14

statute, or by provision in the charter itself.15 Where, however, charters have been held permissive, the courts have generally agreed that the incorporators cannot against their will be compelled to continue the operation of the plant.16

The case of the unincorporated proprietor is distinct from that of the chartered corporation. The chartered corporation has a legal existence only as a public servant and as such can be subjected to more rigid requirements than the unincorporated proprietor who has an existence separate and distinct from his existence as a public servant. Accordingly the cases consistently hold that an individual cannot be compelled to continue the operation of a public service against his will.17 To hold otherwise would endanger his rights under the Thirteenth and Fourteenth Amendments.18

The law on this point has been thrown into confusion because the cases have failed to distinguish between cessation of operation on the one hand and dismantling of the plant on the other. 19 The latter works a much greater hardship on the public than the former. As the Maine Public Utilities Commission recently pointed out,20 "The public is entitled to assurance that the present company shall not be permitted to stand in the way if interested parties wish to render such service." In other words, where a real public necessity for this or a similar service continues, a public utility should not be allowed to scrap its plant until a reasonable time has elapsed within which (1) a purchaser willing to render the same service may be found,21 or (2) the parties being served by the utility may decide to guarantee it against further loss,22 or (3) a

14 Polk v. Mutual Reserve Fund Life Association, 207 U. S. 310 (1907); People ex rel. v. Rose, 207 Ill. 352, 69 N. E. 762 (1904).

15 Supreme Council C. K. A. v. Logsdon, 183 Ind. 183, 108 N. E. 587 (1915); Ashuelot R. Co. v. Elliot, 58 N. H. 451 (1878).

16 East Ohio Gas Co. v. Akron, 81 Ohio St. 33, 90 N. E. 40 (1909); State ex rel. Knight v. Helena Power & Light Co., 22 Mont. 391, 56 Pac. 685 (1899); San Antonio Street Railway Co. v. State, 90 Texas, 520, 39 S. W. 926 (1897). See BOOTH, STREET RAILWAYS, 2 ed., § 65.

17 In the early case of Rex v. Collins, Palmer, 373 (1623), the court said that "an innkeeper may at his pleasure demolish his sign and leave off innkeeping." Similarly as to a ferryman, Carter v. The Commonwealth, 2 Va. Cas. 354 (1823), and as to teamster, Satterlee v. Groat, 1 Wend. (N. Y.) 272 (1828). Since the bulk of public service work is to-day carried on by corporations recent cases as to the right of an unincorporated public service proprietor to withdraw from business at will are scarce. But see San Antonio Street Railway Co. v. State, 90 Texas, 520, 528, 39 S. W. 926, 930 (1897) where the court says, "Certainly carriers who are not corporations may at any time discontinue the business, if they elect to do so." See also State ex rel. Knight v. Helena Power & Light Co., 22 Mont. 391, 397, 56 Pac. 685, 687 (1899).

18 As to Thirteenth Amendment, see United States v. Reynolds, 235 Ú. S. 133 (1914), Ex parte Hollman, 79 S. C. 9, 60 S. E. 19 (1908). As to the Fourteenth Amendment, see Van Denman & Lewis Co. v. Rast, 214 Fed. 827 (1913); Allgeyer v. Louisiana, 165 U. S. 578, 589 (1897).

19 The proper distinction was, however, made in Rowland v. Saline River Railway Co., 119 Ark. 239, 246, 177 S. W. 896, 899 (1915) where the court said, "It does not follow that, because we have held that the order of the railroad commission was arbitrary and oppressive, the railroad company has a right to take up its rails and dispose of them of its own motion.'

