West India & Panama Telegraph Co. v. Public Service Commission
West India & Panama Telegraph Co. v. Public Service Commission
Opinion of the Court
delivered the following opinion:
The bill in this cause was filed April 9, 1918, and seeks to enjoin the Public Service Commission of Porto Rico from regulating the charges on cables between Porto Rico and the-' United States, which that Commission had ordered reduced 40 per cent. The matter comes up at present upon a motion of the defendant, joined in by the Insular Chamber of Commerce, heretofore permitted to intervene, raising the question of jurisdiction of this court and also moving to dismiss the bill for reasons set out.
1. The jurisdiction of this court in similar cases has been affirmed in a line of cases such as People v. American R. Co. 9 Porto Rico Fed. Rep. 519; Scoville v. Soler,- ante, 308, and Porto Rico American Tobacco Co. v. Benedicto, ante, 565. These rest upon the principle that an unconstitutional law is
2. Commerce may be said to be one of the most important bases of civilized life. A nation may exist without it, as in the instance of China, but national life, in the modern sense of the word, presupposes interchange of commodities and of thought. In fact the ease and'rapidity of communication may be said to be the test of civilization. So powerful do corporations and institutions connected with commerce become that in modern times they are everywhere the subject of regulation by the state, where, indeed, they are not actually functions performed by the state authorities. In the United States regulation has so far been preferred to public ownership'. When,.it ■comes to interstate communication, or what for our purpose is the same thing, communication from Porto Pico to the United States and foreign countries, the need of regulation is all the more apparent. The right to conduct such interchange is in the highest degree a public franchise and subject to regulation by the public. The regulation is sometimes provided for in the act of incorporation or permit to do business, but the two companies now concerned are corporations foreign to the United States and the charters are not in issue. This, however, makes very little difference, because the police power of the state extends to all such matters.
These principles are not open to doubt. It is the question
3. As held in People v. American R. Co. 9 Porto Rico Fed. Rep. 579, the interstate commerce commission applied in Porto Rico even though the Commission did not exercise its jurisdiction and was not aware of it until the Didrickson case. The provisions of this (Interstate Commerce) Act shall “apply to . . . telegraph, telephone and cable companies, (whether wire or wireless) engaged in sending messages from one state, territory or district of the United States to another state, territory or district of the United States or to any foreign country.” 36 Stat. at L. 544, chap. 309, § 7, U. S. Comp. Stat. 1916, § 8563. This on its face embraces cable companies, and therefore the plaintiffs herein. There is nothing so far to show that the Interstate Commerce Commission ever took jurisdiction of these companies or that these companies ever made reports or otherwise submitted to such jurisdiction. The law, however, does not depend upon whether the people accept it or not; indeed its greatest usefulness may be where people do not accept it. The points in the motion to dismiss based herein are not well taken. The question is as to the applicability of the law, not its actual application.
“Definitions as to what constitutes interstate commerce are not easily given so that they shall clearly define the full meaning of the term. We know from the cases decided in this court that it is a term of very large significance. It comprehends as it is said, intercourse for the purposes of trade in any and all its forms, including transportation, purchase, sale and exchange of commodities between the citizens of different States, and the power to regulate it embraces all the instruments by which such commerce may be conducted.”
It has been held that the telegraph is an instrument of commerce and that telegraph companies are subject to the regulating power of Congress with respect to their foreign and interstate business. Pensacola Teleg. Co. v. Western U. Teleg. Co. 96 U. S. 1, 24 L. ed. 708. A telegraph company occupies the same relation to commerce as a carrier of messages that a railroad company does as a carrier of goods. Both companies are instruments of commerce, and their business is commerce itself. They do their transportation in different ways, and their liabilities are in some respects different, but they are both indispensable to those engaged to any considerable extent in commercial pursuits. Western U. Teleg. Co. v. Texas, 105 U. S. 464, 26 L. ed. 1068. Commerce with foreign countries and commerce among the several states are the same in nature and grow out of the same constitutional grant. Const, art. I, § 8, cl. 3. Commercial intercourse is an element of commerce which comes within the regulating power of Congress. Gibbons v. Ogden, 9 Wheat. 1, 6 L. ed. 23. And these powers are not confined to the instrumentalities in use when the Constitution was adopted,
Cable business therefore is a part of interstate commerce and there can be no question that up to the passage of the Jones Act the Interstate Commerce, Act applied. Did the Jones Act change the situation ?
