Farmers' Grain Co. of Embden v. Langer

• Decision Date: 03 May 1921
• Docket Number: 5728.
• Citation: 273 F. 635
• Parties: FARMERS' GRAIN CO. OF EMBDEN v. LANGER, Attorney General of North Dakota, et al.
• Court: U.S. Court of Appeals — Eighth Circuit

273 F. 635

FARMERS' GRAIN CO. OF EMBDEN v. LANGER, Attorney General of North Dakota, et al.

No. 5728.

United States Court of Appeals, Eighth Circuit.

May 3, 1921

David F. Simpson, of Minneapolis, Minn. (Sveinbjorn Johnson, of Grand Forks, N.D., and William A. Lancaster, John Junell James E. Dorsey, and Harold G. Simpson, all of Minneapolis Minn., on the brief), for appellant.

Seth W Richardson, of Fargo, N.D. (William Lemke, of Bismarck, N.D on the brief), for appellees.

Before CARLAND, Circuit Judge, and LEWIS and COTTERAL, District judges.

CARLAND Circuit Judge.

Appellant commenced this action for the purpose of having chapter 138, Laws North Dakota of 1919, adjudged to be null and void, as imposing a direct burden upon interstate commerce, and as being in conflict with the United States Grain Standards Act (39 Stat. 482 (Comp. St. Secs. 8747 1/2-8747 1/2k)), and for the further purpose of having appellees, their agents, servants, and employees, perpetually enjoined from enforcing the same. The case was heard on pleadings and proofs, and as a result thereof the action was dismissed on the merits. Appellant appealed.

Counsel for appellees have moved to dismiss the appeal for want of jurisdiction. The parties are all citizens of North Dakota and the jurisdiction of the District Court was invoked upon the ground that the suit arose under the Constitution and a law of the United States. If the jurisdiction of the District Court to entertain the suit had been based alone upon the ground that it was one arising under the Constitution of the United States, then the jurisdiction of the Supreme Court to review the case on appeal would have been exclusive.

Judicial Code, Secs. 128-238 (Comp. St. Secs. 1120-1215); Raton Waterworks Co. v. City of Raton, 249 U.S. 552, 39 Sup.Ct. 384, 63 L.Ed. 768; American Sugar Refining Co v. New Orleans, 181 U.S. 277, 281, 21 Sup.Ct. 646, 45 L.Ed. 859; Huguley Manufacturing Co. v. Galeton Cotton Mills, 184 U.S. 209, 295, 22 Sup.Ct. 452, 46 L.Ed. 546; Union & Planters Bank v. Memphis, 189 U.S. 71, 73, 23 Sup.Ct. 604, 47 L.Ed. 712; Vicksburg v. Vicksburg Waterworks Co., 202 U.S. 453, 26 Sup.Ct. 660, 50 L.Ed. 1102, 6 Ann.Cas. 253; Carolina Glass Co. v. South Carolina, 240 U.S. 305, 318, 36 Sup.Ct. 293, 60 L.Ed. 658. The jurisdiction of the District Court, however, as above stated, was based upon two grounds: (a) The construction or application of the Constitution of the United States. (b) A suit arising under a law of the United States. Grain Standards Act, supra. In such a case the jurisdiction of the Supreme Court to hear an appeal from the judgment below is not exclusive, and the appeal in this case was properly taken to this court. Spreckles Sugar Refining Co. v. McClain, 192 U.S. 397, 24 Sup.Ct. 376, 48 L.Ed. 496. The Spreckles Case was one arising under both the Constitution and the laws of the United States. It arose under the Constitution, because the plaintiff's cause of action as stated in its complaint was based upon the proposition that the law under which the defendant proceeded to collect the taxes in controversy in that case was contrary to the Constitution. It also arose under a law of the United States, because the plaintiff pleaded that, if the statute was not unconstitutional, still it did not authorize the collection of the taxes in question. The Supreme Court in reference to this matter said:

'But the case distinctly presented other questions which involved simply the construction of the act, and those questions were disposed of by the Circuit Court at the same time it determined the question of the constitutionality of the act. If the case had depended entirely on the construction of the act of Congress-- its constitutionality not being drawn in question-- it would not have been one of those described in the fifth section of the act of 1891, and, consequently, could not have come here directly from the Circuit Court. As, then, the case, made by the plaintiff, involved a question other than those relating to the constitutionality of the act and to the application and construction of the Constitution, the Circuit Court of Appeals had jurisdiction to review the judgment of the Circuit Court, although if the plaintiff had elected to bring it here directly, this court would have had jurisdiction to determine all the questions arising upon the record. The plaintiff was entitled to bring it here directly from the Circuit Court, or, at its election, to go to the Circuit Court of Appeals for a review of the whole case.'

