Vol. XVIII Q. ,

PHILIPPINE

, No.6

LAW JOURNAL NOVEMBER, 1938

(ontents

PAGE

Unwarranted Application of the Due Process Clause-By Jose Leva ...........................••..... 249

~nt ~jsions .......................... . . .. ,' .. , 286

Recent Legislation . . ....•......•......•...•..•..... , 306

Publulud monthlll dllring th, academic "ear, J"tll to March. lnclw'vt!.

Sub.crlptio1l-Stud,nts ' •. 00 'lilT annumj aU otTters '5.00 pelT l11tnum.

Singl, number 60 centavo"

• PHILIPPINE LAW JOURNAL Vol. XV III NOVElli HEll, 1938

UNWARRANTED APPLICATION OF TH E DUE PROCESS CLAUSE

By JOSE LAVA *

CHA PTER IV

No.5

ATTITUDE OF THE UNITED STA TES AN D PH ILiPPINE SUPREME

COURTS ON SOCIAL LEGISLATIONS AS GLEAMED FROM

CASES DECIDED

In this chapter, we sh .. "iU present cases, decided by the Su­preme Courts of the United States and of the Philippines, in­volving the constitutionality of social legislations. It is 110t pre· tended that all cases dealing with socia l legi slations are included in our chapter . We e~pecially selected cases wherein the issue involved is the conflict of the due process clause and the pol ice power, .and wherein the laws tested were declared ullconstitu­tional, as being violative of t he due process clause. We shall pl'esent both the majority and the vigorous disRe nting opinions, and shall allow the eminent justices to speak for themselves, in· stead of us p.araphrasing what they have to ~my . Our purpose in thus quoting from the decisions at length i8 to present to our readers the menIal processes, the trend of reasoning of t he emi. nent justices, and to leave to them (our readers) to detect any fl aw in the reasoning thus presented.

For lack of time, we are not able to include among Ollr cases the very recen t decision of the Un ited States' Supreme Coun declaring the New York Minimum Wage L..'lW Ullconstitu· tional as being Viol09.tive of the due proceSl) clause. Just ices Brandeis. Cardozo, Stone and Chief Justice Hughes dissented wry vigorously.

Lochner v. Nell) Y ork 198 U. S. 46

In error to the County Court of One ida County, state of New York to revic\v a judgment of conviction for a violation

• LL.B., University of the Philippines.

250 PHILIPPINE LAW JOURNA L

of the labor law cf that state by permitting an employee to work more than 60 hours a week.

Section 110 of the labor bow provides: "No employee shall be required or permitted to work in a

biscuit, bread 01' cake bakery or confectionery establishment more than sixty hours in anyone week, or more than ten hours in anyone day, unless for the purpose of making a shorter work day on the last day of the week; nor mOl'e hours in anyone week than will make an average of ten days during such week in which snch employee shall work."

Mr. Justice Peckham delivered the opinion of the court: "It is not an act merely fixing the number of hours which

shall constitute a legal day's work, but an absolute prohibition upon the employer permitting, under any circnmstances, more than ten hours work to be done in his establishment. The em­ployee may desire to earn the extra money which would arise fl'om his worldng more th.an the prescribed time, but this stat­ute forbids the employer from permitting the employee to earn it. • * *

"Therefore when the stal~ by its legislature, in the assumed exercise of its police powers, has passed an act which seriously limits the right to labor or the right of contract in regard to their means of livelihood between persons who are sui juris (both employer and employee), it becomes of great importance to determine which shall prev.,iI,-the right of the individual to labor for such ti",e as he may choose, or the right of the state to prevent the individual from laboring, Or fro In entering i"to It"Y contract to labor beyond" certain ti",e prescribed by the state. * * •

"There ~s no contention t.hat bakers as a chss are not equal in in telligence and capacity to men in other trades or manual ('coupations, or that they are not able to assert their rights and care for themselves without the protecting .~rm of the state inter­fering with their imlependence of judgment and of action. They are in no sense wards of the state. Viewed in the light of a plll'ely labor law, with no reference whatever to the ques[jon of health, we think lhat a law like the one before us involves neither the safety, the morals nor lhe welfare of the public, and lh.t the inter"t of the public is not in the slightest degree af­fected by such an act. • • •

Mr. Justice Harlan with whom Mr. Justice White and Mr. Justice Day concurred, dissenting:

THE DUE PROCESS CLAUSE 251

"It is plain that this statute was enacted in order to protect the physical well-being of those who work in bakery and con­fection ery establishments. It may be that the statute had its origin, in part, in the belief that employers and employees in slIch establisbments were not upon an equal footing, and that the nece"ities of the latter often compelled them to submit to such exactions as unduly taxed thei r strength. Be this as it ma)', the statute must be t"ken as expressing the belief of the people of Nell' York that as a general rule, and in the case of the average man, labor in excess of sixty hours during a week in such establishments may endanger the health of those who thus labor. Whether or not this be wise legislation, it is not the province of the court to inquire * * • the court may inquire whether the means devised by the state are germane to an end which may be lawfully accomplished, and have a real and sub­stantial relation to the protection of henlth, as involved in tho daily work of the persons male and female, engaged in bakery and confectionery establishments. But when th is inquiry is entered upon, I find it impossible, in view of common experience, to say that there is no real 01' !ubstantial relation between the means employed by the st.,te and the end sought to be accom­plished. • • •

"[ uo not stop to consider whether any particular view of this economic question present, the sounder theory. What the precise facts are, it may be difficult to say. It is enough for the determination of this case and it is enough for this COUlt to know, that the question is one about which there is room for debate, and for an hones! difference of opinion. There are many reasons of a weighty, substantial character, based upon the ex­perience of mankind, in suppOli of the theory that, all things considered, more than ten hours steady work each day, from week to week in , bakery or confectionery establishment, may endanger the health and shorten the lives of the workmen, there­by diminishing their physical and mental capacity to serve and to provide for those dependent upon them. • • •

"If such reasons exist, that ought to be the end of this case for the state is not aImnable to the judiciary, in respect of its legislative enactments, unJess such en.:l.ctment.s are plainly, and palpably beyond all question, inconsistent with the Constitution of the United States • • ."

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MI'. JU f;t ice Holmes dissenting": "This case is decided upon an economic theory which a

large pnxt of -the country does not entertain. If it were a ques_ tion whethel' I agreed with that theory. I should desire to study it further and long before making tip my mind. But I do not conceiye thRt to be my duty, because 1 strongly believe that my agreement or disagreement has nothing to do with the right of

" 80 majority to embody their opinions in law. It is settled by various decisions of this court that state constitutions and state laws may regulate life in many ways which we as legislators might think as injudicious, or if you like as tyrannical, as this, and which equally with this, interfere with the liberty to COIl_

hact. Sunday laws and usury laws are ancient examples. A more modern one i!;: t he prohibition of lotteries. The liberty of the citizen to do as he likes, so long as he does not interfere with t he liber ty of ethers to do the same, which has been a shibboleth for some well-known writers, is interferl'ed with by school laws, by the Postoffice, by every state 01' mun icipal in­stitut ion which takes his money for purposes thought desirable whether he likes it or not. The 14th Amendment does. not enact Ml'. Herbert Spencer's Social Statics. • • •

"General propositions do not decide concrete cases. The decis ion will depel:d on a judgment or intuition more subtle than any articu late major premise. But I think that the pro­position just stated, if it is accepted, will carry us far toward the end. Every opinion tends to become a law; I think that the wor~ "liberty" in the 14th Amendment, is pC1"Vel"l ed

1chen it is held. to p'revent the 1w.tuml outcom-e of a. domi ttanl opini01t, unless it can be said that a rational and fail" man nec­essa l'ily would admit that the statute proposed would infringe fllndamental principles as they have been understood by the tnlditions of our people and our law, It does not research to show that no such sweeping condemnations can be passed upon the statute before liS . A reasonable man might think it a proper measure on the score of health. Men whom I certainly could Ilot pl'onounce unreasonable would uphold it as a first instal­ment of .a general regulation of the hours of work. Whether in the latter aspect it , ... ·ould be open to the charge of inequality, 1 think it unnecessa ry to discuss. • • •

THE DUE PROCESS CLAUSE

.4.dair '/:. United States 208 U. S. 161

253

This case involves the constitutionality of certain provi. s ions of t he act of Congress of June I, 1·898 (30 Stat. at L. 424 thap. 370 U. S. Compo Stat. 1901 p. 3205), concerning carriers engaged in interst.ate commerce and their employees.

The 10th section upon which the prosecution is based is in these words:

"That any employer subject to the provisions of this act, rond any officer, agent or recei ver of such employer, who shall require any employee, or any person seeking employment, as a condition of such employment, to enter into an agreement, either written or verbal, not to become or remain a member of .sny labor corporation, association or organization: or 81utU t!/,1'eaten any employee 1vith l08s of employ'ment. or shall 1m· ju,stl?1 discriminate against (Lnll employee becau.se of his mem.­lle1'8hip 'in such labO?' c01'poration, ussociaUon 01' o1'ywniuttion, ..... is hereby declared guilty of a misdemeanor - • - ."

1'.·}r . Just ice Harlan delivered t he opinion of the court: " In our opinion t hat section in the particular mentioned, is

an invasion of the pe.rsoMI liberty as well as of the right of property, guaranteed by the fifth amendment, Such liberty and right embrace the right to make contracts for the purchase of the labor of others, and equa lly the r ight to make contracts for the sale of one's own labor; e.'lch r ight, however, being subject to the fundamental condition that no contract whatever its sub­j€ct-matter, c.:!.n be sustained which the law, upon reasonable grounds, forbids as inconsistent with the public interests, or as hurtful to the public ordel', or as detrimental to th-e common r ood. - ... It W.!lS the legal right of the defendant Adair-how­ever unwise such a course might have been-to discharge Cop­page because of his being a member of a labor organization, as it was t he legal right of Coppage, if he saw fit to do ~o--how­ever unwise such a course on his part might have been-to guit the service in which he was engaged, because the defendant employed some persons who were not members of a labor or­ganizat ion. In all such particulars, the employer and the em­ployee ha ve equality of right, and .any legislation that disturbs t hat equality is an arbitrary interference with the liberty of contract which no government can legally justify in a free land, .. - ."