4. The distance of Porto Rico from the mainland and difference of its economic conditions seem to call for some different regulation, and so Congress in the Jones Act, § 38, declared that “the Interstate Commerce Act and the several amendments . . . shall not apply to Porto Rico.
“The legislative assembly of Porto Rico is hereby authorized to enact laws relating to the regulation of the rates, tariffs and service of public carriers by rail in Porto Rico, and the Public Service Commission hereby created shall have power to enforce such laws under appropriate regulation.” [39 Stat. at L. 964, chap. 145, Comp. Stat. —, § 3803 p.] The acts now in question arise subsequent to this law. What-is the meaning of the law ?
It is suggested that the provision authorizing the legislative assembly to enact laws as to public carriers by rail is to be con
5. The proper construction of the grant of power in § 38 of the Jones Act depends very largely upon the meaning of the words “Porto Pico.” It is declared that the Interstate Commerce Act shall not apply to “Porto Pico,” and the regulation of rates of public carriers by rail is necessarily and expressly limited to those in “Porto Rico.” There is no reason to suppose that what is included in Porto Pico in this section differs from what is included in Porto Pico in other sections of the act. Section 1. “To provide a civil government for Porto Pico,” declares that “The provisions of this act shall apply to the Island of Porto Pico and to the adjacent islands belonging to the United States and the waters of those islands; and the name Porto Pico as used in this act shall be held to include not
The legislation of Porto Rico itself in regard to the Public Service Commission tends in the same direction. The Public Service Commission Act of December 6,. 1917, now in question is a law of one hundred and ten sections, in its title “Defining public service companies; and providing for their regulation; prescribing, defining, regulating and limiting their rights, powers and duties; prescribing and defining the powers and duties of the Public Service Commission and its officers, prescribing and regulating the practice and procedure before such commission and upon appeal, and for other purposes.” The definition of public service companies is “such natural persons or bodies corporate as may engage in Porto Rico in any of the following pursuits or business . . . telegraph and telephone communications, whether by wire, wireless or by cable.” By its terms it is limited not to persons in Porto Rico, but to persons who may engage in such business in Porto Rico. It may be doubted whether this properly includes any business outside of the territorial limits of Porto Rico. The principal instrumentality of
And not only are interstate telegraph messages not specifically covered by the Public Service Act, but they are expressly reserved for congressional regulation. The Supreme Court holds in Wabash St. L. & P. R. Co. v. Illinois, 118 U. S. 557, 558, 30 L. ed. 244, 1 Inters. Com. Rep. 31, T Sup. Ct. Rep. 4: “This court holds now, and has never consciously held
This is merely an application to telegraphs of principles made applicable to railroads in many other cases. Covington & C. Bridge Co. v. Kentucky, 154 U. S. 204, 38 L. ed. 962, 4 Inters. Com. Rep. 649, 14 Sup. Ct. Rep. 1087; Southern R. Co. v. Reid, 222 U. S. 424, 56 L. ed. 257, 32 Sup. Ct. Rep. 140; Southern B. Co. v. Burlington Lumber Co. 225 U. S. 99, 56 L. ed. 1001, 32 Sup. Ct. Rep. 657; Southern R. Co. v. Railroad Commission, 236 U. S. 439, 59 L. ed. 661, 35 Sup. Ct. Rep. 304; Erie R. Co. v. New York, 233 U. S. 671, 58 L. ed. 1149, 52 L.B.A. (N.S.) 266, 34 Sup. Ct. Rep. 756, Ann. Cas. 1915D, 138.
6. It is quite true that a cable stands, or more strictly speaking lies, in a different condition from other property from its very nature. Begarded as wire and gutta-percha it has practically no value until it is laid at the bottom of the ocean and connected at each end with suitable transmitting instruments on land. Typically it lies in the ocean outside the territorial limits of any nation. Nevertheless it is protected by international law. The ocean is not a No Mean’s Land, where anyone may take possession of anything he finds there. That is piracy. Not only ships sailing upon the face of the seas, but cables lying at the bottom, are fully protected by international law, treaties, and custom. The ocean is a tract of water held in common by
matters which cannot be the subject of local regulation. Norfolk & W. R. Co. v. Pennsylvania, 136 U. S. 114, 34 L. ed. 394, 3 Inters. Com. Rep. 178, 10 Sup. Ct. Rep. 958; Robbins v. Taxing Dist. 120 U. S. 489, 492, 30 L. ed. 694, 695, 1 Inters. Com. Rep. 45, 7 Sup. Ct. Rep. 592; An interstate telegraph is such an instance. Western U. Teleg. Co. v. Texas, 105 U. S. 460, 26 L. ed. 1068; Hopkins v. United States, 171 U. S. 5778, 597, 43 L. ed. 290, 297, 19 Sup. Ct. Rep. 40.
