follows: '(a) In addition to all of the licenses, fees or taxes imposed upon motor vehicles in this state, and in consideration of the use of the public highways of this state, every motor carrier, as defined in this act, shall, at the time of the issuance of a certificate and annually thereafter, on or between the first day of July and the fifteenth day of July, of each calendar year, pay to the board of railroad commissioners of the state of Montana the sum of ten dollars ($10.00), for every motor vehicle operated by the carrier over or upon the public highways of this state. * * *' In further relation to issuance of the permit, see note 5. 2 This section originally was Mont.Laws, 193 , c. 100, § 2. It reads as follows: 'In addition to all other licenses, fees and taxes imposed upon motor vehicles in this state and in consideration of the use of the highways of this state, every motor carrier holding a certificate of public convenience and necessity issued by the public service commission, shall between the first and fifteenth days of January, April, July and October of each year, file with the public service commission a statement showing the gross operating revenue of such carrier for the preceding three months of operation, or portion thereof, and shall pay to the board a fee of one-half of one per cent of the amount of such gross operating revenue; provided, however, that the minimum annual fee which shall be paid by each class A and class B carrier for each vehicle registered and/or operated under the provisions of the motor carrier act shall be thirty dollars ($30.00) and the minimum annual fee which shall be paid by each class C carrier for each vehicle registered and/or operated under the motor carrier act shall be fifteen dollars ($15.00).' Section 3847.2, Rev.Codes Mont. (1935), contains the definitions of the three classes of carriers. 3 The moneys in the motor carrier fund were subject to appropriation for use in supervision and regulation of many activities other than those connected with the public highways. See Rev.Codes Mont. (1935), §§ 3847.17, 3847.28; and cf. note 13. 4 Appellant's answer and cross-complaint set forth statistics concerning its use of Montana highways during the years 1937, 1938 and 1939. The figures show appellant's equipment operating on Montana highways during 227 days in 1937, 385 trucking days in 1938; and 405 trucking days in 1939. See also note 6. 5 The statute was Mont.Laws, 1931, c. 184, § 23, now Rev.Codes Mont. (1935), § 3847.23. The section applied the act of which it was a part to interstate and foreign commerce 'insofar as such application may be permitted under the provisions of' the Federal Constitution, treaties and acts of Congress, but expressly exempted interstate carriers from making 'any showing of public convenience and necessity' in order to secure the certificate or permit. 6 These taxes were imposed separately from the two involved in this case. Appellant's brief states the registration and license plate fees increased from $660.50 in 1937 to $1,212.50 in 1938 and to $1,630.50 in 1939. The gasoline tax increased from $745.30 in 1937 t $1,257.90 in 1938 and $1,649.98 in 1939. The gallonage tax, though ultimately borne by the consumer, was laid on the sale and collected from the dealer. 7 It should be noted that 'the board of railroad commissioners,' as used in § 3847.16(a), and 'the public service commission,' as used in § 3847.27, designate a single body, invested with regulatory power over various public utilities in addition to motor carriers, e.g., railroads, common carriers of oil, etc. By Rev.Codes Mont. (1935), § 3880, 'The board of railroad commissioners * * * shall be ex-officio the public service commission hereby created * * *.' The two terms were said by the Montana Supreme Court in this case to be 'used interchangeably.' 172 P.2d 452, 461. 8 This judicial construction was embodied in an amendment to the section made by Mont.Laws, 1947, c. 73, § 2. 9 Louisiana ex rel. Francis v. Resweber, 329 U.S. 459, 67 S.Ct. 374, 91 L.Ed. 422; Huddleston v. Dwyer, 322 U.S. 232, 64 S.Ct. 1015, 88 L.Ed. 1246; Minnesota v. Probate Court, 309 U.S. 270, 60 S.Ct. 523, 84 L.Ed. 744, 126 A.L.R. 530; Morehead v. N.Y. ex rel. Tipaldo, 298 U.S. 587, 56 S.Ct. 918, 80 L.Ed. 1347, 103 A.L.R. 1445; cf. Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, 114 A.L.R. 1487. 10 Acting not only in the view that statutes are presumptively constitutional and, if necessary, are to be so construed as to make them so, the court noted that § 3847.16(b) expressly provides that, when service 'is rendered partly in this state and partly in an adjoining state or foreign country,' carriers 'shall comply with the provisions of this act' concerning 'payment of compensation' and making reports by showing 'the total business performed within the limits of this state.' (Emphasis added.) Accordingly it held that §§ 3847.27 and 3847.16 should be read together and the limitation of § 3847.16(b) 'within the limits of this state' thus became a part of § 3847.27 as well as § 3847.16(a). Mont., 172 P.2d 452, 460. 11 Appellant's vice president and general manager, Wheating, testified that for purposes of applying § 3847.27 he had calculated, for each of the years 1939 through 1942, 'the (gross) income for that operation of the load miles operated in Montana by using an average income per mile figure based upon the probable load factor we would have had in Montana.' (Emphasis added.) On this basis the amount of the tax as calculated at one-half of one per cent quarterly was substantially below the statutory minimum for each of the four years. See note 19. These figures apparently were reported to and accepted by the board as the basis for its demands upon the taxpayer for the flat $15 minimum annual tax. 12 Mont., 172 P.2d 452, 460. Appellant had argued, as it does here, that even if the 'gross revenue' tax is limited to revenue derived from operations in Montana, it is nevertheless invalid for want of any prescribed method on the face of the statute for ascertaining or calculating the tax. The state court held that the statute by necessary implication authorized the board to 'adopt any fair and reasonable mode of enforcement designed to effectuate the purposes of the Act.' Mont., 172 P.2d 452, 461. In view of our limitation of the question before us, as stated in the text, we need not express opinion concerning this ruling or any tax above the minimum calculated in accordance with it. Cf. note 11. In another connection the state supreme court adverted to the separability clause contained in § 3847.24 of the statute, though not referring to it expressly in relation to the statement quoted in the text. 13 See note 6 and text. It is admitted by the pleadings that the proceeds of he vehicle registration and license tax and the gallonage tax are allocated to the construction, repair and maintenance of state highways. 14 The board concedes in the brief filed here that the state supreme court was in error in the statement that the revenue from the two taxes presently in issue 'is devoted to the building, repairing and policing of such highways * * *.' Mont., 172 P.2d 452, 462. 15 See note 3 and text. 16 It is immaterial that the state receives federal aid for state road construction, a fact on which appellant places some emphasis. 17 See note 18 infra and text. 18 In Clark v. Poor, 274 U.S. 554, 557, 47 S.Ct. 702, 703, 71 L.Ed. 1199, the Court stated: 'Since the tax is assessed for a proper purpose and is not objectionable in amount, the use to which the proceeds are put is not a matter which concerns the plaintiffs.' 19 Appellant claims that the $15 minimum fee is unreasonable since it is roughly ten times greater than the tax that would be required if the percentage standard provided in the statute were applied. To accept appellant's position would mean that a state could never impose a minimum fee, but would have to adjust its taxes to the inevitable variations in the use of the highways made by various carriers. The Federal Constitution does not require the state to elaborate a system of motor vehicle taxation which will reflect with exact precision every graduation in use. In return for the $15 fee appellant can do business grossing $3,000 per vehicle annually for operations on Montana roads. Appellant was not wronged by its failure to make the full use of the highways permitted. Aero Transit Co. v. Georgia Commission, 295 U.S. 285, 55 S.Ct. 709, 79 L.Ed. 1439; Morf v. Bingaman, 298 U.S. 407, 56 S.Ct. 756, 80 L.Ed. 1245; cf. Kane v. New Jersey, 242 U.S. 160, 37 S.Ct. 30, 61 L.Ed. 222.
78
332 U.S. 507 68 S.Ct. 190 92 L.Ed. 128 PANHANDLE EASTERN PIPE LINE CO.v.PUBLIC SERVICE COMMISSION OF INDIANA et al. No. 69. Argued Nov. 14—17, 1947. Decided Dec. 15, 1947. Appeal from the Supreme Court of the State of Indiana. Mr. John S. L. Yost, of New York City, for appellant. Mr. Karl J. Stipher, of Indianapolis, Ind., for appellee, Public Service Commission of Indiana. Mr. William P. Evans, of Indianapolis, Ind., for appellees, Indiana Gas & Water Co. et al. Mr. Justice RUTLEDGE, delivered the opinion of the Court. 1 Broadly the question is whether Indiana has power to regulate sales of natural gas made by an interstate pipe-line carrier direct to industrial consumers in Indiana. More narrowly we are asked to decide whether the commerce clause, Const. Art. I, § 8, by its own force forbids the appellee, Public Service Commission, to require appellant to file tariffs, rules and regulations, annual reports, etc., as steps in a comprehensive plan of regulation preliminary to possible exercise of jurisdiction over rates and service in such sales.1 2 Panhandle Eastern transports natural gas from Texas and Kansas fields into and across intervening states, including Indiana, to Ohio and Michigan. In Indiana it furnishes gas to local public utility distributing companies and municipalities. These in turn supply the needs of over 112,000 residential, commercial and industrial consumers. 3 Since 1942 appellant also has sold gas in large amounts direct to Anchor-Hocking Glass Corporation for industrial consumption.2 Shortly before beginning this service appellant had informed a number of its customers, local distributing companies in Indiana, that it intended to render service directly to large industrial consumers wherever possible.3 Pursuant to that policy, since these proceedings began direct service has been extended to another big industrial user.4 4 In 1944 the Commission initiated hearings relative to direct service by Panhandle Eastern to Indiana consumers. It concluded that 'the distribution in Indiana by Panhandle of natural gas direct to consumers is subject to regulation by this Commission under the laws of this state,' notwithstanding any alleged contrary effect of the commerce clause upon appellant's direct sales to industrial sers. Accordingly it issued its order of November 21, 1945, for the filing of tariffs, etc., as has been stated. 5 Early in 1946 Panhandle Eastern brought this suit in a state court to set aside and enjoin enforcement of the order. While the cause was pending the Commission issued a supplemental order declining appellant's offer to submit the specified tariffs, reports, etc., 'as information only,' and reasserting its full regulatory power as conferred by the Indiana statutes.5 63 P.U.R., N.S., 309. 6 The trial court vacated the orders and enjoined the Commission from enforcing them. It accepted appellant's view of the effect of the commerce clause on its operations. The Supreme Court of Indiana reversed that judgment and denied the relief appellant sought. 71 N.E.2d 117. It held first that the Commission's orders amounted to an unequivocal assertion of power to regulate rates and service on appellant's direct industrial sales and thus presented squarely the question of the Commission's jurisdiction over such sales as affected by the commerce clause. The court did not flatly hold that the sales are in interstate rather than intrastate commerce. But, taking them to be of the former kind, it held them nevertheless subject to the state's power of regulation under the doctrine of Cooley v. Board of Wardens, 12 How. 299, 13 L.Ed. 996. The court further held that appellant, in making these sales, is a public utility within the meaning and application of the state's regulatory statutes, Burns Ind.Stat.Ann. § 54-105 and Ind. Acts 1945, c. 53, p. 110. It is this decision we have to review pursuant to § 237 of the Judicial Code, 28 U.S.C. 344(a), 28 U.S.C.A. § 344(a).6 7 The effect of the state statutes, whether permitting the filing of the tariffs, etc., as information unrelated to further regulation or requiring the filing as initial and integral steps in the regulatory scheme, and thus as presenting at the threshold of the scheme's application the question of the state's power to go further with it, is primarily a question of construction for the state courts to determine. In view of the Commission's position, as construed by the state supreme court, we cannot say that the only thing presently involved is the state's power to require the filing of information without reference to its further use for controlling these sales. Cf. Arkansas Louisiana Gas Co. v. Department of Public Utilities, 304 U.S. 61, 58 S.Ct. 770, 82 L.Ed. 1149. Here the orders constituted 'an unequivocal assertion of power' to regulate rates and service. Indeed they involve something more than a mere threat to apply the regulatory plan in its later phases. They represent the actual application of that plan in its initial stage. In such a situation appellant was not required to await a further regulatory order before contesting the Commission's jurisdiction. Cf. Public Utilities Comm. of Ohio v. United Fuel Gas Co., 317 U.S. 456, 63 S.Ct. 369, 87 L.Ed. 396. 8 This does not mean that we now express opinion concerning the validity of any further order which the Commission may enter. No such order is before us. It does mean that we are required to decide whether the sales in question lie within the scope of the state's power to regulate rates and service, so that some further order in those respects may or may not be entered. 9 Nor do we question that these sales are interstate transactions. The contrary suggestion left open in the state supreme court's treatment rests upon the view that gas transported interstate takes on the character of a commodity which has come to rest or broken bulk when it leaves the main transmission line and, under reduced pressure, enters branch lines or laterals irrevocably on its way to final distribution or consumption. Those merely mechanical considerations are no longer effective, if ever they were exclusively, to determine for regulatory purposes the interstate or intrastate character of the continuous movement and resulting sales we have here.7 10 Thus gas furnished to local utilities for resale is supplied unquestionably, both as to transportation and as to sale, in interstate commerce. Yet it is subjected to practically identical changes in pressure with the gas sold by appellant directly for industrial use.8 Neither Practical common sense nor constitutional sense would tolerate holding that reduction in pressure makes the industrial sales to Anchor-Hocking wholly intrastate for purposes of local regulation while deliveries at similar pressures to utility companies remain exclusively interstate. Variations in main pressure are not the criterion of the states' regulatory powers under the commerce clause. Cf. Interstate Natural Gas Co. v. Federal Power Comm., 331 U.S. 682, 689, 67 S.Ct. 1482, 1486. The sales here were clearly in interstate commerce. 11 The controlling issues therefore are two: (1) Has Congress, by enacting the Natural Gas Act, 52 Stat. 821, 15 U.S.C. § 717, 15 U.S.C.A. § 717 et seq., in effect forbidden the states to regulate such sales as tho e appellant makes directly to industrial consumers; (2) if not, are those sales of such a nature, as related to the Cooley formula, that the commerce clause of its own force forbids the states to act. 12 We think there can be no doubt of the answer to be given to each of these questions, namely, that the states are competent to regulate the sales. The two questions may best be considered in the background of the legislative history of the Natural Gas Act and of the judicial history leading to its enactment in 1938. 13 Prior to that time this Court in a series of decisions had dealt with various situations arising from state efforts to regulate the sale of imported natural gas. The story has been adequately told9 and we do not stop to review it again or attempt reconciliation of all the decisions or their groundings. Suffice it to say that by 1938 the Court had delineated broadly between the area of permissible state control and that in which the states could not intrude. The former included interstate direct sales to local consumers, as exemplified in Pennsylvania Gas Co. v. Public Service Comm., 252 U.S. 23, 40 S.Ct. 279, 64 L.Ed. 434; the latter, service interstate to local distributing companies for resale, as held in State of Missouri v. Kansas Natural Gas Co., 265 U.S. 298, 44 S.Ct. 544, 68 L.Ed. 1027, reinforced by Public Utilities Comm. of Rhode Island v. Attleboro Steam and Electric Co., 273 U.S. 83, 47 S.Ct. 294, 71 L.Ed. 549. 14 Shortly then, as the decisions stood in 1938, the states could regulate sales direct to consumers, even though made by an interstate pipe-line carrier. This was true of sales not only for domestic and commercial uses but also for industrial consumption, at any rate whenever the interstate carrier engaged in distribution for all of these uses.10 On the other hand, sales for resale, usually to local distributing companies, were beyond the reach of state power, regardless of the character of ultimate use. This fact not only prevented the states from regulating those sales but also seriously handicapped them in making effective regulation of sales within their authority.11 15 This impotence of the states to act in relation to sales for resale by interstate carriers brought about the demand for federal regulation and Congress' response in the Natural Gas Act. To reach those sales and prevent the hiatus in regulation their immunity caused, the Act declared in § 1(b): 'The provisions of this chapter shall apply to the transportation of natural gas in interstate commerce, to the sale in interstate commerce of natural gas for resale for ultimate public consumption for domestic, commercial, industrial, or any other use, and to natural-gas companies engaged in such transportation or sale, but shall not apply to any other transportation or sale of natural gas or to the local distribution of natural gas or to the facilities used for such distribution or to the production or gathering of natural gas.' 16 This section determines the Act's coverage and does so in the light of the situation existing at the time. Three things and three only Congress drew within its own regulatory power, delegated by the Act to its agent, the Federal Power Commission. These were: (1) the transportation of natural gas in interstate commerce; (2) its sale in interstate commerce for resale; and (3) natural gas companies engaged in such transportation or sale. 17 The omission of any reference to other sales, that is, to direct sales for consumptive use, in the affirmative declaration of coverage was not inadvertent. It was deliberate. For Congress made sure its intent could not be mistaken by adding the explicit prohibition that the Act 'shall not apply to any other * * * sale * * *.' (Emphasis added.) Those words plainly mean that the Act shall not apply to any sales other than sales 'for resale for ultimate public consumption for domestic, commercial, industrial, or any other use.' Direct sales for consumptive use of whatever sort were excluded. 18 The line of the statute was thus clear and complete. It cut sharply and cleanly between sales for resale and direct sales for consumptive uses. No exceptions were made in either category for particular uses, quantities or otherwise. And the line drawn was that one at which the decisions had arrived in distributing regulatory power before the Act was passed.12 19 Moreover, this unusual legislative precision was not employed with any view to relieving or exempting any segment of the industry from regulation. The Act, though extending federal regulation, had no purpose or effect to cut down state power. On the contrary, perhaps its primary purpose was to aid in making state regulation effective, by adding the weight of federal regulation to supplement and reinforce i in the gap created by the prior decisions.13 The Act was drawn with meticulous regard for the continued exercise of state power, not to handicap or dilute it in any way. This appears not merely from the situation which led to its adoption and the legislative history, including the committee reports in Congress cited above, but most plainly from the history of § 1(b) in respect to the changes which took place in reaching its final form.14 20 It would be an exceedingly incongruous result if a statute so motivated, designed and shaped to bring about more effective regulation, and particularly more effective state regulation, were construed in the teeth of those objects, and the import of its wording as well, to cut down regulatory power and to do so in a manner making the states less capable of regulation than before the statute's adoption. Yet this, in effect, is what appellant asks us to do. For the essence of its position, apart from standing directly on the commerce clause, is that Congress by enacting the Natural Gas Act has 'occupied the field,' i.e., the entire field open to federal regulation, and thus has relieved its direct industrial sales of any subordination to state control. 21 The exact opposite is the fact. Congress, it is true, occupied a field. But it was meticulous to take in only territory which this Court had held the states could not reach.15 That area did not include direct consumer sales, whether for industrial or other uses. Those sales had been regulated by the states and the regulation had been repeatedly sustained. In no instance reaching this Court had it been stricken down.16 22 It is true that no case came here involving state regulation of direct industrial sales wholly apart from sales for other uses. In the cases sustaining state power, whether to regulate or to tax, the company making the industrial sales was selling also to domestic and commercial users.17 But there was no suggestion, certainly no decision, that a different result would follow if only direct industrial sales were being made. Neither the prior judicial line nor the statutory line was drawn between kinds of use or on the relation between sales for different uses. Both lines were drawn between sales for use, of whatever kind, and sales for resale. Cf. Colorado Interstate Gas Co. v. Federal Power Comm., 324 U.S. 581, 595, 596, 65 S.Ct. 829, 836, 89 L.Ed. 1206. 23 The Natural Gas Act created an articulate legislative program based on a clear recognition of the respective responsibilities of the federal and state regulatory agencies. It does not contemplate ineffective regulation at either level. We have emphasized repeatedly that Congress meant to create a comprehensive and effective regulatory scheme, complementary in its operation to those of the states and in no manner usurping their authority. Public Utilities Comm. of Ohio v. United Fuel Gas Co., 317 U.S. 456, 467, 63 S.Ct. 369, 375, 87 L.Ed. 396; Federal Power Comm. v. Hope Natural Gas Co., 320 U.S. 591, 609, 610, 64 S.Ct. 281, 291, 88 L.Ed. 333; Interstate Natural Gas Co. v. Federal Power Comm., 331 U.S. 682, 690, 67 S.Ct. 1487. And, as was pointed out in Federal Power Comm. v. Hope Natural Gas Co., supra, 320 U.A. at page 610, 64 S.Ct. at page 291, 'the primary aim of this legislation was to protect consumers against exploitation at the hands of natural gas companies.' The scheme was one of co-operative action18 between federal and state agencies. It could accomplish neither that protective aim nor the comprehensive and effective dual regulation Congress had in mind, if those companies could divert at will all or the cream of heir business to unregulated industrial uses.19 24 The Natural Gas Act therefore was not merely ineffective to exclude the sales now in question from state control. Rather both its policy and its terms confirm that control. More than 'silence' of Congress is involved. The declaration, though not identical in terms with the one made by the McCarran Act, 59 Stat. 33, 15 U.S.C. § 1011, 15 U.S.C.A. § 1011 et seq., concerning continued state regulation of the insurance business, is in effect equally clear, in view of the Act's historical setting, legislative history and objects, to show intention for the states to continue with regulation where Congress has not expressly taken over. Cf. Prudential Ins. Co. v. Benjamin, 328 U.S. 408, 66 S.Ct. 1142, 90 L.Ed. 1342, 164 A.L.R. 476. Congress has undoubted power to define the distribution of power over interstate commerce. Southern Pacific Co. v. State of Arizona, 325 U.S. 761, 769, 65 S.Ct. 1515, 1520, 89 L.Ed. 1915, and authorities cited; cf. Prudential Ins. Co. v. Benjamin, supra. Here the power has been exercised in a manner wholly inconsistent with exclusion of state authority over the sales in question. 25 Congress' action moreover was an unequivocal recognition of the vital interests of the states and their people, consumers and industry alike, in the regulation of rates and service. Indiana's interest in appellant's direct sales is obvious. That interest is certainly not less than the interest of California and her people in their protection against the evil effects of wholly unregulated sale of insurance interstate. Robertson v. People of State of California, 328 U.S. 440, 66 S.Ct. 1160, 90 L.Ed. 1366. Not only would industrial consumers in most instances go without protection as to rates and service other than that supplied by competition from other fuels,20 but the state's regulatory system would be crippled and the efforts of the Indiana Commission seriously hampered in protecting the interests of other classes of users equally if not more important.21 26 As against these vital local interests, becoming more important with every passing year in the steady transition from use of more primitive fuels to natural gas and fuel oils, appellant seeks to set up its own interest in complete freedom from regulation and, if any is to be imposed, a supposed national interest in uniform regulation. The national interest, considered apart from its own, is largely illusory on this record. For itself, the company asserts that state regulation of prices and service will amount to a power of blocking the commerce or impeding its free flow. 27 There are two answers. One is experience. Insofar as this phase of the natural gas industry has been subjected to state regulation to date, those effects have not been shown to occur. The other answer, in case that experience should vary, is the power of Congress to correct abuses in regulation if and when they appear. State power to regulate interstate commerce, wherever it exists, is not the power to destroy it, unless Congress has expressly so provided.22 It is the power to require that it be done on terms reasonably related to the necessity for protecting the local interests on which the power rests. 28 Appellant also envisages conflicting regulations by the commissions of the various states its main pipe line serves, particularly in relation to curtailment of service when weather conditions or others require it, and fears conflict also between the state commissions and the Federal Power Commission. It assigns these possibilities in support of its view that national uniform regulation alone is appropriate to its operations. There is no evidence thus far of substantial conflict in either respect23 and we do not see that the probability of serious conflict is so strong as to outweigh the vital local interests to which we have referred requiring regulation by the states. Moreover, if such conflict should develop, the matter of interrupting service is one largely related, as appellees say, to transportation and thus within the jurisdiction of the Federal Power Commission to control, in accommodation of any conflicting interests among various states.24 29 These considerations all would lead to the conclusion that the states are not made powerless to regulate the sales in question by any supposed necessity for uniform national regulation but that on the contrary the matter is of such high local import as to justify their control, even if Congress had remained wholly silent and given no indication of its intent that state regulation should be effective. But in this case, in addition to those considerations taken independently, the policy which we think Congress has clearly delineated for permitting and supporting state regulation removes any necessity for determining the effect of the commerce clause independently of action by Congress and taken as operative in its silence. 30 The attractive gap which appellant has envisioned in the co rdinate schemes of regulation is a mirage. The judgment of the Supreme Court of Indiana is affirmed. 31 Affirmed. 32 Mr. Justice JACKSON concurs in the result. 33 Mr. Justice MURPHY took no part in the consideration or decision of this case. 1 The Commission is authorized to take these steps by Indiana statutes creating the state's regulatory scheme for public utilities. Burns Ind.Stat.Ann. §§ 54-101 et seq. 2 Appellant's sales to Anchor-Hocking are far larger than sales made to several of the local distributing companies. Thus, in 1943 appellant sold 1,150,279 cubic feet to Anchor-Hocking and only 151,065 cubic feet to the local utility served from the same branch line. See note 8 infra. 3 This was in 1941. In 1943 the chairman of appellant's board stated that 'Panhandle was anxious to take over such business because it was unregulated transaction both as to the Federal Power Commission and the Public Service Commission of Indiana and that he intended to establish higher industrial rates based on a competitive fuel basis.' 4 Prior to the hearings before the Commission appellant had entered into arrangements to provide direct industrial service to an E. I. DuPont de Nemours & Company plant near Fortville, Indiana. That service was commenced subsequent to the hearings. 5 In the trial court the Commission had urged, as it still does, that its first order merely required the filing of information and that no action would lie to contest its power to fix rates or otherwise regulate the sales until that power was exercised. This resulted in bringing forth appellant's tender of compliance as 'information only,' conditioned upon the Commission's acceptance of the filing as such and without prejudice to appellant's right to contest the validity of any subsequent order. The supplemental order expressly stated that the filing, if any, would be deemed to be for the purpose of and available for use by the Commission in carrying out its further duties under the statute. 6 Several of the local utility companies, which had been intervenors in the proceedings before the Commission, were permitted to intervene in the court test of the orders and are appellees here. The National Association of Railroad and Utilities Commissioners has filed a brief amicus curiae in support of the Commission's position. 7 In Illinois Natural Gas Co. v. Central Illinois Public Service Co., 314 U.S. 498, 504, 62 S.Ct. 384, 386, 86 L.Ed. 371, the Court referred to earlier decisions turned by 'applying this mechanical test for determining when interstate commerce ends and intrastate commerce begins,' namely, 'upon the introduction of the gas into the service pipes of the distributor,' and then stated: 'In other cases the Court, in determining the validity of state regulations, has been less concerned to find a point in time and space where the interstate commerce in gas ends and intrastate commerce begins, and has looked to the nature of the state regulation involved, the objective of the state, and the effect of the regulation upon the national interest in the commerce. Cf. South Carolina Highway Dept. v. Barnwell Bros., 303 U.S. 177, 185, 187 et seq., 58 S.Ct. 510, 513, 514, 82 L.Ed. 734; California v. Thompson, 313 U.S. 109, 113, 114, 61 S.Ct. 930, 932, 85 L.Ed. 1219; Duckworth v. Arkansas, 314 U.S. 390, 62 S.Ct. 311 (86 L.Ed. 294, 138 A.L.R. 1144).' 314 U.S. at page 505, 62 S.Ct. at page 386. 8 Appellant's gas enters Indiana in a 22-inch main at a pressure of 250 pounds or more per square inch. In the state the gas enters a 16-inch branch line at a pressure of 200 pounds per square inch, and then a 6-inch lateral line at a pressure of 100 pounds per square inch. In the lateral line the gas is transported to two adjacent meter houses. From one house gas is delivered to Anchor-Hocking at pressures as low as 10 pounds per square inch, while from the other deliveries are made to a local distributing company at pressures ranging from 9 to 25 pounds per square inch. Similarly, gas from other laterals stemming from appellant's main line is reduced to a pressure of 16 pounds per square inch before being furnished to the DuPont plant and to pressures of approximately 20 pounds per square inch for two utility companies served from the same lateral as the DuPont plant. 9 For a summary of the leading decisions concerning the sale and transportation of gas prior to the passage of the Natural Gas Act, see Illinois Natural Gas Co. v. Central Illinois Public Service Co., 314 U.S. 498, 504, 505, 62 S.Ct. 384, 386, 86 L.Ed. 371. See also Powell, Note Physics and Law—Commerce in Gas and Electricity, 58 Harv.L.Rev. 1072; Howard, Gas and Electricity in Interstate Commerce, 18 Minn.L.Rev. 611. 10 Appellant contends that 'wholesale,' i.e., large quantity, service direct to industrial consumers, as exemplified by its sales to Anchor-Hocking, is to be distinquished from the sales in Pennsylvania Gas Co. v. Public Service Comm., 252 U.S. 23, 40 S.Ct. 279, 64 L.Ed. 434, which were made in a manner commonly associated with a local distribution system supplying gas to consumers in a city. Nothing in the decision, however, requires it to be so limited. On the contrary, emphasis may rather be placed on the fact that both situations involve sales to ultimate consumers, Anchor-Hocking being just as clearly in that category as the 'factories and residences' served by the company in the Pennsylvania Gas Co. case. See Illinois Natural Gas Co. v. Oentral Illinois Public Service Co., 314 U.S. 498, 505, 62 S.Ct. 384, 387, 86 L.Ed. 371, where Chief Justice Stone, in summarizing the Pennsylvania Gas Co. case, stated that it involved gas 'sold directly to ultimate local consumers'; Jersey Central Power and Light Co. v. Federal Power Comm., 319 U.S. 61, 78, 80, 63 S.Ct. 953, 962, 87 L.Ed. 1258 (dissenting opinion); Powell, Note, 58 Harv.L.Rev. 1072, 1082, quoted infra note 12. 11 The Attleboro decision, 273 U.S. 83, 47 S.Ct. 294, 71 L.Ed. 549, had been made in the face of the Rhode Island Commission's finding that the Narragansett company in selling electric current interstate to the Attleboro company was suffering an operating loss while the rates to its other customers yielded a fair return; and over the Commission's contentions grounded on that finding that it could not effectively regulate rates of the Narragansett company to its local consumers without also regulating its rates to the Attleboro company. Compare the memorandum submitted on behalf of the National Association of Railroad and Utility Commissioners by its general solicitor, Mr. John E. Benton, Hearings before Committee on Interstate and Foreign Commerce on H.R. 4008, 75th Cong., 1st Sess. 141, 143: 'Sales for industrial use ought not to be exempt from all regulation, for the result may very well be that unjustifiable discrimination will result, and there will be no commission to which complaint may be made. Sales for industrial uses plainly ought to be subject to regulation by the same Commission which regulates sales to other classes of consumers, so that just and reasonable rates, for the several classes of service, properly related to each other, may be established.' 12 '* * * (T)he Supreme Court has from the beginning allowed the state both to tax and to fix the price on the first sale or delivery of gas or electricity brought in from a sister state when and if this first sale is also necessarily the last sale because consummated by consumption.' Powell, Note, 58 Harv.L.Rev. 1072, 1082. 13 In H. Rep. No. 709, 75th Cong., 1st Sess., the Committee on Interstate and Foreign Commerce said of the proposed bill which became the Natural Gas Act: 'It confers jurisdiction upon the Federal Power Commission over the transportation of natural gas in interstate commerce, and the sale in interstate commerce of natural gas for resale for ultimate public consumption for domestic, commercial, industrial, or any other use. The States have, of course, for many years regulated sales of natural gas to consumers in intrastate transactions. The States have also been able to regulate sales to consumers even though such sales are in interstate commerce, such sales being considered local in character and in the absence of congressional prohibition subject to State regulation. (See Pennsylvania Gas Co. v. Public Service Commission (1920), 252 U.S. 23 (40 S.Ct. 279, 64 L.Ed. 434).) There is no intention in enacting the present legislation to disturb the States in their exercise of such jurisdiction. However, in the case of sales for resale, or so-called wholesale sales, in interstate commerce (for example, sales by producing companies to distributing companies) the legal situation is different. Such transactions have been considered to be not local in character and, even in the absence of Congressional action, not subject to State regulation. (See (State of) Missouri v. Kansas (Natural) Gas Co. (1924), 265 U.S. 298 (44 S.Ct. 544, 68 L.Ed. 1027), and Public Service Commission (of Rhode Island) v. Attleboro Steam and Electric Co. (1927) 273 U.S. 83 (47 S.Ct. 294, 71 L.Ed. 549).) The basic purpose of the present legislation is to occupy this field in which the Supreme Court has held that the States may not act.' See also H. Rep. No. 2651, 74th Cong., 2d Sess., 1—3; Sen. Rep. No. 1162, 75th Cong., 1st Sess. 14 In the hearings on H.R. 4008, the bill in the 75th Congress, the representative of several large pipe-line companies construed § 1(b) as it then stood to exempt sales to industrial consumers from all regulation, state as well as federal, and proposed an amendment exempting sales for resale, when for industrial use only, from regulation under the proposed legislation. Hearings before Committee on Interstate and Foreign Commerce on H.R. 4008, 75th Cong., 1st Sess. 124. In an answering memorandum, Mr. Benton pointed out the pipe-line representative's misunderstanding of the purposes of § 1(b), stating that 'service to an industrial user is just as much a local service * * * as is a sale to a householder for domestic use * * * (and) until Congress occupies the field, a sale for industrial use is accordingly subject to State regulation * * *.' Id. at 143. He proposed an alternative amendment to render it clear beyond doubt that federal regulation of sales for resale extended to transactions where the gas was to be used for industrial purposes only. Id. at 142. Mr. Benton's amendment was adopted by the House committee and appears in substantially unaltered form in § 1(b) of the Natural Gas Act as finally enacted. In H.Rep.No.709, 75th Cong., 1st Sess., the committee emphasized that Mr. Benton and other representatives of state commissions and municipalities appeared in support of the bill. In support of its position appellant relies in part on H. Rep. No. 800, 80th Cong., 1st Sess., favorably reporting H.R. 4051 amending the Natural Gas Act. This bill did not become law. The views expressed in the committee report made in 1947, some nine years after the Natural Gas Act's passage, are hardly determinative or, in juxtaposition with the contemporaneous history, persuasive of the congressional intent in passing that Act. 15 See notes 12 and 13 supra. 16 Ibid. 17 Pennsylvania Gas Co. v. Public Service Comm., 252 U.S. 23, 40 S.Ct. 279, 64 L.Ed. 434, appears to be the only case flatly ruling the point for regulatory purposes. But its authority was clearly recognized in Illinois Natural Gas Co. v. Central Illinois Public Service Co., 314 U.S. 498, 505, 62 S.Ct. 384, 386, 86 L.Ed. 371; cf. note 10 supra; State of Missouri v. Kansas Natural Gas Co., 265 U.S. 298, 308, 44 S.Ct. 544, 545, 68 L.Ed. 1027; Public Utilities Comm. of Rhode Island v. Attleboro Steam and Electric Co., 273 U.S. 83, 87, 47 S.Ct. 294, 295, 71 L.Ed. 549, and other cases, as well as in the congressional report quoted in note 13. 18 The jurisdiction granted the Federal Power Commission by the Natural Gas Act necessitates close correlation with state regulatory bodies. Section 17 of the Act provides for cooperation between the federal and state agencies. See note 23 and text. fn19 Over 38 per cent of the gross revenues of the local Indiana utilities from the sale of gas is derived from service to the approximately 250 industrial consumers served by them. If service to any substantial number of the industrial users were to be taken over by appellant, the local utilities not only would suffer great losses in revenue, but would be unable to dispense with more than a trivial percentage of their plant properties. The resultant increase in unit cost of gas would lead necessarily to increased rates for the consumers served by the local companies. 19 Over 38 per cent of the gross revenues of the local Indiana utilities from the sale of gas is derived from service to the approximately 250 industrial users were to be taken over by appellant, the local utilities not only would suffer great losses in revenue, but would be unable to dispense with more than a trivial percentage of their plant properties. The resultant increase in unit cost of gas would lead necessarily to increased rates for the consumers served by the local companies. 20 Pipe-line service, by the very physical conditions characterizing the industry and magnitude of investment required, acquires large monopolistic effects, more particularly in marketing areas distant from producing ones. Cf. Federal Power Comm. v. Hope Natural Gas Co., 320 U.S. 591, 610, note 17, 64 S.Ct. 281, 291, 88 L.Ed. 333 and text. Most often its competition is with other fuels rather than competing pipe lines. 21 See note 19. Cf. Milk Control Board of Commonwealth of Pennsylvania v. Eisenberg Farm Products, 306 U.S. 346, 59 S.Ct. 528, 83 L.Ed. 752; Robertson v. People of State of California, 328 U.S. 440, 448, 66 S.Ct. 1160, 1164, 90 L.Ed. 1366; Ind strial Gas Co. v. Public Utilities Comm. of Ohio, 135 Ohio St. 408, 412, 21 N.E.2d 166; In re Service Gas Co., 15 P.U.R.,N.S., 202. 22 Kentucky Whip and Collar Co. v. Illinois Cent. R. Co., 299 U.S. 334, 57 S.Ct. 277, 81 L.Ed. 270; Clark Distilling Co. v. Western Maryland R. Co., 242 U.S. 311, 37 S.Ct. 180, 61 L.Ed. 326, L.R.A.1917B, 1218, Ann.Cas.1917B, 845; United States v. Darby, 312 U.S. 100, 61 S.Ct. 451, 85 L.Ed. 609, 132 A.L.R. 1430. 23 There is no evidence of any conflict in the asserted exercise of jurisdiction by the appellee Commission with any functions of the Federal Power Commission. In granting appellant permission under § 7(c) of the Natural Gas Act to extend its facilities to serve the DuPont plant, see note 4 supra, the Federal Power Commission specifically provided that the order was 'without prejudice to the authority of the Indiana Commission in the exercise of any jurisdiction which it may have over the sale or service proposed to be rendered by Panhandle Eastern to du Pont.' Cf. note 18. 24 See note 23.
910
332 U.S. 524 68 S.Ct. 229 92 L.Ed. 142 JONES, Collector of Internal Revenue,v.LIBERTY GLASS CO. No. 71. Argued Nov. 18, 1947. Decided Dec. 22, 1947. Rehearing Denied March 8, 1948. See 333 U.S. 850, 68 S.Ct. 657. Mr. Lee A. Jackson, of Washington, D.C., for petitioner. Mr. Earl Foster, of Oklahoma City, Okl., for respondent. Mr. Justice MURPHY delivered the opinion of the Court. 1 Our concern here is with the period of limitations applicable to the filing of claims for refund of federal income taxes. Must such claims be filed within two years after payment of the tax, as provided by § 322(b)(1) of the Internal Revenue Code, 26 U.S.C.A. Int.Rev.Code, § 322(b)(1), or within four years after payment of the tax, as provided by § 3313 of the Code? 2 The corporate taxpayer, respondent herein, filed its income and excess-profits tax return for 1938, a return which indicated a tax liability of $1,193.25. This sum, plus a small additional assessment, was paid in 1939. A revenue agent later investigated the taxpayer's liability again, resulting in an additional assessment of $6,640.81. Payment of this amount was made on March 8, 1941. Over three years later, on March 30, 1944, the taxpayer filed a claim for refund of $1,053.49. It was stated that the revenue agent erroneously had failed to allow certain credits for sums used by the taxpayer in 1938 to reduce its indebtedness. Reliance was placed by the taxpayer on the four-year limitation period specified in § 3313. The Commissioner of Internal Revenue rejected this claim, pointing out that § 3313 specifically exempts from its application income, war-profits, excess-profits, estate and gift taxes. 3 This suit was then brought by the taxpayer in the District Court to recover the amount alleged by t e refund claim to be due. That court held that § 3313 was applicable and gave judgment for the taxpayer. 66 F.Supp. 254. The TenthCircuit Court of Appeals, one judge dissenting, affirmed the judgment. 159 F.2d 316. The problem being one of importance in the administration of the revenue laws, we granted certiorari. 331 U.S. 800, 67 S.Ct. 1514. 4 Section 322(b)(1) is to be found in Subtitle A of the Internal Revenue Code, a subtitle dealing with those taxes over which the Tax Court has jurisdiction. Such jurisdiction includes income, excess-profits, estate and gift taxes. More specifically, § 322(b)(1) appears under Chapter 1 of the Code, pertaining to income taxes. It is concerned with overpayments of income taxes and provides quite simply that no refund shall be allowed unless a claim for refund 'is filed by the taxpayer within three years from the time the return was filed by the taxpayer or within two years from the time the tax was paid.'1 5 Section 3313, on the other hand, is located under Subtitle B of the Code, a subtitle devoted to miscellaneous taxes. It is in Chapter 28, which contains various provisions common to such taxes. And it is among those provisions dealing with the assessment, collection and refund of the taxes. It reads as follows: 'All claims for the refunding or crediting of any internal revenue tax alleged to have been erroneously or illegally assessed or collected, or of any penalty alleged to have been collected without authority, or of any sum alleged to have been excessive or in any manner wrongfully collected must, except as otherwise provided by law in the case of income, war-profits, excess-profits, estate, and gift taxes, be presented to the Commissioner within four years next after the payment of such tax, penalty, or sum. The amount of the refund (in the case of taxes other than income, war-profits, excess-profits, estate, and gift taxes) shall not exceed the portion of the tax, penalty, or sum paid during the four years immediately preceeding the filing of the claim, or if no claim was filed, then during the four years immediately preceding the allowance of the refund.' 6 The substance of § 3313 of the Code has long been a part of federal statutory law. Its ancestry can be traced back to 1872, when § 3228 of the Revised Statutes was enacted.2 Section 3228 established a procedure for filing claims for refund of any internal revenue tax alleged to have been 'erroneously or illegally assessed or collected' and created a limitation period of two years from the time the cause of action accrued, later extended in 1921 to four years from the date of payment of the tax.3 But soon after the entry of the income tax into the federal scene in 1913, separate provision was made for the filing of claims for refund of income taxes 'paid in excess of those properly due.' Section 14(a) of the Revenue Act of 19164 was the first such provision and it made clear that § 3228 was inapplicable to claims of this nature. Section 252 of the Revenue Act of 1918,5 followed by § 252 of the 1921 Act,6 continued this scheme of separate treatment. These later provisions were written so as to include refund claims relating to war-profits and excess-profits taxes as well as those involving income taxes; and a limitation of five years from the date the return was due was placed on the filing of such claims. It was further specified that the procedure therein detailed was to be followed 'notwithstanding the provisions' of § 3228. 7 Section 252, as it appeared in the 1921 Act, was then changed in 19237 so as to permit claims for refund of income and profits taxes 'paid in excess of that properly due' to be filed within two years after the tax was paid, in addition to the five-year period after the due date of the return. This change was made 'so that the taxpayer who has, by agreement with the Treasury, permitted the time for the final assessment of the taxes due from him to be made after the expiration of the five-year period, will not be barred from making a claim for a refund when such assessment is made and the taxpayer alleges that the assessment is illegal.'8 Amending § 252 rather than § 3228 of the Revised Statutes to accomplish this purpose was significant. It was an unequivocal indication that § 252, in speaking of claims for refund of 'excess' payments of income and profits taxes, was designed by its framers to include not only those payments growing out of errors in the preparation of returns but also those payments resulting from illegal or erroneous assessments. See Graham v. Dupont, 262 U.S. 234, 258, 43 S.Ct. 567, 570, 67 L.Ed. 965. 8 The Revenue Act of 19249 transferred the substance of the former § 252 to a new § 281. A four-year period of limitations from the date of the payment of the tax was established, a period coinciding in length with that prescribed by § 3228. The reference to the type of payments involved was recast; in place of speaking of payments 'in excess of that properly due,' § 281 used the simple term 'overpayments.'10 And instead of stating in § 281 that its provisions should apply 'notwithstanding the provisions' of § 3228 of the Revised Statutes, § 3228 itself was amended11 to make it applicable to all claims for the refunding or crediting of any internal revenue tax 'except as provided in section 281 of the Revenue Act of 1924.' This placing of an exceptive clause in § 3228 was done 'to remove the doubt which now exists as to whether or not the provisions of section 3228, Revised Statutes, apply in any event to income taxes.'12 In other words the statutory drafters intended to make certain that § 3228 was in no event to apply to income tax refund claims. Such claims were to be governed exclusively by § 281. 9 The essence of § 281 of the 1924 Act has been carried through to the present § 322 of the Internal Revenue Code.13 The only significant change in the interval, for our purposes, was a reduction in the period of limitations, as measured from the payment of the tax, from four years to three years and finally to two years. And § 3228 of the Revised Statutes, as amended to state that it applies 'except as otherwise provided by law in the case of income, warprofits, excess-profits, estate, and gift taxes,' has become the current § 3313 of the Code. 10 With this background in mind, we find the pattern of limitation periods for tax refund claims to be clear. Section 3313 of the Code establishes a four-year period for all internal revenue taxes, except as otherwise provided by law in the case of specified taxes. Among the latter is the income tax, as to which § 322(b)(1) makes provision 'otherwise' by requiring that refund claims be presented within two years of payment or within three years from the filing of the return. Provisions are also made 'otherwise' in the case of the estate tax (§ 910 of the Code) and the gift tax (§ 1027 of the Code). 11 The argument is made, however, that § 322(b)(1) deals only with income tax 'overpayments' and not with income taxes 'erroneously or illegally assessed or collected.' Overpayments are said to refer solely to excess payments resulting from errors by taxpayers in the preparation of their returns or in related activities, while erroneous or illegal assessments and collections are claimed to relate to various kinds of errors on the part of revenue agents. Since there is no provision 'otherwise' for income tax refund claims involving the latter type of errors, the conclusion is reached that the four-year limitation period of § 3313 remains applicable. We cannot agree. 12 In the absence of some contrary indication, we must assume that the framers of these statutory provisions intended to convey the ordinary meaning which is attached to the language they used. See Rosenman v. United States, 323 U.S. 658, 661, 65 S.Ct. 536, 527, 89 L.Ed. 535. Hence we read the word 'overpayment' in its usual sense, as meaning any payment in excess of that which is properly due. Such an excess payment may be traced to an error in mathematics or in judgment or in interpretation of facts or law. And the error may be committed by the taxpayer or by the revenue agents. Whatever the reason, the payment of more than is rightfully due is what characterizes an overpayment. 13 That this ordinary meaning is the one intended by the authors of § 322(b)(1) is quite evident from the legislative history which we have detailed. The word 'overpayment' first appeared in § 281 of the 1924 Revenue Act, one of the direct ancestors of § 322(b)(1). The word was there used as a substitute for the previous reference to payments 'in excess of that properly due,' a phrase that is a perfect definition of an overpayment and that is not necessarily confined to overpayments occasioned by errors made by taxpayers. The immediate predecessor of § 281 had employed that phrase and had been enacted in 1923 with the expressed intention of including claims growin out of illegal assessments. There was not the slightest indication that the substitution of the word 'overpayment' was designed to narrow the scope of § 281. It apparently was a mere simplification in phraseology. But it does make clear the sense in which the word was first used in this context. The generic character of the word was emphasized from the start.14 And we see no basis for making it over into a word of art at this late date. 14 The legislative history further reveals a consistent intention to make a separate and complete limitation provision for income tax refund claims, whatever might be the underlying basis of the claims. Section 322 and its predecessors were devised in order to provide such an exclusive scheme. Claims relating to the income tax have at all times been explicitly excluded from § 3313.15 This arrangement is but part of the general plan evident in the Internal Revenue Code of providing separate treatment for the income, profits, estate and gift taxes, as distinct from the miscellaneous taxes and the excise, import and temporary taxes. We would be doing unwarranted violence to this clear demarcation were we to read the word 'overpayment' so as to place certain types of income tax refund claims within the scope of § 3313, a section that has always been divorced from the income tax portion of the revenue laws. 15 It is pointed out, however, that various lower federal courts beginning in 1939, have reached a contrary result.16 They have held that § 3313 rather than § 322(b)(1) governs refund claims for income taxes alleged to have been 'erroneously or illegally assessed or collected.' Since Congress has subsequently convened from time to time and has amended § 322 in other respects without expressly disapproving this interpretation, the contention is advanced that legislative acquiescence in the interpretation must be assumed. But the doctrine of legislative acquiescence is as best only an auxiliary tool for use in interpreting ambiguous statutory provisions. See Helvering v. Reynolds, 313 U.S. 428, 432, 61 S.Ct. 971, 973, 85 L.Ed. 1438, 134 A.L.R. 1155. Here the language and the purpose of Congress seem clear to us. The arrangement whereby all income tax refund claims are to be governed by what is now § 322(b)(1) was established in an unmistakable manner nearly a quarter of a century ago, an arrangement that has been continued through various reenactments and changes in the revenue laws. And that arrangement has been consistently recognized and followed by the Treasury Department.17 Under those circumstances, it would take more than legislative silence in the face of rather recent contrary decisions by lower federal courts to overcome the factors upon which we have placed reliance. Cf. Electric Storage Battery Co. v. Shimadzu, 307 U.S. 5, 14, 613, 616, 59 S.Ct. 675, 681, 83 L.Ed. 1071; State of Missouri v. Ross, 299 U.S. 72, 75, 57 S.Ct. 60, 62, 81 L.Ed. 46; United States v. Elgin, J. & E.R. Co., 298 U.S. 492, 500, 56 S.Ct. 841, 843, 80 .Ed. 1300. We do not expect Congress to make an affirmative move every time a lower court indulges in an erroneous interpretation. In short, the original legislative language speaks louder than such judicial action. 16 We accordingly conclude that all income tax refund claims, whatever the reasons giving rise to the claims, must be filed within three years from the time the return was filed or within two years from the time the tax was paid, as provided in § 322(b)(1). The four-year period prescribed by § 3313 is inapplicable to such claims. Since respondent filed its income tax refund claim more than three years after filing the return and more than two years after payment of the tax, its claim was out of time. That is true even though the claim arose out of an income tax alleged to have been 'erroneously or illegally assessed or collected.' 17 Reversed. 18 Mr. Justice DOUGLAS dissents. 1 The return in this case was filed in June, 1939. Since the claim was filed on March 30, 1944, no contention could be made that it was within the three-year period from the date the return was filed. 2 Section 3228 was in the nature of a revision of § 44 of the Act of June 6, 1872, 17 Stat. 230, 257. 3 Revenue Act of 1921, § 1316, 42 Stat. 227, 314. 4 39 Stat. 756, 772. This provided that the claim for refund might be presented 'notwithstanding the provisions of section thirty-two hundred and twenty-eight of the Revised Statutes.' 5 40 Stat. 1057, 1085. 6 42 Stat. 227, 268. 7 Act of March 4, 1923, 42 Stat. 1504, 1505. In amending § 252, the Act of March 4, 1923, made mention of refunds of income taxes to withholding agents which might be made under the provisions of 'section 3228 of the Revised Statutes.' This was an obvious reference to the practice of the Treasury Department, admitted to be of 'very doubtful legality,' H.Rep.No.1424, 67th Cong., 4th Sess., p. 2, of allowing a taxpayer who had permitted an additional assessment after the five-year period from the due date of the return (specified by § 252 of the 1921 Act) to file a claim for refund within four years after payment of the tax (pursuant to § 3228), even though the five-year period had elapsed. The Treasury had instituted this practice to prevent inequities which might otherwise ensue to such taxpayers, but it was without legislative sanction. It was to take care of the taxpayers who had taken advantage of the Treasury practice that the reference in question in the Act of March 4, 1923, was made. As to claims pending on March 4, 1923, which were timely filed under § 3228, but not timely under § 252, refunds to withholding agents were necessarily to be made under § 3228. This provision was not repeated in subsequent legislation and it was not indicative of a legislative intent to permit income tax refund claims to be governed by § 3228 in the future. 8 Emphasis added. H.Rep.No.1424, 67th Cong., 4th Sess., p. 2; S.Rep.No.1137, 67th Cong., 4th Sess., p. 2. 9 43 Stat. 253, 301. 10 The Revenue Act of 1924, 43 Stat. 253, 296, also created a new § 272, dealing with 'overpayments' of income tax installments. This spoke of verpayments in the sense of payments of 'more than the amount determined to be the correct amount of such installment.' This provision now exists as § 321 of the Internal Revenue Code, 26 U.S.C.A. Int.Rev.Code, § 321. 11 43 Stat. 253, 342. 12 H.Rep.No.179, 68th Cong., 1st Sess., p. 71; S.Rep.No.398, 68th Cong., 1st Sess., p. 44. This quotation was taken verbatim by the Congressional committees from the statement of A. W. Gregg of the Treasury Department, Statement of the Changes Made in the Revenue Act of 1921 by H.R.6715 and the Reasons Therefor, Senate Committee Print, 68th Cong., 1st Sess., March 6, 1924, p. 37. 13 See Revenue Act of 1926, § 284, 44 Stat. 9, 66; Revenue Act of 1928, § 322, 45 Stat. 791, 861; Revenue Act of 1932, § 322, 47 Stat. 169, 242; Revenue Act of 1934, § 322, 48 Stat. 680, 750. 14 Section 272 of the 1924 Act (now § 321 of the Code) referred to 'overpayments' of income tax installments as payments of 'more than the amount determined to be the correct amount of such installment.' See note 10, supra. Such a definition admits of no distinction between errors by the taxpayer and errors by the revenue agents. 15 Reference should also be made to the second sentence of § 3313, providing that the amount of refund may not exceed the amount of tax paid during the four-year period. There is a parenthetical phrase in this sentence which specifically excludes income, war-profits, excess-profits, estate and gift taxes. If the first sentence of § 3313, establishing the four-year limitation period, applied to income tax refund claims arising out of illegal assessments, there would be no limit on the amount of refund by reason of this second sentence. Such a result is without support in the purpose or history of the provisions dealing with these refund claims. 16 Huntley v. Southern Oregon Sales, 9 Cir., 102 F.2d 538, was the first case so holding. Subsequent decisions of the same tenor have relied in large part upon the Huntley case. Olsen v. United States, D.C., 32 F.Supp. 276; United States v. Lederer Terminal Warehouse Co., 6 Cir., 139 F.2d 679; In re Tindle's Estate, D.C., 59 F.Supp. 667, affirmed per curiam sub nom. Pennsylvania Co. for Insurances on Lives and Granting Annuities v. United States, 3 Cir., 152 F.2d 757; Godfrey v. United States, D.C., 61 F.Supp. 240; Noble v. Kavanagh, D.C., 66 F.Supp. 258, affirmed per curiam, 6 Cir., 160 F.2d 104; Sbarbaro v. United States, D.C., 73 F.Supp. 213. See also Fawcett v. United States, D.C., 70 F.Supp. 742. Compare Central Hanover Bank & Trust Co. v. United States, D.C., 67 F.Supp. 920. In many cases, however, the applicability of § 322(b)(1) to claims of the type here involved was assumed without question and without an explicit holding on the point. See, for example, United States v. Garbutt Oil Co., 302 U.S. 528, 58 S.Ct. 320, 82 L.Ed. 405. 17 See I.T. 1447, I—2 Cum.Bull. 220 (1922); T.D. 3457, II—1 Cum.Bull. 177 (1923) and T.D. 3462, amending Regulations 62, II—1 Cum.Bull. 180 (1923); S.M. 1712, III—1 Cum.Bull. 345 (1924); S.M. 2293, III—2 Cum.Bull. 310 (1924); G.C.M. 3152, VII—1 Cum.Bull. 153 (1928); G.C.M. 13759, XIII—2 Cum.Bull. 102 (1934); Mim. 4814, 1938 2 Cum.Bull. 96; I.T. 3483, 1941—1 Cum.Bull. 397. The present Treasury viewpoint is codified in Treasury Regulations 111, promulgated under the Internal Revenue Code, § 29.322—3 and § 29.322—7. See also Treasury Regulations 103, promulgated under the Code, § 19.322—3 and § 19.322—7, as amended by T.D. 5256, 1943 Cum.Bull. 550; and Treasury Regulations 101, promulgated under the Revenue Act of 1938, Articles 322—3 and 322 7.
1112
332 U.S. 535 68 S.Ct. 235 92 L.Ed. 150 KAVANAGH, Collector of Internal Revenue,v.NOBLE. No. 70. Argued Nov. 18, 1947. Decided Dec. 22, 1947. Rehearing Denied March 8, 1948. See 333 U.S. 850, 68 S.Ct. 656. Mr. Lee A. Jackson, of Washington, D.C., for petitioner. Messrs. W. H. Harris and E. M. Baynes, both of West Palm Beach, Fla., for respondent. Mr. Justice MURPHY delivered the opinion of the Court. 1 This case is a companion to Jones v. Liberty Glass Co., 322 U.S. 524, 68 S.Ct. 229. 2 The stipulated facts show that on March 16, 1936, the respondent taxpayer filed with the Collector of Internal Revenue a joint individual income tax return for himself and his wife for the calendar year 1935. This disclosed a tax liability of $8,017.01, which was duly paid. In the return the losses and gains from sales of capital assets by the taxpayer and his wife were reported together, the losses of the wife being deducted from the gains of the husband, resulting in a net loss in excess of $2,000. This amount (the allowable limit of loss) was deducted on the return. 3 On June 7, 1937, the taxpayer was advised at a conference with revenue agents that there was additional income tax due for the year 1935, aggregating $421.80. The taxpayer's check, which was tendered for that amount, was later returned to him. Then by a letter dated June 11, 1937, a revenue agent notified the taxpayer that instead of a deficiency of $421.80 on the 1935 income tax return there was a deficiency of $19,973.93 and the taxpayer was furnished a computation showing the basis for such determination. The agent relied upon Article 117-5, Regulations 86, later declared void by this Court in Helvering v. Janney, 311 U.S. 189, 61 S.Ct. 241, 85 L.Ed. 118, 131 A.L.R. 980. After protest and further conference, the taxpayer gave the agent a check for $21,527.70, covering the then proposed deficiency assessment of $19,973.93, plus interest of $1,553.77. This check was remitted to the United States Treasury, after having been received by the Collector on July 21, 1937. 4 On July 14, 1937, the taxpayer and his wife executed an agreement waiving certain statutory restrictions in their favor and consenting to the immediate assessment and collection against them of 1935 income tax in the principal sum of $19,973.93, plus deficiency interest of $1,553.77, which the Commissioner thereafter assessed. The agreement specified in a footnote that it was not a final closing agreement under § 606 of the Revenue Act of 1928, 26 U.S.C.A. Int.Rev.Acts, page 458, and that it did not therefore preclude the assertion of a further deficiency if one should be determined, nor did it extend the statutory period of limitation for refund, assessment or collection of the tax. 5 On January 28, 1941, the taxpayer and his wife filed a claim for refund of $21,105.90, plus interest, on the ground that there had been an illegal assessment and collection since the revenue agents had 'refused to allow the losses of one spouse against the gains of the other spouse in the joint return of husband and wife.' Reference was made to § 3313 of the Internal Revenue Code, 26 U.S.C.A. Int.Rev.Code, § 3313, specifying a four-year period of limitations. The Commissioner of Internal Revenue rejected this claim in reliance upon § 322(b)(1) of the Revenue Act of 1934, the same as § 322(b)(1) of the Code, 26 U.S.C.A. Int.Rev.Code, § 322(b)(1), establishing a two-year period of limitations; it was pointed out that § 3313 specifically excludes income taxes from those for which a claim may be filed within four years after payment. 6 On July 12, 1941, the taxpayer filed his individual claim for refund of $21,527.70 paid with respect to the year 1935. The claim was on the same grounds as the claim previously filed by the taxpayer and his wife. This claim was returned with the request that the wife join in the execution of the claim; this request was refused and the claim was returned to the Collector; once again the claim was returned to the taxpayer. 7 The taxpayer then brought this suit against the Collector to recover the amount alleged to be due in the refund claim. The District Court held that the decision of the Sixth Circuit Court of Appeals in United States v. Lederer Terminal Warehouse Co., 139 F.2d 679, controlled the case and made it clear that the four-year period of § 3313 was applicable. Summary judgment was therefore entered for the taxpayer. 66 F.Supp. 258. The Sixth Circuit Court of Appeals affirmed per curiam, 160 F.2d 104, citing its previous decision in the Lederer Terminal case. 8 For reasons which we have set forth in Jones v. Liberty Glass Co., 332 U.S. 524, 68 S.Ct. 229, the decision below cannot stand. The two-year period provided by § 322(b)(1), rather than the four-year period of § 3313, governs income tax refund claims. The overpayment which brings § 322(b)(1) into operation occurs whenever the taxpayer has paid an amount over and above his true liability. Hence, if we assume that the deficiency assessment and collection in this case were without legal authority, the taxpayer's payment of that illegal assessment was an overpayment within the meaning of § 322(b)(1). And he had two years from th date of that payment within which to file a claim for refund. Since he did not file his claim until three and a half years after payment, the claim was out of time. 9 It may well be that the taxpayer's refund claim was prompted by this Court's decision in Helvering v. Janney, supra, which set aside the Treasury regulation upon which the deficiency assessment was based. That decision was rendered on December 9, 1940, and the taxpayer filed his first refund claim on January 28, 1941. But assuming that the Janney decision makes clear that the taxpayer here made an overpayment, the loss which he now suffers from an application of § 322(b)(1) is a loss which is inherent in the application of any period of limitations. Such periods are established to cut off rights, justifiable or not, that might otherwise be asserted and they must be strictly adhered to by the judiciary. Rosenman v. United States, 323 U.S. 658, 661, 65 S.Ct. 536, 538, 89 L.Ed. 535. Remedies for resulting inequities are to be provided by Congress, not the courts. 10 Moreover, it is not our province to speculate as to why Congress established a shorter period of limitations relative to the income tax than is the case of those taxes governed by § 3313. It is enough that § 322(b)(1) creates a two-year period applicable to all income tax refund claims and that the claim in this case is of that type. 11 Reversed. 12 Mr. Justice DOUGLAS dissents.
1112
332 U.S. 561 68 S.Ct. 240 92 L.Ed. 170 MARINOv.RAGEN. No. 93. Distributed to Court on Petition and Confession of Error Oct. 6, 1947. Decided Dec. 22, 1947. Motion for Instructions to Circuit Court Denied March 15, 1948. See 333 U.S. 852, 68 S.Ct. 729. Tony Marino, pro se. George F. Barrett, Wm. C. Wines and James C. Murray, all of Chicago, Ill., for respondent. PER CURIAM. 1 Petitioner sought a writ of habeas corpus in the Circuit Court of Winnebago County, Illinois, alleging that his conviction in 1925 on a charge of murder was the result of a denial of his rights under the ederal Constitution. That court, after a hearing, quashed the writ; and as its order cannot be reviewed by any higher Illinois court under Illinois practice, this petition for a writ of certiorari is properly addressed to this Court. See Woods v. Nierstheimer, 328 U.S. 211, 66 S.Ct. 996, 90 L.Ed. 1177; 15 U. of Chic.L.Rev. 118, 122. 2 The facts conceded by respondent are as follows: 3 The common-law record recites that petitioner was arraigned in open court and advised through interpreters of the meaning and effect of a plea of guilty and that petitioner signed a statement waiving jury trial and pleading guilty. He was sentenced to life imprisonment. It does not appear, however, that an attorney was appointed to represent him. The waiver was not in fact signed by him, and no plea of guilty was entered at the trial. He was 18 years old at that time and had been in this country only two years. He did not understand the English language and it is doubtful that he understood American trial court procedure. The arresting officer served as an interpreter for petitioner at the original trial. 4 The State of Illinois speaking through the Attorney General admits the foregoing facts, confesses error, and consents to a reversal of the judgment below. He states that the writ of habeas corpus is a proper remedy in Illinois in this case because the facts, which he concedes to be a denial of due process of law under the decisions of this Court, were known to the court at the time of the original trial, though they were not a matter of record at the trial. Whether or not on this showing habeas corpus is an appropriate remedy in the court to correct a denial of due process is a question of state law as to which we accept the concession of the state's Attorney General. 5 In light of the confession of error (see Young v. United States, 315 U.S. 257, 62 S.Ct. 510, 86 L.Ed. 832; Bozza v. United States, 330 U.S. 160, 67 S.Ct. 645; cf. Baltzer v. United States, 248 U.S. 593, 39 S.Ct. 132, 63 L.Ed. 437) and the undisputed facts, we conclude that petitioner was denied the due process of law which the Fourteenth Amendment requires. 6 Permission to proceed in forma pauperis is granted. The petition for a writ of certiorari is granted and the judgment below is vacated and remanded to the Circuit Court. 7 Judgment vacated. 8 So ordered. 9 Mr. Justice RUTLEDGE, with whom Mr. Justice DOUGLAS and Mr. Justice MURPHY join, concurring. 10 This case sharply points up a much larger problem, of growing concern to this Court, than merely the disposition to be made of Marino's petition in view of the state's confession of error. I agree that relief is due him, and I join in the Court's opinion. But I do not find his case different, except in one respect, from many others which have come regularly to this Court from Illinois in recent years, in which relief has been as regularly denied. The only substantial difference, in my judgment, is that here the state has confessed error. That confession raises, in my opinion, the question of the course this Court should follow in the future concerning the disposition of similar petitions from Illinois. 11 During the last three terms we have been flooded with petitions from Illinois alleging deprivations of due process and other constitutional rights. Thus in the 1944 term, out of a total of 339 petitions filed in forma pauperis, almost all by prisoners, 141 came from Illinois; in the 1945 term, 175 out of 393 were from Illinois; and in the 1946 term, 322 out of 528 came from that state.1 With mechanical regularity petitions for certiorari to review Illinois' refusals to grant relief, often even to grant a hearing, have been denied.2 We have adhered consistently to the practice of not entertaining such a petition when it seemed to appear that the applicant had not sought the appropriate state remedy. Woods v. Nierstheimer, 328 U.S. 211, 66 S.Ct. 996, 90 L.Ed. 1177. And, as a corolarly of this practice, we have i sisted that the federal courts deny a hearing to an applicant for habeas corpus who has not exhausted his state remedies. Ex parte Hawk, 321 U.S. 114, 64 S.Ct. 448, 88 L.Ed. 572; Ex parte Abernathy, 320 U.S. 219, 64 S.Ct. 13, 88 L.Ed. 3 and cases cited. 12 This rule, requiring exhaustion of state remedies as a condition precedent to federal relief, has been firmly established by repeated decisions of this Court. Even in extreme situations its application has been justified by sound administrative reasons. See Mooney v. Holohan, 294 U.S. 103, 115, 55 S.Ct. 340, 343, 79 L.Ed. 791, 98 A.L.R. 406. But it has always been clear that the rule may be applied only on the assumption that an adequate state remedy is actually available. Carter v. Illinois, 329 U.S. 173, 176, 67 S.Ct. 216, 219; Woods v. Nierstheimer, supra, 328 U.S. 211, at page 217, 66 S.Ct. 996, 999, 90 L.Ed. 1177; Ex parte Hawk, supra, 321 U.S. 114, at page 118, 64 S.Ct. 448, 450, 88 L.Ed. 572. And it would be nothing less than abdication of our constitutional duty and function to rebuff petitioners with this mechanical formula whenever it may become clear that the alleged state remedy is nothing but a procedural morass offering no substantial hope of relief. Experience has convinced me that this is true of Illinois. 13 This case presents a flagrant example of deprivation of due process. In 1925 petitioner was convicted of murder and sentenced to life imprisonment. He was then 18 years old and unable to speak English, having arrived in the United States from Italy less than two years before. The police officer who arrested him served as one of the two interpreters at his trial. He was not represented by counsel nor, as far as can be determined, was his right to counsel explained to him. See Foster v. Illinois, 332 U.S. 134, dissenting opinion 141, 67 S.Ct. 1716, 1720. Although the record shows that petitioner signed a written shows that petitioner signed a written had entered a plea of guilty, in fact he did not sign any such waiver, and no guilty plea appears to have been entered. His sentence was imposed one week after the indictment. 14 Twenty-two years later these facts were established at a hearing in the Circuit Court of Winnebago County, Illinois, on petitioner's application for habeas corpus. Nevertheless, the writ was denied without assignment of any ground.3 Petitioner sought certiorari in this Court, and when called upon for a response, Illinois confessed error. While I concur in the Court's judgment, the light which the confession of error sheds on the Illinois procedural labyrinth confirms the growing conviction that Illinois offers no adequate remedy to prisoners situated as is the present petitioner. 15 The trouble with Illinois is not that it offers no procedure. It is that it offers too many, and makes them so intricate and ineffective that in practical effect they amount to none. The possibility of securing effective determination on the merits is substantially foreclosed by the probability, indeed the all but mathematical certainty, that the case will go off on the p ocedural ruling that the wrong one of several possible remedies has been followed.4 16 Thus, our understanding of Illinois law at the time of Woods v. Nierstheimer, supra, was that habeas corpus would not lie in such a case as this because petitioner neither challenged the jurisdiction of the court which convicted him, nor alleged any subsequent events having the effect of voiding that conviction. 328 U.S. 211, 215, 66 S.Ct. 996, 90 L.Ed. 1177. Hence we assumed that coram nobis would be the appropriate remedy. But Illinois now suggests that we have oversimplified the situation. That habeas corpus is appropriate here is explained by the state's attorney general as follows: 'In order to keep Illinois' position constant and consistent before this court, we venture to point out that although the present Attorney General has prevailed upon this court to recognize that coram nobis is a remedy in Illinois exclusive of habeas corpus, where the facts constituting denial of due process but dehors the record were not known to the trial court at the time of the imposition of sentence, we have always conceded that where, as in the instant case, those facts although not a matter of record at the trial were nevertheless known to the trial court, habeas corpus may be available in proper cases. We deem habeas corpus to be clearly appropriate under the Illinois law in this case. We do not concede, however, that there are no cases in which writ of error, as distinct from either coram nobis or habeas corpus, would be the proper remedy.' 17 Notwithstanding the explanation, the extent of the applicability of this expanded scope of habeas corpus 'in proper cases' is by no means clear. Perhaps it is limited to a case where over 20 years have elapsed since the conviction, and hence neither writ of error nor coram nobis is available; perhaps it would be available any time after the five-year statute of limitations on coram nobis had run.5 Possibly the rule is general for cases of deprivation of constitutional rights whenever the judge responsible for the deprivation had knowledge of the facts. I can only indulge in speculation, because I am aware of nothing in the Illinois statutes or decisions which defines these novel limitations on the use of habeas corpus or supports the attorney general's position. Nor do I know whether the lower Illinois courts accept this position in view of the limited area to which the writ has been confined by the state supreme court decisions. See e.g., Thompson v. Nierstheimer, 395 Ill. 572, 71 N.E.2d 343; Barrett v. Bradley, 391 Ill. 169, 62 N.E.2d 788. 18 In short, the effect of the state's confession of error in this case is not to clarify, it is rather to confuse further, a situation already so muddled that only one rational conclusion may be drawn. It is that the Illinois procedural labyrinth is made up entirely of blind alleys, each of which is useful only as a means of convincing the federal courts that the state road which the petitioner has taken was the wrong one. If the only state remedy is the possibility that the attorney general will confess error when he det rmines that a flagrant case will not survive scrutiny by this Court,6 it is hardly necessary to point out that the federal courts should be open to a petitioner even though he has not made his way through several courts applying for habeas corpus, then writ of error, and finally coram nobis.7 19 Moreover, even though there may be an avenue of escape through the state courts in a rare case, the situation is no different as long as the technical distinctions between the various remedies are so fine that only an oracle could point out the proper procedural road. The exhaustion-of-state-remedies rule should not be stretched to the absurdity of requiring the exhaustion of three separate remedies when at the outset a petitioner cannot intelligently select the proper way, and in conclusion he may find only that none of the three is appropriate or effective. That each is severely restricted is clear.8 That any one is available as a matter of right is by no means clear.9 And even if each has a limited function exclusive of the other two, it may well be that no one is adequate in a case where the petitioner must show a combination of facts to establish a violation of his constitutional rights.10 20 The Illinois scheme affords a theoretical system of remedies. In my judgment it is hardly more than theoretical. Experience has shown beyond all doubt that, in any practical sense, the remedies available there are inadequate.11 Whether this is true because in fact no remedy exists, or because every remedy is so limited as to be inadequate, or because the procedural problem of selecting the proper one is so difficult, is beside the point. If the federal guarantee of due process in a criminal trial is to have real significance in Illinois, it is imperative that men convicted in violation of their constitutional rights have an adequate opportunity to be heard in court. This opportunity is not adequate so long as they are required to ride the Illinois merry-go-round of habeas corpus, coram nobis, and writ of error before getting a hearing in a federal court. 21 Consequently, as far as I am concerned, the Illinois remedies are exhausted here, apart from the state's confession of error. I also think that, until that state affords a reasonably clear and adequate means for presenting and disposing of such questions as Marino's case involves, this Court should no longer require exhaustion of its present scheme of ineffective and inadequate remedies before permitting resort to the federal district courts sitting in Illinois.12 We should neither delay nor deny justice, nor clog its administration, with so useless and harmful a procedural strangling of federal constitutional rights. 1 This increasing volume no doubt is due in part to the assiduity with which prisioners seek relief either from prison or from the tedium of prison life. But that not all of it can be attributed to that factor seems clear from the facts that no other state presents anything approaching such a volume of petitions or so complicated a procedure for finally disposing of the questions raised. 2 Of the 322 petitions filed in the 1946 term, only two were granted. In Foster v. Illinois, 332 U.S. 134, 67 S.Ct. 1716, the narrow scope of review by writ of error in Illinois precluded relief here; in McLaren v. Nierstheimer, 329 U.S. 685, 67 S.Ct. 365, the judgment was vacated and the case remanded after the state confessed error. 3 But for the state's confession of error, our usual practice in these cases would lead us to assume that the denial had been on the ground that habeas corpus was not the appropriate state remedy. See note 4. 4 Since the petitions more often than otherwise are disposed of by mere denial without assignment of grounds, it is seldom possible for this Court to know whether the Illinois court has acted on the merits or on the state ground that the wrong remedy has been followed. It is therefore always possible to assume here that the ruling was of the latter type and this would seem to be true, if not of every such determination, at least of all until the last conceivably possible route has been followed. 5 Ill.Rev.Stat. (1947) c. 110, § 196. This five-year limitation period applies to 'all coram nobis proceedings.' People v. Touhy, 397 Ill. 19, 26, 72 N.E.2d 827, 831; People v. Rave, 392 Ill. 435, 65 N.E.2d 23. Writ of error is governed by a common-law limitation period of 20 years. People v. Chapman, 392 Ill. 168, 64 N.E.2d 529; People v. Murphy, 296 Ill. 532, 129 N.E. 868. 6 See McLaren v. Nierstheimer, 329 U.S. 685, 67 S.Ct. 365. 7 'Under present procedures, it is nearly impossible to secure adjudication of the in Violation of Due Process in Illinois, judgments of conviction in Illinois courts; yet petitioners must present their applications for consideration seven to twelve times in order to escape the procedural maze of the state courts and to secure their initial hearings on the truth of their allegations in the federal courts.' Note, A Study of the Illinois Supreme Court, 15 U. of Chi.L.Rev. 107, 120. 8 Review by writ of error in Illinois is limited to matters in the common-law record where no bill of exceptions is filed. Carter v. Illinois, 329 U.S. 173, 67 S.Ct. 216; Foster v. Illinois, 332 U.S. 134, 67 S.Ct. 1716; People v. Owens, 397 Ill. 166, 73 N.E.2d 274. The bill of exceptions must be preserved within 50 days after judgment was entered unless an extension is granted during that time. Ill.Rev.Stat. c. 110, § 259.70A. Habeas corpus has been thought to be available only to challenge jurisdiction in the narrow sense of jurisdiction over the person or the subject matter, or to show events subsequent to the trial which render the original conviction void. Woods v. Nierstheimer, 328 U.S. 211, 66 S.Ct. 996, 90 L.Ed. 1177; Thompson v. Nierstheimer, 395 Ill. 572, 71 N.E.2d 343; Barrett v. Bradley, 391 Ill. 169, 62 N.E.2d 788. Coram nobis is available only to present factual questions of a certain kind, People v. Drysch, 311 Ill. 342, 349, 143 N.E. 100, which were not known to the trial court, People v. Schuedter, 336 Ill. 244, 168 N.E. 323, which do not conflict with jury findings, and which petitioner failed to raise because of excusable mistake rather than negligence on his, or his attorney's part, see People v. Rave, 392 Ill. 435, 440, 65 N.E.2d 23. See Comment, Collateral Relief from Convictions in Violation of Dur Process in Illinois, 42 Ill.L.Rev. 329. 9 It is questionable whether Illinois affords a remedy for a man deprived of his right to counsel. See Foster v. Illinois, 332 U.S. 134, dissenting opinion 141, 67 S.Ct. 1716, 1720; People v. Evans, 397 Ill. 430, 74 N.E.2d 708. The trial judge would surely know that he had refused to appoint counsel and would be presumed to be familiar with the record, see People v. Rave, 392 Ill. 435, 440, 65 N.E.2d 23; hence coram nobis would not lie. Assuming that the clerk makes the routine entry to the effect that the accused was apprised of his rights, which he promptly waived, see People v. Green, 355 Ill. 468, 189 N.E. 500, writ of error would afford inadequate review. See Carter v. Illinois, 329 U.S. 173, 67 S.Ct. 216. Only if the attorney general's view of habeas corpus would extend to such a case would a remedy be available. There may even be doubt whether an allegation that a confession was obtained by coercion would warrant review, see People v. Drysch, 311 Ill. 342, 143 N.E. 100; People v. Schuedter, 336 Ill. 244, 168 N.E. 323. 10 For example, petitioner might allege that he had inadequate time to prepare his defense, that the trial court denied him counsel, and that a forced confession was used as evidence at the trial. The first allegation could be made only by writ of error because the crucial dates would be a matter of record; the second only by habeas corpus, if at all, because the trial court is presumed to know what is in the record and he would certainly know that he had refused to appoint counsel; and the third allegation only by coram nobis because the facts would be unknown to the trial court. Perhaps none of the allegations considered separately would establish a deprivation of due process, yet with the whole picture before the court a violation of constitutional rights would be apparent. 11 See note 1 and text; also note 2. '(The) inevitable conclusion must be reached that the state of Illinois provides no satisfactory or adequate method for post-conviction hearings * * *.' Note, A Study of the Illinois Supreme Court, 15 U. of Chi.L.Rev. 107, 128. 12 This Court has frequently recognized that the policy underlying the exhaustion-of-remedies doctrine does not require the exhaustion of inadequate remedies. Hillsborough Twp. v. Cromwell, 326 U.S. 620, 66 S.Ct. 445, 90 L.Ed. 358; White v. Ragen, 324 U.S. 760, 65 S.Ct. 978, 89 L.Ed. 1348; Driscoll v. Edison Light & Power Co., 307 U.S. 104, 59 S.Ct. 715, 83 L.Ed. 1134; Mountain States Power Co. v. Public Service Commission, 299 U.S. 167, 57 S.Ct. 168, 81 L.Ed. 99; Corporation Commission v. Cary, 296 U.S. 452, 56 S.Ct. 300, 80 L.Ed. 324; Pacific Telephone & Telegraph Co. v. Kuykendall, 265 U.S. 196, 44 S.Ct. 553, 68 L.Ed. 975; Oklahoma Natural Gas Co. v. Russell, 261 U.S. 290, 43 S.Ct. 353, 67 L.Ed. 659; Moore v. Dempsey, 261 U.S. 86, 43 S.Ct. 265, 67 L.Ed. 543; Wallace v. Hines, 253 U.S. 66, 40 S.Ct. 435, 64 L.Ed. 782.9
01
332 U.S. 539 68 S.Ct. 248 92 L.Ed. 154 BLUMENTHALv.UNITED STATES. GOLDSMITH v. SAME. WEISS v. SAME. FEIGENBAUM v. SAME. Nos. 54 to 57. Argued Oct. 23, 1947. Decided Dec. 22, 1947. Rehearing Denied Jan. 19, 1948. [Syllabus from pages 539-541 intentionally omitted] Mr. Arthur B. Dunne, of San Francisco, Cal., for petitioners Blumenthal, Goldsmith, and Feigenbaum. Mr. Samuel S. Weiss, pro se. Beatrice Rosenberg, of Washington, D.C., for respondent. Mr. Justice RUTLEDGE delivered the opinion of the Court. 1 The four petitioners and Abel, another defendant, were convicted of conspiring to sell whiskey at prices above the ceiling set by regulations of the Office of Price Administration, in violation of the Emergency Price Control Act. 50 U.S.C.A.Appendix, §§ 902(a), 904(a) and 925(b), 50 U.S.C.A.Appendix, §§ 902(a), 904(a), 925(b). The charge was made pursuant to the general conspiracy statute, § 37 of the Criminal Code, 18 U.S.C.A. § 88. The convictions were affirmed by the Circuit Court of Appeals, one judge dissenting. 158 F.2d 883, dissenting opinion at 158 F.2d 762. Abel has not sought review in this Court. Certiorari was granted, 331 U.S. 799, 67 S.Ct. 1306, as to the other four defendants because we thought important questions were presented concerning the applicability of our recent decision in Kotteakos v. United States, 328 U.S. 750, 66 S.Ct. 1239, 90 L.Ed. 1557. 2 We did not limit our grant of certiorari to that question, however, and on the record it is inseparably connected with the other issues, which relate to the admissibility and sufficiency of the evidence. Accordingly we have considered all of petitioners' contentions. The competent proof was clearly sufficient to show that each petitioner had aided in the whiskey's illegal sale and had conspired with others to do so. The only phase of the case meriting further attention is whether, because of a difference in the state of the proof affecting two groups of defendants, the proof, in variance from the indictment, shows that there was more than one conspiracy. I. 3 The indictment charges a single conspiracy in a single count. Ten overt acts are specified. The Government alleged and sought to establish that all of the defendants and other unidentified persons conspired together to dispose of two carloads, each consisting of about 2,000 cases, of Old Mr. Boston Rocking Chair Whiskey at over the ceiling wholesale prices. 4 This whiskey was shipped by rail from the distiller or his agent to the Francisco Distributing Company, in San Francisco, in December, 1943. Goldsmith was the individual and sole owner of that business and held a wholesale liquor dealer's basic permit as required by federal law. Weiss, his former partner, was sales manager for the business. Feigenbaum operated the Sunset Drugstore in San Francisco. Blumenthal owned and operated the Sportorium, a sporting goods and pawn shop in the same city. Abel either owned or worked in a jewelry store in Vallejo, California. The evidence does not show that any of these last three was connected with Francisco in any way except that each had part in arranging sales and deliveries of portions of these two shipments to purchasers. These were tavern owners in San Francisco and near-by towns such as Vallejo, Santa Rosa, Livermore, Cottonwood and El Cerrito. Proof of the activities of Feigenbaum, Blumenthal and Abel was made largely by the testimony of the various tavernkeepers with whom they respectively dealt. 5 The evidence showed that on arrival of the whiskey in San Francisco legal title was taken in Francisco's name, in which the shipping documents were made out; that it honored sight drafts for both shipments, upon Goldsmith's directions to Francisco's bank to pay them out of Francisco's account; that some of the whiskey was delivered ex car directly to tavernkeepers who previously had arranged for purchases in lots varying from 25 to 200 cases; that the remainder was placed in storage with the San Francisco Warehouse Company, pursuant to arrangements made by Weiss, and thereafter was delivered by the warehouse to various purchasers holding invoices issued by Francisco1 on orders given by Weiss. The ex car deliveries also were made pursuant to similar invoices and orders. 6 If further appeared that the cost of the whiskey to Francisco was $21.97 a case,2 the wholesale ceiling price was $25.27, and Francisco received, by check of the purchasing tavernkeepers, $24.50 for each case sold. There was thus left to it a margin above cost of $2.53 on each case, out of which were to come storage charges, if any, and legitimate net profit. 7 Thus far no illegal act, transaction, intent or agreement appears. But by the testimony of purchasing tavernkeepers the Government proved that in connection with each sale the purchaser had paid to the selling intermediary, in addition to the $24.50 per case remitted by check to Francisco, an additional sum in cash amounting roughly to from $30 to $40 per case. Thus the actual cost to the retailer was from $55 to $65 per case. 8 In some instances the identity of the person arranging the transaction for the seller and receiving the cash payment was not established or known to the witness testifying to the sale and its details. In others, however, Blumenthal, Feigenbaum or Abel was identified as the salesman or intermediary. It was not brought out with what person or persons Abel, Feigenbaum, Blumenthal or the other salesmen dealt in securing the whiskey from Francisco.3 In two sales, Figone, a tavernkeeper of El Cerrito, testified he arranged for the purchases in Francisco's offices, but could not identify the person with whom he dealt. 9 In all instances, however, whether involving sales to San Francisco or to out-of-town dealers and whether through identified or unidentified selling intermediaries, the sales followed the general pattern described above. That is, once the understanding had been reached, the purchaser made out his check at the price of $24.50 per case, to the order of 'Francisco Distributing Co.,' at the direction of the selling intermediary, to whom the check was delivered; at the same time or later the purchaser also paid in cash to the intermediary the difference between the amount of the check and the agreed overceiling purchase price; then or later the purchaser received invoices in the name of Francisco for the number of cases of Old Mr. Boston Rocking Chair Whiskey bought showing only the legal price of $24.50 per case; and thereafter the purchaser received delivery of the whiskey from the warehouse company, by freight in the case of out-of-town buyers. Weiss gave the warehouse company instructions for shipments or local deliveries. Francisco collected the checks by endorsing and sending them through its bank for collection. Slight variations in detail of the pattern appear in some instances but they are insignificant for our purposes. 10 The foregoing is substantially the evidence used, not only in part to show the conspiracy, but also to connect Blumenthal, Feigenbaum and Abel with it. In addition to the evidence already related as it affects Goldsmith and Weiss, the court received as to them alone the testimony of Harkins, a special investigator for the Alcohol Tax Unit of the Treasury Department. He related conversations had with Goldsmith and Weiss, during which important admissions were made by one or the other or both. Those admissions give rise to the crucial problems in the case. 11 At the initial conference 'early in January,' 1944, attended by both Goldsmith and Weiss, the latter 'did most of the talking.' Questioned concerning who purchased the two carloads and how they were handled, Weiss said 'that his firm received $2.00 a case for clearing it through their books.' Goldsmith concurred in this and both stated that they divided the $2.00, each taking a dollar. 'They both stated, agreed, that they did not sell any of the whiskey. It was sold by others, and they received the check generally for the payment for the whiskey in advance of the date that they had to take up the sight draft bills of lading. At that time they did not tell us who actually sold the whiskey.' 12 Later conferences held separately with Goldsmith and Weiss simply confirmed the substance of the first to the effect that Francisco was not the actual owner, but that Goldsmith and Weiss were acting for an unidentified person in handling the shipments in Francisco's name.4 The identity of the owner was not established. But Goldsmith added the admission that he wrote most of the invoices. 13 Shortly after the trial began the court announced that it would save time and be fairer to all for the evidence to be received initially only as against the particular defendant or defendants to whom it appeared expressly related, reserving to the Government, however, the right to move for its admission as against any or all of the other defendants whenever in the Government's opinion sufficient facts had been introduced to show such defendants to have been connected with the conspiracy charged. 14 This course was followed. At the close of the Government's case, the court granted its motion to admit all of the evidence as against all of the defendants, except that it declined to allow Harkins' testimony concerning his conversations with Goldsmith and Weiss to be admitted as against the defendants Blumenthal, Feigenbaum and Abel. That testimony however was allowed to stand against both Goldsmith and Weiss insofar as it related the conversation had in the presence of both, and as to each of them respectively to the extent that the other interviews took place in his presence. 15 The court overruled numerous objections to these rulings by each defendant. None offered evidence in his own behalf. 16 Following its rulings on admissibility, the trial court concluded as against various objections that the evidence was sufficient to go to the jury on the issues whether the conspiracy charged had been made out and concerning each defendant's connection with it. Accordingly, it overruled the defendants' motions for directed verdicts and submitted the case to the jury. In the instructions the court expressly stated, in accordance with the previous rulings on admissibility, that Harkins' testimony was to be considered only as against Goldsmith and Weiss, not as against the other three defendants. II. 17 In the Kotteakos case, supra, the Government conceded that, under the charge of a single, all-inclusive conspiracy, the proof showed distinct and separate ones connected only by the fact that one man, Brown, was a participant and key figure in all. But it urged that under the ruling in Berger v. United States, 295 U.S. 78, 55 S.Ct. 629, 79 L.Ed. 1314, the variance was at the most harmless error, a contention we rejected. Here the situation is the reverse. The Government has conceded, in effect, that prejudice has resulted if more than one conspiracy has been proved.5 But it insists that the evidence establishes a single conspiracy and no more, an issue not presented or determined in the Kotteakos case. 18 The proof, in relation to whether one or more conspiracies were shown as well as relative to whether any was made out, requires somewhat different treatment concerning the two groups of defendants, Weiss and Goldsmith, on the one hand, and Blumenthal, Feigenbaum and Abel, on the other. This is by reason of the court's exclusion of the admissions of Goldsmith and Weiss from consideration as to the other three defendants. 19 The Government does not maintain that Francisco, or Goldsmith (or therefore Weiss), was the owner of the whiskey. It accepts the view that another or others unidentified, were the real owner or owners and that Francisco (and thus Goldsmith and Weiss) was merely a channel for distributing the liquor and giving that unlawful process a legal facade. Indeed the 'innocent appearing actions' of Weiss and Goldsmith in their use of Francisco, the brief asserts, 'were the crux of the conspiracy * * * since the color of legitimacy was an essential part of the plan to dispose of the liquor to tavern owners at over-ceiling prices.'6 20 The evidence including the admissions was clearly sufficient to establish that the owner devised a plan which contemplated the entire chain of events from the original purchase in Francisco's name to the ultimate black market sales and deliveries. This includes the obvious inference that he made the arrangements for clearance through Francisco's books. Since Goldsmith and Weiss were the owner and sales manager respectively of Francisco and had active parts personally in carrying out those arrangements, there hardly can be any question that they knew the owner, had part in making the arrangements with him and, by virtue of those facts and their parts in facilitating the sales and deliveries to the tavernkeepers, knew also of his intention to resell the whiskey and of his plan for doing so in every material respect except that he intended to sell at over-ceiling prices. 21 The showing on that crucial question was entirely circumstantial. It was nonetheless substantial. Goldsmith and Weiss knew that there was a margin of only about 77¢ between the legal price ceiling and the $24.50 per case they received by check in payment for the whiskey.7 They knew that the invoices sent by Francisco to each purchaser gave no room for even that slender margin but represented only the owner's cost figure. They knew further that by using Francisco's name, services and facilities the owner was concealing his identity from the purchasers in the sales, making Francisco appear as the owner on the paper records; that sales were being made to numerous and widely scattered tavernkeepers; and that in every sale remittance was made to them uniformly not only by check, usually of the purchaser, but also in the exact amount of $24.50 per case. 22 The inference that the unknown owner giving away the liquor is scarcely conceivable. The most likely inferences to be drawn were two, namely, that the owner was selling for a legal margin of not more than 77¢ or that he was selling at overceiling prices. The first inference is hardly tenable, especially in view of the prevailing and widespread shortage and demand, with accompanying black market activity, of which the most meticulous wholesale liquor dealer hardly could have been ignorant. The inference was not only justified, it was almost inescapable, that Goldsmith and Weiss knew of the owner's intent and purpose to sell above the lawful price, as well as most of the detail of his plan for doing so. With that knowledge their active aid toward executing his design made them co-conspirators with him, and he with them, toward accomplishing it. III. 23 It remains however to consider whether, without the admissions, Blumenthal, Feigenbaum and Abel have been shown to have conspired together and with Goldsmith and Weiss in the scheme proved against the latter two. 24 The admissions alone disclosed the unknown owner's existence; that Goldsmith and Weiss were aci ng for him, not for themselves; received from the transactions, and divided equally, the $2 per case; and gave the use of Francisco's name to cover up the unknown owner's existence, identity and part in the scheme. 25 Whether or not the evidence stripped of those facts was sufficient to sustain the charge, a preliminary question arises upon the trial court's disposition of the admissions. They supplied strong confirmatory or supplementing proof to show, not only the connections of Goldsmith and Weiss with the scheme, but also its existence and illegal character. If therefore it were shown, or even were doubtful, that the admissions had been improperly received as against Blumenthal, Feigenbaum and Abel, reversal would be required as to them.8 26 But the trial court's rulings, both upon admissibility9 and in the instructions,10 leave no room for doubt that the admissions were adequately excluded, insofar as this could be done in a joint trial, from consideration on the question of their guilt. The rulings told the jury plainly to disregard the admissions entirely, in every phase of the case, in determining that question.11 The direction was a total exclusion, not simply a partial one as the Government's argument seems to imply.12 The court might have been more emphatic. But we cannot say its unambiguous direction was inadequate. Nor can we assume that the jury misunderstood or disobeyed it. 27 With the admissions thus entirely excluded, we think nevertheless that the remaining evidence was sufficient to show, in accordance with the charge, that the five defendants joined in a single conspiracy to sell the whiskey at over-ceiling prices in the guise of legal sales. We set forth in the margin the remaining evidence, in part, which justifies this conclusion both as to Goldsmith and Weiss13 and as to the other three defendants.14 28 The main difference comes with the climination of the unknown owner from view, and Francisco's consequent appearance as both actual and legal owner. This changes the detail of the facade, but does not remove either the facade itself or the essence of the unlawful scheme. That still was to sell the whiskey illegally in the guise of legal sales,15 to the knowledge of each defendant.16 The gist of the conspiracy lay not in who actually owned the whiskey, but in the agreement to sell it in this unlawful fashion, regardless of who might own it. 29 With the case thus posited, it is true the salesmen did not know of the unknown owner's existence or part in the plan. And in a hypertechnical aspect the case as a whole might be regarded as showing in one phase an agreement among Goldsmith, Weiss and the unknown owner, X, and in the other an agreement among the five defendants to which X was not a party. Thus in the most meticulous sense it might be regarded as disclosing two agreements, with Goldsmith and Weiss as figures common to both. 30 Indeed that may be what took place chronologically, for conspiracies involving such elaborate arrangements generally are not born full grown. Rather they mature by successive stages which are necessary to bring in the essential parties. And not all of those joining in the earlier ones make known their participation to others later coming in. 31 The law does not demand proof of so much. For it is most often true, especially in broad schemes calling for the aid of many persons, that after discovery of enough to show clearly the essence of the scheme and the identity of a number participating, the identity and the fact of participation of others remain undiscovered and undiscoverable. Secrecy and concealment are essential features of successful conspiracy. The more completely they are achieved, the more successful the crime. Hence the law rightly gives room for allowing the conviction of those discovered upon showing sufficiently the essential nature of the plan and their connections with it, without requiring evidence of knowledge of all its details or of the participation of others.17 Otherwise the difficulties, not only of discovery, but of certainty in proof and of correlating proof with pleading would become insuperable, and conspirators would go free by their very ingenuity. 32 Here, apart from the weight which the proof of the unknown owner's existence and participation added to the convictions of Weiss and Goldsmith, it added no essential feature to the charge against the five defendants. The whiskey was the same. The agreements related alike to its disposition. They comprehended illegal sales in the guise of legal ones. Who owned the whiskey was irrelevant to the basic plan and its essential illegality. It was a matter of indifferent detail to the salesmen, as by the same token was the fact that Goldsmith and Weiss were receiving and splitting only the $2 per case. It mattered nothing to the others whether those two received only that amount or the larger illegal sums. 33 We think that in the special circumstances of this case the two agreements were merely step in the formation of the larger and ultimate more general conspiracy. In that view it would be a perversion of justice to regard the salesmen's ignorance of the unknown owner's participation as furnishing adequate ground for reversal of their convictions. Nor does anything in the Kotteakos decision require this. The scheme was in fact the same scheme; the salesmen knew or must have known that others unknown to them were sharing in so large a project; and it hardly can be sufficient to relieve them that they did not know, when they joined the scheme, who those people were or exactly the parts they were playing in carrying out the common design and object of all. By their separate agreements, if such they were, they became parties to the larger common plan, joined together by their knowledge of its essential features and broad scope, though not of its exact limits, and by their common single goal. 34 The case therefore is very different from the facts admitted to exist in the Kotteakos case. Apart from the much larger number of agreements there involved, no two of those agreements were tied together as stages in the formation of a large all-inclusive combination, all directed to achieving a single unlawful end or result. On the contrary each separate agreement had its own distinct, illegal end. Each loan was an end in itself, separate from all others, although all were alike in having similar illegal objects. Except for Brown, the common figure, no conspirator was interested in whether any loan except his own went through. And none aided in any way, by agreement or otherwise, in procuring another's loan. The conspiracies therefore were distinct and disconnected, not parts of a larger general scheme, both in the phase of agreement with Brown and also in the absence of any aid given to others as well as in specific object and result. There was no drawing of all together in a single, over-all, comprehensive plan. 35 Here the contrary is true. All knew of and joined in the overriding scheme. All intended to aid the owner, whether Francisco or another, to sell the whiskey unlawfully, though the two groups of defendants differed on the proof in knowledge and belief concerning the owner's identity. All by reason of their knowledge of the plan's general scope, if not its exact limits, sought a common end, to aid in disposing of the whiskey. True, each salesman aided in selling only his part. But he knew the lot to be sold was larger and thus that he was aiding in a larger plan. He thus became a party to it and not merely to the integrating agreement with Weiss and Goldsmith. 36 We think therefore that in every practical sense the unique facts of this case reveal a single conspiracy of which the several agreements were essential and integral steps, and accordingly that the judgments should be affirmed. 37 The grave danger in this case, if any, arose not from the trial court's rulings upon admissibility or from its instructions to the jury. As we have said, these were as adequate as might reasonably be required in a joint trial. The danger rested rather in the risk that the jury, in disregard of the court's direction, would transfer, consciously or unconsciously, the effect of the excluded admissions from the case as made againt Goldsmith and Weiss across the barrier of the exclusion to the other three defendants. 38 That danger was real. It is one likely to arise in any conspiracy trial and more likely to occur as the number of persons charged together increases. Perhaps even at best the safeguards provided by clear rulings on admissibility, limitations of the bearing of evidence as against particular individuals, and adequate instructions, are insufficient to ward off the danger entirely. It is therefore extremely important that those safeguards be made as impregnable as possible. Here, however, the case as presented involved none of the risks common to mass trials. And, in view of the trial court's caution, the risk of transference of gul t over the border of admissibility was reduced to the minimum. So great was the court's concern that it expressly told the jury, in addition to the instructions set forth above, '* * * the guilt or innocence of each defendant must be determined by the jury separately. Each defendant has the same right to that kind of consideration on your part as if he were being tried alone.' 39 We have considered petitioners' remaining contentions and find them without merit.18 40 The judgment is affirmed. 41 Affirmed. 42 Mr. Justice DOUGLAS concurs in the result. 1 Of the more than 4,000 cases received by Francisco, proof concerning disposition at over-ceiling prices related to less than half, or some 1,500-plus cases. 2 Consisting of $19.24 per case to the distiller, 81¢ for freight, and $1.92 for state taxes. 3 The witnesses identifying Feigenbaum testified they sought him out at the Sunset Drugstore in San Francisco and made the arrangements with him for their purchasers there. Similar testimony was given by those identifying Blumenthal with the arrangements taking place in the Sportorium. In some instances the out-of-town purchasing witnesses testified that they went to San Francisco in search of whiskey to buy and by one means or another, usually through inquiry of persons frequentig bars where the witnesses stopped, were directed to the selling agent. In other instances the intermediary sought out the tavernkeeper as a prospective purchaser at his place of business. 4 At an interview with Goldsmith 'early in September,' Goldsmith was asked 'who actually bought him the whiskey, who owned it.' In reply 'he said that Blumenthal brought it in, and when asked if he knew of his own knowledge, he said, 'No." He again stated that Francisco received $2 per case, of which he gave Weiss half. A still further questioning of Goldsmith took place on September 13. Harkins showed Goldsmith several invoices given to purchasers in the name of Francisco. Goldsmith admitted that he wrote most of the invoices and identified his own handwriting, stating however that a few were written by his bookkeeper. Harkins testified also regarding a conversation with Weiss on May 14, 1944. In this Weiss stated 'it was true that he received half of the $2 commission paid to the Francisco Distributing Company for clearing this whiskey through their books, and he finally refused to answer who actually owned the whiskey. He said 'I don't want to involve myself." Weiss also admitted knowing Blumenthal, but 'refused to state, to the best of my (the witness') recollection, positively, whether Mr. Blumenthal was the owner of the whiskey or not.' 5 The brief states: 'The Government does not contend that if the proof showed several conspiracies, as the dissenting judge thought, the variance would not be prejudicial.' 6 The brief also declares that 'the gist of the conspiracy * * * was the scheme to sell liquor to tavern owners at over-ceiling prices in an apparently legitimate fashion through the medium of Francisco.' The plan, it is said, 'was not merely to sell liquor at over-ceiling prices; it was a plan to sell liquor at over-ceiling prices in an apparently legitimate fashion' and 'the core of the scheme was the arrangement by which the whiskey would clear to tavern owners through Francisco, a legitimate wholesaler.' 7 The $24.50 price was at the most 53¢ above the actual cost of the whiskey, see note 2, plus the $2.00 fee paid Francisco for the use of its books. There is no evidence that the unknown owner received any portion of this 53¢ margin. Since the record shows that Francisco was billed by the warehouse company for the storage of the liquor, the inference was fully justified that the 53 margin was largely dissipated by the storage charges and other overhead costs attributable to the sale of the whiskey and that the remaining sum, if any, was retained by Francisco. 8 Even if the evidence were sufficient with the admissions excluded, they were of such importance that if admitted improperly the jury might have drawn entirely different inferences from the whole evidence including them than from it without them. 9 Before sending the case to the jury the court stated in its presence and for its benefit that it had granted the Government's motion to admit all the evidence against all the defendants except: 'That the testimony of the last witness, Mr. Harkins, is admitted in evidence as against the defendant Goldsmith as to the conversation had by the witness with the defendant Goldsmith; that his testimony is admitted as to the defendant Weiss with respect to conversations with the defendant Weiss; and as to both defendants, Goldsmith and Weiss, as to all conversations at which both defendants, Goldsmith and Weiss, were present, and exceptions are noted as to this ruling on behalf of all the defendants separately.' The court then added, on inquiry, that counsel was right in taking this to mean that the Harkins testimony 'does not affect the defendants Blumenthal and the other two or three.' 10 At three distinct places the court made references either generally and abstractly or expressly applicable to the admissions. In the first, after stating that the testimony of an accomplice or co-conspirator and oral admissions of a defendant must be received with caution, the court said: 'In this case * * * proof of the conspiracy charged * * * must be made independent of admissions of any defendant made after the termination of the alleged conspiracy.' At a later point the jury was told: '* * * you must disregard entirely any testimony stricken out by the Court, or any testimony to which an objection has been sustained * * *. Testimony which has been admitted only to apply as to a specified defendant may only be considered by you as to that defendant and none other.' (Emphasis added.) And finally near the end of the instructions, expressly referring to the admissions of Goldsmith and Weiss, the court said: 'Where the existence of a criminal conspiracy has been shown, every act or declaration of each member of such conspiracy, done or made thereafter pursuant to the concerted plan and in furtherance of the common object, is considered the act and declaration of all the conspirators, and is evidence against each of them. On the other hand, after a conspiracy has come to an end, either by the accomplishment of the common design, or by the parties abandoning the same, evidence of acts or del arations thereafter made by any of the conspirators can be considered only as against the person doing such acts or making such statements. 'In that connection, you will recall that I advised you during the trial of the case that the statements made by the defendants Goldsmith and Weiss to the witness Harkins could only be considered by you as against those two named defendants.' (Emphasis added.) 11 It is not entirely clear whether the words 'In that connection,' italicized in the last paragraph of note 10, refer only to the last or to both of the preceding sentences, in the specific context of the two paragraphs last quoted. But when those statements are taken in conjunction with the earlier ones and with the court's rulings on admissibility made in the jury's presence, we think the total effect of the instructions was to tell the jury plainly to disregard the admissions entirely in considering the guilt of Blumenthal, Feigenbaum and Abel. This view, though apparently differing from the Government's, see note 12, is reinforced by the further instruction, immediately following the one last quoted in note 10, to the effect that admissions of a conspirator not made in execution of the common design are not evidence against any of the parties other than the one making them. The admissions here fell clearly in that category, some of them because made after termination of the conspiracy, others because they had no effect to forward its object. None were made in furtherance of the conspiracy's object. Cf. Fiswick v. united States, 329 U.S. 211, 67 S.Ct. 224. 12 Although we are not sure the argument goes so far, it seems to urge, see note 6 and text, that the admissions, as well as the other evidence expressly affecting only one or some of the defendants, were admissible and were received, not merely as against Weiss and Goldsmith on the whole case but also in part as against the other three, that is, to show even as to them the existence and illegal character of the scheme, though not to establish their connections with it. We do not read the record as showing this was the effect of the trial court's ruling. 13 The evidence as to the unknown owner no longer being in the picture, the inference is almost irresistible that Francisco was the owner. On arrival of the whiskey, title was taken in Francisco's name, in which the shipping documents were made out; sight drafts for the two carloads were paid, at Goldsmith's direction, from Francisco's bank account; and the whiskey was stored and delivered by the warehouse company in accordance with Weiss' directions. At a time when wholesale liquor distributors were hard put to supply even long-established customers, Francisco sold its liquor, through the medium of salesmen who had no previous connection with the firm and were not regularly engaged in the business of selling liquor, to various tavern owners who had not previously had dealings with Francisco. Moreover, the sales were billed at a price 77¢ per case below the OPA ceiling, despite the fact that tavern owners and other retail distributors considered themselves fortunate to secure whiskey at the full ceiling price. Also of interest are tavern owner Figone's over-ceiling purchases, which followed the pattern of the other sales, except in the important respect that they were made at the Francisco office, but with a person Figone could not identify. See text supra following note 3. We are not prepared to say that the jury was not justified in inferring from this evidence that Goldsmith and Weiss, the guiding hands of Francisco, were willig to make the sales only because of an illegal agreement with the salesmen to receive over-ceiling prices. The case would stand little better for Goldsmith and Weiss upon an inference that they sold to some other person, who in turn resold to the tavernkeepers through the salesmen. For then the 77 legal margin would remain, now for the intervening purchaser, together with the use of Francisco's books and records to conceal his existence and part in the transactions and the allowable inferences from those facts. 14 Acting almost simultaneously in early December before the first carload arrived in San Francisco, Blumenthal and Feigenbaum, as well as Abel and other unidentified salesmen, made it known that they could obtain whiskey for tavernkeepers. There are compelling indications that these salesmen were kept informed of the status of the whiskey. Thus, on the 8th or 9th of December, Feigenbaum told one purchaser that the whiskey would arrive in San Francisco in 'about a week or ten days,' that it would come in by railroad, and that there would be 'a carload of it.' The first of the two carloads of liquor actually arrived on December 17. Similarly, on the 3d or 4th of December, Blumenthal told tavernkeeper Fingerhut that the whiskey would arrive in the latter part of the month. The whiskey did so arrive and the purchaser received delivery. Then, late in December, Fingerhut received a telephone call, which he said was from Blumenthal, asking whether he needed more whiskey. As a result, Fingerhut made an additional purchase on January 3 or 4, 1944. The second carload was received by the warehouse company on or about January 3d. In addition to being well informed as to the progress of the whiskey in its journey westward, the salesmen followed a singularly set pattern in making their respective sales. All knew and so told the prospective customer that he would receive Francisco's invoice for the whiskey at the same below-ceiling price, which invoice was of great importance because it enabled the tavernkeepers to comply with the record-keeping requirements imposed by the California law. See note 15. All made arrangements for the payment of the identical price of $24.50 per case to Francisco by check. All received the checks, which were delivered to Francisco and collected by it. Of some significance, in connection with the other evidence, is the testimony of tavernkeeper Reinburg that on two occasions, at Abel's direction, he drove Abel to San Francisco, dropped him at the Sportorium, Blumenthal's place of business, and picked him up there about a half hour later. The inference was justified that Blumenthal, Feigenbaum and the other salesmen were aware that their individual sales were part of a larger common enterprise, dependent on the carefully evolved arrangements to give the sales the guise of legitimacy, to dispose of a larger store of liquor. Where a salesman knew, as did Feigenbaum, that at least a carload of whiskey was involved, it was an entirely reasonable inference that he knew that other salesmen, paralleling his efforts, were making sales similar to his. On the basis of the evidence, the jury was well warranted in deciding that the facts dovetailed too neatly to be the result of mere chance. 15 The evidence showed that some of the purchasers were unwilling to buy liquor without receiving a document to show purchase from a lawfully authorized source as reqi red by state law. With Francisco appearing as actual owner the scheme took on the aspect of one to sell its own whiskey illegally in the guise of lawful sales. 16 Each salesman knew that he was receiving $30 to $40 above the ceiling; that Francisco was supplying the whiskey; that the elaborate arrangements were made not merely for his sales, but also for others, see note 14; and that he had to have the cash, as well as the check, before delivery from Francisco was completed. The basis for imputing such knowledge to Goldsmith and Weiss becomes not so compelling as with the admissions included, but nevertheless remains adequate. However the case is viewed, apart from the admissions, they knew the margin of legal profit left, whether for themselves or for others, after deducting the $24.50 per case, was only 77¢. If they actually owned and sold the whiskey, why sell below the ceiling in the face of the shortage and demand, when selling costs including the salesmen's compensation still were to be paid? If they did not own or sell at the $24.50 figure, then why the checks and false invoices in that amount? The inference is justified that either they or someone else to their knowledge was receiving more than the lawful price. 17 Marino v. United States, 9 Cir., 91 F.2d 691; Lefco v. United States, 3 Cir., 74 F.2d 66; Jezewski v. United States, 6 Cir., 13 F.2d 599; Allen v. United States, 6 Cir., 4 F.2d 688. 18 These include the argument that petitioners were prosecuted under the wrong statute. Section 4(a) of the Emergency Price Control Act makes it unlawful, as a misdemeanor, § 205(b), for any person to sell or deliver any commodity in violation of price regulations, 'or to offer, solicit, attempt, or agree to do any of the foregoing.' (Emphasis added.) Petitioners regard the prohibitory words 'or agree,' etc., as repeal by implication of the general conspiracy statute, § 37 of the Criminal Code, insofar as otherwise it might apply to the acts forbidden by § 4(a). There was no 'implied repeal.' Conviction under the general conspiracy statute requires more than mere agreement, namely, the commission of an overt act. See also Taub v. Bowles, Em.App., 149 F.2d 817; H.Rep. No. 827, 79th Cong., 1st Sess., 7, 8.
01
332 U.S. 575 68 S.Ct. 237 92 L.Ed. 180 SEALFONv.UNITED STATES. No. 174. Argued Dec. 11, 1947. Decided Jan. 5, 1948. Mr. John J. Wilson, of Washington, D.C., for petitioner. Mr. W. Marvin Smith, of Washington, D.C., for respondent. Mr. Justice DOUGLAS delivered the opinion of the Court. 1 This case presents the question whether an acquittal of conspiracy to defraud the United States precludes a subsequent prosecution for commission of the substantive offense, on the particular facts here involved. 2 Two indictments were returned against petitioner and others. One charged a conspiracy to defraud the United States of its governmental function of conserving and rationing sugar by presenting false invoices and making false representations to a ration board to the effect that certain sales of sugar products were made to exempt agencies.1 The other indictment charged petitioner and Greenberg with the commission of the substantive offense,2 viz., uttering and publishing as true the false invoices. The conspiracy indictment was tried first and the following facts were shown: 3 Defendant Greenberg manufactured syrup and approached Sanford Doctors, a salesman for a brokerage concern, to sell vanilla syrup. Doctors negotiated some sales to petitioner who did a wholesale business under the name of Sero Syrup Co. Thereafter Greenberg asked Doctors to get a list from petitioner showing the places where petitioner made sales and told him that if any sales were made to exempt agencies, Greenberg could sell to petitioner in larger quantities. Doctors so informed petitioner and some time thereafter petitioner wrote to Greenberg saying, 'at the present time some of our syrups are being sold at the Brooklyn Navy Yard' and various defense plants. Petitioner did sell some of his syrup to a vending company which had machines at the Navy Yard but it was not vanilla syrup and no sales were made to the Navy Yard as such. Greenberg thereafter presented a series of false invoices to the ration board purporting to show sales to petitioner for delivery to the Navy Yard. Petitioner's letter was never shown to the board. On the basis of these invoices Greenberg received replacement certificates for 21 million pounds of sugar, 10 million of which he sold to petitioner in the form of vanilla syrup, and which was by petitioner sold to non-exempt consumers, mostly the Natio al Biscuit Company. Petitioner at first made payments to Greenberg by check but thereafter gave checks to his trucker which the latter cashed, deducted his trucking fee, and paid Greenberg. 4 The jury returned a verdict of not guilty as to petitioner.3 Thereafter a trial was had on the other indictment which charged petitioner and Greenberg with uttering and publishing as true the false invoices introduced in the conspiracy trial. Greenberg pleaded guilty and the trial proceeded against petitioner on the theory that he aided and abetted Greenberg in the commission of the substantive offense. The false invoices, the letter from petitioner to Greenberg, and essentially the same testimony were again introduced against petitioner. In addition, it was brought out on cross-examination that petitioner had unsuccessfully sought replacement certificates from his ration board for sugar contained in syrups sold at the Navy Yard and defense plants. Geenberg gave testimony from which the jury could conclude that petitioner was a moving factor in the scheme to defraud which was constructed around petitioner's letter and that he was familiar with Greenberg's intention to submit false invoices. Greenberg further testified that petitioner received $500,000 in cash under the agreement as a rebate of two cents a pound on all replacement sugar which Greenberg received on Navy Yard invoices whether or not it was used in syrup sold to petitioner. This time the jury returned a verdict of guilty and petitioner was sentenced to five years' imprisonment and fined $12,000. 5 Petitioner moved to quash the second indictment on grounds of double jeopardy (abandoned in this Court) and res judicata, and also objected to the introduction of the evidence adduced at the first trial. The district judge ruled against petitioner, and the court below affirmed. 3 Cir., 161 F.2d 481. We granted the petition for a writ of certiorari because of the importance of the question to the administration of the criminal law. 6 It has long been recognized that the commission of the substantive offense and a conspiracy to commit it are separate and distinct offenses. Pinkerton v. United States, 328 U.S. 640, 643, 66 S.Ct. 1180, 1182, 90 L.Ed. 1489. Thus, with some exceptions, one may be prosecuted for both crimes. Ibid. But res judicata may be a defense in a second prosecution. That doctrine applies to criminal as well as civil proceedings (United States v. Oppenheimer, 242 U.S. 85, 87, 37 S.Ct. 68, 69, 61 L.Ed. 161, 3 L.R.A. 516; United States v. De Angelo, 3 Cir., 138 F.2d 466, 468; Harris v. State, 193 Ga. 109, 17 S.E.2d 573, 147 A.L.R. 991; see Frank v. Mangum, 237 U.S. 309, 334, 35 S.Ct. 582, 590, 59 L.Ed. 969) and operates to conclude those matters in issue which the verdict determined though the offenses be different. See United States v. Adams, 281 U.S. 202, 205, 50 S.Ct. 269, 74 L.Ed. 807. 7 Thus the only question in this case is whether the jury's verdict in the conspiracy trial was a determination favorable to petitioner of the facts essential to conviction of the substantive offense. This depends upon the facts adduced at each trial and the instructions under which the jury arrived at its verdict at the first trial. 8 Respondent argues that the basis of the jury's verdict cannot be known with certainty, that the conspiracy trial was pr dicated on the theory that petitioner was a party to an over-all conspiracy ultimately involving petitioner, Greenberg, and the Baron Corporation.4 Thus it is said that the verdict established with certainty only that petitioner was not a member of such conspiracy, and that therefore the prosecution was not foreclosed from showing in the second trial that petitioner wrote the letter pursuant to an agreement with Greenberg to defraud the United States. The theory is that under the instructions given the jury might have found that petitioner conspired with Greenberg and yet refused to infer that he was a party to the over-all conspiracy. 9 The instructions under which the verdict was rendered, however, must be set in a practical frame and viewed with an eye to all the circumstances of the proceedings. We look to them only for such light as they shed on the issues determined by the verdict. Cf. De Sollar v. Hanscome, 158 U.S. 216, 222, 15 S.Ct. 816, 818, 39 L.Ed. 956. Petitioner was the only one on trial under the conspiracy indictment. There was no evidence to connect him directly with anyone other than Greenberg. Only if an agreement with at least Greenberg was inferred by the jury could petitioner be convicted. And in the only instruction keyed to the particular facts of the case the jury was told that petitioner must be acquitted if there was reasonable doubt that he conspired with Greenberg. Nowhere was the jury told that to return a verdict of guilty it must be found the petitioner was a party to a conspiracy involving not only Greenberg but the Baron Corporation as well.5 Viewed in this setting, the verdict is a determination that petitioner, who concededly wrote and sent the letter, did not do so pursuant to an agreement with Greenberg to defraud. 10 So interpreted, the earlier verdict precludes a later conviction of the substantive offense. The basic facts in each trial were identical. As we read the records of the two trials, petitioner could be convicted of either offense only on proof that he wrote the letter pursuant to an agreement with Greenberg. Under the evidence introduced, petitioner could have aided and abetted Greenberg in no other way. Indeed, respondent does not urge that he could. Thus the core of the prosecutor's case was in each case the same: the letter, and the circumstances surrounding it and to be inferred from it, and the false invoices. There was, of course, additional evidence on the second trial adding detail to the circumstances leading up to the alleged agreement, petitioner's participation therein, and what he may have got out of it. But at most this evidence only made it more likely that petitioner had entered into the corrupt agreement. It was a second attempt to prove the agreement which at each trial was crucial to the prosecution's case and which was necessarily adjudicated in the former trial to be non-existent. That the prosecution may not do. 11 Reversed. 1 See § 28, Criminal Code, 18 U.S.C. § 72, 18 U.S.C.A. § 72. 2 See § 332, Criminal Code, 18 U.S.C. § 550, 18 U.S.C.A. § 550. 3 The conspiracy indictment also named Leo and Murray Greenberg, Fresh Grown Preserves Corporation in which the Geenbergs were officers (all of whom we refer to simply as Greenberg), the S. J. Baron Corporation, the Royal Crown Bottling Co. of Baltimore, Inc., Royal Crown Bottling Co. of Washington, Inc., and William C. Franklin, president of the Royal Crown companies. Greenberg pleaded guilty, Baron Corporation pleaded nolo contendere, and verdicts were directed for Royal Crown and Franklin. It was charged that the Baron Corporation participated in the conspiracy by writing a letter similar to that written by petitioner, discussed hereafter. 4 See note 3, supra. 5 That was the view of the judge who tried both cases. At the second trial he characterized as follows the charge and the verdict at the first: '* * * what was tried on the 11th of December was a charge of conspiracy and what the jury by its verdict determined was that Sealfon had not entered into common agreement with the Greenbergs and the Fresh Grown Company to violate the law.'
01
332 U.S. 581 68 S.Ct. 222 92 L.Ed. 210 UNITED STATESv.DI RE. No. 61. Argued Oct. 17, 1947. Decided Jan. 5, 1948. Mr. Frederick Bernays Wiener, of Providence, R.I., for petitioner. Mr. Charles J. McDonough, of New York City, for respondent. Mr. Justice JACKSON delivered the opinion of the Court. 1 Michael Di Re was convicted on a charge of knowingly possessing counterfeit gasoline ration coupons in violation of § 301 of the Second War Powers Act, 1942.1 The decisive evidence was that obtained by search of his person, after he was arrested without a warrant of any kind. The Circuit Court of Appeals, Second Circuit, 159 F.2d 818, considered that any question as to the timeliness of his objection to this evidence was eliminated by its disposition on its merits by the District Court, and, one judge dissenting, it held both his search and arrest to have been illegal. The Government was granted certiorari,2 raising no question other than the correctness of the holding by the Court of Appeals that the evidence was the fruit of an illegal arrest and search. 2 An investigator of the Office of Price Administration was informed by one Reed that he was to buy counterfeit gasoline ration coupons from a certain Buttitta at a named place in the City of Buffalo, New York. The investigator and a detective from the Buffalo Police Department trailed Buttitta's car and finally came upon it parked at the appointed place. They went to the car and found the informer Reed, the only occupant of the rear seat, holding in his hand two gasoline ration coupons which later proved to be counterfeit. Reed, on being asked, said he obtained them from Buttitta, who was sitting in the driver's seat. Beside Buttitta sat Di Re. All three were taken into custody, 'frisked' to make sure they had no weapons and were then taken to the police station. Here Di Re complied with a direction to put the contents of his pockets on a table. Two gasoline and several fuel oil ration coupons were laid out. He said he had found them in the street. About two hours later, after questioning, he was 'booked' and thoroughly searched. One hundred inventory gasoline ration coupons were found in an envelope concealed between his shirt and underwear. These, as well as the gasoline coupons earlier disclosed, proved to be counterfeit. Their introduction as evidence, over the objection of the defendant, was held by the court below to require reversal of the conviction.3 I. 3 The Government now defends the search upon alternative grounds: 1, that search of Di Re was justified as incident to a lawful arrest; 2, that search of his person was justified as incident to search of a vehicle reasonably believed to be carrying contraband. We consider the second ground first. 4 The claim is that officers have the rights, without a warrant, to search any car which they have reasonable cause to believe carries contraband, and incidentally may search any occupant of such car when the contraband sought is of a character that might be concealed on the person. This contention calls, first, for a determination as to whether the circumstances gave a right to search this car. 5 The belief that an automobile is more vulnerable to search without warrant than is other property has its source in the decision of Carroll v. United States, 267 U.S. 132, 45 S.Ct. 280, 69 L.Ed. 543, 39 A.L.R. 790. That search was made and its validity was upheld under the search and seizure provisions enacted for enforcemen of the National Prohibition Act and of that Act alone. Transportation of liquor in violation of that Act subjected first the liquor, and then the vehicle in which it was found, to seizure and confiscation, and the person 'in charge thereof' to arrest.4 The Court reviewed the legislative history of enforcement legislation and concluded (267 U.S. at page 147, 45 S.Ct. at page 283), 'The intent of Congress to make a distinction between the necessity for a search warrant in the searching of private dwellings and in that of automobiles and other road vehicles in5 the enforcement of the Prohibition Act is thus clearly established by the legislative history of the Stanley Amendment. Is such a distinction consistent with the Fourth Amendment? We think that it is. The Fourth Amendment does not denounce all searches or seizures, but only such as are unreasonable.' The progeny of the Carroll case likewise dealt with searches and seizures under this Act. Husty v. United States, 282 U.S. 694, 51 S.Ct. 240, 75 L.Ed. 629, 74 A.L.R. 1407. 6 Obviously the Court should be reluctant to decide that a search thus authorized by Congress was unreasonable and that the Act was therefore unconstitutional. In view of the strong presumption of constitutionality due to an Act of Congress, especially when it turn on what is 'reasonable,' the Carroll decision falls short of establishing a doctrine that, without such legislation, automobiles nonetheless are subject to search without warrant in enforcement of all federal statutes. This Court has never yet said so. The most that can be said is that some of the language by which the Court justified the search and seizure legislation in the Carroll case might be used to make a distinction between what is a reasonable search as applied to an automobile and as applied to a residence or fixed premises, even in absence of legislation. 7 We need not decide whether, without such Congressional authorization as was found controlling in the Carroll case, any automobile is subject to search without warrant on reasonable cause to believe it contains contraband. In the case before us there appears to have been no search of the car itself. No one on the spot seems to have thought there was cause for searching it, or that it was subject to forfeiture. The nature of ration tickets, the contraband involved, was not such that a car would be necessary or advantageous in carrying them except as an incident of carrying the person. When the question of admissibility of this evidence arose in the trial court, counsel for the Government made no claim that there had b en search or cause for search of the car. No question of fact concerning such a claim has been resolved by the trial court or the jury. 8 Assuming, however, without deciding, that there was reasonable cause for searching the car, did it confer an incidental right to search Di Re? It is admitted by the Government that there is no authority to that effect, either in the statute or in precedent decision of this Court, but we are asked to extend the assumed right of car search to include the person of occupants because 'common sense demands that such rights exist in a case such as this where the contraband sought is a small article which could easily be concealed on the person.' 9 This argument points up the different relation of the automobile to the crime in the Carroll case than in the one before us. An automobile, as was there pointed out, was an almost indispensable instrumentality in large-scale violation of the National Prohibition Act, and the car itself therefore was treated somewhat as an offender and became contraband. But even the National Prohibition Act did not direct the arrest of all occupants but only of the person in charge of the offending vehicle, though there is better reason to assume that no passenger in a car loaded with liquor would remain innocent of knowledge of the car's cargo than to assume that a passenger must know what pieces of paper are carried in the pockets of the driver. 10 The Covernment says it would not contend that, armed with a search warrant for a residence only, it could search all persons found in it. But an occupant of a house could be used to conceal this contraband on his person quite as readily as can an occupant of a car. Necessity, an argument advanced in support of this search, would seem as strong a reason for searching guests of a house for which a search warrant had issued as for search of guests in a car for which none had been issued. By a parity of reasoning with that on which the Government disclaims the right to search occupants of a house, we suppose the Government would not contend that if it had a valid search warrant for the car only it could search the occupants as an incident to its execution. How then could we say that the right to search a car without a warrant confers greater latitude to search occupants than a search by warrant would permit? 11 We see no ground for expanding the ruling in the Carroll case to justify this arrest and search as incident to the search of a car. We are not convinced that a person, by mere presence in a suspected car, loses immunities from search of his person to which he would otherwise be entitled. II. 12 The other ground on which the Government defended the search of Di Re, and the only one on which it relied at the trial, is that the officers justifiably arrested him and that this conferred a right to search his person. If he was lawfully arrested, it is not questioned that the ensuing search was permissible. Hence we must examine the circumstances and the law of arrest. 13 Some members of this Court rest their conclusion that the arrest was invalid on § 180 of the New York Code of Criminal Procedure which requires an officer making an arrest without a warrant to inform the suspect of the cause of arrest, except when it is made during commission of the crime or when in pursuit after an escape.6 This question was first raised from the Bench during argument in this Court. Di Re did not assert this ground of invalidity at the trial. Had he done so the Government might have met it with proof of circumstances which in themselves would show that Di Re had been effectively informed, even if the circumstances fell short of establishing the statutory exception. The proceedings below did not develop the facts concerning Di Re's arrest in connection with this requirement. Inasmuch as the issue would lead to exploration of the law as to waiver when the defense was not raised in either court below, or indeed by the petition here, and as to applicability of he statute if, as the Government contends, lack of express declaration was unnecessary because circumstances supplied the required information, we do not undertake to determine on this record whether Di Re's arrest satisfied this provision of the New York law. 14 The arrest was challenged in the courts below on the ground that it violated another provision of New York law which was considered to be controlling on the subject. The court below assumed that the arresting officer, a state officer, derived his authority to arrest Buttitta and Reed, although it was for a federal crime, from s 177 of the New York Code of Criminal Procedure, and also considered the legality of the arrest of Di Re under paragraph 3 thereof.7 In this Court the Covernment originally argued that the arrest was authorized under both paragraphs 2 and 3 of the State law, but in a supplemental brief the Government withdraws the suggestion 'that the arrest of respondent can be justified under subsection 2 of section 177 of the New York Code of Criminal Procedure.' Instead, it now urges that 'the validity of an arrest without a warrant for a federal crime is an matter of federal law to be determined by a uniform rule applicable in all federal courts.' 15 We believe, however, that in absence of an applicable federal statute the law of the state where an arrest without warrant takes place determines its validity. By one of the earliest acts of Congress, the principle of which is still retained, the arrest by judicial process for a federal offense must be 'agreeably to the usual mode of process against offenders in such State.'8 There is no reason to believe that state law is not an equally appropriate standard by which to test arrests without warrant, except in those cases where Congress has enacted a federal rule. Indeed the enactment of a federal rule in some specific cases seems to imply the absence of any general federal law of arrest. 16 Turning to the Acts of Congress to find a rule for arrest without warrant, we find none which controls such a case as we have here and none that purports to create a general rule on the subject. If we were to try to find or fashion a federal rule for arrest without warrant, it appears that the federal legislative materials are meager, inconsistent and inconclusive. Federal Bureau of Investigation officers are authorized only 'to make arrests without warrant f r felonies which have been committed and which are cognizable under the laws of the United States, in cases where the person making the arrest has reasonable grounds to believe that the person so arrested is guilty of such felony and where there is a likelihood of the person escaping before a warrant can be obtained for his arrest, but the person arrested shall be immediately taken before a committing officer.'9 However, marshals and their deputies 'shall have the power to make arrests without warrant for any offense against the laws of the United States committed in their presence or for any felony cognizable under the laws of the United States in cases where such felony has in fact been or is being committed and they have reasonable grounds to believe that the person to be arrested has committed or is committing it,'10 and they are also given the same powers as sheriffs in the same state may have, by law, in executing the laws thereof.11 17 In denouncing unlawful search by federal officers as a misdemeanor, Congress provided that it should not apply to one 'arresting or attempting to arrest any person committing or attempting to commit an offense in the presence of such officer, agent or employee, or who has committed, or who is suspected on reasonable grounds of having committed, a felony.'12 Thus the legislative sources, while yielding some common provisions, also contain many inconsistencies. No act of Congress lays down a general federal rule for arrest without warrant for federal offenses. None purports to supersede state law. And none applies to this arrest which, while for a federal offense, was made by a state officer accompanied by federal officers who had no power of arrest. Therefore the New York statute provides the standard by which this arrest must stand or fall. 18 Since, under that law, any valid arrest of Di Re, if for a misdemeanor must be for one committed in the arresting officer's presence, and if for a felony must be for one which the officer had reasonable grounds to believe the suspect had committed, we seek to learn for what offense this man was taken into custody. The arresting officer testified that he did not tell Di Re what he was being arrested for. After he was taken to the station he was 'booked,' but the record does not show upon what charge. He was later indicted for the misdemeanor of knowingly possessing counterfeit gasoline ration coupons in violation of Ration Order No. 5(c) of the Office of Price Administrator. But on appeal the Government suggested the arrest may be defended as one for a felony because probable grounds existed for believing him guilty of the felony of conspiracy under § 37 of the Criminal Code,13 and in this Court for the first time it suggests that there were grounds for arrest on a charge of possessing a known counterfeit writing with intent to utter it as true for the purpose of defrauding the United States, a felony under § 28 of the Criminal Code.14 19 Assuming, without deciding, that an arrest without a warrant on a charge not communicated at the time may later be justified if the arresting officer's knowledge gave probable grounds to believe any felony found in the statute books had been committed, we are brought to the inquiry whether the circumstances at that time afforded such grounds. 20 The Government now concedes that the only person who committed a possible misdemeanor in the open presence of the officer was Reed, the Government informer who was found visibly possessing the coupons. Of course, as to Buttitta they had previous information that he was to sell such coupons to Reed, and Reed gave information that he had done so. But the officer had no such information as to Di Re. All they had was his presence, and if his presence was not enough to make a case for arrest for a misdemeanor, it is hard to see how it was enough for the felony of violating § 28 of the Criminal Code. 21 The relevant difference between Ration Order 5(c) and § 28 of the Criminal Code is that the former declares mere possession of a counterfeit coupon an offense, while the latter defines a felony which consists not merely of possession but also of knowledge of the instrument's counterfeit character, and also of intent to utter it as true. It is admitted that at the time of the arrest the officers had no information implicating Di Re and no information pointing to possession of any coupons, unless his presence in the car warranted that inference. Of course they had no information hinting further at the knowledge and intent required as elements of the felony under the statute. III. 22 The Government's defense of the arrest relies most heavily on the conspiracy ground. In view of Reed's character as an informer, it is questionable whether a conspiracy is shown. But if the presence of Di Re in the car did not authorize an inference of participation in the Buttitta-Reed sale, it fails to support the inference of any felony at all. 23 There is no evidence that it is a fact or that the officers had any information indicating that Di Re was in the car when Reed obtained ration coupons from Buttitta, and none that he heard or took part in any conversation on the subject. Reed, the informer, certainly knew it if any part of his transaction was in Di Re's presence. But he was not called as a witness by the Government, nor shown to be unavailable, and we must assume that his testimony would not have been helpful in bringing guilty knowledge home to Di Re. 24 An inference of participation in conspiracy does not seem to be sustained by the facts peculiar to this case. The argument that one who 'accompanies a criminal to a crime rendezvous' cannot be assumed to be a bystander, forceful enough in some circumstances, is farfetched when the meeting is not secretive or in a suspicious hide-out but in broad daylight, in plain sight of passersby, in a public street of a large city, and where the alleged substantive crime is one which does not necessarily involve any act visibly criminal. If Di Re had witnessed the passing of papers from hand to hand, it would not follow that he knew they were ration coupons, and if he saw that they were ration coupons, it would not follow that he would know them to be counterfeit. Indeed it appeared at the trial to require an expert to establish that fact. Presumptions of guilt are not lightly to be indulged from mere meetings. 25 Moreover, whatever suspicion might result from Di Re's mere presence seems diminished, if not destroyed, when Reed, present as the informer, pointed out Buttitta, and Buttitta only, as a guilty party. No reason appears to doubt that Reed willingly would involve Di Re if the nature of the transaction permitted. Yet he did not incriminate Di Re. Any inference that everyone on the scene of a crime is a party to it must disappear if the Government informer singles out the guilty person. IV. 26 The Government also makes, and several times repeats, an argument to the effect that the officers could infer probable cause from the fact that Di Re did not protest his arrest, did not at once assert his innocence, and silently accepted the command to go along to the police station. One has an undoubted right to resist an unlawful arrest, and courts will uphold the right of resistance in proper cases. But courts will hardly penalize failure to display a spirit of resistance or to hold futile debates on legal issues in the public highway with an officer of the law. A layman may not find it expedient to hazard resistance on his own judgment of the law at a time when he cannot know what information, correct or incorrect, the officers may be acting upon. It is likely to en in fruitless and unseemly controversy in a public street, if not in an additional charge of resisting an officer. If the officers believed they had probable cause for his arrest on a felony charge, it is not to be supposed that they would have been dissuaded by his profession of innocence. 27 It is the right of one placed under arrest to submit to custody and to reserve his defenses for the neutral tribunals erected by the law for the purpose of judging his case. An inference of probable cause from a failure to engage in discussion of the merits of the charge with arresting officers is unwarranted. Probable cause cannot be found from submissiveness, and the presumption of innocence is not lost or impaired by neglect to argue with a policeman. It is the officer's responsibility to know what he is arresting for, and why, and one in the unhappy plight of being taken into custody is not required to test the legality of the arrest before the officer who is making it. 28 The Government's last resort in support of the arrest is to reason from the fruits of the search to the conclusion that the officer's knowledge at the time gave them grounds for it. We have had frequent occasion to point out that a search is not to be made legal by what it turns up.15 In law it is good or bad when it starts and does not change character from its success. V. 29 We meet in this case, as in many, the appeal to necessity. It is said that if such arrests and searches cannot be made, law enforcement will be more difficult and uncertain. But the forefathers, after consulting the lessons of history, designed our Constitution to place obstacles in the way of a too permeating police surveillance, which they seemed to think was a greater danger to a free people than the escape of some criminals from punishment. Taking the law as it has been given to us, this arrest and search were beyond the lawful authority of those who executed them. The conviction based on evidence so obtained cannot stand. 30 Affirmed. 31 The CHIEF JUSTICE and Mr. Justice BLACK dissent. 1 50 U.S.C.App. Supp. V, § 633, 50 U.S.C.A.Appendix, § 633. 2 331 U.S. 800, 67 S.Ct. 1348. 3 2 Cir., 159 F.2d 818. 4 Section 26, Title II of the National Prohibition Act provided in part as follows: 'When * * * any officer of the law shall discover any person in the act of transporting in violation of the law, intoxicating liquors in any wagon, buggy, automobile, water or air craft, or other vehicle, it shall be his duty to seize any and all intoxicating liquors found therein being transported contrary to law. Whenever intoxicating liquors transported or possessed illegally shall be seized by an officer he shall take possession of the vehicle and team or automobile, boat, air or water craft, or any other conveyance, and shall arrest any person in charge thereof. * * *' 27 U.S.C.A. § 40. In the Carroll case it was said 267 U.S. at page 155, 45 S.Ct. at page 286, that this section was intended 'to reach and destroy the forbidden liquor in transportation and the provisions for forfeiture of the vehicle and the arrest of the transporter were incidental'; and 267 U.S. at page 158, 45 S.Ct. at page 287, 'the right to search and the validity of the seizure are not dependent on the right to arrest. They are dependent on the reasonable cause the seizing officer has for belief that the contents of the automobile offend against the law. The seizure in such a proceeding comes before the arrest as section 26 indicates. * * *' 5 This word 'in' is erroneously printed 'is' in the case as reported in 267 U.S. 6 Section 180 provides: 'When arresting a person without a warrant the officer must inform him of the authority of the officer and the cause of the arrest, except when the person arrested is in the actual commission of a crime, or is pursued immediately after an escape.' See also People v. Marendi, 213 N.Y. 600, 610, 107 N.E. 1058, 1061. Cf. John Bad Elk v. United States, 177 U.S. 529, 20 S.Ct. 729, 44 L.Ed. 874; Christie v. Leachinsky (1947) 1 All Eng. 567. 7 Section 177 of the New York Code of Criminal Procedure provides: 'A peace officer may, without a warrant, arrest a person, '1. For a crime, committed or attempted in his presence; '2. When the person arrested has committed a felony, although not in his presence; '3. When a felony has in fact been committed, and he has reasonable cause for believing the person to be arrested to have committed it.' 8 The Act of September 24, 1789 (Ch. 20, § 33, 1 Stat. 91), concerning arrest with warrant, provided: 'That for any crime or offence against the United States, the offender may, by any justice or judge of the United States, or by any justice of the peace, or other magistrate of any of the United States where he may be found agreeably to the usual mode of process against offenders in such state, and at the expense of the United States, be arrested, and imprisoned or bailed, as the cae may be, for trial before such court of the United States as by this act has cognizance of the offence.' This provision has remained substantially similar to this day. 18 U.S.C. § 591, 18 U.S.C.A. § 591. See also 1 Ops.Atty.Gen. 85, 86. 9 48 Stat. 1008, 49 Stat. 77, 5 U.S.C. § 300a, 5 U.S.C.A. § 300a. 10 49 Stat. 378, 28 U.S.C. § 504a, 28 U.S.C.A. § 504a. 11 1 Stat. 425, 12 Stat. 282, 28 U.S.C. § 504, 28 U.S.C.A. § 504. 12 49 Stat. 877, 18 U.S.C. § 53a, 18 U.S.C.A. § 53a. 13 18 U.S.C. § 88, 18 U.S.C.A. § 88. 14 18 U.S.C. § 72, 18 U.S.C.A. § 72. 15 See, for example, Byars v. United States, 273 U.S. 28, 29, 47 S.Ct. 248, 71 L.Ed. 520.
01
332 U.S. 571 68 S.Ct. 246 92 L.Ed. 177 GLOBE LIQUOR CO., Inc.v.SAN ROMAN et al. No. 205. Argued Dec. 17, 1947. Decided Jan. 5, 1948. Rehearing Denied Feb. 2, 1948. Mr. Benjamin W. Heineman, of Chicago, Ill., for petitioner. Mr. Nat M. Kahn, of Chicago, Ill., for respondents. Mr. Justice BLACK delivered the opinion of the Court. 1 The petitioner, Globe Liquor Company, Inc., brought this act on in Federal District Court against respondents, Frank and Dorothea San Roman, doing business under the name of International Industries. The complaint claimed damages for an alleged breach of warranty in the sale of certain liquors. An answer was filed; issues were appropriately joined. After all the evidence had been introduced, each party requested a directed verdict. The petitioner's motion was granted, verdict was returned in its favor, and judgment was accordingly entered. The respondents then moved for a new trial on the ground among others that there were many contested issues of fact which should have been submitted to the jury. They did not move for judgment under Rule 50(b) of the Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c, which provides in part: 'Within 10 days after the reception of a verdict, a party who has moved for a directed verdict may move to have the verdict and any judgment entered thereon set aside and to have judgment entered in accordance with his motion for a directed verdict * * *. A motion for a new trial may be joined with this motion, or a new trial may be prayed for in the alternative. If a verdict was returned the court may allow the judgment to stand or may reopen the judgment and either order a new trial or direct the entry of judgment as if the requested verdict had been directed.' On appeal the Circuit Court of Appeals not only set aside the judgment in favor of the petitioner but also remanded the case to the District Court with directions to enter judgment for the respondent. 7 Cir., 160 F.2d 800. We granted certiorari, 332 U.S. 756, 68 S.Ct. 74, to consider the apparent inconsistency between this latter action of the Circuit Court of Appeals and our holding in Cone v. West Virginia Pulp and Paper Co., 330 U.S. 212, 67 S.Ct. 752, 755. 2 In the Cone case we held that the Circuit Court of Appeals was without power to order the entry of final judgment for the loser of a jury verdict in the District Court where he had failed to follow his motion for directed verdict with a timely motion for judgment as required by Rule 50(b). We pointed out in the Cone case that Rule 50(b) vested district judges with a discretion, under the circumstances outlined in the rule, to choose between two alternatives: (1) reopening the judgment and granting a new trial, and (2) ordering the entry of judgment as if the losing party's request for directed verdict had been granted by the trial judge. 3 It is urged that the reasons which supported the Cone decision are not relevant here because, unlike the Cone case, the jury in this case returned its verdict under specific directions of the trial judge. However significant this variance between the two cases might be for some purposes, it is of no importance here. By its terms the rule applies equally to cases where the verdict returned by the jury was not directed, as in the Cone case, or was directed, as in this case. 4 Furthermore, the very circumstances which arose in this case emphasize the importance of having the District Court first pass upon whether its error should result in a new trial or in a judgment finally ending the controversy. For there is here a dispute between the parties whether all or certain parts of a deposition containing important evidence were properly introduced in the trial court. Both parties took the position in the Circuit Court of Appeals that some, though different portions of the deposition, were properly presented in evidence. The Circuit Court of Appeals decided the case on the assumption that no part of the deposition was ever admitted as evidence. In this Court respondents argue that no part of the deposition was ever read to the jury and therefore no part of it can be considered as introduced in evidence. Whether this deposition or any part of it was properly before the court, and even if it were not before the court, whether the ends of justice required that a new trial be granted in order that the evidence it contained might properly be offered, were questions which the petitioner was entitled under Rule 50(b) to have passed upon in the first instance by the trial court. What we said in the Cone case is peculiarly appropriate here: 'Determination of whether a new trial should be granted or a judgment entered under Rule 50(b) calls for the judgment in the first instance of the judge who saw and heard the witnesses and has the feel of the case which no appellate printed transcript can impart.' It was error therefore for the Circuit Court of Appeals to direct the District Court to enter judgment for the respondents. 5 Petitioner also strongly urges that the evidence in the District Court was such that the trial judge was justified in directing a verdict in its favor and that the judgment resting on that verdict should be reinstated. Whether a verdict should have been directed, however, depends upon a number of factors, including an interpretation of the law of Illinois where the contract was made, a proper interpretation of the pleadings, a determination whether the disputed deposition was admitted in evidence in whole or in part, and the effect of that evidence if admitted. Under these circumstances, the judgment of the Circuit Court of Appeals in reversing and remanding the cause to the District Court is affirmed. But since the respondents made no motion for judgment under Rule 50(b), it was error to direct the District Court to enter a judgment in their favor. The case should go back to the District Court for a new trial. 6 It is so ordered.