25< PHILIPPINE LAW JOURN AL

Mr . Justice McKenna---dissenting: "We are told that labor assoc iations a r e to be commended.

May not, then Congress recognize their existence? Yes , and recognize their power as conditions to be counted wit h in fram~ iilg legislation', Of what use would it be to attempt to bring bodies of men t o agreement and compromise of controversies if you put ou t of view the influences which move t hem or the fi)lJowsh ip which binds them-maybe c:ont rols or impels them whether rightfully or wrongfuily, to ms.ke the cause of one the cause of all? And this practical wisdom, Congress observed_ obseryed, 1 may say, not in speculation Or uncerta in prevision of evils. but in experience of evils,-an experience which ap· proached to the dimensions of a nati onal calamity. The facts of hi~tory should not be overlooked, nor the course of legisla­tion. The act involved in the present (',3se was preceded by one enacted in 1888 of si milar im port, ~~5 Stat. at L. 501 chap. 1063. That act did not recognize labor associatiolls, or dis­t inguish between the members of such a~:sociations and the other employees of carriel's. It failed in its purpose, whether from defect in its pl'ovisions or other cause, we m.3y only conjecture, At any r a te, it did not avert the strike :>It Chk.1.go in 1894, 111-,'estigatiol1 followed, and as a resul t of it. the act of 1898 \vas finally passed. Presumably its provis:ions and remedy were add ressed to the mischief which the .'>tct of 1898 was finally passed. Presumably its provisions and remedy were addl'esRed to the mischief which the act of 1888 Ia iled to reach or avert. Jt was t he judgment of Congl'ess that the sc heme of arbitl'ution might be helped by engaging in it the labor associations. Those associations unified bodies of employees ill every depal'tment uf t he c8l'riers. and th is unity could be a.n obstacle or aid to at'­bitrations. I t was nttempted to be made an aid; but how could it be made an aid. if pending the effort!: of 'med iation and con­ciliation' of the dispute as pl'ovided in Section 2 of the act, other provisions of the act may be arbitrarily disregarded, which al'e of concern to the members in the dispute'? How can it be an aid, how can controversies which may seri ously interrupt or threalen to interrupt the business of carriel's •• *" be averted or composed, if the carried c..<tn bring on the conflict or prevent its nm io3ble settlement by t he exercise of mere whim and capl'ice'! 1 osl'l.,v mere whim and cHprice, fo r this is liber ty which is atter.1 pteri to b~ vindicated 3S t he constitutional r ight

THE DUE PROCESS CLA US E 255

of the ca r riers . * * • Liberty IS a n att ractive theme, but the li­berty which is exercised in s heer antipathy does not plead strongly for recognition,"

Mr. J ust ice Hol mes----dissenting: "I t cannot be doubted that to prevent strikes, and so fal'

liS poss ible, to f oster its scheme of a r bit ration. might be deem­ed by Congress an important point of policy, and I think it im poss ible to say that Congress might not I'eason.ably think that the provis ion in question could help a good deal to carl'y its policy along. But suppose the o!liy effect really' were 10

tend to bring about t he complete unionizing of such railroad ·laborers as Congress can deal with, I think that object alone would justif.v the act. I quite agree that t he question \vh.llt and how much good labor unions do, is one on which intelligent people may differ. T think that labol'ing men sometimes at­tribute to them ad \'antages, as many attribute to combinations of capital, di::adv<lntages, that l'-eally are du e to economic COlldi­t ions of a fal' wider and deeper kinu; but I could not pl'onouce it unwarran ted, if Congress should decide that to foster a strong u.niol1 was for the best interest, not only of the men, but of t he railroads and the country at large. • * ."

Coppage v . f{ansas 236 U. S. 1

Tn cr l'Ol' to the Sl1!wcme Court of the state of Kansa:;; to review .!l. judgment which 3fflrmed a conviction under an infor­mation charging a violat ion of a statute of the state fo rbidding employe rs to exact a promise not to join Ol' retain member:;;hip in a labor organization, as a condi tion of securing 01' r etaiu­ing employment,

The act upon which the prosecution was based reads as follows :

An Act to P l'ovide a Penalty for Coercing or Tnfluencing or l\'Iaking Demands upon or Requi rements of Em ployees, Ser­Va l)ts, Laborel's and Persons Seeking Employment .

Be it enacted etc,: Section L That it Sh3 !l be unlawful for any indi vidual.

or member of any fil·m, or ,Ul)~ agent, officer or employ'~e of l\ny company or corporation to coel·ce, r equi re , demand or influence any person , or pel"sons to enter. into any ag t'eement, either wl"it. ten or verbal, not to join, 01' become, or remain a membe r of an y labor organi z..."'Ltion or associat ion, as a condition of sllch

2&6 PH ILIPPINE LAW JOURNAL

Ilerson or persons secur ing employment, or continuing in the (:mployment of such individual, firm or corporation.

Section 2, Provides for the penalty fo r violation, 1\1l'. Justice Pitney delivered the opinion of the court: "But in this case, the Kansas court of last resort has held

1 hat Coppage, the plaintiff in error is a criminal, punishable wilh fine or imprisonment under this statute, simply and mere­ly because, while acting as the representative of the railroad company and dealing with Hedges, an employee at will, and a man of full o,ge , and unde)'Ma1uiing, f,"'u.bject to no restraint t'lr disability (italic.~ ours) Coppage insisted that Hedges shOUld fre-ely choose whether he would leave the employ of t he company or would agree to refrain from association with t he union while so employed. IF • $"

"The act, as the construction given to it by the state court ~hows, is intended to deprive employers of a part of their liber ty to contract, to the corresponding advantage of the ~mployed, and the upbuilding of the labor organizations. But no attempt is made, 0 1' could reasonably be made, to sustain the purpose to strengthen t hese volun t.:lry organizations, any more t han other "oluntary associations of persons, ,!is a legitimate object for the exercise of the police power. They a1'e not ']nwlk ins titutiom, dtarge(l by la'w with public or (lOve?'1IAI!.entlu duties , such as would 1'ender the 1l1aintena.nce of thei1' m,emhe1'ship a matte1' 0/ direct concern to the general1Velfatre, If they were, a different f!UeSUOn would be 11'1'esented, (italic.;! ours)

"No doubt, whenever the r ight of pri vate property exist fot , there must and will be inequalities of fortune; and thus it na­turally happens that part ies negotiating about a contract are not equally unhampered by circumstances, This applies to all contracts, and not merely to th.:!t between employer and em­ployee. Indeed, a little reflection will show that whenever t he right of private property and the right of free contract coexist, each party when contracting, is inevitably more or le:;:s in­fluen ced by the questions whether he has much property, or little, or none, for the contract is made to the very end that e-ach may g.ain something that he needs or desires more urgent;. Iy than that which he proposes to give in exchange. And since it is .!;clf evident, that, unless all things are held in common, some persons must have more property than others, it is from the nature of things impossible to uphold freedom of contract Hnd the right of private property, without at the same time

TEtE DUE PROCESS CLA USE 257

recogmzmg a$ legitim3.te those inequalities of fortune t hat are the necessa ry result of th,e exercise of t hose rights. But. the 14th Amemlrnent in declaring thAt a state shaH not "de­prive any pel'son of life, liberty or property without due pro­cesS of law," gives to each of these an equal.. sancth:m; it recog­lli zes ;; \i ber ty" a nd "property" as coexistent h'umun "ights. and <iebal'S t he states from any unwarrantable interference with either. • • •

" When a man is called upon to agl'l2e not to become a mem­ber of the un ion while work ing £01' a pa r ticular employer , he in e'ffect is only .3sked to deal openly and frankly with his em­ployer , so as not to retain the employment, upon terms to which lhe latter is not wi lli ng to agree. And the liberty of making contracts does not incl ude a liberty to procure employment from an unwilling employer , or without a fa ir understanding. Nor may the employe)' be foreclosed by legislation from exercising the same freedom of choice that is t he r ight of the employee.

"To ask a man to .agree, in advance to refrain f rom affili a. t ion with t he union while retain ing a ce rtain position of em· ployrnent, is not to ask him to give up any part of his constitu­t ional f reedom. He is f ree to decline the employment on those terms, just as t he emplorer may dec li ne to offer employment on any other, for "it t akes t wo to make a bargain. • • • ..

Mr . J ustice Holmes, dissenting: "I t hin k t he judgment should be affi rmed. In present con·

dit ions, a workman noE unnaturally may believe that only b}' helonging to a union ca n he secure a contract that shall be fair to h im. If that belief, whether r ight or wrong. may be held by a reasonable man, it seems to me that it may be enforced by law in order t o establi sh t he equality of posit ion between the part ies in wh ich li berty of contr.!!"ct begins. Whether in the long ru n i t is wise for the work ing man to enact legislation of this -sort, is not my concer n, but T am st rongly of opinion that t here is nothi ng in the Constitution of the United States to pre~ vent it . • • ."

