# Amicus Curiae Brief — Western Union Telegraph Co. v. Poston

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Curiae Brief
- **Published:** January 1, 1921
- **Citation:** 256 U.S. 662

## Text

see ANTE BOSE Wk ees STA,

Supreme Court of the United States

OcroneR TERM, 1920.

No, 2938,

WESTERN UNION TELEGRAPH
COMPANY,
Appellant,

against
S. B. Posrox,
Appellee.

BRIEF AS AMICI CURIAE ON BE-
HALF OF APPELLEE.

The construction of the contract between the
appellant and the Postmaster General will affect
generally the rights of numerous claimants against
telegraph and telephone companies arising out of
the operation under Government control. It will
affect particularly the rights of a litigant we rep-
resent in an action entitled Herstein y. New York
Telephone Company, now pending in the Supreme
Court, State of New York, County of New York.
Upon the written consent of the attorneys for both
sides of this appeal, we ask leave of the Court to
file this brief as amici curiae and respectfully

a

eae esate lg cha SEC ATOR

RSs ESE REI Re OS. Ata ae xe Oe

Seah kat Beats IN RE ELAS

pray that, in the construction of the said contract
aud particularly Sections S(e) and 15 thereof, the
Court take into consideration the facts in the //er-
sien case, supra,

Facts.

Herstein, an infant, while walking on one of the
streets in the City of New York, on February 26,
1919. received serious injuries due to the falling
of a pole bearing telephone wires, The Telephone
Company by its answer admits it erected the pole
long prior to the joint resolution on July 96, 1918,
und the proclamation and orders pursuant thereto,
but disclaims liability for the injuries received by
the plaintiff on the ground that its lines at the
time of the accident were “under the operation and
control of the Federal Government.” The agree-
ment between the New York Telephone Company
and the Postmaster General is identical with the
one between appellant and the Postmaster General
in the present case (Exhibit No. 4, p. 41).

The Supreme Court of the State of South Caro-
lina has affirmed the existence of liability against
the wire company under the terms of this agree-
ment. We submit that the following principles
justify the decision of the Court:

1. We agree with appellant’s view that a tort
Claimant would have no right of action against
the United States (Belknap v. Schild, 161 U. &.,
10, and other cases cited in appellant’s brief). He
either has his remedy directly against the wire
company, or he has no remedy at all. If the con-
tract between the wire company and the Postmaster

a

3

General is not capable of a construction that would
protect both the wire company and the public, in-
juries to large numbers of claimants will go with-
out remedy. The sections of the agreement. in-
volved are Section 8(e) and Section 15.

Section 8(e) (p. 46) provides, in part:

“The Postmaster General shall * * *
also pay or save the owner harmless from
all judgments or decrees that may be recov-
ered or issued against, and all fines and
penalties that may be imposed upon it, by
reason of any cause of action arising out of
Federal control, or anything done or omit-
ted in the possession, operation, use or con-
trol of its property, during the period of
Federal control, except judgments or decrees
founded on obligations of the owner to the
Postmaster General or the United States.”

Section 15 (p. 73) provides:

“In presenting this proposal it is under-
stood that only the salient features incident
to the relations of the parties have been de-
scribed and that further details not covered
arising from the operation of the property
by the Postmaster General shall be settled
in conformity with the broad principles
herein enunciated.”

In construing these two sections of the agree-
ment, effect should also be given to the statement
of the Postmaster General in his Order No. 1783
(Exhibit No. 3, p. 40), assuming control of the
lines, that the purpose was to operate the lines as
a national system “with due regard to the interest
of the public and the owners of the property.”

PRET NL See, PEE, SET

TEBE IE

Pesce

SSeS Ess

4

The sections just cited must be given some
effect; they cannot be considered void. A contract
must be so construed as to give meaning and effect
to all its provisions.

Burdon Century Sugar Ref, Co, v. Payne,
167 US. 127, 142.

Hobbs v. MeLean, WNT UL S., 567, 576.

(. S. ve Central Pacific BR. R. Co., 118
UL S., 235, 241,

l tley Vv. Donaldson, 0A UL S., 29, 46.

Binghamton Bridge, 3 Wall, 51, 73.

It will not be seriously contended by the appel-
lant that either the Government or the wire com-
pany intentionally omitted provision in the agree-
ment for the protection of such of the public as
might be injured during the ordinary course of
operation. The very insertion of Section 15 in the
contract argues to the contrary.

2. Section Sie) and Section 15, taken together
and broadly construed, may be considered to be a
provision for the protection of injured members of
the public in suits against the wire company, as
well as protection for the wire company by reim-
bursement from the Postmaster General. Any other
construction would be harsh and unjust and would
be contrary to the established rule that “When an
instrument is capable of two constructions, one
working injustice and the other consistent with the
right of the case, that one should be favored which
standeth with the right.”

5

Norman vy. Bradley, 9 Wall., 394, 407.
Utley v. Donaldson, supra.

Binghamton Bridge, supra.

Hoffman vy. Aetna Ins. Co., 32 N. Y., 405.

It must be assumed that the Postmaster General,
ia preparing this form of agreement, did not intend
to deprive claimants of their common law remedies,
and that he knew at the time of the execution of
the agreement that tort claimants could not insti-
tute suits against the Government. We are forced
to the conclusion, therefore, that he intended by
the provisions of Section 8(e) to protect both the
public and the companies; the former, because, by
implication, suits were permitted against the com-
panies; the latter, because, by express provision of
the contract, he agreed to indemnify them against
judgments recovered in such suits. In giving these
provisions this fair and equitable construction no
injury is done to the Government, for it is merely
called upon to do what it agreed to do; no injury
is done to the wire companies, for the Government
is to reimburse them for all moneys so paid out;
no injury is done to the public, for claimants are
not then deprived of remedies for injuries sustained.
The contrary construction urged by the appellant
would be a harsh, inequitable and unjust one which
would benefit only the party who framed the con-
tract.

3. Order No. 2114 (Exhibit No. 4, p. 41), the
agreement in question, is the form provided by the
Postmaster General to all wire companies. If a
doubt in the construction of its provisions arises, it
must be construed strongly against the Postmaster

6

General, for language must be construed most
strongly against the party employing it.

Grace Vv. American Central Ins. Co., 109
U. 8., 278, 282.

American Surety Co. vy. Pauly, 170 UL S.,
133, 144.

/naurance Companies vy. Wright, 1 Wall.,
456, 468,

H. Lt is respectfully submitted that the judg-
ment of the Supreme Court of South Carolina
should be affirmed.

WM. M. SILVERMAN,
JOSEPH P. TOLINS,
Counsel amici curiae ou
behalf of appellee.

[19212]

SUBJECT INDEX.

Oe On ccccuecevuevedesscssesceccena’ ube eeeee
Specification Of @FTOTs... cee ccc eee eeccecccccese
Re GE GIN ccc ccecsttcecccseccvece seacesnes pesveses
I, Federal possession, control, and operation of the wire
systems and liability of the owner companies there.
SE BWeeeee Web ves chosen ctors caces: beenuecussene
1, Relationship established between the United
States and the wire companies by the seizure

of their systems under joint resolution No,

Sh4o oof Congress of July 16, 1918, and the
proclamation of the President of July 22,
eee SRUdCeahe ehbeeeereseaeteeneretens

2. Notmresponsibility and nomliability of the
owner wire companies for the acts of the
United States during its control and opera-

tion of their systems......... eeveeceveecete

a. Neither the joint resolution nor the
proclamation imposes liability on the

wire companies for the acts of the

CROCE BAGS. ccccncccsscvccececes oe

b. The effect of the presidential action

taken under authority of the joint

resolution was to supplant the owner

wire companies and thus do away

with all their liabilities as com-

MON CArTIOTS. 6... cece ee Coececcccccce

(1) Common carriers are charged

with no duties and respon-

sibilities that may not be

suspended by the paramount

authority of the war power

of the United States,......

(2) Relation of lessor and lessee

did not exist between the

wire companies and the

United Btetebscccccccceses

(3) The United States was not the

agent of the wire companies.

aoe s

16

7

21

41

INDEX.

(4) The wire companies were not
the masters of the servants
of the United States.......

(5) The wire companies cannot be
held liable on the theory of
the Postmaster General being
a statutory receiver of their
BYSTCMS .cccceccs Seesesvces

Il. Federal possession, coutrol, and operation of the wire
systems and liability of the United States there
WOE and exec ay aed ah OLSEN RES PERRO TOE Tae

1. This suit is based solely on acts of the United
States; hence it is the real party in interest.

v. Authority to sue the United States must he
expressly given by Congress.......... sarees

3. The judgment herein is inoperative against the
United States, and, if effective at all, is effect-

ive against the telegraph compuny..........

a. The proper construction of the contract
between the Postmaster General and

the telegraph company..............

b. The Postmaster General had no au
thority to submit the rights of the

United States to the determination of

Se COR case ce tase hoes evn ee

e If the contract gives authority to sue

the United States, such suit must be

either in the district court or Court of

Olpis 26s: PCE, RT RE a AIA Re ld

III. Constitutional objections to the maintenance of this
suit and the recovery of a judgment therein effect
ive against the owner telegraph company..........

1. Denial of due process of law under the Fifth
ERNE oe ee annie sVaar cana ee es Kane 4
2. Denial of due process of law under the Four-
teenth Amendment.......... ME ree
Eh SO ak scan ave eenes sine oes ied cinaawe eve ase :

he

INDEX.

TABLE OF CASES.

ili

Page

Attorney: General vs. Old Colony Ro Co. (160° Mass.. 62 22
Je Ie Vg | Sa eerie ie gh ine one AP aeer, StS Ma A Sen MeNAL ND 8 94, 97
saltimore & Ohio R. Co, vs. Burris (111 Fed., 882).......... 60
ecrs YS: Arwanunn (20 How., S273. 656 oes eoes sccbas tenes SS
OPK ED -VBy MCE CPO WT, 00 663 sews > ss 6 devia ef ciwe le 67, 69
Bieviie We. Bios (200 Ped. O08) co.cc divice odie vabecuhe 61
Brady vs, Chicago, etc., R. Co, (114 Fed,, 100)..........6... m4
Brooks Scanlon Co, vs. R. R. Commission (251 U. 8. 396).... WG
purleson: vs, Dempey (2h0°U. S., TO. 5 occ soos booksesceccwic. 14

Canidate vs, Western Union Tel. Co. (SS South. 10) (Ala.—not
ROU OUMIAiUY “POPGIURE Ys 5') 6:06 60 vio Wh So 000s bake ienaocs 15, 24, 54, 63
Carr -vs,United (Stites: (OR. 8.) 483). 60.0 s cccsassaeceeens 71,84
COME VS, DOPCOH Cet WAI, PUR os -6 Xoo sce celles oooacukadus S4
Castle vs. Southern R. Co. (112 8. ¢., 407; 99 S. E.. 846).... 4
Central Trust Co. vs, Charlotte, ete. Ro Co. (65 Fed... 257).. a 49)
Chicago, ete., R. Co. vs. Bond (240: U. S., 440)..........

a Na ae

tad hea

=

68

This principle, however, is wholly inapplicable to the pres.
ent case. As this court held in the Dakota Central Tels.
phone Company case, when the United States took over the
wire lines and entered into the conduct of the telegraph busi.
ness it was operating such business “as a governmental
agency. "The contracts for the breach of which this suit is
brought were made with agents of the United States in the
aetual course of the operation of such governmental agency,
henee the breach of duty by failing to transmit and deliver
the telegrams promptly was a breach of duty le the United
States as the carrier conducting the business. and not a breach
of a duty owed personally by such agents to the plaintiff
The case, therefore, falls squarely within the principle an.
nounced in the leading ease of Hodgson vs, Derter, 1 Craneh,
845 (2 L. Ed. 180), where was invelved the question of the
right to maintain # suit against the Secretary of War per.
sonally on a lease made to him and his successors, and re.
specting which this court, speaking through Chief Justice
Marshall, said:

“The court is unanimously and clearly of opin-
ion that this contract was entered into entirely on be.
half of the Government, by a person properly author.
ized to make it. and that its obligation is on the Goy-
ernment only, Whatever the claims of the plaintiff
may be, it is to the Government and not to the defend.
ant he must resort to have them satisfied.”

This case has been cited with approval in the following
CUuses :
Garland vs, Davis, 4 Howard, 131 (11 L. Ed., 907).
Belknap vs. Schild, 11 UL S8., 10 (40-1. Ed., 599),
District of Columbia vs. Camden Tron Works, 181 0.
S., 458 (45 1. Ed., 948),

The authorities, therefore, conclusively establish that the
United States, and not the telegraph company named as de-

69

fendant on the record, is the real party in interest in this

ease.

2. The United States, being the real party in interest,
authority to bring and maintain this suit indirectly agains‘
the United States must be found in an act of Congress or it
does not exist.

