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through the Postmaster General, in power. But as the contention at the exertion of the duty imposed best concerns not a want of power, upon him by the resolution of Con- but a mere excess or abuse of disgress to make compensation, con- cretion in exerting a power given, cluded a contract with the telephone it is clear that it incompanies of the most comprehen- volves considera- Courts-relation sive character, covering the whole tions which are be- department field while the possession, control, yond the reach of discretion. and operation by the United States judicial power. This continued. By its terms stipulated must be, since, as this court has amounts were to be paid as consid- often pointed out, the judicial may eration for the possession, control, not invade the legislative or execuand operation by the United States, tive departments so as to correct and the earnings resulting from alleged mistakes or wrongs arising such operation became the property from asserted abuse of discretion. of the United States. Although The second contention, although concluded in October, 1918, by stip- it apparently rests upon the asserulation the contract related back to tion that there was an absence of the time when the President took power in the President to exert the over the property.

authority to the extent to which he Following this, by authority of did exert it, when it is correctly the President, the Postmaster Gen- understood, amounts only to an aseral fixed a general schedule of serted limitation on the power rates, and it was the order to put granted, based upon a plain misthis schedule in effect which gave conception of the terms of the resorise to the suit, the trial, and the lution of Congress_by which the resulting judgment which we have power was given. In other words, now under consideration.

it assumed that by the resolution That, under its war power, Con- only a limited power as to the tele. gress possessed the right to confer phone lines was conferred upon the upon the President the authority President, and hence that the as

which it gave him, sumption by him of complete posTelephones


think needs session and control was beyond the operation-war nothing here but authority possessed.

but authority possessed. But although statement,

we it may be conceded that there is have disposed of that subject in the some ground for contending, in North Dakota Railroad Rate Case. view of the elements of authority And the completeness of the war enumerated in the resolution of power under which the authority Congress, that there was power was exerted and by which complete- given to take less than the whole if ness its exercise is to be tested suf

the President deemed it best to do fices, we think, to dispose of the so, we are of opinion that authority many other contentions urged as to was conferred as to all the enumer. the want of power in Congress to ated elements, and that there was confer upon the President the au- hence a right in the thority which it gave him.

· President to take TelephonesThe proposition that the Presi- complete possession ton-right to dent, in exercising the power, ex- and control to enceeded the authority given him, is able the full operation of the lines based upon

two considerations : embraced in the authority. The First, because there was nothing in contemporaneous official steps taken the conditions at the time the power to give effect to the resolution, the was exercised which justified the proclamation of the President, the calling into play of the authority; action of the Postmaster General unindeed, the contention goes further der the authority of the President, and assails the motives which it is the contracts made with the teleasserted induced the exercise of the phone companies in pursuance of





Federal opera


(250 U. 8. 163, 63 L. ed. 910, P.U.R.1919D, 717, 39 Sup. Ct. Rep. 507.) authority to fix their compensation, two significations,—a comprehenall establish the accuracy of this sive one embracing in substance the view, since they all make it clear that whole field of state authority, and it was assumed that power to take the other a narrower one, includfull control was conferred, and that ing only state power to deal with it was exerted so as to embrace the the health, safety, and morals of the entire business and the right to the people. Although it was admitted entire revenues to arise from the that the reservation, considered inact of the United States in carrying trinsically, was not susceptible of it out. Indeed, Congress, in subse- being interpreted in the broader of quently dealing with the situation the two lights, it was held that it thus produced, would seem to have was necessary to so interpret it beentertained the same conception as cause of the clause of the proviso to the scope of the power conveyed prohibiting the states from legislaby the resolution, and dealt with it ting concerning the issue of stocks from that point of view. Act of and bonds by the companies during October 30, 1918, 40 Stat. at L. the United States control. The rea1017.

soning was this: It was inconThis brings us to the proposition ceivable, it was said, that the subupon which the court based its con- ject-stocks and bonds-should clusion; that is, that although com- have been withdrawn from state plete possession, exclusive control, control by an express prohibition and the right to all the revenues de- unless that subject would have rived from the operation of the been under state control in the abbusiness, were in the United States sence of the prohibition,-a result as the result of the resolution, the which could only exist by giving the proclamation, and the contracts, saving clause as to police power its yet, as to intrastate earnings, the widest significance. But the fact state power remained to "encum- that the rule of construction apber” the authority of the United plied had the result of incorporatStates, because that situation neces- ing in the act of Congress unlimitsarily resulted from the terms of ed state authority merely as the rethe congressional resolution.

