GRAINGER et al. v. DOUGLAS PARK JOCKEY CLUB, 148 F. 513

COCHRAN, District Judge. This is an appeal from an interlocutory order granting a preliminary injunction. It was made May 34, 1906, in a suit brought May 15, 1906, by the appellee, a Kentucky corporation created and organized December 13, 1905, against the appellants, Charles F. Grainger, Louis des Cognets, J. P. Chinn, Milton Young, and E. F. Clay, all citizens of Kentucky. All of the appellants except Charles F. Grainger reside in the Eastern district of Kentucky, but the appellee has its place of business, and hence resides, in the Western district.

Diversity of citizenship not existing, the lower court did not have jurisdiction of the suit on that ground. The sole ground of' jurisdiction was that the basis of the relief sought was state action claimed to have been in violation of the tenth

section of the first

article of the federal Constitution and the fourteenth amendment thereto. This being so, this court will not have jurisdiction of an appeal from- the final decree therein. That must go to the Supreme Court. It has jurisdiction of this appeal from said interlocutory order by virtue of the Act of Congress of April 14, 1906 (chapter 1637, 34 Stat. 116), amending the seventh

section of the act establishing the Circuit Courts of Appeals (Act March 3, 1891, c. 517, 36 Stat. 838 [U. S. Comp. St. 1901, p. 550]), so as to give them jurisdiction of an appeal from an interlocutory order or decree granting or continuing an injunction or appointing a receiver “in any cause” instead of in “a cause in which an appeal from á final decree may be taken under the provisions” of said act to the Circuit Court of Appeals as before.

The Douglas Park Jockey Club was empowered by its charter to acquire, equip, and operate in Jefferson county, Ky., within which the city of Louisville is located, a race track for running horses, and prior to the bringing of this suit it had acquired 135 acres of land adjoining said city and equipped it for said purpose at an expense of $335,-000. The most, if not all, of this expense was incurred prior to the doing of any of the acts complained of in said suit. The five individual appellants are the constituent members of the state racing commission appointed April 2, 1906, by the Governor of Kentucky, under

an act of the Legislature thereof, approved by him March 23,1906, and which then became a law by virtue of an emergency clause. Said act is as follows: “An act to regulate tlie racing of running horses in the commonwealth of Kentucky and to establish a state racing commission and prescribing Its powers and duties. “Be it enacted by the General Assembly of the commonwealth of Kentucky: “Section 1.

Any corporation formed for the purpose of racing and breeding or improving the breed of horses and conducting races and contests of speed, shall have the power and right, subject to the provisions of this act, to hold one or more running race meetings in each year, and to hold, maintain, and conduct running races at such meetings.

At such meetings the corporation or the owners of the horses engaged in such races, or others who are not participants in the racing, may contribute purses, prizes, premiums or stakes to be¡ contested for; but no person or persons other than the owner or owners of a horse or horses contesting in a race shall have any pecuniary interest in the purse, prize, premium or stake contested for in such a race, or be entitled to, or receive any portion thereof after such race shall have been finished ; and the whole of such purse, prize, premiums or stake shall be allotted in accordance with the terms and conditions of such race.

Such meeting shall not be held except during the period extending from the 1st day of April, to the 1st day of December, inclusive in each year. No running races are authorized or shall be permitted except during the period aforesaid, nor except between sunrise and sunset. “Sec. 2.

A state racing commission is hereby established, to consist of five persons to be appointed by the Governor, three of whom shall be breeders and raisers of thoroughbred stock, and no two of whom shall be members of the same racing association.' The members of said commission shall hold their offices for a term of four years, and the first commission shall be appointed within twenty days after this act shall go into effect.

Such commission shall appoint a secretary, who shall serve during its pleasure, whose duty it shall be to keep a full and faithful record of its proceedings, and preserve at its general office all books, maps, documents and papers intrusted to its care, and perform such other duties as the commission may prescribe.

He shall be paid a salary, to be fixed by the commission at a rate not exceeding $1,200 per annum which shall be paid by the several racing corporations or associations, the amounts to be paid by each to be apportioned by the commission, which shall on or before the 1st day of December in each year assess upon each of said corporations or associations its just proportion of such salary.

The commission shall biennially make a full report to the General Assembly of its proceedings for the two year period ending with the 1st day of December preceding the meeting of the General Assembly, and shall embody therein such suggestions and recommendations as it shall deem desirable. “Sec. 3. Said commission shall have the power to prescribe the rules, regulations and conditions under which running races shall be conducted in this state, and no such races shall be conducted, except by a corporation or association duly licensed by said commission, as herein provided.

Any corporation or association desiring to conduct such racing may annually apply to the state racing commission for a license to do so.

If in the judgment of the commission a proper case for the issuance of such license is shown, it may grant the same for a term of one year; and every such license shall contain a condition that all races or race meetings conducted thereunder shall be subject to the rules, regulations, and conditions from time to time prescribed by the commission, and shall be revocable by the commission for any violation thereof, or whenever the continuance of such license shall be deemed by the commission not conducive to the interests of legitimate racing. “But if said license is refused or revoked, said commission shall publicly state its reasons for so doing, and said reasons shall be written in full In the minute b.ook of said commission, which shall at all times be subject to inspection upon application of any one desiring to do so; said finding of said commission shall be subject to the review of a court of competent jurisdiction ; provided, tliat a refusal of the commission to grant to any racing association a license or to assign any racing association at least forty days in each year if desired for racing at such association, and the decision of such commission revoking any license of any association shall be subject to review of the courts of the state. “Sec. 4.

Every running race meeting at which racing shall be permitted for any stake, purse or reward, except as allowed by this act, is hereby declared to be a public nuisance, and every person acting or aiding therein shall be deemed guilty of a. misdemeanor and punished by a fine of not less than $500 nor more than $1,000 for each day of such meeting or racing; and in addition thereto, in a suit brought for the purpose by the state racing commission in the circuit court of the county where it may be proposed to conduct such unauthorized racing, an injunction may be obtained against the same. “Sec. 5.

This act shall not apply to trotting meetings or races, nor shall it apply to racing conducted by any state, county or other fair association, holding not more than one meeting annually, and for a period not exceeding six days for such meeting. “Sec. 6.

Inasmuch as there is no general law regulating racing in this commonwealth, and it is desirable that one should be in operation as soon as possible, an emergency is hereby declared to exist and this act shall be in full force and effect from and after its passage.” Its provisions can be stated and grouped in a way to impress them on one’s mind, and we think, though at the risk of tediousness, that this should be done. This act has no application to trotting races. It applies only to running races.

It has no application to such races when conducted by any state, county, or other fair association holding not more than one meeting annually and for a period not exceeding six days for such' meeting. It prohibits running races not so conducted, except when conducted by a corporation or association formed for that purpose, and by such corporation or association unless licensed by the commission so to do-. It further prohibits a corporation so formed and licensed from running such races except between April 1st and December 1st, inclusive, in each year, and between sunrise and sunset.

It provides that no one save the owners of the horses participating in the races shall have any pecuniary interest in the stakes contested for or be entitled to or receive any portion -thereof, and that the commis-. sion shall have power to prescribe the rules, regulations, and conditions under which races shall be conducted.

As to the granting of licenses, it provides that they shall be granted annually; that they shall be for the term of one year; that they shall be granted if in the judgment of the commission a proper case for issuance of the license is shown; that they-shall contain a condition that all races shall be subject to the rules, regulations, and conditions from time to time prescribed by the commission; that they shall be revocable by the commission for any violation thereof or whenever the continuance therof shall be decided not conducive to the interest of legitimate racing; that, if the commission refuses or revokes a license, it shall publicly state the reagons for so doing in full in its minute book, which shall at all times be subject to inspection upon application of any one; and that said finding shall be subject to the review of a “court of competent jurisdiction.” It would seem that the commission has power, not only to grant licenses, but that it has power also to assign and fix the dates at which the races shall be run under the license, which two powers need not be exercised simultaneously, hut may be exercised successively, in which case, however, the power to assign and fix dates shall be exercised subsequent to the exercise of the power to grant the license.