89
332 U.S. 625 68 S.Ct. 296 92 L.Ed. 242 CALLENv.PENNSYLVANIA R. CO. No. 331. Argued Dec. 18, 1947. Decided Jan. 12, 1948. Mr. B. Nathaniel Richter, of Philadelphia, Pa., for petitioner pro hac vice by special leave of Court. Mr. Philip Price, of Philadelphia, Pa., for respondent. Mr. Justice JACKSON delivered the opinion of the Court. 1 Plaintiff, a railroad brakeman, brought this action under the Federal Employers' Liability Act, 35 Stat. 65, 53 Stat. 1404, 45 U.S.C. § 51, 45 U.S.C.A. § 51. He recovered a jury verdict of $24,990, but the Circuit Court of Appeals reversed because of errors in the charge by the District Judge and ordered a new trial, 3 Cir., 162 F.2d 832. The plaintiff's claim as submitted to the jury was negligence on the part of an engineer in effecting a coupling operation at a speed which plaintiff thought would jolt him off the stirrup of the car he was riding. In jumping for safety, he claimed to have received a severe and permanent back injury. The defendant denied the occurrence, offered testimony that plaintiff did not work at the time in question and also evidence of his admission that he did not work on that day but instead shoveled snow to get his car out of the garage. It also was testified that he had told his conductor he hurt his back on a different occasion. But if the injury was sustained at the time and place alleged, the defendant denied negligence, claimed contributory negligence and pleaded a general release. The controversy here concerns the release. 2 It was proved and not denied that for a consideration of $250 the plaintiff executed a general release of 'all claims and demands which I have or can or may have against the said Pennsylvania Railroad Co. for or by reason of personal injuries sustained by me' at the time and place involved in the suit. It also released claims for loss of time and expens, and recited that the payment was in compromise and not an admission of liability, that plaintiff read and understood the agreement and that the sum of money stated therein is all that he was to receive. 3 On the trial, the plaintiff testified that he read and understood the release, knew what he was doing and intended to waive any further claim, and that when he began talking settlement he said he should have between $300 and $350. No fraud was alleged, but the plaintiff testified that he executed the release in reliance on the claim agent's assurance that 'there was nothing wrong' and that he 'could get back to the job.' 4 At the trial, plaintiff offered evidence from which the jury might well find that he had a permanent and serious injury. The claim agent admitted that at the time of settlement he did not know the plaintiff was suffering the injury which the doctors at the trial described. The plaintiff had gone to a family physician who taped his back and to a chiropractor whose report plaintiff took with him to the claim agent. It did not diagnose permanent injury but did suggest a weakness making him more susceptible to recurrence. The Railroad procured no medical examination of plaintiff. The claim agent's testimony was that he determined the amount of the settlement on the basis of his belief that there was no liability. 5 Instructing the jury, the trial court stated: 6 'Anyhow, they settled to the extent of $250.00 and the release has been offered in evidence and admitted, and both sides agree that the release was not in contemplation of any sort of permanent injury. 7 'Now, I am going to consider that release as binding to the amount of $250.00, and if you find a verdict for the plaintiff you will deduct that from any amount you would otherwise give him. The $250.00 he got for expenses and medical bills and services that the obtained up to that time; and if you find that he is entitled to a verdict at your hands I will ask you to deduct that $250.00 from any amount you otherwise would award him, because that is what he agreed to take toward that particular phase of his claim, and of course he would not and does not ask, as I understand it, to be excused from that,—he admits that he got it, and there it is. 8 'The release, a I have told the attorneys for both sides, I do not consider binding insofar as it applies to his permanent injuries, because the Pennsylvania Railroad certainly didn't know he was permanently injured * * *.' 9 The Circuit Court of Appeals, quite rightly we think, construed the charge of the District Judge as withdrawing the question of validity of the release from the jury and said (162 F.2d 832, 834): 'This was palpable error under the facts relating to the release and entirely aside from the Court's incorrect assumption that there was no dispute about the permanency of the injuries.' 10 An examination of the record at the trial makes it clear that the issue was raised and sharply litigated as to whether the injury, if received by plaintiff in the manner alleged, was permanent in character. Only when and if this issue was resolved in favor of one party or the other could it be known whether there was a basis for finding a mutual mistake or any mistake of fact in executing the release. The court, however, resolved the issue of permance of injury against the defendant, at least so far as the release was concerned, and on that basis withdrew consideration of that issue from the jury. Even if the issue of permanence were resolved against the defendant, an issue still existed as to validity of the release since the defendant insists that it did not act from mistake as to the nature and extent of the injuries but entered into the release for the small consideration involved because, upon the evidence in its hands at the time, no liability was indicated. We think the defendant was entitled to argue these contentions to the jury and to have them submitted under proper instructions. 11 It is apparent that the jury accepted the instructions of the court on the subject of the release. Returning, they rendered a verdict 'for the plaintiff, and assess the damages of $25,240.00, of which the Railroad is to be reimbursed with $250.00.' The court, saying he wanted to make the record right, asked the jury if they made a net finding of $24,990, which the foreman said they did. Under the instructions they had received, there was little else that the jury could do, for the court had withdrawn from them the issue as to the validity of the release and consequently had given them no instructions as to the law that should govern the determination of any such question. 12 While the trial court assumed a finding of permanency as a basis for his setting aside of the release, after challenge to his assumption as to the nature of the injuries he made every effort to correct the impression, insofar as it affected the issue of damages. But the trial court did not correct or in any way alter his determination that the release was not binding insofar as it rested on the assumption of permanent injury. The Court of Appeals was right in holding that failure to submit this latter question to the jury was reversible error. 13 We are urged, however, to decide in this case that the release was properly disregarded by the trial court upon the ground that the burden should not be on one who attacks a release, to show grounds of mutual mistake or fraud, but should rest upon the one who pleads such a contract, to prove the absence of those grounds. It is not contended that this is or ever has been the law; rather, it is contended that it should be the law, at least as to railroad cases. The amicus brief puts it that 'We ask that the burden of establishing the validity of a release taken from a railroad employe under the Federal Employers' Liability Act be placed on the railroad. And that where but a nominal sum has been paid which is less than or even equal to only the wages lost, that fact of itself be held to be evidence of at least a mistake of facts, if not presumed fraud, since the railroad possesses superior facilities for determining the extent of injuries * * *.' Considerable reliance is placed upon a concurring opinion in the Court of Appeals for the Second Circuit in Ricketts v. Pennsylvania R. Co., 153 F.2d 757, 760, 164 A.L.R. 387. However persuasive the arguments there stated may be that inequality of bargaining power might well justify a change in the law, they are also a frank recognition that the Congress has made no such change. An amendment of this character is for the Congress to consider rather than for the courts to introduce. If the Congress were to adopt a policy depriving settlements of litigation of their prima facie validity, it might also make compensation for injuries more certain and the amounts thereof less speculative. But until the Congress changes the statutory plan, the releases of railroad employees stand on the same basis as the releases of others. One who attacks a settlement must bear the burden of showing that the contract he has made is tainted with invalidity, either by fraud practiced upon him or by a mutual mistake under which both parties acted. 14 The plaintiff has also contended that this release violates § 5 of the Federal Employers' Liability Act which provides that any contract to enable any common carrier to 'exempt itself from any liability created by this chapter, shall to that extent be void.' 35 Stat. 66, 45 U.S.C. § 55, 45 U.S.C.A. § 55. It is obvious that a release is not a device to exempt from liability but is a means of compromising a claimed liability and to that extent recognizing its possibility. Where controversies exist as to whether there is liability, and if so for how much, Congress has not said that parties may not settle their claims without litigation. 15 Since we believe the Court of Appeals was right in directing a new trial at which the jury shall be permitted to pass on all issues of fact, the judgment is affirmed. 16 Affirmed. 17 Mr. Justice BLACK, Mr. Justice DOUGLAS, Mr. Justice MURPHY and Mr. Justice RUTLEDGE, being of the view that releases under the Federal Employers' Liability Act should be governed by the same rule which applies to releases by seamen in admiralty (see the separate opinion of Judge Jerome Frank, Ricketts v. Pennsylvania R. Co., 2 Cir., 153 F.2d 757, 767—770, 164 A.L.R. 387), dissent from an affirmance of the judgment.
78
332 U.S. 631 68 S.Ct. 299 92 L.Ed. 247 SIPUELv.BOARD OF REGENTS OF UNIVERSITY OF OKLAHOMA et al. No. 369. Argued Jan. 7, 8, 1948. Decided Jan. 12, 1948. Messrs. Thurgood Marshall, of New York City, and Amos Hall, of Tulsa, Okl., for petitioner. Messrs. Fred Hansen, of Oklahoma City, Okl., and Maurice H. Merrill, of Norman, Okl., for respondents. PER CURIAM. 1 On January 14, 1946, the petitioner, a Negro, concededly qualified to receive the professional legal education offered by the State, applied for admission to the School of Law of the University of Oklahoma, the only institution for legal education supported and maintained by the taxpayers of the State of Oklahoma. Petitioner's application for admission was denied, solely because of her color. 2 Petitioner then made application for a writ of mandamus in the District Court of Cleveland County, Oklahoma. The writ of mandamus was refused, and the Supreme Court of the State of Oklahoma affirmed the judgment of the District Court. Okl. Sup., 180 P.2d 135. We brought the case here for review. 3 The petitioner is entitled to secure legal education afforded by a state institution. To this time, it has been denied her although during the same period many white applicants have been afforded legal education by the State. The State must provide it for her in conformity with the equal protection clause of the Fourteenth Amendment and provide it as soon as it does for applicants of any other group. State of Missouri ex rel. Gaines v. Canada, 1938, 305 U.S. 337, 59 S.Ct. 232, 83 L.Ed. 208. 4 The judgment of the Supreme Court of Oklahoma is reversed and the cause is remanded to that court for proceedings not inconsistent with this opinion. 5 The mandate shall issue forthwith. 6 Reversed. LEE v. STATE OF MISSISSIPPI
12
332 U.S. 596 68 S.Ct. 302 92 L.Ed. 224 HALEYv.STATE OF OHIO. No. 51. Argued Nov. 17, 1947. Decided Jan. 12, 1948. Mr. Edgar W. Jones, of Canton, Ohio, for petitioner. Messrs. D. Deane McLaughlin and W. Bernard Rodgers, both of Canton, Ohio, for respondent. Mr. Justice DOUGLAS announced the judgment of the Court and an opinion in which Mr. Justice BLACK, Mr. Justice MURPHY, and Mr. Justice RUTLEDGE join. 1 Petitioner was convicted in an Ohio court of murder in the first degree and sentenced to life imprisonment. The Court of Appeals of Ohio sustained the judgment of conviction over the objection that the admission of petitioner's confession at the trial violated the Fourteenth Amendment of the Constitution. 79 Ohio App. 237, 72 N.E.2d 785. The Ohio Supreme Court, being of the view that no debatable constitutional question was presented, dismissed the appeal. 147 Ohio St. 340, 70 N.E.2d 905. The case is here on a petition for a writ of certiorari which we granted because we had doubts whether the ruling of the court below could be squared with Chambers v. State of Florida, 309 U.S. 227, 60 S.Ct. 472, 84 L.Ed. 716; Malinski v. People of State of New York, 324 U.S. 401, 65 S.Ct. 781, 89 L.Ed. 1029, and like cases in this Court. 2 A confectionery store was robbed near midnight on October 14, 1945, and William Karam, its owner, was shot. It was the prosecutor's theory, supported by some evidence which it is unnecessary for us to relate, that petitioner, a Negro boy age 15, and two others, Willie Lowder, age 16, and Al Parks, age 17, committed the crime, petitioner acting as a lookout. Five days later—around midnight October 19, 1945—petitioner was arrested at his home and taken to police headquarters. 3 There is some contrariety in the testimony as to what then transpired. There is evidence that he was beaten. He took the stand and so testified. His motor testified that the clothes he wore when arrested, which were exchangedt wo days later for clean ones she brought to the jail, were torn and blood-stained. She also testified that when she first saw him five days after his arrest he was bruished and skinned. The police testified to the contrary on this entire line of testimony. So we put to one side the controverted evidence. Taking only the undisputed testimony (Malinski v. People of State of New York, supra, 324 U.S. at page 404, 65 S.Ct. at page 783, 89 L.Ed. 1029, and cases cited), we have the following sequence of events. Beginning shortly after midnight this 15-year old lad was questioned by the police for about five hours. Five or six of the police questioned him in relays of one or two each. During this time no friend or counsel of the boy was present. Around 5 a.m.—after being shown alleged confessions of Lowder and Parks—the boy confessed. A confession was typed in question and answer form by the police. At no time was this boy advised of his right to counsel; but the written confession started off with the following statement: 'we want to inform you of your constitutional rights, the law gives you the right to make this statement or not as you see fit. It is made with the understanding that it may be used at a trial in court either for or against you or anyone else involved in this crime with you, of your own free will and accord, you are under no force or duress or compulsion and no promises are being made to you at this time whatsoever. 4 'Do you still desire to make this statement and tell the truth after having had the above clause read to you? A. Yes.' 5 He was put in jail about 6 or 6:30 a.m. on Saturday, the 20th, shortly after the confession was signed. Between then and Tuesday, the 23d, he was held incommunicado. A lawyer retained by his mother tried to see him twice but was refused admission by the police. His mother was not allowed to see him until Thursday, the 25th. But a newspaper photographer was allowed to see him and take his picture in the early morning hours of the 20th, right after he had confessed. He was not taken before a magistrate and formally charged with a crime until the 23d—three days after the confession was signed. 6 The trial court, after a preliminary hearing on the voluntary character of the confession, allowed it to be admitted in evidence over petitioner's objection that it violated his rights under the Fourteenth Amendment. The court instructed the jury to disregard the confession if it found that he did not make the confession voluntarily and of his free will. 7 But the ruling of the trial court and the finding of the jury on the voluntary character of the confession do not foreclose the independent examination which it is our duty to make here. Ashcraft v. State of Tennessee, 322 U.S. 143, 147, 148, 64 S.Ct. 921, 923, 88 L.Ed. 1192. If the undisputed evidence suggests that force or coercion was used to exact the confession, we will not permit the judgment of conviction to stand even though without the confession there might have been sufficient evidence for submission to the jury. Malinski v. People of State of New York, supra, 324 U.S. at page 404, 65 S.Ct. at page 783, 89 L.Ed. 1029, and cases cited. 8 We do not think the methods used in obtaining this confession can be sequared with that due process of law which the Fourteenth Amendment commands. 9 What transpired would make us pause for careful inquiry if a mature man were involved. And when, as here, a mere child—an easy victim of the law—is before us, special care in scrutinizing the record must be used. Age 15 is a tender and difficult age for a boy of any race. He cannot be judged by the more exacting standards of maturity. That which would leave a man cold and unimpressed can overawe and overwhelm a lad in his early teens. This is the period of great instability which the crisis of adolescence produces. A 15-year old lad, questioned through the dead of night by relays of police, is a ready victim of the inquisition. Mature men possibly might stand the ordealf rom midnight to 5 a.m. But we cannot believe that a lad of tender years is a match for the police in such a contest. He needs counsel and support if he is not to become the victim first of fear, then of panic. He needs someone on whom to lean lest the overpowering presence of the law, as he knows it, may not crush him. No friend stood at the side of this 15-year old boy as the police, working in relays, questioned him hour after hour, from midnight until dawn. No lawyer stood guard to make sure that the police went so far and no farther, to see to it that they stopped short of the point where he became the victim of coercion. No counsel or friend was called during the critical hours of questioning. A photographer was admitted once this lad broke and confessed. But not even a gesture towards getting a lawyer for him was ever made. 10 This disregard of the standards of decency is underlined by the fact that he was kept incommunicado for over three days during which the lawyer retained to represent him twice tried to see him and twice was refused admission. A photographer was admitted at once; but his closest friend—his mother—was not allowed to see him for over five days after his arrest. It is said that these events are not germane to the present problem because they happened after the confession was made. But they show such a callous attitude of the police towards the safeguards which respect for ordinary standards of human relationships compels that we take with a grain of salt their present apologia that the five-hour grilling of this boy was conducted in a fair and dispassionate manner. When the police are so unmindful of these basic standards of conduct in their public dealings, their secret treatment of a 15-year old boy behind closed doors in the dead of night becomes darkly suspicious. 11 The age of petitioner, the hours when he was grilled, the duration of his quizzing, the fact that he had no friend or counsel to advise him, the callous attitude of the police towards his rights combine to convince us that this was a confession wrung from a child by means which the law should not sanction. Neither man nor child can be allowed to stand condemned by methods which flout constitutional requirements of due process of law. 12 But we are told that this boy was advised of his constitutional rights before he signed the confession and that, knowing them, he nevertheless confessed. That assumes, however, that a boy of fifteen, without aid of counsel, would have a full appreciation of that advice and that on the facts of this record he had a freedom of choice. We cannot indulge those assumptions. Moreover, we cannot give any weight to recitals which merely formalize constitutional requirements. Formulas of respect for constitutional safeguards cannot prevail over the facts of life which contradict them. They may not become a cloak for inquisitorial practices and make an empty form of the due process of law for which free men fought and died to obtain. 13 The course we followed in Chambers v. State of Florida, supra, White v. State of Texas, 310 U.S. 530, 60 S.Ct. 1032, 84 L.Ed. 1342, Ashcraft v. State of Tennessee, supra, and Malinski v. People of State of New York, supra, must be followed here. The Fourteenth Amendment prohibits the police from using the private, secret custody of either man or child as a device for wringing confessions from them. 14 Reversed. 15 Mr. Justice FRANKFURTER, joining in reversal of judgment. 16 In a recent series of cases, beginning with Brown v. State of Mississippi, 297 U.S. 278, 56 S.Ct. 461, 80 L.Ed. 682, the Court has set aside convictions coming here from State courts because they were based on confessions admitted under circumstances that offended the requirements of the 'due process' exacted from the States by the Fourteenth Amendment. If the rationale of those cases ruled this, we would dispose of it per curiam with the mere citation of the cases. They do not rule it. Since at best this Court' reversal of a State court's conviction for want of due process always involves a delicate exercise of power and since there is a sharp division as to the propriety of its exercise in this case, I deem it appropriate to state as explicitly as possible why, although I have doubts and difficulties, I cannot support affirmance of the conviction. 17 The doubts and difficulties derive from the very nature of the problem before us. They arise frequently when this Court is obliged to give definiteness to 'the vague contours' of Due Process or, to change the figure, to spin judgment upon State action out of that gossamer concept. Subtle and even elusive as its criteria are, we cannot escape that duty of judicial review. The nature of the duty, however, makes it especially important to be humble in exercising it. Humility in this context means an alert self-scrutiny so as to avoid infusing into the vagueness of a Constitutional command one's merely private notions. Like other mortals, judges, though unaware, may be in the grip of prepossessions. The only way to relax such a grip, the only way to avoid finding in the Constitution the personal bias one has placed in it, is to explore the influences that have shaped one's unanalyzed views in order to lay bare prepossessions. 18 A lifetime's preoccupation with criminal justice, as prosecutor, defender of civil liberties and scientific student, naturally leaves one with views. Thus, I disbelieve in capital punishment. But as a judge I could not impose the views of the very few States who through bitter experience have abolished capital punishment upon all the other States, by finding that 'due process' proscribes it. Again, I do not believe that even capital offenses by boys of fifteen should be dealt with according to the conventional criminal procedure. It would, however, be bald judicial usurpation to hold that States violate the Constitution in subjecting minors like Haley to such a procedure. If a State, consistently with the Fourteenth Amendment, may try a boy of fifteen charged with murder by the ordinary criminal procedure, I cannot say that such a youth is never capable of that free choice of action which, in the eyes of the law, makes a confession 'voluntary.' Again, it would hardly be a justifiable exercise of judicial power to dispose of this case by finding in the Due Process Clause constitutional outlawry of the admissibility of all private statements made by an accused to a police officer however much legislation to that effect might seem to me wise. See The Indian Evidence Act of 1872, § 25; cf. § 26. 19 But whether a confession of a lad of fifteen is 'voluntary' and as such admissible, or 'coerced' and thus wanting in due process, is not a matter of mathematical determination. Essentially it invites psychological judgment—a psychological judgment that reflects deep, even if inarticulate, feelings of our society. Judges must divine that feeling as best they can from all the relevant evidence and light which they can bring to bear for a confident judgment of such an issue, and with every endeavor to detach themselves from their merely private views. (It is noteworthy that while American experience has been drawn upon in the framing of constitutions for other democratic countries, the Due Process Clause has not been copied. See, also, the illuminating debate on the proposal to amend the Irish Home Rule Bill by incorporating our Due Process Clause. 42 H.C.Deb. 2082 2091, 2215—2267 (5th ser., Oct. 22, 23, 1912).) 20 While the issue thus formulated appears vague and impalpable, it cannot be too often repeated that the limitations which the Due Process Clause of the Fourteenth Amendment placed upon the methods by which the States may prosecute for crime cannot be more narrowly conceived. This Court must give the freest possible scope to States in the choice of their methods of criminal procedure. But these procedures cannot include methods that may fairly be deemed to be in conflict with deeply rooted feei ngs of the community. See concurring opinions in Malinski v. People of State of New York, 324 U.S. 401, 412, 65 S.Ct. 781, 787, 89 L.Ed. 1029, and State of Louisana ex rel. Francis v. Resweber, 329 U.S. 459, 466, 67 S.Ct. 374, 377. Of course this is a most difficult test to apply, but apply it we must, warily, and from case to case. 21 This brings me to the precise issue on the record before us. Suspecting a fifteen-year-old boy of complicity in murder resulting from attempted robbery, at about midnight the police took him from his home to police headquarters. There he was questioned for about five hours by at least five police officers who interrogated in relays of two or more. About five o'clock in the morning this procedure culminated in what the police regarded as a confession, whereupon it was formally reduced to writing. During the course of the interrogation the boy was not advised that he was not obliged to talk, that it was his right if he chose to say not a word, nor that he was entitled to have the benefit of counsel or the help of his family. Bearing upon the safeguards of these rights, the Chief of Police admitted that while he knew that the boy 'had a right to remain mute and not answer any questions' he did not know that it was the duty of the police to apprise him of that fact. Unquestionably, during this whole period he was held incommunicado. Only after the night-long questioning had resulted in disclosures satisfactory to the police and as such to be documented, was there read to the boy a clause giving the conventional formula about his constitutional right to make or withhold a statement and stating that if he makes it, he makes it of his 'own free will.' Do these uncontested fact justify a State court in finding that the boy's confession was 'voluntary,' or do the circumstances by their very nature preclude a finding that a deliberate and responsible choice was exercised by the boy in the confession that came at the end of five hours questioning? 22 The answer, as has already been intimated, depends on an evaluation of psychological factors, or, more accurately stated, upon the persuasive feeling of society regarding such psychological factors. Unfortunately, we cannot draw upon any formulated expression of the existence of such feeling. Nor are there available experts on such matters to guide the judicial judgment. Our Constitutional system makes it the Court's duty to interpret those feelings of society to which the Due Process Clause gives legal protection. Because of their inherent vagueness the tests by which we are to be guided are most unsatisfactory, but such as they are we must apply them. 23 The Ohio courts have in effect denied that the very nature of the circumstances of the boy's confession precludes a finding that it was voluntary. Their denial carries great weight, of course. It requires much to be overborne. But it does not end the matter. Against it we have the judgment that comes from judicial experience with the conduct of criminal trials as they pass in review before this Court. An impressive series of cases in this and other courts admonishes of the temptations to abuse of police endeavors to secure confessions from suspects, through protracted questioning carried on in secrecy, with the inevitable disquietude and fears police interrogations naturally engender in individuals questioned while held incommunicado, without the aid of counsel and unprotected by the safeguards of a judicial inquiry. Disinterested zeal for the public good does not assure either wisdom or right in the methods it pursues. A report of President Hoover's National Commission on Law Observance and Enforcement gave proof of the fact, unfortunately, that these potentialities of abuse were not the imaginings of mawkish sentimentality, nor their tolerance desirable or necessary for a stern policy against crime. Legislation throughout the country reflects a similar belief that detention for purposes of eliciting confessions through secret, pes istent, longcontinued interrogation violates sentiments deeply embedded in the feelings of our people. See McNabb v. United States, 318 U.S. 332, 342, 343, 63 S.Ct. 608, 613, 614, 87 L.Ed. 819. 24 It is suggested that Haley's guilt could easily have been established without the confession elicited by the sweating process of the night's secret interrogation. But this only affords one more proof that in guarding against misuse of the law enforcement process the effective detection of crime and the prosecution of criminals are furthered and not hampered. Such constitutional restraints of decency derive from reliance upon the resources of intelligence in dealing with crime and discourage the too easy temptations of unimaginative crude force, even when such force is not brutally employed. 25 It would disregard standards that we cherish as part of our faith in the strength and well-being of a rational, civilized society to hold that a confession is 'voluntary' simply because the confession is the product of a sentient choice. 'Conduct under duress involves a choice,' Union Pacific R. Co. v. Public Service Commission, 248 U.S. 67, 70, 39 S.Ct. 24, 25, 63 L.Ed. 131, and conduct devoid of physical pressure but not leaving a free exercise of choice is the product of duress as much so as choice reflecting physical constraint. 26 Unhappily we have neither physical nor intellectual weights and measures by which judicial judgment can determine when pressures in securing a confession reach the coercive intensity that calls for the exclusion of a statement so secured. Of course, the police meant to exercise pressures upon Haley to make him talk. That was the very purpose of their procedure. In concluding that a statement is not voluntary which results from pressures such as were exerted in this case to make a lad of fifteen talk when the Constitution gave him the right to keep silent and when the situation was so contrived that appreciation of his rights and thereby the means of asserting them were effectively withheld from him by the police, I do not believe I express a merely personal bias against such a procedure. Such a finding, I believe, reflects those fundamental notions of fairness and justice in the determination of guilt or innocence which lie embedded in the feelings of the American people and are enshrined in the Due Process Clause of the Fourteenth Amendment. To remove the inducement to resort to such methods this Court has repeatedly denied use of the fruits of illicit methods. 27 Accordingly, I think Haley's confession should have been excluded and the conviction based upon it should not stand. 28 Mr. Justice BURTON, with whom The CHIEF JUSTICE, Mr. Justice REED and Mr. Justice JACKSON concur, dissenting. 29 The issue here is a narrow one of fact turning largely upon the credibility of witnesses whose testimony on material points is in direct conflict with that of other witnesses. The judgment rendered today by this Court does not hold that the procedure authorized by the State of Ohio to determine the admissibility of the confession of a person accused of a capital offense violates per se the Due Process Clause of the Fourteenth Amendment. It holds merely that the application made of that procedure in this case amounted to a violation of due process under the Fourteenth Amendment in that, on this record, it amounted to a refusal by the trial court to exclude from the jury this particular confession which this Court is convinced was an involuntary confession. The following facts are not disputed: 30 About midnight, on October 14, 1945, a storekeeper in Canton, Ohio, was shot to death in his store by one of two boys, Alfred Parks, aged 16, or Willie Lowder, aged 17. The accused, John Harvey Haley, then about 15 years and 8 months old and a senior in high school, was with these boys before they went into the store and was waiting for them outside of it at the time when the shooting occurred. Haley testified 'all of a sudden I heard a shot and a man hl lered, and I was scared and I ran.' The two other boys also ran away immediately after the shot was fired. The three soon met and Haley then went home. These boys had been together all that evening. Early in the evening, while Parks and Lowder waited outside of Haley's home, Haley went in to get a pistol for their joint use. Without the knowledge of William Mack, the owner of the pistol, Haley took from a trunk a .32 caliber automatic pistol which Haley had shot once on New Year's Day and, from another place in his home, a handful of ammunition for the pistol. The three boys took part in loading it. Haley then turned it over to Parks and Lowder, one or the other of whom thereafter retained possession of it throughout the evening. A day or two after the shooting, Haley asked the two boys what they had done with the gun. He testified that in answer 'They said they got rid of it.' This much of the story Haley testified to at the trial and has admitted substantially ever since his arrest and since abandoning his first, and admittedly false, statement that he and his two friends had gone to a show that evening. A .32 caliber automatic Colt pistol, the admission of which in evidence is not here in issue, was sent by the Canton police to the Federal Bureau of Investigation for identification, together with the bullet which killed the storekeeper and a cartridge shell found by the police at the scene of the crime. An uncontradicted expert witness from the F.B.I. fired three bullets from the pistol, compared the microscopic markings on them with those on the bullet which had killed the storekeeper and, on this basis, positively identified the pistol as the weapon which had fired the fatal shot. This fatal shot admittedly was fired while Parks and Lowder were in the store of the deceased and were in possession of the pistol with which Haley had supplied them. There is nothing in the record to suggest the presence in the store of any other pistol. Haley testified that this pistol 'looked like' the one he had given to his companions. 31 After hearing the foregoing and other material evidence, including the disputed confession of Haley, the jury found him guilty of murder in the first degree while attempting to perpetrate robbery. The verdict carried a recommendation of mercy which automatically reduced the statutory penalty from death to life imprisonment. In considering the record as a whole, and particularly in reaching a conclusion of fact that the police officers who examined Haley coerced him into making his confession, it is appropriate to note that the foregoing undisputed facts left comparatively little need for such a confession as was signed by Haley. That confession, in substance, added only the express statement by Haley that he knew that Parks and Lowder went into the store to rob the storekeeper and that Haley remained outside to serve as a lookout and to warn Parks and Lowder by tapping on the window in case anyone approached. 32 The procedure followed by the police as soon as they had the information upon which they arrested Haley was substantially as follows: 33 On Friday, October 19, 1945, again at about midnight, and while Haley was still up and about his home, after having returned from an evening football game, he was arrested by four policemen who came to his home in two cars. They were admitted to Haley's home by his mother and they took him with them to police headquarters, not using handcuffs. He was 'booked' there at about 12:30 a.m. From then until between 3 and 4 a.m. he was in the record room of the detective bureau, usually with two officers. What took place there leading up to his oral, and later signed, confession is the subject of directly contradictory testimony given by the accused and the police. Haley testified that he was roughly handled in such a manner that if this testimony is believed the confession was not voluntary. On the other hand, the police and everyone else who was present or saw Haley during or after this examint ion testified in detail, and with positiveness, that Haley was not abused or roughly handled in any degree and that his person and clothes presented a normal appearance after the examination. Immediately after Haley had been shown alleged confessions by Parks and Lowder and had read at least that by Parks, Haley made an oral statement evidently similar to that made by Parks. Thereupon, Haley was taken to a front room where a sergeant of detectives typed Haley's confession in question and answer form during a period which consumed from one hour to an hour and a half. Before taking this confession the sergeant testified that he typed and read to Haley, clearly and distinctly, the preliminary statement, a part of which is quoted in this Court's opinion as being at the beginning of the written confession. The sergeant testified that Haley, after hearing this introduction, said that he still desired to make a statement and tell the truth. When completed, the statement, so prepared, was signed by Haley in the presence not only of some of the police officers who had questioned him but also of two civilian witnesses called in for that purpose from outside of police headquarters. The Acting Chief of Police, who himself was a member of the Bar of Ohio, requested Haley to read the entire confession. When this had been done, the Acting Chief of Police, in the capacity of a notary public, administered the oath signed by Haley at the end of the confession, stating that the facts contained therein were true and correct as Haley verily believed. A newspaper photographer then took a picture of Haley in company with Parks and Lowder. Either then or on the following Monday, the date being disputed, Haley was taken back to his home where the police found the trunk described by him as that from which he had taken the pistol. After his confession he was placed in the city jail and, on the following Tuesday, October 23, he was removed to the county jail. On that day, a complaint was filed in the Court of Common Pleas of Stark County, Ohio, Division of Domestic Relations, Juvenile Department, by a sergeant of police, charging Haley with being a delinquent child. 34 On October 29, 1945, pursuant to a motion of the prosecuting attorney, the judge assigned to the above-mentioned Domestic Relations Division of the Court of Common Pleas appointed a doctor to make a physical and mental examination of the accused. 35 On November 1, 1945, the mental and physical examination was filed and, after hearing, the court found 'that the said child has committed an act which, if (it) had been committed by an adult, would be a felony; an examination having been made of the said John Haley by a competent physician, qualified to make such examination, it is ordered that the said John Haley shall personally be and appear before the of the next term thereof to answer for of the next erm thereof to answer for such act.' 36 On November 14, 1945, a transcript from the docket of the above-mentioned Juvenile Court was filed in the Court of Common Pleas. Thereafter, beginning with an indictment for first degree murder which was returned on January 8, 1946, the case proceeded to arraignment on January 11, and to trial in the Court of Common Pleas March 25—April 3, when a verdict of guilty as charged was returned, with a recommendation of mercy. A motion for a new trial was overruled and the case was appealed to the Court of Appeals for Stark County, Ohio, and there was unanimously affirmed October 25, 1946. Appeal was made, both on a motion for leave to appeal and as a matter of right, to the Supreme Court of Ohio. The motion for leave to appeal was overruled and the appeal, as a matter of right, was dismissed by unanimous action of the five judges sitting in the case. The reason given for dismissal was that the court found that no debatable constitutional question was involved in the case.1 37 Beginning with the arraignment of the accused, the record shows that Haley has been represented by counsel. The case has proceeded in this Court in forma pauperis, the accused being represented by the same competent counsel who represented him in the state courts. It does not appear that the accused ever asked to have counsel appointed for him. It does not appear that, at any time before his arriagnment, he employed counsel or asked for counsel to represent him. The nearest approach to such action is that discosed by the testimony of Haley's mother and by a stipulation between the parties that Leroy Contie, an attorney, on Monday, October 22, was employed by Mrs. Haley to represent her son. Mr. Contie went to the city jail on two occasions after Haley's confession was signed, was unable to see him and was refused admission by the police authorities. Mr. Contie did not see Haley until after the latter had been transferred to the county jail, some days after that. He apparently did not become an attorney of record in the case. 38 It is not disputed on Haley's behalf that his arrest and uncoercive questioning after his arrest would have been proper under such circumstances. While the constitutional and statutory rights of the accused, under such circumstances, must be safeguarded carefully, it is eqully clear that serious constitutional and statutory obligations rest upon law enforcement officers to discover promptly those guilty of such an unprovoked murder as had been committed. Likewise, the comparative youth of these three boys who now have been convicted of this murder is entitled to full recognition in considering the constitutionality of the process of law that has been applied to them. This has been done. Haley's youth was recognized expressly by the preliminary proceedings before the Juvenile Department of the Division of Domestic Relations of the local court. Those proceedings markedly differentiated the procedure from that ordinarily followed in the case of an adult. Undoubtedly the thought of Haley's youth was reflected in the jury's recommendation of mercy, and in the care which the sergeant and the Acting Chief of Police testified that they took in preparing his confession for signature and in seeing to it that Haley understood it and his rights in connection with it. It is necessary to recognize, on the other hand, that the offense here charged was not an ordinary juvenile offense. It was a capital offense of the most serious kind. It involved the same fatal consequence to a lawabiding citizen of Canton as would have been the case if it had been committed by adult offenders. An obligation rests upon the police not only to discover the perpetrators of such a crime but also to determine, as promptly as possible their guilt or innocence to a degree sufficient to justify their prosecution or release. It is common knowledge that many felonies are being committed currently by minors and an obligation attaches to law enforcement officials to punish, prevent and discourage such conduct by minors as well as by adults. If Haley's part in this crime had been reasonably suspected by the police immediately after its commission at midnight, October 14, the police would have deserved severe criticism if they had not arrested ad questioned him that night. The same obligation rested on them, five days later, at midnight, October 19. 39 As admitted by the petitioner in this Court, the entire issue here resolves itself into a consideration of the methods used in obtaining the confession. This in turn resolves itself primarily into a question of the credibility of witnesses as a means of determining the contested question as to what methods in fact were used. A voluntary confession not only is valid but it is the usual, best and generally fairest kind of evidence. Often it is the only direct evidence obtainable as to the state of mind of the accused. The giving of such a confession promptly is to be encouraged in the interest of all concerned. The police are justified and under obligation to seek such confessions. At the same time, it is a primary part of their obligation to see to it that coercion, including intimidation, is not used to secure a confession. It should be evident to them not only that involuntary confessions are worthless as evidence, but that coercion applied in securing them itself constitutes a serious violation of duty. 40 The question in this case is the simple one—was the confession in fact voluntary? As in many other cases it is difficult, because of conflicting testimony, to determine this controlling fact. It may not be possible to become absolutely certain of it. Self-serving perjury, however, must not be the passkey to a mandatory exclusion of the confession from use as evidence. It is for the trial judge and the jury, under the safeguards of constitutional due process of criminal law, to apply even-handed justice to the determination of the factual issues. To do this, they need every available lawful aid to help them test the credibility of the conflicting testimony. 41 Due process of law under the Fourteenth Amendment requires that the states use some fair means to determine the voluntary character of a confession like that in this case. The procedure may differ in each state. The form adopted by Ohio is not criticized by this Court. The sole question here is the validity of the application of the Ohio procedure to the facts of this case. That application can be tested in this Court only under the great handicap of attempting to appraise, by use of the printed record, the action of the trial court and jury taken in the light of the living record. In connection with every confession that is unaccompanied by testimony as to how it was secured, all sorts of conditions may be conjectured as to the methods used to secure it. To rely upon conjecture, either in favor of or against the accused, is not justice. It is not due process of law by any definition. Similarly, all sorts of conditions as to the methods which might have been used in obtaining such a confession may be conjectured by a witness and falsely testified to by him. Such action puts the true testimony into direct conflict with the false. In the present case, the conflict of testimony is so clear that it is evident that one or more of the witnesses must have committed perjury. The issue resolves itself, therefore, not into one of civil rights but into one of the truth or falsity of the testimony as to the methods used in obtaining Haley's confession. This issue of credibility cannot be resolved here with nearly as good a chance of determining the truth as that which was enjoyed by the trial court and jury. They saw and heard the witnesses and they examined the exhibits. Furthermore, they and the State Appellate and Supreme Courts also were familiar with the general conditions and standards of law enforcement in effect in the long-established industrial civic center of over 100,000 people of Canton, Ohio, where this confession was made and used. The testimony of the witnesses as to the methods used should be read in the context of the community where such testimony was given in order for it to be fairly appraised. There is no suggestion that racial discrimination or prejudice existed in the attiu de of any of the witnesses, or of the courts or of the community of Canton. The issue is the credibility of these particular police officers and other local witnesses. It cannot be determined on the basis of published reports, however authentic, of police methods in other communities in other years. 'The mere fact that a confession was made while in the custody of the police does not render it inadmissible.' McNabb v. United States, 318 U.S. 332, 346, 63 S.Ct. 608, 615, 87 L.Ed. 819. 42 The present case, turning as it does upon the credibility of the testimony as to the existence of the coercion, if any, that was used to secure the confession, is readily distinguishable from cases relied upon by the accused. For example, in the present case, this Court does not rely on any claim that the confession was elicited by unreasonably delaying the arrignment of the accused or even by any alleged delay in charging him with delinquency in the Juvenile Court. The confession of the accused was given, transcribed and signed by 5:30 a.m. on October 20, immediately following his arrest at about midnight. There is, accordingly, no basis for contending that there was unnecessary delay in taking the accused before a court or magistrate having jurisdiction of the offense insofar as such unnecessary delay, if any, had relation to the confession. Whatever delay there was occurred after the confession was made and it is obvious that it was not unreasonable to delay the taking of the accused before a court or magistrate at least until after 5:30 a.m. United States v. Mitchell, 322 U.S. 65, 64 S.Ct. 896, 88 L.Ed. 1140, Cf. Anderson v. United States, 318 U.S. 350, 63 S.Ct. 599, 87 L.Ed. 829; McNabb v. United States, 318 U.S. 332, 63 S.Ct. 608, 87 L.Ed. 819. 43 If the unequivocal and consistent testimony of the several police officers is believed, including that of the Acting Chief of Police, the confession was clearly voluntary. The police officers were men of experience in the local detective service and, if inferences are to be indulged in, it may be inferred that they understood the necessity that the confession be uncoerced and voluntary if it was to be admissible in evidence. The principal examining officers were two detectives, one of nine and the other of eleven years' police service. The sergeant of detectives who typed the confession was a man of nine years' police service. Every policeman who took any part in the examination was called as a witness. Each testified that there was no use of force and no intimidation during the examination. Each testified that in fact the confession was uncoerced. The questioning of the accused was described as having been carried on while the parties to it were seated near a desk and not within arm's length of each other. It was conducted in the record room of the detective bureau, rather than in jail. The accused was not handcuffed nor subjected to indignities. The police, the newspaper reporter, and the iceman who was brought in to witness the accused's signature to the confession testified to the normal appearance of the clothing and person of the accused during or following the examination, including the time he was photographed. The witnesses testified only as to what they severally had observed during the respective periods that they were present but, together, they covered the entire period of the examination. If the confession was in fact voluntary, these witnesses could not have said more to prove it. If their testimony is true, it makes false much of the testimony of the accused. The testing of the credibility of this testimony is therefore important. This testimony, furthermore, should not be laid aside here merely because it is in conflict with opposing testimony. If the trial court and jury believed the police and disbelieved the accused on this testimony, there was no substantial ground left for any inference of coercion. If, on the contrary, they believed the accused and therefore concluded that the police and other win esses agreeing with them were perjurers, the trial court could not fairly have admitted the confession in evidence. 44 The evidence in the record includes ample evidence to support the action taken by the trial judge and jury against the accused if this Court chooses to believe that evidence and to disbelieve the conflicting evidence. Furthermore, that evidence, if so believed, is strong and specific enough greatly to offset conflicting inferences which otherwise might be suggested to this Court by the undisputed evidence. 45 As a reviewing court, we have a major obligation to guard against reading into the printed record purely conjectural concepts. To conjecture from the printed record of this case that the accused, because of his known proximity to the scene of the crime and his known association that night with the boys, one of whom did the actual shooting, must have been a hardened, smart boy, whose conduct and falsehoods necessarily made all of his testimony worthless per se, is as unjustifiable as it would be to assume, without seeing him or his mother as witnesses, that he was an impressionable, innocent lad, likely to be panicstricken by police surroundings and that all his testimony must be accepted as true except where expressly admitted by him to have been false. To assume from the printed record that the policemen, including the Acting Chief, and the civilians who gave unequivocal testimony as to the absence of force and intimidation in securing the confession or as to the normal appearance of the accused and of his clothing at the time of making the confession, were callous as to the feelings of a boy 15 years of age or were guilty of deliberate perjury would be as unjustifiable as it would be to assume, without hearing and seeing the respective police officers, as witnesses, that each of them was as well-informed, tolerant and thoughtful as an ideal juvenile judge. In this case, this Court seems to have laid aside all the conflicting testimony and then, without seeing or hearing the witnesses, has attempted to draw, from the meager balance of the record, important inferences of callousness and coercion on the part of the examining officers. By disregarding the conflicting material testimony instead of choosing between the true and the false material testimony, the material record is reduced largely to isolated items of subsequent conduct on the part of certain police officers who are alleged to have hampered the boy's mother or an attorney in trying to see him several days after his confession. There is no likelihood that these officers were the same ones who conducted the examination.2 It is not enough for this Court to say in its opinion today that if 'the undisputed evidence suggests that force or coercion was used to exact the confession, we will not permit the judgment of conviction to stand * * *.' Recognition must be given also to the right of the trial court to weigh the credibility of the material disputed evidence. 46 We are not in a position, on the basis of mere suspicion, to hold the trial court in error and to conclude 'that this was a confession wrung from a child by means which the law should not sanction.' While coercion and intimidation in securing a confession should be unequivocally condemned and punished and their product invalidated, nevertheless such coercion should not be presumed to exist because of a mere suggestion or suspicion, in the face of contrary findings by the triers of fact. On the basis of the undisputed testimony relied upon by this Court, it is not justified in making such a determination of 'the callous attitude of the police' of Canton as thereby to override not only the sworn testimony of the State's public officials but also the conclusions of the triers of fact. The trial judge, with his first-hand knowledge, both of the credibility indicated by the testimony in open court and of the habitual 'attitude of the police' of Canton, if there be any such attitude, found to the contrary. That judge and the law enforcement officers of Canton have been entrusted by the State of Ohio with the enforcement of the constitutional obligations of the public to each individual and also of each individual to the public. In the absence of substantial proof to upset the findings of the trial court, these public officers should not be charged with callousness toward, or with violation of, their constitutional obligations. 47 The legal process governing the admission of confessions in evidence in jury trials in Ohio in a case like this takes conditions into consideration. The Ohio procedure provides for a preliminary examination by the trial judge, out of the presence of the jury, to determine whether the confession should be excluded as involuntary. Such an examination was made at length in this case and the judge, in the absence of the jury, overruled the objection made to the confession upon such ground. The motion was renewed in the presence of the jury and again denied. The judge likewise refused to direct a verdict for Haley at the close of the State's case and again at the close of the entire case. The admissibility of the confession was fully argued in the trial court and, before its admission, the trial judge took the subject under advisement while he adjourned the hearing over a week end. Having decided that the confession was not to be excluded, it was his duty to submit it to the jury. He did this with ample instructions advising the jury of its responsibility in connection with the confession. Testimony then was given at length, in the presence of the jury, bearing upon the voluntariness of the confession as well as upon the probable truth or falsity of its contents. The final instructions of the court emphasized not only the obligation and opportunity of the jury to pass upon the voluntariness of the confession but also its obligation to give appropriate weight to the confession in the light of all the testimony in the event that the confession was found by the jury to have been a voluntary one.3 48 The rule of law governing this case is stated in Lisenba v. People of State of California, 314 U.S. 219, 238, 62 S.Ct. 280, 291, 86 L.Ed. 166: 'There are cases, such as this one, where the evidence as to the methods employed to obtain a confession is conflicting, and in which, although denial of due process was not an issue in the trial, an issue has been resolved by court and jury which involves an answer to the due process question. In such a case we accept the determination of the triers of fact, unless it is so lacking in support in the evidence that to give it effect would work that fundamental unfairness which is at war with due process.' (Italics supplied.) 49 This Court properly reserves to itself an opportunity to consider the record in a case like this independently from the consideration given to that record by the lower courts. However, when credibility plays as large a part in the record as it does in this case, this Court rarely can justify a reversal of the judgment of the trial court and the verdict of the jury. This is increasingly true where the judgment of the trial court has been affirmed, as here, by two Stae courts of review. In the preliminary examination as to the admissibility of the confession in this case, the trial court may have believed the police and disbelieved the accused. On that basis, there is more than ample evidence to support the trial court's conclusion in refusing to exclude the confession. A similar statement may be made as to the presentation of evidence to the jury. It is not justifiable for this Court, in testing the conclusions of the triers of fact, to rely on inferences drawn solely from those portions of the record which, when read separately, apparently were not disputed. The acceptance of one version or the other of the sharply conflicting testimony which was before the triers of fact could reasonably justify a conclusion of the trial court and jury to exclude or admit the confession without reference to, or even in spite of, implications which might be drawn from the comparatively colorless undisputed testimony if that undisputed testimony stood alone. This Court should include in its appraisal of the record not only the undisputed testimony, but it also should allow for a reasonable conclusion by the trial court and jury, based upon acceptance or rejection of the disputed testimony. On this basis, this Court is not justified, in this case, in holding that the determination by the trial judge that the confession was admissible, or that the holding by the trial jury that the confessor was guilty, 'is so lacking in support in the evidence that to give it effect woudl work that fundamental unfairness which is at war with due process.'4 50 In testing due process this Court must first make sure of its facts. Until a better way is found for testing credibility than by the examination of witnesses in open court. we must give trial courts and juries that wide discretion in this field to which a living record, as distinguished from a printed record, logically entitles them. In this living record there are many guideposts to the truth which are not in the printed record. Without seeing them ourselves, we will do well to give heed to those who have seen them. 1 It appears from the opinion of the Court of Appeals for Stark County in this case that the three boys were separately indicteda nd tried. Lowder and Haley were tried by juries. Parks waived that right and was tried before three judges. Each was convicted of murder in the first degree, with a recommendation of mercy. Appeals from the three cases were heard together and the judgments were affirmed in each with a single opinion emphasizing the separate consideration that had been given to each. State of Ohio v. Lowder (State of Ohio v. Haley, State of Ohio v. Parks), 79 Ohio App. 237, 72 N.E.2d 785. See also, State of Ohio v. Haley, 147 Ohio St. 340, 70 N.E.2d 905; State of Ohio v. Lowder, 147 Ohio St. 530, 72 N.E.2d 102; State of Ohio v. Parks, 147 Ohio St. 531, 72 N.E.2d 81; where each appeal was dismissed for lack of a debatable constitutional question. 2 In a case which arose in the District of Columbia, this Court said: 'But the circumstances of legality attending the making of these oral statements are nullified, it is suggested, by what followed. For not until eight days after the statements were made was Mitchell arraigned before a committing magistrate. Undoubtedly his detention during this period was illegal. * * * Illegality is illegality, and officers of the law should deem themselves special guardians of the law. But in any event, the illegality of Mitchell's detention does not retroactively change the circumstances under which he made the disclosures. These, we have seen, were not elicited through illegality. Their admission, therefore, would not be use by the Government of the fruits of wrongdoing by its officers. Being relevant, they could be excluded only as a punitive measure against unrelated wrongdoing by the police. Our duty in shaping rules of evidence relates to the propriety of admitting evidence. This power is not to be used as an indie ct mode of disciplining misconduct.' United States v. Mitchell, 322 U.S. 65, 70, 71, 64 S.Ct. 896, 898, 88 L.Ed. 1140. 3 The trial court included in its final instructions to the jury the following: 'You will recall that I have heretofore said to you that, in general, the judge determines the admissibility of evidence. But, you will recall I think that on Monday just before certain alleged statements or declarations claimed by the State to have been made by the defendant, in part oral and in part consisting of an alleged written or typed statement or declaration, identified as State's Exhibit D, were by the judge permitted to be introduced with the instruction that you the jury would in the end and finally, determine first, whether the defendant made said statements and declarations, and if he did make it, whether they were made by the defendant voluntarily and of his own free will; and further in the event you should find he did mae them and made them voluntarily and of his free will, just what weight, if any, should be accorded them. 'I now again direct your attention to that evidence. The State claims the defendant made said statements and declarations and that he made them voluntarily and of his own free will. The defendant denies the State's said claims and asserts they were not made voluntarily and of free will. You will decide these questions from all the evidence in the case. Should you find from all the evidence that the defendant did not make them, or if he made them that he did not make them voluntarily and of his free will, you will in that event disregard them entirely and not consider them further. On the other hand, should you find defendant did make them and that he made them voluntarily and of his own free will, you will consider them as evidence and give them just such weight to which you find from all the evidence they are entitled. Should you find from the evidence that some of them were made by the defendant and by him made voluntarily and of his free will, and find others were not made by him, or if made by him, not made by him voluntarily and of his free will, you will consider only those you find were made by him voluntarily and of his free will and reject the others. You will consider the alleged oral statements or declarations, separate and apart from the said written or typed statements, and the circumstances incident to each. 'You are instructed further that statements of guilt or declarations of guilt as they are sometimes called, made through the influence of hopes or fears, statements or declarations induced by promises of temporal benefit or threats of disadvantage, are to be weighed and not to be considered of any value. Statements and declarations which are not voluntary and of free will made, are excluded on the ground that they are probably not true. Another ground for the exclusion is that it is a violation of the constitutional provision that no man shall be required to give evidence against himself, for if he is compelled by threats or induced by hopes to make confession against himself, it is an indirect method of compelling him to give evidence against himself, when statements or declarations made under such circumstances are afterwards proven against him in court. On the other hand, a free will and voluntary statement or admission, made by a defendant against his interest, against his interest, is one of the most satisfactory proofs of guilt, for an innocent person will not voluntarily subject himself to infamy and liability to punishment by false statements against himself. 'The State having offered these statements or admissions, must prove that they were made; but the burden of proving that a particular statement or admission was obtained by improper inducements, in general, is upon the defendant.' 4 See Lisenba v. California, supra, 314 U.S. at page 238, 62 S.Ct. at page 291, 86 L.Ed. 166.
01
332 U.S. 689 68 S.Ct. 331 92 L.Ed. 297 UNITED STATESv.SULLIVAN. No. 121. Argued Dec. 9, 1947. Decided Jan. 19, 1948. Mr. Robert L. Stern, of Washington, D.C., for petitioner. Messrs. Robert M. Arnold and J. Madden Hatcher, both of Columbus, Ga., for respondent. Mr. Justice BLACK delivered the opinion of the Court. 1 Respondent, a retail druggist in Columbus, Georgia, was charged in two counts of an information with a violation of § 301(k) of the Federal Food, Drug, and Cosmetic Act of 1938. That section prohibits 'the doing of any * * * act with respect to, a * * * drug * * * if such act is done while such article is held for sale after shipment in interstate commerce and results in such article being misbranded.'1 Section 502(f) of the Act declares a drug 'to be misbranded * * * unless its labeling bears (1) adequate directions for use; and (2) such adequate warnings against use * * * dangerous to health, or against unsafe dosage * * * as are necessary for the protection of users.' The information charged specifically that the respondent had performed certain acts which resulted in sulfathiazole being 'misbranded' while 'held for sale after shipment in interstate commerce.' 2 The facts alleged were these: A laboratory had shipped in interstate commerce from Chicago, Illinois, to a consignee at Atlanta, Georgia, a number of bottles, each containing 1,000 sulfathiazole tablets. These bottles had labels affixed to them, which, as required by § 502(f)(1) and (2) of the Act, set out adequate directions for the use of the tablets and adequate warnings to protect ultimt e consumers from dangers incident to this use.2 Respondent bought one of these properly labeled bottles of sulfathiazole tablets from the Atlanta consignee, transferred it to his Columbus, Georgia, drugstore, and there held the tablets for resale. On two separate occasions twelve tablets were removed from the properly labeled and branded bottle, placed in pill boxes, and sold to customers. These boxes were labeled 'sulfathiazole.' They did not contain the statutorily required adequate directions for use or warnings of danger. 3 Respondent's motion to dismiss the information was overruled, a jury was waived, evidence was heard, and respondent was convicted under both counts. D.C., 67 F.Supp. 192. 4 The Circuit Court of Appeals reversed. 161 F.2d 629, 630. The court thought that as a result of respondent's action the sulfathiazole became 'misbranded' within the meaning of the Federal Act, and that in its 'broadest possible sense' the Act's language 'may include what happened.' However, it was also of the opinion that the Act ought not to be taken so broadly 'but held to apply only to the holding for the first sale by the importer after interstate shipment.' Thus the Circuit Court of Appeals interpreted the statutory language of § 301(k) 'while such article is held for sale after shipment in interstate commerce' as though Congress had said 'while such article is held for sale by a person who had himself received it by way of a shipment in interstate commerce.' We granted certiorari to review this important question concerning the Act's coverage. 5 First. The narrow construction given § 301(k) rested not so much upon its language as upon the Circuit Court's view of the consequences that might result from the broader interpretation urged by the Government. The court pointed out that the retail sales here involved were made in Columbus nine months after this sulfathiazole had been shipped from Chicago to Atlanta. It was impressed by the fact that, if the statutory language 'while such article is held for sale after shipment in interstate commerce' should be given its literal meaning, the criminal provisions relied on would 'apply to all intrastate sales of imported drugs after any number of intermediate sales within the State and after any lapse of time; and not only to such sales of drugs, but also to similar retail sales of foods, devices and cosmetics, for all these are equally covered by these provisions of the Act.' The court emphasized that such consequences would result in farreaching inroads upon customary control by local authorities of traditionally local activities, and that a purpose to afford local retail purchasers federal protection from harmful foods, drugs and cosmetics should not be ascribed to Congress in the absence of an exceptionally clear mandate, citing Federal Trade Commission v. Bunte Bros., 312 U.S. 349, 61 S.Ct. 580, 85 L.Ed. 881. Another reason of the court for refraining from construing the Act as applicable to articles misbranded while held for retail sale, even though the articles had previously been shipped in interstate commerce, was its opinion that sc h a construction would raise grave doubts as to the Act's constitutionality. In support of this position the court cited. National Labor Relations Board v. Jones & Laughlin Steel Coroporation, 301 U.S. 1, 30, 57 S.Ct. 615, 620, 81 L.Ed. 893, 108 A.L.R. 1352; and Schechter Poultry Corporation v. United States, 295 U.S. 495, 55 S.Ct. 837, 79 L.Ed. 1570, 97 A.L.R. 947. 6 A restrictive interpretation should not be given a statute merely because Congress has chosen to depart from custom or because giving effect to the express language employed by Congress might require a court to face a constitutional question. And none of the foregoing cases, nor any other on which they relied, authorizes a court in interpreting a statute to depart from its clear meaning. When it is reasonably plain that Congress meant its Act to prohibit certain conduct, no one of the above references justifies a distortion of the congressional purpose, not even if the clearly correct purpose makes marked deviations from custom or leads inevitably to a holding of constitutional invalidity. Although criminal statutes must be so precise and unambiguous that the ordinary person can know how to avoid unlawful conduct, see M. Kraus & Bros., Inc., v. United States, 327 U.S. 614, 621, 622, 66 S.Ct. 705, 707, 708, 90 L.Ed. 894, even in determining whether such statutes meet that test, they should be given their fair meaning in accord with the evident intent of Congress. United States v. Raynor, 302 U.S. 540, 552, 58 S.Ct. 353, 358, 82 L.Ed. 413. 7 Second. Another consideration that moved the Circuit Court of Appeals to give the statute a narrow construction was its belief that the holding in this case with reference to misbranding of drugs by a retail druggist would necessarily apply also to 'similar retail sales of foods, devices and cosmetics, for all these,' the court said, 'are equally covered by these provisions of the Act.' And in this Court the effect of such a possible coverage of the Act is graphically magnified. We are told that its application to these local sales of sulfathiazole would logically require all retail grocers and beauty parlor operators to reproduce the bulk container labels on each individual item when it is taken from the container to sell to a purchaser. It is even prophesied that, if § 301(k) is given the interpretation urged by the Government, it will later be applied so as to require retail merchants to label sticks of candy and sardines when removed from their containers for sale. 8 The scope of the offense which Congress defined is not to be judicially narrowed as applied to drugs by envisioning extreme possible applications of its different misbranding provisions which relate to food, cosmetics, and the like. There will be opportunity enough to consider such contingencies should they ever arise. It may now be noted, however, that the Administrator of the Act is given rather broad discretion—broad enough undoubtedly to enable him to perform his duties fairly without wasting his efforts on what may be no more than technical infractions of law. As an illustration of the Administrator's discretion, § 306 permits him to excuse minor violations with a warning if he believes that the public interest will thereby be adequately served. And the Administrator is given extensive authority under §§ 405, 503 and 603 to issue regulations exempting from the labeling requirements many articles that otherwise would fall within this portion of the Act. The provisions of § 405 with regard to food apparently are broad enough to permit the relaxation of some of the labeling requirements which might otherwise impose a burden on retailers out of proportion to their value to the consumer. 9 Third. When we seek the meaning of § 301(k) from its language we find that the offense it creates and which is here charged requires the doing of some act with respect to a drug (1) which results in its being misbranded, (2) while the article is held for sale 'after shipment in interstate o mmerce.' Respondent has not seriously contended that the 'misbranded' portion of § 301(k) is ambiguous. Section 502(f), as has been seen, provides that a drug is misbranded unless the labeling contains adequate directions and adequate warnings. The labeling here did not contain the information which § 502(f) requires. There is a suggestion here that, although alteration, mutilation, destruction, or obliteration of the bottle label would have been a 'misbranding,' transferring the pills to non-branded boxes would not have been, so long as the labeling on the empty bottle was not disturbed. Such an argument cannot be sustained. For the chief purpose of forbidding the destruction of the label is to keep it intact for the information and protection of the consumer. That purpose would be frustrated when the pills the consumer buys are not labeled as required, whether the label has been torn from the original container or the pills have been transferred from it to a non-labeled one. We find no ambiguity in the misbranding language of the Act. 10 Furthermore, it would require great ingenuity to discover ambiguity in the additional requirement of § 301(k) that the misbranding occur 'while such article is held for sale after shipment in interstate commerce.' The words accurately describe respondent's conduct here. He held the drugs for sale after they had been shipped in interstate commerce from Chicago to Atlanta. It is true that respondent bought them over six months after the interstate shipment had been completed by their delivery to another consignee. But the language used by Congress broadly and unqualifiedly prohibits misbranding articles held for sale after shipment in interstate commerce, without regard to how long after the shipment the misbranding occurred, how many intrastate sales had intervened, or who had received the articles at the end of the interstate shipment. Accordingly we find that the conduct of the respondent falls within the literal language of § 301(k). 11 Fourth. Given the meaning that we have found the literal language of § 301(k) to have, it is thoroughly consistent with the general aims and purposes of the Act. For the Act as a whole was designed primarily to protect consumers from dangerous products. This Court so recognized in United States v. Dotterweich, 320 U.S. 277, 282, 64 S.Ct. 134, 137, 88 L.Ed. 48, after reviewing the House and Senate Committee Reports on the bill that became law. Its purpose was to safeguard the consumer by applying the Act to articles from the moment of their introduction into interstate commerce all the way to the moment of their delivery to the ultimate consumer. Section 301(a) forbids the 'introduction or delivery for introduction into interstate commerce' of misbranded or adulterated drugs; § 301(b) forbids the misbranding or adulteration of drugs while 'in interstate commerce'; and § 301(c) prohibits the 'receipt in interstate commerce' of any misbranded or adulterated drug, and 'the delivery or proffered delivery thereof for pay or otherwise.' But these three paragraphs alone would not supply protection all the way to the consumer. The words of paragraph (k) 'while such article is held for sale after shipment in interstate commerce' apparently were designed to fill this gap and to extend the Act's coverage to every article that had gone through interstate commerce until it finally reached the ultimate consumer. Doubtless it was this purpose to insure federal protection until the very moment the articles passed into the hands of the consumer by way of an intrastate transaction that moved the House Committee on Interstate and Foreign Commerce to report on this section of the Act as follows: 'In order to extend the protection of consumers contemplated by the law to the full extent constitutionally possible, paragraph (k) has been inserted prohibiting the changing of labels so as to misbrand articles held for sale after interstate shipment.'3 We hold that § 301(k) prohibits the misbranding h arged in the information. 12 Fifth. It is contended that the Act as we have construed it is beyond any authority granted Congress by the Constitution and that it invades the powers reserved to the States. A similar challenge was made against the Pure Food and Drug Act of 1906, 34 Stat. 768, 21 U.S.C.A. § 1 et seq., and rejected, in McDermott v. State of Wisconsin, 228 U.S. 115, 33 S.Ct. 431, 57 L.Ed. 754, 47 L.R.A.,N.S., 984, Ann.Cas.1915A, 39. That Act did not contain § 301(k), but it did prohibit misbranding and authorized seizure of misbranded articles after they were shipped from one State to another, so long as they remained 'unsold.' The authority of Congress to make this requirement was upheld as a proper exercise of its powers under the commerce clause. There are two variants between the circumstances of that case and this one. In the McDermott case the labels involved were on the original containers; here the labels are required to be put on other than the original containers—the boxes to which the tablets were transferred. Also, in the McDermott case the possessor of the labeled cans held for sale had himself receive them by way of an interstate sale and shipment; here, while the petitioner had received the sulfathiazole by way of an intrastate sale and shipment, he bought it from a wholesaler who had received it as the direct consignee of an interstate shipment. These variants are not sufficient we think to detract from the applicability of the McDermott holding to the present decision. In both cases alike the question relates to the constitutional power of Congress under the commerce clause to regulate the branding of articles that have completed an interstate shipment and are being held for future sales in purely local or intrastate commerce. The reasons given for the McDermott holding therefore are equally applicable and persuasive here. And many cases decided since the McDermott decision lend support to the validity of § 301(k). See, e.g., United States v. Walsh, 331 U.S. 432, 67 S.Ct. 1283; Wickard v. Filburn, 317 U.S. 111, 63 S.Ct. 82, 87 L.Ed. 122; United States v. Wrightwood Dairy Co., 315 U.S. 110, 62 S.Ct. 523, 86 L.Ed. 726; United States v. Darby, 312 U.S. 100, 657, 61 S.Ct. 451, 85 L.Ed. 609, 132 A.L.R. 1430; see United States v. Olsen, 9 Cir., 161 F.2d 669. 13 Reversed. 14 Mr. Justice RUTLEDGE, concurring. 15 This case has been presented as if the Federal Food, Drug, and Cosmetic Act of 1938 had posed an inescapable dilemma. It is said that we must either (1) ignore Congress' obvious intention to protect ultimate consumers of drugs through labeling requirements literally and plainly made applicable to the sales in this case or (2) make criminal every corner grocer who takes a stick of candy from a properly labeled container and sells it to a child without wrapping it in a similar label. 16 The trouble-making factor is not found in the statute's provisions relating specifically to drugs. Those provisions taken by themselves are clear and unequivocal in the expressed purpose to protect the ultimate consumer by the labeling requirements. So is the legislative history. Standing alone, therefore, the drug provisions would cover this case without room for serious question. 17 However, those provisions do not stand entirely separate and independent in the Act's structure. In some respects, particularly in § 301(k), they are interlaced with provisions affecting food and cosmetics. And from this fact is drawn the conclusion that this decision necessarily will control future decisions concerning those very different commodities. 18 If the statute as written required this, furnishing no substantial basis for differentiating such cases, the decision here would be more difficult than I conceive it to be. But I do not think the statute has laid the trap with which we are said to be faced. Only an oversimplified view of its terms and effects could produce that result. 19 The Act is long and complia ted. Its numerous provisions treat the very different subjects of drugs, food and cosmetics alike in some respects, differently in others. The differences are as important as the similarities, and cannot be ignored. More is necessary for construction of the statute than looking merely to the terms of §§ 301(k) and 502(f). 20 It is true that § 301(k) deals indiscriminately with food, drugs, devices and cosmetics, on the surface of its terms alone. Hence it is said that the transfer of sulfathiazole, a highly dangerous drug, from a bulk container to a small box for retail sale, could not be 'any other act' unless a similar transfer of candies, usually harmless, also would be 'any other act.' From this hypothesis it is then concluded that the phrase must be interpreted with reference to the particularities which precede it, namely,' alteration, mutilation, destruction, obliteration or removal' of any part of the label, and must be limited by those particularities. 21 That construction almost, if not quite, removes 'any other act' from the section. And by doing so it goes far to emasculate the section's effective enforcement, especially in relation to drugs. Any dealer holding drugs for sale after shipment in interstate commerce could avoid the statute's effect simply by leaving the label intact, removing the contents from the bulk container, and selling them, however deadly, in broken parcels without label or warning. 22 I do not think Congress meant the phrase to be so disastrously limited. For the 'doing of any other act with respect to, a food, drug, device, or cosmetic' is prohibited by § 301(k) only 'if such act * * * results in such article being misbranded.' And the statute provides, not a single common definition of misbranding for foods, drugs and cosmetics, but separate and differing sections on misbranded foods, misbranded drugs and devices, and misbranded cosmetics. §§ 403, 502, 602. 23 The term 'misbranded' as used in § 301(k) therefore is not one of uniform connotation. On the contrary, its meaning is variable in relation to the different commodities and the sections defining their misbranding. So also necessarily is the meaning of 'any other act,' which produces those misbranding consequences. Each of the three sections therefore must be taken into account in determining the meaning and intended scope of application for § 301(k) in relation to the specific type of commodity involved in the particular sale, if Congress' will is not to be overridden by broadside generalization glossed upon the statute. As might have been expected, Congress did not lump food, drugs and cosmetics in one indiscriminate hopper for the purpose of applying § 301(k), either in respect to misbranding or as to 'any other act' which produces that consequence. Brief reference to the several misbranding sections incorporated by reference in § 301(k) substantiates this conclusion. 24 The three sections contain some common provisions.1 But the fact that each section is also different from the other two in important respects indicates that each broad subdivision of the Act presents different problems of interpretation. Neither the misbranded foods section nor the misbranded cosmetics section contains any provision directly comparable to § 502(f), which the respondent here has violated. That section, however, is to be contrasted with § 403(k), one of the subsections dealing with misbranded foods. Comparison of the two provisions indicates that the doing of a particular act with respect to a drug may result in misbranding, whereas the same method of selling food would be proper. 25 Section 502(f) provides that a drug shall be deemed to be misbranded: 26 'Unless its labeling bears (1) adequate directions for use; and (2) such adequate warnings against use in those pathological conditions or by children where its use may be dangerous to health, or against unsafe dosage or methods or duration of administration or application, in such manner and form, as are necessary for the protection of users: Provided, That where any requirement of clause (1) of this paragraph, as applied to any drug or device, is not necessary for the protection of the public health, the Administrator shall promulgate regulations exempting such drug or device from such requirement.' 27 This provision, dealing with directions for use and warnings against improper use, in terms is designed 'for the protection of users.' To be effective, this protection requires regulations of the label which the container bears when the drug reaches the ultimate consumer.2 The legislative history leaves no doubt that the draftsmen and sponsors realized the importance of having dangerous drugs properly labeled at the time of use, not just at the time of sale.3 The intent to protect the public health is further emphasized by the limited scope of the proviso, which directs the Administrator to make exemptions only when compliance with clause (1) 'is not necessary for the protection of the public health.' 28 Section 403(k), which contains the principal basis for 'making every retail grocer a criminal,' is very different. By its terms food is deemed to be misbranded: 29 'If it bears or contains any artificial flavoring, artificial coloring, or chemical preservative, unless it bears labeling stating that fact: Provided, That to the extent that compliance with the requirements of this paragraph is impracticable, exemptions shall be established by regulations promulgated by the Administrator. The provisions of this paragraph and paragraphs (g) and (i) with respect to artificial coloring shall not apply in the case of butter, cheese, or ice cream.' 30 The section, in contrast to § 502(f)'s coverage of drugs, applies not to all foods shipped interstate, but only to the restricted classes containing artificial flavoring, or coloring, or chemical preservatives. The labeling requirement is much simpler. And the proviso confers a much broader power of exemption upon the Administrator than does the proviso of § 502(f). Under the latter he is given no power to exempt on the ground that compliance is impracticable. He cannot weigh business convenience against protection of the public health. Only where he finds that labeling is not necessary to that protection is he authorized to create an exemption for drugs and devices. Health security is not only the first, it is the exclusive, criterion. 31 Under § 403(k), however, in dealing with foods the Administrator can dispense with labels much more broadly. In terms the criterion for his action becomes 'the extent that compliance * * * is impracticable' rather than, as under § 502(f), 'where any requirement of clause (1) (adequate directions for use) * * * is not necessary for the protection of the public health.' Practical considerations affecting the burden of compliance by manufacturers and retailers, irrelevant under § 502(f), become controlling under § 403(k). Thus under the statute's intent a much more rigid and invariable compliance with the labeling requirements for drugs is contemplated than for those with foods, apart from its greatly narrower coverage of the latter. And the difficulty of compliance with those requirements for such articles as candies explains the difference in the two provisos.4 32 These differences, and particularly the differences in the provisos, have a direct and an intended relation to the problem of enforcement. The labeling requirements for foods are given much narrower and more selective scope for application than those for drugs, a difference magnified by the conversely differing room allowed for exemptions. What is perhaps equally important, the provisos are relevant to enforcement beyond specific action taken by the Administrator to create exemptions. 33 His duty under both sections is cast in mandatory terms. Whether or not he can be forced by mandamus to act in certain situations, his failure to act in some would seem to be clearly in violation of his duty. Obviously there must be many more instances where compliance with the labeling requirements for foods will be 'impracticable' than where compliance with the very different requirements for drugs will not be 'necessary for the protection of the public health.' That difference is obviously important for enforcement, particularly by criminal prosecution. I think it is one which courts are entitled to take into account when called upon to punish violations. The authors of the legislation recognized expressly that 'technical, innocent violations * * * will frequently arise.' S.Rep.No. 152, 75th Cong., 1st Sess. 4. In other words, there will be conduct which may be prohibited by the Act's literal wording, but which nevertheless should be immune to prosecution. 34 When that situation arises, as it often may with reference to foods, by virtue of the Administrator's failure to discharge his duty to create exemptions before the dealer's questioned action takes place, that failure in my judgment is a matter for the court's consideration in determining whether prosecution should proceed. Whenever it is made to appear that the violation is a 'technical, innocent' one, an act for which the Administrator should have made exemption as required by § 403(k), the prosecution should be stopped. This Court has not hesitated to direct retroactive administrative determination of private rights when that unusual course seemed to it the appropriate solution for their determination. Addison v. Holly Hill Fruit Products, 322 U.S. 607, 64 S.Ct. 1215, 88 L.Ed. 1488, 153 A.L.R. 1007. If that is permissible in civil litigation, there is much greater reason for the analogous step of taking into account in a criminal prosecution an administrative officer's failure to act when the commanded action, if taken, would have made prosecution impossible. 35 It is clear therefore that the corner grocer occupies no such position of jeopardy under this legislation as the druggist, and that the meaning of § 301(k) is not identical for the two, either as to what amounts to misbranding or as to what is 'the doing of any * * * act' creating that result. The supposed dilemma is false. Congress had power to impose the drug restrictions, they are clearly applicable to this case, the decision does not rule the corner grocer selling candy, and the judgment should be reversed. I therefore join in the Court's judgment and opinion to that effect. 36 Mr. Justice FRANKFURTER, dissenting. 37 If it takes nine pages to determine the scope of a statute, its meaning can hardly be so clear that he who runs may read, or that even he who reads may read. Generalities regarding the effect to be given to the 'clear meaning' of a statute do not make the meaning of a particular statute 'clear.' The Court's opinion barely faces what, on the balance of considerations, seems to me to be the controlling difficulty in its rendering of § 301(k) of the Federal Food, Drug, and Cosmetic Act, 52 Stat. 1040, 1042, 21 U.S.C. § 331(k), 21 U.S.C.A. § 331(k). That section no doubtr elates to articles 'held for sale after shipment in interstate commerce and results in such article being misbranded.' But an article is 'misbranded' only if there is 'alteration, mutilation, destruction, obliteration, or removal of the whole or any part of the labeling of, or the doing of any other act with respect to, a food, drug, device, or cosmetic.' Here there was no 'alteration, mutilation, destruction, obliteration, or removal' of any part of the label. The decisive question is whether taking a unit from a container and putting it in a bag, whether it be food, drug or cosmetic, is doing 'any other act' in the context in which that phrase is used in the setting of the Federal Food, Drug, and Cosmetic Act and particularly of § 301(k).1 38 As bearing upon the appropriate answer to this question, it cannot be that a transfer from a jar, the bulk container, to a small paper bag, without transferring the label of the jar to the paper bag, is 'any other act' when applied to a drug, but not 'any other act' when applied to candies or cosmetics. Before we reach the possible discretion that may be exercised in prosecuting a certain conduct, it must be determined whether there is anything to prosecute. Therefore, it cannot be put off to some other day to determine whether 'any other act' in § 301(k) applies to the ordinary retail sale of candies or cosmetics in every drug store or grocery throughout the land, and so places every corner grocery and drug store under the hazard that the Administrator may report such conduct for prosecution. That question is now here. It is part of this very case, for the simple reason that the prohibited conduct of § 301(k) applies with equal force, through the same phrase, to food, drugs and cosmetics insofar as they are required to be labeled. See §§ 403, 502, and 602 of the Act. 39 It is this inescapable conjunction of food, drugs and cosmetics in the prohibition of § 301(k) that calls for a consideration of the phrase 'or the doing of any other act,' in the context of the rest of the sentence and with due regard for the important fact that the States are also deeply concerned with the protection of the health and welfare of their citizens on transactions peculiarly within local enforcing powers. So considered, 'the doing of any other act' should be read with the meaning which radiates to that loose phrase from the particularities that precede it, namely 'alteration, mutilation, destruction, obliteration or removal' of any part of the label. To disregard all these considerations and then find 'a clear meaning' is to reach a sum by omitting figures to be added. There is nothing in the legislative history of the Act, including the excerpt from the Committee Report on which reliance is placed, to give the slightest basis for inferring that Congress contemplated what the Court now finds in the statute. The statute in its entirety was of course intended to protect the ultimate consumer. This is no more true in regard to the requirements pertaining to drugs than of those pertaining to food. As to the reach of the statute—the means by which its ultimate purpose is to be achieved the legislative history sheds precisely the same light on the provisions pertaining to food as on the provisions pertaining to drugs. If differentiations are to be made in the enforcement of the Act and in the meaning which the ordinary person is to derive from the Act, such differentiations are interpolations of construction. They are not expressions by Congress. 40 In the light of this approach to the problem of construction presented by this Act, I would affirm the judgment below. 41 Mr. Justice REED and Mr. Justc e JACKSON join in this dissent. 1 'Sec. 301. The following acts and the causing thereof are hereby prohibited: '(k) The alteration, mutilation, destruction, obliteration, or removal of the whole or any part of the labeling of, or the doing of any other act with respect to, a food, drug, device, or cosmetic, if such act is done while such article is held for sale after shipment in interstate commerce and results in such article being misbranded.' 52 Stat. 1042, 21 U.S.C. § 331(k), 21 U.S.C.A. § 331(k). 2 The following inscription appeared on the bottle labels as a compliance with § 502(f)(1) which requires directions as to use: 'Caution.—To be used only by or on the prescription of a physician.' This would appear to constitute adequate directions since it is required by regulation issued by the Administrator pursuant to authority of the Act. 21 C.F.R.Cum.Supp. § 2.106(b) (3). The following appeared on the label of the bottles as a compliance with § 502(f)(2) which requires warnings of danger: 'Warning.—In some individuals Sulfathiazole may cause severe toxic reactions. Daily blood counts for evidence of anemia or leukopenia and urine examinations for hematuria are recommended. 'Physicians should familiarize themselves with the use of this product before it is administered. A circular giving full directions and contraindications will be furnished upon request.' 3 H.Rep. 2139, 75th Cong., 3d Sess., 3. 1 E.g., §§ 403(a), 502(a) and 602(a) are in identical language. 2 See S.Rep.No.361, 74th Cong., 1st Sess. 19. 3 See H.R.Rep.No.2139, 75th Cong., 3d Sess. 8. 4 'The proviso of this paragraph likewise requires the establishment of regulations exempting packages of assorted foods from the naming of ingredients or from their appearance in the order of predominance by weight where, under good manufacturing practice, label declaration of such information is impracticable. This provision will be particularly applicable, for example, to assorted confections, which under normal manufacturing practices may vary from package to package not only with respect to identity of ingredients but also in regard to the relative proportions of such ingredients as are common to all packages.' S.Rep.No.493, 73d Cong., 2d Sess. (1912). The proviso discussed is in § 403(i), not in § 403(k); but the discussion brings out the sort of considerations which require exemption when compliance is impracticable. 1 'The alteration, mutilation, destruction, obliteration, or removal of the whole or any part of the labeling of, or the doing of any other act with respect to, a food, drug, device, or cosmetic, if such act is done while such article is held for sale after shipment in interstate commerce and results in such article being misbranded.'
78
332 U.S. 742 68 S.Ct. 300 92 L.Ed. 330 LEEv.STATE OF MISSISSIPPI. No. 91. Argued Nov. 21, 1947. Decided Jan. 19, 1948. Mandate Conformed to April 12, 1948. See 34 So.2d 736. Mr. Forrest B. Jackson, of Jackson, Miss., for petitioner. Mr. Richard Olney Arrington, of Jackson, Miss., for respondent. Mr. Justice MURPHY delivered the opinion of the Court. 1 This case involves a question of procedure under the due process clause of the Fourteenth Amendment of the United States Constitution. Does a defendant in a state criminal proceeding lose the right to contend that a confession was coerced because of his testimony that the confession was in fact never made? 2 Petitioner, a 17-year-old Negro, was indicted by a grand jury in Mississippi on a charge of assault with intent to ravish a female of previous chaste character. During the course of the trial, the state offered the testimony of two city detectives as to an alleged oral confession obtained by them from petitioner. Objection was made that this confession had been secured as the result of duress, threats and violence inflicted upon petitioner by two unidentified police officers several hours prior to the confession. The jury retired and a preliminary hearing was held before the trial judge as to the voluntariness of this confession. After various witnesses appeared, including the petitioner himself, the judge concluded that the confession was voluntary and that the testimony in relation thereto was admissible. This testimony proved to be the crucial element leading to the jury's conviction of petitioner. His sentence was fixed at 18 years in prison. 3 Th Mississippi Supreme Court affirmed the conviction on appeal, rejecting petitioner's contention that the introduction of the testimony in question contravened his rights under the Fourteenth Amendment. It stated that the conduct of the two unidentified officers alleged to have struck and threatened petitioner was, if true, indefensible and warranted condemnation. But it felt that 'the issue of fact as well as credibility was for the trial judge upon such preliminary qualification, and we are not willing to disturb his conclusion.' Miss., 29 So.2d 211, 212. This constitutional contention was treated quite differently by the court on the filing of a suggestion of error. It found that petitioner's testimony at the preliminary hearing that he had been threatened prior to making the confession was entirely undisputed in the record. But it also found that petitioner had steadfastly testified, both at the preliminary hearing and at the trial on the merits before the jury, that he did not in fact admit to the city detectives that he had committed the crime. The court then stated: 'If the accused had not denied having made any confession at all, we would feel constrained to reverse the conviction herein becaue of the fact that his testimony as to the threat made to him during the forenoon by the plain clothes men is wholly undisputed, the jailer not having been asked about this threat, and having testified only that he was not struck by anyone in his presence after his arrest for this crime. But, we think that one accused of crime cannot be heard to say that he did not make a confession at all, and at the same time contend that an alleged confession was made under the inducement of fear.' Miss., 30 So.2d 74, 75. The suggestion of error was accordingly overruled. 4 The incomplete record before us precludes our determination of whether petitioner did deny in the trial court that he had confessed the crime.1 But assuming that he did so testify, we cannot agree with the court below that he was thereby estopped from asserting his constitutional right to due process of law. The important fact is that the oral confession was introduced, admitted and used as evidence of petitioner's guilt. Not only may this confession have been influential in inducing the jury's verdict, but it formed an essential part of the evidentiary basis of the conviction now under review. His alleged denial of the confession went only to the original issue of whether he actually made the confession, an issue that is no longer open. That question was at most a disputed one; but the jury resolved the matter against petitioner and, like the court below, we accept that determination. The sole concern now is with the validity of the conviction based upon the use of the oral confession. 5 The due process clause of the Fourteenth Amendment invalidates a state court conviction grounded in whole or in part upon a confession which is the product of other than reasoned and voluntary choice.2 A conviction resulting from such use of a coerced confession, however, is no less void because the accused testified at some point in the proceeding that he had never in fact confessed, voluntarily or involuntarily. Testimony of that nature can hardly regalize a procedure which conflicts with the accepted principles of due process. And since our constitutional system permits a conviction to b sanctioned only if in conformity with those principles, inconsistent testimony as to the confession should not and cannot preclude the accused from raising the due process issue in an appropriate manner. White v. State of Texas, 310 U.S. 530, 531, 532, 60 S.Ct. 1032, 1033, 84 L.Ed. 1342. Indeed, such a foreclosure of the right to complain 'of a wrong so fundamental that it made the whole proceeding a mere pretense of a trial and rendered the conviction and sentence wholly void,' Brown v. State of Mississippi, 297 U.S. 278, 286, 56 S.Ct. 461, 465, 80 L.Ed. 682, would itself be a denial of due process of law. 6 The judgment below must be reversed. Since the Mississippi Supreme Court upheld the conviction solely because it thought petitioner was not entitled to raise the constitutional issue, we remand the case to that court so that it may definitively express its views on that issue. 7 Reversed. 1 The transcript of the trial on the merits is not before us. At the preliminary hearing on the voluntariness of the confession, the transcript of which is before us, petitioner stated in regard to the alleged confession: 'I don't know what all he asked and all I said, but I didn't admit I did it.' He also denied having confessed various details of the crime. Such testimony, however, might be construed as nothing more than a layman's inexact way of stating that his answers did not amount to a voluntary confession. But in the absence of the complete record, we express no opinion on the matter. 2 Brown v. State of Mississippi, 297 U.S. 278, 56 S.Ct. 461, 80 L.Ed. 682; Chambers v. State of Florida, 309 U.S. 227, 60 S.Ct. 472, 84 L.Ed. 716; Canty v. State of Alabama, 309 U.S. 629, 60 S.Ct. 612, 84 L.Ed. 988; White v. State of Texas, 309 U.S. 631, 60 S.Ct. 706, 84 L.Ed. 989; Id., 310 U.S. 530, 60 S.Ct. 1032, 84 L.Ed. 1342; Lomax v. State of Texas, 313 U.S. 544, 61 S.Ct. 956, 85 L.Ed. 1511; Vernon v. State of Alabama, 313 U.S. 547, 61 S.Ct. 1092, 85 L.Ed. 1513; Lisenba v. People of State of California, 314 U.S. 219, 62 S.Ct. 280, 86 L.Ed. 166; Ward v. State of Texas, 316 U.S. 547, 62 S.Ct. 1139, 86 L.Ed. 1663; Ashcraft v. State of Tennessee, 322 U.S. 143, 64 S.Ct. 921, 88 L.Ed. 1192; Id., 327 U.S. 274, 66 S.Ct. 544, 90 L.Ed. 667; Lyons v. State of Oklahoma, 322 U.S. 596, 64 S.Ct. 1208, 88 L.Ed. 1481; Malinski v. People of State of New York, 324 U.S. 401, 65 S.Ct. 781, 89 L.Ed. 1029; Haley v. State of Ohio, 332 U.S. 596, 68 S.Ct. 302. See, in general, Boskey and Pickering, 'Federal Restrictions on State Criminal Procedure,' 13 U. of Chi. L. Rev. 266, 282—295.
01
332 U.S. 633 68 S.Ct. 269 92 L.Ed. 249 OYAMA et al.v.STATE OF CALIFORNIA. No. 44. Argued Oct. 22, 1947. Decided Jan. 19, 1948. Messrs. A. L. Wirin, of Los Angeles, Cal., and Dean G. Acheson, of Washington, D.C., for petitioners. Messrs. Everett W. Mattoon, of Los Angeles, Cal., and Duane J. Carnes, of San Diego, Cal., for respondents. [Argument of Counsel from page 634 intentionally omitted] Mr. Chief Justice VINSON delivered the opinion of the Court. 1 Petitioners challenge the constitutionality of California's Alien Land Law1 as it has been applied in this case to effect an escheat of two small parcels of agricultural land.2 One of the petitioners is Fred Oyama, a minor American citizen in whose name title was taken. The other is his father and guardian, Kajiro Oyama, a Japanese citizen not eligible for naturalization,3 who paid the purchase price. 2 Petitioners press three attacks on the Alien Land Law as it has been applied in this case: first, that it deprives Fred Oyama of the equal protection of the laws and of his privileges as an American citizen; secondly, that it denies Kajiro Oyama equal protection of the laws; and, thirdly, that it contravenes the due process clause by sanctioning a taking of property after expiration of the applicable limitations period. Proper foundation for these claims has been laid in the proceedings below. 3 In approaching cases, such as this one, in which federal constitutional rights are asserted, it is incumbent on us to inquire not merely whether those rights have been denied in express terms, but also whether they have been denied in substance and effect. We must review independently both the legal issues and those factual matters with which they are commingled.4 4 In broad outline, the Alien Land Law forbids aliens ineligible for American citizenship to acquire, own, occupy, lease, or transfer agricultural land.5 It also provides that any property acquired in violation of the statute shall escheat as of the date of acquisition6 and that the same result shall follow any transfer made with 'intent to prevent, evade or avoid' escheat.7 In addition, that intent is presumed, prima facie, whenever an ineligible alien pays the consideration for a transfer to a citizen or eligible alien.8 5 The first of the two parcels in question, consisting of six acres of agricultural land in southern California, was purchased in 1934, when Fred Oyama was six years old. Kajiro Oyama paid the $4,000 consideration, and the seller executed a deed to Fred. The deed was duly recorded. 6 Some six months later, the father petitioned the Superior Court for San Diego County to be appointed Fred's guardian, stating that Fred owned the six acres. After a hearing, the court found the allegations of the petition true and Kajiro Oyama 'a competent an proper person' to be appointed Fred's guardian. The appointment was then ordered, and the father posted the necessary bond. 7 In 1936 and again in 1937, the father as guardian sought permission to borrow $4,000, payable in six months, for the purpose of financing the next season's crops and to mortgage the six-acre parcel as security. In each case notice of the petition and date for hearing was published in a newspaper, the court then approved the borrowing as advantageous to Fred Oyama's estate, and the father posted a bond for $8,000. So far as appears from the record, both loans were obtained, used for the benefit of the estate, and repaid on maturity. 8 The second parcel, an adjoining two acres, was acquired in 1937, when Fred was nine years old. It was sold by the guardian of another minor, and the court supervising that guardianship confirmed the sale 'to Fred Oyama' as highest bidder at a publicly advertised sale. A copy of the court's order was recorded. Fred's father again paid the purchase price, $1,500. 9 From the time of the two transfers until the date of trial, however, Kajiro Oyama did not file the annual reports which the Alien Land Law requires of all guardians of agricultural land belonging to minor children of ineligible aliens.9 10 In 1942, Fred and his family were evacuated from the Pacific Coast along with all other persons of Japanese descent. And in 1944, when Fred was sixteen and still forbidden to return home, the State filed a petition to declare an escheat of the two parcels on the ground that the conveyances in 1934 and 1937 had been with intent to violate and evade the Alien Land Law. 11 At the trial the only witness, other than a court official testifying to records showing the facts set forth above, was one John Kurfurst, who had been left in charge of the land at the time of the evacuation. He testified that the Oyama family once lived on the land but had not occupied it for several years before the evacuation. After the evacuation, Kurfurst and those to whom he rented the property drew checks to Fred Oyama for the rentals (less expenses), and Kurfurst transmitted them to Fred Oyama through the War Relocation Authority. The canceled checks were returned endorsed 'Fred Oyama,' and no evidence was offered to prove that the signatures were not by the son. Moreover, the receipts issued by the War Relocation Authority for the funds transmitted by Kurfurst were for the account of Fred Oyama, and Kurfurst identified a letter signed 'Fred Oyama' directing him to turn the property over to a local bank for management. 12 On direct examination by the State's Attorney, however, Kurfurst also testified that he knew the father as 'Fred,' but he added that he had never heard the father refer to himself by that name. In addition, he testified on cross-examination that he had once heard the father say, 'Some day the boy will have a good piece of property because that is going to be valuable.' He also admitted that he knew 'the father was running the boy's business' and that 'the property belonged to the boy and to June Kushino' (Fred's cousin, an American citizen). Kurfurst further acknowledged that in a letter he had written about the property and had headed 'Re: Fred Yoshihiro Oyama and June Kushino' he meant by 'Fred Yoshihiro Oyama' the boy, not the father. He also understood a letter written to him by the War Relocation Authority 'Re: Fred Oyama' to refer to the boy. 13 From this evidence the trial court found as facts that the father had had the beneficial use of the land and that the transfers were subterfuges effected with intent to prevent, evade or avoid escheat. Accordingly, the court entered its conclusion of law that the parcels had vested in the State as of the date of the attempted transfers in 1934 and 1937. 14 The trial court filed no written p inion but indicated orally that its findings were based primarily on four inferences: (1) the statutory presumption that any conveyance is with 'intent to prevent, evade or avoid' escheat if an ineligible alien pays the consideration;10 (2) an inference of similar intent from the mere fact that the conveyances ran to a minor child;11 (3) an inference of lack of bona fides at the time of the original transactions from the fact that the father thereafter failed to file annual guardianship reports; and (4) an inference from the father's failure to testify that his testimony would have been adverse to his son's cause. No countervailing inference was warranted by the exhibits in Fred's name, the judge said, 'because there are many instances where there is little in a name.' 15 In holding the trial court's findings of intent fully justified by the evidence, the Supreme Court of California pointed to the same four inferences. It also ruled that California could constitutionally exclude ineligible aliens from any interest in agricultural land,12 and that Fred Oyama was deprived of no constitutional guarantees since the land had passed to the State without ever vesting in him. 16 We agree with petitioners' first contention, that the Alien Land Law, as applied in this case, deprives Fred Oyama of the equal protection of California's laws and of his privileges as an American citizen. In our view of the case, the State has discriminated against Fred Oyama; the discrimination is based solely on his parents' country of origin; and there is absent the compelling justification which would be needed to sustain discrimination of that nature. 17 By federal statute, enacted before the Fourteenth Amendment but vindicated by it, the states must accord to all citizens the right to take and hold real property.13 California, of course, recognizes both this right and the fact that infancy does not incapacitate a minor from holding realty.14 It is also established under California law that ineligible aliens may arrange gifts of agricultural land to their citizen children.15 Likewise, when a minor citizen does become the owner of agricultural land, by gift or otherwise, his father may be appointed guardian of the estate, whether the father be a citizen, an eligible alien, or an ineligible alien.16 And, once appointed, a guardian is entitled to have custody of the estate and to manage and husband it for the ward's benefit.17 To that extent Fred Oyama is ostensibly on a par with minors of different lineage. 18 At this point, however, the road forks. The California law points in one direction for minor citizens like Fred Oyama, whose parents cannot be naturalized, and in another for all other children—for minor citizens whose parents are either citizens or eligible aliens, and even for minors who are themselves aliens though eligible for naturalization. 19 In the first place, for most minors California has the customary rule that where a parent pays for a conveyance to his child there is a presumption that a gift is intended; there is no presumption of a resulting trust, no presumption that the minor takes the land for the benefit of his parent.18 When a gift is thus presumed and the deed is recorded in the child's name, the recording suffices for delivery,19 and, absent evidence that the gift is disadvantageous, acceptance is also presumed.20 Thus the burden of proving that there was in fact no completed bona fide gift falls to him who would attack its validity. 20 Fred Oyama, on the other hand, faced at the outset the necessity of overcoming a statutory presumption that conveyances financed by his father and recorded in Fred's name were not gifts at all. Something very akin to a resulting trust was presumed and, at least prima facie, Fred was presumed to hold title for the benefit of his parent.21 21 In the second place, when it came to rebutting this statutory presumption, Fred Oyama ran into other obstacles which, so far as we can ascertain, do not beset the path of most minor donees in California. 22 Thus the California courts said that the very fact that the transfer put the land beyond the father's power to deal with it directly—to deed it away, to borrow money on it, and to make free disposition of it in any other way—showed that the transfer was not complete, that it was merely colorable. The fact that the father attached no strings to the transfer was taken to indicate that he meant, in effect, to acquire the beneficial ownership himself. The California law purports to permit citizen sons to take gifts of agricultural land from their fathers, regardless of the fathers' nationality. Yet, as indicated by this case, if the father is ineligible for citizenship, facts which would usually be considered indicia of the son's ownership are used to make that ownership suspect; if the father is not an ineligible alien, however, the same facts would be evidence that a completed gift was intended. 23 Furthermore, Fred Oyama had to counter evidence that his father was remiss in his duties as guardian. Acts subsequent to a transfer may, of course, be relevant to indicate a transferor's intent att he time of the transfer. In this case the trial court itself had reservations as to the evidentiary value of the father's omissions;22 with these we agree, especially because there was some reason to believe reports were not required of him until 1943,23 and he had been excluded from the state from 1942 on. More important to the issue of equal protection, however, our attention has been called to no other case in which the penalty for a guardian's derelictions has fallen on any one but the guardian. At any time the court supervising the guardianship could have demanded the annual accounts and, if appropriate, could have removed Kajiro Oyama as guardian; severe punishment could also have been meted out.24 The whole theory of guardianships is to protect the ward during his period of incapacity to protect himself. In Fred Oyama's case, however, the father's deeds were visited on the son; the ward became the guarantor of his guardian's conduct. 24 The cumulative effect, we believe, was clearly to discriminate againt Fred Oyama. He was saddled with an onerous burden of proof which need not be borne by California children generally. The statutory presumption and the two ancillary inferences, which would not be used against most children, were given such probative value as to prevail in the face of a deed entered in the public records, four court orders recognizing Fred Oyama as the owner of the land, several newspaper notices to the same effect, and testimony that business transactions regarding the land were generally understood to be on his behalf. In short, Fred Oyama lost his gift, irretrievably and without compensation, solely because of the extraordinary obstacles which the State set before him. 25 The only basis for this discrimination against an American citizen, moreover, was the fact that his father was Japanese and not American, Russian, Chinese, or English. But for that fact alone, Fred Oyama, now a little over a year from majority, would be the undisputed owner of the eight acres in question. 26 The State argues that racial descent is not the basis for whatever discrimination has taken place. The argument is that the same statutory presumption of fraud would apply alike to any person taking agricultural land paid for byK ajiro Oyama, whether the recipient was Fred Oyama or a stranger of entirely different ancestry. We do not know how realistic it is to suppose that Kajiro Oyama would attempt gifts of land to others than his close relatives. But in any event, the State's argument ignores the fact that the generally applicable California law treats conveyances to the transferor's children differently from conveyances to strangers. Whenever a Chinese or English parent, to take an example, pays a third party to deed land to a stranger, a resulting trust is presumed to arise, and the stranger is presumed to hold the land for the benefit of the person paying the consideration;25 when the Alien Land Law applies a similar presumption to a like transfer by Kajiro Oyama to a stranger, it appears merely to reiterate the generally applicable law of resulting trusts. When, on the other hand, the same Chinese or English father uses his own funds to buy land in his citizen son's name, an indefeasible title is presumed to vest in the boy;26 but when Kajiro Oyama arranges a similar transfer to Fred Oyama, the Alien Land Law interposes a presumption just to the contrary. Thus, as between the citizen children of a Chinese or English father and the citizen children of a Japanese father, there is discrimination; as between strangers taking from the same transferors, there appears to be none. 27 It is for this reason that Cockrill v. California, 1925, 268 U.S. 258, 45 S.Ct. 490, 49 L.Ed. 944, does not support the State's position. In that case an ineligible alien paid for land and had title put in a stranger's name, and this Court affirmed a decision upholding the statutory presumption of the Alien Land Law as there applied.27 28 There remains the question of whether discrimination between citizens on the basis of their racial descent, as revealed in this case, is justifiable. Here we start with the proposition that only the most exceptional circumstances can excuse discrimination on that basis in the face of the equal protection clause and a federal statute giving all citizens the right to own land.28 In Hirabayashi v. United States this Court sustained a war measure which involved restrictions against citizens of Japanese descent. But the Court recognized that, as a general rule, 'Distinctions between citizens solely because of their ancestry are by their very nature odious to a free people whose institutions are founded upon the doctrine of equality.' 1943, 320 U.S. 81, 100, 63 S.Ct. 1375, 1385, 87 L.Ed. 1774. 29 The only justification urged upon us by the State is that the discrimination is necessary to prevent evasion of the Alien Land Law's prohibition against the ownership of agriu ltural land by ineligible aliens. This reasoning presupposes the validity of that prohibition, a premise which we deem it unnecessary and therefore inappropriate to reexamine in this case. But assuming, for purposes of argument only, that the basic prohibition is constitutional, it does not follow that there is no constitutional limit to the means which may be used to enforce it. In the light most favorable to the State, this case presents a conflict between the State's right to formulate a policy of landholding within its bounds and the right of American citizens to own land anywhere in the United States. When these two rights clash, the rights of a citizen may not be subordinated merely because of his father's country of origin. 30 Since the view we take of petitioners' first contention requires reversal of the decision below, we do not reach their other contentions: that the Alien Land Law denies ineligible aliens the equal protection of the laws, and that failure to apply any limitations period to escheat actions under that law takes property without due process of law. 31 Reversed. 32 Mr. Justice BLACK, with whom Mr. Justice DOUGLAS agrees, concurring. 33 I concur in the Court's judgment and its opinion. But I should prefer to reverse the judgment on the broader grounds that the basic provisions of the California Alien Land Law violate the equal protection clause of the Fourteenth Amendment and conflict with federal laws and treaties governing the immigration of aliens and their rights after arrival in this country. The California law in actual effect singles out aliens of Japanese ancestry, requires the escheat of any real estate they own, and its language is broad enough to make it a criminal offense, punishable by imprisonment up to ten years, for them to acquire, enjoy, use, possess, cultivate, occupy, or transfer real property.1 It would therefore appear to be a crime for an alien of Japanese ancestry to own a home in California, at least if the land around it is suitable for cultivation.2 This is true although the statute does not name the Japanese as such, and although its terms also apply to a comparatively small number of aliens from other countries. That the effect and purpose of the law is to discriminate against Japanese because they are Japanese is too plain to call for more than a statement of that well-known fact. 34 We are told, however, that, despite the sweeping prohibition against Japanese ownership or occupancy, it is no violation of the law for a Japanese to work on land as a hired hand for American citizens or for foreign nationals permitted to own California lands. And a Japanese man or woman may also use or occupy land if acting only in the capacity of a servant. In other o rds, by this Alien Land Law California puts all Japanese aliens within its boundaries on the lowest possible economic level. And this Land Law has been followed by another which now bars Japanese from the fishing industry. Cal.Stats.1945, c. 181, p. 659; see Torao Takahashi v. Fish and Game Commission, Cal.Sup., 185 P.2d 805. If there is any one purpose of the Fourteenth Amendment that is wholly outside the realm of doubt, it is that the Amendment was designed to bar States from denying to some groups, on account of their race or color, any rights, privileges, and opportunities accorded to other groups. I would now overrule the previous decisions of this Court that sustained state land laws which discriminate against people of Japanese origin residing in this country.3 35 Congress has provided strict immigration tests and quotas. It has also enacted laws to regulate aliens after admission into the country. Other statutes provide for deportation of aliens. Although Japanese are not permitted to become citizens by the ordinary process of naturalization, still Congress permitted the admission of some Japanese into this country. All of this means that Congress, in the exercise of its exclusive power over immigration, Truax v. Raich, 239 U.S. 33, 42, 36 S.Ct. 7, 11, 60 L.Ed. 131, L.R.A.1916D, 545, Ann.Cas.1917B, 283, decided that certain Japanese, subject to federal laws, might come to and live in any one of the States of the Union. The Supreme Court of California has said that one purpose of that State's Land Law is to 'discourage the coming of Japanese into this state * * *.' Estate of Yano, 188 Cal. 645, 658, 206 P. 995, 1001. California should not be permitted to erect obstacles designed to prevent the immigration of people whom Congress has authorized to come into and remain in the country. See Hines v. Davidowitz, 312 U.S. 52, 68, 61 S.Ct. 399, 404, 85 L.Ed. 581. There are additional reasons now why that law stands as an obstacle to the free accomplishment of our policy in the international field. One of these reasons is that we have recently pledged ourselves to cooperate with the United Nations to 'promote * * * universal respect for, and observance of, human rights and fundamental freedoms for all without distinction as to race, sex, language, or religion.'4 How can this nation be faithful to this international pledge if state laws which bar land ownership and occupancy by aliens on account of race are permitted to be enforced? 36 Mr. Justice MURPHY, with whom Mr. Justice RUTLEDGE joins, concurring. 37 To me the controlling issue in this case is whether the California Alien Land Law on its face is consistent with the Constitution of the United States. Can a state prohibit all aliens ineligible for American citizenship from acquiring, owning, occupying, enjoying, leasing or transferring agricultural land? Does such a prohibition square with the language of the Fourteenth Amendment that no state shall 'deny to any person within its jurisdiction the equal protection of the laws'? 38 The negative answer to those queries is dictated by the uncompromising opposition of the Constitution to racism, whatever cloak or disguise it may assume. The California statute in question, as I view it, is nothing more than an outright racial discrimination. As such, it deserves constitutional condemnation. And since the very core of the statute is so defective, I consider it necessary to give voice to that fact even though I join in the opinion of the Court. 39 In its argument before us, California has disclaimed any implication that the Alien Land Law is racist in its origin, purpose or effect. Reference is made to the fact that nowhere in the statt e is there a single mention of race, color, creed or place of birth or allegiance as a determinant of who may not own or hold farm land. The discrimination established by the statute is said to be entirely innocent of the use of such factors, being grounded solely upon the reasonable distinctions created by Congress in its naturalization laws. However, an examination of the circumstances surrounding the original enactment of this law in 1913, St.1913, p. 206, its reenactment in 1920 and its subsequent application reveals quite a different story.1 40 The California Alien Land Law was spawned of the great anti-Oriental virus which, at an early date, infected many persons in that state. The history of this anti-Oriental agitation is not one that does credit to a nation that prides itself, at least historically, on being the friendly haven of the tired and the oppressed of other lands. Beginning in 1850, with the arrival of substantial numbers of Chinese immigrants, racial prejudices and discriminations began to mount. Much of the opposition to these Chinese came from trade unionists, who feared economic competition, and from politicians, who sought union support. Other groups also shared in this opposition. Various laws and ordinances were enacted for the purpose of discouraging the immigrants and dramatizing the native dissatisfaction. Individual Chinese were subjected to many acts of violence. Eventually, Congress responded to this popular agitation and adopted Chinese exclusion laws. 41 It was not until 1900 that Japanese began to arrive in California in large numbers. By that time the repressive measures directed at the Chinese had achieved much of their desired effect; the Chinese population had materially decreased and the antipathy of the Americans was on the decline. But the arrival of the Japanese fanned anew the flames of anti-Oriental prejudice. History then began to repeat itself. White workers resented the new influx, a resentment which readily lent itself to political exploitation. Demands were made that Japanese immigration be limited or prohibited entirely.2 Numerous acts of violence were perpetrated against Japanese businessmen and workers, combined with private economic sanctions designed to drive them out of business. Charges of espionage, unassimilativeness, clannishness and corruption of young children were made against these 'Mongolian invaders.' Campaigns were organized to secure segregated schools and to preserve 'America for the Americans.' 42 Indeed, so loud did this anti-Japanese clamor become that the Japanese Government made formal protests to the United States. President Theodore Roosevelt thereupon investigated and intervened in the California situation. He was able to secure a slight amelioration. Further negotiations with the Japanese Government resulted in a so-called 'gentlemen's agreement,' whereby the Japanese Government agreed to limit passports to the United States to nonlaborers and to others who had already established certain business and personal interests in this country.3 43 But the agitation did not die and anti-Japanese measures continued to be proposed in wholesale fashion. The first anti-Japanese land bills were introduced in the California legislature in 1907, but the combined efforts of President Roosevelt and Governor Gillett prevented their passage. At least seventeen anti-Japanese bills were introduced in the 1909 session, including another land bill. President Roosevelt again intervened. This time he succeeded in having the land bill amended to apply to all aliens, as a result of which the bill was defeated;4 he was also instrumental in preventing the passage of a school segregation bill. The flood of anti-Japanese proposals continued in the 1911 session, at which more than twenty such measures were introduced. Among them, of course, was still another alien land bill. It provided that 'no alien who is not eligible to citizenship' should hold real property in California. The prospects for the passage of this bill seemed good, for by this time all political parties in the state had anti-Japanese planks in their platforms. But Presidential intervention was once again successful and the bill died in committee.5 44 In 1913, however, nothing could stop the passage of the original version of what is now the Alien Land Law.6 This measure, though limited to agricultural lands, represented the first official act of discrimination aimed at the Japanese. Many Japanese were n gaged in agricultural pursuits in 1913 and they constituted a substantial segment of the California farm labor supply. From 1900 to 1910, Japanese-controlled farms in California had increased from 4,698 acres to 99,254 acres. The agricultural situation thus offered a fruitful target for the anti-Japanese forces, who had been balked in their attempts to secure a ban on all Japanese immigration and to outlaw Japanese acquisition and enjoyment of resi dential and commercial property. In this new endeavor they were eminently successful. Secretary of State Bryan, acting on behalf of President Wilson, made a personal appearance in California to plead for caution, but his request was ignored as the legislators voted overwhelmingly in favor of the bill. This 1913 law denied 'aliens ineligible to citizenship' the privilege of buying land for agricultural purposes in California, and allowed them to lease land for such purposes for no more than three years. The measure was so drawn as not to be inconsistent with the Japanese-American treaty of 1911, which authorized Japanese in this country to lease and occupy land for residential and commercial purposes. But since the treaty made no mention of agricultural land, legislation on the matter by California did not present a square conflict. 45 The passage of the law was an international incident. The Japanese Government made an immediate protest on the ground that the statute was an indication of unfriendliness towards its people. Indeed, the resentment was so violent inside Japan that demands were made that war be declared against the United States. Anti-American agitation grew rapidly.7 The question was discussed at length on the diplomatic level. It was declared by the Japanese Minister of Foreign Affairs that the statute 'is essentially unfair and invidiously discriminatory against my countrymen, and inconsistent as well with the sentiments of amity and good neighborhood which have presided over the relations between the two countries * * *.'8 But the matter was allowed to lapse as both countries became increasingly occupied with the developments of World War I. 46 The intention of those responsible for the 1913 law was plain. The 'Japanese menace' was to be dealt with on a racial basis. The immediate purpose, of course, was to restrict Japanese farm competition. As subsequently stated by Governor Stephens of California, 'In 1913 the legislature of this state passed a statute forbidding the ownership of agricultural lands by Japanese and limiting their tenure to three year leaseholds. It was the hope at that time that this statute might put a stop to the encroachments of the Japanese agriculturist.'9 Actually, however, the law had little effect on the farm situation. It failed to prohibit the acquisition of farms in the future or to divest any existing holdings; and there was no limitation on the renewal of leases. The Japanese farm population remained largely intact. 47 The more basic purpose of the statute was to irritate the Japanese, to make economic life in California as uncomfortable and unprofitable for them as legally possible. It was thus but a step in the long campaign to discourage the Japanese from entering California and to drive out those who were already there. The Supreme Court of California admitted as much in its statement that the Alien Land Law was framed so as 'to discharge the coming of Japanese into this state.' Estate of Tetsubumi Yano, 188 Cal. 645, 658, 206 P. 995, 1001. Even more candid was the declaration in 1913 by Ulysses S. Webb, one of the authors of the law and an Attorney General of California. He stated: 'The fundamental basis of all legislation upon this subject, State and Federal, has been, and is, race undesirability. It is unimportant and foreign to the question under discussion whether a particular race is inferior. The simple and single question is, is the race desirable * * *. It (the Alien Land Law) seeks to limit their presence by curtailing their privileges which they may enjoy here; for they will not come in large numbers and long abide with us if they may not acquire land. And it seeks to limit the numbers who will come by limiting the opportunities for their activity here when they arrive.'10 48 Further evidence of the racial prejudice underlying te Alien Land Law is to be found in the events relating to the reenactment and strengthening of the statute by popular initiative in 1920. More severe and effective than the 1913 law, the initiative measure prohibited ineligible aliens from leasing land for agricultural purposes; and it plugged various other loopholes in the earlier provisions. A spirited campaign was waged to secure popular approval, a campaign with a bitter anti-Japanese flavor. All the propaganda devices then known—newspapers, speeches, films, pamphlets, leaflets, billboards, and the like—were utilized to spread the anti-Japanese poison.11 The Japanese were depicted as degenerate mongrels and the voters were urged to save 'California the White Man's Paradise' from the 'yellow peril,' which had somewhat lapsed in the public mind since 1913. Claims were made that the birth rate of the Japanese was so high that the white people wuold eventually be replaced and dire warnings were made that the low standard of living of the Japanese endangered the economic and social health of the community. Opponents of the initiative measure were labeled 'Jap-lovers.' The fires of racial animosity were thus rekindled and the flames rose to new heights. 49 In a pamphlet officially mailed to all voters prior to the election, they were told that the primary purpose of the new measure was 'to prohibit Orientals who cannot become American citizens from controlling our rich agricultural lands * * *. Orientals, and more particularly Japanese, (have) commenced to secure control of agricultural lands in California * * *.'12 The arguments in the pamphlet in support of the measure were repeatedly directed against the Japanese alone, without reference to other Orientals or to others who were ineligible for American citizenship. In this atmosphere heavy with race hatred, the voters gave decisive approval to the proposal, 668,483 to 222,086, though the majority constituted less than half of the total electrorate. But so virulent had been the campaign and so deep had been the natural resentment in Japan that once again the threat of war appeared on the horizon, only to die in the rush of other events. 50 It is true that the Alien Land Law, in its original and amended form, fails to mention Japanese aliens by name. Some of the proposals preceding the adoption of the original measure in 1913 had in fact made specific reference to Japanese aliens. But the expansion of the discrimination to include all aliens ineligible for citizenship did not indicate any retreat from the avowed anti-Japanese purpose. Adoption of the Congressional standard of ineligibility for citizenship was only an indirect, but no less effective, means of achieving the desired end. The federal legislation at all pertinent times has been so drawn as to exclude Japanese aliens from American citizenship.13 This Court has said, in referring to such legislation, that 'a person of the Japanese race, if not borna citizen, is ineligible to become a citizen, i.e., to be naturalized.' Morrison v. California, 291 U.S. 82, 85, 54 S.Ct. 281, 283, 78 L.Ed. 664. The framers of the California law were therefore able to utilize the federal standard with full assurance that the result would be to exclude Japanese aliens from the ownership and use of farm land. Congress supplied a ready-made vehicle for discriminating against Japanese aliens, a vehicle which California was prompt to grasp and expand to purposes quite beyond the scope or object of the Congressional statute. 51 Moreover, there is nothing to indicate that the proponents of the California law were at any time concerned with the use or ownership of farm land by ineligible aliens other than those of Japanese origin. Among those ineligible for citizenship when the law was under consideration were Chinese aliens. But the Chinese in California were generally engaged in small commercial enterprises rather than in agricultural occupations and, in addition, were not considered a menace because of the Chinese exclusion acts.14 No mention was made by the statute's proponents of the Hindus or the Malay and Polynesian aliens who were resident in California. Aliens of the latter types were so numerically insignificant as to arouse no interest or animosity.15 Only the Japanese aliens presented the real problem. It was they, the 'yellow horde,' who were the object of the legislation. 52 That fact has been further demonstrated by the subsequent enforcement of the Alien Land Law. At least 79 escheat actions have been instituted by the state since the statute became effective. Of these 79 proceedings, 4 involved Hindus, 2 involved Chinese and the remaining 73 involved Japanese.16 Curiously enough, 59 of the 73 Japanese cases were begun by the state subsequent to Pearl Harbor, during the period when the hysteria generated by World War II magnified the opportunities for effective anti-Japanese propaganda.17 Vigorous enforcement of the Alien Land Law has been but one of the cruel discriminatory actions which have marked this nation's treatment since 1941 of those residents who chanced to be of Japanese origin. 53 The Alien Land Law, in short, was designed to effectuate a purely racial discrimination, to prohibit a Japanese alien from owning or using agricultural land solely because he is a Japanese alien. It is rooted deeply in racial, economic and social antagonisms. The question confronting us is whether such a statute, viewed against the background of racism, can mount the hurdle of the equal protection clause of the Fourteenth Amendment. Can a state disregard in this manner the historic ideal that those within the borders of this nation are not to be denied rights and privileges because they are of a particular race? I say that it cannot. 54 The equal protection clause is too clear to admit of any other conclusion. It provides that no state shall 'deny to any person within its jurisdiction the equal protection of the laws.' The words 'any person' have sufficient scope to include resident aliens, whether eligible for citizenship or not. Yick Wo v. Hopkins, 118 U.S. 356, 6 S.Ct. 1064, 30 L.Ed. 220; Truax v. Raich, 239 U.S. 33, 36 S.Ct. 7, 60 L.Ed. 131, L.R.A.1916D, 545, Ann.Cas.1917B, 283. Hence Japanese aliens ineligible for citizenship must be accorded equal protection. And the laws as to which equal protection must be given certainly include those protecting the right to engage in common occupations like farming, Yick Wo v. Hopkins, supra, and those pertaining to the use and ownership of agricultural lands, Buchanan v. Warley, 245 U.S. 60, 38 S.Ct. 16, 62 L.Ed. 149, L.R.A.1918C, 210, Ann.Cas.1918A, 1201. The concept of equal protection, however, may in rare cases permit a state to single out a class of persons, such as ineligible aliens, for distinctive treatment. The crucial test in these exceptional instances is whether there is a rational basis for the particular kind of discrimination involved. Are the characteristics of the class such as to provide a rational justification for the difference in treatment? 55 Such a rational basis is completely lacking where, as here, the discrimination stems directly from racial hatred and nitolerance. The Constitution of the United States, as I read it, embodies the highest political ideals of which man is capable. It insists that our government, whether state or federal, shall respect and observe the dignity of each individual, whatever may be the name of his race, the color of his skin or the nature of his beliefs. It thus renders irrational, as a justification for discrimination, those factors which reflect racial animosity. Yet the history of the Alien Land Law shows beyond all doubt that factors of that nature make up the foundation upon which rests the discrimination established therein. And such factors are at once evident when the legal, social and economic considerations advanced in supprot of the discrimination are subjected to rigid scrutiny. 56 First. It is said that the rule established by Congress for determining those classes of aliens who may become citizens furnishes in and of itself a reasonable basis for the discrimination involved in the Ai en Land Law. 57 The proposition that the 'plenary' power of Congress over naturalization is uninhibited, even by the constitutional prohibition of racism, is one that is open to grave doubts in my mind.18 Racism has no justifiable place whatever in our way of life, even when it appears under the guise of 'plenary' power. Cf. concurring opinion in Bridges v. Wixon, 326 U.S. 135, 161, 162, 65 S.Ct. 1443, 1455, 1456, 89 L.Ed. 2103. But the fact remains that Congress has made racial distinctions in establishing naturalization standards. And those distinctions in large part have grown out of the demands of racially intolerant groups, including many of those who were among the foremost proponents of the Alien Land Law. Yet it does not follow, even if we assume that Congress was justified in adopting such racial distinctions, that California can blindly adopt those distinctions for the purpose of determining who may own and enjoy agricultural land. What may be reasonable and constitutional for Congress for one purpose may not be reasonable or constitutional for a state legislature for another and wholly distinct purpose. Otherwise there would be few practical limitations to the power of a state to discriminate among those within its jurisdiction, there being a plethora of federal classifications which could be copied.19 58 In other words, if a state wishes to borrow a federal classification, it must seek to rationalize the adopted distinction in the new setting. Is the distinction a reasonable one for the purposes for which the state desires to use it? To that question it is no answer that the distinction was taken from a federal statute or that the distinction may be rationalized for the purpose for which Congress used it. The state's use of the distinction must stand or fall on its own merits. And if it appears that the equal protection clause forbids the state from using the distinction for the desired purpose, the fact that Congress is free to adopt the distinction in some other connection gives the state no additional power to act upon it. Thus the state acquires no power whatever to impose racial discriminations upon resident aliens from the Congressional power to exclude some or all aliens on a racial basis. 59 Second. It is said that eligibility for American citizenship is inherently related to loyal allegiance and desire to work for the success and welfare of the state, which has a vital interest in the farm lands within its borders. Hence it may limit the ownership and use of farms to those who are or who may become citizens. 60 Such a claim is outlawed by reality. In 1940 there were 4,741,971 aliens residing in the continental United States, of whom 48,158 were ineligible for naturalization.20 Many of these ineligible aliens have long been domiciled in this country. They have gone into various businesses and professions. They have established homes and reared children, who have the status of American citizens by virtue of their birth in this country. And they have entered into the social and religious fabrics of their communities. Such ineligible aliens thus have a vital interest in the economic, social and political well-being of the states in which they reside and their loyalty has been proved many times.21 The fact that they are ineligible for citizenship does not, by itself, make them incapable of forming these ties and interests. Nor does their ineligibility necessarily preclude them from possessing the loyalty and allegiance which the state rightly desires. 61 Loyalty and the desire to work for the welfare of the state, in short, are individual rather than group characteristics. An ineligible alien may or may not be loyal; he may or may not wish to work for the success and welfare of the state or nation. But the same can be said of an eligible alien or a natural born citizen. It is the essence of naivete to insist that these desirable characteristics are always lacking in a racially ineligible alien, whose ineligibility may be remedied tomorrow by Congress.22 These are matters which depend upon factors far more subtle and penetrating than the prevailing naturalization standards. As this Court has said, 'Loyalty is a matter of the heart and mind not of race, creed, or color.' Ex parte Endo, 323 U.S. 283, 302, 65 S.Ct. 208, 218, 89 L.Ed. 243. And so racial eligibility for citizenship is an irrational basis for determining who is loyal or who desires to work for the welfare of the state. 62 Third. It has been said that if ineligible aliens could lease or own farms, it is within the realm of possibility that they might acquire every foot of land in California which is fit for agriculture. 63 If we assume that it is wrong for ineligible aliens to own or use all the farm land in California, such a contention is statistically absurd.23 The Japanese population in California, both citizen and alien, has increased from 41,356 (more than one-tenth of them citizens) in 1910 to 71,952 (about one-third of them citizens) in 1920 to 93,717 (about two-thirds of them citizens) in 1940. Of the total farms in California in 1920, Japanese citizens and aliens controlled 4.4%, comprising 1.2% of the total acreage. In 1930 they controlled 2.9% of the farms, or 0.6% of the acreage. And in 1940 they controlled 3.9% of the farms, or 0.7% of the acreage. Since we are concerned here only with the Japanese aliens, the percentage of the farms and acreage controlled by them is materially less than the foregoing figures. Thus the possibility of all the California farm land falling under the control of Japanese aliens is quite remote, to say the least. 64 Moreover, the nature of the Japanese alien segment of the California population is significant. In 1940 there were 33,569 Japanese aliens in that state, but the number is now smaller, the best estimate being about 25,000.24 The 33,569 figure represents those who entered before 1924, when Congress prohibited further immigration of aliens ineligible for citizenship.25 By 1940, all but 2,760 of these individuals were 35 years of age or older. More than half of them were 50 years or more in age. These age figures have risen to 43 and 58 during the past eight years and death is beginning to take a more rapid toll. Deportation, voluntary return to Japan and departure to other states have also contributed to the decline. The number of these aliens decreased 42% between 1920 and 1940 and an ever-increasing loss is inevitable. 65 Further deductions from this declining total of Japanese aliens must be made, for our purposes, for men and women who are engaged in non-agricultural activities. In 1940 about 58% of them resided in urban centers of 2,500 population or more. Out of 23,208 alien Japanese, fourteen years of age or older, only 10,512 were reported as engaged in farming occupations. While the Alien Land Law has undoubtedly discouraged some from becoming farmers, the number who would normally be non-farmers remains relatively substantial. The farmers, actual and potential, among this declining group are numerically minute. 66 One other fact should be mentioned in this connection. 'Many of these aged and aging Japanese aliens suffered heavy pecuniary losses incident to their evacuation during the war. Suddenly ordered to abandon their properties and their homes, many felt compelled to sell at sacrificial prices. Others lost through unfaithful custodianship of their properties during their absence. Confined to so-called relocation centers, they were cut off for nearly three years from any gainful employment. The result is that many of the well-to-do among them returned to California broken in fortune, with very few years of life left for financial recuperation.'26 67 Such is the nature of the group to whom California would deny the right to own and occupy agricultural land. These elderly individuals, who have resided in this country for at least twenty-three years and who are constantly shrinking in number, are said to constitute a menace, a 'yellow peril,' to the welfare of California. They are said to be encroaching on the agricultural interests of American citizens. They are said to threaten to take over all the rich farm land of California. They are said to be so efficient that Americans cannot compete with them. They are said to be so disloyal and so undesirous of working for the welfare of the state that they must be denied the right to earn a living by farming. The mere statement of these contentions in the context of the actual situation is enough to demonstrate their shallowness and unreality. The existence of a few thousand aging residents, possessing no racial characteristic dangerous to the legitimate interests of California, can hardly justify a racial discrimination of the type here involved. 68 Fourth. It is stated that Japanese aliens are so efficient in their farming operations and that their living standard is so low that American farmers cannot compete successfully with them. Their right to own and use farm lands must therefore be denied if economic conflicts are to be avoided. 69 That Japanese immigrants brought with them highly developed techniques of cultivation is not to be denied. In Japan they had learned to obtain the highest possible yield from each narrow strip of soil. And they possessed the willingness and ability to perform the great amount of labor necessary for intensive farming. When they came to California they put their efficient methods into operation. There they pioneered in the production of various crops and reclaimed large areas, developing some of the richest agricultural regions in the state. In performing these tasks, however, the Japanese caused no substantial displacement of American farmers. The areas which they cultivated were, for the most part, deserted or undesired by others.27 70 But eventually, the Japanese concentrated all of their agricultural efforts in the production of vegetables, small fruits and greenhouse products, experience having shown that they could not compete successfully in larger farming endeavors. Within this truck-farm sphere, the Japanese achieved a near-monopoly by their diligence and effice ncy. While they had, as we have seen, an infinitesimal proportion of the total farm acreage in California, their 1941 truck crops covered 42% of the state's acreage devoted to such production.28 In Los Angeles County alone, they raised 64% of the truck crops for processing and 87% of the vegetables for fresh marketing.29 This concentration of effort by the Japanese, many of whom were not aliens, naturally gave strong competition to other producers and forced some of them our of the field. 71 The success thus achieved through diligence and efficiency, however, does not justify prohibiting the Japanese from owning or using farm lands. Free competition and the survival of the fittest are supposedly vital elements in the American economic structure. And those who are injured by the fair operation of such elements can make no legitimate objection. It would indeed be strange if efficiency in agricultural production were to be considered a rational basis for denying one the right to engage in that production. Certainly from a constitutional standpoint, superiority in efficiency and productivity has never been thought to justify discrimination. 72 Comparatively speaking, the standard of living of the Japanese immigrants may have been low at first. But they have worked to raise their standard despite such obstacles as the Alien Land Law. Like many other first-generation immigrants, the Japanese were often forced to work long hours for low pay. Yet nothing has indicated that, given a fair opportunity, they are incapable of improving their economic status. At the very least, a low standard of living is hardly a justification for a statute which operates to keep that standard low. Something more than its own bootstraps is needed to pull such a law up to the constitutional level. 73 Fifth. Closely knit with the foregoing are a host of other contentions which make no pretense at concealing racial bigotry and which have been used so successfully by proponents and supporters of the Alien Land Law. These relate to the alleged disloyalty, clannishness, inability to assimilate, racial inferiority and racial undesirability of the Japanese, whether citizens or aliens. The misrepresentations, halftruths and distortions which mark such contentions have been exposed many times and need not be repeated here. See dissenting opinion in Korematsu v. United States, 323 U.S. 214, 236—240, 65 S.Ct. 193, 202—204, 89 L.Ed. 194. Suffice it to say that factors of this type form no rational basis for a statutory discrimination. 74 Unquestionably there were and are cultural, linguistic and racial differences between Japanese aliens and native Americans not of Japanese origin or ancestry.30 The physical characterists of the Japanese, their different customs and habits, their past connections with Japan, their unique family relationships, their Oriental religion, and their extreme efficiency all contributed to the social and economic conflicts which unfortunately developed. But the crucial mistake that was made, the mistake that made the attitude of many Americans one of intolerance and bigotry, was the quick assumption that these differences were all racial and unchangeable. From that mistake it was an easy step to charge that the Japanese race was undesirable and that all Japanese persons were unassimilable. And from that mistake flowed the many proposals to deal with the social and economic conflicts on a group or racial basis. It was just such a proposal that became the Alien Land Law. 75 Hence the basic vice, the constitutional infirmity, of the Alien Land Law is that its discrimination rests upon an unreal racial foundation. It assumes that there is some racial characteristic, common to all Japanese aliens, that makes them unfit to own or use agricultural land in California. There is no such characteristic. None has even been suggested. The arguments in support of the statute make no attempt whatever to discover any true racial factor. They merely represent social and economic antagonisms which have been translated into false racial terms. As such, they cannot form the rationalization necessary to conform the statute to the requirements of the equal protection clause of the Fourteenth Amendment. Accordingly, I believe that the prior decisions of this Court giving sanction to this attempt to legalize racism should be overruled.31 76 Added to this constitutional defect, of course, is the fact that the Alien Land Law from its inception has proved an embarrassment to the United States Government. This statute has been more than a local regulation of internal affairs. It has overflowed into the realm of foreign policy; it has had direct and unfortunate consequences on this country's relations with Japan. Drawn on a background of racial animosity, the law was so patent in its discrimination against Japanese aliens as to cause serious antagonism in Japan, even to the point of demands for war against the United States. The situation was so fraught with danger that three Presidents of the United States were forced to intervene in an effort to prevent the Alien Land Law from coming into existence. A Secretary or State made a personal plea that the passage of the law might turn Japan into an unfriendly nation. Even after the law became effective, federal authorities feared that enforcement of its provisions might jeopardize our relations with Japan. That fear was in large part responsible for the substantial non-enforcement of the statute prior to World War II. But the very existence of the law undoubtedly has caused many in Japan to bear ill-feeling toward this country, thus making friendly relations between the two nations that much more difficult. 77 Moreover, this nation has recently pledged itself, through the United Nations Charter, to promote respect for, and observance of, human rights and fundamental freedoms for all without distinction as to race, sex, language and religion. The Alien Land Law stands as a barrier to the fulfillment of that national pledge. Its inconsistency with the Charter, which has been duly ratified and adopted by the United States, is but one more reason why the statute must be condemned. 78 And so in origin, purpose, administration and effect, the Alien Land Law does violence to the high ideals of the Constitution of the United States and the Charter of the United Nations. It is an unhappy facsimile, a disheartening reminder, of the racial policy pursued by those forces of evil whose destruction recently necessitated a devastating war. It is racism in one of its most malignant forms. Fortunately, the majority of the inhabitants of the United States, and the majority of those in California,32 reject racism and all of its implications. They recognize that under our Constitution all persons are entitled to the equal protection of the laws without regard to their racial ancestry. Human liberty is in too great a peril today to warrant ignoring that principle in this case. For that reason I believe that the penalty of unconstitutionality should be imposed upon the Alien Land Law. 79 Mr. Justice REED, with whom Mr. Justice BURTON joins, dissenting. 80 The Court's opinion assumes arguendo that the California Alien Land Laws are constitutional. As we read the opinion, it holds that the Alien Land Laws of California, as here applied, discriminate in an unconstitutional manner against an American citizen—a son born in the United States to resident parents of Japanese nationality. From this holding we dissent. 81 California, through an exercise of the police power, which has been repeatedly approved by us,1 has prohibited ownership of land within the state by aliens ineligible for citizenship.2 Recognizing that the benefits flowing from ownership can be enjoyed through subterfuges by persons not the holders of legal or equitable title, California has proscribed as to the state every 'conveyance * * * made with intent to prevent, evade or avoid escheat * * *.'3 Transfers of real property made with this intent 'shall be void as to the state and the interest thereby conveyed or sought to be conveyed shall escheat to the state as of the date of such transfer * * *.' To assist in the proof of 'intent to prevent, evade or avoid escheat,' the state was given the benefit of a 'prima facie presumption that the conveyance is made with such intent * * *' where the state proves: 'The taking of the property in the name of a person other than (an alien who cannot hold land) * * * if the consideration is paid or agreed or understood to be paid by an alien (who cannot hold land) * * *.' Thus the state has made void as to it, two substantive acts: (1) ownership of land by ineligible aliens and (2) transfers made to avoid by indirection the prohibition against ownership of land by ineligible aliens. The statutory scheme recognizes that the purpose of the Alien Land Laws cannot be achieved unless attempts to avoid the basic prohibition of the law are penalized. Any law aimed at the prevention of ownership by ineligible aliens, which did not penalize both the act of owning and the act of attempting to enjoy the rights of ownership through a cloak, would be defective and readily avoided. 82 The trial court found that the transfers challenged by California in this case were made with an 'intent to prevent, evade or avoid escheat'; in so finding the court considered the statutory presumption together with the other evidence detailed in the Court's opinion and concluded that the defendants had not met the statutory burden of proof imposed by § 9. The Supreme Court of California affirmed. 83 We do not have in this review a balancing of constitutional rights; on one hand, the right of California to exclude ineligible aliens from land ownership and, on the other, the right of their citizen sons to hold land. California does not deny the right to own land in California to a citizen son of an ineligible alien. If that citizen obtains the land in any way not made void as a violation of law he may hold it. Under § 9 the land escheats because of the father's violation of law before it reaches the son. The denial to the father by California of the privilege of land ownership is not challenged. Neither is the right to protect that denial by an escheat of the land on the father's attempt to avoid the limitations of the California land law. Actually, the only problem is whether the presumption arising from the payment of money for land by the ineligible father denies equal protection of the law to the son. We understand the majority opinion to hold that presumption (a) of § 9, with its so-called ancillary inferences because of the son's minority and the father's failure to file guardianship reports or testify, as here applied, discriminates unconstitutionally against Fred Oyama. If that presumption, with the inferences, had been held constitutional, apparently the Court would have affirmed the opinion below because the issue then remaining would have been the correctness of the findings of fact by the trial judge. No one would suggest that the correctness of those findings could be challenged here; the resolution of disputed dissues of fact in non-constitutional mattes is for the state judicial system. This Court does not intimate that it disagrees with California's factual conclusion. Its ruling is based on the 'cumulative effect' of the 'statutory presumption' and 'two ancillary inferences.' On remand to the courts of California, the case may be tried again. On that retrial all of the evidence admitted at the first trial may be submitted to the triers of fact for no one says that the items of evidence, including the father's payment of consideration, introduced by the state are inadmissible. A major vice of the state's application of the law apparently was the reliance upon a presumption and inferences that this Court holds deny equal protection. If an intent to 'prevent, evade or avoid escheat' is found on the same evidence, an escheat will again take place. 84 Presumption (a) of § 9 has been construed by the California Supreme Court: 'That if the consideration for the purchase of the real property is paid by an ineligible alien and the title is taken in the name of a third person, it will be presumed, in the absence of other evidence to the contrary, that it was the intent of both the alien and the grantee to 'prevent, evade or avoid' the escheat at law. * * * But the presumption is recognized as disputable and as disappearing in the face of contrary evidence of sufficient strength to meet our rule on conflict of testimony.'4 We do not interpret the opinion of our Brethren to say that the presumption, if valid, is irrebuttable; or, to put the matter differently, that the effect of the presumption, if valid, is to make in inevitable that all gifts of real property by an alien-Japanese father to his child can be successfully escheated by the state. As the cases prove, an alien-Japanese father can give California lands to his son in spite of the presumption.5 The effect of the presumption, if valid, is rather to place a burden, an 'onerous burden' to adopt the phrase of the majority opinion, upon all grantees who take land under those conditions set forth in § 9. 85 The issue in this case, therefore, is neither the validity of the California prohibition against the ownership of agricultural land by a person ineligible to become an American citizen, nor the validity of a law, § 9, that an attempt to evade that prohibition shall be penalized by escheat. The validity of both of these provisions is unchallenged by this Court's opinion. The issue here is the validity of the presumption that when an ineligible person pays the consideration for land conveyed to an eligible person, these is a prima facie presumption that the conveyance is made to avoid the prohibited ownership. The essence of the argument in the opinion is this: 'When an alien-English father purchases land from a third party and puts title in his child, acceptance by the child and delivery of the deed are presumed; however, if an alien-Japanese father engages in the same transaction, his child must meet the 'onerous burden' of the presumption; therefore, Fred Johnson and Fred Oyama are not treated equally by the laws of California and Fred Oyama is denied equal protection by those laws. These facts are accurate; the flaw is that the conclusion does not follow. California has, as against the state, made illegal a particular class of transactions: transfers made with the intent to evade escheat of lands. Anyone, no matter what his racial origin may be, who as a grantee is a party to a sale of land which the state attacks as being within the proscribed class must overcome the presumption of § 9 to establish the legality of the transfer. This presumption operae § with a mechanical impartiality. Whoever the grantee in a transfer questioned by the state is, be he Fred Johnson or Fred Oyama, he must bear the 'onerous burden'; he must bear it not because of descent or nationality but because he has been a party to a transaction which the state challenges as illegal under an admittedly valid law. 86 As we see the Court's argument, it focuses attention upon what it contends are two parallel situations: the gift of an English father to a citizen son and the gift of a Japanese father to a citizen son. Upon examination of the relevant state laws, it concludes that the son of the Japanese father is placed in a position less advantageous than that of the son of an English father. That is so, but for our purposes it is the reason for the result, and not the result itself, that is important. The legal positions of the two sons are different only because the situations are not parallel. The Japanese father and his citizen son are parties to an illegal transaction if the land was transferred with the 'intent to prevent, evade or avoid escheat'; as an English father is not prevented from holding real property, his gift cannot be challenged on that ground by the state. The capacities of the donors are different and it is this difference, and nothing else, which raises in one case and fails to raise in the other, the presumption complained of by Oyama.6 It is not a denial of equal protection for a state to classify transactions readily leading to law evasions differently from those without such a possibility. Such classification is permissible. 87 Let us test the Court's reasoning by applying it to a different set of facts. For purposes of illustration, we put these cases: (1) a solvent father purchases land from a third party and puts the title in his son; and (2) an insolvent father purchases land from a third party and puts the title in his son. In example (2), the creditors of the father in an action against the son to subject the land to the satisfaction of their claims against the father, can raise a prima facie presumption that the transfer was fraudulent as to them by proving that the transaction took place during the period of the father's insolvency.7 Here the son of the insolvent father bears an 'onerous burden' to which the son of a solvent father is not subjected; he bears this burden because he has been a party to a transaction which creditors challenge as voidable. The disability of the father taints the son's right and, therefore, he is placed in a position less advantageous than that of the son of a solvent father. Would itb e reasonable to say that the son of the insolvent father has been denied 'equal protection' and, consequently, the presumption is unconstitutional? No one would so contend. The inequality between the sons of eligible and ineligible landowners does not seem to us to differ. 88 As we understand petitioners' argument in briefs and before this Court, the petitioners in their discussion of the denial of equal protection to the citizen son depended solely upon the invalidity of the presumption arising from the payment of the money by the father. This Court's opinion recognizes that petitioners' argument includes discrimination, amounting to a lack of equal protection, arising (1) from the requirement of § 9 that the son must take the burden of proving affirmatively the bona fides of the gift from the father; (2) because the gift to the infant son of a Japanese is presumed invalid while the gift to an infant son of an aligible alien is presumed valid; (3) because the Court took into consideration the father's omission to file guardian reports after the transfer. Normally, the Court says, a guardian's subsequent improper conduct would not affect the validity of a gift to a child. Because of what is deemed additional burdens thus placed upon the son, the Court concludes that: 89 'The cumulative effect, we believe, was clearly to discriminate against Fred Oyama. * * * 'The only basis for this discrimination against an American citizen, moreover, was the fact that his father was Japanese and not American, Russian, Chinese, or English.' 90 These discriminations, if such they are, seem to us mere elaborations of the central theory that the challenged presumption of § 9 is unconstitutional as a denial of equal protection. It is of course true that the son of a citizen of Japan cannot receive a gift from an ineligible father as readily as a son of an alien entitled to naturalization but again such a classification is entirely reasonable when we once assume that the State of California has a right to prohibit the ownership of California land directly or indirectly by a Japanese. 91 Discrimination in the sense of placing more burdens upon some than upon others is not in itself unconstitutional. If all types of discrimination were unconstitutional, our society would be incapable of legislation upon many important and vital questions. All reasonable classification puts its subjects into different categories where they may have advantages or disadvantages that flow from their positions.8 The grouping of all those who take land as grantees, in a transaction in which an ineligible alien pays the consideration, in a class subject to the statutory presumption of § 9 and other inferences which are reasonably related to the transfer, should not be struck down as unconstitutional. Unless the California Land Laws are to be held unconstitutional, we think the presumption and its resulting effects must be accepted as legal. 92 Mr. Justice JACKSON, dissenting. 93 I am unable to see how this Court logically can set aside this judgment unless it is prepared to invalidate the California Alien Land Laws, on which it is based. If this judgment of escheat seems harsh as to the Oyamas, it is only because it faithfully carries out a legislative policy, the validity of which this Court does not question. 94 The State's argument is as simple as this: If California has power to forbid certain aliens to own its lands, it must have incidental power to prevent evasion of that prohibition by use of an infant's name to cloak a forbidden ownership. If it has the right to protect itself against such evasion, its courts must have the right to decide the question of fact whether a given transaction constitutes an evasion. And if its courts have to apply the Act, the State has power to aid them by creating reasonable presumptions. I cannot find that this reasoning is defective or that it fails to support the judgment below, however little I like the result. 95 In this case the elder Oyama arranged to acquire some six acres of agricultural lands. He could not take title in his own name because of his classification as an ineligible alien, and hence one forbidden to acquire such lands. Title was taken in the name of Fred, his son. When this was happening Fred was six years old. He had no funds and the entire consideration was paid by the father. We can hardly criticize the state court for concluding, especially in absence of any proof to the contrary, that a 6-year-old child did not decide for himself to go into agriculture, or that these particular lands would be suitable for him of he did. The lands would require continuous cultivation if they were not to revert to a state of nature and it was not unreasonable to doubt that the 6-year-old son could supply either the manual labor or the oversight necessary to preserve the investment or to make it yield a return. Moreover, the return from the lands, even if applied to the support of young Oyama, operated to reduce the parental obligation. In short, there is no proof that this 6-year-old child contributed to the purchase of these lands either funds, judgment or desire. The California court considered that his name was used in the transaction without the infant's understanding consent. Even if there were no presumption created by statute. I should find it difficult to say that this conclusion is an unreasonable one. 96 Nor do I think we could say that it would offend the Federal Constitution if the State, to make admittedly constitutional legislation effective, should go so far as to create a presumption that where the consideration is paid by an ineligible father and the title is taken in the name of his infant son, it is to be deemed the father's purchase. I do not understand the Court to say that this is a far-fetched or unreasonable inference from such facts. It seems to say, however, that a presumption, which it construes in this way, is invalid becaus it operates only against sons of persons ineligible for citizenship. If even such a presumption strikes only a limited class, it is because the basic prohibitions of the Act strike only a limited class. If the State can validly classify certain Asiatics as a separate class for exclusion from land ownership, I do not see why it could not do so for purposes of a presumption. 97 But the California statute has not made a presumption applicable only against sons of the excluded Asiatics. The statutory presumption, so far as it applies here, is cast in this language: 98 'A prima facie presumption that the conveyance is made with such intent shall arise upon proof of any of the following group of facts: 99 '(a) The taking of the property in the name of a person other than the persons mentioned in Section 2 hereof (the excluded alien) if the consideration is paid or agreed or understood to be paid by an alien mentioned in Section 2 hereof * * *.' 100 The same presumption would be raised by the statute against any American citizen or any alien or any person whatsoever if he received the title and any ineligible alien paid the consideration. The Court's decision is that the presumption denies Fred Oyama the equal protection of the laws because grantees are treated differently if they are sons of ineligible aliens than if they are the sons of others. This Act makes no such classification. The presumption does not apply to him because he is the son of an ineligible father—it applies because he is a grantee of lands paid for by an ineligible alien. The Court itself reads this father and son classification into the Act, quite unjustified by its words. It is true that in this case the relationship of father and son also exists, but that is not the relationship that calls the presumption into operation. 101 The Act classifies granted only as those whose lands have been paid for by an ineligible alien and those whose lands have not. Every member of the class whose lands have been paid for by such an alien must overcome the presumption. Every grantee similarly situated is saddled by the identical burden imposed on Fred Oyama whether the is the son of a Japanese, the son of an American citizen or the son of an eligible alien. Thus there is no discrimination apparent on its face in the provision of the statute which the Court strikes down. 102 But it is said that a discrimination is latent in this presumption from the fact that other fathers may give land to their sons and no presumption would apply. That there is a discrimination in this situation no one will deny; it is the fundamental one, which the Court does not touch, by which the elder Oyama could not, directly or indirectly, acquire this land while many other fathers could. The presumption, of course would not apply if the consideration were paid by a person to whom the statute does not apply. But Fred Oyama, the son, is in no different position as to the presumption than the son of any other person whatsoever. If a citizen's son received this land from Oyama senior under the same conditions, he would be confronted with the same presumption and escheat. If the Oyama lad, on the other hand, received this land from a citizen, he would take it as free of presumption and escheat as any California lad could do. The only discrimination which prejudices young Oyama is the one which makes his father ineligible to own land or be a donor of it. That discrimination is passed by as valid, and one that seems to me wholly fictitious is first erected by this Court and then struck down. 103 I do not find anything in the Federal Constitution which authorizes us to strip a State of its power to enact reasonable presumptions which put the burden of producing evidence upon the only person who possesses it. This presumption is not made conclusive and the California courts have sometimes held it to be overcome by evidence. In this case, if there is any name to acquire beneficial interests for himself which he was forbidden to acquire in name, no one knows those facts better than the senior Oyama. He did not take the witness stand. He left unrebutted both the presumption of the statute and the inference that most reasonable persons, even in the absence of a statute, would draw from the facts. 104 This Court also says that California used the default of the father, in failing to file accountings as trustee for the infant, as evidence against the infant, and seems to imply this was an unconstitutional procedure. As we have seen, this infant was of such tender years that he had neither ideas nor will nor understanding about the purchase. The only person's intention which would stamp this transaction as one in good faith or as an evasion of the statute was the intention of the father. He was the only actor; he gave the land to the son and accepted on his behalf, so we are told. Certainly it was competent for the California courts, as bearing on his intentions and good faith, to receive evidence of the fact that the sole actor did not consider himself under an obligation to account as the law would require him to do if the property really belonged to an infant and he were a trustee. 105 While I think that California has pursued a policy of unnecessary severity by which the Oyamas lose both land and investment, I do not see how this Court, while conceding the State's right to keep the policy on its books, can strip the State of the right to make its Act effective. What we seem to be holding is that while the State has power to exclude the alien from land ownership, the alien has the constitutional right to nullify the policy by a device we would be prompt to condemn if it were used to evade a federal statute. 106 A majority of the Court agrees that the ground assigned by the Court's opinion is sufficient to decide this litigation. It does not therefore seem necessary or helpful to enter into a discussion of the constitutionality of the Alien Land Laws themselves. 1 1 Cal.Gen.Laws Act 261 (Deering 1944, 1945 Supp.). 2 1946, 29 Cal.2d 164, 173 P.2d 794. 3 At the time the Alien Land Law was adopted the right to be naturalized extended only to free white persons and persons of African nativity or descent. In 1940, descendants of races indigenous to the Western Hemisphere were also made eligible, 54 Stat. 1140; in 1943 Chinese were made eligible, 57 Stat. 601; and in 1946 Filipinos and persons of races indigenous to India were made eligible, 60 Stat. 416, 8 U.S.C.A. § 703 (1946 Supp.). While it is not altogether clear whether the statute should be interpreted to include or to exclude certain peoples, see Note, 54 Harv.L.Rev. 860, 864—5 (1941), it seems to be accepted that Japanese are among the few groups not eligible for citizenship. 4 See Patton v. Mississippi, 1947, 332 U.S. 463, 68 S.Ct. 184; Chambers v. Florida, 1940, 309 U.S. 227, 228, 229, 60 S.Ct. 472, 473, 84 L.Ed. 716; Norris v. Alabama, 1935, 294 U.S. 587, 590, 55 S.Ct. 579, 580, 79 L.Ed. 1074. 5 §§ 1 and 2. 6 § 7. 7 § 9. 8 § 9(a). 9 §§ 4 and 5. This was the holding of the state courts. Petitioners argue that until 1943 there was some doubt as to whether reports were required. See note 23, infra. 10 § 9(a) of the Alien Land Law. 11 The judge stated that in the absence of a strong reason people just do not take title to real estate in the name of their seven-year old children-thereby putting it beyond the power of the parents to deal with it directly, to deed it away, to borrow money on it and to make free disposition of it. 12 This conclusion was based in large measure on a series of cases decided within a week of each other in 1923: Terrace v. Thompson, 263 U.S. 197, 44 S.Ct. 15, 68 L.Ed. 255; Porterfield v. Webb, 263 U.S. 225, 44 S.Ct. 21, 68 L.Ed. 278; Webb v. O'Brien, 263 U.S. 313, 44 S.Ct. 112, 68 L.Ed. 318; and Frick v. Webb, 263 U.S. 326, 44 S.Ct. 115, 68 L.Ed. 323. 13 'All citizens of the United States shall have the same right, in every State and Territory, as is enjoyed by white citizens thereof to inherit, purchase, lease, sell, hold, and convey real and personal property.' R.S. § 1978, 8 U.S.C. § 42, 8 U.S.C.A. § 42. 14 The State in its brief concedes that this is so. See also Estate of Yano, 1922, 188 Cal. 645, 649, 206 P. 995, 998; People v. Fujita, 1932, 215 Cal. 166, 169, 8 P.2d 1011, 1012. 15 The State also concedes the accuracy of this proposition. See also People v. Fujita, supra note 14. 16 A statute of general applicability requires that parents be given preference in the appointment of a minor's guardian. Cal.Prob.Code, § 1407. Section 4 of the Alien Land Law, as enacted in 1920, prohibiteda n ineligible alien from becoming the guardian of that part of his child's estate which consisted of his child's estate which consisted p. 83. This section was held unconstitutional in Estate of Yano, supra note 14. 17 See De Greayer v. Superior Court, 1897, 117 Cal. 640, 49 P. 983, 59 Am.St.Rep. 220. 18 Gomez v. Cecena, 1940, 15 Cal.2d 363, 101 P.2d 477; Quinn v. Reilly, 1926, 198 Cal. 465, 245 P. 1091; Russ v. Mebius, 1860, 16 Cal. 350; cf. Lezinsky v. Mason Malt Whisky Distilling Co., 1921, 185 Cal. 240, 250, 196 P. 884, 889; Hamilton v. Hubbard, 1901, 134 Cal. 603, 605, 65 P. 321, 322, 66 P. 860. 19 People v. Fujita, 1932, 215 Cal. 166, 169, 8 P.2d 1011, 1012: Estate of Yano, 1922, 188 Cal. 645, 649, 206 P. 995, 998; cf. Turner v. Turner, 1916, 173 Cal. 782, 786, 161 P. 980, 982. 20 People v. Fujita and Estate of Yano, both supra note 19; De Levillain v. Evans, 1870, 39 Cal. 120, 123. 21 It is interesting to note that in two previous cases the California Supreme Court has explicitly stated that where aliens are prohibited from holding lands, an implied trust by operation of law will not arise in their favor. Estate of Yano and People v. Fujita, both supra, note 19. Both cases were decided before purchase of either of the parcels involved in this case and at the time of the purchase apparently represented the established State law. 22 While relying to some extent on this inference the trial court indicated that it did not consider it a strong one 'because sometimes people who are not informed as to the requirements of the law in connection with those matters simply fail to do the thing that the law requires.' 23 Section 4 of the Alien Land Law, as amended in 1920, prohibited ineligible aliens from becoming guardians of agricultural land owned by their minor children, Cal.Stats.1921, p. 83, while § 5 required certain reports of persons who could and did become guardians of such land—i.e., persons other than the parents. Section 4 was held invalid in 1922 in Estate of Yano, supra note 21, and was not replaced until 1943, when there was enacted a new § 4 enunciating requirements for ineligible alien guardians. Section 5 has remained on the books continuously. Petitioners argue that there may have been at least a justifiable belief on the part of ineligible aliens such as Kajiro Oyama that they were not required to file guardianship reports until 1943. As inferential corroboration of this view, they point to the failure of both the guardianship court and the district attorney to take action against Kajiro Oyama under § 5 between 1935 and 1943. 24 If, as the State contends, § 5 of the Act required Kajiro Oyama to file annual reports, the same section set as the penalty for violation a fine up to $1,000 and imprisonment up to a year. Other statutes of general applicability subject guardians to the law of trusts and authorize the court to remove a guardian for mismanagement or failure to render accounts. Cal.Prob.Code §§ 1400, 1580. Furthermore, since 1943 the statute has provided that breach of § 4 may subject the guardian to a maximum of 10 years' imprisonment and a $5,000 fine. 25 Cal.Civil Code, § 853. 26 See note 18 supra. 27 In the Cockrill case the ineligible alien, one Ikada, first attempted to purchase the land in his own name. When the seller questioned the legality of the transfer, it was arranged for title to be put in the name of Cockrill, Ikada's attorney. That was done, and immediately on execution of the contract of sale, Ikada himself entered into possession. There was some evidence that the land was purchased and was being held for Ikada's American-born children, but a jury found Ikada and Cockrill guilty of conspiracy to violate the Alien Land Law. In affirming, the California appellate court pointed out that no move had been made toward having a guardian appointed for the children. 62 Cal.App. 22, 45, 216 P. 78, 88. Before this Court Ikada and Cockrill argued that the statutory presumption denied equal protection to the Japanese, not to the donee as in the present case. Since we do not reach petitioners' second argument, that it is unconstitutional for a state to forbid the ownership of land by an ineligible alien, we do not think it appropriate to reexamine either the cases cited in note 12, supra, or the necessary implication in the Cockrill case that the basic prohibition of the Alien Land Law is valid. 28 See note 13 supra. 1 Section 10a of the Alien Property Initiative Act provides: 'Any person who violates any of the provisions of this act shall be punishable by imprisonment in the county jail not to exceed one year or in the State penitentiary not exceeding 10 years, or by a fine not to exceed five thousand dollars ($5,000) or both.' Section 2 of the Act provides that aliens ineligible for citizenship 'may acquire, possess, enjoy, use, cultivate, occupy and transfer real property, or any interest therein' in California only to the extent allowed by treaty between the United States and the nation of which the alien is a citizen. 2 The United States-Japanese Treaty of 1911, which guaranteed Japanese in this country the right to own and lease land 'for residential and commercial purposes,' 37 Stat. 1504, was abrogated effective January 26, 1940. Dept. of State Bull., July 29, 1939, p. 81. Since the abrogation of this treaty, it is doubtful whether Japanese aliens in California may own or rent a home or a business. We are told that a recent intermediate court decision upholding the right of Japanese aliens to rent a building for business purposes, Palermo v. Stockton Theatres, Cal.App., 1946, 172 P.2d 103, has been appealed to the Supreme Court of California. 3 Terrace v. Thompson, 263 U.S. 197, 44 S.Ct. 15, 68 L.Ed. 255; Porterfield v. Webb, 263 U.S. 225, 44 S.Ct. 21, 68 L.Ed. 278; Webb v. O'Brien, 263 U.S. 313, 44 S.Ct. 112, 68 L.Ed. 318; Frick v. Webb, 263 U.S. 326, 44 S.Ct. 115, 68 L.Ed. 323. 4 United Nations Charter, Articles 55c and 56, 59 Stat. 1046 (1945). 1 The story is a familiar one and has been told many times. See the following sources: Treatises.—Millis, The Japanese Problem in the United States (1915); Ichihashi, Japanese in the United States (1932); Strong, The Second Generation Japanese Problem (1934); McWilliams, Prejudice (1944); Konvitz, The Alien and the Asiatic in American Law (1946), ch. 5. Articles.—Buell, 'The Development of Anti-Japanese Agitation in the United States,' 37 Pol.Sci.Q. 605, 38 id. 57; Bailey, 'California, Japan, and the Alien Land Legislation of 1913,' 1 Pac.Hist.Rev. 36; McGovney, 'The Anti-Japanese Land Laws of California and Ten Other States,' 35 Calif.L.Rev. 7; Ferguson, 'The California Alien Land Law and the Fourteenth Amendment,' 35 Calif.L.Rev. 61; Comment, 56 Yale L.J. 1017. Government Publications.—H.R. Rep. No. 2124, 77th Cong., 2d Sess.; U.S. Dept. of Interior, W.R.A., People in Motion: The Postwar Adjustment of the Evacuated Japanese Americans (1947). 2 'In November of 1904 the American Federation of Labor, in annual convention in San Francisco, resolved to exclude Japanese and Korean, as well as Chinese laborers. The San Francisco Chronicle in February 1905 began the publication of a series of articles captioned: 'Crime and Poverty Go Hand in Hand with Asiatic Labor,' 'Brown Men an Evil in the Public Schools,' 'Japanese a Menace to American Women,' 'Japs Throttle Progress in the Rich Fruit Section.' The campaign was immediately effective. In early Marh the California Legislature, followed by the Nevada Legislature, passed a resolution demanding immediate action to limit the immigration of Japanese laborers. And in May 1905 the Asiatic Exclusion League, originally the Japanese and Korean Exclusion League, was organized in San Francisco * * *. 'The avowed purpose of the league was to preserve North America for Americans, by preventing or minimizing the immigration of Asiatics, who were said to be unassimilable, and ill-suited to complement the machine processes of American industrial life. The league declared itself in favor of segregation of Japanese in the schools and a boycott against Japanese workers and businessmen. In California alone, it was claimed that membership of the league was 110,000 in February of 1908. Of the 238 affiliated bodies composing the league, 202 were labor unions; the rest were fraternal, civic, benevolent, political, and military societies.' H.R. Rep. No. 2124, 77th Cong., 2d Sess., pp. 72, 73. 3 See Ichihashi, Japanese in the United States (1932), ch. XVI. 4 During the legislative debate on this bill, one of the assemblymen stated: 'I would rather every foot of California was in its native wilderness than to be cursed by the foot of these yellow invaders, who are a curse to the country, a menace to our institutions, and destructive of every principle of Americanism. I want no aliens, white, red, black or yellow, to own a foot of land in the State of California.' Another assemblyman said that he intensely and unalterably hated the Japanese, whom he characterized as 'a bandy-legged bagaboo, miserable craven Simian, degenerated rotten little devil.' From the San Francisco Chronicle, February 3, 1909, quoted in Ichihashi, Japanese in the United States (1932), p. 262. 5 Also opposing the bill at this time was the Panama Pacific Exposition Company and its supporters. They desired not to antagonize Japan and thus jeopardize the chances of Japan's participation in the exposition, which was soon to be held at San Francisco. 6 'By 1913 the political situation was ripe for the passage of an anti-Japanese land law. The state administration in California remained Progressive Republican while the national administration became Democratic and exercised less influence over the state legislature. The Exposition had progressed to the point where the appeal from its success was no longer sufficiently effective. Opposition to the bill came only from a few relatively ineffective groups.' Ferguson, 'The California Alien Land Law and the Fourteenth Amendment,' 35 Calif.L.Rev. 61, 66. 7 'The land act could not have been passed at a more inopportune time. Shortly prior to its adoption, this country had aroused considerable resentment in Japan by its recognition of the newly established Chinese Republic * * *. Furthermore the land act was passed, as Mr. A. M. Pooley has pointed out, 'shortly after the Tokio mob had succeeded in shattering the third Katsura Ministry.' Passage of the bill occasioned violent resentment in Japan. 'Revelling in the recent discovery of its power,' writes Mr. Pooley, 'the mob, inflamed by the opposition, endeavored to use the same methods to force a settlement of the California question on the government' that it had used in ousting the Katsura Ministry. Throughout April and May, 1913, the Japanese press adopted a most threatening and truculent tone. California newspapers on April 18, 1913, carried a dispatch from Tokyo to the effect that 'a demand that Japan resort to arms was hysterically cheered at a mass meeting here tonight to protest against the alien land bill now pending before the California legislature. Twenty thousand persons assembled.' "More unfortunate still,' observed Mr. Pooley, 'the wave of excitement grew under the stimulus of anti-American societies formed by men in responsible positions. The agitation of April and May, 1913, e came a national movement and of such volume that the Government had to pay respect to it. The anti-American movement spread, associations sprang up like mushrooms to deal with the matter." McWilliams, Prejudice (1944), p. 46. 8 Quoted in Ichihashi, Japanese in the United States (1932), p. 274. 9 Report of California State Board of Control, California and the Oriental (1920), p. 11. 10 From a speech before the Commonwealth Club of San Francisco on August 9, 1913, quoted in Ichihashi, Japanese in the United States (1932), p. 275. Apparently one factor which, in Mr. Webb's mind, made the Japanese an 'undesirable' race was their efficiency in agricultural production. In a brief signed by him and submitted to this Court in Porterfield v. Webb, 1923, 263 U.S. 225, 44 S.Ct. 21, 68 L.Ed. 278, p. 25, he stated: 'The fundamental question is not one of race discrimination. It is a question of recognizing the obvious fact that the American farm, with its historical associations of cultivation, environment, and including the home life of its occupants, can not exist in competition with a farm developed by Orientals with their totally different standards and ideas of cultivation of the soil, of living and social conditions. 'If the Oriental farmer is the more efficient, from the standpoint of soil production, there is just that much greater certainty of an economic conflict which it is the duty of statesmen to avoid. 'The conservative and intelligent statesmen of Japan have recognized this truth just as fully as have those of America. It is far better to have an occasional outburst from extremists who refuse to recognize the underlying reason for such legisation, than to permit of a condition that would lead to results far more serious from the standpoint of the friendly relations of the two nations.' 11 'In point of virulence, the 1920 agitation far exceeded any similar demonstration in California. In support of the initiative measures, the American Legion exhibited a motion picture throughout the state entitled 'Shadows of the West.' All the charges ever made against the Japanese were enacted in this film. The film showed a mysterious room fitted with wireless apparatus by which 'a head Japanese ticked out prices which controlled a state-wide vegetable market'; spies darted in and out of the scenes, Japanese were shown dumping vegetables into the harbor to maintain high prices; two white girls were abducted by a group of Japanese men only to be rescued, at the last moment, by a squad of American Legionnaires. When meetings were called to protest the exhibition of this securrilous film, the meetings were broken up.' McWilliams, Prejudice (1944), p. 60. 12 From the pamphlet, 'Argument in Favor of Proposed Alien Land Law,' quoted in McGovney, 'The Anti-Japanese Land Laws of California and Ten Other States,' 35 Calif.L.Rev. 7, 14. 13 See 8 U.S.C. § 703, as last amended on July 2, 1946, 60 Stat. 416, 8 U.S.C.A. § 703. This extends the right to become a naturalized citizen only to white persons, persons of African nativity or descent, persons who are descendants of races indigenous to the continents of North or South America or adjacent islands, Filipino persons, Chinese persons and persons of Chinese descent, and persons of races indigenous to India. But Chinese and Hindus were not eligible at the time the Alien Land Law was under consideration. 14 'The people of that state (California) did not object particularly to Chinese and Negroes, who were racially different, but who stayed in their place. But they did object to the Japanese because they were efficient, thrifty, ambitious, and, above all, unwilling to remain 'mudsillers." Bailey, 'California, Japan, and the Alien Land Legislation of 1913,' 1 Pac.Hist.Rev. 36, 57. 15 The California State Board of Control collected statistics in 1920 as to city lots and farm lands occupied by Orientals, both American citizens and aliens. Of the total of 27,931,444 acres of farm land in the state, Japanese owned 74,769 acres, Chinese owned 12,076 acres and Hindus owned 2,099 acres. At the same time, Japanese held under lease or crop contract 383,287 acres, Chinese held 65,181 acres and Hindus held 86,340. There was no indication that any other aliens then ineligible for citizenship held any substantial amount of farm lands. Report, California and the Oriental (1920), p. 47. 16 These statistics have been compiled by the petitioner (Appendix B of brief in this Court) from the biennial reports of the California Attorney General's Office from 1912—14 through 1944 46, as supplemented by the state's brief in this case (p. 47). 17 In 1944 the Attorney General of California explained thatt he substantial non-enforcement of the law prior to World War II was 'a reflection of the National policy to refrain from acts which might be regarded as unfriendly to the Japanese race and the Japanese empire.' Proceedings, California Land Title Association (38th Ann.Conf.1944), p. 97. Such was also the reason given by a California Senate Fact Finding Committee on Japanese Resettlement (Report of May 1, 1945), p. 3: 'The Federal authorities since the beginning have not looked with favor upon the enforcement of the law just as they opposed its enactment in the beginning. The principal reason for this attitude seems to have been that expressed by William Jennings Bryan when, as Secretary of State, he came to California in opposition to the enactment of the law. He stated that the enactment of the law might turn a now friendly Nation into an unfriendly Nation. Undoubtedly, the attitude of the Federal authorities on this matter has been an important influence.' 18 See Gordon, 'The Racial Barrier to American Citizenship,' 93 U. of Pa.L.Rev. 237. 19 See Arrowsmith v. Voorhies, D.C., 55 F.2d 310, holding invalid a Michigan statute which prohibited 'undesirable aliens,' as defined by the laws of the United States, from establishing or maintaining legal residence in that state or from securing employment in that state. See also Hines v. Davidowitz, 312 U.S. 52, 61 S.Ct. 399, 85 L.Ed. 581. 20 Of the 48,158 aliens ineligible o r naturalization, 48,305 were Japanese, 749 were Korean, 9 were Polynesian, and 95 belonged to other Asiatic groups. 16th Census of the United States: 1940, Characteristics of the Nonwhite Population, p. 2. 21 There was no indication of any sabotage or other subversive activities in the period surrounding Pearl Harbor on the part of Japanese aliens along resident in this country. 22 Thus see the recent amendment to the Naturalization Act, 56 Stat. 182, 8 U.S.C. § 1001, 8 U.S.C.A. § 1001, permitting the naturalization of every person who honorably served in the armed forces of the United States during World War II without regard to what would otherwise be racial ineligibility. Presumably a Japanese alien could own or use farm land in California if he meets the requirements of this provision. 23 The statistics which follow are taken from the 16th Census of the United States: 1940, Characteristics of the Nonwhite Population. See also McGovney, 'The Anti-Japanese Land Laws of California and Ten Other States,' 35 Calif.L.Rev. 7, 15, 16. 24 McGovney 'The Anti-Japanese Land Laws of California and Ten Other States,' 35 Calif.L.Rev. 7, 14. 25 43 Stat. 161, 8 U.S.C. § 213(c), 8 U.S.C.A. § 213(c). 26 McGovney, 'The Anti-Japanese Land Laws of California and Ten Other States,' 35 Calif.L.Rev. 7, 16, 17. 27 McWilliams, Prejudice (1944), pp. 79, 80. 28 H.R.Rep.No.2124, 77th Cong., 2d Sess., pp. 117, 118. In 1941 the Japanese produced 90% or more of California's snap beans for marketing, spring and summer celery, peppers and strawberries; 50% to 90% of the artichokes, snap beans for canning, cauliflower, fall and winter celery, cucumbers, fall peas, spinach and tomatoes; 25% to 50% of the asparagus, cabbage, cantaloupes, carrots, lettuce, onions, and watermelons. 29 Id., p. 118. 30 See McWilliams, Prejudice (1944), ch. III. 31 Terrace v. Thompson, 263 U.S. 197, 44 S.Ct. 15, 68 L.Ed. 255; Porterfield v. Webb, 263 U.S. 225, 44 S.Ct. 21, 68 L.Ed. 278; Webb v. O'Brien, 263 U.S. 313, 44 S.Ct. 112, 68 L.Ed. 318; Frick v. Webb, 263 U.S. 326, 44 S.Ct. 115, 68 L.Ed. 323. 32 On November 5, 1946, the voters of California rejected by 1,143,780 to 797,067 an attempt to 'close loopholes in legislative enactments (the Alien Land Laws) based on constitutional grouns .' The rejected amendment validated various additions to the Alien Land Law which had been made by the legislature to prevent circumvention of that law. U.S. Dept. of Interior, W.R.A., People in Motion: The Postwar Adjustment of the Evacuated Japanese Americans (1947), pp. 41—45. 1 See footnote 12 of the majority opinion. 2 Sec. 1: 'All aliens eligible to citizenship under the laws of the United States may acquire, possess, enjoy, use, cultivate, occupy, transfer, transmit and inherit real property, or any interest therein, in this state, and have in whole or in part the beneficial use thereof, in the same manner and to the same extent as citizens of the United States, except as otherwise provided by the laws of this state.' Sec. 2: 'All aliens other than those mentioned in section one of this act may acquire, possess, enjoy, use, cultivate, occupy and transfer real property, or any interest therein, in this state, and have in whole or in part the beneficial use thereof, in the manner and to the extent, and for the purposes prescribed by any treaty now existing between the government of the United States and the nation or country of which such alien is a citizen or subject, and not otherwise.' Sec. 7: 'Any real property hereafter acquired in fee in violation of the provisions of this act by any alien mentioned in Section 2 of this act, or by any company, association or corporation mentioned in Section 3 of this act, shall escheat as of the date of such acquiring, to, and become and remain the property of the State of California. * * *' 3 Sec. 9: 'Every transfer of real property, or of an interest therein, though colorable in form, shall be void as to the State and the interest thereby conveyed or sought to be conveyed shall escheat to the State as of the date of such transfer, if the property interest involved is of suc a character that an alien mentioned in Section 2 hereof is inhibited from acquiring, possessing, enjoying, using, cultivating, occupying, transferring, transmitting or inheriting it, and if the conveyance is made with intent to prevent, evade or avoid escheat as provided for herein. 'A prima facie presumption that the conveyance is made with such intent shall arise upon proof of any of the following group of facts: '(a) The taking of the property in the name of a person other than the persons mentioned in Section 2 hereof if the consideration is paid or agreed or understood to be paid by an alien mentioned in Section 2 hereof; '(b) The taking of the property in the name of a company, association or corporation if the memberships or shares of stock therein held by aliens mentioned in Section 2 hereof, together with the memberships or shares of stock held by others but paid for or agreed or understood to be paid for by such aliens, would amount to a majority of the membership or issued capital stock of such company, association or corporation; '(c) The execution of a mortgage in favor of an alien mentioned in Section 2 hereof if such mortgagee is given possession, control or management of the property. 'In each of the foregoing instances the burden of proof shall be upon the defendant to show that the conveyance was not made with intent to prevent, evade or avoid escheat. 'The enumeration in this section of certain presumptions shall not be so construed as to preclude other presumptions or inferences that reasonably may be made as to the existence of intent to prevent, evade or avoid escheat as provided for herein.' Presumption (a) has not been challenged on due process grounds. Such an attack would be futile as there is a 'rational connection between the fact(s), proved and the ultimate fact presumed.' Tot v. United States, 319 U.S. 463, 467, 63 S.Ct. 1241, 1245, 87 L.Ed. 1519. In Cockrill v. California, 268 U.S. 258, 45 S.Ct. 490, 69 L.Ed. 944, this Court held that presumption (a) did not violate due process. 4 People v. Fujita, 215 Cal. 166, 170, 171, 8 P.2d 1011, 1012; see Takeuchi v. Schmuck, 206 Cal. 782, 276 P. 345. Indeed, a holding that this presumption was conclusive might open it to a serious attack based upon due process grounds. See Heiner v. Donnan, 285 U.S. 312, 52 S.Ct. 358, 76 L.Ed. 772. 5 People v. Fujita, 215 Cal. 166, 8 P.2d 1011; see Estate of Yano, 188 Cal. 645, 206 P. 995. 6 Mobile, J. & K.C.R. Co. v. Turnipseed, 219 U.S. 35, 42, 43, 31 S.Ct. 136, 137, 55 L.Ed. 78, 32 L.R.A.,N.S., 226, Ann.Cas.1912A, 463: 'Legislation providing that proof of one fact shall constitute prima facie evidence of the main fact in issue is but to enact a rule of evidence, and quite within the general power of government. Statutes, national and state, dealing with such methods of proof in both civil and criminal cases, abound, and the decisions upholding the are numerous. * * * 'That a legislative presumption of one fact from evidence of another may not constitute a denial of due process of law or a denial of the equal protection of the law, it is only essential that there shall be some rational connection between the fact proved and the ultimate fact presumed, and that the inference of one fact from proof of another shall not be so unreasonable as to be a purely arbitrary mandate. So, also, it must not, under guise of regulating the presentation of evidence, operate to preclude the party from the right to present his defense to the main fact thus presumed.' Seaboard Air Line R. Co. v. Watson, 287 U.S. 86, 90, 53 S.Ct. 32, 34, 77 L.Ed. 180, 86 A.L.R. 174; Bandini Petroleum Co. v. Superior Court, 284 U.S. 8, 18, 19, 53 S.Ct. 103, 107, 76 L.Ed. 136, 78 A.L.R. 826; United States ex rel. St. Louis S.R. Co. v. I.C.C., 264 U.S. 64, 77, 44 S.Ct. 294, 295, 68 L.Ed. 565. 7 Bailey v. Blackmon, 4 Cir., 3 F.2d 252, 253, affirmed on rehearing, 4 Cir., 14 F.2d 16; Hedrick v. Hockfield, D.C., 283 F. 574, 576, 577; Ryan v. Wohl, South & Co., 241 Ala. 123, 124, 125, 1 So.2d 292; Judson v. Lyford, 84 Cal. 505, 509, 24 P. 286; Swartz v. Hazlett, 8 Cal. 118, 128; Chrisman v. Greer, 239 Ky. 378, 380, 39 S.W.2d 678; Pruyn v. Young, 51 La.Ann. 320, 322, 25 So. 125; Lusk v. Riggs, 65 Neb. 258, 261, 91 N.W. 243; Grambling, Spalding & Co. v. Dickey, 118 N.C. 986, 988, 24 S.E. 671; Willamette Grocery Co. v. Skiff, 118 Or. 685, 689, 248 P. 143. This analogy is exact because in most jurisdictions the fact of a blood relationship alone raises no presumption of fraud. Gottlieb v. Thatcher, 151 U.S. 271, 279, 14 S.Ct. 319, 322, 38 L.Ed. 157; Gray v. Galpin, 98 Cal. 633, 635, 33 P. 725. See cases collected in 27 C.J. 827, note 99; 37 C.J.S., Fraudulent Conveyances, § 251, note 9. 8 Lindsley v. Natural Carbonic Gas Co., 220 U.S. 61, 78, 79, 31 S.Ct. 337, 340, 55 L.Ed. 369, Ann.Cas.1912C, 160: 'The rules by which this contention mustb e tested, as is shown by repeated decisions of this court, are these: 1. The equal-protection clause of the 14th Amendment does not take from the state the power to classify in the adoption of police laws, but admits of the exercise of a wide scope of discretion in that regard, and avoids what is done only when it is without any reasonable basis, and therefore is purely arbitrary. 2. A classification having some reasonable basis does not offend against that clause merely because it is not made with mathematical nicety, or because in practice it results in some inequality. 3. When the classification in such a law is called in question, if any state of facts reasonably can be conceived that would sustain it, the existence of that state of facts at the time the law was enacted must be assumed. 4. One who assails the classification in such a law must carry the burden of showing that it does not rest upon any reasonable basis, but is essentially arbitrary.' Finley v. California, 222 U.S. 28, 32 S.Ct. 13, 56 L.Ed. 75.