But if, as shown, the United States, and not the defendant
telegraph company, is the real party in interest, the question
then arises as to the authority to bring this suit and recover
indirectly against the United States

Whatever may be the true prineples on which it) is
founded (1) SN. rs, Lee, 106 U8. 196; 27 L. Ed. 171), it
is a rule firmly established by an unbroken current of de-
cisions Of this court dating back to its very beginning that
the United States, like all sovereigns, is exempt from: suit da
any court, either at law or in equity, without its consent,
The rule is thus clearly stated in the leading ease of Belknap
va, Schild, 161 USS. 10; 40-1, Bd. 599;

“The United States, however, like all sovereigns,
cannot be impleaded in a judicial tribunal, except so
far as they have consented to be sued. This doctrine
has been affirmed by this court in cases too numerous
in be cited. and was clearly stated by Mr. Justice
Field delivering judgment in the case of The Siren,
as follows. ‘It is a familiar doctrine of the common
law that the sovereign cannot be sued yn his own
courts, without his consent. The doctrine rests upon
reasons of public poliey—the inconvenience and
danger which would follow from any different rule.
It is obvious that the public service would be hindered,
and the public safety endangered, if the supreme
authority could be subjected to suit at the instance of
every citizen, and consequently controlled in the use
and disposition of the means required for the proper
administration of (ie Government. The exemption
from direct suit is, therefore, without exception. This
doctrine of the common law is «qually applicable to

70

the supreme authority of the nation, the Unite
States. They cannot be subjected to legal proceed.
Ings at law oor in equity without their consent. and
whoever institutes such proceedings must hiring h
cause within the authority of some achoof Congres,
Such is the language of this court in (nited States vs
Clorke S Peters, 444. The same exemption from jy
dicial process extends to the property of the United
States, and for the same reasons. As justly observe
by the learned judge who tried this cease, Mere iene
distinction between suits against the Governiceut di
reetly and suits against its property. The Siren. 4
Wall, 152, 154. So much of this statement asp
yards suits against the United States or against they
property Was repeated by the present Chief Justice iy
the recent case of Stanley vs, Sehwalhy, WV Us
DOS, 51207 CT talies added, )

Among the numerous cuses in this court announeme and
applying the rule we may cite

Cohens ve. Virginia, 6 Wheat.. 264, 880 05 1. Ed,
2457).

United States va. Clarke, S Peters, 486 (8 LL. Ed.
1001),

Inited States va, MeLemore, 4 How., 286 011 1. Ed
977).

All vs. United States, 9 TIow.. 386 018 TL. Ed.. 183)

Murray vs. Hoboken Land, ete., Co. IS Wow,, 272
(15 L. Ed., 372).

Nations vs, Johnson, 24 Tow. 199 (16 1. id. 628),

Vnited States vs, Tillou, 6 Wall. (Sd CES Lo Ea.
920),

Nicholl vs. United States, 7 Wall, P22 C18 1b. Ed.
125).

The Siren, 7 Wall., 152 (19 L, Ed., 129),

The Davia, 10 Wall., 15 (19 L. Ed., 875),

United Ntates vs, Thompson, 98 U.S., 484 (25 T.. Ed.
194).

-_-

oe
il

Carr vs, United States, OS US. 438 (25 1. Ed. 209),

United States vs, Lee, LOB ULS., 196 (27 L, Ed. 171).

Finn vs, United States, 128 Ul 8., 227 (31 1. Ed.,
}ZS),

United Ntates vs, Gleeson, 124-0, S,. 205 (31 L., Ed..
420),

Ntanle WR, Nehu alhy, lay ©, 8. BOR (971. ed... 25M).

Stanley vs, Schwalhy, 162 Ul 8., 255 (40 L. Bad..
HOU),

Minnesota vs, Hitcheoek, 185 UL S.. 374 (46 1. Ed.
HO4).

Internatioval Postal Supply Co, vx, Brace, WA UOS.,
WHOL (AS LL. Md, 1134).

Oregon 08, Mitehcock, 202 U8. GO (50-1. Badd,
035),

Naganah ox, Miteheock, 202 U8. ATS (50-1. Bad..
1118),

Nansas vs, United States, 204 U8. 8831 (51 L. Ed.
510),

Louisiana vs. Garfield, 211 UlS.. 70 (53 L. Ed. 92).

New Merico vs, Lane, 2438 U- S., O2 (61 L. Ed., 588).

Ilinvis, ete, R. Co, os, Public, ete., Com... 245 0. S.,
493 (62 1. Ed., 425),

Wells vx, Roper, 246 US8., 335 (62 L. Ed., 755).

Not only, however, is the United States eXemipt frome suit
in any court, except by its consent, but such consent must
le given by un act of Congress in express terms, This is set-
led bevond dispute by the decisions of this court,

Thus in United States vs, Clarke, 8 Peters, 436 (8 L, Ed.,
1001), Chief Justice Marshall, speaking for the court, de-
clared :

“As the United States are not suable of common
right, the party who institutes such suit must bring
his case within the authority of some act of Congress,
or the court cannot exercise jurisdiction over it.”

(Italics added. )

PPT IT Oe Te SE LS

12

This statement of the rule has been approved and followed

in The Siren, 7 Wall, 152 (19 L. Ed., 129), Belknap vs

Nehild,

supra, and other cases,

In Stanley vs, Schwalhy, W208, 250 (40 IL. Bal, 860).
the principle is stated in these words:

The

Cases |

The

“Tt is a fundamental prine:ple of pubite law, af
firmed by a long series of decisions of this court, and
clearly recognized in its former opinion in this case,
that no suit can be maintained against the United
States or against their property, ome any court, with
out express authority of Congress, IAT USS. oR
(87 L. Ed., 261). See also Belknap vs, Schild, 16)
US. 10 (40° L. Ed., 599). The United States by
various acts of Congress, have consented to be sued in
their own courts in certian classes of cases; but they
have never consented to be sued in: the courts of a
State in any case” (Ttalies added. )

same point has been expressly ruled in the foilowing

Nicholl vs, United States, 7 Wall, 122 (19 L. Ed,
125).

The Davia, 10 Wall, 15 (19 LL. Bd. 875),

Hill va. United States, 9 How. 386 (18 L, Ed., 185),

Schillinger vs. United States, 155 UO 8., 162 (39-1,
Ed., 108).

Illinois Central R, Co. vs, Public Utilities Com., 245
U_S., 493 (62 L. Ed., 425).

rule is further well settled that this exemption of the

United States from suit, except by its consent, extends to
suits in which the United States is (adereetly interested as
well as to those in whieh it has a direct interest, and in sueb
indirect suits the courts, in the absence of an express grant
by Congress, are without authority to enter any judgment
that will bind either the United States or its property.

In Belknap vs. Schild, 161 US, 10 (40 L, Ed., 599), an
injunction was sought against the commandant of | the

73

United States navy yard at Mare Island, California, and
some of his subordinates, to prevent the use of a caisson gate
in the dry dock at that place, contrary to the rights of the
plaintiff as patentee, The case was heard on pleas setting
up that the caisson gate was made and used by the United
States for public purposes and that it was the property of the
United Stutes. As the complaint sought, in addition to the
injunction, the recovery of damages for the alleged tortious
acts of the defendants, the court dismissed the bill without
prejudice to the plaintiff to bring a law action, but held that
the defendants had no personal interest in the continued use
of the gate, and that so far as the injunction was concerned
the suit Was against the United States, Said the court:

“There is no distinction between suits against the
Government directly and suits against its property,
* * * It necessarily follows that unless ercpressly
permitted by act of Congress, no injunction can be
granted against the United States.” (Italics added).

The case of Jnternational Postal Supply Co. vs. Bruce, 194
Us, GOL (48 L. Ed., 1184), was a bill in equity by the
plaintiff, as the owner of the patent for a stamp cancelling
and postmarking machine, against the defendant as pest-
master of the United States post-office at Syracuse, New
York, to enjoin the use in such post-office of two machines
alleged to be infringements on plaintiff's patent. The ma-
chines in question in the Syracuse post-office were leased by
the United States Post-Oflice Department for a term, which
had not expired, from the manufacturer and owner, at an
agreed rental, and were being used by the employees of the
United States. This court declared that the suit was really
against the United States and could not be maintained, say-
ing:

“In the case at bar the United States is not the
owner of the machines, it is true, but it is a lessee in
possession, for a term which has not expired. It has

10y

u property —a right (a renein the machines, whieh,
though less extensive than absolute ownership. tia.
the same dneident of a right to use them while i list
This right cannot be interfered with hehind is had
and as iteamnot be rede a party, this suit, The thay
of Belhnap es, Sehild avast fail Citalies added.)

ln Goldberg vx, Daniels, 251 US, 208 (OS L, Ba, dy
the plointil applied to the court for a tiandamius against th
secretary of the Navy to compel hin to deliver a Govern.
tent cruiser to the plamti® as the highest bidder therefor
Wider proposals for the purchase of sueh cruiser advertised
hy the Seeretary, The lower court dismissed the petition
onthe ground that whether plaintiffs Iyd should be accepted
Was dn the diseretion of the Seeretary, ‘This ruling was af
firmed by this court, whieh said

"We see me sufticient reason for throwing doult
upon this premise for the deeision, but there ts ay
other that) comes earlier in) point of Jogie Th
United States is the owner, in Possess lon af the vessel
Tt cannot be interfered with behind ite back. and a
Hocunnot be made a party, this suit miust fal
(Italies added, )

To the same effect are:
Stanley vs, Schwalhy, W208, 255 (40-1, Ed,
G0),
Louisiana vs, Garfield, 2V1 US. T0058 1, Bad, 9),

Welle vv, Roper, 246 US, 885 (O21, Bd. 795),

Briefly stated, therefore, the rule to be deduced trom: the
decisions of this court is thata suit, either at haw or in equity,
cantiot be maintained, either direetly or indireetly, against
the United States in any court unless erpreas/y authorized by
an act of Conuress.

But to recur to the facts of the present ease: The suit is
for breach of contracts to transmit and deliver telegrams en-
tered into with the agents of the United States while it was

-—

74

operating the telegraph system as “a governmental ageney,”’
the defendant telegraph company had no interest in or eon
nection With such contracts, the effect of the judgment will
le to interfere with the property of the United States by at-
temipling to make collection out of the revenues of the
United States, and the joint resolution under which the
United States acquired the telegraph system contains not a
word of authority to bring such suit. Sueh being the rule
then, and such the faets, the ease is identical in’ principle
with the case of International Postal Supply Co. vx, Bruce,
supra, and is concluded by it; for if the interests of the
United States as lessee of a machine are such as to prevent a
“Hit against a postmaster to restrain the use of such machine,
a fortior’ they must be such as to prevent the maintenance
of a suit for breach of a contract entered into on behalf of
the Cotted States and the recovery of a judgment therein
that will affect the property of the United States,

It likewise falls squarely within the decision in Wells vs,
Roper, supra, for if, as held in that case, a bill in equity will
wot he to enjoin the annulment by the Assistant Postmaster
General of a contract made in behalf of the Unived States.
certainty an action at law will not lie indirectly against the
United States to recover for acts of the agents of the United
States constituting a breach of contract entered inte ly such
agents on behalf of the United States,

\. The judgment herein is inoperative against the United
States, and, if effective at all, is effective against the tele.
graph company.

The decisions we have just been considering, unless there
issomething in this case to take it out of their operation,
lead to two inevitable conclusions, viz: (1) the United States
isthe real party in interest, and (2) the suit eannot be main-
tained and judgment recovered therein indireet/y against the

76

United States, since Congress has not seen fit to give the
necessary consent therefor,

But it is insisted that paragraph (¢) of seetion S of the
contract entered into between the Postmaster General and the
telegraph company gives authority to institute and maintain
a suit like this against the telegraph company and thus in-
directly to institute and maintain it against the United States,
thereby removing it from the operation of the rules to whieh
we have just referred, The provision in question reads thus
(Transeript, Ex. 4, p. 46):

“(e) The Postmaster General shall pay, or save the
owner harmless from, all expenses incident to or grow
ing out of the possession, © veration, and use of the
property taken over during the period of Federal con-
trol. He shall also pay or save the owner harniles
from all judgments or deerves that may he recovered
or issued against, and all fines and penalties that may
be imposed upon it by reason of any eause of action
arising out of Federal control or anything done or
omitted in the possession, operation, use or control of
its property during the period of Federal control, ex-
cept judgments or decrees founded on obligations of
the owner to the Postmaster General or the United
States.”

