author: ST. SURE, District Judge.

text:
    BOWLES, Adm’r, Office of Price Administration, v. TROWBRIDGE et al.
    No. 23550-S.
    District Court, N. D. California, S. D.
    April 6, 1945.

      Thomas C. Ryan, George A. Faraday, and Ralph Golub, all of San Francisco, Cal., for plaintiff.
    George M. Naus, of San Francisco, Cal., and Hagar, Crosby & Crosby, of Oakland, Cal., for defendant.
   ST. SURE, District Judge.

Plaintiff has proposed written interrogatories to be answered by defendant under Rule 33, Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c, in an action for injunction and treble damages for alleged violations of section 4(a) of the Emergency Price Control Act, 50 U.S.C.A.Appendix § 904(a). Defendant objects to the interrogatories on the ground that they are proposed in violation of the Fifth Amendment to the United States Constitution, wherein it is provided that “No person * * * shall be compelled in any Criminal Case to be a witness against himself * * *j> An action for a penalty is considered a “criminal case” within the purview of this clause. Boyd v. U. S., 116 U.S. 616, 6 S.Ct. 524, 29 L.Ed. 746; Lees v. United States, 150 U.S. 476, 14 S.Ct. 163, 37 L.Ed. 1150. The question for decision is whether an action for treble damages brought by the Administrator of the Office of Price Administration under section 205(e) of the Act, 50 U.S.C.A.Appendix § 925(e), is one for a penalty.

The District Court decisions upon this question are in conflict, and the question was left open by the Circuit Court of Appeals of this Circuit in Bowles v. Glick Bros. Lumber Co., 9 Cir., 146 F.2d 566, 571. fn that case the Office of Price Administration had examined certain documents belonging to defendants before suing for an injunction and treble damages. The District Court held that the action was one for a penalty, and that defendants were entitled to a dismissal based on their immunity against self-incrimination. The Circuit Court of Appeals reversed the District Court, on the ground that the documents produced for inspection were quasi-public in nature, and that to require the pro-Auction of such documents would not violate defendants’ rights under the Fourth or Fifth Amendment. The Court said, “This is true whether the action be regarded as remedial or penal.”

The present situation does not involve the production of documents, but is a direct attempt to compel defendant to testify.

In Huntington v. Attrill, 146 U.S. 657, 673, 683, 13 S.Ct. 224, 230, 36 L.Ed. 1123, the Supreme Court said that the test of whether a statute is remedial or penal “depends upon the question whether its purpose is to punish an offense against the public justice of the state, or to afford a private remedy to a person injured by the wrongful act. * * * The test is not by what name the statute is called by the legislature or the courts of the state in which it was passed, but whether it appears to the tribunal which is called upon to enforce it to be, in its essential character and effect, a punishment of an offense against the public, or a grant of a civil right to a private person.”

Section 925 of 50 U.S.C.A.Appendix, is entitled “Enforcement,” and provides for fine and imprisonment, suspension of licenses, injunctions, and treble damages, for violations of the Act. Section 925(e), relating to suits for treble damages, limits suits thereunder by private individuals to the ultimate consumer or tenant, each of whom is designated in the Act as the “buyer.” Actions for treble damages may not be brought by one who purchases in the course of trade or business, and the Administrator is empowered in such cases to sue on behalf of the United States. The damages for which he sues are usually based upon an accumulation of sales to a number of customers, and are many times greater than the amount of damages the buyer may ordinarily claim. As originally enacted, the statute permitted the buyer to sue within a year of the violation. By amendment of June 30, 1944, 50 U.S.C.A.Appendix § 925(e), the limitation of the buyer’s action has been reduced to thirty days after the violation, and at the end, of that time the Administrator may sue in the buyer’s stead on behalf of the United States, and such suit by the Administrator operates as a bar to any subsequent action by the buyer for damages for the same violation. No notice to the buyer of the Administrator’s intention to sue is required by statute, and he may presumably lose his right of action without being aware that such right existed. The relatively short period within which the buyer may exercise his right to damages under this provh’on indicates that the true purpose of the section is to aid in the enforcement of the Act by providing an additional means of punishing offenders, and is not primarily to provide a remedy to private parties who are injured by violations of the Act. This purpose is also shown by the further amendment of section 205(e), which provides that damages shall be only the amount of the overcharge if defendant proves that the violation was neither willful nor the result of failure to take practicable precautions against the occurrence of the violation. Treble damages are assessed, therefore, to punish willfulness or carelessness, rather than to remedy the wrong caused to an individual or sovereign, for the injury would be the same whether the violation were voluntary or involuntary.

In Bowles v. Berard, 57 F.Supp. 94, the District Court of Wisconsin held that both the buyer’s and the administrator’s actions are remedial suits of a civil nature; that when the Administrator sues on behalf of the United States he represents the public at large, who would be damaged by inflation; and also enables the Government to recoup for damages .suffered due to resultant price increases in wartime commodities which it purchases. With regard to the first argument, it may be said that in the prosecution of any public offense the Government sues on behalf of the public at large. Almost any crime or offense which involves money or property affects the national economy, and both the public and the Government in its sovereign capacity benefit directly or indirectly from the punishment of the offender. So far as recoupment by the Government of its own damages caused by inflation is concerned, unless it purchases goods in excess of ceiling prices from the offender himself, I think the violation of the act by an individual has too remote an effect on the price of commodities purchased by the Government to be considered a basis for civil damages.

In Brown v. Cummins Distilleries, 56 F.Supp. 941, 942, the District Court of Kentucky held that an action by the Administrator under section 205(e) is one for a penalty. The court said: “It [a penalty] is essentially different from the idea of damages which is compensation to an injured party for the injury which he has suffered. In a proceeding of this nature the plaintiff has suffered no damages, and the action is not for the purpose of compensation. Regardless of the language in the statutory provision, it is the nature of the provision itself that is controlling. The action is essentially one for the recovery of a penalty.”

In Miller v. Municipal Court, 22 Cal.2d 818, 142 P.2d 297, the Supreme Court of California held that section 205(e) is a penal provision with respect to suits brought by the buyer as well as by the Administrator.

In Bowles v. Nasif, D.C., 58 F.Supp. 644, 645, an action by the Administrator for treble damages, the question of whether section 205(e) is remedial or penal is not directly presented, but the court remarks that “This statute, 50 U.S.C.A.Appendix, § 901 et seq., is highly penal in its nature iji # % f)

An action for treble damages would not be a bar to a later criminal suit by the United States against the defendant. It cannot be questioned that the defendant in such criminal action would have the privilege of refusing to testify. Yet if the privilege does not extend to the present action, incriminating testimony might be elicited from defendant here which would enable his conviction in a criminal case. If this be so, the protection guaranteed by the Fifth Amendment would be an empty shell. In United States v. Goodner, D.C., 35 F.Supp. 286, 290, the court said: “This provision [against self-incrimination], long regarded as one of the safeguards of civil liberty, should be, and according to the authorities must be, applied in a broad spirit to secure to the citizen immunity from self-accusation, and applies to all proceedings wherein the defendant is acting as a witness in any investigation that requires him to give testimony that might tend to show him guilty of a crime * *

I conclude that the present action is one for a penalty within the rule set forth in Huntington v. Attrill, supra.

Defendant’s objections to plaintiff’s proposed interrogatories will be sustained.


source: Caselaw Access Project

author: MURRAH, Circuit Judge. HUXMAN, Circuit Judge

license: Public Domain

text:
    STAPLETON et al. v. MITCHELL, Atty. Gen., et al. McELROY et al. v. SAME. AMERICAN FEDERATION OF LABOR et al. v. SAME. CONGRESS OF INDUSTRIAL ORGANIZATIONS et al. v. SAME.
    Nos. 4821, 4822, 4826, 4827.
    District Court, D. Kansas, First Division.
    March 5, 1945.

      Louis R. Gates, of Kansas City, Kan., for United Mine Workers.
    Clif Langsdale, of Kansas City, Mo., and P. W. Croker, of Kansas City, Kan., for Building and Construction Trades Council of Kansas City.
    Joseph A. Padway, Gen. Counsel, A. F. of L., of Washington, D. C., and James H. Barnes, of Kansas City, Kan., for American Federation of Labor.
    Lee Pressman, Gen. Counsel, C.I.O., and Eugene Cotton, Asst. Council, C.I.O., both of Washington, D. C., and Harry C. Clark, of Kansas City, Mo., for C.I.O. and C.I.O. Affiliated Unions.
    James H. Barnes, of Kansas City, Kan., and Harry C. Clark, of Kansas City, Mo., for Four Transportation Brotherhoods and I. T.U.
    A. B. Mitchell, Atty. Gen., of Kansas, Allen Meyers, Co. Atty., Shawnee County, of Topeka, Kan., Samuel M. Terbovich, Co. Atty., Wyandotte County, of Kansas City, Kan., and Clayton Brenner, Co. Atty., Johnson County, of Olathe, Kan., for defendant.
    Before HUXMAN and MURRAH, Circuit Judges, and RICE, District Judge.
   MURRAH, Circuit Judge.