Some confusion has existed in some of the decided cases owing to a failure to appreciate what the Supreme Court meant in the Spreckles Case by the words 'other questions.' It will be observed in that case that the 'other questions' beside the constitutional question was the construction of a law of the United States which was also a ground of jurisdiction in the lower court. So that it is not true that merely because a case involves other questions than a constitutional question that the case may be brought to this court on appeal or writ of error. In what we now say upon the question of jurisdiction we put to one side all cases where the jurisdiction of the lower court is based upon a diversity of citizenship and confine our remarks to those cases where the jurisdiction of the court below is based upon what is generally termed, a federal question. What is meant by 'other questions' in the Spreckles Case is well illustrated by the case of Raton Waterworks Co. v. City of Raton, supra. On the face of the opinion in that case the question decided was one which the Supreme Court had decided several times before. The facts as they appeared in the certificate of this court, when taken together with the decision of the Supreme Court, illustrate what is meant by the words 'other questions.' In the Raton Case the waterworks company commenced an action against the city of Raton for the purpose of enjoining the city from constructing a system of waterworks of its own before the expiration of the franchise granted by the city to the waterworks company on the ground that the ordinance providing for the construction of the city system, having been passed in pursuance of authority granted by the Legislature of New Mexico, was a law which impaired the obligation of the contract between the city and the waterworks company. Walla Walla v. Walla Walla Water Co., 172 U.S. 1, 19 Sup.Ct. 77, 43 L.Ed. 341. This and other constitutional questions were the sole grounds of jurisdiction upon which the action was based. The contract or franchise made between the city and the waterworks company contained a provision to the effect that, if the waterworks company should fail at any time for a certain period to furnish good and potable water to the city, the city should have the right to terminate the contract. The city pleaded this provision as a defense to the action of the waterworks company. On the trial much evidence was taken upon this defense. The trial court sustained the defense made by the city and rendered judgment against the waterworks company; the constitutional question serving no purpose except as a ground of jurisdiction.

The Supreme Court in the case of Vicksburg v. Vicksburg Waterworks Co., 202 U.S. 453, 26 Sup.Ct. 660, 50 L.Ed. 1102, 6 Ann.Cas. 253, had decided that where complainant's bill disclosed an intention by a municipality to deprive complainant, a water supply company, of rights under an existing contract by subsequent legislation, and the city could not show any inherent want of legal validity in the contract, or any such disregard of its obligations by complainant as would absolve the city therefrom, the case was one arising under the Constitution of the United States, and that a direct appeal would lie to the Supreme Court. The facts in the Raton Case brought it within the rule stated in the Vicksburg Case. An appeal was taken to this court, and, there being doubt about our jurisdiction, the question was certified to the Supreme Court. It thus appears that, while there was another question in the Raton Case besides the constitutional one, still the Supreme Court decided that the jurisdiction of the Supreme Court to review the judgment was exclusive, thus showing, it seems to us, that the 'other questions' mentioned in the Spreckles Case mean questions based upon some jurisdictional ground. We are unable to find that the Spreckles Case has been modified in any way by the Supreme Court, and it was cited with approval in City of Pomona v. Sunset Telephone & Telegraph Co., 224 U.S. 330, 342, 32 Sup.Ct. 477, 56 L.Ed. 788.

Whether or not the North Dakota law conflicts with the Grain Standards Act requires the construction of both laws. If the jurisdiction in the court below had been rested alone upon the Grain Standards Act, an appeal could not have been taken to the Supreme Court, but of necessity would have been taken to this court. We are therefore clearly of the opinion that the jurisdiction of the Supreme Court to review the judgment below in this case was not exclusive, and that this court has jurisdiction of the whole case.

Coming to the merits, the facts are as follows: The spring wheat crop of North Dakota varies from 100,000,000 to 156,000,000 bushels annually. Approximately 90 per cent. of this wheat is bought for shipment and actually shipped to terminal markets outside of the state, principally Minneapolis and Duluth Minn. Approximately 2,200 elevators have been built, connected with railroad tracks at all stations within the grain-growing area of North Dakota, by men and companies engaged in handling this grain. Appellant is a Farmers' Co-operative Elevator Company. It buys grain from its members and other farmers at Embden, N.D., and either...