Mr. J ustice Day di ssenting: "But libe rty of making cont racts is subject to conditions in

t he interest of public welfa re, and which shall prevail-princi­Ille or condition--cannot be defined by any precise and univer­sal fo,·mula. Each instance of .asserted conflict must be deter­mined by itself, and it has been said many times that each act of leg islation has the support of t he presumption that it is an

PHILI P PI NE LAW JOURNAL

exercise in the interest of the public, The burden is on him who attacks the legislation. and it is not susta ined by declaring a liberty of contract. It can only be sustained by demons trating that it conflicts with some constitutional restraint, 01' that the public welfare is not subs~rved by the legislation. The legi<sla_ tUl'e is, in the fir"l in st-.ance, the judge of what is necessary for the public welfare, and a judicial review of its judgment is lim­i ted. The earnest conflict of seri ous opinion does not suffice to bring it within the range of judicial cognizance. * ,. *

"The right to join labor unions is undi sputed, and has been the subject of f requen t affirmation in judicial opinions. Act­ing within their legal rights, such associations are as legi timate as any organization of citizens fOl'rued to promote t heir common interest. They are organized under the I<tWS of many states, by virtue of express statutes formed for that purpose, and be­ing legal and acting under their constitutional rights, the right to join them, as against coercive action to the contrary. may be the legitimate subject of protection in the exercise of the police aut hority of the states . '" • •

"The act ml1st be t aken as an att empt of the legislatl1re to en.gct a statute which it deemed ne~es~ ary to the good order and security of soc iety. It imposes a penalty fo,' 'coercing or influencing, or making demands upon or requirements of em­ployees, servants, labore!'s, and persons seeking employments.' • * '" Of course if the act is necessarily arbitrary and therefore unconstitutional, mere declarations of good intent cannot mve i t, but it mllst be presumed to have been passed by the legisla­tive branch of the state government in good faith. amI fo l' the purpose of reaching the desired end. The legislature may have believed, acting LIpan conditions known to it, that the public welf,m'e would be promoted by the enactment of a statute which ~hould pl'event the compulsory exaction of written agreements t·o forego the acknowledged legal right here involyed, as a con­dition of employmen t in one'". trade or occupation,

"It would be impos!"ible to ma inta in that because one is free to accept or refuse to employ another, it follows thai the parti es have a constitutional right to insert in an agreement of employment any st ipuinticl1 they choose. 'rhey canllot put ill. terms that a te against public policy, either as it is deemed b~' the courts to exist .at common Jaw, 01' a ~ it may be declared by the legislature as the arbiter within t he limits of reason of the public policy (If the state • • ...

THE DUE PROCESS CLAUSE 259

" It is constantly emphasized that the case presented is not one of coercion. But in view of the 1'euti'i'l'e pos'ition of em­ployer and employed, who is to deny that the stipulation here insis ted upon and fo rb idden by the law, is essentially coercive? No form of words can strip it of its true cooracter. Whatever our individual opin ion may be as to t he wisdom of sllch legisla­tion , we cannot put our judgment in place of that of the leg­islature, and refuse to acknowledge the existence of conditions with which it was dealing. Opinions may differ as to the remedy, but we cannot understand upon what ground it can be said that a subject so intimately related to the welfare of so­ciety is removed from the legislative powel' • • • ,.

Adam,s v . Tanner 244 U. S. 590

This case involves the constitutionali ty of Initiative iVleas­ure Number 8-popularly known as "The Employment Agency Law" which among other things IH'ohibits an employment agen­cy to collect fees from persons wek ing employment.

Mr. J ustice McReynolds delivered the opinion of the court: " But we think it plain, that there is nothing inherently im­

moral or dangerou~ to public welfare. in acting as paid repre­:,;entat ive of another to find a position in which he can earn an honest fi ving. • • •

"Because abuses may, SlId probably do, grow up in con­nection with this business, is adequate reason foJ' hedging h about by proper regulations. But th is is not enough to justify destruction of one's right to follow a distinctly useful calling in an upright way, Cel'tainl~·. there is no profession. po!;sibly no hus iness. which does not offer peculiar opportunities fOr repre­henSible practices, and as to everyone of them, no doubt some tan be found Quite I·eady earnestly to maintain that its sup­pressio)) would be in the public intel·est. Skillfully directed agitat ion might also bring about apparent condemnation of any one of t he m by the public. Happily for all, the fuuriamental gu.aranties of the Constitution cannot be freely submerged, if, and whenever some ostensible justification is sdvanced and the Police power invoked. .. • ."

Mr. Justice Brandies dissenting; "The act leaves the plaintiff f ree to collect fees from em.­

l )loyeJ'S, and it appears that private employment offices thus

260 PHILIPPIN E LAW JOURNAL

restric ted, a re still car rying on business. But even if it should prove, as plaintiffs allege that t heir business could not live without collecting fees from employees, t hat fact would not nee.. €ssarily render the act invalid. • •• And this court has made it clear, that a statute enacted to promote health. safety, morals, 01' the public welfare may be valid, although it will compel dis_ continwlnce of existing businesses in whole or in part . Sta­tutes prohi biting the manufacture and sale of liquor presenl the most familiar example of such a prohibition. • • •

"These cases show that the scope of the police power is not limited to "'egulat ion, as distinguished fl'om pl'ohibition. They show, also, that the power of t he state exists equally, whether the .e nd sought to be attai ned is the promotion of health, safety 01' mOl'als, 0 1' is the pl'evention of fraud , or t he prevention of general demoralization. • • •

"The problems which confronted the people of Washington was far mOl'e comprehensive and fundamental than that of pro­tecti ng wOl'kers applying to the private ,g,gencies . It was the chronic problem of unemployment-perhaps the gravest and most difficult problem of modern industry-the problem which owing t.o business dep reSSion. was the most acute in business du ring the years 1913 to 1915. In the state of Washington, the suffering from un2mployment was accentuated by the lack of staple industries operating continously throughout the ye,lr. and by unusual fluctuations in the demand fo r labor. with conse­Quent reduction of wages and increase of s.ocial unrest. Stu­den ts of t he larger problem of unemployment appear to agree, tha t the establishment of an .adequate system of employment offices or labor exchanges, is an indispensable first step tow3rd its solution. Ther~ is reason to believe that the people. of Wash­ington not only cons.ider-ed the collection by the privata em­ployment offices of fees f rom employees a soci.:3.l injustice, but that t hey considererl the elimination of the practice. a necessary preliminal'Y to the establishm('nt of a constructive policy for deaUng with the subject of unemployment .

,·It is facts and considerations like these which may have led the people of W.9.shington to proh ibit the collection by em-1l10yment agencies of fees from applicants for work. And weight should be given to the fact that t he statute has been held constitutional by the supreme court of Washington, and

THE DUE PROCESS CLAIJSE 26l

by the Federal district court-courts presumably familiar with the local conditions and needs. • • • ..

Mr. Justice Holmes and Mr. Justice Clarke concur in this dissent.

Mr. Justice Mckenna also dissented.

T"ua:l: v. Conigan 257 U. S. 312

This case involves the constitutionality of pa r . 1464 of the Revised Statutes of Ari:wna 1913. denying the relief of injullc­tion in an y dispute betwe-en employer and employee involving terms or conditions of employment, "unless necessary to prevent ir reparable inju ry to property or to a property right of the par­ty making the application, for which inju ry there is no ade­quate r€medy at law". The statute is in effect one prohibiting granting of injunction to prevent picketing.

Mr. J ustice Taft deliverE:d the opinion of the court: "But here the illegality of fhe means used is without doubt

and fundamental. The m(;'ans used are the libelous and abusive attacks on the plaintiff's reputation, like attacks on their em­ployees and customers, th l'eats of such attacks on would-be cus­tomers, picketing ~.nd patrolling of the entnll1ce to their place of business, and th~ consequent obstruction of free access there­to,-all with the pllrpose of depriving the plaintiffs of their bUsiness. To give operation to a statute whereby serious losses inflicted by such un lawful means are in effect made remediless, is, we think to disregard fundamental rights of liberty and prop­erty, and to deprive the person suffering the loss of due process of law. • • ."

Mr. J ustice Holmes dissenting: "The dangers of a delus ive exactness in the application of

the 14th Amendment have been averted to before now. • .. • Delusive exactness is a source of falklcy throughout the law. By calling a business 'property', you make it seem like land, and lead up to t he conclusion that a statute cannot subslantially cut down the .gdvantages of ownership existing before the ,<;t8o­

tute was passed. An established business, no doubt may have pecuniary value, and commonly is protected by law against va­rious un justified injuries. But you cannot g ive it definiteness of contour by calling it a thing. It is a course of conduct; and like other conduct, is subject lo substantial modification accord­ing to time and circumstances, both in itself and in reg,grd to

262 PHIL IPP INE LAW JOURNAL

what shall Justify doing it 0. harm . .... '" Legislation may begin where an ev il begins. If, as many intelligent people bel'ieve, there is more danger that the injunction will be abused in liabor C!1ses than elsewhere. 1 can feel no doubt of the power of the legislature to deny it in 'luch cases. '" .. '"

"1 must add one general consideration. There is nothing that I more deprecate than the use of the 14th Am.end. ment beyond the absolute compulsion of its words to prevent the making of social experiments that an important part of the community desires. in the insulated chambers afforded by the several states, even though the experiments may seem futile or even noxious to me and j 'O those whose judgment I most re­spect. .. ,. .n

"Mr. Justice Pi tney, with whom concurred Mr. Justice Clark, <iissenting:

"The use of the: process of injunction to prevent disturbance of a going bu!> iness by such a campa ign as defendants here have conducted is, in the essential sen~, a measure of police reg'ula­tion. And just as the states have a broad discretion about es· tablishing police regulations. so they have a di scretion equally broad, about modifying and reI.axing them. .. .. ..

"Hence r have no doubt that without infl'inging the 'due jlroces;; ' clause, a state might, by statute establish protection against picketing ot' boycotting, however conducted. '" .... And just as one state might C'stablish such protection by statute so anothel' state may, by statute di sestabli sh the protection . ... .­In neither case can I find ground fo r declaring that the state's .ndion is ~o arbitral'Y and devoid of reasonable basis that iL Cftll

bf. called a deprivution of liberty or property without due pro· cess of la\v in the constitutional sense. • • •

"Doubtless, the legislatu re. upon a review of the ~ubject in the light of a knowledge of conditions in their own state that we do not possess. concluded that in labor controversies, there were reasons affecting the public interest for preventing re­!;:ort to the process of injunction and leaving the parties to t he crdinary legal remedies, which reasons did not apply genElral­Jy. .. .. ."