20 Re St. Croix Gaslight Co., P. U. R. 1919 A, 487, 493 (Maine Pub. Util. Com.).

21 Re St. Croix Gaslight Co., supra, note 20.

22 See Central Bank & Trust Corporation v. Cleveland, 252 Fed. 530, 534 (1918).

substitute service may be provided,23 or (4) the state may exercise its option to take the property by eminent domain in behalf of either state or private ownership and operation.24

The principal case raises the further question whether a public utilities commission has jurisdiction over the cessation of service by and dismantling of a public utility. It is settled that the inherent power of the state to regulate the service of a public utility enterprise may be delegated to a commission or other administrative body.25 The Colorado Public Utilities Act, which is typical of the public utilities acts of other states, simply confers upon the commission power to regulate service,* but the court expressly says, and it seems correctly, that the power to regulate, necessarily includes the power to prevent a railway, where there is a public necessity, from discontinuing service and dismantling its plant.27 It is true, great power is thereby conferred upon the commissions, but it must be remembered that their decisions are kept by the courts within constitutional bounds.28

23 I WYMAN, 8 317.

24 See 2 LEWIS, EMINENT DOMAIN, 3 ed., § 445.

On the other hand, "a railroad track may be abandoned and its construction material removed when it is conclusively shown that the public no longer has any interest in such materials remaining on the roadbed." Enid, O. & W. Railway Co. v. State, 181 S. W. 498, 502 (Tex. Civ. App.) (1915).

25 See Atlantic Coast Electric Railway Co. v. Board of Public Utility Commissioners, 104 Atl. 218 (N. J.) (1918); Trustees of Saratoga Springs v. Saratoga Gas, E. L. & P. Co., 191 N. Y. 123, 83 N. E. 693 (1908). 32 HARV. L. REV. 74.

26 1913 SESS. LAWS COLORADO, chap. 127, as amended by 1915 SESS. LAWS COLORADO, chap. 134, and by 1917 SESS. LAWS Colorado, chap. 110.

27 People ex rel. Hubbard v. Colorado Title & Trust Co., supra, note 5, at page 9; State ex rel. Tate v. Brooks-Scanlon Co., 143 La. 539, 78 So. 847 (1918).

For commission decisions see Re Parkville Oil & Gas Co., P. U. R. 1919 A, 502 (Mo. Pub. Serv. Com.); City of Pana v. Central Illinois Public Service Co., P. U. R. 1916 B, 177 (Ill. Pub. Util. Com.).

It is submitted that in exercising this power the commission should not be too hasty in deciding that the utility in question cannot be operated except at a loss. The utility should be compelled to exhaust every reasonable effort to give the service required. The Indiana, New Jersey, and Colorado commissions have taken a proper step in refusing to allow discontinuance of service without a previous application to the commission to increase rates. Re Muncie Light Co., P. U. R. 1918 B, 194 (Ind. Pub. Serv. Com.); Re Seashore Gas Co., P. U. R. 1918 A, 871 (N. J. Board of Pub. Util. Comrs.); Re Denver, L. & N. R. Co., P. U. R. 1917 F, 744 (Colo. Pub. Util. Com.). See also City of Pana v. Central Illinois Public Service Co., P. U. R. 1916 B, 177, 179 (Ill. Pub. Util. Com.).

28 State ex rel. Railroad Commissioners v. Florida East Coast Railway Co., 69 Fla. 165, 67 So. 906 (1915); Northern Pacific Railway Co. v. North Dakota, 236 U. S. 585 (1915); Atchison, Topeka, & S. Fe Railway Co. v. Railroad Commission, 173 Cal. 577, 160 Pac. 828 (1916). See St. Louis, I. M. & S. Railway Co. v. Bellamy, 113 Ark. 384, 169 S. W. 322 (1914).

The types of questions arising before the courts on review are illustrated in Salt Lake City v. Utah Light & Traction Co., 173 Pac. 556, 559 (Utah), (1918), where the court says: "The order of the commission increasing the fares as aforesaid presents three questions: (1) Did the passing of the franchise ordinances fixing the fares and their acceptance by the defendant constitute a contract . . . ? (2) If the franchise ordinances constituted contracts, was it within the power of the Legislature to authorize the commission to change the fares? (3) Does the constitutional provision by which the city authorities are given the exclusive right to permit or to refuse permission to street railway companies to construct and operate street cars within the cities of this state prevent the state, through its Legislature, from exercising its sovereign prerogative to regulate and change the fares fixed in the franchise ordinances?"