7. It is quite true' that the laws applicable to a state are not always applicable to a territory, for a state is not an instrumentality of the nation, but a component part, while on the other hand a territory is merely a subdivision constituted by Congress for local purposes, and upon the territory may be conferred whatever powers Congress may think proper for the more effective execution of even national functions, such as regulating international cables to Cuba and Santo Domingo. There certainly is, .however, no presumption that Congress is
Tbe acts of tbe government are in conformity with this principle. Tbe English company operates under a Spanish grant which in itself conferred no rights upon any insular authori
The local permit from the executive council provides “that within the limitations provided in the permit granted by the United States government . . . the charges of the said grantee for the transmission of messages between Porto Eico and the United States shall be subject to regulation by the executive council according to law.” So far as shown, however, there was no such regulation of charges until now by the Public Service Commission. This Commission does not inherit the exact duties of the executive council. Section 38 of the Jones Act gives to the Commission the granting of franchifees, and “the said Commission is also empowered and directed to discharge all the executive functions relating to public service corporations heretofore conferred by law upon the executive council,” there immediately following the repeal of the Interstate Commerce Act and its congeners. It would seem, therefore, that “the charges of said grantee for transmission of messages between Porto Eico and the United States” are subject to regulation by the Public Service Commission in the same manner as formerly by the executive council, “according to law.” This
Under a reasonable construction the national legislation does not seem to have conferred upon the legislation of Porto Rico powers beyond those necessary for local purposes, and the Interstate Commerce Commission has the same jurisdiction over submarine cables that it had before the passing of the Jones Act.
8. The bill in this case originally alleged in § 8 that the order of the Public Service Commission reducing rates 40 per cent “constitutes an attempt to take their property without due process of law, contrary to the Constitution and laws of the United States.” This was afterwards eliminated by amendment. The motion to dismiss now alleges that this eliminates the constitutional provision as to due process of law, and prevents the court from going into the question of the propriety of the rates charged. It would not seem, however, to eliminate the due process clause, for whether the court can investigate the propriety of the charges made or not, the order of the Public Service Commission on its face, according to other paragraphs of the bill, cuts off almost half of the revenue of the cable companies. If the Public Service Commission had the right to reduce rates, the court still would have to consider the propriety of the reduction so as to ascertain whether or not the reduction amounted to confiscation or was otherwise a deprivation of property rights. On the other hand, if, as is now determined, the Public Service
9. The court invited in persons deeming themselves "wronged by the reduction of the rates before this amendment to the bill was made. Petitioner, the chamber of commerce, intervened .after the amendment was made. How far under the circumstances it can now go into the question of rates by intervention need not be discussed at present. It could probably do so one way or the other as a person injured by the rates, if it proves injury. The rule is that at common law the shipper by a common carrier could sue in the courts for an overcharge. Texas & P. E. Co. v. Abilene Cotton Oil Co. 204 U. S. 426, 51 L. ed. 553, 27 Sup. Ct. Rep. 350, 9 Ann. Cas. 1075. For the purpose of an independent suit, however, there would have to be the requirements as to citizenship and amount involved. The point need not be further discussed at this time.
It follows, therefore, that the Public Service Commission of Porto Eico has not the power to fix cable rates for service outside the 3 mile limits of Porto Eico. It is clear that a reduction of 40 per cent on rates on all commercial messages between the United States and Porto Eico as ordered would exceed its power, and must therefore be enjoined. The motion to dismiss is therefore denied.
It is so ordered.
Reference
- Full Case Name
- WEST INDIA & PANAMA TELEGRAPH COMPANY v. PUBLIC SERVICE COMMISSION OF PORTO RICO
- Status
- Published