sult of a prohibition by Congress This superficially was based on against the exertion of state power an interpretation of the resolution, in a specific instance, in and of itbut in substance was caused by the self admonishes of the incorrectness application to the clause of the res- of the rule. But its want of foundaolution interpreted, of the erron- tion is established by two fur. eous presumption as to the continu ther considerations: (i) because it ance of state power dealt with in the causes the provision as to stocks North Dakota Case, 250 U. S. 135, and bonds, which was plainly enact63 L. ed. 897, P.U.R.1919D, 705, 39 ed to preserve the financial control Sup. Ct. Rep. 502. Let us see if of the United States over the corpothis is not necessarily so. The pro- rations, to limit if not destroy such vision dealt with was the proviso of control; (2) because by converting the resolution which in the first the prohibition against state power place saved “the lawful police regu- into an affirmative and comprehenlations of the several states," and sive grant of that power, it so intherefore subjected the control of terprets the act as to limit the grant the United States to the operation of authority which the act beyond of such power; and, in the second doubt gave to the United States. place, prohibited the states, during these considerations not only show the United States control, from ex- the mistake of the interpretation, erting authority as to the issue of but also point out the confusion and stocks and bonds.

conflict which must necessarily It was conceded that the words arise from giving effect to the mis“police power" were susceptible of taken presumption of the continu

4 A.L.R.-103.

ance of state power to which we passage, and further, that we have have previously referred.

also considered all the suggestions Inherently the power of a state made in the many and voluminous to fix rates to be charged for intra- briefs filed on behalf of various state carriage or transmission is in state authorities and individuals its nature but derivative, since it having interests in suits pending arises from and depends upon the elsewhere, concerning the construcduty of those engaged in intrastate

tion of the resolution. In saying commerce to charge only reasonable this, however, we must except sugrates for the services by them rendered, and the authority possessed gestions as to want of wisdom or by the state to exact a compliance necessity for conferring the power with that duty. Conceding that it given, or as to the precipitate or

uncalled-for exertion of the power was within the power of Congress, subject to constitutional limita

as conferred, from all of which we tions, to transplant the state power

have turned aside because the right as to intrastate rates into a sphere to consider them was wholly bewhere it, Congress, had complete yond the sphere of judicial author. control over telephone lines because ity. it had taken possession of them and In view of our conclusion we was operating them as a govern- shall in this case, as we did in the mental agency, it must follow that previous one, and for the reasons in such sphere there would be noth- therein stated, content ourselves

ing upon which the with reversing the judgment below -intrastate state power could

upon the merits, with directions for be exerted except such further proceedings as may upon the power of the United

be not inconsistent with this opinStates; that is, its authority to fix ion. rates for the services which it was

And it is so ordered. rendering through its governmental agencies. The anomaly re- Mr. Justice Brandeis dissents. sulting from such conditions adds cogency to the reasons by which, in the North Dakota Case, the error in

NOTE. presuming the continuance of state power in such a situation was point- The reported case (DAKOTA CENT. ed out, and makes it certain that TELEPH. Co. v. SOUTH DAKOTA, ante, such a result could be brought about 1623), authoritatively established as a only by clear expression, or at least matter of substantive law that state from the most convincing implica- control over intrastate telephone rates tion.

ceased with the exercise by the PresiThis disposes of the case; but be- dent of his authority under the joint fore leaving it we observe that we resolution of July 16, 1918, to take have not overlooked in its consider- control of the telephone companies. ation the references made to pro- The general subject of Federal control ceedings in Congress concerning of public utilities is treated in the anthe resolution at the time of its notation beginning at page 1680, post.

rateg-state control.


(- N. D. —, 172 N. W. 841.)

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JOHN MCGREGOR, Admr., etc., of Christ Hanson, Deceased, Appt.,

North Dakota Supreme Court - April 30, 1919.

(- N. D. —, 172 N. W. 841.)
Railroad - order for action against Director General – validity.

1. General Order No. 50, promulgated by the Director General of Railroads, which requires that suits upon causes of action arising subsequent to December 31, 1917, shall be brought against the Director General of Railroads, and not otherwise, and which authorizes the substitution of the Director General for the carrier company as party defendant and the dismissal of the action as to the company, is not warranted by the Rail Control Act of March 21, 1918, in so far as it purports to be applicable to causes of action already vested.

(See note on this question beginning on page 1680.] - right of action against when the period of Federal control, remain vested.

legal entities, capable of suing and be2. In an action by an administrator ing sued in the courts, and are chambrought under the Federal Employers' pions of their own legal rights. Liability Act to recover damages oc- Courts status of railroad

power casioned by the death of the plaintiff's to determine. intestate through alleged negligence 6. The liability or nonliability of a of the defendant railway company, carrier corporation for acts of alleged where the cause of action arose and

negligence occurring during the period the action was begun subsequent to of Federal control is not an administhe assumption of Federal control and trative question to be decided by the before the passage of the Rail Control Director General, but is a judicial Act of March 21, 1918, it is held : question to be determined by the

Under the Act Cong. Aug. 29, 1916, courts. § 1, authorizing the assumption, in

Master and servant - negligence of time of war, of control by the Presi.

carrier's servant dent of systems of transportation, and


7. The question as to whether or not under the proclamation of the Presi

a carrier corporation may be liable for dent issued in pursuance thereof,

the negligence of an employee during prima facie a cause of action for the

the period of Federal control is not dealleged negligence arose and became

cided. vested in the plaintiff prior to the

Judgment — against one not present passage of the Rail Control Act.