Mr. Justice Bi'andeis dissenting : "This right to cnrry business-be it called prop,~r[y

or liberty-has value: and he who interfel'es with the right without cause renders himself liable. But for cause the right

THE DUE PROCESS CLAUSE 263

may be interfe red with and even be destroyed. Such cause exists when, in the pursu it of an equal r ight t o furthe r their seve ral interests, his competitors make in roads UPOIl his trade, or when suppliers of merchand ise or of labor make inroads upon hi s profi ts. What methods and means may be permissi­ble in t hi s struggle o[ contending forces is determined in par t by decis ions of the COllrts, in part by acts of t he legislatures. The rules governing the contest necessal-ily change from time to t ime. F or condit ions ch.3.nge; and fu rthermore, the rules involved be ing merely ex periments in government must be dis­carded when t.hey p '·ove to be failures. * * *

"Practically every change in the Jaw governing the relation of employer and employee must abr idge, in some respect, the Jiberty or property of one of the parties. if liberty or property be measured by the sta ndard of the ~aw theretofore prevail ing. t; *" '" Although the change may involve interference with exist­ing libert~' or proper ty of individuals, the statute will not be declared a violation of the due pj'ocess clause un less the court. finds t ha t the inter fe rence in a rbitrary or un l'easo!lable, or that, considered ,as a means, the measure has no real or substantial rela t ion of cause to a per miss ible end . • • •

" Nearly a ll legislation involves a weighing of public needs as against private des ires; and likewise a weighing of relative social \talues. Since, government is not an exact science, pre­vailing pub lic opinion concerning the evils and t he remedy is among the im portant facts deserving consideration, particularly when th-e public conviction is both deep-seated and widesp read, and has been reached after deliberation . What, at any parti­cu lar time is t he paramount public need, is necessarily la,·gely a matter of judgment. '" * * The hi story of the rules governi ng contracts between employer and employee in the :;.everal Eng­lish-speaking countries, illustrate both the susceptibility of such ru les to ·change. and the variet.y of contemporary opinion as to what r ules will best serve the public interest. The di vergence of o}linion in th is difficult fi-eld of gover nmental action should hdmonish us not to declare a r ule arbitrary and unreasonable merely because we a re convinced that it is f raught with danger to the public weal, and th us to close the door to expgr iment within t he law."

264 PHILIPPINE LAW JOURNAL

Adkin,<1 v . Children's Hospital 261 U. S. 525

The question presented for determination in this case was the constitutionality of an .act providing for the fixing of mini­mum wages for women and children in the district of Colum­bia.

Mr. J ustice Sutherland delivered the opinion of the cOllrt: " In view of the great-not to say revoiutionary-changes

w hich have taken place since thaL utterance, in the contractual. political and civil st. .. "'l.tus of women culminating in the 19th Amendment. it is not unreasonable to say that these differences hav{' now come almost if not quite to the vanishing point. In this aspect of the matter, while the physical differences must he recognized in appropriate cases, and legislation fixing hours or conditions of work m.3y properly take them into account, we cannot accept the doctrine that women of mature age, sui juris, )'equire or may be subjected to restrictions upon theil' liberty of contract which could not lawfully be imposed in the case of men undel' similar cirCllm ;:tances, To do so would be to ignore all the implications to be drawn from tlte present day trend of legislation, as well '~1S that of common thought and usage, by which woman is accorded emancipation from the old doctrine that she must be given specia l protection or be subjected to spe· cial restraint in her contractual and civil relationships, * ., .,

" It is simply and exclusively fL price-fixing law, confined to adult women (for we are not now con~idering the provisions relating to miners), who are legally as capable of contracting fo)' themselves a3 men * • ., The price fixed by the board need have no relation to the capacity 01' earn ing power of the employee, the number of hours which may happen to consti· tute the day's work, the ch,9. racter of the place where the work i!'O to be done, or the circumstances or su rround ings of the em· ployment. And while it has no other basis to support its vali· dity than the assumed necessities of the employee, it takes uo account of any independent re£ources that she may have .. .. .

"The law takes account of the necessities of only one party to the co ntract, It ignores the necessities of the employer by compelling him to pay not less than a certain sum, not 0111y whether the employer is capable of earning it, but irrespective of the ability of his business to sustain the burden, generously leaving him of COllrse, the privilege of aba ndoning his business as an alternative for going at a loss, * • * It compels him to

T H E DUE PROCESS CLAU SE 265

pay a t least the sum fixed ill allY event , because the employee needs it, hut requi res no service of equh-alcnt value from t.he employee, It the refol'e under takes to sol"e but one half of the problem, 'fhe other ha lf is the establ ishment of a correspond. ing standurd of efficiency; and this formR no part of the pol icy of the legislation, although in pract ice t he fo rmel' half without the b tt el', tn U"t lend to ultimate f:.ilul'e , in accor dance with the inexorable law tlmt no one can continue indefinitely to take out more than he puts ill without ultimately exhausting the supply. The law is not confined to the great and powerful employers, but embraces those who~e bargaining power ma.v be as weak as that of the employee, It takes no account of periods of "tr'eSR and bus iness dep res~ion, of crippling lo~ses, which may loove the employer himself without adequate means of livelih00d, * * •

"The ethical l' ight of every worker, man or woman, to a li ving wage, may be conceded, One of the decla]'ed and impor. tant purposes of trade organizations is to secu re it. And with that I))'inciple, and with eyery legitimate effort to realize it in fact, no one can Qual'l'e l, but the fallacy of lhe proposed method of attaining it is that it assu mes that very emplo:ver is bound, at all events to furnish it • * *."

Mr, Chief J ustice Taft, with whom coflcurs Mr, Justice San. ford, dissent ing:

"Leg islatu res in li miting freedom of contract between em· player and employee by ft minimum wage, proceed on the as· sumpt ion thnt employees in the class rec.eidng le:.tst pay are not. Upon a full level of equality of choice with the ir employe I', and in th~ir necessitous circumstances are prone to accept pretty much anything t hat is offered. They Gore peculiarly subject to the overreaching, the harsh and g reedy employer, The evils of the sweat ing system and of t he long hours and wage:; which are characteristic of it. are weI! known . Now, r agree that it is a di sputable Question in the fie ld of polit ical economy how far a statutory I'eqllirement of maximum hOlll'S or minimu m wages may be a usefu l remedy fo r t hese evils, and whether it may not make the ca"e of the oPPl'essed employee worse than it was before, But it is not t he function of this court to hold congressional a(' ts ill\'nlid simply because they are pa;;:sed to carry out economic views which the cou r t beljeves to be unwise or unsound. *' • *

"Legislatul'es which adopt a requirement of maximum hou rs or minim um wages may be presumed to bel ieve that when

266 PHILLPPINE LAW JOURNA L

"weating employers are prevented from paying unduly low wages by positive law they will continue their business, abating that part of their profits which were wI'ung f rom the necessities of their employees, and will concede the better terms requil'ed by the law: and that while in individual cases h:l1'dship may re­su lt, the I'estl' iction wili illlll'e to the benefit of the general class of employees in whose interest the law is passed, and so to that or the community at large, • • ."

),11', J ustice Holmes dissenting: "] confess thai:. I do not understand the principle on which

I'he power to fix a minimum (or the wages of women can be denied by thos.e who admit the power to fix a maximum for their hours of work, J fully a:::sent to the proposition that here, as (,Isewhere, the distinctions of the law are distinctions of degree; but 1 perceive liD diffel'enee in the kind or degree of interference with libe l'ty, the only matter with which we have !lny concern, hetween the one case and the other. The bargnin is equally af· fected whichever half you regulate, Muller v. Oregon, J take it. is as good law today as it was in 1908. It will need more than the 19th Amendment to convince me that there are 110 differences between men and wom<!n, or that legislation can· Ilot take these differences into account. • • •

"This statute does I!ct compel anybodv to pav anything, I t s im ply forbid s employment at rates below the!O-e fixed a<; the minimum requirement of health and right living. It is safe to assume that women will not be employed at even the lowest wages unle"s they .earn them, or unless the employer's busfness can sustain the burden • • ."

Mi.').~olt1'i Ex Rei. Bell T, Co. v . Pltblic Se1'IIice COlJlmissit)11 262 U. S. 281

'fh i;:: case involves the validity of !In ordel' of the Public Service Commissioll of Missour i. undertaking to I'educe rates for .exchange service. and abolish the installation and moving charges theretofore demal1ded by plaintiff in errol', The order is challenged as confisc~tory and in conflict with the 14th Amendment,

Mr, Just ice McReynolds delivered the opinion of the cOllrt: "Ob\"iOllSI:v, the commission undertook to value the prop­

erty without according any weight to the greatly ellhanced costs of material. labor, supplies, etc., over t.hose prevailing in 1913) 1914. and 19]6, A" matter of common knowledge, these in-Cl'eases wel'e hll'ge. • • •

THE DUE PRO CESS CLA USE 267

"Th-ere mllst be a fair return upon the reasonable value of the property at the li!lle it is being used for the pUblic . ., ., ., And we concur with the court below in holding that the value of the property is to be determined as of the time when the lllQuir.v is made ]'egarding the -rates. If the property which legally ell tel'S into the consideration of the question of rates has increased in nillle since it wa::. acquired. the company is entitled to the benefit of much increase.

"The muking of a just return for the lise of the property jnvolves the recognition of its face value, if it be more than its cost. The property is held in prh'ate ownership, (HId it is that p r ope1·ty, and 1/1.0t the ol'iginal CO$lt oj it. of which the owner may not be deprived without due process of law. ., .. * ..

1\11-. Justice Brandei;:, with whom MI'. J ustice Holmes con­curs :

"-I COil cur in the judgment of rever;,:al. But I do so on the ground that the order of the g1ate commission prevents the uti­Ji ty from earning ' !1 fair return on thl' amount pnlde11tly in­vested in it. Thus I differ fundamentally from my brethren concerning the rule to be applied in determining whether a pre· scribed rate is conn:::cator:.'. 'fhe court adhering to the so-called rule of Smyth v. Ames'" and further defining it, declares that what is te r m-ed 'value' must be ascert.ained by giving weight. among other things to estimate:: of what it would cost to repro· duce t he property .~lt the time of t he rate hearing.

"Th-e so-called rule of Smyth v. Ames is in my opinion legally and economically unsound. The thing devoted by the investor to the public use is not specific property, tangible and intangible, but capital embarked in the enterprise. Upon the CGpital so invested, the Federal Constitution guarantees to the utility the opportunity to earn a fair retul'll. Thus. it sets the limit to the power of the state to regulate mtes. The Conftt i­tutian does not guarantee to the utility the opportunity to earn a retllrn on the vville of all items of pl-operty. Qt. of any of them. The several items of property constituting the utility. taken singly and freed from the public m~e, may conceivably have an aggrcllllte value grpater than if the items are used in combination. • " •

"The investor agrees, by embarking capita! in a utility, that its charges to the public shall be 1·eaJJOna.b(e. His company ig the substitute 1'01" the :::tate in the performance of thc public

* 169 U. S. 4IiG.