EXEMPTION OF FEDERAL HOMESTEAD FROM LIABILITY FOR DEBTS CONTRACTED PRIOR TO PATENT. Section 2296 of the United States Revised Statutes provides: "No lands acquired under the provisions of this Act shall in any event become liable to the satisfaction of any debt or debts contracted prior to the issuing of the patent therefor." 1 Under the literal interpretation put upon this enactment in a recent decision by the United States Supreme Court, until the patent does issue, the claimant may hold the land and laugh at his creditors. Other courts have construed the statute in the same way. But some courts have sagaciously held the land liable for debts contracted after the issuance of the final certificate, even though before the patent.*

5

The patent is the legal conveyance. Until it issues, the legal title is in the United States. However, when the entryman has done everything necessary to entitle him to the patent, even before the patent issues he has a complete equitable title. Indeed, many states have statutes permitting one in such a position to maintain ejectment." Congress cannot

1 Act of May 20, 1862. 12 STAT. L. 392. Except this provision, there is nothing in the federal laws indicating the remotest difference between lands patented under the Homestead Act and other privately owned lands within the state. See Buchser v. Morss, 196 Fed. 577, 579 (1912).

Ruddy v. Rossi, No. 17, October Term, U. S. Sup. Ct. (1918). See Recent Cases, page 730.

3 Barnard v. Boller, 105 Cal. 214, 38 Pac. 728 (1894); Wallowa National Bank v. Riley, 29 Ore. 289, 45 Pac. 766 (1896); Sprinkle v. West, 62 Wash. 587, 114 Pac. 430, 34 L. R. A. (N. s.) 404 (1911); Grames v. Consolidated Timber Co., 215 Fed. 785 (1914). See In re Cohn, 171 Fed. 568, 570 (1909).

The same court which laid down this literal interpretation in In re Cohn, supra, later held that the exemption must be confined to the debts of the entrywoman, and did not cover those of her husband contracted before patent. In re Parmeter's Estate, 211 Fed. 757 (1914). This construction, while obviously correct, is against the sweeping terms of the statute.

In Brandhoeffer v. Bain, 45 Neb. 781, 64 N. W. 213 (1895), the debt was contracted in 1876 and the patent issued in 1878. The entryman conveyed away the land in 1885 and reacquired title in 1892. It was held that the land was still not liable. Accord, Van Doren v. Miller, 14 S. D. 264, 85 N. W. 187 (1901). Contra, De Lany v. Knapp, III Cal. 165, 43 Pac. 598 (1896). It is refreshing to find a court showing such a wholehearted respect for a statute; but in playing this judicial Ruth to the legislative Naomi, the court reaches a result entirely foreign to the purposes of the Act.

Struby-Estabrook Mercantile Co. v. Davis, 18 Colo. 93, 31 Pac. 495 (1892); Leonard v. Ross, 23 Kan. 292 (1880); Johnson v. Borin, 7 Kan. App. 365, 54 Pac. 989 (1898); Flanagan v. Forsythe, 6 Okla. 225, 50 Pac. 152 (1897). See Kansas Lumber Co. v. Jones, 32 Kan. 195, 4 Pac. 74 (1884).

5 Bagnell v. Broderick, 13 Pet. (U. S.) 436 (1839); Gibson v. Chouteau, 13 Wall. (U. S.) 92 (1871); United States v. Schurz, 102 U. S. 378 (1880); Michigan Land and Lumber Co. v. Rust, 168 U. S. 589 (1897). See Gould v. Tucker, 18 S. D. 281, 100 N. W. 427 (1904).

