Court Opinion

ID: 6847343
Source: CourtListenerOpinion
Date Created: 2022-07-23 20:31:03.413536+00
Date Added: 2024-06-11T16:05:00.288056
License: Public Domain

BOURQUIN, District Judge
(dissenting):
The case is practically on all fours with the Hall Case, 242 U. S. 539; 37 S. Ct. 217, 61 L. Ed. 480, L. R. A. 1917F, 514, Ann. Cas. 1917C, 643; Caldwell Case, 242 U. S. 559, 37 S. Ct. 224, 61 L. Ed. 493; and Merrick Case, 242 U. S. 568, 37 S. Ct. 227, 61 L. Ed. 498.
In all are involved Blue Sky Laws alike in all material particulars; in all, like objections were made; and in all those cited tlig Supreme Court (8 to 1) reversed the lower tribunals and upheld the laws. Although the personnel of the court has largely changed and the “presently approved doctrine” may have likewise [See Terral’s Case, 267 U. S. 533, 42 S. Ct. 188, 66 L. Ed. 352, 21 A. L. R. 186; Great Falls Case (D. C.) 39 F.(2d) 176, 177, 180], those cases are to be followed until reversed by the minority again become the majority. It is true the law in the Hall Case provides for notice before cancellation, *195and this at bar does not, but that is immaterial so far as due process goes; for no hearing was allowed, and the notice was an idle gesture and sheer futility. It must be remembered that the commissioner’s power to prescribe conditions and to cancel permits for breach of them is administrative, delegated by the Legislature, and partakes of legislative, rather than judicial, quality. See Louisville & N. R. Co. v. Garrett, 231 U. S. 318, 34 S. Ct. 48, 58 L. Ed. 229. He can do what the Legislature might do, his order is law as though by the Legislature made, and, as it might create conditions and cancel permits without notice and hearing (Compare National Council Case, 203 U. S. 163, 27 S. Ct. 46, 51 L. Ed. 132), so may he; in either case due process being afforded by judicial review which in itself is notice and hearing. The principle which distinguishes due process in legislative proceedings from the like in judicial proceedings is that, in the former, action followed by notice and hearing in judicial review is due process; in'the latter, action must bo preceded'by notice and hearing to be due process. The eases more or less vaguely will be found to follow this rule.
The Minnesota Rate Case (Chicago, M. & St. P. R. Co. v. Minnesota), 134 U. S. 418, 10 S. Ct. 702, 33 L. Ed. 970, illustrates it, the court concluding that, although the statute authorized the commission without notice-or hearing to fix rates, it would he valid if the state court would construe it to permit judicial review. And see Vandalia R. Co., v. Public Service Commission of Indiana, 242 U. S. 260, 37 S. Ct. 93, 61 L. Ed. 276. In any ease is the right to judicial review on constitutional grounds implied if not expressed. See Plymouth Coal Co. v. Pennsylvania, 232 U. S. 547, 34 S. Ct. 359, 58 L. Ed. 713; Merrick’s Case, 242 U. S. 590, 37 S. Ct. 227, 61 L. Ed. 498; Dayton, etc., Co. v. U. S., 263 U. S. 485, 486, 44 S. Ct. 169, 68 L. Ed. 388, 33 A. L. R. 472. Where property alone is involved, judicial review after action satisfies due process. See Phillips’ Case, 283 U. S. 589, 51 S. Ct. 608, 75 L. Ed. 1289. And here and now plaintiff has judicial review of the order. Compare the Ben Avon Case, 253 U. S. 294, 40 S. Ct. 527, 64 L. Ed. 908. In the matter of standards, the Hall and companion eases cited are equally conclusive. See, also, Mutual Film Corp. v. Com., 236 U. S. 245, 35 S. Ct. 387, 59 L. Ed. 552, Ann. Cas. 1916C, 296; U. S. v. Grimaud, 220 U. S. 517, 31 S. Ct. 480, 55 L. Ed. 563; Union Bridge Co. v. U. S., 204 U. S. 364, 27 S. Ct. 367, 51 L. Ed. 523; U. S. v. Chicago, M. & St. P. R. Co., 282 U. S. 324, 51 S. Ct. 159, 75 L. Ed. 359.