12
332 U.S. 708 68 S.Ct. 316 92 L.Ed. 309 VON MOLTKEv.GILLIES. No. 73. Argued Nov. 20, 1947. Decided Jan. 19, 1948. Mr. G. Leslie Field, of Detroit, Mich., for petitioner. Mr. Frederick Bernays Wiener, of Providence, R.I., for respondent. Mr. Justice BLACK announced the judgment of the Court and an opinion in which Mr. Justice DOUGLAS, Mr. Justice MURPHY, and Mr. Justice RUTLEDGE concurred. 1 The petitioner was indicted for conspiracy to violate the Espionage Act of 1917.1 The specific charge was that, in order to injure the United States and to aid the German Reich, she and twenty-three others had conspired during the second World War to collect and deliver vital military information to German agents. 2 With no money to hire a lawyer and without the benefit of counsel the petitioner appeared before a federal district judge, told him that the indictment had been explained to her, signed a paper stating that she waived the 'right to be represented by counsel at the trial of this cause,' and then pleaded guilty. Under her plea she could have been sentenced to death or to imprisonment for not more than thirty years. After thirteen months in jail following her plea, the court sentenced her to four years in prison. 3 In this habeas corpus proceeding she charged that the sentence, resting as it did solely on her plea of guilty, was invalid for two reasons: First, she alleged that the plea was entered by reason of the coercion, intimidation, and deception of federal officers in violation of the due process clause of the Fifth Amendment. Second,s he alleged that she neither understandingly waived the benefit of the advice of counsel nor was provided with the assistance of counsel as required by the Sixth Amendment. As the Government concedes, these charges entitle the petitioner to have the issues heard and determined in a habeas corpus proceeding, and, if true, invalidate the plea and sentence.2 The District Court heard evidence offered by both the petitioner and the Government, and then found that she had failed to prove either contention. 72 F.Supp. 994. The Sixth Circuit Court of Appeals affirmed with one judge dissenting. 161 F.2d 113. 4 On the basis of what he designated as 'the undisputed evidence,' the dissenting judge concluded that petitioner had pleaded guilty because of her reliance upon the legal advice of a Federal Bureau of Investigation (FBI) lawyer-agent, which advice 'was though honestly given, false.' Neither the District Court nor the majority of the Circuit Court of Appeals controverted this conclusion of the dissenting judge. A challenge to a plea of guilty made by an indigent defendant, for whom no lawyer has been provided, on the ground that the plea was entered in reliance upon advice given by a government lawyer-agent, raises serious constitutional questions. Under these circumstances we granted certiorari in this case. 331 U.S. 800, 67 S.Ct. 1517. 5 It thus becomes apparent that determination of the questions presented depends upon what the evidence showed. There was conflicting testimony on many points in this case. We do not attempt to resolve these conflicts. Our conclusion is reached from the following facts shown by the testimony of government agents or by undisputed evidence offered by petitioner. 6 The petitioner was born in Germany. In that country she bore the title of countess. She and her husband came to the United States in December, 1926. Since 1930 they have lived in Detroit where the petitioner has been a housewife and her husband an instructor in German at Wayne University. Her husband is a naturalized citizen of the United States; her own naturalization papers have been pending for some time. They have four children, three of whom were born in this country as American citizens. 7 August 24, 1943, between 6 and 7 a.m., six FBI agents came to their home. The petitioner was in bed. She was informed that she must get up and go with them. The home was searched with her husband's permission. She was taken to the local office of the FBI, fingerprinted, photographed, and examined by a physician. From there she was taken to the Immigration Detention Home, placed in solitary confinement, and, with one exception noted below, not permitted to see or communicate with anyone outside for the next four days. Two FBI agents persistently but courteously examined her every day from about 10 a.m. until about 9 p.m. She knew nothing about her arrest and detention except that she was being held indefinitely on a presidential warrant 'as a dangerous enemy alien.' She was informed 'that the FBI is an investigating agency, and not a prosecuting, and as an enemy alien I (she) was not allowed to see an attorney.' During this first period of questioning, the only relaxation of petitioner's incommunicado status was a single permission to relay instructions through an FBI agent to her husband who was told how to look after their nine-year-old disbetic child. The child, for whom the mother had specially cared since his infancy, required a strict diet and injections twice daily. 8 September 1, eight days after her early morning arrest, petitioner was taken before an Enemy Alien Hearing Board. She was not then informed of any specific charges against her, but she was told that she could no be 'represented by a legal attorney' at the hearing. The results of this hearing were not make known to her. At its conclusion she was returned to the detention home. 9 September 18 the petitioner was handed the indictment against her. In our printed record this document covers a little more than fourteen pages. It charges generally, in the language of the statute, that the twenty-four defendants conspired to violate the statute. It also enumerates forty-seven overt acts alleged to have been performed in pursuance of the objects of the conspiracy, five of which acts specifically refer to the petitioner. Four out of the five merely allege that the petitioner 'met and conferred with' one or more of the other defendants; the fifth alleges that she 'introduced' someone to one of the defendants. 10 September 21, almost a month after her arrest, the petitioner and a co-defendant, Mrs. Leonhardt, were taken to the courthouse for arraignment. Upon being told that the two defendants had no attorney and no means to obtain one, the judge said he would appoint counsel right away and would not arraign them until they had seen an attorney. They were then led 'to the bull pen to wait for the attorney.' Before any attorney arrived they were taken back into the courtroom. Court was in session. As explained by petitioner and corroborated by others, 'Judge Moinet was on the bench, and there seemed to be a trial going on because Judge Moinet appointed a lawyer in the courtroom. He said 'Come here, 'so and so,' and help these two women out,' and the young lawyer objected to that; he sad he didn't want to have anything to do with that. But then he consented just for the arraignment, to help out, and he came over to us—we were sitting on the side bench, and he asked me, 'How do you want to plead?' I said, 'Not guilty.' And he asked Mrs. Leonhardt and she said the same thing. So he told us that, he whispered to us, in fact, he went over it, whispered that it would not be advisable, but I do not know even now why, but he suggested it would be proper to stand mute.' In this two to five minute whispered conversation (the lawyer said 'a couple of minutes') the lawyer asked both defendants if they 'understood what this was all about.' They indicated that they did. He did not even see the indictment, did not inform the petitioner as to the nature of the charge against her or as to her possible defenses, and did not inquire if she knew the punishment that could be imposed for her alleged offense. The case on trial was then interrupted, the charge was made against the defendants, who stood mute, and a plea of not guilty was entered. With reference to their future representation by an attorney, the petitioner's uncontradicted testimony was that the judge 'said he would appoint an attorney right away, and I understood that the gentleman was to be expected to come right away.' 11 The two women, unable to get out on bond, were then immediately taken from the courthouse to the Wayne County jail. The matron there informed the petitioner that she had strict orders to hold the petitioner and Mrs. Leonhardt 'incommunicado.' Notwithstanding this order, however, the FBI agents continued to visit and talk with both of them and a third defendant, Mrs. Behrens, every day except Sunday. During this period all three of them were allowed to read and discuss among themselves the unfavorable newspaper reports which their arrest and indictment had occasioned. They talked also with the FBI agents about this adverse publicity and about how they should plead to the charges. 12 September 25, one month and one day after Mrs. von Moltke's arrest, two lawyers came to the jail to see her. They had been sent by her husband. One of them appears to have taken the husband's language course at Wayne University. These lawyers' message was the first communication she had been permitted to receive from her husband since her removal to the county jail. She had been so well shut off from the outside world that she thog ht he did not even know where she was then confined. These lawyers informed her that, although they had come at her husband's request, they would not represent her as counsel. Fourthermore, they warned her that they would not even hold what she said in confidence, and that they would feel free to disclose anything she told them to the Government. Only one of the lawyers appeared at the trial. He testified that the petitioner was concerned during their visit for her children and her husband, whom the university had removed from his $4,000 position the day after her arrest. She particularly inquired whether it would help her husband to get his university position back if she pleaded guilty, but received no counsel on the subject one way or another. In fact, the lawyers emphasized a number of times that they could not and would not advise her what she should do. Although they gave her a form of cross-examination regarding the charges against her in the indictment, they did not attempt to explain to her the implications of these charges, or to advise her as to any possible defenses to them, or to inform her of the permissible punishments under the indictment. 13 September 28, three days after the lawyers' visit, the petitioner and Mrs. Leonhardt were taken by FBI agents to the marshal's office where they talked with the assistant district attorney about what plea they should enter. Mrs. Leonhardt announced there that she would plead guilty, which plea she later entered, but the petitioner first asked for the opportunity of discussing the matter with her husband. He came to the marshal's office, was allowed to talk with his wife in the 'bull pen,' and advised her not to do anything before she saw a lawyer. She then declined to plead guilty and was taken back to jail. 14 October 7, nine days later, she did plead guilty without having talked to any lawyer in the meantime except the FBI agent-attorneys, although she had seen her husband several more times. A few days before the 7th, Mrs. Behrens had entered a plea of guilty, and rumors reached the petitioner that other defendants named in the indictment would also plead guilty. During the interval between the 28th of September and petitioner's plea of guilty on the 7th of October, the FBI men had talked to her daily. She had particularly asked them whether under United States law she would have the right to a trial if all her co-defendants pleaded guilty. The agent's reply, as he remembered it, was 'that the question of trial would be up to the United States attorney's office.' She also repeatedly plied the agents with questions as to what plea she should enter in order to reduce as much as possible the injurious publicity of the affair, and what would be the least harmful course to make it possible for her husband to recover his old position. She was also vitally interested in whether she would be deported, and whether, if she did plead guilty, her sentence could be served close to her family. All of these subjects the agents talked over with her in their daily conversations and one of them offered to, and did, discuss them with the assistant district attorney on her behalf. Following this discussion, the agent brought back word to the petitioner that the assistant district attorney could not control deportation, publicity, or the place of her imprisonment, but that if she pleaded guilty he would write a letter to the controlling authorities and recommend that she be imprisoned close to her family. 15 About this time one of the lawyer-agents of the FBI discussed the petitioner's legal problems with her at great length. According to his testimony he did his best to explain the implications of the indictment. She told this agent-attorney about a statement she had heard while in jail that unless she pleaded guilty her husband would be involved, and she asked the agent if this were true. He replied that he could not answer this question. She also asked one of the lawyer-agents whether mere association with peope guilty of a crime—such association as that with which she was charged in the five overt acts—was sufficient in itself to bring about her conviction under the indictment. This agent, according to the petitioner, then explained the indictment to her by the use of a 'Rum Runners' plot as an example. She testified that he said: 'That if there is a group of people in a 'Rum' plan who violate the law, and another person is there and the person doesn't know the people who are planning the violation and doesn't know what is going on, but still it seemed after two years this plan is carried out, in the law the man who was present becomes * * * the person nevertheless is guilty of conspiracy * * *.' The FBI agent did not deny that he had given her the rum runner illustration. In fact, the agent said that it was quite possible that the conversation had occurred.3 16 During the ten days prior to her plea of guilty, petitioner had many conversations with FBI agents about how she should plead to the indictment. In resolving her doubts she had no legal counsel upon whom to rely except the government lawyer-agents, since neither she nor her husband could afford a lawyer, and the counsel promised by Judge Moinet never appeared. Her chief concern in trying to decide whether to plead guilty was not the indictment, or possible imprisonment; as was testified by government agents, 'She was concerned about her husband and his job,' and 'she was hoping to do whatever would be best for her husband and her child.' That her troubled state of mind was recognized by the prosecuting attorney is shown by these leading questions he asked her on cross-examination: 17 'Q. Now, isn't it true that up until the time you plead (sic) guilty you repeatedly asked the agents for advice as to whether you should plead guilty or not? Isn't that true? A. There was nobody else I could ask. 18 'Q. Well, just say yes or no. A. Yes.' 19 October 7, having reached a temporary decision, she went with two of the agents to the assistant district attorney and told him that she wanted to plead guilty. Since Judge Moinet was not available, she was taken before another judge who was unfamiliar with the case. At first he would not accept the plea of guilty because she then had no lawyer, and the record before him indicated that she had previously pleaded not guilty under the advice of counsel. But in response to the judge's questions, she said that she understood the indictment and was voluntarily entering a plea of guilty. The judge then permitted petitioner to sign a written waiver of counsel. The whole matter appears to have been disposed of by routine questioning within five minutes during an interlude in another trial. If any explanation of the implications of the indictment or of the consequences of her plea was then mentioned by the judge, or by anyone in his presence, the record does not show it. Nor is there anything to indicate she was informed that a sentence of death could be imposed under the charges. The judge appears not to have asked petitioner whether she was able to hire a lawyer, why she did not want one, or who had given her advice in connection with her plea. Apparently he was not informed that the petitioner's only legal counsel had come from FBI agents. 20 Petitioner continued thereafter to worry about whether she had acted wisely in changing her plea to guilty. On learning in January, 1944, from and FBI agent that she could request permission to withdraw the plea, she sent messages to the district attorney, seeking such permission. Some months later Judge Moinet appointed counsel solely for the purpose of filing a motion for lev e to withdraw her plea. Counsel did file such a motion, but its dismissal as tardy4 was required by the Criminal Appeals Rules, even if the motion had been made when petitioner first learned of her rights. Had the motion to withdraw the plea of guilty not been tardy, the court would have been required to consider it in the light of what this Court declared in Kercheval v. United States, 274 U.S. 220, 223, 47 S.Ct. 582, 583, 71 L.Ed. 1009: 'A plea of guilty differs in purpose and effect from a mere admission or an extrajudicial confession; it is itself a conviction. * * * Out of just consideration for persons accused of crime, courts are careful that a plea of guilty shall not be accepted unless made voluntarily after proper advice and with full understanding of the consequences.'5 21 It is suggested that some adverse inference should be drawn against the petitioner because she failed to try to appeal from her conviction and sentence following the denial of her motion. In view of her counsel's appointment solely for 'the purpose of moving that she be allowed to withdraw her plea' of guilty, it is questionable whether he had authority to prosecute an appeal from her conviction and sentence. At least the appointed counsel did not take an appeal and he was the only lawyer petitioner had. Furthermore, the futility of an appeal based upon the trial court's refusal to permit the withdrawal of the plea was obvious, in view of her failure to meet the strict requirements of Rule II (4). It seems pretty plain that the petitioner has raise the question here in the only proper way—by habeas corpus proceedings. 22 We accept the government's contention that the petitioner is an intelligent, mentally acute woman. It is not now necessary to determine whether, as the Government argues, the District Court might reasonably have rejected much of petitioner's testimony. Nor need we pass upon the government's contention that the evidence might have supported a finding that the FBI lawyer-agent did not actually give her the erroneous advice that mere association with criminal conspirators was sufficient in and of itself to make a person guilty of criminal conspiracy. For, assuming the correctness of the two latter contentions, we are of the opinion that the undisputed testimony previously summarized shows that when petitioner pleaded guilty, she did not have that full understanding and comprehension of her legal rights indispensable to a valid waiver of the assistance of counsel. 23 First. The Sixth Amendment guarantees that an accused, unable to hire a lawyer, shall be provided with the assistance of counsel for his defense in all criminal prosecutions in the federal courts. Walker v. Johnston, 312 U.S. 275, 286, 61 S.Ct. 574, 579, 85 L.Ed. 830; see Foster v. People of State of Illinois, 332 U.S. 134, 136, 137, 67 S.Ct. 1716, 1717, 1718. This Court has been particularly solicitous to see that this right was carefully preserved where the accused was ignorant and uneducated, was kept under close surveillance, and was the object of widespread public hostility. Powell v. State of Alabama, 287 U.S. 45, 53 S.Ct. 55, 77 L.Ed. 158, 84 A.L.R. 527. The petitioner's case bristled with factors that made it all the more essential that, before accepting a waiver of her constitutional right to counsel, the court be satisfied that she fully comprehended her perilous position. We were waging total war with Germany. She had a German name. She was a German. She had been a German countess. The war atmosphere was saturated at that time with a suspicion and fear of Germans. The indictment charged that while this country was at war with Germany and Japan the petitioner had conspired with others to betray our military secrets to Germany. She had been kept in close confinement since her arrest. Many of her alleged co-conspirators had already pleaded guilty. If found guilty, she could have been, and many people might think should have been, legally put to death as punishment for violation of the Espionage Act. If not executed, she could have been imprisoned for thirty years or for such shorter period as the judge in his discretion might fix. Even when the trial court was about to impose sentence on this petitioner following her plea of guilty, a lawyer might have rendered her invaluable aid in calling to the court's attention any mitigating circumstances that might have inclined him to fix a lighter penalty for her. Anyone charged with espionage in wartime under the statute in question would have sorely needed a lawyer; Mrs. von Moltke in particular, desperately needed the best she could get. 24 Second. A waiver of the constitutional right to the assistance of counsel is of no less moment to an accused who must decide whether to plead guilty than to an accused who stands trial. See Williams v. Kaiser, 323 U.S. 471, 475, 65 S.Ct. 363, 366, 89 L.Ed. 398. Prior to trial an accused is entitled to rely upon his counsel to make an independent examination of the facts, circumstances, pleadings and laws involved and then to offer his informed opinion as to what plea should be entered. Determining whether an accused is guilty or innocent of the charges in a complex legal indictment is seldom a simple and easy task for a layman, even though acutely intelligent. Conspiracy charges frequently are of broad and confusing scope, and that is particularly true of conspiracies under the Espionage Act. See e.g., Gorin v. United States, 312 U.S. 19, 61 S.Ct. 429, 85 L.Ed. 488; United States v. Heine, 2 Cir., 151 F.2d 813. And especially misla ding to a layman are the overt act allegations of a conspiracy. Such charges are often, as in this indictment, mere statements of past associations or conferences with other persons, which activities apparently are entirely harmless standing alone. A layman reading the overt act charges of this indictment might reasonably think that one could be convicted under the indictment simply because he had, in perfect innocence, associated with some criminal at the time and place alleged. The undisputed evidence in this case that petitioner was concerned about many of these legal quesitions—such as the significance of the overt act charges, and her possibilities of defense should all her co-defendants plead guilty emphasizes her need for the aid of counsel at this stage. 25 Third. It is the solemn duty of a federal judge before whom a defendant appears without counsel to make a thorough inquiry and to take all steps necessary to insure the fullest protection of this constitutional right at every stage of the proceedings. Johnson v. Zerbst, 304 U.S. 458, 463, 58 S.Ct. 1019, 1022, 82 L.Ed. 1461, 146 A.L.R. 357; Hawk v. Olson, 326 U.S. 271, 278, 66 S.Ct. 116, 120, 90 L.Ed. 61. This duty cannot be discharged as though it were a mere procedural formality. In Powell v. State of Alabama, 287 U.S. 45, 53 S.Ct. 55, 77 L.Ed. 158, 84 A.L.R. 527, the trial court, instead of appointing counsel particularly charged with the specific duty of representing the defendants, appointed the entire local bar. This Court treated such a cavalier designation of counsel as a mere gesture, and declined to recognize it as a compliance with the constitutional mandate relied on in that case. It is in this light that we view the appointment of counsel for petitioner when she was arraigned. This lawyer, apparently reluctant to accept the case at all, agreed to represent her only when promised by the judge that it would take only two or three minutes to perform his duty. And it seems to have taken no longer. Even though we assume that this attorney did the very best he could under the circumstances, we cannot accept this designation of counsel by the trial court as anything more than token obedience to his constitutional required duty to appoint counsel for petitioner. Arraignment is too important a step in a criminal proceeding to give such wholly inadequate representation to one charged with a crime. The hollow compliance with the mandate of the Constitution at a stage so important as arraignment might be enough in itself to convince one like petitioner, who previously had never set foot in an American courtroom, that a waiver of this right to counsel was no great loss—just another legalistic formality. We are unable to agree with the government's argument that the momentary appointment of the lawyer for arraignment purposes supports the contention that the petitioner intelligently waived her right to counsel. In fact, that court episode points in the other direction, for the judge then told the petitioner that he would appoint another lawyer 'right away' for her—which he never did until long after she had pleaded guilty, too late to do her any good. 26 Fourth. We have said: 'The constitutional right of an accused to be represented by counsel invokes, of itself, the protection of a trial court, in which the accused—whose life or liberty is at stake—is without counsel. This protecting duty imposes the serious and weighty responsibility upon the trial judge of determining whether there is an intelligent and competent waiver by the accused.'6 To discharge this duty properly in light of the strong presumption against waiver of the constitutional right to counsel,7 a judge must investigate as long and as thoroughly as the circumstances of the case before him demand. The fact that an accused may tell him that he is informed of his right to counsel and desires to waive this right does not automatically end the judge's responsibility. To be valid such waiver must be made with an apprehensio of the nature of the charges, the statutory offenses included within them, the range of allowable punishments thereunder, possible defenses to the charges and circumstances in mitigation thereof, and all other facts essential to a broad understanding of the whole matter. A judge can make certain that an accused's professed waiver of counsel is understandingly and wisely made only from a penetrating and comprehensive examination of all the circumstances under which such a plea is tendered. 27 This case graphically illustrates that a mere routine inquiry the asking of several standard questions followed by the signing of a standard written waiver of counsel—may leave a judge entirely unaware of the facts essential to an informed decision that an accused has executed a valid waiver of his right to counsel. And this case shows that such routine inquiries may be inadequate although the Constitution 'does not require that under all circumstances counsel be forced upon a defendant.' Carter v. People of State of Illinois, 329 U.S. 173, 174, 175, 67 S.Ct. 216, 218. For the record demonstrates that the petitioner welcomed legal aid from all possible sources; there would have been no necessity for forcing counsel on her. 28 Twice the court did designate counsel for petitioner. The first occasion was upon her arraignment. Petitioner appears willingly to have cooperated with this appointed counsel for the two or three minutes he was called upon to act. The second occasion was when counsel was named for the sole purpose of moving to withdraw her plea of guilty. Notwithstanding her unfortunate first encounter with court-appointed counsel and despite the fact that counsel was not designated the second time until it was obviously months too late to submit this motion under the procedural rules, there is no complaint that the petitioner failed to cooperate with him. And the record is filled with evidence from many witnesses that the petitioner persistently sought legal advice from all of the very limited number of people she was permitted to see during the period of her close incarceration before her plea of guilty was entered. It is apparent from the record that when she did plead guilty the slightest deviation from the court's routine procedure would have revealed the petitioner's perplexity and doubt. For the testimony of all the witnesses points unerringly to the existence of the uncertainty which was obviously just below the surface of the petitioner's statements to the judge. 29 Fifth. The right to counsel guaranteed by the Constitution contemplates the services of an attorney devoted solely to the interests of his client. Glasser v. United States, 315 U.S. 60, 70, 62 S.Ct. 457, 465, 86 L.Ed. 680. Before pleading guilty this petitioner undoubtedly received advice and counsel about the indictment against her, the legal questions involved in a trial under it, and many other matters concerning her case. This counsel came solely from government representatives, some of whom were lawyers. The record shows that these representatives were uniformly courteous to her, although there is no indication that they ever deviated in the slightest from the course dictated by their loyalty to the Government as its agents. In the course of her association with these agents, she appears to have developed a great confidence in them. Some of their evidence indicates a like confidence in her.8 30 The Constitution does not contemplate that prisoners shall be dependent upon government agents for legal counsel and aid, however conscientious and able those agents may be. Undivided allegiance and faithful, devt ed service to a client are prized traditions of the American lawyer.9 It is this kind of service for which the Sixth Amendment makes provision. And nowhere is this service deemed more honorable than in case of appointment to represent an accused too poor to hire a lawyer, even though the accused may be a member of an unpopular or hated group, or may be charged with an offense which is peculiarly abhorrent. 31 The admitted circumstances here cannot support a holding that petitioner intelligently and understandingly waived her right to counsel. She was entitled to counsel other than that given her by Government agents. She is still entitled to that counsel before her life or her liberty can be taken from her. 32 What has been said represents the views of Mr. Justice BLACK, Mr. Justice DOUGLAS, Mr. Justice MURPHY, and Mr. Justice RUTLEDGE. They would therefore reverse the judgment of the Circuit Court of Appeals, set aside the prior judgment of the District Court and direct that court to grant the petitioner's prayer for release from further imprisonment under the judgment based on her plea of guilty. Mr. Justice FRANKFURTER and Mr. Justice JACKSON, for the reasons stated in a separate opinion, agree that the judgment of the Circuit Court of Appeals should be reversed, and that the District Court's prior judgment should be set aside, but they are of the opinion that, after setting aside its judgment, the District Court should further consider and make explicit findings on, the questions of fact discussed in the separate opinion. 33 The judgment of the Circuit Court of Appeals is reversed and that of the District Court is set aside. The cause is remanded to the District Court so that it may hold further hearings and give consideration to, and make explicit findings on, the questions of fact discussed in the separate opinion. If upon such further hearings and consideration the District Court finds that the petitioner did not competently, intelligently, and with full understanding of the implications, waive her constitutional right to counsel, an order should be entered directing that she be released from further custody under the judgment based on her plea. It is so ordered. 34 Reversed and cause remanded. 35 Separate opinion of Mr. Justice FRANKFURTER, in which Mr. Justice JACKSON joins. 36 The appropriate disposition of this case turns for me on the truth of petitioner's allegation that she was advised by an F.B.I. agent, active in the case, that one who merely associated, however innocently, with persons who were parties to a criminal conspiracy was equally guilty. 37 We are dealing, no doubt with a person of intellectual acuteness. But it would be very rare, indeed, even for an extremely inintelligent layman to have the understanding necessary to decide what course was best calculated to serve her interests when charged with participation in a conspiracy. The too easy abuses to which a charge of conspiracy may be put have occasioned weighty animadversion by the Conference of Senior Circuit Judges. Report of the Attorney General, 1925, pp. 5, 6; and see also the observations of Judge Leare d Hand in United States v. Falcone, 2 Cir., 109 F.2d 579, 581, affirmed in 311 U.S. 205, 61 S.Ct. 204, 85 L.Ed. 128. The subtleties of refined distinctions to which a charge of conspiracy may give rise are reflected in this Court's decisions. See, e.g., Kotteakos v. United States, 328 U.S. 750, 66 S.Ct. 1239, 90 L.Ed. 1557. Because of its complexity, the law of criminal conspiracy, as it has unfolded, is more difficult of comprehension by the laity than that which defines other types of crimes. Thus, as may have been true of petitioner, an accused might be found in the net of a conspiracy by reason of the relation of her acts to acts of others, the significance of which she may not have appreciated, and which may result from the application of criteria more delicate than those which determine guilt as to the usual substantial offenses. Accordingly, if an F.B.I. agent, acting as a member of the prosecution, gave her, however honestly, clearly erroneous legal advice1 which might well have induced her to believe that she was guilty under the law as expounded to her by one who for her represented the Government, a person in the petitioner's situation might well have thought a defense futile and the mercy of the court her best hope. Such might have been her conclusion, however innocent she may have deemed herself to be. I could not regard a plea of guilty made under such circumstances, made without either the advice of counsel exclusively representing her or after a searching inquiry by the court into the understanding that lay behind it, as having been made on the necessary basis of informed, self-determined choice. 38 Of course an accused 'in the exercise of a free and intelligent choice, and with the considered approval of the court * * * may * * * competently and intelligently waive' his right to the assistance of counsel guaranteed by the Sixth Amendment. Adams v. United States ex rel. McCann, 317 U.S. 269, 275, 63 S.Ct. 236, 240, 87 L.Ed. 268, 143 A.L.R. 435; and see Patton v. United States, 281 U.S. 276, 50 S.Ct. 253, 74 L.Ed. 854, 70 A.L.R. 263, and Johnson v. Zerbst, 304 U.S. 458, 58 S.Ct. 1019, 82 L.Ed. 1461, 146 A.L.R. 357. There must be both the capacity to make an understanding choice and an absence of subverting factors so that the choice is clearly free and responsible. If the choice is beclouded, whether by duress or by misleading advice, however honestly offered by a member of the prosecution, a plea of guilty accepted without more than what this record discloses can hardly be called a refusal to put the inner feeling of innocence to the fair test of the law with intelligent awareness of consequences. Therefore, if the F.B.I. agent had admitted that the petitioner accurately stated his advice to her, or if the District Court upon a conflict of testimony had found that memory or truth lay with the petitioner, I could not escape the conclusion that the circumstances under which the petitioner's plea of guilty was accepted did not measure up to the safeguards heretofore enunciated by this Court for accepting a plea of guilty, especially where a sentence of death was at hazard. 39 On the record as we have it, however, I cannot tell whether the advice which, if given, would have colored the plea of guilty was actually given. If the unrevealing words of the cold record spoke to me with the clarity which they convey to four of my brethren, I should agree that the petitioner must be discharged. Conversely, if the District Court's opinion conveyd to me the findings which it radiates to my other brethren, I too would conclude that the judgment should be affirmed. 40 Unfortunately, the record does not give me a firm basis for judgment regarding the crucial issue of the F.B.I. agent's advice to the petitioner. It is not disputed that the agent, who was also a lawyer, did talk with her and did discuss legal issues with her. But he neither admitted nor denied whether, in the course of his discussions with her, he expounded the law so as hardly to leave her escape, however innocent under correct view of the law she may have been. He did not even suggest that even though he did not remember, he was confident that he could not have given her the kind of misleading legal information she attributed to him. On the contrary, he added that 'it is quite possible that Mrs. von Moltke's memory is better than mine.'2 From the dead page, in connection with the rest of the agent's testimony, this suggests a scrupulous witness. But I cannot now recreate his tone of voice or the gloss that personality puts upon speech. Therefore I am unable to determine whether the petitioner pleaded guilty in reliance on the palpably erroneous advice of an F.B.I. lawyer-agent who, as the symbol of the prosecution, owed it to an accused in petitioner's position to give her accurate guidance, if he gave any. 41 Nor does the District Judge's opinion resolve these difficulties for me. From what he wrote it would be the most tenuous guessing whether he rejected the petitioner's account of the F.B.I. agent's counseling or whether he did not attach to that issue the legal significance which I deem controlling.3 Since the record affords neither resolving evidence not the District Court's finding on what I deem to be the circumstance of controlling importance, I would send the cause back to the District Court for further proceedings with a view to a specific finding of fact regarding the conversation between petitioner and the F.B.I. agent, with as close a recreation of the incident as is now possible. 42 Mr. Justice BURTON, with whom THE CHIEF JUSTICE and Mr. Justice REED concur, dissenting. 43 As the issues in this case are factual and deal largely with the credibility of witnesses, the binding force of this decision as a precedent is narrow. However, to guard against undue extension of its influence, a recorded dissent seems justified. 44 The Government does not contest the release of the pei tioner if she establishes, as a matter of fact, that either her long considered and unequivocal plea of guilty in the original proceedings against her for violation of the Espionage Act or her written and otherwise clearly stated waiver of counsel in those proceedings was not freely, intelligently and knowingly made. The Government vigorously contends that she has failed in this proceeding to establish either of those facts. We agree with the Government. She has failed to do so and, having so failed, she is not entitled to release. The printed record does not require reversal of the judgment. The uniform findings of fact against her by the three trial judges who separately saw and heard her are amply sustainable. 45 The petitioner made her plea of guilty and filed her waiver of counsel in open court before District Judge Arthur F. Lederle on October 7, 1943. In November, 1944, after consideration and denial of her motion for leave to withdraw her plea of guilty, she was sentenced by District Judge Edward J. Moinet. She has made no direct attack on the judgment against her. Accordingly, before considering the exceptional burden of proof which she must bear in making a collateral attack upon that judgment more than a year after it was entered, it is well to examine the process of law which led up to this judgment. 46 At her arraignment, September 21, 1943, before District Judge Edward J. Moinet, she was assigned counsel to assist her during the arraignment. Such counsel advised her to stand mute. She did so. This conduct preserved her full rights and it has not prejudiced her position. A plea of not guilty was entered for her. This left her free to stand by it or to change it to a plea of guilty as she later did. There is no indication that other counsel could have done more for her than was done. She thus was made aware that the court would assign counsel to assist her. In fact she testified that, after the arraignment, 'Judge Moinet said he would appoint an attorney right away, and I understood that the gentleman was to be expected to come right away.' This referred to the period after her arraignment. 47 In addition to this contact with the attitude of the court on the subject of counsel, she frequently discussed the subject of counsel with her husband. He himself had some legal education. She also talked with two lawyer friends of her husband who came to see her as friends, although not professionally. She likewise discussed her situation on many occasions with the representatives of the Federal Bureau of Investigation and occasionally with representatives of the United States Attorney. She repeatedly was urged by her husband not to do anything until she had consulted with an attorney. On the basis of this advice, she decided not to plead guilty on September 28, although several other defendants in the same proceeding had done so. She testified as follows about her husband's advice and about her decision of September 28: 48 'Q. He told you to get a lawyer? A. Yes; he said I should not (plead guilty) before I have seen an attorney; on such a question I should talk to an attorney first about the whole thing: 49 'A. My husband said to wait until a lawyer comes out. 50 'Q. And you decided not to plead guilty because of that? A. Because of that, yes.' 51 Several days later she finally determined to plead guilty. On October 7, 1943, she expressly waived counsel both in open court and in writing. As to this she later was asked on the stand: 'Q. So, during the week you decided to disregard the advice that your husband had given you? A. Yes, sir. 52 'Q. You made that decision; yes or no? A. Yes.' 53 In other words, she had discussed her situation to her own satisfaction to the point where she had reached a conclusion both as to her plea of guilty and as to her wish to waive counsel. There is no constitutional provision that required or permitted counsel to be thrust upon her against her wishes. She had a right to decide that she di not want to discuss her case further with anyone. The issue was not then and is not now whether she might have been benefited by having counsel. She was an 'intelligent, mentally acute woman' and, for reasons of her own, she made up her mind that she wished to plead guilty and to waive counsel. If she did this freely, intelligently and knowingly, that was her right and that action should be final, subject only to a motion to withdraw her plea in regular course by due process of law or to appeal from the judgment rendered on her plea. Under the rules of the court, any withdrawal of her plea had to be made within ten days after entry of such plea and before sentence was imposed. Rules for Criminal Appeals, Rule II(4), 292 U.S. 662. This was not done. Judge Lederle, to guard against any misunderstanding, on October 7, 1943, especially inquired if she desired the assistance of counsel. She answered in the negative. He then inquired as to what her plea was. She answered guilty. In addition, she submitted a written waiver of counsel. The court then deferred sentence and referred the case to the United States Probation Officer for investigation and report. Ample time was taken for this. 54 In June, 1944, she was taken before Judge Moinet before whom she originally had been arraigned. She then advised him that she wished to change her plea. The judge informed her that she was entitled to representation by counsel and that an attorney ought to make a motion for permission to withdraw her plea and that, if she had a preference as to counsel, he would appoint such counsel as she desired him to appoint. The matter was left in abeyance while she tried to select counsel. On July 3, 1944, she wrote to Judge Moinet, advising him that she had no preference and the court soon thereafter appointed counsel for the purpose of making her motion. The assistance rendered by such counsel is not criticized. He secured from Judge Moinet not merely a ruling upon the procedural point as to the untimeliness of her motion, but also specific findings bearing upon its merits. This order made by Judge Moinet, about a year after her arraignment before him, is significant because of its direct relation to the issue now before the Court. His order read as follows: 55 'This cause having come on for hearing upon the motion of the defendant Grafin Marianna von Moltke for leave to withdraw her plea of guilty, heretofore entered, and for leave to enter a plea of Not Guilty to the indictment filed herein, the matter after hearing, having been submitted, the Court, after consideration of said motion and of the arguments presented on behalf of the respective parties hereto, specifically finds: 56 '1. That the defendant Grafin Marianna von Moltke was properly advised of her constitutional rights by the Court, both prior to and at the time she entered her plea of Guilty to the indictment; 57 '2. That the plea of Guilty, entered several weeks after the filing of the indictment and her arraignment thereon, was submitted after due and careful deliberation; 58 '3. That the defendant was advised of and thoroughly understood the nature of the charge contained in the indictment filed in this cause; 59 '4. That no promises or inducements or threats were made for the purpose of obtaining the plea of Guilty, and that the entry of the plea of Guilty was not due to any misrepresentations; 60 '5. That the motion praying for leave to withdraw the plea of Guilty was not filed within the period fixed by Rule II(4) adopted by the Supreme Court of the United States of America; 61 'Wherefore, It is Ordered that the said motion to withdraw the plea of guilty entered by the defendant Graffin (Grafin) Marianna von Moltke in the above entitled cause, be and the same is hereby denied.' 62 This was in November, 1944. Judge Moinet asked the defendant whether she had anything to say why judgment should not be pronounced against her, and, no sufficient reason to the contrary being shown or appearing to the judge, he sentencd her to imprisonment for four years. She began serving her sentence. However, after a determination had been made by the Government in 1945, looking toward her removal and repatriation to Germany, she, in 1946, filed a petition for habeas corpus making the present collateral attack on the original proceedings. We, therefore, are asked to review here the factual findings of the District Court made in April, 1946, through District Judge Ernest A. O'Brien in this habeas corpus proceeding and, by way of collateral attack, to review the action of the same District Court, taken in the original proceeding through Judge Lederle in October, 1943, and through Judge Moinet in November, 1944. While such proceedings by habeas corpus, based on constitutional grounds, are vital to the preservation of individual rights, the protection of our judicial process against the making, in this way, of unjustified attacks upon such process is equally important to the preservation of the rights of the people as a whole. Each attempted attack calls for the careful weighing not only of the claims made, but also of the proof submitted to sustain each claim. 63 In now attacking collaterally the unappealed and deliberate judicial proceedings of 1944, a heavy burden of proof rests upon the petitioner to establish the invalidity of her original plea and waiver. The essential presumption of regularity which attaches to judicial proceedings is not lightly to be rebutted. Johnson v. Zerbst, 304 U.S. 458, 468, 469, 58 S.Ct. 1019, 1024, 1025, 82 L.Ed. 1461, 146 A.L.R. 357; Hawk v. Olson, 326 U.S. 271, 279, 66 S.Ct. 116, 120, 90 L.Ed. 61. Judge O'Brien recognized the strength of this presumption and the heavy burden of proof to be borne by the petitioner. He therefore held extended hearings at which the petitioner and many others appeared as witnesses. The evidence included a substantial showing that the trial judge in accepting the petitioner's plea of guilty in the original proceeding had done so only after satisfying himself, by careful questioning, that the plea was not the result of threats or promises and that, with knowledge of her right to counsel, the petitioner had voluntarily waived that right.1 At the conclusion of these hearings Judge O'Brien found not only that the petitioner had failed to sustain the burden resting upon her, but that the overwhelming weight of the evidence in these proceedings was against her. 64 His statement as the trial judge in the habeas corpus proceedings is impressive and entitled to great weight here (72 F.Supp. 994, 995): 65 'In the petition filed in this cause the petitioner directly or by implication charges that the District Attorney having the case in charge and agents of the Federal Bureau of Investigation mislead (misled) her or made promises to her that which at least (in) some degree, influenced her action in pleading guilty to the charge. I am of the opinion that these charges have now been abandoned by the petitioner but for the purposes of the record I wish to state most vigorously that there was absolutely nothing in the testimony sustaining such charges or implications. The conduct of both the officials of the District Attorney's office and the agents of the Federal Bureau of Investigation were meticulous in safeguarding the rights of the petitioner and that the record is utterly bare of any support of petitioner's contentions. 66 'The petitioner is a woman obviously of good education and above the average in intelligence. Her knowledge of English was fluent and ample. She had discussed the case with various people before the plea of guilty was entered. In fact, at her own request, she had a conference with the chief assistant district attorney wherein she endeavored to secure from him some promises of leniency and convenience as an inducement to a plea of guilty. These advancements by the petitioner were, o course, repudiated by the district attorney and she was informed of the officials who had jurisdiction over the matter in advent (the event) of her plea of guilty. 67 'The chief contention of the petitioner was that her waiver of her right to counsel was not competently and intelligently made. The plea was taken before Judge Arthur Lederle of this District. The evidence showed that the Judge inquired of her if she understood the charges made in the indictment. She answered in the affirmative. The Judge inquired if she desired the assistance of counsel. She answered in the negative. The Judge then inquired what was her plea. She answered guilty. In addition to this she submitted a signed waiver stating that she did not desire counsel. 68 'The only substantial question in this case is whether the petitioner intelligently and knowingly waived her constitutional rights. It was her obligation to sustain the allegations of her petition by a preponderance of evidence. Not only has she failed in this, but I believe that the evidence is overwhelming against her contentions. The petitioner is an intelligent, mentally acute woman. She understood the charge and the proceedings. She freely, intelligently and knowingly waived her constitutional rights. I conclude, therefore, that there is no merit in her petition and that it shall be dismissed together with the writ.' 69 The Circuit Court of Appeals affirmed the judgment dismissing the petition for the writ of habeas corpus. That judgment is now brought here and we are called upon to make a further review of the factual conclusions of the District Court in the habeas corpus proceedings. 70 Due process of law calls for an equal regard by us for the interests of the Government and of the petitioner in seeking the nearest possible approximation to the truth. Necessarily we have only the printed record here. On the other hand, the trial judge, faced by the same issues, heard spoken the words we now read. He saw the original instruments that we now see reproduced. He observed the conduct and expressions of the petitioner and of the other witnesses whereas we cannot make an informed independent conjecture as to such conduct or expressions. From the living record he found the factual issues overwhelmingly against the petitioner. 71 There is nothing in the printed record sufficient to convince us that, if we had seen the witnesses and heard the testimony, we would not have reached the same conclusion. Much less is there anything in it that convinces us that, not having seen or heard it made, we are justified in reversing his findings which were based upon more than can be before us. Under the circumstances, we believe that the truth is more nearly approximated and justice is more surely served by reading the printed record in the strong light of the trial judge's factual conclusions than by attempting to interpret that record without giving large effect to his conclusions as to its credibility and to the inferences he has drawn from it. The aid to the ascertainment of the truth to be derived from the trial court's impartial observation of the witnesses should not be dissipated in the process of review. His appraisal of the living record is entitled to proportionately more, rather than less, reliance the further the reviewing court is removed from the scene of the trial. See District of Columbia v. Pace, 320 U.S. 698, 701, 64 S.Ct. 406, 408, 88 L.Ed. 408; United States v. Johnson, 319 U.S. 503, 518, 63 S.Ct. 1233, 1240, 87 L.Ed. 1546; Williams Mfg. Co. v. United Shoe Machinery Corp., 316 U.S. 364, 367, 62 S.Ct. 1179, 1181, 86 L.Ed. 1537; Delaney v. United States, 263 U.S. 586, 589, 590, 44 S.Ct. 206, 207, 68 L.Ed. 462. 72 Her status as an enemy alien does not, in itself, affect her right to counsel or the informed character of her plea of guilty and her waiver of counsel. The fact that the charge against her was under the Espionage Act and therefore carried a technical possibility of the death penalty did not at any time it roduce a practical consideration that she was in actual danger of suffering capital punishment. She accurately forecast the general character of her sentence and was concerned primarily with the wish that her sentence be served near her family. An assistant district attorney stated that he would write a letter recommending that she be imprisoned close to her family. 73 While a conspiracy is exceptionally difficult to define in all its legal and factual complexities, there is nothing in the Constitution that prevents an accused from freely, intelligently and knowingly choosing to plead guilty to that, as well as to other complex charges, for reasons best known to the accused, as an alternative to standing trial on that charge. This was her right. Having thus positively decided not to stand trial she did not require counsel in order freely, intelligently and knowingly to waive counsel. 74 Our Constitution, Bill of Rights and fundamental principles of government call for careful and sympathetic observance of the due process of law that is guaranteed to all accused persons, including enemy aliens like the petitioner. The Constitution, however, was adopted also in order to establish justice, insure domestic tranquility, promote the general welfare and secure the blessings of liberty to the people of the United States as a whole. To that end, it is equally important to review with sympathetic understanding the judicial process as constitutionally administered by our courts. While the majority of this Court are not ready to affirm the judgment below on the record as it stands, their decision to remand the case for further findings does not mean that established and salutary general presumptions in favor of the validity of judicial proceedings and in favor of a trial court's conclusions as to the credibility of witnesses are to be relaxed. 1 Section 32 defines the substantive crime of espionage. Section 34 declares conspiracies to violate § 32 to be unlawful. 40 Stat. 217, 50 U.S.C. §§ 32, 34, 50 U.S.C.A. §§ 32, 34. 2 Waley v. Johnston, 316 U.S. 101, 62 S.Ct. 964, 86 L.Ed. 1302; Walker v. Johnston, 312 U.S. 275, 286, 61 S.Ct. 574, 579, 85 L.Ed. 830; Johnson v. Zerbst, 304 U.S. 458, 467, 58 S.Ct. 1019, 1024, 82 L.Ed. 1461, 146 A.L.R. 357; cf. Sunal v. Large, 332 U.S. 174, 177, 67 S.Ct. 1588, 1590. 3 'Q. And did you during that discussion use a (sic) illustration about a rum runner? A. Well, I heard Mrs. von Moltke say that, and since she did I have been trying to recall, and I cannot remember such an illustration. 'Q. I see. A. But it is quite possible that Mrs. von Moltke's memory is better than mine, and I may have used such an illustration.' 4 Rule II (4) of the Criminal Appeals Rules, effective September 1, 1934, then required such motions to be filed within ten days after entry of the plea and before imposition of sentence. Swift v. United States, 79 U.S.App.D.C. 387, 148 F.2d 361; see Hood v. United States, 8 Cir., 152 F.2d 431, 435; United States v. Achtner, 2 Cir., 144 F.2d 49, 52. It has since been liberalized by Rule 32(d) of the Federal Rules of Criminal Procedure, 18 U.S.C.A. following section 687, effective March 21, 1946. Petitioner's brief states that the court denied her motion to withdraw the plea of guilty 'without taking any testimony or permitting petitioner to take the stand * * *.' The Government has not challenged that statement. There is nothing in the record which indicates that the judge allowed any witnesses to testify on the motion. Nevertheless the judge, 'after consideration of said motion and of the arguments presented,' made purported findings of fact to the effect that she had pleaded guilty 'after due and careful deliberation' and that at the time she entered the plea she 'thoroughly understood the nature of the charge contained in the indictment.' Neither the majority nor the minority opinion of the Circuit Court of Appeals referred to these so-called 'findings' as a support for denial of the motion to withdraw the plea of guilty. The Circuit Court of Appeals simply justified the denial on the ground that the motion was filed 'far too late.' (161 F.2d 113, 116) 5 On this same subject see Orfield, Criminal Procedure from Arrest to Appeal (1947) at 300: 'Since a plea of guilty is a confession in open court and a waiver of trial, it has always been received with great caution. It is the duty of the court to see that the defendant thoroughly understands the situation and acts voluntarily before receiving it.' See also 4 Blackstone, Commentaries at *329: 'Upon a simple and plain confession, the court hath nothing to do but to award judgment; but it is usually very backward in receiving and recording such confession, out of tenderness to the life of the subject; and will generally advise the prisoner to retract it and plead to the indictment,' and Bowyer, Commentaries on the Constitutional Law of England (1846) at 355: 'The civil law will not allow a man to be convicted on his bare confession, not corroborated by evidence of his guilt, because there may be circumstances which may induce an innocent man to accuse himself.' 6 Johnson v. Zerbst, 304 U.S. 458, 465, 58 S.Ct. 1019, 1023, 82 L.Ed. 1461, 146 A.L.R. 357; see also Adams v. United States ex rel. McCann, 317 U.S. 269, 270, 63 S.Ct. 236, 237, 87 L.Ed. 268, 143 A.L.R. 435. 7 Johnson v. Zerbst, 304 U.S. 458, 464, 58 S.Ct. 1019, 1023, 82 L.Ed. 1461, 146 A.L.R. 357; Glasser v. United States, 315 U.S. 60, 70, 62 S.Ct. 457, 465, 86 L.Ed. 680. 8 See note 3, supra. 9 American Bar Association, Canons of Professional and Judicial Ethics, Canon 15: 'The lawyer owes 'entire devotion to the interest of the client, warm zeal in the maintenance and defense of his rights and the exertion of his utmost learning and ability,' to the end that nothing be taken or withheld from him, save by the rules of law, legally applied. No fear of judicial disfavor or public unpopularity should restrain him from the full discharge of his duty. In the judicial forum the client is entitled to the benefit of any and every remedy and defense that is authorized by the law of the land, and he may expect his lawyer to assert every such remedy or defense.' Canon 4: 'A lawyer assigned as counsel for an indigent prisoner ought not to ask to be excused for any trivial reason, and should always exert his best efforts in his behalf.' 1 This is the precise testimony: 'That if there is a group of people in a 'Rum' plan who violate the law, and another person is there and the person doesn't know the people who are planning the violation and doesn't know what is going on, but still it seemed after two years this plan is carried out, in the law the man who was present becomes * * * the person nevertheless is guilty of conspiracy.' The law, of course, is precisely to the contrary. United States v. Falcone, 311 U.S. 205, 210, 61 S.Ct. 204, 206, 85 L.Ed. 128. 2 'Q. And did you (the F.B.I. agent) during that discussion use a (sic) illustration about a rum runner? A. Well, I heard Mrs. von Moltke say that, and since she did I have been trying to recall, and I cannot remember such an illustration. 'Q. I see. A. But it is quite possible that Mrs. von Moltke's memory is better than mine, and I may have used such an illustration.' 3 The District Judge indicated abandonment of the charges that the 'agents of the Federal Bureau of Investigation mislead (sic) her or made promises to her that, which at least (in) some degree, influenced her action in pleading guilty to the charge,' but 'for the purpose of the record' he stated 'most vigorously that there was absolutely nothing in the testimony sustaining such charges or implications.' While it does appear, from the record, that petitioner abandoned her charge of coercion, there is nothing to bttress the suggestion that she abandoned the charge that she had been misled by the agent, and I therefore read the statement as referring to threats or promises to induce confession by the petitioner. The District Judge gave no intimation whatever that in his view the plea of guilty in connection with all the other circumstances could not be deemed to have been intelligently tendered, if in fact it was influenced by the F.B.I. agent's exposition of the law, as asserted by the petitioner. Nowhere is there a suggestion that although the agent was not prepared to say her memory of the interview was false or incorrect, the District Judge rejected her account. 1 See Adams v. United States ex rel. McCann, 317 U.S. 269, 276, 277, 63 S.Ct. 236, 240, 241, 87 L.Ed. 268, 143 A.L.R. 435.
01
333 U.S. 28 68 S.Ct. 358 92 L.Ed. 455 BOB-LO EXCURSION CO.v.PEOPLE OF STATE OF MICHIGAN. No. 374. Argued Dec. 16, 17, 1947. Decided Feb. 2, 1948. Appeal from the Supreme Court of the State of Michigan. Mr. Wilson W. Mills, of Detroit, Mich., for appellant. Mr. Edmund E. Shepherd, of Lansing, Mich., for appellee. Mr. Justice RUTLEDGE delivered the opinion of the Court. 1 Bois Blanc Island is part of the Province of Ontario, Canada. It lies just above the mouth of the Detroit River, some fifteen miles from Michigan's metropolis upstream. The island, known in Detroit by the corruption 'Bob-Lo,' has been characterized as that city's Coney Island. 2 Appellant owns almost all of Bois Blanc in fee.1 For many years it has operated the island, during the summer seasons, as a place of diverse amusements for Detroit's varied population. Appellant also owns and operates two steamships for transporting its patrons of the island's attractions from Detroit to Bois Blanc and return. The vessels engage in no other business on these trips.2 No freight, mail or express is carried; the only passengers are the patrons bent on pleasure, who board ship at Detroit; they go on round-trip one-day limit3 tickets which include the privilege of landing at Bois Blanc and going back by a later boat.4 No intermediate stops are made on these excursions. 3 In conducting this business of amusement and transportation, appellant long has followed the policy, by advertisement and otherwise, to invite and encourage all comers, except two classes. One is the disorderly; the other, colored people.5 From the latter exclusion this case arises. 4 In June of 1945 Sarah Elizabeth Ray, the complaining witness, was employed by the Detroit Ordnance District. She and some forty other girls were also members of a class conducted at the Commerce High School under the auspices of the ordnance district. The class planned an excursion to Bois Blanc for June 21 under the district's sponsorship. 5 On that morning thirteen girls with their teacher appeared at appellant's dock in Detroit to go on the outing. All were white except Miss Ray. Each girl paid eighty-five cents to one of the group, who purchased round-trip tickets and distributed them. The party then passed through the gate, each member giving in her ticket without question from the ticket taker. They then checked their coats, went to the upper decks and took chairs. 6 Shortly afterward Devereaux, appellant's assistant general manager, and a steward named Fox appeared and stated that Miss Ray could not go along because she was colored. At first she remonstrated against the discrimination and refused to leave. But when it appeared she would be ejected forcibly, she said she would go. Devereaux and Fox then escorted her ashore, saying the company was a private concern and could exclude her if it wished. They took her to the ticket office and offered to return her fare. She refused to accept it, took their names, and left the company's premises. There is no suggestion that she or any member of her party was guilty of unbecoming conduct. Nor is there any dispute concerning the facts. 7 This criminal prosecution followed in the Recorder's Court for Detroit, for violation of the Michigan civil rights act6 in the discrimination practiced against Miss Ray. Jury trial being formally waived, the court after hearing evidence and argument found appellant guilty as charged and sentenced it to pay a fine of $25.7 On appeal the Supreme Court of Michigan affirmed the judgment, holding the statute applicable to the circumstances presented by the case and valid in that application, as against the constitutional and other objections put forward. 317 Mich. 686, 27 N.W.2d 139. In due course probable jurisdiction was noted here. Judicial Code, § 237(a), 28 U.S.C.A. § 344(a). 8 The Michigan civil rights Act, § 146, enacts: 9 'All persons within the jurisdiction of this state shall be entitled to full and equal accommodations, advantages, facilities and privileges of inns, hotels, restaurants, eating houses, barber shops, billiard parlors, stores, public conveyances on land and water, theatres, motion picture houses, public educational institutions, in elevators, on escalators, in all methods of air transportation and all other places of public accommodation, amusement, and recreation, where refreshments are or may hereafter be served, subject only to the conditions and limitations established by law and applicable alike to all citizens and to all citizens alike, with uniform prices.'8 10 By § 147, any owner, lessee, proprietor, agent or employee of any such place who directly or indirectly withholds any accommodation secured by § 146, on account of race, creed or color, becomes guilty of a misdemeanor, punishable as the section states, and liable to a civil action for treble damages.9 11 The Michigan statute is one of the familiar type enacted by many states before and after this Court's invalidation of Congress' similar legislation in the Civil Rights Cases, 109 U.S. 3, 3 S.Ct. 18, 27 L.Ed. 835.10 The Michigan Supreme Court held the statute applicable to appellant's business over its objection that as a matter of local law it is not a 'public conveyance' within the meaning of § 146.11 We accept this conclusion of the state court as a matter of course. That court also impliedly rejected appellant's constitutional objections based upon alleged denial of due process of law and equal protection of the laws under the Fourteenth Amendment, issues now eliminated from the case.12 12 We have therefore only to consider the single and narrow question whether the state courts correctly held that the commerce clause, Art. I, § 8, of the Federal Constitution does not forbid applying the Michigan civil rights act to sustain appellant's conviction. We agree with their determination. 13 There can be no doubt that appellant's transportation of its patrons is foreign commerce within the scope of Art. I, § 8.13 Lord v. Goodall Steamship Co., 102 U.S. 541, 26 L.Ed. 224; cf. Edwards v. California, 314 U.S. 160, 62 S.Ct. 164, 86 L.Ed. 119. Appellant's vessels sail to and from a port or place in foreign territory wholly under another nation's sovereignty. They cross the international boundary, which is the thread of the Detroit River, several times in the course of each short trip. Appellant necessarily complies with federal regulations applicable to foreign commerce, including those governing customs, immigration and navigation matters. It likewise satisfies similar regulations of the Canadian authorities.14 14 Of course we must be watchful of state intrusion into intercourse between this country and one of its neighbors. But if any segment of foreign commerce can be said to have a special local interest, apart from the necessity of safeguarding the federal interest in such matters as immigration, customs and navigation, the transportation of appellant's patrons falls in that characterization. It would be hard to find a substantial business touching foreign soil of more highly local concern. Except for the small fenced-off portion reserved for the lighthouse and three cottage sites,15 the island is economically and socially, though not politically, an amusement adjunct of the city of Detroit. Not only customs and immigrations regulations of both countries, but physical barriers prevent intercourse, both commercial and social, between Canadians and appellant's patrons, except as the former may come first by other means to Detroit, then go to the island from American soil on appellant's vessels, and return from the holiday by the same roundabout route. 15 The record indicates there are no established means of access from the Canadian shore to the island. There is no evidence of even surreptitious entry trom the Canadian mainland. Appellant's vessels not only are the sole meas of transportation to and from the island, but carry only its own patrons of Bois Blanc's recreational facilities. These travel exclusively on round-trip tickets for passage beginning and ending on American soil. They are principally residents of Detroit and vicinity. All go aboard there and return the same day. None go from the island to the Canadian bank of the river. The only business conducted at the island is the operation of appellant's recreational and accessory facilities, which apparently do not include provision for overnight guests. No other persons than appellant's patrons come to the island, or have a right to come, from Canada's mainland or elsewhere, or go from the island to Detroit. 16 The sum of these facts makes Bois Blanc an island in more than the geographic sense. They insulate it and appellant's business done in connection with it from all commercial or social intercourse and traffic with the people of another country usually characteristic of foreign commerce, in short from the normal flow and incidents of such commerce. Since the enterprise is conducted in this highly closed and localized manner with Canada's full consent, no detraction whatever from that friendly neighbor's sovereignty is implied by saying that the business itself is economically and socially an island of local Detroit business, although so largely carried on in Canadian waters. As now conducted, apart from presently applicable Canadian and federal regulations and until Canada or Congress or both countries by treaty see fit to add others, the business is of greater concern to Detroit and the State of Michigan than to Dominion or Ontario interests or to those of the United States in regulating our foreign commerce. 17 The regulation in this application contains nothing out of harmony, much less inconsistent with our federal policy in the regulation of commerce between the two countries nor, so far as we are advised, with Canadian law and policy.16 Appellant urges, however, that Canada might adopt regulations in conflict with Michigan's civil rights act, thus placing it in an inescapable dilemma if that act may be applied to its operations. Conceding the possibility, we think the state is right in viewing it as so remote that it is hardly more than conceivable. The same thing, we think, is true of the possibility that Congress might take conflicting action. 18 If therefore in any case a state may regulate foreign commerce, the facts here would seem clearly to justify Michigan's application of her civil rights act. It is far too late to maintain that the states possess no regulatory powers over such commerce. From the first meeting of Congress they have regulated important phases of both foreign and intes tate commerce, particularly in relation to transportation by water, with Congress' express consent.17 And without such consent for nearly a hundred years they have exercised like power under the local diversity branch of the formula announced in Cooley v. Board of Wardens, 12 How. 299, 13 L.Ed. 996.18 See Union Brokerage Co. v. Jensen, 322 U.S. 202, 64 S.Ct. 967, 88 L.Ed. 1227, 152 A.L.R. 1072; Kelly v. Washington, 302 U.S. 1, 58 S.Ct. 87, 82 L.Ed. 3, and authorities cited in both cases. Indeed the Cooley criterion has been applied so frequently in cases concerning only commerce among the several states that it is often forgotten that that historic decision dealt indiscriminately with such commerce and foreign commerce.19 19 Appellant hardly suggests that the power of Congress over foreign commerce excludes all regulation by the states. But it verges on that view in regarding Hall v. DeCuir, 95 U.S. 485, 24 L.Ed. 547, supplemented by Morgan v. Virginia, 328 U.S. 33 , 66 S.Ct. 1050, 90 L.Ed. 1317, 165 A.L.R. 574, and Pryce v. Swedish-American Lines, D.C., 30 F.Supp. 371, as flatly controlling this case. We need only say that no one of those decisions is comparable in its facts, whether in the degree of localization of the commerce involved; in the attenuating effects, if any, upon the commerce with foreign nations and among the several states likely to be produced by applying the state regulation; or in any actual probability of conflicting regulations by different sovereignties. None involved so completely and locally insulated a segment of foreign or interstate commerce.20 In none was the business affected merely an adjunct of a single locality or community as is the business here so largely. And in none was a complete exclusion from passage made. The Pryce case, of course, is not authority in this Court, and we express no opinion on the problem it presented. The regulation of traffic along the Mississippi River, such as the Hall case comprehended and of interstate motor carriage of passengers by common carriers like that in the Morgan case, are not factually comparable to this regulation of appellant's highly localized business, and those decisions are not relevant here. 20 It is difficult to imagine what national interest or policy, whether of securing uniformity in regulating commerce, affecting relations with foreign nations, or otherwise, could reasonably be found to be adversely affected by applying Michigan's statute to these facts or to outweigh her interest in doing so. Certainly there is no national interest which overrides the interest of Michigan to forbid the type of discrimination practiced here. And, in view of these facts, the ruling would be strange indeed, to come from this Court, that Michigan could not apply her long-settled policy against racial and creedal discrimination to this segment of foreign commerce, so peculiarly and almost exclusively affecting her people and institutions. 21 The Supreme Court of Michigan concluded 'that holding the provisions of the Michigan statute effective and applicable in the instant case results only in this, defendant will be required in operating its ships as 'public conveyances' to accept as passengers persons of the negro race indiscriminately with others. Our review of this record does not disclose that such a requirement will impose any undue burden on defendant in its business in foreign commerce.' 317 Mich. 686, 694, 27 N.W.2d 139, 142. Those conclusions were right. 22 The judgment is affirmed. 23 Affirmed. 24 Mr. Justice DOUGLAS, concurring. 25 The case is, I think, controlled by a principle which cuts deeper than that announced by the Court and which is so important that it deserves to be stated separately. 26 Hall v. DeCuir, 95 U.S. 485, 24 L.Ed. 547, and Morgan v. Virginia, 328 U.S. 373, 66 S.Ct. 1050, 90 L.Ed. 1317, 165 A.L.R. 574, presented phases of the problem of segregation. The former held unconstitutional a Louisiana law forbidding steamboats (which plied the Mississippi) from segregating passengers according to race. The latter held unconstitutional a Virginia law requiring segregation of passengers on interstate motor buses. It was held that diverse regulations of that character by the severalStates through which the traffic moved would be an undue or unreasonable burden on interstate commerce. But the question here is a simpler one. It is whether a State can prevent a carrier in foreign commerce from denying passage to a person because of his race or color. For this is a case of a discrimination against a Negro by a carrier's complete denial of passage to her because of her race. 27 It is unthinkable to me that we would strike down a state law which required all carriers—local and interstate—to transport all persons regardless of their race or color. The common-law duty ofc arriers was to provide equal service to all, a duty which the Court has held a State may require of interstate carriers in the absence of a conflicting federal law. Missouri Pacific R. Co. v. Larabee Flour Mills Co., 211 U.S. 612, 619, 623, 624, 29 S.Ct. 214, 216, 218, 53 L.Ed. 352. And the police power of a State under our constitutional system is adequate for the protection of the civil rights of its citizens against discrimination by reason of race or color. Railway Mail Ass'n v. Corsi, 326 U.S. 88, 65 S.Ct. 1483, 89 L.Ed. 2072. Moreover, in this situation there is no basis for saying that the Commerce Clause itself defeats such a law. This regulation would not place a burden on interstate commerce within the meaning of our cases. It does not impose a regulation which discriminates against interstate commerce or which, by specifying the mode in which it shall be conducted, disturbs and uniformity essential to its proper functioning. See Southern Pacific R. Co. v. Arizona, 325 U.S. 761, 65 S.Ct. 1515, 89 L.Ed. 1915; Morgan v. Virginia, supra. I see nothing in the Commerce Clause which places foreign commerce on a more protected level. 28 There is in every case, of course, a possibility that Congress may pass laws regulating foreign or interstate commerce in conflict with regulations prescribed by a State. Or in the case of foreign commerce the national government might act through a treaty. Inconsistent State law would then give way to any exercise of federal power within the scope of constitutional authority. But I am aware of no power which Congress has to create different classes of citizenship according to color so as to grant freedom of movement in the channels of commerce to certain classes only. Cf. Edwards v. California, 314 U.S. 160, 177—181, 62 S.Ct. 164, 168—170, 86 L.Ed. 119. The federal policy reflected in Acts of Congress indeed bars any such discrimination (see Mitchell v. United States, 313 U.S. 80, 61 S.Ct. 873, 85 L.Ed. 1201) and so is wholly in harmony with Michigan's law. And no treaty reveals a different attitude. 29 Moreover, there is no danger of burden and confusion from diverse state laws if Michigan's regulation is sustained. If a sister State undertook to bar Negroes from passage on public carriers, that law would not only contravene the federal rule but also invade a 'fundamental individual right which is guaranteed against state action by the Fourteenth Amendment.' Mitchell v. United States, supra, 313 U.S. at page 94, 61 S.Ct. at page 877. Nothing short of at least 'equality of legal right' (Missouri ex rel. Gaines v. Canada, 305 U.S. 337, 350, 59 S.Ct. 232, 236, 83 L.Ed. 208) in obtaining transportation can satisfy the Equal Protection Clause. Hence I do not see how approval of Michigan's law in any way interferes with the uniformity essential for the movement of vehicles in commerce. The only constitutional uniformity is uniformity in the Michigan pattern. 30 If a State's law made a head-on collision with the policy of a foreign power whose shores were reached by our vessels, a different problem might be presented. But no such conflict is present here. 31 Mr. Justice BLACK, who joins in the opinion of the Court, concurs also in this opinion. 32 Mr. Justice JACKSON, with whom The CHIEF JUSTICE agrees, dissenting. 33 This Michigan statute undoubtedly is valid when applied to Michigan intrastate commerce, just as a Congressional enactment of like tenor would undoubtedly be valid as to commerce among the states and with foreign countries. The question here, however, is whether the Michigan statute can validly be applied to that commerce which is set apart by the Constitution for regulation by the Congress. 34 The sphere of a state's power has not been thought to expand or contract because of the policy embodied in a particular regulation. A state statute requiring equality of accommodations for white and Negro passengers was held invalid as applied to interstate commerce. Hall v. DeCuir, 95 U.S. 485, 24 L.Ed. 547. On the sm e principle a state statute requiring segregation was held invalid as applied to interstate commerce. Morgan v. Virginia, 328 U.S. 373, 66 S.Ct. 1050, 90 L.Ed. 1317, 165 A.L.R. 574. Heretofore the Court steadily has held that the failure of Congress to enact a law on this specific subject does not operate to expose interstate commerce to the burden of local rules, no matter what policy in this highly controversial matter a state sought to advance. It would seem to me that the constitutional principles which have been so apparent to the Court that it would not permit local policies to burden national commerce, are even more obvious in relation to foreign commerce. 35 Certainly if any state can enforce regulations concerning embarkation and landing, it can in effect control much that pertains to the foreign journey. To determine what persons and commodities shall be taken abroad is to control what persons and commodities may become the subject of foreign commerce, and that is to control the lifeblood of the commerce itself. These are identical with matters in which this commerce is subject to control by federal and foreign governments. The Federal Government takes active control of the inbound movement of goods by virtue of its customs service and of the movement of persons by virtue of its immigration service across these boundaries. The Canadian government does the same on the outbound crossing of the international line. It does so in this case, and it does so even if the bulk of the travelers do not go very far or stay very long and are merely amusement bent. 36 The wholesome and amiable situation detailed in the Court's opinion is made possible only by international relations wholly controlled by the Federal Government. It alone can effectively protect or foster this kind of commerce, and it alone should be allowed to burden it. If we are to concede this power over foreign commerce to one state, it would seem that it could logically be claimed by every state which has a port, border, or landing field used by foreign commerce. 37 The Court admits that the commerce involved in this case is foreign commerce, but subjects it to the state police power on the ground that it is not very foreign. It fails to lay down any standard by which we can judge when foreign commerce is foreign enough to become free of local regulation. The commerce involved here is not distinguishable from a great deal of the traffic across our Canadian and Mexican borders, except perhaps in volume. Communities have sprung up on either side, whose social and economic relations are interdependent, but are conducted with scrupulous regard for the international boundary. Localities on either side of the line may develop in reliance on a certain reciprocity and stability of policy which has characterized two nations for years, when they cannot rely on similar stability or farsightedness in local policy. 38 It seems to me no adequate protection of foreign commerce from a multitude and diversity of burdening and capricious local regulations that this Court may stand ready, as in this case, to apply itself to an analysis of the traffic involved and determine in each case whether the local interest in it is sufficiently strong and the foreign element is sufficiently weak so that we will permit the regulation to stand. We do not and apparently cannot enunciate any legal criteria by which those who engage in foreign commerce can predict which classification we will impose upon any particular operation and we lay down no rule other than our passing impression to guide ourselves or our successors. All is left to case-by-case conjecture. The commerce clause was intended to promote commerce rather than litigation. 39 I believe that once it is conceded, as it is in this case, that the commerce involved is foreign commerce, that fact alone should be enough to prevent a state from controlling what may, or what must, move in the stream of that commerce. 1 A small fenced-off tract at one end is reserved for lighthouse purposes, and three small cottage lots. Appellant is a Michigan corporation, authorized by its charter to 'lease, own and operate amusement parks in Canada, and to charter, lease, own and operate excursion steamers and ferry boats in interstate and foreign commerce, together with dock and terminal facilities pertaining thereto,' as well as to acquire, own, use and dispose of real and personal property 'as may be necessary or convenient in connection with the aforesaid business of the company.' 2 The record shows that at times during the season appellant uses these ships to provide excursion trips for residents of the Province of Ontario, but these excursions are kept entirely separate from those between Detroit and Bois Blanc and we are concerned with no question relating to them. 3 Apparently no facilities are provided at the island for overnight guests. 4 The company fixes its own rates. The usual round-trip charge is 85¢, except for Saturday nights and Sundays when a higher rate applies. Special excursions at times are arranged for churches, Sunday schools, clubs, lodges, etc., for which the regular charge is paid by the passenger but the company allows the organization a discount which permits it to make a profit. The discounts are not uniform. 5 Appellant's assistant general manager, Devereaux, testified: 'The defendant adopted the policy of excluding so-called 'Zoot-suiters,' the rowdyish, the rough and the boisterous and it also adopted the policy of excluding colored.' Appellant printed on the back of each ticket: 'Right reserved to reject this ticket by refunding the purchs e price.' The record contains no evidence of any exclusion or policy of exclusion of others than disorderly or colored persons. 6 Mich. Penal Code §§ 146—148, as amended by Act No. 117, Mich. Pub. Acts 1937, Mich. Comp.Laws (Supp.1940) §§ 17115-146 to 17115-148, Mich.Stat.Ann. (1946 Cum.Supp.) §§ 28.343—28.346. These sections of the Penal Code reenacted and broadened the application of Act No. 130, Mich. Pub.Acts 1885. See notes 8 and 10. 7 Appellant's motion for 'directed' verdict of not guilty was denied, as was also its motion after judgment for a new trial. The trial court filed a written opinion which is unreported. 8 The appropriate statutory citations are set forth in note 6. 9 Section 147 is as follows: 'Any person being an owner, lessee, proprietr , manager, superintendent, agent or employe of any such place who shall directly or indirectly refuse, withhold from or deny to any person any of the accommodations, advantages, facilities and privileges thereof or directly or indirectly publish, circulate, issue, display, post or mail any written or printed communications, notice or advertisement to the effect that any of the accommodations, advantages, facilities and privileges of any such places shall be refused, withheld from or denied to any person on account of race, creed or color or that any particular race, creed or color is not welcome, objectionable or not acceptable, not desired or solicited, shall for every such offense be deemed guilty of a misdemeanor and upon conviction thereof shall be fined not less than twenty-five dollars or imprisoned for not less than fifteen days or both such fine and imprisonment in the discretion of the court; and every person being an owner, lessee, proprietor, manager, superintendent, agent or employe of any such place, and who violates any of the provisions of this section, shall be liable to the injured party, in treble damages sustained, to be recovered in a civil action: Provided, however, That any right of action under this section shall be unassignable.' No suggestion is made that the phrase 'on account of race, creed or color' does not apply to the withholding and denying provisions of the section as well as those relating to publishing, etc., the notices or advertisements specified. Section 148 of the Act forbids discrimination because of race, creed or color in selecting grand and petit jurors. 10 These cases were decided in 1883. The Michigan statute was enacted originally in 1885. Seventeen other states have similar, and in many instances substantially identical, legislation. The statutory citations are given in Morgan v. Virginia, 328 U.S. 373, 382, n. 24, 66 S.Ct. 1050, 1056, 90 L.Ed. 1317, 165 A.L.R. 574. 11 Appellant urged that it was not a common carrier, a public utility, or a 'public conveyance' within the specific terms of § 146. The state supreme court said: 'There is no escape from the conclusion that defendant herein is engaged in the business of operating 'public conveyances' by water, and the Michigan statute provides: 'All persons within the jurisdiction of this state shall be entitled to full and equal accommodations' afforded by such conveyances. The Michigan enactment has been held constitutional. Bolden v. Grand Rapids Operating Corp., 239 Mich. 318, 214 N.W. 241, 53 A.L.R. 183. Our conclusion is * * * that the Michigan civil rights act * * * is applicable to the business carried on by defendant * * *.' 317 Mich. 686, 695, 27 N.W.2d 139, 143. The court distinguished Meisner v. Detroit, Belle Isle & Windsor Ferry Co., 154 Mich. 545, 118 N.W. 14, 19 L.R.A.,N.S., 872, 129 Am.St.Rep. 493, in which appellant's corporate predecessor was held not liable in tort for breach of an alleged duty as a common carrier of passengers, by pointing out that no right apparently had been asserted in that case grounded on the civil rights act. 317 Mich. 686, 696, 27 N.W.2d 139. 12 The jurisdictional statement sought review of these Fourteenth Amendment questions, as well as the commerce clause issue. But appellant's reply brief stats : 'The cause before us is a business case arising under the Michigan Civil Rights Act and the Commerce Clause: not one arising under the (federal) Civil Rights Act and the 14th Amendment.' And we were given to understand at the oral argument, in response to specific inquiry, that the only issue on which decision was sought as of that time was the commerce clause question. The Michigan Supreme Court did not refer explicitly in its opinion to appellant's Fourteenth Amendment contentions, but the record shows they were presented to that court in the assignments of error on appeal and were therefore necessarily rejected by its affirmance of the judgment of the Recorder's Court. 13 Until the case reached this Court, apparently, the state had maintained that foreign commerce was not involved and the trial court so held, although the ruling was hedged with the further one that, if it was erroneous, still the state's power to apply the civil rights act was not nullified by the commerce clause. 14 E.g., on arrival at Bois Blanc all passengers who land pass through Canadian customs and immigration inspection. Prior to the late war, on returning to Detroit, similar inspections were made by United States authorities. During the war the latter inspection was suspended, appellant filing a bond to indemnify the Treasury against loss of revenue and expenses arising from any free importation of dutiable goods from Bois Blanc or Canada and an agreement with the Immigration Service not to bring in aliens ineligible for entry. 15 It does not appear whether these sites are inhabited, but presumably a keeper of the lighthouse occupies some part of the reserved premises. 16 The Province of Ontario enacted in 1944 its Racial Discrimination Act, Session Laws 1944, c. 51. Federal legislation has indicated a national policy against racial discrimination in the requirement, not urged here to be specifically applicable in this case, of the Interstate Commerce Act that carriers subject to its provisions provide equal facilities for all passengers, 49 U.S.C. § 3(1), 49 U.S.C.A. § 3(1), extended to carriers by water and air, 46 U.S.C. § 815, 49 U.S.C. §§ 484, 905, 46 U.S.C.A. § 815, 49 U.S.C.A. §§ 484, 905. Cf. Mitchell v. United States, 313 U.S. 80, 61 S.Ct. 873, 85 L.Ed. 1201. Federal legislation also compels a collective bargaining agent to represent all employees in the bargaining unit without discrimination because of race. 45 U.S.C. § 151 et seq., 45 U.S.C.A. § 151 et seq. Steele v. Louisville & Nashville R. Co., 323 U.S. 192, 65 S.Ct. 226, 89 L.Ed. 173; Tunstall v. Brotherhood of Locomotive Firemen & Enginemen, 323 U.S. 210, 65 S.Ct. 235, 89 L.Ed. 187. The direction of national policy is clearly in accord with Michigan policy. Cf. also Hirabayashi v. United States, 320 U.S. 81, 63 S.Ct. 1375, 87 L.Ed. 1774; Korematsu v. United States, 323 U.S. 214, 65 S.Ct. 193, 89 L.Ed. 194; Ex parte Mitsuye Endo, 323 U.S. 283, 65 S.Ct. 208, 89 L.Ed. 243. 17 It is hardly necessary to recall again that by the Act of August 7, 1789, the First Congress declared that pilotage in bays, inlets, rivers, harbors and ports of the United States should continue to be regulated in conformity with existing state laws or others thereafter enacted until further action by Congress. 1 Stat. 54. Congress on occasion has modified such state legislation, e.g., by the Act of March 2, 1837, 5 Stat. 153, 46 U.S.C.A. § 212, making it lawful for vessels navigating waters constituting the boundary between two states to take on pilots qualified under the laws of either. 18 In Olsen v. Smith, 195 U.S. 332, 25 S.Ct. 52, 49 L.Ed. 224, the Court sustained a Texas statute regulating pilotage of a British vessel coming from a foreign port. The contention that the state was without power to legislate in this field was disposed of in one sentence. 'The unsoundness of this contention is demonstrated by the previous decisions of this court, since it has long since been settled that even although state laws concerning pilotage are regulations of commerce, 'they fall within that class of powers which may be exercised by the states until Congress has seen fit to act upon the subject.' (Citing the Cooley and other cases).' 195 U.S. at page 341, 25 S.Ct. at page 53. Other cases upholding state regulation of foreign commerce are to the same effect. Pacific Mail Steamship Co. v. Joliffe, 2 Wall. 450, 17 L.Ed. 805; Wilson v. McNamee, 102 U.S. 572, 26 L.Ed. 234; Anderson v. Pacific Coast S.S. Co., 225 U.S. 187, 32 S.Ct. 626, 56 L.Ed. 1047. Cf. Clyde Mallory Lines v. Alabama, 296 U.S. 261, 56 S.Ct. 194, 80 L.Ed. 215, and cases cited; Pigeon River Improvement, Slide & Boom Co. v. Charles W. Cox Ltd., 291 U.S. 138, 158, 159, 54 S.Ct. 361, 366, 78 L.Ed. 695. 19 The Court's opinion in that case deals expressly but indiscriminately with both types of commerce. And from the record and arguments of counsel it seems clear that both were actually involved. There were two cases relating to two different vessels, the Consul, which was engaged in coastwise trade between Philadelphia and New York, and the Undine, which appears to have been engaged exclusively in foreign commerce. The destination, whether foreign or domestic, of the Undine is not shown by the record, which merely states that it sailed 'from the port of Philadelphia to a certain port not within the river Delaware * * *.' But from the specific 'addition' by counsel for argumentative purposes, 12 How. 299, at pages 302, 303, 13 L.Ed. 996, of the facts that the Consul held a federal coasting license and was bound from one domestic port to another, plus the omission of any reference in argument or in the record to a similar license for the Undine (when such a reference would have supported the additional argument), the inference seems justified that the Undine had sailed for a foreign port. Moreover counsel argued that both ships were engaged in foreign commerce, although only the Consul was engaged in coastwise trading. 20 Cf. Port Richmond & Bergen Point Ferry Co. v. Board of Chosen Freeholders of Hudson County, 234 U.S. 317, 331, 332, 34 S.Ct. 821, 825, 826, 58 L.Ed. 1330.
12
333 U.S. 10 68 S.Ct. 367 92 L.Ed. 436 JOHNSONv.UNITED STATES. No. 329. Argued Dec. 18, 1947. Feb. 2, 1948. Mr. James Skelly Wright, for petitioner. Mr. Robert Erdahl, of Washington, D.C., for respondent. Mr. Justice JACKSON delivered the opinion of the Court. 1 Petitioner was convicted on four counts charging violation of federal narcotic laws.1 The only question which brings the case here is whether it was lawful, without a warrant of any kind, to arrest petitioner and to search her living quarters. 2 Taking the Government's version of disputed events, decision would rest on these facts: 3 At about 7:30 p.m. Detective Lieutenant Belland, an officer of the Seattle police force narcotic detail, received information from a confidential informer, who was also a known narcotic user, that unknown persons were smoking opium in the Europe Hotel. The informer was taken back to the hotel to interview the manager, but he returned at once saying he could smell burning opium in the hallway. Belland communicated with federal narcotic agents and between 8:30 and 9 o'clock went back to the hotel with four such agents. All were experienced in narcotic work and recognized at once a strong odor of burning opium which to them was distinctive and unmistakable. The odor led to Room 1. The officers did not know who was occupying that room. They knocked and a voice inside asked who was there. 'Lieutenant Belland,' was the reply. There was a slight delay, some 'shuffling or noise' in the room and then the defendant opened the door. The officer said, 'I want to talk to you a little bit.' She then, as he describes it, 'stepped back acquiescently and admitted us.' He said, 'I want to talk to you about the opium smell in the room here.' She denied that there was such a smell. Then he said, 'I want you to consider yourself under arrest because we are going to search the room.' The search turned up incriminating opium and smoking apparatus, the latter being warm, apparently from recent use. This evidence the District Court refused to suppress before trial and admitted over defendant's objection at the trial. Conviction resulted and the Circuit Court of Appeals affirmed.2 4 The defendant challenged the search of her home as a violation of the rights secured to her in common with others, by the Fourth Amendment to the Constitution. The Government defends the search as legally justifiable, more particularly as incident to what it urges was a lawful arrest of the person. I. 5 The Fourth Amendment to the Constitution of the United States provides: 6 'The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.' 7 Entry to defendant's living quarters, which was the beginning of the search, was demanded under color of office. It was granted in submission to authority rather than as an understanding and intentional waiver of a constitutional right. Cf. Amos v. United States, 255 U.S. 313, 41 S.Ct. 266, 65 L.Ed. 654. 8 At the time entry was demanded the officers were possessed of evidence which a magistrate might have found to be probable cause for issuing a search warrant. We cannot sustain defendant's contention, erroneously made, on the strength of Taylor v. United States, 286 U.S. 1, 52 S.Ct. 466, 76 L.Ed. 951, that odors cannot be evidence sufficient to constitute probable grounds for any search. That decision held only that odors alone do not authorize a search without warrant. If h e presence of odors is testified to before a magistrate and he finds the affiant qualified to know the odor, and it is one sufficiently distinctive to identify a forbidden substance, this Court has never held such a basis insufficient to justify issuance of a search warrant. Indeed it might very well be found to be evidence of most persuasive character. 9 The point of the Fourth Amendment, which often is not grasped by zealous officers, is not that it denies law enforcement the support of the usual inferences which reasonable men draw from evidence. Its protection consists in requiring that those inferences be drawn by a neutral and detached magistrate instead of being judged by the officer engaged in the often competitive enterprise of ferreting out crime.3 Any assumption that evidence sufficient to support a magistrate's disinterested determination to issue a search warrant will justify the officers in making a search without a warrant would reduce the Amendment to a nullity and leave the people's homes secure only in the discretion of police officers.4 Crime, even in the privacy of one's own quarters, is, of course, of grave concern to society, and the law allows such crime to be reached on proper showing. The right of officers to thrust themselves into a home is also a grave concern, not only to the individual but to a society which chooses to dwell in reasonable security and freedom from surveillance. When the right of privacy must reasonably yield to the right of search is, as a rule, to be decided by a judicial officer, not by a policeman or Government enforcement agent. 10 There are exceptional circumstances in which, on balancing the need for effective law enforcement against the right of privacy, it may be contended that a magistrate's warrant for search may be dispensed with. But this is not such a case. No reason is offered for not obtaining a search warrant except the inconvenience to the officers and some slight delay necessary to prepare papers and present the evidence to a magistrate. These are never very convincing reasons and, in these circumstances, certainly are not enough to bypass the constitutional requirement. No suspect was fleeing or likely to take flight. The search was of permanent premises, not of a movable vehicle. No evidence or contraband was threatened with removal or destruction, except perhaps the fumes which we suppose in time will disappear. But they were not capable at any time of being reduced to possession for presentation to court. The evidence of their existence before the search was adequate and the testimony of the officers to that effect would not perish from the delay of getting a warrant. 11 If the officers in this case were excused from the constitutional duty of presenting their evidence to a magistrate, it is difficult to think of a case in which it should be required. II. 12 The Government contends, however, that this search without warrant must be held valid because incident to an arrest. This alleged ground of vai dity requires examination of the facts to determine whether the arrest itself was lawful. Since it was without warrant, it could be valid only if for a crime committed in the presence of the arresting officer or for a felony of which he had reasonable cause to believe defendant guilty.5 13 The Government, in effect, concedes that the arresting officer did not have probable cause to arrest petitioner until he had entered her room and found her to be the sole occupant.6 It points out specifically, referring to the time just before entry, 'For at that time the agents did not know whether there was one or several persons in the room. It was reasonable to believe that the room might have been an opium smoking den.' And it says, '* * * that when the agents were admitted to the room and found only the petitioner present they had a reasonable basis for believing that she had been smoking opium and thus illicitly possessed the narcotic.' Thus the Government quite properly stakes the right to arrest, not on the informer's tip and the smell the officers recognized before entry, but on the knowledge that she was alone in the room, gained only after, and wholly by reason of, their entry of her home. It was therefore their observations inside of her quarters, after they had obtained admission under color of their police authority, on which they made the arrest.7 14 Thus the Government is obliged to justify the arrest by the search and at the same time to justify the search by the arrest. This will not do. An officer gaining access to private living quarters under color of his office and of the law which he personifies must then have some valid basis in law for the intrusion. Any other rule would undermine 'the right of the people to be secure in their persons, houses, papers and effects,'8 and would obliterate one of the most fundamental distinctions between our form of government, where officers are under the law, and the police-state where they are the law. 15 Reversed. 16 The CHIEF JUSTICE, Mr. Justice BLACK, Mr. Justice REED and Mr. Justice BURTON dissent. 1 Two counts charged violation of § 2553(a) of the Internal Revenue Code, 26 U.S.C. § 2553(a), 26 U.S.C.A. Int.Rev.Code, § 2553(a), and two counts charged violation of the Narcotic Drugs Import and Export Act, as amended, 21 U.S.C. § 174, 21 U.S.C.A. § 174. 2 9 Cir., 162 F.2d 562. 3 In United States v. Lefkowitz, 285 U.S. 452, 464, 52 S.Ct. 420, 423, 76 L.Ed. 877, 82 A.L.R. 775, this Court said: '* * * the informed and deliberate determinations of magistrates empowered to issue warrants as to what searches and seizures are permissible under the Constitution are to be preferred over the hurried action of officers and others who may happen to make arrests. Security against unlawful searches is more likely to be attained by resort to search warrants than by reliance upon the caution and sagacity of petty officers while acting under the excitement that attends the capture of persons accused of crime. * * *' 4 'Belief, however well founded, that an article sought is concealed in a dwelling house, furnishes no justification for a search of that place without a warrant. And such searches are held unlawful notwithstanding facts unquestionably showing probable cause.' Agnello v. United States, 269 U.S. 20, 33, 46 S.Ct. 4, 6, 70 L.Ed. 145, 51 A.L.R. 409. 5 This is the Washington law. State v. Symes, 20 Wash. 484, 55 P. 626; State v. Lindsey, 192 Wash. 356, 73 P.2d 738; State v. Krantz, 24 Wash.2d 350, 164 P.2d 453; State v. Robbins, 25 Wash.2d 110, 169 P.2d 246. State law determines the validity of arrests without warrant. United States v. Di Re, 332 U.S. 581, 68 S.Ct. 222. 6 The Government brief states that the question presented is 'whether there was probable cause for the arrest of petitioner for possessing opium prepared for smoking and the search of her room in a hotel incident thereto for contraband opium, where experienced narcotic agents unmistakably detected and traced the pungent, identifiable odor of burning opium emanating from her room and knew, before they arrested her, that she was the only person in the room.' 7 The Government also suggests that 'In a sense, the arrest was made in 'hot pursuit'. * * *' However, we find no element of 'hot pursuit' in the arrest of one who was not in flight, was completely surrounded by agents before she knew of their presence, who claims without denial that she was in bed at the time, and who made no attempt to escape. Nor would these facts seem to meet the requirements of the 'Washington Uniform Law on Fresh Pursuit.' Session Laws 1943, ch. 261. 8 In Gouled v. United States, 255 U.S. 298, 302, 303, 41 S.Ct. 261, 263, 65 L.Ed. 647, this Court said: 'It would not be possible to add to the emphasis with which the framers of our Constitution and this court (in Boyd v. United States, 116 U.S. 616, 6 S.Ct. 524, 29 L.Ed. 746, in Weeks v. United States, 232 U.S. 383, 34 S.Ct. 341, 58 L.Ed. 652, L.R.A.1915B, 834, Ann.Cas.1915C, 1177, and in Silverthorne Lumber Co. v. United States, 251 U.S. 385, 40 S.Ct. 182, 64 L.Ed. 319 (24 A.L.R. 1426)) have declared the importance to political liberty and to the welfare of our country of the due observance of the rights guaranteed under the Constitution by these two (Fourth and Fifth) Amendments. The effect of the decisions cited is: That such rights are declared to be indispensable to the 'full enjoyment of personal security, personal liberty, and private property'; that they are to be regarded as of the very essence of constitutional liberty; and that the guaranty of them is as important and as imperative as are the guaranties of the other fundamental rights of the individual citizen—the right to trial by jury, to the writ of habeas corpus, and to due process of law. It has been repeatedly decided that these amendments should receive a liberal construction, so as to prevent stealthy encroachment upon or 'gradual depreciation' of the rights secured by them, by imperceptible practice of courts or by well-intentioned, but mistakenly overzealous, executive officers.'
01
333 U.S. 1 68 S.Ct. 371 92 L.Ed. 429 LE MAISTREv.LEFFERS et al. No. 362. Argued Jan. 7, 1948. Decided Feb. 2, 1948. Messrs. W. B. Shelby Crichlow and Dewey A. Dye, both of Bradenton, Fla., for petitioner. Mr. James Alfred Franklin, of Fort Myers, Fla., for respondents. Mr. Justice DOUGLAS delivered the opinion of the Court. 1 Section 205 of the Soldiers' and Sailors' Civil Relief Act of 1940, 54 Stat. 1178, as amended, 56 Stat. 769, 770, 50 U.S.C.App. Supp. V § 525, 50 U.S.C.A.Appendix, § 525, provides in part that no portion of the period of military service1 which occurs after October 6, 1942,2 shall be included 'in computing any period now or hereafter provided by any law for the redemption of real property sold or forfeited to enforce any obligation, tax, or assessment.' 2 Petitioner owned land in Florida on which taxes became delinquent April 1, 1940. Under Florida statutory procedure3 the tax collector after notice sells the land at public sale and issues a tax certificate to the purchaser. At any time after two years from the date of the certificate the holder thereof may apply for a tax deed. Notice is given, a public sale is had, and a tax deed is issued. The owner may redeem the land at any time after issuance of the certificate and before issuance of the tax deed. 3 In accordance with this procedure a tax certificate on petitioner's lands was issued August 5, 1940. Petitioner was on active duty in the Navy from August 18, 1942, until his discharge on December 18, 1945. Application for a tax deed was made by one Conrod in January, 1943, and the deed issued to him on March 1, 1943. It is through him that respondents claim by mesne conveyances. 4 Petitioner filed this suit in equity on March 25, 1946, seeking to set aside the tax deed by reason of § 205 of the Soldiers' and Sailors' Civil Relief Act. The Florida Supreme Court affirmed a judgment denying the relief, Fla., 31 So.2d 155, on the authority of its earlier decision in De Loach v. Calihan, Fla., 30 So.2d 910. The case is here on a petition for a writ of certiorari which we granted because the construction given to the federal Act seemed to us not only a dubious one but also at variance with Illinois Nat. Bank of Springfield v. Gwinn, 390 Ill. 345, 61 N.E.2d 249, 159 A.L.R. 468. 5 Under Florida law petitioner concededly could have redeemed any time between August 5, 1940, when the certificate was issued, and March 1, 1943, when the tax deed was issued. The provision of the federal Act with which we are here concerned became effc tive during that period—October 6, 1942. At that time petitioner was in the Navy and at once became a beneficiary of it. That means that the running of the time granted him under Florida law to redeem was tolled as long as he was in the military service. Since he would have had from October 6, 1942, to March 1, 1943, to redeem, the effect of the Act was to give him the same length of time after his discharge for that purpose. His present action being timely, there is thus no barrier to his recovery so far as the Act is concerned. 6 Two reasons, however, are advanced against it. First, it is argued that § 205 applies only where state law provides for transfer of title to the purchaser subject to defeasance by redemption. The Florida procedure is said to be not covered by § 205 since title passes only on issuance of the deed, which ends the period of redemption. We do not think § 205 deserves such a technical reading. The provision in question was added in 1942 to remedy what this Court had held to be a casus omissus in a preceding Act.4 Ebert v. Poston, 266 U.S. 548, 554, 45 S.Ct. 188, 190, 69 L.Ed. 435. Its language does no compel the narrow reading that is suggested; and the spirit of the amendment repels any such restriction. It covers 'any period * * * provided by any law for the redemption of real property sold or forfeited,' etc. We see neither in that language nor in the legislative history of the provision any purpose to restrict its application to cases where redemption follows passage of title. 7 The second reason urged against petitioner is the one adopted by the Supreme Court of Florida in De Loach v. Calihan, supra. It held that § 205 is limited by § 500, 50 U.S.C.A.Appendix, §§ 525, 560. The latter section gives added protection to a person in military service by providing that no sale for taxes or assessments shall be made except upon leave of court 'in respect of * * * real property owned and occupied for dwelling, professional, business, or agricultural purposes,' and by granting a given period for redemption.5 The Supreme Court of Florida held that § 500 describes the class of real property on which a soldier or sailor is granted indulgence, while § 205 indicates the period of the indulgence. Under that view petitioner would fail because the property in question does not appear to be land 'owned and occupied for dwelling, professional, business, or agricultural purposes.' 8 We do not, however, read the Act so restrictively. The two sections—205 and 500—supplement each other. Section 500, applicable to restricted types of real property, gives greater protection than § 205. It restrains the sale for taxes or assessments of specified types of real property except upon leave of court and prescribes for them a specified time within which the right to redeem may be exercised if the property is sold. Section 205 extends in terms to all land and only tolls the time for redemption for the period of military service. The other construction attributes to Congress a purpose to protect only certain classes of real property owned by those in the armed services. We cannot do that without drastically contracting the language of § 205 and closing our eyes to its beneficent purpose. But as we indicated on another occasion, the Act must be read with an eye friendly to those who dropped their affairs to answer their country's call. Boone v. Lightner, 319 U.S. 561, 575, 63 S.Ct. 1223, 1231, 87 L.Ed. 1587. 9 Reversed. 1 The term is defined in § 101(2) of the Act, 50 U.S.C.A.Appendix, § 511(2), as follows: 'For persons in active service at the date of the approval of this Act it shall begin with the date of approval of this Act; for persons entering active service after the date of this Act, with the date of entering active service. It shall terminate with the date of discharge from active service or death while in active service, but in no case later than the date when this Act ceases to be in force.' 2 That was the effective date of the amendment which added this provision to § 205. 3 Fla.Stats.1941, cc. 193, 194, F.S.A. 4 The purpose was stated as follows: 'The running of the statutory period during which real property may be redeemed after sale to enforce any obligation, tax, or assessment is likewise tolled during the part of such period which occurs after the enactment of the Soldiers' and Sailors' Civil Relief Act Amendments of 1942. Although the tolling of such periods is now within the spirit of the law, it has not been held to be within the letter thereof (I.R. 1269 C.B., June 1922, p. 311; Ebert v. Poston, 266 U.S. 549, 45 S.Ct. 189, 69 L.Ed. 435).' Sen.Rep.No.1558, 77th Cong., 2d Sess., p. 4. 5 Section 500 reads in part: '(1) The provisions of this section shall apply when any taxes or assessments, whether general or special (other than taxes on income), whether falling due prior to or during the period of military service, in respect of personal property, money, or credits, or real property owned and occupied for dwelling, professional, business, or agricultural purposes by a person in military service or his dependents at the commencement of his period of military service and still so occupied by his dependents or employees are not paid. '(2) No sale of such property shall be made to enforce the collection of such tax or assessment, or any proceeding or action for such purpose commenced, except upon leave of court granted upon application made therefor by the collector of taxes or other officer whose duty it is to enforce the collection of taxes or assessments. The court thereupon, unless in its opinion the ability of the person in military service to pay such taxes or assessmentsi § not materially affected by reason of such service, may stay such proceedings or such sale, as provided in this Act, for a period extending not more than six months after the termination of the period of military service of such person. '(3) When by law such property may be sold or forfeited to enforce the collection of such tax or assessment, such person in military service shall have the right to redeem or commence an action to redeem such property, at any time not later than six months after the termination of such service, but in no case later than six months after the date when this Act ceases to be in force; but this shall not be taken to shorten any period, now or hereafter provided by the laws of any State or Territory for such redemption.'
12
333 U.S. 6 68 S.Ct. 374 92 L.Ed. 433 FONG HAW TANv.PHELAN, Acting District Director, Immigration and Naturalization Service. No. 370. Argued Jan. 8, 9, 1948. Decided Feb. 2, 1948. Mr. Lambert O'Donnell, of Washington, D.C., for petitioner. Beatrice Rosenberg, of Washington, D.C., for respondent. Mr. Justice DOUGLAS delivered the opinion of the Court. 1 An alien 'who is sentence more than once' to imprisonment for a term of one year or more because of conviction in this country of a crime involving moral turpitude committed after his entry shall, with exceptions not material here, be deported. Section 19(a)1 of the Immigration Act of February 5, 1917, 39 Stat. 889, as amended 54 Stat. 671, 8 U.S.C. § 155(a), 8 U.S.C.A. § 155(a). It appears that petitioner, a native of China, was convicted of murder under each of two counts of an indictment, one count charging the murder of one Lai Quan, the other charging the murder on or about the same date of one Ong Kim.2 The jury fixed the punishment for each murder at life imprisonment. He was thereupon sentenced to prison for the period of his natural life by one judgment, construed by the Circuit Court of Appeals to impose that sentence on him for each of the convictions. Sometime thereafter a warrant for his deportation to China issued. Later he was paroled, released from prison, and taken into the custody of the Immigration Service. He then filed a petition for a writ of habeas corpus challenging the legality of his detention. The District Court denied the petition on the authority of Nishimoto v. Nagle, 9 Cir., 44 F.2d 304. The Circuit Court of Appeals affirmed. 9 Cir., 162 F.2d 663. The case is here on a petition for a writ of certiorari which we granted because of the contrariety of views among the circuits concerning the meaning of the statutory words 'sentenced more than once.' 2 The Ninth Circuit view is that a conviction and sentence for more than one offense, whether at the same or different times and whether carrying concurrent or consecutive sentences, satisfy the statute. That was the position taken in Nishimoto v. Nagle, supra, and followed below. The Second Circuit holds that an alien who is given consecutive sentences is sentenced more than once, while an alien who is given concurrent sentences is not, even though the crimes are distinct. Johnson v. United States, 2 Cir. 28 F.2d 810; United States ex rel. Mignozzi v. Day, 2 Cir., 51 F.2d 1019. The Fourth Circuit takes the position that the statute is satisfied whether or not the sentences imposed run concurrently or consecutively provided that the two crimes which the committed and for which separate sentences are imposed arise out of separate transactions. Tassari v. Schmucker, 4 Cir., 53 F.2d 570. The Fifth Circuit takes the view that an alien is 'sentenced once when, after a conviction or plea of guilty, he is called before the bar and receives judgment, whether for one or several crimes, with one or several terms of imprisonment. He is sentenced more than once when that happens again.' Wallis v. Tecchio, 5 Cir., 65 F.2d 250, 252. That view is an adaptation of the position taken earlier by a District Court in the same circuit that Congress by this provision aimed to deport 'repeaters,' viz. 'persons who commit a crime and are sentenced, and then commit another and are sentenced again.' Opolich v. Fluckey, D.C. 47 F.2d 950. 3 The latter is the reading we give the statute. There is a trace of that purpose found in its legislative history. Congressman Sabath who proposed the provision as an amendment said it was aimed at the alien 'who is a criminal at heart, a man who is guilty of a second offense involving moral turpitude and for the second time is convicted.' 53 Cong.Rec. 5167. Congressman Burnett, who was in charge of the bill on the floor of the House, gave the same emphasis when he said that the amendment proposed 'that those who committed a second crime involving moral turpitude showed then a criminal heart and a criminal tendency, and they should then be deported.' Id., p. 5168. The Committee Report in the Senate put the matter into sharper focus when it stated that the provision was 'intended to reach the alien who after entry shows himself to be a criminal of the confirmed type.' S.Rep.No.352, 64th Cong., 1st Sess., p. 15. Perhaps the plainest 'confirmed type' of criminal is the repeater. We give expression to that view by reading this provision of the statute to authorize deportation only where an alien having committed a crime involving moral turpitude and having been convicted and sentenced, once again commits a crime of that nature and is convicted and sentenced for it. 4 We resolve the doubts in favor of that construction because deportation is a drastic measure and at times the equivalent of banih ment of exile, Delgadillo v. Carmichael, 332 U.S. 388, 68 S.Ct. 10. It is the forfeiture for misconduct of a residence in this country. Such a forfeiture is a penalty. To construe this statutory provision less generously to the alien might find support in logic. But since the stakes are considerable for the individual, we will not assume that Congress meant to trench on his freedom beyond that which is required by the narrowest of several possible meanings of the words used. 5 Reversed. 1 Section 19(a) so far as material here provides: '* * * except as hereinafter provided, any alien who is hereafter sentenced to imprisonment for a term of one year or more because of conviction in this country of a crime involving moral turpitude, committed within five yearsa fter the entry of the alien to the United States, or who is hereafter sentenced more than once to such a term of imprisonment because of conviction in this country of any crime involving moral turpitude, committed at any time after entry * * * shall, upon the warrant of the Attorney General, be taken into custody and deported. * * * The provision of this section respecting the deportation of aliens convicted of a crime involving moral turpitude shall not apply to one who has been pardoned, nor shall such deportation be made or directed if the court, or judge thereof, sentencing such alien for such crime shall, at the time of imposing judgment or passing sentence or within thirty days thereafter, due notice having first been given to representatives of the State, make a recommendation to the Attorney General that such alien shall not be deported in pursuance of this Act; nor shall any alien convicted as aforesaid be deported until after termination of his imprisonment. * * *' 2 Whether the two murders resulted from one act or from two does not appear.
12
333 U.S. 18 68 S.Ct. 376 92 L.Ed. 442 UNITED STATESv.BROWN. No. 100. Argued Jan. 5, 6, 1948. Decided Feb. 2, 1948. Rehearing Denied March 8, 1948. Mr. Robert W. Ginnane, of Washington, D.C., for petitioner. Mr. Elmo B. Hunter, of Kansas City, Mo., for respondent. Mr. Justice RUTLEDGE delivered the opinion of the Court. 1 The Federal Escape Act requires that a sentence for escape or attempt to escape 'shall begin upon the expiration of, or upon legal release from, any sentence under which such person is held at the time of' the escape or attempt.1 The narrow question is whether the Act requires that a sentence for attempt to escape shall begin upon the expiration of the particular sentence being served when the attempt occurs or at the expiration of the aggregate term of consecutive sentences then in effect, of which the one being served is the first. 2 The facts are these. Respondent was charged under two indictments in the District Court for the Western District of Arkansas. One contained two counts, the first charging conspiracy to escape, the second attempt to escape. The other indictment was for violation of the National Motor Vehicle Theft Act. 41 Stat. 324, 59 Stat. 536, 18 U.S.C.A. § 408. Respondent pleaded guilty to all three charges. On October 26, 1945, he was sentenced as follows: under the first indictment charging the escape offenses, imprisonment for one year on the second count, and for two years on the first count, the sentences to run consecutively in that order; under the motor vehicle theft indictment, imprisonment for two years, to run consecutively to the other two. Thus the aggregate of the three consecutive sentences was five years. 3 On November 2, 1945, respondent was serving the one year term of the first sentence as ordered by the court. On that date he was being transported in custody of a United States marshal from an Arkansas jail to Leavenworth Penitentiary in Kansas.2 During the journey's progress through Missouri he attempted to escape. This resulted in another indictment, in the Western District of Missouri, to which also respondent pleaded guilty. The District Court sentenced him to imprisonment for five years, the term 'to begin at the expiration of any sentence he is now serving, or to be served which was imposed prior to this date * * *.' 4 Respondent filed a motion to correct this last sentence. He contended that at the time of the last attempt he was being 'held,' within the meaning of the last sentence of the Federal Escape Act, only under the one-year sentence pronounced in the Western District of Arkansas, and that the Act required the five-year sentence under the indictment returned in Missouri to commence at the expiration of that one-year term. 5 The District Court overruled the motion. It held that under the statute the sentencing court could order that the sentence begin to run after the service of any one or all of respondent's three prior sentences. 67 F.Supp. 116. The Circuit Court of Appeals, however, reversed the judgment. Relying on the canon of strict construction of criminal statutes, it equated the statutory word 'held' to 'serving,' and concluded that a sentence for escape or attempt to escape must begin at the expiration of the particular sentence which the prisoner is serving at the time the escape or attempt occurs. Accordingly the court remanded the cause to the District Court with directions to correct the five-year sentence so that it would begin upon expiration of or legal release from the one-year sentence. 160 F.2d 310. We granted certiorari because of the importance of the question in the administration of the Federal Escape Act. 6 Although prison breach or other escape by prisoners from custody was a crime under the common law,3 there was no federal statute proscribing such conduct prior to the enactment of the original Federal Escape Act in 1930, 46 Stat. 327. That Act dealt only with escape or attempted escape while under sentence. It was enacted as part of a program sponsored by the Attorney General for the reorganization and improved administration of the federal penal system. H.R.Rep.No. 106, 71st Cong. 2d Sess. The Act took its present form in 1935, when it was broadened at the Attorney General's request4 to cover escape while in custody on a federal charge prior to conviction.5 7 The legislation reflects an unmistakable intention to provide punishment for escape or attempted escape to be superimposed upon the punishment meted out for previous offenses. This appears from the face of the statute itself. It first provides that persons escaping or attempting to escape while in custody, whether before or after conviction, shall be guilty of an offense. Then follow provisions for determining whether the offense shall be a felony or a misdemeanor, with corresponding prescriptions of penalties. 8 At this point the statute had no need tog o further if the intention had been merely to leave to the court's discretion whether the penalties, within the limits prescribed, should run concurrently or consecutively in accordance with the generally prevailing practice. On that assumption the statute was complete, without addition of the last two sentences. But in that form the Act would have left the court with discretion to make the sentence run concurrently or consecutively with the other sentences previously in effect or put into effect in the case or cases pending when the escape occurred. 9 Precisely to avoid this more was added, in the explicit provisions that 'the sentence imposed hereunder shall be in addition to and independent of any sentence imposed in the case in connection with which such person is held in custody at the time of such escape or attempt to escape. If such person be under sentence at the time of such offense, the sentence imposed hereunder shall begin upon the expiration of, or upon legal release from, any sentence under which such person is held at the time of such escape or attempt to escape.' (Emphasis added.) 10 These sentences foreclosed, and were intended to foreclose, what the earlier portions of the Act had left open, namely, the court's power to make the escape sentence run concurrently with the other sentences.6 Whether the escape was before or after conviction, additional punishment was made mandatory, in the one case by the explicit requirement, 'in addition to and independent of' and sentence imposed; in the other by the command that the escape sentence 'shall begin upon the expiration of, or upon legal release from, any sentence,' etc. The differing verbal formulations were necessary to meet the different 'before' and 'after' conviction situations. But the two provisions had one and the same purpose, to require additional punishment for the escape offense. The idea of allowing the escape sentences to run concurrently with the other sentences was completely inconsistent with this common and primary object, as well as with the wording of the two concluding clauses. In many cases such concurrent sentences would nullify the statutory purpose altogether; in others, they would do so partially.7 11 Moreover, imposition of such additional punishment had been the prime object, indeed the only one, of the original Escape Act, which was applicable only to escapes after conviction. It made such escapes or attempts 'offenses,' punishable by imprisonment for not more than five years, 'such sentence to begin upon the expiration of or upon legal release from the sentence for which said person was originally confined.'8 This provision, though differing from the wording of the last sentence of the present Act, had the same prime object. Concurrent sentences were as inconsistent with its terms as with those of the present Act, for in many cases like this one they would have added no further punishment in fact. 12 Congress, it is true, did not cast the original Act in terms specifically relating to a situation comprehending consecutive sentences existing at the time of the escape or attempt, as more careful drafting of the At would have required to insure achieving the object of adding independent punishment in all cases. Its concentration upon that main aspect of the legislation apparently led it to reduced emphasis upon and care in the definition of the situations to which the Act would apply. 13 Nevertheless in view of the Act's broad purpose, it would be difficult to conclude that the original phrasing, 'the sentence for which said person was originally confined,' was intended to apply only to the sentence, one of several consecutive ones, which the prisoner happened to be serving when the escape or the attempt occurred, or that the Act would be effective only where the prisoner was serving time under a single sentence, which was perhaps the more common of the situations which Congress perhaps had in mind. The same basic reasons which require rejection of either of those views of the present Act would apply to the original one. 14 But, in any event, Congress changed the wording of the 'after expiration or release' clause in the original statute when enacting the amended one. 'The sentence for which said person was originally confined' became 'any sentence under which such person is held at the time of such escape or attempt to escape.' This change is not without significance. For use of the words 'any sentence under which such person is held' means something more than the narrowest possible construction of 'the sentence for which said person was originally confined,' unless the change is to be taken as meaningless. We think it was intended, as were the other amendments made at the same time, to broaden the Act's coverage or to assure its broad coverage,9 and therefore to include situations where the prisoner was being 'held' under more than one sentence. Otherwise there would be no reason for or meaning in the change. 15 We think therefore that the Act contemplates 'additional' and 'independent' punishment in both the concluding clauses in a practical sense, not merely in the technical sense of concurrent sentences having no effect to confine the prisoner for any additional time. In a very practical sense, a person in custody under several consecutive sentences is being 'held' under the combined sentences. And the legislative language is a natural, though not nicely precise, way of stating the purpose that the sentence for escape shall begin upon the expiration of the aggregate of the terms of imprisonment imposed by earlier sentences. Granted that the present problem could have been obviated by even more astute draftsmanship, the statute on its face and taken in its entirety sufficiently expresses the congressional mandate that the sentence for escape is to be superimposed upon all prior sentences. 16 We are mindful of the maxim that penal statutes are to be strictly construed. And we would not hesitate, present any compelling reason, to apply it and accept the restricted interpretation. But no such reason is to be found here. The canon in favor of strict construction is not an inexorable command to override common sense and evident statutory purpose. It does not require magnified emphasis upon a single ambiguous word in order to give it a meaning contradictory to the fair import of the whole remaining language. As was said in United States v. Gaskin, 320 U.S. 527, 530, 64 S.Ct. 318, 319, 88 L.Ed. 287, the canon 'does not require distortion or nullification of the evident meaning and purpose of the legislation.' Nor does it demand that a statute be given the 'narrowest meaning'; it is satisfied if the words are given their fair meaning in accord with the manifest intent of the lawmakers. United States v. Raynor, 302 U.S. 540, 552, 58 S.Ct. 353, 359, 82 L.Ed. 413; United States v. Giles, 300 U.S. 41, 48, 57 S.Ct. 340, 344, 81 L.Ed. 493; Gooch v. United States, 297 . S. 124, 128, 56 S.Ct. 395, 397, 80 L.Ed. 522; United States v. Corbett, 215 U.S. 233, 242, 30 S.Ct. 81, 84, 54 L.Ed. 173. 17 To accept the decision of the Circuit Court of Appeals would lead to bizarre results. The congressional purpose would be frustrated, in part at least, in every situation where an escape is effected or attempted during the prisoner's service of any but the last of two or more consecutive sentences, possibly even in that instance, Barring intervention of executive clemency, it would be completely nullified in all cases where the consecutive sentences which the prisoner has not yet begun to serve aggregate five years or more. In the latter situation the prisoner could attempt any number of jail breaks with impunity. A court would be powerless to impose added confinement for violation of the Escape Act. 18 The holding of the Circuit Court of Appeals thus places it beyond the power of the judge to superimpose additional imprisonment for escape in those instances where such punishment is most glaringly needed as a deterrent.10 There is also this further striking incongruity. The judge is completely interdicted for imposing an additional sentence for escape or attempt to escape, the one type of offense which Congress unmistakably intended to be subject to separate and added punishment, although he may direct that a sentence for any other federal offense shall begin at the expiration of consecutive sentences theretofore imposed. 19 No rule of construction necessitates our acceptance of an interpretation resulting in patently absurd consequences. And the absence of any significant legislative history, other than has been related, may be indicative that Congress considered that there was no such problem as is now sought to be injected in the statutory wording or that by the 1935 amendment it had cured the previously existing one. The liberty of the individual must be scrupulously protected. But the safeguards of cherished rights are not to be found in the doctrinaire application of the tenet of strict construction. Neither an ordered system of liberty nor the proper administration of justice would be served by blind nullification of the congressional intent clearly reflected in the Federal Escape Act. 20 The judgment of the Circuit Court of Appeals is reversed. 21 Reversed. 22 Mr. Justice BLACK and Mr. Justice DOUGLAS dissent. 1 The Act is as follows: 'Any person committed to the custody of the Attorney General or his authorized representative, or who is confined in any penal or correctional institution pursuant to the direction of the Attorney General, or who is in custody by virtue of any process issued under the laws of the United States by any court, judge, or commissioner, or who is in custody of an officer of the United States pursuant to lawful arrest, who escapes or attempts to escape from such custody or institution, shall be guilty of an offense. If the custody or confinement is by virtue of an arrest on a charge of felony, or conviction of any offense whatsoever, the offense of escaping or attempting to escape therefrom shall constitute a felony and any person convicted thereof shall be punished by imprisonment for not more than five years or by a fine of not more than $5,000, or both; and if the custody or confinement is by virtue of an arrest or charge of or for a misdemeanor, and prior to conviction, the offense of escaping or attempting to escape therefrom shall constitute a misdemeanor and any person convicted thereof shall be punished by imprisonment for not more than one year or by a find of not more than $1,000, or both. The sentence imposed hereunder shall be in addition to and independent of any sentence imposed in the case in connection with which such person is held in custody at the time of such escape or attempt to escape. If such person be under sentence at the time of such offense, the sentence imposed hereunder shall begin upon the expiration of, or upon legal release from, any sentence under which such person is held at the time of such escape or attempt to escape.' 49 Stat. 513, 18 U.S.C. § 753h, 18 U.S.C.A. § 753h. 2 The sentence began to run as of the time respondent was committed to jail to await transportation to the Leavenworth penitentiary. 47 Stat. 381, 18 U.S.C.A. § 709a. 3 Miller, Criminal Law 463—465. 4 H.R. Rep. No. 803, 74th Cong., 1st Sess.; S. Rep. No. 1021, 74th Cong., 1st Sess. 5 The Government's brief aptly summarizes some of the more serious considerations leading to adoption of the original and amended acts, as follows: 'Escapes and attempted escapes from penal institutions or from official custody present a most serious problem of penal discipline. They are often violent, menacing, as in the instant case, the lives of guards and custodians, and carry in their wake other crimes attendant upon procuring money, weapons and transportation and upon resisting recapture.' 6 But see Rutledge v. United States, 5 Cir., 146 F.2d 199. 7 Depending on whether the term of the sentence for escape, as of the time of its imposition, is shorter or longer than the periods of the other sentences remaining unserved. 8 The Act was as follows: 'Any person properly committed to the custody of the Attorney General or his authorized representative or who is confined in any penal or correctional institution, pursuant to the direction of the Attorney General, who escapes or attempts to escape therefrom shall be guilty of an offense and upon apprehension and conviction of any such offense in any United States court shall be punished by imprisonment for not more than five years, such sentence to begin upon the expiration of or upon legal release from the sentence for which said person was originally confined.' 46 Stat. 327. 9 Either by eliminating the original wording's ambiguity by rejecting the narrow construction or, if that construction were thought valid, by changing the Act's terms to insure a different result. 10 The $5,000 fine that could be imposed for each escape attempt, see not 1 supra, would be no deterrent to an impecunious offender, and little more than an empty threat to the long-incarcerated one whose all-consuming interest is freedom.