Each of these suits was brought by a national and international labor union and all of its integrated entities and affiliates, officers, agents and representatives, acting in both their individual and representative capacities, and certain non-affiliated individuals in their individual and representative capacities. The parties jointly and severally challenge the constitutionality of the 1943 Kansas Labor Law, Session Laws of 1943, c. 191, and seek a judgment enjoining the operation and enforcement of the Act, as applied to them individually and collectively, on the grounds that its very existence as a law imposes a previous restraint upon the exercise of the fundamental rights to free speech, press and assembly, guaranteed by the First Amendment, and protected against state abridgement by the due process clause of the Fourteenth; that the operation and enforcement of the law will deprive them, and each of them, of the equal protection of the law, impose involuntary servitude, and is in collision with the National Labor Relations Act, 29 U.S.C.A. § 151 et seq., in the field of industrial relations affecting interstate commerce, and therefore cannot stand with it.

The pleadings are studiously designed and the issues framed to effectivély present the constitutional cause of everyone connected with, or engaged in self-organization for collective bargaining purposes, from the international and national union to the smallest union, and from the highest official of the international organization to the lowest worker, as well as non-members of a union, who are seeking to organize for collective bargaining purposes.

Federal jurisdiction is laid in the allegations that the suit arises under the Constitution and laws of the United States, and that the value of the right involved exceeds $3,000, and upon the further and firmer ground that it is brought to redress the deprivation of the rights of free speech, press and assembly under color of state statute. Original jurisdiction is conferred by the Civil Rights Act, 8 U.S.C.A. § 43, and this suit is clearly within the adjudicatory power of the Federal courts without consideration of the question of diversity of citizenship or the amount in controversy. Hague v. C. I. O., 307 U.S. 496, 514, 59 S.Ct. 954, 83 L.Ed. 1423; Douglas v. City of Jeannette, 319 U.S. 157, 63 S.Ct. 877, 87 L.Ed. 1324. Because each petition prays for an interlocutory injunction, in addition to the prayer for an adjudication of unconstitutionality and permanent injunctive relief, the suits are cognizable by a three-judge court under Section 266 of the Judicial Code, 28 U.S.C.A. § 380, and in pursuance of the mandate of that statute this court was convened to hear and decide the issues presented. See Phillips v. United States, 312 U.S. 246, 61 S.Ct. 480, 85 L.Ed. 800; Query v. United States, 316 U.S. 486, 62 S.Ct. 1122, 86 L.Ed. 1616. The sole basis for the three-judge jurisdiction is the prayer for the interlocutory relief, but its jurisdiction once properly invoked is coextensive and co-ordinate with the jurisdiction of a single judge in the trial of the controversy committed to it by the statute. Thus all the formal jurisdictional elements are present and it becomes the duty of the court to hear and decide the controversy.

But, notwithstanding the authority of the court to hear and dispose of the cases, it is our duty to heed the repeated admonitions concerning the appropriate exercise of the jurisdiction thus conferred. Much confusion has arisen from the adjudicated cases bearing upon the appropriate exercise of Federal jurisdiction to enjoin the enforcement of state statutes as violative of the Fourteenth Amendment to the Constitution. See Penal Statutes by Declaratory Action, 52 Yale Journal, June 1943, by Edwin Borchard. In cases challenging the constitutionality of a state regulatory act as violative of the due process and equal protection clauses of the Fourteenth Amendment, it is said that this court is not warranted in interfering with the declared public policy of a state by injunctive process, unless it patently appears that each and every clause, sentence and paragraph in whatever manner and against whomever it may be made applicable, contravenes the .Federal Constitution and that the operation of the statute will cause great and immediate loss to the complainant. Watson v. Buck, 313 U.S. 387, 61 S.Ct. 962, 85 L.Ed. 1416; Spielman Motor Sales Co. v. Dodge, 295 U.S. 89, 55 S.Ct. 678, 79 L.Ed. 1322; Beal v. Missouri Pacific R. R. Corporation, 312 U.S. 45, 61 S.Ct. 418, 85 L.Ed. 577; Douglas v. City of Jeannette, supra. And, we are not at liberty to nullify the act simply because some state official may make an unconstitutional application .of it. Adequate redress for this type of grievance is provided elsewhere when it arises.

It is noteworthy, however, that the “doctrine of abstention” (Railroad Commission of Texas v. Pullman Co., 312 U.S. 496, 61 S.Ct. 643, 85 L.Ed. 971) was evolved in cases where property rights under the Fourteenth Amendment and not personal rights under the First were the subject of adjudication. Apparently the courts now make a distinction in the appropriate exercise of Federal jurisdiction where only the due process and equal protection clause of the Fourteenth Amendment are involved, and those cases where the legislation is challenged because it collides with the fundamental principles of the First. “Much of the vagueness of the due process clause disappears when the specific provisions of the First become its standard.” West Virginia State Board of Education v. Barnette, 319 U.S. 624, 63 S.Ct. 1178, 1186, 87 L.Ed. 1628. The right of a state to regulate property rights as far as the due process clause is concerned includes the power to impose all the restrictions “which a legislature may have a ‘rational basis’ for adopting.” West Virginia State Board of Education v. Barnette, supra. But, as Justice Jackson said in that case, freedom of speech, press and assembly “may not be infringed on such slender grounds. They are susceptible of restriction only to prevent grave and immediate danger to interests which the state may lawfully protect. It is important to note that while it is the Fourteenth Amendment which bears directly upon the State, it is the more specific limiting principles of the First Amendment that finally govern this case.” Schneider v. State, 308 U.S. 147, 161, 60 S.Ct. 146, 84 L.Ed. 155. Cf. Connolly v. Union Sewer Pipe Co., 184 U.S. 540, 558, 22 S.Ct. 431, 46 L.Ed. 679; Barbier v. Connolly, 113 U.S. 27, 5 S.Ct. 357, 28 L.Ed. 923.

In other words the distinction is between a “rational basis” in the property-right cases arising under the Fourteenth Amendment alone and the “clear andl present danger” cases in which the Fourteenth Amendment is an instrument for transmitting human liberties guaranteed by the First. For example, the court had no-difficulty in sustaining the three-judge court’s jurisdiction to strike down the flag-salute statute in the Barnette case, or the-three-judge jurisdiction to invalidate a. Louisiana statute which had for its purpose, as the court held, the licensing of the press by the imposition of a gross receipts tax for the privilege of engaging in: the newspaper business. Grosjean v. American Press, 297 U.S. 233, 56 S.Ct. 444, 80 L.Ed. 660. In Douglas v. City of Jeanette, supra, the Supreme Court sustained federal jurisdiction, but withheld theinjunctive hand of the court because there-was no finding of immediately threatened irreparable injury in the circumstances, and because a decision of the Supreme Court. that day in another case (Murdock v. Pennsylvania, 319 U.S. 105, 63 S.Ct. 870, 87 L.Ed. 1292, 146 A.L.R. 82) gave the petitioners all the relief they sought in the three-judge court. See also Hague v. C. I. O., supra, 307 U.S. at pages 501, 502, 59 S.Ct. 954, 83 L.Ed. 1423.

In sum, it seems fairly plain that •although the state courts are the preferable forum for the adjudication of the question whether a state statute offends against the Federal Constitution on the theory that ■state courts equally with the Federal courts are charged with the duty of safeguarding constitutional rights, and since they are the sole judge of the meaning and import of a state statute they should be the first judge of whether state law transcends rights protected by the Federal Constitution. But, where as here, fundamental human liberties are drawn in issue, the Federal courts are a proper forum for the ■determination of the question whether a state statute trespasses upon an area which the Federal Constitution has set apart as hallowed grounds for expression of democratic ideas. We yet like to believe that wherever the Federal courts sit, human rights under the Federal Constitution are .always a proper subject for adjudication, and that we have not the right to decline the exercise of that jurisdiction simply because the rights asserted may be ■adjudicated in some other forum.

With these precepts in mind it is competent for us to judge the quality and estate of the rights asserted, and to determine for ourselves whether they are abridged by the declared public policy of Kansas, as embodied in the legislation drawn in issue. The legislation is entitled '“An Act relating to employers and employees, organizations of employees, and •officers and agents of such organizations, and providing penalties for violations there•of.” It became effective on May 1, 1943, and has not been enforced against any of the complainants, only because of the ■sufferance of the Attorney General during the pendency of these proceedings.

Section 1 of the Act defines "Labor ■organization” as any organization of employees having within its membership residents of the State of Kansas organized for the purpose of dealing with employers concerning hours of employment, rate of pay, working conditions or greivances of any kind relating to the employer. The term '“business agent” is defined as any person, without regard to title, who shall act or attempt to act for any labor organization (a) in the issuance of membership or authorization cards, work permits, or any other evidence of rights granted or claimed in or by a labor organization, or (b) in soliciting or receiving from any employer any right or privilege for employees when such labor organization has not been certified or recognized as the bargaining unit for such employees. Section 2 guarantees the right of self-organization and collective bargaining through chosen representatives, and the right to refrain from such activities. Section 3 provides that no person shall operate in Kansas as a business agent, without first having obtained a license from the Secretary of State by making application therefor and the payment of $1 as a “fee”. The application must state the name and residence of applicant, and must be accompanied by the signed statement of the president and secretary of the organization for whom the applicant will act, showing his authority to do so. The “license” is issued for the calendar year, unless sooner surrendered, suspended, or revoked.