There is no express provision to this effect. If it has such power it is to be implied from the proviso» of

section 3, the second of the two- court review clauses which the act for some reason contains,, whereby it is provided that, not only the refusal of the commission to- grant a license or its revoking a license shall be subject to the review" of the courts of the state, but also that a refusal to assign any racing association at least 40 daj s in each year if desired for racing by such association shall be subject to like review.

If the act is construed as conferring such power in addition to the power of granting licenses, then, of course, the act prohibits the run - ning of races-by an association having a license at any other time than the dates assigned by the commission.

It is provided that at least three of the commissioners shall be breeders and raisers of thoroughbred stock, and that no two of them shall be me- bers of the same association; that they shall hold their offices for me term of four years; that they shall have a secretary to be paid a salary of not exceeding $1,200 per annum by the several racing corporations or associations as apportioned amongst them by the commission; that the commission shall biennially make report to the Legislature of its proceedings, embodying therein such suggestions and recommendations as it shall deem desirable.

Tt is further provided that every running race meeting except as allowed by the act shall be a public nuisance, and every person acting or aiding therein shall be subject to a certain penalty, and that the commission may obtain an injunction against such unauthorized racing in a suit brought for that purpose in the circuit court of the county where it is proposed to conduct it. The emergency stated for the act’s going into effect at once is this: “There is no general law regulating raping in this commonwealth, and it is desirable that one should be in operation as soon as possible.’’ .The appellant Charles If.

Grainger is president of the New Louisville Jockey Club, a racing corporation owning a race track for running horses adjoining Louisville, which it has operated for over 30 years continuously, and a member of the American Turf Association, a national organization of associations engaged in operating race tracks for running horses. None of the other appellants seems to he a member of a racing association. The commission organized April 18, 1906, by the election of Col. J. P. Chinn, who had introduced the act into the Legislature and thus given it its name, to wit, the Chinn Act, as president, and A. B.

Louse, as secretary. On the same date a license was granted to the Kentucky Racing Association of Lexingon, and from April 23, to May 1, 1906, inclusive, was assigned to it as dates for racing.

On April 23,1906, at a subsequent meeting of the commis-> sion, certain rules for the government of the commission were adopted ; said New Louisville Jockey Club applied orally for a license and the assignment to it of May 2, to May 23, 1906, inclusive, as racing dates, submitting therewith a list of the racing officials at said meeting, which application was granted; the Latonia Jockey Club, owner and operator of a race track for running horses at Covington, Ky., opposite Cincinnati, Ohio, and a member also of said American Turf Association, applied orally for a license and the assignment to it of May 30, to July 4, 1906, inclusive, submitting therewith a list of the names of the racing officials at said meeting, which application was granted; and the appel-lee, Douglas Park Jockey Club, which was .a member of the Western Jockey Club, a national association in rivalr)*- with said American Turf Association, applied by written communication for the assignment of May 12, to June 15, 1906, inclusive, to it as racing dates, which application was thereupon refused on the ground, as stated in the minutes of the commission, “that the dates asked for by said Douglas Park Jockey Club had previously been assigned.” Either at this meeting or at the previous meeting there was adopted a resolution to the effect that all associations making application for license shall give the names of the officers thereof, and, when making, application 'for racing dates, shall submit the names of the racing officials of the meeting, and also a form of license.

The form so adopted provides that the license is to hold race meetings at such times as the commission shall assign and fix, and upon condition that the licensee shall permit all owners and trainers not ruled off or suspended for fraud by a recognized meeting to race over its course subject to the general rules of racing; that no racing official shall act at its meeting except by approval of the racing commission; that all races shall be subject to the rules and regulations and conditions from time to time prescribed by the commission, and shall be revocable by the commission for any violation thereof or whenever the continuance of the license shall be deemed by the commission not conducive to the best interests of legitimate racing.

It is to be noted that the application of the appellee, the Douglas Park Jockey Club, was not for the granting of a license, but for an assignment of certain dates, and it seems never to have made an application for a license; and, further, that with its application it did not give or submit the names of its officers or of the racing officials at its proposed meeting.

However, the Lexington Racing Association seems not to have given or submitted the names of either, and the New Louisville Jockey Club and the Latonia Jockey Club seem not to have given the names of the officers of the corporations in connection with their respective applications, and it is uncertain whether the resolution calling for the giving and submission of said names was adopted prior to any of said applications. After the refusal of the appellants acting as said commission to grant said appellee’s said application, the suit in the lower court was brought.

The relief sought was an injunction against appellants restraining them from asserting that the appellee did not have the right, and would not be permitted, to have running races for stakes on its race track from June 2, 1906, to Jitly 7, 1906, inclusive, a different period of time from that covered by its said application, from enforcing said act against it and instituting actions civil or criminal under said law, and from in any manner interfering with the operation, conduct, or management of its race track. The ground upon which said relief was sought was that said act was unconstitutional.

It was claimed to be in violation of both the state and federal Constitutions. No further reference need be made, however, to the claim as to- the state Constitution. It was claimed to be in violation of' the tenth

section of

article 1 of the federal Constitution and of the fourteenth amendment thereto. The basis of the claim as to said tenth

section was an allegation that prior to the passage of the law appellee had entered into contracts with a large number of persons skilled in the management and conduct of race meetings to conduct, operate, and manage said race meeting, the obligation whereof was impaired thereby.

The ground upon which said act was claimed to be in violation of the fourteenth amendment was that it deprived it of its liberty and property without due process of law and denied it the equal protection of the laws, in that it made its right' to operate its race track at all and the time -when it should operate it to depend on the arbitrary determination of the commission, and had no application at all to corporations or associations organized to operate race tracks for trotting horses and fair associations. The case was heard in the lower court upon bill, answer, and affidavits. .

It assumed, without deciding, that the act in question was constitutional, but held that the action of the commission was in violation of the fourteenth amendment. The order of injunction contained two provisions. In one the appellants were enjoined from instituting or instigating any proceedings against appellee under said act with reference to any running race meetings held by it between the date of order and December 1, 1906, and from in any manner interfering or causing others to interfere with its operation, conduct, and management of its track.

In the other the appellants were enjoined from refusing to grant the appellee a license in due form to hold one or more race meetings as authorized by said act at any time or times it might elect between the date of the order and December 1, 1906. This latter provision was a mandatory injunction and in effect commanded appellants to grant appellee a license under the act permitting it to run such races as it pleased on its track up until December 1, 1906, without applying to appellee for an assignment of dates.

The court seems to have been of the opinion that the sole power conferred on the commission was to grant licenses and prescribe general rules to govern the running of races thereunder, and that it had no power in relation to the assignment of dates. These two provisions of the order are hardly consistent with each other, and the first one is hard!}’ consistent with the view that the act is constitutional. The first one, which restrains appellants from taking any steps against, appellee for operating without a license, presupposes that appellee does not need a license, and hence that the act is unconstitutional.

The second one in effect commands the appellants to grant appellee a broad license. It presupposes that appellee does need a license and that the act is constitutional. The relief covered by the first provision is the only specific relief sought in the bill. That covered by the second is not specifically prayed for, and, to say the least, it is doubtful whether it is in accordance with appellee’s theory of its case as presented in the bill. Each provision will be considered separately and in its order. The first one, as stated, presupposes that said act is unconstitutional, and appellee so contends here.

