Sterling v. Constantin v. 15 8212 16, 1932

Decision Date12 December 1932
Docket Number453,Nos. 11,s. 11
Citation77 L.Ed. 375,287 U.S. 378,53 S.Ct. 190
CourtU.S. Supreme Court
PartiesSTERLING, Governor of Texas, et al. v. CONSTANTIN et al. Argued Nov. 15—16, 1932

Appeals from the District Court of the United States for the Eastern District of Texas.

[Syllabus from pages 378-380 intentionally omitted] Appeal from the interlocutory injunction order dismissed, and judgment affirmed on appeal from the final judgment.

Messrs. E. F. Smith, of Austin, Tex., and Dan Moody, of Austin, Tex., for appellants.

[Argument of Counsel from pages 380-385 intentionally omitted] Messrs. Joseph W. Bailey, Jr., and Luther Nickels, both of Dallas, Tex., for appellees.

Mr. Chief Justice HUGHES delivered the opinion of the Court.

The District Court, composed of three judges (U.S.C. tit. 28, § 380 (28 USCA § 383)), granted an interlocutory injunction restraining the appellants, Ross S. Sterling, Governor of the state of Texas, W. W. Sterling, adjutant general of the state, and Jacob F. Wolters, brigadier general of the Texas National Guard, from enforcing their military or executive orders regulating or restricting the production of oil from complainants' wells and from interfering in any manner 'with the lawful production of oil from plaintiffs' property.' 57 F.(2d) 227, 242. By stipulation, causes of action set forth in the amended bill of complaint against these defendants and others were severed, and the suit proceeded to trial upon the merits against these defendants separately, and was submitted upon the pleadings and the evidence taken on the application for the interlocutory injunction. The court entered final judgment making the interlocutory injunction permanent, and appeals have been taken to this Court from both the interlocutory order and the final judgment. As the case is now here on the latter appeal (No. 453), the appeal from the interlocutory order (No. 11) will be dismissed. Champlin Refining Co. v. Corporation Commission, 286 U.S. 210, 224, 52 S.Ct. 559, 76 L.Ed. 1062.

Complainants, as owners of interests in oil and gas leaseholds, originally brought the suit, on October 13, 1931, against members of the Railroad Commission of Texas, the Attorney General of the state, Brigadier General Wolters, and others, to restrain the enforcement of orders of the commission limiting the production of oil. These orders were alleged to be arbitrary and illegal, as having been made in violation of the statutes of Texas and in pursuance of a conspiracy in the interest of prices, and as operating to deprive complainants of their property without due process of law, contrary to both the state and the Federal Constitutions. The District Judge set the application for preliminary injunction for hearing on October 28, 1931, before a specially constituted court of three judges, and meanwhile made a temporary order restraining the defendants from limiting complainants' production below 5,000 barrels per well. 57 F.(2d) page 229. The defendants who were members of the Railroad Commission accordingly ceased their attempt to enforce the orders thus challenged.

Previously, on August 16, 1931, Governor Sterling had issued a proclamation stating that certain counties (in which complainants' properties were located) were in 'a state of insurrection, tumult, riot, and a breach of the peace,' and declaring 'martial law' in that territory. The Governor directed Brigadier General Wolters to assume supreme command of the situation and to take such steps as he might deem necessary in order 'to enforce and uphold the majesty of the law,' subject to the orders of the Governor as commanders in chief, as given through the adjutant general. From that time General Wolters acted as 'commanding officer of said military district.'

When the District Court made its temporary restraining order in this suit, as above stated, Governor Sterling, learning that the orders made by the Railroad Commis- sion could no longer be enforced, issued his oral and written orders to General Wolters to limit the production of oil in the described military district to 165 barreils per well per day. This was the limit fixed by the commission's order of October 10th, the enforcement of which was subject to the restraining order. On October 28th, the Governor made the limit 150 barrels, and on November 6th, 125 barrels. These orders were enforced by General Wolters, and contempt proceedings were brought against him.