The State Supreme Court gave this provision of the con
tract the foree and effect for whieh respondent now contends,
as appears from this language quoted from the opinion on
page 61 of the transeript:

“While the action and the judgment therein re
covered are in form against the Western Union Tele
graph Company, yet in effect they are against the
Postmaster General,

“The plaintiff! followed the mode of procedure di-
rected by the President in his proclamation and
ordered by the Postmaster fenet not only in his
order hereinbefore mentioned, but also when he rati
fied the contract between the Western Union Tele
graph Company and himself, which contemplated a

—
ae

judgment in form against the defendant Western
Union Telegraph Company.” (Italies added.)

That this conclusion is wholly unsound is readily demon-
strated by a proper construction of the contract, and particu-
larly of section 8, paragraph (¢) thereof, entered into be-
tween the Postmaster General and the telegraph eompany.
In making this interpretation, it, is necessary to determine
(1) the purpose and meaning of the contract, and particn-
larly of section &, paragraph (¢) thereof, and (2) the legal-
ity of section 8, paragraph (¢), of the contract in so far as it
submits the rights of the United States to the courts for
adjudication,

Considering these propositions in the order stated, we first
inquire as to the purpose and meaning of the contract be-
tween the Postmaster General and the telegraph company,
and particularly of section S, paragraph (eo) thereof,

In the joint resolution of Congress of July 16, TODS, au-
thorizing and empowering the President to take possession
and assume control of the wire systems, it was distinetly pro-
vided “that just compensation shall be made for such super-
vision, possession, control, or operation, to be determined by
the President.” The system of Western Union Telegraph
Company was taken over pursuant to the proclamation of the
President on August 1, T9TS, and thereafter, on October 9,
1918, it submitted to the Postmaster General a proposal
wherein it offered “to accept a just compensation for the
supervision, possession, control, and operation’ of its: tele-
graph system “to be fixed’ as set out in detail in the proposal
(Transeript, Exhibit 4, pp. 41-51). Among the elements of
the just compensation thus proposed by the owner was the
provision for indemnity against judgments or decrees ren-
dered against if on causes of action “arising out of Federal
control,’ appearing as section S, paragraph (¢), of the con-
tract (Transeript, p. 46). The contract was completed by
an acceptance of the proposal by the Postmaster General in
these words ;

78

“The proposal of the Western Union Telegraph
Company, dated October 9, L918, with respect to just
compensation for the use of the properties owned by
them during the period of Federal control * * +
is hereby accepted on behalf of the United States. and
compensation will be paid in accordance with the
terms and provisions thereof.” (italies added. )

(ex. 4, Transeript. p. 41.)

Under the facts, therefore, as well as under the decisions
in Dakota Central Telephone Co, vs, South Dakota ex rel,
Payne, ZOO ES. 165 068 1. Bd. 910). and A richinan vs.
Mnited States, 263 Ped. S38, construing precisely similar
contracts, the sole object and purpose of this contract was
to provide for COM pe neation to, not liability against, the
owner for the use of its property by the United States,

Having ascertained the purpose of the contract, it is next
in order to inquire as to the meaning and reason for the
provision for indemnity against judgments and decrees found
in paragraph Ce) of section 8,

It is quite obvious that this provision is no affirmative grant
of aright to sue anyone ona “eanse of action arising out of
Federal control.” On the contrary, in so far as the right of
suit is concerned. it is wholly negative. its plain’ primary
meaning hemng that ether in the event suit should be entered
against the owner corporation on a cause of action arising out
of Federal control and a recovery defeated, or in the event
that such suit should be entered and a judgment recovered,
then in the first case the expenses incident to the defense
of the suit. and in the second ease the judgment and the ex-
penses incident thereto should he treated as liabilities of the
United States, and should not he deducted out of the COM pen
vation to be paid te the owner for the use of its property by
the United States.

Manifestly, therefore, the purpose of the provision was not
to give aright of action, but fo provide for contingencies, viz,
either the contingency of the owner being compelled to de-

79

fend at its own expense suits against it on causes of action
arising Out of Federal control, or the contingency of ultimate
lability against the owner on such causes of action being
found by the courts to exist either by virtue of then existing
law or of law subsequently to be enacted,

At the time the telegraph company’s system was taken over
by the United States, and for many years prior thereto, suits
agailist such Company were of daily occurrence in the various
State and Federal courts throughout the country. [twas
evident at the outset that parties with erievances, real or
fancied, growing out of transactions had in the conduet of
the telegraph business, would not cease bringing these suits
merely because of the President's proclamation, and that
vane one would have to defend such suits when they were
brought. But if the suits were brought against the tele-
graph company, clearly it would be compelled to defend or
else suffer a recovery against it by default. Whether it ulti-
mately won or lost, such company would have to pay its at-
torneys’ fees und at least some part of the court costs and
disbursements. When it is reealled that experience extend-
ing over a long period of years had established the fact of an
annual average of more than one thousand of these suits,
itis quite apparent that the aggregate annual cost of defend-
ing, and of ultimately defeating many of them in whieh
adverse initial judgments should be rendered, would be enor-
mous. Hence the telegraph company faced the practical
consideration of the necessity for making provision for the
expense of defending suits brought against it on causes of
action arising out of Federal control, regardless of its success
or lack of success in defeating a recovery against it in such
suits. In fact, as the company knew from experience, the
annual expense of defending suits practically equalled the
amount paid out in satisfaction of judgments: so it was quite
as important to have the Postmaster General agree to take
care of the expense of the suits as it was to have him agree
to pay the judgments. To meet and provide for this con-

su

dition must therefore be considered the first object of this
paragraph of the contract, which expressly requires the Post-
mnaster General to “pay * * * all expenses incident to
or growing out of the possession, operation, wna use of the
property” is well as “all judgiients or decrees.” Without
such a provision, judgments would have been obtained
against the telegraph company on causes of action “arising
out of Federal control” and the United States would have
been under no obligation to reimburse such company tor the
expenses incurred by it in employing counsel and otherwise
in order to be rid of such judgments.

The two other practical considerations confronting the tele
graph company at this time were the doubt as to whether the
court would decide that sueh company could be held lable
under the provisions of the joint resolution, and the possi-
bility of the subsequent ehactiient hy Congress of a valid
law establishing such liability. As to liability under exist-
ing law, it must be borne in mind that at this time this court
had neither construed the proviso of the joint resolution sav-
ing the “lawful police regulations of the several States,” nor
determined the status existing among the United States, the
several States, and the telegraph company under the action
of the President exerted pursuant to the authority of the joint
resolution, and that it was not until some eight months there:
after that these questions were settled in the Dakota Central
Telephone Co. case, supra. Not only, however, was there this
uneertainty as to the mght to sue the owner “on causes of
action arising during Federal control” under existing State
laws, but there was like uneertaimty as to what action Con-
gress would take in the future looking to giving a right of
action in such cases against the owner corporations. No
doubt the officers of the telegraph company as well as of the
United States knew that a proposal to give such a right had
been rejected by Congress when the joint resolution had been
adopted. but this was no guarantee that it would not enact it
in future; and in fact they must have known that was pre

81

cisely what Congress had done with respect to failroads in
enacting section 10 of the Federal control act of March zi,
1918, which was passed long subsequent to the action of Con-
gress and the President under which the railroad systems
were seized. Actuated, therefore, by the certainty of being
forced to Ineur expenses in the defense of suits brought
against it on causes of action arising out of Federal control
and by the further fear of liability being held by the court
to exist, either by virtue of State laws not superseded by the
action of Congress and the President, or by laws subsequently
enacted by Congress, it was but natural that the telegraph
company, in submitting a proposal for just compensation
for the use of the property of which it had deen deprived,
should include a demand that it be indemnified by the United
States against the expense of such suits and the effect of all
judgments recovered therein. By making this demand, the
telegraph company neither admitted nor intended to admit
liability on such causes of action, either under the law as it
then stood or as it might be thereafter enacted, but realizing
the certainty of incurring expense in defending suits and the
contingency of a ruling by the courts or an enactment by
Congress making it liable in such suits, it merely, out of the
abundance of caution sought and obtained from the United
States an agreement to indemnify and save it harmless from
all such suits and judgments. In brief. the purpose of the
entire contract is to make just conpensation to the telegraph
company and not to provide a right of action against it for
the defaults of the agents of the United States; while the ob-
ject and meaning of section 8, paragraph (¢). of the contract
is merely to provide for indemnity against the expenses of
all suits against the telegraph company on such causes of
action and against the judgments and expenses im ail such
suits wherein a recovery should be had against such com-
pany, either by virtue of the law as it then stood or by virtue
of subsequent legislation by Congress. But if this be the
true interpretation of the contract, and especially of the sec-

lly

$2

tion relied on by the court, it is quite manifest that the con-
clusion of the court is wholly unfounded, for it is rather dith-
cult, if not tinpossible, to perceive how a provision inscrted
ina contract by the first party thereto asa protection agiinst
the expense of defending suits brought against it for the wets
of the other party and against the possible contingency of a
ruling by the courts making such first party liable for the aets
of the other puerty thereto, or the possible COMMENCES of a
legislative enactment to the same effect, can be construcd as
authority to maintain such suits against such first: party,
expecially where the contemplated legislative action has never
been taken and where the courts have not only failed to make
the contemplated ruling but have se decided as to make such
ruling impossible.

From what has been said, it must inevitably follow that
the court erred in construing this negative section of the con-
tract as an affirmative grant of power to sue the telegraph
COMPANY in the State court and pass the judgment therein
on to the United States for payiment.

This brings us to a consideration of the second reason
viven above for interpreting the contract as not giving a right
to recover a judgment in form: against the telegraph com-
pany but in effect against the United States, viz: the illegal-
ity of section S, paragraph (¢), of the contract if construed
as an attempt to submit the rights of the United States to the
courts for adjudication

In the case of Hobbs vs. McLean, 117 U.S., 567 (29 :
ied... 940). this court said

“It isa rule of interpretation that where a contract
ix fairly open to two constructions, by one of which
it would be lawful and the other unlawful. the former
must be adopted.”

We have endeavored to show that the true interpretation
of section S, paragraph (¢), of this contract is merely that
in case it be held by the courts that under the then existing

8&3

law, or in case it be subsequently enacted by Congress, that
a judgment can be rightfully obtained against the owner cor-
poration on a cause of action arising out of Federal control,
then and in either event the United States will pay the judg-
ment and not deduct the amount thereof from the compensa-
tion agreed to be paid the owner for the use of the property,

As thus construed, the meaning of the contract is clear to
all and entirely free from even a tinge of illegalitv. But
if it is to be construed, as the Supreme Court of South Caro-
lina held, and the respondent now contends, as an affirma-
tive grant of authority to bring suit against the telegraph
company and collect from the United States the judgment
obtained therein, then, as we shall show, such construction
is clearly illegal and must be rejected under the principle
quoted from Hobbs vs, McLean, supra.

The decisions to which we have heretofore referred estab-
lish bevond controversy that the United States is the real
party in interest in this case. In faet, this mueh is virtually
admitted by the Supreme Court of South Carolina, for it
saVs In its opinion that “the action and judgment therein
recovered are mm form against the Western Union Telegraph
Company, vet in effect they are against the Postmaster Gen:
eral” (Transcript, p. 61).

As we have already shown, no suit) an be maintained.
either directly or indirectly, against the © aited States with-
out its consent, and this consent cannot be inferred, but
must be given in express terms by an aet oo Congress. It is
evident from a mere inspection that the contract does not
even, purport to give a right to sue the | nied States. but
even conceding, for the sake of argumen , that it does, vet
this does not help out respondent's contention, The joint
resolution of Congress, pursuant to which the contract: was
executed, neither authorized nor consented to suits against
the United States, nor authorized the Postmaster General to
enter into any contract wherein such consent should be given.
The contract between the Postmaster General and the tele-

84

graph company isa purely private matter, It certainly 1s not
an aet of Congress or a resolution of Congress, neither ts ita
publie or general order of the Postmaster General having the
foree and effeet of an act of Congress. A stipulation in such
private contract attempting to give consent to sue the United
States is utterly unlike the general orders issued by the Di-
rector General of Railroads, with the approval of the Presi-
dent, beeause the right to make sueh orders and) enibrace
therein the subject-matter thereof was erpressly given by aet
of Congress. while here there was not only no erpress pro
vision, but ne provision afallin this act of Congress authoriz
ing the Postmaster General to consent to a suit, either di
rectly or indirectly, against the United States, Sneh hemy
the facts under which it Was made, if section Ss, paragraph
(¢), of the contract is held to be an attempt to consent to
maintain suits against the United States in the State courts,
it is illegal and void. This. we submit, is the crresistibls
conclusion to be deduced from: the decisions of this court to
which we now refer.

In Case vs. Terrell, 11 Wall, 199 (20 LL. Md... 154), this
court, In speaking of the extent of the powers of the Comp
troller of the Curreney. said

“We has no authority to subject the United States
to such jurisdiction, and to submit the rights of the
Government to litigation in any court, without sone
provision of lau authorizing him ta da go,” ( Italics
added. )

Speaking of the authority of the Secretary of the Treasury,
this court. in Carr vs. United States, 98 UL S.. 488 (025-1.
Ed, 209), declared.