It contends that it is in violation of the fourteenth amedment to the federal Constitution. It makes no point as to the tenth

section of the first

article thereof. It claims that it is in violation of both of the last two clauses of the first

section of the amendment. It deprives it of its liberty and property without due process of law, in that by its provisions it cannot operate its race track without a license and an assignment of dates from the commission. This affects its liberty of action and depreciates the value of its property.

It denies it the equal protection of the laws, in that it confers arbitrary power on the commission in the matter of granting licenses and assignment of dates and has- no application to owners of race tracks for trotting horses or to state, county, or other fair associations holding not more than one meeting annually and for a period not exceeding six days for such meeting. It cites in support of its contention the following decisions of the Supreme Court, to wit: Yick Wo v. Hopkins, 118 U. S. 356, 6 Sup. Ct. 1064, 30 L. Ed. 220; Gulf, C. & S. F. R. Co. v. Ellis, 165 U. S. 162, 17 Sup. Ct. 255, 41 L.

Ed. 666; Cotting v. Godard, 183 U. S. 79, 22 Sup. Ct. 30, 46 L. Ed. 92; Connolly v. Union Sewer Pipe Co., 184 U. S. 540, 22 Sup. Ct. 431, 46 L. Ed. 679; Dobbins v. Los Angeles, 195 U. S. 223, 25 Sup. Ct. 18, 49 L. Ed. 169; Lochner v. New York, 198 U. S. 64, 25 Sup. Ct. 539, 49 L. Ed. 937.

In those cases the following statutes and ordinances were held to be in violation of said clauses of said amendment: In'the Yick Wo Case the San Francisco ordinance forbidding any one to carry on the laundry business within the limits of the city without first obtaining the consent of the board of supervisors, except the same be located in a building constructed either of brick or stone; in the Gulf, C. & S. E. R. Co.

Case, the Texas statute imposing an attorney’s fee not exceeding $10 in addition to costs upon railway corporations omitting to pay certain claims within a certain time after presentation; in the Cotting Case, the Kansas statute limiting the charges to be made by the Kansas City Stock Yards Company for services to be rendered; in the Connolly Case, the Illinois statute prohibiting a recovery of the price of articles sold by any trust or combination formed in violation thereof, exempting agricultural products and live stock in the hands of the producer or raiser; in the Dobbins Case, the Eos Angeles ordinance prohibiting the erection and maintenance of gas works except within certain limits; and, in the Eochner Case, the New York statute restricting the hours of employment in bakeries to 60 hours a week and 10 hours a day.

Main reliance is placed on the last clause of the first

section or the equality clause of the amendment, and particular stress is laid on the words of Mr. Justice Matthews in the Yick Wo Case, to wit: “When we consider the nature and theory of -our institution of government, the principles upon which they are supposed to rest, and review the history of tlieir development, we are constrained to conclude that they do not moan to leave room for the play and action of purely personal and arbitrary action.” Of which words Mr. Justice Brewer, in the Gulf, C. & S. F. R. Co.

Case, said: “No language is more worthy of frequent and thoughtful consideration.” It is to be noted in this connection that the question whether said act confers arbitrary power is not to be determined by the fact that the power conferred may have been exercised arbitrarily as to the appellee. If such is the case, possibly it may have some bearing cm the

interpretation of the power conferred. In the Yick Wo Case Mr. Justice Matthews seems to intimate that the arbitrary action of the board of supervisors complained of therein did have an interpreting effect on the nature of the power conferred. But we think Judge Sawyer struck a true note, in the case of Ex parte Christensen (C. C.) 43 Fed. 243, 247, when he said: “The validity of an ordinance must be determined by its terms, by what it authorizes, not by the manner of its execution. It is valid or invalid irrespective of tho manner in which it is in fact administered.

Its capability of being abused is the test.” And, in the case of Williams v. Mississippi, 170 U. S. 214, 18 Sup. Ct. 583, 42 L. Ed. 1012, it was held that the equal protection of the laws is not denied to colored persons by the Constitution and laws of Mississippi, which make no discrimination against the colored race in terms, but grant a discretion to certain officers which can be used to the abridgment of the rights of colored persons to vote and serve on juries, when it is not shown that their actual administration is evil, but only that evil is possible under them.

But, in order to reach a correct conclusion in this case, it will not do to confine our attention to the said decisions of the Supreme Court relied on by appellee. We should consider in connection therewith other decisions of that court in which certain statutes and ordinances were held not to be in violation of said amendment, as for instance the following, to wit: Slaughter House Cases, 83 U. S. 36, 21 L. Ed. 394; Northwestern Fertilizer Co. v. Hyde Park, 97 U. S. 659, 24 L. Ed. 1036; Barbier v. Connolly, 113 U. S. 27, 5 Sup. Ct. 357, 28 L. Ed. 923; Soon Hing v. Crowley, 113 U. S. 703, 5 Sup. Ct. 730, 28 L.

Ed. 1145; Mugler v. Kansas, 123 U. S. 623, 8 Sup. Ct. 273, 31 L. Ed. 205; Powell v. Pennsylvania, 127 U. S. 678, 8 Sup. Ct. 992, 32 L. Ed. 253; Crowley v. Christensen, 137 U. S. 86. 11 Sup. Ct. 13, 34 L. Ed. 620; N. Y. & N. E. R. Co. v. Bristol, 151 U. S. 567, 14 Sup. Ct. 437, 38 L. Ed. 269; Davis v. Massachusetts, 167 U. S. 43, 17 Sup. Ct. 731, 42 L. Ed. 71; Gundling v. Chicago, 177 U. S. 183, 20 Sup. Ct. 633, 44 L. Ed. 725; L’Hote v. New Orleans, 177 U. S. 595, 20 Sup. Ct. 788, 44 L. Ed. 899; Booth v. Illinois, 184 U. S. 426, 22 Sup. Ct. 425, 46 L. Ed. 623; Otis & Gasman v. Parker, 187 U. S. 606, 23 Sup.

Ct. 168, 47 L. Ed. 323; Fischer v. St. Louis, 194 U. S. 361, 24 Sup. Ct. 673, 48 L. Ed. 1018; Jacobson v. Massachusetts, 197 U. S. 11, 25 Sup. Ct. 358, 49 L. Ed. 643; Lieberman v. Van De Carr, 199 U. S. 552, 26 Sup. Ct. 144, 50 L. Ed. 305.

The statutes and'ordinances upheld in them are as follows, to wit: In the Slaughter House Cases, the Louisiana statute granting- to the Crescent City Live Stock, Landing & Slaughter House Company the exclusive privilege of establishing and maintaining landing places, stock yards and slaughter houses in the city of New Orleans, at which all stock intended for sale or slaughter in said city should be landed, inclosed, and slaughtered; in the Northwestern Fertilizer Company Case, the Hyde Park ordinance prohibiting the transportation of offal or other offensive or unwholesome matter through said village and any person from carrying on any offensive or unwholesome business within the village limits or within one mile thereof; in the Barbier and Soon Hing Cases, the San Francisco ordinance prohibiting any one from carrying on the laundry business within certain prescribed limits of the city without first obtaining certain certificates from the health officer and board of fire wardens and not at all between the hours of 10 o’clock at night and 0 o’clock in the morning; in the Mugler Case, the Kansas statute prohibiting the manufacture and sale of intoxicating liquors; in the Powell Case, the Pennsylvania statute prohibiting the manufacture and sale of oleomargarine; in the Christensen Case, the San Francisco ordinance requiring a license for the sale of intoxicating liquors and wines, and providing that no license should be issued without the written consent of the board of police commissioners or- in the event of their refusal without the recommendation of 12 citizens of the city owning real estate in the block or square in which the business was to be carried on; in the N.

