American Bond & Mortgage Co. v. United States

52 F.2d 318 (1931) | Cited 9 times | Seventh Circuit | October 12, 1931

On Rehearing.

Appellants' attack on the constitutionality of the Radio Act 1927 (47 USCA § 81 et seq.) was not considered in the opinion which disposed of this appeal, because we labored under the impression that counsel on oral argument expressly waived the assignments of error which presented this question. Counsel assure us they neither intended to, nor did, waive these assignments of error, and we unhesitatingly and without question accept their statement of their position. Their brief covered the question, and it was the principal question argued therein. We are glad of the opportunity of correcting, upon this petition for rehearing, what was seemingly our misunderstanding.

Appellants argue that the construction of their broadcasting station with its attendant large expenditure of money and its use antedating the enactment of the Radio Act created property rights in the owners or lessees of the station, which Congress was powerless to confiscate without just compensation.

At the threshold of our consideration of this question, we are met by the fact that, after the passage of the act assailed, appellants, to secure some of the benefits which followed the federal regulation of broadcasting stations, voluntarily made application for a permit to conduct a station and accepted a revocable and limited license with the conditions and limitations clearly set forth. The permit, as well as sections of the statutes referred to therein, is also set forth.1 Such conditions and time limitations restricted appellants' property rights, as well as its broadcasting privileges. Having sought and secured a government permit or license with its attendant benefits, appellants obviously cannot later assert rights which were surrendered in order to secure the permit. Rome Ry. & Light Co. v. Floyd County, 243 U.S. 257, 37 S. Ct. 291, 61 L. Ed. 706.

We find the legal proposition which is the basis of this conclusion stated in Cooley on Constitutional Limitations (8th Ed.) vol. I, p. 369, as follows: "So a person who obtains a license under a law, and seeks for a time to enjoy the benefits thereof, can not afterwards, and when the license is sought to be revoked, question the constitutionality of the act." See also Cofman v. Ousterhous, 40 N.D. 390, 168 N.W. 826, 18 A.L.R. 219; Frost v. Corporation Commission, 278 U.S. 515, 527, 49 S. Ct. 235, 73 L. Ed. 483; Buck v. Kuykendall, 267 U.S. 307, 316, 45 S. Ct. 324, 69 L. Ed. 623, 38 A.L.R. 286; Hurley v. Commission of Fisheries, 257 U.S. 223, 225, 42 S. Ct. 83, 66 L. Ed. 206; St. Louis, etc., Co. v. Prendergast Const. Co., 260 U.S. 469, 472, 43 S. Ct. 178, 67 L. Ed. 351.

Moreover, we would be compelled to reach the same conclusion even though appellants had not limited or narrowed their asserted rights by applying for and accepting a limited license or permit. For it has been held by the various courts, that have passed upon the question, that the regulation of broadcasting stations is within the expressly delegated power of Congress to regulate interstate commerce. KFKB Broadcasting Ass'n v. Federal Radio Commission, 60 App.D.C. 79, 47 F.2d 670; City of New York v. Federal Radio Commission, 59 App.D.C. 129, 36 F.2d 115; General Electric Co. v. Federal Radio Commission, 58 App.D.C. 386, 31 F.2d 630; Station WBT v. Poulnot (D.C.) 46 F.2d 671. See, also, International Text-Book Co. v. Pigg, 217 U.S. 91, 30 S. Ct. 481, 54 L. Ed. 678, 27 L.R.A.(N.S.) 493, 18 Ann.Cas. 1103; W. U. Telegraph Co. v. Pendleton, 122 U.S. 347, 7 S. Ct. 1126, 30 L. Ed. 1187. In the absence of a single authority holding to the contrary and in view of the reasons set forth as the basis of the above decision, we, too, reach the same conclusion.

Whether Congress was acting within its power to regulate the radio broadcasting stations by ordering certain stations off the air presents, of course, a closer question, which can only be solved by an examination of the facts to ascertain the reasonableness of the Commission's order.

The purpose of federal regulation of radio broadcasting stations was obvious. The confusion which resulted from the uncontrolled operation of such tations was ruinous to all commercial enterprises engaged therein, as well as destructive of the benefit which the public enjoyed as a result of the development of the radio industry. There was but one effective method of regulation, to wit, through licensing of stations and the limiting of their use to specific wave lengths and to certain kilowatt power. Such regulation necessarily contemplated a reduction of the number of broadcasting stations, or a limitation of hours a station could broadcast, or the lessening of the area (through reduction of power) through which the wave lengths traveled. It Congress under the Commerce Clause of the Constitution had the power to regulate this subject, it surely could exercise its power in the only manner which would accomplish the desired end, which was through the elimination f a plurality of broadcasting stations operating on the same wave length in the same territory at the same time. Every investment in broadcasting stations was subject to this exercise of reasonable and necessary regulation by Congress. As against such possible regulation there existed no vested right in favor of the investors.

The petition for rehearing is denied.

1. Provisions of License "* * * American Bond and Mortgage Company is hereby authorized to use and operate the radio apparatus * * * for the term ending December 31, 1927, unless this license is sooner suspended or revoked. This license shall not vest in the licensee any right to operate in the use of frequencies or wave lengths specified herein, beyond the terms hereof, nor in any other manner nor at any other time or place than authorized herein * * * this license is expressly subject in terms to the right of use or control conferred by Section 6, of the Radio Act. * * * As one of th conditions of this license, the licensee is required during the term of this license to render adequate service of the character above specified during the authorized time of operation and a violation of this condition will be considered a ground for the suspension or revocation of this license. This license is issued under and in accordance with the Radio Act of 1927, and all of the terms and conditions thereof are made a part hereof as though specifically set out in full herein. * * *" Provisions of Statute (47 USCA) "Sec. 81. * * * No * * * corporation shall use or operate any apparatus for the transmission of energy or communications * * * by radio * * * except under and in accordance with this chapter and with a license in that behalf granted under the provisions of this chapter." "Sec. 85.* * * No station license shall be granted by the commission * * * until the applicant therefor shall have signed a waiver of any claim to the use of any particular frequency or wave length or of the ether as against the regulatory power of the United States because of the previous use of the same, whether by license or otherwise" "Sec. 91. * * * The station license shall not vest in the licensee any right to operate the station nor any right in the use of the frequencies or wave length designated in the license beyond the term thereof nor in any other manner than authorized therein. * * *"

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