Howard Sports Daily, Inc. v. Public Service Commission

Delaplaine, J., delivered the opinion of the Court. Howard Sports Daily, Inc., is appealing from a decree of the Circuit Court No. 2 of Baltimore City, which affirmed an order of the Public Service Commission refusing to require the Western Union Telegraph Company to furnish special contract service for the appellant. In January, 1940, the Western Union agreed to furnish telegraphic service for the appellant’s business of gathering and distributing sports news. The facilities included a Morse circuit extending from New Jersey to its office in Elkridge, and a teleprinter to transmit the news to tickers in Maryland, Virginia, North Carolina, South Carolina and Georgia.

The service was rendered in ac ³⁵⁷ cordance with a tariff filed with the Federal Communications Commission, stipulating that special contract service shall be furnished for an initial period of one month and may be cancelled thereafter upon a minimum of one day’s notice by either party, and also that no facilities shall be used for any purpose or in any manner, directly or indirectly, in violation of any Federal law or the laws of any of the States through which the circuits pass or the equipment is located. In February the telegraph company, after receiving a warning from the United States Attorney for the Northern District of Illinois that the facilities were used in violation of federal and state statutes, terminated the interstate service; but the appellant filed a complaint with the Public Service Commission of Maryland under Code, art. 23, sec. 380, to prevent discontinuance of service within the State. The Commission passed a temporary restraining order, after which the appellant acquired its news from outside the State by telephone, but continued to transmit the news by teleprinter to customers in Maryland. The reports sent by the appellant included the entries in races, the positions of the horses at various stages of the races, the final results, and the prizes paid to the winning horses.

According to witnesses who testified before the Commission on March 19th, there were eleven tickers in operation in the State. In Hyattsville there were two tickers, one of which was installed in a second-floor apartment, the other in a cellar. The other nine were located in Frederick, Emmitsburg, Brunswick, Bel Air, Havre de Grace, Bladensburg, Mt. Rainier, Silver Hill, and Takoma Park.

On five of the premises gambling was seen by the witnesses. It is beyond question that the contract was subject to cancellation. On April 3rd the Commission passed an order dismissing the complaint. On the same day the appellant filed a bill of complaint under Code, art. 23, sec. 415, and the court enjoined the Western Union from disconnecting the telegraphic service pending determination of the case, and ordered the Public ³⁵⁸ Service.

Commission to show cause why its order should not be vacated and annulled. After the trial the court dismissed the appellant’s bill. The appellant complained that the order of the Commission deprived it of due process of law and denied it the equal protection of the laws in violation of the Fourteenth Amendment to the Constitution of the United States, and Article 23 of the Maryland Declaration of Rights, which provides that no man ought to be deprived of his life, liberty or property, but by the judgment of his peers, or by the law of the land. Unquestionably, if a law is applied and administered by public authority “with an evil eye and an unequal hand” so as to make unjust discrimination between persons in similar circumstances, material to their rights, such denial of equal justice is within the prohibition of the Constitution.

Yick Wo v. Hopkins, 118 U. S. 356, 373 , 6 S. Ct. 1064, 1073 , 30 L. Ed. 220, 227 . But in considering the application of the constitutional safeguard, due regard must be given to the principle that the State may regulate and restrict the freedom of the individual to act whenever such regulation or restraint is essential to the protection of the public safety, health or morals. Dasch v. Jackson, 170 Md. 251, 262 , 183 A. 534, 539 . Chief Justice Taft thus defined “due. process” as guaranteed by the Fourteenth Amendment: “The due process clause requires that every man shall have the protection of his day in court, and the benefit of the general law, a law1 which hears before it condemns which proceeds not arbitrarly or capriciously, but upon inquiry, and renders judgment only after trial, so that every citizen shall hold his life, .liberty, property and immunities under the protection of the general rules which govern society.” Truax v. Corrigan, 257 U. S. 312, 332 , 42 S. Ct. 124, 129 , 66 L. Ed. 254, 263 .