• Carroll v. Safford, 3 How. (U. S.) 441 (1845); Lytle v. Arkansas, 9 How. (U. S.) 314 (1850); Garland v. Wynn, 20 How. (U. S.) 6 (1857); Lessee of French v. Spencer, 21 How. (U. S.) 228 (1858); Lindsey v. Hawes, 2 Black (U. S.) 554 (1862); Witherspoon v. Duncan, 4 Wall. (U. S.) 210 (1866); Simmons v. Wagner, 101 U. S. 260 (1879); Deffeback v. Hawke, 115 U. S. 392 (1885); Benson Mining Co. v. Alta Mining Co., 145 U. S. 428 (1891); United States v. Detroit Lumber Co., 200 U. S. 321 (1905); Gourley . Countryman, 18 Okla. 220, 90 Pac. 427 (1907); Budd v. Gallier, 50 Ore. 42, 89 Pac. 638 (1907); S. S. Dale & Sons v. Griffith, 93 Miss. 573, 46 So. 543 (1908).

7 The language in some of the cases suggests that legal title passes with the certificate and the patent is merely evidence. See Goodlet v. Smithson, 5 Porter (Ala.) 245, 249 (1837). This is an erroneous conclusion from the well-established doctrine that the patent when issued relates back to the inception of the rights of the patentee, so

have intended that an administrative delay, due to the rush of business or to negligence in the Land Department and lasting perhaps for years, should change the substantive rights of the parties.8 "Legislative bodies rarely take into consideration the period between the time when, under the law, executive officers should perform clerical duties, and the time when such duties are actually performed." While the terms of the enactment are unambiguous, the courts are not precluded from correcting the legislative misstatement. "The intention of the lawmaker is the law," ,"10 anything in the terms of the statute to the contrary notwithstanding."1

A far more fascinating problem is raised by Mr. Justice Holmes' opinion. He says:

"My question is: When land has left the ownership and control of the United States and is part of the territory of a State not different from any privately owned land within the jurisdiction and no more subject to legislation on the part of the United States than any other land, on what ground is a previous law of Congress supposed any longer to affect it in a way that a subsequent one could not? This land was levied upon, not on the assertion that any lien upon it was acquired before the title passed from the United States, but merely as any other land might be attached for a debt that Rossi [the creditor] had a right to collect, after the United States had left the premises. I ask myself what the United States has to do with that. There is no condition, no reserved right of re-entry, no reversion in the United States, saved either under the Idaho law as any private grantor might save it, or by virtue of antecedent title. All interest of the United States as owner is at an end. It is a stranger to the title. Even in case of an escheat the land would not go to it, but would go to the State. Therefore the statute must operate, if at all, purely by way of legislation, not as a qualification of the grant. If § 2296 is construed to apply to this case, there is simply the naked assumption of one sovereignty to impose its will after whatever jurisdiction or authority it had has ceased and the land has come fully under the jurisdiction of what for this purpose is a different power. It is a pure attempt to regulate the alienability of land in Idaho by law,

far as may be necessary to cut off intervening claimants. Stark v. Starrs, 6 Wall. (U. S.) 402 (1867).

8 Section 2324, Revised Statutes, provides: "On each claim located after May 10, 1872, and until a patent has been issued therefor, not less than one hundred dollars' worth of labor shall be performed or improvements made during each year.. Plaintiff had a final certificate but no patent for his land, and had failed to do the one hundred dollars' worth of work during a year. Held, that he did not have to do the work after obtaining the certificate. Benson Mining Co. v. Alta Mining Co., note 6, supra. Accord, Aurora Hill Con. Min. Co. v. 85 Mining Co., 34 Fed. 515 (1888); Deno v. Griffin, 20 Nev. 249 (1889). See SICKELS, MINING DECISIONS, 377, 384.

It is interesting to note that an exemption in the Timber-Culture Act similar to that in the Homestead Act covers only "debts contracted prior to the issuing of the final certificate." Act of March 3, 1893, c. 208, 27 STAT. AT L. 593, 5 U. S. COMP. STAT. 1916, § 5116.