Section 4 requires every labor organization desiring to operate within the state to file a copy of its constitution and bylaws with the Secretary of State, provided that no secret ritual relating solely to initiation and reception of members shall be required. Section 5 requires every labor organization operating in the State of Kansas and having twenty-five or more members to make annual reports to the Secretary of State, showing the condition of such organization at the close of business of each calendar year. It is required to give the name of the labor organization, location of its office, name of its. president, secretary, treasurer, and business agent, together with the post office address and the remuneration paid each; the date of the regular election of officers, the rate of its initiation fees, and any other charges against its members, and a verified statement of the income, expenditures, assets and liabilities of the organization. Upon the filing of such report, the labor organization is required to pay the Secretary of State an annual fee of $2. Section 6 provides that these reports become public property in the custody of the Secretary of State. Section 7 makes it unlawful for any employer to interfere with, restrain, or coerce employees in the exercise of the right of self-organization and collective bargaining guaranteed by Section 2 of the Act, provided that no provision of the Act shall be construed to deprive the employer of his constitutional right to free speech as guaranteed by the State and Federal Constitutions.

Section 8, inter alia, makes it unlawful for any person (1) to interfere with, or prevent the right of franchise of any member of any labor organization, including the right to make complaint, file charges, give information, etc., concerning violations of the Act, or of his right of free petition, lawful assembly, and free speech; (3) to participate in any strike, walk-out or cessation of work or continuation thereof without the same being authorized by a majority vote of the employees to be governed thereby, provided that this shall not prohibit any person from terminating his employment on his own volition; (4) to enter into an all union agreement as a representative of employees in a collective bargaining unit, unless and until the employees to be governed thereby have by a majority vote authorized such agreement; (5) to conduct any election without a secret ballot; (6) to charge, receive, or retain dues, assessments or other charges, in excess of or not authorized by the constitution and by-laws; (7) to act as a business agent without a valid license; (8) to solicit membership or act as a representative of a labor organization without authority of such organization; (10) to act as business agent or representative of any labor organization which does not have on file with the Secretary of State its constitution and by-laws; (11) to seize or occupy property unlawfully during the existence of a labor dispute; (12) to refuse to handle, install, use, or work on particular materials or equipment and supplies because not produced, processed, or delivered by members of a labor organization; (13) to cause any cessation of work or interfere with the progress of work by reason of any jurisdictional dispute, grievance or disagreement between or within labor organizations; (15) to picket beyond the area of the industry within which a labor dispute arises; (16) to picket other than in a peaceable manner.

Section 9 authorizes the Attorney General or the County Attorney of any county of the state to prosecute an action for the suspension or revocation of any license of a business agent for violations of any provisions of the Act upon the complaint of any interested party, and provides that the action shall be commenced in the district court of the county of the residence of the business agent, or of the county in which the violations occurred, and that such actions shall be heard by the court without a jury in accordance with the Code of Civil Procedure. The court is authorized to suspend or revoke such license as in its judgment is deemed best.

Section 10 authorizes a suit against any labor organization in its commonly used name, provides for process of service, and for the enforcement of a judgment against the common property of such labor organization.

Section 12 provides that “except as specifically provided in this act, nothing therein shall be construed so as to interfere with or impede or diminish in any way the right to strike or the right of individuals to work; or shall anything in this Act be so construed to invade unlawfully the right to freedom of speech.” Under Section 13 a violation of any provision of the Act is made a misdemeanor and is punishable by a fine not to exceed $500, or imprisonment in the county jail for six months, or both.

The Act also contains a severability clause to the effect that if any provision of the Act or the application thereof to any person or circumstance be held invalid, such invalidity shall not affect other provisions or application of the Act which can be given effect without the invalid provision or application, and to this end the provisions of the Act are declared to be severable in its operation. Cf. Section 111.18 of the Wisconsin Employment Peace Act, laws of 1939, c. 57, Wisconsin Statutes, before the Supreme Court in Allen-Bradley Local No. 1111 v. Wisconsin Employment Relations Board, 315 U.S. 740, 741, 62 S.Ct. 820, 86 L.Ed. 1154.

The Act, when considered in its entirety, is a comprehensive plan for the effective regulation of all labor organizations, their agents, and representatives operating, or desiring to operate, in the State of Kansas. It also attempts to regulate the conduct of individuals while engaging in concerted activities in furtherance of the aims and objects of the labor organization. However, such regulations are not intended to interfere with the right of employees to-self-organization, to form, join or assist labor organizations, to bargain collectively and to engage in concerted activities for .that purpose, or other mutual aid or protection. See Sections 2 and 7. Nor is the Act to be construed to invade unlawfully the right of free speech. See Section 12.

On this record it is established that the existence and operation of a labor union necessarily involve the integrated, correlated and concerted activities of everyone connected with the organization, from the individual member to the highest official; that the activities of the individual member as he goes about his daily work preaching the doctrine of unionism is the heart and soul of the organization, and without which it cannot exist. It is also established that the life and strength of a labor organization is dependent upon the free exercise of speech, press and assembly, by all those who further its objects, regardless of their status in relation to the organization. It is plain also that compliance with certain provisions of the Act (Sections 3, 4 and 5) is a condition precedent to the exercise of whatever rights are involved in the functioning of a labor organization, and it is of course fundamental and self-evident that free speech, press and assembly are sacred human liberties, and their free exercise cannot be made to depend upon any condition imposed by state law, nor may they be previously restrained in the absence of clear and present danger to the community. On this premise it is argued by the complainants that since free speech, press and assembly are essential to the attainment of the common objects of the organization, and since compliance with the Act is a condition precedent to their exercise, they come squarely within the ambit of the Federal Constitution which secures these rights against abridgment by regulation under color of state law.

The spark which gave life and courage to these contentions of the complainants is found in the words of Mr. Justice Brandeis in Senn v. Tile Layers Union, 301 U.S. 468, 57 S.Ct. 857, 862, 81 L.Ed. 1229, when he said that “members of the union might, without special statutory authorization by a state, make known the facts of a labor dispute, for freedom of speech is guaranteed by the Federal Constitution.” That case involved picketing as one of the attributes of the collective bargaining process. Then came Thornhill v. Alabama, 310 U.S. 88, 106, 60 S.Ct. 736, 84 L.Ed. 1093, in which peaceful picketing was definitely established as a form of dissemination of information concerning the facts of a labor dispute, which must be regarded as within that area of free speech guaranteed by the First Amendment to the Constitution, and it held a state statute, having for its purpose the regulation of the right to picket in the area of a labor dispute in an industrial conflict invalid upon its face, with the observation “where regulations of the liberty of free discussion are concerned, there are special reasons for observing the rule that it is the statute, and not the accusation or the evidence under it, which prescribes the limits of permissible conduct and warns against transgression.” Thornhill v. Alabama, supra, 310 U.S. at page 98, 60 S.Ct. at page 742, 84 L.Ed. 1093. Although the court recognized that the rights of employers and employees were subject to modification and qualification in the public interests, it said that any such qualification could be justified only in cases of grave and immediate danger to the community.

The Thornhill doctrine met its first test in the Meadowmoor case (Milk Wagon Drivers Union of Chicago, Local 753 v. Meadowmoor Dairies), 312 U.S. 287, 61 S.Ct. 552, 555, 85 L.Ed. 836, 132 A.L.R. 1200, in which the union complained that an injunction by the Illinois court deprived its members of their constitutional right of free speech by preventing all picketing of an employer’s business, merely because various acts of violence had occurred on the picketing lines. The majority of the court, speaking through Mr. Justice Frankfurter, while recognizing peaceful picketing as a form of free speech, held that the right of free speech had not been unduly invaded by the injunction, because the acts of violence on the picket line had generated a "momentum of fear [which] would survive even though future picketing might be wholly peaceful.” The majority did not view this pronouncement as a qualification of the Thornhill and Carlson cases, but a strong minority (Justices Black, Douglas and Reed), regarded the reasoning of the court as a “basic departure from the Thornhill case”, and were at pains to point out what they regarded as the departure.

Next came the Swing case, (American Federation of Labor v. Swing), 312 U.S. 321, 61 S.Ct. 568, 570, 85 L.Ed. 855, where the beauticians union sought to force a non-union beauty shop operator to employ union labor. Swing, the owner of the shop, obtained an injunction against the union on the grounds that under the law of Illinois, picketing by persons not in proximate relation to the employment was unlawful. The Supreme Court reversed in an opinion also by Mr. Justice Frankfurter, in which he observed that the case clearly presented a substantial claim of the right of free discussion which should be guarded with a jealous eye, and that such ban of free communication was inconsistent with the guaranty of free speech. He said that the scope of the Fourteenth Amendment was not confined to the notion of a particular state regarding the wise limits of an injunction in an industrial dispute, whether those limits be defined by statute or by the judicial organ of the state; that a state could not deny the right of free speech “by drawing a circle of economic competition between employers and workers so small as to contain only an employer and those directly employed by him.” Mr. Justice Roberts and the Chief Justice dissented on the grounds that the means employed were justified by the circumstances of the case.