01
333 U.S. 103 68 S.Ct. 431 92 L.Ed. 568 CHICAGO & SOUTHERN AIR LINES, Inc.,v.WATERMAN S.S. CORPORATION. CIVIL AERONAUTICS BOARD v. SAME. Nos. 78 and 88. Argued Nov. 19, 1947. Decided Feb. 9, 1948. Mandate Conformed to April 13, 1948. Mr. R. Emmett Kerrigan, of New Orleans, La., for petitioner Chicago & Southern Air Lines, Inc. Mr. Robert L. Stern, of Washington, D.C., for petitioner Civil Aeronautics Board. Mr. Bon Geaslin, of Washington, D.C., for respondent. Mr. Justice JACKSON delivered the opinion of the Court. 1 The question of law which brings this controversy here is whether § 1006 of the Civil Aeronatics Act, 49 U.S.C. § 646, 49 U.S.C.A. § 646, authorizing judicial review of described orders of the Civil Aeronautics Board, includes those which grant or deny applications by citizen carriers to engage in overseas and foreign air transportation which are subject to approval by the President under § 801 of the Act. 49 U.S.C. § 601, 49 U.S.C.A. § 601. 2 By proceedings not challenged as to regularity, the Board, with express approval of the President, issued an order which denied Waterman Steamship Corporation a certificate of convenience and necessity for an air route and granted one to Chicago and Southern Air Lines, a rival applicant. Routes sought by both carrier interests involved overseas air transportation, § 1(21) (b), 49 U.S.C.A. § 401(21)(b), between Continental United States and Caribbean possessions and also foreign air transportation, § 1(21)(c), between the United States and foreign countries. Waterman filed a petition for review under § 1006 of the Act with the Circuit Court of Appeals for the Fifth Circuit. 159 F.2d 828. Chicago and Southern intervended. Both the latter and the Board moved to dismiss, the grounds pertinent here being that because the order required and had approval of the President, under § 801 of the Act, it was not reviewable. The Court of Appeals disclaimed any power to question or review either the President's approval or his disapproval, but it regarded any Board order as incomplete until court review, after which 'the completed action must be approved by the President as to citizen air carriers in cases under Sec. 801.' 159 F.2d 828, 831. Accordingly, it refused to dismiss the petition and asserted jurisdiction. Its decision conflicts with one by the Court of Appeals for the Second Circuit. Pan American Airways, Inc., v. Civil Aeronautics Board, 21 F.2d 810. We granted certiorari both to the Chicago and Southern Air Lines, Inc. (No. 78) and to the Board (No. 88) to resolve the conflict. 3 Congress has set up a comprehensive scheme for regulation of common carriers by air. Many statutory provisions apply indifferently whether the carrier is a foreign air carrier or a citizen air carrier, and whether the carriage involved is 'interstate air commerce,' 'overseas air commerce' or 'foreign air commerce,' each being appropriately defined. 49 U.S.C. § 401(20), 49 U.S.C.A. § 401(20). All air carriers by similar procedures must obtain from the Board certificates of convenience and necessity by showing a public interest in establishment of the route and the applicant's ability to serve it. But when a foreign carrier asks for any permit, or a citizen carrier applies for a certificate to engage in any overseas or foreign air transportation, a copy of the application must be transmitted to the President before hearing; and any decision, either to grant or to deny, must be submitted to the President before publication and is unconditionally subject to the President's approval. Also the statute subjects to judicial review 'any order, affirmative or negative, issued by the Board under this Act, except any order in respect of any foreign air carrier subject to the approval of the President as provd ed in section 801 of this Act.' It grants no express exemption to an order such as the one before us, which concerns a citizen carrier but which must have Presidential approval because it involves overseas and foreign air transportation. The question is whether an exemption is to be implied. 4 This Court long has held that statutes which employ broad terms to confer power of judicial review are not always to be read literally. Where Congress has authorized review of 'any order' or used other equally inclusive terms, courts have declined the opportunity to magnify their jurisdiction, by self-denying constructions which do not subject to judicial control orders which, from their nature, from the context of the Act, or from the relation of judicial power to the subject-matter, are inappropriate for review. Examples are set forth by Chief Justice Hughes in Federal Power Commission v. Metropolitan Edison Co., 304 U.S. 375, 384, 58 S.Ct. 963, 967, 82 L.Ed. 1408. Cf. Rochester Telephone Corporation v. United States, 307 U.S. 125, 130, 59 S.Ct. 754, 757, 83 L.Ed. 1147. 5 The Waterman Steamship Corporation urges that review of the problems involved in establishing foreign air routes are of no more international delicacy or strategic importance than those involved in routes for water carriage. It says, 'It is submitted that there is no basic difference between the conduct of the foreign commerce of the United States by air or by sea.' From this premise it reasons that we should interpret this statute to follow the pattern of judicial review adopted in relation to orders affecting foreign commerce by rail, Lewis-Simas-Jones Co. v. Southern Pacific Co., 283 U.S. 654, 51 S.Ct. 592, 75 L.Ed. 1333; News Syndicate Co. v. New York Central R. Co., 275 U.S. 179, 48 S.Ct. 39, 72 L.Ed. 225, or communications by wire, United States v. Western Union Telegraph Co., 2 Cir., 272 F. 893, or by radio, Mackay Radio & Telegraph Co. v. Federal Communications Commission, 68 App.D.C. 336, 97 F.2d 641; and it likens the subject-matter of aeronautics legislation to that of Title VI of the Merchant Marine Act of 1936, 46 U.S.C. § 1171, 46 U.S.C.A. § 1171, and the function of the Aeronautics Board in respect to overseas and foreign air transportation to that of the Maritime Commission to such commerce when water-borne. 6 We find no indication that the Congress either entertained or fostered the narrow concept that air-borne commerce is a mere outgrowth or overgrowth of surface-bound transport. Of course, air transportation, water transportation, rail transportation and motor transportation all have a kinship in that all are forms of transportation and their common features of public carriage for hire may be amenable to kindred regulations. But these resemblances must not blind us to the fact that legally, as well as literally, air commerce, whether at home or abroad, soared into a different realm than any that had gone before. Ancient doctrines of private ownership of the air as appurtenant to land titles had to be revised to make aviation practically serviceable to our society. A way of travel which quickly escapes the bounds of local requlative competence called for a more penetrating, uniform and exclusive regulation by the nation than had been thought appropriate for the more easily controlled commerce of the past. While transport by land and by sea began before any existing government was established and their respective customs and practices matured into bodies of carrier law independently of legislation, air transport burst suddenly upon modern governments, offering new advantages, demanding new rights and carrying new threats which society could meet with timely adjustments only by prompt invocation of legislative authority. However useful parallels with older forms of transit may be in adjudicating private rights, we see no reason why the efforts of the Congress to foster and regulate development of a revolutionary commerce that operates in three dimensions should be judc ially circumscribed with analogies taken over from two-dimentional transit. 7 The 'public interest' that enters into awards of routes for aerial carriers, who in effect obtain also a sponsorship by our government in foreign ventures, is not confined to adequacy of transportation service, as we have held when that term is applied to railroads. State of Texas v. United States, 292 U.S. 522, 531, 54 S.Ct. 819, 824, 78 L.Ed. 1402. That aerial navigation routes and bases should be prudently correlated with facilities and plans for our own national defenses and raise new problems in conduct of foreign relations, is a fact of common knowledge. Congressional hearings and debates extending over several sessions and departmental studies of many years show that the legislative and administrative processes have proceeded in full recognition of these facts. 8 In the regulation of commercial aeronautics, the statute confers on the Board many powers conventional in other carrier regulation under the Congressional commerce power. They are exercised through usual procedures and apply settled standards with only customary administrative finality. Congress evidently thought of the administrative function in terms used by this Court of another of its agencies in exercising interstate commerce power: 'Such a body cannot in any proper sense be characterized as an arm or an eye of the executive. Its duties are performed without executive leave and, in the contemplation of the statute, must be free from executive control.' Humphrey's Executor v. United States, 295 U.S. 602, 628, 55 S.Ct. 869, 874, 79 L.Ed. 1611. Those orders which do not require Presidential approval are subject to judicial review to assure application of the standards Congress has laid down. 9 But when a foreign carrier seeks to engage in public carriage over the territory or waters of this country, or any carrier seeks the sponsorship of this Government to engage in overseas or foreign air transportation, Congress has completely inverted the usual administrative process. Instead of acting independently of executive control, the agency is then subordinated to it. Instead of its order serving as a final disposition of the application, its force is exhausted when it serves as a recommendation to the President. Instead of being handed down to the parties as the conclusion of the administrative process, it must be submitted to the President, before publication even can take place. Nor is the President's control of the ultimate decision a mere right of veto. It is not alone issuance of such authorizations that are subject to his approval, but denial, transfer, amendment, cancellation or suspension, as well. And likewise subject to his approval are the terms, conditions and limitations of the order. 49 U.S.C. § 601, 49 U.S.C.A. § 601. Thus, Presidential control is not limited to a negative but is a positive and detailed control over the Board's decisions, unparalleled in the history of American administrative bodies 10 Congress may of course delegate very large grants of its power over foreign commerce to the President. Norwegian Nitrogen Products Co. v. United States, 288 U.S. 294, 53 S.Ct. 350, 77 L.Ed. 796; United States v. George S. Bush & Co., 310 U.S. 371, 60 S.Ct. 944, 84 L.Ed. 1259. The President also possesses in his own right certain powers conferred by the Constitution on him as Commander-in-Chief and as the Nation's organ in foreign affairs. For present purposes, the order draws vitality from either or both sources. Legislative and Executive powers are pooled obviously to the end that commercial strategic and diplomatic interests of the country may be coordinated and advanced without collision or deadlock between agencies. 11 These considerations seem controlling on the question whether the Board's action on overseas and foreign air transportation applications by citizens are subject to revision or overthrow by the courts. 12 It may be conceded that a literal reading of § 1006 subjects this r der to re-examination by the courts. It also appears that the language was deliberately employed by Congress, although nothing indicates that Congress foresaw or intended the consequences ascribed to it by the decision of the Court below. The letter of the text might with equal consistency be construed to require any one of three things: first, judicial review of a decision by the President; second, judicial review of a Board order before it acquires finality through Presidential action, the court's decision on review being a binding limitation on the President's action; third, a judicial review before action by the President, the latter being at liberty wholly to disregard the court's judgment. We think none of these results is required by usual canons of construction. 13 In this case, submission of the Board's decision was made to the President, who disapproved certain portions of it and advised the Board of the changes which he required. The Board complied and submitted a revised order and opinion which the President approved. Only then were they made public, and that which was made public and which is before us is only the final order and opinion containing the President's amendments and bearing his approval. Only at that stage was review sought, and only then could it be pursued, for then only was the decision consummated, announced and available to the parties. 14 While the changes amde at direction of the President may be identified, the reasons therefor are not disclosed beyond the statement that 'because of certain factors relating to our broad national welfare and other matters for which the Chief Executive has special responsibility, he has reached conclusions which require' changes in the Board's opinion. 15 The court below considered, and we think quite rightly, that it could not review such provisions of the order as resulted from Presidential direction. The President, both as Commander-in-Chief and as the Nation's organ for foreign affairs, has available intelligence services whose reports neither are nor ought to be published to the world. It would be intolerable that courts, without the relevant information, should review and perhaps nullify actions of the Executive taken on information properly held secret. Nor can courts sit in camera in order to be taken into executive confidences. But even if courts could require full disclosure, the very nature of executive decisions as to foreign policy is political, not judicial. Such decisions are wholly confided by our Constitution to the political departments of the government, Executive and Legislative. They are delicate, complex, and involve large elements of prophecy. They are and should be undertaken only by those directly responsible to the people whose welfare they advance or imperil. They are decisions of a kind for which the Judiciary has neither aptitude, facilities nor responsibility and have long been held to belong in the domain of political power not subject to judicial intrusion or inquiry. Coleman v. Miller, 307 U.S. 433, 454, 59 S.Ct. 972, 982, 83 L.Ed. 1385, 122 A.L.R. 695; United States v. Curtiss-Wright Corporation, 299 U.S. 304, 319—321, 57 S.Ct. 216, 220, 221, 81 L.Ed. 255; Oetjen v. Central Leather Co., 246 U.S. 297, 302, 38 S.Ct. 309, 310, 62 L.Ed. 726. We therefore agree that whatever of this order emanates from the President is not susceptible of review by the Judicial Department. 16 The court below thought that this disability could be overcome by regarding the Board as a regulatory agent of Congress to pass on such matters as the fitness, willingness and ability of the applicant, and that the Board's own determination of these matters is subject to review. The court, speaking of the Board's action, said (159 F.2d 831): 'It is not final till the Board and the court have completed their functions. Thereafter the completed action must be approved by the President as to citizen air carriers in cases under Sec. 801.' The legal incongruity of interposing judicial reviw between the action by the Board and that by the President are as great as the practical disadvantages. The latter arise chiefly from the inevitable delay and obstruction in the midst of the administrative proceedings. The former arises from the fact that until the President acts there is no final administrative determination to review. The statute would hardly have forbidden publication before submission if it had contemplated interposition of the courts at this intermediate stage. Nor could it have expected the courts to stay the President's hand after submission while they deliberate on the inchoate determination. The difficulty is manifest in this case. Review could not be sought until the order was made available, and at that time it had ceased to be merely the Board's tentative decision and had become one finalized by Presidential discretion. 17 Until the decision of the Board has Presidential approval, it grants no privilege and denies no right. It can give nothing and can take nothing away from the applicant or a competitor. It may be a step, which if erroneous will mature into a prejudicial result, as an order fixing valuations in a rate proceeding may foreshow and compel a prejudicial rate order. But administrative orders are not reviewable unless and until they impose an obligation, deny a right or fix some legal relationship as a consummation of the administrative process. United States v. Los Angeles & Salt Lake R. Co., 273 U.S. 299, 47 S.Ct. 413, 71 L.Ed. 651; United States v. Illinois Central R. Co., 244 U.S. 82, 37 S.Ct. 584, 61 L.Ed. 1007; Rochester Telephone Corporation v. United States, 307 U.S. 125, 131, 59 S.Ct. 754, 757, 83 L.Ed. 1147. The dilemma faced by those who demand judicial review of the Board's order is that, before Presidential approval, it is not a final determination even of the Board's ultimate action, and after Presidential approval, the whole order, both in what is approved without change, as well as in amendments which he directs, derives its vitality from the exercise of unreviewable Presidential discretion. 18 The court below considered that after it reviewed the Board's order, its judgment would be submitted to the President, that his power to disapprove would apply after as well as before the court acts, and hence that there would be no chance of a deadlock and no conflict of function. But if the President may completely disregard the judgment of the court, it would be only because it is one the courts were not authorized to render. Judgments, within the powers vested in courts by the Judiciary Article of the Constitution, may not lawfully be revised, overturned or refused faith and credit by another Department of Government. 19 To revise or review an administrative decision, which has only the force of a recommendation to the President, would be to render an advisory opinion in its most obnoxious form—advice that the President has not asked, tendered at the demand of a private litigant, on a subject concededly within the President's exclusive, ultimate control. This Court early and wisely determined that it would not give advisory opinions even when asked by the Chief Executive. It has also been the firm and unvarying practice of Constitutional Courts to render no judgments not binding and conclusive on the parties and none that are subject to later review or alteration by administrative action. Hayburn's Case, 2 Dall. 409, 1 L.Ed. 436; United States v. Ferreira, 13 How. 40, 14 L.Ed. 42; Gordon v. United States, 117 U.S 697; In re Sanborn, 148 U.S. 222, 13 S.Ct. 577, 37 L.Ed. 429; Interstate Commerce Commission v. Brimson, 154 U.S. 447, 14 S.Ct. 1125, 38 L.Ed. 1047; La Abra Silver Mining Co. v. United States, 175 U.S. 423, 20 S.Ct. 168, 44 L.Ed. 223; Muskrat v. United States, 219 U.S. 346, 31 S.Ct. 250, 55 L.Ed. 246; United States v. Jefferson Electric Mfg. Co., 291 U.S. 386, 54 S.Ct. 443, 78 L.Ed. 859. 20 We conclude that orders of the Board as to certificate for overseas or foreign air transportatin are not mature and are therefore not susceptible to judicial review at anytime before they are finalized by Presidential approval. After such approval has been given, the final orders embody Presidential discretion as to political matters beyond the competence of the courts to adjudicate. This makes it unnecessary to examine the other questions raised. The petition of the Waterman Steamship Corp. should be dismissed. 21 Judgment reversed. 22 Mr. Justice DOUGLAS, with whom Mr. Justice BLACK, Mr. Justice REED and Mr. Justice RUTLEDGE concur, dissenting. 23 Congress has specifically provided for judicial review of orders of the Civil Aeronautics Board of the kind involved in this case. That review can be had without intruding on the exclusive domain of the Chief Executive. And by granting it we give effect to the interests of both the Congress and the Chief Executive in this field. 24 The Commerce Clause of the Constitution grants Congress control over interstate and foreign commerce. Art. I, § 8. The present Act is an exercise of that power. Congress created the Board and defined its functions. It specified the standards which the Board is to apply in granting certificates for overseas and foreign air transportation.1 It expressly made subject to judicial review orders of the Board granting or denying certificates to citizens and withheld judicial review where the applicants are not citizens.2 If this were all, there would be no question. 25 But Congress did not leave the matter entirely to the Board. Recognizing the important role the President plays in military and foreign affairs, it made him a participant in the process. Applications for certificates of the type involved here are transmitted to him before hearing, all decisions on the applications are submitted to him before their publication, and the orders are 'subject to' his approval.3 Since his decisions in these matters are of a character which involve an exercise of his discretion in foreign affairs or military matters, I do not think Congress intended them to be subject to judicial review. 26 But review of the President's action does not result from reading the statute in the way it is written. Congress made reviewable by the courts only orders 'issued by the Board under this Act.'4 Those orders can be reviewed without reference to any conduct of the President, for that part of the orders which is the work of the Board is plainly identifiable.5 The President is presumably concerned only with the impact of the order on foreign relations or military matters. To the extent that he disapproves action taken by the Board, his action controls. But where that is not done, the Board' order has an existence independent of Presidential approval, tracing to Congress' power to regulate commerce. Approval by the President under this statutory scheme has relevance for purposes of review only as indicating when the action of the Board is reviewable. When the Board has finished with the order, the administrative function is ended. When the order fixes rights, on clearance by the President, it becomes reviewable. But the action of the President does not broaden the review. Review is restricted to the action of the Board and the Board alone. 27 The statute, as I construe it, contemplates that certificates issued will rest on orders of the Board which satisfy the standards prescribed by Congress. Presidential approval cannot make valid invalid orders of the Board. His approval supplements rather than supersedes Board action. Only when the Board has acted within the limits of its authority has the basis been laid for issuance of certificates. The requirement that a valid Board order underlie each certificate thus protects the President as well as the litigants and the public interest against unlawful Board action. 28 The importance of the problem is evidenced by the character of cases controlled by this decision. The present ruling is not limited to cases granting or denying certificates for air transportation to and from foreign countries. It also denies power to review orders governing air transportation between two points in Alaska, between two points in Hawaii, between Seattle and Juneau, between New Orleans and San Juan.6 All of those are now beyond judicial review. And so they should be so far as conduct of the President is concerned. But Congress has commanded otherwise as to action by the Board. The Board can act in a lawless way. With that in mind, Congress sought to preserve the integrity of the administrative process by making judicial review a check on Board action. That was the aim of Congress, now defeated by a legalism which in my view does not square with reality. 29 In this petition for review, the respondent charged that the Board had no substantial evidence to support its findings that Chicago and Southern Air Lines was fit, willing and able to perform its obligations under the certificate; and it charged that when a change of conditions as to Chicago and Southern Air Lines' ability to perform was called to the attention of the Board, the Board refused to reopen the case. I do not know whether there is merit in those contentions. But no matter how substantial and important the questions, they are now beyond judicial review. Today a litigant tenders questions concerning the arbitrary character of the Board's ruling. Tomorrow those questions may relate to the right to notice, adequacy of hearings, or the lack of procedural due process of law. But no matter how extreme the action of the Board, the courts are powerless to correct it under today's decision. Thus the purpose of Congress is frustrated. 30 Judicial review would assure the President, th litigants and the public that the Board had acted within the limits of its authority. It would carry out the aim of Congress to guard against administrative action which exceeds the statutory bounds. It would give effect to the interests of both Congress and the President in this field. 1 See §§ 401, 408(b), 52 Stat. 987, 1001, 49 U.S.C. §§ 481, 488, 49 U.S.C.A. §§ 481, 488. 2 Section 1006(a) provides in part: 'Any order, affirmative or negative, issued by the Board under this Act, except any order in respect of any foreign air carrier subject to the approval of the President as provided in section 801 of this Act, shall be subject to review by the circuit courts of appeals of the United States or the United States Court of Appeals for the District of Columbia upon petition, filed within sixty days after the entry of such order, by any person disclosing a substantial interest in such order.' 52 Stat. 1024, 54 Stat. 1235, 49 U.S.C. § 646(a), 49 U.S.C.A. § 646(a). Section 401(a) requires every air carrier to have a certificate before engaging in air transportation. 52 Stat. 987, 49 U.S.C. § 481(a), 49 U.S.C.A. § 481(a). There is the same requirement in case of a foreign air carrier. § 402(a), 52 Stat. 991, 49 U.S.C. § 482(a), 49 U.S.C.A. § 482(a). An air carrier is defined as a citizen (§ 1(2), 52 Stat. 977, 49 U.S.C. § 401(2), 49 U.S.C.A. § 401(2)), and a foreign air carrier as any person not a citizen, and engaged in foreign air transportation. § 1(19), 52 Stat. 978, 49 U.S.C. § 401(19), 49 U.S.C.A. § 401(19). 3 § 801. 52 Stat. 1014, 49 U.S.C. § 601, 49 U.S.C.A. § 601. 4 § 1006(a), supra, note 2. 5 The Board had consolidated for hearing 29 applications for certificates to engage in air transportation which were filed by 15 applicants. The President's partial disapproval of the proposed disposition of these applications did not relate to the applications involved in this case. As to them, the action of the Board stands unaltered. 6 By § 801 the approval of the President extends to orders 'authorizing an air carrier to engage in overseas or foreign air transportation, or air transportation between places in the same Territory or possession.' 52 Stat. 1014, 49 U.S.C. § 601, 49 U.S.C.A. § 601. Section 1(21) includes in overseas air transportation commerce between a place in the continental United States and a place in a Territory or possession of the United States, or between a place in a Territory or possession of the United States and a place in any other Territory or possession. 52 Stat. 979, 49 U.S.C. § 401(21), 49 U.S.C.A. § 401(21).
89
333 U.S. 95 68 S.Ct. 397 92 L.Ed. 562 MUSSER et al.v.STATE OF UTAH. No. 60. Reargued Jan. 5, 1948. Decided Feb. 9, 1948. Appeal from the Supreme Court of the State of Utah. Mr. Claude T Barnes, of Salt Lake City, Utah, for petitioners. Mr. Calvin L. Rampton, of Salt Lake City, Utah, for respondent. Mr. Justice JACKSON delivered the opinion of the Court. 1 The appellants sought review by this Court of a decision by the Supreme Court of Utah on the ground that the State convicted them in violation of the Fourteenth Amendment to the Federal Constitution. In the trial court a motion to dismiss the charge at the close of the evidence broadly indicated reliance on the Fourteenth as well as the First Amendment, and such reliance was indicated in requests for instructions. A preliminary motion to quash the information was stated in broad terms which it is claimed admitted argument of any federal grounds. Trial resulted in conviction and the Supreme Court of the State overruled all constitutional objections and affirmed. 2 On argument in this Court, inquiries from the bench suggested a federal question which had not been specifically assigned by defendants in this Court, nor in any court below, although general transgression of the Fourteenth Amendment had been alleged. This question is whether the Utah statute, for violation of which the appellants are amerced, is so vague and indefinite that it fails adequately to define the offense or to give reasonable standards for determining guilt. The question grew out of these circumstances: 3 Defendants were tried on an information which charged violation of § 103—11—1, Utah Code Ann.1943, in that they conspired 'to commit acts injurious to public morals as follows: * * *' It then specified acts which amount briefly to conspiring to counsel, advise and practice polygamous or plural marriage, and it set forth a series of overt acts in furtherance thereof. The Supreme Court considered that the prosecution was under Paragraph (5) of 103—11—1 which, so far as relevant, defines conspiracy, '(5) To commit any act injurious to the public health, to public morals, or to trade or commerce, or for the perversion or obstruction of justice or the due administration of the laws * * *.' 4 It is obvious that this is no narrowly drawn statute. We do not presume to give an interpretation as to what it may include. Standing by itself, it would seem to be warrant for conviction for agreement to do almost any act which a judge and jury might find at the moment contrary to his or its notions of what was good for health, morals, trade, commerce, justice or order. In some States the phrase 'injurious to public morals' would be likely to punish acts which it would not punish in others because of the varying policies on such matters as use of cigarettes or liquor and the permissibility of gambling. This led to the inquiry as to whether the statute attempts to cover so much that it effectively covers nothing. Statutes defining crimes may fail of their purpose if they do not provide some reasonable standards of guilt. See, for example, United States v. Cohen Grocery Co., 255 U.S. 81, 41 S.Ct. 298, 65 L.Ed. 516, 14 A.L.R. 1045. Legislation may run afoul of the Due Process Clause because it fails to give adequate guidance to those who would be law-abiding, to advise defendants of the nature of the offense with which they are charged, or to guide courts in trying those who are accused. 5 When the adequacy of this statute in these respects was questioned, the State asked and was granted reargument here. Rehearing convinces us that questions are inherent in this appeal which were not presented to or considered by the Utah Supreme Court and which involve determination of state law. We recognize that the part of the statute we have quoted does not stand by itself as the law of Utah but is part of the whole body of common and statute law of that State and is to be judged in that context. It is argued that while Paragraph (5) as quoted is admittedly very general, the present charge is sustainable under Paragraph (1) thereof which makes a crime of any conspiracy to commit a crime and that the sweep of Paragraph (5) is or a y be so limited by its context or by judicial construction as to supply more definite standards for determining guilt. It is also said that the point, so far as this case is concerned, has been waived or lost because there was no timely or sufficient assignment of it as ground for dismissal to comply with state practice. We believe we should not pass upon the questions raised here until the Supreme Court of Utah has had opportunity to deal with this ultimate issue of federal law and with any state law questions relevant to it. 6 This trial was not conducted in federal court nor for violation of federal law. It is a prosecution by the State, in its courts, to vindicate its own laws. Our sole concern with it is to see that no conviction contrary to a valid objection raised under the Fourteenth Amendment is upheld. What the statutes of a State mean, the extent to which any provision may be limited by other Acts or by other parts of the same Act, are questions on which the highest court of the State has the final word. The right to speak this word is one which State courts should jealously maintain and which we should scrupulously observe. In order that the controversy may be restored to the control of the Supreme Court of Utah, its present judgment is vacated and the cause is remanded for proceedings not inconsistent herewith. 7 Vacated and remanded. 8 Mr. Justice BLACK concurs in the result. 9 Mr. Justice RUTLEDGE, with whom Mr. Justice DOUGLAS and Mr. Justice MURPHY concur, dissenting. 10 I would make a different disposition of the case. I think a deeper vice infects these convictions than their apparent invalidity for vagueness of the Utah statute, first suggested on the original argument here, even if further construction by the Utah courts might possibly remove that ground for reversal. The crucial question, which the case was brought to this Court to review, is whether the state supreme court has construed the Utah statute to authorize punishment for exercising the right of free speech protected by the First and Fourteenth Amendments to the Federal Constitution. 11 The statute which appellants have violated provides that it shall be a crime for two or more persons to conspire 'to commit any act injurious * * * to public morals.' The opinion of the state supreme court construes these words to apply to conduct which induces people to enter into bigamous relationships and, more particularly, to the advocacy of the practice of polygamy. It held that the appellants were properly convicted because the evidence proved that they were parties to 'an agreement to advocate, counsel, advise and urge the practice of polygamy and unlawful cohabitation by other persons.' (175 P.2d 724, 734) 12 Although the entire record of the trial has not been brought here, it is clear that some appellants urged certain particular individuals to practice polygamy.1 For present purposes I assume that such direct and personalized activity amounting to incitation to commit a crime may be proscribed by the state. However the charge was not restricted to a claim that appellants had conspired to urge particular violations of the law. Instead, the information as construed by the state court broadly condemned the conspiracy to advocate and urge the practice of polygamy.2 This advocacy was at least in part conducted in religious meetings where, although pressure may also have been applied to individuals, considerable general discussion of the religious duty to enter into plural marriages was carried on.3 13 Neither the statute, the information, nor the portions of the charge to the jury which are preserved in the printed record distinguish between the specific incitations and the more generalized discussions. Cf. Thomas v. Collins, 323 U.S. 516, 65 S.Ct. 315, 89 L.Ed. 430. Thus the trial and convictions proceeded on the theory that the statute applied indiscriminately to both types of activity. This is made doubly clear by the fact that the state supreme court set aside the convictions of several defendants who had done no more than attend meetings, give opinions on religious subjects and criticize legislation.4 By setting aside these convictions that court indicated that it did not consider every discussion of polygamy, or attendance at meetings where the practice is advocated, to be 'an act injurious to the public morals.' Such a limitation on the scope of the statute was unquestionably required by the Federal Constitution. But as I read the opinion of the state court, it did not make a further limitation also required by the First and Fourteenth Amendments. The Utah statute was construed to proscribe any agreement to advocate the practice of polygamy.5 Thus the line was drawn between discussion and advocacy. 14 The Constitution requires that the statute be limited more narrowly. At the very least the line must be drawn between advocacy and incitement, and even the state's power to punish incitement may vary with the nature of the speech, whether persuasive or coercive, the nature of the wrong induced, whether violent or merely offensive to the mores, and the degree of probability that the substantive evil actually will result. See Bridges v. California, 314 U.S. 252, 262, 263, 62 S.Ct. 190, 193, 194, 86 L.Ed. 192, 159 A.L.R. 1346. 15 It is axiomatic that a democratic state may not deny its citizens the right to criticize existing laws and to urge that they be changed. And yet, in order to succeed in an effort to legalize polygamy it is obviously necessary to convince a substantial number of people that such conduct is desirable. But conviction that the practice is desirable has a natural tendency to induce the practice itself.6 Thus, depending on where the circular reasoning is started, the advocacy of polygamy may either be unlawful as inducing a violation of law, or be constitutionally protected as essential to the proper functioning of the democratic process. 16 In the abstract the problem could be solved in various ways. At one extreme it could be said that society can best protect itself by prohibiting only the substantive evil and relying on a completely free interchange of ideas as the best safeguard against demoralizing propaganda.7 Or we might permit advocacy of lawbreaking, but only so long as the advocacy falls short of incitement.8 But the other extreme position, that the state may prevent any conduct which induces people to violate the law, or any advocacy of unlawful activity, cannot be squared with the First Amendment. At the very least, as we have indicated, under the clear-and-present-danger rule, the second alternative stated marks the limit of the state's power as restricted by the Amendment. 17 The Supreme Court of Utah has in effect adopted the third position stated above. It affirmed the convictions on the theory that an agreement to advocate polygamy is unlawful. The trial court certainly proceeded on this theory, if it did not go further and consider discussion of polygamy as injurious to public morals as well. Therefore, even assuming that appellants may have been guilty of conduct which the state may properly restrain, the convictions should be set aside. A general verdict was returned, and hence it is impossible to determine whether the jury convicted appellants on the ground that they conspired merely to advocate polygamy or on the ground that the conspiracy was intended to incite particular and immediate violations of the law. Since therefore the convictions may rest on a ground invalid under the Federal Constitution, I would reverse the judgment of the state court. Cf. Thomas v. Collins, supra; Williams v. North Carolina, 317 U.S. 287, 63 S.Ct. 207, 87 L.Ed. 279, 143 A.L.R. 1273; Stromberg v. California, 283 U.S. 359, 51 S.Ct. 532, 75 L.Ed. 1117, 73 A.L.R. 1484. 1 'At one of these meetings, one Heber C. Smith, Jr. was made the specific object of remarks of various defendants.' Utah, 175 P.2d 724, 735. 2 Although the information in terms charged a conspiracy to advocate and practice polygamy, the state court construed it as though it charged a conspiracy to advocate the practice of polygamy. Utah, 175 P.2d 724, 730. 3 'It is true * * * that at certain meetings speakers discussed polygamy, readingf rom the Bible and making the claim that the ancient polygamous marriage system was instituted of God, and that 'plural marriage is a law of God'; and that some individuals at these meetings declared that legislation prohibiting the practice of polygamy violates the spirit of the First Amendment to the Federal Constitution; that some speakers denounced officials of the Mormon Church for excommunication of people for teaching or practicing plural marriage, stating that the leaders of said church have 'no divine authority' and that such church is apostate; and that some services were conducted as 'testimonial meetings' at which members of the congregation arose voluntarily to express their views on any subject, and to acknowledge gratitude to God.' Utah, 175 P.2d 724, 734. 4 'If it were true that none of the defendants did anything other than to attend meetings as indicated above (see note 3 supra), expressing disagreement with some other denomination, criticizing legislation, and giving opinions on religious subjects, none of the convictions could be upheld. The right of free speech cannot be curtailed by indirection through a charge of criminal conspiracy.' Utah, 175 P.2d 724, 734. 5 The court held 'that an agreement to advocate, teach, counsel, advise and urge other persons to practice polygamy and unlawful cohabitation, is an agreement to commit acts injurious to public morals within the scope of the conspiracy statute.' Utah, 175 P.2d 724, 731. 6 'Political agitation, by the passions it arouses or the convictions it engenders, may in fact stimulate men to the violato n of law. Detestation of existing policies is easily transformed into forcible resistance of the authority which puts them in execution, and it would be folly to disregard the causal relation between the two. Yet to assimilate agitation, legitimate as such, with direct incitement to violent resistance, is to disregard the tolerance of all methods of political agitation which in normal times is a safeguard of free government. The distinction is not a scholastic subterfuge, but a hard-bought acquisition in the fight for freedom, and the purpose to disregard it must be evident when the power exists. If one stops short of urging upon others that it is their duty or their interest to resist the law, it seems to me one should not be held to have attempted to cause its violation.' Judge Learned Hand in Masses Pub. Co. v. Patten, D.C., 244 F. 535, 540. 7 'We have nothing to fear from the demoralizing reasonings of some, if others are left free to demonstrate their errors and especially when the law stands ready to punish the first criminal act produced by the false reasonings; these are safer corrections than the conscience of a judge.' Excerpt of letter written by Thomas Jefferson to Elijah Boardman of New Milford, Connecticut, on July 3, 1801, quoted by Charles A. Beard, The Nation, July 7, 1926, vol. 123, p. 8. 8 'But even advocacy of violation, however reprehensible morally, is not a justification for denying free speech where the advocacy falls short of incitement and there is nothing to indicate that the advocacy would be immediately acted on.' Mr. Justice Brandeis, concurring in Whitney v. California, 274 U.S. 357 at 376, 47 S.Ct. 641 at page 648, 71 L.Ed. 1095.
89
333 U.S. 56 68 S.Ct. 401 92 L.Ed. 476 MAGGIOv.ZEITZ. In re LUMA CAMERA SERVICE, Inc. No. 38. Submitted Oct. 13, 1947. Decided Feb. 9, 1948. [Syllabus from pages 56-58 intentionally omitted] Mr. Max Schwartz, of Brooklyn, N.Y., for petitioner. Mr. Joseph Glass, of New York City, for respondent. Mr. Justice JACKSON delivered the opinion of the Court. 1 Joseph Maggio, the petitioner, was president and manager of Luma Camera Service, Inc., which was adjudged bankrupt on April 23, 1942. In January of 1943 the trustee asked the court to direct Maggio to turn over a considerable amount of merchandise alleged to have been taken from the bankrupt concern in 1941, and still in Maggio's possession or control. After hearing, the referee found that 'the trustee established by clear and convincing evidence that the merchandise hereinafter described, belonging to the estate of the bankrupt, was knowingly and fraudulently concealed by the respondent (Maggio) from the trustee herein and that said merchandise is now in the possession or under the control of the respondent.' A turnover order issued and was affirmed by the District Court and then unanimously affirmed by the Circuit Court of Appeals, Second Circuit, without opinion other than citation of its own prior cases. Zeitz v. Maggio, 2 Cir., 145 F.2d 241. Petition for certiorari was denied by this Court. 324 U.S. 841, 65 S.Ct. 587, 89 L.Ed. 1403. 2 As Maggio failed to turn over the property or its proceeds, the Referee found him in contempt. After hearing, the District Court affirmed and ordered Maggio to be jailed until he complied or until further order of the court. Again the Circuit Court of Appeals affirmed. 2 Cir., 157 F.2d 951, 955. 3 But in affirming the Court said: 'Although we know that Maggio cannot comply with the order, we must keep a straight face and pretend that he can, and must thus affirm orders which first direct Maggio 'to do an impossibility, and then punish him for refusal to perform it." Whether this is to be read literally as its deliberate judgment of the law of the case or is something of a decoy intended to attract our attention to the problem, the declaration is one which this Court, in view of its supervisory power over courts of bankruptcy, cannot ignore. Fraudulent bankruptcies probably present more difficulties to the courts in the Second Circuit than they do elsewhere. These conditions are reflected in conflicting views within the Court of Appeals, which we need not detail as they are already set out in the books: In re Schoenberg, 2 Cir., 70 F.2d 321; Danish v. Sofranski, 2 Cir., 93 F.2d 424; In re Pinsky-Lapin & Co., 2 Cir., 98 F.2d 776; Seligson v. Goldsmith, 2 Cir., 128 F.2d 977; Rosenblum v. Marinello, 2 Cir., 133 F.2d 674; Robbins v. Gottbetter, 2 Cir., 134 F.2d 843; Cohen v. Jeskowitz, 2 Cir., 144 F.2d 39; Zeitz v. Maggio, 2 Cir., 145 F.2d 241. 4 The problem is illustrated by this case. The court below says that in the turnover proceedings it was sufficiently established that, towards the end of 1941, a shortage occurred in this bankrupt's stock of merchandise. It seems also to regard it as proved that Maggio personally took possession of the corporation's vanishing assets. But this abstraction by Maggio occurred several months before bankruptcy and over a year before the turnover order was applied for. The only evidence that the goods then were in the possession or control of Maggio was the proof of his one time possession supplemented by a 'presumption' that, in the absence of a credible explanation by Maggio of his disposition of the goods, he continues in possession of them or their proceeds. Because the Court of Appeals felt constrained by its opinions to adhere to this 'presumption' or 'fiction' it affirmed the turnover order. Now it says it is convinced that in reality Maggio did not retain the goods or their proceeds up to the time of the turnover proceedings and that the turnover order was unjust. But it considers the turnover order res judicata and the injustice beyond reach on review of the contempt order. 5 The proceeding which leads to commitment consists of two separate stages which easily become out-of-joint because the defense to the second often in substance is an effort to relitigate, perhaps before another judge, the issue supposed to have been settle in the first, and because while the burden of proof rests on the trustee, frequently evidence of the facts is entirely in possession of i § adversary, the bankrupt, who is advantaged by nondisclosure. Because these separate but interdependent turnover and contempt procedures are important to successful bankruptcy administration, we restate some of the principles applicable to each, conscious however of the risk that we may do more to stir new than to settle old controversies. I. 6 The turnover procedure is one not expressly created or regulated by the Bankruptcy Act. It is a judicial innovation by which the court seeks efficiently and expeditiously to accomplish ends prescribed by the statute, which, however, left the means largely to judicial ingenuity. 7 The courts of bankruptcy are invested 'with such jurisdiction at law and in equity as will enable them' to 'cause the estates of bankrupts to be collected, reduced to money and distributed, and determine controversies in relation thereto * * *.' Title 11 U.S.C. § 11(a)(7), 11 U.S.C.A. § 11, sub. a(7), and the function to 'collect and reduce to money the property of the estates' is also laid upon the trustee. 11 U.S.C. § 75(a)(1), 11 U.S.C.A. § 75, sub. a(1). A correlative duty is imposed upon the bankrupt fully and effectually to turn over all of his property and interests, and in case of a corporation the duty rests upon its officers, directors or stockholders. 11 U.S.C. § 25, 11 U.S.C.A. § 25. 8 To compel these persons to discharge their duty, the statute imposes criminal sanctions. It denounces a comprehensive list of frauds, concealments, falsifications, mutilation of records and other acts that would defeat or obstruct collection of the assets of the estate, and prescribes heavy penalties of fine or imprisonment or both. 11 U.S.C. § 52(b), 11 U.S.C.A. § 52, sub. b. It also confers on the courts power to arraign, try and punish persons for violations, but 'in accordance with the laws of procedure' regulating trials of crimes. 11 U.S.C. § 11(a)(4), 11 U.S.C.A. § 11, sub. a (4). And it specifically provides for jury trial of offenses against the Bankruptcy Act. 11 U.S.C.A. § 42(c), 11 U.S.C.A. § 42, sub. c. Special provisions are also made to induce vigilance in prosecuting such offenses. It is the duty of the referee and trustee to report any probable grounds for believing such an offense has been committed to the United States Attorney, who thereupon is required to investigate and report to the referee. In a proper case he is directed to present the matter to the grand jury without delay, and if he thinks it not a proper case he must report the facts to the Attorney General and abide his instructions. 11 U.S.C. § 52(e), 11 U.S.C.A. § 52, sub. e. 9 Courts of bankruptcy have no authority to compensate for any englect or lack of zeal in applying these prescribed criminal sanctions by perversion of civil remedies to ends of punishment, as some judges of the Court of Appeals suggest is being done. 10 Unfortunately, criminal prosecutions do not recover concealed treasure. And the trustee, as well as the Court, is commanded to collect the property. The Act vests title to all property of the bankrupt, including any transferred in fraud of creditors, in the trustee, as of the date of filing the petition in bankruptcy, 11 U.S.C. § 110, 11 U.S.C.A. § 110, which puts him in position to pursue all plenary or summary remedies to obtain possession. 11 To entertain the petitions of the trustee the bankruptcy court not only is vested with 'jurisdiction of all controversies at law and in equity' between trustees and adverse claimants concerning property acquired or claimed by the trustee, 11 U.S.C. § 46, 11 U.S.C.A. § 46, but it also is given a wide discretionary jurisdiction to accomplish the ends of the Act, or in the words of the statute to 'make such orders, issue such process, and enter such judgments, in addition to those specifically provided for, as may be necessary for the enforcement of the provisions of this title.' 11 U.S.C. § 11(a)(15), 11 U.S.C.A. § 11, sub. a(15). 12 In applying these grants of power, courts of bankruptcy hav fashioned the summary turnover procedure as one necessary to accomplish their function of administration. It enables the court summarily to retrieve concealed and diverted assets or secreted books of account the withholding of which, pending the outcome of plenary suits, would intolerably obstruct and delay administration. When supported by 'clear and convincing evidence,' the turnover order has been sustained as an appropriate and necessary step in enforcing the Bankruptcy Act. Oriel v. Russell, 278 U.S. 358, 49 S.Ct. 173, 73 L.Ed. 419; Cooper v. Dasher, 290 U.S. 106, 54 S.Ct. 6, 78 L.Ed. 203. See also Farmers' & Mechanics' National Bank v. Wilkinson, 266 U.S. 503, 45 S.Ct. 144, 69 L.Ed. 408. 13 But this procedure is one primarily to get at property rather than to get at a debtor. Without pushing the analogy too far, it may be said that the theoretical basis for this remedy is found in the common law actions to recover possession—detinue for unlawful detention of chattels and replevin for their unlawful taking—as distinguished from actions in trespass or trover to recover damages for the withholding or for the value of the property. Of course the modern remedy does not exactly follow any of these ancient and often overlapping procedures, but the object possession of specific property—is the same. The order for possession may extend to proceeds of property that has been disposed of, if they are sufficiently identified as such. But it is essentially a proceeding for restitution rather than indemnification, with some characteristics of a proceeding in rem; the primary condition of relief is possession of existing chattels or their proceeds capable of being surrendered by the person ordered to do so. It is in no sense based on a cause of action for damages for tortious conduct such as embezzlement, misappropriation or improvident dissipation of assets. 14 The nature and derivation of the remedy make clear that it is appropriate only when the evidence satisfactorily establishes the existence of the property or its proceeds, and possession thereof by the defendant at the time of the proceeding. While some courts have taken the date of bankruptcy as the time to which the inquiry is directed, we do not consider resort to this particular proceeding appropriate if, at the time it is instituted, the property and its proceeds have already been dissipated, no matter when that dissipation occurred. Conduct which has put property beyond the limited reach of the turnover proceeding may be a crime, or, if it violates an order of the referee, a criminal contempt, but no such acts, however reprehensible, warrant issuance of an order which creates a duty impossible of performance, so that punishment can follow. It should not be necessry to say that it would be a flagrant abuse of process to issue such an order to exert pressure on friends and relatives to ransom the accused party from being jailed. II. 15 It is evident that the real issue as to turnover orders concerns the burden of proof that will be put on the trustee and how he can meet it. This Court has said that the turnover order must be supported by 'clear and convincing evidence,' Oriel v. Russell, 278 U.S. 358, 49 S.Ct. 173, 174, 73 L.Ed. 419, and that includes proof that the property has been abstracted from the bankrupt estate and is in the possession of the party proceeded against. It is the burden of the trustee to produce this evidence, however difficult his task may be. 16 The trustee usually can show that the missing assets were in the possession or under the control of the bankrupt at the time of bankruptcy. To bring this past possession down to the date involved in the turnover proceedings, the trustee has been allowed the benefit of what is called a presumption that the possession continues until the possessor explains when and how it ceased. This inference, which might be entirely permissible in some cases, seem to have settled into a rigid presumption which it is said the lower courts apply without regard to its reasonableness in the particular case. 17 However, no such presumption, and no such fiction, is created by the bankruptcy statute. None can be found in any decision of this Court dealing with this procedure.1 Language can, of course, be gleaned from judicial pronouncements and texts that conditions once existing may be presumed to continue until they are shown to have changed. But such generalizations, useful enough, perhaps, in solving some problem of a particular case, are not rules of law to be applied to all cases, with or without reason. 18 Since no authority imposes upon either the Court of Appeals or the Bankruptcy Court any presumption of law, either conclusive or disputable, which would forbid or dispense with further inquiry or consideration of other evidence and testimony, turnover orders should not be issued, or approved on appeal, merely on proof that at some past time property was in possession or control of the accused party, unless the time element and other factors make that a fair and reasonable inference.2 Under some circumstances it may be permissible, in resolving the unknown from the known, to reach the conclusion of present control from proof of previous possession. Such a process, sometimes characterized as 'presumption of fact,' is, however, nothing more than a process of reasoning from one fact to another, an argument which infers a fact otherwise doubtful from a fact which is proved. 19 Of course, the fact that a man at one time had a given item of property is a circumstance to be weighed in determining whether he may properly be found to have it at a later date. But the inference from yesterday's possession is one thing, that permissible from possession twenty months ago quite another. With what kind of property do we deal? Was it salable or consumable? The inference of continued possession might be warranted when applied to books of account which are not consumable or marketable, but quite inappropriate under the same circumstances if applied to perishable merchandise or salable goods in considerable demand. Such an inference is one thing when applied to a thrifty person who withdraws his savings account after being involved in an accident, for no apparent purpose except to get it beyond the reach of a tort creditor, see Rosenblum v. Marinello, 2 Cir., 133 F.2d 674; it is very different when applied to a stock of wares being sold by a fast-living adventurer using the proceeds to make up the difference between income and outgo. 20 Turnover orders should not be issued or affirmed on a presumption thought to arise from some isolated circumstances, such as one time possession, when the reviewing court finds from the whole record that the order is unrealistic and unjust. No rule of law requires that judgment be thus fettered; nor has this Court ever so prescribed. Of course, deference is due to the trial court's findings of fact, as prescribed by our rules, but even this presupposes that the trier of fact be actually exercising his judgment, not merely applying some supposed rule of law. In any event, rules of evidence as to inferences from facts are to aid reason, not to override it. And there does not appear to be any reason for allowing any such presumptio to override reason when reviewing a turnover order. 21 We are well aware that these generalities do little to solve concrete issues. The latter can be resolved only by the sound sense and good judgment of trial courts, mindful that the order should issue only as a responsible and final adjudication of possession and ability to deliver, not as a questionable experiment in coercion which will recoil to the discredit of the judicial process if time proves the adjudication to have been improvident and requires the courts to abandon its enforcement. III. 22 Unlike the judicially developed turnover proceedings, contempt proceedings for disobedience of a lawful order are specifically authorized by two separate provisions of the Act and are of two distinct kinds. The court is authorized to 'enforce obedience by persons to all lawful orders, by fine or imprisonment, or fine and imprisonment.' 11 U.S.C. § 11(a)(13), 11 U.S.C.A. § 11, sub. a(13). This creates the civil contempt proceeding to coerce obedience, now before us. There is also provision for a criminal contempt proceeding whose end is to penalize contumacy, the court also being authorized to 'punish persons for contempts committed before referees.' 11 U.S.C. § 11(a)(16), 11 U.S.C.A. § 11, sub. a(16). These contempts before referees are defined to include disobedience or resistance to a lawful order, and the statute provides for a summary proceeding before the District Judge who, if the evidence 'is such as to warrant him in so doing,' may punish the accused or commit him upon conditions. 11 U.S.C. § 69, 11 U.S.C.A. § 69. 23 The proceeding before us sought only a coercive or enforcement sanction. The petition asked commitment 'until he shall have complied with the aforesaid turnover order.' The commitment was only until he 'shall have purged himself of such contempt by complying with the turnover order or until the further order of this court.' Thus no punishment whatever was imposed for past disobedience, and every penalty was contingent upon failure to obey. This is a decisive characteristic of civil contempt and of the truly coercive commitment for enforcement purposes, which, as often is said, leaves the contemnor to 'carry the key of his prison in his own pocket.' Penfield Co. v. Securities & Exchange Commission, 330 U.S. 585, 67 S.Ct. 918. We thus have before us now a civil contempt of the same kind that was before the Court in Oriel v. Russell, 278 U.S. 358, 363, 49 S.Ct. 173, 174, 73 L.Ed. 419. What we say, therefore, is not applicable to criminal contempt proceedings designed solely for punishment and vindication of the court's flouted authority, such, for example, as a proceeding to sentence one for destroying or mutilating books of account or property in his possession which the court had ordered him to turn over. 24 The question now arises as to whether, in this contempt proceeding, the Court may inquire into the justification for the turnover order itself. It is clear however that the turnover proceeding is a separate one and, when completed and terminated in a final order, it becomes res judicata and not subject to collateral attack in the contempt proceedings. This we long ago settled in Oriel v. Russell, 278 U.S. 358, 49 S.Ct. 173, 73 L.Ed. 419, and, we think, settled rightly. 25 The court order is increasingly resorted to, especially by statute,3 to coerce performance of duties under sanction of contempt. It would be a disservice to the law if we were to depart from the long-standing rule that a contempt proceeding does not open to reconsideration the legal or factual basis of the order alleged to have been disobeyed and thus become a retrial of the original controversy. The procedure to enforce a court's order commanding or forbidding an act should not be so inconclusive as to foster experimentation with disobedience. Every precaution should be taken that orders issue, in turnover as in other proceedings, only after legal grounds are shown and only when it appears that obd ience is within the power of the party being coerced by the order. But when it has become final, disobedience cannot be justified by re-trying the issues as to whether the order should have issued in the first place. United States v. United Mine Workers of America, 330 U.S. 258, 259, 67 S.Ct. 677; Oriel v. Russell, 278 U.S. 358, 49 S.Ct. 173, 73 L.Ed. 419. Counsel appears to recognize this rule, for the record in the case now before us does not include the evidence on which the turnover order was based. We could learn of it only by going outside of the present record to that in the former case, which would be available only because an application was made to this Court to review that earlier proceeding. 26 We therefore think the Court of Appeals was right insofar as it concluded that the turnover order is subject only to direct attack, and that its alleged infirmities cannot be relitigated or corrected in a subsequent contempt proceeding. IV. 27 But does this mean that the lower courts 'must thus affirm orders which first direct a bankrupt 'to do an impossibility, and then punish him for refusal to perform it."? 28 Whether the statement by the Court of Appeals that it knows Maggio cannot comply with the turnover order is justified by the evidence in this record, we do not stop to inquire. We have regarded turnover and contempt orders, and petitions for certiorari to review them, as usually raising only questions of fact to be solved by the careful analysis of evidence which we expect to take place in the two lower courts. The advantage of the referee and the District Court in having the parties and witnesses before them, instead of judging on a cold record, is considerable. The Court of Appeals for each circuit also has the advantage of closer familiarity with the capabilities, tendencies, and practices of the referee and District Judge. Both lower courts better know the fruits of their course of decision in actual practice than can we. Consequently, we have been loath to venture a review of particular cases, especially where the turnover order carries approval of the referee, the District Court and the Court of Appeals. 29 However the court below appears to have affirmed the order for commitment in this case, by relying on the earlier finding of previous possession to raise a presumption of wilful disobedience continuing to the time of commitment, even though that conclusion is rejected by the court's good judgment. While the court protests that such a presumed continuance of possession from the time of bankruptcy to the time of the turnover order is unrealistic, it seems to have affirmed the contempt order by extending the presumption from the time of the turnover order to the time of the contempt proceedings, although persuaded that Maggio had overcome the presumption if it were rebuttable. 30 The fact that the contempt proceeding must begin with acceptance of the turnover order does not mean that it must end with it. Maggio makes no explanation as to the whereabouts or disposition of the property which the order, earlier affirmed, declared him to possess. But time has elapsed between issuance of that order and initiation of the contempt proceedings in this case. He does tender evidence of his earnings after the turnover proceedings and up until November 1944; his unemployment after that time allegedly due to his failing hel th; and of his family obligations and manner of living during the intervening period. He has also sworn that neither he nor his family has at any time since the turnover proceedings possessed any real or personal property which could be used to satisfy the trustee's demands. And he repeats his denial that he possesses the property in question. 31 It is clear that the District Court in the contempt proceeding attached little or no significance to Maggio's evidence or testimony, although the Court gave no indication that the evidence was incredible. The District Court in its opinion cites only In re Siegler, 2 Cir., 31 F.2d 972, in which the Court of Appeals reversed a District Judge who, because he believed the bankrupt's testimony, had refused to commit him for contempt. The Siegler case and other cases decided by the Court of Appeals apparently led the District Judge to conclude that no decision other than commitment of Maggio would be approved by that court. 32 Nor did the Court of Appeals reject this view. Indeed it affirmed the commitment for contempt because it considered either that present inability to comply is of no relevance or that there is an irrebuttable presumption of continuing ability to comply even if the record establishes present inability in fact. It seems to be of the view that this presumption stands indefinitely, if not permanently, and can be overcome by the accused only when he affirmatively shows some disposition of the property by him subsequent to the turnover proceedings. We do not believe these views are required by Oriel v. Russell, 278 U.S. 358, 49 S.Ct. 173, 73 L.Ed. 419, despite some conflicting statements in the opinion, which the Court of Appeals construed as compelling affirmance of the contempt decree. 33 This Court said in the Oriel case that 'a motion to commit the bankrupt for failure to obey an order of the court to turn over to the receiver in bankruptcy the property of the bankrupt is a civil contempt and is to be treated as a mere step in the proceedings to administer the assets of the bankrupt as provided by law, and in aid of the seizure of those assets and their proper distribution. While in a sense they are punitive, they are not mere punishment—they are administrative but coercive, and intended to compel, against the reluctance of the bankrupt, performance by him of his lawful duty.' 278 U.S. 358, at page 363, 49 S.Ct. 173, at page 174, 73 L.Ed. 419. 34 Of course, to jail one for a contempt for omitting an act he is powerless to perform would reverse this principle and make the proceeding purely punitive, to describe it charitably. At the same time, it would add nothing to the bankrupt estate. That this Court in the Oriel case contemplated no such result appears from language which it borrowed from a Circuit Court of Appeals opinion which, after pointing out that confinement often failed to produce the money or goods, said, 'Where it has failed, and where a reasonable interval of time has supplied the previous defect in the evidence, and has made sufficiently certain what was doubtful before, namely the bankrupt's inability to obey the order, he has always been released, and I need hardly say that he would always have the right to be released as soon as the fact becomes clear that he cannot obey.'4 Moreover, the authorities relied upon in Chief Justice Taft's opinion5 make it clear that his decision did not contemplate that a coercive contempt order should issue when it appears that there is at that time no wilful disobedience but only an incapacity to comply.6 Indeed, the quotation from In re Epstein, cited supra (note 4) also stated: 'In the pending case, or in any other, the court may believe the bankrupt's assertion that he is not now in possession or control of the money or the goods, and in that event the civil inquiry is at an end * * *'7 35 The source of difficulties in these cases has been that in the two successive proceedings the same question of possession and ability to produce the goods or their proceeds is at issue, but as of different points of time. The earlier order may not be impeached, avoided or attacked in the latter proceedings and no relief can be sought against its command. But when the trustee institutes the later proceeding to commit, he tenders the issue as to present wilful disobedience, against which the court is asked to direct its sanctions. The latter issue must be tried just as any other issue, and the court is entitled to consider all evidence relevant to it. The turnover order adjudges the defendant to be in possession at the date of its inquiry, but does it also cut off evidence as to nonpossession at the later time? Thus, the real problem concerns the evidence admissible in the contempt proceeding. Of course we do not attempt to lay down a comprehensive or detailed set of rules on this subject. They will have to be formulated as specific and concrete cases present different aspects of the problem. 36 In Oriel's case, this Court said: '* * * on the motion for commitment the only evidence that can be considered is the evidence of something that has happened since the turnover order was made showing that since that time there has newly arisen an inability on the part of the bankrupt to comply with the turnover order.' This language the Court of Appeals has construed to mean that the accused can offer no evidence to show that he does not now have the goods if that evidence, in the absence of an affirmative showing of when and how he disposed of the goods, might tend to indicate that he never had them and hence to contradict findings of the turnover order itself. We agree with the Court of Appeals that the turnover order may not be attacked in the contempt proceedings because it is res judicata on this issue of possession at the time as of which it speaks. But application of that rule in these civil contempt cases means only that the bankrupt, confronted by the order establishing prior possession, at a time when continuance thereof is the reasonable inference, is thereby confronted by a prima facie case which he can successfully meet only with a showing of present inability to comply. He cannot challenge the previous adjudication of possession, but that does not prevent him from establishing lack of present possession. Of course, if he offers no evidence as to his inability to comply with the turnover order, or stands mute, he does not meet the issue. Nor does he do so by evidence or by his own denials which the court finds incredible in context.8 37 But the bankrupt may be permitted to deny his present possession and to give any evidence of present conditions or intervening events which corroborate him. The credibility of his denial is to be weighed in the light of his present circumstances. It is everywhere admitted that even if he is committed, he will not be held in jail forever if he does not comply. His denial of possession is given credit after demonstration that a period in prison does not produce the goods. The fact that he has been under the shadow of prison gates may be enough, coupled with his denial and the type of evd ence mentioned above, to convince the court that his is not a wilful disobedience which will yield to coercion. 38 The trial court is obliged to weigh not merely the two facts, that a turnover order has issued and that it has not been obeyed, but all the evidence properly before it in the contempt proceeding in determining whether or not there is actually a present ability to comply and whether failure so to do constitutes deliberate defiance which a jail term will break. 39 This duty has nowhere been more clearly expressed than in the Oriel case:9 '* * * There is a possibility, of course, of error and hardship, but the conscience of judges in weighing the evidence under a clear perception of the consequences, together with the opportunity of appeal and review, if properly taken, will restrain the courts from recklessness of bankrupt's rights on the one hand and prevent the bankrupt from flouting the law on the other. * * *' 40 Such a careful balancing was said to be required in turnover proceedings because 'coercive methods by imprisonment are probable and are foreshadowed.'10 Certainly the same considerations require as careful and conscientious weighing of the evidence relevant in the contempt proceeding. At that stage, imprisonment is not only probable and foreshadowed—it is imminent. And, without such a weighing, it becomes inevitable. V. 41 We deal here with a case in which the Court of Appeals was persuaded that the bankrupt's disobedience was not wilful. It appears, however, that the District Court did not, in the contempt proceedings, weigh and evaluate the evidence before it but felt bound almost automatically to order Maggio's commitment in deference to clear precedents established by the Court of Appeals. Moreover, the Court of Appeals affirmed the commitment order although it was convinced that Maggio was not deliberately disobeying but had established his contention that he was unable to comply. On such findings the Oriel case would require Maggio's discharge even if he were already in jail. It is hardly consistent with that case, or with good judicial administration, to order his commitment on findings that require his immediate release. 42 When such a misapprehension of the law has led both courts below to adjudicate rights without considering essential facts in the light of the controlling law, this Court will vacate the judgments and remand the case to the District Court for further proceedings consistent with the principles laid down in this Court's opinion. Manufacturers' Finance Company v. McKey, Trustee in Bankruptcy, 294 U.S. 442, 453, 55 S.Ct. 444, 449, 79 L.Ed. 982; Gerdes, Trustee in Bankruptcy, v. Lustgarten, 266 U.S. 321, 327, 45 S.Ct. 107, 109, 69 L.Ed. 309, and cases cited.11 That practice is appropriate in this case in view of what has been said herein concerning the judgments below. 43 Vacated and remanded. 44 Separate opinion of Mr. Justice BLACK, in which Mr. Justice RUTLEDGE concurs. 45 August 9, 1943, the referee in bankruptcy found that petitioner had possession of certain merchandise belonging to a bankrupt corporation and ordered him to turn it or the proceeds over to the bankruptcy trustee. In these contempt proceedings (April 18, 1945) the District Court found that petitioner had failed to prove he no longer had possession of the property, and ordered him to be held in jail until he delivered the property or its proceeds to the trustee. 46 Had the petitioner been charged with embezzling this same property after the 1943 turnover order, doubtless no one would even argue that a doctrine of res judicata barred him from introducing evidence to show that the turnover findings of possession were wrong, and that in truth, he did not have possession of the property or its proceeds either on, before, or after August 9, 1943, or April 18, 1945. One basic reason why the findings of fact in a turnover proceeding would not be res judicata in an embezzlement proceeding is that the burden of proof is different in the two types of proceedings. In the first, a turnover proceeding, 'clear and convincing proof' is enough; in the second, embezzlement, 'proof beyond a reasonable doubt' is required. The burden of proof is heavier in the embezzlement case because a judgment of conviction may embody a criminal punishment, while a turnover judgment does not—it is merely an order for the surrender of property, similar to an order of delivery in a replevin suit. 47 There is no such reason for different measurements of proof in contempt and embezzlement cases; consequentially, the two are almost identical. Fine, imprisonment, or both can result from a conviction of either. Here if this contempt judgment is carried out against the petitioner, he might be compelled to remain in prison longer than he would had he been convicted and sentenced on a charge of embezzlement. It is true that if the court was correct in finding that petitioner had possession of the property or its proceeds (and if he still has it), he carries the keys of the jail in his pocket, because he can turn the property or proceeds over to the trustee at any time and thus get his freedom. The crucial question to petitioner in this contempt proceeding was whether he had possession of the property or its proceeds June 5, 1945. And that crucial question was decided against petitioner by the trial court without holding that the evidence was sufficient to prove beyond a reasonable doubt that petitioner still had possession of the property. 48 I am unwilling to agree to application of a doctrine of res judicata that results in sending people to jail for contempt of court upon a measure of proof substantially the same as that which would support the rendition of a civil judgment for the plaintiff on a promissory note, an open account or some other debt. All court proceedings, whether designated as civil or criminal contempt of court or given some other name, which may result in fine, prison sentences, or both, should in my judgment require the same measure of proof, and that measure should be roof beyond a reasonable doubt. See Gompers v. United States, 233 U.S. 604, 610, 611, 34 S.Ct. 693, 695, 58 L.Ed. 1115; Michaelson v. United States, 266 U.S. 42, 66, 67, 45 S.Ct. 18, 20, 69 L.Ed. 162, 35 A.L.R. 451; Pendergast v. United States, 317 U.S. 412, 417, 418, 63 S.Ct. 268, 270, 87 L.Ed. 368. 49 The foregoing is written on the assumption that the turnover-contempt procedure is legal, an assumption which I do not accept. I share the opinion of the Circuit Court of Appeals that this procedure is unauthorized by statute and that it should not be permitted to take the place of criminal prosecutions for fraud as apparently was done here.1 This whole procedure flavors too much of the old discredited practice of imprisonment for debts debts which people are unable to pay. For here, if petitioner did wrongfully dispose of the property, whether or not he was guilty of a crime, he ws probably liable in some sort of civil action, basically similar to, if not actually one for debt. Had a judgment been obtained against him in such a civil case, I doubt if it would be thought at this period that the bankruptcy court could have thrown petitioner in jail for his failure to obey what would have been in effect a court order to pay the debt embodied in the judgment. 50 Furthermore, the finding of possession of the merchandise as of 1943 may rest on an evidential foundation firm enough to support a civil turnover order but it is too shaky to support a sentence to prison. Accepting that finding, however, the presumption of present or 1945 possession from the possible 1941 or 1943 possession achieves a procedural result which runs counter to basic practices in our system of laws. For as the District Court said, it gave the prosecution the advantage of a 'presumption' which, of itself, was held to relieve it from offering further proof of petitioner's guilt in a case where forfeiture of his personal liberty and property was sought; it threw upon the petitioner the burden of proving his innocence.2 51 For the foregoing reasons, among others, I would reverse the judgment of the Circuit Court of Appeals, with directions that the petitioner be released and that no further contempt proceedings be instituted against him based on his refusal to obey the turnover order. 52 Mr. Justice FRANKFURTER, dissenting. 53 This is one of those rare cases where I find myself in substantial agreement with the direction and main views of an opinion, but am thereby led to a different conclusion. Too often we are called upon to disentangle a snarled skein of facts into a thread of legal principles. In this case, the Court's opinion seems to me to snarl a straight thread of facts into a confusing skein of legal principles. It was the record in a prior case involving the same litigants that invited correction of a rule of bankruptcy administration in the Second Circuit. We denied review.1 The record in this case precludes such correction, but the Court's opinion is an effort to whip the devil round the stump. 54 The precise question before us may be simply stated. The District Court ordered the bankrupt to turn over goods withheld by him from the trustee. On the basis of two prior cases,2 the Circuit Court of Appeals affirmed this order, per curiam. 2 Cir., 145 F.2d 241. These earlier cases in turn relied on a previous case.3 All three enforced a rule of the Second Circuit that goods in the possession of a bankrupt on the day of bankruptcy are presumed to continue in his possession regardless of the time that may have elapsed. In all three cases, the Circuit Court of Appeals had affirmed the turnover orders although it was maintained that the bankrupts could not obey them.4 Likewise, in all three cases, that court had declared is impotence to change what it regarded as an untenable rule of bankruptcy administration, although fashioned by it and not by this Court.5 In almost imprecating language review and reversal by this Court in these cases were invited.6 In one of these cases, the bankrupt filed a petition for certiorari, which this Court denied.7 Then came the prior case involving the litigants now before us, with this Court's refusal to review the turnover order. To be sure, the denial of a petition for certiorari carries no substantive implications. Reference to it here is e levant as proof of the finality with which the turnover order, as affirmed by the Circuit Court of Appeals, was invested. 55 In Oriel v. Russell, 278 U.S. 358, 49 S.Ct. 173, 73 L.Ed. 419, a unanimous bench, including in its membership judges of wide experience with bankruptcy law,8 held that upon a citation for contempt to compel obedience of a turnover order the issues adjudicated by that order could not be relitigated. That case decided nothing if it did not decide that what the turnover order adjudicated—that the bankrupt withheld certain property from the bankrupt estate and was still in control of this property on the day he was ordered to turn it over—is the definitive starting point for contempt proceedings to exact obedience to the turnover order. In short, the contempt proceedings must proceed from the turnover order and cannot go behind it. We should not ignore this relevant sentence in Oriel v. Russell: 'Thereafter on the motion for commitment the only evidence that can be considered is the evidence of something that has happened since the turnover order was made showing that since that time there has newly arisen an inability on the part of the bankrupt to comply with the turnover order.'9 56 The Court today reaffirms Oriel v. Russell. At the same time it makes inroad on the practical application of Oriel v. Russell. On virtually an identical record10 it reverses where Oriel v. Russell affirmed. The nature and scope of the inroad are uncertain because the Court's opinion, to the best of my understanding, leaves undefined how the District Court is to respect both Oriel v. Russell and today's decision. 57 About some aspects of our problem there ought to be no dispute. We are all agreed that while the bankrupt cannot relitigate the determination of a turnover order that he had such and such goods on the day of the order, he can avoid the duty of obedience to that order if he 'can show a change of situation after the turnover order relieving him from compliance.'11 The right to be relieved from obeying the turnover order by sustaining the burden of inability to perform, on proof of circumstances not questioning the turnover order, has never been disputed. Again, if a judgment of civil contempt is rendered and the bankrupt is sent to jail until he chooses to obey the court's command, he will not be kept there when keeping him no longer gives promise of performance. Oriel v. Russell so pronounced.12 58 And so, since the fact that the bankrupt had possession of the goods on the day of the turnover order is a fact that cannot be controverted or relitigated because his possession of the goods on that day was the very thing adjudicated, the case reduces itself to this simple question: Where, on failure to obey the turnover order, the bankrupt stands mute, offers no evidence as to a change of circumstances since the order or offers evidence of a kind which the District Court may justifiably disbelieve, has he met his burden of proof so as to preclude the District Court from enforcing obedience by commitment for civil contempt? 59 On the record and the findings of the District Court this is the precise question now presented. There is nothing else in the record, except Judge Frank's statement below that the bankrupt was ordered to perform although the court knew that it was impossible for him to perform.13 But this assertion of 'impossibility' was not derived from the record in these contempt proceedings. It derives from Judge Frank's familiar hostility to what he deems the unfairness of his court's rule of presumption in ordering turnover.14 Judge Frank here merely repeats his conviction that a turnover order like that rendered against Maggio is an order to turn over goods which could not be turned over. But that was water over the dam in the contempt proceeding. To give it legal significance when enforcement of the turnover order is in issue is to utter contradictory things from the two corners of the mouth. It is saying that the turnover order cannot be relitigated—that we cannot go back on the adjudication that the bankrupt had the goods at the time he was ordered to turn them over—but we know he did not have the goods, so we contradict the turnover order and do not respect it as res judicata. 60 I cannot reconcile myself to saying that we adhere to Oriel v. Russell and yet reject its only meaning, namely, that we cannot go behind the judicial determination made by the turnover order that the bankrupt on such and such a day had the enumerated goods. Moreover, the authorities relied upon in Chief Justice Taft's opinion15 make it clear that his decision did contemplate that a coercive contempt order should issue when it appears that the bankrupt has introduced no evidence or, what is the same, evidence tht may properly not satisfy the District Court by establishing incapacity to comply since the turnover order.16 In this case, the District Court was entirely warranted in finding that the bankrupt had produced no evidence to contradict the adjudication of the turnover order that he had the goods when he was told to turn them over, unless, in place of what is usually deemed evidence, an infirmity has been found to seep, by a process of osmosis, into the turnover order respect for which in its entirety is the starting point of our problem. 61 The time to have acted on the inference of impossibility of performance of the turnover order, or to have taken notice of the imprisoning rule of the Second Circuit as to the presumption of continued possession of a bankrupt's withheld goods, was when we were asked to review the Circuit Court of Appeal's denigrating affirmance of the turnover order.17 When we declined to review that turnover order, it became a final and binding adjudication. Neither court below was under a misapprehension as to the applicable law in the instant contempt proceeding. The District Court relied on In re Siegler, 2 Cir., 31 F.2d 972. But surely reliance on a case that was correctly decided is hardly an indication of misapprehension of law. If the Siegler dicision had preceded instead of followed18 Oriel v. Russell, it might well have been one of the authorities relied upon in Chief Justice Taft's opinion.19 Nor do we have to speculate as to whether Judge Frank's conclusion that Maggio was unable to comply was based on evidence in this record or on doubt as to the propriety of the turnover order. We have the same printed record before us that he had and it is barren of such evidence. Presumably Judge Frank did not travel outside this record and act on undisclosed private knowledge. The whole course of this issue in the Second Circuit in recent years makes it obvious that his observation was merely another animadversion on that Circuit's practice in issuing turnover orders. The Circuit Court of Appeals did not purport to make an independent evaluation of Maggio's evidence bearing on his incapacity to obey the turnover order. It was beyond its power to do so. The Circuit Court was not at large. Its power was limited to a consideration of the justifiability of the District Court's findings on the basis of the record before that court. 62 The cure for this procedural situation, if cure is called for, is correction of the rule of the Second Circuit regarding presumptions in turnover orders.20 It ought not to be dealt with indirectly and at the cost of beclouding the doctrine of res judicata in proceedings for civil contempt. If Maggio has become the unhappy victim of the procedural snarl into which the Circuit Court of Appeals for the Second Circuit has involved itself by its decisions on the appeals of turnover orders and by this Court's refusal to review such adjudications, the law is not without ample remedies. The District Court has power to discharge a contemnor when confinement has become futile, or release may be had through use of habeas corpus, which, in the now classic language of Mr. Justice Holmes, 'cuts through all forms and goes to the very tissue of the structure. It comes in from the outside, not in subordination to the proceedings * * *.' Frank v. Mangum, 237 U.S. 309, 346, 35 S.Ct. 582, 595, 59 L.Ed. 969. These are means available to correct whatever specific hardship this case may present without generating cloudiness indeterminate in range upon a legal principle of such social significance as that of res judicata and upon a remedy so vital as civil contempt for the sturdy administration of justice. 63 How is the conscientious District Court to carry out the directions conveyed by the Court's opinion? If the District Court gives unquestioned respect, as it is told to do, to the turnover order of August 9, 1943, it will start with the fact that on August 9, 1943, the bankrupt was able to comply with that order. With that as a startingpoint will the District Court not be entitled to find again, as it has already found,21 that nothing presented by the bankrupt in exculpation for not complying with the turnover order disproves that he continued to have the property, which he was found to have had as of August 9, 1943. If the District Court should so find, would not the Circuit Court of Appeals and this Court if the case came here for review, be under duty bound to hold that, on the basis of the situation as adjudicated by the turnover order, the District Court could reasonably make such a finding? Or is the District Court to infer that in view of the snarl into which these proceedings have got by reason of the failure to upset the turnover order when directly under review, this Court was indulging in benign judicial winking that while the fact of the possession of the property had been adjudicated by the turnover order and could not verbally be questioned, the District Court need not accept the determination of that order as facts? But if the District may so drain the adjudication of the turnover order of is only legal significance, why assert that Oriel v. Russell is left without a scratch? Why reaffirm that an adjudication sustaining a turnover order may not be relitigated when obedience is sought to such turnover order? These are questions which will confront not merely the district judge to whom this case will be remanded. After all, we are concerned with the practical administration of the Bankruptcy Act by district judges all over the United States. 64 By abstaining from expressing views regarding the requisites of a turnover order, I mean neither to agree nor disagree with observations made by the Court. There has been opportunity in the past for adjudication of that matter, and there may be such an opportunity in the future. This case does not present it. From all of which I conclude that the judgment below should be affirmed, leaving for another day, when the occasion makes it appropriate, to consider directly and explicitly the principle that should govern the issue of turnover orders by bankruptcy courts.22 MAGGIO 65 v. ZEITZ. APPENDIX TO OPINION OF FRANKFURTER, J. 66 Comparison between Maggio v. Zeutz and Prela v. Hushman (companion case to Oriel v. Russell), 278 U.S. 358 Indenties Differences Maggio Prela Maggio Prela 67 Name of bankrupt. Joseph Maggio Samuel Prela 68 (R. cover). (R. cover). 69 Name of trustee Raymond Zeitz Louis Hubshman 70 (R. cover). (R. cover). 71 Type of property Photographic equipment Silk (R.1) 72 (R.2). 73 Date of proven Before Jan. 1, 1942 Before Nov. 22 74 possession. (324 U.S. 841, R.13). (R.1) 75 Date of petition Apr. 14, 1942 Nov. 22,1924 76 in bankruptcy. (324 U.S. 841, R. 4). 77 Date of position Jan. 7, 1942 July 1, 1925 (R.5) 78 for turnover (324 U.S. 841, R. 8). Interval between 79 petition in bank- 80 ruptcy and petition Eight months more or less. 81 for turnover 82 Trustee's proof of Examination of Maffio's inven- Prela manufacturedblouses from 83 possession tories revealed discrepencies silk; each blouse required 1 1/2 84 in bankruptcy between sales and stock on hand yards of silk; examination of 85 at close of last inventory Prela's books revealed 86 (324 U.S. 841, R.7). discrepency between blouses 87 manufactured and silk on hand (R.1) 88 Bankrupt's reply to 1. Inventory figures erroneous 1. Assumption from books 89 above proof. (unrecorded sales) erroneous-manufactured a kind 90 (324 U.S. 841, R. 5361),of blouse that required more than 91 2. Denial of present possession 1 1/2 yards of silk (R.2,19). 92 of the property.(Id. at 62.) 2. Denial of present possession 93 of the property. (Ibid.) 94 District court's 1. Assumptions as to past 2. Bankrupt's denial of present 95 ruling on evidence. possession correct. possession disbelieved. 96 (324 U.S. 841.111). (R.1,5.) 97 Date of turnover Aug. 9,1943 (R.5) July 8, 1926(R.3) 98 order. Interval between 99 dates of proven 20 months or less 100 possession and 101 turnover order. Review of turnover Unanimously affirmed by CCA 2 without opionion. 102 order. L. Hand, Swan, and Clark, J.J., Hough, Mack and L Hand, Cert. denied Feb.5, 103 on Oct. 25, 1944 (145 F.2d 241). J.J. on Dec. 13, 1926 1945,324 U.S. 841. 104 (unreported)(R.15). 105 Date of trustee's Dec. 7, 1944(R.3). Apr 22,1927(R.13) 106 petition forcon- 107 tempt citation. 108 Trustee's proof of 1. Turnover order.2. Failure to comply. 109 contempt. (R.16.) (R.13,15.) 110 Bankrupt's reply 1. Did not have possessionon date of turnover order. 3 (a) Heart trouble 3 (a) Paralytic 111 to above proof. 2. Hasn't got it now. (R.15.) stroke (R.24). 112 3. Has become physically incapacitated.(b) Wife sick, 113 (R.13,17.) (R.17.) too. (Ibid.,25.) 114 4. merely repeated 4. Filed Affidavits 115 denial(R.13,17.) of former cutter, 116 salesman, and 117 blouse buyers to 118 the effect that 119 blouses inques- 120 tion used 2 and 121 more yards of 122 silk (R.27,28,29). 123 District's court's 1.Trustee makes outprima facie case by proof of non-compliance with turnover order. 124 ruling on evidence 2.Turnover order cannot be collaterally attacked by providing that bankrupt 125 disposed of property prior to date of order to show 126 present inability to comply with order. 127 3.To avoid contempt, bankrupt must prove present inablilty to comply by proof 128 of disposition of property subsequent to turnover order. 129 4. Bankrupt makes no claim that he has disposed of the 130 property since the turnover order. 131 (R.18,19) (R.48,52.) 132 5. Physical incapacity of bankrupt and/or bankrupt's wifeignored. 133 6. Bankrupt's bare denial of 6. Bankrupt's evi- 134 inability tp comply with turn- dence and that of 135 over disbelieved (R19). other witnesses 136 that as a matter 137 of fact bankrupt 138 disposed of silk 139 prior to turnover 140 order excluded and 141 or stricken(R.33 142 -34,45-46,50,54). 143 Date of contempt April. 18,1945 (R19). Sept. 9,1927(R52) 144 citation. 145 Interval between date Certiorari to review Certiorari to 146 of turnover order and turnover order applied for review turnover 147 contempt citation. 20 months 14 months and denied. order not sought. 148 Review of contempt Affirmed. Frank and L.Hand J.J., Manton and Swan 149 citation by CCA 2. 157 F2d.951. 23 F. 2d 413 with Swan J., (concurring J.J., with L. 150 1. "With the turnover order once 1."A disobedience of the order in the result). Hand, J.,dissenting 151 sustained, the contempt order to turn over presents a prima 152 necessarily followed." Citing the faice case of contumacy for 153 Oriel case (at p. 954). punishment." Citing the CCA Oriel 154 case (at p. 414). 155 2. Findings in the turnover order procedding are res judicata in 156 the contempt proceeding. (Ibid.) 3."That is to say" the district 3. Having been directed to turn 3(a). "Although we know 157 court "had to accept it as true" over property, it is presumed that that Maggio cannot 158 Maggio had possession on the the offender continues in his will- comply with the order, 159 date of the turnover order and full and deliberate conduct when we must keep a straight 160 that "this possession continued he fails to obey the order." (Ibid) face and pretend that 161 . . . unless Maggio showed that, he can..." (at pp.954-5 162 since aug. 1943, he had been 163 deprived of that possession or 164 had in some other way become unable 165 to comply with the turnover 166 order."(Ibid.) 167 4."As Maggio made no such 4."No evidence was offered by the 168 showing of an intervening bankrupt to show what he had 169 change of facts, there was done with the property since he was 170 no error in the entry of adjudged a bankrupt"(at p. 413). 171 the contempt order (Ibid.) 172 5. Physical incapacity of bankrupt and/or wife treated as 173 irrelevant. 1 The Court of Appeals itself said: '* * * the Supreme Court has never decided in favor of the fictitious 'presumption' here invoked. * * *' 157 F.2d 951, 954. 2 Other circuits have treated the presumption of continued possession as one which 'grows weaker as time passes, until it finally ceases to exist' (C.C.A.8th in Marin v. Ellis, 15 F.2d 321) and as one 'only as strong as the nature of the circumstances permits' and which 'loses its force and effect as time intervenes and as circumstances indicate that the bankrupt is no longer in possession of the missing goods or their proceeds' (C.C.A.4th in Brune v. Fraidin, 149 F.2d 325, 328. See also Comments in 95 U. of Pa.L.Rev. 789 (1947) and 42 Ill.L.Rev. 396 (1947). 3 For examples of statutory provisions, see Interstate Commerce Act, 49 U.S.C. § 12(3), 49 U.S.C.A. § 12(3); Securities Exchange Act of 1934, 15 U.S.C. § 78u(c), 15 U.S.C.A. § 78u(c); Public Utility Holding Company Act of 1935, 15 U.S.C. § 79r(d), 15 U.S.C.A. § 79r(d); Communications Act of 1934, 47 U.S.C. § 409(d), 47 U.S.C.A. § 409(d); National Labor Relations Act, 29 U.S.C. § 161(2), 29 U.S.C.A. § 161(2); Federal Trade Commission Act, 15 U.S.C. § 49, 15 U.S.C.A. § 49; Administrative Procedure Act of 1946, 5 U.S.C. § 1005(c), 5 U.S.C.A. § 1005(c); and Atomic Energy Act of 1946, 42 U.S.C. § 1816(d), 42 U.S.C.A. § 1816(d). 4 278 U.S. 358, 366, 49 S.Ct. 173, 175, 73 L.Ed. 419, quoting from In re Epstein, (cited as Epstein v. Steinfeld), DC ., 206 F. 568, 569. 5 278 U.S. 358, 364, 49 S.Ct. 173, 174, 175, 73 L.Ed. 419. 6 The late Chief Justice said '* * * the following seem to us to lay down more nearly the correct view,' and cited Toplitz v. Walser, 3 Cir., 27 F.2d 196, at page 197, a contempt case in which it is said 'The sole question is whether the bankrupt is presently able to comply with the turnover order previously made and, accordingly, whether he is disobeying that order * * *'; Epstein v. Steinfeld, 3 Cir., 210 F. 236, a turnover proceeding, in which the Court delineates both turnover and contempt procedures and states that a contempt order should not be issued unless there is present ability to comply; Schmid v. Rosenthal, 3 Cir., 230 F. 818, a turnover case, citing Epstein v. Steinfeld, supra; Frederick v. Silverman, 3 Cir., 250 F. 75, a contempt case, reciting the necessity for present ability to comply; Reardon v. Pensoneau, 8 Cir., 18 F.2d 244, a contempt case, holding the evidence there insufficient to establish present inability to comply; United States ex rel. Paleais v. Moore, 2 Cir., 294 F. 852, 856, involving a commitment for contempt, stating '* * * the court should be satisfied of the present ability of the bankrupt to comply * * *'; In re Frankel, D.C., 184 F. 539, a contempt case in which the evidence was held insufficient to show present inability to comply; Drakeford v. Adams, 98 Ga. 722, 25 S.E. 833, a State contempt case requiring present ability to comply to be 'clearly and satisfactorily established'; and Collier, Bankruptcy (Gilbert's ed., 1927) 652. The cumulative effect of these authorities seems clearly to be that, while a bankrupt's denial of present possession, standing alone may not be sufficient to establish his inability to produce the property or its proceeds, if the Court is satisfied, from all the evidence properly before it, that the bankrupt has not the present ability to comply, the commitment order should not issue. Other decisions are to the same effect. See, for example, American Trust Co. v. Wallis, 3 Cir., 126 F. 464; Samel et al. v. Dodd, 5 Cir., 142 F. 68, certiorari denied 201 U.S. 646, 26 S.Ct. 761, 50 L.Ed. 903; In re Nisenson, D.C., 182 F. 912; In re Holden, 6 Cir., 203 F. 229, certiorari denied 229 U.S. 621, 33 S.Ct. 1049, 57 L.Ed. 1355; In re McNaught, D.C., 225 F. 511; Dittmar v. Michelson, 281 F. 116; In re Davison, D.C., 143 F. 673; In re Marks, D.C., 176 F. 1018; In re Elias, D.C., 240 F. 448; Freed v. Central Trust Co. of Illinois, 7 Cir., 215 F. 873; In re Nevin, 6 Cir., 278 F. 601; Johnson et al. v. Goldstein, 6 Cir., 11 F.2d 702; In re Magen, D.C., 14 F.2d 469; Id., D.C., 18 F.2d 288; In re Walt, D.C., 17 F.2d 588; Clark v. Milens, 9 Cir., 28 F.2d 457; Berkhower v. Mielzner, 6 Cir., 29 F.2d 65, certiorari denied 279 U.S. 848, 49 S.Ct. 345, 73 L.Ed. 992; In re Tabak et al., D.C., 34 F.2d 209; In re Weisberger, D.C., 43 F.2d 258. See also Collier, Bankruptcy (14th ed.) pp. 244—249; 2 id. pp. 535—542; 5 Remington, Bankruptcy (4th ed.) pp. 624—681; 8 C.J.S., Bankruptcy, § 210; 6 Am.Jur. § 369, pp. 752—753. 7 Similarly, the following cases involving contempt orders for failure to pay alimony were cited (278 U.S. at page 365, 49 S.Ct. at page 175, 73 L.Ed. 419) as illustrating rules of evidence concerning ability to comply, 'much the same as here laid down for bankruptcy': Smiley v. Smiley, 99 Wash. 577, 169 P. 962, affidavit as to lack of ability to comply being undenied, commitment for contempt by failure to pay hele erroneous; Barton v. Barton, 99 Kan. 727, 163 P. 179, 180, evidence held sufficient to justify commitment although it is said '* * * the defendant cannot, of course, be committed for the failure to do something which is beyond his power * * *'; In re Von Gerzabek, 58 Cal.App. 230, 208 P. 318, a showing of inability to comply said to be 'the most effectual answer' to a contempt order; Hurd v. Hurd, 63 Minn. 443, 65 N.W. 728; Heflebower v. Heflebower, 102 Ohio St. 674, 133 N.E. 455, and Fowler v. Fowler, 61 Okla. 280, 161 P. 227, L.R.A.1917C, 89, defendant's evidence inu fficient to establish inability to comply which would have prevented commitment. 8 These conclusions are supported by the cases cited in the Oriel case as laying down 'more nearly the correct view.' See note 6, supra. Of course cases such as Gompers v. United States, 233 U.S. 604, 34 S.Ct. 693, 58 L.Ed. 1115; Michaelson v. United States ex rel. Chicago, St. P., M. & O.R. Co., 266 U.S. 42, 45 S.Ct. 18, 69 L.Ed. 162, 35 A.L.R. 451, Pendergast v. United States, 317 U.S. 412, 63 S.Ct. 268, 87 L.Ed. 368 and Cooke v. United States, 267 U.S. 517, 45 S.Ct. 390, 69 L.Ed. 767, all involving criminal contempt charges, are of no relevance here, as we deal only with civil contempts. See text, page 67 of 333 U.S., page 407, of 68 S.Ct. 9 278 U.S. at page 364, 49 S.Ct. at page 175, 73 L.Ed. 419. 10 278 U.S. at page 363, 49 S.Ct. at page 174, 73 L.Ed. 419. 11 Cf. Kay v. United States, 303 U.S. 1, 10, 58 S.Ct. 468, 473, 82 L.Ed. 607; Prairie Farmer Publishing Company v. Indiana Farmer's etc., 299 U.S. 156, 159, 57 S.Ct. 135, 136, 81 L.Ed. 93; Buzynski v. Luckenbach S.S. Co., 277 U.S. 226, 228, 48 S.Ct. 440, 441, 72 L.Ed. 860. 1 'We would hold that a turnover proceeding may not, via a fiction, be substituted for a criminal prosecution so as to deprive a man of a basic constitutional right, the right of trial by jury. We would note, too, that one consequence of the fiction is that the respondet may be twice punished for the same offense, since, if he is later indicted for violation of 11 U.S.C.A. § 52, sub. b, his imprisonment for contempt will not serve as a defense. We would add that nowhere in the Bankruptcy Act has Congress even intimated an intention to authorize such results, and that they stem solely from a judge-made gloss on the statute.' In re Luma Camera Service, 2 Cir., 157 F.2d 951, 953, 954. 2 In holding petitioner in contempt, the District Court said: 'Respondent has not sustained his burden of satisfactorily accounting for the disposition of the assets by his mere denial of possession under oath.' It then made the following finding of fact: '4. The respondent, Joseph F. Maggio, has wholly failed to comply with said turnover order, and he has failed to explain to the satisfaction of this Court his failure to comply.' 1 324 U.S. 841, 65 S.Ct. 587, 89 L.Ed. 1403. 2 Robbins v. Gottbetter, 2 Cir., 134 F.2d 843, and Cohen v. Jeskowitz, 2 Cir., 144 F.2d 39. 3 Seligson v. Goldsmith, 2 Cir., 128 F.2d 977. 4 Seligson v. Goldsmith, 2 Cir., 128 F.2d 977, 978, 979; Robbins v. Gottbetter, 2 Cir., 134 F.2d 843, 844; Cohen v. Jeskowitz, 2 Cir., 144 F.2d 39, 41 (concurring opinion of Frank, J.). 5 Presumably, this avowed inability of the Circuit Court of Appeals for the Second Circuit to free itself from its own prior decision in this situation is not the reflection of a principle similar to that which binds the House of Lords to its past precedents. It must be attributable to the fact that the Second Circuit has six circuit judges who never sit en banc and that presumably they deem it undesirable for the majority of one panel to have a different view from that of a majority of another panel. 6 128 F.2d at page 979; 134 F.2d at page 844; 144 F.2d at pages 40, 41. 7 In the first two of these cases, the bankrupt did not seek review in this Court; in the Jeskowitz case, the bankrupt took the hint, but this Court denied certiorari. 323 U.S. 787, 65 S.Ct. 278, 89 L.Ed. 628. 8 Judge A. N. Hand's observation concurring, in the Robbins case, 134 F.2d at page 845 is also pertinent: '* * * all the justices of a court of which those exceptionally alert guardians of civil rights, Justices Holmes, Brandeis and Stone, were members, unanimously concurred in the opinion of Chief Justice Taft * * *.' 9 278 U.S. at page 363, 49 S.Ct. at page 174, 73 L.Ed. 419. 10 See Appendix, 68 S.Ct. p. 420. 11 278 U.S. at page 364, 49 S.Ct. at page 15 , 73 L.Ed. 419. 12 "I have known a brief confinement to produce the money promptly, thus justifying the court's incredulity, and I have also known it to fail. Where it has failed, and where a reasonable interval of time has supplied the previous defect in the evidence, and has made sufficiently certain what was doubtful before, namely the bankrupt's inability to obey the order, he has always been released, and I need hardly say that he would always have the right to be released as soon as the fact becomes clear that he cannot obey." 278 U.S. at page 366, 49 S.Ct. at page 175, 73 L.Ed. 419, quoting from Judge McPherson's opinion in Re Epstein, D.C., 206 F. 568, 570. 13 'Although we know that Maggio cannot comply with the order, we must keep a straight face and pretend that he can, and must thus affirm orders which first direct Maggio 'to do an impossibility, and then punish him for refusal to perform it." 157 F.2d at page 955 (italics supplied). Judge Frank made this statement concerning the presumption of continued possession in turnover order proceedings, and was not addressing his remarks to the record before him in the contempt proceeding. The dictum bagan with this sentence: 'Were this a case of first impression involving the validity of a turnover order, we would not accept such reasoning.' 157 F.2d 951, 953. The 'thus' in his statement indicates hostility to the basis of the turnover order because of a virus which the lower court feels unable to extract but which automatically infects the contempt proceedings. 14 'With the turnover order once sustained, the contempt order necessarily followed.' Id., 157 F.2d at page 954. 15 278 U.S. 358, 364, 49 S.Ct. 173, 175, 73 L.Ed. 419. 16 The Chief Justice said '* * * the following seem to us to lay down more nearly the correct view,' and cited Toplitz v. Walser, 27 F.2d 196, at page 197, a Third Circuit contempt case in which it is said: 'It therefore devolves upon the bankrupt in the latter (contempt) proceeding to show how and when the property previously adjudged in his possession or control had passed out of his possession or control * * *. The trouble with the evidence in the contempt proceeding, the only evidence properly here for review, is that it is directed to the issue of the bankrupt's possession and control of property at the date of bankruptcy raised an definitely decided against her in the turnover proceeding. * * * Though not in form this is in substance a collateral attack upon the now finally established turnover order, which of course is not permissible.'; Epstein v. Steinfeld, 210 F. 236, a turnover proceeding, in which the Third Circuit delineated its procedure, different from that followed in the Second Circuit, whereby if the referee found a shortage at the time of bankruptcy the turnover order was automatically entered, and the question of present possession or ability to comply with that order was left open for possible contempt proceedings, the presumption of continued possession being applied in such proceedings since the bankrupt had to show that by reason of events occurring since the bankruptcy he was unable to comply (cf. In re Eisenberg, 3 Cir., 130 F.2d 160) (this distinction has no real bearing on the instant issue as to either collateral attack or the presumption of continued possession); Schmid v. Rosenthal, 230 F. 818, a Third Circuit turnover case, citing Epstein v. Steinfeld, supra; Frederick v. Silverman, 250 F. 75, a Third Circuit contempt case citing Epstein v. Steinfeld, supra; Reardon v. Pensoneau, 18 F.2d 244, at pages 245, 246, an Eighth Circuit contempt case, holding that the bankrupt had not met his burden of establishing present inability to comply, in which it is said 'They (turnover orders) establish the bankrupt's possession and control on the day the referee's order was made. The burden was on him to show what disposition had been made of the $6,900. Until that showing is made relieving him of an intentional loss of its possession and control, it must be presumed that he still has it. * * * a bankrupt cannot escape an order for the surrender of property belonging to his estate 'by simply denying under oath that he has it."; United States ex rel. Paleais v. Moore, 294 F. 852, at page 857 a Second Circuit habeas corpus case following a commitment for contempt, stating 'If, at the time the turn-over order was made, the books and papers were in the bankrupt's hands, the presumption is that they continued to be in his possession or under his control until he has satisfactorily accounted to the court of bankruptcy for their subsequent disposition or disappearance. The burden is upon him satisfactorily to so account for them. He cannot escape an order for their surrender by simply denying under oath that he no longer has them.'; In re Frankel, D.C., 184 F. 539, a contempt case in which L. Hand, then a District Judge, refused to commit for contempt because he did not deem the turnover order binding as res judicata, but on rehearing reversed himself, holding that the bankrupt could not show present inability by evidence constituting an indirec attack on the turnover order, stating (at page 542) 'Therefore, in so far as the (turnover) order directs anyone to do anything, he may not in the contempt proceeding question the propriety of the direction; and in so far as the order determines an existing fact, which is necessary in law to the validity of the direction, he may not question its truth. To question such a fact is to question the validity of the direction which depends upon it, and is only an indirect way of reviewing the order. Therefore now to deny the fact that the bankrupt had the money in his possession is in this case to assert that the order directing him to pay it over was erroneous. On this account, therefore, that fact is concluded, once it be granted that it was necessary to the validity of the order, which I have shown. Quite reluctantly, therefore, I can only conclude that I was wrong originally to inquire into the merits, and that a commital must issue.' The cumulative effect of these authorities is that a bankrupt's denial of present possession, standing alone, is not sufficient to establish his inability to produce the property or its proceeds, and that the bankruptcy court will not permit the bankrupt to prove present inability to comply with the turnover order by evidence which indirectly constitutes a collateral attack on that order. 17 For almost forty years, the Second Circuit has tenaciously abided by the presumption of continued possession. While this presumption was previously sub silentio utilized (e.g., In re Schlesinger, 2 Cir., 102 F. 117, affirming, D.C., 97 F. 930), In re Stavrahn in 1909, 174 F. 330, 20 Ann.Cas. 888, appears to have been the Second Circuit's case of first impression, and the decision that sired the presumption. There the court stated that the bankrupt could not defend against a contempt citation following a turnover order on the assertion that he had never taken the assets in question, but had to come forward with some reasonable explanation as to what had become of the assets since the turnover order. In 1912, the Second Circuit reiterated the reasoning of its earlier decision in Re Weber Co., 200 F. 404. The presumpi on had been somewhat inarticulately phrased in the earlier opinion, and the court in this case commended the District Judge for aptly carrying out the mandate of the Stavrahn decision. The cases up to 1925 and before the Oriel case are listed and discussed at length in In re H. Magen Co., 2 Cir., 10 F.2d 91, in which the court observed that 'The law relating to turn-over orders is pretty well established in this circuit.' 10 F.2d at page 93. In re Siegler, note 18 supra, was decided three months after this Court's decision in the Oriel case. Then came: Danish v. Sofranski, 2 Cir., 93 F.2d 424; In re Pinsky-Lapin & Co., 2 Cir., 98 F.2d 776; Seligson v. Goldsmith, note 3 supra; Robbins v. Gottbetter, note 2 supra; Cohen v. Jeskowitz, note 2 supra; and the per curiam affirmance of the turnover order in the instant bankruptcy proceedings. 18 'Any difference of opinion respecting the force and effect of a turnover order, which may have prevailed before the decision of the Supreme Court, in Prela v. Hubshman (278 U.S. 358), 49 S.Ct. 173, 73 L.Ed. 419 (companion case to Oriel v. Russell) * * * is now out of place in any discussion of the subject.' 31 F.2d at page 973. 19 Cf. In re Frankel, note 16 supra. 20 Cf. Brune v. Fraidin, 4 Cir., 149 F.2d 325. 21 In the opinion dated April 18, 1945, holding petitioner in contempt of court, the District Court stated that: 'Respondent (petitioner here) has not sustained his burden of satisfactorily accounting for the disposition of the assets by his mere denial of possession under oath.' And that court's fourth finding of fact was as follows: 'The respondent, Joseph F. Maggio, has wholly failed to comply with said turnover order, and he has failed to explain to the satisfaction of this court his failure to comply.' 22 'The proceedings in these two cases have been so long drawn out by efforts on the part of the bankrupts to retry the issue presented on the motion to turn over as to be, of themselves, convincing argument that, if the bankruptcy statute is not to be frittered away in constant delays and failures of enforcement of lawful orders, the rule we have laid down is the proper one.' 278 U.S. at page 363, 49 S.Ct. at page 174, 73 L.Ed. 419.
01
333 U.S. 46 68 S.Ct. 391 92 L.Ed. 468 JOHNSONv.UNITED STATES. No. 138. Argued Dec. 10, 1947. Decided Feb. 9, 1948. Motion to Recall Mandate Denied April 5, 1948. See 333 U.S. 865, 68 S.Ct. 788. Messrs. Silas B. Axtell, of New York City, and David A. Fall, of San Pedro, Cal., for petitioner. Mr. Samuel D. Slade, of Washington, D.C., for respondent. Mr. Justice DOUGLAS delivered the opinion of the Court. 1 This case is here on a petition for a writ of certiorari which we granted because of the seeming misapplication by the court below of Jesionowski v. Boston & M.R. Co., 329 U.S. 452, 67 S.Ct. 401. 2 Petitioner was a seaman on S.S. Mission Soledad, a steam tanker owned and operated by the United States. He was on the main deck rounding in two blocks, an operation which followed the cradling of the boom. One block was attached to the outer end of the boom by a wire rope. The other block was being held by a shipmate, one Dudder, who stood above petitioner on the meccano deck, a structure of beams which had been erected on the main deck. Petitioner was taking in the slack by pulling on the free end of the rope which ran through the two blocks. As he pulled on the rope the two blocks were brought together. When that was done Dudder had to walk forward with the block he held at a rate of speed controlled by petitioner. The operation went forward smoothly. Petitioner would pull on the rope, Dudder would walk forward, and then petitioner would stop to coil the accumulated free line. Petitioner and Dudder had worked harmoniously, neither one jerking on the line nor interfering with the other's function. There was no fouling of the lines; the rope was taut and ran free. 3 We have only a partial account of how the injury to petitioner occurred. Dudder was not called. The only testimony we have is from petitioner and his version of the episode is uncontradicted. The block which it was Dudder's duty to hold (and which weighed 25 or 30 pounds) was permitted to fall; it hit petitioner on the head and caused the injury for which this libel in personam (see 41 Stat. 525, 46 U.S.C.A. § 742) was filed under the Jones Act, 38 Stat. 1185, as amended, 41 Stat. 1007, 46 U.S.C. § 688, 46 U.S.C.A. § 688. Dudder, as we have said, was standing above petitioner. It is not certain why the block fell. Petitioner was hit without warning. When hit, he was bending over coiling the line on the deck. 4 The rule of res ipsa loquitur applied in Jesionowski v. Boston & Maine R. Co., supra, means that 'the facts of the occurrence warrant the inference of negligence, not that they compel such an inference.' Sweeney v. Erving, 228 U.S. 233, 240, 33 S.Ct. 416, 418, 57 LE d. 815. We need not determine what the result would be if it were shown that petitioner was pulling on the rope when the accident happened. For the uncontradicted evidence is that he was not pulling on the rope but was bending over coiling it on the deck. A man who is careful does not ordinarily drop a block on a man working below him. Some external force might conceivably compel him to do so. But where, as here, the injured person is not implicated (Jesionowski v. Boston & Marine R. Co., supra), the falling of the block is alone sufficient basis for an inference that the man who held the block was negligent. In short, Dudder alone remains implicated, since on the record either he or petitioner was the cause of the accident and it appears that petitioner was not responsible. 5 The Jones Act makes applicable to these suits the standard of liability of the Federal Employers' Liability Act, 35 Stat. 65, as amended, 53 Stat. 1404, 45 U.S.C. § 51, 45 U.S.C.A. § 51. Thus the shipowner becomes liable for injuries to a seaman resulting in whole or in part from the negligence of another employee. See De Zon v. American President Lines, 318 U.S. 660, 665, 63 S.Ct. 814, 817, 87 L.Ed. 1065. And there is no reason in logic or experience why res ipsa loquitur is not applicable to acts of a fellow servant. See Lejeune v. General Petroleum Corporation, 128 Cal.App. 404, 18 P.2d 429; Johnson v. Metropolitan Street R. Co., 104 Mo.App. 588, 592, 593, 78 S.W. 275. True, the doctrine finds most frequent application in cases of injuries arising from instruments or properties under the employer's exclusive control. San Juan Light & Transit Co. v. Requena, 224 U.S. 89, 32 S.Ct. 399, 56 L.Ed. 680; Jesionowski v. Boston & Maine R. Co., supra; Lukon v. Pennsylvania R. Co., 3 Cir., 131 F.2d 327; Sweeting v. Pennsylvania R. Co., 3 Cir., 142 F.2d 611. Inherent, however, in the negligence inferred in that type of case is an act or failure to act by an individual. While the acts of negligence underlying such accidents may reach higher into the management hierarchy than the one involved here, the Federal Employers' Liability Act compels us to go no higher than a fellow servant. See Terminal R. Ass'n v. Staengel, 8 Cir., 122 F.2d 271, 136 A.L.R. 789. 6 No act need be explicable only in terms of negligence in order for the rule of res ipsa loquitur to be invoked. The rule deals only with permissible inferences from unexplained events. In this case the District Court found negligence from Dudder's act or dropping the block since all that petitioner was doing at the time was coiling the rope. The Circuit Court of Appeals reversed, 160 F.2d 789, feeling that petitioner might have pulled the block out of Dudder's hands. It reasoned that although petitioner testified he was bending over coiling the rope when the block hit him, the concussion may have caused a lapse of memory which antedated the actual injury. The inquiry, however, is not as to possible causes of the accident but whether a showing that petitioner was without fault and was injured by the dropping of the block is the basis of a fair inference that the man who dropped the block was negligent. We think it is, for human experience tells us that careful men do not customarily do such an act. 7 Petitioner presses here his claim for maintenance and cure which was rejected by both courts below. He was hospitalized by respondent for a number of weeks following the accident. He was then found unfit for sea duty and doctors of the Public Health Service recommended that he enter various government hospitals. He refused and went instead to live on the ranch of his parents. We need not decide whether an agreement between petitioner and the government doctors for out-patient treatment and rest at his home might be inferred. Cf. Rey v. Colonial Nav. Co., 2 Cir., 116 F.2d 580; Moyle v. National Petroleum Transport Corporation, 2 Cir., 150 F.2d 840. For there is ample evidence to support the findings of the two lower courts that petitin er had incurred no expense or liability for his care and support at the home of his parents. See Field v. Waterman S.S. Corporation, 5 Cir., 104 F.2d 849. On that issue we affirm the Circuit Court of Appeals. On the issue of negligence we reverse it. 8 Affirmed in part; reversed in part. 9 So ordered. 10 Mr. Justice FRANKFURTER dissenting in part. 11 What is this case? It is a suit by the petitioner, a seaman, for an injury sustained while working on a vessel owned and operated by the United States. Under existing law the United States is liable only if it failed in its duty of exercising reasonable care in safeguarding its employees—the United States is liable, that is, only if it was negligent. And it is up to the plaintiff to prove such negligence. 12 What is the plaintiff's claim here? It is that while the petitioner and a fellow seaman named Dudder were working together in an operation known as 'rounding in' blocks to bring two blocks of a block and tackle together, somehow or other a block fell and struck the petitioner, who was operating on a deck below Dudder, on the head. The claim is that the block which hit petitioner was negligently released by Dudder and that the United States is responsible for Dudder's negligence. (The 'fellow servant rule' is not a defense under the Jones Act which authorizes this suit. 38 Stat. 1185, as amended, 41 Stat. 1007, 46 U.S.C. § 688, 46 U.S.C.A. § 688.) There were no witnesses to this happening besides Dudder and Johnson. The only sources of knowledge for ascertaining what actually happened—whether fault lay with Dudder or Johnson or with nobody, as the law determines fault—were the accounts which Dudder and Johnson might furnish and such inferences as human experience could reasonably draw from the occurrence itself. 13 What evidence does the record disclose? Of the two available witnesses only one testified. That was the petitioner. It is accurate to state, therefore, that his version of what immediately preceded the injury was uncontradicted. But it is no less true that he was unable to furnish any evidence bearing on the cause of the happening.1 His testimony has not established that it was the carelessness of Dudder that caused the block to fall out of Dudder's hand rather than a careless jerk of the rope by himself which caused such release. Dudder was available as a witness but he was not called. The United States in fact had Dudder's deposition taken before the trial, and it was placed at Johnson's disposal. Neither party, for reasons of its own, called Dudder as a witness or introduced his deposition. 14 What conclusions are to be drawn from the facts as they were developed at the trial? It is not the business of this Court to conduct the trial of a case or, even where a case is technically open here on the facts, to sit in independent judgment on the facts. If a case like this is to be allowed to come here at all, we sit in judgment on the proceedings in their entirety. This is a proceeding in Admiralty tried by a judge and not a jury. The trial judge, who heard the testimony and who was in the best possible position to weigh what he heard and saw, died before he gave his view of the testimony. By agreement, the cause was then submitted for judgment by another district judge on the basis of the cold record. He decided for the petitioner. The United States then appealed to the Circuit Court of Appeals for the Ninth Circuit. Three other judges on the basis of the same dead record reversed the district judge. 160 F.2d 789. The result is that on the issue whether the United States is liable because one of its employees was negligent—that is, whether Duddr in fact carelessly let the block slip out of his hands—one judge said yes, and three judges said no. 15 What is the applicable law? My brethren say the circumstances speak for themselves in establishing Dudder's negligence. This means that the three judges below should have found, and this Court must now find, that the record proves that the injury can only be explained by Dudder's carelessness—for the petitioner, it deserves repeating, must have established Dudder's carelessness in order to hold the United States liable. I agree that if the rule of res ipsa loquitur determines this case, the scope of that rule is found in Sweeney v. Erving, 228 U.S. 233, 33 S.Ct. 416, 57 L.Ed. 815, reaffirmed last term as a 'decision which cut through the mass of verbiage built up around the doctrine of res ipsa loquitur.' Jesionowski v. Boston & M.R. Co., 329 U.S. 452, 457, 67 S.Ct. 401, 404. But these two sentences are a vital part of the Sweeney case: 'Res ipsa loquitur, where it applies, does not convert the defendant's general issue into an affirmative defense. When all the evidence is in, the question for the jury is whether the preponderance is with the plaintiff.' 228 U.S. at page 240, 33 S.Ct. at page 418, 57 L.Ed. 815. Therefore, even if the rule of res ipsa loquitur is here relevant, it should not by itself sustain a finding for the petitioner, 'for the reason that in cases where (it) does apply, it has not the effect of shifting the burden of proof.' 228 U.S. at page 238, 33 S.Ct. at page 417, 57 L.Ed. 815. Since we cannot tell from the record how the injury to the petitioner occurred—it certainly was not established why the block fell—I cannot escape the conclusion that petitioner failed to sustain his burden of proving by a fair preponderance of the evidence that his injuries were attributable to the respondent's negligence. Cf. the Jesionowski case, supra, 329 U.S. at page 454, 67 S.Ct. at page 402. 16 But I do not believe that res ipsa loquitur is applicable here. It is, after all, a 'rule of necessity to be invoked only when necessary evidence is absent and not readily available.' See Cooley, Torts, 4th Ed., § 480. Here the evidence as to the cause of petitioner's injuries was admittedly available, and it would seem to follow that since what actually happened could have been adjudicated, it should have been adjudicated. Therefore, I would affirm the judgment of the court below but modify its mandate so that there may be a new trial on this issue and an adjudication based upon an adequate determination. 17 While a court room is not a laboratory for the scientific pursuit of truth, a trial judge is surely not confined to an account obviously fragmentary, of the circumstances of a happening, here the meagre testimony of Johnson, when he has at his command the means of exploring them fully, or at least more fully, before passing legal judgment. A trial is not a game of blind man's buff; and the trial judge—particularly in a case where he himself is the trier of the facts upon which he is to pronounce the law—need not blindfold himself by failing to call an available vital witness simply because the parties, for reasons of trial tactics, choose to withhold his testimony. 18 Federal judges are not referees at prizefights but functionaries of justice. See Herron v. Southern Pac. Co., 283 U.S. 91, 95, 51 S.Ct. 383, 384, 75 L.Ed. 857; Quercia v. United States, 289 U.S. 466, 469, 53 S.Ct. 698, 699, 77 L.Ed. 1321. As such they have a duty of initiative to see that the issues are determined within the scope of the pleadings, not left to counsel's chosen argument. See New York Cent. R. Co. v. Johnson, 279 U.S. 310, 318, 49 S.Ct. 300, 73 L.Ed. 706. Just as a Federal judge may bring to his aid an auditor, without consent of the parties, to examine books and papers, hear testimony, clarify the issues, and submit a report, in order to 'render possible an intelligent consideration of the case by court and jury,' Ex parte Peterson, 253 U.S. 300, 306, 40 S.Ct. 543, 545,6 4 L.Ed. 919, and in so doing has the power to tax the expense as costs 'necessary to the true understanding of the cause on both sides,' Whipple v. Cumberland Cotton Co., Fed.Cas.No.17,515, 3 Story 84, 86, he has the power to call and examine witnesses to elicit the truth. See Glasser v. United States, 315 U.S. 60, 82, 62 S.Ct. 457, 470, 86 L.Ed. 680. He surely has the duty to do so before resorting to guesswork in establishing liability for fault. 19 Dudder's account of what happened surely could supplement Johnson's as a basis for recreating the events which led to Johnson's injury. Neither party saw fit to use his available testimony. Instead of entering judgment for the party who had the burden of proof and did not meet it, the trial judge should at least have called Dudder as the court's witness. As Judge Sibley observed in a case where witnesses who knew what actually happened had not been called to testify: 'We think the interests of justice would be served by a new and more orderly trial, which can easily be managed * * *. Williams and Batson (the witnesses) certainly know the truth of the things in dispute. If neither party will risk calling a witness who knows important facts, it is in the power of the court to call and examine such a witness, in the interest of truth and justice, allowing both parties the right of cross-examination and impeachment.' Chalmette Petroleum Corporation v. Chalmette Oil Distributing Co., 5 Cir., 143 F.2d 826, 828, 829. 20 Three courts and thirteen judges have now passed on this case when in good reason a situation like this ought never to get into court at all. The crux of the difficulty is that an industrial injury such as the petitioner suffered is as to interstate railroad employees and seamen still determined by the archaic law of negligence instead of by a just system of workmen's compensation. Occurrences like the one now in controversy are inherent in industrial employment and to make liability depend on a finding of 'negligence' is to pursue unreality. Engliand abolished negligence as the basis of liability fifty years ago. The States, long laggards in making law conform to the actualities of industry, have now, with only a single exception, supplanted the outmoded liability for fault by a rational system of workmen's compensation laws, and Congress has enacted compensation laws for the District of Columbia, federal employees, and for longshoremen and harbor workers. 'It is reasonable that the public should pay the whole cost of producing what it wants and a part of that cost is the pain and mutilation incident to production.' Holmes, J., in Arizona Employers' Liability Cases, 250 U.S. 400, 433, 39 S.Ct. 553, 561, 63 L.Ed. 1058, 6 A.L.R. 1537. But so long as Congress sees fit to have liability for injuries by railroad employees and seamen based solely on proof of fault, it is not for this Court to torture and twist the law of negligence so as to make it in result a law not of liability for fault but a law of liability for injuries. 21 One cannot be unmindful that 'the radiating potencies of a decision may go beyond the actual holding.' Hawks v. Hamill, 288 U.S. 52, 58, 53 S.Ct. 240, 242, 77 L.Ed. 610. Lower courts read the opinions of this Court with a not unnatural alertness to catch intimations beyond the precise ratio decidendi. A decision like this exerts an influence, however unwittingly, well calculated to lead lower court judges to avoid reversals by deciding compassionately for the plaintiff in these negligence cases confident that such decisions are not likely to be reviewed here. 22 I would have the cause remanded to the District Court for further proceedings in conformity with this opinion. 23 Mr. Justice JACKSON and Mr. Justice BURTON join in this dissent. 1 Petitioner testified: 'Q. Now, when you were standing there just before the accident, in the last thing you knew before the accident happened, what were you doing? A. I was coiling the line on the well deck or the Maccano deck. 'Q. Standing up or bending over? A. I was bending over. 'Q. Then what happened? A. That is all I remember.'
78
333 U.S. 138 68 S.Ct. 421 92 L.Ed. 596 WOODSv.CLOYD W. MILLER CO. et al. No. 486. Argued Feb. 6, 1948. Decided Feb. 16, 1948. Appeal from the District Court of the United States for the Northern District of Ohio. Mr. Philip B. Perlman, Sol. Gen.,o f Washington, D.C., for appellant. Mr. Paul S. Knight, of Cleveland, Ohio, for appellees. Mr. Justice DOUGLAS delivered the opinion of the Court. 1 The case is here on a direct appeal, Act of August 24, 1937, 50 Stat. 752, 28 U.S.C. § 349a, 28 U.S.C.A. § 349a, from a judgment of the District Court holding unconstitutional Title II of the Housing and Rent Act of 1947, Pub. L. 129, 80th Cong., 1st Sess., 50 U.S.C.A.Appendix, § 1891 et seq. 2 The Act became effective on July 1, 1947, and the following day the appellee demanded of its tenants increases of 40% and 60% for rental accommodations in the Cleveland Defense-Rental Area, and admitted violation of the Act and regulations adopted pursuant thereto.1 Appellant thereupon instituted this proceeding under § 206(b) of the Act2 to enjoin the violations. A preliminary injunction issued. After a hearing it was dissolved and a permanent injunction denied. 3 The District Court, Creedon v. Cloyd W. Miller Co., D.C., 74 F.Supp. 546, was of the view that the authority of Congress to regulate rents by virtue of the war power (see Bowles v. Willingham, 321 U.S. 503, 64 S.Ct. 641, 88 L.Ed. 892) ended with the Presidential Proclamation terminating hostilities on December 31, 1946,3 since that proclamation inaugurated 'peace-in-fact' though it did not mark termination of the war. It also concluded that even if the war power continues, Congress did not act under it because it did not say so, and only if Congress says so, or enacts provisions so implying, can it be held that Congress intended to exercise such power. That Congress did not so intend, said the District Court, follows from the provision that the Housing Expediter can end controls in any area without regard to the official termination of the war,4 and from the fact that the preceding federal rent control laws (which were concededly exercises of the war power) were neither amended nor extended. The District Court expressed the further view that rent control is not within the war power because 'the emergency created by housing shortage came into existence long before the war.' It held that the Act 'lacks in uniformity of application and distinctly constitutes a delegation of legislative power not within the grant of Congress' because of the authorization to the Housing Expediter to lift controls in any area before the Act's expiration. It also held that the Act in effect provides 'low rentals for certain groups without taking the property or compensating the owner in any way.' See D.C., 74 F.Supp. 546, 548. 4 We conclude, in the first place, that the war power sustains this legislation. The Court said in Hamilton v. Kentucky Distilleries and Warehouse Co., 251 U.S. 146, 161, 40 S.Ct. 106, 110, 64 L.Ed. 194, that the war power includes the power 'to remedy the evils which have arisen from its rise and progress' and continues for the duration of that emergency. Whatever may be the consequences when war is officially terminated,5 the war power does not necessarily end with the cessation of hostilities. We recently held that it is adequate to support the proservation of rights created by wartime legislation, Fleming v. Mohawk Wrecking and Lumber Co., 331 U.S. 111, 67 S.Ct. 1129. But it has a broader sweep. In Hamilton v. Kentucky Distilleries and Warehouse Co., supra, and Ruppert v. Caffey, 251 U.S. 264, 40 S.Ct. 141, 64 L.Ed. 260, prohibition laws which were enacted after the Armistice in World War I were sustained as exercises of the war power because they conserved manpower and increased efficiency of production in the critical days during the period of demobilization, and helped to husband the supply of grains and cereals depleted by the war effort. Those cases followed the reasoning of Stewart v. Kahn, 11 Wall. 493, 20 L.Ed. 176, which held that Congress had the power to toll the statute of limitations of the States during the period when the process of their courts was not available to litigants due to the conditions obtaining in the Civil War. 5 The constitutional validity of the present legislation follows a fortiori from those cases. The legislative history of the present Act makes abundantly clear that there has not yet been eliminated the deficit in housing which in considerable measure was caused by the heavy demobilization of veterans and by the cessation or reduction in residential construction during the period of hostilities due to the allocation of building materials to military projects.6 Since the war effort contributed heavily to that deficit, Congress has the power even after the cessation of hostilities to act to control the forces that a short supply of the needed article created. If that were not true, the Necessary and Proper Clause, Art. I, § 8, cl. 18, would be drastically limited in its application to the several war powers. The Court has declined to follow that course in the past. Hamilton v. Kentucky Distilleries and Warehouse Co., supra, 251 U.S. pages 155, 156, 40 S.Ct. pages 107, 108, 64 L.Ed. 194; Ruppert v. Caffey, supra, 251 U.S. pages 299, 300, 40 S.Ct. page 149, 64 L.Ed. 260. We decline to take it today. The result would be paralyzing. It would render Congress powerless to remedy conditions the creation of which necessarily followed from the mobilization of men and materials for successful prosecution of the war. So to read the Constitution would be to make it self-defeating. 6 We recognize the force of the argument that the effects of war under modern conditions may be felt in the economy for years and years, and that if the war power can be used in days of peace to treat all the wounds which war inflicts on our society, it may not only swallow up all other powers of Congress but largely obliterate the Ninth and the Tenth Amendments as well. There are no such implications in today's decision. We deal here with the consequences of a housing deficit greatly intensified during the period of hostilities by the war effort. Any power, of course, can be abused. But we cannot assume that Congress is not alert to its constitutional responsibilities. And the question whether the war power has been properly employed in cases such as this is open to judicial inquiry. Hamilton v. Kentucky Distilleries and Warehouse Co., supra; Ruppert v. Caffey, supra. 7 The question of the constitutionality of action taken by Congress does not depend on recitals of the power which it undertakes to exercise. Here it is plain from the legislative history that Congress was invoking its war power to cope with a current condition of which the war was a direct and immediate cause.7 Its judgment on that score is entitled to the respect granted like legislation enacted pursuant to the police power. See Block v. Hirsh, 256 U.S. 135, 41 S.Ct. 458, 65 L.Ed. 865, 16 A.L.R. 165; Marcus Brown Holding Co. v. Feldman, 256 U.S. 170, 41 S.Ct. 465, 65 L.Ed. 877; Chastleton Corporation v. Sinclair, 264 U.S. 543, 44 S.Ct. 405, 68 L.Ed. 841. 8 Under the present Act the Housing Expediter is authorized to remove the rent controls in any defense-rental area if in his judgment the need no longer exists by reason of new construction or satisfaction of demand in other ways.8 The powers thus delegated are far less extensive than those sustained in Bowles v. Willingham, supra, 321 U.S. pages 512—515, 64 S.Ct. page 647, 88 L.Ed. 892. Nor is there here a grant of unbridled administrative discretion. The standards prescribed pass muster under our decisions. See Bowles v. Willingham, supra, 321 U.S. pages 514 516, 64 S.Ct. pages 647, 648, 88 L.Ed. 892, and cases cited. 9 Objection is made that the Act by its exemption of certainc lasses of housing accommodations9 violates the Fifth Amendment. A similar argument was rejected under the Fourteenth Amendment when New York made like exemptions under the rent-control statute which was here for review in Marcus Brown Holding Co. v. Feldman, supra, 256 U.S. pages 195, 198, 199, 41 S.Ct. pages 465, 466, 65 L.Ed. 877. Certainly Congress is not under greater limitations. It need not control all rents or none. It can select those areas or those classes of property where the need seems the greatest. See Barclay and Co. v. Edwards, 267 U.S. 442, 450, 45 S.Ct. 135, 348, 349, 69, L.Ed. 703. This alone is adequate answer to the objection, equally applicable to the original Act sustained in Bowles v. Willingham, supra, that the present Act lacks uniformity in application. 10 The fact that the property regulated suffers a decrease in value is no more fatal to the exercise of the war power (Bowles v. Willingham, supra, 321 U.S. pages 517, 518, 64 S.Ct. pages 648, 649, 88 L.Ed. 892) than it is where the police power is invoked to the same end. See Block v. Hirsh, supra. 11 Reversed. 12 Mr. Justice FRANKFURTER concurs in this opinion because it decides no more than was decided in Hamilton v. Kentucky Distilleries and Warehouse Co., 251 U.S. 146, 40 S.Ct. 106, 64 L.Ed. 194, and Jocob Ruppert v. Caffey, 251 U.S. 264, 40 S.Ct. 151, 64 L.Ed. 260, and merely applies those decisions to the situation now before the Court. 13 Mr. Justice JACKSON, concurring. 14 I agree with the result in this case, but the arguments that have been addressed to us lead me to utter more explicit misgivings about war powers than the Court has done. The Government asserts no constitutional basis for this legislation other than this vague, undefined and undefinable 'war power.' 15 No one will question that this power is the most dangerous one to free government in the whole catalogue of powers. It usually is invoked in haste and excitement when calm legislative consideration of constitutional limitation is difficult. It is executed in a time of patriotic fervor that makes moderation unpopular. And, worst of all, it is interpreted by the Judges under the influence of the same passions and pressures. Always, as in this case, the Government urges hasty decision to forestall some emergency or serve some purpose and pleads that paralysis will result if its claims to power are denied or their confirmation delayed. 16 Particularly when the war power is invoked to do things to the liberties of people, or to their property or economy that only indirectly affect conduct of the war and do not relate to the a nagement of the war itself, the constitutional basis should be scrutinized with care. 17 I think we can hardly deny that the war power is as valid a ground for federal rent control now as it has been at any time. We still are technically in a state of war. I would not be willing to hold that war powers may be indefinitely prolonged merely by keeping legally alive a state of war that had in fact ended. I cannot accept the argument that war powers last as long as the effects and consequences of war for if so they are permanent—as permanent as the war debts. But I find no reason to conclude that we could find fairly that the present state of war is merely technical. We have armies abroad exercising our was power and have made no peace terms with our allies not to mention our principal enemies. I think the conclusion that the war power has been applicable during the lifetime of this legislation is unavoidable. 1 Section 204(b) of the Act provides that 'no person shall demand, accept, or receive any rent for the use or occupancy of any controlled housing accommodations greater than the maximum rent established under the authority of the Emergency Price Control Act of 1942, as amended (50 U.S.C.A.Appendix, § 901 et seq.), and in effect with respect thereto on June 30, 1947.' Controlled Housing Rent Regulation, 12 Fed.Reg. 4331, contains similar provisions. §§ 2(a), 4(a). Provisions of this statute and regulation, not here material, allow adjustment of maximum rentals when necessary to correct inequities and permit a 15% increase if negotiated between landlord and tenant and incorporated in a lease of a designated term. 2 Section 206(a) makes it unlawful 'to offer, solicit, demand, accept, or receive any rent for the use or occupancy of any controlled housing accommodations in excess of the maximum rent prescribed under section 204.' Section 206(b) authorized the Housing Expediter to apply to any federal, state, or territorial court of competent jurisdiction for an order enjoining 'any act or practice which constitutes or will constitute a violation of subsection (a) of this section.' 3 Proclamation 2714, 50 U.S.C.A.Appendix, § 601 note, 12 Fed.Reg. 1. That proclamation recognized that 'a state of war still exists.' On July 25, 1947, on approving S.J.Res. 123 terminating certain war statutes, the President is ued a statement in which he declared that 'The emergencies declared by the President on September 8, 1939, and May 27, 1941, and the state of war continue to exist, however, and it is not possible at this time to provide for terminating all war and emergency powers.' 4 Section 204(c) provides: 'The Housing Expediter is hereby authorized and directed to remove any or all maximum rents before this title ceases to be in effect, in any defense-rental area, if in his judgment the need for continuing maximum rents in such area no longer exists due to sufficient construction of new housing accommodations or when the demand for rental housing accommodations has been otherwise reasonably met.' 5 See Commercial Trust Co. of New Jersey v. Miller, 262 U.S. 51, 57, 43 S.Ct. 486, 488, 67 L.Ed. 858. 6 See H.R.Rep.No.317, 80th Cong., 1st Sess., pp. 1, 2, 3, 10 11. The Report states, p. 2: 'There are several factors, in addition to the normal increase in population, which have contributed to the existing housing shortage. These include demobilization of a large number of veterans, shifts in population, less intensive use of housing accommodations, amount of new housing construction, trend away from construction of rental units, and change from tenant to owner occupancy.' As to the effect of demobilization of veterans the Report states, p. 2: 'Heavy demobilization of members of our armed forces, particularly in late 1945 and the first half of 1946, made effective an important demand for housing accommodations. In 1945 an estimated 6,279,000 veterans of World War II were returned to civilian life, in 1946 the number so returned was 5,659,000, and in 1947 to February 28 an additional 212,000 veterans were demobilized. Statistics are not available as to the number of new family units created by returning veterans but undoubtedly the figure is substantial and in many cases creation of new family units was delayed until these veterans were returned to civilian life. The importance and delayed impact of the 11,938,000 veterans returned to civilian life in 1945 and 1946 on an already acute housing shortage is readily apparent.' The effect of the war upon the construction of new dwelling units is shown by the following table: 1937.....336,000.1943 350,000 1938.....406,000.1944 169,000 1939.....515,000.1945 247,000 1940.....603,000.1946 776,000 1941.....715,000.1947 799,000 1942.....497,000 The figures for the years 1937—1945 inclusive are taken from H.R.Rep.No.317, supra, p. 3. Those for 1946 and 1947 are taken from U.S. Bureau of Labor Statistics, Construction, Dec. 1947, p. 4. 7 See H.R.Rep.No.317, supra, note 6, and statement of Representative Wolcott, Chairman of the House Committee on Banking and Currency which reported the rent bill, 93 Cong.Rec. 4395. 8 See note 4, supra. 9 Sec. 202(c) provides: 'The term 'controlled housing accommodations' means housing accommodations in any defense-rental area, except that it does not include—(1) those housing accommodations, in any establishment which is commonly known as a hotel in the community in which it is located, which are occupied by persons who are provided customary hotel services such as maid service, furnishing and laundering of linen, telephone and secretarial or desk service, use and upkeep of furniture and fixtures, and bellboy service; or (2) any motor court, or any part thereof; or any tourist home serving transient guests exclusively, or any part thereof; or (3) any housing accommodations (A) the construction of which was completed on or after February 1, 1947, or which are additional housing accommodations created by conversion on or after February 1, 1947, except that contracts for the rental of housing accommodations to veterans of World War II and their immediate families, the construction of which was assisted by allocations or priorities under Public Law 388, Seventy-ninth Congress, approved May 22, 1946 (50 U.S.C.A.Appendix, § 1821 et seq.), shall remain in full force and effect, or (B) which at no time during the period February 1, 1945, to January 31, 1947, both dates inclusive, were rented (other than to members of the immediate family of the occupant) as housing accommodations.'
34
333 U.S. 147 68 S.Ct. 389 92 L.Ed. 604 FISHERv.HURST, Chief Justice, et al. No. 325 Misc. Submitted on Motion for Leave to File Petition for Writ of Mandamus Jan. 30, 1948. Decided Feb. 16, 1948. Messrs. Thurgood Marshall, of New York City, and Amos T. Hall, of Oklahoma City, Okl., for petitioner. PER CURIAM. 1 Petitioner moves for leave to file a petition for a writ of mandamus to compel compliance with our mandate issued in Sipuel v. Board of Regents, 332 U.S. 631, 68 S.Ct. 299, January 12, 1948. We there said: 2 'The petitioner is entitled to secure legal education afforded by a state institution. To this time, it has been denied her although during the same period many white applicants have been afforded legal education by the State. The State must provide it for her in conformity with the equal protection clause of the Fourteenth Amendment and provide it as soon as it does for applicants of any other group. Missouri ex rel. Gaines v. Canada, 1938, 305 U.S. 337, 59 S.Ct. 232, 83 L.Ed. 208.' Petitioner states that on January 17, 1948, 190 P.2d 437, 438, the Supreme Court of Oklahoma rendered an opinion in which it was said: 3 'Said Board of Regents is hereby directed, under the authority conferred upon it by the provisions of Art. 13-A, Constitution of the State of Oklahoma, and Title 70 O.S.1941 §§ 1976, 1979, to afford to plaintiff, and all others similarly situated, an opportunity to commence the study of law at a state institution as soon as citizens of other groups are afforded such opportunity, in conformity with the equal protection clause of the Fourteenth Amendment of the Federal Constitution and with the provisions of the Constitution and statutes of this state requiring segregation of the races in the schools of this state. Art. 13, Sec. 3, Constitution of Oklahoma; 70 O.S.1941 §§ 451—457. 4 'Reversed with directions to the trial court to take such proceedings as may be necessary to fully carry out the opinion of the Supreme Court of the United States and this opinion. The mandate is ordered to issue forthwith.' It is further stated by petitioner that the District Court of Cleveland County of Oklahoma entered an order on January 22, 1948, as follows: 5 'It is, therefore, ordered, adjudged and decreed by this court that unless and until the separate school of law for negroes, which the Supreme Court of Oklahoma in effect directed the Oklahoma State Regents for Higher Education to establish 'with advantages for education substantially equal to the advantages afforded to white students,' is established and ready to function at the designated time applicants of any other group may hereafter apply for admission to the first-year class of the School of Law of the University of Oklahoma, and if the plaintiff herein makes timely and proper application to enroll in said class, the defendants, Board of Regents of the University of Oklahoma, et al, be, and the same are hereby ordered and directed to either: 6 '(1) enroll plaintiff, if she is otherwise qualified, in the first-year class of the School of Law of the University of Oklahoma, in which school she will be entitled to remain on the same scholastic basis as other students thereof until such a separate law schoolf or negroes is established and ready to function, or 7 '(2) not enroll any applicant of any group in said class until said separate school is established and ready to function. 8 'It is further ordered, adjudged and decreed that if such a separate law school is so established and ready to function, the defendants, Board of Regents of the University of Oklahoma, et al., be, and the same are hereby ordered and directed to not enroll plaintiff in the first-year class of the School of Law of the University of Oklahoma. 9 'The cost of this case is taxed to defendants. 10 'This court retains jurisdiction of this cause to hear and determine any question which may arise concerning the application of any performance of the duties prescribed by this order.' 11 The only question before us on this petition for a writ of mandamus is whether or not our mandate has been followed. It is clear that the District Court of Cleveland County did not depart from our mandate. 12 The petition for certiorari in Sipuel v. Board of Regents, did not present the issue whether a state might not satisfy the equal protection clause of the Fourteenth Amendment by establishing a separate law school for Negroes. On submission, we were clear it was not an issue here. The Oklahoma Supreme Court upheld the refusal to admit petitioner on the ground that she had failed to demand establishment of a separate school and admission to it. On remand, the district court correctly understood our decision to hold that the equal protection clause permits no such defense. 13 Nothing which may have transpired since the orders of the Oklahoma courts were issued is in the record before us, nor could we consider it on this petition for writ of mandsmus if it were. The Oklahoma District Court has retained jurisdiction to hear and determine any question arising under its order. Whether or not the order is followed or disobeyed should be determined by it in the first instance. The manner in which, or the method by which, Oklahoma may have satisfied, or could satisfy the requirements of the mandate of this Court, as applied by the District Court of Cleveland County in its order of January 22, 1948, is not before us. 14 Motion for leave to file petition for writ of mandamus is denied. 15 Mr. Justice MURPHY is of the opinion that a hearing should be had in order to determine whether the action of the Oklahoma courts subsequent to the issuance of this Court's mandate constitutes an evasion of that mandate. 16 Mr. Justice RUTLEDGE, dissenting. 17 I am unable to join in the Court's opinion or in its disposition of the petition. In my judgment neither the action taken by the Supreme Court of Oklahoma nor that of the District Court of Cleveland County, following upon the decision and issuance of our mandate in No. 369, Sipuel v. Board of Regents, 332 U.S. 631, 68 S.Ct. 299, decided January 12, 1948, is consistent with our opinion in that cause or therefore with our mandate which issued forthwith.1 18 It is possible under those orders for the state's officials to dispose of petitioner's demand for a legal education equal to that afforded to white students by establishing overnight a separate law school for Negroes or to continue affording the present advantages to white students while denying them to petitioner. The latter could be done either by excluding all applicants for admission to the first-year class of the state university law school after the date of the District Court's order or, depending upon the meaning of that order, by excluding such applicants and asking all first-year students enrolled prior to that order's date to withdraw from school. 19 Neither of those courses, in my opinion, would comply with our mandate. It plainly meant, to me at any rate, that Oklahoma should end the discrimination practiced against petitioner ato nce, not at some later time, near or remote. It also meant that this should be done, if not by excluding all students, then by affording petitioner the advantages of a legal education equal to those afforded to white students. And in my comprehension the equality required was equality in fact, not in legal fiction. 20 Obviously no separate law school could be established elsewhere overnight capable of giving petitioner a legal education equal to that afforded by the state's long-established and well-known state university law school. Nor could the necessary time be taken to create such facilities, while continuing to deny them to petitioner, without incurring the delay which would continue the discrimination our mandate required to end at once. Neither would the state comply with it by continuing to deny the required legal education to petitioner while affording it to any other student, as it could do by excluding only students in the first-year class from the state university law school. 21 Since the state courts' orders allow the state authorities at their election to pursue alternative courses, some of which do not comply with our mandate, I think those orders inconsistent with it. Accordingly I dissent from the Court's opinion and decision in this case. 1 The mandate reversed the Oklahoma Supreme Court's judgment and remand ed the cause to it 'for proceedings not inconsistent with this opinion.'
12
333 U.S. 118 68 S.Ct. 426 92 L.Ed. 580 SEABOARD AIR LINE R. CO.v.DANIEL, Attorney General of South Carolina, et al. No. 390. Argued Jan. 8, 1948. Decided Feb. 16, 1948. Appeal from the Supreme Court of the State of South Carolina. Mr. W. R. C. Cocke, of Norfolk, Va., for appellant. Mr. Irvine F. Belser, of Columbia, S.C., for appellees. Mr. Justice BLACK delivered the opinion of the Court. 1 The constitution and statutes of South Carolina provide that railroad lines within that state can be owned and operated only by state created corporations; a railroad corporation chartered only under the laws of another state is forbidden under heavy penalties to exercise such powers within South Carolina.1 There is a way, however, in which a foreign railroad corporation may, under South Carolina statutes, indirectly exercise some powers over its South Carolina operations. It may organize a South Carolina Subsidiary. In addition, it may, under South Carolina law, consolidate that corporation with itself. In that event, so far as South Carolina statutes can govern, the consolidated result would be a corporation both of South Carolina and of another state.2 2 In 1946 the appellant, Seaboard Air Line Railroad Company, with the approval of the Interstate Commerce Commission, succeeded to the ownership and operation of a unitary railroad system with 4,200 railway miles in six southern states. Seven hundred and thirty-six miles of its lines traverse South Carolina Connecting with its lines in adjoining states. Appellant is a Virginia created corporation, has no South Carolina subsidiary, and has effected no consolidation with a South Carolina created corporation. It is therefore subject to the penalties provided by South Carolina law if that law can validly be applied to it. 3 This action was brought by appellant in the South Carolina Supreme Court to enjoin the state attorney general from attempting to collect the statutory penalties from appellant or to enforce the statutory provisions against it.3 The complaint alleged the following facts, about which there is no substantial dispute. Appellant applied to the Interstate Commerce Commission for approval of its purchase of the railway system pursuant to § 5 of the Interstate Commerce Act, as amended, 49 U.S.C. § 5, 49 U.S.C.A. § 5. After notice to the Governor of South Carolina and others, the Commission conducted hearings and made a report in which it found that compliance by appellant with the South Carolina railroad corporation laws would result in 'substantial delay and needless expense.' It further found that compliance 'would not be consistent with the public interest'—the criterion which 5 § required the Commission to use in passing upon a change in ownership or control of a railroad. The Commission then entered an order which authorized appellant, as a Virginia corporation, to own and operate the entire system including the South Carolina mileage. The complaint also asserted that the order, by explicit reference to the Commission finding in its report, affirmatively authorized appellant to own and operate the entire railway system without complying with the South Carolina railroad corporation laws.4 4 The answer to the complaint did not challenge the constitutional power of Congress to relieve appellant of compliance with South Carolina's requirements of state incorporation. It took the position that insofar as the Commission order could be interpreted as an attempt to override state laws in this respect it was void because outside the scope of the Commission's statutory authority. The appellant then filed a demurrer on the ground that the answer as a matter of law constituted neither a defense nor a counterclaim since it admitted all allegations of fact in the complaint, and advanced nothing more than erroneous legal conclusions as asserted reasons why appellant should not be granted the relief for which it prayed. 5 No evidence was taken and the State Supreme Court decided the case on the pleadings. That court construed the Commission's order as relieving appellant from compliance with the statutory and constitutional provisions in issue, but it agreed with the respondents that the Commission lacked power under § 5 to enter such an order. Accordingly the State Supreme Court revoked the temporary restraining order it had previously issued, denied the requested injunction, and dismissed the complaint. S.C., 43 S.E.2d 839. The case is properly here on appeal under § 237(a) of the Judicial Code, as amended, 28 U.S.C.A. § 344(a), 28 U.S.C.A. § 344(a). 6 First. The complaint largely relied on an order of the Interstate Commerce Commission as a basis for the relief sought. The answer questioned the validity and scope of that order but did not seek a decree to set it aside or suspend it. Federal district courts have exclusive jurisdiction of suits to enjoin, set aside, annul or suspend an order of the Commission. In such suits the United States is an indispensable Party. 28 U.S.C. § 46, 28 U.S.C.A. § 46. Although the jurisdiction of the South Carolina Supreme Court was there conceded, and is not here challenged, we think it appropriate to pass upon it. 7 So far as the appellant's complaint is concerned, this is not the kind of action to 'set aside' a Commission order of which the federal district courts have exclusive jurisdiction. While the action does involve the scope and validity of a Commission order, the relief requested in the complaint was the removal of an obstruction to the railroad's obedience to the order, not its suspension or annulment. Nor did the answer seek to have the enforcement of the order enjoined, although it did question its validity as a basis for the relief sought in the complaint. 8 The appellant was in this dilemma. Federal law required it to obey the order so long as it remained in effect; for a failure to abide by its terms serious fedr al penalties could be imposed on it. 49 U.S.C. §§ 10(1), 16(7), (8), (9), (10), 49 U.S.C.A. §§ 10(1), 16(7—10). On the other hand, South Carolina statutes provided penalties for obedience to the order, which South Carolina officials asserted were enforceable against appellant despite the Commission's order. There was thus a bona fide controversy between appellant and the state officials over the validity of the order. Appellant wanted to obey the order; the state officials insisted appellant must obey their statutes instead. Federal district courts have not been granted special jurisdiction to review and confirm orders of the Commission at the suit of railroads wishing to obey such orders. 9 Under the foregoing circumstances appellant was not compelled to wait until some one who had standing to attack the Commission's order might decide to seek its annulment in a federal district court. It properly sought relief from a court which could obtain jurisdiction of the parties whose refusal to recognize the order gave rise to its predicament. And the state court then had power, because of the issues raised by the complaint and because of the relief requested, to determine whether the order, properly interpreted, did exempt appellant from compliance with the state railroad corporation laws and, if so, whether the Commission had transcended its statutory authority in making the order. Illinois Cent. R. Co. v. Public Utilities Commission, 245 U.S. 493, 502 505, 38 S.Ct. 170, 173, 174, 62 L.Ed. 425. See Lambert Run Coal Co. v. Baltimore & Ohio R. Co., 258 U.S. 377, 381, 382, 42 S.Ct. 349, 350, 351, 66 L.Ed. 671; Central New England R. Co. v. Boston & A.R. Co., 279 U.S. 415, 420, 421, 49 S.Ct. 358, 359, 360, 73 L.Ed. 770. 10 Second. It is here contended that the Commission's order did not manifest a clear purpose to authorize the exemption of appellant from obedience to the state's domestic corporation policy. We have no doubt that the Commission intended its order to have this effect. Its final order expressly stated that, subject to a condition not here relevant, it approved and authorized 'the purchase * * * and the operation' by the appellant of the South Carolina and other railroad properties. Furthermore, the Commission discussed the South Carolina requirements in its report and therein made findings that compliance by appellant with them 'would not be consistent with the public interest.' These references were made to the South Carolina provisions, according to the Commission's report, in response to the appellant's suggestion that it would 'avoid complications' if the Commission's report showed 'on its face that our order is intended to override them.' 11 Third. Respondents contend that the Commission lacked statutory authority to enter an order which would permit a Virginia corporation to operate these railroad lines in and through South Carolina, contrary to that state's constitutional and legislative policy. They point to the broad powers states have always exercised in excluding foreign corporations and in admitting them within their borders upon conditions. They also emphasize the importance of this regulatory power to the states, and urge that, in the absence of express language requiring it, § 5 should be construed neither to restrict that state power nor to authorize the Commission to override state enactments. Recognizing the force of these arguments in general, we note the following circumstances which render them inapplicable in case. 12 Congress has long made the maintenance and development of an economical and efficient railroad system a matter of primary national concern. Its legislation must be read with this purpose in mind. In keeping with this purpose Congress has often recognized that the nation's railroads should have sound corporate and financial structures and has taken appropriate steps to this end. The purchase of this very railroad by appellant resulted from extensive reorganization proceedings conducted by the Interstate Cm merce Commission and federal district courts in accordance with congressional enactments applicable to railroads. In furtherance of this congressional policy these agencies approved reorganization plans which called for the purchase and operation of these properties, including the portion in South Carolina, by appellant, as a Virginia corporation. 13 This Court has previously approved a Commission order entered in a § 5 consolidation proceeding which granted a railroad relief from state laws analogous to the state requirements here. Texas v. United States, 1934, 292 U.S. 522, 54 S.Ct. 819, 78 L.Ed. 1402. Most of the reasons which justified the Commission's order in that case are equally applicable here. Furthermore, since that case was decided Congress has given additional proof of its purpose to grant adequate power to the Commission to override state laws which may interfere with efficient and economical railroad operation. By § 5(11) of the Interstate Commerce Act of 1940, 54 Stat. 908, 49 U.S.C. § 5(11), 49 U.S.C.A. § 5(11), Congress granted the Commission 'exclusive and plenary' authority in refusing or approving railroad consolidations, mergers, acquisitions, etc. The breadth of this grant of power can be understood only by reference to § 5(2)(b) which authorizes the Commission to condition its approval upon 'such terms and conditions and such modifications as it shall find to be just and reasonable.' All of this power can be exercised in accordance with what the Commission may find to be 'consistent with the public interest.' The purchaser of railroad property with Commission approval is authorized by § 5(11) 'to own and operate any properties * * * acquired through said transaction without invoking any approval under State authority,' and such an approved owner, according to that paragraph, is 'relieved from the operation of the antitrust laws and of all other restraints, limitations, and prohibitions of law, Federal, State, or municipal, insofar as may be necessary to enable them to carry into effect the transaction so approved * * * and to hold, maintain, and operate any properties * * * acquired through such transaction.' 14 This language very clearly reposes power in the Commission to exempt railroads under a § 5 proceeding from state laws which bar them from operating in the state or impose conditions upon such operation. The state court nevertheless thought that the last sentence of § 5(11) negatived a congressional purpose to empower the Commission to relieve railroads from state laws such as South Carolina's. That sentence reads: 'Nothing in this section shall be construed to create or provide for the creation, directly or indirectly, of a Federal corporation, but any power granted by this section to any carrier or other corporation shall be deemed to be in addition to and in modification of its powers under its corporate charter or under the laws of any State.' We see nothing in this sentence that detracts from the broad powers granted the Commission by § 5. In fact, the language of the sentence appears to support the Commission's power here exercised. Although the sentence bars creation of a federal corporation, it clearly authorizes a railroad corporation to exercise the powers therein granted over and above those bestowed upon it by the state of its creation. These federally conferred powers can be exercised in the same manner as though they had been granted to a federally created corporation. See California v. Central Pacific R. Co., 127 U.S. 1, 38, 40—45, 8 S.Ct. 1073, 1079—1083, 32 L.Ed. 150. Here, just as a federally created railroad corporation could for federal purposes operate in South Carolina, so can this Virginia corporation exercise its federally granted power to operate in that state. 15 Other arguments of respondent have been considered and found to be without merit. Appellant is entitled to the injunction it sought. 16 The judgment of the South Carolina Supreme Court denying the injunction and dismissing the complan t is reversed, and the cause is remanded to that court for proceedings not inconsistent with this opinion. 17 Reversed and remanded. 1 S.C.Const. Art. 9, § 8; S.C.C.ode Ann. § 7784 (1942). Violations are punishable by fines of $500 for each county in which the railroad operates. Apparently each day's operation of the railroad constitutes a separate offense. The appellant in this suit operates in 30 South Carolina counties. 2 S.C.Const. Art. 9, § 8; S.C.Code Ann. §§ 7777, 7778, 7779, 7785, 7789 (1942). See Geraty v. Atlantic Coast Line R. Co., 80 S.C. 355, 361, 60 S.E. 936, 937. 3 The appellant also prayed for a mandamus to compel the Secretary of State to accept and file papers and documents tendered by appellant seeking authority to do business in the state as a foreign corporation under other South Carolina statutes. That phase of the case is not pressed here. 4 The complaint also alleged, and it is argued here, that the state constitutional and statutory provisions imposed burdens on this interstate railroad in violation of the Commerce Clause of the Constitution of the United States, Art. 1, § 8, cl. 3. The view we take makes it unnecessary for us to pass on this contention.