Y. & N. E. R. Co.

Case, the order of the Connecticut railroad commisioners requiring the removal of a certain grade crossing on said company’s line at its own expense; in the Davis Case, the Boston ordinance prohibiting any person from making any public address on any public grounds without a permit from the mayor; in the Gundling Case, the Chicago ordinance prohibiting the sale of cigarettes without a license and conferring on the mayor power to grant a license and requiring him so to do if the applicant was of good character and reputation and a suitable person to be intrusted with their sale, determinable from certain evidence in regard thereto submitted to the board of health and certified with its opinion to him ryith the application; in the L’Hote Case, the New Orleans ordinance prohibiting women of lewd character from dwelling outside of certain limits of the city; in the Booth Case, the Illinois' statute prohibiting options to buy or sell grain or other commodities at a future time; in the Otis & Gasman Case, the California constitutional provision prohibiting all contracts for sales of shares of corporate stocks on margin; in the Fischer Case, the St.

Louis ordinance forbidding the establishment or maintenance of a dairy or cow stable within the city limits without having received permission so to do from the municipal assembly; in the Jacobson Case, the Massachusetts statute providing for compulsory vaccination; and, in the Lieberman Case, the New York sanitary code provision enacted by the board of health, providing that no milk should be received, held, kept, sold, or delivered in said city without a permit in writing from the board of health and subject to the conditions thereof. .

The points actually decided in the cases relied on by appellee and those we have referred to are of but little help to us in reaching a conclusion in this case. It is essential that we get behind them and grasp the fundamental principles which led to their decision. Or, to vary the metaphor, those principles having been congealed therein, we must restore them to their original fluid state and then let them carry or push us where they will.

In the first place, it is to be noted that a statute or ordinance depriving one of his liberty or property is not in violation of said amendment merely because of such deprivation. Either of three things is essential to bring the deprivation within the amendment. It must have no real or substantial relation to the public welfare, or the deprivation it provides for must be a deprivation without due process of law, or it must amount to a denial of the equal protection of the laws.

If the statute or ordinance has a real and substantial relation to the public welfare, if it provides for a deprivation by due process of law, and if it affords an equal protection of the laws, it is valid, notwithstanding its enforcement will deprive a person subject thereto of his liberty or property.

In the Slaughter House Cases, the ordinance upheld required the closing of all existing stock landings, stock yards, and slaughter houses; in the Northwestern P'ertilizer Company Case, the ordinance upheld ruined the business of that company and rendered its plant valueless for the purpose for which it was erected; in the Mugler Case, the statute upheld required the abatement of all existing distilleries and breweries as nuisances and was enforced there-* in as to a brewery owned by one oE the parties thereto; in the Powell Cáse, by reason of the statute upheld therein the owner of a large quantity of oleomargarine was denied the right to sell it within the jurisdiction thereo E; and, in the N.

Y. & N. E. R. Co. Case, the order of the railroad commissioners upheld required the removal of the dangerous railroad crossing at the expense of the railroad company. In the R’Hote Case, Mr.

Justice Brewer said: ‘■The truth is that the exercise of the police power often works pecuniary injury, but the settled rule of this court is that the mere fact of pecuniary injury does not warrant the overthrow of legislation of a police character.” The Jacobson Case, in which the Massachusetts compulsory vaccination statute was upheld, affords a recent instance of a holding that the effect of a police statute on one’s liberty is no reason for overthrowing it. Mr.

Justice Harlan said therein: “In every well-ordered society charged with the duty of conserving the safety of its members, the rights of the individual in respect of his liberty may at times, under the pressure of great dangers, be subjected to such restraints, to be enforced by reasonable regulations, as the safety of the general public may demand.” It is true that he said further therein as follows: “It is easy, for instance, to suppose the case of an' adult who Is embraced by the mere words of the act, but yet to subject whom to vaccination in a particular condition of his health or body would be cruel and inhuman in the last degree.

We are not to be understood as holding that the statute was intended to be applied to such a ease, or, if it was so intended, that the judi-eiai-y would not.be competent to interfere and protect the health and life of the individual.” But this is no qualification of our position. A statute so intended would in so far have no real or substantial relation to the public welfare. Indeed, each one of the cases which we have referred to, in addition to those cited and relied on by appellee, is an illustration of the proposition we have laid down.

In each case the statute or ordinance upheld deprived some person or persons of their liberty or property, and it was upheld because either it did have, or it could not be said that it did not have, a real or substantial relation to the public welfare and also complied with the requirements as to due process of law and equal protection of the laws. The cases emphasized are simply striking cases of such deprivation.

The deprivation, then, which the amendment has in view is not any deprivation, but a deprivation that has no real or substantial relation to the public welfare or that is brought about without due process of law or that amounts to> a denial of the equal protection of the laws. Again, a statute or ordinance depriving one of liberty or property does not amount to a denial of the equal protection of the laws because it does not apply to all persons within the jurisdiction of the legislative body enacting it, but is applicable only to certain of such persons.

A legislative body has a right to discriminate amongst those persons and to limit the application of its laws to a portion of them only. The act of so discriminating is usually termed classification. There is, however, a limit to its right to discriminate and to classify, and it is important to understand exactly what that limitation is. .It is frequently said that the classification must embrace all persons similarly situated. In the Barbier Case, Mr.

Justice Field said: “Though, iñ many respects necessarily special in their character, they [statutory regulations] do not furnish just ground of complaint if they operate alike on all persons and property under the same circumstances and conditions.

Class legislation discriminating against some and favoring others is prohibited, but legislation which in carrying out a public purpose is limited in its application, if within the sphere of its operation it affects alike all persons similarly situated, is not within the amendment.” There can be no doubt as to the correctness of this test as to the validity of any particular classification. The danger with it is that it may lead one to use an incorrect test, to wit, that the classification embraces all persons engaged in the same business. In the Powell Case, Mr.

Justice Harlan said: “The objection that the statute is reiragnant to the clause of the fourteenth amendment forbiddjng the denial by the statute to any person within the jurisdiction of the equal protection of the laws is untenable.

The statute places under the same restrictions and subjects to like penalties and burdens all who manufacture or sell or offer for sale or keep in possession to sell the .articles embraced in its prohibitions, thus recognizing and preserving the principle of equality amongst those engaged in the same business.” Usually all persons engaged in the same business may be said to include all persons similarly situated, but not always; and in such cases that the classification embraces all persons engaged in the same .business is not a correct test as to its validity. This happened in the Gulf, C. & S. F. R. Co. Case.

There the statute involved imposed an attorney’s fee in certain cases on all railroad corporations, and yet it was held invalid. Sometimes the test made use of is that the classification must be reasonable, and not arbitrary. In the Otis & Gasman Case, Mr. Justice Holmes said: “Tlie circumstances disclose a reasonable ground for classification.” In the Gulf, C. & S. F. R. Co. Case, Mr. Justice Brewer said: “Arbitrary selection can never be justified by calling it classification.” In the same case he quoted from the opinion of Judge Black, in the case of State v. Loomis, 115 Mo. 307, 314, 22 S. W. 350, 21 L. R.

A. 789, these words: “Classification for legislative purposes must have some reasonable basis upon which to stand. It must be evident that the differences which will support class legislation must be such as in the nature of things furnish a reasonable basis for separate laws and regulations.” There can be no doubt also as to the correctness of this test. The only thing against it is its generality. One is in danger of losing himself in the terms “reasonable” and “arbitrary.” The Gulf, C. & S. F. R. Co.