Then came Bakery and Pastries Drivers and Helpers Local 802 of International Brotherhood of Teamsters v. Wohl, 315 U.S. 769, 62 S.Ct. 816, 86 L.Ed. 1178, by Mr. Justice Jackson. In that case, members of a labor union who were drivers engaged in the distribution of baked goods peacefully picketed their former employer, and the employer’s customers in an effort to induce peddlers, who had taken their places as independent contractors, to work six days a week and hire a non-union member one day a week at union wages. The New York State Court granted an injunction on the theory that a labor dispute did not exist within the meaning of the New York Anti-Injunction Act, and the picketing was therefore an unlawful labor objective. The Supreme Court reversed, holding that the state could not abridge the right of free speech on its conception of what constituted a labor dispute within the state law. For the first time, however, the court indicated an overt disposition to contract the doctrine of the Thornhill case by recognizing the right of the state to regulate peaceful picketing under circumstances which the court did not define or disclose. The minority recognized this aberration from the Thornhill case by a special concurring opinion, in which the purity of the right of freedom of speech as practiced through the medium of a picketing line was reaffirmed without qualification. The court said that if the principles of the Thornhill case are to survive, the state must not be permitted to prescribe the limitations of the area of a labor dispute in the absence of clear and present danger to life and property.

The cleavage between the two schools of thought is made plain in Carpenters and Joiners Union of America, Local No. 213 v. Ritter’s Cafe, 315 U.S. 722, 62 S.Ct. 807, 810, 86 L.Ed. 1143. Ritter owned a cafe in which he employed only union labor, and also owned a plot of land about one and one-half miles from the cafe, upon which he let a contract to construct a building to a contractor who employed non-union workmen on the project. The Carpenters Union peacefully picketed Ritter’s cafe in an endeavor to induce Ritter to require the contractor to employ only union labor, and the restaurant employees were also induced to a sympathetic strike at the cafe. The Texas court found that the picketing activities constituted a violation of the state anti-trust law, and enjoined picketing of the cafe. The Supreme Court affirmed in an opinion by Mr. Justice Frankfurter, in which he said that although peaceful picketing was one phase of the “constitutional right of free utterance”, it was also in reality one of the familiar weapons of industrial combat, and as such could be limited by the state within reasonable bounds.

That because the restaurant business has no “nexus” with the labor dispute, the Texas court could insulate an area which had no industrial connection with it. The court reasoned that although a labor dispute was the occasion for the exercise of freedom of expression, it was met with the claims on behalf of the state to impose reasonable regulations for the protection of the community as a whole. There was a dissent by Justices Black, Douglas and Murphy, and a separate dissent by Justice Reed, in which the “basic departure” from the doctrine of the Thornhill case was again emphasized. Thus in the opinion of a strong minority, the Thornhill case has been sapped of much of its original strength and vigor by process of judicial attrition.

It may be said that the Ritter case revitalized the philosophy of Justice Brandéis when he said, “All rights are derived from the purposes of the society in which they exist; above all rights rises duty to the community.” Duplex Printing Press Co. v. Deering, 254 U.S. 443, 488, 41 S.Ct. 172, 184, 65 L.Ed. 349, 16 A.L.R. 196. The obvious limitations upon free speech sanetioned in the Ritter case are found in the doctrine relating to the permissible area of an industrial conflict, rather than upon the test of “clear and present danger” heretofore thought to be the only permissible limitation upon the right of free speech. In other words, freedom of speech practiced through the medium of picketing is characterized as a form of coercive technique which is entitled to constitutional protection, but not without special limiitations in the public interest. To that extent the “clear and present danger” test as applied to peaceful picketing in the Thornhill case gave way to the “reasonable basis” test in the Ritter case. See Norris LaGuardia Act in the Constitution, George Washington Law Review, June 1943, page 441; Picketing and Free Speech; A Dissent, Harvard Law Review, January 1943; Picketing and Free Speech; A Reply, Harvard Law Review, January, 1943; Freedom of Speech and Labor Controversies, Missouri Law Review, January, 1943.

Since picketing is only one of the familiar weapons used by unions in the attainment of their economic objectives, we think the philosophy of the cases which have defined the quality of free speech inherent in picketing furnishes a reliable criterion for the determination of the quality of the rights involved in the whole of the economic struggle in the field of industrial relations.

The Constitutionality of Section 5 of the Texas Labor Act, House Bill No. 109, Acts of 1943, c. 104, p. 180, Vernon’s Ann.Civ. St. art. 5154a, § 5, which is textually and contextually similar to section 3 of the Kansas Act, was challenged in Ex parte Thomas, 141 Tex. 591, 174 S.W.2d 958, 960. Thomas a union official, after having been previously restrained from speaking to a publicized meeting sponsored by a local labor union, delivered a prepared address at the scheduled meeting in which he espoused the cause of unionism, urged everyone present to become a member of the local union and offered if necessary to personally issue the membership cards. Specifically, and as if deliberately to test the requirements of the Act, he singled out one O’Sullivan and solicited his membership in the union. After the speech had been delivered to a peaceful assembly, he was arrested and charged with contempt for violations of the injunction restraining the solicitation of members in the labor union ivithout first having obtained an organizer’s card as required by Section 5 of the Texas Act. He was found guilty and sentenced for contempt. On habeas corpus to the Supreme Court of Texas, Thomas contended that Section 5 of the Act was unconstitutional as an abridgment of free speech and assembly, but the Texas court held that because “labor unions enter into practically every business and industrial enterprise, and greatly affect the economic condition of the country”, the restraints imposed upon free speech and assembly by the Act, as enforced, was justified in the public interest. In arriving at these conclusions, the Texas Court used the “reasonable basis” rather than the “present clear danger” test as a guide for constitutional justification.

The Supreme Court of the United States, 323 U.S. 516, 65 S.Ct. 315, discharged Thomas, holding that the injunctive process of the Texas court deprived him of his constitutional right to traditional free speech. The court observed that the state had made no distinction between the general and personal solicitations of membership, and that the injunction must therefore be regarded as prohibiting all. On this basis, the court held that because the threat of the restraining order, backed by the power of contempt, and the arrest for crime hung over every word of his speech delivered to a peaceful assembly, he was previously restrained from exercising his constitutional right to free speech.

The conclusions of the court are planted squarely upon the fundamental premise that the state may not either by statute or injunctive process, restrain any person from publicly speaking in behalf of unionism at a peaceful assembly, although the speech may have for its purpose the direct solicitation of members in the organization for which he speaks. But the court did not nullify the Texas Act or any section thereof, rather it freely conceded the power of the state to regulate labor unions in the public interest so long as such regulations did not trespass upon the domain set apart for the exercise of traditional free speech and assembly. A strong minority thought that the restraints were reasonable and justified, and although the court specifically refrained from so holding, we think it may be fairly implied from what was said in the majority and concurring opinions that the state may, without infringing the constitutional safeguards, condition the right of an individual to personally solicit membership in a union when that solicitation partakes of a commercial transaction in the field of union activities. In sum, the advocacy of the cause of labor unions was placed on a constitutional parity with any other cause or doctrine, and so long as such advocacy is not primarily devoted to a commercial objective, it is not subject to restrictive legislation unless the public interest clearly outweighs the value of the right to the individual. But the court did not attempt to draw the line between the purely doctrinal aspects of the union enterprise which is free from restraint and the purely commercial which, like all other enterprises, is subject to reasonable regulation — beyond the observation that the task was a “difficult” one. The decision in that case rested upon the concrete clash of actualities. The court was not required to draw hypothetical lines — it deliberately refused to do so, and we must do likewise.

The states of Alabama (Acts of 1943, p 252, Code 1940, Title 26, § 376 et seq.) and Florida (Acts 1943, Chap. 21968, F.S.A., Sec. 481.01 et seq.) have enactments similar to Texas and Kansas. The Supreme Court of Alabama (Alabama State Federation of Labor v. McAdory, 18 So.2d 810) has sustained the constitutionality of the Act of that State when considered as a whole, and in particular it has sustained that provision (Sec. 7, Code Ala. 1940, Tit. 26, § 382, similar to Sections 4, 5 and 6 of the Kansas Act), which is designed to regulate the functions of labor organizations in the state, on the grounds that a reasonable basis exists for the exercise of the state police power within the limits of free speech, press and assembly. The court nullified as fundamentally unconstitutional sections 12 and 13, and the cognate parts of Section 14, Code Ala. 1940, Tit. 26, §§ 387-389, which are similar to Section 8 (3) (12) and (13) .of the Kansas Act. See also A. F. of L. v. Bain, 165 Or. 183, 106 P.2d 544, 130 A.L.R. 1278, but see Borden v. Sparks, D. C., 54 F.Supp. 300. The Florida Supreme Court (Hill v. State, 19 So.2d 857) has sustained Sections 4 and 6 of its act, F.S.A. §§ 481.04, 481.06, which are not materially different from Sections 3, 4 and 5 of the Kansas Act, as against the contention that compliance with these sections of the Act constitutes a violation of the constitutional right to free speech and assembly. Cf. the Colorado Peace Act in A. F. of L. v. Reilly, 1944, 155 P.2d 145. On November 20, 1944, and February 5, 1945, the Supreme Court of the United States granted certiorari to review both the Alabama and Florida cases, (65 S.Ct. 191 and 588) and it cannot escape the necessity of deciding the very questions presently before us.

We have the word of the Attorney General of the State of Kansas, speaking in his official capacity, that he does not regard the activities of “stewards” and nonsalaried union men in the solicitation of members, and the collection of dues, as within the ambit of the definition of a “business agent” under § 1, subd. 2 of the Act, and that they are therefore not subject to the licensing requirements of Section 3. The Attorney General in his official capacity freely recognizes the right of any individual to speak for and on behalf of a labor organization, and for members of the union to publicly solicit memberships and to peaceably assemble in the furtherance of the right of self-organization without any previous restraint, and without violation of any of the provisions of this Act. We think it is our duty to take the word of the highest enforcement officer of the state concerning the construction of an act which we are called upon to annul as unconstitutional, and if we take his word, it follows that only salaried representatives of a labor organization who engage in union activities as a livelihood or vocation are required to comply with Section 3 of the Act.