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333 U.S. 127 68 S.Ct. 440 92 L.Ed. 588 FUNK BROS. SEED CO.v.KALO INOCULANT CO. No. 280. Jan. 13, 1948. Decided Feb. 16, 1948. Mr. H. A. Toulmin, Jr., of Dayton, Ohio, for petitioner. Mr. J. Bernhard Thiess, of Chicago, Ill., for respondent. Mr. Justice DOUGLAS delivered the opinion of the Court. 1 This is a patent infringement suit brought by respondent. The charge of infringement is limited to certain product claims1 of Patent No. 2,200,532 issued to Bond on May 14, 1940. Petitioner filed a counterclaim asking for a declaratory judgment that the entire patent be adjudged invalid.2 The District Court held the product claims invalid for want of invention and dismissed the complaint. It also dismissed the counterclaim. Both parties appealed. The Circuit Court of Appeals reversed, holding that the product claims were valid and infringed and that the counterclaim should not have been dismissed. 7 Cir., 161 F.2d 981. The question of validity is the only question presented by this petition for certiorari. 2 Through some mysterious process leguminous plants are able to take nitrogen from the air and fix it in the plant for conversion to organic nitrogenous compounds. The ability of these plants to fix nitrogen from the air depends on the presence of bacteria of the genus Rhizobium which infect the roots of the plant and form nodules on them. These root-nodule bacteria of the genus Rhizobium fall into at least six species. No one species will infect the roots of all species of leguminous plants. But each will infect well-defined groups of those plants.3 Each species of root-nodule bacteria is made up of distinct strains which vary in efficiency. Methods of selecting the strong strains and of producing a bacterial culture from them have long been known. The bacteria produced by the laboratory methods of culture are placed in a powder or liquid base and packaged for sale to and use by agriculturists in the inoculation of the seeds of leguminous plants. This also has long been well known. 3 It was the general practice, prior to the Bond patent, to manufacture and sell inoculants containing only one species of root-nodule bacteria. The inoculant could therefore be used successfully only in plants of the particular cross-inoculation group corresponding to this species. Thus if a farmer had crops of clover, alfalfa, and soy beans he would have to use three separate inoculants.4 There had been a few mixed cultures for field legumes. But they had proved generally unsatisfactory because the different species of the Rhizobia bacteria produced an inhibitory effect on each other when mixed in a common base, with the result that their efficiency was reduced. Hence it a d been assumed that the different species were mutually inhibitive. Bond discovered that there are strains of each species of root-nodule bacteria which do not exert a mutually inhibitive effect on each other. He also ascertained that those mutually non-inhibitive strains can, by certain methods of selection and testing, be isolated and used in mixed cultures. Thus he provided a mixed culture of Rhizobia capable of inoculating the seeds of plants belonging to several cross-inoculation groups. It is the product claims which disclose that mixed culture that the Circuit Court of Appeals had held valid. 4 We do not have presented the question whether the methods of selecting and testing the non-inhibitive strains are patentable. We have here only product claims. Bond does not create state of inhibition or of non-inhibition in the bacteria. Their qualities are the work of nature. Those qualities are of course not patentable. For patents cannot issue for the discovery of the phenomena of nature. See Le Roy v. Tatham, 14 How. 156, 175, 14 L.Ed. 367. The qualities of these bacteria, like the heat of the sun, electricity, or the qualities of metals, are part of the storehouse of knowledge of all men. They are manifestations of laws of nature, free to all men and reserved exclusively to none. He who discovers a hitherto unknown phenomenon of nature has no claim to a monopoly of it which the law recognizes. If there is to be invention from such a discovery, it must come from the application of the law of nature to a new and useful end. See Telephone Cases, 126 U.S. 1, 532, 533, 8 S.Ct. 778, 780, 781, 31 L.Ed. 863; De Forest Radio Co. v. General Electric Co., 283 U.S. 664, 684, 685, 51 S.Ct. 563, 568, 569, 75 L.Ed. 1339; Mackay Radio & Tel. Co. v. Radio Corp., 306 U.S. 86, 94, 59 S.Ct. 427, 431, 83 L.Ed. 506; Cameron Septic Tank Co. v. Saratoga Springs, 2 Cir., 159 F. 453, 462, 463. The Circuit Court of Appeals thought that Bond did much more than discover a law of nature, since he made an new and different composition of noninhibitive strains which contributed utility and economy to the manufacture and distribution of commercial inoculants. But we think that that aggregation of species fell short of invention within the meaning of the patent statutes. 5 Discovery of the fact that certain strains of each species of these bacteria can be mixed without harmful effect to the properties of either is a discovery of their qualities of non-inhibition. It is no more than the discovery of some of the handiwork of nature and hence is not patentable. The aggregation of select strains of the several species into one product is an application of that newly-discovered natural principle. But however ingenious the discovery of that natural principle may have been, the application of it is hardly more than an advance in the packaging of the inoculants. Each of the species of root-nodule bacteria contained in the package infects the same group of leguminous plants which it always infected. No species acquires a different use. The combination of species produces no new bacteria, no change in the six species of bacteria, and no enlargement of the range of their utility. Each species has the same effect it always had. The bacteria perform in their natural way. Their use in combination does not improve in any way their natural functioning. They serve the ends nature originally provided and act quite independently of any effort of the patentee. 6 There is, of course, an advantage in the combination. The farmer need not buy six different packages for six different crops. He can buy one package and use it for any or all of his crops of leguminous plants. And, as respondent says, the packages of mixed inoculants also hold advantages for the dealers and manufacturers by reducing inventory problems and the like. But a product must be more than new and useful to be patented; it must also satisfy the requirements of invention or discovery. Cuno Engineering Cor. v. Automatic Devices Corp., 314 U.S. 84, 90, 91, 62 S.Ct. 37, 40, 41, 86 L.Ed. 58, and cases cited; 35 U.S.C. § 31, 35 U.S.C.A. § 31, R.S. § 4886. The application of this newly-discovered natural principle to the problem of packaging of inoculants may well have been an important commercial advance. But once nature's secret of the non-inhibitive quality of certain strains of the species of Rhizobium was discovered, the state of the art made the production of a mixed inoculant a simple step. Even though it may have been the product of skill, it certainly was not the product of invention. There is no way in which we could call it such unless we borrowed invention from the discovery of the natural principle itself. That is to say, there is no invention here unless the discovery that certain strains of the several species of these bacteria are non-inhibitive and may thus be safely mixed is invention. But we cannot so hold without allowing a patent to issue on one of the ancient secrets of nature now disclosed. All that remains, therefore, are advantages of the mixed inoculants themselves. They are not enough. 7 Since we conclude that the product claims do not disclose an invention or discovery within the meaning of the patent statutes, we do not consider whether the other statutory requirements contained in 35 U.S.C. § 31, 35 U.S.C.A. § 31, R.S. § 4886 are satisfied. 8 Reversed. 9 Mr. Justice FRANKFURTER, concurring. 10 My understanding of Bond's contribution is that prior to his attempts, packages of mixed cultures of inoculants presumably applicable to two or more different kinds of legumes had from time to time been prepared, but had met with indifferent success. The reasons for failure were not understood, but the authorities had concluded that in general pure culture inoculants were alone reliable because mixtures were ineffective due to the mutual inhibition of the combined strains of bacteria. Bond concluded that there might be special strains which lacked this mutual inhibition, or were at all events mutually compatible. Using techniques that had previously been developed to test efficiency in promoting introgen fixation of various bacterial strains, Bond tested such efficiency of various mixtures of strains. He confirmed his notion that some strains were mutually compatible by finding that mixtures of these compatible strains gave good nitrogen fixation in two or more different kinds of legumes, while other mixtures of certain other strains proved mutually incompatible. 11 If this is a correct analysis of Bond's endeavors two different claims of originality are involved: (1) the idea that there are compatible strains, and (2) the experimental demonstration that there were in fact some compatible strains. Insofar as the court below concluded that the packaging of a particular mixture of compatible strains is an invention and as such patentable, I agree, provided not only that a new and useful property results from their combination, but also that the particular strains are identifiable and adequately identified. I do not find that Bond's combination of strains satisfies these requirements. The strains by which Bond secured compatibility are not identified and are identifiable only by their compatibility. 12 Unless I misconceive the record, Bond makes no claim that Funk Brothers used the same combination of strains that he had found mutually compatible. He appears to claim that since he was the originator of the idea that there might be mutually compatible strains and had practically demonstrated that some such strains exist, everyone else is forbidden to use a combination of strains whether they are or are not identical with the combinations that Bond selected and packaged together. It was this claim that, as I understand it, the District Court found not to be patentable, but which, if valid, had been infringed. 13 The Circuit Court of Appeals defined the claims to 'cover a composite culture in which are included a plurality of species of bactr ia belonging to the general Rhizobium genus, carried in a conventional base.' 7 Cir., 161 F.2d 981, 983. But the phrase 'the claims cover a composite culture' might mean 'a particular composite culture' or 'any composite culture.' The Circuit Court of Appeals seems to me to have proceeded on the assumption that only 'a particular composite culture' was devised and patented by Bond, and then applies it to 'any composite culture' arrived at by deletion of mutually inhibiting strains, but strains which may be quite different from Bond's composite culture. 14 The consequences of such a conclusion call for its rejection. Its acceptance would require, for instance in the field of alloys, that if one discovered a particular mixture of metals, which when alloyed had some particular desirable properties, he could patent not merely this particular mixture but the idea of alloying metals for this purpose, and thus exclude everyone else from contriving some other combination of metals which, when alloyed, had the same desirable properties. In patenting an alloy, I assume that both the qualities of the product and its specific composition would need to be specified. The strains that Bond put together in the product which he patented can be specified only by the properties of the mixture. The District Court, while praising Bond's achievement, found want of patentability. The Circuit Court of Appeals reversed the judgment of the District Court by use of an undistributed middle—that the claims cover a 'composite culture' in the syllogism whereby they found patentability. 15 It only confuses the issue, however, to introduce such terms as 'the work of nature' and the 'laws of nature.' For these are vague and malleable terms infected with too much ambiguity and equivocation. Everything that happens may be deemed 'the work of nature,' and any patentable composite exemplifies in its properties 'the laws of nature.' Arguments drawn from such terms for ascertaining patentability could fairly be employed to challenge almost every patent. On the other hand, the suggestion that 'if there is to be invention from such a discovery, it must come from the application of the law of nature to a new and useful end' may readily validate Bond's claim. Nor can it be contended that there was no invention because the composite has no new properties other than its ingredients in isolation. Bond's mixture does in fact have the new property of multi-service applicability. Multi-purpose tools, multivalent vaccines, vitamin complex composites, are examples of complexes whose sole new property is the conjunction of the properties of their components. Surely the Court does not mean unwittingly to pass on the patentability of such products by formulating criteria by which future issues of patentability may be prejudged. In finding Bond's patent invalid I have tried to avoid a formulation which, while it would in fact justify bond's patent, would lay the basis for denying patentability to a large area within existing patent legislation. 16 Mr. Justice BURTON, with whom Mr. Justice JACKSON concurs, dissenting. 17 On the grounds stated by the Circuit Court of Appeals the judgment should be affirmed. 18 When the patentee discovered the existence of certain strains of bacteria which, when combined with certain other strains of bacteria, would infect two or more leguminous plants without loss of their respective nitrogen-fixing efficiencies, and utilized this discovery by segregating some of these mutually non-inhibitive strains and combining such strains into composite inoculants, we agree with Mr. Justice FRANKFURTER that the combinations so produced satisfied the statutory requirements of invention or discovery.1 These products were a promt and substantial commercial success, filling a long-sought and important agricultural need. 19 However, we do not agree that the patent issued for such products is invl id for want of a clear, concise description of how the combinations were made and used. The statutory requirement is that the inventor or discoverer— 20 'shall file in the Patent Office a written description of the same, and of the manner and process of making, constructing, compounding, and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art or science to which it appertains, or with which it is most nearly connected, to make, construct, compound, and use the same; and in case of a machine, he shall explain the principle thereof, and the best mode in which he has contemplated applying that principle, so as to distinguish it from other inventions; and he shall particularly point out and distinctly claim the part, improvement, or combination which he claims as his invention or discovery. * * * No plant patent shall be declared invalid on the ground of noncompliance with this section if the description is made as complete as is reasonably possible.'2 21 The completeness and character of the description must vary with the subject to be described. Machines lend themselves readily to descriptions in terms of mechanical principles and physical characteristics. On the other hand, it may be that a combination of strains of bacterial species, which strains are distinguished from one another and recognized in practice solely by their observed effects, can be definable reasonably only in terms of those effects. In the present case, the patentee has defined the combinations in terms of their mutually inhibiting and non-inhibiting effects upon their respective abilities to take free nitrogen from the air and place it in the soil. These combinations were discovered by observation of these effects—they are in practice identified by these effects for the commercial uses for which they are made. It is these effects that differentiate them from the other bacteria heretofore generally identified only as common members of the same species and not commercially valuable for use with leguminous plants of more than one of the groups named in the opinion of the Court. The identification of the strains stated in the patent is that which the patentee used in making the novel combinations of them that have been shown to be highly useful. There appears to be no question but that the petitioners are now able to identify and use the strains in the manner described in the patent. The record thus indicates that the description is sufficiently full, clear, concise and exact to enable persons skilled in the art or science to which this discovery appertains or with which it is most nearly connected to make, construct, compound and use the same. There is no suggestion as to how it would be reasonably possible to describe the patented product more completely. The patent covers all composite cultures of bacterial strains of the species described which do not inhibit each other's ability to fix nitrogen. Bacteriologists, skilled in the applicable art, will not have difficulty in selecting the non-inhibitive strains by employing such standard and recognized laboratory tests as are described in the application for this patent. 22 The statute itself shows that Congress has recognized the inherent difficulty presented. While this patent may not be technically a 'plant patent' in the precise sense in which that term is used in this Section, the references in the Section to the differences in descriptions expected in mechanical patents and plant patents obviously support the position here taken. An inventor should not be denied a patent upon an otherwise patentable discovery merely because the nature of the discovery defies description in conventional terms. Terms ordinarily unsuitable to describe and distinguish products that are capable of description and distinction by their appearance may be the most appropriate in which to describe and distingus h other products that are not reasonably possible of identification by their appearance, but which are easily identified by their effects when being sought for or described by those skilled in the art. 1 The product claims in suit are 1, 3, 4, 5, 6, 7, 8, 13, and 14. Claim 4 is illustrative of the invention which is challenged. It reads as follows: FC 'An inoculant for leguminous plants comprising a plurality of selected mutually non-inhibitive strains of different species of bacteria of the genus Rhizobium, said strains being unaffected by each other in respect to their ability to fix nitrogen in the leguminous plant for which they are specific.' 2 The patent also contains process claims. 3 The six well-recognized species of bacteria and the corresponding groups (cross-inculation groups) of leguminous plants are: Rhizobium trifolii Rhizobium meliloti Rhizobium phaseoli Rhizobium leguminosarum Rhizobium lupini Rhizobium japonicum Red clover, crimson clover, mammoth clover, alsike clover Alfalfa, white or yellow sweet clovers Garden beans Garden peas and vetch Lupines Soy beans 4 See note 3, supra. 1 R.S. § 4886, as amended, 46 Stat. 376, 53 Stat. 1212, 35 U.S.C. § 31, 35 U.S.C.A. § 31. 2 R.S. § 4888, as amended, 38 Stat. 958, 959, 46 Stat. 376, 35 U.S.C. § 33, 35 U.S.C.A. § 33.
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333 U.S. 169 68 S.Ct. 494 92 L.Ed. 618 UNITED STATES et al.v.BALTIMORE & O.R. CO. et al. No. 223. Argued and Submitted Feb. 3, 4, 1948. Decided March 8, 1948. Appeal from the District Court of the United States for the Northern District of Ohio. Mr. Frederick Bernays Wiener, of Providence, R.I., for appellants The U.S. and I.C.C. Messrs. William N. Strack, of Chicago, Ill., and John P. Staley, of Oklahoma City, Okl., for appellant Swift & Co. Mr. Ashley Sellers, of Washington, D.C., for appellee Cleveland Union Stockyards Co. Mr. Robert R. Pierce, of Cleveland, Ohio, for appellees, New York Central R.R. Co., and others. [Argument of Counsel from page 170 intentionally omitted] Mr. Justice BLACK delivered the opinion of the Court. 1 This case is properly here on appeal from a District Court decree enjoining enforcement of a cease and desist order of the Interstate Commerce Commission. 28 U.S.C. § 345, 28 U.S.C.A. § 345; 71 F.Supp. 499. The order enjoined required the five railroad appellees1 to abstain from refusing to deliver interstate shipments of livestock to the sidetrack of Swift & Company's packing plant at Cleveland, Ohio, and to establish tariffs for such deliveries. Swift's sidetrack has only one connection with a railroad. That connection is with the main line of the New York Central by way of a spur track, known as 'Spur No 245,' operated by that railroad. One end of this spur owned by the New York Central connects with its main line; the other end of the spur, also owned by the railroad, connects with Swift's sidetrack and with other private sidetracks. A 1619-foot middle segment of the spur, known as 'Track 1619,' is owned by the Cleveland Union Stock Yards Company. Under the terms of a trackage agreement with Stock Yards, New York Central uses Track 1619 for deliveries to Swift's sidetrack and other private sidetracks connected with Spur No. 245. Thus all interstate railroad shipments to Swift's siding and to others similarly located can be made only over the segment of track owned by Stock Yards. Because of its interest in Track 1619, Stock Yards was made a party to the proceedings before the Commission and was included in its cease and desist order along with the railroads.2 So long as Stock Yards continues to own Track 1619, delivery of livestock and other freight by New York Central to Swift and others similarly located depends upon whether and to what extent Stock Yards will grant or has granted New York Central a right to operate over Track 1619. This present case involves the question of whether the railroads, and particularly New York Central, in making deliveries of livestock over Track 1619 to Swift's sidetrack must comply with certain conditions imposed by Stock Yards in its present agreement with New York Central. 2 Track 1619 was constructed in 1899 on Stock Yards' property by Stock Yards and New York Central's predecessor in interest. A contemporaneous written agreement, cancellable on 60-days written notice by the railroad, gave the railroad a right to use the track for railroad purposes, provided the use did not interfere with Stock Yards' business. In 1910, after negotiations with the railroad, Swift built its sidetrack, and the railroad extended its Spur No. 245 by a track which connected Track 1619 with Swift's siding. The 1899 written trackage agreement was superseded by another in 1924. This one was cancellable by either party on 30-days written notice. It provided that the railroad should maintain the tracks at its own expense, and it granted to the railroad 'the free and uninterrupted use of any and all tracks or portions thereof belonging to the Industry and located on its land.' From 1910, when Swift's siding was constructed to 1924, and for many years thereafter, the railroad continued to deliver all kinds of commodities to Swift and to other packers likewise served only by way of Spur No. 245 and Track 1619. 3 In the early 1930's Stock Yards concluded that it was losing patronage and fees because of delivery of livestock to Swift at its siding. A large source of Stock Yard's income comes from fees it charges for unloading and delivering interstate shipments of livestock to pens within its yard. Stock carried over Track 1619 to Swift's siding and to other private sidings are unloaded at those sidings; as a result Stock Yards loses the fees it would receive if livestock consigned to Swift and to other packers were unloaded at the Stock Yards. With a view toward collecting unloading fees from Swift and other packers served by Spur No. 245, Stock Yards instituted negotiations with the New York Central which in 1935 resulted in a modification of their 1924 agreement. The old 1924 agreement had unconditionally granted 'Railroad, the free and uninterrupted use of any and all tracks * * *.' The 1935 modified agreement also granted New York Central 'the free and uninterrupted use,' of Stock Yard's tracks but added, 'except for competitive traffic a charge for which use shall be the subject of a separate agreement.' 4 After this 1935 restrictive modification Stock Yards demanded that the railroad adopt one of two courses with regard to livestock, which the parties agreed was the 'competitive traffic' the modified agreement was designed to suppress. The railroad must either stop carrying livestock over Track 1619 to Swift and other packers, or pay Stock Yards, for use of Track 1619 in carrying livestock to these packers, amounts equivalent to fees Stock Yards would have collected had the livestock consigned to them been unloaded and delivered in the yard. This amount was considered exorbitant by New York Central and the other railroads for whom New York Central performed switching charges, and they therefore refused to pay it. The result was that in 1938 the railroads ceased delivering livestock to the sidings of Swift and other packers served by Spur No. 245,3 although they haveu nder agreement with Stock Yards continued to use the spur for delivery of all other kinds of commodity shipments to these sidings. Swift demanded that the railroads deliver livestock to its siding, and in 1941 filed a complaint with the Interstate Commerce Commission upon their refusal to make deliveries. 5 After notice and hearing the Commission concluded that the railroad's refusal to carry livestock to Swift violated several provisions of the Interstate Commerce Act, 49 U.S.C.A. § 1 et seq. It was found to violate § 3(1) because of the discrimination against a single commodity, livestock, and because New York Central's deliveries of livestock to the sidetracks of some of Swift's nearby competitors, whose sidings were served without using Track 1619, subjected Swift to undue prejudice and gave those competitors and undue preference. The Commission also found that the failure to deliver under the circumstances shown was a violation of § 1(6) which forbids unreasonable practices affecting the manner and method of delivering freight, and also a violation of § 1(9) which requires railroads to operate switch connections with private side tracks without discrimination under such conditions as the Commission found to exist here. 6 The Commission's findings of fact are not challenged. There can be no doubt that those facts found would constitute a violation of the sections referred to if Spur No. 245 were wholly owned by the railroad. Ownership of Track 1619 by Stock Yards and its objection to livestock deliveries is, in fact, the only reason suggested for the railroads' failure to deliver shipments of livestock to Swift as they do to neighboring packers, and for their failure to provide switching connections for livestock shipments. From what has been said our question is this: Can the noncarrier owner of a segment of railroad track who contracts for an interstate railroad's use of the segment as part of its line reserve a right to regulate the type of commodities that the railroad may transport over the segment, or would such a reservation be invalid under the Interstate Commerce Act? 7 The Interstate Commerce Act is one of the most comprehensive regulatory plans that Congress has ever undertaken. The first Act, and all amendments to it, have aimed at wiping out discriminations of all types, State of New York v. United States, 331 U.S. 284, 296, 67 S.Ct. 1207, 1213, and language of the broadest scope has been used to accomplish all the purposes of the Act. United States v. Pennsylvania R. Co., 323 U.S. 612, 616, 65 S.Ct. 471, 473, 89 L.Ed. 499. It would be strange had this legislation left a way open whereby carriers could engage in discriminations merely by entering into contracts for the use of trackage. In fact this Court has long recognized that the purpose of Congress to prevent certain types of discriminations and prejudicial practices could not be frustrated by contracts, even though the contracts were executed before enactment of the legislation. See Philadelphia, Baltimore & Washington R. Co. v. Schubert, 224 U.S. 603, 613, 614, 32 S.Ct. 589, 592, 56 L.Ed. 911; Louisville & Nashville R. Co. v. Mottley, 219 U.S. 467, 483, 485, 486, 31 S.Ct. 265, 270, 271, 55 L.Ed. 297, 34 L.R.A.,N.S., 671. 8 We think the provisions of the Interstate Commerce Act plainly empowered the Commission to enter thi order against the discriminatory practices found, despite ownership of Track 1619 by Stock Yards. Section 1(1)(a) makes the Interstate Commerce Act applicable to common carriers 'wholly by railroad.' Section 1(3)(a) defines the term 'railroad' as including 'all the road in use by any common carrier operating a railroad, whether owned or operated under a contract, agreement, or lease, and also all switches, spurs, tracks * * *.' As one of the many other indications that Congress did not intend its railroad regulatory provisions to depend on who had legal title to transportation instrumentalities, § 1(3)(a) also provides that the word 'transportation' as used in the Act shall broadly include 'locomotives * * * and all instrumentalities and facilities of shipment or carriage, irrespective of ownership or of any contract, express or implied, for the use thereof * * *.' It is true, as appellees argue, that the above language of § 1(3)(a) is definitional only. Ellis v. Interstate Commerce Commission, 237 U.S. 434, 35 S.Ct. 645, 59 L.Ed. 1036. But it is also true that these definitions by their unambiguous language, make all trackage 'in use by any common carrier' subject to the regulatory provisions of the Act, even though not owned by the carrier, but only used by it under a contract or agreement. Thus Track 1619, though owned by Stock Yards, was subject to the Act because of its use by the New York Central under trackage agreements. 9 It is just as prejudicial to shippers and the public for a railroad that uses a portion of track under lease or contract to discriminate, as it is for the discrimination to be inflicted by a railroad that owns its entire track. Practically the only argument suggested to justify discriminatory practices under the circumstances here is that an owner has a right to let others use his land subject to whatsoever conditions the owner chooses to impose. It is even argued that to construe the Interstate Commerce Act as limiting that right would result in depriving an owner of his property without due process of law. But no such broad generalization can be accepted. Property can be used even by its owner only in accordance with law, and conditions its owner places on its use by another are subject to like limitations. Of course it does not deprive an owner of his property without due process of law to deny him the right to enforce conditions upon its use which conflict with the power of Congress to regulate railroads so as to secure equality of treatment of those whom the railroads serve. 10 Here Congress under its constitutional authority has provided that no railroad shall engage in certain types of discriminatory conduct in violation of three provisions of the Act. The Commission found that discriminatory conduct here. The excuse offered by the railroads is that the owner of Track 1619 required them to do the prohibited things. But the command of Congress against discrimination cannot be subordinated to the command of a track owner that a railroad using the track practice discrimination. 11 We hold that the Commission's order was authorized by statute and that it does not deprive Stock Yards of its property without due process of law. In doing so we do not pass upon any questions in relation to the dedication of Track 1619 to railroad use. Neither do we decide what are the relative financial rights of Stock Yards and New York Central under their contracts, nor whether Stock Yards can cancel the contract with New York Central, nor what would be the duty of New York Central should Stock Yards attempt to terminate its right to use Track 1619. We only hold that Stock Yards' ownership of Track 1619 does not vest it with power to compel the railroads to operate in a way which violates the Interstate Commerce Act. 12 The Commission's order is valid and should be enforced. 13 Reversed. 14 Mr. Justice BURTON, dissenting. 15 For the reasons stated in the opinion of the District Court in this case, 71 F.Supp. 499, I believe that the ore r of the Interstate Commerce Commission exceeded its jurisdiction and that the judgment permanently enjoining the enforcement of such order should have been affirmed. 1 The ral road appellees are Baltimore & Ohio Railroad Company, the Erie Railroad Company, the Wheeling & Lake Erie Railroad Company, the New York Central Railroad Company, and the Pennsylvania Railroad Company. 2 Appellees argue that Stock Yards was improperly made a party and that the Commission was without power to include Stock Yards in its cease and desist order. We think § 2 of the Elkins Act, 32 Stat. 848, 49 U.S.C. § 42, 49 U.S.C.A. § 42, justified the Commission's action and find no merit to the contention that we should be interpretation restrict that section's broad language authorizing inclusion as parties of 'all persons interested in or affected by the rate, regulation, or practice under consideration' by the Commission or by a court, and which provides that decrees may be made with reference to such additional parties to the same extent as though they were carriers. 3 In 1938 New York Central ceased to switch livestock carloads of other carriers over Spur No. 245 to Swift's siding, and it canceled its tariffs for this service. Since that time there has been no specific tariff authority for movement of livestock to Swift's siding when shipped to Cleveland over lines other than the New York Central. Although New York Central has never canceled its tariff for livestock shipments to Swift's Cleveland siding from points of origin on its own lines, it has delivered all livestock consigned to Swift's siding to Stock Yards since 1938. Swift has been forced to pay charges to Stock Yards to obtain possession of livestock unloaded at the yards.
78
333 U.S. 203 68 S.Ct. 461 92 L.Ed. 649 PEOPLE OF STATE OF ILLINOIS ex rel. McCOLLUMv.BOARD OF EDUCATION OF SCHOOL DIST. NO. 71, CHAMPAIGN COUNTY, ILL, et al. No. 90. Argued Dec. 8, 1947. Decided March 8, 1948. Appeal from the Supreme Court of the State of Illinois. Mr. Walter F. Dodd, of Chicago, Ill., for appellant. Messrs. Owen Rall, of Chicago, Ill., and John L. Franklin, of Champaign, Ill., for appellees. Mr. Justice BLACK delivered the opinion of the Court. 1 This case relates to the power of a state to utilize its tax-supported public school system in aid of religious instruction insofar as that power may be restricted by the First and Fourteenth Amendments to the Federal Constitution. 2 The appellant, Vashti McCollum, began this action for mandamus against the Champaign Board of Education in the Circuit Court of Champaign County, Illinois. Her asserted interest was that of a resident and taxpayer of Champaign and of a parent whose child was then enrolled in the Champaign public schools. Illinois has a compulsory education law which, with exceptions, requires parents to send their children, aged seven to sixteen, to its tax-supported public schools where the children are to remain in attendance during the hours when the schools are regularly in session. Parents who violate this law commit a misdemeanor punishable by fine unless the children attend private or parochial schools which meet educational standards fixed by the State. District boad § of education are given general supervisory powers over the use of the public school buildings within the school districts. Ill.Rev.Stat. ch. 122, §§ 123, 301 (1943). 3 Appellant's petition for mandamus alleged that religious teachers, employed by private religious groups, were permitted to come weekly into the school buildings during the regular hours set apart for secular teaching, and then and there for a period of thirty minutes substitute their religious teaching for the secular education provided under the compulsory education law. The petitioner charged that this joint public-school religious-group program violated the First and Fourteenth Amendments to the United States Constitution. The prayer of her petition was that the Board of Education be ordered to 'adopt and enforce rules and regulations prohibiting all instruction in and teaching of all religious education in all public schools in Champaign District Number 71, * * * and in all public school houses and buildings in said district when occupied by public schools.' The board first moved to dismiss the petition on the ground that under Illinois law appellant had no standing to maintain the action. This motion was denied. An answer was then filed, which admitted that regular weekly religious instruction was given during school hours to those pupils whose parents consented and that those pupils were released temporarily from their regular secular classes for the limited purpose of attending the religious classes. The answer denied that this coordinated program of religious instructions violated the State or Federal Constitution. Much evidence was heard, findings of fact were made, after which the petition for mandamus was denied on the ground that the school's religious instruction program violated neither the federal nor state constitutional provisions invoked by the appellant. On appeal the State Supreme Court affirmed. 396 Ill. 14, 71 N.E.2d 161. Appellant appealed to this Court under 28 U.S.C. § 344(a), 28 U.S.C.A. § 344(a), and we noted probable jurisdiction. 67 S.Ct. 1524. 4 The appellee presses a motion to dismiss the appeal on several grounds, the first of which is that the judgment of the State Supreme Court does not draw in question the 'validity of a statute of any State' as required by 28 U.S.C. § 344(a), 28 U.S.C.A. § 344(a). This contention rests on the admitted fact that the challenged program of religious instruction was not expressly authorized by statute. But the State Supreme Court has sustained the validity of the program on the ground that the Illinois statutes granted the board authority to establish such a program. This holding is sufficient to show that the validity of an Illinois statute was drawn in question within the meaning of 28 U.S.C. § 344(a), 28 U.S.C.A. § 344(a). Hamilton v. Regents of University of California, 293 U.S. 245, 258, 55 S.Ct. 197, 202, 79 L.Ed. 343. A second ground for the motion to dismiss is that the appellant lacks standing to maintain the action, a ground which is also without merit. Coleman v. Miller, 307 U.S. 433, 443, 445, 464, 59 S.Ct. 972, 978, 986, 83 L.Ed. 1385, 122 A.L.R. 695. A third ground for the motion is that the appellant failed properly to present in the State Supreme Court her challenge that the state program violated the Federal Constitution. But in view of the express rulings of both state courts on this question, the argument cannot be successfully maintained. The motion to dismiss the appeal is denied. 5 Although there are disputes between the parties as to various inferences that may or may not properly be drawn from the evidence concerning the religious program, the following facts are shown by the record without dispute.1 In 1940 interested members of the Jewish, Roman Catholic, and a few of the Protestant faiths formed a voluntary association called the Champaign Council on Religious Education. They obtained permission from the Board of Education to offer classes in religious instruction to public schoolp upils in grades four to nine inclusive. Classes were made up of pupils whose parents signed printed cards requesting that their children be permitted to attend;2 they were held weekly, thirty minutes for the lower grades, forty-five minutes for the higher. The council employed the religious teachers at no expense to the school authorities, but the instructors were subject to the approval and supervision of the superintendent of schools.3 The classes were taught in three separate religious groups by Protestant teachers,4 Catholic priests, and a Jewish rabbi, although for the past several years there have apparently been no classes instructed in the Jewish religion. Classes were conducted in the regular classrooms of the school building. Students who did not choose to take the religious instruction were not released from public school duties; they were required to leave their classrooms and go to some other place in the school building for pursuit of their secular studies. On the other hand, students who were released from secular study for the religious instructions were required to be present at the religious classes. Reports of their presence or absence were to be made to their secular teachers.5 6 The foregoing facts, without reference to others that appear in the record, show the use of tax-supported property for religious instruction and the close cooperation between the school authorities and the religious council in promoting religious education. The operation of the state's compulsory education system thus assists and is integrated with the program of religious instruction carried on by separate religious sects. Pupils compelled by law to go to school for secular education are released in part from their legal duty upon the condition that they attend the religious classes. This is beyond all question a utilization of the tax-established and tax-supported public school system to aid religious groups to spread their faith. And it falls squarely under the ban of the First Amendment (made applicable to the States by the Fourteenth) as we interpreted it in Everson v. Board of Education, 330 U.S. 1, 67 S.Ct. 504. There we said: 'Neither a state nor the Federal Government can set up a church. Neither can pass laws which aid one religion, aid all religions, or prefer one religion over another.6 Neither can force or influence a person to go to or to remain away from church against his will or force him to profess a belief or disbelief in any religion. No person can be punished for entertaining or professing religious beliefs or disbeliefs, for church attendance or nonattendance. No tax in any amount, large or small, can be levied to support any religious activities or institutions, whatever they may be called, or whatever form they may adopt to teach or practice religion.7 Neither a state nor the Federal Government can, openly or secretly, participate in the affairs of any religious organizations or groups, and vice versa. In the words of Jefferson, the clause against establishment of religion by law was intended to erect 'a wall of separation between Church and State." Id., at pages 15, 16 of 330 U.S., at page 511 of 67 S.Ct. The majority in the Everson case, and the minority as shown by quotations from the dissenting views in our notes 6 and 7, agreed that the First Amendment's language, properly interpreted, had erected a wall of separation between Church and State. They disagreed as to the facts shown by the record and as to the proper application of the First Amendment's language to those facts. 7 Recognizing that the Illinois program is barred by the First and Fourteenth Amendments if we adhere to the views expressed both by the majority and the minority in the Everson case, counsel for the respondents challenge those views as dicta and urge that we reconsider and repudiate them. They argue that historically the First Amendment was intended to forbid only government preference of one religion over another, not an impartial governmental assistance of all religions. In addition they ask that we distinguish or overrule our holding in the Everson case that the Fourteenth Amendment made the 'establishment of religion' clause of the First Amendment applicable as a prohibition against the States. After giving full consideration to the arguments presented we are unable to accept either of these contentions. 8 To hold that a state cannot consistently with the First and Fourteenth Amendments utilize its public school system to aid any or all religious faiths or sects in the dissemination of their doctrines and ideals does not, as counsel urge, manifest a governmental hostility to religion or religious teachings. A manifestation of such hostility would be at war with our national tradition as embodied in the First Amendment's guaranty of the free exercise of religion. For the First Amendment rests upon the premise that both religion and government can best work to achieve their lofty aims if each is left free from the other within its respective sphere. Or, as we said in the Everson case, the First Amendment had erected a wall between Church and State which must be kept high and impregnable. 9 Here not only are the state's taxsupported public school buildings used for the dissemination of religious doctrines. The State also affords sectarian groups an invaluable aid in that it helps to provide pupils for their religious classes through use of the state's compulsory public school machinery. This is not separation of Church and State. 10 The cause is reversed and remanded to the State Supreme Court for proceedings not inconsistent with this opinion. 11 Reversed and remanded. 12 Mr. Justice FRANKFURTER delivered the following opinion, in which Mr. Justice JACKSON, Mr. Justice RUTLEDGE and Mr. Justice BURTON join.* 13 We dissented in Everson v. Board of Education, 330 U.S. 1, 67 S.Ct. 504, 512, because in our view the Constitutional principle requiring separation of Church and State compelled invalidation of the ordinance sustained by the majority. Illinois has here authorized the commingling of sectarian with secular instruction in the public schools. The Constitution of the United States forbids this. 14 The case, in the light of the Everson decision, demonstrates anew that the mere formulation of a relevant Constitutional principle is the beginning o the solution of a problem, not its answer. This is so because the meaning of a spacious conception like that of the separation of Church from State is unfolded as appeal is made to the principle from case to case. We are all agreed that the First and the Fourteenth Amendments have a secular reach far more penetrating in the conduct of Government than merely to forbid an 'established church.' But agreement, in the abstract, that the First Amendment was designed to erect a 'wall of separation between Church and State,' does not preclude a clash of views as to what the wall separates. Involved is not only the Constitutional principle but the implications of judicial review in its enforcement. Accommodation of legislative freedom and Constitutional limitations upon that freedom cannot be achieved by a mere phrase. We cannot illuminatingly apply the 'wall-of-separation' metaphor until we have considered the relevant history of religious education in America, the place of the 'released time' movement in that history, and its precise manifestation in the case before us. 15 To understand the particular program now before us as a conscientious attempt to accommodate the allowable functions of Government and the special concerns of the Church within the framework of our Constitution and with due regard to the kind of society for which it was designed, we must put this Champaign program of 1940 in its historic setting. Traditionally, organized education in the Western world was Church education. It could hardly be otherwise when the education of children was primarily study of the Word and the ways of God. Even in the Protestant countries, where there was a less close identification of Church and State, the basis of education was largely the Bible, and its chief purpose inculcation of piety. To the extent that the State intervened, it used its authority to further aims of the Church. 16 The emigrants who came to these shores brought this view of education with them. Colonial schools certainly started with a religious orientation. When the common problems of the early settlers of the Massachusetts Bay Colony revealed the need for common schools, the object was the defeat of 'one chief project of that old deluder, Satan, to keep men from the knowledge of the Scriptures.' The Laws and Liberties of Massachusetts, 1648 edition (Cambridge 1929) 47.1 17 The evolution of colonial education, largely in the service of religion, into the public school system of today is the story of changing conceptions regarding the American democratic society, of the functions of State-maintained education in such a society, and of the role therein of the free exercise of religion by the people. The modern public school derived from a philosophy of freedom reflected in the First Amendment. It is appropriate to recall that the Remonstrance of James Madison, an event basic in the history of religious liberty, was called forth by a proposal which involved support to religious education. See Mr. Justice Rutledge's opinion in the Everson case supra, 330 U.S. at pages 36, 37, 67 S.Ct. at pages 521, 522. As the momentum for popular education increased and in turn evoked strong claims for State support of religious education, contests not unlike that which in Virginia had produced Madison's Remonstrance appeared in various form in other States. New York and Massachusetts provide famous chapters in the history that established diassociation of religious teaching from State-maintained schools. In New York, the rise of the common schools led, despite fierce sectarian opposition, to the barring of tax founds to church schools, and later to any school in which sectarian doctrine was taught.2 In Massachusetts, largely through the efforts of Horace Mann, all sectarian teachings were barred from the common school to save it from being rent by denominational conflict.3 The upshot of these controversies, often long and fierce, is fairly summarized by saying that long before the Fourteenth Amendment subjected the States to new limitations, the prohibition of furtherance by the State of religious instruction became the guiding principle, in law and feeling, of the American people. In sustaining Stephen Girard's will, this Court referred to the inevitable conflicts engendered by matters 'connected with religious policy' and particularly 'in a country composed of such a variety of religious sects as our country.' Vidal et al. v. Girard's Executors, 2 How. 127, 198, 11 L.Ed. 205. That was more than one hundred years ago. 18 Separation in the field of education, then, was not imposed upon unwilling States by force of superior law. In this respect the Fourteenth Amendment merely reflected a principle then dominant in our national life. To the extent that the Constitution thus made it binding upon the States, the basis of the restriction is the whole experience of our people. Zealous watchfulness against fusion of secular and religious activities by Government itself, through any of its instruments but especially through its educational agencies, was the democratic response of the American community to the particular needs of a young and growing nation, unique in the composition of its people.4 A totally different situation elsewhere, as illustrated for instance by the English provisions for religious education in State-maintained schools, only serves to illustrate that free societies are not cast in one mold. See the Education Act of 1944, 7 and 8 Geo. VI, c. 31. Different institutions evolve from different historic circumstances. 19 It is pertinent to remind that the establishment of this principle of separation in the field of education was not due to any decline in the religious beliefs of the people. Horace Mann was a devout Christian, and the deep religious feeling of James Madison is stamped upon the Remonstrance. The secular public school did not imply indifference to the basic role of religion in the life of the people, nor rejection of religious education as a means of fostering it. The claims of religion were not minimized by refusing to make the public schools agencies for their assertion. The non-sectarian or secular public school was the means of reconciling freedom in general with religious freedom. The sharp confinement of the public schools to secular education was a recognition of the need of a democratic society to educate its children, insofar as the State undertook to do so, in an atmosphere free from pressures in a realm in which pressures are most resisted and where conflicts are most easily and most bitterly engendered. Designed to serve as perhaps the most powerful agency for promoting cohesion among a heterogeneous democratic people, the public school must keep scrupulously freef rom entanglement in the strife of sects. The preservation of the community from divisive conflicts, of Government from irreconcilable pressures by religious groups, of religion from censorship and coercion however subtly exercised, requires strict confinement of the State to instruction other than religious, leaving to the individual's church and home, indoctrination in the faith of his choice. 20 This development of the public school as a symbol of our secular unity was not a sudden achievement nor attained without violent conflict.5 While in small communities of comparatively homogeneous religious beliefs, the need for absolute separation presented no urgencies, elsewhere the growth of the secular school encountered the resistance of feeling strongly engaged against it. But the inevitability of such attempts is the very reason for Constitutional provisions primarily concerned with the protection of minority groups. And such sects are shifting groups, varying from time to time, and place to place, thus representing in their totality the common interest of the nation. 21 Enough has been said to indicate that we are dealing not with a full-blown principle, nor one having the definiteness of a surveyor's metes and bounds. But by 1875 the separation of public education from Church entanglements, of the State from the teaching of religion, was firmly established in the consciousness of the nation. In that year President Grant made his famous remarks to the Convention of the Army of the Tennessee: 22 'Encourage free schools and resolve that not one dollar appropriated for their support shall be appropriated for the support of any sectarian schools. Resolve that neither the state nor the nation, nor both combined, shall support institutions of learning other than those sufficient to afford every child growing up in the land the opportunity of a good common school education, unmixed with sectarian, pagan, or atheistical dogmas. Leave the matter of religion to the family altar, the church, and the private school, supported entirely by private contributions. Keep the church and state forever separated.' 'The President's Speech at Des Moines,' 22 Catholic World 433, 434-35 (1876). 23 So strong was this conviction, that rather than rest on the comprehensive prohibitions of the First and Fourteenth Amendments, President Grant urged that there be written into the United States Constitution particular elaborations including a specific prohibition against the use of public funds for sectarian education,6 such as had been written into many State constitutions.7 By 1894, in urging the adoption of such a provision in the New York Constitution, Elihu Root was able to summarize a century of the nation's history: 'It is not a question of religion, or of creed, or of party; it is a question of declaring and maintaining the great American principle of eternal separation between Church and State.' Root, Addresses on Government and Citizenship, 137, 140.8 The extent to which this principle was deemed a presupposition of our Constitutional system is strikingly illustrated by the fact that every State admitted into the Union since 1876 was compelled by Congress to write into its constitution a requirement that it maintain a school system 'free from sectarian control.'9 24 Prohibition of the commingling of sectarian and secular instruction in the public school is of course only half the story. A religious people was naturally concerned about the part of the child's education entrusted 'to the family altar, the church, and the private school.' The promotion of religious education took many forms. Laboring under financial difficulties and exercising only persuasive authority, various denominations felt handicapped in their task of religious education. Abortive attempts were therefore frequently made to obtain public funds for religious schools.10 But the major efforts of religious inculcation were a recognition of the principle of Separation by the establishment of church schools privately supported. Parochial schools were maintained by various denominations. These, however, were often beset by serious handicaps, financial and otherwise, so that the religious aims which they represented found other directions. There were experiments with vacation schools, with Saturday as well as Sunday schools.11 They all fell short of their purpose. It was urged that by appearing to make religion a one-day-a-week matter, the Sunday school, which acquired national acceptance, tended to relegate the child's religious education, and thereby his religion, to a minor role not unlike the enforced piano lesson. 25 Out of these inadequate efforts evolved the week-day church school, held on one or more afternoons a week after the close of the public school. But children continued to be children; they wanted to play when school was out, particularly when other children were free to do so. Church leaders decided that if the week-day church school was to succeed, a way had to be found to give the child his religious education during what the child conceived to be his 'business hours.' 26 The initiation of the movement12 may fairly be attributed to Dr. George U. Wenner. The underlying assumption of his proposal, made at the Interfaith Conference on Federation held in New York Ciy in 1905, was that the public school unduly monopolized the child's time and that the churches were entitled to their share of it.13 This, the schools should 'release.' Accordingly, the Federation, citing the example of the Third Republic of France,14 urged that upon the request of their parents children be excused from public school on Wednesday afternoon, so that the churches could provide 'Sunday school on Wednesday.' This was to be carried out on church premises under church authority. Those not desiring to attend church schools would continue their normal classes. Lest these public school classes unfairly compete with the church education, it was requested that the school authorities refrain from scheduling courses or activities of compelling interest or importance. 27 The proposal aroused considerable opposition and it took another decade for a 'released time' scheme to become part of a public school system. Gary, Indiana, inaugurated the movement. At a time when industrial expansion strained the communal facilities of the city, Superintendent of Schools Writ suggested a fuller use of the school buildings. Building on theories which had become more or less current, he also urged that education was more than instruction in a classroom. The school was only one of several educational agencies. The library, the playground, the home, the church, all have their function in the child's proper unfolding. Accordingly, Writ's plan sought to rotate the schedules of the children during the school-day so that some were in class, othr § were in the library, still others in the playground. And some, he suggested to the leading ministers of the City, might be released to attend religious classes if the churches of the City cooperated and provided them. They did, in 1914, and thus was 'released time' begun. The religious teaching was held on church premises and the public schools had no hand in the conduct of these church schools. They did not supervise the choice of instructors or the subject matter taught. Nor did they assume responsibility for the attendance, conduct or achievement of the child in a church school; and he received no credit for it. The period of attendance in the religious schools would otherwise have been a play period for the child, with the result that the arrangement did not cut into public school instruction or truly affect the activities or feelings of the children who did not attend the church schools.15 28 From such a beginning 'released time' has attained substantial proportions. In 1914—15, under the Gary program, 619 pupils left the public schools for the church schools during one period a week. According to responsible figures almost 2,000,000 in some 2,200 communities participated in 'released time' programs during 1947.16 A movement of such scope indicates the importance of the problem to which the 'released time' programs are directed. But to the extent that aspects of these programs are open to Constitutional objection, the more extensively the movement operates, the more ominous the breaches in the wall of separation. 29 Of course, 'released time' as a generalized conception, undefined by differentiating particularities, is not an issue for Constitutional adjudication. Local programs differ from each other in many and crucial respects. Some 'released time' classes are under separate denominational auspices, others are conducted jointly by several denominations, often embracing all the religious affiliations of a community. Some classes in religion teach a limited sectarianism; others emphasize democracy, unity and spiritual values not anchored in a particular creed. Insofar as these are manifestations merely of the free exercise of religion, they are quite outside the scope of judicial concern, except insofar as the Court may be called upon to protect the right of religious freedom. It is only when challenge is made to the share that the public schools have in the execution of a particular 'released time' program that close judicial scrutiny is demanded of the exact relation between the religious instruction and the public educational system in the specific situation before the Court.17 30 The substantial differences among arrangements lumped together as 'released time' emphasize the importance of detailed analysis of the facts to which the Constitutional test of Separation is to be applied. How does 'released time' operate in Champaign? Public school teachers distribute to their pupils cards supplied by church groups, so that the parents may indicate whether they desire religious instruction for their children. For those desiring it, religious classes are conducted in the regular classrooms of the public schools by teachers of religion paid by the churches and appointed by them, but, as the State court found, 'subject to the approval and supervision of the Superintendent.' The courses do not profess to give secular instruction in subjects concerning religion. Their candid purpose is sectarian teaching. While a child can go to any of the religious classes offered, a particular sect wishing a teacher for its devotees requires the permission of the school superintendent 'who in turn will determine whether or not it is practical for said group to teach in said school system.' If no provision is made for religious instruction in the particular faith of a child, or if for other reasons the child is not enrolled in any of the offered classes, he is required to attend a regular school class, or a study period during which he is often left to his own devices. Reports of attendance in the religious classes are submitted by the religious instructor to the school authorities, and the child who fails to attend is presumably deemed a truant. 31 Religious education so conducted on school time and property is patently woven into the working scheme of the school. The Champaign arrangement thus presents powerful elements of inherent pressure by the school system in the interest of religious sects. The fact that this power has not been used to discriminate is beside the point. Separation is a requirement to abstain from fusing functions of Government and of religious sects, not merely to treat them all equally. That a child is offered an alternative may reduce the constraint; it does not eliminate the operation of influence by the school in matters sacred to conscience and outside the school's domain. The law of imitation operates, and nonconformity is not an outstanding characteristic of children. The result is an obvious pressure upon children to attend.18 Again, while the Champaign school population represents only a fraction of the more than two hundred and fifty sects of the nation, not even all the practicing sects in Champaign are willing or able to provide religious instruction. The children belonging to these non-participating sects will thus have inculcated in them a feeling of separatism when the school should be the training ground for habits of community, or they will have religious instruction in a faith which is not that of their parents. As a result, the public school system of Champaign actively furthers inculcation in the religious tenets of some faiths, and in the process sharpens the consciousness of religious differences at least among some of the children committed to its care. These are consequences not amenable to statistics. But they are precisely the consequences against which the Constitution was directed when it prohibited the Government common to all from becoming embroiled, however innocently, in the destructive religious conflicts of which the history of even this country records some dark pages.19 32 Mention should not be omitted that the integration of religious instruction within the school system as practiced in Champaign is supported by arguments drawn from educational theories as diverse as those derived from Catholic conceptions and from the writings of John Dewey.20 Movements like 'released time' are seldom single in origin or aim. Nor can the intrusion of religious instruction into the public school system of Champaign be minimized by saying that it absorbs less than an hour a week; in fact, that affords evidence of a design constitutionally objectionable. If it were merely a question of enabling a child to obtain religious instruction with a receptive mind the thirty or forty-five minutes could readily be found on Saturday or Sunday. If that were all, Champaign might have drawn upon the French system, known in its American manifestation as 'dismissed time,' whereby one school day is shortened to allow all children to go where they please, leaving those who so desire to go to a religious school.21 The momentum of the whole school atmosphere and school planning is presumably put behind religious instruction, as given in Champaign, precisely in order to secure for the religious instruction such momentum and planning. To speak of 'released time' as being only half or three quarters of an hour is to draw a thread from a fabric. 33 We do not consider, as indeed we could not, school programs not before us which, though colloquially characterized as 'released time,' present situations differing in aspects that may well be constitutionally crucial. Different forms which 'released time' has taken during more than thirty years of growth include programs which, like that before us, could not withstand the test of the Constitution; others may be found unexceptionable. We do not now attempt to weigh in the Constitutional scale every separate detail or various combination of factors which may establish a valid 'released time' program. We find that the basic Constitutional principle of absolute separation was violated when the State of Illinois, speaking through its Supreme Court, sustained the school authorities of Champaign in sponsoring and effectively furthering religious beliefs by its educational arrangement. 34 Separation means separation, not something less. Jefferson's metaphor in describing the relation between Church and State speaks of a 'wall of separation,' not of a fine line easily overstepped. The public schooli § at once the symbol of our democracy and the most pervasive means for promoting our common destiny. In no activity of the State is it more vital to keep out divisive forces than in its schools, to avoid confusing, not to say fusing, what the Constitution sought to keep strictly apart. 'The great American principle of eternal separation'—Elihu Root's phrase bears repetition—is one of the vital reliances of our Constitutional system for assuring unities among our people stronger than our diversities. It is the Court's duty to enforce this principle in its full integrity. 35 We renew our conviction that 'we have staked the very existence of our country on the faith that complete separation between the state and religion is best for the state and best for religion.' Everson v. Board of Education, 330 U.S. at page 59, 67 S.Ct. at page 532. If nowhere else, in the relation between Church and State, 'good fences make good neighbors.' 36 Mr. Justice JACKSON, concurring. 37 I join the opinion of Mr. Justice FRANKFURTER, and concur in the result reached by the Court, but with these reservations: I think it is doubtful whether the facts of this case establish jurisdiction in this Court, but in any event that we should place some bounds on the demands for interference with local schools that we are empowered or willing to entertain. I make these reservations a matter of record in view of the number of litigations likely to be started as a result of this decision. 38 A Federal Court may interfere with local school authorities only when they invade either a personal liberty or a property right protected by the Federal Constitution. Ordinarily this will come about in either of two ways: 39 First. When a person is required to submit to some religious rite or instruction or is deprived or threatened with deprivation of his freedom for resisting such unconstitutional requirement. We may then set him free or enjoin his prosecution. Typical of such cases was West Virginia State Board of Education v. Barnette, 319 U.S. 624, 63 S.Ct. 1178, 87 L.Ed. 1628, 147 A.L.R. 674. There penalties were threatened against both parent and child for refusal of the latter to perform a compulsory ritual which offended his convictions. We intervened to shield them against the penalty. But here, complainant's son may join religious classes if he chooses and if his parents so request, or he may stay out of them. The complaint is that when others join and he does not, it sets him apart as a dissenter, which is humiliating. Even admitting this to be true, it may be doubted whether the Constitution which, of course, protects the right to dissent, can be construed also to protect one from the embarrassment that always attends nonconformity, whether in religion, politics, behavior or dress. Since no legal compulsion is applied to complainant's son himself and no penalty is imposed or threatened from which we may relieve him, we can hardly base jurisdiction on this ground. 40 Second. Where a complaint is deprived of property by being taxed for unconstitutional purposes, such as directly or indirectly to support a religious establishment. We can protect a taxpayer against such a levy. This was the Everson Case, 330 U.S. 1, 67 S.Ct. 504, as I saw it then and see it now. It was complained in that case that the school treasurer drew a check on public funds to reimburse parents for a child's bus fare if he went to a Catholic parochial school or a public school, but not if he went to any other private or denominational school. Reference to the record in that case will show that the School District was not operating busses, so it was not a question of allowing Catholic children to ride publicly owned busses along with others, in the interests of their safety, health or morals. The child had to travel to and from parochial school on commercial busses like other paying passengers, and all other school children, and he was exposed to the same dangers. If it could, in fairness, have been said that the expeni ture was a measure for the protection of the safety, health or morals of youngsters, it would not merely have been constitutional to grant it; it would have been unconstitutional to refuse it to any child merely because he was a Catholic. But in the Everson Case there was a direct, substantial and measurable burden on the complainant as a taxpayer to raise funds that were used to subsidize transportation to parochial schools. Hence, we had jurisdiction to examine the constitutionality of the levy and to protect against it if a majority had agreed that the subsidy for transportation was unconstitutional. 41 In this case, however, any cost of this plan to the taxpayers is incalculable and negligible. It can be argued, perhaps, that religious classes add some wear and tear on public buildings and that they should be charged with some expense for heat and light, even though the sessions devoted to religious instruction do not add to the length of the school day. But the cost is neither substantial nor measurable, and no one seriously can say that the complainant's tax bill has been proved to be increased because of this plan. I think it is doubtful whether the taxpayer in this case has shown any substantial property injury. 42 If, however, jurisdiction is found to exist, it is important that we circumscribe our decision with some care. What is asked is not a defensive use of judicial power to set aside a tax levy or reverse a conviction, or to enjoin threats of prosecution or taxation. The relief demanded in this case is the extraordinary writ of mandamus to tell the local Board of Education what it must do. The prayer for relief is that a writ issue against the Board of Education 'ordering it to immediately adopt and enforce rules and regulations prohibiting all instruction in and teaching of religious education in all public schools * * * and in all public school houses and buildings in said district when occupied by public schools.' The plaintiff, as she has every right to be, is an avowed atheist. What she has asked of the courts is that they not only end the 'released time' plan but also ban every form of teaching which suggests or recognizes that there is a God. She would ban all teaching of the Scriptures. She especially mentions as an example of invasion of her rights 'having pupils learn and recite such statements as, 'The Lord is my Shepherd, I shall not want." And she objects to teaching that the King James version of the Bible 'is called the Christian's Guide Book, the Holy Writ and the Word of God,' and many other similar matters. This Court is directing the Illinois courts generally to sustain plaintiff's complaint without exception of any of these grounds of complaint, without discriminating between them and without laying down any standards to define the limits of the effect of our decision. 43 To me, the sweep and detail of these complaints is a danger signal which warns of the kind of local controversy we will be required to arbitrate if we do not place appropriate limitation on our decision and exact strict compliance with jurisdictional requirements. Authorities list 256 separate and substantial religious bodies to exist in continental United States. Each of them, through the suit of some discontented but unpenalized and untaxed representative, has as good a right as this plaintiff to demand that the courts compel the schools to sift out of their teaching everything inconsistent with its doctrines. If we are to eliminate everything that is objectionable to any of these warring sects or inconsistent with any of their doctrines, we will leave public education in shreds. Nothing but educational confusion and a discrediting of the public school system can result from subjecting it to constant law suits. 44 While we may and should end such formal and explicit instruction as the Champaign plan and can at all times prohibit teaching of creed and catechism and ceremonial and can forbid forthright proselyting in the schools, I think it remain to be demonstrated whether it is possible, even if desirable, to comply with such demands as plaintiff's completely to isolate and cast out of secular education all that some people may reasonably regard as religious instruction. Perhaps subjects such as mathematics, physics or chemistry are, or can be, completely secularized. But it would not seem practical to teach either practice or appreciation of the arts if we are to forbid exposure of youth to any religious influences. Music without sacred music, architecture minus the cathedral, or painting without the scriptural themes would be eccentric and incomplete, even from a secular point of view. Yet the inspirational appeal of religion in these guises is often stronger than in forthright sermon. Even such a 'science' as biology raises the issue between evolution and creation as an explanation of our presence on this planet. Certainly a course in English literature that omitted the Bible and other powerful uses of our mother tongue for religious ends would be pretty barren. And I should suppose it is a proper, if not an indispensable, part of preparation for a worldly life to know the roles that religion and religions have played in the tragic story of mankind. The fact is that, for good or for ill, nearly everything in our culture worth transmitting, everything which gives meaning to life, is saturated with religious influences, derived from paganism, Judaism, Christianity—both Catholic and Protestant—and other faiths accepted by a large part of the world's peoples. One can hardly respect a system of education that would leave the student wholly ignorant of the currents of religious thought that move the world society for a part in which he is being prepared. 45 But how one can teach, with satisfaction or even with justice to all faiths, such subjects as the story of the Reformation, the Inquisition, or even the New England effort to found 'a Church without a Bishop and a State without a King,' is more than I know. It is too much to expect that mortals will teach subjects about which their contemporaries have passionate controversies with the detachment they may summon to teaching about remote subjects such as Confucius or Mohamet. When instruction turns to proselyting and imparting knowledge becomes evangelism is, except in the crudest cases, a subtle inquiry. 46 The opinions in this case show that public educational authorities have evolved a considerable variety of practices in dealing with the religious problem. Neighborhoods differ in racial, religious and cultural compositions. It must be expected that they will adopt different customs which will give emphasis to different values and will induce different experiments. And it must be expected that, no matter what practice prevails, there will be many discontented and possibly belligerent minorities. We must leave some flexibility to meet local conditions, some chance to progress by trial and error. While I agree that the religious classes involved here go beyond permissible limits, I also think the complaint demands more than plaintiff is entitled to have granted. So far as I can see this Court does not tell the State court where it may stop, nor does it set up any standards by which the State court may determine that question for itself. 47 The task of separating the secular from the religious in education is one of magnitude, intricacy and delicacy. To lay down a sweeping constitutional doctrine as demanded by complainant and apparently approved by the Court, applicable alike to all school boards of the nation, 'to immediately adopt and enforce rules and regulations prohibiting all instruction in and teaching to religious education in all public schools,' is to decree a uniform, rigid and, if we are consistent, an unchanging standard for countless school boards representing and serving highly localized groups which not only differ from each other but which themselves from time to time change attitudes. It seems to me that to do so is to allowz eal for our own ideas of what is good in public instruction to induce us to accept the role of a super board of education for every school district in the nation. 48 It is idle to pretend that this task is one for which we can find in the Constitution one word to help us as judges to decide where the secular ends and the sectarian begins in education. Nor can we find guidance in any other legal source. it is a matter on which we can find no law but our own prepossessions. If with no surer legal guidance we are to take up and decide every variation of this controversy, raised by persons not subject to penalty or tax but who are dissatisfied with the way schools are dealing with the problem, we are likely to have much business of the sort. And, more importantly, we are likely to make the legal 'wall of separation between church and state' as winding as the famous serpentine wall designed by Mr. Jefferson for the University he founded. 49 Mr. Justice REED, dissenting. 50 The decisions reversing the judgment of the Supreme Court of Illinois interpret the prohibition of the First Amendment against the establishment of religion, made effective as to the states by the Fourteenth Amendment, to forbid pupils of the public schools electing, with the approval of their parents, courses in religious education. The courses are given, under the school laws of Illinois as approved by the Supreme Court of that State, by lay or clerical teachers supplied and directed by an interdenominational, local council of religious education.1 The classes are held in the respective school buildings of the pupils at study or released time periods so as to avoid conflict with recitations. The teachers and supplies are paid for by the interdenominational group.2 As I am convinced that this interpretation of the First Amendment is erroneous, I feel impelled to express the reasons for my disagreement. By directing attention to the many instances of close association of church and state in American society and by recalling that many of these relations are so much a part of our tradition and culture that they are accepted without more, this dissent may help in an appraisal of the meaning of the clause of the First Amendment concerning the establishment of religion and of the reasons which lead to the approval or disapproval of the judgment below. 51 The reasons for the reversal of the Illinois judgment, as they appear in the respective opinions may be summarized by the following excerpts. The opinion of the Court after stating the facts, says: 'The foregoing facts, without reference to others that appear in the record show the use of tax-supported property for religious instruction and the close cooperation between the school authorities and the religious council in promoting religious education. * * * And it falls squarely under the ban of the First Amendment (made applicable to the States by the Fourteenth) as we interpreted it in Everson v. Board of Education, 330 U.S. 1, 67 S.Ct. 504.' Another opinion phrases it thus: 'We do not now attempt to weigh in the Constitutional scale every separate detail or various combination of factors which may establish a valid 'released time' program. We find that the basic Constitutional principle of b solute separation was violated when the State of Illinois, speaking through its Supreme Court, sustained the school authorities of Champaign in sponsoring and effectively furthering religious beliefs by its educational arrangement.' These expressions in the decisions seem to leave open for further litigation variations from the Champaign plan. Actually, however, future cases must run the gantlet not only of the judgment entered but of the accompanying words of the opinions. I find it difficult to extract from the opinions any conclusion as to what it is in the Champaign plan that is unconstitutional. Is it the use of school buildings for religious instruction; the release of pupils by the schools for religious instruction during school hours; the so-called assistance by teachers in handing out the request cards to pupils, in keeping lists of them for release and records of their attendance; or the action of the principals in arranging an opportunity for the classes and the appearance of the Council's instructors? None of the reversing opinions say whether the purpose of the Champaign plan for religious instruction during school hours is unconstitutional or whether it is some ingredient used in or omitted from the formula that makes the plan unconstitutional. 52 From the tenor of the opinions I conclude that their teachings are that any use of a pupil's school time whether that use is on or off the school grounds, with the necessary school regulations to facilitate attendance, falls under the ban. I reach this conclusion notwithstanding one sentence of indefinite meaning in the second opinion: 'We do not consider, as indeed we could not, school programs not before us which, though colloquially characterized as 'released time,' present situations differing in aspects that may well be constitutionally crucial.' The use of the words 'cooperation,' 'fusion,' 'complete hands-off,' 'integrate' and 'integrated' to describe the relations between the school and the Council in the plan evidences this. So does the interpretation of the word 'aid.' The criticized 'momentum of the whole school atmosphere,' 'feeling of separatism' engendered in the non-participating sects, 'obvious pressure * * * to attend,' and 'divisiveness' lead to the stated conclusion. From the holding and the language of the opinions, I can only deduce that religious instruction of public school children during school hours is prohibited. The history of American education is against such an interpretation of the First Amendment. 53 The opinions do not say in words that the condemned practice of religious education is a law respecting an establishment of religion contrary to the First Amendment. The practice is accepted as a state law by all. I take it that when the opinion of the Court says that 'The operation of the state's compulsory education system thus assists and is integrated with the program of religious instruction carried on by separate religious sects' and concludes 'This is beyond all question a utilization of the tax-established and tax-supported public school system to aid religious groups to spread their faith,' the intention of its author is to rule that this practice is a law 'respecting an establishment of religion.' That was the basis of Everson v. Board of Education, 330 U.S. 1, 67 S.Ct. 504, 508. It seems obvious that the action of the School Board in permitting religious education in certain grades of the schools by all faiths did not prohibit the free exercise of religion. Even assuming that certain children who did not elect to take instruction are embarrassed to remain outside of the classes, one can hardly speak of that embarrassment as a prohibition against the free exercise of religion. As no issue of prohibition upon the free exercise of religion is before us, we need only examine the School Board's action to see if it constitutes an establishment of religion. 54 The facts, as stated in the reversing opinions, are adequately set out if we interpret the abstract wod § used in the light of the concrete incidents of the record. It is correct to say that the parents 'consented' to the religious instruction of the children, if we understand 'consent' to mean the signing of a card like the one in the margin.3 It is correct to say that 'instructors were subject to the approval and supervision of the superintendent of schools,' if it is understood that there were no definitive written rules and that the practice was as is shown in the excerpts from the findings below.4 The substance of the religious education course is determined by the members of the various churches on the council, not by the superintendent.5 The evidence and findings set out in the two preceding notes convince me that the 'approval and supervision' referred to above are not of the teachers and the course of studies but of the orderly presentation of the courses to those students who may elect the instruction. The teaching largely covered Biblical incidents.6 The religious teachers and their teachings in every real sense, were financed, and regulated by the Council of Religious Education, not the School Board. 55 The phrase 'an establishment of religion' may have been intended by Congress to be aimed only at a state church. When the First Amendment was pending in Congress in substantially its present form, 'Mr. Madison said, he apprehended the meaning of the words to be, that Congress should not establish a religion, and enforce the legal observation of it by law, nor compel men to worship God in any manner contrary to their conscience.'7 Passing years, however, have brought about acceptance of a broader meaning, although never until today, I believe, has this Court widened its interpretation to any such degree as holding that recognition of the interest of our nation in religion, through the granting, to qualified representatives of the principal faiths, of opportunity to present religion as an optional, extracurricular subject during released school time in public school buildings, was equivalent to an establishment of religion. A reading of the general statements of eminent statesmen of former days, referred to in the opinions in this and Everson v. Board of Education, supra, will show that circumstances such as those in this case were far from the minds of the authors. The words and spirit of those statements may be wholeheartedly accepted without in the least impugning the judgment of the State of Illinois.8 56 Mr. Jefferson, as one of the founders of the University of Virginia, a school which from its establishment in 1819 has been wholly governed, managed and controlled by the State of Virginia,9 was faced with the same problem that is before this Court today: The question of the constitutional limitation upon religious education in public schools. In his annual report as Rector, to the President and Directors of the Literary Fund, dated October 7, 1822, approved by the Visitors of the University of whom Mr. Madison was one,10 Mr. Jefferson set forth his views at some length.11 These suggestions of Mr. Jefferson were adopted12 and ch. II, § 1, of the Regulations of the University of October 4, 1824, provided that: 57 'Should the religious sects of this State, or any of them, according to the invitation held out to them, establish within, or adjacent to, the precincts of the University, schools for instruction in the religion of their sect, the students of the University will be free, and expected to attend religious worship at the establishment of their respective sects, in the morning, and in time to meet their school in the University at its stated hour.'13 58 Thus, the 'wall of separation between church and State' that Mr. Jefferson built at the University which he founded did not exclude religious education from that school. The difference between the generality of his statements on the separation of church and state and the specificity of his conclusions on education are considerable. A rule of law should not be drawn from a figure of speech. 59 Mr. Madison's Memorial and Remonstrance against Religious Assessments14 relied upon by the dissenting Justices in Everson is not applicable here.15 Mr. Madison was one of the principal opponents in the Virginia General Assembly of A Bill Establishing a Provision for Teachers of the Christian Religion. The monies raised by the taxing section16 of that bill were to be appropriated 'by the Vestries, Elders, or Directors of each religious society, * * * to a provision for a Minister or Teacher of the Gospel of their deo mination, or the providing places of divine worship, and to none other use whatsoever * * *.' The conclusive legislative struggle over this act took place in the fall of 1785 before the adoption of the Bill of Rights. The Remonstrance had been issued before the General Assembly convened and was instrumental in the final defeat of the act which died in committee. Throughout the Remonstrance, Mr. Madison speaks of the 'establishment' sought to be effected by the act. It is clear from its historical setting and its language that the Remonstrance was a protest against an effort by Virginia to support Christian sects by taxation. Issues similar to those raised by the instant case were not discussed. Thus, Mr. Madison's approval of Mr. Jefferson's report as Rector gives, in my opinion, a clearer indication of his views on the constitutionality of religious education in public schools than his general statements on a different subject. 60 This Court summarized the amendment's accepted reach into the religious field, as I understand its scope, in Everson v. Board of Education, supra. The Court's opinion quotes the gist of the Court's reasoning in Everson. I agree as there stated that none of our governmental entities can 'set up a church.' I agree that they cannot 'aid' all or any religions or prefer one 'over another.' But 'aid' must be understood as a purposeful assistance directly to the church itself or to some religious group or organization doing religious work of such a character that it may fairly be said to be performing ecclesiastical functions. 'Prefer' must give an advantage to one 'over another.' I agree that pupils cannot 'be released in part from their legal duty' of school attendance upon condition that they attend religious classes. But as Illinois has held that it is within the discretion of the School Board to permit absence from school for religious instruction no legal duty of school attendance is violated. 396 Ill. 14, 71 N.E.2d 161. If the sentence in the first opinion, concerning the pupils' release from legal duty, is intended to mean that the Constitution forbids a school to excuse a pupil from secular control during school hours to attend voluntarily a class in religious education, whether in or out of school buildings, I disagree. Of course, no tax can be levied to support organizations intended 'to teach or practice religion.' I agree too that the state cannot influence one toward religion against his will or punish him for his beliefs. Champaign's religious education course does none of these things. 61 It seems clear to me that the 'aid' referred to by the Court in the Everson case could not have been those incidental advantages that religious bodies, with other groups similarly situated, obtain as a by-product of organized society. h is explains the well-known fact that all churches receive 'aid' from government in the form of freedom from taxation. The Everson decision itself justified the transportation of children to church schools by New Jersey for safety reasons. It accords with Cochran v. Louisiana State Board of Education, 281 U.S. 370, 50 S.Ct. 335, 74 L.Ed. 913, where this Court upheld a free textbook statute of Louisiana against a charge that it aided private schools on the ground that the books were for the education of the children, not to aid religious schools. Likewise the National School Lunch Act aids all school children attending tax exempt schools.17 In Bradfield v. Roberts, 175 U.S. 291, 20 S.Ct. 121, 44 L.Ed. 168, this Court held proper the payment of money by the Federal Government to build an addition to a hospital, chartered by individuals who were members of a Roman Catholic sisterhood, and operated under the auspices of the Roman Catholic Church. This was done over the objection that it aided the establishment of religion.18 While obviously in these instances the respective churches, in a certain sense, were aided, this Court his never held that such 'aid' was in violation of the First or Fourteenth Amendments. 62 Well-recognized and long-established practice support the validity of the Illinois statute here in question. That statute, as construed in this case, is comparable to those in many states.19 All differ to some extent. New York may be taken as a fair example.20 In many states the program is under the supervision of a religious council composed of delegates who are themselves communicants of various faiths.21 As is shown by Bradfield v. Roberts, supra, the fact that the members of the council have religious affiliations is not significant. In some, instruction is given outside of the school buildings; in others, within these buildings. Metropolitan centers like New York usually would have available quarters convenient to schools. Unless smaller cities and rural communities use the school building at times that do not interfere with recitations, they may be compelled to give up religious education. I understand that pupils not taking religious education usually are given other work of a secular nature within the schools.22 Since all these states use the facilities of the schools to aid the religious education to some extent, their desire to permit religious education to school children is thwarted by this Court's judgment.23 Under it, as I understand its language, children cannot be released or dismissed from school to attend classes in religion while other children must remain to pursue secular education. Teachers cannot keep the records as to which pupils are to be dismissed and which retained. To do so is said to be an 'aid' in establishing religion; the use of public money for religion. 63 Cases running into the scores have been in the state courts of last resort that involved religion and the schools. Except where the exercises with religious significance partook of the ceremonial practice of sects or groups, their constitutionality has been generally upheld.24 Illinois itself promptly struck down as violative of its own constitution required exercises partaking of a religious ceremony. People ex rel. Ring v. Board of Education, 245 Ill. 334, 92 N.E. 251, 29 L.R.A., N.S., 442, 19 Ann.Cas. 220. In that case compulsory religious exercises a reading from the King James Bible, the Lord's Prayer and the singing of hymns—were forbidden as 'worship services.' In this case, the Supreme Court of Illinois pointed out that in the Ring case, the activities in the school were ceremonial and compulsory; in this, voluntary and educational. 396 Ill. 14, 20, 21, 71 N.E.2d 161. 64 The practices of the federal government offer many examples of this kind of 'aid' by the state to religion. The Congress of the United States has a chaplain for each House who daily invokes divine blessings and guidance for the proceedings.25 The armed forces have commissioned chaplains from early days.26 They conduct the public services in accordance with the liturgical requirements of their respective faiths, ashore and afloat, employing for the purpose property belonging to the United States and dedicated to the services of religion.27 Under the Servicemen's Readjustment Act of 1944, eligible veterans may receive training at government expense for the ministry in denominational schools.28 The schools of the District of Columbia have opening exercises which 'include a reading from the Bible without note or comment, and the Lord's prayer.'29 65 In the United States Naval Academy and the United States Military Academy, schools wholly supported and completely controlled by the federal government, there are a number of religious activities. Chaplains are attached to both schools. Attendance at church services on Sunday is compulsory at both Military and Naval Academies.30 At West Point the Protestant services are held in the Cadet Chapel, the Catholic in the Catholic Chapel, and the Jewish in the Old Cadet Chapel; at Annapolis only Protestant services are held on the reservation, midshipmen of other religious persuasions attend the churches of the city of Annapolis. These facts indicate that both schools since their earliest beginnings have maintained and enforced a pattern of participation in formal worship. 66 With the general statements in the opinions concerning the constitutional requirement that the nation and the states, by virtue of the First and Fourteenth Amendments,31 may 'make no law respecting an establishment of religion,' I am in agreement. But, in the light of the meaning given to those words by the precedents, customs, and practices which I have detailed above, I cannot agree with the Court's conclusion that when pupils compelled by law to go to school for secular education are released from school so as to attend the religious classes, churches are unconstitutionally aided. Whatever may be the wisdom of the arrangement as to the use of the school buildings made with The Champaign Council of Religious Education, it is clear to me that past practice shows such cooperation between the schools and a non-ecclesiastical body is not forbidden by the First Amendment. When actual church services have always been permitted on government property, the mere use of the school buildings by a non-sectarian group for religious education ought not to be condemned as an establishment of religion. For a non-sectarian organization to give the type of instruction here offered cannot be said to violate our rule as to the establishment of religion by the state. The prohibition of enactments respecting the establishment of religion do not bar every friendly gesture between church and state. It is not an absolute prohibition against every conceivable situation where the two may work together any more than the other provisions of the First Amendment—free speech, free press—are absolutes.32 If abuses occur such as the use of the instruction hour for sectarian purposes, I have no doubt, in view of the Ring case, that Illinois will promptly correct them. If they are of a kind that tend to the establishment of a church or interfere with the free exercise of religion, this Court is open for a review of any erroneous decision. This Court cannot be too cautious in upsetting practices embedded in our society by many years of experience. A state is entitled to have great leeway in its legislation when dealing with the important social problems of its population.33 A definite violation of legislative limits must be established. The Constitution should not be stretched to forbid national customs in the way courts act to reach arrangements to avoid federal taxation.34 Devotion to the great principle of religious liberty should not lead us into a rigid interpretation of the constitutional guarantee that conflicts with accepted habits of our people. This is an instance where, for me, the history of past practices is determinative of the meaning of a constitutional clause not a decorous introduction to the study of its text. The judgment should be affirmed. 1 Appellant, taking issue with the facts found by the Illinois courts, argues that the religious education program in question is invalid under the Federal Constitution for any one of the following reasons: (1) In actual practice certain Protestant groups have obtained an overshadowing advantage in the propagation of their faiths over other Protestant sects; (2) the religious education program was voluntary in name only because in fact subtle pressures were brought to bear on the students to force them to participate in it; and (3) the power given the school superintendent to reject teachers selected by religious groups and the power given the local Council on Religious Education to determine which religious faiths should participate in the program was a prior censorship of religion. In view of our decision we find it unnecessary to consider these arguments or the disputed facts upon which they depend. 2 The Supreme Court described the request card system as follows: '* * * Admission to the classes was to be allowed only upon the express written request of parents, and then only to classes designated by the parents. * * * Cards were distributed to the parents of elementary students by the public-school teachers requesting them to indicate whether they desired their children to receive religious education. After being filled out, the cards were returned to the teachers of religious education classes either by the public-school teachers or the children. * * *' (396 Ill. 14, 71 N.E.2d 162.) On this subject the trial court found that '* * * those students who have obtained the written consent of their parents therefor are released by the school authorities from their secular work, and in the grade schools for a period of thirty minutes' instruction in each week during said school hours, and forty-five minutes during each week in the junior high school, receive training in religious education * * *. Certain cards are used for obtaining permission of parents for their children to take said religious instruction courses, and they are made available through the offices of the superintendent of schools and through the hands of principals and teachers to the pupils of the school district. Said cards are prepared at the cost of the council of religious education. The handling and distribution of said cards does not interfere with the duties or suspend the regular secular work of the employees of the defendant * * *.' 3 The State Supreme Court said: 'The record further discloses that the teachers conducting the religious classes were not teachers in the public schools but were subject to the approval and supervision of the superintendent. * * *' The trial court found: 'Before any faith or other group may obtain permission from the defendant o r the similar, free and equal use of rooms in the public school buildings said faith or group must make application to the superintendent of schools of said School District Number 71, who in turn will determine whether or not it is practical for said group to teach in said school system.' The president of the local school board testified: '* * * The Protestants would have one group and the Catholics, and would be given a room where they would have the class and we would go along with the plan of the religious people. They were all to be treated alike, with the understanding that the teachers they would bring into the school were approved by the superintendent * * *. The superintendent was the last word so far as the individual was concerned * * *.' 4 There were two teachers of the Protestant faith. One was a Presbyterian and had been a foreign missionary for that church. The second testified as follows: 'I am affiliated with the Christian church. I also work in the Methodist Church and I taught at the Presbyterian. I am married to a Lutheran.' 5 The director of the Champaign Council on Religious Education testified: '* * * If any pupil is absent we turn in a slip just like any teacher would to the superintendent's office. The slip is a piece of paper with a number of hours in the school day and a square, and the teacher of the particular room for the particular hour records the absentees. It has their names and the grade and the section to which they belong. It is the same sheet that the geography and history teachers and all the other teachers use, and is furnished by the school * * *.' 6 The dissent, agreed to by four judges,s aid: 'The problem then cannot be cast in terms of legal discrimination or its absence. This would be true, even though the state in giving aid should treat all religious instruction alike. * * * Again, it was the furnishing of 'contributions of money for the propagation of opinions which he disbelieves' that the fathers outlawed. That consequence and effect are not removed by multiplying to all-inclusiveness the sects for which support is exacted. The Constitution requires, not comprehensive identification of state with religion, but complete separation.' Everson v. Board of Education, 330 U.S. 1, 59, 60, 67 S.Ct. 504, 533. 7 The dissenting judges said: 'In view of this history no further proof is needed that the Amendment forbids any appropriation, large or small, from public funds to aid or support any and all religious exercises. * * * Legislatures are free to make, and courts to sustain, appropriations only when it can be found that in fact they do not aid, promote, encourage or sustain religious teaching or observances, be the amount large or small.' Everson v. Board of Education, 330 U.S. 1, 41, 52, 53, 67 S.Ct. 504, 524. * Mr. Justice RUTLEDGE and Mr. Justice BURTON concurred also in the Court's opinion. 1 For an exposition of the religious origins of American education, see S. W. Brown, The Secularization of American Education (1912) cc. I, II; Knight, Education in the United States (2d rev. ed. 1941) cc. III, V; Cubberly, Public Education in the United States (1934) cc. II, III. 2 See Boese, Public Education in the City of New York (1869) c. XIV; Hall, Religious Education in the Public Schools of the State and City of New York (1914) cc. VI, VIII; Palmer, The New York Public School (1905) cc. VI, VII, X, XII. And see New York Laws 1842, c. 150, § 14, amended, New York Laws 1844, c. 320, § 12. 3 S. M. Smith, The Relation of the State to Religious Education in Massachusetts (1926) c. VII; Culver, Horace Mann and Religion in Massachusetts Public Schools (1929). 4 It has been suggested that secular education in this country is the inevitable 'product of 'the utter impossibility of harmonizing multiform creeds." T. W. M. Marshall, Secular Education in England and the United States, 1 American Catholic Quarterly Review 278, 308. It is precisely because of this 'utter impossibility' that the fathers put into the Constitution the principle of complete 'hands-off,' for a people as religiously heterogeneous as ours. 5 See Cubberley, Public Education in the United States (1934) pp. 230 et seq.; Zollmann, The Relation of Church and State, in Lotz and Crawford, Studies in Religious Education (1931) 403, 418 et seq.; Payson Smith, The Public Schools and Religious Education, in Religion and Education (Sperry, Editor, 1945) pp. 32 et seq.; also Mahoney, The Relation of the State to Religious Education in Early New York 1633—1825 (1941) c. VI; McLaughlin, A History of State Legislation Affecting Private Elementary and Secondary Schools in the United States, 1870—1945 (1946) c. I; and see note 10, infra. 6 President Grant's Annual Message to Congress, December 7, 1875, 4 Cong.Rec. 15 et seq.; Ames, The Proposed Amendments to the Constitution of the United States during the First Century of its History, H.Doc.No.353, Pt. 2, 54th Cong., 2d Sess., pp. 277, 278. In addition to the first proposal, 'The Blaine Amendment,' five others to similar effect are cited by Ames. The reason for the failure of these attempts seems to have been in part 'That the provisions of the State constitutions are in almost all instances adequate on this subject, and no amendment is likely to be secured.' Id. In the form in which it passed the House of Representatives, the Blaine Amendment read as follows: 'No State shall make any law respecting an establishment of religion, or prohibiting the free exercise thereof; and no religious test shall ever be required as a qualification to any office or public trust under any State. No public property, and no public revenue of, nor any loan of credit by or under the authority of, the United States, or any State, Territory, District, or municipal corporation, shall be appropriated to, or made or used for, the support of any school, educational or other institution, under the control of any religious or anti-religious sect, organization, or denomination, or wherein the particular creed or tenets of any religious or anti-religious sect, organization, or denomination shall be taught. And no such particular creed or tenets shall be read or taught in any school or institution supported in whole or in part by such revenue or loan of credit; and no such appropriation or loan of credit shall be made to any religious or anti-religious sect, organization, or denomination, or to promote its interests or tenets. This article shall not be construed to prohibit the reading of the Bible in any school or institution; and it shall not have the effect to impair rights of property already vested * * *.' H.Res. 1, 44th Cong., 1st Sess. (1876). 7 See Constitutions of the States and United States, 3 Report of the New York State Constitutional Convention Committee (1938) Index, pp. 1766, 1767. 8 It is worthy of interest that another famous American lawyer, and indeed one of the most distinguished of American judges, Jeremiah S. Black, expressed similar views nearly forty years before Mr. Root: 'The manifest object of the men who framed the institutions of this country, was to have a State without religion and a Church without politics—that is to say, they meant that one should never be used as an engine for any purpose of the other * * *. Our fathers seem to have been perfectly sincere in their belief that the members of the Church would be more patriotic, and the citizens of the State more religious, by keeping their respective functions entirely separate. For that reason they built up a wall of complete and perfect partition between the two.' From Religious Liberty (1856) in Black, Essays and Speeches (1886) 51, 53; cf. Brigance, Jeremiah Sullivan Black (1934). While Jeremiah S. Black and Elihu Root had many things in common, there were also important differences between them, perhaps best illustrated by the fact that one became Secretary of State to President Buchanan, the other to Theodore Roosevelt. That two men, with such different political alignment, should have shared identic views on a matter so basic to the well-being of our American democracy affords striking proof of the respect to be accorded to that principle. 9 25 Stat. 676, 677, applicable to North Dakota, South Dakota, Montana and Washington, required that the constitutional conventions of those States 'provide, by ordinances irrevocable without the consent of the United States and the people of said States * * * for the establishment and maintenance of systems of public schools, which shall be open to all the children of said States, and free from sectarian control. * * *' The same provision was contained in the Enabling Act for Utah, 28 Stat. 107, 108; Oklahoma, 34 Stat. 267, 270; New Mexico and Arizona, 36 Stat. 557, 559, 570. Idaho and Wyoming were admitted after adoption of their constitutions; that of Wyoming contained a irrevocable ordinance in the same terms. Wyoming Constitution, 1889, Ordinances, § 5. The Constitution of Idaho, while it contained no irrevocable ordinance, had a provision even more explicit in its establishment of separation. Idaho Constitution, 1889, art. IX, § 5. 10 See, e.g., the New York experience, including, inter alia, the famous Hughes controversy of 1840—42, the conflict culminating in the Constitutional Convention of 1894, and the attempts to restore aid to parochial schools by revision of the New York City Charter, in 1901, and at the State Constitutional Convention of 1938. See McLaughlin, A History of State Legislation Affecting Private Elementary and Secondary Schools in the United States, 1870—1945 (1946) pp. 119—25; Mahoney, The Relation of the State to Religious Education in Early New York 1633—1825 (1941) c. VI; Hall, Religious Education in the Public Schools of the State and the City of New York (1914) pp. 46—47; Boese, Public Education in the City of New York (1869) c. XIV; Compare New York Laws 1901, vol. 3, § 1152, p. 492, with amendment, id., p. 668; see Nicholas Murray Butler, Religion and Education (Editorial) in 22 Educational Review 101, June, 1901; New York Times, April 8, 1901, p. 1, col. 1; April 9, 1901, p. 2, col. 5; April 19, 1901, p. 2, col. 2; April 21, 1901, p. 1, col. 3; Editorial, April 22, 1901, p. 6, col. 1. Compare S. 2499, 79th Cong., 2d Sess., providing for Federal aid to education, and the controversy engendered over the inclusion in the aid program of sectarian schools, fully discussed in, e.g., 'The Nation's Schools,' January through June, 1947. 11 For surveys of the development of private religious education, see, e.g., A. A. Brown, A History of Religious Education in Recent Times (1923); Athearn, Religious Education and American Democracy (1917); Burns and Kohlbrenner, A History of Catholic Education in the United States (1937); Lotz and Crawford, Studies in Religious Education (1931) Parts I and IV. 12 Reference should be made to Jacob Gould Schurman, who in 1903 proposed a plan bearing close resemblance to that of Champaign. See Symposium, 75 The Outlook 635, 636, November 14, 1903; Crooker, Religious Freedom in American Education (1903) pp. 39 et seq. 13 For the text of the resolution, a brief in its support, as well as an exposition of some of the opposition it inspired, see Wenner's book, Religious Education and the Public School (rev. ed. 1913). 14 The French example is cited not only by Wenner but also by Nicholas Murray Butler, who thought released time was 'restoring the American system in the state of New York.' The Place of Religious Instruction in Our Educational System, 7 Vital Speeches 167, 168 (Nov. 28, 1940); see also Report of the President of Columbia University, 1934, pp. 22—24. It is important to note, however, that the French practice must be viewed as the result of the struggle to emancipate the French schools from control by the Church. The leaders of this revolution, men like Paul Bert, Ferdinand Buission, and Jules Ferry, agreed to this measure as one part of a great step towards, rather than a retreat from, the principle of Separation. The history of these events is described in Muzzey, State, Church, and School in France, The School Review, March through June, 1911. In effect, moreover, the French practice differs in crucial respects from both the Wenner Proposal and the Champaign system. The law of 1882 provided that 'Public elementary schools will be closed one day a week in addition to Sunday in order to permit parents, if they so desire, to have their children given religious instruction outside of school buildings.' Law No. 11,696, March 28, 1882, Bulletin des Lois, No. 690. This then approximates that aspect of released time generally known as 'dismissed time.' No children went to school on that day, and the public school was therefore not an alternative used to impel the children towards the religious school. The religious education was given 'outside of school buildings.' The Vichy Government attempted to introduce a program of religious instruction within the public school system remarkably similar to that in effect in Champaign. The proposal was defeated by intense opposition which included the protest of the French clergy, who apparently feared State control of the Church. See Schwartz, Religious Instruction under Pertain, 58 Christian Century 1170, Sept. 24, 1941. 15 Of the many expositions of the Gary plan, see, e.g., A. A. Brown, The Week-Day Church Schools of Gary, Indiana, 11 Religious Education 5 (1916); Writ, The Gary Public Schools and the Churches, id. at 221 (1916). 16 See the 1947 Yearbook, International Council of Religious Education, p. 76; also New York Times, September 21, 1947, 22, col. 1. 17 Respects in which programs differ include, for example, the amount of supervision by the public school of attendance and performance in the religious class, of the course of study, of the selection of teachers; methods of enrollment and dismissal from the secular classes; the amount of school time devoted to operation of the program; the extent to which school property and administrative machinery are involved; the effect on the public school program of the introduction of 'released time'; the proportion of students who seek to be excused; the effect of the program on non-participants; the amount and nature of the publicity for the program in the public schools. The studies of detail in 'released time' programs are voluminous. Most of these may be found in the issues of such periodicals as The International Journal of Religious Education, Religious Education, and Christian Century. For some of the more comprehensive studies found elsewhere, see Davis, Weekday Classes in Religious Education, U.S. Office of Education bullei n 1941, No. 3; Gorham, A Study of the Status of Weekday Church Schools in the United States (1934); Lotz, The Weekday Church School, in Lotz and Crawford, Studies in Religious Education (1931) c. XII; Forsyth, Week-Day Church Schools (1930); Settle, The Weekday Church School, Educational Bulletin No. 601 of The International Council of Religious Education (1930); Shaver, Present-Day Trends in Religious Education (1928) cc. VII, VIII; Gove, Religious Education on Public School Time (1926). 18 It deserves notice that in discussing with the relator her son's inability to get along with his classmates, one of his teachers suggested that 'allowing him to take the religious education course might help him to become a member of the group.' 19 The divergent views expressed in the briefs submitted here on behalf of various religious organizations, as amici curiae, in themselves suggest that the movement has been a divisive and not an ironic influence in the community: The American Unitarian Association; The General Conference of Seventh Day Adventists; The Joint Conference Committee on Public Relations sect up by the Southern Baptist Convention, The Northern Baptist Convention, The National Baptist Convention Inc., and the National Baptist Convention; The Protestant Council of the City of New York; and The Synagogue Council of American and National Community Relations Advisory Council. 20 There is a prolific literature on the educational, social and religious merits of the 'released time' movement. In support of 'released time' the following may be mentioned: The International Council of Religious Education, and particularly the writings of Dr. Erwin L. Shaver, for some years Director of its Department of Week-day Religious Education, in publications of the Council and in numerous issues of The International Journal of Religious Education (e.g., They Reach One-Third, Dec., 1943, p. 11; Weekday Religious Education Today, Jan., 1944, p. 6), and Religious Education (e.g., Survey of Week-Day Religious Education, Feb., 1922, p. 51; The Movement for Weekday Religious Education, Jan.—Feb., 1946, p. 6); see also Information Service, Federal Council of Churches of Christ, May 29, 1943. See also Cutton, Answering the Arguments, The International Journal of Religious Education, June, 1930, p. 9, and Released Time, id., Sept., 1942, p. 12; Hauser, 'Hands Off the Public School?', Religious Education, Mar.—Apr., 1942, p. 99; Collins, Release Time for Religious Instruction, National Catholic Education Association Bulletin, May, 1945, pp. 21, 27—28; Weigle, Public Education and Religion, Religious Education, Apr.—June, 1940, p. 67; Nicholas Murray Butler, The Place of Religious Instruction in Our Educational System, 7 Vital Speeches 167 (Nov. 28, 1940); Howlett, Released Time for Religious Education in New York City, 64 Education 523, May, 1944; Blair, A Case for the Church School, 7 Frontiers of Democracy 75, Dec. 15, 1940; cf. Allred, Legal Aspects of Release Time (National Catholic Welfare Conference, 1947). Favorable views are also cited in the studies in note 17, sur a. Many not opposed to 'released time' have declared it 'hardly enough' or 'pitifully inadequate.' E.g., Fleming, God in Our Public Schools (2d ed. 1944) pp. 80—86; Howlett, Released Time for Religious Education in New York City, Religious Education, Mar.—Apr., 1942, p. 104; Cavert, Points of Tension Between Church and State in America Today, in Church and State in the Modern World (1937) 161, 168; F. E. Johnson, The Church and Society (1935) 125; Hubner, Professional Attitudes toward Religion in the Public Schools of the United States Since 1900 (1944) 108—109, 113; cf. Ryan, A Protestant Experiment in Religious Education, The Catholic World, June, 1922; Elliott, Are Weekday Church Schools the Solution?, The International Journal of Religious Education, Nov., 1940, p. 8; Elliott, Report of the Discussion, Religious Education, July—Sept., 1940, p. 158. For opposing views, see V. T. Thayer, Religion in Public Education (1947) cc. VII, VIII; Moehlman, The Church as Educator (1947) c. X; Chave, A Functional Approach to Religious Education (1947) 104—107; A. W. Johnson, The Legal Status of Church-State Relationships in the United States (1934) 129—130; Newman, The Sectarian Invasion of Our Public Schools (1925). See also Payson Smith, The Public Schools and Religious Education, in Religion and Education (Sperry, Editor, 1945) 32, 42—47; Herrick, Religion in the Public Schools of American, 46 Elementary School Journal 119, Nov., 1945; Kallen, Churchmen's Claims on the Public School, The Nation's Schools, May, 1942, p. 49; June, 1942, p. 52. And cf. John Dewey, Religion in Our Schools (1908), reprinted in 2 Characters and Events (1929) 504, 508, 514. 'Released time' was introduced in the public schools of the City of New York over the opposition of organizations like the Public Education Association and the United Parents Associations. The arguments and sources pro and con are collected in Hubner, Professional Attitudes toward Religion in the Public Schools in the United States since 1900 (1944) 94 et seq. And see the symposia, Teaching Religion in a Democracy, The International Journal of Religious Education, Nov., 1940, pp. 6—16; The Aims of Week-Day Religious Education, Religious Education, Feb., 1922, p. 11; Released Time in New York City, id., Jan.—Feb., 1943, p. 15; Progress in Weekday Religious Education, id., Jan.—Feb., 1946, p. 6; Can Our Public Schools Do More about Religion?, 125 Journal of Education 245, Nov., 1942, id. at 273, Dec., 1942; Religious Instruction on School Time, 7 Frontiers of Democracy 72—77, Dec. 15, 1940; and the articles in 64 Education 519 et seq., May, 1944. 21 See note 14, supra. Indications are that 'dismissed time' is used in an inconsiderable number of the communities employing released time. Davis, Weekday Classes in Religious Education, U.S. Office of Education Bulletin 1941, No. 3, p. 22; Shaver, The Movement for Weekday Religious Education, Religious Education, Jan Feb., 1946, pp. 6, 9. 1 The trial court found that: "The Champaign Council of Religious Education' (is) a voluntary association made up of the representatives of the Jewish, Roman Catholic and Protestant faiths in the school district.' 2 There is no extra cost to the state but as a theoretical accounting problem it may be correct to charge to the classes their comparable proportion of the state expense for buildings, operation and teachers. In connection with the classes, the teachers need only keep a record of the pupils who attend. Increased custodial requirements are likewise nominal. It is customary to use school buildings for community activities when not needed for school purposes. See Ill.Rev.Stat., ch. 122, § 123, Smith-Hurd Stats.Ill. c. 122, § 6—43. 3 'Champaign Council of Religious Education 1945—1946 Parent's Request Card Please permit ..... in Grade .. at ..... School to attend a class in Religious Education one period a week under the Auspices of the Champaign Council of Religious Education. (Check which) Date ( ) Interdenominational ( ) Protestant ( ) Roman Catholic ( ) Jewish Signed (Parent name) Parent's Church Telephone No. Address A fee of 25 cents a semester is charged each pupil to help cover the cost of material used. If you wish your child to receive religious instruction, please sign this card and return to the school. Mae Chapin, Director.' Mae Chapin, the Director, was not a school employee. 4 'The superintendent testified that Jehovah's Witnesses or any other sect would be allowed to teach provided their teachers had proper educational qualifications, so that bad grammar, for instance, would not be taught to the pupils. A similar situation developed with reference to the Missouri Synod of the Lutheran Church. The evidence tends to show that during the course of the trial that group indicated it would affiliate with the Council of Religious Education. 'Before any faith or other group may obtain permission from the defendant for the similar, free and equal use of rooms in the public school buildings said faith or group must make application to the superintendent of schools of said School District Number 71, who in turn will determine whether or not it is practical for said group to teach in said school system. 'The court feels from all the facts in the record that an honest attempt has been made and is being made to permit religious instruction to be given by qualified outside teachers of any sect to people of their own faith in the manner above outlined. The evidence shows that no sect or religious group has ever been denied the right to use the schools in this manner.' 5 A finding reads: 'The curriculum of studies in the Protestant classes is determined by a committee of the Protestant members of the council of religious education after consultation with representatives of all the different faiths included in said council. The Jewish classes of course would deny the divinity of Jesus Christ. The teaching in the Catholic classes of course explains to Catholic pupils the teaching of the Catholic religion, and are not shared by other students who are Protestants or Jews. The teachings in the Protestant classes would undoubtedly, from the evidence, teach some doctrines that would not be accepted by the other two religions.' 6 It was found: 'The testimony shows that sectarian differences between the sects are not taught or emphasized in the actual teaching as it is conducted in the schools. The testimony of the religious education teachers, the secular teachers who testifie, and the many children, mostly from Protestant families, who either took or did not take religious education courses, is to the effect that religious education classes have fostered tolerance rather than intolerance.' The Supreme Court of Illinois said: 'The religious education courses do not go to the extent of being worship services and do not include prayers or the singing of hymns.' 396 Ill. 14, 21, 71 N.E.2d 161, 164. 7 1 Annals of Congress 730. 8 For example, Mr. Jefferson's striking phrase as to the 'wall of separation between church and State' appears in a letter acknowledging 'the affectionate sentiments of esteem and approbation' included in a testimonial to himself. In its context it read as follows: 'Believing with you that religion is a matter which lies solely between man and his God, that he owes account to none other for his faith or his worship, that the legislative powers of government reach actions only, and not opinions, I contemplate with sovereign reverence that act of the whole American people which declared that their legislature should 'make no law respecting an establishment of religion, or prohibiting the free exercise thereof,' thus building a wall of separation between church and State.' 8 The Writings of Thomas Jefferson (Washington ed., 1861) 113. 9 Acts of the Assembly of 1818—19 (1819) 15; Phillips v. Rector and Visitors of the University of Virginia, 97 Va. 472, 474, 475, 34 S.E. 66, 47 L.R.A. 284. 10 19 The Writings of Thomas Jefferson (Memorial edition, 1904) 408, 409. 11 Id., pp. 414—417: 'It was not, however, to be understood that instruction in religious opinion and duties was meant to be precluded by the public authorities, as indifferent to the interests of society. On the contrary, the relations which exist between man and his Maker, and the duties resulting from those relations, are the most interesting and important to every human being, and the mos incumbent on his study and investigation. The want of instruction in the various creeds of religious faith existing among our citizens presents, therefore, a chasm in a general institution of the useful sciences * * *. A remedy, however, has been suggested of promising aspect, which, while it excludes the public authorities from the domain of religious freedom, will give to the sectarian schools of divinity the full benefit the public provisions made for instruction in the other branches of science * * *. It has, therefore, been in contemplation, and suggested by some pious individuals, who perceive the advantages of associating other studies with those of religion, to establish their religious schools on the confines of the University, so as to give to their students ready and convenient access and attendance on the scientific lectures of the University; and to maintain, by that means, those destined for the religious professions on as high a standing of science, and of personal weight and respectability, as may be obtained by others from the benefits of the University. Such establishments would offer the further and greater advantage of enabling the students of the University to attend religious exercises with the professor of their particular sect, either in the rooms of the building still to be erected, and destined to that purpose under impartial regulations, as proposed in the same report of the commissioners, or in the lecturing room of such professor * * *. Such an arrangement would complete the circle of the useful sciences embraced by this institution, and would fill the chasm now existing, on principles which would leave inviolate the constitutional freedom of religion, the most inalienable and sacred of all human rights, over which the people and authorities of this state, individually and publicly, have ever manifested the most watchful jealousy; and could this jealousy be now alarmed, in the opinion of the legislature, by what is here suggested, the idea will be relinquished on any surmise of disapprobation which they might think proper to express.' Mr. Jefferson commented upon the report on November 2, 1822, in a letter to Dr. Thomas Cooper, as follows: 'And by bringing the sects together, and mixing them with the mass of other students, we shall soften their asperities, liberalize and neutralize their prejudices, and make the general religion a religion of peace, reason, and morality.' 12 Ford, The Works of Thomas Jefferson (Fed. ed., 1905) 272. 12 3 Randall, Life of Thomas Jefferson (1858) 471. 13 19 The Writings of Thomas Jefferson (Memorial edition, 1904) 449. 14 The texts of the Memorial and Remonstrance and the bill against which it was aimed, to wit, A Bill Establishing a Provision for Teachers of the Christian Religion are set forth in Everson v. Board of Education, 330 U.S. 1, 28, 63—74, 67 S.Ct. 504, 517, 534—539. 15 See, generally, the dissent of Mr. Justice Rutledge, 330 U.S. 1, 28, 67 S.Ct. 504, 517. 16 330 U.S. at pages 72, 73, 67 S.Ct. at page 539: 'Be it therefore enacted by the General Assembly, That for the support of Christian teachers,—per centum on the amount, or—in the pound on the sum payable for tax on the property within this Commonwealth, is hereby assessed, and shall be paid by every person chargeable with the said tax at the time the same shall become due; and the Sheriffs of the several Counties shall have power to levy and collect the same in the same manner and under the like restrictions and limitations, as are or may be prescribed by the laws for raising the Revenues of this State. 'And be it enacted, That for every sum so paid, the Sheriff or Collector shall give a receipt, expressing therein to what society of Christians the person from whom he may receive the same shall direct the money to be paid, keeping a distinct account thereof in his books. * * *' 17 60 Stat.ch. 281, §§ 4, 11(d)(3), 42 U.S.C.A. §§ 1753, 1760(d)(3). 18 See Selective Draft Law Cases (Arver v. United States), 245 U.S. 366, 390, 38 S.Ct. 159, 62 L.Ed. 349, L.R.A.1918 C, 361, Ann.Cas.1918B, 856; Quick Bear v. Leupp, 210 U.S. 50, 28 S.Ct. 690, 52 L.Ed. 954. 19 Education Code of Cal. (Deering, 1944) § 8286; 6 Ind.Stat.Ann. (Burns, 1934) 1945 Supp. § 28-505a; 1 Code of Iowa ch. 299, § 299.2 (1946); Ky.Rev.Stat. (1946) § 158.220; 1 Rev.Stat. of Maine (1944) ch. 37, § 131; 2 Ann.Laws of Mass. (1945) ch. 76, § 1; Minn.Stat. (1945) § 132.05; N.Y. Education Law, § 3210(1); 8 Ann.Laws of Or. (1940) § 111-3014; 24 Pa.Stat.Ann. (Purdon, 1930) § 1563; 1 Code of S.D. (1939) § 15.3202; 1 Code of W. Va. (1943), 18-8-1 (§ 1847). 20 Education Law § 3210(1) provides that: 'a. A minor required by the provisions of part one of this article to attend upon instruction shall attend regularly as prescribed where he resides or is employed, for the entire time the appropriate public schools or classes are in session and shall be subordinate and orderly while so attending. 'b. Absene for religious observance and education shall be permitted under rules that the commissioner shall establish.' Acting under the authority of the New York law the State Commissioner of Education issued, on July 4, 1940, these regulations: '1 Absence of a pupil from school during school hours for religious observance and education to be had outside the school building and grounds will be excused upon the request in writing signed by the parent or guardian of the pupil. '2 The courses in religious observance and education must be maintained and operated by or under the control of a duly constituted religious body or of duly constituted religious bodies. '3 Pupils must be registered for the courses and a copy of the registration filed with the local public school authorities. '4 Reports of attendance of pupils upon such courses shall be filed with the principal or teacher at the end of each week. '5 Such absence shall be for not more than one hour each week at the close of a session at a time to be fixed by the local school authorities. '6 In the event that more than one school for religious observance and education is maintained in any district, the hour for absence for each particular public school in such district shall be the same for all such religious schools.' On November 13, 1940, rules to govern the released time program of the New York City schools were adopted by the Board of Education of the City of New York. Under these rules the practice of the religious education program is this: classes in religious education are to be held outside of school buildings; establishment of the program rests in the initiative of the church and home; enrollment is voluntary and accomplished by this technique: the church distributes cards to the parents and these are filled out and presented to the school; records of enrollment and arrangements for release are handled by school authorities; discipline is the responsibility of the church; and children who do not attend are kept at school and given other work. See Rules of the Board of Education of the City of New York adopted Nov. 13, 1940; Public Education Association, Released Time for Religious Education in New York City Schools (1943); id. (1945). Constitutional approval by the New York Court of Appeals of these practices was given before the passage of Education Law § 3210(1). People ex rel. Lewis v. Graves, 245 N.Y. 195, 156 N.E. 663. 21 The New York City program is supervised by The Greater New York Coordinating Committee on Released Time, a group of laymen drawn from Jews, Protestants and Roman Catholics. This Committee is an example of a broad national effort to bring about religious education of children through cooperative action of schools and groups of members of various religious denominations. The methods vary in different states and cities but are basically like the work of the New York City Committee. See Brief Sketches of Weekday Church Schools, Department of Weekday Religious Education, International Council of Religious Education, Chicago, Illinois (1944). 22 See note 20 supra. 23 The use of school buildings is not unusual. See Davis, Weekday Classes in Religious Education, U.S. Office of Education (Bulletin 1941, No. 3) 27; National Education Association, The State and Sectarian Education, Research Bulleth (Feb. 1946) 36. The International Council of Religious Education advises that church buildings be used if possible. Shaver, Remember the Weekday, International Council of Religious Education (1946). 'Today, approximately two thousand communities in all but two states provide religious education in cooperation with the public schools for more than a million and a half of pupils.' Shaver, The Movement for Weekday Religious Education, Religious Education (Jan.-Feb. 1946). 24 Many uses of religious material in the public schools in a manner that has some religious significance have been sanctioned by state courts. These practices have been permitted: reading selections from the King James Bible without comment; reading the Bible and repeating the Lord's Prayer; teaching the Ten Commandments; saying prayers; and using textbooks based upon the Bible and emphasizing its fundamental teachings. When conducted in a sectarian manner reading from the Bible and singing hymns in the school's morning exercise have been prohibited as has using the Bible as a textbook. There is a conflict of authority on the question of the constitutionality of wearing religious garb while teaching in the public schools. It has been held to be constitutional for school authorities to prohibit the reading of the Bible in the public schools. There is a conflict of authority on the constitutionality of the use of public school buildings for religious services held outside of school hours. The constitutionality, under state constitutions, of furnishing free textbooks and free transportation to parochial school children is in conflict. See Nichols v. Henry, 301 Ky. 434, 191 S.W.2d 930, 168 A.L.R. 1385; Findley v. City of Conneaut, Prob. Ct., 12 Ohio Supp. 161. The earlier cases are collected in 5 A.L.R. 866 and 141 A.L.R. 1144. 25 Rules of the House of Representatives (1943) Rule VII; Senate Manual (1947) 6, fn. 2. 26 3 Stat. 297 (1816). 27 Army Reg., No. 60—5 (1944); U.S. Navy Reg. (1920), ch. 1, § 2 and ch. 34, §§ 1—2. 28 58 Stat. 289, 38 U.S.C.A. § 693 et seq. 29 Board of Education Rules, ch. VI, § 4. 30 Reg. for the U.S. Corps of Cadets (1947) 47: 'At endance at chapel is part of a cadet's training; no cadet will be exempted. Each cadet will receive religious training in one of the three principal faiths: Catholic, Protestant, or Jewish.' U.S. Naval Academy Reg., Art. 4301(b): '(b) Midshipmen shall attend church services on Sundays at the Naval Academy Chapel or at one of the regularly established churches in the city of Annapolis.' Morning prayers are also required at Annapolis. U.S. Naval Academy Reg., Art. 4301 (a): 'Daily, except on Sundays, a Chaplain will conduct prayers in the messhall, immediately before breakfast.' Rpotestant and Catholis Chaplains take their turn in leading these prayers. 31 The principles of the First Amendment were absorbed by the Fourteenth Amendment. Pennekamp v. Florida, 328 U.S. 331, 335, 66 S.Ct. 1029, 1031, 90 L.Ed. 1295. 32 See Whitney v. People of State of California, 274 U.S. 357, 371, 47 S.Ct. 641, 646, 71 L.Ed. 1095; Reynolds v. United States, 98 U.S. 145, 166, 25 L.Ed. 244; Cantwell v. State of Connecticut, 310 U.S. 296, 303, 60 S.Ct. 900, 903, 84 L.Ed. 1213, 128 A.L.R. 1352; Cox v. State of New Hampshire, 312 U.S. 569, 574, 576, 61 S.Ct. 762, 765, 85 L.Ed. 1049, 133 A.L.R. 1396; Chaplinsky v. State of New Hampshire, 315 U.S. 56, 571, 62 S.Ct. 766, 768, 86 L.Ed. 1031; Prince v. Commonwealth of Massachusetts, 321 U.S. 158, 64 S.Ct. 438, 88 L.Ed. 645. 33 Cf. Bob-Lo Excursion Co. v. People of State of Michigan, 333 U.S. 28, 68 S.Ct. 358. 34 Higgins v. Smith, 308 U.S. 473, 60 S.Ct. 355, 84 L.Ed. 406; Helvering v. Clifford, 309 U.S. 331, 60 S.Ct. 554, 84 L.Ed. 788; Commissioner of Internal Revenue v. Tower, 327 U.S. 280, 66 S.Ct. 532, 90 L.Ed. 670, 164 A.L.R. 1135; Lusthaus v. Commissioner of Internal Revenue, 327 U.S. 293, 66 S.Ct. 539, 90 L.Ed. 679.