Case brought to the surface a still other and, as we deem it, the best test for determining the validity of a given classification. It is this: There must be a real and substantial relation between the classification and that for which the statute or ordinance making it was enacted — the object which it was intended to accomplish, to wit, the public welfare. Just as a deprivation of liberty or property to be valid must have a real and substantial relation to the public welfare, so a classification to be valid also must have such a relation thereto. In the Gulf, C. & S. F. R. Co. Case, Mr.

Justice Brewer said: “It is said that it is not within the scope of the fourteenth amendment to withhold from the states the power of classification, and that if the law deals alike with all of a certain class it is not obnoxious lo the charge of a denial of equal protection. This as a general proposition is undeniably true. It is equally true that such classification cannot be made arbitrarily. There are distinctions which do not furnish any proper basis for the attempted classification.

That must always rest upon some difference which bears a reasonable and just relation to the act in respect to which the classification is proposed.” And again: “The mere classification is not sufficient to relieve a statute from the reach of the equality clause of the fourteenth amendment. That in all cases it must appear not only that a classification has been made, but also that it is one based upon some reasonable ground — some difference which bears a just and proper relation to the attempted classification and is not a mere arbitrary selection.” In the case of Atchison, T. & S. F. R. Co. v. Matthews, 174 U.

S. 104, 19 Sup. Ct. 612, 43 L. Ed. 909, Mr. Justice Brewer said: “On the other hand, it is also true that the equal protection guarantied by the Constitution forbids the Legislature to select a person natural or artificial and impose upon him burdens and liabilities 'which are not cast upon others similarly situated. It cannot pick out one individual or one corporation and enact that whenever he or it is sued the judgment shall' be for double damages or subject to an attorney’s fee in favor of the plaintiff, when no other individual or corporation is subjected to the same rule.

Neither can it make a classification of individuals or corporations which is purely arbitrary and impose upon such class special burdens and liabilities. Even where the selection is not obviously unreasonable and arbitrary, if the discrimination is based upon matters which have no relation to the object sought to be accomplished, the same conclusion of unconstitutionality is affirmed.” Here the test that the classification must embrace all persons similarly situated, and the test that it must have relation to the object sought to be accomplished, are both referred to.

Probably as good a general rule to guide one in passing on the validity of a particular classification as can be found is that contained in these words of Judge Sullivan, in the case of State v. Farmers’ Irr. Co., 59 Neb. 4, 80 N.

W. 53: “Classification to be valid must rest upon some reason of public policy, some substantial difference of situation or circumstances that would naturally suggest the justice or expediency of diverse legislation with respect to the objects classified.” Though, as heretofore indicated, a classification which embraces all persons engaged in the same business will not always be valid, yet generally it will. Most always it will embrace all persons similarly situated and will have a real and substantial relation to the object intended to be accomplished, to wit, the public welfare.

It follows, therefore, that a classification of persons according to business may be a valid classification. In the Northwestern Fertilizer Co., Mugler, Powell, and Booth Cases the legislation upheld applied only to persons engaged in the same business and embraced all who were or might be engaged therein. They were forbidden to engage therein or to continue to carry them on. Those businesses were the manufacture and sale of offensive materials, of intoxicating liquors and oleomargarine, and the sale of options.

The object intended to be accomplished by said legislation was the stoppage of the evils growing out of those businesses. Those particular evils grew out of those businesses, and none' other. Hence a classification according to businesses in such cases was held valid. It had a real and substantial relation to the object intended to be accomplished, to wit, freedom from those evils or the public welfare. So a classification of persons according to particular branches of a business, i. e., that turn on such branches may be valid.

In the Barbier and Soon Hing Cases, the ordinances upheld, forbidding the carrying on of the laundry business between the hours of 10 at night and 6 in the morning, applied to those engaged in washing and ironing, but not to those engaged in fluting, polishing, bluing, and wringing. Mr.

Justice Field said: “It is not discriminating legislation in any invidious sense that branches-of the same business from which danger is apprehended are prohibited during certain hours of the night, whilst other branches involving no such danger are permitted.” In the Otis & Gasman Case, the statute upheld forbade contracts for sale of shares of corporate stock on margin, and not contracts for such sales of other articles. Mr.

Justice Holmes said: “With regard to the objection that this provision strikes at only some, not all, of the objects of possible speculation, it is enough to say that probably In California the evil sought to be stopped was confined in the main to stocks in corporations. California is a mining state, and mines offer the most striking temptation to people in a hurry to get rich. Mines generally are represented by stocks. Stock is convenient for purposes of speculation because of the ease with, which it is transferred from hand to hand as well as for other reasons.

If stopping the purchase and sale of stocks on margin will stop the gambling which it was desired to prevent, it was proper for the people of California to go no farther in what they forbade. The circumstances disclose a reasonable ground for the classification.” So a classification of persons according to equipment to carry on a particular business as determined by administrative officers to whom the matter is committed may be valid.

In the Barbier and Soon Hing Cases, the ordinance upheld forbade any person from .carrying on the laundry business without first obtaining a certificate from the health officer that his premises were properly and sufficiently drained, and that all proper arrangements had been made to carry on the business without injury to the sanitary condition of the neighborhood; and also one from the board of fire wardens that his washing and ironing apparatus was in good condition, that their use was not dangerous to the surrounding property from fire, and that all proper precautions were taken to comply with the provisions of the ordinance in relation to fire limits.

So a classification of persons according to their personal fitness to carry on a particular business as so determined may be valid. In the Yick Wo Case, Mr.

Justice Matthews said: “The ordinance therefore also differs from the not unusual case where discretion is lodged by , the law in public ofiicers or bodies to grant or withhold licenses to keep taverns or places for the sale of spirituous liquors and the like, when one of the conditions is that the applicant shall be a fit person for the exercise of the privilege, because in such cases the fact of the fitness is submitted to the judgment of the officer and calls for the exercise of a discretion of a judicial nature.” In the Gundling Case, the ordinance upheld forbade any person from carrying on the business of selling cigarettes without first obtaining a license from the mayor, granted after a determination that he was of good character and reputation and a suitable person to be intrusted with their sale, based upon certain evidence in regard thereto submitted to the board of health and certified with its opinion to the mayor.

Mr. Justice Peckham said: “In the case at bar the license Is to be Issued If the mayor is satisfied that the person applying Is of good character and reputation and a suitable person to be intrusted with the sale of cigarettes, provided such applicant will file a bond as stated in the ordinance. * * »

The mayor is bound to grant a license to every person fulfilling these conditions, and thus the fact of fitness is submitted to the judgment of the officer, and it calls for the exercise of a discretion of a judicial nature.” So a classification of persons according to personal fitness and equipment both as so determined may be valid. In the Ifieberman Case, the sanitary code provisions upheld forbade all persons from receiving, holding, keeping, selling, or delivering milk in New York City without a permit in writing from the board of health. As to the authority conferred on the board of health, Mr.

Justice Day said that it was “to issue or withhold permits in the honest exercise of a reasonable discretion.” It appears from the sanitary code containing the provision so forbidding, more particularly set forth in report of the same case in 175 N. Y. 444, 67 N. E. 913, that the discretion was to be exercised mainly in view of equipment, but no doubt also of personal fitness and past history. And so also a classification of persons according to certain reasonable considerations as so determined may be valid.

In the Fischer Case the ordinance upheld forbade the erection of a dairy or cow stable except by permission of the municipal assembly. Mr. Justice Brown said: “We do not regard the fact that permission to keep cattle may be granted by the municipal assembly as impairing in any degree the validity of the ordinance or as denying to the disfavored dairy keepers the equal protection of the laws.

Such discrimination might well be made where one person desired to keep 2 cows and another 50; where one desired to establish a stable in the heart of the city and another in the suburbs; or where one wasi known to keep his stable in a filthy condition and another had established a reputation for good order and cleanliness. Such distinctions are constantly made the basis for licensing one person to sell intoxicating llquorsi and denying it to others.