2vS P HILI PPINE LA W JOURNAL

service, thus becoming a public servant. The compensation which the Constitution g ua rantees an oppor tunity to eal'n, is the reasonable cost. of conducting the business, Cost includes not only operating expenses. but also capital charges. Capital charges covel' the nllowance, by way of interest, for the use of the capita l, whatever the nature of the secu ri ty issued there. for ; the allowance for risk incurred; and enough more to at­t ract capital. The reasonable !'ate to be prescribed by a com_ mission may allow an efficiently managed /IWity much mOl'e. But a rate is constitutionally compensato ry. if it allows to the utility the opportllll i ty to earn the cost of the serviw as thus defined . '* '* *

" T o give to capital embarked in public utilities the protec. t ion gual'anteed by the Constitution, and to secure to the public reasonab le rates, i t is essential that the rate based be definite, stable and r eadil y 8sce l·tainable; and that the percentage to be earned on the rate base be meal'ured by the cost 01' charge of the capital employed in t he enterprise. • • •

"To requi re that reproduction cost at the date of the rate hear ing be g iven weight in fix ing the rate base, may subject investors to heavy losses when the high war and post-\ ..... ar price levels pass and the pr ice t rend is again downwa rd. • '* '*

" If the aim were to ascer tain the value (in its ordina ry ~en se ) of the utility property. the inquiry would be not what it would cost to I'epl'oduce the identica l property. but what it would cost to establish a plant which could I'en rler the service; or in other words, at what cost could an equally efficient substitute be them produced. Surely the cost of an equally efficient sub· stitute must be the maximum of the ral-e base. if prudent in\'est. ment be I'ejected as the measu re. 'l'he utilities seem to claim t hat t he constitution'll protection agai nst ccnfiscation guara n· tees them a l'oztUl'll both upon 1I1lCa1'IlCd increment and upon the cost of P1'OPCl't?J J'emiered 1'ulllekss by obsolescence. '* '* . ..

BU1'1t!~ Baldna en. v. BrYfIIIL 264 U. S. 503

This case in volves the cOllst.ituticnality of an act of the legislature of Nehl':1ska providing that every loaf of bread made TOI' the purpose of sale, shall be one·half pound, a pound , a pound and ,g half, or exact multiples of one pOllnd, and pr'O-' ll ibits leaves of othel' weights. It allows a tolera nce in excess (1f the speci fied standard weights at the rate of two ounces per

THE DUE PROCESS CLAUSE 269

pound a nd no more, and requi~s that the specified weight shall be the a\"erage weigh t of not less tha n t wenty- fi ve loaves, a nd that such a\'erage shall not be more than the maximum 1101' less than the minimum required. Violations of the act are punish­able by fine or impr isonment,

1\11', Justice Butler delivered the opinion of the cou r t : "No Question is pre!'€llted as to the power of the state to

make regulations ::afegu.uding or affecting the qualiti es of bread . Concretely, the sole purpose of fixing the maximum weights, as held by the Supreme COllrt is to prev·ent the sale of a loaf weighing anything oye r nine ounces for a one-pound loaf, and the sale of a loaf weighing an yt hing over eighteen ounces for a pound-and-half loaf ::md so on. The permitted tolel'ance as to the half-pound loaf I!in~s the hal,er the benefit of only one \lunce out of the spI'ead of eight ounces, and as to the pound loaf, t he benefit of two ounces out of a like spread. There is no evidence in support of the thought that purchasers have b2en or likely to be induced to take a nine and one~half or a ten ounce loaf for a pound (16 ounce) loaf, or an eighteen and one-half or nineteen ounce loaf fOI" a pound-and-a-half (24 ounce) loai ; ·and it i:;; contrary to cemmon experience and un reasonable to assume that there could be any danger of such decept ion, Im­position through short weights readily could have been dea lt within a di r<€ct and effective way, For the reasons stated we conclude that the vrovision that the average weights shaH not exceed the m.'lximums fixed is not necessa ry for t he protection of pu rchaser!; against impos ition and fraud by short weights. nnd is not calculated to effectuate that purpose, and that it sub­J"ects bakers and sellers of bread to restr ict ions which are es­sentia ll.v unre3!=onable and a rbit ral'v, and is therefore repug­nant to the 14th Amendment, * * * ..

Mr, J ustice Brandeis, with \"hom 1\'11'. Justice Holmes con­curs di ssenting:

" The purpose of the Nebl'aska Standard Weigh t Bread Law is to protect buye rs from "hort weight s and hOllest bakers f rom tmfail' competition. It provides for a few stnndal'd-s iz.e loa \'es, wh ich ,:are designated by weight. and prohibi ts as to each s izE., the bakil1g 0 1' selling of a loaf which weights either less 01' more than t he pres·cribed weight . Schmidinger v. Chicago 226 U. S, 578, soettled that the bu:::iness of makinp- and selling bread is a permiss ible subject fo r ]'egulation: that the prevention of short weights is a proper end of regulation; that the fixing of standard

270 PHILIPPINE LAW JOURNAL

sizes and weights of loaves is an appropriate means to that end , and that prevalent marketing fraud s make the enactment of some much protective legislation permissible. * - *

"Why it should be a crime to bake one which weights more than the standard is not obvious. The reason given is that such a loaf, .also. is a handy instrument of fraud. In orde r that t he buyer may be afforded protection, the d ifference be­tween standard sizes must be sO large as to be evident and con­spicuous. The buyer has usualiy in mind the diffel'ence in ap. pearance bet.ween a one-pound loaf .and a pound-and-a-ha lf loaf so that it is difficult fOr the dealer to palm off the fOl'mer fca: the latter, Bl.t a loaf we!ghing one pound and rive ouoces rnav look so much like ~he buyer's memory of the pound-and-a-half leaf that the deale!' may effectuate the fraud by delivering the former. The prohibition of excess weight is imposed in order to prevent ? loaf '1f one standard size fl'om being increased so rr:uch, th3t it can )·eadi l.\' he ",old for a loaf of a larger :dandal'd size , • • ...

Woll'!' P((ckinfl Cn. v . Court ot I/UlW;tl'i<tl Relati01ls of Kansas

267 U, S, 552

This was an original proceeding in mandamus in the su­!lreme court of 1(ansas to compel the Wolff Packing Company to put into effect an order of a stat~ agency. called the court of induf;tl'iai relations. dptermining a dispute respecting wages, hours of labor, and working conditions in a slaughtel·jng and packing plant owned and operated by the company, The order "",as made in a compulsory proceeding under a Kansas statute f':lllecl the I ndustrial Rela tion" Act.

Mr. Justice Van Devanter delivered the opinion of the court:

"The decla red and adjudged purpose of the act is to insure continuity of operati on and production in certain businesses which i t calls 'es:c:ential indtl!'Ll'ies', To that end it !H'ovides for the compusory settlement by state agency of all labot' con­troversies in such businesses which endanger the intended con­tinuity. It proceeds on the assumption that the public has a paramount inte rest in the subject which justifies the compul­s ion, The businesses named include among others, that of roan­;1i'l.lctur ing and pl'eparing food products for sale and human consumption, - - - No distinction is made bet.ween wages and hours of labor ; both are put on the same plane, In the fixing

TH E DUE PROCESS CLAUSE 271

of wages, regard is 10 be had for what is fai r between .employer and employee, and in the fixing of 1,0urs of labor, regard is to be had for what are healthful periods; but neithe]' is to be fixed $ave in t he compusory adjustment of an endangering cont roversy to the end that business shall go on.

"The power of the legislature to compel continuity in a bus iness can only ar ise when the obligation of continued ~er­

vice by t.he owne ]' and itR employees is direct, and is assu med when t he business is elltered upon. A common cal']'ier which accepts a railroad f ranchise is not free to withdraw the use of t hat which it h:as granted to t he public, It i~ t rue that if ope­i'aLion is impossibloe without continuous loss, it may give up its franchise and enterp rise, but short of this it may continue, Not so the owner (in anothel' field) when by mere changed condi­ti ons his business becomes clothed with a public interest. He may stop at will whethe]' thoe business is losing or profit­able. .. .. ..

"The syr;tem of compul~ory arbitration which the act estab· lishes is intended to compel, and if slistained will compel the owner and employees to continue the bw:;iness on terms which are not of t.hei r making, It will constrnin them not merely to refipect the tel'ms if they continue the business, but wi!! con­st.rain t hem to cominue the business on tho::::e terms, Tl'lI e the terms ha ve Rome qualifications , but as shown in the prior deci­sion, the ql1alifications <lre rather illusory and do 110t subtr,,'let much from the duty imposed. Such a sy~tem infl'inges the liber ty of contract and right.." of property guarant.eed by the due process of law clause of the 14th Amendment. .. .. ."