“He may have deemed it prudent to assist the off-
cers who were sued, without intending to waive any of
the rights of the Government. And, in faet, he had
no authority to waive those rights,” (Mtalies added.)

SS

In United States vx. Lee, 106 UV. 8., 196 (27 L. Ed., 171),
Mr. Justice Miller, delivering the opinion of the court, stated
the principle thus

“There is vested inne officer or body the authority
to consent that the State shall be sued, except in the
law-making power, which may give such consent on
the terms it may choose to impose.” (Italies added. )

In Stanley ve, Schvalhy, 162 Ul S8., 255 (40-1, Ed., 960),
suit Was brought ina State court of Texas to try title to a
part of a military reservation of the United States, and the
distriet attorney, professing to represent the United States
and to be acting under instructions of the Attorney General,
appeared in the cause and joined in the answer, This court,
after holding that the United States had “never consented to
he sued in the courts of a State in any case,” said:

“The answer actually tiled by the district attorney,
if treated as undertaking to make the United States a
party defendant in the cause, and liable to have
judgment rendered against them, was in excess of the
instructions of the Attorney General, and of any
power vested by law in him or in the district attorney,
and could not constitute a voluntary submission by
the United States to the jurisdiction of the court.”
(Ttalies added.

Withont multiplying quotations, we cite the following di-
rectly applicable cases:

The Davis, 1 Wall, 15 (19 1. bd., 875),

Finn vs, United States, 128 U.S, 227 (31 LL. Ed.
128)

Price vs, Abbott, 17 Fed., 506

Northern Bank vs, Stone, 88 Fed.. 413.

Railroad Tas cases, 136 Fed., 233.

United States vs, Pearson, 231 Fed. 270.

Gouge vs. Hart, 250 Fed., S02,

Jacoh Hoffmann Brewing Co. vs, MecElligott, 259
Fed., 321.

Westbrook vs. Director General, 263 Fed., 211.

SH

In se far, therefore, as anything in the joint resolution ay.
theorizing the seizure of the telegraph lines is concerned, thy
action of the Postmaster General in attempting by section §
paragraph (4), of the contract to consent to suits against thy
United States on causes of wetion arising out of Federal cop.
trol if it ean be construed as sueh consent, was wholly tnay
thorized. Henee, when the Supreme Court of South Caroling
found that the judgment was “i effeet against the Postma
ter General.” it should have distnissed the ease,

But conceding the contract contains a consent to sie th
United States. the only statutes ander whieh it could pos
stbly have beem authorized were seetion 145, paragraph |
and section 24, paragraph YO) of the Judieial Code, Wherein
the United States lis consented to be sued om clams ~imtlar
to that here inivelved either in the Court of Clatms or the
district court, the court of any particular suit to be deter.
tinned hy the amount on COnMPOVErSY, Section Td, jrira
graph 1, of the Judieial Code PPO idles:

“The Court of Claims shall have jurisdietion to
hear and determine the following matters: First. Al!
claitis Cexeept for pensions) founded upon the Con
stitution of the Tnited States or any law of Congress,
upon any regulation of an) Executive Depertiment
Hpen any contract, express or implied, with the Gov
ernment of the United States, or for damage-. Haque
dated or unbiquidated. mm eases not sounding in tort
In Pespect of whiel: elaimis the party would be entitied
to redress against the Cnited States either in a court
of law, ely, or admiralty if the United States wer
suable: Provided. however, That nothing in this see
tion shall be construed as giving to the said) court
jurisdiction to hear and determine elaims growing
out of the late eivil war. and commonly known as
‘war claims. or to hear and determine other claims
which, prior to March third, eighteen hundred and
eighty-seven, had been rejeeted or reported on ad:
versely by any court, department, or commission au
thorized to hear and determine the same.”

ST

And section 24, paragraph 20, of the Judicial Code is as
follows :
“The district courts shall have original jurisdiction
as follows:

* a + * * + *

“20. Coneurrent with the Court of Claims, of all
claims not exceeding $10,000, founded upon the Con
stitution of the United States or any law of Congress,
or upon any regulation of an Executive Depurtiient,
or Upon any contract, express or implied. with the
Government of the United States, or for damages,
liquidated or unliquidated, in cases not sounding in
tort, In respeet to which claims the party would be
entitled to redress against the United States either ina
court of law, equity, or admiralty, if the United States
were suable.”

These sections had been long on the statute books at the
(ime the joint resolution was adopted, and no doubt. the
knowledge of their existence and the completeness of the
nmedy they afforded were the determining factors that in-
tuenced Congress not to encumber the joint resolution with
additional provisions as to suits,

Not only, however, has it been settled by this court that
authority to sue the United States, directly or indireetly, must
be expressly given by un act of Congress, but it is equally
well settled that the grant of a right to sue the United States
even When expressly given by Congress. must be construed in
triet accordance with its terms. Thus in the recent case of
Minois Central Railroad Co. vs. Public Utilities ¢ OE TLESSLON,
Mo US. 405 (62 1. Ed., 425), Congress had given per-
mission to sue the United States, but only in designated judi-
dal districts, The plaintiff brought his suit in a distriet
other than that in which the aet of Congress had authorized
suit, and this court, holding that the terms of the grant to
‘ue must be absolutely followed, dismissed the complaint,

§
3
\
A
4
:
i
:
:
i
j
;

SS

Among the numerous cases applying the principle, we refer
the court to
Beers vx, Arkansas, 20 Wow, 527 (15 1. deal, sy
Nicholl vs, United States, 7 Wall. 122 C1 1. Bd,
125)
Sehillinger ox United States, Lae ( S., 162 (39 |
Ied., 10S)

The consent to sue the United States, if it be such, found
in section S, paragraph Ce), of the contract, must therefore,
by force of this principle, be construed in cCommection with
section 145, paragraph |, and seetion 24. paragraph 20, of
the Judicial Code, the only statutes under whieh it could have
possibly been awuthorized bell) construed, the consent pave
absolutely no authority to wiaintain in any State eourt this
suit in which the United States was the real and sole party
in interest. The plaintiff’. rights, if rights le had, could
only be determined by the distriet court or the Court of
Claims of the United States. as they. and they alone, were
vested with authority and jurisdiction to render a judg.
ment effective iuwiitist the United States as the real defendant
in the action,

In the recent cuse of Heil os, United States (District Court,
New York, decided June 15, 1920, not vet reported ), the
plaintiffs brought suit agaist the United States in the Dis
triet Court for the Southern District of New York to recover
for the loss sustained by failure to transmit a cable message
for the purchise of pounds sterling on the London exchange
The Government contended that it was tot Hable to the plain
tiffs for failure to tratenmiit the thessage but this contention
was denied by the court. The opinion is se pertinent ty
the present issue that we set it enti full as Exhibit “€"
in the appendix hereto

In the precisely unalogous cases of Belknap va, Sehild and
Wella ve, Roper, supra, this court held that the suits could
not be maintained, but that the parties must, under the Fed

SY

eral statutes which now appear as section 145 and section 24,
paragraph 20, of the Judicial Code, be remitted for relief to
the Court of Claims or the Distriet Court of the United
States These cases are conclusive here, and render further
diseUsS1ON Tnecessary,

From these considerations we are forced to the conclusion
that there is te warrant for holding. as the State court has
done, that the contract allows the recovery of a judgment in
forts against the owner but in effect ugainst the United
States, and from stich conelusion at must follow that the
judgment is inoperative against the United States, and if ef-
fective at all, is effective against the telegraph company,

IL,

CONSTITUTIONAL OBJECTIONS TO THE MAINTE.
NANCE OF THIS SUIT AND THE RECOVERY OF A
JUDGMENT THEREIN EFFECTIVE AGAINST THE
OWNER TELEGRAPH COMPANY.

As we have seen, the judgment is ineffective against the
United States, the party really liable; but it is in ecistenes
and is (a form against the telegraph company: hence until
reversed by competent authority, it is both effective and cu
forcibly against the telegraph company, ‘The question, then,
i, Can a JUdginent against the telegraph company under the
facts of this case, for a liability wholly of the United States,
dand under the provisions of the Fifth and Pourteenth
Amendments to the Poderal Constitution’

In determining this (Question a hecoiies Hecessary te oon
sider and ascertain the rights of the telegraph compan ond
the application thereto of eaeh of the conetet thal atti
Ments wi question Henee we mgiite ast

l2y

1. Due Process of Law under the Fifth Amendment.

The Fifth Amendment to the Constitution of the United
States declares that “no person * * * shall be deprived
of life, libertv or property without due process of law, nor
shall private property be taken for public use without just
compensation.” This amendment is a direct liuitation on
the powers of the Federal Cirovernment and is here moked
as applicable to any authority to institute this suit and re.
cover a judgment against the owner corporation by virtue
of a grant exerted under the authority of an act of Congress

Vast as are the powers of the United States in tine of war,
vet these powers are not so extensive as to authorize the viola
tion of any of the provisions of the Constitution, Tn the
leading ease of By parte Milligan, 1 Wall. 2 oCIS LL. Kad
ZS1), this eourt declared the principle in these words

“The Constitution of the United States is a law for
rulers and people, equaliv in war and in peace, and
covers with the shield of its protection all classes of
men, at all times, and under all cireunistanees, No
doctrine, tivelying mere pernietous consequences
was ever invented by the wit of man than that ans
of its provisions can be suspended during any of the
great exigencies of government, Such a doctrine
leads directly to anarchy or despotism, but the theors
of necessity on which it is based is false.”

To the same etlect are
The Legal Treader Cases, V2 Wall, 457 (20 Lb. Bad.
257).
Hamilton va, Nentue hy Distilleriea, ete., Co. 201.
S.. 46 (H4 L, Edo, —).

Had Congress therefore attempted even by statute to cor
fer upon the respondent in this case a right of wetion agains!
the telegraph company for the obligations of the United
States in its management and operation of the telegraph sy

_—

91

tem, its action would have encountered these prohibitions of
the Fifth Amendment against the taking of private prop-
rty without due process of law, Consistently with due
process of law, private property can only be taken for public
use, and only then when necessary for the paramount pur-
poses of the Government, and even this right cannot be exer-
cised except upon payment of just and adequate compensa*
tion

United States ve, Cress, 243 U.S. 316 (61 L. bd.

746),

Hence, where the private property of the telegraph com-
pany is made subject to the satisfaction of a demand due hy
the United States to an utter stranger to sueh company, it is
manifest not only that sueh property is being used for the
purpose Of paving a debt of the United States for whieh the
company is not responsible, but also is being devoted to the
private use of such stranger in making payment of his de-
mand,

As we have heretofore shown, no authority whatever for
bringing this suit against the telegraph company ean be
found in the aetion either of Congress or of the President.
the respondent basing his claim to seh right selely ona
supposed authority conferred by the Postmaster General in
the contract for compensation entered inte between hime and
the company. "Phis action of the Postmaster General, grant
ing to it the scope and effeet urged by the respondent, was,
under the decisions of this court, wholly u/tra vires if it was
intended to confer jurisdiction of an action like this on a
State court, But waiving this contention and assuming that
Congress granted this oficial such authority, the result niust
le the same, and for the reason that the action, whether
authorized or unauthorized, in so far as it contemplates the
recovery of a judgment against the telegraph company ina
case like this is a denial of due process of law. In defining
the seope and meaning of this provision of the Constitution,

92

this court, in the recent case of Ochoa vs. Hernandez, 230 V.
S., 139 (57 L. Ed., 1427), said:

“Without the guaranty of ‘due process’ the right
of private property cannot be said to exist, in the sense
in which it is known to our laws. The principle,
known to the common law before Magna Charta, was
embodied in that charter (2 Coke, Inst., 45, 50), and
has been recognized since the Revolution as among
the safest foundations of our institutions. Whatever
else may be uncertain about the definition of the
term ‘due process of law, all authorities agree that
it inhibits the taking of one man’s property and giv.
ing it to another, contrary to settled usages and modes
of procedure, and without notice or an opportunity
for a hearing.”

To permit this suit to be maintained against the present
defendant for the acts of the Government, for which acts, as
has been shown, i* was in no way responsible, would be in
direct violation of chis last statement of the principle of due
process of law, for it would certainly be the taking of its
property to pay the debts of another contrary to all the set-
tled usages of our jurisprudence. As was once well said by
the late Mr. Justice Peckham:

“There are some things so contrary to justice as to
admit of no doubt of their utter illegaiity, such as the
arbitrary taking under the form of a legislative enact-
ment, of the property of one man and bestowing it
upon another.”