The question in each case is whether the establishment of a dairy and cow stable is likely In the hands of the applicant to be a nuisance or not to the neighborhood and to imperil or conduce to the health of its customers. As the dispensing power must be vested in some one, it is not easy to see why it may not properly be delegated to the municipal assembly which enacted the ordinance.

Of course, cases may be imagined where the power to issue permits may be abused and the permission accorded to social or political favorites and denied to others who for reasons totally disconnected with the merits of the case are distasteful to the licensing power. No such complaint, however, is made to the practical application of the law in this case, and we are led to infer that none such exists.

We have no criticism to make of the principle of granting a license to one and denying it to another, and are bound to assume that the discrimination is made in the interest of the public and upon conditions applying to the health and comfort of the neighborhood.” In all those cases where the right to carry on a particular business was made dependent on the determination of administrative officers as to equipment, personal fitness, past history, or other reasonable considerations, though such determination is made the basis of the classification, in reality the true basis thereof is the matter of equipment, personal fitness, past history, or other reasonable considerations; the commitment of the determination thereof to such officers being the only practical way of meeting such a situation.

But a classification can be made that approaches nearer to the arbitrary line than any yet considered — cases where the choice of the legislative body or of administrative officers to whom the matter is committed is the sole basis of the classification. Of course, in such cases even it is not to be supposed that the choice is made or to be made arbitrarily but only in view of all relevant considerations, .and yet it is a choice that cannot be questioned when made. Such are cases where the power to limit the number of persons who may carry on a certain business or the place where it may be carried on exists.

It is conceivable that the public welfare may require such a limitation, and, of course, if this is so power to make it resides in the legislative body. Where this is-so power to choose the persons or place must also exist. If it does not, there .can be no power to limit. -Either that power must go or with it must exist the power to choose or select. A case of this sort is to- be found in the Slaughter House Cases.

The statute upheld therein limited the territory within which the stock landing, stock yard, and slaughter house business could be carried on and conferred on the Crescent City Live Stock, Landing & Slaughter House Company the exclusive privilege of carrying on that business. It required that company to permit others desiring to do so, upon payment of certain charges, to land, yard, and slaughter their live stock at its landing, stock yard, and slaughter house, but it excluded every one else from the right to operate a lauding yard and slaughter house.

The welfare of the community required that this particular business should be restricted to a particular territory, and that but one person should be allowed to carry it on. Hence the Legislature had power to so restrict and allow, and with that power went the power also to select and choose the person who was to carry it on. The one power could not exist without the other. The two powers were inseparably hound together. If there was any error in the decision in that case, it was in holding that the right to carry on such business could be conferred on a single person.

There could have been no error in holding that the Legislature had the power to select the person who should carry it on. Mr. Justice Field, in his dissenting opinion, took the position that, if the Legislature had power to select in that instance, it had the power to select the persons who should carry on all the ordinary avocations of life. But this did not follow. In most avocations there is no power to limit, and in the absence of power to limit there can be no power to select. Another case of this sort is to he found in the L’Hote Case.

There the ordinance upheld prohibited women of lewd character from dwelling outside of certain limits of the city of New Orleans. Certain persons living and owning property within those limits claimed that they were deprived of their property thereby, in that it was depreciated in value, and that they were denied the equal protection of the laws. Out of this claim that case arose. Mr. Justice Brewer said: “Upon what ground shall it bo adjudged that such restriction is unjustifiable, that it is an unwarranted exercise of the police power?

Is the power to control and. regulate limited only as to matter of territory? May that not be one of the wisest and safest methods of dealing with the problem? At any rate, can the power to so regulate be denied? But given the power to limit the location of these persons to certain localities and no one can question the legality of the location. The power- to prescribe a limitation carries with it the power to discriminate against one citizen and in favor of another. Some must suffer by the establishment of any lerriforial boundaries.

We do not question what is so earnestly said by counsel for plaintiffs in error in respect to the disagreeable results from the neighborhood of such houses and people, but, If the power to- prescribe territorial limits exists, the courts cannot say that the limits shall be other thaii those the legislative body prescribes. If these limits hurt the present plaintiffs in error, other limits would hurt others. But clearly the inquiry as to the reasonableness or propriety of the limits is a matter for legislative consideration and cannot become the basis of judicial action.

The ordinance is an attempt to protect a part of the citizens from the unpleasant consequences of such neighbors. Because the legislative body is unable to protect all,, must it be denied the power to protect any?” These two cases were instances where the selection was made by the legislative body. Cases exist where the right to make the selection was conferred on administrative officers.

In the Christensen Case, the ordinance upheld forbade the sale of intoxicating liquors or wines without a license to be granted upon the written consent of the board of police commissioners, or in the event of their refusal upon the written recommendation of 12 citizens of the city owning real estate in the block or square in which the business was to be carried on. Here the right to carry on this business depended upon the consent of said board or of said real estate owners. It could not otherwise be carried on. The classification which it made was based upon such consent.

The requirement of such consent was not a whit less stringent than the requirement of the ordinance involved in the Yick Wo Case that one to carry on the laundry business in a frame building should have the consent of the board of supervisors. Of this requirement Mr.

Justice Matthews had this to say. “They seem intended to confer, and actually do confer, not a discretion to be exercised upon a consideration of tbe circumstances of eacb case, but a naked and arbitrary power to give or withhold consent not only as to places but as to persons.” And again this: “The power given them is not confided to their discretion in the legal sense of the word, but is granted to their mere will. It is purely arbitrary and acknowledges neither guidance nor restraint.” Yet the ordinance was upheld, notwithstanding that the ordinances involved in the Yick Wo Case were invalidated.

The controversy over the ordinance involved in the Christensen Case arose first in the state courts, and the California Supreme Court upheld the ordinance. Ex parte Christensen, 85 Cal. 208, 24 Pac. 747. The court said: “The objection is that this makes the license depend upon the arbitrary will and pleasure of the board of police commissioners in the first instance, and of the 12 property owners in the second, and the case of Yick Wo v. Hopkins, 118 U. S. 356, 6 Sup. Ct. 1064, 30 L. Ed. 220, and other cases from the federal courts are cited.

But whatever force this objection might have in reference to licenses to carry on the ordinary avocations of life, which are not supposed to have any injurious tendency, it has no force in the present case. It is well settled that the governing power may prohibit the manufacture and traffic in liquor altogether, provided only that it does not interfere with interstate commerce.” From the state courts the controversy was transferred to the federal courts by habeas corpus proceedings. The lower federal court held the ordinance invalid, feeling bound by the decision of the Supreme Court in the Yick Wo Case.

Ex parte Christensen (C. C.) 43 Fed. 243. The distinction made by the Supreme Court of California was pressed upon Judge Sawyer, but he did not concur in it.

He said: “It is sought by counsel for the city, as was attempted by the state Supreme Court, to distinguish this ease from the laundry ordinance case cited, on the ground that the laundry business is a necessary business, and eannot be wholly suppressed, but only regulated, for the purposes of securing safety from fires, while selling liquor is supposed to be injurious to society per se, and may be wholly prohibited or permitted upon such conditions as may be prescribed; that the power to absolutely prohibit necessarily includes the power to impose any terms or conditions, however arbitrary, no matter what, less than absolute prohibition, and, consequently, that the power to grant or refuse a license may be delegated to the arbitrary and unregulated will of one or more persons, official or unofficial.

I cannot, as at present advised, assent to this proposition. This ordinance does not limit or regulate, or propose to limit or regulate, the sale of liquors. Tt would seem to be upon its face, like other license ordinances, a mere revenue measure. It does not prohibit .the sale of liquors, or limit their sale to any particular portion of the city, or to any number of persons, nor prescribe any qualifications whatever which shall be necessary to entitle a party to a license, or prescribe any conditions or characteristics which shall constitute a disqualification and debar one from obtaining a license.

