Reprinted from THE AMERICAN POLITICAL SCIENCE REVIEW, Vol. XIII, No. 2, May, 1919 CONSTITUTIONAL LAW IN 1917-1918. II THE CONSTITUTIONAL DECISIONS OF THE SUPREME COURT OF THE UNITED STATES IN THE OCTOBER TERM, THOMAS REED POWELL Columbia University 1917 VII. RETROACTIVE CIVIL LEGISLATION There is little or no homogeneity to the questions to be considered under the head of retroactive legislation. A dispute whether a state has passed a law impairing the obligation of contracts may turn on a question as to the proper interpretation or application of language, or on opposing views of what is sufficient consideration or what agreements are against public policy. It was under the obligation-of-contracts clause that the Pennsylvania Hospital case72 decided that the power of governmental authorities to exercise eminent domain could not be bargained away. The crucial question is more often whether alleged rights existed than whether undoubted rights have been impaired. The Fourteenth Amendment and the doctrine of vested rights combine to make the obligation-of-contracts clause almost superfluous, as it is difficult to think of any impairment of the obligation of contracts which that clause inhibits which could not equally well be held deprivations of liberty or property without due process of law. This is apparent from the fact that retroactive legislation by Congress is questioned under the due-process clause of the Fifth Amendment, a contract being regarded as a property right that can be interfered with only when there is sufficient justification for what is done. During the October term, 1917, three cases decided that a congressional change of policy with respect to 72 Note 69, supra. Indian lands interfered with no vested rights. Egan v. McDonald and Brader v. James" held that restrictions on the sale of Indian lands were not contracts and that therefore such restrictions might be later removed. Jefferson v. Fink" determined that statutory provisions as to rules of descent for lands allotted to Indians were legislative rather than contractual, and so might be altered as to any land not already passed to the heir by descent from the owner. As in the preceding triennium, all the objections to retroactive state action were directed against alleged impairment of contracts made by some governmental authority. Aikens v. Kingsbury had to do with a statute relating to the sale of public school lands which provided that the state might foreclose for arrears, but gave the purchaser a right to redeem within twenty days after judgment of foreclosure. This right of redemption was held not to be not part of the contract of sale, but to relate merely to remedies, and therefore constitutionally subject to subsequent modification within limits not transgressed in the case at bar. In Hendrickson v. Apperson," on the other hand, it was declared that the provisions for levying taxes which were in force at the time of the issue of the bonds in suit formed a part of the contract of borrowing, and that the obligation of this contract was impaired by a later law which sought to restrict the power of the tax officials to the substantial disadvantage of the bondholders. Municipal Securities Corporation v. Kansas City78 was a suit on certain tax bills assigned to the plaintiff by the contractor who received them in payment for the construction of a sewer. The bills were made liens on abutting private property, and payment for the bills was not to be exacted from the city itself. Nevertheless the plaintiff sued the city on certain bills, basing his right 7 (1918) 246 U. S. 227. (1918) 246 U. S. 88. 75 (1918) 247 U. S. 288. 76 (1918) 247 U. S. 484. 77 (1917) 245 U. S. 105. See 31 Harvard Law Review 491. to do so on the fact that the lots on which the bills were liens had been taken by the city in eminent domain proceedings and on the claim that unless the city were liable it would take the plaintiff's property without due process, through its destruction of the lien that insured their payment. The Supreme Court, however, accepted the opinion of the state court that this constitutional question could properly arise only in an action of tort "as for conversion, or destruction, of the property upon which ordinarily the lien of the tax bills would have been fixed," and held that the case was not reviewable since the state court had rested its decision upon a ground of general law adequate to support it, independently of the decision upon the alleged violation of a right claimed under the Fourteenth Amendment. That independent ground was that a suit against the city on the bills themselves was expressly forbidden by the law under which the bills were issued, and that the plaintiff was not the assignee of any other right of action than that upon the bills. Sears v. Akron," already mentioned in the section on eminent domain, dismissed also a number of objections founded on the obligation-of-contracts clause. The plaintiff complained that the execution of the municipal water project would interfere with rights to construct and operate a power system previously granted to a company in which he was interested, and that for such a taking compensation must be paid. But the court held that the powers conferred