Case Name: Ike Elkins et al., Appellants, v. Ferd Schaaf, as Director of the Department of Public Service, et al., Respondents
Court: Washington Supreme Court
Jurisdiction: Washington
Decision Date: 1940-05-02
Citations: 4 Wash. 2d 12
Docket Number: No. 27661
Parties: Ike Elkins et al., Appellants, v. Ferd Schaaf, as Director of the Department of Public Service, et al., Respondents.
Judges: Blake, C. J., Main, Beals, and Jeffers, JJ., concur.
Reporter: Washington Reports
Volume: 4
Pages: 12–36

Head Matter:
[No. 27661.
En Banc.
May 2, 1940.]
Ike Elkins et al., Appellants, v. Ferd Schaaf, as Director of the Department of Public Service, et al., Respondents.
Roy C. Fox (Gray & McNaughton, of counsel), for appellants.
The Attorney General and Don Cary Smith, Assistant (Will M. Derig, of counsel), for respondents.
Frederick J. Lordan, amicus curiae.
Reported in 102 P. (2d) 230.

Opinion:
Millard, J.
On December 14, 1929, Ike Elkins and J. E. Elkins, who are engaged in the business of logging contractors, entered into a contract with the Panhandle Lumber Company, under the terms of which they were obligated to cut, limb, end stamp, skid, and deliver afloat in the Pend Oreille river the timber on certain lands belonging to the lumber company. In the summer of 1935, W. W. Saults entered into a similar contract for the logging of certain other timber belonging to the Panhandle Lumber Company. The contracts were for a stated price for the whole operation, which, as stated above, included delivery of the logs at certain designated points.
The three parties named are engaged exclusively in the carrying on of the contracts and, among other necessary equipment, used exclusively in the business, own and use a number of trucks with trailers.
In order to carry on the business after felling, limbing, stamping, and loading the logs, it is necessary, in order to deliver the same, to transport them by truck to one of two landings which are suitable for the delivery of logs afloat into the Pend Oreille river. These two points are the only suitable points for delivery of the logs from the lands covered by the contract into the river. From May 1st to October 10th, when the flow of the river is high, the logs are delivered afloat directly into the river, and during these operations it is necessary for the logging contractors to only cross over a secondary highway. From October 10th to May 1st, when the waters of the river are low, it is necessary to deck the logs in a slough adjacent to the river, where they can be carried away when the high water period arrives. During this period of operation, it is necessary for' the logging contractors to travel on one of the public highways a distance of approximately four and one-half miles.
The department of public service, deeming the provisions of chapter 184, of the Laws of 1935, p. 883, applicable to the operations of the logging contractors, demanded that the contractors procure permits, file liability and property damage insurance with the department, and otherwise comply with the provisions of chapter 184 as interpreted by the department. The logging contractors brought an action to permanently restrain the department from interfering with the contractors' transportation of timber products under their contracts with the Panhandle Lumber Company. As a result of the trial of that cause, a decree was entered permanently enjoining the department from interfering with the operations of the contractors under their contracts'.. On appeal of the department, we held that the logging contractors did not come within any of the statutory (chapter 184, Laws of 1935) definitions of carriers, hence the statute (chapter 184, Laws of 1935) was not applicable to them. Elkins v. Schaaf, 189 Wash. 42, 63 P. (2d) 421.
The legislature had the power, and, pursuant thereto, explicitly declared, by chapter 166, Laws of 1937, p. 627, § 5 (Rem; Rev. Stat., Vol. 7A, § 6382-4a [P. C. § 234-13%dd]), which amended chapter 184, Laws of 1935, by the addition of § 4-a to chapter 184, its inten tion to include logging contractors who are engaged, like the contractors in the case at bar, for compensation to perform a combination of services which includes transportation of property of others upon the public highways within the class required to obtain a carrier's permit.
The department of public service demanded, under the provisions of chapter 166, Laws of 1937, that the logging contractors procure permits, file liability and property damage insurance with the department, etc. The logging contractors instituted an action to permanently restrain the department from interference with the contractors' transportation of timber products under their contracts with the Panhandle Lumber Company. The sufficiency of the complaint — the allegations of which are not materially different, except as to the amendment of chapter 184, Laws of 1935, by chapter 166, Laws of 1937, than the facts in Elkins v. Schaaf, 189 Wash. 42, 63 P. (2d) 421 — to constitute a cause of action was challenged by demurrer, which was sustained. The appeal is from the judgment of dismissal rendered upon the plaintiffs' refusal to plead further.
Section 2, subd. (e), chapter 184, Laws of 1935, p. 884, defines a common carrier as:
". . . any person who undertakes to transport property for the general public by motor vehicle for compensation, whether over regular or irregular routes, or regular or irregular schedules, including motor vehicle operations of carriers by rail or water and of express or forwarding companies."