It is not a matter of regulation at all. It simply provides that no license shall issue to any party unless he obtain the written consent of a majority of the police commissioners, or of 12 property holders in the same block, without indicating any conditions whatever upon which the assent may or ought to be given, or withheld. It leaves it to the absolute, arbitrary, unregulated will of the persons named. They can consent to grant a license to every vagabond and disreputable person in the city, and refuse to consent to a license to every respectable person in the city.

The ordinance permits and authorizes such action. It puts it in the absolute, arbitrary power of these persons to control the whole retail liquor trade of the city, without regard to qualifications of the parties seeking a license, or to circumstances or conditions, or the interests of society. Tn my judgment, an ordinance that upon its face permits and authorizes such discrimination and inequality of operation is a violation of the Constitution of the United States.

I admit the full power of the state to prohibit, limit, and control the domestic liquor traffie, and to prescribe the qualifications and conditions applicable to all of those who are to be permitted to sell liquors, but this is a very different proposition from that which claims the authority to confer upon any one or more persons the arbitrary power, in accordance with their uncontrolled will, to regulate these matters.” On appeal to the Supreme Court, Judge Sawyer’s decision was reversed. Crowley v. Christensen, supra. Mr.

Justice Field does not in his opinion controvert the position taken as to the nature of the power conferred and seemingly assumes that it was of the same nature as that conferred by the laundry ordinance involved in the Yick Wo Case.

Fie distinguished these two cases in these words: “It will thus ho seen that that case was essentially different from the one now under consideration: the ordinance there held invalid vesting uncontrolled discretion in the board of supervisors with reference to a business harmless in itself and useful to the community, and the discretion appearing to have been exercised for the express purpose of depriving the petitioner of a privilege that was extended to others.

In the present case the business is not one that any person is permitted to carry on without a license, but one that may be entirely prohibited or subjected to such restrictions as the governing authority of the city may prescribe.” Again, he said: “If there were no property holders in the block, the discretionary authority would be exercised finally by the police commissioners, and their refusal to grant the license is not a matter of review by this court, as it violates no principle of federal law.” In the latter quotation he speaks of the power conferred as “discretionary authority,” but, as indicated by what he says in the former quotation, the discretion he has in mind is an “uncontrolled discretion,” the same discretion no doubt which Air.

Justice Alatthews1 had in mind when he used the words, “not a discretion to be exercised upon a consideration of the circumstances of the case.” Possibly, in view of the decisions in the Fischer and Lieberman Cases, in the former of which the provision of the ordinance upheld was that no one should erect a dairy or cow stable except by permission of'the municipal assembly, and in the latter of which the provision in the sanitary code upheld was that no one should sell milk without a permit in writing- from the board of health, that the power conferred was a “reasonable discretion,” it would not now be held that by an ordinance similar to the one involved in the Christensen Case the power conferred was an “uncontrolled discretion.” But, viewing it as an uncontrolled discretion, the ordinance was upheld because it related to a business which might be entirely prohibited or subjected to such restrictions as the governing authority of the city might prescribe.

Again, in the Davis Case, the- ordinance upheld prohibited any person from making any public address on any public grounds without a permit from the mayor, and one was convicted in the state courts of speaking on Boston Common in violation of this ordinance. The Supreme Court of Massachusetts had held according to Mr.

Justice White: “That the Common was absolutely under the control of the Legislature, which in the exercise of its discretion could limit the use to the extent deemed by it advisable and could and did delegate to the municipality the power to assert such authority.” This absolute power over Boston Common in the municipality was held to include the power to prescribe that no one should speak thereon without the mayor’s permit. Mr.

Justice White said: “The assertion that, although it be conceded that the power existed in the state or municipality to absolutely control the use of the Common, the particular ordinance in question is nevertheless void because arbitrary and unreasonable, in that it vests in the mayor the power to determine when he will grant a permit, in truth, whilst admitting on the one hand the power to control, on the other denies its existence.

The right to absolutely exclude all right to use necessarily includes the authority to determine under what circumstances such use may be availed of,' as the greater power includes the lesser.” In the case of Louisville Water Co. v. Wiemer, 130 Fed. 257, 64 C. C.

A. 503, this court held that a regulation of a water company requiring persons engaged in the business of sprinkling 'streets to obtain a license from the company, and providing that more than one license would not be granted covering the same streets or part of a street, which should be granted to the applicant having the larges't list of petitioning owners of abutting property, was reasonable and valid and upheld a selection made by the company under the regulation.

Judge Severens sajd: “Certainly it cannot be said that there would be any propriety in granting licenses to any and all comers who should.dejnand to do the same thing. In this particular service it is obvious that this would lead to chaos, would embarrass the service to the public, and would be inconvenient and prejudicial to the company. We see nothing, therefore, that could be injurious to any lawful 'right of others in restricting the grant of the license to one person for a definite locality, so long as that person accomplished the duty of the company to, the public -in a proper way.

The concession of this place to the one wlio could bring the largest approval of those of tlie other party who were most interested seems fair.” It must therefore be conceded that a classification can properly be made on the basis of the choice or selection of the legislative body or of administrative officers to whom the matter is committed.

As stated, it is not to be presumed in such cases that the choice or selection is made in the one instance or authorized to be made in the other without regard to such considerations as may be relevant thereto, and yet in fact it may be so made and have no effect upon the classification. This is so as to all businesses where the power to limit exists. Possibly it may not be so in all cases where the power to prohibit exists. Possibly the power to prohibit may not always include the power to- .limit. We are led to refer to this possibility in view of the Union Sewer Pipe Company Case.

It would seem to be certain that the power to prohibit all trusts and combinations exists, and yet in that case a limited prohibition was held invalid. But certainly where the power to limit exists the power to select also exists. This power to select in such cases may be likened to the power to appoint to office. As but one person can be appointed, the person having appointing power has the power of selection. Or it may be likened to the power to make grants of exclusive franchises. As but one grant can be made, the power to select the person to whom the grant shall be made necessarily exists.

Such a classification in such cases has a real and substantial relation to the public welfare. The public welfare requires the limitation, and the limitation necessitates the selection. The iouchstone, therefore, of the validhy of legislation depriving one of his liberty or property or making a discrimination amongst the persons to whom it is applicable is the public welfare. 1 f the deprivation or classification has a real and substantial relation thereto it is valid, otherwise it is not. This brings us to another fundamental principle embodied in the decisions cited and referred to.

It is this: A court has no right to invalidate or overthrów legislation depriving a person of his liberty or property or making a discrimination as to the persons-to whom it is applicable simply because it believes to a certain degree that it has no real or substantial relation to the public welfare. Something more than this is required in order to warrant its interference.

That something more is that it must be palpably clear that the legislation in question has no real or substantial relation thereto, '¡'he Legislature or local assembly acting under its authority is the governing body of the state or that portion thereof. It is its primary duty to determine what the public welfare demands, and every presumption must be indulged in its favor. It follows, therefore, that unless it is palpably clear that its determination is wrong it must be allowed to stand. Many quotations could be made in support of this position. Two will suffice. In the Gundling Case, Mr.

Justice Peckham said: “Regulations respecting tlie pursuit of a lawful trade or business are of ■very frequent occurrence in tlie various cities of tlie country, and wliat such regulations shall be and to what particular trade, business, or occupation they shall apply are questions for the state to determine, and their determination comes within the proper exercise of the police power by the state, and, unless the regulations are so utterly unreasonable and, extravagant in their nature and purpose that the property and personal rights ot the citizens are unnecessarily and in a manner wholly arbitrary interfered with or destroyed without due process of law, they do not extend beyond the power of the state to pass, and they form no subject for federal interference.” And in the Booth Case, Mr.