FnJf;t t'. Railma<l CO))1mi,~slo'll 271 U. S. 583

Thi~ case involves the constitutionality of the Auto, Stage and Truck Transportation Act of California. The act provided for the supervision and regulation of transportation for com­l)ensation over pl:blic highways by automobiles, auto trucks etc., Ly the R ailroad Commission, Ii was further llrov ided that 110

t ranspor tation company shall operate for compensation o\'cr the highways without fi rst having secllI'ed from the commjs~ion a certificate of public convenience and necessity so to do,

l\lr. J ustice Suthel'iand delivered the opinion of the court: "Having regard to form alone, the act here is an offer to

~he private carrier of a privilege, which the state may grant or deny, l1pon a condition. which t he car]'ie l' is f ree to accept 0]'

272 PH ILI PPINE LAW ,JOU RNAL

reject, In reality, the carrier is given no choice, except a choice between the rock :.mel the whirlpool,-an option to forego a privilege which may be vita] to his livelihood, 01' to s ubmit to a r equi rement which may constitute an intolerable burden,

"It is not necessary to challenge the proposition that as a general rule, the st.ate having power to deny a pri vilege alto_ gether may g ra nt it upon such condit ions as it sees fi t to impose, But the power of the state in that respect is not unlimited, and one of the limitat ions is that it may not impose conditions which requ ire the r elinquishment of constitution:')'] rights. If the state may compel the surrender of one constitutional right, as a condition of it:; favor, it mily , in like manner, compel a sur­render of all. It is inconceiy,!l.ble that gual'anties embedded in t he Constitution of the United States may thus be manip ub.ted out of existence. • • ."

l\'Ir, Justice Holmes dissenting: ;'1 agree of course with the cases cited by my bl'Other Suth­

erland , ••• that even generally lawful acts OJ' conditions may hecome unlawful when done or imposed to accomplish an un­l<twful end . But that is only the converse of the proposition that acts in other circumstances unlawful may be justified by the purpose for which they are done. This applies to acts of the legislatu re as well as to the doings of pri\'ate parties. The only valuable significance of the much abused phrase 'police power' is this power of the state to limit what othenvise would be rights having.'it pecuniary value, when a pl'edominent public interest I'equ il'es the restraint. The power of the state in its tUrn iii limited by the const itutional guaranties of private rights, ~nd it often is a delicate muLto)' to decide which interest pre­ponderates, and how far the ~tate may go without making com­pensation. The line cannot be drawn by generalities, but suc­cessive points in it must be fixed by weighing the particular facts .

"The point before us seems to me well within the legislative power. We all know what serious problems the automobile has introducerl. The difficulties of keeping the streets reasonably clea r for t ravel and for t raffic are very great. If a state speak­ing through its legislature should think , that, in order to make its highways most useful, the business traffic upon them must be controlled, I suppose that no one wou ld doubt that it consti­tutiomdlv could, as I presume most states or cities do, exercise some such control. The only question is how far it c.'il.n go, I

THE DUE PROCESS CLAUSE

see nothing to prev~nt it going to the point of requiring a license and bri nging the whole business und-er the control of a railroad commission so far as to determine the number, character and conduct of transportation companies, and so to pre\'ent the streets from being made useless and dftllgerouil by the number and lawlessness of those who seek to usc them, * • ."

TUSQlI a)ld Brother v. Ban fO?I 275 U. S. 418

Th is case involves the constitutionality of an act providing thus :

"Section 167 : Matters of public int--erest. It is hereby determined and dec!:l.I'ed that the pr ice of or charge for admis­sions to theatres, places of amm;emcllt or entertainment, or other place~ where public exhibitions, games, contests or per­formances are held is a matter ,~ffected with a public interest and sub.iect to the SU1>el"vil'-ioll of the state for the purpose of safegua l'ding the public against fraud, extortion, exorbitant r;l. tes and similar abuses."

"Section 172: Restriction as to price. No ]jcen ~es shall l'esell any such ticket 01' other evidence of the right of entry to any theatre * * .. al a price in e.xcess of fifty cents in advance ("If the price printed on the face of such ticket. * * ."

MI'. J ustice Suther land delivered the opinion of the court: "A theatre is a privnte. <:!nterprisc, which in its relntion to

the public, differs obviously and widely, both in character and degree from a gl'ain elevator· .. * etc.; 01' stock. yard * * * etc.; or an insurance company ...... etc. Sales of theatre tickets bear no relation to the commer ce of the country; and they am lIot interdependent t ranS!l.ctiollS, but stand , both in form and "in effect, separate and apart from each other terminat ing in their effect with the instances. And certainly, a place of entertain­ment is in no legal sense a public utility; ancl quite as certainly its activities al'e not such that their enjoyment can be regarded under any conditions fl'om the point of view of an emergency.

"The intere:Jt of the public in theatres ancl other places of entertainment ma y be more nearly, and with better reason as­s imilated to the like interest in provision stores and markets nnd in the renta l of houses and apartments for residential pur­poses; although in importance it falls below stich an interest in the proportion that food and shelter are of more moment than amusement or inst ruction. As we have shown, there i~ no leg-

27~ PHI LI P P INE LA W JOU RNA L

j"lative power to fix t he pr ice of p rovisions 0 1" clothing or the renta l cha rges for houses or apart ments. in the absence of some to ntrolli ug emergency; and we m'e unable to perceive any dis­!:Ii mil a ri t ies of such quality or deg l'ee as to j usti fy a different rule in respect of amusements and enter tai nments, .. .. ..

"While t heatres have existed fOl" centu ries and have beel) regulated in a variety of \vays. and whi le price fi xing by legj~_ lalion is an old story, it does not .3ppear t hat any attempt hither_ to has been m.sde to fix t hei r charges by law. • • •

"That such evils ex ist i n some degree in connection with tllf' theatr ical busi ltess and its ally, lhe ticket bl"oker , is un­doubtedly true, as it unfortu nately is t. r ue in respect of the sumt! or simi la r e\Cils in other kinds of business. But evils ilre to be sllPJJI"essed 01' pl'oRecuted by legis latio n which comports willi the constitution, lind not by such as s.tri kes down those essen· t ial rights. of pr ivate property protected by that instrument aga inst undue government intel'ferencf~. .. • • ..

MI". J ustice Holmes dissenting : "We fear to g .·ant power and are unwilling to recognize it

when it ex icts *" ... t< and when legisl<l.tu l'es a re held to be 3U­thori zed to do an;-.·t.hing cons iderably affecting public welfme, it is covered by apologetic ph rai'es likE" the po lice powel', 0.' the statement that t he bus iness concerned has been dedicnted to a public use. The fMmel' expression is convenient to be sure, to conc iliate the mind to something that needs exphtnation .• '" '" But police powe)' often is used in a wide sense to covel' and as 1 Mid to apo logize for the general power of the legislature to make a part of the community uncomfortable by a change.

HI do not believe ill such apologies, ' think the prOper eou rse is to recognize that a state leg:islat.ul"e can do whatever it sees fit to do, un less it is restraim!d by some e..-..::pre"g pro­hibiti(m in the Con~ututiOIl of the United States, 01" of the state, <; nd t hat COUl·ts !':hou ld be careful not to extend sllch prohibi­tions beyond their obvious meaning, by reading into them COIl­

teptions of public ~olicy that the particu lar COlll·t may happen to entertuin. Coming down to the case before LIS, I think as I intimated in Adkins v. Children's Hospital 261 U. S. 525 that the notion that t he busines;.l is clothed with :l pUblic interest :md have been d~voted to the public use is little more than a fiction intended to beautify what is d isagreeable to suffere '·s . The truth seems to me that, subject to compensation when com­pensation is due, t he leg is la t ure may forbid 0 1" restr ict a ny bus i-

THE DUE PROCESS CL AUSE 275

ness when it JUl.'; a sufficient force Of public opinion behind i t. Lotteri es were thought useful ad juncts of the state a century or so ago; now they are believed to be immoral and t hey have been stopped. Wine haR been thought good for ma n f rom the time of the Apostles unt.il recent years. But whe n pu blic opin­ion changed, it. diu not need th.., 18th Amend men t, notwit h­standing the fourteenth to enable a state to say that the b usi­ness shou ld end. Mugler V. Kansas. 123 U. S. 623. What has happened to lotteries and wine migh t happen to theatres in some moral storm of the future , not because theatres were de­voted to a public use, hut beC:iUS€I people had come to t hink t ha t way.

"But if we are to yeild to fashionable convention, it seems to me t hat. theatres are as much devot.ed to public use a.s any­thing well can be. We have not that respect for al·t that is one of the glories of France. But to many people, t he supel'flous is the necessary, and it seems to me t.hat government does not go beyond its sphere in a ttempting to make life livable for t hem. I am far from saying that 1" think this part icular law a \vise and rntion-'1.l provi::;ion. That is not my affa ir. But if the people of t he sta t.e of New York speaking by their authorized voice say that they want it, 1 see nothing in the Constitution of the Un ited States to prevent their having their will. • • • ..

Mr. Justice Bralldeis concurs in thi 1; opinion. 1\11'. Justice Stone dissenting: "It is undoubtedly true as a general proposition that one

of the incidents of the ownership of properly is the power to fix the price at wh ich it may be dispo~ed . It m.:'!.y also be as­sumed that as a genera l proposition, under the decisions of this court, the power of state governments to regulate and control prices may be invoked on ly in special and not well defined cir­cllmstances. But when that po\ver is invoked in the public in ­terest and in consequence of the gross abuse of pri\'ate right <.li sclosed by th is recol·d. we should make seal·ching and critical examination of those ci rcumstances wh ich in thie pust han: been deemed sufficient to justify the exercise of the power be­fore concluding that it may not be exercised hen:.

"The phrase business affected with a public interest seems to me to be too vague and illusory to carry us ve ry far on the '''ay to a solut ion. It tends in use to become only a convenient

276 PHILI PP INE LAW JOURNAL

expression for descri bing those businesses, regulation of which hns been permitted in the past, To say that only those busi­nesses affected with a public interest may be regulated is but anot.her way of stating that all those businesses which may be Tegulated are affected with a public interest, It is di fficult to use the ph rase fn:e of jts C'onnot.'ltion of legal consequ-ellces, and hence when used as a basis of judicial decision, to avoid begging the question to the decided, The very fact that it has been applied to businesses un known to Lord Hale, who gave f;n nction to its use, should caution us against the assumption that the category has now become complete or fixed, and that there may not be brought into it new classes of businesses- or t ransactions not hitherto included, in consequence of newly dE:­vised met hods of extort ionate price exaction,

"The constitutional t heory that prices normally may JlOt be regulated, rests upon the a~sumption that the public interest and private right are both adequately protected when there is "f ree" competition among buyers and sellers, and that in such ~ state of economic society, the interference with so important an incident of t he ownersh ip of private proper ty as price fixing 13 not just ined and hence is a taking of property without due 11rocess of law, • • •

"Statutory regulation of price is commonly directed toward tpe pl'evcntion of exorbita nt demands of b uyers or sellers. An examination of the decisions of this court in which price regu­lation has been upheld will di sclose that the element common to all is the existellce of a situation or a combination of cir­cumstances ma ter ially restricting the regulati ve force of com­petition, so that buye rs or sellers are placed at such a disad­vantage in the bargaining st.ruggle t hat serious economic con­sequences resul t to a very la rge number of members of the com· munity, Whether this s ituation arises from the monopoly con­ferred upon publ ic service companies, or from the circumstance that the st rategical position of a group is such a s to enable it to impose its will in matlers of price upon t.hose who s·e Jl, buy, or consume as in l\1u nn v, Illinois, 01' from the predetermination of prices in the councils of those who sell, promulgated in !'chedules of practically cont rolling constancy as in German Alliance Ins, Co, v, Kan :'>3s, or from a housing shortage groW­ing out of a public emergency as in Block v. Hirsh, the resul t

TH E DUE PROCESS CLA US E 277

is the same. Self.interest is not permitted to invoke constitu· tional protection at the expense of public intereRt, and reason· able r egulation of price is upheld."