The decisions construing the acts of Congress and the proe-
lamation of the President demonstrate toa certainty that at
the time this cause of action acerued the property of the de-
fendant was being operated by the United States, and there
fore that the liability sought to be enforeed in the complaint
was that of the Government. However, the judgment has
been rendered against the defendant as the owner of the
property for acts over which it, as a matter of fact, did not

93

exercise, and, as a matter of law, could not have exercised,
any control. The assertion, therefore, that this suit can be
maintained against it, despite these facts, is a bald assertion
that the owner can be made liable for the acts of the United
States irrespective of its connection with the contracts or cir-
cumstances out of which the suit arises,

A recent instructive case, holding that such a result can-
not be accomplished under the constitutional provision here
invoked, is Daugherty vs. Thomas, 174 Mich., 371; 140
N. W.. 615; Ann. Cas., 1915A. 1168; 45 L. R. A. (N.S.),
899. In that ease the court had under consideration a statute
of Michigan that made the owner of a motor vehicle per-
conally liable for any accident that might occur from the
negligent operation of such vehicle by any person that might
be using it with or without the consent of such owner. The
court. after making an extended review of the cases, reached
the conclusion that the statute in question was clearly un-
constitutional, saving:

“To hold subdivision 3 of section 10 constitutional
is to hold a party absolutely liable for the negligent
conduct of another, a mere stranger or a wilful tres-
passer, no matter how careful or free from negligence
he himself has been. We think that the result of
such holding would be to take the property of de-
fendant Thomas to’ pay for the wrongfui and negli-
gent act of another person not sustaining to him the
relation of servant. agent or employee. Such a doc-
trine seems unnatural and repugnant to the provis-
ions of the Constitution here invoked. We are forced
to the conclusion that the provisions of this subdivis-
ion are not a necessary regulation in the exercise of
the police power: that in and by its terms the plain
provisions of the Constitution are violated: and the
subdivision must be held unconstitutional, and the
statutory liability therein asserted done away with,”

V4

The rule is thus tersely stated in 12 C. J., at page 1244

“The owner of property, the ordinary use of whic
is beneficial to the publie, cannot be made lable for
the negligence of one not a servant or eccupying ,
similar relation.”

The use of the defendant's telegraph system by the United
States Was certainly beneficial to the publie, and, as has al.
ready been shown, the Government was in no sense a servant,
agent, emplovee, or lessee of the owner. Therefore, this
statement of the rule is directly applicable to the facts of the
present cause.

Other authorities holding that due process of law forbids
making one person lable for the debt of another are these

Cooley, Const, Lim... 7th id., 150,

Afforney General vs, Old Colony Ro Co. 160) Mass.
On; oe tx B. A.,; FS

Colon vs, Lisk, 13 N.Y... 188; 60 Am. St. Ro. 609.

Knorville Traction Co, vs. MeMillan, 111 Tenn... 32!
65 L. Ro AL, 296,

In the latter case, we find this clear statement:

“The statute arbitrarily imposes upon the traction
company bability for this debt of the advertisin:
company and requires it te pay it with its own means
This is a deprivation of property without a hearing
er due process of law clearly within the prohibition
of the constitutional provision relied upon. ‘This is
too obvious for argument, and the property of on
citizen can ne more be taken to pay a tax or publi
debt due from another than the private debt of stich
other person.”

The lability of the United States Government, if such lia-
bility exists. to the present plaintiff for failure to deliver
promptly the telegrams involved in this case, was in no sense
a public liability but solely private, or, in other words, a

wa

ts

YF

liability that existed between the Government and the plain-
tiff alone. If the property of this defendant is to be taken
ty pay such a debt, it is patent that it would be a diversion
of its property to a private purpose and therefore within the

inhibition of the due process of daw clause of the Fifth

ge et eee

Amendment,

In the case of Missours Pacific Ro Co. vs, Nebraska, 164
Us. 408 (41 Lb. Ed., 489). where a railroad commission
ordered a railroad company to furnish a portion of its right
of way to individuals for the purpose of erecting a grain
elevator, this precise question came before this court and the
right to take the property for such purposes was denied hy
the court, Which said :

“This court, confining itself to what is uecessary
for the decision of the case before it, is unanimously
of opinion that the order in question so far as it: re-
quired the railroad corporation to surrender a part of
its land to the petitioners for the purpose of build-
ing und maintaining their elevator upon it, was in
essence and effect a taking of private property of the
railroad corporation for the private use of the pe-
titioners, The taking by a State of the private prop-
erty of one person or corporation without the owner's
consent for the private use of another is not due
process of law and is a violation of the Fourteenth
Article of Amendment of the Coustitution of the
United States.”

The same principle has been applied in the subsequent
cases of :

Missouri Pacific Railroad Co. vs. Nebraska, 217 U.S.
196 (54 L. Ed., 727).

St. Lows, ete., Railroad Co, vs. Wynne, 224 02 S.,
sot (56 L. Ed... 799).

Eubank vs. Riehmond, 226 UL S8.. 1&7 (57 LL. Ed.,
156).

Chicagy, ete., R. Co. vos. Polt, 232 UU. 8.. 165 (58
L. Ed., 554).

Los Angeles UNS, Los Angeles (fas. etc., Corp. 25)

U.S., 32 (64 L. Ed., —).

Brooks-Neanlon (Cu iN Railroad Contimission aa |
ULS., 306 (64 L. Ed., —).

(ireat Northern R. Co. vs Cahill, U. 5.. (de.

cided May 17, 1920; not vet reported ),

It is suggested, however, that under the contract between
the telegraph company and the Postmaster General, such
company would have a right) of action over against the
United States In case it is compelled to pay the judgment,
and therefore this removes all constitutional objections,
Such a contention finds support neither in reason nor in
authority.

A right of action over resulting from the payment of a
judgment is based on the fundamental principle that the
party against whom it is sought to recover im this latter ae-
tion was not only legally liable, but also subject to suit in the
court which rendered the judgment. But it has been shown
that the United States was the real party in interest in this
suit and that the court which rendered the judgment was
devoid of any jurisdiction in the premises. “This being true,
the telegraph company, after paying the judgment, would
have no legal ground upon whieh it could make a demand
on the United States for reimbursement. Sueh being the
facts, it is clear that the telegraph company, if it paid: such
a judgment, would not have an absolute right to compensa-
tion but only a contingent myht which would be subjeet to
be defeated by the United States in the Court of Claims ot
the district court. ‘To the faet that the right to recover com-
pensation by suit against the Government would be con-
tingent must be added the further fact that even if a right
of action existed for such compensation, the relief afforded
would be both expensive and inadequate. This results from
the reason that there is no authority m the existing Federal
statutes for an award, either by the Court of Claims or by

97

the District Court, of a sum of money in addition to the
amount of the Claim sufficient to compensate for the expenses
incident to the proceeding in such court to enforce the right.
Obviously, therefore, even if the face of the claim: should be
ultimately paid, the expenses incident to its adjudication
would necessarily have to be borne by the claimant, and to
this extent the recovery would be diminished, which diminu-
tion Would measure the failure of the remedy to provide just
and adequate Compensation,

It has been frequentiy held that even where authority may
be exe reised for acquiring private property for public pur-
poses, due process of Jaw requires that the compensation must
be both certain and adequate. In such cases, the means of
securing Indemmity must be such that the owner will run ne
risk. Among the cases applying this principle are:

Attorney General vs, Old Colony Railroad Co., 160
Mass., 62; 22 L. R. A., 120.

Haverhill Bridge vs. Esser County, 103 Mass., 120;
4 Am. Rep., 518,

Lovisville, ete., Railroad Co, vs. Central Stock Yard:
Co., 212 U. S., 182 (53 L. Ed., 441).

But if due process of law is not afforded in a case where
property is authorized to be taken, but compensation there-
for rests on a subsequent and contingent right of action
against another party, for much greater reasons it is not af:
forded where the taking in the first instance was wholly un.
authorized and only a subsequent, uncertain and contingent
night of aetion by way of compensation was left to the owner
as his only means of redress. As has been pointed out, the
right of action of this defendant against the Government is
wholly uncertain and contingent and can be defeated at any
time the Government raises the question in the Federal
courts Where the suit to force the indemnity is brought.
This completely destroys all semblance of due process of law

13y

SA DS ae chia alae OI a oes

2
i
s

5}
re

Suc 5 ae i Ai dns aint
seas

sis de
nine

Pe

aS

oe

98

in the contention that the present defendant can be held
hable for the aets of the United States in handling the tele-
grams invelved tn the present case,

The precise question here involved has recently been con
sidered by one of the courts of New York ana ly several of
the lower Federal courts in suits involving the liability of
the transportation corporations for the acts of the Utited
States during the period of Federal control of their proper:
ties, and in each of these cases the contentions we here make
have veen sustained. The language of the case referred ty
in New York. Schumacher vs, Pennsylvania Railroad Co.,
106 N.Y. Mise. 564: 175 NO Yo Suppo. pe Sa. is se pertinent
that we quote at length:

“Tf our view and construction of the statute in
question is correct, we are face to face with the legal
question whether, ia so far as it authorizes actions
and judgments against carriers for the negligence or
default of the Government or its agents, such pro
Visions are constitutional and valid, To. state the
question is to answer it. We can reach no other con
clusion than that in that respect Congress has ex-
ceeded its constitutional powers. Tt is repugnant to
the great underlying principles of our jurisprudence
and violates, we think, the express provisions of the
Fifth Amendment to the Federal Constitution, de-
claring :

“*No person shall be * * * deprived of life,
liberty, or property, without due process of law) nor
shall private property be taken for public use, without
just compensation.”

“Certainly the taking of the property of a corpora
tion to pay the debtor liability of the Government, tor
whieh the corporation is in no way responsible, cio
lates this provision of the Constitution, and depri exit
of the equal protection of the law.

“Tt probably was the intention of the framers of the
statute that the Government should ultimately pay all
such demands as in justice and by right it should.
Jt is impossible to believe that the contrary was in
their minds, but the statute nowhere so provides. If

99

the carrier were compelled to pay the judgment thus
sought to he entered, it would undoubtedly have a just
demand against the Government to be reimbursed for
moneys so paid, but the fact that such a demand exists
In no way cures the statute of the infirmity of uncon-
stitutionality. The taking of the property of one to
pau the debt of another is none the less egal, even
though the party wronged may assert his right for
compensation, The condemnation is against the il-
legal taking, and the violation of this constitutional
guaranty is not cured by the possibility of future
restitution,

“It is urged by plaintiff's counsel that the United
States, like every sovereign Government, has the in-
herent power to take private property for publie use
(l'nited States ve. Jones, 109 UL S.. 518: 8 Sup. yt.
46,27 L, Bd., 1015), and that this right is not de-
pendent upon any provision of the Constitution for its
exereise (Boom Co, vs. Patterson, 98 U.S. 4065 25
I. Bd, 206) ; and it is argued that the exercise of this
right, as provided by section 10 of the aet of Mareh
21, TIS, is simply an exercise of such a power and
cannot be questioned, particularly as it is in’ the
nature of a war measure and in aid of a vigorous
prosecution of the war. The act, however, under
consideration, goes further, in that it provides, not
for the taking of the defendant's property by the
Government itself, but hy a third party to pay a Gov-
ernment lability, the enforcement of a Hiability
against a party in no way legally responsible for it.
To carry the argument to its logieal extent. it might
with equal propriety be urged that Congress had the
right to authorize actions against private individuals
for the payment of Government bonds.