Justice Harlan said: “The courts cannot interfere, unless, looking through mere forms and at the substance of the matter, they can say that the statute enacted professedly to protect the public morals has no real or substantial relation to that object, but is a clear and unmistakable infringement of rights secured by the fundamental law.” It would seem, therefore, that the New York Court of Appeals, in a holding in a certain case referred to with approval by Mr. Justice Field in his dissenting opinion in the Powell Case, did not put the matter right.

That holding as stated by him was as follows: “When a health law is challenged in the courts as unconstitutional, on the ground that it arbitrarily interferes with personal liberty and private property without due process of law, the court must be able to see that it has in fact some relation to the public health, that the public health is the end aimed at, and that it is appropriate and adapted to that end; and, as it could not see that the law in question * * * was designed to prorhote the public health, it pronounced the law unconstitutional and void.” Rather the court will not so pronounce a law, unless it is able to see that it will not promote the public welfare, and that beyond a reasonable doubt.

And it would seem further that Mr.

Justice Peckham, in the Lochner Case, did not put the matter^exactly right, when he said: “In every case that comes before this court, therefore, where legislation of this character is concerned, and where the protection of the federal Constitution is sought, the question necessarily arises: Is this a fair, reasonable, and appropriate exercise of the police power of the state, or is it an unreasonable, unnecessary, and arbitrary interference with the right of the individual to his personal liberty.” Rather, is not the question that necessarily arises in such cases this: Is or not it palpably clear that the legislation in question is not a fair, reasonable, and appropriate exercise of the police power of the state, but is an unreasonable, unnecessary, and arbitrary interference with the right of the individual to his personal liberty?

If, then, in a given case the court must admit that it is possible for a reasonable man to conceive that the legislation in question may sub-serve the public welfare, it must leave it alone. As said by Mr. Justice Holmes, in the Otis & Gasman Case: “While the courts must exercise a judgment of their own, it by no means is true that every law is void which may seem to the judges who pass upon it excessive, unsuited to its ostensible end, or based upon conceptions of morality with which they disagree.

Considerable latitude must be allowed for differences of view, as well as for possible peculiar conditions which this court can know but imperfectly, if at all.

Otherwise a Constitution, instead of embodying only relatively fundamental rules of right as generally understood by all English speaking communities, would become the partisan of a particular set of ethical or economical opinions, which by no means are held semper ubique et ab omnibus.” And if, further, in a given case, the court must admit that it is possible for the Legislature to have known some fact not known to it which would make the legislation in question conducive to the public welfare, it must keep its hands off.

In the Powell Case, it was agreed that the oleomargarine which the defendant was charged with having for sale, a portion of which he sold, was in packages so marked as to let purchasers know that it was oleomargarine, and it appeared from the evidence offered and rejected that it was wholesome and nutritious, yet the statute and the conviction under it were upheld because it was conceived that it was possible that most kinds of oleomargarine in the market contained ingredients that were or might become injurious to health, a fact as to which the court could not take judicial knowledge, but might have been known to the Legislature and caused the passage of the law.

But just here the caution of Mr. Justice Brewer, in the Gulf, C. & S. F. R. Co. Case, should he borne in mind.

It is in these words: “While good faith and a knowledge of existing conditions on tlie part of the Legislature is to be presumed, yet to carry that presumption to the extent of always holding that there must be some undisclosed and unknown' reason for subjecting certain individuals and corporations to hostile and discriminating legislation is to make the protecting clause of the fourteenth amendment a mere rope of sand in no manner restraining state action.” A final fundamental principle embodied in said decisions which the proper disposition of this case requires should be taken note of is this: If legislation depriving one of his liberty or property or making a discrimination as to the persons to whom it is applicable does in fact have a real and substantial relation t@ the public welfare both so far as said deprivation and discrimination are concerned, the motive which prompted its enactment cannot be inquired into.

In the Soon Ring Case, Mr. Justice Field said: “The principal objection, however, of the petitioner to the ordinance in question is founded upon the supposed hostile motives of the supervisors in passing it. The petition alleges that it was adopted owing to a feeling of antipathy and hatred prevailing in the city and county of San Francisco against the subjects of the Emperor of China resident therein, and for the purpose of compelling those engaged in the laundry business to abandon their lawful vocation, and residence there, and not for any sanitary, police, or other legitimate purpose.

There is nothing, however, in the language of the ordinance, or in the record of its enactment, which in any respect tends to sustain this allegation. And the rule is general, with reference to the enactments of legislative bodies, that the courts cannot inquire into the motives of the legislators in passing them, except as they may be disclosed on the face of the acts, or inferable from their operation, considered with reference to the condition of the country and existing legislation.

The motives of the legislators, considered as the purposes they had in view, will always be presumed to he to accomplish that which follows as the natural and reasonable effect of their enactments. Their motives, considered as the moral inducements for their votes, will vary with the different members of the legislative body. The diverse character of such motives, and the impossibility of penetrating into the hearts of men and ascertaining the truth, precludes all such inquiries as impracticable and futile.

And in the present case, even if the motives of the supervisors were as alleged, the ordinance would not be thereby changed from a legitimate police regulation, unless in Its enforcement it is made to operate only against the class mentioned; and of this there is no pretense.” In the Dobbins Case, Mr. Justice Day said: “It is urged that, where the exercise of legislative or municipal power is clearly within constitutional limits, the court will not inquire into the motives which may haye actuated the legislative body in passing the law or ordinance in question.

Whether when it appears that the facts would authorize 'the exercise of the power, the courts will restrain its exercise because of alleged, wrongful motives inducing tile passage of an ordinance is not a question necessary to be determined in this case; but, where the facts as to the situation and conditions are such as to establish the exercise of the police power in such manner as to oppress or discriminate against a class or an individual, the courts may consider and give weight to such purpose in considering the validity of the ordinance.” And, in the Bochner Case, Mr.

Justice Peckhani said: “It is impossible for us to shut our eyes to the fact that many of the laws of this character, while passed under what is claimed to be the police power for the purpose of protecting the public health or welfare, are in reality passed from other motives. We are justified in saying so, when from the character of the law and the subject upon which it legislates it is apparent that the-public health or welfare bears but the most remote relation to the law.” There is nothing in these statements of Mr. Justice Day and Mr. Justice Peckham inconsistent with that of Mr.

Justice Field in the Soon King Case. All that they mean is that the courts have the right to consider the question whether any given legislation has a real or substantial relation to the public welfare, and, if they determine that it has not, they have the right to conclude that it was enacted, not for the public welfare, but for the purpose of depriving the persons affected by it of their liberty and property. In such a case the latter is the real motive behind the enactment, and the claim that it was the public welfare that led thereto is mere pretense.

But, where it determines that such legislation does in fact have a real and substantial relation to the public welfare, they do not mean to intimate that the courts have the right to inquire into the real motives that brought about its enactment, and if they conclude that in fact it was not the public welfare, but some sinister motive that was at the bottom of it to overthrow it. Always, as is to be gathered from Mr. Justice Peckham’s statement, the inquiry as to motive is limited to the character of the law and the subject upon which it legislates. It cannot go outside of that.

This completes our presentation of the fundamental principles embodied in the decisions of the Supreme Court we have added to those cited and relied on by appellee. There is nothing in the latter decisions qualifying in the slightest those principles. We have just directed attention to Mr. Justice Day’s statement, in the Dobbins Case, and Mr. Justice Peckham’s statement, in the Dochner Case, on the question of motive and shown their true bearing. In the

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