23
333 U.S. 287 68 S.Ct. 550 92 L.Ed. 701 UNITED STATESv.LINE MATERIALS CO. et al. No. 8. Reargued Nov. 12, 13, 1947. Decided March 8, 1948. Mr. Frederick Bernays Wiener, of Providence, R.I., for appellant. Mr. John Lord O'Brian, of Washington, D.C., for appellees. Mr. Albert R. Connelly, of New York City, for appellee, Westinghouse Electric Corporation. Appeal from the District Court of the United States for the Eastern District of Wisconsin. Mr. Justice REED delivered the opinion of the Court. 1 The United States sought an injunction under §§ 1 and 4 of the Sherman Act1 in the District Court against continuance of violations of that Act by an allegedly unlawful combination or conspiracy between appellees, through contracts, to restrain interstate trade in certain patented electrical devices. The restraint alleged arose from a cross-license arrangement between the patent owners, Line Material Company and Southern States Equipment Corporation, to fix the sale price of the devices to which arrangement the other appellees, licensees to make and vend, adhered by supplemental contracts.2 2 The District Court, 64 F.Supp. 970, dismissed the complaint as to all defendants upon its conclusion that the rule of United States v. General Electric Co., 272 U.S. 476, 47 S.Ct. 192, 71 L.Ed. 362, was controlling. That case approved as lawful a patentee's license to make and vend which required the licensee in its sales of the patented devices to conform to the licensor's sale price schedule. Appeal was taken directly to this Court, 32 Stat. 823, 15 U.S.C.A. §§ 28, 29, and probable jurisdiction noted here. 67 S.Ct. 113. We have jurisdiction.3 I. The Facts. 3 The challenged arrangements enter r ound three product patents, which are useful in protecting an electric circuit from the dangers incident to a short circuit or other overload. Two of them are dropout fuse cutouts and the third is a housing suitable for use with any cutout. Dropout fuse cutouts may be used without any housing. The District Court found that 40.77% of all cutouts manufactured and sold by these defendants were produced under these patents. This was substantially all the dropout fuse cutouts made in the United States. There are competitive devices that perform the same functions manufactured by appellees and others under different patents than those here involved. 4 The dominant patent, No. 2,150,102, in the field of dropout fuse cutouts with double jointed hinge construction was issued March 7, 1939, to the Southern States Equipment Corporation, assignee, on an application of George N. Lemmon.4 This patent reads upon a patent No. 2,176,227, reissued December 21, 1943, Re. 22,412, issued October 17, 1939 to Line Material Company, assignee, on an application by Schultz and Steinmayer.5 The housing patent No. 1,781,876, reissued March 31, 1931, as Re. 18,020, and again February 5, 1935, as Re. 19,449, was issued November 18, 1930 to Line, assignee, on an application by W. D. Kyle. The Kyle patent covers a wet-process porcelain box with great dielectric strength, which may be economically constructed and has been commercially successful. We give no weight to the presence of the Kyle patent in the licenses. 5 The applications for the Lemmon and Schultz patents were pending simultaneously. They were declared in interference and a contest resulted. The decision of the Patent Office, awarding dominant claims to Southern and subservient claims to Line on the Lemmon and the Schultz applications made it impossible for any manufacturer to use both patents when later issued without some cross-licensing arrangement. Cf. Temco Electric Motor Co. v. Apco Mfg. Co., 275 U.S. 319, 328, 48 S.Ct. 170, 173, 72 L.Ed. 298. Only when both patents could be lawfully used by a single maker could the public or the patentees obtain the full benefit of the efficiency and economy of the inventions. Negotiations were started by Line which eventuated in the challenged arrangements. 6 The first definitive document was a bilateral, royalty-free, cross-license agreement of May 23, 1938, between Southern and Line after the patent office award but before the patents issued. This, so far as here pertinent, was a license to Southern by Line to make and vend the prospective Schultz patented appart us with the exclusive right to grant licenses or sublicenses to others. Line also granted Southern the right to make and vend but not to sublicense the Kyle patent. Southern licensed Line to make and vend but not to sublicense the prospective Lemmon patent for defined equipment which included the Schultz apparatus. Sublicense royalties and expenses were to be divided between Line and Southern. Although a memorandum of agreement of January 12, 1938, between the parties had no such requirement, Line agreed to sell equipment covered by the Southern patent at prices not less than those fixed by Southern. Southern made the same agreement for equipment covered solely by the Line patent. No requirement for price limitation upon sales by other manufacturers under license was included. 7 Six of the other manufacturers6 here involved were advised by Line by letter, dated June 13, 1938, that Southern had authority to grant licenses under the Schultz prospective patent. On October 3, 1938, Kearney took from Southern a license to practice the Lemmon and Schultz patents. The license had a price, term and condition of sale clause, governed by Southern's prices, which bound Kearney to maintain the prices on its sales of devices covered by the patents. On October 7, 1938, the five other manufacturers mentioned above were offered by Southern the same contract as the standard licensor's agreement. The Kearney contract was discussed at Chicago in October, 1938, by all of the above manufacturers except Railway. Pacific also participated. It never was enforced. The first patent involved in this case did not issue until March, 1939. Those manufacturers who were making double jointed open and enclosed dropout cutouts wanted to and did explore co-operatively (F.F. 15) the validity of the patents. They failed to find a satisfactory basis for attack. They were faced with infringement suits. Other reasons developed for the refusal of the six manufacturers to accept the Kearney form contracts (F.F. 16 & 17) unnecessary to detail here. One reason was that the prospective sublicensees preferred Line to Southern as licensor because of the fact that Line, as owner and manufacturer, would license the Kyle patent. New arrangements were proposed for the licensees. After mutual discussion between the licensees and patentees, these new agreements were submitted. A finding to which no objection is made states: 8 'On October 24, 1939, General Electric, Westinghouse, Kearney, Matthews, Schweitzer and Conrad, and Railway met with Line in Chicago and jointly discussed drafts of the proposed license agreements under the Lemmon, Schultz, and Kyle patents. Thereafter, identical sets of revised licenses were sent by Line to General Electric, Westinghouse, Matthews, Schweitzer and Conrad, and the attorneys for Railway and Kearney.' 9 A form for a proposed licensing agreement that contained the essential elements of the price provision ultimately included in the licenses had been circulated among prospective licensees by Line by letters under date of October 6, 1969. 10 To meet the various objections of the future licensees, the agreement of May 23, 1938, between Southern and Line was revised as of January 12, 1940. Except for the substitution of Line for Southern as licensor of other manufacturers, it follows generally the form of the earlier agreement. There were royalty free cross-licenses of the Schultz and Lemmon patents substantially as before. Line was given the exclusive right to grant sublicenses to others for Lemmon.7 Southern retained the privilege, royalty free, of making and vending the Kyle patent, also. Southern bound itself to maintain prices, so long as Line required other licensees to do so.8 Even if it be assumed that the proper interpretation of the Line-Southern agreement permitted Southern to manufacture under its on Lemmon patent without price control, the practical result is that Southern does have its price for its products fixed because the only commercially successful fabrication is under a combination of the Lemmon and Schultz patents. Findings of Fact 7 and 10. 11 The price maintenance feature was reflected in all the licenses to make and vend granted by Line, under the Line-Southern contract, to the other appellees. There were variations in the price provisions that are not significant for the issues of this case. A fair example appears below.9 The execution of these sublicenses by the other appellees, except Johnson and Royal,10 followed within a year. Licenses were executed by the two on June 15, 1943, and March 24, 1944, respectively. After August 1, 1940, since a number of the appellees had executed the license contracts, two consultations of the licensees and the patentees were held to classify the products of the various licensees in comparison with the licensor's devices.11 The trial judge found that prices were not discussed. These were fixed by Line without discussion with or advice from any other appellee. There can be no doubt, however, that each licensee knew of the proposed price provisions in the licenses of other licensees from the circulation of proposed from of license on October 6, 1939, subsequent consultations among the licensees and an escrow agreement, fulfilled July 11, 1940. That agreement was entered into after General Electric took its license and required for fulfillmet the acceptance of identical licenses by Matthews, Kearney and Railway. The licenses that were the subject of the escrow contained the price provisions of General Electric's license. This awareness by each signer of the price provisions in prior contracts is conceded by appellees' brief. A price schedule became effective January 18, 1941. Thereafter, all the appellees tried to maintain prices. Where there was accidental variation, Line wrote the licensee calling attention to the failure.12 12 The licenses were the result of arm's length bargaining in each instance. Price limitation was actively opposed in toto or restriction of its scope sought by several of the licensees, including General Electric, the largest producer of the patented appliances. A number tried energetically to find substitutes for the devices. All the licensees, however, were forced to accept the terms or cease manufacture. By accepting they secured release from claims for past infringement through a provision to that effect in the license. The patentees through the licenses sought system in thei royalty collections and pecuniary reward for their patent monopoly. Undoubtedly one purpose of the arrangements was to make possible the use by each manufacturer of the Lemmon and Schultz patents. These patents in separate hands produced a deadlock. Lemmon by his basic patent 'blocked' Schultz' improvement. Cross-lices es furnished appellees a solution. 13 On consideration of the agreements and the circumstances surrounding their negotiation and execution, the District Court found that the arrangements, as a whole, were made in good faith, to make possible the manufacture by all appellees of the patented devices, to gain a legitimate return to the patentees on the inventions and apart from the written agreements there was no undertaking between the appellees or any of them to fix prices.13 Being convinced, as we indicated at the first of this opinion, that the General Electric case controlled and permitted such price arrangements as are disclosed in the contracts the District Court dismissed the complaint. The Government attacks the rationale of the General Electric case and urges that it be overruled, limited and explained or differentiated. 14 II. The General Electric Case. 15 That case was decided in 1926 by a unanimous court, Chief Justice Taft writing. It involved a bill in equity to enjoin further violations of the Sherman Act. While violations of the Act by agreements fixing the resale price of patented articles (incandescent light bulbs) sold to dealers also were alleged in the bill, so far as here material the pertinent alleged violation was an agreement between General Electric and Westinghouse Company through which Westinghouse was licensed to manufacture lamps under a number of General Electric's patents, including a patent on the § e of tungsten filament in the bulb, on condition that it should sell them at prices fixed by the licensor. On considering an objection to the fixing of prices on bulbs with a tungsten filament, the price agreement was upheld as a valid exercise of patent rights by the licensor. 16 Speaking of the arrangement, this Court said: 'If the patentee * * * licenses the selling of the articles (by a licensee to make), may he limit the selling by limiting the method of sale and the price? We think he may do so provided the conditions of sale are normally and reasonably adapted to secure pecuniary reward for the patentee's monopoly.' 272 U.S. at page 490, 47 S.Ct. at page 197, 71 L.Ed. 362. This proviso must be read as directed at agreements between a patentee and a licensee to make and vend. The original context of the words just quoted makes clear that they carry no implication of approval of all a patentee's contracts which tend to increase earnings on patents. The opinion recognizes the fixed rule that a sale of the patented article puts control of the purchaser's resale price beyond the power of the patentee. 272 U.S. at page 489, 47 S.Ct. at page 196, 71 L.Ed. 362. Compare United States v. Univis Lens Co., 316 U.S. 241, 62 S.Ct. 1088, 86 L.Ed. 1408. Nor can anything be found in the General Electric case which will serve as a basis to argue otherwise than that the precise terms of the grant define the limits of a patentee's monopoly and the area in which the patentee is freed from competition of price, service, quality or otherwise. Compare Mercoid Corporation v. Mid—Continent Inv. Co., 320 U.S. 661, 665, 666, 64 S.Ct. 268, 271, 272, 88 L.Ed. 376; United States v. Masonite Corporation, 316 U.S. 265, 277, 278, 280, 62 S.Ct. 1070, 1077, 1078, 1079, 86 L.Ed. 1461; Motion Picture Patents Co. v. Universal Film Mfg. Co., 243 U.S. 502, 510, 37 S.Ct. 416, 418, 61 L.Ed. 871, L.R.A. 1917E, 1187, Ann.Cas.1918A, 959. 17 General Electric is a case that has provoked criticism and approval. It had only bare recognition in Ethyl Gasoline Corporation v. United States, 309 U.S. 436, 456, 60 S.Ct. 618, 625, 84 L.Ed. 852. That case emphasized the rule against the extension of the patent monopoly, 309 U.S. at page 456, 60 S.Ct. at page 625, 84 L.Ed. 852, to resale prices or to avoid competition among buyers. 309 U.S. at pages 457, 458, 60 S.Ct. at pages 625, 626, 84 L.Ed. 852. We found it unnecessary to reconsider the rule in United States v. Masonite Corporation, 316 U.S. 265, 277, 62 S.Ct. 1070, 1077, 86 L.Ed. 1461, although the arrangement there was for sale of patented articles at fixed prices by dealers whom the patentee claimed were del credere agents. As we concluded the patent privilege was exhausted by a transfer of the articles to certain agents who were part of the sales organization of competitors, discussion of the price fixing limitation was not required. In Edward Katzinger Co. v. Chicago Metallic Mfg. Co., 329 U.S. 394, 398, 67 S.Ct. 416, 419, where a suit was brought to recover royalties on a license with price limitations, this Court refused to examine the General Electric rule because of the claimed illegality of the Katzinger patent. If the patent were invalid, the price fixing agreement would be unlawful. We affirmed the action of the Circuit Court of Appeals in remanding the case to the District Court to determine the validity of the patent. The General Electric case was cited with approval in Carbice Corporation of America v. American Patents Development Corporation, 283 U.S. 27, 31, 51 S.Ct. 334, 335, 75 L.Ed. 819. Other courts have explained or distinguished the General Electric rule.14 As a reason for asking this Court to reexamine the rule of the General Electric case, the Government states that price maintenance under patents through various types of agreements is involved in certain pending cases.15 Furthermore, the point is made that there is such a 'host of difficult and unsettled questions' ai sing from the General Electric holding that the simplest solution is to overrule the precedent on the power of a patentee to establish sale prices of a licensee to make and vend a patented article.16 18 Such a liquidation of the doctrine of a patentee's power to determine a licensee's sale price of a patented article would solve problems arising from its adoption. Since 1902, however, when E. Bement & Sons v. National Harrow Co., 186 U.S. 70, 22 S.Ct. 747, 46 L.Ed. 1058, was decided, a patentee has been able to control his licensee's sale price within the limits of the patent monopoly.17 Litigation that the rule has engendered proves that business arrangements have been repeatedly, even though hesitatingly, made in reliance upon the contractors' interpretation of its meaning. Appellees urge that Congress has taken no steps to modify the rule.18 Such legislative attitude is to be weighed with the counter balancing fact that the rule of the General Electric case grew out of a judicial determination. The writer accepts the rule of the General Electric case as interpreted by the third subdivision of this opinion. As a majority of the Court does not agree with that position, the case cannot be reaffirmed on that basis. Neither is there a majority to overrule General Electric. In these circumstances, we must proceed to determine the issues on the assumption that General Electric continues as a precedent. Furthermore, we do not think it wise to undertake to explain, further than the facts of this case require, our views as to the applicability of patent price limitation in the various situations listed by the Government. On that assumption where a conspiracy to restrain trade or an effort to monopolize is not involved, a patentee may license another to make and vend the patented device with a provision that the licensee's sale price shall be fixed by the patentee. The assumption is stated in this was so as to leave aside the many variables of the General Electric rule that may arise. For example, there may be an aggregation of patents to obtain dominance in a patent field, broad or narrow, or a patent may be used as a peg upon which to attach contracts with former or prospective competitors, touching business relations other than the making and vending of patented devices. Compare United States v. United States Gypsum Co., decided today; United States v. Masonite Corporation, 316 U.S. 265, 62 S.Ct. 1070, 86 L.Ed. 1461. 19 It may be helpful to specify certain points that either are not contested or are not decided in this case. The agre ments, if illegal, restrain interstate commerce contrary to the Sherman Act. No issue of monopoly is involved. (F.F. 31.) Cf. American Tobacco Co. v. United States, 328 U.S. 781, 788, 66 S.Ct. 1125, 1128, 1129. That is to say, the complaint charges restraint of trade under § 1 and does not charge 'monopoly' under § 2 of the Sherman Act, so that we need not deal with the problems of consolidation, merger, purchase of competitors or size of business as tending toward attaining monopoly. See United States v. United Shoe Machinery Co., 247 U.S. 32, 44—55, 38 S.Ct. 473, 477—481, 62 L.Ed. 968; United States v. Aluminum Co. of America, 2 Cir., 148 F.2d 416, 427—31; United States v. American Tobacco Co., 221 U.S. 106, 181—83, 31 S.Ct. 632, 648—650, 55 L.Ed. 663; United States v. United States Steel Corporation, 251 U.S. 417, 451, 40 S.Ct. 293, 299, 64 L.Ed. 343, 8 A.L.R. 1121. We are not dealing with a charge of monopoly or restraint because of the aggregation of patents, by pooling or purchase, by an owner or owners, in a single industry or field. See United States v. United Shoe Machinery Co., 247 U.S. 32, 38 S.Ct. 473, 62 L.Ed. 968. Within the limits of the patentee's rights under his patent, monopoly of the process or product by him is authorized by the patent statutes. It is stipulated by the United States that the validity of the patents is not in issue. With these points laid aside, we proceed to the issues presented by this record. III. The Determination of the Issue. 20 Under the above-mentioned assumption as to General Electric, the ultimate question for our decision on this appeal may be stated, succinctly and abstractly, to be as to whether in the light of the prohibition of § 1 of the Sherman Act, note 1, supra, two or more patentees in the same patent field may legally combine their valid patent monopolies to secure mutual benefits for themselves through contractual agreements between themselves and other licensees, for control of the sale price of the patented devices. 21 The appellees urge that the findings of the District Court, quoted in note 13 supra, stand as barriers to a conclusion here that § 1 of the Sherman Act has been violated by the licenses. Since there was material evidence to support the District Court's finding of the evidentiary facts and the Court necessarily weighed the credibility of the witnesses and the probative value of their testimony to establish appellees' contentions, appellees insist that the inferences or conclusions as to violations of the Sherman Act, drawn by the District Court, must be accepted by us.19 As to the evidentiary facts heretofore stated, there is no dispute. From them the District Court made findings of fact Nos. 32 to 36, inclusive, hereinbefore set out in note 13. Even though we accept, as we do, these findings on preliminary facts as correct, the last sentence in findings 32 and 34 crumbles their asserted bar to an examination by us as to whether the agreements are violative of the Sherman Act. Those sentences are to the effect that there was an agreement to fix prices between all parties in the language of the contracts as set out in notes 8 and 9 supra. If the patent rights do not empower the patentees to fix sale prices for others, the agreements do violate the Act. The previous summary in this opinion of the agreements which compose these arrangements demonstrates that the agreements were intended to and did fix prices on the patented devices. Compare Interstate Circuit v. United States, 306 U.S. 208, 226, 59 S.Ct. 467, 474, 83 L.Ed. 610. While Line's sublicenses to others than General Electric, note 9, gave to Line the power which it exercised to fix prices only for devices embodying its own Schultz patent, the sublicense agreements licensed the use of the dominant Lemmon patent. As the Schultz patent could not be practiced without the Lemmon, the result of the agreement between Southern and Line for Line's sublicensing of the Lemmon patent was to combine n Line's hands the authority to fix the prices of the commercially successful devices embodying both the Schultz and Lemmon patents. Thus though the sublicenses in terms followed the pattern of General Electric in fixing prices only on Line's own patents, the additional right given to Line by the license agreement of January 12, 1940, between Southern and Line, to be the exclusive licensor of the dominant Lemmon patent, made its price fixing of its own Schultz devices effective over devices embodying also the necessary Lemmon patent. See note 9. By the patentees' agreement the dominant Lemmon and the subservient Schultz patents were combined to fix prices. In the absence of patent or other statutory20 authorization, a contract to fix or maintain prices in interstate commerce has long been recognized as illegal per se under the Sherman Act.21 This is true whether the fixed price is reasonable or unreasonable. It is also true whether it is a price agreement between producers for sale or between producer and distributor for resale. 22 It is equally well settled that the possession of a valid patent or patents does not give the patentee any exemption from the provisions of the Sherman Act beyond the limits of the patent monopoly.22 By aggregating patents in one control, the holder of the patents cannot escape the prohibitions of the Sherman Act. See Standard Sanitary Mfg. Co. v. United States, 226 U.S. 20, 33 S.Ct. 9, 57 L.Ed. 107; United States v. United States Gypsum Co., decided today. During its term, a valid patent excludes all except its owner from the use of the protected process or product. United States v. United Shoe Machinery Co., 247 U.S. 32, 58, 38 S.Ct. 473, 482, 62 L.Ed. 968; Special Equipment Co. v. Coe, 324 U.S. 370, 378, 65 S.Ct. 741, 745, 89 L.Ed. 1006. This monopoly mayb e enjoyed exclusively by the patentee or he may assign the patent 'or any interest therein' to others. Rev.Stat. § 4898, as amended 55 Stat. 634, 35 U.S.C.A. § 47. As we have pointed out, a patentee may license others to make and vend his invention and collect a royalty therefor. Thus we have a statutory monoply by the patent and by the Sherman Act a prohibition, not only of monopoly or attempt to monopolize, but of every agreement in restraint of trade. Public policy has condemned monopolies for centuries. The Case of Monopolies (Darcy v. Allein) 11 Co.Rep. 84-b. See United States v. Aluminum Co. of America, 2 Cir., 148 F.2d 416, 428, 449. See Employment Act of 1946, § 2, 60 Stat. 23, 15 U.S.C.A. § 1022. Our Constitution allows patents. Art. I, § 8, cl. 8. The progress of our economy has often been said to owe much to the stimulus to invention given by the rewards allowed by patent legislation. The Sherman Act was enacted to prevent restraints of commerce but has been interpreted as recognizing that patent grants were an exception. Bement v. National Harrow Co., supra, 186 U.S. at page 92, 22 S.Ct. at page 755, 46 L.Ed. 1058; 21 Cong.Rec. 2457. Public service organizations, governmental and private aside, our economy is built largely upon competition in quality and prices. Associated Press v. United States, 326 U.S. 1, 12—14, 65 S.Ct. 1416, 1420—1422, 89 L.Ed. 2013. Validation by Congress of agreements to exclude competition is unusual.23 Monopoly is a protean threat to fair prices. It is a tantalizing objective to any business compelled to meet the efforts of competitors to supply the market. Perhaps no single fact manifests the power and will to monopolize more than price control of the article monopolized. There can be no clearer evidence of restraint of trade. Whatever may be the evil social effect of cutthroat competition on producers and consumers through the lowering of labor standards and the quality of the produce and the obliteration of the marginal to the benefit of the surviving and low-cost producers, the advantages of competition in opening rewards to management, in encouraging initiative, in giving labor in each industry an opportunity to choose employment conditions and consumers a selection of product and price, have been considered to overbalance the disadvantages. The strength of size alone, the disappearance of small business are ever present dangers in competition. Despite possible advantages to a stable economy from efficient cartels with firm or fixed prices for products, it is crystal clear from the legislative history and accepted judicial interpretations of the Sherman Act that competition on prices is the rule of congressional purpose and that where exceptions are made, Congress should make them. The monopoly granted by the patent laws is a statutory exception to this freedom for competition and consistently has been construed as limited to the patent grant. Ethyl Gasoline Corporation v. United States, 309 U.S. 436, 452, 455, 60 S.Ct. 618, 623, 624, 84 L.Ed. 852; United States v. Univis Lens Co., 316 U.S. 241, 62 S.Ct. 1088, 86 L.Ed. 1408; Hartford Empire Co. v. United States, 323 U.S. 386, 65 S.Ct. 373, 89 L.Ed. 322. It is not the monopoly of the patent that is invalid. It is the use of that monopoly, improperly. 23 The development of patents by separate corporations or by cooperating units of an industry through organized research group is a well known phenomenon. However far advanced over the lone inventor's experimentation this method of seeking improvement in the practices of the arts and sciences may be, there can be no objection, on the score of illegality, either to the mere size of such a group or the thoroughness of its research. It may be true, as Carlyle said, that 'Genius is an infinite capacity for taking pains.' Certainly the doctrine that control of prices, outside the limits of a patent monopoly, violates the Sherman Act is as well understood by Congress as by all other interested parties. 24 We are thus called to make an adjustment between the lawful restraint on trade of the patent monopoly and the illegal restraint prohibited broadly by the Sherman Act. That adjustment has already reached the point, as the precedents now stand, that a patentee may validly license a competitor to make and vend with a price limitation under the General Electric case and that the grant of patent rights is the limit of freedom from competition under the cases first cited at note 22. 25 With the postulates in mind that price limitations on patented devices beyond the limits of patent monopoly violate the Sherman Act and that patent grants are to be construed strictly, the question of the legal effect of the price limitations in these agreements may be readily answered. Nothing in the patent statute specifically gives a right to fix the price at which a licensee may vend the patented article. 35 U.S.C. §§ 40, 47, 35 U.S.C.A. §§ 40, 47. While the General Electric case holds that a patentee may, under certain conditions, lawfully control the price the licensee of his several patents may charge for the patented device, no case of this Court has construed the patent and anti-monopoly statutes to permit separate owners of separate patents by cross-licenses or other arrangements to fix the prices to be charged by them and their licensees for their respective products. Where two or more patentees with competitive, non-infringing patents combine them and fix prices on all devices produced under any of the patents, competition is impeded to a greater degree than where a single patentee fixes prices for his licensees. The struggle for profit is less acute. Even when, as here, the devices are not commercially competitive because the subservient patent cannot be practiced without consent of the dominant, the statement holds good. The stimulus to seek competitive inventions is reduced by the mutually advantageous price fixing arrangement. Compare, as to acts by a single entity and those done in combination with others. Swift & Co. v. United States, 196 U.S. 375, 396, 25 S.Ct. 276, 279, 49 L.Ed. 518; United States v. Reading Co., 226 U.S. 324, 357, 33 S.Ct. 90, 98, 57 L.Ed. 243; Eastern States Lumber Dealers' Ass'n v. United States, 234 U.S. 600, 34 S.Ct. 951, 58 L.Ed. 1490, L.R.A.1915A, 788; Binderup v. Pathe Exch., 263 U.S. 291, 44 S.Ct. 96, 68 L.Ed. 308. The merging of the benefits of price fixing under the patents restrains trade in violation of the Sherman Act in the same way as would the fixing of prices between producers of nonpatentable goods. 26 If the objection is made that a price agreement between a patentee and a licensee equally restrains trade, the answer is not that there is no restraint in such an arrangement but, when the validity of the General Electric case is assumed, that reasonable restraint accords with the patent monopoly granted by the patent law. Where a patentee undertakes to exploit his patent by price fixing through agreements with onyone, he must give consideration to the limitations of the Sherman Act on such action. The patent statutes give an exclusive right to the patentee to make, use, and vend and to assign any interest in this monopoly to others. The Gn eral Electric case construes that as giving a right to a patentee to license another to make and vend at a fixed price. There is no suggestion in the patent statutes of authority to combine with other patent owners to fix prices on articles covered by the respective patents. As the Sherman Act prohibits agreements to fix prices, any arrangement between patentees runs afoul of that prohibition and is outside the patent monopoly. 27 We turn now to the situation here presented of an agreement where one of the patentees is authorized to fix prices under the patents. The argument of respondents is that if a patentee may contract with his licensee to fix prices, it is logical to permit any number of patentees to combine their patents and authorize one patentee to fix prices for any number of licensees. In this present agreement Southern and Line have entered into an arrangement by which Line is authorized to and has fixed prices for devices produced under the Lemmon and Schultz patents. It seems to us, however, that such argument fails to take into account the cumulative effect of such multiple agreements in establishing an intention to restrain. The obvious purpose and effect of the agreement was to enable Line to fix prices for the patented devices. Even where the agreements to fix prices are limited to a small number of patentees, we are of the opinion that it crosses the barrier erected by the Sherman Act against restraint of trade though the restraint is by patentees and their licensees. 28 As early as 1912, in Standard Sanitary Mfg. Co. v. United States, 226 U.S. 20, 33 S.Ct. 9, 57 L.Ed. 107, this Court unanimously condemned price limitation under pooled24 patent licenses.25 As the arrangement was coupled with an agreement for limitation on jobbers resale prices, the case may be said to be indecisive on patent license agreements for price control of a product without the jobber's resale provision. No such distinction appears in the opinion. This Court has not departed from that condemnation of price fixing. Even in Standard Oil Co. (Indiana) v. United States, 283 U.S. 163, 51 S.Ct. 421, 75 L.Ed. 926, where an arrangement by which the patentees pooled their oil cracking patents and divided among themselves royalties from licensees fixed by the pooling contracts was upheld, the theory was reiterated that a price limitation for the product was unlawful per se. 283 U.S. at page 170, 173, 175, 51 S.Ct. at pages 423, 425, 75 L.Ed. 926. Of course, if a purpose or plan to monopolize or restrain trade is found, the arrangement is unlawful. 283 U.S. at page 174, 51 S.Ct. at page 425, 75 L.Ed. 926. The Government's contention in that case that the limitation on royalties in itself violated the Sherman Act by fixing an element in the price was dismissed because the Court was of the view that controlled royalties were effective as price regulators only when the patentees dominated the industry. 283 U.S. at page 174, 51 S.Ct. at page 425, 75 L.Ed. 926. This domination was thought by this Court not to have been proven. 29 When a plan for the patentee to fix the sale prices of patented synthetic hardboard on sales made through formerly competing manufacturers and distributors, designated at del credere agents,26 came before this Court on allegations that the plan was in violation of the Sherman Act, we invalidated the scheme. We said that the patentee could not use its competitor's sales organization as its own agents so as to control prices. The patent monopoly, under such circumstances, we said, was exhausted on disposition of the product to the distributor. We reasoned that such an arrangement was a restriction on our free economy, 'a powerful inducement to abandon competition' and that it derogated 'from the general law (against price limitation) beyond the necessary requirements of the patent statute.' United States v. Masonite Corporation, 316 U.S. 265, 281, 280, 62 S.Ct. 1070, 1079, 1078, 86 L.Ed. 1461. 30 We think that this general rule against price limitation clearly applies in the circumstances of this case. Even if a patentee has a right in the absence of a purpose to restrain or monopolize trade, to fix prices on a licensee's sale of the patented product in order to exploit properly his invention or inventions, when patentees join in an agreement as here to maintain prices on their several products, that agreement, however advantageous it may be to stimulate the broader use of patents, is unlawful per se under the Sherman Act. It is more than an exploitation of patents. There is the vice that patentees have combined to fix prices on patented products. It is not the cross-licensing to promote efficient production which is unlawful. There is nothing unlawful in the requirement that a licensee should pay a royalty to compensate the patentee for the invention and the use of the patent. The unlawful element is the use of the control that such cross-licensing gives to fix prices. The mere fact that a patentee uses his patent as whole or part consideration in a contract by which he and another or other patentees in the same patent field arrange for the practice of any patent involved in such a way that royalties or other earnings or benefits from the patent or patents are shared among the patentees, parties to the agreement, subjects that contract to the prohibitions of the Sherman Act whenever the selling price, for things produced under a patent involved, is fixed by the contract or a license, authorized by the contract. Licensees under the contract who as here enter into license arrangements, with price fixing provisions, with knowledge of the contract, are equally subject to the prohibitions. 31 The decree of the District Court is reversed and the case is remanded for the entry of an appropriate decree in accordance with this opinion. 32 Mr. Justice JACKSON took no part in the consideration or decision of this case. 33 Reversed and remanded. 34 Mr. Justice DOUGLAS, with whom Mr. Justice BLACK, Mr. Justice MURPHY and Mr. Justice RUTLEDGE, join, concurring. 35 While I have joined in the opinion of the Court, its discussion of the problem is for me not adequate for a full understanding of the basic issue presented. My view comes to this it is a part of practical wisdom and good law not to permit United States v. General Electric Co., 272 U.S. 476, 47 S.Ct. 192, 71 L.Ed. 362, to govern this situation, though if its premise be accepted, logic might make its application to this case wholly defensible. But I would be rid of United States v. General Electric Co. My reasons for overruling it start with the Constitution itself. 36 The Constitution grants Congress the power 'To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Iv entors the exclusive Right to their respective Writings and Discoveries.' Art. I, § 8, Cl. 8. It is to be noted first that all that is secured to inventors is 'the exclusive Right' to their inventions; and second that the reward to inventors is wholly secondary, the aim and purpose of patent statutes being limited by the Constitution to the promotion of the progress of science and useful arts. United States v. Masonite Corporation, 316 U.S. 265, 278, 62 S.Ct. 1070, 1077, 86 L.Ed. 1461, and cases cited. 37 Congress faithful to that standard, has granted patentees only the 'exclusive right to make, use, and vend the invention or discovery.' Rev.Stat. § 4884, 35 U.S.C. § 40, 32 U.S.C.A. § 40. And as early as 1853 the Court, speaking through Chief Justice Taney, defined the narrow and limited monopoly granted under the statutes as follows. 'The franchise which the patent grants, consists altogether in the right to exclude every one from making, using, or vending the thing patented, without the permission of the patentee.' Bloomer v. McQuewan, 14 How. 539, 549, 14 L.Ed. 532. But the ingenuity of man has conceived many ways to graft attractive private perquisites onto patents. The effort through the years has been to expand the narrow monopoly of the patent. The Court, however, has generally been faithful to the standard of the Constitution, has recognized that the public interest comes first and reward to inventors second, and has refused to let the self-interest of patentees come into the ascendency. As we stated in B. B. Chemical Co. v. Ellis, 314 U.S. 495, 498, 62 S.Ct. 406, 408, 86 L.Ed. 367, 'The patent monopoly is not enlarged by reason of the fact that it would be more convenient to the patentee to have it so, or because he cannot avail himself of its benefits within the limits of the grant.' From Motion Picture Patents Co. v. Universal Film Mfg. Co., 243 U.S. 502, 37 S.Ct. 416, 61 L.Ed. 871, L.R.A.1917E, 1187, Ann.Cas.1918A, 959, which overruled Henry v. A. B. Dick Co., 224 U.S. 1, 32 S.Ct. 364, 56 L.Ed. 645, Ann.Cas.1913D, 880, to International Salt Co. v. United States, 332 U.S. 392, 68 S.Ct. 12, decided only the other day, the Court has quite consistently refused to allow the patentee's 'right to exclude' to be expanded into a right to license the patent on such conditions as the patentee might choose. For the power to attach conditions would enable the patentee to enlarge his monopoly by contract and evade the requirements of the general law applicable to all property. The philosophy of those decisions was summed up in Mercoid Corporation v. Mid—Continent Inv. Co., 320 U.S. 661, 666, 64 S.Ct. 268, 271, 88 L.Ed. 376, where we said: 'The necessities or convenience of the patentee do not justify any use of the monopoly of the patent to create another monopoly. The fact that the patentee has the power to refuse a license does not enable him to enlarge the monopoly of the patent by the expedient of attaching conditions to its use. * * * The patent is a privilege. But is it a privilege which is conditioned by a public purpose. It results from invention and is limited to the invention which it defines. When the patentee ties something else to his invention, he acts only by virtue of his right as the owner of property to make contracts concerning it and not otherwise. He then is subject to all the limitations upon that right which the general law imposes upon such contracts.' 38 The Court, however, allowed an exception in this long line of cases. In United States v. General Electric Co., supra, decided in 1926, it followed Bement v. National Harrow Co., 186 U.S. 70, 22 S.Ct. 747, 46 L.Ed. 1058, decided in 1902, and sustained a price-fixing provision of a license to make and vend the patented invention. By that decision price-fixing combinations which are outlawed by the Sherman Act (United States v. Socony Vacuum Oil Co., 310 U.S. 150, 60 S.Ct. 811, 84 L.Ed. 1129) were held to be lawful when the property involved was a patent. By what authority was ths done? 39 The patent statutes do not sanction price-fixing combinations. They are indeed wholly silent about combinations. So far as relevant here, all they grant, as already noted, is the 'exclusive right to make, use, and vend the invention or discovery.' Rev.Stat. § 4884, 35 U.S.C. § 40, 35 U.S.C.A. § 40. There is no grant of power to combine with others to fix the price of patented products. Since the patent statutes are silent on the subject, it would seem that the validity of price-fixing combinations in this field would be governed by general law. And since the Sherman Act outlaws price-fixing combinations it would seem logical and in keeping with the public policy expressed in that legislation to apply its prohibitions to patents as well as to other property. The Court made an exception in the case of these price-fixing combinations in order to make the patent monopoly a more valuable one to the patentee. It was concerned with giving him as high a reward as possible. It reasoned that if the patentee could not control the price at which his licensees sold the patented article, they might undersell him; that a price-fixing combination would give him protection against that contingency and therefore was a reasonable device to secure him a pecuniary reward for his invention. Thus the General Electric case inverted Cl. 8 of Art. I, § 8 of the Constitution and made the inventor's reward the prime rather than an incidental object of the patent system. 40 In that manner the Court saddled the economy with a vicious monopoly. In the first place, this form of price fixing underwrites the high-cost producer. By protecting him against competition from lowcost producers, it strengthens and enlarges his monopoly. It is said in reply that he, the patentee, has that monopoly anyway—that his exclusive right to make, use, and vend would give him the right to exclude others and manufacture the invention and market it at any price he chose. That is true. But what he gets by the price-fixing agreement with his competitors is much more than that. He then gets not a benefit inherent in the right of exclusion but a benefit which flows from suppression of competition by combination with his competitors. Then he gets the benefits of the production and marketing facilities of competitors without the risks of price competition. Cf. United States v. Masonite Corporation, supra. In short, he and his associates get the benefits of a conspiracy or combination in restraint of competition. That is more than an 'exclusive right' to an invention; it's an 'exclusive right' to form a combination with competitors to fix the prices of the products of invention. The patentee creates by that method a powerful inducement for the abandonment of competition, for the cessation of litigation concerning the validity of patents, for the acceptance of patents no matter how dubious, for the abandonment of research in the development of competing patents. Those who can get stabilized markets, assured margins, and freedom from price cutting will find a price-fixing license an attractive alternative to the more arduous methods of maintaining their competitive positions. Competition tends to become impaired not by reason of the public's preference for the patented article but because of the preference of competitors for price fixing and for the increased profits which that method of doing business promises. 41 Price fixing in any form is perhaps the most powerful of all inducements for abandonment of competition. It offers security and stability; it eliminates much of the uncertainty of competitive practices; it promises high profits. It is therefore one of the most effective devices to regiment whole industries and exact a monopoly price from the public. The benefits of competition disappear. The prices charged by the regimented industry are determined not by representatives of the public, as in the case of electric, water and gas rates, but by private parties who incline to charge all the traffi will bear. And the type of combination in this case has the power to inflict precisely the type of public injury which the Sherman Act condemns. This price-fixing scheme does far more than secure to inventors 'the exclusive Right' to their discoveries within the meaning of Cl. 8 of Art. I, § 8 of the Constitution. It gives them a leverage on the market which only a combination, not a patent by itself, can create. Yet it is 'every' combination in restraint of trade which § 1 of the Sherman Act condemns, price-fixing combinations dealing with patents not excluded. 42 Congress has much to say as to the pattern of our economic organization. But I am not clear that Congress could expand 'the exclusive right' specified in the Constitution into a right of inventors to utilize through a price-fixing combination the production and marketing facilities of competitors to protect their own high costs of production and eliminate or suppress competition. It is not apparent that any such restriction or condition promotes the progress of science and the useful arts. But however that may be, the Constitution places the rewards to inventors in a secondary role. It makes the public interest the primary concern in the patent system. To allow these price-fixing schemes is to reverse the order and place the rewards to inventors first and the public second. This is not the only way a patentee can receive a pecuniary reward for his invention. He can charge a royalty which has no relation to price fixing. Or he can manufacture and sell at such price as he may choose. Certainly if we read the patent statutes so as to harmonize them as closely as possible with the policy of anti-trust laws, we will strike down a combination which is not necessary to effectuate the purpose of the patent statutes. If we did that in this case we would overrule the General Electric Co. case. 43 This Court, not Congress, was the author of the doctrine followed in that case. The rule it sanctions is another of the private perquisites which the Court has written into the patent laws. See Special Equipment Co. v. Coe, 324 U.S. 370, 383, 65 S.Ct. 741, 747, 89 L.Ed. 1006. Since we created it, we should take the initiative in eliminating it. It is hard for me to square it with the standards which the Constitution has set for our patent system. It plainly does violence to the competitive standards which Congress has written into the Sherman Act. 44 Mr. Justice BURTON, with whom THE CHIEF JUSTICE and Mr. Justice FRANKFURTER concur, dissenting. 45 This dissent is impelled by regard for the soundness, authority and applicability to this case of the unanimous decisions of this Court in Bement v. National Harrow Co., 186 U.S. 70, 22 S.Ct. 747, 46 L.Ed. 1058, and United States v. ,General Electric Co., 272 U.S. 476, 47 S.Ct. 192, 71 L.Ed. 362. 46 The complaint charges violation of § 1 of the Sherman Anti-trust Act1 by the defendant patent owners and cross-licensors, Line Material Company and Southern States Equipment Corporation (here called respectively Line and Southern), and also by the ten defendants who hold licenses under the two complementary patents, owned respectively by Line and Southern. These patents are for dropout fuse cutouts. Southern's patent is the dominant patent but the product made under it alone has not been commercially successful. Line's patent is for an improvement of that product which has made it commercially successful. Each of the twelve defendants has received and exercised authority under both patents to make and sell this improved product, but the Government charges them with having engaged in an unlawful combination and conspiracy in restraint of trade to fix, maintain and control the prices at which they have sold, in interstate commerce, their respective products under these patents. It is not disputed that the sales were made in interstate commerce. The trial court's findings of fact demonstrate, however, that there have been no agreements between any of the defendants wih respect to the prices of these products other than the price-limiting provisions contained in their respective licenses.2 The findings of fact show also that, unless the Government sustains its contention that those provisions constitute, per se, an unlawful restraint of trade, its complaint should be dismissed.3 47 The question thus presented is: Do the price-limiting provisions in some or all of the licenses under Line's or Southern's patents constitute a restraint of trade in violation of § 1 of the Sherman Act? We agree with the court below that they do not.4 The price-limiting provisions in this case are comparable to those which, in the Bement and General Electric cases, supra, were held not to violate the Sherman Act. This Court sustained the agreement in the Bement case because the Sherman Act—'clearly does not refer to that kind of a restraint of interstate commerce which may arise from reasonable and legal conditions imposed upon the assignee or licensee of a patent by the owner thereof, restricting the terms upon which the article may be used and the price to be demanded therefor. Such a construction of the act, we have no doubt, was never contemplated by its framers.' 186 U.S. at page 92, 22 S.Ct. at page 756, 46 L.Ed. 1058. 48 The license in that case was issued under several patents and, as here, it limited the prices at which the licensee was authorized to sell articles produced by the licensee under that license. In the General Electric case, this Court, in speaking of the patent holder's right to limit the selling prices of his licensee's products, said: 49 'We think he (the patent holder) may do so provided the conditions of sale are normally and reasonably adapted to secure pecuniary reward for the patentee's monopoly. One of the valuable elements of the exclusive right of a patentee is to acquire profit by the price at which the article is sold.' 272 U.S. at page 490, 47 S.Ct. at page 197, 71 L.Ed. 362. 50 In the present case, there are two types of license agreements. The price-limiting provisions are the same in each. The first type is that of the cross-licensing agreement between Line and Southern. In it Line granted to Southern a nonexclusive, royalty-free license to make and sell the products here in question. Line also prescribed that Southern's prices, terms and conditions of sale should be 'not more favorable to the customer than those established from time to time and followed by the Line Company in making its sales.' The difference between this license agreement and Line's agreements with each of the other defendants is that Southern, in return for this license, instead of paying cash royalties to Line, issued to Line a limited cross-license under Southern's complementary patent on a dropout fuse cutout. Southern also granted to Line an exclusive right to issue sublicenses under that patent. Southern inserted no price limitation in its cross-license to Line and Line made no commitmen to insert price limitations in any sublicense which it might issue under Southern's patent. As far as price limitations were concerned, they all were contained in the royalty-free, nonexclusive license from Line to Southern and were applicable only to products made and sold by the latter under Line's patent. Assuming that the limitations thus placed by Line on the price of Southern's products, made and sold by it under Line's complementary patent, were reasonable limitations, especially in relation to Line's own operations under the same patent, they represented a lawful protection of Line's patent interests. They evidenced a normal exercise by a manufacturing patentee 'of the exclusive right of a patentee * * * to acquire profit by the price at which the article is sold.'5 In some ways, they were even more natural and reasonable provisions for insertion by Line than would have been a bare provision for royalties. Line evidently needed these price limitations to enable it to continue to make and sell the product which its own improvement had converted from a commercial failure into a commercial success. It will be demonstrated later that Line's receipt of a royalty-free, unconditional cross-license under Southern's complementary patent, as consideration for Line's license to Southern, did not, per se, convert this otherwise lawfully limited license into an invalid license violating the Sherman Act. 51 The other type of license that was used by Line was that of a direct license issued separately to each of the ten other licensee-defendants. These licenses closely resembled each other. Each was a nonexclusive license calling for the payment of a modest royalty to Line on each product made and sold by the licensee under Line's patent. Each included price limitations comparable to those in Line's license to Southern. These price-limiting licenses from Line are, as such, entirely comparable to those in the Bement and General Electric cases. Each license, however, also included a sublicense issued by Line under Southern's complementary patent. The royalties on the products made and sold under the two complementary patents were to be divided equally between Line and Southern. It will be demonstrated later that this sublicense under Southern's complementary patent and the agreement by Line to divide with Southern the royalties received upon products made and sold under the two patents did not, per se, convert these otherwise lawfully limited licenses into invalid licenses violating the Sherman Act. 52 Line also granted to certain licensee-defendants desiring it, a license under Line's so-called 'Kyle patent' for enclosed fuse boxes. Some of these licenses carried price limitations on products made and sold by the licensee under the Kyle patent. These licenses are entirely comparable to those in the Bement and General Electric cases. They are well within the scope of those precedents and carry no suggested basis for a distinction claimed to convert them into invalid licenses violating the Sherman Act. 53 The Government now asks this Court to overrule the Bement and General Electric cases. The opinion by Mr. Justice REED rejects that request but seeks to justify a reversal of the judgment below by distinguishing this case from those precedents. This dissent undertakes not only to emphasize the soundness of the Bement and General Electric decisions, but to demonstrate that the basic principles which sustain those decisions apply to this case with at least equal force. This initial discussion will omit the consideration of the cross-license from Southern to Line, the grant from Southern to Line of the exclusive right to issue sublicenses under the Southern patent and the agreement for the division of royalties between Southern and Line. The Bement and General Electric decisions are authority for upholding the remaining portions of such agreements in te light of the previously mentioned findings of fact which show that the agreements 'arise from reasonable and legal conditions imposed upon the assignee or licensee of a patent by the owner thereof, restricting the terms upon which the article may be used and the price to be demanded therefor'6 and that 'the conditions of sale are normally and reasonably adapted to secure pecuniary reward for the patentee's monopoly.'7 This dissent accordingly re-examines the foundation for those decisions and emphasizes the development, nature and effect of the patent rights which are decisive of the main issue both in those cases and in this. 54 Patent Rights. 55 An understanding of the historical development and of the nature of patent rights in the United States is essential to a discussion of the relation between them and the restraints of trade prohibited by the Sherman Act. American patent rights find their origin in Great Britain. That nation appears to have been the first to issue 'patents' to secure to inventors for limited times exclusive rights to their respective discoveries. These 'patents' were called 'literae patentes,' i.e., 'open letters,' because they were not sealed up but were exposed to view with the Great Seal pendant at the bottom. They were addressed by the sovereign to all subjects of the realm. Such instruments were, and to a degree still are, the common form used for making grants of dignities, such as peerages, appointments to certain offices and grants of privilege of various kinds. Their form, therefore, was similar to that of the 'patents' used to grant exclusive rights or 'monopolies' to trade guilds, corporations and, in some cases, individuals, permitting them to exclude competitors from the conduct of certain lines of profitable business.8 56 The contrast between these two kinds of exclusive rights in their relation to the public was reflected later in acts of the British Parliament and in the Constitution and statutes of the United States. A patent to an inventor took nothing from the public which the public or the inventor's competitors already had. By hypothesis, it dealt with a new asset available to civilization only through its inventor. The royal patent served to encourage the inventor to disclose his invention. By granting to the inventor the right to exclude all others from making, using or selling the invention for a limited time, it was felt that the public was well served by the invention's disclosure, its early availability under the patent and its later general availability to everyone. This procedure was popular. On the other hand, royal patents securing exclusive rights to private parties to conduct profitable enterprises to the exclusion of existing or available competitors were issued to show royal favor or to secure funds at the expense of the public. Such patents became highly unpopular. The courts, at an early date, held them invalid.9 57 As early as 1602, Francis Bacon, in the House of Commons, supported the princil e that a monopoly should be granted only for a 'new manufacture.' In 1623, there was enacted the Statute of Monopolies (21 Jac. I, c. 3, § 1; 1 Walker on Patents, pp. 18—21 (Deller's Ed.1937) which declared void all monopolies and letters patent 'of or for the sole Buying, Selling, Making, Working or Using of any Thing within this Realm, * * *.' However, § VI of this Act made an express exception in favor of patents for inventions.10 That Section has become the foundation of the patent law securing exclusive rights to inventors not only in Great Britain but throughout the world. 58 The result, historically and in principle, has not been a conflict between two legislative mandates. It has been rather a long standing approval, both by the British Parliament and the Congress of the United States, of the unique value of the exercise, for limited periods, of exclusive rights by inventors to their respective inventions, paralleled by an equally sustained and emphatic disapproval of certain other restraints of trade not representative of exclusive rights of inventors to their inventions. 59 The long and unfaltering development of our patent law often has been touched upon in our decisions. However, in the face of the direct attack now made upon some of its underlying principles, the infinite importance of our inventions justifies a brief review hereof the development and nature of the patent rights attacked. The decision in this case must turn upon this Court's understanding of the relation between the licenses before it, the patent rights to which they relate and the Sherman Act. As interpreter of the Congressional Acts that have expressed the patent policy of this nation since its beginning, this Court is entrusted with the protection of that policy against intrusions upon it. The crucial importance of the development of inventions and discoveries is not limited to this nation. As the population of the world has increased, its geographical frontiers have shrunk. However, the frontiers of science have expanded until civilization now depends largely upon discoveries on those frontiers to meet the infinite needs of the future. The United States, thus far, has taken a leading part in making those discoveries and in putting them to use. 60 The Constitution of the United States provides that 'The Congress shall have Power * * * To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries; * * *.' (Italics supplied.) Art. I, § 8. 61 The statutes primarily implementing this provision state: 62 'Any person who has invented or discovered any new and useful art, machine, manufacture, or composition of matter, or any new and useful improvements thereof, * * * not known or used by others in this country, before his invention or discovery thereof, and not patented or described in any printed publication in this or any foreign country, before his invention or discovery thereof, or more than one year prior to his application, and not in public use or on sale in this country for more than one year prior to his application, unless the same is proved to have been abandoned, may, upon payment of the fees required by law, and other due proceeding had, obtain a patent therefor.' R.S. § 4886, as amended, 46 Stat. 376, 53 Stat. 1212, 35 U.S.C. § 31, 35 U.S.C.A. § 31. 63 'Every patent shall contain a short title or description of the invention or discovery, correctly indicating its nature and design, and a grant to the patentee, his heirs or assigns, for the term of seventeen years, of the exclusive right to make, use, and vend the invention or discovery * * * throughout the United States and the Territories thereof, referring to the specification for the particulars thereof. * * *' (Italics supplied.) R.S. § 4884, as amended, 46 Stat. 376, 35 U.S.C. § 40, 35 U.S.C.A. § 40.11 64 'Every application for patent or patent or any interest therein shall be assignable in law by an instrument in writing, and the applicant or patentee or his assigns or legal representatives may in like manner grant and convey an exclusive right under his application for patent or patent to the whole or any specified part of the United States. * * *' (Italics supplied.) R.S. § 4898, as amended, 55 Stat. 634, 35 U.S.C. § 47 (Supp. V, 1946), 35 U.S.C.A. § 47. 65 Conway P. Coe, Commissioner of Patents of the United States from 1933 to 1945, discussed the historical significance of the early establishment of the American patent system in his testimony before the Temporary National Economic Committee in 1939. He said: 66 'The American patent system was established at a time when mechanical inventions had already begun to affect not only the industrial conditions, but also the economic, social, and political status of Europe and the new Nation just erected on this continent. The significance f the inventions put to work in England and the States of the Confederation was realized by the American statemen of that era. It is agreed that their recognition of the value of these new economic factors prompted them to write into the Constitution the provision of article I, section 8, empowering Congress 'to promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.' This provision, by the way, is impressive not only because it is included in the Constitution as one of the major grants of power to Congress, but equally because it bestows on patentees a complete monopoly, and therefore raises a question as to the constitutionality of an attempt to compel the owner of a patent to share with others the title, use, and avail of his property. I do not presume to determine the point; but I must contemplate it as an issue to be met here or hereafter. 67 'The authors of our patent system, judging by the language of article I, section 8, held the exclusiveness of the rights vested in a patentee as a powerful aid to progress in arts and sciences.'12 Hearings before the Temporary National Economic Committee, 76th Cong., 1st Sess. 839—840(1939). 68 He analyzed the 'patent rights' granted to the inventor and stated his reasons for concluding that the 'monopoly' vested in a patentee is not in conflict with our antitrust laws as follows: 69 'It occurs to me that a great deal of misapprehension results from the failure to distinguish between the monopoly or privilege vested in a patentee and the sort of monopoly that British sovereigns once conferred. It is only when we appreciate this distinction that we can understand how Jefferson could consistently advocate the monopoly of patents for inventions while condemning the traditional form of monopoly. 70 'Americans generally detest monopoly in the true sense of the term because it makes possible the ruthless exercise of power. Indeed, the American Revolution was precipitated by popular resentment of the monopoly on tea held by the East India Co. It would, therefore, have been exceedingly strange if, only a few years later, the delegates sent to the Constitutional Convention by Massachusetts and the other Colonies had been willing to sanction an equivalent form of monopoly under the new government they were creating. In the sixteenth and seventeenth centuries a king or queen of England could reward a favorite by granting him a monopoly on salt or some other necessary of life. This beneficiary of royal favor was not, of course, the discoverer of salt. That came ready-made from the hands of the Creator eons before the advent of man. What the darling of his or her majesty received was the power to compel others to use salt solely of his supplying and only on terms of his dictation. 71 'But a patent i no such monopoly. It is a reward for the invention or discovery of something new, something before unknown, something added to the sum total of human knowledge, utility, well-being; something which the inventor or discoverer, despising the lure of money or fame, might have withheld from his fellow men. By the monopoly that goes with a patent, then, the Government recompenses and, for a limited time, protects the inventor or discoverer who gives to the world the use and benefit of his invention or discovery. This is a kind and a degree of mutuality that negatives monopoly in the old or the current concept. Monopoly in the latter sense of the term gave to an individual or a group complete dominion of something already existent. A patent awards monopoly to the producer of something original, something superadded to the common store. So it is that two things bearing the same name need not be of the same nature. 72 'It has been contended that there sometimes occurs a clash between the antitrust laws and the patent statutes. I might suggest that since the first anti-trust legislation in 1890, the patent laws and the anti-trust laws have coexisted without any irreconcilable conflicts between them. They have each of them at least one common objective, namely, the retention by the public of a right once acquired by it. As a matter of fact, patents accomplish more than the retention of the acquired rights. Their influence is creative; they operate to multiply and expand acquisitions by the public.' (Id. at pp. 840, 841.) 73 A comparable analysis of the nature of the grant to inventors of the exclusive right to their respective inventions or discoveries for a limited time has been made by this Court. 74 'Though often so characterized a patent is not, accurately speaking, a monopoly, for it is not created by the executive authority at the expense and to the prejudice of all the community except the grantee of the patent. Seymour v. Osborne, 11 Wall. 516, 533, 20 L.Ed. 33. The term 'monopoly' connotes the giving of an exclusive privilege for buying, selling, working, or using a thing which the public freely enjoyed prior to the grant. Thus a monopoly takes something from the people. An inventor deprives the public of nothing which it enjoyed before his discovery, but gives something of value to the community by adding to the sum of human knowledge. United States v. American Bell Telephone Co., 167 U.S. 224, 239, 17 S.Ct. 809 (810), 42 L.Ed. 144; Paper Bag Patent Case, 210 U.S. 405, 424, 28 S.Ct. 748, (753), 52 L.Ed. 1122; Brooks v. Jenkins, 3 McLean 432, 437, Fed.Cas.No.1,953; Parker v. Haworth, 4 McLean 370, 372, Fed.Cas.No.10,738; Allen v. Hunter, 6 McLean 303, 305, 306, Fed.Cas.No. 225; Attorney General v. Rumford Chemical Works, 2 Bann. & Ard. 298, 302. He may keep his invention secret and reap its fruits indefinitely. In consideration of its disclosure and the consequent benefit to the community, the patent is granted. An exclusive enjoyment is guaranteed him for seventeen years, but, upon the expiration of that period, the knowledge of the invention enures to the people, who are thus enabled without restriction to practice it and profit by its use. Kendall v. Winsor, 21 How. 322, 327, 16 L.Ed. 165; United States v. American Bell Telephone Co., supra, page 239 of 167 U.S., 17 S.Ct. 809 (at page 810, 72 L.Ed. 144). To this end the law requires such disclosure to be made in the application for patent that others skilled in the art may understand the invention and how to put it to use.' United States v. Dubilier Condenser Corporation, 289 U.S. 178, 186, 187,13 53 S.Ct. 554, 557, 77 L.Ed. 1114, 85 A.L.R. 1488. 75 This constitutional and legislative policy toward inventions is specific in contrast with the generality of the language in the Sherman Act of 1890. The constitutional and long standing statutory approval of the exclusive rights of an inventor to make, use and sell products of his invention for a limited time was an ample guaranty that the Sherman Act did not directly or impliedly repeal such approval. The prohibition of unreasonable restraints of trade and the approval of exclusive rights of inventors to their inventions for limited periods of time continued to exist together. This was nothing new. As long as the inventors kept within their statutory exclusive rights, they were not engaging in unreasonable restraints of trade violating the Sherman Act. 76 There was nothing to indicate an intent that the general language of the Sherman Act was to change the nation's traditional and specifically stated policy towards inventions. That policy had been widely regarded as having made a major contribution to the nation's exceptional economic progress. The Sherman Act unquestionably applied to any abuse of a patentee's exclusive rights which exceeded the limit of those rights and which amounted to an unreasonable restraint of interstate trade. Hooever, there was nothing to indicate that the Sherman Act restricted the traditional patent rights. Bement v. National Harrow Co., supra, 186 U.S. at page 92, 22 S.Ct. at page 755, 46 L.Ed. 1058. 77 LIMITED LICENSE AGREEMENTS. 78 The primary issue in this case, therefore, is to determine whether or not Line by the issuance of its restricted licenses has thereby sought to exercise any right that is in excess of the exclusive right secured to Line by the patent laws of the United States. If it has done so, then such licenses, like other agreements, must be scrutinized to determine whether or not they create an unreasonable restraint of trade in violation of the Sherman Act. 79 The first consideration is the relation of the Sherman Act to provisions in a license agreement which place limitations—as in the Bement and General Electric cases—upon the prices which may be charged by the licensee for products made and sold by it under the protection of its license. The issue corresponds to that raised by the Westinghouse license in the General Electric case.14 The Sherman Act's invalidation of agreements in restraint of trade applies only to those in unreasonable restraint of trade and the definition of such unreasonableness depends largely upon the common law meaning of restraint of trade.15 This permits such invalidation where,f or example, a license is a mere subterfuge for price fixing which otherwise would amount to unreasonable restraint of trade in violation of the Sherman Act. See United States v. U.S. Gypsum Co., decided concurrently with this case.16 80 The Sherman Act's prohibition of unreasonable restraints of trade, accordingly, would not invalidate an unconditional, nonexclusive license agreement which served only to release the licensee from the right of the patent holder to exclude him from making, using or selling a patented article. The original, exclusive right of the patent holder, being secured to him through the terms of his patent, was not in violation of the Sherman Act. Accordingly, his release or waiver of a part of that exclusive right by issuance of an unconditional, non-exclusive license, per se, decreased rather that increased the statutory restraint of trade to which he was entitled. 81 The next question is whether the insertion in such a license of some limitation upon the licensee's right to sell the articles made by the licensee under the patent, per se, converts this otherwise lawful agreement into an unreasonable restraint of trade violative of the Sherman Act. The answer is no. Just as an unlimited license is a partial, but lawful, relaxation of the lawful restraint of trade imposed by the patent so a limited license is but a correspondingly less relaxation of that same restraint. 82 The fact that the limitation in the license is a limitation on the price which may be charged by the licensee in making sales of the article made by the licensee under the protection of the patent does not change the answer, provided the price prescribed is 'normally and reasonably adapted to secure pecuniary reward for the patentees monopoly.'17 Here again, the restraint of trade imposed by the patent itself is lawful. Therefore, as long as the license agreement has only the effect of reducing the lawful restraint imposed by the patent, such agreement merely converts the original lawful restraint into a lesser restraint, equally lawful. 83 Such argeements should be carefully scrutinized to make sure that they do not introduce new restrictions which, as judicially construed, unreasonably restrain trade and thus violate the Sherman Act. In the instant case the findings eliminate such possibilities and thus reduce the issue here to one comparable with the issue in the Bement and General Electric cases. 84 This brings us to a further discussion of the nature of the license in the present case and of the precise limitations contained in it. This requires, first of all, a consideration of the nature of the exclusive right to make, use and sell the patented product. The precise nature of such a 'patent right' has been described as follows by Chief Justice Taft in a unanimous opinion of this Court: 85 'It is the fact that the patentee has invented or discovered something useful and thus has the common-law right to make, use and vend it himself which induces the government to clothe him with power to exclude everyone else from making, using or vending it. In other words, the patent confers on such common-law right the incident of exclusive enjoyment and it is the common-law right with this incident which a patentee or an assignee must have (in order to bring a suit for infringement). That is the implication of the descriptive words of the grant 'the exclusive right to make, use and vend the invention.' The government is not granting the common-law right to make, use and vend, but it is granting the incident of exclusive ownership of that common-law right, which can not be enjoyed save with the common-law right. A patent confers a monopoly. So this court has decided in the Paper Bag Case, supra (210 U.S. 405, 28 S.Ct. 748, 52 L.Ed. 1122) and in many other cases. The idea of monopoly held by one in making, using and vending connotes the right in him to do that thing from which he excludes others.' Crown Co. v. Nye Tool Works, 261 U.S. 24, 36, 37, 43 S.Ct. 254, 256, 257, 67 L.Ed. 516. 86 This analysis is the key to the issue before us. It demonstrates that the common law right to make, use and sell the product of an unpatented invention exists without any right to exclude others from so making, using or selling such product. The additional 'exclusive right,' or so-called 'patent right,' which is added to the common law right of the inventor is added by authority of the Constitution and of the federal statutes, so as to promote the progress of science, the useful arts and, no doubt, the general welfare. The patent or any interest therein may be assigned. R.S. § 4898, as amended, 55 Stat. 634, 35 U.S.C. § 47 (Supp. V, 1946), 35 U.S.C.A. § 47.18 An assignee, exercising his right to exclude others during the life of the patent from making, using or selling articles under protection of the patent, does not practice a restraint of trade in violation of the Sherman Act any more than would his assignor if the assignment had not been made. 87 Any attempted assignment or transfer short of those indicated in the statute 'is a mere license, giving the licensee no title in the patent, and no right to sue at law in his own name for an infringement.'19 The legal position of the holder of a simple, unconditional, nonexclusive license is important.20 Before his receipt of his license, he had the common law right to make, use and sell the patented article as well as other articles, except to the important extent prevented by the patentee's exclusive rights. The license changed that position by withdrawing from the licensee, to the extent of the license, the restriction which the patent placed upon him. Accordingly, to the extent of his license, the restraint placed upon trade by the patent was diminished. In relation to the Sherman Act his license, instead of creating an added ground for asserting a violation of the Sherman Act, thus, per se, relaxed an existing restraint of trade. The previous restraint imposed by the patent was not a violation of the Sherman Act and, therefore, the mere lessening of that restraint was not a violation of that Act. The important point is the need to see to it that the lessening of the restaint resulting from the issuance of either an absolute license or a limited license is, in fact, no more than a mere withdrawal of the lawful restraint imposed by the patent and is not either directly or indirectly an imposition of a new restraint not within the ambit of the patent right. An unconditional, nonexclusive and royalty-free license presents, per se, no need for special scrutiny under the Sherman Act. A royalty-yielding license presents the issue suggested by the language in the General Electric case. In order not to violate the Sherman Act, the royalty must be 'normally and reasonably adapted to secure pecuniary reward for the patentee's monopoly.'21 However, as well explained in that case, a royalty may not, by itself, satisfy the needs of the patent holder. Limitations on the price of sales by the licensee of products made by the license under the patent may be the best, or even the only, condition that is thus 'normally and reasonably adapted' to the situation. 88 The following statements illustrate the directness with which this Court repeatedly has decided in favor of the validity of limited licenses when that question has been before it: 89 '* * * the general rule is absolute freedom in the use or sale of rights under the patent laws of the United States. The very object of these laws is monopoly, and the rule is, with few exceptions, that any conditions which are not in their very nature illegal with regard to this kind of property, imposed by the patentee and agreed to by the licensee for the right to manufacture or use or sell the article, will be upheld by the courts. The fact that the conditions in the contracts keep up the monopoly or fix prices does not render them illegal.' Bement v. National Harrow Co., supra, 186 U.S. at page 91, 22 S.Ct. at page 755, 46 L.Ed. 1058. 90 'As was said in Unite States v. General Electric Co., 272 U.S. 476, 489, 47 S.Ct. 192, 196, 71 L.Ed. 362, the patentee may grant a license 'upon any condition the performance of which is reasonably within the reward which the patentee by the grant of the patent is entitled to secure.' The restriction here imposed (upon the licensee to manufacture and to sell the patented article for certain uses only) is of that character. The practice of granting licenses for a restricted use is an old one, see Providence Rubber Company v. Goodyear, 9 Wall. 788, 799, 800, 19 L.Ed. 566; Gamewell Fire-Alarm Telegraph Co. v. Brooklyn, C.C., 14 F. 255. So far as appears, its legality has never been questioned.' General Talking Pictures Corporation v. Western Electric Co., 305 U.S. 124, 127, 59 S.Ct. 116, 117, 83 L.Ed. 81. 91 The normality, reasonableness and practical necessity for inserting a price-limiting condition in certain licenses, without trespassing upon the prohibited area of unlawful restraints of trade, is effectively summarized in the General Electric case, 272 U.S. at page 490, 47 S.Ct. at page 197, 71 L.Ed. 362: 92 'If the patentee goes further and licenses the selling of the articles, may he limit the selling by limiting the method of sale and the price? We think he may do so provided the conditions of sale are normally and reasonably adapted to secure pecuniary reward for the patentee's monopoly. One of the valuable elements of the exclusive right of a patentee is to acquire profit by the price at which the article is sold. The higher the price, the greater the profit, unless it is prohibitory. When the patentee licenses another to make and vend and retains the right to continue to make and vend on his own account, the price at which his licensee will sell will necessarily affect the price at which he can sell his own patented goods. It would seem entirely reasonable that he should say to the licensee, 'Yes, you may make and sell articles under my patent but not so as to destroy the profit that I wish to obtain by making them and selling them myself.' He does not thereby sell outright to the licensee the articles the latter may make and sell or vest absolute ownership in them. He restricts the property and interest the licensee has in the goods he makes and proposes to sell.'22 93 During the hearings of the Temporary National Economic Committee, testimony was received from the Commissioner of Patents and manufacturers familiar with the commercial development of patented products bearing on the reasonableness and propriety of price limitations in patent licenses comparable to those in the present case. It was to the effect that commercially successful mechanical inventions, such as those in the electrical, communications and automotive industries, usually represent not only the intrinsic merit of the inventions themselves but a substantial investment in research, experimentation and promotion. If, after the disclosure of the invention, others are to be licensed to make the patented article, the costs of production by such licensees will reflect none of the investments above-mentioned. If the patentee is to be reimbursed for his expenditures, he will need, therefore, to secure the benefit of a royalty sufficient to accomplish this or of a restriction on the price at which licensees may sell their products under the patent. This price would have to be one that would enable the patentee to manufacture and sell the article in such quantities and at such prices as would produce a return to him commensurate with his investment in it. He might prescribe both a royalty and a restriction. As long as the royalties and the prices were 'normally and reasonably adapted to secure pecuniary reward for the patentee's monopoly.'23 They would perform much the same function.24 94 In cases where patents are owned by comparatively small industrial producers but licenses are to be issued by them to comparatively large industrial producers in the same field, the necessity for early reimbursement of the patent owners for their development costs is clear and the danger that a large licensee will undersell his smaller licensor is obvious. This is the situation in the present case. The General Electric Company and the Westinghouse Electric Corporation are among the licensees of the much smaller patent holders, Line and Southern. Similarly, where outside capital is needed to finance the development of an invention, iti § normal and reasonable for the investors to require not only a valid patent but also to insist that any licenses issued during the initial operating period shall contain such price limitations as will allow the patent holder to amortize his original investment within a reasonable time. In this case, finding of fact No. 32 shows that 'the price limitation provisions contained in the various license agreements here in evidence were insisted upon by the patent owner and were intended and reasonably adapted to protect its own business and secure pecuniary reward for the patentee's monopoly.'25 95 The following statement by Conway P. Coe, Commissioner of Patents, before the Temporary National Economic Committee in 1939, reinforces the above conclusions: 96 'Speculative capital must be encouraged to fall in behind a new enterprise and this is true whether the enterprise is wholly new or represents merely an expansion of an established organization. Some testimony has been offered to this committee by representatives of large corporations that they would continue to invent, and invent, and invent, and research, research, and research whether or not they were rewarded by the patent grant, but, if you will investigate, I believe you will find that whenever these large corporations, themselves firmly established, undertake a new development, that development is likely to be founded upon patent protection. Whatever opinions have been expressed to this committee or may hereafter be expressed as to whether or not the inventor will continue to invent without the patent system, I think I can present to you indisputable evidence that speculative capital will not back new inventions without the patent protection. And in the final analysis this is the crux and the most important thing in the whole patent question.'26 Hearings before the Temporary National Economic Committee, supra, at pp. 857, 858. 97 The foregoing supports the conclusions reached in the Bement and General Electric cases, supra. The basis for such support is sufficiently broad to lead to the same result in the present case. 98 SUBLICENSES AND CROSS-LICENSES. 99 Under the foregoing principles and authorities, a simple price-limiting patent license, in which the price limitations meet the test stated in the General Electric case, is a lawful agreement. Such a license would involve, as a possible restraint of trade, only the exclusive right to make, use and sell the patented product. That restraint would exist by virtue of the statute and constitutional provision long antedating the Sherman Act. If the limitations in a license reach beyond the scope of the statutory patent rights, then they must be tested by the terms of the Sherman Act. Assuming that in the instant case the price limitations do not reach beyond the restraint of the patent, the next question is: Does the additional sublicense issued by Line under the Southern patent make a difference? The answer is no. 100 The sublicense, per se, further diminishes the statutory restraint of trade imposed by the patent law. It adds a release r om the restraint of Southern's patent. Line's authority to issue the sublicense was an express grant by Southern to Line of an exclusive right to issue it. Per se, this sublicense certainly amounts to no more than another license under another patent. In the instant case it is under a complementary patent without which Line's license would be without commercial value. For that very reason it is a reasonable and necessary part of the transaction. In both the Bement and General Electric cases, the license in question was issued not merely under one, but under many patents held by the licensor. In those cases, apparently, it was not thought necessary to question the relation of those patents to one another or the authority of the licensor to issue the license under each of them. In any event, there hardly could have existed in those cases any closer relationship between the patents involved or a more essential and normal reason, of a patent nature, for combining rights under them than existed here between Line's and Southern's complementary patents. Except for the cross-licensing feature, to be next considered, the situation in relation to the Sherman Act is the same here as though Line had received an assignment of Southern's patent and issued licenses under it as well as under Line's patent. 101 In the present case, there are ten licensee-defendants instead of one as in each of the Bement and General Electric cases. In view of the positive finding that there was no agreement or understanding among the licensees amounting to an unreasonable restraint of trade, this mere multiplication of one license by ten produces a repetition of the same issue rather than a different issue. It is apparent also from the record in the General Electric case that, in that case, in addition to the Westinghouse license, there were licenses to 13 other manufacturers, which had been issued by the licensor, although the licensees under them were not made parties to the suit. 15 F.2d 715, 716. 102 It is suggested also that the Bement and General Electric rule does not apply because there is a cross-licensing agreement between Line and Southern. The suggestion apparently is that such an agreement, per se, reaches beyond the scope of the exclusive rights of the parties under the patents and converts the price limitations in the respective licenses into unreasonable restraints of trade violating the Sherman Act. 103 The cross-license from Southern carries no price-limiting feature. At most it is a royalty-free cross-license issued to Line in consideration of Line's license to Southern. It is accompanied by a grant from Southern to Line of an exclusive license to grant sublicenses under Southern's patent. Provision is made also for the equal division between Southern and Line of such royalties as shall be received by Line upon products made and sold by the respective licensees under the Southern and Line patents. 104 These sublicenses and the royalties derived from them do not, however, increase the restraints on trade beyond those restraints which are inherent in the respective patents. In fact, each original license decreased those restraints under Line's patent and each sublicense did the same under Southern's patent. Because of the complementary relationship between the patents, these sublicenses have served substantially to remove the restraints which the respective patents, when held separately, put in the way of production. The two patents together completely covered the product. If the price limitations were valid under Line's licenses, the issuance by Line of the sublicenses under Southern's patent has no more effect on the question involved in this case than if Southern, instead of granting to Line an exclusive right to issue sublicenses under Southern's patent, had assigned that patent to Line and Line had then issued original licenses under it on the same terms as Line issued the sublicenses. 105 The next consideration is the effect of the cross-license by Southern to Line,c oupled with the grant of the exclusive right to issue the above-mentioned sublicenses under Southern's patent and the division of certain royalties received by Line. Where, as here, there is no agreement, course of dealing or other circumstance than the existence of the cross-licenses between complementary patent holders, the cross-licensing agreements do not, per se, reach beyond the scope of the patent rights. 106 Patent pools, especially those including unrelated or distantly related patents and involving the issuance of many forms of royalty-free, royalty-bearing or price-limiting licenses and cross-licenses, might present a different picture from that in this case. Such arrangements might be but a screen for, or incident to, an unlawful agreement in restraint of trade violating the Sherman Act. Here we have no such facts. The findings eliminate all bases for the claim of invalidity except the terms of the license agreements, per se. We are not here confronted with the effect of cross-licenses between unrelated patents, Here we have only that natural situation, common under our patent laws, where two or more complementary patents are separately owned. One is for an improvement that is commercially essential to the other. In such a case one solution is to combine the ownership of the two by purchase and complete assignment. That, per se, would not involve an unlawful restraint of trade. 107 The solution in the instant case was even more natural than a consolidation of the patents by purchase. It conduced even more to the maintenance of competition. Each patentee granted to the other a nonexclusive, royalty-free license. This cross-licensing amounted to a waiver by each patent holder of his right to exclude the other from making, using or selling the patented product. This resulted in a diminution of the restraint created by the patent statute. This, per se, was, therefore, well within the scope of the patent and not a violation of the Sherman Act. Both patentees became producers. 108 Unless the terms of the cross-licenses reach beyond those that are normally and reasonably adapted to the patent relationships of the parties, the cross-licenses are no more outside of the protection of the patent law than would be direct licenses. A reasonable price-limiting provision in at least one of two cross-licenses is just as normal and reasonable a patent provision as it would be in a direct license. In the present case the validity of the price limitation in Line's license to Southern is entitled to the same judicial support and for the same reasons as if no cross-license had been issued in exchange. 109 In the present case, the need for price-limiting provisions, both in the license to Southern and in the licenses to the other ten defendants, rest upon the need of the patent holder to protect its opportunity to continue the manufacture of its own patented product. The substance of the situation is that the patent holder needs to protect itself precisely as much and in the same way as in the case of a direct license standing alone. The Sherman Act traditionally tests its violation not by the form but by the substance of the transaction. 110 In distinction from patent pools and from cross-license between holders of competing or even noncompeting but unrelated patents, we have here a case of a cross-license and a division of royalties between holders of patents which are complementary and vitally dependent upon each other. We have here complementary patents each of which alone is commercially of little value, but both of which, together, spell commercial success for the product. Cross-licenses between their holders, on terms within the needs of their patent monopolies, are essential to the realization of the benefits contemplated by the patent statutes. Far from being unlawful agreements violative of the Sherman Act, such agreements provide in fact the only reasonable means for releasing to the public the benefits intended for the public by te patent laws. A cross-license between mutually deadlocked complementary patents is, per se, a desirable procedure. Standard Oil Co. v. United States, 283 U.S. 163, 170 et seq., 51 S.Ct. 421, 423, 75 L.Ed. 926. Its validity must depend upon the terms and substance of the surrounding circumstances. 111 The record in the General Electric case discloses that the license agreement between the General Electric Company and Westinghouse which was there upheld was itself a cross-licensing agreement.27 In fact, the opinion of the lower court in the instant case commented on that cross-license as follows: 112 'A cross-license agreement existed between General Electric and Westinghouse which contained agreements even more restrictive than the price protection provisions of the cross-licenses involved in the case at bar.' United States v. Line Material Co., D.C., 64 F.Supp. 970, 975. 113 The opinion in the General Electric case makes no distinction between cross-licenses and direct licenses. That case, therefore, is itself a precedent for upholding a cross-licensing agreement under facts characterized below as being 'even more restrictive' than those here presented. 114 The acquisition by a single party of patents on noncompeting machines has been held not to be, per se, a violation of the Sherman Act. In United States v. Winslow, 227 U.S. 202, 217, 33 S.Ct. 253, 255, 57 L.Ed. 481, Mr. Justice Holmes, in a unanimous opinion of the Court, said: 115 'The machines are patented, making them is a monopoly in any case, the exclusion of competitors from the use of them is of the very essence of the right conferred by the patents, Paper Bag Patent Case (Continental Paper Bag Co. v. Eastern Paper Bag Co.) 210 U.S. 405, 429, 28 S.Ct. 748 (755), 52 L.Ed. 1122, 1132, and it may be assumed that the success of the several groups was due to their patents having been the best. As, * * * they did not compete with one another, it is hard to see why the collective business should be any worse than its component parts. * * * we can see no greater objection to one corporation manufacturing 70 per cent of three noncompeting groups of patented machines collectively used for making a single product than to three corporations making the same proportion of one group each. The disintegration aimed at by the statute does not extend to reducing all manufacture to isolated units of the lowest degree.' See, also United States v. United Shoe Machinery Co., 247 U.S. 32, 45, 51 et seq., 38 S.Ct. 473, 478, 480, 62 L.Ed. 968; United Shoe Machinery Corporation v. United States, 258 U.S. 451, 463, 464, 42 S.Ct. 363, 367, 66 L.Ed. 708. 116 In Standard Oil Co. v. United States, 283 U.S. 163, 170, 171, 175, 51 S.Ct. 421, 423, 424, 425, 75 L.Ed. 926, Mr. Justice Brandeis spoke as follows for a unanimous Court (except for Mr. Jut ice Stone who took no part in the case): 117 'The Government concedes that it is not illegal for the primary defendants to cross-license each other and the respective licensees; and that adequate consideration can legally be demanded for such grants. But it contends that the insertion of certain additional provisions in these agreements renders them illegal. It urges, first, that the mere inclusion of the provisions for the division of royalties, constitutes an unlawful combination under the Sherman Act (15 U.S.C.A. § 1 et seq.) because it evidences an intent to obtain a monopoly. This contention is unsound. Such provisions for the division of royalties are not in themselves conclusive evidence of illegality. Where there are legitimately conflicting claims or threatened interferences, a settlement by agreement, rather than litigation, is not precluded by the Act. * * * An interchange of patent rights and a division of royalties according to the value attributed by the parties to their respective patent claims is frequently necessary if technical advancement is not to be blocked by threatened litigation.28 * * * 118 'But an agreement for cross-licensing and division of royalties violates the Act only when used to effect a monopoly, or to fix prices, or to impose otherwise an unreasonable restraint upon interstate commerce.' 119 In the above context, and for the reasons previously presented, it is evident that the agreements effecting a price fixation which thus may violate the Sherman Act are only those which 'impose * * * an unreasonable restraint upon interstate commerce,' within the meaning of the Sherman Act read in the light of the patent laws.29 The agreements which remain within the ambits of the patents to which they relate still are lawful agreements by virtue of the patent laws, just as they have been throughout the life of our patent system. 120 JUDICIAL AND LEGISLATIVE HISTORY SINCE THE GENERAL ELECTRIC CASE. 121 Neither the Bement nor the General Electric cases, supra, has been overruled and the reasoning upon which they are based has not been directly or indirectly rejected by this Court. On the other hand, this Court repeatedly has recognized the existence of the principles announced in them. See, for example, Carbice Corporation v. American Patents Development Corporation, 283 U.S. 27, 31, 51 S.Ct. 334, 335, 75 L.Ed. 819; General Talking Pictures Corporation v. Western Electric Co., 305 U.S. 124, 127, 59 S.Ct. 116, 117, 83 L.Ed. 81: 122 'Appellants argue that the distributors were free to license the films for exhibition subject to the restrictions, just as a patentee in a license to manufacture and sell the patented article may fix the price at which the licensee may sell it.' (Citing the Bement and General Electric cases.) Interstate Circuit, Inc. v. United States, 306 U.S. 208, 228, 59 S.Ct. 467, 475, 83 L.Ed. 610. 123 And see United States v. Univis Lens Co., 316 U.S. 241, 252, 62 S.Ct. 1088, 1094, 86 L.Ed. 1408; United States v. Masonite Corporation, 316 U.S. 265, 277, 62 S.Ct. 1070, 1077, 86 L.Ed. 1461. 124 The rule of stare decisis applies to the interpe tation given to the patent statutes and to the Sherman Act by the Bement and General Electric cases. There is no occasion here for such a relaxation of that rule as was suggested by Mr. Justice Brandeis in cases interpreting broad constitutional phrases. See his dissent in Burnet v. Coronado Oil & Gas Co., 285 U.S. 393, 410, 52 S.Ct. 443, 448, 76 L.Ed. 815. To the extent that the present holdings are based upon opinions of this Court, that element is inherent in the rule of stare decisis. 125 The exceptional recent activity in seeking, by statutory amendment, a change in the patent laws as interpreted in the Bement and General Electric cases indicates a widespread understanding that, if such interpretation is to be changed, the remedy calls for congressional action. The resistance to such a change which has been shown by Congress is impressive.30 It indicates no dissatisfaction with the interpretation of existing law as expressed in the Bement and General Electric cases. 126 There appears, therefore, to be neither adequate reason nor authority for overruling the Bement and General Electric cases or for distinguishing this case fromt hem. 1 26 Stat. 209, as amended by 36 Stat. 1167, 15 U.S.C.A. §§ 1, 4: 'Sec. 1. Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal * * *.' 'Sec. 4. The several district courts of the United States are invested with jurisdiction to prevent and restrain violations of this act; and it shall be the duty of the several district attorneys of the United States, in their respective districts, under the direction of the Attorney General, to institute proceedings in equity to prevent and restrain such violations. * * *' 2 The names of appellees and the abbreviations hereinafter used as well as the percentage of production of the dropout fuse devices manufactured under the patents are listed below: Appellee Abbreviated title Percent General Electric General Electric 29.2 Line material Co. Line 25.4 James R. Kearney Corp. Kearney 18.9 Southern States Equipment Corp Southern 7.9 Westinghouse Electric Corp. Westinghouse 5.3 Schweitzer & Conrad, Inc. Schweitzer & Conrad 5.1 Railway & Industrial Engineering Co. Railway 3.8 W. N. Matthews Corp. Matthews 2.0 Porcelain Products Co. Porcelain 1.5 Royal Electric Mfg. Co. Royal .5 Pacific Electric Mfg. Co. Pacific .2 T. F. Johnson Johnson .2 100.0 All are corporations of various states except T. F. Johnson, doing business as Johnson Manufacturing Company, Atlanta, Georgia. 3 The case was argued April 29, 1947, and at our request reargued November 12—13, 1947. United States v. United States Gypsum Co., 333 U.S. 364, 68 S.Ct. 525, decided today, considers related phases of Sherman Act legislation. 4 '* * * The Lemmon device consists essentially of an expulsion tube supported by a double jointed hinge at its lower end. As the tube moves into closed circuit position, the hinge is locked and a latch engages a terminal on top of the tube to hold the tube in place. The hinge is released by a relatively complicated and expensive solenoid mechanism when the current becomes excessive because of a short circuit or overload. Thereupon the circuit is broken in the tube and the tube drops downwardly, its upper end disengaging from the latch, which permits the tube to swing out and down. By reason of claims covering the double jointed hinge construction in cutouts, this patent dominates the manufacture of dropout fuse cutouts involved in this suit.' Findings of Fact, No. 6. 5 '* * * The Schultz patent covers a dropout fuse cutout which is an improvement on the device disclosed in the Lemmon patent, and is dominated by the Lemmon patent. In the Schultz structure an expulsion tube is supported by a double jointed hinge which is held rigid by a fuse link. On overload, the fuse melts, breaking the circuit in the tube and the hinge is released automatically, which permits the tube to drop down and then swing outwardly. This Schultz dropout fuse is much simpler, and can be manufactured at considerably less than the cost of a comparable solenoid operated cutout, and has met widespread commercial demand and use.' Findings of Fact, No. 7. 6 Schweitzer & Conrad, General Electric, Westinghouse, Railway, Kearney, Matthews. 68 S.Ct.—35 1/2 7 'The Southern Corporation grants to the Line Company a fully paid license to make, use and sell, with the exclusive right to grant sub-licenses to others to make, use and sell, expulsion tube electric circuit interrupting equipment in which the circuit interruption is caused by the thermally initiated rupturing of a current carrying element in an expulsion tube, coming under claims 3, 4 to 10 inclusive, 15 to 22 inclusive, 25, and 27 to 30 of the patent to G. N. Lemmon, No. 2,150,102, dated March 7, 1939, entitled 'Circuit Breaker' and/or any division, continuation, substitute, renewal and/or reissue thereof.' 8 '15. The licenses hereby granted or agreed to be granted are on the express condition that the prices, terms and conditions of sale of the Southern Corporation for electric fuse equipment made and sold under the licenses herein granted shall, so long as such electric fuse equipment continues to be covered by Letters Patent of the Line Company under which a license is granted by this agreement, be not more favorable to the customer than those established from time to time and followed by the Line Company in making its sales. 'It is the purpose and intent of this agreement that there shall not be directly, or indirectly, any modification of the prices set by the Line Company as they exist from time to time, as for instance, by including in the transaction other material or parts, or labor, or services, at less than the regular price at which the party making the same is at the time selling such other material or parts or furnishing such labor or services or by making allowances for freight or terms of payment other than those employed by the Line Company. 'Prices, terms and/or conditions of sale may be changed by the Line Company from time to time through reasonable notice in writing to the Southern Corporation, but not less than ten (10) days' written notice shall be given before the change shall go into effect. 'It is agreed that if the Line Company shall grant a license to a third party under any of the patents of this agreement (but excepting from the provisions of this paragraph a license to be granted to General Electric Company of Schenectady, New York, under said Kyle reissue patent 19,449), without a provision for maintenance by said third partyof prices, maintenance by said third party of prices, in the first paragraph of this section, then Southern Corporation shall be relieved from its obligation under said section.' 9 In the Line-General Electric license agreement of March 15, 1940, the first under the revised Line-Southern contract, the price maintenance provision was as follows: '9. The license hereby granted by the Licensor is subject to the express limitations that as to dropout fuse cutouts manufactured and sold by Licensee which are comparable in respect to general type and purpose, ampere and voltage rating, and rupturing capacity, to dropout fuse cutouts manufactured and sold by Licensor, Licensee's prices, terms and conditions of sale of dropout fuse cutouts for use in the United States made under the license herein granted to Licensee under the aforesaid Letters Patent, Lemmon No. 2,150,102, and Schultz and Steinmayer No. 2,176,227, and as long as such dropout fuse cutouts continue to be covered by such Letters Patent, shall be no more favorable to a customer of the Licensee than those established from time to time and followed by the Licensor in its sales. The prices, terms and conditions of sale as at present established and in force are those set forth in Schedule A annexed hereto and forming a part hereof. This schedule of prices may be changed from time to time by the Licensor upon ten (10) days' notice in writing to the Licensee. '10. The spirit and intent of this license agreement, contemplates that in no transaction shall there be any modification of Licensee's prices, either directly or indirectly, as for instance by inclusion in the transaction of other material or parts or services or labor at less than the regular prevailing prices at which the party making the sale is at the time accustomed to sell such other material or parts or furnish such services or labor, as will serve in effect to reduce Licensee's prices below those named in Schedule A as it exists from time to time.' This was repeated in the Line-General Electric revised agreement of November 17, 1941. A variable appears in the Westinghouse and other licenses. In its price provisions, the Lemmon patent is not mentioned but the Lemmon patent was included in its grant of license and the subsidiary Schultz patent could not be practiced without the right to use the dominant Lemmon. 10 These two produced an aggregate of less than one percent of the devices. 11 All appellees, except Royal, Pacific and Johnson, attended one or another of these conferences. We do not find it necessary to determine whether or not the selling prices also of the licensees were before the conference. The agreements adequately show an intention to fix prices. 12 The licenses contained provisions for records of sale, inspection thereof and cancellation of the license for breach. 13 Findings of Fact: '32. The price limitation provisions contained in the various license agreements here in evidence were insisted upon by the patent owner and were intended and reasonably adapted to protect its own business and secure pecuniary reward for the patentee's monopoly. Each of the licenses granted to the licensee-defendants was taken and granted in good faith, the parties to the licenses believing a license under the patents to be necessary in order that the licensee could continue lawfully to manufacture and sell its dropout fuse cutouts. Apart from the written license agreements here in evidence, there was no agreement, express or implied, between the licensor and any licensee, or between any two or more licensees, with respect to the prices of licensed dropout fuse cutouts. '33. All of the devices for which minimum prices were established by Line were comparable to, and competitive with, devices which Line manufactured and sold regularly or which it was ready to manufacture and sell to its customers on special order. '34. The cross-license agreements between Line and Southern were limited to the commercially practicable device covered by the subservient Schultz patent, and did not create additional power for price control of the licensed cutouts over that which each had before entering into the agreements. The inflexible intention to insist upon price limitation existed independently in each of the patent owners prior to any discussions or arrangements between them. Such cross-license agreements were entered into in good faith, not for the purpose of fixing prices in the industry but to permit the manufacture and sale of the cheaper device covered by the subservient patent, to facilitate the negotiation of licenses, and to provide royalty income. There was no agreement, express or implied, between Line and Southern with respect to prices on cutouts other than the written cross-license agreements. '35. The license agreements here in evidence did not restrain trade but promoted it by making available several sources where the patented devices could be obtained, thus increasing competition in such devices, particularly with respect to design, quality and service. Competition among the defendants for business in these devices continued to be vigorous after the making of the license agreements. '36. There was no combination or conspiracy among the defendants, or any of them, to fix, maintain or control prices of dropout fuse cutouts or parts thereof, or to restrain trade or commerce therein.' 14 For illustration and without implication as to this Court's position on the issues, we call attention to the following: Barber—Colman Co. v. National Tool Co., 6 Cir., 136 F.2d 339. In a suit by the licensor against the licensee, injunctive relief to compel compliance with a price fixing provision in the patent license was denied. The General Electric case was held not to permit the patentee to fix prices on unpatented hobs which were produced under a process patent by a patented machine. Cummer—Graham Co. v. Straight Side Basket Corp., 5 Cir., 142 F.2d 646. Licensee was denied relief in an action against licensor for failing to require other licensees to comply with price fixing provisions; licensor of a patent on an attachment to a basket making machine may not fix prices on baskets produced by the machine. United States v. Vehicular Parking, Ltd., D.C., 54 F.Supp. 828. Antitrust proceeding against patent holding company and manufacturing licensees in parking meter industry. The patent licenses fixed the prices at which parking meters could be sold and contained restrictive provisions on marketing practices. In ordering compulsory licensing at a reasonable royalty, the court distinguished the General Electric case principally on the ground that the patentee in this case did not itself manufacture the parking meters; other distinctions noted were the number and active concert of licensees, the weakness of the patents, the fixing of prices on unpatented articles, and the existence of marketing restrictions. 15 For example, such price arrangements under the type of agreement indicated are in litigation as follows: United States v. Allegheny Ludlum Steel Corp., D.N.J.Civil 45 83, stainless steel company owning patents on a particular type of stainless steel allegedly issued licenses fixing prices on all types of stainless steel. United States v. American Optical Co., S.D.N.Y.Civil 10—391, optical patents owned by patent holding company which gave exclusive licenses; exclusive licensee sublicensed to other manufacturers who agreed to maintain prices and comply with marketing restrictions. United States v. Bausch & Lomb Optical Co., S.D.N.Y. Civil 10 394, patent holding company issued licenses to two licensees to manufacture bifocal lenses, the licenses fixing prices at which the bifocal lenses were to be sold and the selection of wholesalers and retailers for the lenses. United States v. Catalin Corporation of America, D.N.J.Civil 7743, manufacturer of phenolic resins licensed other manufacturers under its process patents, the licensees agreeing to sell at prices established by the licensor. United States v. General Cable Corp., S.D.N.Y.Civil 40—76, cross licenses among holders of patents on fluid filled cable, the licensees agreeing to adhere to uniform prices and to observe territorial marketing limitations. United States v. General Electric Co., D.N.J.Civil 1364, cross licensing agreements between manufacturers of electrical bulbs providing for price and quantitative restrictions. United States v. General Electric Co., Fried.Krupp, S.D.N.Y.Cr. 110—412, cross licensing of tungsten carbide patents with price and territorial restrictions. United States v. General Instrument Corp., D.N.J.Cr. 3960—C, Civil 8586, owners of variable condenser patents assigned patents to holding company and took back licenses with price fixing provisions; explicit price fixing provisions subsequently removed but allegedly continued by tacit agreement. United States v. Phillips Screw Co., N.D.Ill.Civil 47—C—147, holder of patents on cross recessed head screws granted exclusive license to leading screw manufacturer who sublicensed to other manufacturers; patent holder, exclusive licensee, and sublicensees agreed on price terms for all screws produced.* * Case dismissed March 9, 1948. 16 The United States lists: Uncertainty as to the nature of the patent, process or product, which justifies price control; extent of patent domination over the device; may a patent pooling corporation control all licensees' sale prices; extent of price control in an industry. U.S.Brief 65 et seq. 17 In earlier cases involving the National Harrow Company the lower courts held that an industry wide combination to fix prices was illegal. National Harrow Co. v. Hench, 3 Cir., 83 F. 36, 39 L.R.A. 299; National Harrow Co. v. Quick, C.C., 67 F. 130, affirmed on other grounds, 74 F. 236. Compare Rubber Tire Wheel Co. v. Milwaukee Rubber Works Co., 7 Cir., 154 F. 358, and Indiana Mfg. Co. v. J. I. Case Threshing Mach. Co., 7 Cir., 154 F. 365, upholding industry wide price fixing, with Blount Mfg. Co. v. Yale & Towne Mfg. Co., C.C., 166 F. 555, holding such price fixing illegal. 18 Bills have been introduced which would outlaw price limitation in patent licenses: H.R. 22345, 62d Cong., 2d Sess. (1912); S. 2730, 77th Cong., 2d Sess. (1942); S. 2491, 77th Cong., 2d Sess. (1942), and Hearings thereon; H.R. 7713, 77th Cong., 2d Sess. (1942); H.R. 109, 78th Cong., 1st Sess. (1943); H.R. 1371, 78th Cong., 1st Sess. (1943); H.R. 3874, 78th Cong., 1st Sess. (1943); H.R. 97, 79th Cong., 1st Sess. (1945); H.R. 3462, 79th Cong., 1st Sess. (1945); S. 2482, 79th Cong., 2d Sess. (1946); S. 72, 80th Cong., 1st Sess. (1947). See Final Report of Temporary National Economic Committee, Sen.Doc. No. 35, 77th Cong., 1st Sess. (1941), p. 36; Report of the National Patent Planning Commission, H.Doc., No. 239, 78th Cong., 1st Sess. (1943), p. 9. 19 Rules of Civil Procedure, Rule 52, 28 U.S.C.A. following section 723c: Findings by the Court.—'(a) Effect. In all actions tried upon the facts without a jury, the court shall find the facts specially and state separately its conclusions of law thereon and direct the entry of the appropriate judgment; and in granting or refusing interlocutory injunctions the court shall similarly set forth the findings of fact and conclusions of law which constitute the grounds of its action. Requests for findings are not necessary for purposes of review. Findings of fact shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge of the credibility of the witnesses. The findings of a master, to the extent that the court adopts them, shall be considered as the findings of the court.' 20 E.g., Miller-Tydings, 50 Stat. 693, 15 U.S.C.A. § 1. 21 Dr. Miles Medical Co. v. John D. Park & Sons Co., 220 U.S. 373, 31 S.Ct. 376, 55 L.Ed. 502; Boston Store of Chicago v. American Graphophone Co., 246 U.S. 8, 38 S.Ct. 257, 62 L.Ed. 551, Ann.Cas.1918C, 447; United States v. United Shoe Machinery Co., 247 U.S. 32, 58, 38 S.Ct. 473, 482, 62 L.Ed. 968; United States v. Trenton Potteries Co., 273 U.S. 392, 47 S.Ct. 377, 71 L.Ed. 700, 50 A.L.R. 989; United States v. Secony—Vacuum Oil Co., 310 U.S. 150, 222—224, 60 S.Ct. 811, 843—846, 84 L.Ed. 1129; United States v. Univis Lens Co., 316 U.S. 241, 250, 62 S.Ct. 1088, 1093, 86 L.Ed. 1406; Sola Electric Co. v. Jefferson Electric Co., 317 U.S. 173, 63 S.Ct. 172, 87 L.Ed. 165; Katzinger Co. v. Chicago Mfg. Co., 329 U.S. 394, 67 S.Ct. 416. Appalachian Coals v. United States, 288 U.S. 344, 53 S.Ct. 471, 77 L.Ed. 825, cannot be cited to support a contrary view. In that case, this Court held that 'The plan cannot be said either to contemplate or to involve the fixing of market prices.' 288 U.S. at page 373, 53 S.Ct. at page 479, 77 L.Ed. 825. See the Socony-Vacuum case, supra, 310 U.S. at page 214, 60 S.Ct. at page 840, 84 L.Ed. 129 et seq. Perhaps arbitrary or monopoly prices were in mind in Appalachian. 288 U.S. at pages 358, 359, 365, 371, 53 S.Ct. at pages 473, 474, 476, 478, 77 L.Ed. 825. 22 United States v. National Lead Co., 332 U.S. 319, 67 S.Ct. 1634; Hartford-Empire Co. v. United States, 323 U.S. 386, 406, 65 S.Ct. 373, 383, 384, 89 L.Ed. 322; Standard Oil Co. (Indiana) v. United States, 283 U.S. 163, at 169, 51 S.Ct. 421, at 423, 75 L.Ed. 926, and cases cited; Standard Sanitary Mfg. Co. v. United States, 226 U.S. 20, 48, 49, 33 S.Ct. 9, 14, 15, 57 L.Ed. 107. See Transparent—Wrap Mach. Corporation v. Stokes & Smith Co., 329 U.S. 637, 641, 647, 67 S.Ct. 610, 613, 616, and cases cited. 23 The Interstate Commerce Act authorizes carriers to pool revenues and authorizes mergers of carriers, provided that approval of the Interstate Commerce Commission is obtained. The antitrust laws are ia pplicable to such agreements. 49 U.S.C. § 5(1), (2) and (11), 49 U.S.C.A. § 5(1, 2, 11). 24 The words 'patent pool' are not words of art. The expression is used in this opinion to convey the idea of a linking of the right to use patents issued to more than one patentee. 25 226 U.S. at page 48, 33 S.Ct. at page 14, 57 L.Ed. 107: 'The agreements clearly, therefore, transcended what was necessary to protect the use of the patent or the monopoly which the law conferred upon it. They passed to the purpose and accomplished a restraint of trade condemned by the Sherman law. It had, therefore, a purpose and accomplished a result not shown in the Bement Case. There was a contention in that case that the contract of the National Harrow Company with Bement & Sons was part of a contract and combination with many other companies and constituted a violation of the Sherman law, but the fact was not established, and the case was treated as one between the particular parties, the one granting and the other receiving a right to use a patet ed article with conditions suitable to protect such use and secure its benefits. And there is nothing in Henry v. A. B. Dick Co., 224 U.S. 1, 32 S.Ct. 364, 56 L.Ed. 645 (Ann.Cas.1913D, 880.), which contravenes the views herein expressed.' 26 Cf. United States v. General Electric Co., supra. 1 26 Stat. 209, as amended, 50 Stat. 693, 15 U.S.C. § 1, 15 U.S.C.A. § 1. 2 '32. * * * Apart from the written license agreements here in evidence, there was no agreement, express or implied, between the licensor and any licensee, or between any two or more licensees, with respect to the prices of licensed dropout fuse cutouts. '34. * * * There was no agreement, express or implied, between Line and Southern with respect to prices on cutouts other than the written cross-license agreements. '36. There was no combination or conspiracy among the defendants, or any of them, to fix, maintain or control prices of dropout fuse cutouts or parts thereof, or to restrain trade or commerce therein.' (Findings of fact.) 3 In addition to the findings quoted in note 1, supra, the trial court found: '9. The validity of the United States letters patent involved in the licenses of the defendants is not contested by the plaintiff in this action, and therefore is not here in issue. '27. None of the license agreements aforesaid restrains trade in any article moving in interstate commerce, and none of them was entered into as a result of any conspiracy to restrain such trade. '28. * * * The prices listed in Schedule A are Line's own selling prices, determined solely by Line without discussion with or advice from any other defendant. '29. Under the cross-licenses with Southern and its licenses to others, Line established minimum prices only for structures within the ambit of the claims of its own patents. The classification schedules attached to the license agreements were only such as were reasonably necessary to protect the business of the licensor and implement the license agreement so as to prevent evasion by a licensee of lawful price limitation provisions. Line did not establish minimum selling prices for any devise not covered by a claim of its Schultz patent Re. 22,412 or its Kyle patent Re. 19,449. '31. There is no charge of monopoly by the defendants. There was no fixing of resale prices on licensed dropout fuse cutouts by the defendants or any of them. * * * '32. The price limitation provisions contained in the various license agreements here in evidence were insisted upon by the patent owner and were intended and reasonably adapted to protect its own business and secure pecuniary reward for the patentee's monopoly. Each of the licenses granted to the licensee-defendants was taken and granted in good faith, the parties to the licenses believing a license under the patents to be necessary in order that the licensee could continue lawfully to manufacture and sell its dropout fuse cutouts. '34. The cross-license agreements between Line and Southern were limited to the commercially practicable device covered by the subservient Schultz (Line's) patent, and did not create additional power for price control of the licensed cutouts over that which each had before entering into the agreements. * * * Such cross-license agreement were entered into in good faith, not for the purpose of fixing prices in the industry but to permit the manufacture and sale of the cheaper device covered by the subservient patent, to facilitate the negotiation of licenses, and to provide royalty income. * * * '35. The license agreements here in evidence did not restrain trade but promoted it by making available several sources where the patented devices could be obtained, thus increasing competition in such devices, particularly with respect to design, quality and service. Competition among the defendants for business in these devices continued to be vigorous after the making of the license agreements.' That the patents did not represent an industry-wide control appears from the follw ing finding: '5. The defendants are all manufacturers of electrical devices of various kinds. The dropout fuse cutouts manufactured by the defendants under the patent licenses have been and are in open competition with many other devices which perform the same functions and are not manufactured under the patent licenses, such as open single hinge dropout fuse cutouts; open non-dropout fuse cutouts; non-dropout fuse cutouts enclosed in materials other than cast wetprocess porcelain, such as Prestite; automatic circuit breaker cutouts; and others listed in Defendants' Exhibit L—23. The average aggregate annual sales of licensed dropout fuse cutouts manufactured by all the defendants from 1940 to 1944 was $1,918,247.78 and constituted only 40.77% of the average aggregate annual sales of all licensed and competitive cutouts manufactured and sold by all the defendants, and were distributed among the defendants as follows: General Electric, 29.2%; Line (,) 25.4% (;) Kearney, 18.9%; Southern 7.9%; Westinghouse, 5.3%; Schweitzer and Conrad, 5.1%; Railway, 3.8%; Matthews, 2%; Procelain, 1.5%; Royal, 0.5%; Pacific, 0.2%; and Johnson, 0,2%.' 4 '2. The cross-licenses and the license agreements entered into between the various defendants, as set forth in the preceding Findings of Fact, are lawful agreements.' (Conclusions of law.) 5 United States v. General Electric Co., supra, 272 U.S. at page 490, 47 S.Ct. at page 197, 71 L.Ed. 362. 6 Bement case, supra, 186 U.S. at page 92, 22 S.Ct. at page 756, 46 L.Ed. 1058. 7 General Electric case, supra, 272 U.S. at page 490, 47 S.Ct. at page 197, 71 L.Ed. 362. 8 An early patent for the establishment of a new industry was granted to a Flemish weaver in 1331. There are records of a merchant, in 1347, having a monopoly for exporting Cornish tea and of an individual, in 1376, having a monopoly to sell sweet wines in the City of London. The first patent for a new invention that has been found in the records dates from 1561 and covers the manufacture of saltpetre. Meinhardt, Inventions, Patents and Monopoly, pp. 30, 35 (London, 1946). 9 In 1602, in The Case of Monopolies, Darcy v. Allein, 6 Co.Rep. (Q.B.) 159, Part XI—84b; 1 Abb.Pat.Cas. 1; Webs.Pat.Cas. 1; a royal grant of exclusive right to manufacture playing cards within the realm was held void as violating the common law and several Acts of Parliament. And see 1 Walker on Patents, pp. 12—16 (Deller's Ed. 1937). 10 'VI. Provided also, and be it declared and enacted, That any Declaration before-mentioned shall not extend to any Letters Patents and Grants of Privilege for the Term of fourteen Years or under, hereafter to be made, of the sole Working or Making of any manner of new Manufactures within this Realm, to the true and first Inventor and Inventors of such Manufactures, which others at the Time of Making such Letters Patents and Grants shall not use, so as also they be not contrary to the Law, nor mischievous to the State, by raising Prices of Commodities at home, or Hurt of Trade, or generally inconvenient: The said fourteen Years to be accounted from the Date of the first Letters Patents, or Grant of such Privilege hereafter to be made, but that the same shall be of such Force as they should be, if this Act had never been made, and of none other.' 21 Jac. I, c. 3 (1623). 'The Statute of Monopolies created no new right either in the Crown or the people; it was simply declaratory of the common law and enacted into statute law, which bound the Sovereign, the doctrines that the courts had repeatedly affirmed, and reiterated those principles of the Magna Charta (9 Henry III, Ch. XXXVII, A.D. 1225) which declared that the liberties of his subjects shall not be infringed or broken by royal usurpation, and it limited the royal prerogative to certain definite terms and conditions under which it might be lawfully exercised. It is to be noted that there was a reservation of Letters Patent and grants of the privilege of the sole working or making of any new manufactures within the realm to the true and first inventor; conferring upon him an exclusive privilege for the term of fourteen years.' 1 Walker on Patents, supra, at p. 22. 11 The first Act to implement the constitutional provision was approved April 10, 1790. It provided: 'Section 1. * * * That upon the petition of any person or persons to the Secretary of State, the Secretary for the department of war, and the Attorney General of the United States, setting forth, that he, she, or they, hath or have invented or discovered any useful art, manufacture, engine, machine, or device, or any improvement therein not before knowm or used, and praying that a patent may be granted therefor, it shall and may be lawful to and for the said Secretary of State, the Secretary for the department of war, and the Attorney General, or any two of them, if they shall deem the invention or discovery sufficiently useful and important, to cause letters patent to be made out in the name of the United States, to bear teste by the President of the United States, reciting the allegations and suggestions of the said petition, and describing the said invention or discovery, clearly, truly and fully, and thereupon granting to such petitioner or petitioners, his, her or their heirs, administrators or assigns for any term not exceeding fourteen years, the sole and exclusive right and liberty of making, constructing, using and vending to others to be used, the said invention or discovery; * * *.' (Italics supplied.) 1 Stat. 109, 110. 12 The Commissioner referred to the special interest of President Jefferson in this subject: 'No American among his contemporaries or his successors has achieved a greater reputation as an opponent of monopoly than Thomas Jefferson. Yet he not merely sanctioned, he eloquently advocated the form of monopoly represented in patents. I cite his commentary on an early act of Congress, presumably that of 1790, in the administration of which he collaborated with Henry Knox, Secretary of War, and Edmund Randolph, Attorney General. "An act of Congress authorizing the issue of patents for new discoveries has given a spring to invention beyond my conception. Being an instrument of granting the patents, I am acquainted with their discoveries. "In the arts, and especially in the mechanical arts, many ingenious improvements are made in consequence of the patent-right giving exclusive use of them for 14 years. "Certainly an inventor ought to be allowed a right to the benefit of his invention for some certain time. Nobody wishes more than I do that ingenuity should receive liberal encouragement." Hearings before the Temporary National Economic Committee, supra, at p. 840. Some conception of the degree to which the present patent system has been resorted to is found in Commissioner Coe's testimony that, up to 1939, over 2,000,000 patents had been issued, apart from design patents and reissues. The figure is now approximately 2,500,000 of which all but about 100,000 have been issued since 1870. He showed also that only about 60% of the applications filed are finally granted. (Id. at p. 844, and Exhibits 179 and 180.) See also, Official Gazette, U.S.Pat.Off., Vol. 605, pp. 714, 885 (Dec. 30, 1947). After the final report of the Temporary National Economic Committee, the President issued Executive Order No. 8977, December 12, 1941, 1 C.F.R.Cum.Supp. 1040, establishing the National Patent Planning Commission to conduct a comprehensive survey and study of the American patent system and, among other things, to 'consider whether the system now provides the maximum service in stimulating the inventive genius of our people in evolving inventions and in furthering their prompt utilization for the public good; * * * whether there are obstructions in our existing system of patent laws, and if so, how they can be eliminated; * * * and what methods and plans might be developed to promote inventions and discoveries which will increase commerce, provide employment, and fully utilize expanded defense industrial facilities during normal times.' The President appointed Charles F. Kettering, Chairman, Chester C. Davis, Francis P. Gaines, Edward F. McGrady and Owen D. Young as members of the Committee. The Report of the Committee, transmitted by the President o Congress June 18, 1943 (H.R.Doc. No. 239, 78th Cong., 1st Sess. 1), contained the following; 'The American patent system established by the Constitution giving Congress the 'Power * * * To promote the Progress of Science and useful Arts,' is over 150 years old. The system has accomplished all that the framers of the Constitution intended. It is the only provision of the Government for the promotion of invention and discovery and is the basis upon which our entire industrial civilization rests. 'The American people and their Government should recognize the fundamental rightness and fairness of protecting the creations of its inventors by the patent grant. The basic principles of the present system should be preserved. The system has contributed to the growth and greatness of our Nation; it has— '(1) Encouraged and rewarded inventiveness and creativeness, producing new products and processes which have placed the United States far ahead of other countries in the field of scientific and technological endeavor; '(2) Stimulated American inventors to originate a major portion of the important industrial and basic inventions of the past 150 years; '(3) Facilitated the rapid development and general application of new discoveries in the United States to an extent exceeding that of any other country; '(4) Contributed to the achievement of the highest standard of living that any nation has ever enjoyed; '(5) Stimulated creation and development of products and processes necessary to arm the Nation and to wage successful war; '(6) Contributed to the improvement of the public health and the public safety; and '(7) Operated to protect the individual and small business concerns during the formative period of a new enterprise. 'The strongest industrial nations have the most effective patent systems and after a careful study, the Commission has reached the conclusion that the American system is the best in the world.' (Italics supplied.) In its summary of findings and recommendations it added: 'The patent system is the foundation of American enterprise and has demonstrated its value over a period coextensive with the life of our Government. The principle of recognizing a property right in intellectual creation is sound and should be continued as contemplated in the Constitution.' (Id. at p. 9.) 13 In Grant v. Raymond, 6 Pet. 218, 241, 242, 243, 8 L.Ed. 376, Chief Justice Marshall said: 'The law further declares that the patent 'shall be good and available to the grantee or grantees by force of this act, to all and every intent and purpose herein contained.' The amendatory act of 1793 contains the same language, and it cannot be doubted h at the settled purpose of the United States has ever been, and continues to be, to confer on the authors of useful inventions an exclusive right in their inventions for the time mentioned in their patent. It is the reward stipulated for the advantages derived by the public for the exertions of the individual, and is intended as a stimulus to those exertions. The laws which are passed to give effect to this purpose ought, we think, to be construed in the spirit in which they have been made; and to execute the contract fairly on the part of the United States, where the full benefit has been actually received: if this can be done without transcending the intention of the statute, or countenancing acts which are fraudulent or may prove mischievous. The public yields nothing which it has not agreed to yield; it receives all which it has contracted to receive. The full benefit of the discovery, after its enjoyment by the discoverer for fourteen years, is preserved; and for his exclusive enjoyment of it during that time the public faith is pledged. 'The great object and intention of the act is to secure to the public the advantages to be derived from the discoveries of individuals, and the means it employs are the compensation made to those individuals for the time and labour devoted to these discoveries, by the exclusive right to make, use and sell, the things discovered for a limited time.' 14 There is no issue here corresponding to the other issue examined and upheld in the General Electric case, namely, that involving the validity of the patentee's agency system of sales of its patented article. Another system for making sales of a patented article has been held invalid where the 'agencies' were found not to be bona fide agencies. United States v. Masonite Corporation, 316 U.S. 265, 62 S.Ct. 1070, 86 L.Ed. 1461. That case, in turn, did not reach the issue raised by the Westinghouse license in the General Electric case. The Court there said (316 U.S. at page 277, 62 S.Ct. at page 1077, 86 L.Ed. 1461): 'we need not reach the problems presented by Bement v. National Harrow Co., 186 U.S. 70, 22 S.Ct. 747, 46 L.Ed. 1058, and that part of the General Electric case which dealt with the license to Westinghouse Company.' 15 United States v. American Tobacco Co., 221 U.S. 106, 179, 180, 31 S.Ct. 632, 348, 55 L.Ed. 663. See also, Standard Oil Co. v. United States, 221 U.S. 1, 31 S.Ct. 502, 55 L.Ed. 619, 34 L.R.A.,N.S., 834, Ann.Cas.1912D, 734. 16 The instant case also is to be distinguished sharply from those in which the parties to a license have sought to fix prices for the resale by the licensee of patented products previously sold to the licensee by the patentee or others. United States v. Univis Lens Co., 316 U.S. 241, 252, 62 S.Ct. 1088, 1094, 86 L.Ed. 1406; Ethyl Gasoline Corporation v. United States, 309 U.S. 436, 452, 456, 457, 60 S.Ct. 618, 623, 625, 84 L.Ed. 852; Motion Picture Patents Co. v. Universal Film Mfg. Co., 243 U.S. 502, 516, 37 S.Ct. 416, 420, 61 L.Ed. 871, L.R.A. 1917E, 1187, Ann.Cas.1918A, 959; Straus v. Victor Talking Machine Co., 243 U.S. 490, 500, 501, 37 S.Ct. 412, 415, 61 L.Ed. 866, L.R.A.1917E, 1186, Ann.Cas.1918A, 955; Bauer v. O'Donnell, 229 U.S. 1, 16, 17, 33 S.Ct. 616, 619, 57 L.Ed. 1041, 50 L.R.A., N.S., 1185, Ann.Cas.1915A, 150. See also, Standard Oil Co. v. United States, 283 U.S. 163, 169, 51 S.Ct. 421, 423, 75 L.Ed. 926; United Shoe Machine Corporation v. United States, 258 U.S. 451, 463, 464, 42 S.Ct. 363, 367, 66 L.Ed. 708; Standard Sanitary Mfg. Co. v. United States, 226 U.S. 20, 48, 49, 33 S.Ct. 9, 14, 15, 57 L.Ed. 107; Adams v. Burke, 17 Wall. 453, 455, 456, 21 L.Ed. 700. 17 General Electric case, supra, 272 U.S. at page 490, 47 S.Ct. at page 197, 71 L.Ed. 362. 18 In discussing this patent monopoly and the patent laws of the United States this Court long ago said: 'The monopoly thus granted is one entire thing, and cannot be divided into parts, except as authorized by those laws. The patentee or his assigns may, by instrument in writing, assign, grant, and convey, either (1) the whole patent, comprising the exclusive right to make, use, and vend the invention throughout the United States; or (2) an undivided part or share of that exclusive right; or (3) the exclusive right under the patent within and throughout a specified part of the United States. Rev.Stat. § 4898. * * * Any assignment or transfor, short of one f these, is a mere license, giving the licensee no title in the patent, and no right to sue at law in his own name for an infringement. Rev.Stat. § 4919; Gayler v. Wilder, 10 How. 477, 494, 495, (13 L.Ed. 504); Moore v. Marsh, 7 Wall. 515, (19 L.Ed. 37.)' Waterman v. Mackenzie, 138 U.S. 252, 255, 11 S.Ct. 334, 335, 34 L.Ed. 923. This was quoted with approval in Crown Co. v. Nye Tool Works, 261 U.S. 24, 37, 43 S.Ct. 254, 257, 67 L.Ed. 516, and was enlarged upon in the General Electric case, supra, 272 U.S. at page 489, 47 S.Ct. at page 196, 71 L.Ed. 362. 19 See note 18, supra. 20 "As a license passes no interest in the monopoly, it has been described as a mere waiver of the right to sue by the patentee' * * *.' Quoted with approval by Chief Justice Taft in a unanimous opinion of the Court in De Forest Co. v. United States, 273 U.S. 236, 242, 47 S.Ct. 366, 368, 71 L.Ed. 625. 21 General Electric case, supra, 272 U.S. at page 490, 47 S.Ct. at page 197, 71 L.Ed. 362. 22 Chief Justice Taft, 272 U.S. at pages 490, 491, 47 S.Ct. at page 197, 71 L.Ed. 362, made the following significant references to the Bement case: 'This question was considered by this court in the case of Bement v. National Harrow Co., 186 U.S. 70, 22 S.Ct. 747, 46 L.Ed. 1058. A combination of manufacturers owning a patent to make float spring tool harrows licensed others to make and sell the products under the patent on condition that they would not during the continuance of the license sell the products at a less price or on more favorable terms of payment and delivery to purchasers than were set forth in a schedule made part of the license. That was held to be a valid use of the patent rights of the owners of the patent. It was objected that this made for a monopoly. The court, speaking by Mr. Justice Peckham, said (186 U.S.) page 91 (22 S.Ct. 755), 46 L.Ed. 1058); "The very object of these laws is monopoly, and the rule is, with few exceptions, that any conditions which are not in their very nature illegal with regard to this kind of property, imposed by the patentee and agreed to by the licensee for the right to manufacture or use or sell the article, will be upheld by the courts. The fact that the conditions in the contracts keep up the monopoly or fix prices does not render them illegal.' 'Speaking of the contract, he said (186 U.S.) page 93 (22 S.Ct. 756, 46 L.Ed. 1058): "The provision in regard to the price at which the licensee would sell the article manufactured under the license was also an appropriate and reasonable condition. It tended to keep up the price of the implements manufactured and sold, but that was only recognizeing the nature of the property dealt in, and providing for its vl ue so far as possible. This the parties were legally entitled to do. The owner of a patented article can, of course, charge such price as he may choose, and the owner of a patent may assign it or sell the right to manufacture and sell the article patented upon the condition that the assignee shall charge a certain amount for such article." Judge Westenhaver, whose judgment in the District Court was affirmed by this Court in the General Electric case, said: 'If both licensor and licensee are making and selling, it is quite conceivable that the owner of the patent could not safely grant licenses at all on any other terms; otherwise, he would risk having his business destroyed, and hence, as a matter of ordinary business prudence, would feel obliged to keep his patent monopoly wholly within his own hands. And it was so held in Bement v. National Harrow Co., 186 U.S. 70, 22 S.Ct. 747, 46 L.Ed. 1058.' United States v. General Electric Co., D.C., 15 F.2d 715, 718. 23 General Electric case, supra, 272 U.S. at page 490, 47 S.Ct. at page 197, 71 L.Ed. 362. 24 Hearings before the Temporary National Economic Committee, supra; Conway P. Coe, Commissioner of Patents, pp. 839 et seq., 857 et seq.; I. Joseph Farley, patent Counsel, Ford Motor Co., Detroit, Michigan, p. 262 et seq.; Dr. Vannevar Bush, President, Carnegie Institution, Washington, D.C., p. 898 et seq.; Ralph E. Flanders, President, Jones & Lamson, Springfield, Vermont (now U.S. Senator from Vermont), p. 928 et seq.; John A. Graham, President, Motor Improvements, Inc., Newark, New Jersey, p. 938 et seq.; Dr. Frank B. Jewett, President, Bell Telephone Laboratories, Inc., New York City, p. 958 et seq.; Maurice H. Graham, Independent Inventor, Minneapolis, Minnesota, p. 1076 et seq.; and George Baekeland, Vice President, Bakelite Corporation, New York City, p. 1082 et seq. 25 See note 3, supra. 26 In 1939, the Commissioner of Patents testified that of the patents issued, exclusive of design patents and reissues, large corporations (having respectively over $50,000,000 of assets) received but 17.2%, small corporations (having respectively less than $50,000,000 of assets) 34.5%, foreign corporations 5.4% and individuals 42.9%. Subsequent assignments did not materially affect these proportions. Hearings before the Temporary National Economic Committee, supra, at p. 846. Clarence C. Carlton, president of the Automotive Parts and Equipment Manufacturers Association, testified that in the automotive parts industry: 'Patents are valued so much more by the small manufacturer than they are by the large manufacturer. * * * if anything happened to this patent system the fellow who would be hurt more than anyone else would be the smaller manufacturer.' (Id. at pp. 1057, 1058.) 27 'As a part consideration for the granting of the foregoing licenses, the Licensee (Westinghouse) hereby grants and agrees to grant to the Licensor (General Electric) a non-exclusive license under the United States patents which it now owns or controls and under those which may issue on pending applications now owned or controlled by it, and under any United States patents which the Licensee may own or control, during the term of this agreement, for improvements in incandescent lamps specified in paragraphs a, b, c and d of Article 2, to make, use and sell throughout the United States and the territories thereof incandescent lamps of the kinds specified in said paragraphs of Article 2 hereof, such license being personal, non-assignable, indivisible and non-transferable except to successors to substantially the entire good will and business of the Licensor, and to continue for the period during which the licenses from the Licensor to the Licensee remain in force.' Par. (8) of Agreement between General Electric Company and Westinghouse Electric & Manufacturing Company, March 1, 1912, Exhibit A, at p. 117 of the record in the Supreme Court of the United States, No. 113, O.T. 1926. 28 In that Standard Oil case, 283 U.S. at page 171, 51 S.Ct. at page 424, 75 L.Ed. 926, the footnote at this point stated: 'This is often the case where patents covering improvements of a basic process, owned by one manufacturer, are granted to another. A patent may be rendered quite useless, or 'blocked,' by another unexpired patent which covers a vitally related feature of the manufacturing process. Unless some agreement can be reached, the parties are hampered and exposed to litigation. And, frequently, the cost of litigation to a patentee is greater than the value of a patent for a minor improvement.' 29 Before making this statement, Mr. Justice Brandeis already had joined in the opinion of the Court in the General Electric case, supra, and written the opinion in Carbice Corporation v. American Patents Development Corporation, 283 U.S. 27, 51 S.Ct. 334, 75 L.Ed. 819. 30 Many bills relating to these issues have been introduced in Congress and referred to appropriate committees. Not one has been reported back to either House of Congress. As early as 1912, H.R. 22345, 62d Cong., 2d Sess., proposed that a patentee be not permitted to fix the price of articles to be sold by others under his patent. During the hearings held by the Temporary National Economic Committee, the Department of Justice recommended many fundamental as well as minor changes in the patent law. These included the prohibition of price-limiting patent licenses comparable to those here at issue. Preliminary Report, Temporary National Economic Committee, Sen. Doc. No. 95, 76th Cong., 1st Sess., 16, 17 (1939). The Department of Commerce took an opposite position. It submitted recommendations for retaining but improving the patent system substantially in accordance with its traditional underlying policies. The Final Report of the Temporary National Economic Committee incorporated the substance of the proposals of the Department of Justice. It included a recommendation that patentees be not permitted to limit the price at which a licensee might sell a product made under the license. Final Report, Temporary National Economic Committee, Sen. Doc. No. 35, 77th Cong., 1st Sess. 36, 37 (1941). In 1941, the President appointed the National Patent Planning Commission to submit recommendations on questions dealt with in the report. (See note 12, supra.) In 1943, among the examples of the proposed reforms which it concluded 'would not be a beneficial innovation in our patent system,' it listed 'outlawing certain limitations in patent licenses, * * *.' This evidently referred to the above-mentioned proposals of the Temporary National Economic Committee to outlaw price restrictions and other limitations in patent licenses. Report of the National Patent Planning Commission, House Doc. 239, 78th Cong., 1st Sess. 9 (1943). Bills to the same general effect as the proposals of the Temporary National Economic Committee have been introduced and referred to Committees of Congress but have advanced no further. Among them have been the following: S. 2491 (§ 4), S. 2730 (§ 3), H.R. 7713 (§ 3), 77th Cong., 2d Sess. (1942); H.R. 109 (§ 3), H.R. 1371 (§ 29), H.R. 3874 (§ 29), 78th Cong., 1st Sess. (1943); H.R. 97 (§ 29), H.R. 3462 (§ 29), 79th Cong., 1st Sess. (1945); S. 2482, 79th Cong., 2d Sess. (1946); S. 72, 80th Cong., 1st Sess. (1947). Section 3 of S. 2730, supra, proposed that 'Every sale, assignment, or conveyance of a patent and every grant of a license thereunder, in connection with any condition, agreement, or understanding which restricts the price at which the purchaser, assignee, grantee, or license (licensee) may sell any article producible under the patent and customarily marketed in interstate commerce, is hereby declared to be illegal.'
78
333 U.S. 364 68 S.Ct. 525 92 L.Ed. 746 UNITED STATESv.UNITED STATES GYPSUM CO. et al. No. 13. Argued Nov. 13, 14, 1947. Decided March 8, 1948. Rehearing Denied April 5, 1948. On Appeal from the District Court of the United States for the District of Columbia. [Syllabus from pages 364-366 intentionally omitted] Mr. Roscoe T. Steffen, of New Haven, Conn., for appellant. Mr. Bruce Bromley, of New York City, for appellees. Mr. Justice REED delivered the opinion of the Court. 1 The United States instituted this suit on August 15, 1940, in the District Court of the United States for the District of Columbia against United States Gypsum Company, five other corporate defendants, and seven individual defendants, as a civil proceeding under the Sherman Act. The complaint charged that the appellees had violated both §§ 1 and 2 of the Sherman Act, 15 U.S.C.A. §§ 1, 2, by conspiring to fix prices on patented gypsum board and unpatented gypsum products, to standardize gypsum board and its method of production for the purpose of eliminating competition, and to regulate the distribution of gypsum board by eliminating jobbers and fixing resale prices of manufacturing distributors. 2 The Attorney General filed an expediting certificate on December 16, 1941, and on September 17, 1942, a three-judge court was constituted to hear the case. By amendment to the complaint the government charged that the article claims of five patents owned by United States Gypsum were invalid and void. The appellees moved to strike the amendment to the complaint or in the alternative for partial judgment dismissing the amendment. On November 15, 1943, the court granted appellees' motion for partial judgment on the ground that the government had no standing to attack the validity of the patents in an antitrust proceeding. The case thereupon went to trial and upon conclusion of the government's case on April 20, 1944, the appellees moved to dismiss the complaint under Rule 41(b) of the Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c, upon the ground that on the facts and the law the Government had shown no right to relief. On June 15, 1946, the court filed an opinion holding that the motion should be granted, and on August 5, 1946, the court filed findings of fact and conclusions of law and entered judgment dismissing the complaint. The government appealed directly to this Court, 32 Stat. 823, 15 U.S.C.A. § 28, and probable jurisdiction was noted on December 16, 1946. 67 S.Ct. 371. The decisions below are reported as United States v. United States Gypsum Co., D.C., 53 F.Supp. 889 and Id., D.C., 67 . Supp. 397. United States v. Line Material Co., 333 U.S. 287, 68 S.Ct. 550, will be of value to the reader in considering this opinion. I. 3 The appellees are engaged in the production of gypsum and the manufacture of gypsum products, including gypsum plasterboard, gypsum lath, gypsum wallboard, and gypsum plaster. At the time of the alleged conspiracy, appellees sold nearly all of the first three products which were marketed in states east of the Rocky Mountains, and a substantial portion of the plaster sold in the same area. Gypsum products are widely used in the construction industry. In 1939, the sales value of gypsum products was approximately $42,000,000, of which $23,000,000 was accounted for by gypsum board (plasterboard, lath, and wallboard), $17,000,000 by gypsum plaster and the remainder by gypsum block and tile and other products. Over 90% of all plaster used in building construction in the United States is made with gypsum. 4 Gypsum is found in numerous deposits throughout the country. Gypsum board is made by taking the crushed and calcined mineral, adding water, and spreading the gypsum slurry between two paper liners. When the gypsum hardens, the mineral adheres to the paper and the resulting product is used in construction. Plasterboard and lath have a rough surface and are used as a wall and ceiling base for plaster; wallboard has a finished surface and does not require the addition of plaster. 5 Since its organization in 1901, United States Gypsum has been the dominant concern in the gypsum industry. In 1939, it sold 55% of all gypsum board in the eastern area. By development and purchase it has acquired the most significant patents covering the manufacture of gypsum board, and beginning in 1926, United States Gypsum offered licenses under its patents to other concerns in the industry, all licenses containing a provision that United States Gypsum should fix the minimum price at which the licensee sold gypsum products embodying the patents. Since 1929, United States Gypsum has fixed prices at which the other defendants have sold gypsum board. 6 The other corporate appellees are National Gypsum Co., Certain-teed Products Corp., Celotex Corp., Ebsary Gypsum Co., and Newark Plaster Co. Appellee Gloyd is the owner of an unincorporated business trading under the name of Texas Cement Plaster Co. National produced 23% of all gypsum board sold in the eastern area in 1939, Certain-teed 11%, and the other four companies correspondingly smaller amounts. Seven companies which were active when the licensing plan was evolved in 1929 and before have been acquired by other companies, and defendant Celotex entered the industry in 1939 when the licensing plan was fully in effect by acquiring the assets and licenses of American Gypsum Company. The seven individual defendants are presidents of the corporate defendants. The tabulation in the margin lists the corporate and individual defendants, and shows the corporate changes which have taken place.1 7 Prior to 1912, gypsum board was manufactured with an open edge, leaving the gypsum core exposed on all four sides. In 1912, United States Gypsum received as assignee a patent issued to one Utzman, No. 1,034,746, covering both process and product claims on board with closed side edges, the lower paper liner being folded over the exposed gypsum core. Closed-edge board was superior in quality to open-edge board, as it was cheaper to produce, did not break so easily in shipment, and was less subject to crumbling at the edges when nailed in place. United States Gypsum also acquired a FOOTNOTE 1 Date Sales of entered board in 8 Name of Firm gypsum eastern Individual Companies board area in defendants acquired industry 1939 9 United States Gypsum co. 1901 $10,600,000 Sewell L. Avery,president Niagara 10 1920-36; chairmwn of board Gypsum Co. 11 board, 1936 to date Oliver M. Knode, president 12 1936 to date. 13 National Gypsum Co. 1925 4,500,000 Melvin H. Baker, Universal Gypsum and 14 president Lime Co.(1935) Atlantic 15 Gypsum Products Corp. (1936). 16 Certain-teed Products Corp. 1926 2,100,000 Henry J. Hartley, Beaver Products Co. (1928); 17 president Beaver board Co. (1928). 18 Co. (1928); 19 Newark Plaster Co. 1937 750,000 Frederick Tomkins, Kelley Plasterboard Co.(1937) 20 president 21 Ebsary Gypsum Co. 1928 670,000 Frederick G.Ebsary 22 president 23 Celotex Corp. 1939 585,000 American Gypsum Co. (1939). 24 Texas Cement Plaster Co. 1924 230,000 Samuel M. Gloyd, 25 (unincorporated). owner number of other patents relating to the process of making closed-edge board. In 1917, United States Gypsum sued a competitor claiming infringement of the Utzman patent and in 1921 the Circuit Court of Appeals affirmed a judgment holding that the Utzman patent was valid and infringed.2 United States Gypsum settled with an infringer, Beaver Products Co., in 1926, by granting Beaver a license to practice the closed-edge board patent with a provision that United States Gypsum should fix the price at which Beaver sold patented board. Shortly before the settlement with Beaver, United States Gypsum instituted suits against American Gypsum Co., Universal Gypsum and Lime Co., and gave notice of infringement to Niagara Gypsum Co. Universal did not contest the suit but accepted a license with price fixing provisions, and two other small companies followed suit in 1927. American and Niagara would not settle, and in 1928 judgment was entered against American holding that American's partially closed-edge board infringed one of United States Gypsum's patents. United States Gypsum also instituted suits for infringement against National Gypsum Co. in 1926 and 1928 which were settled by the execution of a license and payment of damages as part of the industry-wide settlement with all other defendants in 1929. In that year, two sets of license agreements were signed in which United States Gypsum licensed all but two companies manufacturing gypsum board in substantially identical terms and from that date United States Gypsum has maintained rigid control over the price and terms of sale of virtually all gypsum board. Since 1937 the control has been complete. 26 Up to this point there is no dispute as to the facts. The government charged that the defendants acted in concert in entering into the licensing agreements, that United States Gypsum granted licenses and the other defendants accepted licenses with the knowledge that all other concerns in the industry would accept similar licenses, and that as a result of such concert of action, competition was eliminated by fixing the price of patented board, eliminating the production of unpatented board, and regulating the distribution of patented board. To support its allegations, the government introduced in evidence the license agreements, more than 600 documentary exhibits consisting of letters and memoranda written by officers of the corporate defedndants, and examined 28 witnesses, most of whom were officers of the corporate defendants. Since the appellees' motion to dismiss when the government had finished its case was sustained, the appellees introduced no evidence. They did cross-examine the government's witnesses. The documentary exhibits present a full picture of the circumstances surrounding the negotiation of the patent license agreements, and are chiefly relied on by the government to prove its case. 27 Although the industry-wide network of patent licenses was not achieved until 1929, the government claims that the documentary exhibits show that the process of formulation of the plan began in 1925. On December 12, 1925, Augustus S. Blagden, president of Beaver, sent a memorandum to Sewell Avery, president of United States Gypsum. Beaver had been adjudged an infringer of the Utzman patent, and Blagden and Avery had negotiated terms for settling the suit. Blagden testified that Avery had offered to settle with Beaver by granting Beaver a license with a price-fixing limitation and provision that Beaver should pay damages for past infringement and acknowledge the validity of United States Gypsum's patents. In the memorandum Blagden analyzed in detail the consequences that would flow from five possible decisions of the Circuit Court of Appeals if the decree adjudging Beaver an infringer were appealed. Blagden noted that whether the court upheld or denied United States Gypsum's claim, United States Gypsum 'would lose, perhaps irrevocably, its present opportunity to organize the industry and stabilize prices.' The memorandum further pointed out that if the suit were settled on the terms offered by Avery, the result would be more favorable to United States Gypsum than any possible decision by the Court of Appeals. Beaver would accept a license and 'would agree to use its best endeavors' to induce other manufacturers to accept similar licenses; if Beaver were successful in persuading other manufacturers to execute licenses, United States Gypsum could 'maintain a lawful price control and avoid the necessity of a deduction by plaintiff (United States Gypsum) of current prices to meet competition.' Under such circumstances, United States Gypsum 'would be able to take a dominating position in the industry with an opportunity to control or at least to participate in the control of prices through legitimate means of patent licenses.' 28 Although there is no proof that Avery approved Blagden's memorandum, Blagden did accept a license on the terms offered by Avery in July, 1926, and Blagden testified that he talked to a number of representatives from other companies and urged them to accept licenses from United States Gypsum. Frank J. Griswold, general manager of American Gypsum Company, also was active in promoting a scheme of industrywide licensing. On May 12, 1926, Griswold wrote a letter to the president of American, stating that he had talked to Blagden, and added that 'This matter will be discussed by all independent wallboard manufacturers at a meeting in Chicago next Wednesday afternoon.' Griswold concluded the letter with the statement: 'According to the plans we have we figure that there is a possibility of us holding the price steady on wallboard for the next fourteen or fifteen years which means much to the industry.' 29 Blagden and Griswold did not succeed in persuading other manufacturers to accept licenses in 1926. Universal accepted a license in September, 1926, but there is no evidence that Blagden and Griswold played any part in negotiating the settlement. Griswold suggested to Avery that United States Gypsum offer a shorter term license, but Avery was unwilling to make such a concession. During 1927 Griswold and Blagden continued their negotiations. Griswold and Samuel M. Gloyd, owner of the Texas Cement Plaster Co., corresponded with each other in regard to the licensing proposal. When Griswold informed Gloyd that Atlantic Gypsum Co. had signed a long-term license with United States Gypsum, Gloyd replied that he would apply for a license right away. Previously Gloyd had been trying to secure a shorter term license. Gloyd and Atlantic both signed licenses similar to the original license granted to Beaver. 30 In January 1928 Certain-teed Products Corp. purchased the assets of Beaver. Certain-teed had previously been making open-edge board and selling it at lower prices than the closed-edge board manufactured by United States Gypsum and its licensees. Certain-teed refused to accept the license agreement of Beaver and United States Gypsum filed suit to compel Certain-teed to accept the license. e rtain-teed posted a million dollar bond and commenced to make open-edge board at all Beaver plants. George M. Brown, president of Certain-teed, and Avery had several conferences at which they attempted to compose their differences, but without result. The government introduced in evidence a memorandum written by Brown, dated March 1, 1928, in which Brown expressed confidence that he could make open-edge board and sell it in competition with United States Gypsum, and that he was afraid to sign up a license with price-fixing provisions because his competitors would grant secret rebates. Brown concluded that Certain-teed should answer the suit of United States Gypsum to enforce the Beaver license by claiming that the suit was filed not in the interest of royalties but for the sole purpose of trade domination and monopoly and price control. Brown concluded with the statement that United States Gypsum's 'determination to gather in a monopoly, if possible, leads them to risk everything for such domination because of the big rewards possible, if they can succeed.' Certain-teed did file an answer to the suit couched in those terms. Griswold testified that in a conversation with Brown in the following month Brown stated that he might possibly consider taking out a license if 'all of the other manufacturers, or certain ones of them' took out a license. Griswold also wrote the president of American that he had had a conference with Brown at which Brown had said that 'they were willing at that time to enter into a license agreement without any particular changes in it providing all of the manufacturers, including Ebsary, would enter into it and make it one hundred per cent.' 31 No settlement was reached between United States Gypsum and Certain-teed in 1928, and no other license agreements were signed. A meeting of representatives of the principal non-licensee manufacturers took place in October, and in November the board of directors of National adopted a resolution authorizing the officials of the company to enter into a license agreement. Besides Certain-teed and National, American, Ebsary, Niagara, and Kelley Plasterboard Company manufactured gypsum board but did not hold licenses from United States Gypsum. 32 The patent licenses in force at the beginning of 1929 provided that United States Gypsum could fix prices only during the term of the principal Utzman patent, which was scheduled to expire on August 6, 1929, although the remaining features of the agreements were to remain in force until the expiration of the last patent included under the license, which was in 1937. In negotiations in 1929, various defendants expressed concern over the possibility of an effective plan of price fixing in view of the imminent expiration of the Utzman patent. In a letter dated January 9, J. F. Haggerty, president of National, wrote Eugene Holland, president of Universal, asking his views as to possibility of continuing price control after the expiration of the Utzman patent. Holland in reply wrote as follows: 33 'You will remember that Mr. Avery made it very clear to us that if this plan could not be worked out on the Utzman patent that there were other patents available and we were all agreed that the fact that the Utzman patent expires next August is not a practical reason for continuing the conflict.' 34 Holland also stated: 'I am quite sure that Mr. Avery would not be interested in negotiating settlements unless everyone involved was included.' In point of fact, Holland's interpretation of Avery's views was incorrect; several months later licenses were granted to four unlicensed manufacturers but not to American or Kelley. Other exhibits suggest that the prospective licensees were interested in accepting licenses at the same time. In his letter of January 9, Haggerty wrote as follows: 35 'The question now in my mind is whether or not the other four board makers, who are outside the license agreement, feel that it would be advantageous to go in without the American Gypsm Company. It would seem to me that the chief value in a meeting would be to discuss that point.' 36 On May 14, 1929, the board of directors of National held a meeting 'for the purpose of discussing the license agreement submitted to all the manufacturers of gypsum products in the United States east of the Rocky Mountains by the United States Gypsum Co.' The minutes of the meeting further quoted the chairman as saying that 'he had been definitely informed that all other manufacturers of gypsum products east of the Rocky Mountains, except the American Gypsum Company, had agreed to sign the license contract in substantially the form as submitted to this Board.' The board of directors authorized the execution of the proposed license contract. 37 Two days later National signed the license agreement. On the following day National sent a telegram to Avery as follows: 38 'Our contract signed and in mail Reeb (of Niagara) ready Stop We are working with Ebsary with hope of everybody being set by Saturday to justify your calling meeting all board makers Monday if you like.' 39 On May 18 Avery dispatched identical telegrams to United States Gypsum's licensees, and to Certain-teed and Ebsary, as follows: 40 'Mr. Kling (of American) has sent in a contract with material changes and declares he will not attend meeting unless these changes are accepted by us Stop We cannot accept them and regret that the Tuesday meeting will be futile unless other companies wish to proceed as outlined without American license.' 41 On May 20 Avery wrote Gloyd of Texas Cement Plaster, a licensee since 1927, stating that although American was unwilling to accept a license, officers of Certain-teed, Niagara, Ebsary, and National had expressed themselves favorably 'to this adjustment' and 'it is not improbable that the matter may be closed at the meeting tomorrow or soon thereafter.' On the following day, a meeting of representatives of all but one of the licensed manufacturers, and all unlicensed manufacturers except American and Kelley, took place in Chicago. The three unlicensed manufacturers who were present—Certain-teed, Ebsary and Niagara—signed license agreements. 42 At the same meeting, Avery explained to the licensees that United States Gypsum had acquired applications for a patent covering so-called 'bubble board' and suggested that the licensees take out licenses under these applications. The applications covered a process for making gypsum board by introducing a soap foam in the gypsum slurry which would result in a lighter and cheaper board. Avery subsequently mailed proposed license agreements under the 'bubble board' applications to the licensees. George M. Brown of Certain-teed on June 4th acknowledged receipt of the license proposal in a noncommittal reply, but composed a memorandum for his own files in which he commented that the savings resulting from taking a license would be doubtful, and then added: 43 'They would have a price control of our business, which might be to our advantage and might be to our disadvantage in future. They should be just as anxious to have us use this as we should be to get it if there are to be the benefits that they anticipate in stabilizing the whole industry by making a uniform product and get away from the fierce warfares between different products like we have recently had. The saving is too slight to cause us very great worry even if never permitted to use it and the door will certainly be open later for its use if it has the merit that they believe it has. Under a contract sufficiently liberal, we should proceed at once.' 44 On June 6th the licensees met again in Chicago to discuss the question of accepting a license under the 'bubble board' patents. Shortly thereafter Certain-teed agreed to take out a license. National also agreed to accept a license; the minutes of the meeting of the board of directors on July 23 read in part as follows: 45 'The President stated that the United States Gypsum Company has bee working on a plan to stabilize the Gypsum Industry and has offered to license the entire Industry under the new method of manufacturing gypsum wallboard known as the 'Bubble System.' The license agreements submitted to each of the wallboard manufacturers contain price fixing clauses and under the agreements submitted the prices of wallboard would be fixed for the whole industry for the term of approximately seventeen years.' 46 The board passed a resolution authorizing the executive committee to negotiate a license agreement, 'provided that the United States Gypsum Company, by virtue of this agreement with this Corporation and with other manufacturers of gypsum wallboard, shall control the price of wallboard sold in the United States and its possessions.' 47 Two days later another conference of licensees was held in Chicago. C. O. Brown, vice-president of Certain-teed, prepared a memorandum for George M. Brown, president of Certain-teed, describing what happened at that meeting. According to the memorandum, National and Universal were unwilling to accept 'bubble board' licenses until they had settled their litigation over National's infringement of Universal's starch patent. That patent included process and product claims on wallboard made with starch. Brown noted that United States Gypsum was working on a proposal to combine the starch and 'bubble board' processes; although such a combination would have technological advantages, Brown commented on the fact that the starch patent had already been issued 'so a combination of the two systems would give a patent to work under in the manufacture and sale of Gypsum Wallboard immediately, whereas under only the Bubble process there would be an interim between August 6th and the date of issuance of the Bubble Patent where there would be no Patent control. There is, of course, considerable benefit to having Patent control continue without a break.' Brown further noted that Avery was trying to work out a proposition with Holland to buy the starch patent or to license the industry under both processes. 48 Another meeting of licensees was held in Chicago on August 6, the day on which the Utzman patent expired. In a memorandum summarizing what happened at the meeting, C. O. Brown said that it had been agreed that Universal would assign the starch patent to United States Gypsum, and the latter company would issue a single license contract covering all patents and patent applications. Brown further reported that 'All of the Independent Gypsum Companies are willing to sign on this basis' and that 'The Attorneys feel that such a contract would be exceptionally strong and price control could be maintained for the life of the Contract without difficulty.' On August 27 the board of directors of National held a meeting at which the president was authorized to sign a license with United States Gypsum covering the 'bubble board' and starch patents 'provided that all the present licensees of the United States Gypsum Company enter into a similar license and provided further that in the judgment of the President such action will result in legal stabilization of the markets.' 49 Soon thereafter, National, Certain-teed, Ebsary, Niagara and Atlantic executed licenses with United States Gypsum, to become effective on the date when Universal's receiver transferred the starch patents to United States Gypsum. On November 5 the starch patents were assigned to United States Gypsum, and on the same date Universal also accepted a license. On November 25 American settled its litigation with United States Gypsum and accepted a license. All manufacturers of gypsum board were now licensed by United States Gypsum, except Kelley Plasterboard Co., and that concern executed a license in April of the following year. Texas Cement Plaster, a licensee under the Utzman patent, did not accept a license under the starch and 'bubble board' patents until 1937 when the original license expired. Texas was thus free to sell board at any price from 1929 to1 937. 50 The contracts which became effective in November 1929 were in substantially identical terms. The license with Universal contained preferential royalty terms which were granted as consideration for the transfer of the starch patents; every other license (except that of Texas) provided that if the licensor should subsequently grant more favorable terms to any licensee (except Universal), the same more favorable terms would be granted to the first licensee. Each licensee agreed to pay as royalty a stipulated percentage on the selling price of 'all plasterboard and gypsum wallboard of every kind' whether or not made by patented processes or embodying product claims. The contract covered fifty patents and seven patent applications, including the starch patent and the 'bubble board' applications; the contract was to run until the most junior patent expired. As two 'bubble board' patents were issued in 1937, the licenses ran until 1954. The licensees agreed not to sell patented wallboard to manufacturing distributors unless United States Gypsum gave its consent as to each prospective purchaser. As in the previous contracts, United States Gypsum reserved the right to fix the minimum price at which each licensee sold wallboard embodying the licensor's patents, the licensor agreeing that such minimum price would be not greater than the price at which the licensor itself offered to sell. The more important provisions of the license to this litigation are set forth in an appendix to this opinion. Nothing has been omitted that appears to be significant on the issues considered. 51 In 1934 and 1935 United States Gypsum offered supplemental licenses to practice a patent covering metallized board, which was accepted by almost all licensees, and in 1936 United States Gypsum offered licenses under its perforated lath patent which were also accepted by most licensees. These supplemental licenses contained provisions allowing United States Gypsum to fix the minimum price on board made according to the patents which were licensed. 52 The government charged that the execution of the license agreements in May and November 1929 marked a turning point in the gypsum industry. The government introduced evidence tending to show that the price of first quality wallboard was raised, that United States Gypsum standardized the type of board sold by requiring its licensees to sell No. 2 wallboard and seconds at the same price as standard wallboard, and standardized the methods of sale so that no licensee could offer more favorable terms to a customer than any other licensee. 53 Although the license contracts gave the licensor the right only to fix the minimum price at which the licensee should sell, United States Gypsum issued a series of bulletins which defined in minute detail both the prices and terms of sale for patented gypsum board. They are printed on nearly a thousand pages of the record. The bulletins adopted a basing point system of pricing, according to which each licensee was required to quote a price determined by taking the mill price at the nearest basing point and adding the all rail freight from the basing point to the destination. The freight was to be computed on specified uniform billing weights, in order to prevent variations in freight arising from the differences in weight of board made by different manufacturers, and each licensee was directed to charge exactly the same switching, cartage, and extra delivery charges. Specified board sizes and minimum quantities were prescribed, licensees were forbidden to employ commission salesmen without the written consent of the licensor, regulations were prescribed as to the size, quantity and markings of gypsum board used for packing shipments, granting of long term credit was prohibited, sales on consignment were enjoined and licensees were forbidden to deliver board directly to a building site. 54 It is not practicable to quote one of the hundreds of comprehensive bulletins on prices and terms. The industry ace pted directions for distribution of product as corollary to price control, so that prices would not be infringed by variations of seller contracts. The detail of directives is well illustrated by the directive for computation of freight to be added to the mill price and the provision against subtle price reduction. The excerpts below are from the Board License Bulletin of June 10, 1939.3 55 In order to insure compliance with the price bulletins, United States Gypsum established a wholly owned subsidiary in 1932 named Board Survey, Inc. Licensees were invited to send in complaints as to violations of pricing bulletins to Board Survey and that organization forwarded the complaints to the alleged delinquent licensees. Board Survey was authorized to make a thorough check-up of all reported violations and to take such action as it might deem necessary or proper to protect United States Gypsum's rights under the license agreements and patents. Although the record discloses no instance in which Board Survey took or even threatened to take legal action against any licensee, there are many instances in which Board Survey sent letters to licensees requesting an explanation as to alleged violations. Meetings of licensees were held at which doubtful provisions of the price bulletins were explained. The trial court found that 'in the main' licensees complied with the bulletin conditions. 56 The government further charged that the defendants had discontinued the production of unpatented open-edge board, eliminated jobbers by requiring jobbers to purchase board at the same price as board sold to dealers, induced manufacturing distributors to observe bulletin prices upon resale of board purchased from licensees, and stabilized the price of gypsum plaster and other unpatented products. 57 It is undisputed that after 1929 the defendants ceased to manufacture open-edge board; the government claims that production of the unpatented board was discontinued in order to protect the patented board from competition. Prior to 1929 open-edge board had sold at lower prices than closed-edge board, and the government's exhibits show that the officers of the corporate defendants realized that there could be no effective stabilization of prices on closed-edge board as long as open-edge board was sold without price control. The license agreements provided that royalties should be paid on the sales of all board sold, patented or unpatented, a provision which would tend to discourage and production of higher cost unpatented board. Although the government produced no evidence of any agreement between the defendants to eliminate production of open-edge board, corporate officers of the licensees testified that they anticipated that one result of industry-wide licensing would be h e elimination of open-edge board. 58 The May 1929 licenses required licensees to obtain the consent of the licensor before selling board to manufacturing distributors or to jobbers and a price bulletin issued under those licenses allowed licensees to grant a 10% discount to both classes. The November 1929 licenses, however, eliminated the consent requirement with respect to jobbers, although it was retained with respect to manufacturing distributors. 59 The jobbers' discount was continued in bulletins issued under the later licenses until August 8, 1930, when United States Gypsum ordered that the discount be eliminated. Although jobbers could still buy board if they so desired, jobbers could remain in business only by selling to dealers at an advance over the bulletin prices. The court below found that some jobbers were able to remain in business by selling board in odd lots to dealers who did not wish to buy the minimum lot required in the price bulletins. The government points to the definition of 'jobber' in the license agreements as 'those who do not manufacture but buy and sell plasterboard or gypsum wallboard in straight cars or in mixed cars with other building material and who do not sell at retail,' and points to uncontradicted testimony that jobbers as so defined were eliminated. 60 We do not stop to set forth the evidence upon which the government relied to support its charge that the defendants fixed prices at which manufacturing distributors sold gypsum board which they had purchased from United States Gypsum or its licensees, as that issue is not necessary for a decision of the case. To support the charge of stabilizing the price of unpatented plaster, the government cited letters written by officers of the corporate defendants showing that they anticipated that price stabilization in patented board would be accompanied with stabilization of all gypsum products. The trial court found that the price of plaster and miscellaneous gypsum products in fact did increase after 1929. The government charged that plaster prices were stabilized by requiring licensees who sold plaster together with patented board to sell plaster at prevailing prices. Board and plaster were usually sold together and the defendants claim that cutting of prices on plaster, in sales of the two together, operated in effect as a rebate on the price of board, and hence was legally subject to control. The government introduced in evidence a large number of complaints to Board Survey by licensees as to their competitors' failure to maintain prevailing prices on plaster. A bulletin provision forbidding rebates and allowances stated that a sale of board at posted prices would be in violation of the license if the licensee reduced the price of other products, and Board Survey in summarizing violations of bulletin terms revealed through audit of the licensees' books listed 'Price concessions on other material in connection with board sales.' II. 61 Appellees admit that in the absence of whatever protection is afforded by valid patents the licensing arrangements described would be in violation of the Sherman Act. Accordingly, the government sought to amend its complaint to allege that the 'bubble board' patents were not valid. The trial court held that the government was estopped to attack the validity of the patents in the present proceeding, on the ground that such attack would constitute a review of action by the Commissioner of Patents which was not authorized by statute,4 The trial court thought that the issue was controlled by United States v. American Bell Telephone Co., 167 U.S. 224, 17 S.Ct. 809, 42 L.Ed. 144, in which the United States was held without standing to bring a suit in equity to cancel a patent on the ground of invalidity. 62 While this issue need not be decided to dispose of this case, it seems inadvisable to leave the decision as a precedent. Hurn v. Oursler, 289 U.S. 238, 240, 53 S.Ct. 586, 587, 77 L.Ed. 1148. We cannot g ree with the conclusion of the trial court. The United States does not claim that the patents are invalid because they have been employed in violation of the Sherman Act and that a decree should issue canceling the patents; rather the government charges that the defendants have violated the Sherman Act because they granted licenses under patents which in fact were invalid. If the government were to succeed in showing that the patents were in fact invalid, such a finding would not in itself result in a judgment for cancellation of the patents.5 63 In an antitrust suit instituted by a licensee against his licensor we have repeatedly held that the licensee may attack the validity of the patent under which he was licensed, because of the public interest in free competition, even though the licensee has agreed in his license not to do so. Sola Electric Co. v. Jefferson Electric Co., 317 U.S. 173, 63 S.Ct. 172, 87 L.Ed. 165; Edward Katzinger Co. v. Chicago Metallic Mfg. Co., 329 U.S. 394, 67 S.Ct. 416; MacGregor v. Westinghouse Electric & Manufacturing Co., 329 U.S. 402, 67 S.Ct. 421, 424. In a suit to vindicate the public interest by enjoining violations of the Sherman Act, the United States should have the same opportunity to show that the asserted shield of patentability does not exist. Of course, this appeal must be considered on a record that assumes the validity of all the patents involved. III. 64 The trial court ruled that on motion to dismiss pursuant to Rule 41(b), the court should weigh the evidence and grant the motion if the government failed to establish its case by a preponderance of the evidence, and the court further ruled that the government had the burden of proving both the charge of conspiracy and the charge that the licensing agreements were not within the protection of the patent grant.6 We do not stop to consider those rulings. They are not of importance in this case as we think the preponderance of evidence at the conclusion of the government's case indicated a violation of the Sherman Act. 65 We are unable to accept, however, the ruling of the court that declarations of each defendant were admissible only against the defendant making the declaration.7 A consideration of that point really involves the heart of the case since the treatment of the declarations may vitally affect the outcome. Some may have doubts as to whether the agreements and bulletins alone are sufficient to establish a conspiracy but the admission of the separate declarations against all greatly strengthens the government's position. We think that the industry-wide license agreements, entered into with knowledge on the part of licensor and licensees of the adherence of others, with the control over prices and methods of distribution through the agreements and the bulletins, were sufficient to establish a prima facie case of conspiracy. Each licensee, as is shown by the uncontradicted references to the meetings and discussion that were preliminary to the execution of the licenses could not have failed to be aware of the intention of United States Gypsum and the other licensees to make the arrangements for licenses industry wide. The license agreements themselves, on their face, showed this purpose. The licensor was to fix minimum prices binding both on itself and its licensees; the royalty was to be measured by a percentage of the value of all gypsum products, patented or unpatented; the license could not be transferred without the licensor's consent; the licensee opened its books of accounts to the licensor; the licensee was protected against competition with more favorable licenses and there was a cancellation clause for failure to live up to the arrangements. See the Appendix. Furthermore, the bulletins gave directions to the industry as to its prices and methods of operation in unmistakable terms. The District Court di not accept the foregoing facts as definite evidence of a conspiracy. To us, these facts are proof of a conspiracy. Certainly they are overwhelming evidence of a plan of the licensor and licensees to fix prices and regulate operations in the gypsum board industry. 66 If the District Court had thought that a plan such as is evidenced by the license agreements and the bulletins was illegal under the Sherman Act, it might have had a different conclusion on the question of the admissibility of the declarations of some appellees against all. Its position stemmed logically from its understanding of United States v. General Electric Co., 272 U.S. 476,8 47 S.Ct. 192, 71 L.Ed. 362. The opinions in United States v. Line Material Co., 333 U.S. 287, 68 S.Ct. 550, whatever may be the different views expressed, make clear that the District Court's interpretation of General Electric differs from that of this Court. With its interpretation of the rule of General Electric, the District Court was not required to balance the privileges of United States Gypsum and its licensees under the patent grants with the prohibitions of the Sherman Act against combinations and attempts to monopolize Conspiracies to control prices and distribution, such as we have here, we believe to be beyond any patent privilege. 67 Under its view of the General Electric case, the District Court concluded that only a lack of good faith by defendants in the execution of what that court considered legitimate exploitation of the patents could justify in this case a determination adverse to the defendants.9 The trial court held that an association of defendants in a common plan to organize the gypsum industry and stabilize prices through a network of patent licenses was legally permissible, and that in any event the government failed to prove that the defendants had associated themselves in such a plan. The trial court further found that the license agreements were entered into in good faith, in reliance upon United States v. General Electric Co., supra, and Bement & Sons v. National Harrow Co., 186 U.S. 70, 22 S.Ct. 747, 46 L.Ed. 1058, and were intended to bind the parties to the promises made; that the explicit terms in the licenses were within the scope of the patent grant, and that the government had failed to prove any agreement among the defendants to take actions which were outside the scope of the patent grant. Specifically, the trial court found that there was no agreement among the defendants to raise the price of board to arbitrary and non-competitive levels, to standardize the production of board by pricing No. 2 board and seconds out of the market, to eliminate the production of open-edge board, to eliminate jobbers, to control the resale price of board sold to manufacturing distributors, or to stabilize the price of unpatented gypsum products. The court further held that as to all those charges except the last two the defendants would have been acting within the scope of the patent grant even if they had agreed to do the things charged. We conclude that regardless of motive, the Sherman Act bars patent exploitation of the kind that was here attempted. The license agreements and the bulletins establish the conspiracy of the licensor and each licensee to violate the Sherman Act. With the conspiracy thus fully established, the declarations and acts of the various members, even though made or done prior to the adherence of some to the conspiracy become admissible against all as declarations or acts of co-conspirators in aid of the conspiracy.10 We think that all of the declarations and acts which we have set forth in this opinion are in aid of the ultimate conspiracy. We do not attempt to fix a date when the conspiracy was first formed. At least, the declarations which we have quoted were made with the purpose of advancing a plan which ultimately eventuated in the licenses of 1929. IV. 68 We turn now to a different phase of the case—the correctness of the findings. The trial court made findings of fact which if accurate would bar a reversal of its order. In finding 118 the trial court found that the evidence 'fails to establish that the defendants associated themselves in a plan to blanket the industry under patent licenses and stabilize prices.' The opinion indicates that in making this finding the trial court assumed arguendo that declarations of one defendant were admissible against all. 67 F.Supp. at page 500. In examining the finding we follow Interstate Circuit v. United States, 306 U.S. 208, 59 S.Ct. 467, 83 L.Ed. 610, and United States v. Masonite Corp., 316 U.S. 265, 62 S.Ct. 1070, 86 L.Ed. 1461, as to the quantum of proof required for the government to establish its claim that the defendants conspired to achieve certain ends. In those cases, as here, separate identical agreements were executed between one party and a number of other parties. This Court, in Interstate Circuit, concluded that proof of an express understanding that each party would sign the agreements was not a 'prerequisite to an unlawful conspiracy.' (306 U.S. 208, 59 S.Ct. 474). We held that it was sufficient if all the defendants had engaged in a concert of action within the meaning of the Sherman Act to enter into the agreements. In Masonite the trial court found that the defendants had not acted in concert and that finding was reversed by this Court. One of the things those two cases establish is the principle that when a group of competitors enters into a series of separate but similar agreements with competitors or others, a strong inference arises that such agreements are the result of concerted action. That inference is strengthened when contemporaneous declarations indicate that supposedly separate actions are part of a common plan. 69 In so far as Finding 118 and the subsidiary findings were based by the District Court on its belief that the General Electric rule justified the arrangements or because of a misapplication of Masonite or Interstate Circuit, errors of law occurred. These we can, of course, correct, In so far as this finding and others to which we shall refer are inferences drawn from documents or undisputed facts, heretofore described or set out, Rule 52(a) of the Rules of Civil Procedure is applicable. That rule prescribes that findings of fact in actions tried without a jury 'shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge of the credibility of the witnesses.' It was intended, in all actions tried upon the facts without a jury, to mae applicable the then prevailing equity practice.11 Since judicial review of findings of trial courts does not have the statutory or constitutional limitations of findings by administrative agencies12 or by a jury,13 this Court may reverse findings of fact by a trial court where 'clearly erroneous.' The practice in equity prior to the present Rules of Civil Procedure was that the findings of the trial court, when dependent upon oral testimony where the candor and credibility of the witnesses would best be judged, had great weight with the appellate court. The findings were never conclusive, however.14 A finding is 'clearly erroneous' when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed. 70 The government relied very largely on documentary exhibits, and called as witnesses many of the authors of the documents. Both on direct and cross-examination counsel were permitted to phrase their questions in extremely leading form, so that the import of the witnesses' testimony was conflicting. On cross-examination most of the witnesses denied that they had acted in concert in securing patent licenses or that they had agreed to do the things which in fact were done. Where such testimony is in conflict with contemporaneous documents we can give it little weight, particularly when the crucial issues involve mixed questions of law and fact. Despite the opportunity of the trial court to appraise the credibility of the witnesses, we cannot under the circumstances of this case rule otherwise than that Finding 118 is clearly erroneous. 71 In Findings 54, 56, 62, 63, 64, 65, 66, 89 and 90, the trial court made findings adverse to the government's claim that the defendants conspired to eliminate the production of open-edge board.15 The tenor of those findings is that there was no agreement among the licensees to discontinue the production of open-edge board, although the trial court conceded that it might be 'inferred' that each licensee did not expect to continue the manufacture of open-edge board. The provision in the license contracts that royalties should be paid on the production of unpatented board is strongly indicative of an agreement not to manufacture unpatented board, and the testimony of the witnesses is ample to show that there was an understanding, if not a formal agreement, that only patented board would be sold. Such an arrangement in purpose and effect increased the area of the patent monopoly and is invalid. 72 In Findings 75—79, 99—102,16 the trial court considered the problem of jobbers. Those findings state, in effect, that the license agreements were not executed with the intent of eliminating jobbers, that the discontinuance of the jobbers' discount was an exercise by United States Gypsum of its right to establish a price for a patented product, and that complaints by licensees that other licensees had sold to jobbers at a discount did not establish concerted action to eliminate jobbers. We are unable to agree to these holdings. Since the defendants entered into a common scheme to stabilize the industry, and since the elimination of jobbers was undertaken by United States Gypsum in furtherance of that purpose, a finding of specific intent as to each licensee is not necessary. Nor do we agree that the elimination of jobbers falls within the protection of the patent grant when the purpose, as here, is to prevent competition by uncontrolled resale prices. The inference we draw from the uncontradicted evidence is that the defendants acted in concert to eliminate an important class of jobbers. 73 In Findings 73, 94—97,17 the trial court dealt with the government's charge that the defendants had stabilized the price of unpatented gypsum products. Those findings hold that there was no understanding or agreement that prices would be raised or fixed upon plaster or any unpatented product, that the bulletin provision prohibiting the reduction of price on unpatented products was designed to protect the price of patented board, and was not used to stabilize the price of unpatented materials. We reject all these findings as clearly erroneous. The bulletin provision and the complaints by licensees addressed to Board Survey convince us that the defendants attempted to stabilize plaster prices, and the fact that plaster prices were stabilized only when plaster was sold in conjunction with board appears to us to be immaterial. 74 The trial court made many other findings to which the government objected and yet to determine here whether each is erroneous is unnecessary.18 Perhaps looked at in isolation some of the government's charges are not proven with that fullness that would justify our reversal of the finding of the District Court on the point. It may be that in the light of this opinion the District Court will conclude that many such findings are no longer significant in reaching its decision. As to others a different result will be required. Enough has been said as to the findings and the evidence, we think, to enable the District Court to pass upon the facts that may come before it on further proceedings in accord with our present ruling. V. 75 The foregoing discussion foreshadows our conclusion. What we have said above under III on the invalidity of the arrangements as tested by the Sherman Act in discussing the admissibility of the declarations and acts of separate defendants against all others is applicable here. These licenses and bulletins show plainly a conspiracy to violate the Sherman Act. Price fixing of this type offends. It is well settled that price fixing, without authorizing statutes is illegal, per se. See note 21, United States v. Line Material Co., 333 U.S. 287, 68 S.Ct. 550. Patents grant no privilege to their owners of organizing the use of those patents to monopolize an industry through price control, through royalties for the patents drawn from patent-free industry products and through regulation of distribution. Here patents have been put to such uses as to collide with the Sherman Act's protection of the public from evil consequences. United States v. National Lead Co., 332 U.S. 319, 327, 67 S.Ct. 1634, 1637; Hartford-Empire Co. v. United States, 323 U.S. 386, 406, 65 S.Ct. 373, 384, 89 L.Ed. 322; Standard Oil Co. (Indiana) v. United States, 283 U.S. 163, 170, 174, 51 S.Ct. 421, 424, 425, 75 L.Ed. 926; Standard Sanitary Mfg. Co. v. United States, 226 U.S. 20, 33 S.Ct. 9, 57 L.Ed. 107. The defendants did undertake to control prices and distribution in gypsum board. They did utilize an agency, Board Survey, Inc., to make this control effective. Fashion Originators' Guild v. Federal Trade Commission, 312 U.S. 457, 465, 61 S.Ct. 703, 707, 85 L.Ed. 949. Such facts, together with the other indicia of intent to monopolize the gypsum board industry, hereinbefore detaile as to the agreements, bulletins and declarations, convinces us that the defendants violated the Sherman Act. 76 The General Electric case affords no cloak for the course of conduct revealed in the voluminous record in this case. That case gives no support for a patentee, acting in concert with all members of an industry, to issue substantially identical licenses to all members of the industry under the terms of which the industry is completely regimented, the production of competitive unpatented products suppressed, a class of distributors squeezed out, and prices on unpatented products stabilized. We apply the 'rule of reason' of Standard Oil Co. of New Jersey v. United States, 221 U.S. 1, 31 S.Ct. 502, 55 L.Ed. 619, 34 L.R.A., N.S., 834, Ann.Cas.1912D, 734, to efforts to monopolize through patents as well as in non-patent fields. Even in the absence of the specific abuses in this case, which fall within the traditional prohibitions of the Sherman Act, it would be sufficient to show that the defendants, constituting all former competitors in an entire industry, had acted in concert to restrain commerce in an entire industry under patent licenses in order to organize the industry and stabilize prices. That conclusion follows despite the assumed legality of each separate patent license, for it is familiar doctrine that lawful acts may become unlawful when taken in concert.19 Such concerted action is an effective deterrent to competition; as we said in United States v. Masonite Corp., 316 U.S. at page 281, 62 S.Ct. at page 1079, 86 L.Ed. 1461: 77 'The power of Masonite to fix the price of the product which it manufactures, and which the entire group sells and with respect to which all have been and are now actual or potential competitors, is a powerful inducement to abandon competition. * * * Active and vigorous competition then tend to be impaired not from any preference of the public for the patented product but from the preference of the competitors for a mutual arrangement for price-fixing which promises more profit if the parties abandon rather than maintain competition. * * *' 78 The rewards which flow to the patentee and his licensees from the suppression of competition through the regulation of an industry are not reasonably and normally adapted to secure pecuniary reward for the patentee's monopoly. 79 By the record now presented, violation of the Sherman Act is clear. As the order of dismissal came at the end of the government's presentation on appellee's motion to dismiss under Rule 41(b)20 of the Federal Rules of Civil Procedure, the order is reversed and the case remanded for further proceedings in conformity with this opinion. 80 Reversed and remanded. 81 Mr. Justice JACKSON took no part in the consideration or decision of this case. 82 Mr. Justice FRANKFURTER, concurring. 83 In Part II of the opinion the Court confessedly deals with an issue that 'need not be decided to dispose of this case.' Deliberate dicta, I had supposed, should be deliberately avoided. Especially should we avoid passing gratuitos ly on an important issue of public law where due consideration of it has been crowded out by complicated and elaborate issues that have to be decided. Accordingly, I join in the Court's opinion, except Part II. 84 The Court is agreed that the arrangements challenged by the Government as violative of the Sherman Law cannot find shelter under the patent law, howsoever valid the patents of the defendants may be. In short, we have found that the validity of the patents in the suit is irrelevant to the invalidity of the arrangements based upon them. While fully recognizing this, the Court needlessly considers the question whether the Government may, in view of United States v. American Bell Telephone Co., 167 U.S. 224, 17 S.Ct. 809, 42 L.Ed. 144, attack the validity of the patents in the present proceeding. 85 It does so because 'it seems inadvisable to leave as a precedent the decision' of the trial court that 'the government was estopped to attack the validity of the patents in the present proceeding.' But, surely, it is easy enough to sterilize the trial court's decision by the explicit declaration that the issue need not be decided. 86 I shall not follow the Court's lead and indulge in dicta on the question whether, in a suit like this, the issue of patentability can be contested by the Government. But, as bearing upon the undesirability of announcing dicta on this issue, it is pertinent to point out that the cases on which the Court relies for its pronouncement hardly dispose of the problem. They are cases in which a licensee resisted claims for royalties on what purported to be valid patents. Royalties were refused because there were no patents on which they were owed. Such was the issue involved in Sola Electric Co. v. Jefferson Electric Co., 317 U.S. 173, 63 S.Ct. 172, 87 L.Ed. 165; Edward Katzinger Co. v. Chicago Metallic Mfg. Co., 329 U.S. 394, 67 S.Ct. 416; MacGregor v. Westinghouse Electric & Manufacturing Co., 329 U.S. 402, 67 S.Ct. 421, 424. Different considerations come into play when the Government seeks a declaration of invalidity. See United States v. American Bell Telephone Co., supra. I am not remotely intimating that the differences are decisive. I am merely suggesting that a due weighing of the differences, in the light of the Bell Telephone case, should await the duty of adjudication. It should not be the undesirable product of deliberate dicta. 87 The Court refers to Hurn v. Oursler, 289 U.S. 238, 240, 53 S.Ct. 586, 587, 77 L.Ed. 1148, as reason for passing on an issue that 'need not be decided to dispose of this case,' because 'it seems inadvisable to leave the (trial court's) decision as a precedent.' As to our problem, Hurn v. Oursler was exactly the opposite from this case. The issue on which this Court pronounced in Hurn v. Oursler was inescapably the issue that had to be decided to dispose of the case. 88 The issue in Hurn v. Oursler was this: where a suit for infringement of a copyrighted play was brought in a federal court and with it was joined a non-federal cause of action based on unfair competition in regard to that play, has the federal court jurisdiction to pass on the merits of the claim of unfair competition after the court had rejected the federally-based suit of infringement? The trial court held not, and dismissed the non-federal claim for want of jurisdiction after dismissing the federal claim on the merits. When the case came here this Court could not possibly sustain the trial court (which had been affirmed by the Circuit Court of Appeals) without necessarily affirming the trial court's ruling on the issue of jurisdiction. This Court reversed the trial court on that issue and held that the district court had jurisdiction. It found, however, that the cause of action should have been dismissed but on the merits. Accordingly, this Court modified the decree so that the dismissal was on the merits and not for want of jurisdiction. This Court could not have reached the merits without first determining whether there ws jurisdiction to reach them. In short, in Hurn v. Oursler the precedent of the district court had to be set aside in order to decide the case. Here, the 'precedent' of the district court is upon an issue which is essentially irrelevant, and therefore we should not follow the error of the district court in pronouncing upon an issue which 'need not be decided to dispose of this case.' 89 Appendix. 90 License Agreement. 91 This agreement made this 18th day of October, A.D. 1929, by and between the United States Gypsum Company, an Illinois corporation, of Chicago, Illinois, hereinafter referred to as Licensor, and Ebsary Gypsum Co., Inc. a New York corporation, of Newark, New Jersey, hereinafter referred to as Licensee, Witnesseth, that 92 2. Licensor has agreed to and does hereby give and grant unto Licensee an indivisible and non-exclusive right, license and privilege of using the process or processes and a king and using the machines and/or inventions set forth and claimed in any and all of said patents and/or applications for letters patent set forth in Exhibit A attached hereto in the manufacture of gypsum plasterboard and/or gypsum wallboard at the plants or factories now owned and/or operated by Licensee, or at any other plant or factory hereafter owned and/or operated or controlled by it or any subsidiary, associated or affiliated company, and of manufacturing at any such place or places, selling and using in the United States of America and the territories and possessions thereof gypsum plasterboard or gypsum wallboard manufactured at any such place or places and embodying the inventions and improvements set forth and claimed in said patents and/or applications for letters patent described in said Exhibit A, for the full term of said letters patent or of any letters patent which may be granted for or upon any of said applications, including any extensions and/or reissues thereof. 93 It is expressly understood and agreed that the indivisible and non-exclusive right, license and privilege aforesaid is granted upon condition that the Licensor shall have and it hereby reserves the right to determine and fix at any time and to change from time to time during the existence of said patents and so long as said license shall continue, the minimum price or prices at which Licensee shall sell any plasterboard or gypsum wallboard manufactured by Licensee by use of any of the machines or appliances covered by any of said letters patent and which shall embody the inventions and improvements set forth an claimed in any of said patents which are presently issued, or any of said plasterboard or gypsum wallboard manufactured by second parties and which shall embody the inventions and improvements set forth and claimed in either patent number 1,500,452 or patent number 1,230,297, or commencing with the date when a patent shall have been granted or issued for or upon any of the said Roos or Bayer inventions and/or applications any of said plasterboard or gypsum wallboard manufactured by Licensee, the body or core of which is made according to the process set forth and claimed in any patent granted for or upon any of said Roos or Bayer inventions and/or applications, and in case Licensor shall exercise the right so reserved, it shall first serve written notice of its intention so to do upon Licensee, accompanied with a statement of the minimum price or prices at which Licensee shall sell said gypsum plasterboard or gypsum wallboard, and thereafter shall give to Licensee written or telegraphic notice of any change in such price or prices, and Licensee expressly covenants and agrees that it will not, so long as this agreement shall continue in force and effect and after receipt of such notice given in accordance with the terms and conditions hereof, directly or indirectly, sell or offer for sale any gypsum plasterboard or gypsum wallboard manufactured by it by use of any of the machines or appliances covered by any of said patents and which during the existence thereof shall embody the inventions and improvements set forth and claimed in any of said patents which are presently issued, or any gypsum plasterboard or gypsum wallboard manufactured by second parties and which during the existence thereof shall embody the inventions and improvements set forth and claimed in either patent number 1,500,452 or patent number 1,230,297, or any gypsum plasterboard or gypsum wallboard manufactured by Licensee after a patent shall have issued upon any of the said Roos or Bayer inventions and/or applications and during the existence thereof, the body or core of which is made according to the process set forth and claimed in any patent granted for or upon any of said inventions and/or applications, at a price or prices less than that stated by Licensor in said notice or in any such written or telegraphic notice of a change in such price or prices. 94 Said minimum price shall not be moe than that price at which Licensor determines to sell plasterboard or gypsum wallboard embodying the inventions and improvements set forth and claimed in said patents to its own like trade in the same market. 95 3. Licensee agrees to pay to Licensor for said disclosures, information and assistance and the agreements of Licensor herein contained, and for the right, license and privilege of using the processes and making and using the machines and/or inventions in the manufacture of plasterboard and gypsum wallboard covered by said patents and applications for letters patent described in said Exhibit A, and for the privilege of manufacturing, using and/or selling plasterboard and gypsum wallboard embodying the inventions and improvements set forth and claimed in said patents and applications for letters patent, an amount (hereinafter for convenience referred to as a license fee or royalty) equivalent to three and one-half per cent (3 1/2%) of the selling price of Licensee of all plasterboard and gypsum wallboard of every kind, whether or not made by the use of said machines and/or embodying the inventions and improvements set forth and claimed in said letters patent or applications for letters patent, manufactured and sold by Licensee between the date hereof and February 10, 1937, the date of the expiration of patent number 1,330,413 mentioned in said Exhibit A, and thereafter an amount equivalent to two per cent (2%) of the selling price of Licensee of all such plasterboard and gypsum wallboard manufactured and sold by it between February 10, 1937, and July 8, 1941, the date of the expiration of said patent number 1,500,452, and thereafter an amount equivalent to one per cent (1%) of the selling price of Licensee of all such plasterboard and gypsum wallboard manufactured and sold by it between July 8, 1941, and the date of the expiration of the last to expire of any patent granted or issued for or upon any of the said Roos or Bayer applications; * * * 96 5. It is expressly understood and agreed that the license herein granted shall be personal to the Licensee, and that the same or any right herein or thereunder shall not be sold or assigned or transferred without the written consent of Licensor, or transferred by operation of law; Provided, However, that the same may be assigned by Licensee to any company acquiring all the assets and business or all of the capital stock of Licensee, on condition that Licensee shall first obtain an agreement in writing from any such assignee agreeing to assume all of the obligations of Licensee under this agreement and to be bound by all of the terms and conditions hereof and shall deliver such agreement to Licensor. Licensee agrees not to sell all of its assets and business or all of its capital stock or to transfer and convey its plasterboard and/or wallboard business, or its assets used in connection therewith, without requiring the purchaser or purchasers thereof to assume, in writing, all of the obligations of Licensee hereunder, and to agree to be bound by all of the terms and conditions of this contract, and deliver such agreement to Licensor. 97 6. Licensee agrees to keep separate full and accurate books of accounts and records showing the exact quantity of all plasterboard and gypsum wallboard manufactured and sold by it, as well as a separate record of all plasterboard and/or gypsum wallboard sold by it in bundles, * * *. 98 7. Licensor, or its duly authorized representative, shall have the right at all reasonable times during business hours to inspect the books of account and records of Licensee referred to in the next preceding paragraph hereof, including all records of every kind showing the quantity of said plasterboard and gypsum wallboard manufactured and sold by it and the quantity thereof put up and sold by it in bundles and the price or prices at which the same was sold, and to make copies thereof and memoranda therefrom; * * * 99 9. Having regard for the fact that there are or may be certain manufacu rers of plaster or gypsum products, jobbers or other wholesale distributors of such products, who do not or may not manufacture gypsum wallboard or plasterboard but who desire or may desire to have gypsum wallboard or plasterboard manufactured for them, it is understood and agreed that Licensee may manufacture for jobbers (being those who do not manufacture but buy and sell plasterboard or gypsum wallboard in straight cars or in mixed cars with other building material and who do not sell at retail) gypsum wallboard or plasterboard embodying the inventions and improvements set forth and claimed in said letters patent or in any letters patent after the same shall have been issued, granted for or upon any of the said applications and may with the written consent of first party manufacture for any such other manufacturer or other wholesale distributor, gypsum wallboard or plasterboard embodying the said inventions and improvements; Provided, However, that the said license fee or royalty to be paid to Licensor as hereinbefore provided shall be based upon all gypsum wallboard and plasterboard manufactured for and sold and invoiced to such other manufacturer, jobber or wholesale distributor and upon the regular selling price of Licensee of such plasterboard or gypsum wallboard to its regular dealer trade at the time of such sale and invoice, and shall not be based upon the price at which plasterboard or gypsum wallboard is sold and invoiced by Licensee to such other manufacturer, jobber or wholesale distributor. Nothing hereinbefore contained in this agreement shall be construed to give Licensee the right to manufacture gypsum plasterboard or gypsum wallboard embodying the inventions and inprovements set forth and claimed in any of said letters patent or in any letters patent after the same shall have been granted for or upon any of said applications for said other manufacturers or wholesale distributors and to sell the same, without the written consent of Licensor. 100 12. In the event that either party shall at any time neglect, fail or refuse to keep or perform any of the conditions or agreements herein to be kept by it and performed, then the other party, at its election, may serve upon the party in default written notice of intention to terminate this license, which notice shall specify the alleged neglect, failure or refusal, and if within thirty (30) days from the date of delivery of said notice the party in default shall not cure the default specified in said notice, then the other party may cancel and terminate this agreement by notifying the party in default in writing of its election so to do, without the necessity of any court action; * * * 101 15. In case Licensor shall, subsequent to the effective date hereof, grant to any other person except Abel Davis and Eugene Holland, receivers of the Universal Gypsum & Lime Co. or their successors or to the said Universal Gypsum & Lime Co., any license under said patents or applications for letters patent set forth in said Exhibit A and paragraph 4 hereof for the manufacture, sale or use of gypsum plasterboard or gypsum wallboard or bundles thereof, embodying the claims or inventions set forth and claimed in said patents or said applications, or shall grant any right under any such license, upon terms more favorable than those granted hereunder to this Licensee, then it will grant to this Licensee a license on the same terms or extend to it the same right granted to any such other person. This paragraph shall not apply to any license granted on or prior to the effective date hereof, nor shall the same apply to the terms of settlement of any claim of Licensor or provisions with respect to the payment thereof, contained in any such license. 1 See p. 370 2 Bestwall Mfg. Co. v. United States Gypsum Co., 7 Cir., 270 F. 542. 3 'In computing the delivered minimum price hereunder, rail freight, wherever mentioned in this bulletin shall mean rail freight in accordance with rail rates published in regular freight tariffs, using the weights shown above, and shall include all stopover, switching, cartage and other extra delivery charges applicable to the shipment. * * * 'Rebates, allowances, etc.: 'Any sale of patented products, though ostensibly made at or above the minimum price established by licensor, will nevertheless be considered a violation of the provisions of the license if licensee directly or indirectly reduces the actual price charged by licensee below such minimum price by granting the customer rebates, unearned or unwarranted refunds, credits or discounts, by reducing the price, of other products, by hiring customers' trucks, by granting allowances for advertising or other purposes, by splitting of salesmen's compensation or commissions with customers, by overshipment of patented products, by including board under the guise of dunnage, or by making any other payment or allowance in the form of money or otherwise which has for its purpose and effect reducing the price charged by licensee below such minimum price.' 4 D.C., 53 F.Supp. 889. 5 Compare Becher v. Contoure Laboratories, 279 U.S. 388, 49 S.Ct. 356, 73 L.Ed. 752. 6 D.C., 67 F.Supp. 397, 417, 441. 7 See discussion of 'The rule concerning admissibility of declarations of alleged co-conspirators,' 67 F.Supp. at page 451, and 'Significance of the evidence, assuming the declarations connected,' id., 67 F.Supp. at page 500. 8 To the District Court the General Electric case establishes 'that a patent license agreement granting the right to make, use and vend a patented product, under terms and conditions, including prices, fixed by the licensor, is lawful. Such a license agreement ordinarily, and, when the prices are (as in the General Electric case) a part of the license contract, necessarily, involves negotiation and discussion between the licensor and the licensee and agreement upon the terms and conditions, a purpose to execute and carry out the agreement, combined action in signing the agreement and in performing the obligations thereof, with knowledge that it will result in a stabilized and presumably profitable price for the patented product as between the parties and in the industry (since the parties are, by virtue of the patent, the only ones having a right to make, use and sell the superior patented product) and with knowledge that it will result in a monopoly (i.e., a divided patent monopoly), in probable discontinuance of manufacture and sale by the licensee of inferior materials (the licensee's incentive to take a license is the right to make the superior product), and in control of distribution. What a lawful patent license agreement normally involves cannot be unlawful. Additionally, since a patent owner may lawfully divide his patent monopoly with a plurality of licensees, there will in the usual course be with each of such licensees the same negotiation and discussion, agreement upon terms, purpose to execute and carry out a license contract and to accomplish its normal results, and combined action in so doing, as in the case of a single licensee. And each licensee will be informed of and discuss with the licensor the terms and conditions of the proposed licenses; otherwise no more than a single license could be executed. A patent owner would not be able to license competing manufacturers upon different price terms; no one such would be willing to suffer competitive disadvantages; no one such would be willing to sign in the dark as to the terms to be extended to the others; ordinarily, moreover, there will be discussion at large, i.e., within the trade, of the advantages and disadvantages of the licenses proposed by the patent owner. Each of a plurality of licensees will, moreover, have the same purpose to take a license and to secure its resulting advantages. The licensor and each licensee of such a plurality constitute a 'combination' to f fectuate the purposes of their license. Since a plurality of licenses is lawful, all of this must be lawful. Further, if in practical effect the licensor and the plurality of licensees are a 'combination' to the same end, such a 'combination' is not stigmatized by the law—provided in purpose and effect it does not secure to the patent owner more than the normal reward of a patent monopoly, nor to any of the licensees with whom that monopoly is divided more than the advantages which naturally result to a licensee, as well as to a licensor, from patent licensing. All of this necessarily follows from the General Electric case.' 67 F.Supp. at pages 439, 440. Referring to the evidence above, the District Court said, id., 67 F.Supp. at page 457: 'These items do not prove the conspiracy charged because they do not show that the licenses were not bona fide or that they were executed to accomplish restraints outside the proper limits of a patent monopoly.' 9 67 F.Supp. 500, 501. 'But in view of the importance of this case and the consequent probability that it will reach a higher tribunal, we think it desirable also to state our views as to the meaning of the evidence when the declarations are considered as binding not merely upon the declarant but also upon all of the alleged co-conspirators. We have considered the evidence in this light, and we think the Government still has not proved that the license agreements were executed not as bona fide license agreements reasonably designed to secure to USG the pecuniary rewards of its patent monopoly but only as sham agreements to give color of legality to the illegal purposes alleged in the compaint, and has not proved that the operations of the defendants were carried beyond the proper limits of the USG patent monopoly, and therefore has not proved the combination and conspiracy charged. The evidence discussed in topics V and VI no more proves lack of bona fides in the execution of the license agreements, or operations beyond the limits of the patent monopoly, when the declarations are regarded as binding upon all of the alleged co-conspirators, than it does when such declarations are considered as binding only upon the declarant. This is necessarily so—in the view we take of the significance of the declarations. Since, as demonstrated in topics V and VI, they fail to convict the declarants themselves of lack of bona fides in the execution of the licenses, or of operations beyond the proper limits of the USG patent monopoly, they cannot convict others thereof.' 10 Van Riper v. United States, 2 Cir., 13 F.2d 961, 967; Lefco v. United States, 3 Cir., 74 F.2d 66, 68; Deacon v. United States, 1 Cir., 124 F.2d 352, 358; United States v. Compagna, 2 Cir., 146 F.2d 524, 530. 11 H. Doc. No. 588, 75th Cong., 3d Sess., Notes to Rules of Civil Procedure; Report of the Advisory Committee, Supreme Court of the United States, on Rules of Civil Procedure, April, 1937, Rule 59 and notes; Preliminary Draft, Rules of Civil Procedure for the District Court of the United States, May 1936, Rule 68 and notes. 12 Corn Products Refining Co. v. Federal Trade Comm., 324 U.S. 726, 739, 65 S.Ct. 961, 967, 89 L.Ed. 1320; National Labor Relations Board v. Pennsylvania Greyhound Lines, 303 U.S. 261, 268, 58 S.Ct. 571, 575, 82 L.Ed. 831, 115 A.L.R. 307. 13 Lawrence v. McCalmont, 2 How, 426, 453, 11 L.Ed. 326; Reconstruction Finance Corp. v. Bankers Trust Co., 318 U.S. 163, 170, 63 S.Ct. 515, 519, 87 L.Ed. 680. 14 2 Street, Federal Equity Practice (1909) §§ 1510, 1514; Furrer v. Ferris, 145 U.S. 132, 12 S.Ct. 821, 36 L.Ed. 649; Tilghman v. Proctor, 125 U.S. 136, 149, 150, 8 S.Ct. 894, 901, 31 L.Ed. 664; District of Columbia v. Pace, 320 U.S. 698, 701, 64 S.Ct. 406, 408, 88 L.Ed. 408; Virginian R. Co. v. United States, 272 U.S. 658, 675, 47 S.Ct. 222, 228, 71 L.Ed. 463. 15 We quote Findings 54 and 89 as typical: 54. The fact that for the privilege of using the patents, royalties are fixed in the license agreements at an amount equivalent to a designated percentage of the selling price of the licensees of all gypsum board manufactured by them, whether or not patented, de § not establish an agreement to make only the patented product and does not establish that the license agreements were executed in bad faith. The patents were numerous and covered not only the patented board but machines and processes in the manufacture of board, and the rights and privileges granted were of great value to the manufacturers of gypsum board. This royalty provision is in effect a provision for a percentage of gross sales, and as such is but a convenient means of measuring the amount to be paid for the privilege of using the patents. It might with equal propriety have been a lump sum. This provision in the license agreements was not an attempt to impose a royalty upon an unpatented product, nor was it intended to drive open-edge board off the market, nor did it have that effect.' '89. The defendants did not by any of their operations under the license agreements, nor did they by any agreement or understanding, accomplish any improper standardization of gypsum board or its method of production, as charged by the Government.' 16 We quote Findings 75 and 77 as typical: '75. The license agreements were not executed with an intent to effectuate improper restriction upon the distribution of gypsum board, plaster or miscellaneous gypsum products, specifically, to 'eliminate' jobbers through the discontinuance of a sales discount.' '77. There was no agreement or understanding between any of the parties to the license agreements in the instant case whereby jobbers would be eliminated from the gypsum board distributive system. Nor was there any understanding or agreement that jobbers' discounts would be discontinued. The issuance of the bulletin of August 8, 1930 (Exhibit 430) making the price to jobbers the same as to dealers was the exercise of the right of USG to establish a price for the patented product.' 17 We quote Findings 73 and 95 as typical: '73. There was at no time any understanding or agreement among any of the parties to the respective license agreements that the prices would be raised or fixed p on plaster or any unpatented gypsum product. Nor were the license agreements in the instant case executed with an intent to raise, maintain and stabilize the prices of unpatented materials such as plaster and miscellaneous gypsum products. The parties to the respective license agreements knew that the licensor's right to fix minimum prices was limited to the prices on patented board manufactured and sold by the respective licensees.' '95. The Bulletin provision that 'Any sale of patented products, though ostensibly made at or above the minimum price established by licensor, will nevertheless be considered a violation of the provisions of the license if licensee directly or indirectly reduces the actual price charged by licensee below such minimum price * * * by reducing the price of other products * * *' is but part of a larger provision concerning rebates and allowances made for the purpose and with the effect of reducing the licensee's price on patented board below the minimum price therefor—a price protective provision. It was not a device to raise, maintain or stabilize the price of plaster or miscellaneous gypsum products, and it was not applied by the defendants to that end. Nor did it have that effect. On the contrary the provision in question was a proper price protective measure reasonably designed to secure to USG the pecuniary reward of its patent monopoly. In operation, it was not used to raise, maintain or stabilize the price of unpatented materials.' 18 Objection was made to those findings which held that the defendants had not conspired to fix resale prices of board sold to manufacturing distributors. 19 Binderup v. Patie Exchange, 263 U.S. 291, 44 S.Ct. 96, 68 L.Ed. 308; Eastern States Retail Lumber Dealers' Ass'n v. United States, 234 U.S. 600, 34 S.Ct. 951, 58 L.Ed. 1490, L.R.A.1915A, 788; United States v. Reading Co., 226 U.S. 324, 357, 33 S.Ct. 90, 98, 57 L.Ed. 243; Swift & Co. v. United States, 196 U.S. 375, 396, 25 S.Ct. 276, 279, 49 L.Ed. 518. 20 4 Fed. Rules Serv. (Pike & Fischer) 931; Gulbenkian v. Gulbenkian, 2 Cir., 147 F.2d 173, 177, 158 A.L.R. 990. We know of no reason why the statement in the Gulbenkian case that it is unnecessary for the appellant to offer his evidence a second time is not here applicable.