Mr. J ust ice Sanford also di ssented.

R ib1tik 1'. McBride 277 . S. 350

Chapte r 227 Laws of New Jeniey , l!)"IS, p. 822, an act to r egu late the keepi'1g of \employment agencies, requires that every pel'son operating an employment agency must pl'ocure a li cense from the Commissioner of Labor. Among other require. ments the applicant must "file with the Commissioner of La­t a I' for his apprcnt!. a schedule of fees proposed to be cha rged for any services rendered to employees l;;eeking employers, and pe rsons seeking employment, and all chal'ges must conform t hereto. The schedule of fees may be chiu'ged only with the approval of the Commissione)' of Labol'.

Is~ue : Whethe r the state has the power to require em· ployment agencies to ch:l!'ge only rea:;onable fees for their ser­vices to those seeking employment.

1\11'. Justice Sutherland delivered the opinion of the court: " The business of securing employment for those seeking

work. and employees fo r those seeking workers is essentially lhat of a broker, that is, of an intermediary, While we do not under take to say thst there may not be a deeper concern 011 the part of the public ill the business of an employment agency, that bus iness does not differ in substantia l character from the busj· ness of a real est-ate broker. ship broker. merchandise bl'oker, 01' t icket brokel·. • • •

" An employment agency is essentially a private business, True, it deals \vith the public, bu t so do the druggist, the but­che r , the bakel', the grocer, and the apartment or tenement house owner, and the broker who acts as intermediary between 8uch owne:' and hi s tenants, Of course, anything which sub· stantia lly interferes with employment if': a mattei' of public con­cern . but in the same sellse that intel'ference with the l)1'OClll'e· ment of food and housir.g .and fuel are of public concern • ~ • !:'tc. The interest of the public in the mattel' of employment is not different in quality 01' c.hal'acter from its interest in the othe r things enumerated ; but in none of them is the interest

2,8 P l-JILlP P1Nf.; L AW J OURNAL

that. 'public interest' wh ich the law co ntemplates as the basis fo r legislative pr ice control.

"And we since have held definit.e ly that. the power to r(>­Il uire a licence for and to r egulate the conduct of a business is distinct from the power to fix prices, 'The latter pcwer is not only a more definite and se rious invasion of the rights of prop_ t' rty and t he freedom of contntct, but its exe]'c ise cannot al­ways be just.ified by ci r cumstances which have been held to Jus­tify legislative regulation of the manner in which a busines$ !:ihall be carried on' Tyson v, Banton 273 U , S, 418,

' ;To ll rge that extol"tion, fraud , imposition, discrimination F.nd the like have been practiced to some or to a great. ext-ent in con nection with the business he ]'e under considel'ation. or tha t the business is one lending itself peculia ri:.' to such evil .. , ~.:> simply to restate grounds already fLllly con"idered by this cou r t. These are g]'ounds for regulatio n, but not for price fix­ing, as we have already definitely decided."

1\11'. Justice Sanford concurred in the opinion of the ma­jori t,\'.

Mr. Justice Stone dissenting: "The use by the public general1y of t he specific thing ur

busi ness affected is not the test. The nature of the service ]'endered. the exorbitance of the charges and the arbitrary COII­

t r ol to which the public may be i>ubjected without regulation, fl !'e e lements to be conside red in determining whether the 'pub­lic intere"t' exist~. Chas. W-oiff Packi ng Company v. C01lrt of Indti stl'ial Relations. supra, 538. T he economic disadvantage of a class, and the ::ttiempt to ameliorate its condition may alone be sufficient to give ri se to the 'public interest' and to justify the regulation of contracts with its members, .. <I< * snd obvioll"­Iy. circumstances may so change in point of time, or so differ in s pace as to clothe a business with such an interest which a t (Jthe" ti me;:: and in other places \liould be a matte r purely of Il ri vate concern. -* • ..

" I cannot say a pl'iori that the business of employment agencies in New Jersey lacks the requisite 'publi c interest' , We are JudiCially awa re that the problem of unemployment is of grave public concern; that the conduct of employment agency i::usinef;:s bears .sn im portant relationsh ip to that larger problem fi nd affects vitally the lives of great numbel's of the population, not only in New Jersey. but t hroughout the United States; thl1t employ ment agencies, admittedl y subject to regulation in other

THE DUE P ROCESS CLAUSE 279

res pects, and in fact very generally regulated, deal with a ne­cess itous ck\ss, the members of which a re often dependent on them fo r opportun ity to earn a livelihood, are not free to move from place to place, and are often under exceptional economic compulsion to accept such tel'ms as the agencies offer, We m'e not judicia lly ignorant of what all human experience tMches, that those so s ituated are peculiarly t.he prey of the unscrupu­lous and designing,

"Some presumj)tion should be inrlll iged that the New J er­sey l egi ~ lature had an adequate knowledge of such local con­dit ions .9.5 the ci rcumstances of those seeking employment, the number and distr'iblltion of employment agencies, the local effi­cacy of competition; the preva lent practices with respect to fees, On th is deserved r espect for t.he judgment of the local lawmaker depends of COUl'!;e the presumption in r aV01' of const i­tutionality, for the validity of the regulation turns 'upon the cxj~tence of conditions peculiar to the business unde,- considera­tion' * • •

" For thi r ty yea rs or mo re t he evils found to be connected with the bus,iness of em ployment agencies in the United States have been the subject of repeated im·estigations, official and unofficial , and of exten~i\'e public comment. They have been the prim~tl-y l'ea~Oll fo r the establishment of public employment offices in t he var ious sta tes, * * *

" Quite apart fl'om other evils h id lit the door of the private :lgencies, the data suppl ied by these i1wesligations and reports IIffo rd a substantial basis fo r the conclusion of the New Jersey Icgi !:lature that the business is peculiarly subject to abuses r e­lating to free-charging, ~lnd that. fOl' the co rrection of these, the restriction to a l'easonab le max imum charge is the only affec­tive remedy, * * •

"Ticket brokers and eml)loyment brokers are similar in name ; in no othe l' respect do they seem alike to me, T o over­charge a man fo r the pr ivilege of hea r ing the opera is one t hing ; to control the possibility of his eal'l1ing a livelihood would appear to be quite another, * • •

" To me it seems eq ua ll y obviolls that the Constitution does flot req ui re us to hold that a business , subject to every other form of reasonable regulation, is imm une from the require­men t of l'easonable pr ices, where that ,'eqllirement is the only r emedy appropri ate to the evils encoun tered , In t his r espect, T can see no difference between a reasonable regulation of price

2~O PHI LIP P I NE LA W J OURNA L

-and a reasonable regulation of the use of property, which af_ fects its pr ice or economic return. The pr ivilege of contract and the fl'ee use of pl'Opelty are as seriously cut down in the nne case as ill the other .

" To say that there is constitutional power to regulate a business 01' a particular use of property because of the public in_ terest in the welfare of a ckiss peculiarl:.' affected and to deny sl!ch power to regulate price rOI' the accomplish ment of the same end, when that alone n.ppWI'S to be an appropriate and effec_ tive remedy, is to make a distinction based on no real economic. difference, and for which I C.9.n find no warrant in the constitu. tion itself. nol' any justinc'ltion in the opinions of this c9l1rt."

l\'lr. JustiC€ Holmes an d Mr. Justice Bnmdeis join in thi:i dis5ent :

New SI (lte I ce Co , -{'. Liebmanl) 285 U. S. 262

This case involves the validity of a pOIi.ion of .9.n act for­bidding a commission created by the act, to issue a license to any applicant except upon proof of the necess ity for a supply of ice at the place where it is sought to establish the business, and which authorize a denial of the application where the e,dst­ing licensed facilities "are sufficient to meet the public needs therein."

1\11'. J ust ice Sutherland delivered the opinion of the court : " Here we are dealing with an ordinary bus iness, not with

a paramount ind ustry, upon wh ich the prosperity of the entire state depends. rt is a busi ness as essenti.9.lIy private in its nature, as the business of the grocer, the dairyman, the butcher, the baker , the shoemaker or the tailo r. each of whom performs a service, which, to a greater or le;::s extent, the community is dependent upon, and is intel'ested in having maintained, but which bears no such relation to the public as to warrant its in­clusion il l the categOl·y of business charged with a public LIE-e. • • •

"The conb'ol here asser ted does not protect against monO­poly, but tends to foster it. The aim is not to encourage com­petition. but to pI'event it: not to l'egul:lte business, but to pre­veni persons from engaging in it, * • • It is not the case of a llatunl.l monopoly. or an enterprise in its nature dependent upon the grant of public pr ivileges. The particular requirement before us was evidently not imposed to prevent a practical mono-

THE DUE PROCESS CLAUS E 281

poly of the business, since its tendency is. qu ite to the contrary. Nor is it a case of the protection of nntumi l'csolll·ces. There is nothing in the pl'Odud Ihat we can perce ive on which to rcst a distinction, in respect of this attempted control. from othel' prooucts in common use which enter into free competition, l'ub­jec.t of COUl'se to real:onable regulations prescribed for the pro­tection of the public and applied wit.h appropriate impartiality.

