Source: https://www.legalcrystal.com/case/94495/frost-trucking-co-vs-railroad-comm-n
Timestamp: 2019-04-18 17:18:47+00:00

Document:
Appellant Frost and Frost Trucking Co.
Frost & Frost Trucking Co. v.
1. Assuming that the use of its highways by private carriers for hire is a privilege which the state may deny, it cannot constitutionally affix to that privilege the unconstitutional condition precedent that the carrier shall assume against his will the burdens and duties of a common carrier. P. 271 U. S. 592 .
2. Under the Auto Stage and Truck Transportation Act of California, as amended in 1919, and as construed and applied by the state supreme court in this case, private carriers by automobile for hire cannot operate over the state highways between fixed termini without having first secured from the Railroad Commission a certificate of public convenience and necessity, and therein they not merely become subject to regulations appropriate to private carriers, but submit themselves to the condition of becoming common carriers and of being regulated as such by the Commission. Held violative of the due process clause of the Fourteenth Amendment. P. 271 U. S. 591 .
Error to a judgment of the Supreme Court of California which sustained an order of the Railroad Commission directing the plaintiffs in error to suspend operations under a single private contract for the transportation of fruit over public highways, between fixed termini, unless and until they should secure from the Commission a certificate that public convenience and necessity required the resumption or continuance thereof.
"for the transportation of persons or property as a common carrier for compensation on any public highway in this state between any fixed termini . . . unless a permit has first been secured as herein provided."
and regulate such transportation companies, and to fix their rates, fares, charges, classifications, rules, and regulations, and generally, to regulate them in all matters affecting their relationship with the traveling and shipping public. Section 5 requires, in addition to the permit, that the applicant must obtain from the Railroad Commission a certificate declaring that public convenience and necessity require the exercise of such right or privilege, and it provides that the Commission may attach to the exercise of the rights granted such terms and conditions as in its judgment the public convenience and necessity may require. Operation under a permit without such certificate is prohibited. In 1919, the Act was amended, Statutes 1919, c. 280. p. 457, so as to bring under the regulative control of the Commission automotive carriers of persons or property operating under private contracts of carriage, and the term "transportation company" was enlarged so as to include such a carrier. It was further provided that no such transportation company shall operate for compensation over the highways without first having secured from the Commission a certificate of public convenience and necessity so to do.
Plaintiffs in error were engaged under a single private contract in transporting, for stipulated compensation, citrus fruit over the the public highways between fixed termini. They were brought before the Commission charged with violating the Act for the reason that they had not secured from the Commission a certificate of public convenience and necessity. The Commission, while agreeing that plaintiffs in error were, in fact, private carriers, held that they were subject to the provisions of the Act and directed them to suspend their operations under their contract unless and until they should secure a certificate that public convenience and necessity required the resumption or continuance thereof. The Commission's order was upheld by the state supreme court. 70 Cal.Dec. 457.
"is to impress upon such private carriers certain regulations so long as they desire to use the publicly built and owned highways as the chief situs of their business of hauling goods for compensation,"
and that "they are not, and cannot be, forced, directly or indirectly, to become common carriers."
It is unnecessary to inquire which view is correct, since the Act has been authoritatively construed by the state supreme court. That court, while saying that the state was without power, by mere legislative fiat or even by constitutional enactment, to transmute a private carrier into a public carrier, declared that the state had the power to grant or altogether withhold from its citizens the privilege of using its public highways for the purpose of transacting private business thereon, and that therefore the legislature might grant the right on such conditions as it saw fit to impose. In the light of this general statement of principle, it was held that the effect of the transportation act is to offer a special privilege of using the public highways to the private carrier for compensation upon condition that he shall dedicate his property to the quasi -public use of public transportation; that the private carrier is not obliged to submit himself to the condition, but, if he does not, he is not entitled to the privilege of using the highways.
is the view of the court below plainly expressed. 70 Cal.Dec. pp. 464-466.
Thus it will be seen that, under the Act as construed by the state court, whose construction is binding upon us, a private carrier may avail himself of the use of the highways only upon condition that he dedicate his property to the business of public transportation and subject himself to all the duties and burdens imposed by the Act upon common carriers. In other words, the case presented is not that of a private carrier who, in order to have the privilege of using the highways, is required merely to secure a certificate of public convenience and become subject to regulations appropriate to that kind of a carrier, but it is that of a private carrier who, in order to enjoy the use of the highways, must submit to the condition of becoming a common carrier and of being regulated as such by the Railroad Commission. The certificate of public convenience, required by § 5, is exacted of a common carrier, and is purely incidental to that status. The requirement does not apply to a private carrier qua private carrier, but to him only in his imposed statutory character of common carrier. Apart from that signification, so far as he is concerned, it does not exist.
withhold if it sees fit to do so. Upon the answer to this question the constitutionality of the statute now under review will depend.