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333 U.S. 196 68 S.Ct. 514 92 L.Ed. 644 COLE et al.v.STATE OF ARKANSAS. No. 373. Argued Feb. 4, 5, 1948. Decided March 8, 1948. Messrs. David Rein and Joseph Forer, both of Ws hington, D.C., for petitioner. Messrs. Oscar E. Ellis, of Salem, Ark., and Shields M. Goodwin, of Little Rock, Ark., for respondent. Mr. Justice BLACK delivered the opinion of the Court. 1 The petitioners were convicted of a felony in an Arkansas state court and sentenced to serve one year in the state penitentiary. The State Supreme Court affirmed, one judge dissenting on the ground that the evidence was insufficient to sustain the convictions. Ark., 202 S.W.2d 770, 771. A petition for certiorari here alleged deprivation of important rights guaranteed by the Fourteenth Amendment. We granted certiorari because the record indicated that at least one of the questions presented was substantial, 332 U.S. 834, 68 S.Ct. 217. That question, in the present state of the record, is the only one we find it appropriate to consider. The question is: 'Were the petitioners denied due process of law * * * in violation of the Fourteenth Amendment by the circumstance that their convictions were affirmed under a criminal statute for violation of which they had not been charged'? 2 The present convictions are under an information. The petitioners urge that the information charged them with a violation of § 2 of Act 193 of the 1943 Arkansas Legislature and that they were tried and convicted of violating only § 2. The State Supreme Court affirmed their convictions on the ground that the information had charged and the evidence had shown that the petitioners had violated § 1 of the Arkansas Act which describes an offense separate and distinct from the offense described in § 2. 3 The information charged: '* * * Walter Ted Campbell, acting in concert with other persons, assembled at the Southern Cotton Oil Company's plant in Pulaski County, Arkansas, where a labor dispute existed, and by force and violence prevented Otha Williams from engaging in a lawful vocation. The said Roy Cole, Louis Jones and Jessie Bean,1 in the County and State aforesaid, on the 26th day of December, 1945, did unlawfully and feloniously, acting in concert with eath (sic) other, promote, encourage and aid such unlawful assemblage against the peace and dignity of the State of Arkansas.' 4 The foregoing language describing the offense charged in the information is substantially identical with the following language of § 2 of the Arkansas Act. That section provides: 'It shall be unlawful for any person acting in concert with one or more other persons, to assemble at or near any place where a 'labor dispute' exists and by force or violence prevent * * * any person from engaging in any lawful vocation, or for any person acting * * * in concert with one or more other persons, to promote, encourage or aid any such unlawful assemblage.' The record indicates that at the request of the prosecuting attorney, the trial judge read § 2 to the jury. He then instructed them that § 2 'includes two offenses, first, the concert of action between two or more persons resulting in the prevention of a person by means of force and violence from engaging in lawful vocation. And, second, in promoting, encouraging or aiding of such unlawful assemblage by concert of action among the defendants as is charged in the information here. The latter offense is the one on trial in this case.' 5 The trial court also instructed the jury that they could not convict petitioners unless 'convinced beyond a reasonable doubt that they promoted, encouraged, and aided in an unlawful assemblage at the plant of the Southern Cotton Oil Company, for the purpose of preventing Otha Williams from engaging in a lawful vocation.' This instruction, like the preceding one, told the jury that the trial of petitioners was for violation of § 2, since § 2 makes an unlawful assemblage an ingredient of the offense it defines and § 12 does not. Thus the petitioners were cla rly tried and convicted by the jury for promoting an unlawful assemblage made an offense by § 2, and were not tried for the offense of using force and violence as described in § 1.3 6 When the case reached the State Supreme Court on appeal, that court recognized that the information as drawn did include a charge that petitioners violated § 2 of the Act. That court also held that the information accused petitioners of 'using force and violence to prevent Williams from working,' and that the 'use of force or violence, or threat of the use of force or violence, is made unlawful by § 1.' For this reason the Supreme Court said that it affirmed the convictions of the petitioners 'without invoking any part of § 2 of the Act * * *.' That court accordingly refused to pass upon petitioners' federal constitutional challenges to § 2. It later denied a petition for rehearing in which petitioners argued: 'To sustain a conviction on grounds not charged in the information and which the jury had no opportunity to pass upon, deprives the defendants of a fair trial and a trial by jury, and denies the defendants that due process of law guaranteed by the 14th Amendment to the United States Constitution.' 7 We therefore have this situation. The petitioners read the information as charging them with an offense under § 2 of the Act, the language of which the information had used. The trial judge construed the information as charging an offense under § 2. He instructed the jury to that effect. He charged the jury that petitioners were on trial for the offense of promoting an unlawful assemblage, not for the offense 'of using force and violence.' Without completely ignoring the judge's charge, the jury could not have convicted petitioners for having committed the separate, distinct, and substantially different offense defined in § 1.4 Yet the State Supreme Court refused to consider the validity of the conviction under s 2, for violation of which petitioners were tried and convicted. It affirmed their convictions as though they had been tried for violating § 1, an offense for which they were neither tried nor convicted. 8 No principle of procedural due process is more clearly established than that notice of the specific charge, and a chance to be heard in a trial of the issues raised by that charge, if desired, are among the constitutional rights of every accused in a criminal proceeding in all courts, state or federal. In re Oliver, 333 U.S. 257, 68 S.Ct. 499, and cases there cited. If, as the State Supreme Court held, petitioners were charged with a violation of § 1, it is doubtful both that the information fairly informed them of that charge and that they sought to defend themselves against such a charge; it is certain that they were not tried for or found guilty of it. It is as much a violation of due process to send an accused to prison following conviction of a charge on which he was never trid as it would be to convict him upon a charge that was never made. De Jonge v. State of Oregon, 299 U.S. 353, 362, 57 S.Ct. 255, 259, 81 L.Ed. 278. 9 Furthermore, since Arkansas provides for an appeal to the State Supreme Court and on that appeal considers questions raised under the Federal Constitution, the proceedings in that court are a part of the process of law under which the petitioners' convictions must stand or fall. Frank v. Mangum, 237 U.S. 309, 327, 35 S.Ct. 582, 587, 59 L.Ed. 969. Cf. Mooney v. Holohan, 294 U.S. 103, 113, 55 S.Ct. 340, 342, 79 L.Ed. 791, 98 A.L.R. 406. That court has not affirmed these convictions on the basis of the trial petitioners were afforded. The convictions were for a violation of § 2. Petitioners urged in the State Supreme Court that the evidence was insufficient to support their conviction of a violation of § 2. They also raised serious objections to the validity of that section under the Fourteenth Amendment to the Federal Constitution.5 None of their contentions were passed upon by the State Supreme Court. It affirmed their conviction as though they had been tried and convicted of a violation of § 1 when in truth they had been tried and convicted only of a violation of a single offense charged in § 2, an offense which is distinctly and substantially different from the offense charged in § 1. To conform to due process of law, petitioners were entitled to have the validity of their convictions appraised on consideration of the case as it was tried and as the issues were determined in the trial court. 10 We are constrained to hold that the petitioners have been denied safeguards guaranteed by due process of law—safeguards essential to liberty in a government dedicated to justice under law. 11 In the present state of the record we cannot pass upon those contentions which challenge the validity of § 2 of the Arkansas Act. The judgment is reversed and remanded to the State Supreme Court for proceedings not inconsistent with this opinion. 12 Reversed and remanded. 1 The State Supreme Court held that Bean's conviction was based on insufficient evidence, reversed his conviction, and directed that the cause be dismissed as to him. 2 'Section 1. It shall be unlawful for any person by the use of force or violence, or threat of the use of force or violence, to prevent or attempt to prevent any person from engaging in any lawful vocation within this State. Any person guilty of violating this section shall be deemed guilty of a felony, and upon conviction thereof shall be punished by confinement in the State Penitentiary for not less than one (1) year, nor more than two (2) years.' Act 193, Arkansas Acts of 1943. 3 A previous conviction of petitioners under an indictment charging them with a violation of § 1 was set aside by the State Supreme Court because of the erroneous admission of evidence by the trial court. Cole et al. v. State, 210 Ark. 433, 196 S.W.2d 582. 4 'Under any reasonable construction Section 1 creates separate offenses, as does Section 2, and an indictment that alleges crimes covered by a part of Section 1 does not impose upon the defendant a duty to defend under Section 2 or against 'threat' provisions of Section 1.' Cole et al. v. State, 210 Ark. 433, 196 S.W.2d 582, 586. 5 The objections pressed in the Arkansas Supreme Court and also argued here were: (1) that petitioners were deprived of freedom of speech and assembly by reason of their convictions under § 2; (2) that their convictions were based upon a statute or charges too vague and indefinite to conform to due process; and (3) that Act 193 deprived them of the equal protection of the laws by making certain conduct, which otherwise would have been a misdemeanor, a felony when committed by striking workmen.
34
333 U.S. 424 68 S.Ct. 487 92 L.Ed. 783 MOGALLv.UNITED STATES. No. 48. Argued Oct. 16, 1947. Decided March 8, 1948. Mr. Rudolph F. Becker, Jr., of New Orleans, La., for petitioner. Mr. W. Marvin Smith, of New Orleans, La., for the United States. PER CURIAM. 1 Petitioner and his employee, one Perniciaro, were jointly indicted and tried on the charges contained in an eight-count indictment. The defendants were acquitted under Counts 1 to 7, the first of which charged petitioner and Perniciaro with conspiring for the purpose of enabling Perniciaro to evade military service by failing to make known to the draft board facts which might have resulted in Perniciaro being placed in a different draft classification. The defendants were convicted under Count 8, however, which charged petitioner and Perniciaro with failing to report facts in writing to the local draft board which might have resulted in Perniciaro being placed in a different draft classification, contrary to § 11 of the Selective Training and Service Act of 1940, 54 Stat. 894, 50 U.S.C.Appendix, § 311, 50 U.S.C.A.Appendix, § 311, and § 626.1(b) of the Selective Service Regulations. 2 The Government now concedes that the Selective Service Regulations imposed no legal obligation upon petitioner, as an employer of a registrant under the Selective Training and Service Act, to make such reports to the local board. It is also conceded that petitioner was tried and convicted upon the assumption that he was under such a legal obligation. We agree that the plain language of the Regulation and the record of this case support these conclusions. 3 The Government urges that although the judgment of conviction against petitioner should be reversed, the indictment should not be dismissed since the prosecution may wish to try petitioner a second time on the charges contained in Count 8, as an aider and abettor. 4 There is no showing of facts sufficient for us to pass judgment on the question. Accordingly, we intimate no opinion on the propriety of this procedure or the issues which it might present. See Sealfon v. United States, 1948, 332 U.S. 575, 68 S.Ct. 237. Those questions will be open in the District Court on our remand of the cause. 5 Reversed.
01
333 U.S. 178 68 S.Ct. 591 92 L.Ed.6 28 DONALDSON, Postmaster General,v.READ MAGAZINE, Inc., et al. No. 50. Reargued Jan. 5, 1948. Decided March 8, 1948. Mr. Robert L. Stern, of Washington, D.C., for petitioner. Mr. John W. Burke, Jr., of New York City, for respondents. Mr. Justice BLACK delivered the opinion of the Court. 1 This case presents questions as to the validity of an order issued by petitioner, the Postmaster General, which directed that mail addressed to some of respondents be returned to the senders marked 'Fraudulent,' and that postal money order sums payable to their order be returned to the remitters. 2 The respondent Publishers Service Company has conducted many contests to promote the circulation of newspapers in which it has advertised that prizes would be given for the solution of puzzles. Through its corporate subsidiaries, respondents Literary Classics, Inc., and Read Magazine, Inc., it publishes books and two monthly magazines called Read and Facts. The place of business is in New York City. 3 In 1945 respondents to promote sales of their books put on a nationally advertised project, known as the Facts Magazine Hall of Fame Puzzle Contest. The Postmaster General after a hearing found 'upon evidence satisfactory to him' that the 'puzzle contest' was 'a scheme or device for obtaining money through the mails by means of false and fraudulent pretenses, representations, and promises, in violation of sections 259 and 732 of title 39, United States Code * * *.' Specifically, the Postmaster General found that the representations were false and fraudulent for two principal reasons. First, that prospective contestants were falsely led to believe that they might be eligible to win prizes upon payment of $3 as a maximum sum when in reality the minimum requirement was $9, and as it later developed they were finally called on to pay as much as $42 to be eligible for increased prize offers. Second, the Postmaster General found that though the contest was emphasized in advertisements as a 'puzzle contest' it was not a puzzle contest; that respondents knew from experience that the puzzles were so easy that many people would solve all the 'puzzles' and that prizes would be awarded only as a result of a tie-breaking letter-essay contest; and that contestants were deliberately misled concerning all these facts by artfully composed advertisements. 4 The contest was under the immediate supervision of respondents Henry Walsh Lee and Judith S. Johnson, editor-in-chief and 'contest editor' respectively of Facts. The Postmaster General's original fraud order related to mail and money orders directed to 5 'Puzzle Contest, Facts Magazine; Contest Editor, Facts Magazine; Judith S. Johnson, Contest Editor; Miss J. S. Johnson, Contest Editor; Contest Editor; Facts Magazine; and Henry Walsh Lee, Editor in Chief, Facts Magazine, and their officers and agents as such, at New York, New York.' 6 Respondents filed a complaint in the United States District Court for the District of Columbia to enjoin enforcement of the order. They alleged its invalidity on the grounds that there was no substantial evidence to support the Postmaster General's findings of fraud, and that the statutory provisions under which the order was issued authorize the Postmaster General to act as a censor and hence violate the First Amendment. The District Court issued a temporary restraining order but directed that pending further orders respondents should deposit in court all moneys and the proceeds of all checks and money orders received through the mails as qualifying fees for the Hall of Fame Puzzle Contest. After a hearing the respondents' motion for summary judgment was granted on the ground that the findings were not supported by substantial evidence. 63 F.Supp. 318. The United States Court of Appeals for the District of Columbia affirmed on the same ground, one judge dissenting. 81 U.S.App.D.C. 339, 158 F.2d 542. We granted certiorari. 7 Th case has been twice argued in this Court. Briefs of both parties on the first argument dealt only with the question of whether the Postmaster General's findings of fraud were supported by substantial evidence. But assuming validity of the findings, questions arose during the first oral argument concerning the scope of the fraud order. That order had included a direction to the New York postmaster to refuse to deliver any mail or to pay any money orders to Facts, its officers and agents, including its editor in chief, who was also editor of Read. The two monthly magazines, both published in New York, had an aggregate circulation of nearly five hundred thousand copies. We were told the total deprivation of the right of Facts and of the editor of the two magazines to receive mail and to cash money orders would practically put both magazines out of business. See United States ex rel. Milwaukee Social Democratic Pub. Co. v. Burleson, 255 U.S. 407, 41 S.Ct. 352, 65 L.Ed. 704. Furthermore, the order was of indefinite duration and Facts and its affiliates have made a business of conducting contests to promote the circulation of books and magazines. The order, if indefinitely enforced, might have resulted in barring delivery of mail and payment of money orders in relation to other non-fraudulent contests as well as legitimate magazine business. All of the foregoing raised questions about the validity and scope of the original order, if unmodified, which we deemed of sufficient importance to justify further argument. For that reason we set the case down for reargument, requesting parties to discuss the validity and scope of the order, and whether, if invalid by reason of its scope, it could be so modified as to free it from statutory or constitutional objections.1 8 Thereafter, and before reargument, the Postmaster General revoked the order insofar as it applied to Facts magazine, its editor-in-chief, and its officers and agents. As modified, the order bars delivery of mail and payment of money orders only to addressees designated in the contest advertisements: 9 'Puzzle Contest, Facts Magazine; Contest Editor, Facts Magazine; Judith S. Johnson, Contest Editor; Miss J. S. Johnson, Contest Editor; Contest Editor.' 10 The Postmaster General, so we are informed, does not construe the modified order as forbidding delivery of mail or payment of money orders to Facts magazine or even to Miss Judith (J. S.) Johnson, individually. So construed, the order is narrowly restricted to mail and money orders sent in relation to the Hall of Fame Puzzle Contest found fraudulent, and would not bar deliveries t the magazines, to their editor, or to the three corporate respondents. It would bar deliveries to Judith (J. S.) Johnson, only if sent to her at the designated address and in her capacity as 'Contest Editor.' Likewise the District Court's order impounding funds is limited to qualifying fees received in the Hall of Fame Puzzle Contest. If the Postmaster General's action in modifying the order is valid, the questions we asked to have argued have largely been eliminated from the original order. 11 Respondents' contentions now are: (1) The Postmaster General lacked power to modify his original fraud order, and hence that order remains subject to any and all of its original infirmities. (2) The findings on which the order is based are not supported by substantial evidence. (3) The statutes under which the order was issued violate various constitutional provisions. 12 First. Respondents' contention that the Postmaster General was without power to modify the order by elimination of Facts magazine, its editor, and its officers and agents is based almost entirely on their two other grounds for asserting invalidity of the order. Of course, if the order were wholly invalid as to all of the respondents for these reasons, it could not have been validated merely by eliminating some of them from its terms. But laying aside respondents' other contentions for the moment, we have no doubt as to the Postmaster General's authority to modify the fraud order. 13 Having concluded that the original order was broader than necessary to reach the fraud proved, the Postmaster General not only possessed the power but he had the duty to reduce its scope to what was essential for that purpose. The purpose of mail fraud orders is not punishment, but prevention of future injury to the public by denying the use of the mails to aid a fraudulent scheme. See Com'r v. Heininger, 320 U.S. 467, 474, 64 S.Ct. 249, 251, 88 L.Ed. 171. Such orders if too broad could work great hardships and inflict unnecessary injuries upon innocent persons and businesses. No persuasive reason has been suggested why the Postmaster General should be without power to modify an order of this kind. Such an order is similar to an equitable injunction to restrain future conduct, and like such an injunction should be subject to modification whenever it appears that one or more of the restraints imposed are no longer needed to protect the public. United States v. Swift & Co., 286 U.S. 106, 114, 52 S.Ct. 460, 462, 76 L.Ed. 999; see Skinner & Eddy Corporation v. United States, 249 U.S. 557, 570, 39 S.Ct. 375, 380, 63 L.Ed. 772. 14 Furthermore, the modification here involved was for respondents' benefit; it gave them a part of the very relief for which they prayed. It removed the ban against delivery of mail and payment of money orders to their magazine, its editor and its agents—a ban which we were told would have done them irreparable injury if left in effect. The possibility that another order might be entered against the eliminated respondents is too remote to require us to consider the original order as though the modification had never been made. See United States v. Hamburgh-American S.S. Co., 239 U.S. 466, 475, 476, 36 S.Ct. 212, 216, 60 L.Ed. 387. 15 Nor does the modification subject respondents to any disadvantage in this case in reference to the impounded funds. Those funds are sums sent in as qualifying fees for the scheme found fraudulent. They are in court custody because of the court's restraining order; but for it they would have been returned to the senders as ordered by the Postmaster General. Now, as before the fraud order was modified, their disposition is dependent entirely upon the validity of the finding of fraud. Respondents could thus claim the funds only by asserting a right growing out of the scheme found fraudulent. The court having lawful command of such funds must allocate them to the remitters if the order is valid. See Inland Steel Co. v. United States, 306 U.S. 153, 156—158, 59 S.Ct. 45 , 417, 418, 83 L.Ed. 557; United States v. Morgan, 307 U.S. 183, 194, 195, 59 S.Ct. 795, 801, 802, 83 L.Ed. 1211. 16 Second. Respondents contend that there was no substantial evidence to support the Postmaster General's findings that they had represented that prizes could be won (1) on payment of only three dollars as contest fees or (2) by the mere solution of puzzles. The say that the very advertisements and circular letters to contestants from which these inferences were drawn by the Postmaster General contained language which showed that the first $3 series of puzzles might result in ties, making necessary a second and maybe a third $3 puzzle series, and that if these three efforts failed to determine the prize winners, they would then be selected on the basis of competitive letters, written by the tied contestants on the subject 'The Puzzle I Found Most Interesting and Educational in This Contest.' 17 There were sentences in the respondents' advertisements and communications which, standing alone, would have conveyed to a careful reader information as to the nine-dollar fees and the letter essay feature of the contest. Had these sentences stood alone, doubtless the fraud findings of the Postmaster General would not have been justified. But they did not stand alone. They were but small and inconspicuous portions of lengthy descriptions used by respondents to present their contest to the public in their advertisements and letters. In reviewing fraud findings of the Postmaster General, neither this Court nor any other is authorized to pick out parts of the advertisements on which respondents particularly rely, decide that these excerpts would have supported different findings, and set aside his order for that reason. We consider all the contents of the advertisements and letters, and all of the evidence, not to resolve contradictory inferences, but only to determine if there was evidence to support the Postmaster General's findings of fraud. Leach v. Carlile, 258 U.S. 138, 140, 42 S.Ct. 227, 228, 66 L.Ed. 511. 18 Respondents' advertisements were long; their form letters to contestants discussing the contest, its terms, and its promises were even longer than the advertisements. Paradoxically, the advertisements constituted at the same time models of clarity and of obscurity—clarity in referring to prizes and to a 'puzzle contest,' obscurity in referring to a remote possibility of a letter-essay contest. In bold type, almost an inch high, their advertisements referred to '$10,000 First Prize Puzzle Contest.' Time after time they used the words 'puzzle' and 'puzzle contest.' Conspicuous pictures of sample 'puzzles' covered a large part of a page. Rebus 'puzzles' Nos. 1 to 4 of the contest were there. An explanation of what each represented appeared above it. The first, it was explained, represented 'the inventor of the phonograph and electric light,' the second 'a Republican President who became Chief Justice of the Supreme Court.' The last two contained equally helpful clues to the 'puzzles.' The advertisements left no doubt that the contest presented an opportunity to win large prizes in connection with solution of puzzles, which puzzles, to say the least, would not be too taxing on the imagination. 19 Readers who might have felt some reluctance about paying their money to enter an essay contest were not so impressively and conspicuously informed about that prospect; here the advertisement became a model of obscurity. In the lower left corner of one of the advertising pages appeared the 'Official Rules of the Contest,' to which rules references were carefully placed in various parts of the advertisement, and which were printed, as the District Court's opinion observed, 'in small type.' There were ten rules. About the middle of Rule 9 appeared the only reference to the possible need for letters as a means of breaking ties. And it is impossible to say that the Postmaster General drew an unreasonable inference in concluding that competitive letter-wrii ng thus obscurely referred to was mentioned only as a remote and unexpected contingency. The same kind of obscurity and doubt occurs in reference to the cost of the contest. The District Court in an opinion holding that the Postmaster General's findings were not supported by the evidence had this to say about one advertisement which was widely used: 20 'Indeed, the advertisement is by no means a model of clarity and lucidity. It is diffuse and prolix, and at times somewhat obscure. Many of its salient provisions are printed in rather small type. An intensive and concentrated reading of the entire text is indispensable in order to arrive at an understanding of the entire scheme. Nevertheless, a close analysis of this material discloses the complete plan. Nothing is omitted, concealed or misrepresented. There is no deception. The well-founded criticisms of the plaintiffs' literature are a far cry from justifying a conclusion that the announcement was a fraud on the public. * * * The conclusion is inevitable that there is no evidence to support the finding of fact on which the fraud order is based and that, therefore, the plaintiff is entitled to a permanent injunction against the enforcement of the order.' (63 F.Supp. 322) 21 We agree with the District Court that many people are intellectually capable of discovering the cost and nature of this contest by 'intensive and concentrated reading' and by close analysis of these advertisements. Nevertheless, we believe that the Postmaster General could reasonably have concluded, as he did, that the advertisements and other writings had been artfully contrived and composed in such manner that they would confuse readers, distract their attention from the fact that the scheme was in reality an essay contest, and mislead them into thinking that they were entering a 'rebus puzzle' contest, in which prizes could be won by an expenditure of not more than $3. That respondents' past experience in similar contests enabled them to know at the beginning that essay writing, not puzzle solutions, would determine prize winners is hardly controvertible on this record. That experience was borne out in this contest by the fact that of the 90,000 contestants who submitted answers to the first series of 80 puzzles, 35,000 solved all of them, and of that number 27,000 completed the first set of 'tie-breaking puzzles' when the fraud order was issued. Under the circumstances, to advertise this as a puzzle contest instead of what it actually was cannot be attributed to a mere difference in 'nomenclature'; such conduct falls far short of that fair dealing of which fraud is the antithesis. 22 Advertisements as a whole may be completely misleading although every sentence separately considered is literally true. This may be because things are omitted that should be said, or because advertisements are composed or purposefully printed in such way as to mislead. Wiser v. Lawler, 189 U.S. 260, 264, 23 S.Ct. 624, 626, 47 L.Ed. 802; Farley v. Simmons, 69 U.S.App.D.C. 110, 99 F.2d 343, 346; see also cases collected in 6 Eng.Rul.Cas. 129—131. That exceptionally acute and sophisticated readers might have been able by penetrating analysis to have deciphered the true nature of the contest's terms is not sufficient to bar findings of fraud by a factfinding tribunal. Questions of fraud may be determined in the light of the effect advertisements would most probably produce on ordinary minds. Durland v. United States, 161 U.S. 306—313, 314, 16 S.Ct. 508—511, 512, 40 L.Ed. 709; Wiser v. Lawler, supra, 189 U.S. at page 264, 23 S.Ct. at page 626, 47 L.Ed. 802; Oesting v. United States, 9 Cir., 234 F. 304, 307. People have a right to assume that fraudulent advertising traps will not be laid to ensnare them. 'Laws are made to protect the trusting as well as the suspicious.' Federal Trade Comm. v. Standard Education Society, 302 U.S. 112, 116, 58 S.Ct. 113, 115, 82 L.Ed. 141. 23 The Postmaster General found that respondents' advertisements had been delibr ately contrived to divert readers' attention from material but adroitly obscured facts. That finding has substantial support in the evidence. The District Court and the Court of Appeals were wrong in holding the evidence insufficient. 24 Third. It is contended that §§ 259 and 732 of 39 U.S.C., 39 U.S.C.A. §§ 259, 732, the sections under which this order was issued, are in conflict with various constitutional provisions and that the statutes should be held unenforceable for this reason. Specifically, it is argued that the sections authorize a prior censorship and thus violate the First Amendment; authorize unreasonable searches and seizures in violation of the Fourth Amendment; violate the due process clause of the Fifth Amendment; deny the kind of trial guaranteed in criminal proceedings by the Sixth Amendment and by Art. III, § 2, cl. 3; and inflict unusual punishment in violation of the Eighth Amendment. 25 In 1872 Congress first authorized the Postmaster General to forbid delivery of registered letters and payment of money orders to persons or companies found by the Postmaster General to be conducting an enterprise to obtain money by false pretenses through the use of the mails. 17 Stat. 322—323, 39 U.S.C. § 732, 39 U.S.C.A. § 732. In the same statute Congress made it a crime to place letters, circulars, advertisements, etc., in the mails for the purpose of carrying out such fraudulent artifices or schemes. 17 Stat. 323, 18 U.S.C. § 338, 18 U.S.C.A. § 338. In 1889 Congress declared 'non-mailable' letters and other matters sent to help perpetrate frauds. 25 Stat. 874, 39 U.S.C. § 256, 39 U.S.C.A. § 256. In 1895 the Postmaster General's fraud order powers were extended to cover all letters or other matters sent by mail. 28 Stat. 964, 39 U.S.C. § 259, 39 U.S.C.A. § 259. And Congress has passed many more statutes, such, for illustration, as the Securities Act of 1933, 48 Stat. 77, 906, 15 U.S.C. § 77e, 15 U.S.C.A. § 77e, and the Federal Trade Commission Act, as amended, 52 Stat. 114, 15 U.S.C. § 52, 15 U.S.C.A. § 52, to protect people against fraudulent use of the mails. 26 All of the foregoing statutes, and others which need not be referred to specifically, manifest a purpose of Congress to utilize its powers, particularly over the mails and in interstate commerce, to protect people against fraud. This governmental power has always been recognized in this country and is firmly established. The particular statutes here attacked have been regularly enforced by the executive officers and the courts for more than half a century. They are now a part and parcel of our governmental fabric. This Court in 1904, in the case of Public Clearing House v. Coyne, 194 U.S. 497, 24 S.Ct. 789, 48 L.Ed. 1092, sustained the constitutional power of Congress to enact the laws. The decision there rejected all the contentions now urged against the validity of the statutes in their entirety, insofar as the present contentions have any possible merit. No decision of this Court either before or after the Coyne case has questioned the power of Congress to pass these laws. The Coyne case has been cited with approval many times. 27 Recognizing that past decisions of this Court if adhered to preclude acceptance of their contentions, respondents urge that certain of our decisions since the Coyne case have partially undermined the philosophy on which it rested. Respondents refer particularly to comparatively recent decisions under the First and Fourteenth Amendments.2 None of the recent cases to which respondents refer, however, provide the slightest support for a contention that the constitutional guarantees of freedom of speech and freedom of the press include complete freedom, uncontrollable by Congress, to use the mails for perpetration of swinding schemes. 28 We reject the contention that we should overrule the Coyne case and declare these fraud order statutes to be wholly void and unenforceable. 29 An additional argument urged by respondents is that the fraud order statutes as interpreted and applied by the Postmaster General in this case violate some of the constitutional provisions above mentioned. We consider this suggestion only in connection with the modified order. Its future effect is merely to enjoin the continuation of conduct found fraudulent. Carried no further than this, the order has not even a slight resemblance to punishment—it only keeps respondents from getting the money of others by false pretenses and deprives them of a right to speak or print only to the extent necessary to protect others from their fraudulent artifices. And so far as the impounding order is concerned, of course respondents can have no just or legal claim to money mailed to them as a result of their fraudulent practices. Nor does the modified order jeopardize respondents' magazine except to the extent, if any, that its circulation might be dependent on monies received from this contest scheme found fraudulent. A contention cannot be seriously considered which assumes that freedom of the press includes a right to raise money to promote circulation by deception of the public. 30 The order as modified is valid and its enforcement should not have been enjoined. The judgments of the United States Court of Appeals for the District of Columbia and of the District Court are reversed. The cause is remanded to the District Court to dismiss the petition for injunction and to provide for proper return to the remitters of the impounded funds sent in response to the fraudulent advertisements and communications. 31 It is so ordered. 32 Reversed and remanded. 33 Mr. Justice BURTON, with whom Mr. Justice DOUGLAS concurs, dissenting. 34 The two lower courts reviewed in detail the facts in this case. Both held that the predecessor of the present Postmaster General exceeded his authority in issuing his stringent order of October 1, 1945. The modification of that order on December 8, 1947, by the present Postmaster General, then serving as Acting Postmaster General, has restricted it to appropriate parties. It has not altered, however, the primary basis for the lower court's injunction of November 27, 1945, against the enforcement of the order. That injunction was granted because the record failed to show evidence sufficient to justify the drastic administrative action taken in reliance upon the lottery and fraud sections of the mail and money order statutes. R.S. §§ 3929 and 4041, as amended, 26 Stat. 466, 28 Stat. 964, 39 U.S.C. §§ 259 and 732, 39 U.S.C.A. §§ 259, 732. This dissent protests the overruling of the conclusions of the lower courts on this issue and seeks especially to discourage and increase, or even repetition, of the degree of censorship evidenced by this order. 35 The former Postmaster General applied here the drastic summary police powers entrusted to his office by Congress to deal with fraudulent swindlers using the mail in the conduct of lotteries or any other scheme for obtaining money by false or fraudulent pretenses. No charge of a lottery or scheme of chance was made the basis for the order before us. This particular puzzle and letter-writing contest, to which the order was limited, was a contest of the familiar type which offers prizes and thereby seeks to attract protects for later sales. The sponsor candidly stated that this contest was conducted for advertising purposes and it distributed to the contestants samples from a series of books published by its subsidiary, Literary Classics, Inc. The entrance fees of 15 cents, required to accompany the respective sets f puzzle solutions, might well add up to more than all the expenses of the program, including the substantial prizes, provided the responses were many. Such fees, however, would fail to meet those expenses if the responses were few. The financial success of the contest depended upon the number of volunteers choosing to enter it. The District Court found: 36 'These considerations, * * *, do not justify an inference of fraud. Under no circumstances, therefore, can the puzzle contest and its descriptive literature be considered a fraudulent device or strategem (stratagem) for obtaining money. The conclusion is inevitable that there is no evidence to support the finding of fact on which the fraud order is based and that, therefore, the plaintiff is entitled to a permanent injunction against the enforcement of the order.' Read Magazine v. Hannegan, D.C., 63 F.Supp. 318, 322. The Court of Appeals found: 37 'Appellant does not claim that any statement in the advertisements was untrue or that there was any departure from the procedure announced in the Official Rules of the Contest. There is no claim by him that the judging of the letters was to be other than bona fide, or that any contestant failed to receive the promised books. No contestant, so far as the record shows, complained of being misled or defrauded. In other words, the fraud order is not premised upon specific or affirmative misstatements, or upon failure to perform as promised, but is premised upon an impression which appellant says is conveyed by the advertisements as a whole. He derives the impression from the headlines in the advertisements and the comparative urgency which he finds in some of the expressions in them. 38 'To support appellant's conclusion in this case, one must ascribe to the advertisements an impression directly contrary to the stated rules of the contest. One must thus assume that readers were led not to read the Rules, or were led to ignore them or to misunderstand them or to believe something else contrary to their statement. There is no evidence, we think, to support any of those assumptions. The Rules were legibly printed. They were emphasized, rather than minimized, in the text. They were clear to any reasonable mind. No contradictory expressions occurred elsewhere. 39 'That this contest was an advertising device designed to promote the book-publishing business of appellees must have been plain to the most casual reader. The advertisements specifically told him, 'This contest with Facts Magazine as sponser, being presented as a means of popularizing the Literary Classics Book Club.' * * * 40 'We fail to see that the letters which were written to the contestants who successfully solved the first series of puzzles, cast any complexion upon the venture different from that cast by the original advertisements themselves. 41 'We think that the advertisements before us fairly urged contestants to read the Rules and that the Rules stated fairly, in style of type, placement, and terms, what was proposed. That being so, and there being no ambiguity in or departure from the proposals stated, a finding of false pretenses, representations, or promises could not properly be made.' Hannegan v. Read Magazine, 81 U.S.App.D.C. 339, 158 F.2d 542, 544, 545, 546. 42 Not only do I fail to find adequate reason to overrule the findings and conclusions of the two lower courts but, on examination of the record, I agree with them. I believe that the Postmaster General exceeded his authority when he applied his drastic censorship and fraud order to this particular program. There was no compulsion on anyone to enter this contest. Everyone who did so received, as advertised, certain reprints of classical literature and, until the contest was stopped, each contestant had the advertised opportunity to win certain cash prizes. 43 Anyone who entered this contest to win substantial prizes by doing so little to win them should at least examine the exact terms of the contest and make himself responsil e for meeting the rules prescribed by those offering to make the gifts he sought. The contestants rendered no services for which they had a right to compensation. They merely paid a small entrance fee. For that they were entitled to have the contest conducted in accordance with the rules stated. 44 The findings of the lower courts make it clear that there has been no claim of failure or impending failure by the sponsor to carry out the terms of the contest. The record shows no complaint from any contestant. Nevertheless, the Postmaster General took it upon himself to stop the contest. On the evidence before him and before the courts, this was an abuse of his discretion. It was 'palpably wrong and therefore arbitrary.' See Leach v. Carlile, 258 U.S. 138, 140 42 S.Ct. 227, 228, 66 L.Ed. 511. 1 'This case is ordered restored to the docket for reargument. On reargument counsel need not further discuss the sufficiency of the evidence to support the Postmaster General's findings. They are requested to discuss the following: '1. Does the fraud order prohibit delivery of mail and postal money orders to Facts Magazine and all its employees, including its editor-in-chief? If so, '(a) Is the order within the Postmaster General's authority under 39 U.S.C. Secs. 259, 732 (39 U.S.C.A. §§ 259, 732)? '(b) If so, do these code provisions, in violation of the First Amendment or any other constitutional provisions, abridge the freedom of speech or press of either the senders or the sendees of the mail or the money orders? '2. Does the fraud order prohibit indefinitely the delivery of mail or money orders which relate to subject matters or contests other than the contest on which the order is based? If so, '(a) Is the order within the Postmaster General's statutory authority? '(b) If so, are these code provisions in conflict with the Constitution of the United States? '3. Assuming that the order is in conflict with the code provisions or the Constitution, can it be modified in such way as to free it from statutory or constitutional objections? If so, by whom can the order be modified and by what procedure?' Hannegan v. Read Magazine, 68 S.Ct. 161. 2 Grosjean v. American Press Co., 297 U.S. 233, 245—249, 56 S.Ct. 444, 447—449, 80 L.Ed. 660; Near v. State of Minnesota ex rel. Olson, 283 U.S. 697, 713, 51 S.Ct. 625, 630, 75 L.Ed. 1357, et seq.; Bridges v. State o California, 314 U.S. 252, 260—263, 62 S.Ct. 190, 192—194, 86 L.Ed. 192, 159 A.L.R. 1346; Craig v. Harney, 331 U.S. 367, 67 S.Ct. 1249; United States ex rel. Milwaukee Social Democratic Pub. Co. v. Burleson, 255 U.S. 407, 41 S.Ct. 352, 65 L.Ed. 704.
23
333 U.S. 163 68 S.Ct. 587 92 L.Ed. 614 SUTTLEv.REICH BROS. CONST. CO. et al. No. 214. Argued Dec. 18, 1947. Decided March 8, 1948. Rehearing Denied April 19, 1948. See 333 U.S. 878, 68 S.Ct. 900. Messrs. Charles F. Engle, of Natchez, Miss., and John D. Miller, of New Orleans, La., for petitioner. Mr. George T. Owen, Jr., of Baton Rouge, La., for respondents. Mr. Chief Justice VINSON delivered the opinion of the Court. 1 We granted certiorari in this case to consider a question arising under the federal venue statutes. Petitioner, a resident and citizen of the State of Mississippi, brought a negligence action based on diversity of citizenship in the District Court for the Eastern District of Louisiana. The defendants in that suit were the respondents Reich Bros. Construction Company, a partnership, and its individual members, residents of the Western District of Louisiana, and Highways Insurance Underwriters, a Texas Corporation which had qualified to do business in Louisiana pursuant to a statute of that State. 2 Section 51 of the Judicial Code provides that '* * * where the jurisdiction is founded only on the fact that the action is between citizens of different States, suit shall be brought only in the district of the residence of either the plaintiff or the defendant.'1 This general provision is qualified by § 52 of the Judicial Code, which states that '* * * if there are two or more defendants, residing in different districts of the State, (suit) may be brought in either district, * * *.'2 3 It is conceded by the parties that the Texas corporation, Highways Insurance, having qualified to do business in Louisiana is amenable to suit in the federal courts for either the Eastern or Western District of that State.3 The critical issue of the case is whether Highways Insurance may be regarded as a 'resident' of the Eastern District of Louisiana within the meaning of § 52 of the Judicial Code, so that respondents Reich Bros. Construction Company and its individual members may properly be sued as co-defendants of the corporation in the Eastern District of Louisiana, despite the fact that respondents are residents of the Western District of that State. 4 The respondents moved to dismiss the action on the ground of improper venue. The District Court granted the motion, and the suit was dismissed as to respondents, leaving the action pending against the corporation. The Circuit Court of Appeals affirmed.4 5 The issue we are called upon to resolve is a narrow one. We are not o nfronted with the abstract question whether, under any circumstances or for any purposes, a foreign corporation may properly be regarded as acquiring 'residence' in a State other than that in which it was incorporated. Nor is our problem that of discovering whether, under State law, a qualified foreign corporation is treated as a 'resident' of the State in which it is doing business.5 The sole issue of this case relates to the construction of the term 'residence,' appearing in the particular federal venue statutes under consideration, as it applies to a foreign corporation. 6 The 'residence' of a corporation, within the meaning of these statutes has frequently been the subject of consideration by this Court for a period of over half a century. Shortly after Congress had enacted § 51 of the Judicial Code in substantially its present form, this Court declared that the 'residence' of a corporation, within the meaning of the venue statutes, is only in 'the State and district in which it has been incorporated.'6 Thus, in Shaw v. Quincy Mining Co., 1892, 145 U.S. 444, 450, 12 S.Ct. 935, 937, 36 L.Ed. 768, it was said: 'This statement has been often reaffirmed by this court, with some change of phrase, but always retaining the idea that the legal existence, the home, the domicile, the habitat, the residence, the citizenship of the corporation can only be in the state by which it was created, although it may do business in other states whose laws permit it.' 7 For almost sixty years, in an unbroken line of decisions, this Court has applied the same construction.7 That view was reaffirmed as recently as 1946 in the opinion of the Court in Mississippi Publishing Corp. v. Murphree, 326 U.S. 438, 441, 66 S.Ct. 242, 244, 90 L.Ed. 185.8 8 Congress has revealed a similar understanding of the term 'residence' when enacting special venue statutes in situations in which it was intended that, at the election of the plaintiff, a corporation should become amenable to suit either in the State of incorporation or in States in which it is carrying on corporate activities. In those statutes, Congress has provided that the venue of such suits should be located not only in the district in which the corporationi § a 'resident' or an 'inhabitant,' but also in districts in which it may be 'found,' 'transacts business,' or has an agent to receive service of process.9 9 Nor does the decision of this Court in Neirbo Co. v. Bethlehem Shipbuilding Corp., 1939, 308 U.S. 165, 60 S.Ct. 153, 84 L.Ed. 167, 128 A.L.R. 1437, require that the term 'residence' be construed differently. In that case, the plaintiffs, citizens and residents of New Jersey, brought suit based on diversity of citizenship against the defendant, a Delaware corporation, in the Southern District of New York. This Court held that the venue requirements in the federal courts may be waived and that the defendant, since it had appointed an agent to receive service of process in New York pursuant to a statute of that State, might not insist upon suit being brought in Delaware, the State of its incorporation, or in New Jersey, the State in which plaintiffs resided. But this Court did not hold that in losing the privilege of insisting upon suit in districts specified in § 51 of the Judicial Code, the defendant corporation thereby acquired 'residence' in New York, within the meaning of the venue statutes. Indeed, the Court specifically stated that the suit 'was not brought 'in the district of the residence of either the plaintiff or the defendant."10 10 For the reasons stated, we hold that the Highway Insurance Underwriters, a Texas corporation and respondents' codefendant, is not a resident of the Eastern District of Louisiana in which suit was brought, within the meaning of § 52 of the Judicial Code. While, concededly, the Texas corporation has made itself amenable to suit in the federal courts of either district in Louisiana by qualifying to do business in that State, such action on the part of the corporation may in no way be regarded as a waiver by respondents of the privileges conferred upon them by the venue statutes. Section 51 in general terms provides that a diversity suit of the sort involved here must be brought either in the district in which the plaintiff resides or in which the defendant resides. This suit, brought in the Eastern District of Louisiana, satisfies neither requirement. Respondents' privilege conferred by § 51 can be defeated either by waiver on the part of respondents or, as provided in § 52, by petitioner bringing suit against respondents and others in a district in Louisiana in which one of the co-defendants has acquired residence but in which respondents do not reside. Neither circumstance is present here. Respondents made timely assertion of their privilege and may not be deemed to have waived their venue objections. As we have held, their co-defendant, Highway Insurance Underwriters, may not be regarded as a resident of the Eastern District of Louisiana in which suit was brought. It follows, therefore, that respondents' objections to venue were well taken, and that, in sustaining those objections, the District Court and the Circuit Court of Appeals reached a result in accord with the requirements of the federal venue statutes as consistently construed by this Court. If those requirements are to be altered, it is a task which must be undertaken by Congress. 11 Affirmed. 1 Act of March 3, 1887, 24 Stat. 552, as corrected by Act of August 13, 1888, 25 Stat. 433, 28 U.S.C. § 112, 28 U.S.C.A. § 112. 2 R.S. § 740, 36 Stat. 1101, 28 U.S.C. § 113, 28 U.S.C.A. § 113. This section in its entirety follows: 'When a State contains more than one district, every suit not of a local nature, in the district court thereof, against a single defendant, inhabitant of such State, must be brought in the district where he resides; but if there are two or more defendants, residing in different districts of the State, it may be brought in either district, and a duplicate writ may be issued against the defendants, directed to the marshal of any other district in which any defendant resides. The clerk issuing the duplicate writ shall endorse thereon that it is a true copy of a writ sued out of the court of the proper district; and such original and duplicate writs, when executed and returned into the office from which they issue, shall constitute and be proceeded on as one suit; and upon any judgment or decree rendered therein, execution may be issued, directed to the marshal of any district in the same State.' 3 See Neirbo Co. v. Bethlehem Ship-building Corp., 1939, 308 U.S. 165, 60 S.Ct. 153, 84 L.Ed. 167, 128 A.L.R. 1437; Oklahoma Packing Co. v. Oklahoma Gas & Electric Co., 1940, 309 U.S. 4, 60 S.Ct. 215, 84 L.Ed. 447. 4 5 Cir., 1947, 161 F.2d 289. 5 See Mississippi Publishing Corp. v. Murphree, 1946, 326 U.S. 438, 443—444, 66 S.Ct. 242, 245, 246, 90 L.Ed. 185; Neirbo Co. v. Bethlehem Shipbuilding Corp., 1939, 308 U.S. 165, 175, 60 S.Ct. 153, 158, 84 L.Ed. 167, 128 A.L.R. 1437; Ex parte Schollenberger, 1878, 96 U.S. 369, 377, 24 L.Ed. 853. 6 Shaw v. Quincy Mining Co., 1892, 145 U.S. 444, 449, 12 S.Ct. 935, 937, 36 L.Ed. 768. 7 Southern Pacific Co. v. Denton, 1892, 146 U.S. 202, 205, 13 S.Ct. 44, 45, 36 L.Ed. 942; In Re Keasbey and Mattison Co., 1895, 160 U.S. 221, 229, 16 S.Ct. 273, 275, 40 L.Ed. 402; Macon Grocery Co. v. Atlantic Coast Line R. Co., 1910, 215 U.S. 501, 509, 30 S.Ct. 184, 187, 54 L.Ed. 300; Ladew v. Tennessee Copper Co., 1910, 218 U.S. 357, 367, 31 S.Ct. 81, 83, 84, 54 L.Ed. 1069; Male v. Atchison, Topeka & Santa Fe R. Co., 1916, 240 U.S. 97, 102, 36 S.Ct. 351, 353, 60 L.Ed. 544; General Investment Co. v. Lake Shore & Michigan Southern R. Co., 1922, 260 U.S. 261, 274—279, 43 S.Ct. 106, 112—114, 67 L.Ed. 244; Seaboard Rice Milling Co. v. Chicago, Rock Island & Pacific R. Co., 1926, 270 U.S. 363, 366, 46 S.Ct. 247, 248, 70 L.Ed. 633; Luckett v. Delpark, Inc., 1926, 270 U.S. 496, 499, 46 S.Ct. 397, 398, 70 L.Ed. 703; Burnrite Coal Briquette Co. v. Riggs, 1927, 274 U.S. 208, 211, 47 S.Ct. 578, 71 L.Ed. 1002. And see In re Hohorst, 1893, 150 U.S. 653, 662, 14 S.Ct. 221, 224, 37 L.Ed. 1211; Galveston, Harrisburg and San Antonio R. Co. v. Gonzales, 1894, 151 U.S. 496, 503, 504, 506, 14 S.Ct. 401, 403, 404, 405, 38 L.Ed. 248. 8 Section 52 of the Judicial Code qualifies or provides an exception to the general provisions of § 51. There would be no basis for the suggestion that Congress intended to attribute a meaning to the term 'residence' in § 51 different from that in § 52. 9 See, e.g., § 12 of the Clayton Act, 38 Stat. 736, 15 U.S.C. § 22, 15 U.S.C.A. § 22: 'Any suit, action, or proceeding under the antitrust laws against a corporation may be brought not only in the judicial district whereof it is an inhabitant, but also in any district wherein it may be found or transacts business; and all process in such cases may be served in the district of which it is an inhabitant, or wherever it may be found.' See also § 48 of the Judicial Code, 29 Stat. 695. 28 U.S.C. § 109, 28 U.S.C.A. § 109; § 4 of the Clayton Act, 38 Stat. 731, 15 U.S.C. § 15, 15 U.S.C.A. § 15; 36 Stat. 291, 45 U.S.C. § 56, 45 U.S.C.A. § 56. 10 Neirbo v. Bethlehem Shipbuilding Corp., 1939, 308 U.S. 165, 167, 60 S.Ct. 153, 154, 84 L.Ed. 167, 128 A.L.R. 1437.
89
333 U.S. 257 68 S.Ct. 499 92 L.Ed. 682 In re OLIVER. No. 215. Argued Dec. 11, 1947. Decided March 8, 1948. Messrs. William Henry Gallagher, of Detroit, Mich., and Osmond K. Fraenkel, for petitioner. Mr. Edumund E. Shepherd, of Detroit, Mich., for respondent. Mr. Justice BLACK delivered the opinion of the Court. 1 A Michigan circuit judge summarily sent the petitioner to jail for contempt of court. We must determine whether he was denied the procedural due process guaranteed by the Fourteenth Amendment. 2 In obedience to a subpoena the petitioner appeared as a witness before a Michigan circuit judge who was then conducting, in accordance with Michigan law, a 'one-man grand jury' investigation into alleged gambling and official corruption. The investigation presumably took place in the judge's chambers, though that is not certain. Two other circuit judges were present in an advisory capacity.1 A prosecutor may have been present. A stenographer was most likely there. The record does not show what other members, if any, of the judge's investigatorial staff participated in the proceedings. It is certain, however, that the public was excluded—the questioning was secret in accordance with the traditional grand jury method. 3 After petitioner had given certain testimony, the judge-grand jury, still in secret session, told petitioner that neither he nor his advisors believed petitioner's story—that it did not 'jell.' This belief of the judge-grand jury was not based entirely on what the petitioner had testified. As will later be seen, it rested in part on beliefs or suspicions of the judge-jury derived from the testimony of at least one other witness who had previously given evidence in secret. Petitioner had not been present when that witness testified and so far as appears was not even aware that he had testified. Based on its beliefs thus formed—that petitioner's story did not 'jell'—the judge-grand jury immediately charged him with contempt, immediately convicted him, and immediately sentenced him to sixty days in jail. Under these circumstances of haste and secrecy, petitioner, of course, had no chance to enjoy the benefits of counsel, no chance to prepare his defense, and no opportunity either to cross examine the other grand jury witness or to summon witnesses to refute the charge against him. 4 Three days later a lawyer filed on petitioner's behalf in the Michigan Supreme Court the petition for habeas corpus now under consideration. It alleged among other things that the petitioner's attorney had not been allowed to confer with him and that, to the best of the attorney's knowledge, the petitioner was not held in jail under any judgment, decree or execution, and was 'not confined by virtue of any legal commitment directed to the sheriff as required by law.' An order was then entered signed by the circuit judge that he had while 'sitting as a One-Man Grand Jury' convicted the petitioner of contempt of court because petitioner had testified 'evasively' and had given 'contradictory answers' to questions. The order directed that petitioner 'be confined in the county jail * * * for a period of sixty days * * * or until such time as he * * * shall appear and answer the questions heretofore propounded to him by this Court * * *.' 5 The Supreme Court of Michigan, on grounds detailed in the companion case of Petition of Dohany (In re Hartley), 317 Mich. 441, 27 N.W.2d 48,2 rejected petitioner's contention that the summary manner in which he had been sentenced to jail in the secrecy of the grand jury chamber had depi ved him of his liberty without affording him the kind of notice, opportunity to defend himself, and trial which the due process clause of the Fourteenth Amendment requires.3 Petition of Dohany (Ex Parte Oliver), 318 Mich. 7, 27 N.W.2d 323. We granted certiorari, 332 U.S. 755, 68 S.Ct. 76, to consider these procedural due process questions. 6 The case requires a brief explanation of Michigan's unique one-man grand jury system.4 That state's first constitution (1835), like the Fifth Amendment to the Federal Constitution, required that most criminal prosecutions be begun by presentment or indictment of a grand jury. Art. I, § 11. This compulsory provision was left out of the 1850 constitution and from the present constitution (1908). However, Michigan judges may still in their discretion summon grand juries, but we are told by the attorney general that this discretion is rarely exercised and that the 'One-Man Grand Jury' has taken the place of the old Michigan 16 to 23-member grand jury, particularly in probes of alleged misconduct of public officials. 7 The one-man grand jury law was passed in 1917 following a recommendation of the State Bar Association that, in the interest of more rigorous law enforcement, greater emphasis should be put upon the 'investigative procedure' for 'probing' and for 'detecting' crime.5 With this need uppermost in its thinking the Bar Association recommended a bill which provided that justices of the peace be vested with the inquisitorial powers traditionally conferred only on coroners and grand juries. The bill as passed imposed the recommended investigatory powers not only on justices of the peace, but on police judges and judges of courts of record as well. Mich.Laws 1917, Act 196. 8 Whenever this judge-grand jury may summon a witness to appear, it is his duty to go and to answer all material questions that do not incriminate him. Should he fail to appear, fail to answer material questions, or should the judge-grand jury believe his evidence false and evasive, or deliberately contradit ory, he may be found guilty of contempt. This offense may be punishable by a fine of not more than $100, or imprisonment in the county jail not exceeding sixty days, or both, at the discretion of the judge-grand jury. If after having been so sentenced he appears and satisfactorily answers the questions propounded by the judge-jury, his sentence may, within the judge-jury's discretion, be commuted or suspended. At the end of his first sentence he can be resummoned and subjected to the same inquiries. Should the judge-jury again believe his answers false and evasive, or contradictory, he can be sentenced to serve sixty days more unless he reappears before the judge-jury during the second 60-day period and satisfactorily answers the questions, and the judge-jury within its discretion then decides to commute or suspend his sentence.6 9 In carrying out this authority a judgegrand jury is authorized to appoint its own prosecutors, detectives and aides at public expense,7 all or any of whom may, at the discretion of the justice of the peace or judge, be admitted to the inquiry. Mich.Stat.Ann. § 28.944 (Henderson 1938). Comp.Laws 1929, § 17218. A witness may be asked questions on all subjects and need not be advised of his privilege against self-incrimination, even though the questioning is in secret.8 And these secret interrogations can be carried on day or night, in a public place or a 'hideout,' a courthouse, an office building, a hotel room, a home, or a place of business; so well is this ambulatory power understood in Michigan that the one-man grand jury is also popularly referred to as the 'portable grand jury.'9 10 It was a circuit court judge-grand jury before which petitioner testified. That judge-jury filed in the State Supreme Court an answer to this petition for habeas corpus. The answer contained fragments of what was apparently a stenographic transcript of petitioner's testimony given before the grand jury. It was these fragments of testimony, so the answer stated, that the 'Grand Jury' had concluded to be 'false and evasive.' The petitioner then filed a verified motion with the State Supreme Court seeking to have the complete transcript of his testimony before the judge-jury produced for the habeas corpus hearing. He alleged that a full report of his testimony would disclose that he had freely, promptly, and to the best of his ability, answered all questions asked, and that the full transcript would refute the charge that he had testified evasively or falsely. In his answer to the motion the circuit judge did not deny these allegations. However, he asserted that the fragments contained in the original answer showed 'all of the Grand Jury testimony necessary to the present proceeding' and that 'the full disclosure of petitioner's testimony would seriously retard Grand Jury activities.' The State Supreme Court then denied the petitioner's motion. Thus when that Court later dismissed the petition for habeas corpus it had seen only a copy of a portion of the record of the testimony given by the petitioner. 11 The petitioner does not here challenge the constitutional power of Michigan to grant traditional inquisitorial grand jury power to a single judge, and therefore we do not concern ourselves with that question. It has long been recognized in this country however that the traditionl 12 to 23-member grand juries may examine witnesses in secret sessions. Oaths of secrecy are ordinarily taken both by the members of such grand juries and by witnesses before them. Many reasons have been advanced to support grand jury secrecy. See, e.g., Hale v. Henkel, 201 U.S. 43, 58—66, 26 S.Ct. 370, 372-375, 50 L.Ed. 652; State v. Branch, 68 N.C. 186, 12 Am.Rep. 633. But those reasons have never been thought to justify secrecy in the trial of an accused charged with violation of law for which he may be fined or sent to jail. Grand juries investigate, and the usual end of their investigation is either a report, a 'no-bill' or an indictment. They do not try and they do not convict. They render no judgment. When their work is finished by the return of an indictment, it cannot be used as evidence against the person indicted. Nor may he be fined or sentenced to jail until he has been tried and convicted after having been afforded the procedural safeguards required by due process of law. Even when witnesses before grand juries refuse to answer proper questions, the grand juries do not adjudge the witnesses guilty of contempt of court in secret or in public or at all.10 Witnesses who refuse to testify before grand juries are tried on contempt charges before judges sitting in open court. And though the powers of a judge even when acting as a one-man grand jury may be, as Michigan holds, judicial in their nature,11 the due process clause may apply with one effect on the judge's grand jury investigation, but with quite a different effect when the judge-grand jury suddenly makes a witness before it a defendant in a contempt case. 12 Here we are concerned, not with petitioner's rights as a witness in a secret grand jury session, but with his rights as a defendant in a contempt proceeding. The powers of the judge-grand jury who tried and convicted him in secret and sentenced him to jail on a charge of false and evasive swearing must likewise be measured, not by the limitations applicable to grand jury proceedings, but by the constitutional standards applicable to court proceedings in which an accused may be sentenced to fine or imprisonment or both. Thus our first question is this: Can an accused be tried and convicted for contempt of court in grand jury secrecy? 13 First. Counsel have not cited and we have been unable to find a single instance of a criminal trial conducted in camera in any federal,12 state, or municipal court during the history of this country. Nor have we found any record of even one such secret criminal trial in England since abolition of the Court of Star Chamber in 1641, and whether that court ever convicted people secretly is in dispute. Summary trials for alleged misconduct called contempt of court13 have not been regarded as an exception to this universal rule against secret trials, unless some other Michigan one-man grand jury case may represent such an exception. 14 This nation's accepted practice of guaranteeing a public trial to an accused has its roots in our English common law heritage. The exact date of its origin is obscure, but it likely evolved long before the settlement of our land as an accompaniment of the ancient institution of jury trial.14 In this country the guarantee to an accused of the right to a public trial first appeared in a state constitution in 1776.15 Following the ratification in 1791 of the Federal Constitution's Sixth Amendment, which commands that 'In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial * * *' most of the original states and those subsequently admitted to the Union adopted similar constitutional provisions.16 Today almost without exception17 every state by constitution18 statute,19 or judicial decision,20 requires that all criminal trials be open to the public. 15 The traditional Anglo-American distrust for secret trials has been variously ascribed to the notorious use of this practice by the Spanish Inquisition,21 to the excesses of the English Court of Star Chamber,22 and to the French monarchy's abuse of the lettre de cachet.23 All of these institutions obviously symbolized a menace to liberty. In the hands of despotic groups each of them had become an instrument for the suppression of political and religious heresies in ruthless disregard of the right of an accused to a fair trial. Whatever other benefits the guarantee to an accused that his trial be conducted in public may confer upon our society,24 the guarantee has always been recognized as a safeguard against any attempt to employ our courts as instruments of persecution. The knowledge that every criminal trial is subject to contemporaneous review in the forum of public opinion is an effective restraint on possible abuse of judicial power.25 One need not wholly agree with a statement made on the subject by Jeremy Bentham over 120 years ago to appreciate the fear of secret trials felt by him, his predecessors and contemporaries. Bentham said: '* * * suppose the proceedings to be completely secret, and the court, on the occasion, to consist of no more than a single judge,—that judge will be at once indolent and arbitrary: how corrupt soever his inclination may be, it will find no check, at any rate no tolerably efficient check, to oppose it. Without publicity, all other checks are insufficient: in comparison of publicity, all other checks are of small account. Recordation, appeal, whatever other institutions might present themselves in the character of checks, would be found to operate rather as cloaks than checks; as cloaks in reality, as checks only in appearance.'26 16 In giving content to the constitutional and statutory commands that an accused be given a public trial, the state and e deral courts have differed over what groups of spectators, if any, could properly be excluded from a criminal trial.27 But, unless in Michigan and in one-man grand jury contempt cases, no court in this country has ever before held, so far as we can find, that an accused can be tried, convicted, and sent to jail, when everybody else is denied entrance to the court, except the judge and his attaches.28 And without exception all courts have held that an accused is at the very least entitled to have his friends, relatives and counsel present, no matter with what offense he may be charged.29 In Gaines v. Washington, 277 U.S. 81, 85, 86, 48 S.Ct. 468—470, 72 L.Ed. 793, this Court assumed that a criminal trial conducted in secret would violate the procedural requirements of the Fourteenth Amendment's due process clause, although its actual holding there was that no violation had in fact occurred, since the trial court's order barring the general public had not been enforced. Certain proceedings in a judge's chambers, including convictions for contempt of court, have occasionally been countenanced by state courts,30 but there has never been any intimation that all of the public, including the accused's relatives, friends, and counsel, were barred from the trial chamber. 17 In the case before us, the petitioner was called as a witness to testify in secret before a one-man grand jury conducting a grand jury investigation. In the midst of petitioner's testimony the proceedings abruptly changed. The investigation became a 'trial,' the grand jury became a judge, and the witness became an accused charged with contempt of court—all in secret. Following a charge, conviction and sentence, the petitioner was led away to prison—still without any break in the secrecy. Even in jail, according to undenied allegations, his lawyer was denied an opportunity to see and confer with him. And that was not the end of secrecy. His lawyer filed in the State Supreme Court this habeas corpus proceeding. Even there, the mantle of secrecy enveloped the transaction and the State Supreme Court ordered him sent back to jail without ever having seen a record of his testimony, and without knowing all that took place in the secrecy of the judge's chambers. In viewo f this nation's historic distrust of secret proceedings, their inherent dangers to freedom, and the universal requirement of our federal and state governments that criminal trials be public, the Fourteenth Amendment's guarantee that no one shall be deprived of his liberty without due process of law means at least that an accused cannot be thus sentenced to prison. 18 Second. We further hold that failure to afford the petitioner a reasonable opportunity to defend himself against the charge of false and evasive swearing was a denial of due process of law. A person's right to reasonable notice of a charge against him, and an opportunity to be heard in his defense—a right to his day in court—are basic in our system of jurisprudence; and these rights include, as a minimum, a right to examine the witnesses against him, to offer testimony, and to be represented by counsel.31 Michigan, not denying the existence of these rights in criminal cases generally, apparently concedes that the summary conviction here would have been a denial of procedural due process but for the nature of the charge, namely, a contempt of court, committed, the State urges, in the court's actual presence. 19 It is true that courts have long exercised a power summarily to punish certain conduct committed in open court without notice, testimony or hearing. Ex parte Terry, 128 U.S. 289, 9 S.Ct. 77, 32 L.Ed. 405, was such a case. There Terry committed assault on the marshal who was at the moment removing a heckler from the courtroom. The 'violence and misconduct' of both the heckler and the marshal's assailant occurred within the 'personal view' of the judge, 'under his own eye,' and actually interrupted the trial of a cause then under way. This Court held that under such circumstances a judge has power to punish an offender at once, without notice and without hearing, although his conduct may also be punishable as a criminal offense. This Court reached its conclusion because it believed that a court's business could not be conducted unless it could suppress disturbances within the courtroom by immediate punishment. However, this Court recognized that such departure from the accepted standards of due process was capable of grave abuses, and for that reason gave no encouragement to its expansion beyond the suppression and punishment of the court-disrupting misconduct which alone justified its exercise. Indeed in the Terry case the Court cited with approval its decision in Anderson v. Dunn, 6 Wheat. 204, 5 L.Ed. 242, which had marked the limits of contempt authority in general as being 'the least possible power adequate to the end proposed.' Id., at page 231 of 6 Wheat. And see In re Michael, 326 U.S. 224, 227, 66 S.Ct. 78, 79, 90 L.Ed. 30. 20 That the holding in the Terry case is not to be considered as an unlimited abandonment of the basic due process procedural safeguards, even in contempt cases, was spelled out with emphatic language in Cooke v. United States, 267 U.S. 517, 45 S.Ct. 390, 69 L.Ed. 767, a contempt case arising in a federal district court. There it was pointed out that for a court to exercise the extraordinary but narrowly limited power to punish for contempt without adequate notice and opportunity to be heard, the court-disturbing misconduct must not only occur in the court's immediate presence, but that the judge must have personal knowledge of it acquired by his own observation of the contemptuous condut . This Court said that knowledge acquired from the testimony of others, or even from the confession of the accused, would not justify conviction without a trial in which there was an opportunity for defense. Furthermore, the Court explained the Terry rule as reaching only such conduct as created 'an open threat to the orderly procedure of the court and such a flagrant defiance of the person and presence of the judge before the public' that, if 'not instantly suppressed and punished, demoralization of the court's authority will follow.' Id., at page 536 of 267 U.S., at pages 394, 395 of 45 S.Ct. 21 Except for a narrowly limited category of contempts, due process of law as explained in the Cooke case requires that one charged with contempt of court be advised of the charges against him, have a reasonable opportunity to meet them by way of defense or explanation, have the right to be represented by counsel, and have a chance to testify and call other witnesses in his behalf, either by way of defense or explanation. The narrow exception to these due process requirements includes only charges of misconduct, in open court, in the presence of the judge, which disturbs the court's business, where all of the essential elements of the misconduct are under the eye of the court, are actually observed by the court, and where immediate punishment is essential to prevent 'demoralization of the court's authority * * * before the public.' If some essential elements of the offense are not personally observed by the judge, so that the must depend upon statements made by others for his knowledge about these essential elements, due process requires, according to the Cooke case, that the accused be accorded notice and a fair hearing as above set out. 22 The facts shown by this record put this case outside the narrow category of cases that can be punished as contempt without notice, hearing and counsel. Since the petitioner's alleged misconduct all occurred in secret, there could be no possibility of a demoralization of the court's authority before the public. Furthermore, the answer of the judge-grand jury to the petition for habeas corpus showed that his conclusion that the petitioner had testified falsely was based, at least in part, upon the testimony given before him by one or more witnesses other than petitioner. Petitioner and one Hartley both testified the same day; both were pin-ball machine operators; both had bought or had in their possession certain so-called bonds purchased from one Mitchell; both were sent to jail for contempt the same day. Petition of Dohany (In re Hartley), 317 Mich. 441, 27 N.W.2d 48. The judge-grand jury pressed both petitioner and Hartley to state why they bought bonds which were patently worthless. The petitioner was also repeatedly asked what he had done with the worthless bonds. He answered every question asked him, according to the fragmentary portions of his testimony reported to the Michigan Supreme Court, most of which is included in that court's opinion. He steadfastly denied that he knew precisely what he had done with the worthless bonds, but made several different statements as to how he might have disposed of them, such as that he might have thrown them into the wastebasket, or trash can, or might have burned them. 23 In upholding the judge-grand jury's conclusion that petitioner had testified falsely and evasively, the majority of the Michigan Supreme Court gave as one reason a statement in the judge-grand jury's answer 'That the Grand Jury, after investigation, is satisfied that the bonds sold by the said Carman A. Mitchell to the said William D. Oliver are the same as those sold by the said Carman A. Mitchell to Leo Thomas Hartley.' Nothing in the petitioner's testimony as reported could have remotely justified the judge-jury in drawing such a conclusion. The judge-jury was obviously appraising the truth of Oliver's testimony in light of testimony given the same day in petitioner's absence by Hartley and possibly by othe witnesses. The Terry case and others like it provide no support for sustaining petitioner's conviction of contempt of court upon testimony given in petitioner's absence. This case would be like the Terry case only if the judge there has not personally witnessed Terry's assault upon the marshal but had nevertheless sent him to jail for contempt of court after hearing the testimony of witnesses against Terry in Terry's absence. It may be conceivable, as is here urged, that a judge can under some circumstances correctly detect falsity and evasiveness from simply listening to a witness testify. But this is plainly not a case in which the finding of falsity rested on an exercise of this alleged power. For this reason we need not pass on the question argued in the briefs whether a judge can, consistently with procedural due process, convict a witness of testifying falsely and evasively solely on the judge's ability to detect it from merely observing a witness and hearing him testify. 24 Nor is there any reason suggested why 'demoralization of the court's authority' would have resulted from giving the petitioner a reasonable opportunity to appear and offer a defense in open court to a charge of perjury or to the charge of contempt. The traditional grand juries have never punished contempts.32 The practice that has always been followed with recalcitrant grand jury witnesses is to take them into open court, and that practice, consistent with due process, has not demoralized the authority of courts. Reported cases reveal no instances in which witnesses believed by grand juries on the basis of other testimony to be perjurers, have been convicted for contempt, or for perjury, without notice of the specific charges against them, and opportunity to prepare a defense, to obtain counsel, to cross-examine the witnesses against them and to offer evidence in their own defense. The right to be heard in open court before one is condemned is too valuable to be whittled away under the guise of 'demoralization of the court's authority.' 25 It is 'the law of the land' that no man's life, liberty or property be forfeited as a punishment until there has been a charge fairly made and fairly tried in a public tribunal. See Chambers v Florida, 309 U.S. 227, 236, 237, 60 S.Ct. 472, 477, 84 L.Ed. 716. The petitioner was convicted without that kind of trial. 26 The judgment of the Supreme Court of Michigan is reversed and the cause is remanded to it for disposition not inconsistent with this opinion. 27 Reversed and remanded. 28 Mr. Justice RUTLEDGE, concurring. 29 I join in the Court's opinion and decision. But there is more which needs to be said. 30 Michigan's one-man grand jury, as exemplified by this record, combines in a single official the historically separate powers of grand jury, committing magistrate, prosecutor, trial judge and petit jury. This aggregated authority denies to the accused not only the right to a public trial, but also those other basic protections secured by the Sixth Amendment, namely, the rights 'to be informed of the nature and cause of the accusation;1 to be confronted with the witnesses against him;2 to have compulsory process for obtaining witnesses in his favor, and to have the Assistance of Counsel for his defence.' It takes away the security against being twice put in jeopardy for the same offense3 and denies the equal protection of the laws by leaving to the committing functionary's sole discretion the scope and contents of the record on appeal.4 U.S.Const.Amends. V. and XIV. 31 This aggregation of powers and inherently concomitant denial of historic freedoms were unknown to the common law at the time our institutions crystallized in the Constitution. They are altogether at variance with our tradition and system of government. They cannot stand the test of constitutionaliy for purposes of depriving any person of life, liberty or property. There is no semblance of due process of law in the scheme when it is used for those ends.5 32 The case demonstrates how far this Court departed from our constitutional plan when, after the Fourteenth Amendment's adoption, it permitted selective departure by the states from the scheme of ordered personal liberty established by the Bill of Rights.6 In the guise of permitting the states to experiment with improving the administration of justice, the Court left them free to substitute, 'in spite of the absolutism of continental governments,' their 'ideas and processes of civil justice' in place of the time-tried 'principles and institutions of the common law'7 perpetuated for us in the Bill of Rights. Only by an exercise of this freedom has Michigan been enabled to adopt and apply her scheme as was done in this case. It is the immediate offspring of Hurtado v. California, 110 U.S. 516, 4 S.Ct. 111, 28 L.Ed. 232, and later like cases.8 33 So long as they stand, so long as the Bill of Rights is regarded here as a strait jacket of Eighteenth Century procedures rather than a basic charter of personal liberty, like experimentations may be expected from the states. And the only check against their effectiveness will be the agreement of a majority of this Court that the experiment violates fundamental notions of justice in civilized society. 34 I do not conceive that the Bill of Rights, apart from the due process clause of the Fifth Amendment, incorporates all such ideas. But as far as its provisions go, I know of no better substitutes. A few may be inconvenient. But restrictions upon authority for securing personal liberty, as well as fairness in trial to deprive one of it, are always inconvenient—to the authority so restricted. And in times like these I do not think substitutions imported from other systems, including continental ones, offer promise on the whole of more improvement than harm, either for the cause of perfecting the administration of justice or for that of securing and perpetuating individual freedom, which is the main end of our society as it is of our Constitution. 35 One cannot attribute the collapse of liberty in Europe and elsewhere during recent years solely to the 'ideas and processes of civil justice' prevailing in the nations which have suffered that loss. Neither can one denyt he significance of the contrast between their success in maintaining systems of ordered liberty and that of other nations which in the main have adhered more closely to the scheme of personal freedoms the Bill of Rights secures. This experience demonstrates, I think, that it is both wiser and safer to put up with whatever inconveniences that charter creates than to run the risk of losing its hard-won guaranties by dubious, if also more convenient substitutions imported from alien traditions.9 36 The states have survived with the nation through great vicissitudes, for the greater part of our history, without wide departures or numerous ones from the plan of the Bill of Rights. They accepted that plan for the nation when they ratified those amendments. They accepted it for themselves, in my opinion, when they ratified the Fourteenth Amendment. Adamson v. California, 332 U.S. 46, dissenting opinions, at pages 68, 123, 67 S.Ct. 1672, 1683, 1684, 171 A.L.R. 1223. It was good enough for our fathers. I think it should be good enough for this Court and for the states. 37 Room enough there is beyond the specific limitations of the Bill of Rights for the states to experiment toward improving the administration of justice. Within those limitations there should be no laboratory excursions, unless or until the people have authorized them by the constitutionally provided method. This is no time to experiment with established liberties. That process carries the dangers of dilution and denial with the chances of enforcing and strengthening. 38 It remains only to say that, in the face of so broad a departure from so many specific constitutional guaranties or, if the other view is to control, from their aggregate summarized in the concept of due process as representing fundamental ideas of fair play and justice in civilized society, such as the record in this case presents, this Court's eyes need not remain closed nor its hand idle until the case is returned to the state supreme court for reaffirmation of its position or confirmation of our views expressed in the Court's opinion. Neither Rescue Army v. Municipal Court, 331 U.S. 549, 67 S.Ct. 1409, nor Musser v. Utah, 333 U.S. 95, 68 S.Ct. 397, presented a situation like the one tendered here, whether in relation to the disentanglement of constitutional issues from questions of state law or, consequently, in respect to the breadth and clarity of the state's departure from federal constitutional commands. Neither case therefore requires or justifies the disposition of this cause according to the procedure there followed. This case is neither unripe for decision nor wanting of sufficient basis in the record for exercise of that function. Mr. Justice FRAK FURTER: 39 Under the Fourteenth Amendment, a State may surely adopt as its own a procedure which was the established method for prosecuting crime in nearly half the States which ratified that amendment. And so, it may abolish the grand jury,1 or it may reduce the size of the grand jury, and even to a single member. A State has great leeway in devising its judicial instruments for probing into conduct as a basis for charging the commission of crime. It may, at the same time, surround such preliminary inquiry with safeguards, not only that crime may be detected and criminals punished, but also that charges may be sifted in secret so as not to injure or embarrass the innocent. 40 Flouting of such a judicial investigatory system may be prevented by the hitherto constitutionally valid power to punish for contempt. There must, however, be such recalcitrance, where the basis of punishment is testimony given or withheld, that the administration of justice is actively blocked. See Ex parte Hudgings, 249 U.S. 378, 39 S.Ct. 337, 63 L.Ed. 656, 11 A.L.R. 333. And the procedural safeguards of 'due process' must be observed. Due notice of the charge and a fair opportunity to meet it, are indispensable. This involves an opportunity to canvass the charge in the open and not behind closed doors. So long as a man has ample opportunity to demonstrate his innocence before he is hustled off to jail, he cannot complain that a State has seen fit to devise a new procedure for satisfying that opportunity. Just as it is not violative of due process for a State to take private property for public use and leave to a later stage the constitutional vindication of the right to compensation, it does not seem to me that it would be violative of due process to allow the judge-grand juror of Michigan to find criminal contempt for conduct in his proceedings without the familiar elements of an open trial, provided that the State furnishes the accused a public tribunal before which he has full opportunity to be quit of the finding. 41 But an opportunity to meet a charge of criminal contempt must be a fair opportunity. It would not be fair, if in the court in which the accused can contest for the first time the validity of the charge against him, he comes handicapped with a finding against him which he did not have an adequate opportunity of resisting. 42 We are here dealing with the attempt of a State having the seventh largest population in the Union to curb or mitigate the commission ofc rimes by effective prosecution. This procedure has been in operation for over thirty years. It was not heedlessly entered into nor has it been sporadically pursued. In a series of cases it has had the sanction of the highest court of Michigan. While there are indications in the opinion of the Supreme Court of Michigan from which we could infer the constitutional inadequacy of the procedure pursued in this case, we should not decide constitutional issues and conclude that the Michigan system offends the Constitution of the United States, without a clearer formulation of what it is that actually happens under this system, or did happen here, than the case before us reveals. 43 It is to me significant that the precise issues on which this Court decides this case have never been explicitly challenged before, or passed on, by the Supreme Court of Michigan in the series of cases in which that court had adjudicated controversies arising under the Michigan grand jury system. If a State has denied the due process required by the Fourteenth Amendment, it is more consonant with the delicate relations between the United States and the courts of the United States, and the States and the courts of the States, that the courts of the States be given the fullest opportunity, by proper presentation of the issues, to make such a finding of unconstitutionality. 44 I do not think that we have had that in this case. For instance, while I could regard it inadmissible under the Fourteenth Amendment to have only a partial and mutilated record of the proceedings before the grand juror-judge when the contemnor for the first time has the opportunity to meet the accusation against him publicly, the petitioner himself in this case seems to repel the suggestion that that is his complaint.2 Certainly, as Mr. Justice JACKSON points out, the first ground of the Court's opinion was not made the basis for inviting our review here. I agree with him in concluding that in the light of our decision the other day in Musser v. Utah, 333 U.S. 95, 68 S.Ct. 397, in conjunction with Rescue Army v. Municipal Court, 331 U.S. 549, 67 S.Ct. 1409, the cause should be returned to the Supreme Court of Michigan to enable that court to pass upon these issues. 45 Mr. Justice JACKSON, with whom Mr. Justice FRANKFURTER agrees, dissenting. 46 The principal ground assigned for reversal of the judgment of conviction is the alleged secrecy of the contempt procedure. That ground was not assigned for review in the petition for certiorari to this Court. Nor was it raised in the petition for writ of habeas corpus in the state courts. Therefore, it has not been litigated and the record has not been made with reference to it. On the other hand, the principal question raised by the petition to this Court and argued by the State is not decided by the Court's opinion. 47 When a case here from a state court involves a question not litigated below, not raised by petitioner here and which the state court has had no opportunity to pass upon, we should remand the case for its further consideration, as was just done in Musser v. Utah, 333 U.S. 95, 68 S.Ct. 397. 1 Under certain circumstances Michigan law permits circuit judges to sit with other circuit judges in an advisory capacity. Mich.Stat.Ann. § 27.188 (Henderson 1938), Mich.Comp.Laws 1929, § 13666. 2 In giving reasons in its Hartley opinion for rejecting this petitioner's constitutional contentions, the State Supreme Court said it would have been an 'idle gesture to require such adjournment of the grand jury and its reconvening as a circuit court. The circuit judge, while acting as a one man grand jury may, in appropriate cases, summarily adjudge a witness testifying before him guilty of contempt and impose sentence forthwith. 'Plaintiff's contempt, if any, was committed in the face of the court and required no extraneous proofs as to its occurrence. It was direct and there was, therefore, no necessity for filing of charges, notice to accused and hearing as provided in 3 Comp.Laws of 1929, § 13912, Stat.Ann. § 27.513. It was properly dealt with summarily. 3 Comp.Laws 1929, §§ 13910, 13911, Stat.Ann. §§ 27.511, 27.512.' 317 Mich. at pages 444, 445, 27 N.W.2d at page 50. 3 By a four to four vote the court also held that there was 'evidence to support the finding' of the judge-grand jury that petitioner had testified falsely. Petitioner has argued here that there was not a shred of evidence which under any circumstances could have conceivably supported this finding and thus that he was deprived of his liberty without due process of law. In the view that we take of this case we find it unnecessary to consider this constitutional contention. 4 The laws authorizing the system are found in Michigan Comp.Laws 1929, § 17217 et seq., Mich.Stat.Ann. § 28.943 et seq. (Henderson 1938). A summary of the ten states' statutes which have some similarities to Michigan's appears in Winters, The Michigan One-Man Grand Jury, 28 J.Am.Jud.Soc. 137. See, e.g., Conn.Gen.Stat. § 889f (Supp.1941); McCarthy v. Clancy, 110 Conn. 482, 148 A. 551; Okla.Stat.Ann. tit. 37, § 83; tit. 21 § 951; Ex parte Ballew, 20 Okl.Cr. 105, 201 P. 525. 5 Proceedings of the Twenty-sixth Annual Meeting of the Michigan State Bar Association 101—105 (1916). 6 In re Ward, 295 Mich. 742, 747, 295 N.W. 483, 485. (First 60-day conviction May 31, 1940, followed by second 60-day conviction July 29, 1940. A $100 fine was also imposed in each instance.) 7 In re Petition for Investigation of Recount, 270 Mich. 328, 331, 258 N.W. 776, 777; In re Slattery, 310 Mich. 458, 479, 17 N.W.2d 251, 259. 8 People v. Wolfson, 264 Mich. 409, 413, 250 N.W. 260, 262; In re Watson, 293 Mich. 263, 269, 291 N.W. 652, 655; People v. Butler, 221 Mich. 626, 631, 632, 192 N.W. 685, 687. 9 Winters, The Michigan One-Man Grand Jury, 28 J.Am.Jud.Soc. 137, 143; Unprecedented Success in Criminal Courts, 26 J.Am.Jud.Soc. 42—43. 10 See cases collected in 8 A.L.R. 1579—1580; Orfield, Criminal Procedure from Arrest to Appeal 161 (1947). 11 In re Slattery, 310 Mich. 458, 466—468, 17 N.W.2d 251, 254 255; Kloka v. Brake State Treasurer, 318 Mich. 87, 90, 27 N.W.2d 507, 508; cf. Todd v. United States, 158 U.S. 278, 284, 15 S.Ct. 889, 891, 39 L.Ed. 982; Interstate Commerce Commission v. Brimson, 154 U.S. 447, 481, 489, 14 S.Ct. 1125, 1134, 1137, 38 L.Ed. 1047; United States v. Ferreira, 13 How. 40, 44—48, 14 L.Ed. 42. 12 Cases within the jurisdiction of courts martial may be regarded as an exception. Ex parte Quirin, 317 U.S. 1, 43, 63 S.Ct. 2, 18, 87 L.Ed. 3; King v. Governor of Lewes Prison, 61 Sol.J. 294, 30 Harv.L.Rev. 771. Whatever may be the classification of juvenile court proceedings, they are often conducted without admitting all the public. But it has never been the practice wholly to exclude parents, relatives, and friends, or to refuse juveniles the benefit of counsel. 13 Under Michigan law contempt proceedings against a witness before a one-man grand jury are criminal in nature. In re Wilkowski, 270 Mich. 687, 259 N.W. 658. But this characterization is not material in resolving this due process question. Cf. Gompers v. United States, 233 U.S. 604, 610, 611, 34 S.Ct. 693, 695, 58 L.Ed. 1115. 14 Radin, The Right to a Public Trial, 6 Temp.L.Q. 381—384. Early commentators mention that public trials were commonly held without attempting to trace their origin. Sir Thomas Smith in 1565 in his De Republica Anglorum bk. 2, pp. 79, 101 (Alston ed.1906); Sir Matthew Hale about 1670 in his History of The Common Law of England 343—345 (Runnington Ed.1820). In 1649, a few years after the Long Parliament abolished the Court of Star Chamber, an accused charged with high treason before a Special Commission of Oyer and Terminer claimed the right to public trial and apparently was given such a trial. Trial of John Lilburne, 4 How.St.Tr. 1270, 1274. 'By immemorial usage, wherever the common law prevails, all trials are in open court, to which spectators are admitted.' 2 Bishop, New Criminal Procedure § 957 (2d Ed.1913). 15 Penn.Const., Declaration of Rights IX (1776); N.C.Const. Declaration of Rights IX (1776) (criminal convictions only by jury verdict in 'open court'). 16 See, e.g., Vt.Const., ch. I, art. 11 (1787); Dela.Const. art. 1, § 7 (1792); Ky.Const. art. XII, cl. 10 (1792); Tenn.Const. art. XI, § 9 (1796); Miss.Const. art. I, § 10 (1817); Mich.Const. art. I, § 10 (1835); Tex.Const. art. I, § 8 (1845). 17 Four states, Massachusetts, New Hampshire, Virginia and Wyoming, appear to have neither statutory nor constitutional provisions specifically requiring that criminal trials be held in public, although all have constitutions guaranteeing an accused the right to a jury trial. Mass.Const. Pt. I, art. XII; N.H.Const. Pt. I, arts. XV, XVI: Va.Const. art. I, § 8; Wyo.Const. art. I, § 10. Massachusetts by implication has recognized that an accused has a right to a public trial as well. A statute of that state permits the exclusion of spectators in only a limited category of cases. Mass.Gen.Laws c. 278, § 16A (1932). In New Hampshire and Wyoming no statute or decision has been found in which the right of an accused to a public trial is mentioned. In Virginia, although no decision has been discovered, a statute provides: 'In the trial of all criminal cases, whether the same be felony or misdemeanor cases, the court may, in its discretion, exclude from the trial any or all persons whose presence is not deemed necessary.' Va.Code Ann. § 4906 (1942). 18 Forty-one states: Ala.Const. § 6; Ariz.Const. art. II, § 24; Ark.Const. art. II, § 10; Cal.Const. art. I, § 13; Colo.Const. art. II, § 16; Conn.Const. art. I, § 9; Del.Const. art. I, § 7; Fla.Const. Declaration of Rights, § 11, F.S.A.; Ga.Const. art. I, § 1, par. 5, Code, § 2-105; Idaho Const. art. I, § 13; Ill.Const. art. 2, § 9, Smith-Hurd States.; Ind.Const. art. I, § 13; Iowa Const. art. I, § 10; Kan.Const. Bill of Rights, § 10; Ky.Const. § 11; La.Const. art. I, § 9; Me.Const. art. I, § 6; Mich.Const. art. 2, § 19; Minn.Const. art. I, § 6, M.S.A.; Miss.Cons. § 26; Mo.Const. art. I, § 18 Mo.R.S.A.; Mont.Const. art. I, § 16; Neb.Const. art. I, § 11; N.J.Const. art. I, par. 8, N.J.S.A.; N.M.Const. art. II, § 14; N.C.Const. art. I, § 13 (no convictions for crime except by jury verdict in 'open court'); N.D.Const. art. I § 13; Ohio Const. art. I, § 10; Okl.Const. art. 2, § 20, Okl.St.Ann.; Or.Const. art. I, § 11; Pa.Const. art. I, § 9, P.S.; R.I.Const. art. I, § 10; S.C.Const. art. I, § 18; S.D.Const. art. 6, § 7; Tenn.Const. art. I, § 9; Tex.Const. art. I, § 10, Vernon's Ann.St.; Utah Const. art. I, § 12; Vt.Const. ch. I, art. 10; Wash.Const. art. I, § 22; W.Va.Const. art. III, § 14; Wis.Const. art. I, § 7. 19 Two states: Nev.Comp.Laws Ann. § 10654 (1929); N.Y. Civil Rights Law, Consol.Laws, c. 6, § 12. 20 The Maryland Court of Appeals has apparently interpreted the state constitution as prohibiting secret trials. Dutton v. State, 123 Md. 373, 386—388, 91 A. 417, 422, 423, Ann.Cas.1916C, 89. 21 Radin, The Right to a Public Trial, 6 Temp.L.Q. 381, 389. The criminal procedure of the civil law countries long resembled that of the Inquisition in that the preliminary examination of the accused, the questioning of witnesses, and the trial of the accused were conducted in secret. Esmein, A History of Continental Criminal Procedure 183—382 (1913); Ploscowe, Development of Inquisitorial and Accusatorial Elements in French Procedure, 23 J.Crim.L. & Criminology 372—386. The ecclesiastical courts of Great Britain, which intermittently exercised a limited civil and criminal jurisdiction, adopted a procedure described as 'in name as well as in fact an Inquisition, differing from the Spanish Inquisition in the circumstances that it did not at any time as far as we are aware employ torture, and that the bulk of the business of the courts was of a comparatively unimportant kind * * *.' 2 Stephen, History of the Criminal Law of England 402 (1883). The secrecy of the ecclesiastical courts and the civil law courts was often pointed out by commentators who praised the publicity of the common law courts. See e.g., 3 Blackstone, Commentaries *373; 1 Bentham Rationale of Judicial Evidence, 594—595, 603 (1827. The English common law courts which succeeded to the jurisdiction of the ecclesiastical courts have renounced all claim to hold secret sessions in cases formerly within the ecclesiastical jurisdiction, even in civil suits. See, e.g., Scott v. Scott, (1913) A.C. 417. 22 Davis v. United States, 8 Cir., 247 F. 394, 395, L.R.A.1918C, 1164; Keddington v. State, 19 Ariz. 457, 459, 172 P. 273, L.R.A.1918D, 1093; Williamson v. Lacy, 86 Me. 80, 82, 83, 29 A. 943, 944, 25 L.R.A. 506; Dutton v. State, 123 Md. 373, 387, 91 A. 417, 422, Ann.Cas.1916C, 89; Jenks, The Book of English Law 91 (3d Ed.1932). Some authorities have said that trials in the Star Chamber were public, but that witnesses against the accused were examined privately with no opportunity for him to discredit them. Apparently all authorities agreed that the accused himself was grilled in secret, often tortured, in an effort to obtain a confession and that the most objectionable of the Star Chamber's practices was its asserted prerogative to disregard the common law rules of criminal procedure when the occasion demanded. 5 Holdsworth, A History of English Law, 163, 165, 180—197 (2d Ed.1937); Radin, The Right to a Public Trial, 6 Temp.L.Q. 381, 386 388; Washburn, The Court of Star Chamber, 12 Am.L.Rev. 21, 25—31. 23 Radin, The Right to a Public Trial, 6 Temp.L.Q. 381, 388. The lettre de cachet was an order of the king that one of his subjects be forthwith imprisoned or exiled without a trial or an opportunity to defend himself. In the eighteenth century they were often issued in blank to local police. Louis XV is supposed to have issued more than 150,000 lettres de cachet during his reign. This device was the principal means employed to prosecute crimes of opinion, although it was also used by the royalty as a convenient method of preventing the public airing of intra-family scandals. Voltaire, Mirabeau and Montesquieu, among others denounced the use of the lettre de cachet, and it was abolished after the French Revolution, though later temporarily revived by Napoleon. 13 Encyc. Brit. 971; 3 Encyc. Soc. Sci, 137. 24 Other benefits attributed to publicity have been: (1) Public trials come to the attention of key witnesses unknown to the parties. These witnesses may then voluntarily come forward and give important testimony. 6 Wigmore, Evidence § 1834 (3d Ed.,1940); Tanksley v. United States, 9 Cir., 145 F.2d 58, 59, 156 A.L.R. 257. (2) The spectators learn about their government and acquire confidence in their judicial remedies. 6 Wigmore, Evidence § 1834 (3d Ed. 1940); 1 Bentham, Rationale of Judicial Evidence 525 (1827); State v. Keeler, 52 Mont. 205, 156 P. 1080, L.R.A.1916E, 472, Ann.Cas.1917E, 619; 20 Harv.L.Rev. 489. 25 Jenks, The Book of English Law 91 (1932); Auld, Comparative Jurisprudence of Criminal Process, 1 U. of Toronto L.J. 82, 99; Radin, The Right to a Public Trial, 6 Temp.L.Q. 381; Criminal Procedure in Scotland and England, 108 Edinburgh Rev. 174, 181—182; Holmes, J. in Cowley v. Pulsifer, 137 Mass. 392, 394, 50 Am.Rep. 318; State v. Osborne, 54 Or. 289, 295—297, 103 P. 62, 64—66, 20 Ann.Cas. 627. People v. Murray, 89 Mich. 276, 286, 50 N.W. 995, 998, 14 L.R.A. 809, 28 Am.St.Rep. 294: 'It is for the protection of all persons accused of crime—the innocently accused that they may not become the victim of an unjust prosecution, as well as the guilty, that they may be awarded a fair trial—that one rule (as to public trials) must be observed and applied to all.' Frequently quoted is the statement in 1 Cooley, Constitutional Limitations (8th Ed.1927) at 647: 'The requirement of a public trial is for the benefit of the accused; that the public may see he is fairly dealt with and not unjustly condemned, and that the presence of interested spectators may keep his triers keenly alive to a sense of their responsibility and to the importance of their functions * * *' 26 1 Bentham, Rationale of Judicial Evidence 524 (1827). 27 Compare People v. Murray, 89 Mich. 276, 50 N.W. 995, 14 L.R.A. 809, 28 Am.St.Rep. 294, and People v. Yeager, 113 Mich. 228, 71 N.W. 491, with Reagan v. United States, 9 Cir., 202 F. 488, 44 L.R.A.,N.S., 583. For collection and analysis of the cases, see 6 Wigmore, Evidence § 1834 (3d Ed.1940); Orfield, Criminal Procedure from Arrest to Appeal 385—387 (1947); Radin, The Right to a Public Trial, 6 Temp.L.Q. 381, 389—391; Note, 35 Mich.L.Rev. 474; 8 U. of Det.L.J. 129; Tanksley v. United States, 9 Cir., 145 F.2d 58, 156 A.L.R. 265. 28 'For the purposes contemplated by the provision of the constitution, the presence of the officers of the court—men whom, it is safe to say, were under the influence of the court—made the trial no more public than if they too had been excluded.' People v. Hartman, 103 Cal. 242, 244, 37 P. 153, 154, 42 Am.St.Rep. 108. 29 See, e.g., State v. Beckstead, 96 Utah 528, 88 P.2d 461 (error to exclude friends and relatives of accused); Benedict v. People, 23 Colo. 126, 46 P. 637 (exclusion of all except witnesses, members of bar and law students upheld); People v. Hall, 51 App.Div. 57, 64 N.Y.S. 433 (exclusion of general public upheld where accused permitted to designate friends who remained). 'No court has gone so far as affirmatively to exclude the press.' Note, 35 Mich.L.Rev. 474, 476. Even those who deplore the sensationalism of criminal trials and advocate the exclusion of the general public from the courtroom would preserve the rights of the accused by requiring the admission of the press, friends of the accused, and selected members of the community. Radin, The Right to a Public Trial, 6 Temp.L.Q. 381, 394—395; 20 J.Am.Jud.Soc. 139. 30 Cases are collected in 27 Ann.Cas. 35. 31 The following decisions of this Court involving various kinds of proceedings are among the multitude that support the above statement: Snyder v. Massachusetts, 291 U.S. 97, 116, 54 S.Ct. 330, 336, 78 L.Ed. 674, 90 A.L.R. 575; Powell v. Alabama, 287 U.S. 45, 68—70, 53 S.Ct. 55, 63, 64, 77 L.Ed. 158, 84 A.L.R. 527; Hovey v. Elliot, 167 U.S. 409, 418, 17 S.Ct. 841, 844, 42 L.Ed. 215; Holden v. Hardy, 169 U.S. 366, 390, 391, 18 S.Ct. 383, 387, 42 L.Ed. 780; Morgan v. United States, 304 U.S. 1, 14, 15, 58 S.Ct. 773, 774, 775, 82 L.Ed. 1129, and cases there cited. 32 See note 10 supra. 1 The requirement, of course, contemplates that the accused be so informed sufficiently in advance of trial or sentence to enable him to determine the nature of the plea to be entered and to prepare his defense if one is to be made. Cf. White v. Ragen, 324 U.S. 760, 764, 65 S.Ct. 978, 980, 89 L.Ed. 1348; Powell v. Alabama, 287 U.S. 435, 53 S.Ct. 55, 77 L.Ed. 158, 84 A.L.R. 527. 2 The only 'witness' in this case was the ga nd jury-judge who, so far as the record discloses, did not submit to cross-examination. 3 As the Court's opinion notes, the state supreme court has held that the witness may be reexamined and recommitted for a further 60-day period after serving the first sentence of that length, unless he reappears and answers the same questions to the satisfaction of the one-man grand jury. In re Ward, 295 Mich. 742, 747, 295 N.W. 483. 4 Cf. Cochran v. Kansas, 316 U.S. 255, 62 S.Ct. 1068, 86 L.Ed. 1453. So far as appears, only persons committed or fined by a one-man grand jury are subjected in Michigan to this attenuated appellate procedure. Others convicted of crime, including criminal contempt, apparently are afforded rights to complete and non-discretionary records on appeal. 5 The immediate shift of the proceeding from inquisitorial to punitive function converts it from a grand jury investigation to a proceeding in criminal contempt. 6 Cf. Adamson v. California, 332 U.S. 46, at page 68, 67 S.Ct. 1672, 1684, 171 A.L.R. 1223, dissenting opinion of Mr. Justice Black. 7 See Hurtado v. California, 110 U.S. 516, 531, 4 S.Ct. 111, 118, 28 L.Ed. 232. 8 E.g., Twining v. New Jersey, 211 U.S. 78, 29 S.Ct. 14, 53 L.Ed. 97; Adamson v. California, 332 U.S. 46, 67 S.Ct. 1672, 171 A.L.R. 1223. 9 I do not think it can be demonstrated that state systems, free of the Bill of Rights' 'inconveniences,' have been more fair, just, or efficient than the federal system of administering criminal justice, which has never been clear of their restraints. Notwithstanding Betts v. Brady, 316 U.S. 455, 62 S.Ct. 1252, 86 L.Ed. 1595, and its progeny, I cannot imagine that state denial of the right to counsel beyond that permissible in the federal courts or indeed of any other guaranty of the Sixth Amendment could bring an improvement in the administration of justice. The guaranties seemingly considered most obstructive to that process are those of the Fifth Amendment requiring presentment or indictment of a grand jury and securing the privilege against self-incrimination; the rights to jury trial and to the assistance of counsel secured by the Sixth Amendment; and the requirements relating to suits at common law of the Seventh Amendment. Whatever inconveniences these or any of them may be thought to involve are far outweighed by the aggregate of security to the individual afforded by the Bill of Rights. That aggregate cannot be secured, indeed it may be largely defeated, so long as the states are left free to make broadly selective application of its protections. 1 In sustaining this power of the States, the Court enunciated a principle the force of which has not lessened with time: 'The constitution of the United States was ordained, it is true, by descendants of Englishmen, who inherited the traditions of the English law and history; but it was made for an undefined and expanding future, and for a people gathered, and to be gathered, from many nations and of many tongues; and while we take just pride in the principles and institutions of the common law, we are not to forget that in lands where other systems of jurisprudence prevail, the ideas and processes of civil justice are also not unknown. Due process of law, in spite of the absolutism of continental governments, is not alien to that Code which survived the Roman empire as the foundation of modern civilization in Europe, and which has given us that fundamental maxim of distributive justice, suum cuique tribuere. There is nothing in Magna Charta, rightly construed as a broad charter of public right and law, which ought to exclude the best ideas of all systems and of every age; and as it was the characteristic principle of the common law to draw its inspiration from every fountain of justice, we are not to assume that the sources of its supply have been exhausted. On the contrary, we should expect that the new and various experiences of our own situation and system will mold and shape it into new and not less useful forms.' Hurtado v. California, 110 U.S. 516, 530, 531, 4 S.Ct. 111, 118, 28 L.Ed. 232. 2 'Neither in our brief nor in our argument before the court have we urged this court to reverse this conviction merely because the partial return of the witness's testimony to the Supreme Court constituted a denial of due process. * * * The questions we present are much more basic,—the denial of due process in the original commitment. * * * (To) us it is much more shocking that an accused charged with contempt not committed in open court be denied any trial in the lower court than that he be given a trial only upon an incomplete record in the appellate court.' Petitioner's 'Brief in Answer to Brief of State Bar of Michigan,' pp. 13, 14.
01
333 U.S. 411 68 S.Ct. 518 92 L.Ed. 774 MITCHELL et al.v.COHEN. SAME v. HUBICKEY. Nos. 130, 131. Argued Jan. 6, 1948. Decided March 8, 1948. Mr. Herbert A. Bergson, of Boston, Mass., for petitioners. Mr. Gerhard A. Gesell, of Washington, D.C., for respondents. Mr. Justice MURPHY delivered the opinion of the Court. 1 The problem here is whether temporary members of the Volunteer Port Security Force of the Coast Guard Reserve are entitled to veterans' preference in federal employment by virtue of the Veterans' Preference Act of 1944.1 2 Pursuant to § 207 of the Coast Guard Auxiliary and Reserve Act of 1941,2 approximately 70,000 persons were enrolled as temporary members of the Coast Guard Reserve. The Reserve was a military organization established as a component part of the Coast Guard 'to enable that service to perform such extraordinary duties as may be necessitated by emergency conditions.'3 The Coast Guard, in turn, was created as a military service and constitutes 'a branch of the land and naval forces of the United States.'4 On November 1, 1941, the President directed that the Coast Guard operate as part of the Navy subject to the orders of the Secretary of the Navy.5 3 Of the various classifications of temporary members of the Coast Guard Reserve,6 the largest was known as the Volunteer Port Security Force. Service therein was purely voluntary and was devoted to such activities as the patrol and guarding of harbors, waterfronts, docks, bridges, ships and industrial shore establishments. The members of this force took the oath of allegiance required of the regular members of the Coast Guard. They were enrolled 'for the duration of the war upon the completion of which you will be disenrolled unless the period of your enrollment is sooner terminated by Coast Guard authority.'7 In actual practice, however, the members were usually permitted to leave the Force at any time by making a request to the commanding officer of the unit to which they were assigned. They were given a 'Certificate of Disenrollment' upon severance from the Force, honorable discharges and mustering-out pay not being provided. 4 Members of the Volunteer Port Security Force were obligated to be on active duty 'only as directed by competent authority for a minimum of 12 hours per week.'8 It does not appear that their active duty exceeded that amount to any substantial degree. Because of the small number of hours of service, most members were able to continue their regular civilian employment with little or no interference. They could not be transferred from the cities in which they lived without their consent. Efforts were made by the Coast Guard to assign the 12-hour weekly duty periods to fit the convenience of the members. And many of them were disenrolled at their own request upon representations that their duty assignments conflicted with their civilian employment. They could also be excused from duty if they found it temporarily inconvenient. 5 These members performed their duties without pay. In most cases, however, they received an allowance for uniforms; and in some instances they received food or subsistence allowance while on active duty. Military status attached to them only during periods when they were actually engaged on active duty or en route to and from such duty. While on active duty they wore their uniforms, were subject to the usual Coast Guard discipline and were vested with the same authority as members of the regular Coast Guard of similar rank. 6 At all times the members of the Volunteer Port Security Force remained subject to the Selective Training and Service Act of 1940, 50 U.S.C.A. Appendix, § 301 et seq. They were required to register and were liable for induction into the regular armed forces. In fact, many of them did enlist or were drafted into those forces, thereby necessitating their disenrollment as temporary members of the Coast Guard Reserve. If illness or disease occurred while on duty, they were accorded the same hospital treatment as members of the regular Coast Guard. But if they were injured or killed in the line of duty, they wr e entitled only to the benefits prescribed by law for civilian employees of the United States. Moreover, they were ineligible for the benefits of National Service Life Insurance. 7 Respondent Cohen enrolled on April 13, 1944, as a member of the Volunteer Port Security Force and was assigned to duty with the Captain of the Port, Washington, D.C. He performed his part-time duties without compensation and without interruption to his regular employment as a civilian economist in the War Department. He was disenrolled on September 5, 1945, having served on active duty on 58 days for a total service of 398 hours. Respondent Hubickey was enrolled in the Force on October 18, 1944, and was assigned to duty with the Captain of the Port, Philadelphia, Pa. He too performed his part-time duties without compensation and without interference with his regular work as a civilian naval architect in the Navy Department. On September 30, 1945, he was disenrolled, having served on active duty on 32 days for a total service of 250 hours. 8 On April 4, 1944, before the passage of the Veterans' Preference Act, the Civil Service Commission had ruled that the duties performed by those enrolled in the Volunteer Port Security Force entitled them to veterans' preference in federal employment under the then existing preference laws.9 But on November 4, 1944, after the enactment of the statute in question and pursuant to a recommendation of the Acting Secretary of the Navy, the Commission changed this ruling and decided that such duties did not entitle one to veterans' preference under the terms of the statute.10 9 The two respondents were denied veterans' preference in their government employment in accordance with the Commission's second ruling. Due to general reductions in force, respondent Cohen was discharged from the War Department and respondent Hubickey was notified that he would be discharged from the Navy Department. They then brought these actions to compel the members of the Commission to classify them as preference eligibles; they also asked the court to adjudge and declare them entitled to the status of preference eligibles under the provisions of the Veterans' Preference Act. The District Court granted summary judgments in their favor. 69 F.Supp. 54. The Court of Appeals of the District of Columbia affirmed, one justice dissenting. 160 F.2d 915. We brought the cases here on certiorari, the problem raised being one of importance in the administration of the Veterans' Preference Act. 10 The pertinent portion of the Veterans' Preference Act is to be found near the end of § 2. That establishes preference in government employment for 'those exservicemen and women who have served on active duty in any branch of the armed forces of the United States, during any war, * * * and have been separated therefrom under honorable conditions.' 11 Respondents claim that their service with the Volunteer Port Security Force brings them squarely within this statutory provision, hence entitling them to veterans' preference. It is undisputed, of course, that they did serve part-time on active dt y in a branch of the armed forces of the United States during World War II and that they were separated therefrom under honorable conditions. The crucial question is whether they thereby are 'ex-servicemen' within the meaning of this particular statute. On that score, respondents urge that this term must be given its ordinary and literal meaning so as to refer to all those who performed military service.11 The length or continuity of active duty and the presence or absence of compensation become immaterial from respondents' point of view; the mere performance of some type of military service is thought to be sufficient. Since respondents concededly did perform military service while on intermittent active duty with the Volunteer Port Security Force, the conclusion is reached that they are 'ex-servicemen' within the contemplation of this statute. Resort to the legislative history and other secondary sources is said to be unwarranted, so clear and obvious is the meaning of that term. 12 In our opinion, however, the term 'ex-servicemen' has no single, precise definition which permits us to read and apply that term without help from the context in which it appears and the purpose for which it was inserted in the statute. Exservicemen are indeed those who have performed military service. And they may include those who have served on active duty only part-time and without compensation. But this designation may also be confined to a more definite and narrow class of individuals who performed military service, to those whose full time and efforts were at the disposal of military authorities and whose compensation included military pay and allowances. Such ex-servicemen are those who completely disassociated themselves from their civilian status and their civilian employment during the period of their military service, suffering in many cases financial hardship and separation from home and family. They formed the great bulk of the regular armed forces during World War II. In the popular mind, they were typified by the full-fledged soldier, sailor, marine or coast guardsman. Our problem, of course, is whether Congress used the term 'exservicemen' in the broad or narrow sense when it enacted the Veterans' Preference Act. And the answer to that problem is to be determined by an examination of the statutory scheme rather than by reliance upon dictionary definitions. 13 The Veterans' Preference Act was enacted in 1944 to aid in the readjustment and rehabilitation of World War II veterans. It was felt that the problems of these returning veterans were particularly acute and merited special consideration. Their normal employment and mode of life had been seriously disrupted by their service in the armed forces and it was thought that they could not be expected to resume their regular activities without reemployment and rehabilitation aids. The Federal Government, in its capacity as an employer, determined to take the lead in such a program.12 The Veterans' Preference Act was accordingly adopted, creating special preference and protection for returning veterans at every stage of federal employment. 14 Throughout the legislative reports and debates leading to the birth of this statute is evident a consistent desire to help only those who had sacrificed their normal pursuits and surroundings to aid in the struggle to which this nation had dedicated itself.13 It was the veterans or ex-servicemen who had been completely divorced from their civilian employment by reason of their full-time service with the armed forces who were the objects of Congressional solicitude. Reemployment and rehabilitation were considered to be necessary only as to them. 15 There is nothing to indicate that the legislative mind in this instance was directed toward granting special benefits or rewards to those who performed military service without interference with their normal employment and mode of life. As to them, assistance in reemployment and rehabilitation was thought unnecessary. Their civilian employment status remained unchanged by reason of their military service. And since their civilian life was substantially unaltered, there was no problem of aiding their readjustment back to such a life. Indeed, to have given them preference rights solely because of their part-time military service would have been inconsistent with the professed aims of the statutory framers. Such preference would have diluted the benefits conferred on those ex-servicemen who had made full-scale sacrifices; and it would have been inequitable to the many civilians who also had participated voluntarily in essential war and defense activities but who had not been directly connected with a branch of the armed forces. 16 It is true that § 2 of the Act establishes preference eligibility for the unmarried widows of deceased ex-servicemen despite the fact that these widows may have continued their normal civilian employment during the war. But the preference rights thereby granted are derivative in nature. They are conferred on the widows because of the dislocation and severance from civil life which their deceased husbands suffered while performing full-time military duties and in partial substitution for the loss in family earning power occasioned by their husbands' deaths. Congress felt that this was one way of expressing the moral obligation and the debt of gratitude which this nation was thought to owe these widows. Such a provision certainly affords no basis for widening the concept of 'ex-servicemen' beyond that which we have indicated. The widows of ex-servicemen are in a special category which cannot be compared, in terms of sacrifice or need for reemployment and rehabilitation, with any group of individuals who performed part-time military duties.14 17 In the light of the very clear purpose which Congress had in mind in adopting the Veterans' Preference Act, we are constrained to define the term 'ex-servicemen,' for the purposes of this particular statute, as relating only to those who performed military service on full-time active duty with military pay and allowances, thereby dislocating the fabric of their normal economic and social life.15 It thus becomes obvious that respondents' service with the Volunteer Port Security Force of the Coast Guard Reserve cannot qualify them as 'ex-servicemen' entitled to veterans' preference under this enactment. They continued their normal civilian employment with the War Department and the Navy Department during the war, employment which suffered as little as possible from their military service; they served on active duty for only relatively short periods each week and could be disenrolled at their own request; they received no military pay and very few allowances; they could not be transferred away from their homes without their consent. They were therefore able to retain the essential elements of their civilian life. As to them, there was no problem of reemployment or rehabilitation caused by their military service. They are not among the 'ex-servicemen' whom Congress desired to assist by means of the Veterans' Preference Act. 18 One other matter remains. Respondents claim, and the Court of Appeals held, that they acquired vested preference rights under § 18 of the Act. In pertinent part, § 18 provides that 'this Act shall not be construed to take away from any preference eligible any rights heretofore granted to, or possessed by, him under any existing law, Executive order, civil-service rule or regulation, of any department of the Government or officer thereof.' It is said that the Civil Service Commission's ruling of April 4, 1944, extending preference rights under the then existing laws to those who had performed service with the Volunteer Port Security Force, gave respondents vested rights which were preserved by § 18 when the Veterans' Preference Act was subsequently enacted. 19 This contention is without substance. Veterans' preference rights by their very nature do not accrue until one has become a veteran through separation from the armed forces. On June 27, 1944, when the Veterans' Preference Ac became law, neither of the respondents had as yet disenrolled from the Volunteer Port Security Force. In fact, respondent Hubickey had not even enrolled by that date. Thus they could not be classed as veterans or ex-servicemen, whatever definition be given those terms, on June 27, 1944, and they could not have earned any veterans' preference rights prior to that date. The Commission's ruling of April 4, 1944, did no more than inform respondents that they would be entitled to veterans' preference upon disenrollment, provided such ruling was lawful and still in effect. It did not purport to give them preference rights as of April 4, 1944, or to cause those rights to accrue before disenrollment. Since they did not possess and had not been granted any such rights under prior law, respondents were completely unaffected by the provisions of § 18. That section was primarily designed to perpetuate preferences granted earlier to veterans who had served in the armed forces during peacetime and who were then in government employment or on civil-service registers.16 Respondents were obviously not veterans of that type. 20 Reversed. 21 Mr. Justice DOUGLAS dissents. 1 58 Stat. 387, 5 U.S.C. § 851, 5 U.S.C.A. § 851. 2 55 Stat. 9, 12, as amended, 14 U.S.C., Supp. V, § 307, 14 U.S.C.A. § 307. 3 § 201 of the Coast Guard Auxiliary ad Reserve Act of 1941, 55 Stat. 9, 11, as amended, 14 U.S.C., Supp. V., § 301, 14 U.S.C.A. § 301. 4 55 Stat. 585, 14 U.S.C. § 1, 14 U.S.C.A. § 1. 5 Executive Order No. 8929, 6 Fed.Reg. 5581, 14 U.S.C.A. § 1 note. 6 The other classifications were: (1) Full-time active duty with military pay and allowances; (2) Pilots without pay and allowances other than for uniforms, but paid by their own companies; (3) Officers of Great Lakes vessels without pay and allowances other than for uniforms, but paid by their own companies; (4) Coast Guard police without pay and allowances; (5) Civil Service employees of the Coast Guard enrolled for full-time active duty without pay other than compensation for their civilian positions. 7 From the form entitled 'Temporary Member of Coast Guard Reserve—Enrollment and Active Duty Assignment.' 8 Ibid. It also appears from this form that those mentioned in classifications (2) and (5) in footnote 6, supra, were subject to call at all times. Apparently the other classifications, including the Volunteer Port Security Force, were not subject to such a call. 9 Circular Letter No. 4145 to Regional Directors and Division Chiefs of the Commission. This provided that active duty performed by temporary members of the Coast Guard Reserve, whether full-time, part-time, or intermittently, either with or without pay, including Government employees enrolled without pay other than the compensation of their civilian positions, constituted active duty as distinguished from training duty and entitled the member performing such duty to preference benefits under the then existing preference laws. 10 Departmental Circular No. 508 to to Heads of Departments and Independ-pendent Establishments. This modified the earlier ruling and provided that only those temporary Coast Guard Reservists performing full-time duty with pay and allowances at shore stations or aboard Coast Guard vessels were entitled to preference under the Veterans' Preference Act of 1944. 11 Respondents point out that the word 'serviceman' is defined as 'one who has performed military service.' Webster's New International Dictionary, 2d Ed. (1942). 12 'I believe that the Federal Government, functioning in its capacity as an employer, should take the lead in assuring those who are in the armed services that when they return special consideration will be given to them in their efforts to obtain employment. It is absolutely impossible to take millions of our young men out of their normal pursuits for the purpose of fighting to preserve the Nation, and then expect them to resume their normal activities without having any special consideration shown them. 'The problems of readjustment will be difficult for all of us. They will be particularly difficult for those who have spent months and even years at the battle fronts all over the world. Sue ly a grateful nation will want to express its gratitude in deeds as well as in words.' Letter from the President to Rep. Ramspeck, quoted in H.R. Rep. No. 1289, 78th Cong., 2d Sess., p. 5. 13 H.R. Rep. No. 1289, 78th Cong., 2d Sess.; S. Rep. No. 907, 78th Cong., 2d Sess.; 90 Cong.Rec. 3501—3507. The House report stated (p. 3): 'Private employers and corporations, as well as State, county, and municipal governments, have been urged through the selective-service law and otherwise to afford reemployment to veterans when they leave the armed forces. Your committee feels that the Federal Government should set the pace, and that this proposal is an essential part of the reemployment and rehabilitation program.' The Senate report stated (p. 1): 'The committee believes that in view of the fact that members of the armed forces rapidly are being returned to civilian life, the bill should be enacted without delay.' 14 The same observations apply to the provision in § 2 giving veterans' preference to the wives of ex-servicemen who have a service-connected disability and who themselves have been unable to qualify for any civil-service appointment. See also Public Law 396, 80th Cong., 2d Sess., approved Jan. 19, 1948, extending veterans' preference benefits to the widowed mothers of deceased or permanently and totally disabled ex-servicm ent. H.R. Rep. No. 697, 80th Cong., 1st Sess.; S. Rep. No. 480, 80th Cong., 1st Sess. 15 The view we take of this matter coincides with that expressed by the supporters of H.R. 1389, 80th Cong., 1st Sess. That bill proposed to change § 2 of the Veterans' Preference Act by providing that "active duty in any branch of the armed forces of the United States' shall mean active full-time duty with military pay and allowances in any branch of the armed forces during any campaign or expedition (for which a campaign badge has been authorized).' Hearings were held before the House Committee on Post Office and Civil Service. The bill was unanimously reported out by the committee, H.R. Rep. No. 465, 80th Cong., 1st Sess., and was adopted by voice vote by the House of Representatives, 93 Cong.Rec. 7315—7318. A unanimous Senate Committee on Civil Service also reported the bill favorably, S. Rep. No. 396, 80th Cong., 1st Sess., but the Senate adjourned without considering the bill. The proponents of the bill and the two committees considered it as a clarification of the original Congressional intent as to the meaning of 'ex-servicemen.' It was stated that the country owes a debt of gratitude to the temporary Coast Guard Reservists, 'but they are not to be classed as ex-servicemen, who were actually uprooted from their civilian occupations and subjected to the rigors of full-time military training and combat. It is to the latter group that Congress intended to provide employment preference in Government service.' 93 Cong.Rec. 7315. The need for clarification of § 2 was said to be the confusion created by the lower court decisions in the instant cases. 16 See S. Rep. No. 907, 78th Cong., 2d Sess., p. 2; H.R. Rep. No. 1289, 78th Cong., 2d Sess., p. 3. The Veterans' Preference Act does not grant benefits to future peacetime veterans.
12
333 U.S. 153 68 S.Ct. 488 92 L.Ed. 608 KINGv.ORDER OF UNITED COMMERCIAL TRAVELERS OF AMERICA. No. 171. Argued Dec. 10, 11, 1947. Decided March 8, 1948. Rehearing Denied April 19, 1948. Messrs. Harvey W. Johnson and Jesse W. Boyd, both of Spartanburg, S.C., for petitioner. Messrs. C. F. Haynsworth, of Greenville, S.C., and E. W. Dillon, of Columbus, Ohio, for respondent. Mr. Chief Justice VINSON delivered the opinion of the Court. 1 This is a suit to obtain payment of the proceeds of a $5,000 insurance policy. Federal jurisdiction is founded on diversity of citizenship, and, for present purposes, South Carolina law is controlling.1 We granted certiorari2 in order to determine whether the Circuit Court of Appeals' refusal (161 F.2d 108) to follow the only South Carolina decision directly in point, the decision of a Court of Common Pleas, was consistent with the Rules of Decision Act3 as applied in Erie R. Co. v. Tompkins, 1938, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, 114 A.L.R. 1487, and subsequent cases. 2 The petitioner, Mrs. King, is the beneficiary of the policy; her husband, Lieutenant King, was the insured; and the respondent Order of United Travelers of America is the insurer. The policy insured against King's accidental death, but contained a clause exempting the respondent from liability for 'death resulting from participation * * * in aviation.' It is this aviation exclusion clause which gave rise to the litigation now before us. 3 King lost his life one day in the winter of 1943 when a land-based Civil Air Patrol plane in which he was flight observer made an emergency landing thirty miles off the coast of North Carolina. The plane sank, but King was not seriously hurt and managed to get out of the plane and don his life jacket. He was still alive two and a half hours later, when an accompanying plane was forced to leave the scene. When picked up about four and a half hours after the landing, however, he was dead. The medical diagnosis was 'drowning as a result of exposure in the water.' 4 The respondent took the position that death, while 'accidental,' resulted from 'participation * * * in aviation.' Accordingly, it refused to pay Mrs. King the proceeds of the policy. A resident of South Carolina, she then sued the respondent in a court of that State, contending that drowning rather than the airplane flight was the cause of death within the meaning of the policy. The respondent, an Ohio corporation, exercised its statutory right to remove the cause to the federal District Court for the Western District of South Carolina.4 5 The parties agreed that South Carolina law was controlling, but up to the time of the District Court's decision neither of them had located any decision on aviation exclusion clauses by any South Carolina court. The District Court therefore fell back on what it deemed to be general principles of South Carolina insurance law, as enunciated by the State supreme Court: that ambiguities in an insurance contract are to be resolved in favor of the beneficiary, and that the cause of death, within the meaning of accident insurance policies, is the immediate, not the remote cause.5 Applying these principles, the court held that King's death resulted from drowning, not from participation in aviation, and that Mrs. King was entitled to recover.6 6 Two months later, a South Carolina court, the Court of Common Pleas for Spartanburg County, likewise ruled in favor of Mrs. King in a suit against a different insurer on a $2,500 policy which contained an almost identical aviation exclusion clause. The judge followed the same reasoning as the District Court had and relied, at least in part, on that court's decision. Under South Carolina statutes the insurer in this second case had the right t appeal to the State supreme court,7 but did not do so. 7 On appeal of the present case, the Circuit Court of Appeals reversed the District Court's judgment for Mrs. King.8 The court acknowledged that under South Carolina law ambiguities in insurance policies are to be construed against the insurer, but it found no ambiguity in the aviation exclusion clause insofar as its application to the facts of this case was concerned. On the contrary, Kings' death was thought clearly to have resulted from 'participation * * * in aviation.' Nothing in South Carolina Supreme Court decisions, it was said, was inconsistent with this view, whereas that court's accepted theories of proximate cause in tort cases supported it.9 Under these circumstances, the Circuit Court of Appeals expressed its disbelief that the Supreme Court of South Carolina would have ruled for Mrs. King, had her case been before it, 'in the face of reason and the very considerable authority' from other jurisdictions.10 The Common Pleas decision in Mrs. King's favor, it was thought, was not binding on the Circuit Court of Appeals as a final expression of South Carolina law since it was not binding on other South Carolina courts and since the court rendering it had relied on the District Court's ruling in the present case. 8 After we granted certiorari, a new factor was interjected in the case. Another South Carolina Court of Common Pleas, the one for Greenville County, handed down an opinion which, so far as relevant here, expressly rejected the reasoning of the Spartanburg Court of Common Pleas and espoused that of the Circuit Court of Appeals. 9 What effect, if any, we should give to this second Common Pleas decision becomes an appropriate subject for inquiry only if it is first determined that the Circuit Court of Appeals erred in not following the Spartanburg decision, which was the only one outstanding at the time of its action.11 We therefore address ourselves first to that question. 10 The Rules of Decision Act12 commands federal courts to regard as 'rules of decision' the substantive 'laws' of the appropriate state, except only where the Constitution, treaties or statutes of the United States Provide otherwise. And the Erie R. Co. case decided that 'laws,' in this context, include not only state statutes, but also the unwritten law of a state as pronounced by its courts. 11 The ideal aimed at by the Act is, of course, uniformity of decision within each state. So long as it does not impinge on federal interests, a state may shape its own law in any direction it sees fit, and it is inadmissible that cases dependent on that law should be decided differently according to whether they are before federal or state courts. This is particularly true where accidental factors such as diversity of citizenship and the amount in controlversy enable one of the parties to choose whether the case is tried in a federal or a state court. 12 Effectuation of that policy is comparatively easy when the issue confronting a federal court has previously been decided by the highest court in the appropriate state; the Erie R. Co. case decided that decisions and opinions of that court are binding on federal courts. The Erie R. Co. case left open, however, the more difficult question of the effect to be given to decisions by lower state courts on points never passed on y the highest state court. 13 Two years later, a series of four cases presented some aspects of that question. In three of the cases this Court held that federal courts are bound by decisions of a state's intermediate appellate courts unless there is persuasive evidence that the highest state court would rule otherwise. Six Companies of California v. Joint Highway District No. 13 of California, 1940, 311 U.S. 180, 61 S.Ct. 186, 85 L.Ed. 114; West v. American Telephone & Telegraph Co., 1940, 311 U.S. 223, 61 S.Ct. 179, 85 L.Ed. 139, 132 A.L.R. 956; and Stoner v. New York Life Ins. Co., 1940, 311 U.S. 464, 61 S.Ct. 336, 85 L.Ed. 284.13 In the fourth case, Fidelity Union Trust Co. v. Field, 1940, 311 U.S. 169, 61 S.Ct. 176, 85 L.Ed. 109, the Court went farther and held that a federal court had to follow two decisions announced four years earlier by the New Jersey Court of Chancery, a court of original jurisdiction. 14 The Fidelity Union Trust Co. case did not, however, lay down any general rule as to the respect to be accorded state trial court decisions. This Court took pains to point out that the status of the New Jersey Court of Chancery was not that of the usual nisi prius court. It had state-wide jurisdiction. Its standing on the equity side was comparable to that of New Jersey's intermediate appellate courts on the law side. A uniform ruling by the Court of Chancery over a course of years was seldom set aside by the state's highest court. And chancery decrees were ordinarily treated as binding in later cases in chancery. 15 The present case involves no attack on the policy of the Rules of Decision Act, the principle of the Erie R. Co. case, or the soundness of the other cases referred to above. It involves the practical administration of the Act; and the question it raises is whether, in the long run, it would promote uniformity in the application of South Carolina law if federal courts confronted with questions under that law were obliged to follow the ruling of a Court of Common Pleas. 16 The Courts of Common Pleas make up South Carolina's basic system of trial courts for civil actions.14 There are fourteen judges for these courts, one for each of the judicial circuits into which the state's forty-six counties are grouped.15 A circuit judge hears civil cases at specified times in each county comprising the circuit to which he is then assigned, and at such times his court is called the Court of Common Pleas for that particular county.16 In addition, he presides over a paralled set of criminal courts, the Courts of General Sessions. South Carolina has no tier of intermediate appellate courts, and appeal from Common Pleas decisions is directly, and as a matter of right, to the State supreme Court.17 17 While the Courts of Common Pleas are denominated courts of record, their decisions are not published or digested in any form whatsoever. They are filed only in the counties in which the cases are tried, and even there the sole index is by the parties' names.18 Perhaps because these facts preclude ready availability to bench and bar, the Common Pleas decisions seem to be accorded little weight as precedents in South Carolina's own courts. In this connection, respondent has submitted a certificate from the Chief Justice of the Supreme Court of South Carolina to the effect that 'under the practice in this State an unappealed decision of the Court of Common Pleas is binding solely upon the parties who are before the Court in that particular case and would not constitute a precedent in any other case in that Court or in any other court in the State of South Carolina.' 18 Consideration of these facts leads us to the conclusion that the Circuit Court of Appeals did not commit error. While that court properly attributed some weight to the Spartanburg Common Pleas decision, we believe that it was justified in holding the decision not controlling and in proceeding to make its own determination of what the Supreme Court of South Carolina would probably rule in a similar case. 19 In the first place, a Court of Common Pleas does not appear to have such importance and competence within South Carolina's own judicial system that its decisions should be taken as authoritiative expositions of that State's 'law.' In future cases between different parties, as indicated above, a Common Pleas decision does not exact conformity from either the same court or lesser courts19 within its territorial jurisdiction; and it may apparently be ignored by other Courts of Common Pleas without the compunctions which courts often experience in reaching results divergent from those reached by another court of coordinate jurisdiction. Thus a Common Pleas decision does not, so far as we have been informed, of itself evidence one of the 'rules of decision commonly accepted and acted upon by the bar and inferior courts.'20 Furthermore, as we have but recently had occasion to remark, a federal court adjudicating a matter of state law in a diversity suit it, 'in effect, only another court of the State';21 it would be incongruous indeed to hold the federal court bound by a decision which would not be binding on any state court. 20 Secondly, the difficulty of locating Common Pleas decisions is a matter of great practical significance. Litigants could find all the decisions on any given subject only by laboriously searching the judgment rolls in all of South Carolina's forty-six counties. To hold that federal courts must abide by Common Pleas decisions might well put a premium on the financial ability required for exhaustive screening of the judgment rolls or for the maintenance of private records. In cases where the parties could not afford such practices, the result would often be to make their rights dependent on chance; for every decision cited by counsel there might be a dozen adverse decisions outstanding but undiscovered.22 21 In affirming the decision below, we are deciding only that the Circuit Court of Appeals did not have to follow the decision of the Court of Common Pleas for Spartanburg County. We do not purport to determine the correctness of its ruling on the merits. Nor is our decision to be taken as promulgating a general rule that federal courts need never abide by determinations of state law by state trial courts. As indicated by the Fidelity Union Trust Co. case, other situations in other states may well call for a different result. 22 It may also be well to add that even if the Circuit Court of Appeals had been in error at the time of its decision, reversal of its judgment would not necessarily be appropriate in view of the second Common Pleas decision.23 But we prefer to regard that second decision as an illustration of the perils of interpreting a Common Pleas decision as a definitive expression of 'South Carolina law,' not as a controlling factor in our decision. 23 Affirmed. 1 Both courts below so held, and until the case was briefed for thi Court, neither party took issue with this holding or raised any full faith and credit question. Hence it is unnecessary for us to consider whether or not Order of United Commercial Travelers of America v. Wolfe, 1947, 331 U.S. 586, 67 S.Ct. 1355, is applicable. 2 332 U.S. 754, 68 S.Ct. 70. 3 Judiciary Act of 1789, § 34, R.S. § 721, 28 U.S.C. § 725, 28 U.S.C.A. § 725. 4 28 U.S.C. § 71, 28 U.S.C.A. § 71. 5 For this proposition the court cited Goethe v. New York Life Ins. Co., 1937, 183 S.C. 199, 190 S.E. 451. In that case the insured died following vigorous efforts to put out a fire. There was disputed medical evidence as to whether the symptoms shown just before death indicated heatstroke or heart disease as the cause of death. There was no evidence that the insured suffered from heart disease before that time. The Supreme Court of South Carolina upheld a jury determination that heatstroke caused death, and then, on the most disputed point in the case, ruled that heatstroke was a 'bodily injury' within the meaning of an accident insurance policy. It seems to us, as it apparently did to the Circuit Court of Appeals, questionable whether this case supports the principle for which it was cited. 6 D.C.1946, 65 F.Supp. 740. 7 1 S.C.Code Ann. §§ 26 and 780. 8 4 Cir., 1947, 161 F.2d 108. 9 The court cited Horne v. Atlantic Coast Line R. Co., 1935, 177 S.C. 461, 181 S.E. 642. 10 Among the cases cited were Neel v. Mutual Life Ins. Co. of New York, 2 Cir., 1942, 131 F.2d 159, and Green v. Mutual Benefit Life Ins. Co., 1 Cir., 1944, 144 F.2d 55. 11 Although the decision by the Spartenburg Court of Common Pleas was rendered after the District Court decision, it was proper for the Circuit Court of Appeals to consider it. See Vandenbark v. Owens-Illinois Glass Co., 1941, 311 U.S. 538, 61 S.Ct. 347, 85 L.Ed. 327. 12 See note 3, supra. 13 In all three cases the state supreme court had refused to review the intermediate appellate court decision; in the West and Stoner cases, the intermediate appellate court's decision had involved the same parties engaged in the subsequent case before the federal courts; and in the Six Companies case, the intermediate appellate court's decision had remained on the books for over twenty years without disapproval. These factors were mentioned in our opinions, but were not necessarily determinative. See Fidelity Union Trust Co. v. Field, 1940, 311 U.S. 169, 178, 61 S.Ct. 176, 178, 85 L.Ed. 109. 14 S.C.Const. Art. 5, § 15. These courts also have limited appellate jurisdiction, varying somewhat from county to county. The Court of Common Pleas for Spartanburg County handles appeals from the county's probate court, 1 S.C.Code Ann. § 228, its court of domestic relations, 1 id. §§ 256-24 and 256-44, and its magistrates courts. The latter have civil jurisdiction concurrent with the courts of Common Pleas only in suits involving less than $100, 1 id. § 257. The county court for Spartanburg County has concurrent jurisdiction in civil suits involving less than $3,000, but appeal from its decisions is directly to the Supreme Court of Sout Carolina, 1 id. §§ 184 and 190. 15 S.C.Const. Art. 5, § 13; 1 S.C.Code Ann. § 50. There is provision for periodic interchange of judges among the circuits. 1 S.C.Code Ann. § 22. 16 S.C.Const. Art. 5, § 16; 1 S.C.Code Ann. §§ 51—64. 17 See note 7 supra. 18 S.C.Circuit Court Rule 39. There is a Clerk of the Court of Common Pleas for each county. S.C.Const. Art. 5, § 27. 19 I.e., county courts, magistrates courts, probate courts, and courts of domestic relations. See note 14 supra. 20 West v. American Telephone & Telegraph Co., 1940, 311 U.S. 223, 236, 61 S.Ct. 179, 183, 85 L.Ed. 139, 132 A.L.R. 956. 21 Guaranty Trust Co. of New York v. York, 1945, 326 U.S. 99, 108, 65 S.Ct. 1464, 1469, 89 L.Ed. 2079, 160 A.L.R. 1231. 22 In the present case, the Spartanburg decision came to light because petitioner had been a party to it, h e Greenville decision because respondent's counsel had been a party to it. 23 See Vandenbark v. Owens-Illinois Glass Co., 1941, 311 U.S. 538, 61 S.Ct. 347, 85 L.Ed. 327.
