1 all these subjects; and we think it has never yet been successfully contended that such legislation came within any of the constitutional prohibitions against interference with private property." "When therefore one devotes his property to a use in which the public has an interest, he in effect grants to the public an interest in that use and must submit to be controlled by the public for the common good to the extent of the interest he has thus created. He may withdraw his grant by discontinuing the use, but so long as he maintains the use, he must submit to the control." 2 31. Extension and criticism of the doctrine of Munn v. Illinois. The principle enunciated in Munn v. Illinois3 with respect to the regulation of grain elevators, has been applied again in the line of decisions known as the "Granger Cases," and in the "Railroad Commission Cases." The Granger Cases "decided that railroads are subject to the supervision and control of the legislature, like all carriers at common law, being engaged in a public employment affecting the public interest, and therefore, under the decision of Munn v. Illinois, subject to legislation as to the rates of fare and freight, unless protected by their charters; that in the absence of charter contracts the charges by railroad companies for services within the State may be limited by the legislature and a maximum of charges prescribed; that where the State constitution reserves a right of amendment or repeal, the legislature may prescribe a maximum, although the charter authorizes such . 224, § 2." Munn v. Illinois, 94 U. S. 113, 125. * Munn v. Illinois, 94 U. S. 113, 126. In Buffalo E. S. R. Co. v. Buffalo St. R. Co., (1889) 111 N. Y. 132, it was "With the fifth amendment in force, congress in 1820 conferred power upon the city of Washington 'to regulate . . . the rates of wharfage at private wharves, the sweeping of chimneys, and to fix held that although a contract bethe rate of fees therefor and the weight and quality of bread.' 3 Stat. 587, §7; and in 1848, 'to make all necessary regulations respecting hackney carriages and the rates of fare of the same, and the rates of hauling by cartmen, wagoners, carmen and draymen, and the rates of commission of auctioneers.' 9 Stat. tween two street railway companies respecting rates, was terminated by N. Y. Act of 1875, requiring a reduction in charges, yet, the matter being within the police power of the State, the statute was not unconstitutional as impairing the obligation of contracts. 394 U. S. 113. charges as are reasonable; that more than the maximum fixed by the legislature cannot be recovered by the company by showing that the amount charged was no more than reasonable for the services."1 "The Railroad Commission Cases' affirm the 'Granger Cases,' and go beyond them, sustaining the validity of a statute regulating rates of transportation and creating a State board of commissioners to supervise and enforce the same." "The power of a State to regulate the charges of railway companies for the transportation of persons and property within her limits is governmental, and if it can be bargained away at all, it can only be by words of posi tive grant, or something which is in law equivalent. If there is a reasonable doubt, it is to be resolved in favor of the existence of the power. A surrender of such powers 'ought not to be presumed unless the purpose appears to have been deliberately entertained and is distinctly expressed."" Upon the same principle the State may regulate telephone charges. The fact that telephones are patented is immaterial; nor does such regulation "take" property so as to unlawfully interfere with vested rights. And, the rule has been applied again in the regulation of charges for supplying gas. For, it has 1"The Dartmouth College Case and Private Corporations," by William P. Wells, (1886) 9 Am. Bar Assoc. Rep. 229, 247, citing Chicago, B. & Q. R. Co. v. Iowa, (1876) 94 U. S. 155; Peik v. Chicago & N. R. Co., (1876) 94 U. S. 164, 178, where Chief Justice Waite said, "As to the claim that the courts must decide what is reasonable and not the legislature. This is not new to this case. It has been fully considered in Munn v. Illinois, (94 U. S. 113.) Where property has been clothed with a public interest, the legislature may fix a limit to that which shall in law be reasonable for its use. This limit binds the courts as well as the people. If it has been improperly fixed, the legislature, not the courts, must be appealed to for the change." Chicago, M. & St. P. R. Co. v. Ackley, 94 U. S. 179; 2"The Dartmouth College Case and Private Corporations," by William P. Wells, (1886) 9 Am. Bar Assoc. Rep. 229, 248, citing Railroad Commission Cases, 116 U. S. 307. 3 Hare's American Constitutional Law, 667, citing Providence Bank v. Billings, 4 Peters, 514, 561; Stone v. Farmers' Loan & Trust Co., 116 U. S. 307, 325; Railroad Company v. Maryland, 21 Wall. 456; Chicago, B. & Q. R. Co. v. Iowa. (1876) 94 U. S. 155: Ruggles v. Illinois, 108 U. S. 526, 531. 4 Hockett v. State, 105 Ind. 250; s. c. 55 Am. Rep. 201. been said, the manufacture of gas, and its distribution by means of pipes laid, under legislative authority, in the streets and ways of a city, is not an ordinary business in which every one may engage, as of common right, upon terms of equality; but it is a franchise relating to matters of which the public may assume control. Accordingly, an agreement between a city and a gas company for the supply of gas for a period longer than that authorized by law will not affect the right of the city to fix the price after the expiration of the legal time. And in California it is held that water companies, formed under the act of 1858, have no right, which the State is prohibited by the constitution of the United States from impairing or taking away, to have their charges fixed by a commission made of persons selected as required by that act.2 The State can not, however, impose restrictions which render their franchises less beneficial to the corporation. The doctrine of Munn v. Illinois and the Granger Cases has been made the object of vigorous attack. It has been declared to be subversive of the rights of private property, and to destroy 1 State v. Ironton Gas Co., 37 Ohio as to its use and employment and St. 45. 2 Spring Valley Water Works v. Schottler, (1883) 110 U. S. 347, 350, 351, Field, J., dissenting. 