- effect. - railroad as defendant.

8. A railroad company which has 3. Section 10 of the Rail Control Act

passed under Federal control cannot is construed and held to authorize the

be bound by a judgment rendered bringing of actions against the carrier

against the Director General of Railcorporations during the period of Fed

roads, in which the corporation is deeral control.

nied the right to appear and defend. - right of Director General to defend. [See 15 R. C. L. 1005.) 4. Under the Rail Control Act, the

against one acting in representaDirector General is charged with ad- tive capacity. ministering the transportation sys- 9. Since the Director General' of tems owned by the various carrier cor

Railroads, in directing substitution of porations, but he is not authorized to

himself for railroads sued for negliappear and defend suits brought gent injuries, purports to act in a against them.

representative capacity, a judgment -- status under Federal control. against him will not bind him per

5. The carrier corporations, during sonally. Headnotes 1-7 by BIRDZELL, J.

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- against government.

Appeal — necessity of exceptions, 10. The government cannot be 12. Exceptions to an order substibound by a judgment against a rail- tuting the Director General for the road under its control without its con- railroad company in an action to hold sent.

it liable for damages are not necessary [See 15 R. C. L. 1029.]

to preserve the question for the appel

late court, if it appears upon the recDefinition - carrier.

ord transmitted by the lower court. . 11. The provision of the Railroad [See 2 R. C. L. 92 et seq.] Control Act that actions

Pleading - aiding complaint by aflibrought against carriers while under davit. Federal control refers to the corpora- 13. A complaint cannot be aided in tions themselves, not to the Director its allegations by affidavits which are General of Railroads.

not a part of it.

may be

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(Bronson and Grace, JJ., dissent.)

APPEAL by plaintiff from an order of the District Court for Ward County (Leighton, J.) substituting the Director General as defendant in the place of the defendant company and dismissing the action as to it, in an action brought under the Federal Employers' Liability Act to recover damages for the death of plaintiff's intestate alleged to have been caused by defendant's negligence. Reversed.

The facts are stated in the opinion of the court. Messrs. E. R. Sinkler and M. O. plaintiff's intestate is alleged to Eide, for appellant:

have been inflicted on January 22, The power to determine what shall 1918. In December, 1918, the disbe the law cannot be conferred. Nor trict court of Ward county, upon can the power be conferred to rescind

motion of the defendant's attor. or repeal any law existing. State ex rel. Hahn v. Young, 29

neys, entered an order substituting Minn, 474, 9 N. W. 737; State ex rel.

William G. McAdoo, Director GenRailroad & Warehouse Commission v.

eral of Railroads of the United Chicago, M. & St. P. R. Co. 38 Minn. States, as defendant in the place 281, 37 N. W. 782; State v. Great and stead of the Great Northern Northern R. Co. 100 Minn. 445, 10 Railway Company, and dismissed L.R.A.(N.S.) 250, 111 N. W. 289; Re the action as to the latter. This apWilson, 32 Minn. 145, 19 N. W. 723;

peal is from the order of substituUnited States v. United Verde Copper tion and dismissal. Co. 196 U. S. 207, 49 L. ed. 449, 25 Sup. Ct. Rep. 222; Thornton v. Territory,

Accompanying the notice of mo3 Wash. Terr. 482, 17 Pac. 896; Unit

tion was an affidavit by one of the ed States v. Grimaud, 220 U. S. 506, 55

defendant's attorneys, stating, in L. ed. 563, 31 Sup. Ct. Rep. 480. substance, that the railway com

Messrs. Murphy & Toner and Brad- pany was under Federal control, ford & Nash for respondent.

and was in every way subject to the Birdzell, J., delivered the opinion jurisdiction, management, and pos

session of the government of the of the court: This action is brought by an ad

United States, acting through the ministrator to recover damages oc

Director General of Railroads, casioned by the alleged negligence which control commenced on the 1st of the defendant in causing the day of January, 1918, prior to the death of one Christ Hanson, an em

accrual of the alleged cause of acployee. The Federal Employers' tion; and that on or about NovemLiability Act (chap. 149, 35 Stat. at ber 1, 1918, William G. McAdoo, as L. 65, Comp. Stat. S$ 8657-8665, 8

Director General of Railroads, proFed. Stat. Anno. 2d ed. p. 1208) and mulgated

mulgated General Order No. 50, amendments are relied upon. The ordering that all actions subseinjury resulting in the death of the quently brought based upon certain

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