State ex rel. Blaine v. Wis. Tel. Co.

• Decision Date: 29 April 1919
• Citation: 172 N.W. 225,169 Wis. 198
• Parties: STATE EX REL. BLAINE, ATTY. GEN., v. WISCONSIN TELEPHONE CO.
• Court: Wisconsin Supreme Court

169 Wis. 198

172 N.W. 225

STATE EX REL. BLAINE, ATTY. GEN.,

v.WISCONSIN TELEPHONE CO.

Supreme Court of Wisconsin.

April 29, 1919.

Original action by the State of Wisconsin, on relation of John J. Blaine, as Attorney General, against the Wisconsin Telephone Company. Complaint dismissed.

This is an action by the state, brought originally in this court on relation of the Attorney General, to permanently enjoin the defendant company from charging higher rates for interstate messages than the rates fixed by the Railroad Commission of the state on September 1, 1907. The company, which controls 80 per cent. of the long distance telephone business in the state, answered alleging that on July 31, 1918, the President of the United States took full control and possession of its lines, pursuant to a joint resolution of Congress authorizing such action in the exercise of the war power, and that the increased rates in question were fixed by the Postmaster General acting for the President January 21, 1919, and that in operating its telephone lines it was simply acting as the agent of the United States, and was not operating the same as a public utility.

Both parties moved for judgment on the pleadings, from which it appears, among other things, that by joint resolution of Congress passed July 16, 1918, the President was authorized during the continuance of the war, whenever he deemed it necessary for the national security or defense, “to supervise or to take possession and assume control” of any telegraph or telephone system or any part thereof, and “to operate the same in such manner as may be needful or desirable” for the duration of the war, but not beyond the date of the President's proclamation announcing the ratification of the treaty of peace, just compensation being required for such use; the resolution also providing that nothing therein should 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 except wherein such laws, powers or regulations may affect the transmission of government communications or the issue of stocks and bonds by such system of systems.”

It further appears from the pleadings that the President by proclamation on July 22, 1918, announced that he thereby took possession and assumed control and supervision of each and every telegraph and telephone system in the United States with all equipment, material, and supplies, and that the “supervision, possession, control and operation” of such system should be exercised by and through the Postmaster General, who was authorized to perform his duties through the owners, managers, officers, and employés of the system so long and to such extent and manner as he should determine. Possession was actually taken July 31, 1918, and the defendant's system has since that time been operated by its officers and employés as the agents of the government. A general raise in the rates of all messages was made January 21, 1919, by direction of the Postmaster General, and this action is brought to enjoin the company from charging such increased rates or any rates in excess of the rates fixed by the Railroad Commission September 1, 1907.

Eschweiler and Owen, JJ., dissenting.John J. Blaine, Atty. Gen., and M. B. Olbrich, Asst. Atty. Gen., for plaintiff.

Miller, Mack & Fairchild, of Milwaukee (Eugene S. Wilson, of Chicago, Ill., of counsel), H. A. Sawyer, U. S. Dist. Atty., of Milwaukee, A. C. Wolfe, U. S. Dist. Atty., of La Crosse, and B. R. Goggins, Sp. Asst. to U. S. Atty. Gen., of Grand Rapids, for defendant.

WINSLOW, C. J. (after stating the facts as above).

A number of very important and interesting questions were debated in the present case with ability and force. We shall not attempt to discuss them all in this opinion. Most, if not all of them, will doubtless be presented to the Supreme Court of the United States in the near future and will there receive comprehensive treatment, and, as that court speaks the final word on all such subjects, it seems that it would be a work of supererogation for this court to write at length upon them now. We feel, however, that when so much labor and ability have been expended in the preparation and argument of a case involving such serious questions, it is only fair that the bench should with promptness respond to the effort made by counsel and meet the issue fairly and squarely, instead of evading it. This course seems, not only to be the dignified course, but the course demanded by the public interest, and we have concluded therefore to briefly state our conclusions on several propositions which seem to us controlling in this case.

There is no question as to the authority of the United States by virtue of its exclusive war power to take over and operate the telegraph and telephone lines of the country in time of war.