On November 20, 1931, by leave of the District Court, complainants filed an amended bill making Governor Sterling and W. W. Sterling, adjutant general, parties to the suit, and alleging that the above-mentioned military and executive orders limiting production were without justification in law or in fact, were arbitrary and capricious, and were repugnant to the state and Federal Constitutions. Complainants alleged that there had been no request by the civil authorities for the use of the military forces; that all courts in said area were 'open and transacting their ordinary business'; that there were 'no armed bodies of civilians in said area,' nor 'any bodies of men threatening bloodshed, violence or destruction'; but that, on the contrary, 'the citizens in said community are in a quiet, peaceable condition and amenable and obedient to any process which might be served upon them.' Defendants Governor Sterling. Adjutant General Sterling, and General Wolters answered the bill, setting forth the executive proclamation and orders, and the declaration of martial law, and asserting the validity of the acts assailed. By a supplemental petition, in response to the answer, complainants denied that the Governor, under the Constitution and statutes of the state, could lawfully exercise the authority he had assumed, and specifically alleged that, if any statute of the state conferred such authority, it contravened stated pro- visions of the Constitution of the state and the due process and equal protection clauses of the Fourteenth Amendment. At the time of the hearing of the application for preliminary injunction, it appeared that the executive orders had further limited the complainants' production to 100 barrels per day. 57 F. (2d) page 229.

Upon that application, the District Court received the evidence submitted by both parties, and, considering it to be 'without substantial conflict,' stated that it established the following facts:

In August, 1931, the Legislature of Texas passed an amended oil and conservation act. Chapter 26, Acts 42d Leg. (1931) 1st Called Sess., Vernon's Ann. Civ. St. Texas, arts. 6008, 6014, 6029, 6032, 6049c. The Governor, in issuing his proclamation of August 16th, recited the provisions of the Constitution and statutes of Texas for the conservation of oil and gas and the existence in the East Texas oil field, the territory in question, of an organized group of oil and gas producers who were said to be in a state of insurrection against the conservation laws; that the civil officers did not have a sufficient force to compel them to obey; that by reason of their reckless production enormous physical waste was being created; that this condition had brought about such a state of public feeling that, if the state government could not protect the public's interest, they would take the law into their own hands; that this condition had caused threats of acts of violence; that it was necessary to give the Railroad Commission time to have hearings and promulgate proper orders to put the law into force; that a state of 'insurrection, tumult, riot and breach of the peace existed in the defined area,' and that there was 'serious danger threatening to citizens and property, not only there, but in other oil producing areas of the State'; and that it was necessary 'that the reckless and illegal exploitation' should be stopped until such time as the said resources might be property conserved and developed under the protection of the civil authorities. The troops were then called out, and the oil wells were shut down. In September, after the commission had made its order limiting production, while the proclamation of martial law was not rescinded nor the troops entirely withdrawn, the military occupation in force ended. The wells were opened and continued to produce daily under the order of the Railroad Commission. General Wolters, with the assistance of the 'Rangers,' the civil officers of the community, and 'the few military still remaining in the field,' and in aid of the commission, patrolled the territory to see that its orders were complied with; that from time to time the commission, sometimes with the approval, and sometimes with the disapproval, of the Governor, made its orders further limiting production, and these orders were obeyed.

The District Court also found that, after the restraining order against the commission had been issued in this suit, the defendants Governor Sterling and General Wolters 'determined not to brook court interference with the program of restricted production which they determined to continue.' Acting 'in the real, though mistaken, belief that the federal court, while competent as to the commission, was during the continuance of the proclaimed state of war without jurisdiction over their actions,' by virtue of the claim, which the District Court found to be wholly without support in the evidence, 'that war conditions were prevailing in the field, and that military necessity required the action,' they 'ousted the commission from the fixing of and superintendence over the daily production allowed, and have since controlled production by purported military orders.'

As to the actual conditions in the area affected by these orders, the District Court made for following finding:

'It was conceded that at no time has there been any actual uprising in the territory. At no time has any mili- tary force been exerted to put riots or mobs down. At no time, except in the refusal of defendant Wolters to observe the injunction in this...

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