Sections 4, 5, 6 and 10 regulate labor organizations as legal entities and artificial bodies, “Structurally and functionally, a labor union is an institution which involves more than the private or personal interests of its members. It represents organized, institutional activity as contrasted with wholly individual activity”, and individuals while “acting as representatives of a collective group, cannot be said to be exercising their personal rights and duties and to be entitled to their purely personal privileges. Rather they assume the rights, duties and privileges of the artificial entity or association of which they are agents or officers and they are bound by its obligations.” United States v. White, 322 U.S. 694, 64 S.Ct. 1248, 1252, 88 L.Ed. 1542.

As we have said, the process of self-organization, collective bargaining and all other allied union activities necessarily involve the rights of free speech, press and assembly which may not be conditioned by statute or previous restraint by injunctive process, but we must also recognize that the sum and total of all union activities are directed toward economic objectives and necessarily involve purely commercial activities which may be regulated in the public interest on any reasonable basis. In short, when used as an economic weapon in the field of industrial relations or as coercive technique, speech, press and assembly are subject to reasonable regulation in the public interest and in that respect the state is the primary judge of the need, and it is not required to wait until the danger to the community which it seeks to avoid is “clear and present”.

We are not in accord with the Alabama, Florida and Oregon courts in the treatment of their respective enactments, and we think we may assume for the purposes of this case that the Supreme Court of Kansas would follow the Alabama court in the condemnation of those similar sections of the Act which make unlawful any strike, walkout, or cessation of work, unless authorized by a majority of the employees, or to refuse to handle, install, use or work on particular materials, equipment or supplies because not produced, processed or delivered by members of a labor organization, or to cause any cessation of work or interference with the progress of work by reason of any jurisdictional dispute or disagreement between or within labor organizations. Cf. A. F. of L. v. Bain, supra. The Attorney General has expressly refrained from stating what his “decisions are going to be finally” in regard to the various sub-sections of Section 8. But, no party to this suit or anyone similarly situated has actually been charged with violations of any of these provisions, and our question then is, does the “pervasive threat inherent” in the very existence of these penal provisions generate such a “momentum of fear” as to actually constitute a previous restraint upon human liberties? Thornhill v. Alabama, 310 U.S. 88, 60 S.Ct. 736, 84 L.Ed. 1093; Hague v. C. I. O., 307 U.S. 496, 59 S.Ct. 954, 83 L.Ed. 1423. If it does, we think that injunctive relief is an appropriate exercise of the jurisdiction committed to this court.

The right to peaceably strike or to participate in one, to work or refuse to work, and to choose the terms and conditions under which one will work, like the right to make a speech, are fundamental human liberties which the state may not condition or abridge in the absence of grave and immediate danger to the community. But by Section 8(3) (12) (13), the State of Kansas has not only conditioned these rights, but expressly prohibited them and made their exercise a criminal offense. In this setting we think it is the inherent prohibitions of the statute standing alone which impose the unconstitutional restraint, and those against whom the statute is - plainly directed should not be required to abide the processes of criminal justice in order to obtain the redress to which they are entitled under the Federal Constitution.

We are also urged to nullify the Act in its entirety because the conditions it imposes curtail the right of the employee to the advantage of the employer, thereby depriving the complainants of the equal protection of the laws under the Constitution. But that argument was fully answered by the Supreme Court in National Labor Relations Board v. Jones & Laughlin Steel Corporation, 301 U.S. 1, 57 S.Ct. 615, 81 L.Ed. 893, 108 A.L.R. 1352, when the employer made the same argument in regard to the provisions of the National Labor Relations Act. The employer complained that the National Labor Relations Act singled out the employer for regulations while encouraging and assisting the employee. The philosophy in that case is sufficient answer to the contentions here.

The further contention that the Act in question is a burden upon interstate commerce and cannot stand in the field of labor relations with the National Labor Relations Act is answered by the pronouncements in Allen-Bradley Local No. 1111 v. Wisconsin Employment Relations Board, 315 U.S. 741, 62 S.Ct. 820, 86 L.Ed. 1154, supra. We deem it unnecessary to say more than that the two acts are not in conflict upon their face and it will be time enough to judge the operative conflicts when they actually arise.

We conclude that sub-sections (3) (12) and (13) of Section 8 of the Act are unconstitutional and void on their face, and the defendants are enjoined from enforcing or giving effect thereto. But, under the broad severability clause, the invalidity of one section or provision of the Act does not affect the validity of the other provisions, unless they must stand or fall together. We are of the opinion that the remaining provisions of the Act as construed for the purposes of our case, are not plainly unconstitutional and we are therefore not warranted in overriding the declared public policy of the state of Kansas by the exercise of our injunctive jurisdiction.

Because we have refrained from enjoining certain sections of the Act, we do not wish to be understood as necessarily adjudicating their constitutionality as they may be ultimately construed and applied. Because it is our inescapable duty to examine the complaint of the deprivations of personal rights under the color of state statute does not mean that we are also required to divine all of the possible encroachments which may result from the enforcement of the Act. We simply hold that they do not upon their face encroach upon fundamental human rights.

Conventional findings of fact and conclusions of law consistent with the views herein expressed will follow.

HUXMAN, Circuit Judge

(dissenting).

I agree with the majority that Sections 8(3) (12) (13) are unconstitutional and that enforcement thereof should be enjoined. I also agree that many of the other provisions of the Act do not present a justiciable controversy at this time and that we should therefore refrain from passing upon them, notwithstanding that all the parties would like to have us do so. I proceed upon the assumption that it is agreed that Section 3, which requires a license of a business agent — whatever the definition of a business agent may be — places a burden upon the exercise of the right of free assembly and of free speech, and that Section 4, which requires the filing of the Constitution and by-laws, and Section 8(7) (8), which make it a criminal offense for one to act as business agent without a license or to act as business agent for a labor organization whose constitution and by-laws are not on file likewise impose burdens upon the exercise of these same rights. These sections either do or do not burden the right of speech and of peaceable assembly, and if they do, it is our duty to pass upon the reasonableness thereof. If compliance with these sections is not required before one may exercise the right of free speech and of peaceable assembly, we should so state in clear language, and make it the basis for our refusal to issue the injunction. There is language in the majority opinion from which an inference might be drawn that an interpretation of the term “business agent” and of what activities fall within the scope of his employment might be necessary before we could determine whether these sections impinge upon these constitutional rights. I discard that possibility as a basis for the decision of the majority, because in that event we should stay our hand and require the parties to obtain that interpretation in the state courts before we decide whether these provisions violate the constitutional rights of free 'speech and of free assembly. While the opinion of the majority does not state that these provisions do or do not constitute an unwarranted interference with the right of free speech and peaceable assembly with the same degree of definiteness of language that is used in passing upon the constitutionality of Section 8(3) (12) (13), I conclude that the refusal of the majority to enjoin interference with the right of free speech without complying with these sections means that the majority holds that these provisions do not violate these constitutional guarantees. This is the basis of my dissent.

It is without doubt true that the protection of the rights of individuals, as well as the general welfare of the community as a whole, justifies the imposition of many burdens and restraints upon one in the exercise of his constitutional rights of free speech or of peaceable assembly. These rights are not absolute. In organized society there is no such thing as absolute freedom of action, whether by means of free speech, free assembly, or in any other way. Organized society is made possible only by the relinquishment of individual rights. The more complex society becomes, the more regulation of our conduct toward each other becomes necessary. All of this is accomplished through constitutional legislative enactments under the great reservoir of implied power generally spoken of as the police power of a state, Emergencies or new complexities do not create power to legislate. They merely occasion the right to use the existing power, In the absence of such new situations, the exercise of the power would be unreasonable and unwarranted.

No one can intelligently challenge the right of government to regulate labor unions. It may regulate chambers of commerce, church organizations, or any of the innumerable associations formed for the. mutual benefit of the members, when such activities come into conflict with public interest or the reasonable rights of others, So the State may, by appropriate regulation, protect laborers eligible to membership in unions against exploitation by unscrupulous agents, against exaction of unreasonable dues, or against fraud, or in many other’ ways, the same as it may protect the public against quacks of all kinds or as it may protect one business man against unfair trade practices by his competitor.

