YALE

LAW JOURNAL

VOL. V

DECEMBER, 1895

No. 2

THE DOCTRINE OF THE UNITED STATES SUPREME COURT OF PROPERTY AFFECTED BY A PUBLIC INTEREST, AND ITS TENDENCIES.*

JOHN A. PORTER PRIZE ESSAY.

The student of law who undertakes to examine the decision of the Supreme Court of the United States in Munn v. Illinois, 94 U. S. 113, and to discuss its tendencies, must possess more than the ordinary amount of that assurance which is supposed to accompany ignorance if he does not feel hesitation in analyzing and diffidence in expressing his conclusions upon this difficult and important question.

His examination of the authorities to which he is accustomed to turn for sure guidance in complicated and far-reaching matters leaves him in doubt whether language of cautious generality should be interpreted as giving a hesitating support to, or as veiling a respectful dissent from, the principles upon which this decision is based. For the questions involved are much more than mere legal ones turning upon the application of generally conceded legal principles, or the construction of doubtful phrases. They put in issue the deep underlying matters of political economy which are agitating the whole civilized world of our day.

The gist of the decision is an endeavor to give to the indefinite economic ideas of the present time the support of definite legal principles; or, in other words, to attempt to give to these definite legal principles a force and extent which, in the minds of many experienced jurists, they cannot be made legitimately to sustain. Hence the doubt and dissent with which the decision has been received. And in face of this uncertainty of the

*Munn v. Illinois, Etc.

leaders of the legal profession, the student must feel that, in entering upon a discussion of this subject, he is affording a new illustration of the saying that fools step in where angels fear to tread.

To begin with, it will be well to recall briefly the circumstances of the case.

Munn, a citizen of Illinois, owned and conducted a grain elevator in Chicago. The Constitution of the State having declared the business to be a public one, the Legislature passed a statute for its regulation. This statute required any one in that business to procure a license and give a bond; it also fixed a penalty for failure to comply with these regulations, and required publication of the rate of charges for each ensuing year, and established a maximum charge.

Munn, whose business was in active operation before the passage of this statute, failed to comply with its regulations, and was fined for his failure. He appealed to the Supreme Court of Illinois against the conviction, and, the conviction being affirmed, he sued out a writ of error in the Supreme Court of the United States.

His claim was that the sections of the statute containing the above-mentioned regulations were unconstitutional and void, and that they were repugnant to the Fourteenth Amendment to the Constitution of the United States, which ordains that "No State shall deprive any person of life, liberty, or property, without due process of law."

The question thus squarely presented for the decision of the Supreme Court of the United States was this: Can the Legislature of a State, putting in force a declaration in its constitution that a certain business, heretofore a private one, is a public one and subject to legislative control, compel the owner of such a business, established before the adoption of the State Constitution, to submit to have his charges regulated by the Legislature? Did the Fourteenth Amendment afford him protection in these circumstances?

The majority of the Supreme Court decided that the statute in question was constitutional, and that it did not violate the Fourteenth Amendment.

The opinion delivered by Chief Justice Waite argued as follows: The provision against deprivation as a limitation on the power of States is old; it is found in Magna Charta, and substantially in nearly all the State Constitutions. It was introduced into the Constitution of the United States by the Fifth Amend

ers.

ment, and by the Fourteenth, as a guarantee against State encroachment. A member of a body politic necessarily parts with some rights or privileges which, as an individual not affected by his relations to others, he might retain. This does not confer upon the whole people power to control rights exclusively private, but it does authorize laws requiring each citizen to so use his property as not unnecessarily to injure another. This is the very essence of government, and is the source of the Police PowUnder these powers the Government regulates the manner of using property when necessary to do so for the public good. Under this power it has always been customary in England and in this country to fix rates of charges for ferries, common carriers, hackmen, bakers, millers, wharfingers, innkeepers, etc. This has never been said to come within the constitutional prohibition against interference with private property. Hence it is apparent that down to the adoption of the Fourteenth Amendment it was not supposed that statutes regulating the use or even the price of the use of private property necessarily (although they may sometimes) deprived an owner without due process of law.

As to the principles upon which the power of regulating rests, the opinion argues that the common law, whence came the right which the Constitution protects, rules that when private property is "affected with a public interest, it ceases to be juris privati only," as was said by Lord Hale in De Portibus Maris, 1 Harg. Law Tracts, 78.

The Court then continues: "Property does become clothed with a public interest when used in a manner to make it of public consequence, and affect the community at large. When, therefore, one devotes his property to a use in which the public has an interest, he, in effect, grants to the public an interest in that use, and must submit to be controlled by the public for the common good, to the extent of the interest he has thus created. He may withdraw his grant by discontinuing the use, but so long as he maintains the use he must submit to the control."

The opinion then argues that the grain elevator business in Chicago was a virtual monopoly, and was, therefore, by that, clothed with a public interest and ceased to be juris privati. "It might not have been made so by the statute of Illinois, but it was made so by the facts." It was immaterial that no precedent could be found for a statute precisely like this, as the facts showed a new development of commercial progress, and the statute simply extends the law to meet it. Nor did it matter that the

owner's business was started before the regulations were adopted, as he was from the beginning subject to the power of the body politic to require him to conform to regulations established for the public good.

As to an owner's right to a reasonable compensation, and as to whether it is for the Legislature or the judiciary to decide as to reasonableness, the opinion says that in common law countries it is customary for the Legislature to declare a maximum, beyond which any charge made would be unreasonable. In private contracts the reasonableness is judicially determined, because the Legislature has no control over such contracts.

"The controlling fact is the power to regulate at all, and where that exists the right to establish a maximum of charge, as one of the means of regulation, is implied."'

To sum up the material points of the above argument, it would appear:

That the admitted limitation of the power of deprivation by the State is itself limited by the duty of the citizen, as a member of the body politic, to so use his property as not unnecessarily to injure others. This duty of the citizen the State has a right to enforce by the Police Powers, and such exercise, in certain specified cases, has been unresisted from all time.

That this power of regulation is derived from the common law, and is properly exercised over private property when affected with a public interest.

That such public interest does arise whenever one devotes his property to a use in which the public has an interest.

That this business was a virtual monopoly, and this notwithstanding its vast importance, and, therefore, it was clothed with a public interest, ceased to be juris privati only, and became subject to regulation by the public.

I proceed now to examine this argument and point out the objections that have been made to it.

The first important matter for consideration is the Police Power of the State.

Vague and almost impossible of definition as are the Police Powers of a State, it may be taken as established that such a use of one's property as unnecessarily to injure others can always be prevented by State interference. "The Police Power of a State, in a comprehensive sense, embraces its whole system of internal regulation, by which the State seeks not only to preserve the public order and to prevent offenses against the State, but also to establish for the intercourse of citizens with citizens those rules of