“We can reach no other conclusion than that the
act of March 21, 1918, in so far as it authorized judg-
nents against carrier corporations for the default or
liahilities of the Gove rnment, violates the Federal
Constitution, providing against the taking of private
property ‘without due process of law.” (Ttalies

added. )

100

In Hatcher & Snyder vs. Atchison, ete., R. Vo., 258 Ved,
952. the court said:

“The plaintiffs’ contention is based at last upon see.
tion 10 of the act of March 21, 1918 (Comp. St.
1918, see, 3115347). My view as to the part of that
section relied on is so clearly expressed in) Vaughn's
case, 81 South., 417 (Alabama Court of Appeals,
March 18, 1919), cited in the plaintiffs’ brief, that I
quote the language used :

“*The only authority for suing a carrier whilr
under Federal control must be rested upon the aet of
Congress whieh subjects them “toe all laws and habili
ties as common carriers, Whether arising under State
or Federal laws, or at common law,” with certain ex.
ceptions and provides that “actions at law or suits in
equity may be brought by and against such carriers
and judgments rendered as now provided by law.” ete.
U.S. Comp. Stat. TYES, pr. 456458. And th
validity of this statute os sustainable on no other
theory than that the transportation conmpanies are
operating their ve ape clive systems winder Federal con-
trol. If such companies are in no way connected with
the operation of their respective transportation sys
tems, we submit that it would not he within the power
of Congress to subject them to lability and suits
thereon for the torts, miscarriages, and defaults at
the employres of the Federal Government. Such an
act would be an arbitrary exercise of legeslative power
contrary to the established principles of private rights
and distributive justice and tantamount toa denial of
due process of law. Zeigler vs S-& NASR. R. (‘o,
5S Ala., 594; Mobile Light & RR. Co. vs, Copeland
& Sons, 15 Ala. App., 285; 78 South., Isl: Bank of
Columbia vs. Okley, A Wheat. 285 (4 LL. Ed. 559)
Hurtado vs. California, WOU S., S16: A Sup. Ct,
111, 292; 28 L. Ed., 282; Dent vs, West Virginia, 125
U.S. 114; 9 Sup. Ct, 281,32 L. Ed., 623; Leeper vx
Teras, 139 U. S., 462; 11 Sup. Ct., 577; 35 L. Ed,
225; Giozz vs. Tiernan, JAS US... 657: 18 Sup. Ct.
721: 37 L. Ed., 599; Jones vs. Brim, 165 UL S., 180,
17 Sup. Ct, 282; 41 LL. Ed.. 677: Marwell v. Dow,

176 U.S., 581, 20 Sup. Ct., 448, 494, 44 L. Ed., 597,
6 Rul. Cas. Law, pp. 433-446, embracing paragraphs
430 to 442. on Constitutional Law.

“On the other hand, if the carriers are operating
under Federal control and are agencies of the Govern-
ment, the authority of Congress to impose lability on
the carriers for the torts of their employees is clearly
sustainable on the theory that such responsibility en-
courages caution on the part of the carriers and their
employees, promotes efficiency and safeguards the in-
terests of the Government and the general public.

“There is no proof in this ease that the Railroad
Administration, in the exercise of Federal control,
has exeluded the transportation companies from the
exercise of their functions in the operation of their
respective systems, and we cannot ossume that it has
done so contrary to the manifest purpose and spirit of
the authority conferred by the act of Congress and the
proclamations of the President.’

“That court. however. Appears lo have taken the
view that the congressional acls only authorized a
superintending control and management by the Gov-
ernment of the companies and their roads, and ex-
pressly said that there was no evidence in the case
hefore them showing that the eompanies had been ex-
cluded ‘from the exercise of their funetions in the
operation of their respective systems,’ which is not in
accord either with the construction of the aets given
in the North Dakota case nor with the actual facts
now of Conlon hnouw Ii dye. ('; rlainly there is no
power in Congress to make A lable and suable for the
acts of Bo Fundamental principle x of justice cannot
he overturned by legislative fiat, to say nothing of
constitutional quarantees.’ (Mtalies added.)

As has been shown in the discussion of the present case,
the telegraph company did not operate its svstem under Fed-
eral control; therefore under the reasoning employed by the
court in the case just quoted, an attempt on the part of Con-
gress to hold it liable would be an arbitrary exercise of legis-

Pita ccs

1a

lative power and would be prohibited nnider the due proces
of law clause of the Fifth Amendment

In Mlauhert os, Bw OLR. Ce. QA Fed., 361, the eourt
sid

“Manifestly it seems to me that in view of thes
conditions no lability exists against the railroad con:
pany itself for a personal injury due to operation
under Federal control, and that no judgment ean be
rendered therefor which will become a len upon the
corpus of its property or payment compelled: there:
from. Tf this were done, the result would be that on
ye rson s prope ry would he hake ” without his consent

and without compensation to pay the debtof another”
(Ttalies added.)

And in Nash vs, Southern Pac. Co. 260) Ped. 280. we tind
this clear statement by the eourt

“But that it was intended as the purpose of seetion
10, as urged by plaintiff, te authorize suits against
the owners of these properties in causes of action aris:
ing out of transaetions had with the Federal Railroad
Administration, or through torts committed lw its
agents while under its control—things for whieh, we
report, the ners could hy in we way responsihle
may not for a moment be tdulgwed > sweh a construe.
tian mould ely arly re nde r the proviston ohnod wos te
the objection of authoring the taking of property
without die process of lawia purpose u hich may not
he imputed to Congress.” (Ttalies added.)

Again, in Weethrook os, Director General, 2038 Fed. 211.
it is sane

SH habilities arising during Government operation
are to be recognized at all, manifestly they should be
recognized as liabilities of the United States, at least
to the extent that the ‘revolving fund’ would pay
them, while fo make them lahilities of the owning
companies would he uneonstitutional: for the war
power itself is subject to other applicable constitu.
tional provisions.” (Italics added.)

-—

103

ln the reeent case of Lane os, Hines (Distriet Court, B.D.
of SC, decided August 80, 1920, not yet reported), whieh
Wiis il suit to recover anaes for HU bes stistauined inh at che
radlinent on a railrowd operated by the defendant, the court
cotistried section LQoof the Bederal Control Net applying te
the Transportation eompanios and held that if stieh aet ereated
livbility against these companies for the vets of the United
States, it was clearly unconstitutional, ‘The language is so
pertinent that we quote at length

“Tf the meaning of the language of this provision
could be construed to mean that the former carriers,
the original owners, who had been ejected from their
possession, were liable for and could be sued for the
negligence or dereliction of the United States, while
operating the railroads, the wet would be plainty an-
constitutional, There is no power in the United
States, under the Constitution of the United States.
that would pe rit it to ye cha man from the PHUS8O R=
sion of his wroperty and take entire control and pus
SESSION of that property and operate it for the be nepit
of the United States, and under the orders and eontrol
of the officers of the United States, and for the pur
poses of the United States, without the former owners
having anything whatsoever to do with its operation
or any power of control over it, and then hold the
former owners liable for the neglige nee of the officers
or ¢ mployees of the United States.

“Any such enactment would upon the face of it he
Wholly unconstitutional and in derogation of consti-
tutional right. The only logical and constitutional
construction that can be given to the language of this
section 10 is that it is meant to apply to any actions
or sults that may be brought against the former
owners for any acts of theirs arising in any Way not
inconsistent with the provisions and the requirements
of the act; that in any such action the carrier shall
still be continued to be responsible.

“The present action is not one of those. It is an
uction brought directly against the Director General
for the negligence of his own employees, who are the

lot

employees of the United Stites, operating this prop
erty in the possession of the United States, for the
benetit of the United States. Amy fund) that) pro
ceeded from this operation: is expressly declared: to be
the property of the United States, and any lability
weertied by reason of ated caring: that operation should
reasonably and justly be paid by the United States,

“Phe objeet, therefore, of the present aetion at law
is to fasten a liability upon the United States for the
vets of its employees, whieh is te be paid out of the
funds belonging to the United States, and the only
construction to be given to the language of seetion 10
consistent with the provisions of the United: States
Constitution is that thereby it Was intended to mean
that persons injured or having claims arising out of
the operation of these railroads could enforce a re-
covery on those claims by an aetion against the proper
officer responsible for the operation.

“Such appears to have been the construction placed
upon the statute by the Director General himself, for
by General Orders 50 and S0¢, instructions were given
that all wetions to be brought for injuries suffered
from the operation of these railrouds while in the pos:
session of the Director General, should be brought
against hime as Director General of Railroads, and not
against the railroad company whose property Was in
his possession, and on which property or - the use of
which the accident might at the time have happened.”
(Italics added.)

In the light of these principles, the only conelusion pos
sible is that if authority te maintain this suit against the
telegraph company tas been given in any way by Congress,
such attempted grant of power is a denial of due process of
law and therefore forbidden by the Pitth Amendment.

” Due Process of Law under the Fourteenth Amendment.

The Fourteenth Amendment to the Constitution declares
that no State shall “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”

105

As we have shown, there is no warrant in any action of
Congress for bringing this suit against the telegraph com-
pany, the provision of the conteaet entered into with the
Postinaster General, respecting indemnity, being Wholly in
sufficient for this PULP pose The excistence of the judgment
against the telegraph company and its effect against such
company result wholly from the action of the State courts
in reading a provision for liability into the joint resolution
and do not rest in any way on uny exercise of Federal au-
thority. But under the decisions of this court, the inhibi-
tions of the Fourteenth Amendment extend to and control
the State courts as well us other branches of the State wove
ernment; hence this attempt on the part of the State courts of
South Carolina to create by judicial legislation liability
against the telegraph company where none could otherwise
exist Is a denial of due process of law within the meaning of
the constitutional provision. Conelusive authority for this
position is found in the decisions of this court

Thus in Chicago ete,, RR. Co. va Chicago, 166 UL S., DIG
(41 L. Ed., 879), the law is declared in these words

“The prohibitions of the Fourteenth Amendment
extend to all acts of the State, whether throuch its
legislative, its executive, or its judicial authorities.
* * * A State may not by any of its agencies dis-
regard the prohibitions of the Fourteenth Amend-
ment. Its judicial authorities may keep within the
letter of the statute preseribing forms of proceedure
in the courts and give the parties interested the fullest
opportunity to be heard, and vet it might be that its
final action would be inconsistent with that amend-
ment Tn de te riining “ hat ia diate process of lau re-
gard must be had to substance, not to form.” (Ttalies
added. )

In this case, the telegraph company was afforded a hear-
ig in the State courts and of this it does not complain. On

14y

1035

the contrary, it insists that its rights have been taken away
by the substance that was denied in such trial, that is, the
substantive right it possessed of immunity from suit and
freedom from liability for the acts of the United States, in
which it had no interest and over which it had no control,
In Raymond vs. Chicago, ete., Traction Co, 27 U.S.
(52 1. Ed.. 78). this court held the action of a State board of
equalization unconstitutional as a violation of the Fourteenth
Amendment. In the course of the opinion the court said:

“The provisions of the Fourteenth Amendment are
not confined to the action of the State through its
legislature, or through the executive or judicial au-
thority. Those provisions relate to and cover all the
instrumentalities by whieh the State acts, and so it
has been held that whoever, by virtue of public posi-
tion under a State government, deprives another of
any right protected by that amendment against depri-
vation by the State, violates the constitutional in-
hibition.”

In the case of Western Union Tel, Co, vs, Ferguson, 155
Ind., 64; 60 N. EL, 677, we find this pertinent statement:

“Denial of equal justice, wrongful discrimination
between persons in similar cireumstaices is as Vicious
in judge-made as in statutory law.’

As authority for the proposition just quoted, the court
cited, among other cases, the decision of this court in Viel
Wo vs. Hopkins, US U.8., 356 (40 L.. Bd.. 220), The same
principle has been stated and applied in numerous cases,
among which may be cited

| Dea part Virginia, 100 U. 8... 3380 (26 1. Ed., 676)

Chicago, ete,, Ro Co. vs. Minnesota, W440 S8., 41s
(33 1. Ed. 970).

Scott va. McNeal, 154 U.S... 34 40° 4. Ed, 896)

Hlome Tel., cte., Co. vs Los Any lea, 227 U. S., 278

(57 L. Ed., 510).

107

In discussing the effeet of the guarantees of the Fifth
Amendment we have shown that had such liability resulted
from anything authorized by an act of Congress it would
have been a denial of due process of law. In so far as these
wo amendments are concerned there is no difference in prin-
ciple between an unconstitutional act on the part of Con-
gress and an unconstitutional act on the part of the State:
therefore in the light of the principles declared by the de-
cisions referred to this creating of liability against the tele-
graph company by the action of the judicial authority of the
State of South Carolina is wholly unwarranted and operates
to deprive the telegraph company of its property without
due process of law.

From what has been said it follows that this judgment, hy
rason of the protection thrown around the defendant by the
Fifth and Fourteenth Amendments to the Constitution, ean-
not be enforced by the collection of the same out of its
property.

CONCLUSION.

The sole issue in this case is the liability of the telegraph
company for the acts of the agents of the United States in
the operation of the telegraph system owned by such com-
jany. but from which it was completely excluded by the
paramount authority of the United States,

That such liability does not and cannot exist we have en-
deavored to demonstrate in this discussion, Beginning with
the seizure of the company’s lines under the authority of
Congress, and the status between the United States and the
owner resulting therefrom, we ascertained at the outset the
fundamental fact of the existence of a relationship of com-
plete and absolute assumption of the possession, control, and
operation of the owner’s system by the United States, and an
equally as complete and absolute exclusion of the owner from
all interest or ‘participation therein. Premising the discus-

108

sion on the relationship so established, we have successively
shown that the owner could not as a matter of fact be lable
for the acts complained of, as it was in no way concerned in
either their commission or omission, that such lability could
not be deduced either from anything in the congressional or
presidential action, or from any applicable principle of law,
that the United States was the party really liable, but such
liability could not be determined or enforced in this action,
as it had not consented to be sued, that the provision of the
contract relied on to establish a liability that could be passed
on to the United States was wholly without such effect, and
finally, that the effect of the judgment was to make the owner
liable for aets over whieh it neither had any control nor for
which it was in any way responsible, in violation of the guar-
antees of the Federal Constitution. Once admit the relation.
ship resulting from the status ereated between the United
States and the owner and the conclusions we have drawn fol-
low as logically as the successive steps in the solution of a
problem in geometry, and so following they lead just as in-
evitably to one, and only one, result-—-that the Western
Union Telegraph Company is not, and cannot be made, lable
on a cause of action arising out of the operation of its system
by the sovereign Government of the Unitcd States.