9 Per Keaton, J., in Flanagan v. Forsythe, note 4, supra.

10 Per Swayne, J., in Smythe v. Fiske, 23 Wall. (U. S.) 374, 380 (1874).

11 United States v. Kirby, 7 Wall. (Ú. Š.) 482 (1868); Lionberger v. Rouse, 9 Wall. (U. S.) 468 (1869); Church of the Holy Trinity v. United States, 143 U. S. 457 (1892); Hawaii v. Mankichi, 190 U. S. 197 (1903).

without regard to the will of Idaho, which we must assume on this record to authorize the levy if it is not protected by an act of Congress occupying a paramount place." 12

Authority, such as it is, is against this view.13 The exemption could conceivably be enforced in one of two ways: first, as a qualification of the grant, or secondly, as legislation. The courts in giving it effect did not clearly comprehend the problem. They all point to the situation before the patent issues. Judge Dillon said: "It will be observed that Congress does not attempt to exempt the land from debts contracted after the patent has issued. . . . Before the title has thus passed, Congress, under its power to dispose of the public lands, may prescribe the terms and conditions upon which the disposition shall be made. . . .” 14 This and similar language from other courts is indicative of the weakness of their position. They apparently consider this exemption as a qualification of the grant,15 and this possibility has been buried by Mr. Justice Holmes beneath the granite of unimpeachable reasoning, without so much as a requiescat in pace from the majority of the court.

Can the exemption take effect as legislation? We must really look at the situation after the patent has divested the United States of title, when the levy is attempted. That is the time when the congressional enactment is to shield the land. If, at this date, Congress can control the alienability of the land for debts contracted prior to the patent, why not for debts contracted, say, within two years after the patent? The date of issue of the patent is not, in the fortunes of the settler, the turning point at which he ceases to need protection from his creditors. The Federal Constitution provides: "The Congress shall have power to dispose of and make all needful rules and regulations respecting the territory or other property belonging to the United States." 16 Ours is a territorial scheme of government. It has been frequently asserted that the United States, in holding land within a state, has nothing in the nature of municipal sovereignty.17 It must stand as a private proprietor,

12 Per Holmes, J., in Ruddy v. Rossi, note 2, supra. It is regrettable that the opinion of the court, written by Mr. Justice McReynolds, did not consider more particularly this argument.

13 Sorrels v. Self, 43 Ark. 451 (1884); Miller v. Little, 47 Cal. 348 (1874); Russell v. Lowth, 21 Minn. 167 (1874); Gile v. Hallock, 33 Wis. 523 (1873); Seymour v. Sanders, 3 Dill. (Fed.) 437 (1874).

14 Per Dillon, J., in Seymour v. Sanders, 3 Dill. (Fed.) 437, 442 (1874). Much the same language appears in Sorrels v. Self, 43 Ark. 451, 454 (1884).

15 "To deny to Congress the power to make a valid and effective contract of this character with the homestead claimant would materially abridge its power of disposal...." Per Crockett, J., in Miller v. Little, 47 Cal. 348, 351 (1874).

"Indeed, the exemption created by the act of Congress has never been looked upon as a homestead exempt at all. It is in the nature of a condition attached to the grant, in virtue of the power of the Federal government relating to the primary disposal of the soil, rather than in virtue of any police power vested in the government." Per Rudkin, J., in Ritzville Hardware Co. v. Bennington, 50 Wash. 111, 96 Pac. 826 (1908). This case, holding that the rule, exempting for a reasonable time the proceeds from the sale of a homestead exempt under the state laws, does not include the proceeds from the sale of a federal homestead, is most illuminating.

16 Art. IV, § 3, par. 2.

17 Pollard's Lessee v. Hagan, 3 How. (U. S.) 212 (1845); Omaechevarria v. Idaho, 246 U. S. 343 (1917); United States v. Railroad Bridge Co., 27 Fed. Cas. 686 (1855). See Camfield v. United States, 167 U. S. 518 (1897); Jones v. Florida C. & P. R. Co.,