There is involved in the inquiry not a single power, but two distinct powers. One of these, the power to prohibit the use of the public highways in proper cases, the state possesses, and the other, the power to compel a private carrier to assume against his will the duties and burdens of a common carrier, the state does not possess. It is clear that any attempt to exert the latter separately and substantively must fall before the paramount authority of the Constitution. May it stand in the conditional form in which it is here made? If so, constitutional guaranties, so carefully safeguarded against direct assault, are open to destruction by the indirect, but no less effective, process of requiring a surrender which, though in form voluntary, in fact lacks none of the elements of compulsion. Having regard to form alone, the Act here is an offer to the private carrier of a privilege which the state may grant or deny, upon a condition which the carrier is free to accept or reject. In reality, the carrier is given no choice except a choice between the rock and the whirlpool -- an option to forego a privilege which may be vital to his livelihood or submit to a requirement which may constitute an intolerable burden.
unlimited, and one of the limitations is that it may not impose conditions which require the relinquishment of constitutional rights. If the state may compel the surrender of one constitutional right as a condition of its favor, it may, in like manner, compel a surrender of all. It is inconceivable that guaranties embedded in the Constitution of the United States may thus be manipulated out of existence.
"The question as to the right of a state to impose upon a corporation engaged in interstate commerce the duty of obtaining a permit from the state as a condition of its right to carry on such commerce is a question which it is not necessary to decide in this case. In all the cases in which this Court has considered the subject of the granting by a state to a foreign corporation of its consent to the transaction of business in the state, it has uniformly asserted that no conditions can be imposed by the state which are repugnant to the Constitution and laws of the United States. La Fayette Ins. Co. v. French, 18 How. 404, 59 U. S. 407 ; Ducat v. Chicago, 10 Wall. 410, 77 U. S. 415 ; Insurance Co. v. Morse, 20 Wall. 445, 87 U. S. 456 ; St. Clair v. Cox, 106 U. S. 350 , 106 U. S. 356 ; Phila. Fire Assn. v. New York, 119 U. S. 110 , 119 U. S. 120 ."
"But that statute, requiring the corporation, as a condition precedent to obtaining a permit to do business within the state, to surrender a right and privilege secured to it by the Constitution and laws of the United States, was unconstitutional and void, and could give no validity or effect to any agreement or action of the Corporation in obedience to its provisions."
state is unwise enough to legislate the one, it has no constitutional power to legislate the other. . . ."
"The whole thing, however free from intentional disloyalty, is derogatory to that mutual comity and respect which ought to prevail between the state and general governments, and ought to meet the condemnation of the courts whenever brought within their proper cognizance."
"In the opinion of the Court in this case, the doctrine that a corporation cannot be permitted to be deprived of its right to do business because of the assertion of a federal right is said not to be denied, because the right of a foreign corporation to do business in a state is not secured or guaranteed by the federal Constitution. Conceding the soundness of this general proposition, it by no means follows that a foreign corporation may be excluded solely because it exercises a right secured by the federal Constitution. For, conceding the right of a state to exclude foreign corporations, we must no overlook the limitation upon that right, now equally well settled in the jurisprudence of this Court, that the right to do business cannot be made to depend upon the surrender of a right created and guaranteed by the federal Constitution. If this were otherwise, the state would be permitted to destroy a right created and protected by the federal Constitution under the guise of exercising a privilege belonging to the state, and, as we have pointed out, the state might thus deprive business within its borders except upon the condition that it strip itself of the protection given it by the federal Constitution."
of the protection of the federal Constitution, which secures to alien citizens the right to resort to the courts of the United States."
"In the cases decided in this Court subsequently to Barron v. Burnside, while the general proposition is affirmed that a state may prescribe conditions upon which a foreign corporation may do business within its borders, in no one of them is it asserted that the state may exclude or expel such corporations because they insist upon the exercise of a right created by the federal Constitution. On the contrary, this Court has repeatedly said that such right of exclusion was qualified by the superior right of all citizens to enjoy the protection of the federal Constitution."
of the Constitution. The company was not bound under any circumstances to surrender its constitutional exemption from state taxation, direct or indirect, in respect of its interstate business and its property outside of the state, any more than it would have been bound to surrender any other right secured by the national Constitution."