89
333 U.S. 437 68 S.Ct. 630 92 L.Ed. 792 BAKERY SALES DRIVERS LOCAL UNION NO. 33 et al.v.WAGSHAL. No. 225. Argued Dec. 17, 18, 1947. Decided March 15, 1948. Mr. Herbert S. Thatcher, of Washington, D.C., for petitioner. Mr. Wm. E. Leahy, of Washington, D.C., for respondent. [Argument of Counsel from page 438 intentionally omitted] Mr. Justice FRANKFURTER delivered the opinion of the Court. 1 This is an action brought in a United States District Court to enjoin interference with a business, and the question is whether the complaint subjects that court to the limitations imposed by the Norris-LaGuardia Act upon its equity jurisdiction. 2 This is the substance of the complaint. Respondent owns a delicatessen store which sells food and serves meals. She obtained bread for the delicatessen store from Hinkle's bakery. Deliveries were made by a driver, an employee of Hinkle and a member of Local Union No. 33, one of the petitioners. The driver delivered the bread at noon, which inconvenienced the respondent, since the checking of deliveries at that hour interfered with the serving of lunches. Respondent 'required' the driver to bring the bread at another hour. Shortly thereafter, Hik le informed the respondent that it would no longer furnish her with bakery products. And so, respondent made arrangements with another bakery, which delivered at a more convenient hour. 3 Three weeks later, the petitioner Andre, president of the union, visited the delicatessen store and stated that the respondent owed the driver approximately $150 and requested immediate payment. Respondent replied that she had never had dealings with the driver, but had paid Hinkle directly by check, and would pay the bill in due course. Andre replied that the payment would have to be made to the driver in full; furthermore, that if the respondent did not cease carrying a certain non-union article of food he noticed on display, delivery of bread, milk, and other products necessary to the respondent's business would be cut off. Shortly thereafter the respondent sent a check to Hinkle for the balance of her bill. It was returned by the union, with a letter signed by Andre asserting that the payment was owed to its member, the driver, and could not be accepted. The following day, the bakery which had been serving respondent after Hinkle had stopped doing so, ceased to deal with her, explaining that the union had threatened otherwise 'to pull out all its drivers.' Through an effective boycott, the union kept the respondent from obtaining bread from other bakeries or retail stores. The delicatessen store was also picketed. 4 The complaint prayed for temporary and permanent injunctions against the boycott and other interference with respondent's business, the payment of damages, and the usual catch-all relief. Petitioners moved to dismiss the action on the ground that the controversy as set forth in the complaint involved a 'labor dispute' under the Norris-LaGuardia Act, 47 Stat. 70, 29 U.S.C. § 101 et seq., 29 U.S.C.A. § 101 et seq. Respondent filed an 'answer to motion to dismiss,' attached to which were affidavits, including one of Benjamin Wagshal, manager of the delicatessen store, elaborating the incidents narrated in the complaint. Among other matters set forth, he stated that payment for bread purchased from Hinkle had always been made by check sent directly to Hinkle and was never made to a driver, and that neither the union nor any of its drivers had ever previously questioned this practice; that Andre had asserted by mail and at the delicatessen store that the check which the respondent had sent to Hinkle was $12.22 short of the amount owed; and that the non-union item on sale to which Andre had objected was not a subject of controversy but merely an excuse for Andre's attempt, on his visit to the delicatessen store, to enforce his demands concerning the bill, and that in any event its sale had been discontinued. 5 The District Court granted an injunction pendente lite, restraining the petitioners from interfering with respondent's business or preventing sale and delivery of bakery products to the respondent, by boycott and picketing. At the same time, it denied the petitioners' motion to dismiss. Petitioners filed a notice of appeal to the Court of Appeals for the District of Columbia, and respondents moved to dismiss the appeal. 6 If this case does not involve a 'labor dispute' under the Norris-LaGuardia Act, an appeal as of right could not be had in the Court of Appeals for the District of Columbia. 31 Stat. 1189, 1225, as amended, D.C.Code (1940) § 17—101. However, § 10 of the Norris-LaGuardia Act, 47 Stat. 70, 72, 29 U.S.C. § 110, 29 U.S.C.A. § 110, provides for immediate review of an order granting or denying 'any temporary injunction in a case involving or growing out of a labor dispute * * *.'1 The Court of Appeals, one justice dissenting, held that this was not such a case, and dismissed the appeal. 161 F.2d 380. Because of asserted conflict between this decision and prior decisions of this Court on the scope of 'labor dispute' within the meaning of the Norris-LaGuardia Act, we granted certiorari. 332 U.S. 756, 68 S.Ct. 7. 7 A preliminary claim must be met, that the case has become moot. The short answer to the argument that the Labor Management Relations Act of 1947, P.L. 101, 80th Cong., 1st Sess., § 10(h), 29 U.S.C.A. § 160(h), has removed the limitations of the Norris-LaGuardia Act upon the power to issue injunctions against what are known as secondary boycotts, is that the law has been changed only where an injunction is sought by the National Labor Relations Board, not where proceedings are instituted by a private party. The claim of mootness is also based on an affidavit stating that after dismissal of the appeal by the Court of Appeals, the union lifted its boycott. Since the record does not show that a stay of the injunction was granted pending action in this Court, we must assume that the union's action was merely obedience to the judgment now here for review. We therefore turn to the merits. 8 The petitioners attach significance to three incidents for their claim that a 'labor dispute' is here involved. 9 1. The controversy over the hour of delivery. The petitioners claim that this was a dispute 'concerning terms or conditions of (the driver's) employment,' thereby raising a labor dispute, 'whether or not the disputants stand in the proximate relation of employer and employee.' § 13(c) of the Norris-LaGuardia Act. But the respondent had nothing to do with the working conditions of Hinkle's employees, individually or collectively. Her only desire was to have the bread come at an hour suitable for her business, and she had no interest in what arrangements Hinkle made to satisfy that desire rather than run the risk of losing her trade—to have the bread delivered by the same driver at a different hour, or by another driver, by an independent contractor, or through some other resourceful contrivance. To hold that under such circumstances a failure of two busins smen to come to terms created a labor dispute merely because what one of them sought might have affected the work of a particular employee of the other, would be to turn almost every controversy between sellers and buyers over price, quantity, quality, delivery, payment, credit, or any other business transaction into a 'labor dispute.' Cf. Columbia River Packers Ass'n v. Hinton, 315 U.S. 143, 62 S.Ct. 520, 86 L.Ed. 750. Furthermore, on the basis of what we have before us, respondent's disagreement with Hinkle over the delivery hour was a dead controversy, not involved in the subsequent dispute with the union, or in the boycott against which the injunction was directed. 10 2. The controversy over the bill. The petitioners regard both the question whether payment was to be made to the driver rather than to Hinkle, and the disagreement over the disputed sum of $12.22, as a matter concerning the driver's wages, and therefore a condition of his employment. But, on the allegations now here, respondent had nothing to do with the payment of the driver's wages. The delicatessen store was Hinkle's customer. On the basis of the allegations to be considered, the driver would receive his pay whether or not respondent paid her bill. It is immaterial that the driver may have been the conduit for payment—as drivers who deliver packages normally are. The same is true as to the disputed item of $12.22. The mere fact that it is a labor union representative rather than a bill collector who, with or without the creditor's consent, seeks to obtain payment of an obligation, does not transmute a business controversy into a Norris-LaGuardia 'labor dispute.' Cf. Dorchy v. State of Kansas, 272 U.S. 306, 311, 47 S.Ct. 86, 87, 71 L.Ed. 248. 11 3. The non-union item on sale in the delicatessen store. Sale by a merchant of non-union commodities is, no doubt, a traditional source of labor disputes within the scope of the Norris-LaGuardia Act. While the complaint itself did not indicate the history of this matter after Andre's visit, the affidavit attached to the 'answer to the motion to dismiss' sets forth that it was not a bona fide bone of contention, but a mere pretext, and, further, that the respondent thereafter withdrew the item from sale. While the conclusion of the incident giving rise to a controversy may not necessarily terminate a labor dispute (cf. Hunt v. Crumboch, 325 U.S. 821, 65 S.Ct. 1545, 89 L.Ed. 1954), what is before us leaves no doubt that the subsequent boycott was addressed only to the question of payment of the bill. Petitioners suggest that since no injunction may issue in a case growing out of a labor dispute, except upon oral testimony, determination whether there is a labor dispute should not rest on affidavits. But in this case the affidavits were merely a gloss on the complaint and as such constituted an informal amendment. They serve here as allegations, not proof. 12 This case was decided on a motion to dismiss. All that was determined was that on the basis of the respondent's claims, which the petitioners chose not to controvert, the Norris-LaGuardia Act did not apply. Since the only issue before the court below, and therefore before us, was the appealability of the order for an injunction pendente lite, which in turn depended on the applicability of the Norris-LaGuardia Act, other questions raised are not now open here. 13 Affirmed. 14 Mr. Justice BLACK, Mr. Justice DOUGLAS, and Mr. Justice MURPHY dissent. 15 Mr. Justice RUTLEDGE took no part in the consideration or decision of this case. 1 Section 13 of the Norris-LaGuardia Act, 47 Stat. 70, 73, 29 U.S.C. § 113, 29 U.S.C.A. § 113, reads as follows: 'Section 13. When used in this Act, and for the purposes of this Act—(a) A case shall be held to involve or to grow out of a labor dispute when the case involves persons who are engaged in the same industry, trade, craft, or occupation; or have direct or indirect interests therein; or who are employees of the same employer; or who are members of the same or an affiliated organization of employers or employees; whether such dispute is (1) between one or more employers or associations of employers and one or more employees or associations of employees; (2) between one or more employers or associations of employers and one or more employers or associations of employers; or (3) between one or more employees or associations of employees and one or more employees or associations of employees; or when the case involves any conflicting or competing interests in a 'labor dispute' (as hereinafter defined) of 'persons participating or interested' therein (as hereinafter defined). '(b) A person or association shall be held to be a person participating or interested in a labor dispute if relief is sought against him or it, and if he or it is engaged in the same industry, trade, craft, or occupation in which such dispute occurs, or has a direct or indirect interest therein, or is a member, officer, or agent of any association composed in whole or in part of employers or employees engaged in such industry, trade, craft, or occupation. '(c) The term 'labor dispute' includes any controversy concerning terms or conditions of employment, or concerning the association, or representation of persons in negotiating, fixing, maintaining, changing, or seeking to arrange terms or conditions of employment, regardless of whether or not the disputants stand in the proximate relation of employer and employee. '(d) The term 'court of the United States' means any court of the United States whose jurisdiction has been or may be conferred or defined or limited by Act of Congress, including the courts of the District of Columbia.'
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333 U.S. 445 68 S.Ct. 611 92 L.Ed. 798 FRANCIS et al.v.SOUTHERN PAC. CO. No. 400. Argued Feb. 5, 1948. Decided March 15, 1948. Mr. Parnell Black, of Salt Lake City, Utah, for petitioners. Mr. Paul H. Ray, of Salt Lake City, Utah, for respondent. Mr. Justice DOUGLAS delivered the opinion of the Court. 1 Petitioners are the minor children of Jack R. Francis who was killed while riding as an interstate passenger on one of respondent's trains. They brought this suit, acting through their general guardians, to recover damages on account of his death. Jurisdiction in the federal court was founded on diversity of citizenship. The trial judge submitted to the jury only the question of respondent's wanton negligence. The error alleged is his refusal to submit to the jury the issue of ordinary negligence. The jury returned a verdict for respondent. The Circuit Court of Appeals affirmed. 10 Cir., 162 F.2d 813. 2 The Circuit Court of Appeals held that Utah law creates a right of action in the heirs for the wrongful death of the decedent and that the action is distinct from any which decedent might have maintained had he survived. But the court held that the action is maintainable only where the decedent could hv e recovered damages for his injury if death had not ensued. In this case the decedent, an employee of respondent, was riding on a free pass not in connection with any duties he had as an employee but as a passenger only. The Circuit Court of Appeals therefore held as a matter of federal law that respondent would not have been liable to decedent for damages caused by ordinary negligence, relying on Northern Pacific R. Co. v. Adams, 192 U.S. 440, 24 S.Ct. 408, 48 L.Ed. 513. It concluded that respondent had the same defense against the heirs. We granted the petition for a writ of certiorari to reexamine the relationship between local law and federal law respecting the liability of interstate carriers under free passes. 3 In Van Wagoner v. Union Pac. R. Co., Utah, 186 P.2d 293, 303, decided after the petition for certiorari in the present case was filed, the heirs sued to recover damages for the death of the decedent in a grade-crossing accident. The court held that a defense of contributory negligence which would have barred recovery by the decedent likewise bars the heirs. In view of this ruling by the Utah Supreme Court we cannot say that the Circuit Court of Appeals committed plain error in holding that respondent had the same defenses against petitioners as it would have had against the decedent.1 Yet it requires such showing of error for us to overrule the lower courts in their applications of Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, 114 A.L.R. 1487. See Palmer v. Hoffman, 318 U.S. 109, 118, 63 S.Ct. 477, 482, 87 L.Ed. 645, 144 A.L.R. 719; MacGregor v. State Mutual Life Assur. Co., 315 U.S. 280, 62 S.Ct. 607, 86 L.Ed. 864; Steele v. General Mills, 329 U.S. 433, 439, 67 S.Ct. 439, 442. Cf. Wichita Royalty Co. v. City Nat. Bank, 306 U.S. 103, 59 S.Ct. 420, 83 L.Ed. 515. 4 The free pass in the present case stated that 'the user assumes all risk of injury to person or property and of loss of property whether by negligence or otherwise and absolves the issuing company * * * from any liability therefor.' In Northern Pacific R. Co. v. Adams, supra, a similar provision in a free pass was sustained as a defense to an action brought under an Idaho statute by the heirs of a passenger.2 That was in 1904. The Adams decision was soon followed by Boering v. Chesapeake Beach R. Co., 193 U.S. 442, 24 S.Ct. 515, 48 L.Ed. 742. Then in 1906 came the Hepburn Act which under pain of a criminal penalty prohibited a common carrier subject to the Act from issuing a 'free pass' except, inter alia, to 'its employees and their families.' 34 Stat. 584, 49 U.S.C. § 1(7), 49 U.S.C.A. § 1(7). Thereafter in 1914 the Court held that the rule of the Adams case was applicable under the federal statute and that the 'free pass' was nonetheless a gratuity though issued to an employee of the carrier. Charleston & W.C.R. Co. v. Thompson, 234 U.S. 576, 34 S.Ct. 964, 58 L.Ed. 1476. Kansas City So. R. Co. v. Van Zant, 260 U.S. 459, 43 S.Ct. 176, 67 L.Ed. 348, followed in 1923 and hl d that the liability of an interstate carrier to one riding on a 'free pass' was determined not by state law but by the Hepburn Act. The Court said, 260 U.S. at page 468, 43 S.Ct. at page 177, 67 L.Ed. 348, 'The provision for passes, with its sanction in penalties, is a regulation of interstate commerce, to the completion of which the determination of the effect of the passes is necessary. We think, therefore, free passes in their entirety are taken charge of, not only their permission and use, but the limitations and conditions upon their use; or to put it another way, and to specialize, the relation of their users to the railroad which issued them, the fact and measure of responsibility the railroad incurs by their issue, and the extent of the right the person to whom issued acquires, are taken charge of.' 5 For years this has been the accepted and well-settled construction of the Hepburn Act. During that long period it stood unchallenged in this Court and, so far as we can ascertain, in Congress too. Then came the Transportation Act of 1940, 54 Stat. 898, 900, 49 U.S.C.A. § 1 et seq., with its comprehensive revision of the statutes of which the Hepburn Act was part. Amendments were made to the free-pass provision of the Act to permit free transportation of additional classes of persons.3 No other amendments to the free-pass provision were made. It was reenacted without further change or qualification. In view of this history we do not reach the question of what construction we would give the Hepburn Act were we writing on a clean slate. The extent to which we should rely upon such history is always a difficult question which has frequently troubled the Court in many fields of law and with varied results. See Girouard v. United States, 328 U.S. 61, 69, 70, 66 S.Ct. 826, 829, 830, 90 L.Ed. 1084; Helvering v. Hallock, 309 U.S. 106, 119, 123, 60 S.Ct. 444, 451, 453, 84 L.Ed. 604, 125 A.L.R. 1368. But in the setting of this case, we find the long and well-settled construction of the Act plus reenactment of the free-pass provision without change of the established interpretation most persuasive indications that the rule of the Adams, Thompson, and Van Zant cases has become part of the warp and woof of the legislation. See State of Missouri v. Ross, 299 U.S. 72, 75, 57 S.Ct. 60, 62, 81 L.Ed. 46; United States v. Elgin, J. & E.R. Co., 298 U.S. 492, 500, 56 S.Ct. 841, 843, 80 L.Ed. 1300; United States v. Ryan, 284 U.S. 167, 175, 52 S.Ct. 65, 68, 76 L.Ed. 224; Hecht v. Malley, 265 U.S. 144, 153, 44 S.Ct. 462, 465, 68 L.Ed. 949; Electric Storage Battery Co. v. Shimadzu, 307 U.S. 5, 14, 59 S.Ct. 675, 681, 83 L.Ed. 1071. Any state law which conflicts with this federal rule governing interstate carriers must therefore give way by virtue of the Supremacy Clause. For it was held in the Van Zant case that the free-pass provision of the Hepburn Act was a regulation of interstate commerce 'to the completion of which the determint ion of the effect of the passes is necessary.' (260 U.S. 459, 43 S.Ct. 177.) Thus there is no room for the application of Erie R. Co. v. Tompkins, supra, on this phase of the case. The Van Zant case arose not in a lower federal court but in a state court; the holding was not a declaration of a 'general commercial law' but a ruling that '(the) incidents and consequences' of the pass were controlled by the federal act 'to the exclusion of state laws and state policies.' 260 U.S. at page 469, 43 S.Ct. at page 178, 67 L.Ed. 348. 6 Petitioners contend that the jury panel from which the jury in this case was selected was drawn contrary to Thiel v. Southern Pacific Co., 328 U.S. 217, 66 S.Ct. 984, 90 L.Ed. 1181, 166 A.L.R. 1412. We do not stop to inquire into the merits of the claim. The objection was made for the first time in the motion for a new trial. It seems to have been an afterthought, as the Thiel case was decided a few weeks after the verdict of the jury in the present case. If not an afterthought, it is an effort to retrieve a position that was forsaken when it was decided to take a gamble on the existing jury panel. In either case the objection comes too late. Cf. Queenan v. Oklahoma, 190 U.S. 548, 552, 23 S.Ct. 762, 764, 47 L.Ed. 1175. 7 Affirmed. 8 Mr. Justice BLACK, with whom Mr. Justice MURPHY and Mr. Justice RUTLEDGE join, dissenting. 9 Utah law permits recovery against a railroad when its negligence is responsible for a passenger's death, whether that passenger rides on a free pass containing an attempted waiver of liability for negligence or pays his fare in money. Because I believe Utah law should govern this case I would reverse this judgment. But I think affirmance of the judgment is equally wrong whether the case is to be considered governed wholly by Utah law, by federal law, or in part by both 10 No act of Congress has entrenched upon the long-existing power of all the states, including Utah, to provide damages for such wrongful deaths as this complaint alleged. If there is here any barrier to recovery based upon federal law, it is grounded in judge-made 'general commercial law' announced by this Court in the year 1904 in Northern Pac. R. Co. v. Adams, 192 U.S. 440, 24 S.Ct. 408, 48 L.Ed. 513. The rule laid down in that case was that a railroad could by stipulation validly exempt itself from liability under a state statute for negligent injuries inflicted within that state upon passengers carried wholly gratuitously. Creation of the 1904 Adams rule by this Court was under authority of a power then exercised, but repudiated in 1938 in Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, 114 A.L.R. 1487, whereby federal courts in passing upon questions of state law upon which there was no controlling state legislative enactment declared the 'general commercial law' of a state on the federal court's notion of wise public policy, independently of state court decisions. 11 This Court followed the Adams 'general commercial law' state rule several times between its creation in 1904 and repudiation of this Court's power to create state law in 1938—the last application of the Adams rule having been made by this Court in 1923 in Kansas City So. R. Co. v. Van Zant, 260 U.S. 459, 43 S.Ct. 176, 67 L.Ed. 348. That decision stated that an act of Congress had made the effect of the conditions in an employee's pass a federal question, but decided that 'federal' question entirely by reliance on the old Adams 'general commercial law' state rule. Since the Erie-Tompkins decision in 1938, and in fact since 1923, the Adams rule has never been applied by this Court until today. Now it is applied not as a federally created state rule of 'general commercial law' but as a judicially created post-Erie-Tompkins rule of purely federal law. While this Court may look to the 1904 pre-Erie-Tompkins state rule of general commercial law 'as a convenient source of reference for fashioning' a post-Erie-Tompkins federal u le, Clearfield Trust Co. v. United States, 318 U.S. 363, 367, 63 S.Ct. 573, 575, 87 L.Ed. 838, it should not, as the Court does here, automatically accept the old state rule as a federal rule, without any appraisal of its soundness in relation to present day conditions. No such appraisal has been made here. The old Adams rule, questionable enough in its 1904 environment, should in my judgment be critically examined and then abandoned as wholly incongruous with the accepted pattern of our modern society as embodied in legislative enactments. 12 Furthermore, the 1904 Adams rule, even in its original narrow scope, marked a departure from the philosophy of this Court's previous decisions. One subsequent line of the Court's decisions has tended to limit the 1904 rule's scope while another has tended to expand it. Today's opinion expands that rule beyond any point it has before reached. As indicated, I think the Adams 'general commercial law' state rule is an obstacle to the execution of present congressional policies embodied in statutes. That obstacle I think should be removed by this Court which fashioned the old rule. In any event I certainly would not expand the old Adams rule to cover the facts of this case. 13 I. It should be noted at the outset that tort law has been fashioned largely by judges, too largely according to the ideas of many. But if judges make rules of law, it would seem that they should keep their minds open in order to exercise a continuing and helpful supervision over the manner in which their laws serve the public. Experience might prove that a rule created by judges should never have been created at all, or that their rule though originally sound, had become wholly unsuited to new physical and social conditions developed by a dynamic society. A revaluation of social and economic interests affected by the old rule might reveal the unwisdom of its expansion or imperatively require its revision or abandonment. 14 The Court's uncritical reliance today on the 1904 judicially created rule, which to me is both undesirable and uncertain in scope, emphasizes one of the inherent dangers in judge-made laws pointed out by an eminent legal commentator in the field of tort law. Professor Bohlen, in his Studies in the Law of Torts, 610-611 (1926), had this to say about 'dangers' of court-made tort standards: 'The first is that of the undue rigidity which results from the unfortunate feeling, that any decision of a court creates a rule of law which, as law, is absolutely and eternally valid * * *. To regard a standard of conduct as fixed and immutable because judicially announced, is to create a standard which however just or even necessary at the time, may become a scandal and a hissing in the future.'1 15 II. In 1944, Jack Francis, age 30, his wife, age 29, and their three children, ages 3, 6, and 8, lived in Carlin, Nevada. Jack was then and had been for several years a conductor and brakeman for the respondent, Southern Pacifc Company. His father, Ray E. Francis, had served the respondent in the same capacity for 35 years. The elder Francis and his wife lived in Ogden, Utah, and the young Francis family visited them Christmas week. In the early morning of December 31, Jack and his wife boarded a Southern Pacific train at Ogden bound for Carlin. They took seats in the rear car. Both had passes granted by the respondent because the husband was its employee. Each pass contained a printed stipulation that the user assumed 'all risk of injury to person' and absolved the railroad 'from any liability therefor.' A short distance out of Ogden, while the train was still in Utah, an engine and train of cars crashed into the rear car. Husband and wife were killed. 16 This is one of two suits brought against the railroad by the grandparents as guardians of the three children to recover damages on account of their parents' deaths. The actions were brought under a Utah law since Congress has never passed any act which provides remedies against railroads for negligently injuring or killing railroad passengers, even interstate passengers on interstate railroads. Whether passengers or their dependents shall have a right of action under such circumstances has been a question left by Congress for regulation by the state in which the injury or death occurred. See, e.g., Chicago, R.I. & P.R. Co. v. Maucher, 248 U.S. 359, 363, 39 S.Ct. 108, 63 L.Ed. 294. See also cases collected in 76 A.L.R. 428—435. 17 For many years the states did not generally authorize suits for wrongful death. Their omission of such remedies was due to traditional 'common law' hostility to recoveries for death. This hostility provoked much lay criticism, echoes of which may be found in the cases cited below.2 About the middle of the last century, because of 'dissatisfaction with the archaisms of the common law,' state legislatures began to abolish the common law rule by specifically authorizing suits for wrongful death and now all states have such statutes. Van Beeck v. Sabine Towing Co., 300 U.S. 342, 346, 351, 57 S.Ct. 452, 454, 456, 81 L.Ed. 685. So strong is Utah's antipathy to the common law attitude that art. XVI, § 5, of the Utah Constitution forbids the state legislature to abrogate the right to recover damages for wrongful death. This suit for damages was brought under the Utah statute enacted in accordance with that state constitutional policy. Utah Code Ann. § 104—3—11 (1943). And in a case involving a federal wrongful death statute this Court has said 'It would be a misfortune if a narrow or grudging process of construction were to exemplify and perpetuate the very evils to be remedied' by such statutes. Van Beeck v. Sabine Towing Co., supra, 300 U.S. at pages 350, 351, 57 S.Ct. at page 456, 81 L.Ed. 685. 18 One count of the complaint here alleged ordinary negligence; the other alleged gross negligence. Either type of negligence would justify a recovery under the Utah statute. And since the complaint claimed recovery under the Utah statute, liability, if any, springs from that statute. See Spokane & I.E.R. Co. v. Whitley, 237 U.S. 487, 494, 495, 35 S.Ct. 655, 656, 59 L.Ed. 1060, L.R.A.1915F, 736. Under Utah law the railroad here could not have defeated liability in this case on the ground that the passes stipulated that the users would assume the risk of injury. The trial judge charged the jury, however, that because of opinions of this Court the pass exemption stipulation was valid and barred recovery 'for just ordinary negligence.' The Circuit Court of Appeals affirmed on the bs is of this Court's Adams and Van Zant cases. 10 Cir., 162 F.2d 813, 816. The action of the two lower courts was in accordance with their interpretation of this Court's opinions notwithstanding the fact that long ago the Utah Supreme Court, in declaring state law, rejected such a contention in the following language: 'It is argued that, even if the ticket was a free pass, gratuitously possessed, with the conditions printed thereon, still the defendant could not escape liability for its negligence. We believe the plaintiff is (right) in this contention.' Williams v. Oregon Short Line R. Co., 1898, 18 Utah 210, 221, 54 P. 991, 994, 72 Am.St.Rep. 777. See also Houtz v. Union Pacific R. Co., 33 Utah 175, 179, 93 P. 439, 441, 17 L.R.A.,N.S., 628; Hansen v. Oregon Short Line R. Co., 55 Utah 577, 581, 582, 188 P. 852, 854. This Court has itself recognized and acted on the fact that it is the law of Utah that 'when a common carrier accepts a person as a passenger, he is not permitted to deny that he owes to him the duty of diligence, prudence, and skill which, as carrying on a public employment, he owes to all his passengers, and that he cannot escape liability for a negligent performance of that duty, resulting in injury, by urging that the pass or commission was issued, or the gratuitous carriage permitted by him, in violation of law.' Southern Pac. Co. v. Schuyler, 227 U.S. 601, 609, 610, 33 S.Ct. 277, 279, 57 L.Ed. 662, 43 L.R.A.,N.S., 901.3 19 In the Schuyler case this Court sustained a Utah judgment under the Utah wrongful death statute, which judgment permitted recovery for death of a gratuitous passenger killed while riding free, although assuming he was not a member of a group to whom the carrier might lawfully issue passes under the Hepburn Act. The Schuyler case held that the Hepburn Act did not deprive Schuyler, who violated it, 'of the benefit and protection of the law of the state,' because 'such a violator' was 'a human being, of whose safety the plaintiff in error (railroad) had undertaken the charge.' Jack Francis and his wife were not violators of the Hepburn Act or any other act, federal or state. Each of them 'was a human being of whose safety the railroad had taken charge.' But by today's decision their children are denied the benefit of Utah's law. A federal rule of law is said to compel this Court to bar recovery under Utah's statute. 20 III. What is this federal rule of law? Where did a rule emanate which today constrains this Court, without appraisal of the rule's scope or mr its, to deny these children a right to recover damages from a railroad that negligently killed their parents? I say 'negligently killed' because that must be assumed since the Court affirms a judgment against the children in a case where the jury was denied a right to award damages for a killing caused by the 'ordinary negligence' of the railroad. 21 The Court points to no records and I can find not a single shred of evidence that Congress has ever directly or indirectly, explicitly or impliedly, through the Hepburn Act, or through any other act, authorized railroads to contract against liability for their negligence which results in the injury or death of a railroad employee or any other person legally riding on a railroad pass. The original rule followed in an expanded form by the Court today is actually a judicial product of the old days of Swift v. Tyson, 1842, 16 Pet. 1, 10 L.Ed. 865, days in which federal courts invoked 'a transcendental body of law outside of any particular State * * * using their independent judgment as to what it was.' Holmes, J., dissenting, Black & White Taxicab & Transfer Co. v. Brown & Yellow Taxicab & Transfer Co., 276 U.S. 518, 533, 48 S.Ct. 404, 409, 72 L.Ed. 681, 57 A.L.R. 426. 22 As already pointed out, order decision in Erie R. Co. v. Tompkins, supra, repudiated in toto the old Swift v. Tyson, 'transcendental' or 'general commercial law' power of federal courts. But as I see this case, the Court now perpetuates and strengthens the old rule based on the repudiated Swift v. Tyson doctrine, and the rule applied today rests on no other foundation than a completely uncritical adoption of this Court's 1904 'independent judgment.' That judgment held it to be had public policy, indeed, offensive to the Court's 'moral sense,' for a state to provide that an injured passenger who rode on a wholly gratuitous and guest basis could recover damages if a railroad had cautiously stipulated in advance that such a free passenger must assume the risks of railroad negligence. An investigation of the evolution of the 'rule' from its 1904 beginning and application to its much broader application today will demonstrate, I believe, that it is rooted now, as in 1904, in nothing but the original 'transcendental general law' source. 23 IV. The background of the 1904 rule throws light on its judicial 'general law' origin. In 1852 this Court was unable to find any difference between the kind of duty owed by a railroad to its paying and non-paying passengers; 'public policy and safety' were held to require that a railroad exercise 'the greatest possible care and diligence' for the safety of all passengers, and any less measure of care entitled an injured passenger to recover. Philadelphia & Reading R. Co. v. Derby, 14 How. 468, 485, 486, 14 L.Ed. 502.4 This principle was reaffirmed the next year in a water carriage case 'as resting not only on public policy, but on sound principles of law.' The Steamboat New World v. King, 16 How. 469, 474, 14 L.Ed. 1019; and see to the same effect New York Cent. R. Co. v. Lockwood, 17 Wall. 357, 382, 383, 21 L.Ed. 627. In 1873, this Court in an elaborate and well-reasoned opinion held that it was against the public interest and public policy to permit common carriers to stipulate against the results of the negligence of themselves or their agents, and that while the rule applied both to carriage of goods and passengers, it applied with 'special force to the latter.' New York Cent. R. Co. v. Lockwood, supra, 17 Wall. at page 384, 21 L.Ed. 627. The passenger in the Lockwood case was a drover traveling on a free pass to look after cattle; the Court reserved decision as to whether the rule would apply to a strictly free passenger. Four years later the Court applied the same reasoning to a railroad-designated 'free pass' passenger, finding that in fact there was consideration for the carriage and that it was not a 'matter of charity' or a 'mere gratuity.' Grand Trunk R. Co. of Canada v. Stevens, 95 U.S. 655, 658 660, 24 L.Ed. 535. The Lockwood and Stevens cases plainly stand for the principle that where there is any benefit derived by the railroad a pass is not 'free,' and that a passenger riding on such a pass may recover for injuries due to the railroad's negligence, regardless of stipulations in his pass. 24 In the Lockwood case this Court refused to follow decisions of the Supreme Court of New York, the State where the carriage contract was made and where the accident occurred, but instead, since there was no controlling New York statute, expressly decided the point as one of 'general commercial law.' 17 Wall. at page 368, 21 L.Ed. 627. And see Chicago, Milwaukee & St. P.R. Co. v. Solan, 169 U.S. 133, 136, 137, 18 S.Ct. 289, 290, 42 L.Ed. 688. Out of this 'general commercial law' background emerged the 'rule' relied on by the Court in the Adams case. 25 V. The beginning of the doctrine that a railroad could be stipulation exempt itself from liability for negligent injury to strictly free passengers was in Northern Pac. R. Co. v. Adams, supra, and Boering v. Chesapeake Beach R. Co., 193 U.S. 442, 24 S.Ct. 515, 48 L.Ed. 742, both decided in 1904. The decisions in these cases bear internal proof that they rested on the 'general commercial law' ground. The Adams opinion treated the newly announced doctrine as no more than a special exception to the rule of 'general commercial law' of the Lockwood case, which rule denied railroads power to exempt themselves from the effects of their negligence through the device of 'free' passes. 26 As bearing on the narrow scope of the Adams rule and its 'transcendental law' origin, it is of importance that the Adams and Boering cases were decided in 1904, two years before Congress outlawed political passes in the Hepburn Act. There existed at that time a widespread hostility to the use of 'strictly free' railroad passes. The pass in the Boering case as well as in the Adams case was 'strictly free.' Adams, the deceased, was a lawyer but not employed by the railroad that gave him the pass. Many believed, as shown by the legislative history of the Hepburn Act, that railroads were using passes to influence public men to favor failroads at the expense of the public good. Consequently, pass givers and pass users of 'strictly free' passes as distinguished from givers and users of employees' passes, were in bad repute. The Adams and Boering decisions plainly reflect this sentiment. Both decisions spotlighted the importance of having 'those who accept gratuities and acts of hospitality' stand by their contracts to assume the risks of injury incident to riding. In the Lockwood and Stevens cases, where no money was paid for passage, but neither carriage was strictly free, interests of the public in a carefully operated railroad system were expressly held to outweigh sanctity of contracts and all other considerations; in the Adams and Boering cases, sanctity of contracts, particularly contracts made to obtain strictly free transportation, was given greater weight than the public's interest in safe transportation.5 But all the cases alike turned out judge-made rules of 'general commercial law.' Now let us fl low the Adams rule to its appearance in other cases relied on by the Court today for the statement that this rule of 'general commercial law' has become part of the 'warp and woof' of the Hepburn Act. 27 Charleston & W.C.R. Co. v. Thompson, 234 U.S. 576, 34 S.Ct. 964, 58 L.Ed. 1476, is the next case relied on here. It was decided in 1914, eight years after passage of the Hepburn Act, which had, with certain exceptions, prohibited issuance of passes by railroads. 34 Stat. 584, 49 U.S.C. § 1(7), 49 U.S.C.A. § 1(7). The suit was brought by the wife of a railroad employee to recover for injuries sustained by her while an interstate railroad passenger riding on a pass. The Court of Appeals of Georgia considered it to be the general rule that strictly free pass passengers could not recover for injuries if their passes contained a stipulation requiring the passenger to assume the risk of railroad negligence. But that court went on to hold that the Hepburn Act, by specifically authorizing issuance of passes to railroad employees and their families, had put them in a different category from 'purely gratuitous' passengers. The court regarded passes issued to members of an employee's family as partial compensation for the employee's services, and for that reason distinguished persons riding on such passes from strictly free pass passengers, to whom the harsh Adams rule applied. 13 Ga.App. 528, 80 S.E. 1097. This Court reversed, saying that, 234 U.S. 576, 34 S.Ct. 965, 'The main question is whether, when the statute permits the issue of a 'free pass' to its employees and their families, it means what it says.' It did not find that the pass on which the injured wife of the employee had ridden was free in fact, but held that the 'pass was free under the statute,' thereby treating employees' passes as though they were strictly free, without stating any reason except that the Hepburn Act had referred to passes as 'free.' Cf. Norfolk Southern R. Co. v. Chatman, 244 U.S. 276, 280, 281, 37 S.Ct. 499, 500, 501, 61 L.Ed. 1131, L.R.A.1917F, 1128. The Court then went further and upheld the pass stipulations for railroad exemption from liability for negligence. But the Court did not at all rely on the Hepburn Act for this latter holding. Instead it was said that 'As the pass was free under the statute * * * the validity of its stipulations' was 'established by the decisions of this court,' relying completely upon the Adams and Boering cases. Thus the Charleston & W.C.R. Co. case did not discover the Adams rule in an act of Congress; the rule it relied on had been judicially created in 1904 by an exercise of the Court's 'transcendental' law power. 28 Kansas City So. R. Co. v. Van Zant, 260 U.S. 459, 43 S.Ct. 176, 67 L.Ed. 348, decided in 1923, is the next and the last case relied on by the Court today. That case decided that the 'incidents and consequences' of an employee's pass raise a federal question. Cf. Southern Pac. Co. v. Schuyler, 227 U.S. 601, 610, 33 S.Ct. 277, 279, 57 L.Ed. 662, 43 L.R.A.,N.S., 901; Chicago R.I. & Pac. R. Co. v. Maucher, 248 U.S. 359, 363, 39 S.Ct. 108, 63 L.Ed. 294. It then repeated the statement made in Charleston & W.C.R. Co. v. Thompson, supra, that an employee's pass transportation is 'free,' again without any explanation of why. To this extent it may be said that the Court was then construing the Hepburn Act, though I think its construction was wrong. But the Court did not, even in this last case (1923), hold or intimate that the Hepburn Act of itself put employee-pass passengers in a separate class, to be negligently killed or injured with impuniy . To degrade railroad employee passengers to this unfortunate level this Court in the Van Zant case again relied on the rule it had fasioned in the Adams and Boering decisions. So long as one agreed with the soundness of the Adams case rule and with this Court's exercise of a power to declare 'general commercial law' under the Swift v. Tyson doctrine, the result of the Van Zant case could not be questioned in 1923. But that was fifteen years prior to Erie R. Co. v. Tompkins, supra, in which we abandoned the 'transcendental' law doctrine, as typified by the Adams rule, and today's decision is ten years after we took that salutary step. 29 In applying this pre-Erie-Tompkins court-made transcendental law rule at this time, the Court not only in part neutralizes our Erie-Tompkins decision. It actually leaves a rule standing which might have already fallen under the repudiated Swift v. Tyson doctrine so far as it governed. For though a purely transcendental law rule judicially created by this Court under the pre-Erie-Tompkins doctrine was 'none the less the law of the state,' it need only have remained the 'law of the state' until 'changed by its legislature.' Chicago, Milwaukee & St. P.R. Co. v. Solan, 169 U.S. 133, 136, 137, 18 S.Ct. 289, 290, 42 L.Ed. 688. Hence, had the Swift-Tyson doctrine not been repudiated, the Adams rule as applied to persons injured in Utah should have fallen of its own weight had the Utah legislature passed a law authorizing a man's children to recover from a railroad that negligently killed their parents while they were 'free pass' passengers. Utah has a statute broad enough to authorize such recoveries. The only barrier to recovery under that state statute is grounded on a court-announced 'commercial law' rule, a poor excuse indeed for depriving a state of exercising its traditional power to control actions for local wrongful deaths. Of course this is an interstate carrier and we should not constrict congressional powers over it by narrow statutory interpretations. Cf. Federal Trade Comm. v. Bunte Bros., 312 U.S. 349, 61 S.Ct. 580, 85 L.Ed. 881. But the very absence of a federal statute to take the place of local wrongful death statutes should be the equivalent of a loud congressional warning to courts to refrain from encroaching on state powers here. 30 VI. It is said however that Congress, although aware of the Adams transcendental law rule, has never changed it. Indulging for the moment the convenient fiction that Congress knows all about that rule and what it means, why should it think that old rules laid down by this Court and based on the Swift v. Tyson doctrine could survive our decision in Erie R. Co. v. Tompkins? And why should Congress think that a rule which had never been applied by this Court to bar the children of a deceased employee would be extended to bar recovery by those children? I venture the suggestion that it would be shocking to members of Congress, even those who are in closest touch with interstate commerce legislation, to be told that their 'silence' is responsible for application today of a rule which is out of step with the trend of all congressional legislation for more than the past quarter of a century. There are some fields in which congressional committees have such close liaison with agencies in regard to some matters, that it is reasonable to assume an awareness of Congress with relevant judicial and administrative decisions. But I can find no ground for an assumption that Congress has known about the Adams rule and deliberately left it alone because it favored such an archaic doctrine.6 I reject the idea that Congress ever has approved such a rule, and none of its legislation for the past quarter of a century indicates that it ever would have approved it. 31 VII. The legislative history of the Hepburn Act's free pass provision shows that application of the Adams doctrine to employees' passes is not in accordance with but directly hostile to the congressional purpose in permitting employee passes. That Congress never would have passed an Act which so penalized employees, may be seen by reading even the few portions of the Congressional Record and committee reports cited below.7 In very brief summary that history shows: 32 Prior to 1906, there grew up a demand by the people that railroads cease discriminating against some shippers in favor of others and cease using free passes as a means to obtain special favors from public officials and administrative agencies. Public complaint was not against employees using passes. In fact, some unions had bargaining agreements for passes, and Congressmen who spoke on the Hepburn bill considered employees' passes to be a part of the inducement to work for railroads. Passes were spoken of by those who discussed legislation on the House and Senate floors as part of the compensation of employees. The subject was an important one and was so treated. At one time a conference report recommended to both houses that all passes be prohibited. 40 Cong.Rec. 7741. This report was defeated and the debates indicate that it would have been difficult to pass a bill which failed to permit issuance of passes to railroad employees—not in the spirit of giving alms to beggars or favors to politicians, but to requite men for faithful work. 33 If any senator or congressman discussing the Hepburn Act had ever heard of the Adams rule, he failed to mention it. But it must be conceded there was no reason for him to mention it, since the purposes of the Act bore no relation, directly or remotely, to liability of a railroad for injury to passengers whether riding on passes or paying their fares. Even if some member of Congress has been acquainted with the Adams rule and had thought that the Hepburn Act bore some remote relation to the liabilt y of railroads for injury to passengers, still he would have had no reason to believe this Court would subsequently expand that rule, then applicable only to 'strictly free pass' passengers, to penalize employees and other authorized by Congress to ride on passes. As I see it, today's decision undermines the purpose Congress had in mind in approving the long-standing practice of employees' passes. It perverts an advantage expressly saved to employees into a penalty for making use of it. It makes traps of these passes. 34 VIII. Moreover, the subjection of railroad employees while passengers to the hazards of uncompensated injuries is at war with the basic philosophy which has found expression in other industrial and social legislation for many years. Employers' liability acts, compensation acts, social insurance legislation of the federal government and various states, and a host of other legislative policies have been grounded upon the basic premise that care of the accidentally injured should be accepted as a matter of great public concern. Congress has also erased every vestige of the old judicially created fellow servant and assumption of risk doctrines in connection with suits by railroad employees on account of injuries suffered in the course of their employment. Tiller v. Atlantic Coast Line R. Co., 318 U.S. 54, 63 S.Ct. 444, 87 L.Ed. 610, 143 A.L.R. 967. The analogy between these now repudiated judicially created tort-law doctrines and the present rule was pressed on the Court in briefs for the railroad in the Adams case. Congress has also emphatically outlawed all kinds of stipulations and contracts to exempt railroads from liability for their negligence in Employers' Liability Act cases. Duncan v. Thompson, 315 U.S. 1, 62 S.Ct. 422, 86 L.Ed. 575. All of this body of legislation, and much more to which reference could be made, has departed from the premise of the Adams and Boering decisions that it is more important to society that men abide by ticket and contract stipulations8 than it is to have a system which provides compensation for the industrially injured and the dependents of those who are killed. For our society attempts to take care of its aged, unemployed, crippled and disabled, as well as the dependents of those killed by our industrial machine. See President and Directors of Georgetown College v. Hughes, 76 U.S.App.D.C. 123, 130 F.2d 810, 822—825; Interstate Commerce Comm'n v. Railway Labor Assn., 315 U.S. 373, 376—378, 62 S.Ct. 717, 719, 720, 86 L.Ed. 904. And the present railroad regulatory system is such that payment by railroads for injuries inflicted by them upon passengers is just as certainly borne by the public as though those injured and their dependents were directly supported by governmental institutions. 35 Whether allowance of damages for negligent death is the best way to meet the problems incident to transportation dangers is beside the point. Many courts generally, including this one and Utah's, may have been wrong in thinking that the possibility of having to pay damages for deaths of passengers due to railroad negligence would make railroads more cautious.9 Perhaps society could take care of injured passengers and their dependents in a less wasteful manner. But so long as Congress leaves the state free to adopt this method of meeting the problem, I think this Court should not handicap the states. Congress could provide a substitute for the state laws; we cannot. 36 IX. Today's decision leaves states free to provide that railroads must pay for injury or death of passengers who can and do pay a full money fare for passage. This group is far more likely to include some people who are better able financially to take care of themselves in case of injury than are the members of some of the other groups permitted by the Hepburn Act to ride on free passes, all of whom are penalized by today's decision. These groups are in addition to railroad employees and their families, employees of other railroads; ministers of religion; Young Mens Christian Association workers; inmates of eleemosynary institutions; indigent, destitute, and homeless persons; disabled soldiers; and others in analogous categories. In following a course today that takes all of the above groups out from under the protection of state laws, the Court ignores the signs erected by Congress, all of which point in the opposite direction. Assuming the Court is right in saying that a rule with such consequences has become a part of the warp and woof of the Hepburn Act, it is a defective part which this Court alone has woven into the Act and which clashes with the congressionally fashioned fabric and design. The result is a motley pattern. I would restore the original congressional design. 37 No sound argument has been or can be advanced for application of the 1904 Adams rule in today's entirely different judicial and legislative environment, even as the rule was first narrowly applied to a purely gratuitous carriage, except that it was unquestioningly accepted 34 and 25 years ago in cases where the rule's soundness was not challenged. When precedent and precedent alone is all the argument that can be made to support a court-fashioned rule, it is time for the rule's creator to destroy it. 38 The Van Zant case did hold that since the Hepburn Act the 'incidents and consequences' of an employee's pass raised a federal question. It then held that the user of an employee's pass must stand by his contract to assume the risks of negligent injury by the railroad. Neither it, nor any other case since the Hepburn Act, until the case today, has held that the penalizing consequences of the father's contract must be visited upon his children. I would not so extend the more than dubious Van Zant doctrine. 1 The Utah Supreme Court in its original opinion in the Van Wagoner case stated that the right granted the heirs is a 'right to proceed against the wrongdoer subject to the defenses available against the deceased, had he lived and prosecuted the suit.' On petition for rehearing that statement was eliminated and the following one substituted: 'Under the facts of this case the right to proceed against the wrongdoer is subject to the defense of contributory negligence.' 189 P.2d 701. That ruling is no deviation from the Utah law as construed by the lower federal courts. It supports the view of Utah law taken by the Circuit Court of Appeals and is in line with the weight of authority in the state courts. See Mellon v. Goodyear, 277 U.S. 335, 344, 345, 48 S.Ct. 541, 544, 72 L.Ed. 906. Hence we do not deem it appropriate to remand the case for consideration of the intervening decision in the Van Wagoner case. Cf. Huddleston v. Dwyer, 322 U.S. 232, 64 S.Ct. 1015, 88 L.Ed. 1246. 2 The Court said, 192 U.S. at pages 453, 454, 24 S.Ct. at page 411, 48 L.Ed. 513: 'The railway company was not, as to Adams a carrier for hire. It waived its right as a common carrier to exact compensation. It offered him the privilege of riding in its coaches without charge if he would assume the risks of negligence. He was not in the power of the company and obliged to accept its terms. They stood on an equal footing. If he had desired to hold it to its common law obligations to him as a passenger, he could have paid his fare and compelled the company to receive and carry him. He freely and voluntarily chose to accept the privilege offered; and, having accepted that privilege, cannot repudiate the conditions. It was not a benevolent association, but doing a railroad business for profit; and free passengers are not so many as to induce negligence on its part. So far as the element of contract controls, it was a contract which neither party was bound to enter into, and yet one which each was at liberty to make, and no public policy was violated thereby.' 3 See H.R.Rep. 2016, 76th Cong., 3d Sess., p. 59. 1 Mr. Justice Cardozo said this about the quest for unvarying and eternal certainty in the law: 'I was much troubled in spirit, in my first years upon the bench, to find how trackless was the ocean on which I had embarked. I sought for certainty. I was oppressed and disheartened when I found that the quest for it was futile * * *. As the years have gone by, and as I have reflected more and more upon the nature of the judicial process, I have become reconciled to the uncertainty, because I have grown to see it as inevitable. I have grown to see that the process in its highest reaches is not discovery, but creation; and that the doubts and misgivings, the hopes and fears, are part of the travail of mind, the pangs of death and the pangs of birth, in which principles that have served their day expire, and new principles are born.' The Nature of the Judicial Process, Benjamin N. Cardozo, 166—67 (1921). 'Somewhere between worship of the past and exaltation of the present, the path of safety will be found.' Id. at 160. 2 Van Amburg v. Vicksburg, S. & P.R. Co., 37 La.Ann. 650, 651, 655, 55 Am.Rep. 517, 518; Rowe v. Richards, 35 S.D. 201, 206, 207, 151 N.W. 1001, 1003, L.R.A.1915E, 1075, Ann.Cas.1918A, 294; Salsedo v. Palmer, 2 Cir., 278 F. 92, 94; Maney v. Chicago, B. & Q.R. Co., 49 Ill.App. 105, 112, 113. For a discussion of the state wrongful death statutes, see annotations; L.R.A.1915E, 1075, 1095, 1163, 23 A.L.R. 1262; 27 L.R.A., N.S., 176. 3 The recent Van Wagoner Utah Supreme Court decision cited by the Court is not out of harmony with the above cases but, as amended on reharing, is expressly limited to a holding that contributory negligence of a decedent may bar recovery under the Utah statute on the part of his heirs. That holding simply means that the death was not 'wrongful' under the statute. It does not mean that where there is company negligence Utah would hold that a railroad could barter away the beneficiary's rights. And as I read the opinion of the Circuit Court of Appeals in the case now before us, it did not hold that under Utah law 'an action is maintainable only where the decedent could have maintained an action to recover damages for his injury if death had not ensued.' For that statement in its opinion, the Circuit Court of Appeals relied only on the Adams case and several other opinions of this Court. It did not purport to be construing Utah law. On this point, therefore, there is no question presented as to whether the Circuit Court of Appeals made a 'plain error' in the construction of state law. The state law on that subject has been very clearly stated by the State Supreme Court to the effect that it 'is beyond the power of the Legislature to take from the dependents of an employee their claim against the employer, where such employee dies as a result of a wrongful injury by the employer.' Halling v. Industrial Comm. of Utah, 71 Utah 112, 120, 121, 263 P. 78, 80, 81. 4 The Court said: '* * * It is true, a distinction has been taken, in some cases, between simple negligence, and great or gross negligence; and it is said, that one who acts gratuitously is liable only for the latter. But this case does not call upon us to define the difference (if it be capable of definition,) as the verdict has found this to be a case of gross negligence. 'When carriers undertake to convey persons by the powerful but dangerous agency of steam, public policy and safety require that they be held to the greatest possible care and diligence. And whether the consideration for such transportation be pecuniary or otherwise, the personal safety of the passengers should not be left to the sport of chance or the negligence of careless agents. Any negligence, in such cases, may well deserve the epithet of 'gross." 5 A note appended to the Lockwood case as reported in 21 L.Ed. 627 cites cases in support of the position there taken that the Adams rule was contrary to the weight of judicial authority. And see Muldoon v. Seattle City R. Co., 22 L.R.A. 794; Walther v. Southern Pac. Co., 159 Cal. 769, 116 P. 51, 37 L.R.A.,N.S., 235; Atchison, T. & S.F. Ry. Co. v. Smith, 38 Okl. 157, 132 P. 494, 37 Ann.Cas. 623. 6 The Transportation Act of 1940, 54 Stat. 899, 900, 49 U.S.C. § 1(7), 49 U.S.C.A. § 1(7), expanded the groups eligible to ride on 'free passes.' But no language used in that Act and no legislative history that I have found indicats any congressional knowledge of the existence of the penalizing Adams rule, much less approval of it. Far from indicating a purpose to acquiesce in any kind of reduced employee protection, Congress in § 7(2)(f) of that Act, 49 U.S.C. § 5(2)(f), 49 U.S.C.A. § 5(2)(f), provided a new and extraordinary protection for employees whose jobs might be affected by railroad mergers and consolidations. See Sen.Rep.No.433, 76th Cong., 1st Sess., 4, 21; H.R.No.2832, 76th Cong., 3d Sess., 68—69; Interstate Commerce Comm. v. Railway Labor Executives Assn., 315 U.S. 373, 379, 380, 62 S.Ct. 717, 721, 86 L.Ed. 904. 7 40 Cong.Rec. 7741, 7851—7852, 7920—7940, 7978—7998. The following statement is typical of the sentiment that brought into the Hepburn Act the exception that permitted issuance of passes to and use of them by employees: 'While I am on my feet I will take the opportunity to say in regard to the pass amendment or provision that I have received, as other Senators have, a great many telegrams from railway employees and from organizations of railway employees protesting against any provision being incorporated here that will prevent them from being supplied with or from accepting free transportation. I shall not take time to discuss that, as it has been fully discussed. I simply wish to say that I fully agree with them, and I believe that we ought not to enact any such legislation, and should we do so it would, in my judgment, be perpetrating a very great injustice upon those people. The matter of free transportation, as the Senator from Wisconsin (Mr. Spooner) said yesterday, enters partly into the consideration for their employment, and we have no moral right to deprive them of that privilege.' 40 Cong.Rec. 7981. See also id. at 7984—7985. See Sen.Rep.No.1242, 59th Cong., 1st Sess., Views of Mr. Tillman and Mr. Newlands, pp. 10, 16; 1 Sharfman, the Interstate Commerce Commission 44 (1931); Sassaman v. Pennsylvania R. Co., 3 Cir., 144 F.2d 950, 956 nn. 7 and 8. 8 The Boering case was supported by the following statement: 'The result we have reached conforms the law applicable to the present issue to that moral sense which justly holds those who accept gratuities and acts of hospitality to perform the conditions on which they are granted.' 193 U.S. at page 451, 24 S.Ct. at page 516, 48 L.Ed. 742. 9 New York Cent. Railroad Co. v. Lockwood, 17 Wall. 357, 368, 21 L.Ed. 627. See Jacobus v. St. Paul & C.R. Co., 20 Minn. 125, 130, 18 Am.Rep. 360: 'Whether the case be one of a passenger for hire, a merely r atuitous passenger, or a passenger upon a conditional free pass, as in this instance, the interest of the state in the safety of the citizen is obviously the same. The more stringent the rule as to the duty and liability of the carrier, and the more rigidly it is enforced, the greater will be the care exercised, and the more approximately perfect the safety of the passenger.'
78
333 U.S. 472 68 S.Ct. 624 92 L.Ed. 815 WOODS, Housing Expediter,v.STONE. No. 392. Argued Feb. 4, 1948. Decided March 15, 1948. Mr. Stanley M. Silverberg, of Washington, D.C., for petitioner. James F. Brennan, of San Francisco, Cal., for respondent. Mr. Justice JACKSON delivered the opinion of the Court. 1 Respondent Stone owned a house in Mooresville, Indiana which he rented to one Locke for $75 per month begining on or about August 1, 1944. As this was the first rental of the premises, the applicable law1 and regulations2 imposed on the owner a duty to file a registration statement within thirty days. 2 The respondent failed to register the property. He sold it in April 1945 and registration by the new owner brought notice to the Area Rent Director of respondent's prior renting of the property without complying with the registration requirement. On June 28, 1945, the Director, pursuant to the regulations reduced the rental from $75 to $45 per month, effective from the first rental, and ordered the excess refunded within thirty days thereafter. Respondent failed to refund, the tenant did not sue and this action was instituted by the Price Administrator. The District Court and the Court of Appeals, among other things, held that the one-year statute of limitations ran from the dates of payment of the rentals. 6 Cir., 163 F.2d 393. This conflicted with the holding of the Court of Appeals for the Fourth Circuit which, under similar circumstances, held that the limitation period started upon default in refunding the excess within thirty days after the refund order. Creedon v. Babcock, 163 F.2d 480. We granted certiorari limited to this question. Creedon v. Stone, 332 U.S. 835, 68 S.Ct. 218. 3 No question is raised, and none could have been raised in this proceeding, as to the validity of the relevant regulations and the refund order, either on the ground of retroactivity or otherwise, because any challenge to the validity of either would have to go to the Emergency Court of Appeals. 50 U.S.C.App., Supp. V, § 924, 50 U.S.C.A.Appendix, § 924; Bowles v. Willingham, 321 U.S. 503, 64 S.Ct. 641, 88 L.Ed. 892. See also Woods v. The Cloyd W. Miller Company, 333 U.S. 138, 68 S.Ct. 421. Taking the legislation, the regulations and the order to be valid exercises of governmental power, as we are thus required to do, the only question before us is when do excessive collections by the landlord begin to enjoy the shelter of the statute of limitations? 4 Under the system of rent control as established, a landlord is required to register rented accommodations within thirty days after they are first devoted to that use. This brings notice to the control authority that the premises are within its official responsibility and provides data for quick, if tentative, determination as to whether the rental exacted exceeds the level permitted by the policy of Congress set out in the statute. 5 But when, as in this case, the landlord does not comply with this requirement, there is likelihood that, as happened here, his transaction will be overlooked for some time or perhaps escape scrutiny entirely. But the landlord is not allowed thus to profit from his own disobedience of the law. If he could keep the excess collections by thus retarding or preventing scrutiny of his contract, he would gain an advantage over all landlords who complied with the Act as well as over tenants whose necessity for shelter is too pressing to admit of bargaining over price. The plan therefore provides that, despite his failure to register, the landlord may continue to collect his unapproved price, but only on condition that it is subject to revision by the public authority and to a refund of anything then found to have been excessive.3 6 The plan of the statute and the regulations issued pursuant to it was applied in this case. The landlord failed to register the property. His rental operations escaped notice of the authorities until fortuitously disclosed. He collected as he had a right to do, but subject to readjustment, a rental fixed by himself that was found on inquiry to exceed by 66-2/3% what was fair rental value of the property. He was ordered to refund the excess. He now contends that he can keep all of it that he collected upwards of a year before the action was commenced, upon the ground that the one-year statute of limitations runs,4 not from the date of his default in obeying the refund order, but from the date of each collection of rental. 7 We cannot sustain his contention. The statute and regulations made his rentals tentative but not unlawful. Until the contingency of readjustment occurred, the tenant could have had no cause of action for recovery of any part of the rental exacted by the landlord. The cause of action now does not rest upon, and hence cannot date from, mere collection. The duty to refund was created and measured by the refund order and was not breached until that order was disobeyed. It would be unusual, to say the least, if a statutory scheme were to be construed to include a period during which an action could not be commenced as a part of the time within which it would become barred. United States v. Wurts, 303 U.S. 414, 58 S.Ct. 637, 82 L.Ed. 932. We think no such reu lt was expressed or intended. It was from the violation which occurred when the order was not obeyed within the required time that the statute of limitations commenced to run. Cf. Rawlings v. Ray, 312 U.S. 96, 61 S.Ct. 473, 85 L.Ed. 605; Fisher v. Whiton, 317 U.S. 217, 602, 63 S.Ct. 175, 87 L.Ed. 223; Cope v. Anderson, 331 U.S. 461, 67 S.Ct. 1340. 8 It is now suggested that no cause of action can be based on a refund order, irrespective of its validity. As we have pointed out, the validity of the regulation and order are conclusive upon us here. This cause of action is based upon violation of an 'order * * * prescribing a maximum (rent) * * *.' The command to refund cannot be treated as a thing apart, but must be taken in its setting as an integral and necessary part of the order fixing the maximum rent. It was this order that was disobeyed. It would be a strange situation if there were authority to order the landlord to make a refund but no legal obligation on his part to pay it. We think it clear that default in obedience to the requirement of refund gives rise to the cause of action sued upon herein. 9 It is also suggested that the refund order applies the law to the landlord retroactively. Quite apart from the fact that this is an objection to the order itself rather than to the question of limitation of time, we think the suggestion to be without merit. This is not the case of a new law reaching backwards to make payments illegal that were free of infirmity when made. By legislation and regulation in force before the collections were made, the landlord's own default in registering had rendered these payments conditional, subject to revision and to refund. Readjustment under these conditions cannot be said to be retroactive law making. 10 We hold that the one-year statute of limitations began to run on the date that a duty to refund was breached, and on this point only we reverse the judgment of the court below. 11 Reversed. 12 Mr. Justice FRANKFURTER, concurring. 13 I had supposed that no rule of judicial administration was better settled than that the Court should restrict itself to the questions presented in a petition for certiorari. This is especially true where, as here, the petition was granted but 'limited to the question as to the statute of limitations presented by the petition for the writ, and the case is transferred to the summary docket.' 332 U.S. 835, 68 S.Ct. 218. The exceptions to this rule are rare, as where the jurisdiction of this Court or of the lower courts is plainly wanting, or where a patent error in favorem vitae is to be noted. In any event, it is clear that this case could not be one of them. The exclusive jurisdiction provisions of the Emergency Price Control Act may well preclude our consideration of the validity of the 'retroactive order.' But since an issue other than that pertaining to the statute of limitations has been dealt with, I would like to add a few words to Mr. Justice Jackson's opinion, inasmuch as his immoderate restraint does not lay bare the 'merits' of the controversy. 14 The crux of the matter is that where a landlord rents new housing accommodations but, as here, disobeys the regulatory scheme and fails to file a registration statement, if he chooses to collect the rent that he himself has fixed, he can do so only contingently. The Administrator may catch up with him and fix what was the proper amount from the beginning. The excess is illegal and must therefore be refunded. 15 There is nothing novel about a regulatory scheme whereby landlords who violate the law are denied the right to profit thereby. It has consistently been upheld by the Emergency Court of Appeals. 150 East 47th Street Corp. v. Creedon, Em.App., 162 F.2d 206; see Senderowitz v. Clark, Em.App., 162 F.2d 912, 917, cf. Easley v. Fleming, Em.App., 159 F.2d 422. When Congress provided in § 2(g) of the Act that regulations 'may contain such provisions as the Administrator deems necessary to prevent the circumvention or evasion te reof,' 56 Stat. 23, 27, 50 U.S.C. Supp. V, § 902(g), 50 U.S.C.A.Appendix, § 902(g), it plainly authorized effective administrative remedies for dealing with evasion. 16 If such an order is to be termed 'retroactive,' it comes within the Court's recent ruling that 'such retroactivity must be balanced against the mischief of producing a result which is contrary to a statutory design or to legal and equitable principles. If that mischief is greater than the ill effect of the retroactive application of a new standard, it is not the type of retroactivity which is condemned by law.' Securities & Exchange Commission v. Chenery Corp., 332 U.S. 194, 203, 67 S.Ct. 1575, 1581. 17 Mr. Justice DOUGLAS, dissenting. 18 I think it is plain that a 'refund order' is not a maximum rent order since it does more than fix a rent ceiling. I would not stretch a point to call it such, in view of the aversion our law has to the creation of retroactive liabilities. The Court finds fairness in the result because of the special circumstances of the case. Yet it recognizes a cause of action created not by Congress but by those who administer the law. That cause of action is written into the statute through the addition or retroactive liabilities. 19 The rent collected by this landlord was the maximum rent which he could at the time lawfully collect. At no time did he collect rent in excess of the ceiling then prevailing.1 Almost a year later the ceiling was reduced—from $75 a month to $45 a month and the reduction was made retroactive by a 'refund order.' The landlord is now sued by the government for treble the amount of the so-called overcharge. 20 The statute gives a right of action against anyone who collects more than the prescribed maximum price or rent. § 205(e).2 No right of action to sue for overcharges prescribed by a 'refund order' is contained in § 205(e) which defines the cause of action and the statute of limitations with which we are presently concerned.3 The cause of action there described is based on a violation of a maximum rent order. The statute of limitations runs 'from the date of the occurrence of the violation.' It will not do to say that the date of the violation in this situation must relate to the 'refund order' because prior thereto there was no violation. Such an interpretation rewrites § 205(e) and creates a cause of action not only for violating a rent ceiling but also for violating a 'refund order.' That changes the scheme of the section. The right to obtain a return of money paid normally turns on conditions existing when it was paid. The statute of limitations usually starts to run then and not at some later time. Certainly it is novel law which makes the legality of rent payments turn on the unpredictable future action of an official who in the exercise of his discretion determines that a lower rental should have been paid. Yet the Court has to enter that field of retroactive law in order to make a 'refund order' a maximum rent order for the purposes of § 205(e). 21 Congress here said in effect that all payments for housing and commodities in excess of the prevailing ceiling were unlawful; and all payments at the ceiling were lawful. The Court in its construction of § 205(e) does violence to that policy. For it expands the statutory cause of action so as to penalize those who in yesterday's transactions exacted no more than the law and regulations permitted. Any such use of retroactive law to construe § 205(e) makes it most doubtful that Congress ever adopted the meaning now given the section. I would conclude that Congress had taken that course only if it had said so in unambiguous terms. But one who reads s 205(e) to find any reference to liabilities based on 'refund orders' reads in vain. And it is only violations of the orders described in that section which give rise to the cause of action under it. 22 It is said, however, that no question concerning the validity of the 'refund order' can be considered here because any challenge to its validity would have to go to the Emergency Court of Appeals. I do not dispute that view. See Bowles v. Willingham, 321 U.S. 503, 64 S.Ct. 641, 88 L.Ed. 892; Yakus v. United States, 321 U.S. 414, 64 S.Ct. 660, 88 L.Ed. 834. For Congress in § 203 and § 204 of the Act provided a special administrative procedure for testing the validity of any provision of a 'regulation, order, or price schedule,' a procedure the constitutionality of which we have sustained. See Lockerty v. Phillips, 319 U.S. 182, 63 S.Ct. 1019, 87 L.Ed. 1339; Yakus v. United States, supra. But we are not here concerned with the power of the Administrator to issue a 'refund order.' Our question is different and involves only a question of law turning on the meaning of § 205(e). What we have to decide is whether a 'refund order' is a 'regulation, order, or price schedule prescribing a maximum price' within the meaning of § 205(e). That is the first step in determining the time from which the statutory period of limitations is measured. 23 In short, the cause of action here at issue can be created only by the statute, not by regulations. The question is not one of validity of the regulations but of statutory interpretation; not an interpretation to determine whether the statute authorizes the regulations, but whether it authorizes the suit. 1 Emergency Price Control Act of 1942, 56 Stat. 23, as amended by Stabilization Extension Act of 1944, 58 Stat. 632, 50 U.S.C.App., Supp. V, § 901 et seq., 50 U.S.C.A.Appendix, § 901 et seq. 2 Section 7, Rent Regulations for Housing, 8 Fed.Reg. 14663, 10 Fed.Reg. 3436, providing in part as follows: Registration—(a) Registration statement.—On or before the date specified in Schedule A of this regulation, or within 30 days after the property is first rented, whichever date is the later, every landlord of housing accommodations rented or offered for rent shall file in triplicate a write n statement on the form provided therefor to be known as a registration statement. The statement shall identify each dwelling unit and specify the maximum rent provided by this regulation for such dwelling unit and shall contain such other information as the Administrator shall require. The original shall remain on file with the Administrator and he shall cause one copy to be delivered to the tenant and one copy, stamped to indicate that it is a correct copy of the original, to be returned to the landlord. * * * 3 Section 4, Rent Regulations for Housing, 8 Fed.Reg. 14663, 10 Fed.Reg. 3436, providing in part as follows: Maximum rents—(e) First rent after effective date.—For (1) newly constructed housing accommodations without priority rating first rented on or after the effective date of regulation, or (2) housing accommodations changed on or after such effectv e date so as to result in an increase or decrease of the number of dwelling units in such housing accomodations, or (3) housing accommodations not rented at any time during the two months ending on the maximum rent date nor between that date and the effective date, the first rent for such accommodations after the change or effective date, as the case may be, but in no event more than the maximum rent provided for such accommodations by any order of the Administrator issued prior to September 22, 1942. Within 30 days after so renting the landlord shall register the accommodations as provided in § 7. The Administrator may order a decrease in the maximum rent as provided in § 5(c). If the landlord fails to file a proper registration statement within the time specified (except where a registration statement was filed prior to October 1, 1943), the rent received for any rental period commencing on or after the date of the first renting or October 1, 1943, whichever is the later, shall be received subject to refund to the tenant of any amount in excess of the maximum rent which may later be fixed by an order under § 5(c)(1). Such amount shall be refunded to the tenant within 30 days after the date of issuance of the order. * * *. 4 Section 205(e) of the Acts, as amended, 50 U.S.C.App., Supp. V, § 925(e), 50 U.S.C.A.Appendix, § 925(e), provides: 'If any person selling a commodity violates a regulation, order, or price schedule prescribing a maximum price or maximum prices, the person who buys such commodity for use or consumption other than in the course of trade or business may, within one year from the date of the occurrence of the violation, except as hereinafter provided, bring an action against the seller on account of the overcharge. * * * For the purposes of this section the payment or receipt of rent for defense-area housing accommodations shall be deemed the buying or selling of a commodity, as the case may be * * *. If any person selling a commodity violates a regulation, order, or price schedule prescribing a maximum price or maximum prices, and the buyer either fails to institute an action under this subsection within thirty days from the date of the occurrence of the violation or is not entitled for any reason to bring the action, the Administrator may institute such action on behalf of the United States within such one-year period. * * *' The functions of the Administrator were subsequently transferred to the Housing Expediter who appears as petitioner here. 1 The maximum rent for the type of housing involved here was the first rent after the effective date of the regulations, viz., $75 a month. See Rent Regulation for Housing, § 4(e)(3), 8 F.R. 14663, 10 F.R. 3436. 2 Section 205(e) provides, so far as here material, as follows: 'If any person selling a commodity violates a regulation, order, or price schedule prescribing a maximum price * * * the person who buys such commodity * * * may, within one year from the date of the occurrence of the violation, * * * bring an action against the seller on account of the overcharge. * * * For the purposes of this section the payment or receipt of rent * * * shall be deemed the buying or selling of a commodity, as the case may be; and the word 'overcharge' shall mean the amount by which the consideration exceeds the applicable maximum price.' (Italics added.) 3 It may be that the Administrator could sue to compel compliance with the refund order under § 205(a). See Porter v. Warne Co., 328 U.S. 395, 66 S.Ct. 1087, 90 L.Ed. 1332. There may be other remedies arising from respondent's failure to file a registration statement. Thus § 4(e) of the Rent Regulations for Housing states: 'The foregoing provisions and any refund thereunder do not affect any civil or criminal liability provided by the Act for failure to file the registration statement required by section 7.' There is no need to canvass those possibilities here as § 205(e) supplies the only basis for petitioner's judgment in this case.
78
333 U.S. 426 68 S.Ct. 641 92 L.Ed. 784 ECCLES et al.v.PEOPLES BANK OF LAKEWOOD VILLAGE, CAL. No. 101. Argued Dec. 9, 1947. Decided March 15, 1948. Rehearing Denied April 19, 1948. See 333 U.S. 877, 68 S.Ct. 900. Mr. J. Leonard Townsend, of Washington, D.C., for petitioners. Mr. Samuel B. Stewart, Jr., of New York City, for respondent. Mr. Justice FRANKFURTER delivered the opinion of the Court. 1 This is a proceeding under the Declaratory Judgment Act, 48 Stat. 955, 28 U.S.C. § 400, 28 U.S.C.A. § 400. Its aim is to have declared invalid a condition under which the respondent became a member of the Federal Reserve System. The California State Banking Commission authorized the establishment of the respondent provided it obtained federal deposit insurance. This requirement could be met either by direct application to the Federal Deposit Insurance Corporation or through membership in the Federal Reserve System. § 12B(e) and (f) of the Federal Reserve Act, 49 Stat. 162, 170, 49 Stat. 684, 687, 12 U.S.C. § 264(e) and (f), 12 U.S.C.A. § 264(e, f). Respondent sought such membership but its application was rejected. The promoters of the Bank, having requested the Board of Governors of the federal Reserve System to reconsider the application for membership, were advised that favorable action depended on a showing that the Transamerica Corporation, a powerful bank holding company, did not have, nor was intended to have, any interest in this Bank. Having been satisfied on this point, the Board of Governors granted membership to respondent sube ct to conditions of which the fourth is the bone of contention in this litigation. This condition reads as follows: 2 '4. If, without prior written approval of the Board of Governors of the Federal Reserve System, Transamerica Corporation, or any unit of the Transamerica group, including Bank of America National Trust and Savings Association, or any holding company affiliate or any subsidiary thereof, acquires, directly or indirectly, through the mechanism of extension of loans for the purpose of acquiring bank stock, or in any other manner, any interest in such bank, other than such as may arise out of the usual correspondent bank relationships, such bank, within 60 days after written notice from the Board of Governors of the Federal Reserve System, shall withdraw from membership in the Federal Reserve System.' 3 The Board of Governors gave the respondent this explanation for the condition: 4 'The application for membership has been approved upon representations that the bank is a bona fide local independent institution and that no holding company group has any interest in the bank at the time of its admission to membership, and that the directors and stockholders of the bank have no plans, commitments or understandings looking toward a change in the status of the bank as a local independent institution. Condition of membership numbered 4 is designed to maintain that status.' 5 Some time later, in 1944, Transamerica, without prior knowledge of the respondent, acquired 540 of the 5,000 shares of its outstanding stock. The Bank duly advised the Board of Governors of this fact, but requested that it be relieved of Condition No. 4. This, the Board of Governors declined to do. Then followed this action, in the United States District Court for the District of Columbia, against the Board of Governors for a declaration that Condition No. 4 was invalid and for an injunction against its enforcement. A motion by the defendants to dismiss the complaint, in that it failed to set forth a justiciable controversy, was denied. 64 F.Supp. 811. The defendants answered, claiming that the Bank's acceptance of membership barred it from questioning the validity of Condition No. 4, and that in any case the condition was valid, and moved for judgment on the pleadings. The Bank, having filed a number of affidavits, moved for summary judgment. The District Court, in an unreported opinion, held that the Bank was bound by the condition on which it had accepted membership in the Federal Reserve System, and gave judgment for the defendants. The Court of Appeals for the District of Columbia, one judge dissenting, reversed. It rejected the defense of estoppel and sustained the validity of the condition 'only as a statement that, if the Board of Governors should determine, after hearing, that Transamerica's ownership of the bank's shares has resulted in a change for the worse in the character of the bank's personnel, in its banking policies, in the safety of its deposits or in any other substantial way, it may require the bank to withdraw from the Federal Reserve System.' 161 F.2d 636, 643, 644. Accordingly, it remanded the case to the District Court for entry of a judgment construing Condition No. 4 to such effect. Since this ruling involves a matter of importance to the administration of the Federal Reserve Act, we brought the case here. 332 U.S. 755, 68 S.Ct. 55. 6 Condition No. 4 provides for withdrawal from membership in the Federal Reserve System, for violation of its provisions, 'within 60 days after written notice from the Board of Governors * * *.' Section 9 of the Federal Reserve Act authorizes the Board of Governors to revoke the membership status of a bank 'after hearing.'1 If the case contained no more than the foregoing elements, three questions would emerge: 7 (1) Was this action premature, brought as it was before the Board of Governors commenced revocation proceedings? 8 (2) If not, could the respondent attack the validity of a condition on the basis of which it had been accepted, and had enjoyed, membership? Compare Fahey v. Mallonee, 332 U.S. 245, 255, 67 S.Ct. 1552, 1556. 9 (3) If so, did the Board of Governors have power to impose the condition as a means of guarding against acquisition by Transamerica of an interest in respondent? 10 However, with due regard for the considerations that should guide us in rendering a declaratory judgment, the record as a whole requires us to dispose of the case without reaching any of these questions. 11 Extended correspondence between Marriner S. Eccles, the then Chairman of the Board of Governors of the Federal Reserve System, and A. P. Giannini, Chairman of the Board of Directors of Transamerica, together with the testimony of Eccles before the House Committee on Banking and Currency, set forth the reason for the Board's insistence on the fourth condition. The Board sought to block 'acquisition by Transamerica of stock in independent unit banks, especially when it constitutes a means of evading the requirements of the Federal agencies who will not permit its banks to establish additional branches.' Hearings before Committee on Banking and Currency, House of Representatives, on H.R. 2634, 78th Cong. 1st Sess., p. 15. The Board was concerned not that Transamerica might purchase some shares of independent banks for the ordinary purposes of investment, but that it would buy into banks in order to acquire control, and thereby turn banks, though outwardly independent, into parts of its own banking network. The Board of Governors was therefore carrying out the policy underlying Condition No. 4 when it formally disavowed any intention to invoke that condition against respondent merely because of acquisition by Transamerica of an interest in the Bank, with no indication of subversion of its independence.2 This action by the Board was taken after it had satisfied itself that Transamerica's holding did not affect the Bank's control. The Bank had vigorously insisted on its continued independence, in urging upon the Board the harmlessness of Transamerica's ownership of some of the Bank's stock, and the Board, upon independent investigation found such to be the fact. Accordingly, the Board concluded that 'the public interest' called for no action. 12 A declaratory judgment, like other forms of equitable relief, should be granted only as a matter of judicial discretion, exercised in the public interet . Brillhart v. Excess Insurance Co. of America, 316 U.S. 491, 62 S.Ct. 1173, 86 L.Ed. 1620; Great Lakes Dredge & Dock Co. v. Huffman, 319 U.S. 293, 297, 298, 63 S.Ct. 1070, 1072, 1073, 87 L.Ed. 1407; H.R.Rep. No. 1264, 73rd Cong., 2d Sess., p. 2; Borchard, Declaratory Judgments (2d ed. 1941) pp. 312—14. It is always the duty of a court of equity to strike a proper balance between the needs of the plaintiff and the consequences of giving the desired relief. Especially where governmental action is involved, courts should not intervene unless the need for equitable relief is clear, not remote or speculative. 13 The actuality of the plaintiff's need for a declaration of his rights is therefore of decisive importance. And so we turn to the facts of the case at bar. The Bank has always insisted that it is independent of Transamerica; the Board of Governors has sustained the claim. The Bank stands on its right to remain in the Federal Reserve System; the Board acknowledges that right. The Bank disclaims any intention to give up its independence; the Board of Governors, having imposed the condition to safeguard this independence, disavows any action to terminate the Bank's membership, so long as the Bank maintains the independence on which it insists. What the Bank really fears, and for which it now seeks relief, is that under changed conditions, at some future time, it may be required to withdraw from membership, and if this happens, so the argument runs, the Comptroller of the Currency, one of the Directors of the Federal Deposit Insurance Corporation, has agreed with the Federal Reserve Board to refuse any application by the Bank for deposit insurance as a non-member. 14 Thus the Bank seeks a declaration of its rights if it should lose its independence, or if the Board of Governors should reverse its policy and seek to invoke the condition even though the Bank remains independent and if then the Directors of the Federal Deposit Insurance Corporation should not change their policy not to grant deposit insurance to the Bank as a non-member of the Federal Reserve System. The concurrence of these contingent events, necessary for injury to be realized, is too speculative to warrant anticipatory judicial determinations. Courts should avoid passing on questions of public law even short of constitutionality that are not immediately pressing. Many of the same reasons are present which impel them to abstain from adjudicating constitutional claims against a statute before it effectively and presently impinges on such claims. 15 It appears that the respondent could, if it wished, protect itself from the loss of its independence through adoption of by-laws forbidding any further sale or pledge of its shares to Transamerica or its affiliates. See California Corporations Code, L.1947, c. 1038, § 501(g).3 To this the Bank replies that even if its independence is maintained, the Board of Governors may change its policy, and seek enforcement of Condition No. 4 whether or not such enforcement is required by 'the public interest' in having independent banks, which the condition now serves. Such an argument reveals the hypothetical character of the injury on the existence of which a jurisdiction rooted in discretion is to be exercised. In the light of all this, the difficulties deduced from the present uncertainty regarding the future enforcement of the condition, possibly leading to uninsured deposits, are too tenuous to call for adjudication of important issues of public law.4 We are asked to contemplate as a serious danger that a body entrusted with some of the most delicate and grave responsibilities in our Government will change a deliberately formulated policy after urging it on this Court against the Bank's standing to ask for relief. 16 A determination of administrative authority may of course be made at the behest of one so immediately and truly injured by a regulation claimed to be invalid, that his need is sufficiently compelling to justify judicial intervention even before the completion of the administrative process. But, as we have seen, the Bank's grievance here is too remote and insubstantial, too speculative in nature, to justify an injunction against the Board of Governors, and therefore equally inappropriate for a declaration of rights. This is especially true in view of the type of proof offered by the Bank. Its claims of injury were supported entirely by affidavits. Judgment on issues of public moment based on such evidence, not subject to probing by judge and opposing counsel, is apt to be treacherous. Caution is appropriate against the subtle tendency to decide public issues free from the safeguards of critical scrutiny of the facts, through use of a declaratory summary judgment. Modern equity practice has tended away from a procedure based on affidavits and interrogatories, because of its proven insufficiencies. Equity Rule 46, 28 U.S.C.A. § 723 Appendix, forbade such practice save in exceptional cases. See Los Angeles Brush Mfg. Corporation v. James, 272 U.S. 701, 47 S.Ct. 286, 71 L.Ed. 481; cf. Federal Rule of Civil Procedure 43(a), 28 U.S.C.A. following section 723c. Again, not the least of the evils that led to the Norris-LaGuardia Act, 29 U.S.C.A. § 101 et seq., was the frequent practice of issuing labor injunctions upon the basis of affidavits rather than after oral proof presented in open court. See Amidon, J., in Great Northern R. Co. v. Brosseau, D.C., 286 F. 414, 416; Swan, J., in Aeolian Co. v. Fischer, 2 Cir., 29 F.2d 679, 681, 682. 17 Where administrative intention is expressed but has not yet come to fruition (Ashwander v. Tennessee Valley Authority, 297 U.S. 288, 324, 56 S.Ct. 466, 472, 80 L.Ed. 688), or where that intention is unknown (Great Atlantic & Pacific Tea Co. v. Grosjean, 301 U.S. 412, 429, 430, 57 S.Ct. 772, 779, 81 L.Ed. 1193, 112 A.L.R. 293), we have held that the controversy is not yet ripe for equitable intervention. Surely, when a body such as the Federal Reserve Board has not only not asserted a challenged power but has expressly disclaimed its intention to go beyond the legitimate 'public interest' confided to it, a court should stay its hand. 18 Judgment reversed. 19 The CHIEF JUSTICE, and Mr. Justice DOUGLAS took no part in the consideration or decision of this case. 20 Mr. Justice REED, with whom Mr. Justice BURTON joins, dissenting. 21 In order to get admission into the Federal Reserve System, the respondent was required to put into its charter a provision which was allegedly beyond the power of the Board of Governors of the System to require. It seems obvious that the requirement was a restriction on the market for the respondent's stock and therefore detrimental to the conduct of its business, a continuing threat of the Board to exclude respondent from the benefits of the System. 22 Respondent desired to be free of what it regarded as an illegal requirement. The Board of Governors has not agreed that it will never enforce the prohibition but holds it as a threat to force the respondent to resign from the System upon acquisition of control by those deemed undesirable by the Board. 23 Certainly, as I see it, there is not only the possibility of future injury bt a present injury by reason of the threat to the marketability of respondent's stock. It may have a substantial bearing upon the willingness of customers to establish banking relations with it, especially major relationships looking toward long and close associations of interest. It requires no elaboration to convince me that the threat is a real and substantial interference by allegedly illegal governmental action. As that threat has taken a definite form by the enforced agreement for withdrawal, we have not something that may happen but a concrete written notice requiring withdrawal by this respondent from the System on the happening of a fact which is contrary to the Board's idea of the public interest. Whether the Board's idea of a legitimate public interest is correct is the very point at issue. 24 In such circumstances there is a justiciable controversy, the claim of a right and a present threat to deprive a particular person of the right claimed. The damage from its actual or threatened enforcement is, of course, irremediable. Any bank would be seriously injured by even an effort to oust it from the System. This gives jurisdiction under the Declaratory Judgment Act. Judicial Code, § 274d, 28 U.S.C.A. § 400. 25 This Court has discretion to refuse to consider a petition for a declaratory judgment and an injunction to stop a threatened or existing injury. Alabama State Federation of Labor v. McAdory, 325 U.S. 450, 461, 65 S.Ct. 1384, 1389, 89 L.Ed. 1725. That discretion is not unfettered. Altvater v. Freeman, 319 U.S. 359, 363, 63 S.Ct. 1115, 1117, 87 L.Ed. 1450. There is no difference between declaratory suits involving an equitable remedy and other equity suits. Where an actual controversy with federal jurisdiction exists over the legal relations of adverse parties, discretion usually cannot properly be exercised by refusing an adjudication. Meredith v. City of Winter Haven, 320 U.S. 228, 64 S.Ct. 7, 88 L.Ed. 9; cf. Bell v. Hood, 327 U.S. 678, 66 S.Ct. 773, 90 L.Ed. 939. Unusual circumstances, not here present, such as other pending suits, Brillhart v. Excess Insurance Co. of America, 316 U.S. 491, 62 S.Ct. 1173, 86 L.Ed. 1620, or supersession of state authority, Great Lakes Dredge & Dock Co. v. Huffman, 319 U.S. 293, 63 S.Ct. 1070, 87 L.Ed. 1407, sometimes justify refusal of relief. 26 Under the facts of this case, however, it seems improper to refuse an adjudication at this time. If governmental power is being unlawfully used to constrain respondent's operation of its business, respondent is entitled to protection, now. See Columbia Broadcasting System v. United States, 316 U.S. 407, 62 S.Ct. 1194, 86 L.Ed. 1563, a case where prematurity was clearer than here. 27 I would decide this case on the merits. 1 'If at any time it shall appear to the Board of Governors of the Federal Reserve System that a member bank has failed to comply with the provisions of this section or the reu lations of the Board of Governors of the Federal Reserve System made pursuant thereto, or has ceased to exercise banking functions without a receiver or liquidating agent having been appointed therefor, it shall be within the power of the board after hearing to require such bank to surrender its stock in the Federal reserve bank and to forfeit all rights and privileges of membership. The Board of Governors of the Federal Reserve System may restore membership upon due proof of compliance with the conditions imposed by this section.' 38 Stat. 251, 260, as amended, 46 Stat. 250, 251, 49 Stat. 684, 704, 12 U.S.C. § 327, 12 U.S.C.A. § 327. See also § 5 of the Administrative Procedure Act, 60 Stat. 237, 239, 5 U.S.C. § 1004, 5 U.S.C.A. § 1004. 2 The following is an extract from the minutes of a meeting of the Board on January 28, 1946: 'Upon consideration of the latest report of examination of the Peoples Bank, Lakewood Village, California, from which the Board concluded that there had been no substantial change in the control, management or policy of the bank resulting from the acquisition by Transamerica Corporation of certain shares of the bank's stock, the Board, by unanimous vote, decided that there was no present need in the public interest for any action by the Board with respect to the condition of membership of the bank relating to acquisition of its stock by Transamerica Corporation.' 3 '501. The by-laws of a corporation may make provisions not in conflict with law or its articles for: '(g) Special qualifications of persons who may be shareholders, and reasonable restrictions upon the right to transfe or hypothecate shares.' 'Likewise, the shareholders, or such of them as chose to, could presumably bind themselves not to sell or pledge to Transamerica, and by noting this agreement on their certificates could bind their transferees. Cf. Vannucci v. Pedrini, 217 Cal. 138, 17 P.2d 706. 4 The bank asserted, in its affidavits, not that lack of confidence had deterred depositors, but that deposits had been so heavy that capital expansion was in order, but might be disadvantaged by fear of prospective investors to risk personal assessment if deposits were uninsured.
89
333 U.S. 483 68 S.Ct. 634 92 L.Ed. 823 UNITED STATESv.EVANS. No. 15. Argued Feb. 3, 1948. Decided March 15, 1948. Appeal from the District Court of the United States for the Southern District of California. Mr. David Reich, of Washington, D.C., for appellant. Mr. David Ginsburg, of Washington, D.C., for appellee. Mr. Justice RUTLEDGE delivered the opinion of the Court. 1 Section 8 of the Immigration Act of 1917 provides: 2 'That any person * * * who shall bring into or land in the United States (or shall attempt to do so) or shall conceal or harbor or attempt to conceal or harbor, or assist or abet another to conceal or harbor, in any place * * * any alien not duly admitted by an immigrant inspector or not lawfully entitled to enter or to reside within the United States, under the terms of this Act, shall be deemed guilty of a misdemeanor, and upon conviction thereof shall be punished by a fine not exceeding $2,000 and by imprisonment for a term not exceeding five years for each and every alien so landed or brought in or attempted to be landed or brought in.' (Emphasis added.) 39 Stat. 880, 8 U.S.C. § 144, 8 U.S.C.A. § 144. 3 Appellee and another were indicted for concealing and harboring five named aliens in alleged violation of § 8. Before trial appellee moved that the indictment be dismissed on the ground that it did not charge a punishable offense. He argued that although the statute provided for two different crimes, one landing or bringing in unauthorized aliens, and the other concealing or harboring such aliens, punishment was prescribed in terms only for the former crime. The District Court accepted this argument and granted the motion to dismiss. The Government appealed directly to this Court pursuant to the Criminal Appeals Act, 28 U.S.C. § 345, 28 U.S.C.A. § 345, and we noted probable jurisdiction. 67 S.Ct. 625. 4 The case presents an unusual and a difficult problem in statutory construction. It concerns not so much Congress' intention to make concealing or harboring criminal as it does the penalty to be applied to those offenses including attempts. The choice, as might appear on glancing at the statute, is not simply between no penalty, at the one extreme, and, at the other, fine plus imprisonment up to the specified maxima for each alien concealed or harbored. The problem is rather one of multiple choice, presenting at least three, and perhaps four, possible yet inconsistent answers on the statute's wording. Furthermore, as will appear, the legislative history is neither clear nor greatly helpful in ascertaining which of the possibilities calling for punishment was the one Congress contemplated. 5 Before discussing specifically the alternatives, we note that the Government rests primarily on the clarity with which § 8 indicates Congress' purpose to make concealing or harboring criminal, rather than upon any like indication of legislative intent concerning the penalty.1 Because the purpose to proscribe the conduct is clear, it is said, we should not allow that purpose to fail becauseo f ambiguity concerning the penalty. Rather we are asked to make it effective by applying that one of the possibilities which seems most nearly to accord with the criminal proscription and the terms of the penalizing provision. 6 On the other hand, appellee does not really dispute that Congress meant, by inserting the amendment prohibiting concealing or harboring,2 to make those acts criminal. But he denies that it is possible, either from the section's wording or from the legislative history, to ascertain with any fair degree of assurance which one of the possible penal consequences Congress may have had in mind. From this he falls back upon the conclusion indicated by the premise, namely, that the task of resolving the difficulty goes beyond dispelling ambiguity in the usual sense of judicially construing statutes3 and, if attempted, would require this Court to invade the legislative function and, in effect, fix the penalty. The argument is therefore not merely that a rule of strict construction should be applied in petitioner's favor. It is rather that the choice the Government asks us to make is so broad and so deep, resting among such equally tenable though inconsistent possibilities, that we have no business to make it at all. 7 Even in criminal matters a strong case would be required to bring about the result appellee seeks. For, where Congress has exhibited clearly the purpose to proscribe conduct within its power to make criminal and has not altogether omitted provision for penalty, every reasonable presumption attaches to the proscription to require the courts to make it effective in accord with the evident purpose. This is as true of penalty provisions as it is of others. United States v. Brown, 333 U.S. 18, 68 S.Ct. 376. 8 But strong as the presumption of validity may be, there are limits beyond which we cannot go in finding what Congress has not put into so many words or in making certain what it has left undefined or too vague for reasonable assurance of its meaning. In our system, so far at least as concerns the federal powers, defining crimes and fixing penalties are legislative, not judicial, functions.4 But given some legislative edict, the margin between the necessary and proper judicial function of construing statutes and that of filling gaps so large that doing so becomes essentially legislative, is necessarily one of degree. 9 We turn then to consider whether the Government is asking that we do too much when it puts forward a preferred reading of the penal provision, perhaps suggests another as a permissible alternative, and is prepared to accept a third, though disavowing its complete consistency with Congress' intent, if neither f the others is adopted. 10 The Government's preferred reading would impose the same penalty for concealing or harboring as for bringing in or landing, notwithstanding the 'for each and every alien' clause is limited expressly to aliens 'so landed or brought in or attempted to be landed or brought in.' Under this interpretation the effect of that clause would be to provide additional punishment, as stated in the brief, 'where the crime of landing or bringing in aliens or the crime of concealing or harboring aliens involves more than one alien brought into the country illegally.' (Emphasis added.) 11 This construction is admittedly ungrammatical and the failure to integrate the wording of the 'each and every alien' clause with the language of the 1917 amendment adding the concealing and harboring offenses is conceded to have been possibly due to oversight. 12 If only imperfect grammar stood in the way the construction might be accepted. But we agree with appellee that more is involved. The Government in effect concedes that in terms the section prescribes no penalty for concealing or harboring. But it argues that inclusion of them as offenses becomes meaningless unless the penalty provision, in spite of its wording, is construed to apply to them as well as to bringing in or landing. In other words, because Congress intended to authorize punishment, but failed to do so, probably as a result of oversight, we should plug the hole in the statute. 13 To do this would be to go very far indeed, upon the sheer wording of the section. For it would mean in effect that we would add to the concluding clause the words which the Government's reading inserts, 'and for each and every alien so concealed or harbored.' It is possible that Congress may have intended this. But for more than one reason we cannot be sure of that fact. 14 In the first place, the section as originally enacted was limited to acts of smuggling. And there is some evidence in the legislative history that the addition of concealing or harboring was meant to be limited to those acts only when closely connected with bringing in or landing, so as to make a chain of offenses consisting of successive stages in the smuggling process.5 15 But that evidence is not conclusive.6 And the section's wording is susceptible to much broader constructions. On the language it is possible not only to treat concealing or harboring as offenses distinct and disconnected from smuggling operations; it is also possible to regard them as separate and distinct from each other. And on the broadest possible interpretation, giving independent effect to the words 'or not lawfully entitled * * * to reside within the United States,'7 the section could be taken to apply to concealing or harboring of aliens lawfully admitted but unlawfully remaining within the country. 16 In that event an innkeeper furnishing lodging to an alien lawfully coming in but unlawfully overstaying his visa would be guilty of harboring, if he knew of the illegal remaining. And, with him, one harboring an alien known to have entered illegally at some earlier, even remote, time would incur the penalties provided for smuggling, if the Government's position giving implied extension of the penalty provision were accepted. 17 We do not mention these possibilities to intimate opinion concerning the reach of the statute with reference to covering them, for no such question is squarely before us. But we point them out because they are relevant to the problem of assurance or reasonable certainty in asserting that Congress by necessary implication intended to extend the penalties originally and still clearly provided for smuggling to all offenses covered by the language defining the crimes. 18 The very real doubt and ambiguity concerning the scope of the acts forbidden, if any, beyond those clearly and proximately connected with smuggling raise equal or greater doubt that Congress meant to encompass all those acts within the penal provisions for smuggling. If acts disconnected from that process are forbidden, the separate offenses of concealing and more particularly of harboring, if the two are distinct, might require, in any sound legislative judgment, very different penalties from those designed to prevent or discourage smuggling in its various phases. That is essentially the sort of judgment legislatures rather than courts should make. 19 The position the Government asks us to take involves therefore a major task in two respects, not merely one. The first is to expand the penal language beyond the explicit limitation 'for each and every alien so landed or brought in,' so as to apply the penalties designed for smuggling to all offenses covered by the section. The second is to do this blindly in reference to the scope and quality of the forbidden acts to which the extension is to be made, that is, without resolving beforehand the questions we have noted as arising on the face of the section in relation to its reach in defining the offenses of concealing or harboring. The Government does not ask us to undertake now to say how far the section may or may not go in these numerous aspects of defining coverage.8 We are not willing to undertake extension of the penalty provision blindfold, without knowing in advance to what acts the penalties may be applied. Nor are we any more willing to decide wholesale among the various possibilities of coverage. That problem, squarely presented in concrete instances, might be resolved step by step, were there no difficulty over the penalty. But to resolve it broadside now for all cases the section may cover, on this indirect presentation, would be to proceed in an essentially legislative manner for the definition and specification of the criminal acts, in order to make a judicial determination of the scope and character of the penalty. 20 Beyond the difficulties arising on the section's wording, the legislative history is sufficient in one respect, when added to th other obstacles, to make them insuperable for accepting the Government's preferred reading. It discloses that both before9 and after10 and 1917 amendment the immigration authorities and particularly the Commissioner General repeatedly sought from Congress the specific penal wording the Government now asks us to insert. These efforts were made as conflicting judicial decisions demonstrated that the courts were very much at sea11 and their floundering was brought to congressional attention.12 In each instance nevertheless the effort was unsuccessful. 21 It may well be, as the Government infers, that this only increases the mystery of Congress' failure to include explicit penalties when it added the new offenses. It is possible that Conge §§ may have thought none were needed. But that view hardly explains satisfactorily the subsequent repeated failures to clarify the matter, after experience had shown that need. We cannot take them as importing clear direction to the courts to do what Congress itself either refused or failed on notice to do upon so many occasions and importunities. 22 We are not entirely sure that the Government intends to put forward as an alternative suggestion the reading, already discussed, which would extend the smuggling penalties to the section's broadest possible construction in relation to definition and coverage of criminal acts, i.e., to concealing or harboring of aliens lawfully admitted but unlawfully remaining. But appellee regards this as a tendered possibility and specified statements in the Government's brief appear to sustain his view.13 Whether appellee is correct in taking the statements as suggesting an independent alternative or, on the other hand, they were made, though not accurately phrased for the purpose, in support of the Government's preferred position, is not greatly material. For, in any event, what has been said about extending the penalty to include the narrower range of forbidden acts applies to the broader one with even greater force as calling for the extension's rejection. 23 There is, finally, the third possible interpretation which the Government concedes not wholly consistent with the statutory purpose, but says nevertheless is clearly authorized 'if a strictly grammatical construction of Section 8 is employed.' This would read the 'for each and every alien' clause out of the section insofar as offenses of concealing or harboring are concerned, while leaving it effective for bringing in or landing. In other words, the reading would differentiate the two classes of offenses for applying the penalty provision. The prescribed maximum penalties would be made effective for concealing or harboring, but without augmenting them according to the number of aliens concealed or harbored, even though previously landed or brought in, at the same time. That increase however would continue in force for bringing in or landing.14 24 The wording of § 8 can be made to support this interpretation only by treating the 'for each and every alien' clause as ambivalently separable in relation to the two classes of offenses. Nothing on the face of the section suggests such a reading. The comma preceding the final clause is not equal to the burden of supporting the construction. The clause was part of the section before the concealing and harboring offenses were added. Previously there could have been no possible intent or purpose to apply the clause to some of the offenses but not to others. The clause's function was solely to augment the penalty when more than one alien was involved. That function was o t changed when the new offenses were added.15 Neither the amendment's wording nor its history evinces any purpose to increase punishment, proportionately to the number of aliens involved, for one class of offenders but not for the other. The construction, like the preferred one, is a construction of necessity, to be justified if at all only by the fact that without it the statute becomes unenforceable for the offenses of concealing or harboring. 25 If there were less inconsistency among the tentative possibilities put forward or greater consistency with the section's wording implicit in one, resolution of the difficulty by judicial action would involve a less wide departure from the common function of judicial interpretation of statutes than is actually required by this case. But here the task is too large. With both of the parties we agree that Congress meant to make criminal and to punish acts of concealing or harboring. But we do not know, we can only guess with too large a degree of uncertainty, which one of the several possible constructions Congress thought to apply. The uncertainty extends not only to the inconsistent penalties said to satisfy the section, either grammatically or substantively if not grammatically. It also includes within varying ranges at least possible, and we think substantial, doubt over the section's reach to bring in very different acts which conceivably might be held to be concealing or harboring. The latter ambiguity affects the former and their sum makes a task for us which at best could be only guesswork. 26 This is a task outside the bounds of judicial interpretation. It is better for Congress, and more in accord with its function, to revise the statute than for us to guess at the revision it would make. That task it can do with precision. We could do no more than make speculation law. 27 The judgment is affirmed. 28 Affirmed. 1 Since the issues arise on dismissal of the indictment which charges both concealing and harboring, as well as attempt to conceal and harbor, we are not asked to determine whether 'conceal or harbor' as used in § 8 specifies only one offense or two distinct ones or, if the latter, the difference between the two. Cf. notes 7 and 8 infra and text. 2 Section 8 as enacted originally in 1907, 34 Stat. 900, covered only bringing in or landing and attempts to bring in or land. The prohibition of concealing or harboring and of attempting to conceal or harbor was added by amendment in 1917. 39 Stat. 880. 3 Indeed appellee asserts that the words of § 8 are unambiguously to the effect that fine and imprisonment are to be imposed 'for each and every alien so landed or brought in * * *,' not 'for each and every alien so concealed or harbored.' This view regards the concluding 'for each and every alien' clause as an integral and inseparable part of the penalty provision for all offenses punishable under the section. 4 United States v. Hudson and Goodwin, 7 Cranch 32, 3 L.Ed. 259; United States v. Britton, 108 U.S. 199, 2 S.Ct. 531, 27 L.Ed. 698; United States v. Eaton, 144 U.S. 677, 12 S.Ct. 764, 36 L.Ed. 591; Viereck v. United States, 318 U.S. 236, 241, 243, 244, 63 S.Ct. 561, 563, 564, 565, 87 L.Ed. 734. 5 The Senate Report accompanying the 1917 amendment stated that 'such new provisions as are included are merely to complete the definition of the crime of smuggling aliens into the United States and related offenses * * *.' Sen. Rep. No. 352, 64th Cong., 1st Sess. 9. 6 There is no indication of the degree or character of the relation suggested by the words 'and related offenses,' see the preceding note, with reference to the proximity of the acts proscribed, in time and place, to smuggling operations. 7 This possibility apparently is not comprehended by the indictment in this case, which substitutes 'and' for the 'or' given by the statutory wording in describing the aliens charged to have been concealed and harbored, viz., 'which said alien persons then and there were aliens not duly admitted to the United States by an immigrant inspector and not lawfully entitled to enter or reside in the United States * * *.' (Emphasis added.) Even if this use of the conjunctive in place of the statutory disjunctive, see text of § 8 quoted at the beginning of this opinion, would prevent applying this indictment to a case involving no illegal entry, but only il egal remaining, that fact would not prevent the drafting of other indictments to cover such cases or perhaps amending this one to give it the disjunctive effect. These possibilities are as pertinent to whether the suggested penal extension should be made as if actually presented on the indictment in its present form. 8 The indictment not only conjoins illegal remaining with illegal entry, cf. note 7, but charges that petitioner concealed and harbored aliens 'not duly admitted * * * and not lawfully entitled to enter or reside * * *.' Thus, the specific charge in this case cannot be said to be limited to smuggling, for no wording of the statute relating to bringing in or landing is included. Such a limitation could be read into the indictment only by now declaring the statute to be limited as a whole to acts constituting part of the smuggling process. 9 The bills proposed by the Commissioner General would have clearly prescribed the same penalty for concealing or harboring as for landing or bringing in. The penalty provision of one draft stated that the penalty should apply 'for each and every alien so landed or brought in or attempted to be landed or brought in, or so concealed or harbored, or with respect to whom there has been such an attempt to conceal or harbor, or assisting or abetting another to conceal or harbor.' See Annual Report for 1909 of the Commissioner General of Immigration, 168. The simple clause 'for each and every alien to whom this section is applicable' was substituted in the bill proposed in the annual report for 1910. (P. 170.) In 1911 a bill incorporating many of the Commissioner General's suggested amendments to the Act was introduced, but the penalty provisions of § 8 were not made applicable to concealing or harboring. S. 3175, 62d Cong., 2d Sess. This omission was not corrected in the subsequent drafts that eventually resulted in the 1917 statute. See H.R. 6060, 63d Cong., 2d sess.; H.R. 10384, 64th Cong., 1st Sess. 10 In his 1931 and 1932 annual reports the Commissioner General specifically pointed out that an amendment to § 8 was necessary because it had been interpreted to provide no penalty for the offense of concealing and harboring. A bill introduced in the House of Representatives in 1934, but not enacted, included an amendment to § 8 to make the penalty apply 'for each and every alien in respect to whom any of the foregoing offenses have occurred.' H.R. 9366, 73d Cong., 2d Sess. At the hearings on this bill, the Deputy Commissioner expressly pointed out that the amendment was designed 'to make sure that there will be no question that we can inflict this penalty for concealing a smuggled alien.' Hearings before the House Committee on Immigration and Naturalization on H.R. 9366, 73d Cong., 2d Sess. 22. In 1940 the general problem was again before Congress when it was made unlawful to stow away in order to facilitate entry into the United States or to aid or abet a stowaway, 54 Stat. 306, 18 U.S.C.A. § 469 et seq., and again when the Act was amended to authorize the deportation of any alien who, knowingly and for gain, encouraged, induced or assisted another alien to effect an unlawful entry. 54 Stat. 671, 8 U.S.C.A. § 155. 11 The Circuit Court of Appeals for the First Circuit construes the section to prescribe a penalty for concealing or harboring, but not to authorize increased penalties where more than one alien is concerned, as is the case for the offense of landing or bringing in. Medeiros v. Keville, 63 F.2d 187, see note 14 infra. In the Southern District of California it has been held both that no penalty is prescribed for concealing or harboring, United States v. Niroku Komai, D.C., 286 F. 450; United States v. Kinzo Ichiki, D.C., 43 F.2d 1007, and that the same penalty is prescribed for concealing or harboring as for landing or bringing in, United States v. Roberts, unreported decisions by Yankwich, J., on April 29, 1946; United States v. Piamonte, unreported decision by Weinberger, J., on May 21, 1946. 12 See hearings before the House Committee on Immigration and Naturalization on H.R. 9366, 73d Cong., 2d Sess. 22. 13 Illustrative is the statement, 'We submit, therefore, that a proper reading of Section 8 in the light of the legislative history can leave no doubt of Congress' intention that the penal provisions should apply to the offense of concealing or harboring an alien not duly admitted or not lawfully entitled to enter or reside within the United States.' (Emphasis added.) 14 This was the view taken in Mediros v. Keville, 63 F.2d 187, by the Circuit Court of Appeals for the First Circuit, which appears to be the only appellate decision on the matter. The Government successfully opposed the granting of certiorari in that case, although consistently with its present preferred position it now asserts that, contrary to the ruling, the congressional intent to punish concealing and harboring proportionately to the number of aliens involved is 'equally as clear as the intent to make those offenses punishable at all.' In response to petitioner's suggestion of inconsistency between that position and the one now taken, the Government points out that its brief in opposition also urged that the Medeiros decision was, in any event, correct on other grounds. 15 Indeed it was in effect reinforced by the 1917 amendment. For that amendment not only added the new offenses but substantially increased the maxima of the authorized fine and imprisonment. Congress thus gave specific attention to the penal provision in addition to expanding the criminal acts, and in this respect followed the Commissioner General's recommendation. Yet it declined at the same time to alter the 'for each and every alien' clause, which he also asked to have changed.
01
333 U.S. 541 68 S.Ct. 682 92 L.Ed. 863 CONNECTICUT MUT. LIFE INS. CO. et al.v.MOORE, Comptroller of State of New York. No. 337. Argued Dec. 19, 1947. Decided March 29, 1948. Rehearing Denied May 3, 1948. Appeal from the Court of Appeals of the State of New York. Messrs. Ganson J. Baldwin, of New York City, and B. M. Anderson, of Hartford, Conn., for appellants. Mr. Abe Wagman, of New York City, for appellee. Mr. Justice REED delivered the opinion of the Court. 1 We are asked in this suit to consider the validity of h e New York Abandoned Property Law as applied to policies of insurance issued for delivery in New York on the lives of residents of New York by companies incorporated in states other than New York. 2 Article VII of the Abandoned Property Law, Consol.Laws, c. 1, headed 'Unclaimed Life Insurance Funds,' was enacted in 1943. In 1944 the law was amended so as to cover insurance companies incorporated out of state.1 Section 700 states that 'any moneys held or owing' by life insurance companies in the following three classes of policies issued on the lives of residents of New York shall be deemed abandoned property: (1) matured endowment policies which have been unclaimed for seven years; (2) policies payable on death where the insured, if living, would have attained the limiting age under the mortality table on which the reserves are based (an age varying from 96 to 100), as to which no transaction has occurred for seven years; and (3) policies payable on death in which the insured has died and no claim by the person entitled thereto has been made for seven years.2 Other sections of Art. VII provide that insurance corporations doing business in New York shall make an annual report of abandoned property falling within the definitions of § 700, the lists shall be advertised, and if the abandoned property advertised remains unclaimed, the amounts due and owing shall be paid to the state comptroller so as to be in the care and custody of the state. Art. VII, § 703, Art. XIV, § 1402; State Finance Law, Consol.Laws, c. 56, § 95. Upon payment to the state, the companies are discharged of any obligation, and any person subsequently setting up a claim must file a claim with the comptroller. A penalty of $100 a day is provided for failure to file the required report. Art. XIV, § 1412. 3 The present suit was brought by nine insurance companies, incorporated in states other than New York, in the Supreme Court of New York for a declaration of the invalidity of the Abandoned Property Law of New York, as applied to the plaintiffs, and to enjoin the state comptroller and all other persons acting under state authority from taking any steps under the statute. The Supreme Court ruled that the Abandoned Property Law was void in so far as it applied to policies of life insurance issued for delivery outside of New York by foreign life insurance companies. As no appeal from this ruling was taken by the state, it is not before us. The Supreme Court reserved to the appellant insurance companies the right to assert the invalidity of the Abandoned Property Law or any application thereof in so far as such law or state action thereunder sought to deprive them of any defense against any claim under any life insurance policy. With the above exceptions, the Supreme Court upheld the life insurance sections of the Abandoned Property Law against appellants' attack. The Appellate Division affirmed and the Court of Appeals reversed the judgment of the Supreme Court in so far as it reserved to the companies further right to assert defense against claims under the policies. The Court of Appeals by its interpretation of the New York statute left open to the insurance companies all defenses except the statute of limitations, noncompliance with policy provisions calling for proof of death or of other designated contingency and failure to surrender a policy on making a claim. 297 N.Y. 1, 74 N.E.2d 24. With this modification, it affirmed the trial court's judgment.3 Appeal to this Court was perfected under § 237(a) of the Judicial Code, 28 U.S.C.A. § 344, and probable jurisdiction noted. 332 U.S. 788, 68 S.Ct. 103. 4 In addition to objections under New York law, appellants raised in their complaint and have consistently maintained that the statute impairs the obligation of contract within the meaning of Art. I, § 10, of the Constitution and deprives them of their property without due process of law under the Fourteenth Amendment. Their argument under the Contract Clause is that the statute transforms into a liquidated obligation an obligation which was previously only conditional. Their argument under the Due Process Clause is that New York has no power to sequester funds of these life insurance companies to meet the companies' obligations on insurance policies issued on New York residents for delivery in New York. 5 I. In support of their first contention appellants note that the policy terms provide that the insurer shall be under no obligation until proof of death or other contingency is submitted and the policy surrendered. They contend that in dispensing with these conditions the statute transforms an obligation which is merely conditional into one that is liquidated. They further claim that unless proof of death or other contingency is submitted, they will have difficulty in establishing other complete or partial defenses, such as the fact that the insured understated his age in his application for insurance, that the insured died as a result of suicide, military service, or aviation, and that the insured was not living and in good health when the policy was delivered. We assume that appellants may find it more difficult to establish other defenses, but we do not regard the statute as unconstitutional because of these enforced variations from the policy provisions. 6 Unless the state is alloe d to take possession of sums in the hands of the companies classified by § 700 as abandoned, the insurance companies would retain moneys contracted to be paid on condition and which normally they would have been required to pay. We think that the classification of abandoned property established by the statute describes property that may fairly be said to be abandoned property and subject to the care and custody of the state and ultimately to escheat. The fact that claimants against the companies would under the policies be required to comply with certain policy conditions does not affect our conclusion. The state may more properly be custodian and beneficiary of abandoned property than any person. 7 We think that the state has the same power to seize abandoned life insurance moneys as abandoned bank deposits, Anderson National Bank v. Luckett, 321 U.S. 233, 64 S.Ct. 599, 88 L.Ed. 692, 151 A.L.R. 824; Security Sav. Bank v. People of State of California, 263 U.S. 282, 44 S.Ct. 108, 68 L.Ed. 301, 31 A.L.R. 391, and abandoned deposits in a court registry, United States v. Klein, 303 U.S. 276, 58 S.Ct. 536, 82 L.Ed. 840. There are, of course, differences between the steps a depositor must take to withdraw a bank deposit and those that a beneficiary of a policy must take to collect his insurance. Each, however, must make appropriate representations according to the requirements of his contract with bank or insurance company. When the state undertakes the protection of abandoned claims, it would be beyond a reasonable requirement to compel the state to comply with conditions that may be quite proper as between the contracting parties. The state is acting as a conservator, not as a party to a contract. Abandoned Property Law, Art. XIV, § 1404; State Finance Law, § 95; Anderson National Bank v. Luckett, supra, at page 241 of 321 U.S., at page 603 of 64 S.Ct., 88 L.Ed. 692, 151 A.L.R. 824. 8 We see no constitutional reason why a state may not proceed administratively, as here, to take over the care of abandoned property rather than adopt a plan through judicial process as in Security Sav. Bank v. People of State of California, supra. There is ample provision for notice to beneficiaries and for administrative and judicial hearing of their claims and payment of same.4 There is no possible injury to any beneficiary. The right of appropriation by the state of abandoned property has existed for centuries in the common law. See Anderson National Bank v. Luckett, supra, at pages 240 and 251 of 321 U.S., at page 603 of 64 S.Ct., 88 L.Ed. 692, 151 A.L.R. 824. We find no reason for invalidating the statutory plan under the Contract Clause. 9 II. Nor do we agree with appellants' argument that New York lacks constitutional power to take over unclaimed moneys due to its residents on policies, issued for delivery in the state, by life insurance corporations chartered outside the state. The appellants claim that only the state of incorporation could take these abandoned moneys. They say that only one state may take custody of a debt.5 The statutory e ference to 'any moneys held or owing' does not refer to any specific assets of an insurance company, but simply to the obligation of the life insurance company to pay. The problem of what another state than New York may do is not before us. That question is not passed upon. To prevail appellee need only show, as he does as to policies on residents issued for delivery in New York, that there may be abandoned moneys, over which New York has power, in the hands of appellants. The question is whether the State of New York has sufficient contacts with the transactions here in question to justify the exertion of the power to seize abandoned moneys due to its residents. Appellants urge that the following considerations should be determinative in choosing the state of incorporation as the state for conservation of abandoned indebtedness, if such moneys are to be taken from the possession of the corporations. It is pointed out that the present residence of missing policyholders is unknown; that with our shifting population residence is a changeable factor; that as the insured chose a foreign corporation as his insurer, his choice should be respected; that moneys should escheat to the sovereignty that guards them at the time of abandonment. As a practical matter, it is urged that restricting escheat or conservancy to the state of incorporation avoids conflicts of jurisdiction between states as to the location of abandoned property and simplifies the corporations' reports by limiting them to one state with one law. Attention is called to presently enacted statutes in Pennsylvania,6 New Jersey,7 and Massachusetts.8 None of these statutes apply to corporations chartered outside of the respective states. Furthermore, it is argued that the analogous bank deposit cases have upheld escheat or conservancy by the state of the bank's incorporation.9 Finally reliance is placed on the undisputed fact that the policies are payable at the out-of-state main offices of the corporations, the evidences of their intangible assets are there located and there claims must be made and other transactions carried on. 10 These are reasons which have no doubt been weighed in legislative consideration. We are here dealing with a matter of constitutional power. Power to demand the care and custody of the moneys due these beneficiaries is claimed by New York, under Art. VII of the Abandoned Property Law as construed by its courts, only where the policies were issued for delivery in New York upon the lives of persons then resident in New York. We sustain the constitutional validity of the provisions as thus interpreted with these exceptions. We do not pass upon the validity in instances where insured persons, after delivery, cease to be residents of New York or where the beneficiary is not a resident of New York at maturity of the policy. As interests of other possible parties not represented here may be affected by our conclusions and as no specific instances of those types appear in the record, we reserve any conclusion as to New York's power in such situations. The appellants sought a declaration pursuant to New York procedure of the invalidity of Art. VII of the New York Abandoned Property Law, directed at unclaimed life insurance funds. The Court of Appeals refused to accept appellants' arguments for invalidation of the law on federal constitutional or any other grounds. This decision compelled the appellants to comply with Art. VII, except as theird efenses were saved by the opinion of the Court of Appeals, unless this Court reviewed the federal constitutional issues and decided them in appellants' favor. Consequently a case or controversy arising from a statute interpreted by the state court is here with precise federal constitutional questions as to policies issued for delivery in New York upon the lives of persons then resident therein where the insured continues to be a resident and the beneficiary is a resident at the maturity of the policy. A judgment on that class of policies should be reviewed by this Court. Nashville, C. & St. L.R. Co. v. Wallace, 288 U.S. 249, 259, 53 S.Ct. 345, 346, 77 L.Ed. 730, 87 A.L.R. 1191; Nashville, C. & St. L.R. Co. v. Walters, 294 U.S. 405, 55 S.Ct. 486, 79 L.Ed. 949. See Alabama State Federation of Labor v. McAdory, 325 U.S. 450, 459—463, 65 S.Ct. 1384, 1388—1390, 89 L.Ed. 1725. We pass only upon New York's power to take over the care of abandoned moneys under those circumstances. 11 There have been, over the years, a close supervision and regulation by states of the business of insuring the lives of their citizens. There has been complete recognition of this relationship. See Prudential Insurance Co. v. Benjamin, 328 U.S. 408, 66 S.Ct. 1142, 90 L.Ed. 1342, 164 A.L.R. 476.10 New York has practiced such regulation.11 Foreign corporations must obtain state authority to do business, segregate securities, submit to examination and state process. The business activities connected with the purchase of insurance by New York residents normally take place in New York. It is the beneficiary of the policy not the insurer who has abandoned the moneys. Undoubtedly the relationship is very close.12 Certainly the relationship between New York and foreign insurance companies as to policies here under ciscussion, is as close as that between the company and its state of incorporation.13 The Court of Appeals on this point said (297 N.Y. 1, 74 N.E.2d 27): 12 'For the core of the debtor obligations of the plaintiff companies was created through acts done in this State under the protection of its laws, and the ties thereby established between the companies and the State were without more sufficient to validate the jurisdiction here asserted by the Legislature.' 13 We agree with this statement and hold that New York had power to take over these abandoned moneys in the hands of appellants. 14 The judgment of the Court of Appeals of New York is affirmed except as to issues specifically reserved. 15 Affirmed. 16 Mr. Justice FRANKFURTER, dissenting. 17 My brother JACKSON'S opinion, with which I substantially agree, persuades me that we should decline to exercise jurisdiction in this case. The wise practice governing constitutional adjudication requires it. For this proceeding poses merely hypothetical questions, all of which are intertwined and concern interests not represented before us. Circumstances not more compelling, surely than this record discloses led us in a sere § of recent cases to avoid borrowing trouble by declining to adjudicate premature constitutional issues. Alabama State Federation of Labor v. McAdory, 325 U.S. 450, 65 S.Ct. 1384, 89 L.Ed. 1725; United Public Workers of America v. Mitchell, 330 U.S. 75, 67 S.Ct. 556; Rescue Army v. Municipal Court, 331 U.S. 549, 67 S.Ct. 1409. 18 In appearance this is a suit between a few insurance companies and the State of New York. But at the heart of the controversy are the conflicting claims of several States in a hotchpot of undifferentiated obligations. The proceeds of 'abandoned' life insurance policies cannot, I assume, be seized as for escheat more than once. Since the rights and liabilities growing out of such policies are, to a vast extent, the result of a process that concerns two or more States, their interests may come into conflict when, in exigent search for revenue, they invoke the opportunities of escheat against unclaimed proceeds from insurance policies. I assume merely conflicting State interests and lay aside considerations that may be drawn from the decision in United States v. South-Eastern Underwriters Association, 322 U.S. 533, 64 S.Ct. 1162, 88 L.Ed. 1440. 19 In the vigilant search for new sources of revenue, several States have already sought to tap for their own exchequers the matured obligations of unclaimed policies. It would be impractical not to assume that other States will do likewise. Only New York's claim is before us. It is vital to define the precise nature of this claim. New York does not lay claim to a particular fund constituting the proceeds of abandoned matured obligations. This litigation, it is conceded, seeks to test abstractly the constitutionality of the New York statute providing for turning over to her the avails of abandoned matured insurance policies. New York asks that her right to the hotchpot of undifferentiated obligations be acknowledged. Of course New York may enable its courts to pass on the validity of a comprehensive statute unrelated to the enforcement of specific claims to specific funds that came into existence under circumstances differing in their constitutional significance. It does not follow, however, that what the New York Court of Appeals has adjudicated we must review. 20 The New York Court of Appeals sustained the power of New York to claim escheat on abandoned insurance maturities from foreign insurance companies doing business in New York on the basis of the insured's residence in New York at the time of the delivery of the policy in New York. According to this view, as Mr. Justice JACKSON points out, change of residence of the insured or of the beneficiary long before maturity of the policy, or nonresidence in New York of a beneficiary, other than the insured, at any time, become utterly immaterial. These are only some of the familiar situations that are encompassed by the Court of Appeals validation of the New York statute. 21 This Court does not purport to affirm all that is included in the New York judgment. It is fair, however, to say that the Court's opinion does not enumerate what possible situations included in the judgment below it has not passed upon. It is explicit in putting to one side the validity of the New York statute in 'instances where insured persons, after delivery, cease to be residents of New York or where the beneficiary is not a resident of New York at maturity of the policy. As interests of other possible parties not represented here may be affected by our conclusions and as no specific instances of those types appear in the record, we reserve any conclusion as to New York's power in such a situation.' But 'no specific instances' of any type appear in the record. Indeed, it may be said that the only instances of types of transactions as to which escheat is claimed that are in the record are the types on which the opinion of the Court declines to pass. The complaint specifically refers to the frequency with which policies are issued upon the lives of New York residet § for non-New York beneficiaries, as well as the extent with which holders of policies change their residence. On the state of the pleadings, these allegations must be accepted as true. To be sure, New York lays claim to all funds reflecting these situations, and its highest court has sustained this generalized claim. But, as already indicated, this is not a suit for any specific fund. For all we know there are no funds in New York to which that State could lay claim even within the circumscribed affirmance by this Court of the New York judgment. 22 Whatever the scope of the Court's decision, it is a hypothetical decision. New York has been sustained below in an abstract assertion of authority against funds not claimed nor defined, except compendiously defined as the right to go against insurance companies doing business in New York for the proceeds of policies delivered in New York upon the lives of insured then resident in New York. This generalized decision the Court rejects. Instead, it carves out different and limited claims for which New York may go without any indication that there is anything on which such claims could feed. In any event such a mutilated affirmance of the decision of the New York Court of Appeals, with everything else left open, is bound to hatch a brood of future litigation. Claims of the States of domicile of the insuring companies, claims of the States of residence of the insured at the time of maturity, claims of the States of residence of beneficiaries other than the insured at the time of maturity, are all put to one side here as not presented by the record though they are as much presented as what is decided. To revenue-eager States these are practical situations full of potentialities. This Court is all too familiar with the special position of control claimed by a chartering State and the special powers the domiciliary State of a deceased asserts over his 'intangibles.' 23 How the conflicting interests of the States should be adjusted calls for proper presentation by the various States of their different claims. Words may seek to restrict a decision purporting to pass on a small fragment of what is in truth an organic complexity to that isolated part. But such an effort to circumscribe what has been decided is self-defeating. A decision has a momentum of its own, and it is nothing new that legal doctrines have the faculty of self-generating extension. We ought not to decide any of these interrelated issues until they are duly pressed here by the affected States, so that a mature judgment upon this interrelation may be reached. All the considerations of preventive adjudication—the avoidance of a truncated decision of indeterminate scope, with the inevitable duty of reconsidering it or unconsciously being influenced by implicit overtones of such a decision—require that decision await the ripening process of a defined contest over particular funds as to which different States make concrete claims. 24 The way is open to secure a determination by this Court of the rights of the different States in the variant situations presented by abandoned obligations on matured insurance policies. It is precisely for the settlement of such controversies among the several States that the Constitution conferred original jurisdiction upon this Court. If Florida, Massachusetts, New York and Texas could bring here for determination their right to levy a death tax in respect to a particular succession, State of Texas v. State of Florida, 306 U.S. 398, 59 S.Ct. 563, 830, 83 L.Ed. 817, 121 A.L.R. 1179, even more fitting is it that the claims of various States to seize the matured obligations of abandoned insurance policies should be presented by those States at the bar of this Court and be adjudicated here after full reflection on all these claims. Of course the insurance companies have interests to protect and to present. But the essential problem is the legal adjustment of the conflicting interests of different States, because each may haves ome relation to transactions which give rise to funds that undoubtedly are subject to escheat. Until that is duly before us we should not peck at the problem in an abstract, hypothetical way. 25 The appeal should be dismissed. 26 Mr. Justice JACKSON, with whom Mr. Justice DOUGLAS joins, dissenting. 27 I find myself unable to join the Court in this case. I cannot agree that we may affirm the judgment below without facing, or by reserving our opinion upon, the constitutional question inherent in this statute by which New York would escheat unclaimed insurance proceeds not located either actually or constructively in New York and which are the property of a beneficiary who may never have been a resident or citizen of New York. 28 This action is one for a declaratory judgment as to the validity of the Act and we are therefore passing on the Act as an entirety and in the abstract. The cases of nonresident beneficiaries are before us as much as any other concrete case. The Act purports to escheat in every case in which the policy was issued for delivery in New York and the insured was then a resident of that state. The unchallenged complaint alleges the Comptroller's instructions to be that removal of the insured from the state after issuance of the policy does not take a case out of the Act. The statute, as written and as affirmed, obviously intends to reach nonresident claimants and insured persons, for it provides for binding them by publication (§ 702(2)), and by publication within New York at that. Moreover, and most importantly, in reaching the judgments which we affirm, the opinion of the Special Term of Supreme Court, while holding some features of the Act invalid, expressly considered and upheld these provisions of the Act and the Court of Appeals indicated no disagreement. Our affirmance necessarily sustains the whole judgment below and that sustains the Act in these particulars. It is perhaps unfortunate to adjudicate constitutionality in such a manner. If we had before us a concrete case, contested by adversary state claimants to the right of escheat and based on a record that would show some facts as to residence of parties to the transactions, we would know better what we are talking about. But since in a declaratory judgment action we can have only hypothetical cases before us, I cannot ignore one which certainly occurs frequently and one embraced within both the Act and the decision below. 29 Neither the Act nor the decision below contemplates that the right to escheat is based on residence of the owner of the proceeds at the time of escheat, or at any other time, but rather on these two facts: (1) That the policy was issued for delivery in New York, and (2) that the insured was then a resident of New York. Thus, the State claims power to escheat what is due a beneficiary solely because it was the residence of the insured when the policy was issued and irrespective of the nonresidence at that time and at all times of the beneficiary whose property it takes. Thus, the escheat of one man's property is based on another man's one-time residence in the state. Further, the seizure of today is based not even on the assured's residence at the time the policy matured, but on his residence at some prior date, which, in view of the long-term nature of insurance contracts, may have been many years ago. 30 The effect of the Court's affirmance of the judgment upholding this statute is that a residence by the insured in New York at the time a policy was 'issued for delivery' there shows 'sufficient contacts with the transaction,' so that the State may escheat proceeds owned by a beneficiary who may never have lived in that State. Even in the abstract, I find the concept of 'sufficient contacts with the transaction' too vague to be helpful in defining practical bounds of a state's jurisdiction or power to escheat. We are given no enlightenment as to why any one or more events is regarded as 'sufficient,' nor as to what jurisprudential context is to be give to the term 'contact,' which seems taken over from some vernacular other than that of the law. I cannot even tell here what the Court thinks the controlling 'transaction' is. If it is issuance of the policy that is the 'contacted' transaction, it would seem that the State where it was issued, where premiums were paid, or where it was actually delivered, would be more controlling than the place where it was 'issued for delivery.' If it is the maturing of the claim, I see less 'contact' from a sometime and remote residence than from a later one, or one at the time of events which matured the policy. 31 The weakness of the Court's test of sufficient contacts with the 'transaction' is more fully revealed when we consider that by its application today other states are cut off from escheating the proceeds (unless the company is subject to multiple escheats), although by the same tests they have many more and much closer 'contacts' with some part of the transaction. If we say New York may step into the beneficiary's shoes and collect his unclaimed insurance proceeds solely because the insured lived in New York when the policy issued for delivery there, how can we deny the claim of another state to escheat the same fund when its claim is asserted under any one or more of the following circumstances: (1) It is the state in which the insured has died or where some other contingency occurred which brought the claim to maturity. (2) It is the state in which the beneficiary always has resided and was last known to reside. (3) It is the state of a proved later and longer residence of the insured. (4) It is the state to which both the insured, and the beneficiary removed and resided after the policy was taken out in New York. (5) It is the state of actual permanent domicile, as opposed to mere residence in New York, of the insured and the beneficiary. (6) It is the state of actual delivery of the policy, though it was 'issued for delivery' in New York. (7) It is the state where the claim is payable and where funds for its discharge are and at all times have been located. Certainly the foregoing are 'contacts' as I would understand the term, and some of them or some combination of them seem more persuasive of a right to escheat than the grounds on which we are affirming New York's right to do so. 32 I am not unmindful of the Court's pronouncement that it does not decide what a state other than New York may do and that it excepts from its approval 'instances where insured persons, after delivery, cease to be residents of New York, or where the beneficiary is not a resident of New York at maturity of the policy.' As to those cases, the Court says it reserves any conclusion. But how can it reserve a conclusion as to whether 'contacts' here determined to be sufficient in the case of New York will be sufficient in the case of another state? The issue of 'sufficiency of contacts' is settled by this decision. The premises that are being applied today lead inescapably to the conclusion that other states have equally good grounds (i.e., 'sufficient contacts') to escheat the same claims. Are we going to repudiate our reasoning in this case the first time another state invokes it in conflict with New York, or will we hold the reasoning impeccable and, hence, the company subject to a double or multiple liability to escheat? The effort to remain uncommitted to any conclusion is self-delusive when it is accompanied, as it is here, by a commitment as to all of the factors which shape the conclusion 'reserved.' 33 It seems to me that the constitutional doctrine we are applying here, if we are consistent in its application, leaves us in this dilemma: In sustaining the broad claims of New York, we either cut off similar and perhaps better rights of escheat by other states or we render insurance companies liable to two or more payments of their single liability. If we impale ourselves, and the state and insurance companies along with us, on either horn of this dilemma, I think the faut is in ourselves, not in our Constitution. 34 For the juridical basis on which escheat has from time to time rested, we need go no farther than the law of New York itself as expounded by Judge Cardozo. Escheat survives only as an 'incident of sovereignty,' whether the subject of escheat is personal or real estate. Matter of People (Melrose Ave.) 234 N.Y. 48, 136 N.E. 235, 237, 23 A.L.R. 1233. But sovereignty by itself means nothing; sovereignty exists in respect of something or over someone. The two usual examples of escheat properly incidents of sovereignty are: 35 First, sovereignty in the sense of actual dominion over the property escheated. The State on this basis may, of course, take unto itself lands which fail of private owners through want of heirs, and tangible personal property lost or abandoned in the state. The right to appropriate intangible property constructively within the state also has been upheld by this Court on grounds that 'the deposits are debtor obligations of the bank, incurred and to be performed in the state where the bank is located, and hence are subject to the state's dominion.' Anderson National Bank v. Luckett, 321 U.S. 233, 64 S.Ct. 599, 603, 88 L.Ed. 692, 151, A.L.R. 824; Security Sav. Bank v. People of State of California, 263 U.S. 282, 44 S.Ct. 108, 68 L.Ed. 301, 31 A.L.R. 391. See also United States v. Klein, 303 U.S. 276, 58 S.Ct. 536, 82 L.Ed. 840. But New York can show neither actual nor constructive dominion over the property sought now to be escheated. The proceeds to be escheated are held by out-of-the-state insurance companies and by no stretch of imagination are they within New York's dominion. And certainly residence of the insured at the time the policy issued cannot generate constructive possession of either the beneficiary's claim or the actual proceeds at maturity or at the time of abandonment. 36 Second, sovereignty over the person, as a resident or citizen, will justify the state in stepping into his shoes as claimant of abandoned property. Our federal form of government presupposes a dual allegiance. In addition to a general allegiance to the United States, each person has a particular allegiance to the state of which he is a resident, and hence, under the Fourteenth Amendment, is a citizen. This status, while it lasts, subjects him and what is his to state power. But New York, under this statute, does not rely on this relationship to sustain this escheat. It would step into the shoes of beneficiaries last known to be citizens of other states and even if they were so unfortunate as never to have been in New York State. The State bases its right to seize such a non-resident's assets solely on the fact that the insured was there when the policy issued. But even if the allegiance of the insured would in some circumstances justify escheat of the beneficiaries' payments, how can it do so after the allegiance has long since ceased? The right of a citizen to migrate from one state of the Union to another, cf. Edwards v. People of State of California, 314 U.S. 160, 62 S.Ct. 164, 86 L.Ed. 119, carries with it, of necessity, the right of expatriation, a right for which this Nation has always contended. A state cannot fasten its power and will upon a resident so that it adheres to him for life. I have never before heard it denied that one, if he makes his intent sufficiently clear, may by migration bring to an end his allegiance to a state and with it the state's sovereignty over him. But New York's plan requires us to say not only that sovereignty over an insured reaches the property of a third-party beneficiary but that such a consequence follows both parties for life, although the insured may have deliberately acquired a new allegiance and become a citizen of another state, and the beneficiary may never have been in New York. 37 Consideration of these conventional and established grounds of escheat shows not only that they fail to support the New York statute in this class of cases, but also that they estal ish a superior right of escheat in other states as an incident of their sovereignty. Of course, the two grounds I have mentioned may bring two states into conflict. Indeed, such a conflict now exists. Pennsylvania, apparently relying on the theory of the bank deposit cases, undertakes to escheat all unclaimed funds in the hands of companies it has chartered, even though the insured may have been a resident of New York when the policy issued, so that New York would claim the same fund. Can we now say New York may take, without saying Pennsylvania must give? Do we say the company must pay twice? This makes pertinent the question whether we should not decline to decide such issues as are here involved when they are presented only in the abstract by a declaratory judgment action. See Alabama State Federation of Labor v. McAdory, 325 U.S. 450, 461, 65 S.Ct. 1384, 1389, 89 L.Ed. 1725. 38 But if we are to entertain the case, I think we should decide it, not by extemporized generalities like 'sufficient contacts with the transaction,' but by recognized standards having definite connotations in the law. New York is not the only state with an interest in these questions. New York is merely the sole state whose argument we have heard. The mobility of our population and the complexity of our life create many confusions in which the states may properly look to us for some standard by which they may know what and whom to claim for their own. It seems to me that we should not unnecessarily confound what at best is confusion, by removing the landmarks of state jurisdiction erected by years of trial and error. Cf. dissenting or concurring opinion in Duckworth v. State of Arkansas, 314 U.S. 390, 62 S.Ct. 311, 86 L.Ed. 294, 138 A.L.R. 1144; State Tax Commission v. Aldrich, 316 U.S. 174, 62 S.Ct. 1008, 86 L.Ed. 1358, 139 A.L.R. 1436; Williams v. State of North Carolina, 317 U.S. 287, 63 S.Ct. 207, 87 L.Ed. 279, 143 A.L.R. 1273; General Trading Company v. State Tax Commission, 322 U.S. 335, 64 S.Ct. 1028, 88 L.Ed. 1309; International Harvester Co. v. Wisconsin Department of Taxation, 322 U.S. 435, 64 S.Ct. 1060, 88 L.Ed. 1373; Northwest Air Lines v. State of Minnesota, 322 U.S. 292, 64 S.Ct. 950, 88 L.Ed. 1283, 153 A.L.R. 245; Greenough v. Tax Assessors, 331 U.S. 486, 67 S.Ct. 1400, 172 A.L.R. 329; Bob-Lo Excursion Co. v. People of State of Michigan, 333 U.S. 28, 68 S.Ct. 358; and others, probably, yet to come. 39 While we may evade it for a time, the competition and conflict between states for 'escheats' will force us to some lawyerlike definition or state power over this subject. It is naive beyond even requirements of the judicial office to assume that this lately manifest concern of the states over abandoned insurance proceeds reflects only solicitude for the unknown claimants. If it did the states' claims might reconcile more easily. But escheat of these interests is a newly exploited, if not newly discovered, source of state revenue. Escheat, of course, is not to be denied on constitutional grounds merely because the motive of the states savors more of the publican than of the guardian. But it is relevant to the caution and precision we should use in sustaining one state's claim, least we be foreclosing other better founded ones. 40 This competition and conflict between states already require us, in all fairness to them, to define the basis on which a state may escheat. The first Act of this kind was by Pennsylvania in 1937. Act of June 25, 1937, Pamphlet Laws 2063, Purdon's Pa. Stat., Title 27, § 434. It is also alleged, and not denied, that two other states have enacted similar laws which are now in force. The Pennsylvania statute 'escheats,' as the Court says, only proceeds of policies issued by companies incorporated in Pennsylvania. But it escheats all of those regardless of residence of the insured or of where the policy was delivered. Its conflict with the law before us is patent and immediate. We cannot sustain New York's statute without, to the extent herei ndicated, striking down that of Pennsylvania, which is not a party here and whose claims have not been heard. The original New York statute, ch. 923, Laws of 1939, was similar to the Pennsylvania Act. It was attacked as unconstitutional, New York Life Ins. Co. v. Pink, Sup., 77 N.Y.S.2d 612, but was amended to apply only to policies issued by New York companies on the lives of residents of New York. Ch. 602, Laws of 1940. In 1943 these Acts were removed from the Insurance Law, re-enacted as part of the Abandoned Property Law. Ch. 697, Laws of 1943. In 1944 these present statutes were enacted, extending to foreign insurance companies and on the basis here in question. Chs. 497, 498, Laws of 1944. Thus, it represents a deliberate state plan of escheat based only on issuance, for delivery in New York, of a policy insuring the life of a then New York resident, and irrespective of location of the insurer or residence of the beneficiary. 41 For the reasons outlined herein, I should express disapproval of the declaratory judgment below, decline to certify the validity of this legislation at this time, and deal with this problem only as presented by concrete cases or controversies involving particular funds and facts. But if we are to render a decision in the abstract, I should say that New York by this statute overreaches its sister states by the tests I have set forth. 1 The first statute which included insurance policies as abandoned property was enacted in 1939, ch. 923 of the Laws of 1939. That statute applied only to companies incorporated in New York, but covered all policies issued by such companies. Chapter 602 of the Laws of 1940 amended the statute so as to apply only to policies issued on the lives of residents of New York. Chapter 697 of the Laws of 1943 reenacted the principal features of the earlier statutes as Art. VII, and cc. 497 and 498 (§ 2) of the Laws of 1944 made the statute applicable to foreign insurance companies. Chapter 452 of the Laws of 1946 amended Art. VII so as to provide that a life insurance company which had paid the proceeds of a policy to the state could subsequently pay a second time to a claimant and acquire the rights of the claimant against the comptroller. 2 '§ 700. Unclaimed life insurance corporation moneys. '1. The following unclaimed property held or owing by life insurance corporations shall be deemed abandoned property: '(a) Any moneys held or owing by any life insurance corporation which shall have remained unclaimed for seven years by the person or persons appearing to be entitled thereto under matured life insurance policies on the endowment plan issued on the lives of residents of this state. '(b) Any moneys held or owing by any life insurance corporation which are payable under other kinds of life insurance policies issued on the lives of residents of this state where the insured, if living, would, prior to the thirty-first day of December next preceding the report required by section seven hundred one, have attained the limiting age under the mortality table on which the reserves are based, exclusive of '(i) any policy which has within seven years been assigned, readjusted, kept in force by payment of premium, reinstated or subjected to loan, or '(ii) any policy with respect to which such corporation has on file written evidence received within seven years that the person or persons apparently entitled to claim thereunder have knowledge thereof. '(c) Any moneys held or owing by any life insurance corporation due to beneficiaries under policies issued on the lives ofr esidents of this state who have died, which moneys shall have remained unclaimed by the person or persons entitled thereto for seven years. '2. Any such abandoned property held or owing by a life insurance corporation to which the right to receive the same is established to the satisfaction of such corporation shall cease to be deemed abandoned.' 3 187 Misc. 1004, 65 N.Y.S.2d 143; Id., 271 App.Div. 1002, 69 N.Y.S.2d 323; Id., 297 N.Y. 1, 74 N.E.2d 24. 4 Abandoned Property Law, Art. XIV, § 1404: '1. The care and custody, subject only to the duty of conversion prescribed in section fourteen hundred two of this chapter, of all abandoned property heretofore paid to the state, except '(i) abandoned property in individual amounts of less than one dollar so paid pursuant to chapter one hundred seven of the laws of nineteen hundred forty-two; and of all abandoned property paid to the state comptroller pursuant to this chapter, is hereby assumed for the benefit of those entitled to receive the same, and the state shall hold itself responsible for the payment of all claims established thereto pursuant to law, less any lawful deductions, which cannot be paid from the abandoned property fund.' See also §§ 702, 1402, 1406(1)(a) and(b), and Anderson National Bank v. Luckett, supra, at page 242 of 321 U.S., at page 604 of 64 S.Ct., 88 L.Ed. 692, 151 A.L.R. 824. 5 Compare State Tax Commission v. Aldrich, 316 U.S. 174, 62 S.Ct. 1008, 86 L.Ed. 1358, 139 A.L.R. 1436; Northwest Airlines v. State of Minnesota, 322 U.S. 292, 293, 294, 64 S.Ct. 950, 951, 88 L.Ed. 1283, 153 A.L.R. 245. 6 Purdon's Penna.Stat., Title 27, §§ 434—437. 7 N.J.Rev.Stat. § 17:34—49—34—58, N.J.S.A. 8 Ch. 455, Mass.Acts and Resolves (1946). 9 See Anderson National Bank v. Luckett, supra; Security Sav. Bank v. People of State of California, supra; In re Rapoport's Estate, 317 Mich. 291, 26 N.W.2d 777. 10 An old provision makes New York law applicable to policies issued for delivery in New York. Insurance Law, Consol.Laws, c. 28, § 143(2). 11 New York Insurance Law, §§ 42, 59, 103, 143, 208(5), 216(6). 12 See Greenough v. Tax Assessors, 331 U.S. 486, 67 S.Ct. 1400, 172 A.L.R. 329; Curry v. McCanless, 307 U.S. 357, 59 S.Ct. 900, 83 L.Ed. 1339, 123 A.L.R. 162. Compare International Shoe Co. v. State of Washington, 326 U.S. 310, 320, 66 S.Ct. 154, 160, 90 L.Ed. 95, 161 A.L.R. 1057: 'It is evident that 95, 161 A.L.R. 1057: 'It is evident that or ties with the state of the forum to make it reasonable and just according to our traditional conception of fair play and substantial justice, to permit the state to enforce the obligations which appellant has incurred there.' 13 See New England Mutual Life Insurance Co. v. Woodworth, 111 U.S. 138, 4 S.Ct. 364, 28 L.Ed. 379; Ex parte Schollenberger, 96 U.S. 369, 377, 24 L.Ed. 853; Morgan v. Mutual Benefit Life Insurance Co., 189 N.Y. 447, 82 N.E. 438.
78
333 U.S. 565 68 S.Ct. 705 92 L.Ed. 881 MOORE et al.v.PEOPLE OF STATE OF NEW YORK. No. 485. Argued Feb. 12, 1948. Decided March 29, 1948. Messrs. John F. Wilkinson and I. Saul Fleischman, both of New York City, for petitioners. Mr. George Tilzer, of New York City, for respondent. Mr. Justice JACKSON delivered the opinion of the Court. 1 Petitioners were indicted in Bronx County, New York, on February 11, 1947, for the crime of murder in the first degree. The District Attorney moved the court for an order that the trial be by a special jury, pursuant to New York law, which motion was granted over opposition on behalf of defendants by assigned counsel. One hundred and fifty names were drawn from the special jury panel, under supervision of a Justice of the State Supreme Court, in the presence of defendants' counsel and without objection. 2 When the case was called for trial defendants, as permitted by the state practice, served a written challenge to the panel of jurors upon the following grounds: 3 1. That § 749-aa of the Judiciary Law of the State of New York, Consol.Laws, c. 30, is in violation of § 1 of the Fourteenth Amendment to the Constitution of the United States. 4 2. That qualified Negro jurors were improperly excluded from the list of special jurors, from which said jury panel was drawn. 5 3. That qualified women jurors were improperly excluded from the list of special jurors, from which said jury panel was drawn. 6 After full hearing, the challenge was disallowed and petitioners were tried and convicted. On appeal to the Court of Appeals, the third ground of challenge to the jury panel was abandoned and the convictions were affirmed. 297 N.Y. 734, 77 N.E.2d 25. We granted certiorari on a petition raising the remaining grounds. 332 U.S. 843, 68 S.Ct. 266. 7 The constitutionality of the New York special jury statutes has but recently been sustained by this Court, Fay v. People of State of New York, 332 U.S. 261, 67 S.Ct. 1613, against a better supported challenge than is here presented, and the issue warrants little discussion at this time. 8 Some effort is made by statistics to differentiate this case from the precedent one as to the ratio of convictions before special juries contrasted with that before ordinary juries. The defendants present to us a study from July 1, 1937, to June 30, 1946, which indicates that special juries in Bronx County returned 15 convictions and 4 acquittals during the period and concludes that the special jury convicted in 79% of the cases while the general juries convicted in 57%. The District Attorney responds that in 5 of these 19 cases, the special jury returned conviction in a lesser degree than that charged and, hence in 9 out of 19 cases withheld all or part of what the State asked. Moe over, it is said that all but two were capital cases, another was for manslaughter and one for criminally receiving stolen property. It should be observed that the number of cases involved in these statements is too small to afford a secure basis for generalizing as to the convicting propensities of the two jury panels, even if the cases were comparable. But it appears that in Bronx County a system of special and intensive investigation is applied to capital cases from the moment they are reported, more careful preparation is given them and they are tried by the most experienced prosecutors. This makes this class of cases not fairly comparable with the run-of-the-mill cases, felony and misdemeanor, that are included in the ordinary jury statistics. Moreover, none of these facts were laid before the trial court which was in the best position to analyze, supplement or interpret them. We think on this part of the challenge no question is presented that was not disposed of in Fay v. New York, supra. Indeed, on opening the hearing on defendants' challenge the trial court said, 'I understand the inquiry now is to be directed to the intentional elimination or disqualification of women and Negroes on the special jury panel.' Counsel for both defendants assented to this definition of the issues and no evidence on other subjects was offered. 9 Petitioners' remaining point is that 'the trial of the petitioners, Negroes, by a jury selected from a panel from which Negroes were systematically, intentionally and deliberately excluded, denied petitioners the equal protection of law and due process of law guaranteed them by the Constitution of the United States.' If the evidence supported the assumption of fact included in this statement, the point would be of compelling merit. The law on this subject is now so settled that we no longer find it necessary to write out expositions of the Constitution in this regard. See Brunson et al. v. North Carolina, 333 U.S. 851, 68 S.Ct. 634. 10 It is admitted that on this panel of one hundred and fifty there were no Negroes. But not only is the record wanting in proof of intentional and systematic exclusion—the only witnesses sworn testified that there was no such practice or intent. Nothing in the background facts discredits this testimony. The census figures give a proportion of Negro-to-white population in that county of .7% in 1920, 1.0% in 1930, and 1.7% in 1940. It is admitted that since the last census the Negro population has considerably increased. According to one estimate, the number of colored inhabitants, which in 1940 was 24,892, has increased to 192,066 in 1948. The same estimator later revised the figures to between 65,000 and 70,000. Neither estimate was before the trial court, and no evidence or finding gives us judicially approved data. Of course, new wartime arrivals take some time to qualify as active members of the community and its machinery of justice cannot be expected instantaneously to reflect their presence. The official who compiled the jury lists testified as to Negro jurors that 'from 1946 on I must have examined at least 500 myself.' The number accepted for service could not be ascertained from the records, which make no notation of color, but he testified that there were 'maybe two dozen; maybe three dozen.' For the special panel, he testified that he had examined an estimated one hundred Negroes and had accepted 'maybe a dozen.' The testimony is undenied. 11 The record is utterly devoid of proof of systematic, intentional and deliberate exclusion of Negroes from jury duty. 12 The judgment is affirmed. 13 Affirmed. 14 Mr. Justice MURPHY, with whom Mr. Justice BLACK, Mr. Justice DOUGLAS and Mr. Justice RUTLEDGE concur, dissenting. 15 This case represents a tragic consequence that can flow from the use of the 'blue ribbon' jury. Two men must forfeit their lives after having been convicted of murder not by a jury of their peers, not by a jury chosen from a fair cross-section of the community, but y a jury drawn from a special group of individuals singled out in a manner inconsistent with the democratic ideals of the jury system. That group was chosen because they possessed some trait or characteristic which distinguished them from the general panel of jurors, some qualification which made them more desirable for the State's purpose of securing the conviction of the two petitioners. Such a basis for jury selection has no place in our constitutional way of life. It contravenes the most elementary notions of equal protection and I can no more acquiesce in its use in this case than I was able to do in Fay v. People of State of New York, 332 U.S. 261, 67 S.Ct. 1613. 16 The constitutional invalidity of this 'blue ribbon' system does not depend upon proof of the systematic and intentional exclusion of any economic, racial or social group. Nor does it rest upon a demonstration that 'blue ribbon' juries are more inclined to convict than ordinary juries. Such factors are frequently, if not invariably, present in 'blue ribbon' situations, though proof is extremely difficult. But they are at best only the end products of the system, not the root evil. 17 The vice lies in the very concept of 'blue ribbon' panels—the systematic and intentional exclusion of all but the 'best' or the most learned or intelligent of the general jurors. Such panels are completely at war with the democratic theory of our jury system, a theory formulated out of the experience of generations. One is constitutionally entitled to be judged by a fair sampling of all one's neighbors who are qualified, not merely those with superior intelligence or learning. Jury panels are supposed to be representative of all qualified classes. Within those classes, of course, are persons with varying degrees of intelligence, wealth, education, ability and experience. But it is from that welter of qualified individuals, who meet specified minimum standards, that juries are to be chosen. Any method that permits only the 'best' of these to be selected opens the way to grave abuses. The jury is then in danger of losing its democratic flavor and becoming the instrument of the select few. 18 Hence the 'blue ribbon' method of selecting only the 'best' of the general jurors, a method instituted with the highest of intentions, does violence to the fundamental precepts of the jury system. Appeals to administrative convenience do not soften that violence. And since the method deprives the defendant of the protection accorded others who are able to draw upon the general panel, it falls under the ban of the Fourteenth Amendment. I would therefore reverse the judgment below.
12