That subdivision of § 2 was not amended by chapter 166, Laws of 1937. A contract carrier is defined by § 2, subd. (f), chapter 184, Laws of 1935, as any person not included within the definition of "common carrier" who, "under special and individual contracts or agree ments transports property by motor vehicle for compensation."
The definition of "contract carrier" under § 2, chapter 166, Laws of 1937, p. 624 (Rem. Rev. Stat., Vol. 7A, § 6382-2 [P. C. § 234-13%b]), is the same as the definition in chapter 184, Laws of 1935, except contract carriers are not included within the definition of "common carrier" and "private carrier."
Section 5, chapter 184, Laws of 1935, p. 886, provides:
"Sec. 5. No 'common carrier,' 'contract carrier,' or 'special carrier' shall hereafter operate for the transportation of property for compensation in this state without first obtaining from the department a permit so to do under the provisions of this act. A permit shall be issued to any qualified applicant therefor without hearing, or after hearing if the department deems such hearing necessary in the public interest, authorizing the whole or any part of the operations covered by the application, if it is found that the applicant is fit, willing and able to perform the service proposed and to conform to the provisions of this act and the requirements, rules and regulations of the department hereunder, and that the proposed service to the extent authorized will not be contrary to the declared policy of this act.
"No permit shall be granted if the department finds that the applicant is not financially able, properly and adequately equipped and capable of conducting the transportation service applied for in compliance with the law and rules and regulations of the department, or if the applicant or any of its principal officers or stockholders fail to comply with the laws of the State of Washington or with the laws of the United States regulating motor transportation.
"Nothing contained in this act shall be construed to confer upon any person the exclusive right or privilege of transporting property for compensation over the public highways of the State of Washington. No certificate of public convenience and necessity shall be required and existing certificates of public convenience and necessity for the transportation of property for compensation are hereby abolished."
Chapter 166, Laws of 1937, added a new section, which reads as follows:
"Section 4-a. Every person who engages for compensation to perform a combination of services which includes transportation of property of others upon the public highways shall be subject to the jurisdiction of the department as to such transportation and shall not engage upon the same without first having obtained a common carrier or contract carrier permit to do so. Every person engaging in such a combination of services shall advise the department what portion of the consideration is intended to cover the transportation service and if the agreement covering the combination of services is in writing, the rate and charge for such transportation shall be set forth therein. The rates or charges for the transportation services included in such combination of services shall be subject to control and regulation by the department in the same manner that the rates of common and contract carriers are now controlled and regulated." Laws of 1937, chapter 166, p. 627, § 5 (Rem. Rev. Stat, Vol. 7A, § 6382-4a [P. C. § 234-13%dd]).
It is manifest that the legislature intended by its amendment of the 1935 statute to make logging contractors, like appellants, subject to the jurisdiction of the department as to transportation upon public highways. The legislature could not, by the use of other language, have more clearly expressed its intention. The purpose of the amendatory statute is so patent that interpretation is unnecessary, and attempted construction tends to confuse rather than clarify. To vindicate the obvious, is often as difficult as to elucidate the obscure.
In chapter 166, Laws of 1937, the phrase "contract carrier" includes all motor vehicle operators who are not common carriers and who are not private car riers. A private carrier, under the 1937 statute, is a person who, in his own vehicle, transports only property owned, or being bought or sold by him in good faith, and only when such transportation is purely incidental to some other established private business owned or operated by him in good faith. Of course, the appellants are not private carriers. They do not transport property which is being bought or sold by them. They transport the property of others. They are not within the definition of a private carrier, but they are within the definition of a contract carrier.
Appellants' position that the 1935 statute defining common carriers and contract carriers was not changed in any material respect by the 1937 statute, is not sound. Section 4-a added to chapter 184, Laws of 1935, by chapter 166, Laws of 1937, plainly provides that every person who engages for compensation to perform a combination of services which includes transportation of property of others upon the public highways shall be subject to the jurisdiction of the department as to such transportation, and shall not engage upon the same without first having obtained a common carrier or contract carrier permit to do so. Those carriers are required to inform the department what portion of the consideration they receive for performance of a combination of services is intended to cover the transportation service, and if the agreement covering the combination of services is in writing, the rate and charge for such transportation services shall be set forth therein. The rates or charges for the transportation services included in such combination of services are subject to control and regulation by the department in the same manner that the rates of common and contract carriers are regulated by the department.
Appellants transport property of others by motor vehicle for compensation under special and individual contracts for a combination of services which includes transportation. Our holding in Elkins v. Schaaf, 189 Wash. 42, 63 P. (2d) 421, that the appellants' use of highways was only incidental to their business of logging contractors, hence those contractors were not within any of the definitions of "carriers," as by the terms "operating for compensation" the legislature meant compensation pursuant to contract for the trucking, and the contractors were doing their own trucking, therefore their use of the road was not a special business use, is not controlling, in view of the amendment of chapter 184, Laws of 1935, by addition thereto of § 4-a by chapter 166, Laws of 1937.