3 In City of Erie v. Erie Canal Co., 59 Pa. St. 174, the charter of a company gave them the right to a canal which had been constructed by the State; and it was held that they could not be compelled to build bridges over the canal at the points where it intersected the public high ways. 4" The decisions seem to us to be subversive of the rights of private property, heretofore believed to be protected by constitutional guaranties against legislative interference;' they hold that 'all property and all business of the State are held at the mercy of the legislature;' they deprive private and corporate owners of their property absolutely, although under the guise of mere regulations non-interference with its title and possession." "The Dartmouth College Case and Private Corporations," by William P. Wells, (1886) 9 Am. Bar Assoc. Rep. 229. See also dissenting opinions of Justices Harlan and Field, in the Railway Commission Cases, 116 U. S. 307. "These decisions assert principles which have not received, and, as we believe, can not receive, the assent of the most weighty professional opinion. The reasoning of the dissenting opinions seems to us to be unanswerable. These express with cogent logic, abundant authority and masterly strength the consequences of a doctrine that the legislative power can be unchecked, in its interference with business essentially private, or its prescription of the compensation which private and corporate owners shall receive for the use of their property." "The Dartmouth Col practically all the guaranties of the constitution and of the common law invoked for the protection of vested corporate rights.1 § 32. Of statutes creating a new or modifying or abolishing an old remedy. The constitutional prohibition of laws impairing the obligation of contracts has no application to statutes modifying or abolishing an existing remedy or providing a new one. In this respect again there is no distinction between natural and artificial persons. The rights of both are equally sacred; both are equally subject to legisla tive control; and so long as no new burden is imposed upon corporations which might not be lawfully laid upon natural persons, the State has an undoubted right to provide new remedies by which to enforce the duties of corporations to the public or to redress injuries occasioned by their acts. For all grants of corporate privileges and franchises are subject to the condition that they shall not be abused, nor employed to defeat the ends for which they were conferred, and to an equally implied condition that the legislature may prescribe such reasonable regulations as will secure the ends for which the corporation is organized, provided such regulations do not interfere with or obstruct the enjoyment of the corporate lege Case and Private Corporations," by William P. Wells, (1886) 9 Am. Bar Assoc. Rep. 229, 249. In Stone v. Wisconsin, (1876) 94 U. S. 181, Justice Field, referring to Munn v. Illinois, 94 U. S. 113, said: "So long as that decision remains, it will be a waste of words to discuss the questions argued by counsel in these cases. That decision in its wide sweep practically destroys all the guaranties of the constitution and of the common law invoked by counsel for the protection of the rights of the railroad companies.” And again it is said, "the question to what purpose can the constitutional prohibition upon the States, against impairing the obligation of contracts, be invoked, if the State can, in the face of a charter authorizing a company to charge reasonable rates, prescribe what rates shall be deemed reasonable for services rendered,' can receive, it seems to us, but one answer, viz.: the constitutional inhibition is of no effect." " The Dartmouth College Case and Private Corporations," by William P. Wells, (1886) 9 Am. Bar Assoc. Rep. 229, 250. 2 McCurdy's Appeal, 65 Pa. St. 290, McElrath v. Taggart, 55 Pa. St. 189; Long's Appeal, 87 Pa. St. 114; Union Canal Co. v. Gilfillin, 93 Pa. St. 95; Sanders v. Hillsborough Ins. Co., 44 N. H. 238; Louisville County v. Ballard, 2 Met. (Ky.) 165; Hare's American Constitutional Law, 421, 600. privileges. This principle is expressly declared to be essential to the protection of the public against perils arising from the ignorance, misconduct or fraud of those who manage corporations. Thus acts regulating banks, which impose no new burdens upon them but merely provide means of restraining them from conducting business contrary to banking principles, have been held constitutional. Upon the same principle where an act was passed for the benefit of a turnpike corporation already chartered, which contained a clause authorizing a sale of the property for debt in certain cases, and the company refused to accept the provisions of the act, it was held that although no right was reserved to the legislature to amend the charter, yet that it had power to subject the property of the corporation to the payment of its debts in this way. And a statute modifying the form of remedy for enforcing the individual liability of stockholders for debts of the corporation, but not annulling their liability, is constitutional, even as applied to debts contracted by the corporation before the enactment.' So a statute prescribing a mode of service of process upon a railroad company different from that provided for in its charter is not void as impairing the obligation of a contract; provided the power with respect to remedial legislation be not exercised so as to affect injuriously rights which have been 1 Chicago Life Ins. Co. v. Needles, 113 U. S. 574; The Sinking Fund Cases, 99 U. S. 700; "The Dartmouth College Case and Private Corporations," by William P. Wells, (1886) 9 Am. Bar Assoc. Rep. 229. See also Goodrel v. Kreichbaum, (1887) 70 Iowa, 362, where the court decided that Chapter 76, Laws Twenty-first Gen. Assem. Iowa, providing that foreign corporations, other than those organized for mercantile or manufacturing purposes, shall take out permits before doing business in that State, or suffer certain penalties, and shall not be allowed to exercise the right of eminent domain, or other privileges conferred on corporations, unless they take out such permit, and that if any such foreign corporation, when sued in the State courts of that State, removes the cause to a federal court, on the ground of local prejudice, or because it is a non-resident, it shall forfeit its permit, and no new one shall be issued for the space of three months, was not contrary to section 8, art. 1, Const. U. S., and section 21, art. 1, Const. Iowa, which provide that no law shall be passed impairing the obligation of contracts. 2 Ward v. Farwell, 97 Ill. 593; Commonwealth v. Farmers' & Mechanics' Bank, 21 Pick. 542. 3 Louisville Turnpike v. Ballard, 2 Met. (Ky.) 165. 4 Fourth National Bank v. Francklyn, (1887) 120 U. S. 747. |