Without seriously questioning this proposition, the state contends that the power to prescribe rates is a police power and, being such, is specifically reserved to the states by the proviso at the close of the joint resolution of Congress which specifically says that the laws and powers of the states in relation to taxation or lawful police regulations are not amended, repealed, impaired, or affected.

[1] The term “police power” is very elastic and is used to express different meanings at different times. In its broadest sense, it has been said to include “all legislation and almost every function of civil government.” Sligh v. Kirkwood, 237 U. S. 52-59, 35 Sup. Ct. 501, 59 L. Ed. 835. In its limited sense and as more frequently used, it includes simply regulations “for the protection of the lives, health, and property of citizens, and the promotion of good order and good morals.” C., M. & St. P. Ry. Co. v. Milwaukee, 97 Wis. 418, 72 N. W. 1118. It is police power in this limited sense which the federal Supreme Court grants to the states in cases where its exercise affects interstate commerce. Freund on Police Power, § 10. It is in this limited sense, also, that the term is used when it is said in our own decisions, and in the decisions of the United States courts, that the police power of the state cannot be bargained away either by the Legislature or by municipal corporations. Superior v. Roemer, 154 Wis. 345, 141 N. W. 250;Stone v. Miss, 101 U. S. 814, 25 L. Ed. 1079;N. P. R. R. Co. v. Duluth, 208 U. S. 583, 28 Sup. Ct. 341, 52 L. Ed. 630.

This must be so from the fact that the courts hold that a city may lawfully make a contract which is binding on itself governing rates to be charged by a public utility for its service. Manitowoc v. M. & N. T. Co., 145 Wis. 13, 129 N. W. 925, 140 Am. St. Rep. 1056;Detroit v. Ry. Co., 184 U. S. 368, 22 Sup. Ct. 410, 46 L. Ed. 592. It could not do so if the rate-making power were a “police power” within the meaning of that term as used in the cases first above cited.

[2] The question here is whether the term is used in its broadest sense, or in its limited and perhaps ordinary sense, in the congressional resolution. Looking at the purposes to be accomplished and the context, we think it is clear that the term was used in its limited sense. “To take possession, * * * assume control * * * and to operate,” are broad and sweeping terms. “Possession,” “control,” and “operation,” naturally import absolute power over the subject without interference from others. Control without the power to fix rates is not real control. Unquestionably, the government could exclude every private user, if such course were deemed necessary for war purposes. If it could exclude all private users, it would seem to follow that it may determine on what terms private persons may be allowed to use the lines. Pro hac vice, the telephone lines belong to the government and are part of the enginery with which the war is to be won. It seems unthinkable that the government should deliberately surrender to state agencies in 48 states and to municipal agencies in many cities the power to prescribe on what terms private persons might use government property. We acquit Congress of this absurd intention. The “police regulations” referred to in the proviso are undoubtedly such regulations intended to insure the lives, health, moral and physical welfare, and good order of the public and of the employés, as the state may see fit to prescribe.

There are other considerations which seem to us equally conclusive against the maintenance of this action by the state.

[3][4] The principle has been very definitely settled by the federal Supreme Court that, when the United States by its officers is rightfully in possession of property and is using the same in governmental operations, such use is not to be interfered with by injunctions or other writs issued out of state courts in actions brought against such officers or agents. The reason is that such actions are, in effect, actions brought against the sovereign, and the sovereign cannot be sued except with its own consent, and in courts of its own choice. Belknap v. Schild, 161 U. S. 10, 16 Sup. Ct. 443, 40 L. Ed. 599;International P. S. Co. v. Bruce, 194 U. S. 601, 24 Sup. Ct. 820, 48 L. Ed. 1134;Wells v. Roper, 246 U. S. 335, 38 Sup. Ct. 317, 62 L. Ed. 755.

[5][6] If such actions were to be maintained and injunctive relief granted, the result would be, either that the sovereign would be practically coerced in an action to which it was not a party, or that the sovereign would disregard the brutum fulmen of the trial court and render the decree nugatory and ridiculous. In the present case, if the injunction were to be granted, all that the government would have to do would be to place another set of servants in possession of the telephone system and proceed to operate it as before. The right of the government is not to be interfered with behind its back. Int. P. S. Co. v. Bruce, supra. This does not mean...