The judgment of the Supreme Court of South Carolina
should, therefore, be reversed, and a reversal is respectfully
prayed,

RUSH TAGGART,
FRANCIS RO STARK,
PoA, WILLCOX,
F. L. WILLCOX,
HENRY EK. DAVIS,
Attorneys for Western Union
Telegraph Company.

109

APPENDIX.
EXHIBIT A.

1, ExTRAcTS FROM CONGRESSIONAL RECORD oF JULY 13,
1918,

Mr. Gore. Mr. President, | offer another amendment,
which I send to the desk and ask to have read,

The PResipeN’T pro tempore. The amendment will be
stated.

The Secretary. It is proposed to add a new section, as
follows:

“That in case the President shall take over any of
the properties above described and shail enter into
any agreement with the owners, lessees, or operators
thereof, all such agreements shall contain, in so far
as applicable, the same requirements, conditions and
stipulations as to liability to and exemption from tax-
ation and the payment thereof as are prescribed in
paragraph 3 of section 1, of an aet entitled ‘An Aet to
provide for the operation of transportation svstems
while under Federal control, for the just compensa-
tion of their owners, and for other purposes,’ ap-
proved March 21, 1918, in respect to the taxation and
payment of taxes on the part of common. carriers
under governmental control”

Mr. Gore. Mr, President, some Senators seem to be
under the impression that there will be future legislation
upon this subject, The pending joint legislation is final
legislation upon that point. Ut authorizes the President. to
take over the telegraph and telephone systems. It author-
izes him to enter into agreements with them. There will be
no oecasion for future legislation.

The amendment which T have proposed requires the Presi-
dent to insert in these agreements the provision which was
embodied in the act confirming the taking over of the rail-

110

roads. ‘That measure provided that in agreements entered
into by the President with the railroads the war taxes should
be paid out of the just compensation of the railroads aind all
other taxes should be paid out of their gross reverties ond
should be charged wp as an item of expense. Tf it was wise
to insert that provision in the railway act, it ought equally
to be inserted in the present joint resolution.

Por that reason L offer the amendment,

The PRESIDENT pro tempore, The question is on agree:
ing to the amendment offered by the Senator form Okla
homa.

The amendment was rejected.

The Presipest pro tempore, The joint resolution is still
in Committee of the Whole and open to amendment. Tf
there be no further amendment to he proposed, the yount reso.
lution will be reported to the Senate.

The joint resolution was reported to the Senate without
amendment.

Mr. Reep. Mr. President, 1 desire again to® offer the
amendment which | offered a minute ago, and when it ts
read T want to say just two or three words about it.

The Presipent pro tempore. ‘The Senator from: Misseuri
offers an amendment, which will be stated,

The Secrerany. Tt is proposed to add at the end of the
joint resolution the following:

“The right ane privilege of the people ane the
press, substantially as heretofore enjoyed, to the tun
restricted lise of sata utilities pon fair and equitable
termes shall not be interfered with, except that the goy
ermmental business may, when deemed necessary, be
yiven precedence over all other business, and rites
may be adopted and enforced to prevent the use of
said utilities for any disloval purpose.”

Mr. Reep. Mr. President, T hope T ean get the attention
of the Senators just for a moment to this, TP think, very. im-
portant question, 1 know we are anxious to adjourn; but |

111

hope that no Senator is going to allow his convenience for a
few minutes to affect his vote on an important matter of this
kind.

Lam sure there is a misunderstanding as to the character
of the action we are about to take. This joint resolution
authorizes the taking over of these great utilities. There is
no requirement of a single word of future legislation. They
can be taken over tomorrow morning if this joint resolution
is passed and signed tonight, and the subject-matter will
have passed from the control of Congress. The only pos-
sible Chance we would ever have avaln at this question would
be by an independent measure,

When we adopted the legislation touching the railroads
the only legisiation that ever did really authorize the taking
over of the railroads —we placed in the bill many safequards,
Among other things. we reserved certain powers to the Inter:
state Commerce Comission, T shall not take vour time at
this late hour to vO into the details of that bill, but this bill
as itis now drawn is simply a general authority to take over
these utilities,

Mr. President, let me repeat in part what T said a few
moments ago and offer an observation or two. At the pres-
ent time a citizen has the mght to the use of these utilities,
They can not be denied to him by the proprietors, and whi?
Because they are public utilities and they are held in trast by
the proprietors in part for the public use, [lence every citi-
zn under the common law has the right to demand the
service Of these utilities and to demand it without diserimi-
nation and with a reasonable degree of care and promptness.
But when the Government of the United States lays its
sovereign hand upon these utilities it absorbs into itself all
the rights the public bore to the State. all the rights of the
individual citizens of the United States, because the Govern-
ment stands for and represents all of them in contemplation
of law. If then the Government should tomorrow take over
these utilities and there is no clause written into the law

112

which will perpetuate the legal right of the citizen to this
service, any citizen can be refused that service and he is
totally and absolutely without redress, first, because the
publie use has been absorbed in the sovereignty itself and,
second, because he cannot sue that sovereignty, Nobody can
sue the United States of America, except where Congress has
expressly granted that permission,

Mr. Suievps. Mr. President

The PRESIDENT pro tempore. Does the Senator form Mis-
souri yield to the Senator from ‘Tennessee?

Mr. Reep. I do.

Mr. Suievtps: | should like to ask the Senator the con-
struction of the last clause in the joint resolution,

“Provided, further, That nothing in this act shall
be construed to amend, repeal, impair or affect exist-
ing laws or powers of the States in relation to tax-
ation or the lawful police regulations of the several
States, gpa wherein such laws, powers or regula-
tions may affect the transmission of Government com
munications, or the issue of stocks and bonds by such
system or systems.”

The exception, of course, is not relevant to the amendment
the Senator from Missouri proposes.

Now, the question I wish to ask is, Are not the rights of
the citizens of which the Senator speaks protected by the
provision that this measure shall not be construed to amend,
repeal, impair, or affect existing laws referring to taxation or
the local police regulations of the several States” Is it not
a fact that the right of the general publie to be served by
public utilities, such as common carriers, hotels, telegraph
companies, and telephone companies, comes under the police
regulation? Are not all the laws, both common and statu-
tory, governing these public utilities police regulations, and
must not the public utility render this service, and is not that
preserved in the bill?

Mr. Reep. If the right of a citizen to send a telegram is

113

a police regulation it is news to me. The right of a citizen
to send a telegram rests upon the common-law principle that
these concerns are quasi public in their character, and that
having undertaken to serve a public duty of that kind a
citizen has a right to employ then.

Mr. SHIELDS. If the Senator will allow me to make a sug-
gestion, is it not a fact that the right is born of the duty im-
posed upon the public utility company, because the citizen
has no property and no interest of any kind in the property
or the service of the company except as the police regulation
requires the company to do certain things?

Mr. Reep. It does not rest on that. Police regulations
are for the protection of public morals and of public peace.
The other rights are in their nature such as a suit could be
brought to enforce,

Police regulations—1 read from Black’s Law Dictionary :

“Laws of a State, or ordinances of a municipality,
Which have for their object the preservation and pro-
tection of public peace and good order, and of the
health, morals and security of the people.”

So, Mr. President, for once the distinguished lawyer and
Senator, | think, is in error, The purpose of those who
drafted this resolution and wrote the exception to the law
was not to preserve any such rights as I am discussing.

Mr, Gore. Mr. President——

Mr, Reep, Just one moment, until | finish this sentence.
The exception in the bill was intended, first, to preserve those
laws which affect taxation, and then it says “or the lawful
police regulations of the several States,” Neither of them
has anything to do with interstate messages. The police reg-
ulations of the States, I think. that are referred to here are
those rules and regulations which are adopted for the preser-
vation of the public peace of the community. I yield .o the
Senator from Oklahoma.

lby

114

Mr. Gore. Mr. President, | think the Senator from Mis-
sour is eminently correct in his interpretation of this clause,
and the history of the clause might shed additional lic
upon the subject. This proviso is imported frome the tal:
road vet It was inserted in that aet, of course, to protect
the rights of the State over taxation and to protect the police
powers growing out of the right of certain States to make
regulations with respect to separate cars that ought to be pre-
served inviolate.

Mr. Reep. ‘The Senator means separate cars for white
and colored.

Mr. Gore. Yes, siry that is the origin of that part of the
proviso, Of course it has no relation here, but was siniply
hodily transported into this act,

Mr. Suieeps, The courts, both Federal and State, have
held the laws for the separation of the races on. cars and
in public places to be police regulations,

Mr. Gore, Certainly: that was my suggestion and it was
to preserve that.

Mr. Sienps. At common law the regulation of charges
upon Vehicles, charges at hoteis, and many other things were
police regulations, and the duty of the common earrier to
verve all was held to be a police regulation, Qur statutes
apon the subject are only supplementary of the eomon
law, applied to the new public utilities that have arisen in
latter days,

Mr. Reep. Mr. President, the Senator has expressed lis
view and T have expressed mine. Tam not going to be con-
ceited enough to atlirm that Tam right, but TP undoubtedly
think Lam right. If the right of the citizens to use the tele-
phone is a police regulation and comes under the police reg-
ulation it is news to me, but | have frequently found that I
run across something IT never heard of before and that T have
heen in ignorance of. But let us assume that the Senator
from Tennessee is right, | do cothing in this amendment but
reaflirm and reassert a right and make it clear.

115

When these utilities are taken over the administration of
their business affairs will be turned over to a vast multitude
omen, Tt almost always happens that some men put into
public position become more or less arbitrary, and if they
are under no restraints whatever great damage and injury
may be done, T think you make a mistake when Vou pass
this bill and pass it in such a form as to make it as obnoxious
as possible. [think it will do no harm to say to the people
f the United States your right to use these instrumentalities
is fully preserved. Tam sure under ordinary conditions aud
cretmnstances an amendment of this kind would be accepted,
It is net put in here for any purpose in the world except to
cover What T believe will be a defect in the law governing
these ifilities after they are taken over, It preserves a right
that all of vou expect and wish and hope will be preserved,

Now, Ur. President, I do not eare to argue it further for |
do not want to take the time of the Senate,

Mr. KNox Mr. President, I would like to sav one word
in regard to the amendment, It seems to me a pity to enact
this legislation after this proposition has been made and re-
jeet it. Tt is only writing into the resolution that whieh is
approved as a matter of course. It is neta right in my judg-
ment that rests in the police power, It is a right that grows
out of the nature of the service that these corporations offer
to render to the general publie, and we are only writing inte
the resolution a proposition that in our opinion ne operations
of these lines, if they are taken over by the Government, will
interfere with that natural right. The amendment eontem-
plates and specifically provides that in any situation where
the private right and the Government right conflict the pri-
vate right must give way. [hope the amendment will be
adopted,

The PRESIDENT pro tempore. The question is on agree-
ing to the amendment proposed by the Senator from Mis-
souri (Mr. Reed).

* * * 7 * * *

116
So Mr. Reed’s amendment was rejected.
* * * * * * *

Mr, Lewis Mr, President, | merely wish now to say that
the subject matter of this amendment respecting the wire
companies and the protection of the newspapers and the
press will all be taken care of by proper regulations when
these companies pass into the hands of the Government,
There need be no fear but that they will be taken care of
after consultation with the owners and those who are inter.
ested.

Mr, Penrose. Similar to the railroad regulations, T sup.
pose,

Mr. Lewis, Very similar, because such has been done, |
will say to the Senator.

Mr, Pexnose, Inereased rates, miserable accommodations
for the traveling publie, and general scandal and discontent
all over the country.

Mr. Lewts. The accommodation has not been as generous
as we should like, but that is because the demands of the war
have monopolized opportunity

Mr. Reep. Mr. President, | cannot restrain from: express
ing the satisfaction T have at the official notice as to just how
the business is to be managed

* * * * * ’

So the joint resolution was passed,

” Exrracts prow Cosxaresstoxarn Recorp or dene 10
Py.

Mr. Sueerany. Mr, President, | desire to address a ques
tion to the chairman of the committee, the Senator from
lowa (Mr. Cummins). Can the Senator tell me about claims
for damages accruing during the period of Government own

117

ership” Will the companies be in position to plead that they
were Government agencies and therefore secure immunity
from suits’?