The court cannot adopt the view of the appellant that the Public Service Commission acted arbitrarily or capriciously. To force a public utility, under the guise of impartial regulation, to furnish service and facilities for unlawful purposes would be contrary to public policy. ³⁵⁹ We cannot believe that the Legislature, in providing that no telegraph or telephone company shall subject any person or corporation to “unfair prejudice or disadvantage,” Code, art. 23, sec. 411, intended to make such service mandatory where it would facilitate the violation of the law. Whether a complainant has been deprived of due process of law and denied the equal protection of the laws by action of an administrative body depends upon whether it acted contrary to the statutes and rules and with arbitrary discrimination. Thompson v. Spear, 91 Fed. 2nd 430, 433.

The Fourteenth Amendment protects the citizens in their right to engage in any lawful business, but it does not prevent legislation prohibiting any business which is inherently vicious and harmful. Adams v. Tanner, 244 U. S. 590, 596 , 37 S. Ct. 662, 665 , 61 L. Ed. 1336, 1343 . The State has the undoubted right to enact legislation in the legitimate exercise of its police power. The sovereignty of the State would be a mockery if it lacked the power to compel its citizens to respect its laws.

Allgeyer v. State of Louisiana, 165 U. S. 578 , 17 S. Ct. 427 , 41 L. Ed. 832 . For example, when a complainant sought to enjoin the Maryland Public Service Commission and the Commissioner of Motor Vehicles from prohibiting him from carrying passengers for hire in this state, our court held that, since his scheme contemplated an evasion of the law, he was entitled to no consideration in a court of equity. When the cry of “property rights” is raised in an effort to circumvent the provisions of a law designed to promote and protect the public interest, equity will not aid the attempt by affording the extraordinary remedy of injunction. Restivo v. Public Service Commission, 149 Md. 30, 37 , 129 A. 884, 886 .

It was insisted that the transmission of sports news does not violate any law of the State merely because a recipient of it puts it to illegal use, and that consequently no evidence of illegal activities on the premises of customers should have been produced against the appellant. Harry E. Bilson, secretary and treasurer of the appellant, asserted that while he had executed the con ³⁶⁰ tracts with the customers, he had never visited their places of business, and professed ignorance of the character of their operations. ( ButTít is well settled that a telegraph company has the right to refuse service which is connected with illegal operations. The company may /refuse to render such service, not only where such action would subject it to prosecution as a participant in the illegality, but also where it would have the effect of promoting illegality, even though the company might not be liable to punishment for rendering the service.

There is abundant authority for the principle that a telegraph company cannot be compelled to furnish reports of market prices to a bucket shop, notwithstanding its duty as a public service corporation to serve all customers without discrimination, and even though it may have executed a contract to furnish such reports. Otherwise, telegraph companies would be converted into public vehicles for the consummation of all kinds of illegal designs. Smith v. Western Union Telegraph Co., 84 Ky. 664 , 2 S. W. 483, 485 , 8 Ky. Law Rep. 672 ; Western Union Telegraph Co. v. State, 165 Ind. 492 , 76 N. E. 100, 108 ; Bryant v. Western Union Telegraph Co. 17 Fed. 825 ; 1 Wyman, Public Service Corporations, secs. 590, 607, 613.

Accordingly, after the Kentucky Legislature passed an act making it a criminal offense to withhold the transmission or delivery of a telegraph or telephone message, the Court of Appeals of Kentucky observed: “It would be neither courteous nor fair to the legislative branch of the state government to impute to it, in construing one of its statutes, a purpose to encourage crime and foster immorality * * *, To hold that the statute being considered compelled the transmission of messages by the telegraph company, known to be designed for purposes of gambling within the commonwealth, would be to convict the legislature of favoring the vice of gambling. On the contrary, the true rule of interpretation is that the purpose of the legislature in passing such act will be presumed to be in harmony with the general public policy, evidenced by innumerable statutes against gambling in almost every ³⁶¹ conceivable form.” City of Louisville v. Wehmhoff, 116 Ky. 812 , 76 S. W. 876, 884 , 79 S. W. 201 . The second contention of the appellant was