by the charter were to be distinguished from property rights acquired in execution of those powers, and that the charter powers included no contract by the state as to what water rights would be available. The grant to the city of power to take the water rights which the company had expected to acquire was also said to be susceptible of being regarded as an exercise of the reserved power to alter or revoke the company's charter, "making its rights subject to those of the city if that is necessary to justify the proceeding of the city, which the Act authorized." The action of the company in adopting a plan of the land it proposed to take and in beginning condemnation 7 Note 68, supra. proceedings, even if it might under the general laws of the state give a priority as against rivals, was held to confer no rights not subject to revocation under the reserved power over the charter. As to the property rights claimed to have been actually acquired by purchase from prior owners, it was said that the bill failed to show that they would be interfered with by anything that the city proposed to do, and it was held that at any rate the assertion of such rights and of injury thereto were not such as to give cause for the interposition of injunctive relief. One of the most important problems raised by the obligationof-contracts clause is the interpretation of silence in statutes granting franchises. Disputes arise frequently over the duration of the franchise where the charter fails to specify how long it is to continue. Two such disputes came before the court during the last term. In Northern Ohio Traction Co. v. Ohio, 8o a majority declined to accept the decision of the state court that the absence of any specification as to the period for which the franchise was granted was to be construed as equivalent to a declaration that it was revocable at will. "It would be against common experience," observed Mr. Justice McReynolds, "to conclude that rational men wittingly invested large sums of money in building a railroad subject to destruction at any moment by mere resolution of county commissioners." This argument Mr. Justice Clarke characterized in the dissenting opinion as "reasoning which it seems is more persuasive with courts than with investors or men of affairs." He pointed out that in a number of states indeterminate franchises are given and received, and added: "This form of franchise has been called 'a tenure during good behaviour,' it has resulted in superior service to the public and, to the surprise of those who reason a priori on the subject, such franchises have proved in effect perpetual." The dissenting opinion seemed to proceed on the assumption that the only two alternatives were that the franchise must be revocable at will or else perpetual. Mr. Justice McReynolds, * (1918) 245 U. S. 574. See 31 Harvard Law Review 879. This note also deals most helpfully with Cincinnati v. Cincinnati & Hamilton Traction Co., note 89, however, expressly disclaimed consideration of the question whether the franchise might have expired by a possible twentyfive year limitation contained in the statutes at the time it was granted, since that period had not elapsed at the time of the resolution under consideration. He put to one side, also, the question of the legislature's reserved right to revoke or repeal privileges, since no action had been taken by that body. In Covington v. South Covington & C. St. Ry. Co.,81 however, a franchise grant was declared to be perpetual. In reaching this interpretation, chief reliance was placed on the fact that the charter by its terms conveyed all the right and authority that the city had capacity to grant. Mr. Justice Clarke, however, thought that the language conveyed no hint that the franchise was to be perpetual, but was rather "the cautious describing of what the councilmen thought a doubtful remnant of authority, remaining after the grant to the other company which was threatening litigation if a further grant was made, and that they thought it subject to the limitation of twenty-five years in the general ordinance of 1864." This general ordinance was dismissed by the majority on the ground that it did not address itself to the construction or scope of future ordinances. The interpretation of silence is a difficult literary task, and it is not surprising that, when the judges disagree, neither the majority nor the minority is completely successful in establishing the conclusiveness of its interpretation. It is evident that the opinions in these franchise cases do not fully explain the decisions, and it is probable that competing considerations which are actually weighed and balanced are not set forth in full detail. The cases cannot be stated in terms of doctrine, but must be presented only as instances of adjustments. Nevertheless the decisions of the past few years may be said to indicate rather plainly a disinclination to follow the attitude of some earlier opinions which, as Mr. Justice Clarke reminds his colleagues, declare that a corporation claiming any right in the public streets must show that it has been conferred in plain and express terms, and that 'any ambiguity in the terms of the grant must be resolved in 81 (1918) 246 U. S. 413. |