Under chapter 184, Laws of 1935, Elkins v. Schaaf, supra, is clearly correct. Under chapter 166, Laws of 1937, however, the legislature declared that, where a portion of a combination of services in which a person engaged for compensation included transportation of property of another upon the public highways, such services constituted a business upon public highways and, therefore, subject to regulation.
A portion of the business of appellants as logging contractors — felling, etc. — is not a business affected by a public interest and is not conducted over the public highways; however, another portion of their business— transportation of the logs on motor trucks over the public highways — is both a business affected with a public interest and is carried on over the public highways. It comes within the definition of a contract carrier. Prater v. Department of Public Service, 187 Wash. 335, 60 P. (2d) 238.
Nor do we agree with appellants that, if we construe chapter 184, Laws of 1935, as amended by chapter 166, Laws of 1937, to apply to appellants, that the statute is violative of the fourteenth amendment of the Federal constitution as depriving them of prop erty without due process because their business is not affected with a public interest.
We held in Prater v. Department of Public Service, 187 Wash. 335, 60 P. (2d) 238, that the business of transporting freight over the public highways for gain is a business affected with a public interest. Concededly, a portion of the compensation for the combined services of appellants to the Panhandle Lumber Company is received for transportation of logs of others (Panhandle Lumber Company) over the highways of this state. That is sufficient to establish a public interest.
There is no denial to appellants of equal protection of the law because they, as contractors, are subject to the regulatory act while the owner of the timber, if it does its own hauling, is not subject to the act. A portion of the combined services of appellants under its contract is for use of the highways for gain; therefore, the state may regulate that use. Prater v. Department of Public Service, supra.
The equal protection clause of the fourteenth amendment of the Federal constitution does not deprive the state of the power to classify in the adoption of police laws, but admits of the exercise of a wide scope of discretion in that regard, and avoids what is done only when it is without any reasonable basis, and therefore is purely arbitrary. A classification which has some reasonable basis does not offend against the equal protection clause of the fourteenth amendment merely because it results in some inequality. When the classification in such a law is challenged, if any state of facts reasonably can be conceived that would sustain it, the existence of that state of facts at the time the law was enacted must be assumed. The burden is upon the one who assails the classification in such a law of showing that it does not rest upon any reasonable basis but is essentially arbitrary. Lindsley v. Natural Carbonic Gas Co., 220 U. S. 61, 55 L. Ed. 369, 31 S. Ct. 337, Ann. Cas. 1912C, 160. We must assume the power and the right of the state to regulate the use of its highways, from which it follows that such right cannot be restricted within narrow bounds.
"On the contrary, to the end that such right might be fully enjoyed and exercised, there is a constant recognition of the principle that the state 'has a broad discretion in classification in the exercise of its power of regulation.' Smith v. Cahoon, 283 U. S. 553, loc. cit. 566, 51 S. Ct. 582, 587, 75 L. Ed. 1264. Upon such classification, no person can interpose an objection, save only in those cases where the classification or discrimination is entirely arbitrary." Schwartzman Service v. Stahl, 60 F. (2d) 1034.
In making its classification, the legislature is entitled to consider the frequency and the extent to which the operations will use the highway.
"But the legislature in making its classifications was entitled to consider frequency and character of use and to adapt its regulations to the classes of operations, which by reason of their extensive as well as constant use of the highways brought about the conditions making the regulations necessary. Continental Baking Co. v. Woodring [286 U. S. 352], supra. It is said that the exception was designed to favor transportation by railroad as against transportation by motor trucks. If this was the motive of the legislature, it does not follow that the classification as made in this case would be invalid. The State has a vital interest in the appropriate utilization of the railroads which serve its people, as well as in the proper maintenance of its highways as safe and convenient facilities." Sproles v. Binford, 286 U. S. 374, 76 L. Ed. 1167, 52 S. Ct. 581.
In Continental Baking Co. v. Woodring, 286 U. S. 352, 76 L. Ed. 1155, 52 S. Ct. 595, 81 A. L. R. 1402, it was held that the legislature may also consider the character of the use to which the highway is subjected by the user, and the supreme court of the United States quoted with approval the language of the district court referring to the basis for the distinction which was made by reason of the character of the use of the highway:
"The third exemption applies to 'the transportation of livestock and farm products to market by the owner thereof or supplies for his own use in his own motor vehicle.' In Smith v. Cahoon [283 U. S. 553], supra, the state statute, which applied to all carriers for compensation over regular routes, including common carriers, exempted from its provisions 'any transportation company engaged exclusively in the transporting of agricultural, horticultural, dairy or other farm products and fresh and salt fish and oysters and shrimp from the point of production to the assembling or shipping point en route to primary market, or to motor vehicles used exclusively in transporting or delivering dairy products.' The stated distinction was thus established between carriers, and between private carriers, notwithstanding the fact that they were 'alike engaged in transporting property for compensation over public highways between fixed termini or over a regular route.' The Court was unable to find any justification for' this discrimination between carriers in the same business, that is, between those who carried for hire farm products, or milk or butter, or fish or oysters, and those who carried for hire bread or sugar, or tea or coffee, or groceries in general, or other useful commodities.