Freedom of worship is one of the most sacred of our constitutional guarantees and is most zealously guarded by the courts, But that does not mean that a church society may hold a revival on a summer night in a populous residential district and sing hallelujahs and shout hosannas until 2:00 o’clock in the morning. Neither does it warrant a congregation in blocking the pub-lie streets or the private driveways in the vicinity of the church and in denying to the public or to the individual residents ingress or egress thereto. What I am trying to say is that all individual rights are relative, and subject to reasonable regulation in the interest of the community as a whole. No one would contend that a regulation prohibiting the holding of a revival in a thickly populated residential section at 2 o clock in the morning was unconstitutional because it challenged the right of free speech or free assembly. Neither would anyone contend that such a regulation of a revival in a rural area, five miles from any residence, was constitutional. It is not enough that there is power to regulate or even need for regulation, but the regulation m every m-stance must be reasonable and must reasonably tend to accomplish a permissible attainment. ■

The Alabama Supreme Court, in the case referred to in the majority opinion, as well as the majority in this case, stress the well-recognized principle of law that there is a presumption of constitutionality and that courts are loath to substitute their judgment for that of the Legislature, and that they will not strike down legislation unless it can clearly be said that there is no constitutional authority for the same. With this wholesome principle I am in full ac-cor<^'

But is has no application when sacred constitutional guaranteed rights are involved. Then an entirely different principle must guide us. That is the conclusion I draw from the decision of the Supreme Court in the Thomas case. The court points out that these constitutional guarantees have a sanctity and solemnity which it not accorded to general rights arising by operation of statutory law. When a regulation impinges one of these rights, it must not only be justified by a clear public interest and be passed to meet a clear and present danger to such right, but it must also be reasonable and must have a reasonable relation to the object sought to be accomplished. In such case, there is no presumption of constitutionality. There is rather a suspicion in the minds of the courts, the guardian of our constitutional liberties, and the burden is upon him who would uphold the interference with such rights to carry the burden of justifying the interference within the test laid down by the Supreme Court in the Thomas case, As stated by the Supreme Court, when the right to restrict the exercise of free speech is the subject of inquiry, it is our “tradition to allow the widest room for discussion, the narrowest range for its restriction.” [323 U.S. 516, 65 S.Ct. 315, 323.]

Our ;nqUiry then is to ascertain the reasonableness of the restraints placed upon constitutional rights of free speech and free assembly by these provisions of the aC£ w¡thin the definitions as laid down, "pbere can be no imminent danger to the public or to the rights of others in the mere exercise of the rights of peaceable assembly or 0f free speech. Peaceable assembly neg-ativeS danger to the rights of others, Neither can danger be implied from the mere exercise of the right of free speech, The dang-er t0 the pu.biic or t0 others comeS) if at all, from the time, the manner, or the way in which these rights are exer_ cised. The State has a right to regulate the time, the manner, the place, the means, and the conditions under which these rights are exercised. It may not burden the right itself. The State may not require anything as a condition precedent to the exercise of the right to strike. It may, by appropriate legislation, regulate the manner in which a strike is carried on. The distinction is between the right to speak and the way in which the right is exercised. The one is subject to regulation — the other is not. It is, of course, obvious that the one shades into the other. In a way, regulating the time and the manner in which a speech is delivered is a regulation of the right to speak. There is, however, a valid distinction. The fact that the two are so interrelated accentuates the necessity of inquiry to make sure that any burden placed upon the right to speak is passed for the purpose of accomplishing permissible regulation of the manner in which that right is exercised, and that it reasonably tends to accomplish that purpose.

What -abuses does the act seek to regulate, what public interest is sought to be promoted, what pernicious labor activities are sought to be controlled- or prohibited by the sections of the Act that burden the right of free speech or of free assembly? The answer is, none. How do the requirements for a license or the prohibition to act as a labor representative when the constitution and by-laws are not on file tend to protect the public against any unfair labor practices in addition to the protection that is afforded by the penal sections of the Act? The requirement of a license, the filing of the constitution and by-laws, in no way relate, directly or remotely, to the provisions regarding strikes, picketing, unlawful seizure or occupancy of other’s property during a labor controversy. Doing any of these things does not affect the right to a license or the right to speak or peaceably assemble. The remedial provisions of the act are as effective without the provision of a license Or the filing of the constitution and by-laws as with them. Under these circumstances, conditioning the right to speak upon the procurement of a license or upon the filing of the constitution and by-laws is an unwarranted and unreasonable burden upon the right of free speech and of peaceable assembly. It is not necessary to decide whether the State may, by appropriate legislation, require an association to file its constitution and by-laws, or whether it may require a license of a business agent of an association before he may operate in the state. For the purpose of this dissent this right may -be conceded. It is sufficient to say that it may not, in the manner in which it has in this Act, thus condition the right to speak or to peaceably assemble.

The majority attempt to make a distinction between a person acting in a purely individual capacity and as a representative of a collective group or association. It is stated that one acting as the representative of an association is not exercising his personal rights. That such distinction exists in many instances is of course obvious. A good illustration is apparent from the facts 'upon which rest the decision in United States v. White, 322 U.S. 694, 64 S.Ct. 1248, 88 L.Ed. 1542. But if by that is meant or implied that the right to speak, when exercised in behalf of an organization which the speaker represents, may be burdened otherwise than when he speaks for himself, I cannot agree. Thomas was a paid organizer and represented his union and was speaking as such and in behalf of the union when he made the speech in which the injunction was issued and which the Supreme Court struck down.

If the State may say to a labor organizer that he may not address a meeting called in the interest of his union and being conducted in a proper manner, because he has no license or because the constitution and by-laws of the organization are not on file, it may likewise say to a minister of the Gospel that he may not speak to a church meeting if he does not have a license or if the constitution and by-laws of the church are not on file. Freedom of speech is no more sacred and is just as subject to proper regulation when exercised in behalf of religion as for any other lawful purpose.

The provisions of the statute prohibiting the doing of certain things and regulating the doing of others are just as effective without the provisions requiring the license or the filing of the constitution and -by-laws as with them, and the burden which they impose upon the constitutional right of free speech and of free assembly is therefore unreasonable and unwarranted.

We cannot shrug these burdens off by saying that the means to be employed was for the consideration of the Legislature and we will not substitute our judgment or interfere with its exercise of discretion. These matters burden constitutional rights. The State may not do this unless it clearly shows the danger to be prevented and the reasonableness of the measures employed. The State has failed to show that there is imminent grave danger to the public which requires the imposition of these burdens. Furthermore, the State has wholly and completely failed to show that these burdens, as they are set out in the statute, have any reasonable or substantial relation to any remedial object sought to be obtained by the remedial provisions of the statute.

I would enjoin the enforcement of all the provisions of the statute that are made a condition precedent to the right to speak or peaceably assemble.

       In tin course of the argument on the definition of “business agent” under Section 1, subd. 2, the Attorney General stated that “it would be absurd to say that . the Kansas Legislature intended to inhibit the right of anyone to invite another to join his organization, and that extends to pre-organizing also”.

       Alabama State Federation of Labor v. McAdory, Ala., 18 So. 810; Hill v. State, Fla., 19 So.2d 857; A. F. of L. v. Bain, 165 Or. 183, 106 P.2d 544, 130 A.L.R. 1278.


author: BEN MOORE, District Judge.

text:
    ALLEMANNIA FIRE INS. CO. v. WINDING GULF COLLIERIES et al.
    Civ. A. No. 433.
    District Court, S. D. West Virginia.
    April 9, 1945.

      Steptoe & Johnson, of Charleston, W. Va., for plaintiff.
    Clay S. Crouse, of Beckley, W. Va., for defendant Board of Education of Raleigh County.
    Floyd M. Sayre and J. W. Maxwell, both of Beckley, W. Va., for defendant Winding Gulf Collieries.
   BEN MOORE, District Judge.

The plaintiff Allemannia Fire Insurance Company will be referred to herein as “Insurance Company,” the defendant Winding Gulf Collieries as “Collieries,” and the defendant The Board of Education of the County of Raleigh as “The Board.”

On April 26, 1924, the Board of Education of Slab Fork District, Raleigh County, West Virginia, authorized a bond election for the issuance of $130,000 in bonds, principally for the purpose of erecting a district high school building. The bond issue having been ratified by the voters of the district, the surface of a tract of land consisting of approximately one-half acre was conveyed by the Winding Gulf Colliery Company, predecessor in interest of Collieries, to the Board of Education of the District of Slab Fork, predecessor in interest of The Board, without other consideration, so far as the pleadings disclose, than a covenant by the grantee that the property be used solely for school purposes. The deed was dated August 23, 1924, and the covenant to use the land for school purposes only is expressed in the following paragraph of the deed, which also provides for automatic reversion of title to the grantor in case of cessation of such use: “It is further distinctly understood and agreed by and between the parties hereto as a part of the consideration for this conveyance, that the property hereby conveyed is for public free school purposes only and for no other purpose or purposes and that the same and no part thereof shall at any time be used for any other purpose or purposes whatsoever and that whenever the said property hereby conveyed shall cease to be used for public free school purposes, the same and every part thereof shall thereupon ipso facto revert to and become re-invested in, the said party of the first part, its successors or assigns in fee simple, with like force and to the same effect as if this conveyance had never been made.”

After acquiring the half acre of land conveyed by the foregoing deed, the Slab Fork District Board of Education caused a high school building to be built thereon, which was used continuously for school purposes until destroyed by fire, as will later appear.

Winding Gulf Colliery Company, grantor in the deed, later changed its name to Winding Gulf Collieries. By legislative adoption of the County Unit School System the Board of Education of the District of Slab Fork was absorbed into and became a part of the Board of Education of the County of Raleigh.

On December 1, 1943, the Insurance Company issued a blanket policy of fire insurance in the amount of $142,000 covering “all buildings and structures of every description, now existing or hereafter erected or acquired and on all contents thereof, property of the assured, including those items which by the terms of the policy must be specifically mentioned, but excluding those items as may further herein below be specifically excepted or excluded, the property of the insured; and on the interest of the insured in and/or legal liability for similar property belonging in whole or in part to others, and held by the insured either sold but not removed, on storage of for repairs, or otherwise held; occupied for educational purposes and purposes necessary or incidental thereto, while located on premises owned, occupied, leased or used by the assured in Raleigh County, West Virginia.”