Since that decision, the same principle has been reiterated many times, and never departed from. Pullman Co. v. Kansas, 216 U. S. 56 , 216 U. S. 63 ; International Text-Book Co. v. Pigg, 217 U. S. 91 ; Herndon v. Chi., R.I. & P. Ry., 218 U. S. 135 , 218 U. S. 158 ; Harrison v. St.L. & San Francisco R. Co., 232 U. S. 318 , 232 U. S. 332 ; Looney v. Crane Co., 245 U. S. 178 , 245 U. S. 187 ; International Paper Co. v. Massachusetts, 246 U. S. 135 , 246 U. S. 142 -143; Western Union Tel. Co. v. Foster, 247 U. S. 105 , 247 U. S. 114 ; Public Utility Commrs. v. Ynchausti & Co., 251 U. S. 401 , 251 U. S. 404 ; Terrall v. Burke Constr. Co., supra; Burnes Nat. Bank v. Duncan, 265 U. S. 17 , 265 U. S. 24 ; Fidelity & Deposit Co. of Maryland v. Tafoya et al., 270 U. S. 426 .
the consequence would not follow. Acts generally lawful may become unlawful when done to accomplish an unlawful end ( United States v. Reading Co., 226 U. S. 324 , 226 U. S. 357 ), and a constitutional power cannot be used by way of condition to attain an unconstitutional result ( Western Union Telegraph Co. v. Kansas, 216 U. S. 1 ; Pullman Co. v. Kansas, 216 U. S. 56 ; Sioux Remedy Co. v. Cope, 235 U. S. 197 , 235 U. S. 203 ). The regulation in question is quite as great an interference as a tax of the kind that repeated decisions have held void. It cannot be justified 'under that somewhat ambiguous term of police powers.'"
"The states cannot use their most characteristic powers to reach unconstitutional results. Western Union Telegraph Co. v. Kansas, 216 U. S. 1 ; Pullman Co. v. Kansas, 216 U. S. 56 ; Western Union Telegraph Co. v. Foster, 247 U. S. 105 , 247 U. S. 114 ."
We hold that the Act under review, as applied by the court below, violates the rights of plaintiffs in error as guaranteed by the due process clause of the Fourteenth Amendment, and that the privilege of using the public highways of California in the performance of their contract is not and cannot be affected by the unconstitutional condition imposed. Western Union Tel. Co. v. Kansas, supra, p. 216 U. S. 48 .
understood as challenging the power of the state, or of the Railroad Commission under the present statute, whenever it shall appear that a carrier, posing as a private carrier, is in substance and reality a common carrier, to so declare and regulate his or its operations accordingly.
The question is whether a state may require all corporations or persons, with immaterial exceptions, who operate automobiles, etc., for the transportation of persons or property over a regular route and between fixed termini on the public highways of the state, for compensation, to obtain a certificate from the Railroad Commission that public necessity and convenience require such operation. A fee has to be paid for this certificate, and transportation companies are made subject to the power of the railroad Commission to regulate their rates, accounts, and service. The provisions on this last point are immaterial here, as the case arises upon an order of the Commission under § 5 that the plaintiffs in error desist from transportation of property as above unless and until they obtain the certificate required, and, by the terms of the statute, every section and claim in it is independent of the validity of all the rest. § 10. Whatever the Supreme Court of California may have intimated, the only point that is decided, because that was the only question before it, was that the order of the Commission should stand.
lawful acts or conditions may become unlawful when done or imposed to accomplish an unlawful end. But that is only the converse of the proposition that acts in other circumstances unlawful may be justified by the purpose for which they are done. This applies to acts of the legislature as well as to the doings of private parties. The only valuable significance of the much abused phrase police power is this power of the state to limit what otherwise would be rights having a pecuniary value when a predominant public interest requires the restraint. The power of the state is limited in its turn by the constitutional guaranties of private rights, and it often is a delicate matter to decide which interest preponderates and how far the state may go without making compensation. The line cannot be drawn by generalities, but successive points in it must be fixed by weighing the particular facts. Extreme cases on the one side and on the other are Edgar A. Levy Leasing Co. v. Siegel, 258 U. S. 242 , and Pennsylvania Coal Co. v. Mahon, 260 U. S. 393 .
"In the latter case, the power to exclude altogether generally includes the lesser power to condition and my justify a degree of regulation not admissible in the former."
264 U.S. 264 U. S. 145 . I think that the judgment should be affirmed.
Our primary concern is with the decree below, not with the reasons there advanced to support it. I suppose, if that court had simply approved the action of the Railroad Commission and had said nothing more, there would be little, if any, difficulty here in finding adequate ground for affirmance.
many words, the legislature had said that no intrastate carriers for hire except public ones shall be permitted to operate over the state roads, it would have violated no federal law. So far as the rights of plaintiffs in error are affected, nothing more serious than that has been done.
The states are now struggling with new and enormously difficult problems incident to the growth of automotive traffic, and we should carefully refrain from interference unless and until there is some real, direct, and material infraction of rights guaranteed by the federal Constitution.
I think the decree of the court below should be affirmed.

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