Multitudes of commissions, federal and state, are vested with more or less power to do what Legislatures might do, to stipulate conditions and determine standards of quality, value, reasonableness, etc., for purposes of business and regulation, therein unquestioned or assailed in vain. Of course, until a standard is prescribed, it is mere conjecture, the statute binds no one, and invokes no penalties. See Cohen’s Case, 255 U. S. 81, 41 S. Ct. 298, 65 L. Ed. 516, 14 A. L. R. 1045; Cline’s Case, 274 U. S. 445, 47 S. Ct. 681, 71 L. Ed. 1146.
Investment companies, like banks, are clothed with sufficient public interest to warrant regulation “to stop rat holes,” whether or not is “wisdom of trying to save the ignorant and rash from folly” of alluring contracts, says Mr. Justice Holmes in Dillingham’s Case, 264 U. S. 372, 373, 44 S. Ct. 362, 363, 68 L. Ed. 743. The limit of regulation is reason and the state’s to determine. As rates, interest, compensation, wages, and the like may be by the state pi-escribed, no reason is perceived why the “loading charge” (to unload?) or quasi forfeiture in plaintiff’s contracts may not he.
They provide that, on payment to it of $370 annually in advance for ten years, plaintiff will return $5,000; and that the buyer may withdraw after two payments and eighteen months, receiving $210 of the $740 he has paid, the plaintiff retaining $530. Likewise, at later periods, though the return gradually increasing.
The defendant, conceiving the quasi forfeiture too great and inequitable, made the order involved that withdrawal be permitted after one year, the buyer to receive all paid, plus the guaranteed interest, less 3% per cent, of the amount due at maturity. Thus, if the right be exercised promptly at the end of the year, of the $370 paid plus said interest, the buyer would receive $215.35, the plaintiff retaining $175. The statute authorizing defendant to determine whether the “plan” is “fair, just and equitable,” and if “inequitable” to cancel permits, his finding that plaintiff’s plan is inequitable, his order prescribing an equitable standard and condition, and his cancellation of permits of those who breach the condition, all are within the power of the Legislature and to defendant delegated, are reasonable, supported by sufficient legal evidence, and consistent with the guarantees of the Fourteenth Amendment.
*196High-pressure salesmen like hungry locusts swarm the country side, 'peddling so-called securities which in the indicated quality are too often comparable to a lien on a flock of wild geese. Their methods are well known. Often the very paper they sell is given some resemblance to government 'bonds or greenbacks. Their impressive names, the installment plan, the interest higher than paid by banks, and other alluring features, representations, hopes, and fears by the salesmen urged, made and excited, may induce ill-considered purchases by those of small means who too often soon regret or are unable to complete. Regulation to diminish their losses well might go to the full return made by .banks on withdrawal. Liberty to contract is not a privilege to plunder, and in necessity yields to the police power in behalf of the general welfare. Union Dry Goods Co. v. Georgia Public Service Corp., 248 U. S. 375, 39 S. Ct. 117, 63 L. Ed. 309, 9 A. L. R. 1420; O’Gorman’s Case, 282 U. S. 251, 51 S. Ct. 130, 75 L. Ed. 324.
Even existing contracts of future performance may be affected, since “the operation of reasonable laws for the protection of the public cannot be headed off by making contracts reaching into the future.” Dillingham’s Case, 264 U. S. 374, 44 S. Ct. 362, 364, 68 L. Ed. 742.
Regulation comes on apace or like a flooding tide. Those who kick against the pricks are opposing with weak and flimsy brooms. Even courts grow sensitive to the ground swells.
It is said that Chief Justice White admitted that “in my time we relaxed constitutional guarantees from fear of revolution,” and that Chief Justice Taft declared that “at a conference I announced U have been appointed to reverse a few decisions,’ and,” with his famous chuckle, “I looked right at old man Holmes when I said it.” What a pity were these illuminating incidents lost to history save in so far as the court’s reports will verify them.
The trend of the age is again “liberal,” however much abused the term or like charity it may cover, and we are on our way whether or not we know where we are going or what we will do when we get there. But, so far as regulation is concerned, like it or not, wise or not, it is a fair prophecy that, in classic phrase of the day, “folks, you haint seen nothin’ yit.”
Decree should go for defendant.