The term “assured” is defined as “The Board of Education of the County of Raleigh as is now or may hereafter be constituted for account of whom it may concern,” and this definition is immediately followed by the provision that “loss, if any, under this policy shall be adjusted with and held payable to the Board of Education of the County of Raleigh.” Among the special conditions of the policy are the following : “This insurance shall not be invalidated by the existence of any mortgage or trust deed or other incumbrance that may now or hereafter be in force affecting the property above described, * * *. The Board of Education of the County of Raleigh as may now or hereinafter be constituted, shall be deemed the owner of the property herein named, described and covered by this policy, and no defect in the title to such property shall invalidate this policy in whole or in part.

“Should any of" the within described property be situate on lands not owned by the assured in fee simple, this insurance shall not be affected thereby.”

■ On the night of January 4, 1944, or early in the morning of the following day, a fire occurred which entirely destroyed the high school building. The total amount of the loss was adjusted at a figure of $67,201.02. The amount in controversy in this action is the sum of $4,771.27, but it has been agreed that a large number of other insurance companies are severally liable for other amounts making up the total loss, and that payment thereof will be governed by the final disposition of the smaller amount involved in this case.

On December 22, 1944, the Insurance Company filed this action of interpleader, whereby it deposited in the registry of this court the amount of $4,771.27, alleging that The Board and Collieries were asserting conflicting claims to the proceeds of the fire insurance. The Board filed its answer on January 18, 1945, and Collieries filed its answer on January 30, 1945, which was afterwards amended by an answer filed on March 6, 1945. Collieries answer sets up the facts as above outlined, and bases its claim to the insurance money on the provisions of the deed of conveyance relative to use of the property for school purposes, and reversion in the event of cessation of such use, together with the provisions of the insurance policy, and in particular that provision whereby The Board is designated as the assured “for account of whom it may concern." Collieries alleges in its answer that upon destruction of the building by fire The Board ceased to use the land for school purposes and does not contemplate any further such use; and that by the terms of the deed the property has reverted to the grantor and is now owned by Collieries.

The Board has filed a motion to dismiss the answer of Collieries, “because the answer fails to state a claim against the defendant The Board of Education of the County of Raleigh, West Virginia, upon which relief can be granted.”

In order to pass upon the sufficiency of Collieries' answer, it is necessary to construe the applicable provisions of both the deed and the insurance policy.

The paragraph from the deed quoted above has a double aspect. First, it passes to the grantee a qualified estate in the land, which is variously referred to in the law as a determinable fee, or a fee on a conditional limitation; and secondly, it provides expressly for automatic reversion of the fee to the grantor upon the happening of the event which may terminate the qualified fee. It is probable that even without the express provision for automatic reversion, the grantee’s estate would be terminated whenever the land ceased to be used for school purposes; Copenhaver v. Pendleton, 155 Va. 463. 155 S.E. 802, 77 A.L.R. 324; Board of Education v. Littrell, 173 Ky. 78, 190 S.W. 465 ; but with the inclusion of that provision there can be no doubt that upon The Board ceasing to use the land for school purposes it would immediately revert to the grantor, its successors or assigns, in fee simple; and, of course, all improvements to the land, and particularly all buildings on the land, would revert as part of the real estate. Richey v. Corralitos Union School District, 67 Cal.App. 708, 228 P. 348; Board of Education v. Littrell, supra.

It is clear that under the facts in this case Collieries had an insurable interest in the high school building, whether its estate in the land, being merely a possibility of reverter after a determinable fee, was a vested estate, to become effective on the happening of the condition expressed in the deed, as is held in some cases (Board of Education v. Littrell, supra), or merely a contingent right growing out of the possibility of having an estate in the future. Copenhaver v. Pendleton, supra. It did have an interest in the building. That interest consisted in its right to be reinvested with the fee simple title upon the happening of the condition which might terminate the qualified fee vested in The Board. Sheppard v. Insurance Company, 21 W.Va, 368; Lucas v. Liverpool & London & Globe Insurance Company, 23 W.Va. 258, 49 Am.Rep. 383.

In construing the insurance policy it is important to note that it was a blanket policy, covering no specified property, but applicable alike to any and all buildings and structures of every description then existing or thereafter erected or acquired. This provision, together with the definition of the assured as The Board “for account of whom it may concern,” followed by a stipulation that any loss was to be payable to The Board, and a special condition that the insurance should not be affected by the fact that any of the property might be “situate on lands not owned by the insured in fee simple,” gives rise to a clear inference that The Board intended to insure the complete title, however that title might be owned. The phrase “for whom it may concern” has a well recognized meaning in the law of insurance, and creates the presumption of an intention on the part of the named assured to cover any and all persons who may have an insurable interest in the property; in other words, “to protect the whole title without making it necessary to notify the company and obtain its consent to any transfer of interest.” Hagan v. Scottish Union & National Insurance Company, 186 U.S. 423, 22 S.Ct. 862, 866, 46 L.Ed. 1229. In such cases it is not necessary that the person who takes out such a policy should have any specified individual in mind, and it is not even permissible to receive oral testimony as to the person whom he may have had in mind. New Orleans & S. A. S. S. Co. v. W. R. Grace & Co., 2 Cir., 26 F.2d 967.

A contract of insurance is a personal contract and, in the absence of words indicating a contrary intention, inures to the benefit of the party with whom it is made, and this is true, even though the insured has only a qualified estate in property covered by the policy. Sampson v. Grogan, 21 R.I. 174, 42 A. 712, 44 L.R.A. 711; Clements v. Clements, 167 Va. 223, 188 S.E. 154. But while this is so, and while each party who has an interest can insure that interest solely for his own benefit, yet where the policy of insurance shows on its face an intention that the whole title be insured, it will inure to the benefit of all parties interested in the title, provided they authorized the insurance, or ratified it; and such ratification may be after the loss has occurred as well as before. Lucas v. Liverpool & London & Globe Insurance Company, supra; Murdock v. Franklin Insurance Company, 33 W.Va. 407, 10 S.E. 777, 7 L.R.A. 572; Hagan v. Scottish Union & National Insurance Company, supra.

I cannot agree with the contention of Collieries that The Board owed it the duty to maintain a watchman on the high school premises, and not having done so, is to be deemed guilty of waste upon the occurrence of an accidental fire. I am of opinion that the rights of Collieries do not depend upon the existence of circumstances constituting waste. I agree with the proposition set out in Collieries’ brief that when the whole title has been insured and a total loss occurs, the proceeds of the insurance are to be distributed to the owners of the different estates therein, according to their respective rights. The insurance money stands in place of the building. If abandonment has occurred, the reversioner, having been reinvested ipso facto with the fee simple title, should have the entire proceeds; otherwise, the proceeds should be treated as a trust fund to be used for replacing the building. The following cases are illustrative of this principle: Crisp County Lumber Co. v. Bridges, 187 Ga. 484, 200 S.E. 777, 126 A.L.R. 333; Culbertson v. Cox, 29 Minn. 309, 13 N.W. 177, 43 Am.Rep. 204; Chase v. Swayne, 88 Tex. 218, 30 S.W. 1049, 53 Am.St.Rep. 742; Haxall’s Ex’rs v. Shippen, 10 Leigh, 536, 34 Am.Dec. 745; Brough v. Higgins, 2 Grat.Va., 408; Hawes v. Lathrop, 38 Cal. 493.

It is urged by The Board that the insurance policy should not be construed to cover the interest of the reversioner in the building because, it says, The Board had no authority to provide insurance for the benefit of Collieries, and, therefore, if it did so its act would be ultra vires. It cites the case of Board of Education v. Commercial Casualty Insurance Company, 116 W.Va. 503, 182 S.E. 87, which holds that a Board of Education may recover from an insurance company premiums paid on public liability and property damage insurance on school buses. There the action was one between the insurance company and the Board. The decision is not applicable to the facts of this case, because here there has been no dispute as to the liability of the insurance company. The entire amount of the loss for which the plaintiff in this case is liable has been paid into the registry of the court, and the other companies have admitted liability and have agreed to pay their respective shares of the total loss to whichever of the claimants may be held entitled to receive the money. It may well be that The Board had authority to contract for this insurance for the benefit of Collieries, on the principle that under the provisions of the deed giving Collieries the reversion upon cessation of use, it was The Board’s duty to take reasonable care of the premises, and this duty could be best discharged by insuring the building. However, that question does not call for decision since it is niy opinion that even though the action of The Board were ultra vires, The Board could not take advantage of that fact to defeat the right of Collieries in the proceeds of the insurance policy, under the circumstances of this case.

It follows from what has been said that' the motion of The Board to dismiss the amended answer of Collieries will be overruled, and an order to that effect may be submitted for entry.


author: WYZANSKI, District Judge.

text:
    In re MEADE.
    No. 67915.
    District Court, D. Massachusetts.
    March 29, 1945.
    Isadore Paretsky, of Boston, Mass., for General Ice Cream Corporation.
    Samuel Goldman, of Boston, Mass., trustee.