Mr.CumMins. Unfortunately, Mr. President, the original
act made no provision for bringing suit against the Govern-
ment. The committee believed that it was not wise to enter
upon that subject at this time. Personally my opinion is
that if all the systems were under Federal control or in the
posession of the Government, no suit would lie against the
companies which theretofore had operated them, and that
any suit arising out oof the operation of the Government
would be brought against the Government. and under our
law it Would necessarily be brought in the Court of Claims.

Mr. Suervary. 1 have an amendment prepared pro-
hibiting the companies from pleading in suits for damages
the fact that they had been Government agencies, but if the
chairman of the commnittes does not think it wise to go inte
this tnatter at present [shall not press the amendment,

Mr. CumMins. [think there is a general law whieh con-
fers jurisdiction pon the Court of Claims in such eases

Mr. Rowixsos., Will the Senator yield for a moment?
The chairman of the committee is familiar with the last
provieo of the act approved July 16, TODS. which reads as
follows

“Provided further, That nothing in this act shall be
construed to amend, repeal, impair, or affect existing
laws or powers of the States in relation to taxation or
the lawful police regulations of the several States, ex-
cept Wheremn such laws, powers, or regulations may
affect the transmission of Government communiea-
tions, or the issue of sto ks and bonds hy such svstem
or systems,

Ido not know what the effeet of that provision is, but it
was evidently intended to preserve these rights

Mr, Comins. LT think it was intended really to preserve
inthe States the power or authority of regulation over such

118

rates. But the Supreme Court of the United States, as yo
will remember, a week ago yesterday declared that notwit
standing that provision in the law the Postmaster Gener
had the full and complete authority to make rates, not on)
interstate rates, but State rates as well,

I am inclined to think that would not cover the case of
suit. and anvone whe has suffered damage of that kind w
have to seek his remedy against the United States precise
as every other citizen secks a remedy when the Governme
has wronged hin.

Mr. Suereary. Was this matter brought before the er
mittee during its hearings”

Mr. Cumiss. | do not remember that it was, | cann
recall, but Tam inclined to think it was not

Mr. Suerrarp. Is it the opinion of the Senator that it
not within the power of Congress to provide that these cor
panies may be made responsible in damages by suits of
character indicated,

Mr. Cumsins. IT do not think you can make the cor
panies which formerly operated the properties responsil
for torts committed by the Government; but it is possible
provide—this is a first impression —that suits may he broug
against these companies in the various jurisdictions, and th
any stints pond out hey reason of damages recovered could |
reckoned as a part of the cost of operation, and in that
the Government be made responsible for the damages.

Mr. Usxprerwoop, Mr. President. if the Senator will,
low me, [desire te say that it seems clear that after the Ge
ernment took possession of this property any resulting: da
ages growing out of the possession of the property lie agait
the Government and not against the owners of the proper
If the Government were to take the Senator's automobile f
a war emergeney, and the man who was driving the earn
over somebody and injured him, the Senator would not
liable because it was his ear, but the Government would
liable because it was its act. Of course, those causes tl

11

gose before the Government took possession still exist against
ese COTpUT Les there is neo question about that—but as to
vthing that arose during Ciovernment control and opera.
on these COT pRn Les have nothing todo with

Mr. SHEPPARD But Stipyprose itops provided that uns judy
weht shall be charged to the Operating eXpelises of the SVs-
ems during the period of Government control and shall be
wken out of the receipts during governmental control’

Mr. UNpbeRWoop But you cunt divorce the Covern-
yent from the right, as it ultimately has to pay. Of course,
wt would not be making the Government pay because the
jovernment gets the receipts and then pays its lease for the
ysten If you lid that, you might take away the right of
he Government to defend itself, and you might have actions
ing against the Government that were unjust

Besides that, | doubt very much whether a clause of that
tind would be constitutional, Even if we pass the bill mak-
ing these companies liable for the unlawful acts of the Gov-
mment during its operation, and judgment was rendered,
ould that not be taking private property without due eom

,

ensation? tt would be making an individual pay for an
a which the Government or somebody else committed, Ut
ems to me that clearly it is within the seope of the constitu
tonal inhibition against taking private property without just
mpensation; and even if we put a clause of that kind into
he bill, I do not believe it would pass the courts

Mr. CumMins. Mr. President, | hope the Senator from
\labama will not misunderstand me. In the way he has just
dated it, it would undoubtedly be unconstitutional: but when
he Government comes to pay the compensation dae to these
irious companies during Federal control it must, if it adopts
he plan of net income, allow them damages, for they are
wrt of the operating expelses If a private citizen recovers
fom a company for damages during that period and it is
emitted to charge the judgment into operating expenses,
the Government would have to pay it only onee, and it would

10

be entirely fair, although it is open to the objection that the
Senator has suggested in regard to the Government having
an opportunity to defend, Tt would lave noe opportunity to
defend against a claim of that kind.

Mr. Unperwoop. = It seems to me that as to damaves for
wrong done to individuals during Government control, if
there is a just case against the Govermment during that time,
the individual citizen ought to have his opportunity. [ am
rather inclined. to think that the general statutes in reference
to the jurisdiction of the Court of Claims are broad enough
to cover cases of that kind now; but possibly they are not.
If they are not, the jurisdiction ought to be broadened in the
Court of Claims, so that the citizen who is injured by the
Government during the period of control might have his
day in court. It seems to me that is the only place a case
would lie.

Mr. SHEPPARD. Does the Senator not realize that it would
be a great hardship to have citizens of this country go into
the Court of Claims to press their various suits for damages?

Mr. Unperwoop. Most of those cases would fall within
the jurisdiction of district courts. The district courts have
concurrent jurisdiction with the Court of Claims up to
$10,000, and where the case involve | not more than $10,000 |
do not know that any great hardship would be incurred.
a as

Mr. SHEPPARD. Mr. President, for the information of the
Senate I shall ask that the amendment which I have in mind
be read in order that it may be incorporated in the Record.
I trust opportunity will offer hereafter for the consideration
of the question I have presented.

The Vice-Presipent. The amendiment proposed by the
Senator from Texas will be stated,

The Secretary. It is proposed to add after the last pro-
viso in section | the following:

“And provided further, That actions on claims for
loss and damage on account of the acts or omissions

121

of the agents and employees engaged in the operation
of such systems accruing during the period of controi
of the same under the joint resolution approved July
16, 1918, may be maintained in courts of competent
jurisdiction, and in any such action no defense shall
be made thereto that any such telegraph, telephone,
marine cable, or radio system or systems was an in-
strumentality or ageney of the Federal Government,
and any judgment therein rendered shall be charged
to the operating expenses of such systems during such
period of governmental control, and compensation
made therefor as provided in such joint resolution:
Provided, That no process, mesne or final, shall be
levied against the property of any such system or sys-
tems to satisfy any such judgment.”

The Vicr-Presipent. The question is on the substitute

The amendment was agreed to.

Mr. Watson. Mr. President.

Mr. Cummins. A parliamentary inquiry, Mr. President

The Vice-Presipent. The Senator will state it

Mr. CuMMins. The vote just taken was upon the com-
mittee amendment?

The Vice-PRrEsIDENT. It was upon the committee amend:
ment.

EXHIBIT B.
ORDER No. 2474.

December 12, 1918,
Whereas the Congress of the United States in the exercise
of the constitutional authority vested in them, by joint resolu-
tion of the Senate and House of Representatives bearing date
of July 16, 1918, resolved: That the President during the
continuance of the present war is authorized and empowered,
whenever he shall deem it necessary for the national security

l6y

122
or defense, to supervise, take possession, and assume control
of any telegraph, telephone, marine cable, or radio system
or systems, or any part thereof, and to operate the same in
such manner as may be needful or desirable for the duration
of the war, which supervision, possession, control, or opera.
tion shall not extend beyond the date of the proclamation of
the exchange of the ratification of the treaty of peace, and

Whereas, the President of the United States, by lis proe-
lamation of the 2d day of November, 1918, declared that he
deemed it necessary for the national security and defense to
supervise and take possession and assume control of all
marine cable systems and to operate the same in sueh tian
ner as may be needful or desirable, and did, by said proclania-
tion under and by virtue of the powers vested in linn by said
resolution and hy virtue of all other powers thereto hin
enabling, take possession and assume control and supervision
of each and every marine cable system and every part thereof
owned or controlled and operated by any company or com:
panies organized and existing under the laws of the United
States or any State thereof, including all equipment and
appurtenances thereto whatsoever and all the material and
supplies, and did also by said proclamation direct that such
supervision, possession, control, and operation of said marine
cable systems by him undertaken be exercised by and through
the Postmaster General, Albert S. Burleson, which said: proe-
lamation further directed that until and except so far as the
Postmaster General shall from time to time by general or
special orders otherwise provide, the owners, managers.
boards of directors, receivers, officers, and employees of the
various marine cable systems shall continue the operation
thereof in the usual and ordinary course of business of said
systems in the names of their respective companies, associ
tions, organizations, owners, or managers, as the case may be,
and that from and after 12:00 o'clock midnight on the 2d
day of November, 1918, all of the marine cable systems in
cluded in said proclamations shall conclusively be deemed

128

within the possession and control and wtnder the supervision
of said Postinaster General without further act or notice:

And whereas by Order No, 2351 of the Postmaster ( reneral,
dated’ November 18, 1918, it was directed that all of the offi-
cers, operators, and emplovees of the marine cable companies
continue in the performance of their existing duties. report-
ing to the same officers as theretofore, and on the same terms
of cinployment, in which order it was announced to be the
purpose to co-ordinate and unify these services so that they
might be operated as a national system, with due regard to
the interests of the publie and the owners o” the properties ;

And whereas by letter of the Postmaster General. dated
December 4, 1918, addressed to Mr. Clarence H. Mackay,
president of the Commercial Cable Company, copies of which
were transmitted to Mr. CGreorge Gi. Ward. vice-president of
the Commercial Cable Company, and to Mr. Neweomb Carl-
ton, president of the Western Union Telegraph Company, it
was declared that the interest of the publie service during the
present emergency necessitated the unifieation in operation
to the fullest extent possible of the cable systems leading from
this country to Europe so that the full capacity of all the
cables might be available to the public and the press which
it Was manifest could only be accomplished through the
operation of the two systems under one management, and
that after having made a survey of the situation and becom.
ing satisfied that the object sought could best ve accomplished
by placing the cables under the operating head of the Com-
mercial Cable Company, it was directed that Mr. Croorge Gi,
Ward, viee-president of the Commercial Cable Company, as-
ume the management and operation of both the Commercial
‘able System and the cable systems operated by the Western
Chion Telegraph Company ;

And whereas in his letter of December 6, 1918. said Now-
omb Carlton not only acquiesced for his companies in the
foresaid directions for unifieation in operaion of the two
able systems under said George G, Ward. the operating head

hae

ae

Stam

124

of the Commercial Cable Company, but pledged his hearty
co-operation therein, stating his Judgment to be that such
unification would result in an inerease in’ the total daily
capacity of the cables comprising the two systems, and also
In important economies in operation ;

And whereas in his letter of December 11, 1918, Mr. Clar-
ence H. Mackay, president of the Commercial Cable Com.
pany. advised the Postmaster General that said George G,
Ward has taken no step to unify the properties by taking
possession of the cables controlled by the Western Union
Telegraph Company, and has ne intention of doing so,

And whereas in his said letter of December 11, 1918, the
said Clarence THE. Mackay, president of the Commercial Cable
Company, has shown the hostility of the officials of the said
company to any plan of unification of operation of the cable
systems, and said Ward has declined to comply with said
instructions of the Postmaster General of December 4. 1918.
and

Whereas, the public interests require that the operation of
the said cable systems be unified not only for improvement
of service, but also that important economies in operation
may be effected during the period of Government control
which can be accomplished only by placing such unified
operation under the management of persons in complete ac-
cord with the ends desired,

Now, therefore, it is ordered and directed that so much
of the said Order No, 2351 as directs all of the officers, opera-
tors, and employees of the marine cable companies to eon-
tinue in the performance of their present duties, is modified
so as to exclude Clarence H. Mackay, George G. Ward, and
William W. Cook from any connection with the supervision,
possession, control, or operation of any and all marine cable
systems or any part thereof, the supervision, possession, con
trol, and operation of which was taken over and assumed by
the President in his said proclamation of November 2, 1918,
and said Newcomb Carlton is hereby directed to assume the

125

management and operation of cach and all of the marine
cable systems, the supervision, possession, control, and opera-
tion of which was taken over and assumed by the President
and by him directed to be exercised by and through the Post-
master General so far and to such extent as is authorized by
the said joint resolution of Congress and the said proclama-
tion of the President. The said Carlton will proceed at once
to the execution of this order and shall carry into effect
directions which have been

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386004_0555%3A2. Public record. Not legal advice.