"And it is plain that unreasonable or arbitrary interference or restrictions canllot be sHved from the condemnation of that amendment merely by ca lling them experimental '" '" "'. The pri nciple is embedded in our constitutional system that there nrC cel'bl.in essentials of liberty with which the state is not en­titled to d isven.:c in the interest of experiments. .. • ."

Mr. J ustice Brandeis dissenting: "The Oklahoma statute ml:lkes entJy into the bus inf'S'; of

man ufacturing ice for s:ale and distribution dependent in ('ffect, upon a cel1ificate of public convenience and necessity. SUdl :1 certificate was unknown to the common law. It is a creature of the machi ne age. in which pla nts have displaced tools, and hus-inesses a re substit uted for trades. The pUl'pose of requir­ing it is to promote the puhliC' inte l'e~t by preventing W3s~e. Particularly in those businesses in wh ich interest Clnd dep recia­tion charges on pil'lnt constitute a large element in the co~t d productiun, experience has taught that the financial burcit'ns in­cident to unnecessary duplication of facilities are likely to bring high rates and poor service. There, cost is usually dependent, Rmong othel' things upon volume; and di vi~ion of possible pa­tronage among competing concerns may so raise the uni t co~t of operation as to make it impossible to pl'ovide adequate Sf'1'­

vice at reasonable rate. The introduction in the United State!i of the cel'tifi('8.ie of public convenience and necessity marked the growing conviction that under cer tain circumstances free competition might be harmful to the community and that when It was so, absolute f reedom to enter the business of one's choiCt~ sho uld be denied.

"Oklahoma declared the business of manufactu r ing ice fOJ" sale and distribution 'a public business'; that is a public utiiity. So far as it appeal'S, it was the first state to do so. Of course, a legislature cannot by mere legislative liat. convert a business into a public utility. nut the conception of a public utility is

. not static. .. .. '"

282 P H ILI PPI NE LAW JOURNA L

"Whether the local conditions are such as to justify convert­ing a private business into a public one, is a matter primar ily for the determination of the state legislature. Its determin3._ Lion is subject to judicia! review; but the usu.al presumpt ion of vulidity attends the enactment. .. .. ..

"The bus iness of supplying ice is not only a necessity like that of supplying food and clothing or shelter . but the legisla_ ture could also cons ider that it is one which lends itself pecu­liarly to monopoly. • .. .. In small towns and rural com. mun ities, the duplications of plants and in la rger communities. the duplication of delivery service are wasteful and ultimately bu rdensome to consumers. At the same time, the relati ve case nnd cheapness with which 03.n ice plant may be constructed ex­poses the industry to destructive and f requently ruinous com­petition. Competit ion in the industry tends to be destructive because ice plants have a determinate capacity and inflexible fixed cha rges and opera.t ing costs, and because in .a market of limited area, the volu me of sales. is not readily e."{panded .•• •

"Whatever t he na ture of the business, whatever the scope or character of t he )'egulation applied, the source of the power invoked is the same. And likewise the constitutional Umi ta tions upon that power. The source is the police power, The limita­tion is that set by the due process clause, which as construed requi res t hat the reguLation shall not be unreasonable, 03.rbitrary Lor capr icious; and that t he means of regulation selected shall have a real or substantial relation to the object sought to be ob­tained. The notion of a di stinct category of business 'affected with a public interest', employing property 'devoted to a public use', re3ts upon histor ical error . The consequences. which it is sought to dl'aw from those ph rases, are belied by the meanmg in which they were fi rst used centuries ago, and by t he decision of this comt in Mun n v. lll inois 94 U, S, 113, which first int ro­duced them into the law of the constitution. In my opinion, the state's power extends to every regulation of any business reasonably I'equired and appropriate for the public protection. I find in the due process clause no other limitation upon the character 01' the scope of the regulation permissible,

" It is settled that the police powel' commonly invoked i ll aid of health, safety and morals extends equally to the preser­vation of the public welfare. The cases just cited show that, whi le ordinarily, f l'ee competition in the common caIlings has

THE DUE PROCESS CLAUSE 283

been encouraged, t he public welfare may at other times demand t hat monopolies be created, Upon t his pl'inciple is based our whole modern pl',!lctice t)f public utility regulat ion. It is no objection to the validity of the statute he re assailed that it fosters monopoly. That, inaeed is its design , The certificate of pub­lic cOllvenience and necess ity is a device,--a recent social-eeo­Jlomic invention th rough which the monopoly is kept under ef­fect ive control by vesting in a. commission the power to termi­r.a te it whenever that course is required in the public interest. , . .

"The people of t he United States are now confronted with an emergency more ser ious than war , l\1 isE!l'y is widespread in a time not of sca rci ty , but of over-abundance. The long-conti­nued dep ression has brought unpreced(!nted unemployment, a catast roph ic fall in commodity prices, and a volume of econo­mk losses which threatens our financial in:stitl1tions. Some people believe that the existing conditions threaten even the ~t.g bil ity of the capital istic system. Econo:mists ate sea.rching fo r the causes of this di sorder, and are l'e-E~xami n ing the bases of our inctu!>;triaJ Etructure. Business men :are seeking possible remedie!;. Most of them realize that failu re to distribute wide­ly the p rofits of industry has been a prime (~use of our present plight. But r ightly or wrongly, many persons think that one of the major contr ibu t ing causes has been unbridled competi~ tion. Tncreasingly, doubt is expressed whethel' it is economi­rally wise, or morally right that men ~hould be permi tted to add to the producing facilities of an industi'Y which is already suf­ferin g from over-capacity. In justification of that doubt, men point t o the excess-cap.9.city of OUI' productive facilities resulting from their vast expansion without corresponding increase in the consum ptive capacity of the people. They assert that through improved methods of manufacture, made possible by advances in science and invention and vast accu mul:l:tion of capital, our ind ustr ies had become capable of producing" from thirty to one hundred per cent more than was consum(~d even in days of vaunted p 1'osperity ; and that the present capacity \vill, for a long t ime, exceed the needs of business. AH agree that irregu­lari ty in empJoyment--the greatest of our evils cannot be over­come unless production and consumption are mOl'e neady bal­anced. Many insist that there be some fo rm of economic con­trol. There are plans for proration. 'There are many propoS~ a ls for stabilization. And some thought fu l men of wide bu~i-

PHILIPPI NE LAW JOURNAL

ness expel' ience insist that all projects for stabilization and pro­ra tion must prove (utile unless, in some way, t he equ ivalent of the certificate of public convenience and necessity is made a prerequ isite in embarking new c."l.pitn.l in an industry in which t he capacity already exceeds t he production schedules.

"Some people assert that OU I' present plight is due in part, to t he limi talions set by courts upon experimentation in the fields of social and economic science; and to the discouragement to which propoE-3ls fo r betterment there have been subjected uther wise, There must be power in the states and the nation to remou ld through experimentation, OLlI' economic practices and inst itut ions to meet changing social and economic needs. I cannot believe that the f ramers of the 14th Amendment, Or the s tates which rat ified it , in tended to deprive liS of the power to con ect tne ev ils of technological unemployment and excess pl'oductive capacity which h-3ve attended progress in the useful [II'ts, • • . "

Pe07Jle '1..1. Pomu1' 46 Phil. 440

This case in volves the constitutionality of Sections 13 and 15 of Act No. 3071 of the Philippine Legislature providing thus :

Section 13-"Every person, fi rm 01' corporation owning or managing a factory, shop or place of labor of any description, !'hall be obliged to grant to any woman employed by it as la­borer who may be pregnant, thirty days vacation with pay be­fore, and another thirty days nfter confinement: Provided, That the employer shall Poot di scharge slich laborer without just cause, under the penalty of being required to pay her wages. equivalent to t he total of two months counted from the day of her discharge."

Section 15 prov ides for the penalty of fine 01' im prisonment for violation of Ad; 3071.

MI', Justice Johnson delivered the opinion of the court: "In a republican fo rm of government, public sentiment

wields a t remendous influence upon what the state, mayor may not do, fo r t he protection of the health .and publ ic mor(l.is of the people. Yet, neiiher public sentiment no]' a desire to ameliol'Ute the public morals of the people of t he state will justify the promulgat ion of a law which cOll tnwenoo the exp?'CSS pr()­visions Of the fundamental lWI(} of the peopWr-the cO'nstitutu)/~ of the state."

THE DUE PROCESS CLAUSE

After cit.ing and expounding the cases of Adkins v. ChilM dren's Hospital of the District of Columbia 261 U. S. 525, Adair v. United States 208 U. S. 161, Coppage v. Kansas 236 U. S. 1 Rnd Gillespie v. People 188 Ill. 176, Mr. Justice J ohnson conti~ nues :

"The .".tatute in question is exactly analogous to the 'Mini­mum Wage Act' l'€ferred to above . Tn section 13, it will be seen that no person, firm or corporation owning or managing a factoM ry, shop or place of labor of any description, can make a con­tract with a woman. without incurr ing the obligation, whatever the contract of employment might be, 1tnles.~ he also promiRP to ?Jety to such woman employed a.i {(tboTl!r. who mall become p~'eg­

uant, her 1vages f01' thil·t.y dCtys be/m'e und t.hi"ty clays after COl1-

finement . ••• The law creates a t.eJ'n! in every s lich contract, wi thout the consent of the parties. Such persons are, therefore, cieprived of thei r liberty to contr·:3.Ct. The constitution of the P hilippine Islands guarantees to every citizen his libc1'ty, and one of hi s liberties is the liberty to contract.

'·The. police power of t he state is a growing and expanding power. As civ ilization develops, and public conscience becomes awakened, the police power may be extended, as has been de­monst rated in the growth of public sentiment with reference to

the manufacture and sale of intoxicating liquors. But that power cannot grow faster than the fundamenta l law of the state, nor transcend or violate the express inhibition of the peo­ple's Jaw-the constitution. If the people desire to have the police power extended and applied to conditions and things pro­hibited by the organ ic law, they must first amend that law."

Street, Malcolm, Avancena, Villamor, Ostrand, and Ro­mualdez, J . J . concur.

(To be. cotlcfudE(I in Ihe next issue .)