      Raymond Rambach and Thomas F. Dolan, Jr., both of Boston, Mass., for Gilman Brothers, Inc.
    Harry Olins, of Boston, Mass., for Mc-Kesson & Robbins, Inc.
    Simon Cohen, of Boston, Mass., for Rachel Ehrenfried.
   WYZANSKI, District Judge.

This case arises on petitions for review of an order of Referee Black discharging three attachments against funds of the bankrupt, Raymond J. Meade. Jurisdiction is conferred on this court by 11 U.S.C.A. §§ 66, 67, sub. c, 107, sub. a(4).

September 1941 Meade mortgaged chattels to General Ice Cream Corporation to secure a debt. May 22, 1942, General Ice Cream Corporation took possession under its mortgage; and June 2, 1942, it foreclosed. After payment of all sums due it, General Ice Cream Corporation had a surplus of $341.20. This surplus was attached by McKesson & Robbins May 25, 1942, by Rachel Ehrenfried May 26, and by Gilman Brothers June 2. At the time of these attachments Meade was insolvent and the attaching creditors knew it.

Meade entered the military service of the United States July 3, 1942, and remained there until November 5, 1942, when he was honorably discharged. December 18, 1942, he filed a voluntary petition in bankruptcy. A trustee in bankruptcy was appointed. He petitioned the referee to dissolve the three attachments.

The question is whether the period of Meade’s military service shall be included in computing the period of “four months before the filing of a petition in bankruptcy” which attachments must have stood in order not to be null and void under the provisions of § 67, sub. a, of the Bankruptcy Act, 11 U.S.C.A. § 107, sub. a.

The referee excluded the period of Mieade’s military service and dissolved the attachments. The three attaching creditors now seek a review of the referee’s order.

Section 205 of the Act of October 17, 1940, 54 Stat. 1181, provided: “The period of military service shall not be included in computing any period now or hereafter to be limited by any law for the bringing of any action by or against any person in military service or by or against his heirs, executors, administrators, or assigns, whether such cause of action shall have accrued prior to or during the period of such service.”

These provisions were retained and amplified by the amendatory Act of October 6, 1942, 56 Stat. 770, 50 U.S.C.A.Appendix, § 525, which provides: “The period of military service shall not be included in computing any period now or hereafter to be limited by any law, (regulation, or order) for the bringing of any action (or proceeding in any court, board, bureau, commission, department, or other agency of government) by or against any person in military service or by or against his heirs, executors, administrators, or assigns, whether such cause of action (or the right or privilege to institute such action or proceeding) shall have accrued prior to or during the period of such service, (nor shall any part of such period which occurs after the date of enactment of the Soldiers’ and Sailors’ Civil Relief Act Amendments of 1942 be included in computing any period now or hereafter provided by any law for the redemption of real property sold or forfeited to enforce any obligation, tax, or assessment.)” [material in parentheses indicates amplifications of statute]

The first issue is whether the amendment of October 6, 1942, applies to this case. I am of opinion that it does not apply. All the attachments here involved were made on or before June 2, 1942. Unless prolonged by the original Soldiers’ and Sailors’ Civil Relief Act of October 17, 1940, the four months’ period referred to in § 67, sub. a, of the Bankruptcy Act would have expired by October 2, 1942. In other words, the normal period for potential nullification of the liens would have fully elapsed prior to the passage of the amendment of October 6, 1942. Nothing in that amendatory statute indicates that it was designed to reopen an already closed period. Indeed there is a precisely opposite indication in the last clause of the amendment. Moreover, the common rule is that statutes are ordinarily to be construed as prospective in operation. Ebert v. Poston, 266 U.S. 548, 554, 555, 45 S.Ct. 188, 69 L.Ed. 435. Therefore, in the case at bar if the normal period of four months has been extended the extension must have been by the Act of October 17, 1940.

The next issue is whether literally § 205 of the Act of October 17, 1940, covers this case. It is clear that Meade was a “person in military service” and that his trustee in bankruptcy is, by law, his assign. Bankruptcy Act § 70, 11 U.S.C.A. § 110. But, strictly speaking, the rule of § 67, sub. a, of the Bankruptcy Act, that under certain circumstances “every lien against the property of a person obtained by attachment * * * within four months before the filing of a petition in bankruptcy * * * shall be deemed null and void” does not constitute a “period * * * limited by * * * law for the bringing of any action.” The rule of § 67, sub. a, is not a statute of limitation. Compare Bell v. Buffinton, 244 Mass. 294, 295, 137 N.E. 287. Rather it is a substantive clog on the attaching creditor’s title. It gives the attaching creditor a defeasible right which becomes absolute if the debtor is not involved in bankruptcy within four months. It gives the trustee in bankruptcy power to nullify attachments within four months of bankruptcy. That power is what Mr. Justice Brandéis has called “a primary right as distinguished from a remedy.” Ebert v. Poston, 266 U.S. 548, 553, 45 S.Ct. 188, 190, 69 L.Ed. 435. Hence literally § 205 of the Act of October 17, 1940, does not cover this case.

There remains the issue whether the broad purpose of the act declared in § 100, 54 Stat. 1179, 50 U.S.C.A. § 510 demands that § 205 be liberally construed beyond its letter to include the situation presented in this case. In approaching this issue as presented in this case it is essential to have in mind the relationship not only of § 67, sub. a, of the Bankruptcy Act, but of the entire Bankruptcy Act to the Soldiers’ and Sailors’ Civil Relief Act. As stated in § 100 of the Relief Act, 50 U.S.C.A. § 510, the purpose of the statute is “to suspend enforcement of civil liabilities, in certain cases, of persons in the military service of the United States in order to enable such persons to devote their entire energy to the defense needs of the Nation.” Consistent with that purpose, § 205 of the Relief Act extends the period of time in which actions can be brought against as well as by persons in the military service. Compare Blazejowski v. Stadnicki, Mass., 58 N.E.2d 164. As applied to bankruptcy, this means that, although § 3, sub. b, of the Bankruptcy Act, 11 U.S.C.A. § 21, sub. b, enunciates that “a petition may be filed against a person within four months after the commission of an act of bankruptcy”, the four months’ period is not adhered to if the person has entered military service within four months after an act of bankruptcy. Thus, for example, if an attaching creditor obtains a lien upon an insolvent debtor’s property and within four months thereafter the debtor enters the military service, other creditors have an extension of their right to file a petition for involuntary bankruptcy. It is obviously part of the scheme of the Bankruptcy Act that the right of the other creditors to invoke the lien as a ground for a petition for involuntary bankruptcy, a right given by § 3, sub. a(3) and § 3, sub. b, of the Bankruptcy Act, shall be correlated with the right of the trustee to have the lien declared void, a right given by § 67, sub. a, of the Bankruptcy Act. If, therefore, the Relief Act extends the period of time in which creditors may rely on the lien as a basis for a petition in bankruptcy, the Relief Act should be interpreted to extend the period of time in which the lien is subject to avoidance by the trustee. Any other construction would often promote an absurdity. It would frequently mean that although a creditor made a proper and timely assertion that the securing of a lien was a ground for bankruptcy, the bankruptcy court would be nonetheless powerless to set the lien aside. In order to avoid such paradoxes and to harmonize the statutes it is appropriate to interpret § 205 of the Relief Act broadly so as to treat a lien as defeasible for a period of four months after the lien was obtained plus the period of any military service of the bankrupt which began within four months after the lien was obtained.

This result not only harmonizes two congressional statutes, it also carries out the general policy of the Relief Act. Often a soldier bankrupt may have a legitimate interest in having liens against his property set aside. For example, he may, as in the instant case, have non-dischargeable tax debts to local authorities which he would like to have paid. If the attaching creditors have to forfeit their liens, these tax claims will be paid first and will not survive to plague him after his discharge; If the debtor were not in the military service he could have petitioned for bankruptcy promptly after the liens were secured. Then the trustee would have had the liens discharged and used the funds to pay the tax claims. A broad interpretation of § 205 brings about the same result and prevents the bankrupt from suffering prejudice on account of his military service.

In reaching this conclusion I have not been unmindful of the decision in Ebert v. Poston, 266 U.S. 548, 553-555, 45 S.Ct. 188, 69 L.Ed. 435, which interpreted §§ 100 and 205 of the Soldiers’ and Sailors’ Civil Relief Act of March 8, 1918, 40 Stat. 440, 443, 50 U.S.C.A.Appendix, §§ 101, 116, the prototypes of §§ 100 and 205 of the 1940 Relief Act. Mr. Justice Brandéis’ opinion was directed to the question whether § 205 of the 1918 Act extended the mortgagor’s period of redemption after a foreclosure effected without judicial action. It is true that in answering that question negatively he indicated that § 205 should be read strictly and that the courts should not try to cover a casus omissus in the legislation. But I do not regard those indications as controlling here. Mr. Justice Brandéis did not have to consider the interlacing of two acts of Congress, and the paradoxes which literal construction of each of them would involve. Pie did not have the problem of relating Section 205 to judicial as distinguished from contractual action. And he was concerned with the application of a relief act to that field of law, mortgages, where there is a necessary insistence upon rigidity of construction and upon absolute faithfulness to the letter in order to promote security of transactions. Here we are dealing with the field of bankrupcy, an area where there is a greater need of flexibility in order so far as possible to promote equality of treatment and to prevent overreaching by creditors who have become diligent only after they have learned of their debtor’s insolvency.

Petitions to set aside referee’s order are severally denied.