"The distinction in the instant case is of a different sort. The statute does not attempt to impose an arbitrary discrimination between carriers who transport property for hire, or compensation, with respect to the class of products they carry. The exemption runs only to one who is carrying his own livestock and farm products to market or supplies for his own use in his own motor vehicle. In sustaining the exemption, the District Court referred to the factual basis for the distinction. 'The legislature knew,' said the court 'that as a matter of fact farm products are transported to town by the farmer, or by a non-exempt "contract carrier" employed by him. The legislature knew that as a matter of fact the use of the highways for the transportation of farm products by the owner is casual and infrequent and incidental; farmers use the highways to transport their products to market ordinarily but a few times a year. The legislature rightly concluded that the use of the highways for carrying home his groceries in his own automobile is adequately compensated by the general tax imposed on all motor vehicles.' 55 F. (2d) at p. 352. And the court properly excluded from consideration mere hypothetical and fanciful illustrations of possible discriminations which had no basis in the actual experience to which the statute was addressed. The court found a practical difference between the case of appellants 'who operate fleets of trucks in the conduct of their business and who use the highways daily in the delivery of their products to their customers,' and that of 'a farmer who hauls his wheat or livestock to town once or twice a year.' The legislature in making its classification was entitled to consider frequency and character of use and to adapt its regulations to the classes of operations, which by reason of their habitual and constant use of the highways brought about the conditions making regulation imperative and created the necessity for the imposition of a tax for maintenance and reconstruction. As the Court said in Alward v. Johnson, 282 U. S. 509, 513, 514: 'The distinction between property employed in conducting a business which requires constant and unusual use of the highways, and property not so employed, is plain enough.' See, also, Bekins Van Lines v. Riley, 280 U. S. 80, 82; Carley & Hamilton v. Snook, 281 U. S. 66, 73."
In State ex rel. Department of Public Works v. Inland etc. Corp., 164 Wash. 412, 2 P. (2d) 888, we held that the exclusion of taxicabs and other motor vehicles used exclusively in moving farm products to market from the classification of "auto transportation company" within the act regulating common carriers for hire, was a reasonable classification and not violative of constitution, Art. I, § 12, guaranteeing equal protection of the laws to all citizens. We said:
"Closely akin to the question just discussed, it is further argued on behalf of the appellant that the statutes violate Art. I, § 12, of the constitution, which guarantees equal protection to all citizens. Reliance is had on a portion of subdivision 'd,' § 1 of the act wherein, after defining the term 'auto transportation company,' it says:
" 'Provided, that the term "auto transportation company," as used in this act, shall not include corporations or persons, their lessees, trustees, receivers or trustees appointed by any court whatsoever, insofar as they own, control, operate or manage taxicabs, hotel busses, school busses, motor propelled vehicles, operated exclusively in transporting agricultural, horticultural, or dairy or other farm products from the point of production to the market, or any other carrier which does not come within the term "auto transportation company" as herein defined.' Laws of 1921, p. 338; Rem. Comp. Stat., § 6387.
"But that does not amount to a discrimination between common carriers or carriers of the same class. Those enumerated in the proviso are simply not included in the term 'auto transportation company,' as that term is used in the definition of common carriers under the act. Those that are stated or named as not included are not only those who
" '. . . own, control, operate or manage taxicabs, hotel busses, school busses, motor propelled vehicles, operated exclusively in transporting agricultural, horticultural, or dairy or other farm products from the point of production to the market,' . . .
" '. . . any other carrier which does not come within the term "auto transportation company" as herein defined.'
"In the last analysis, all of the language in the proviso is the equivalent of saying that all carriers who do not come within the term ' "auto transportation company" as herein defined,' are excluded. Thus, in a way, all carriers are divided into two classes; first, those who come within the term 'auto transportation company' as defined in the act, and second, those who, by exclusion do not — the one common carriers, the others not common carriers, the latter being commonly spoken of as private carriers. The act applies to the whole of one class and not to any of the other. The classification is natural and reasonable rather than arbitrary, and therefore within the recognized discretionary power of the legislature to classify. The classification creates a difference not in degree, but in kind, and treats alike all those included in the class of common carriers, while all other carriers are treated alike by not being included."
We agree with counsel for respondents that there is a fundamental distinction between an owner hauling his own products, such as timber, over the highways of this state and a contractor who hauls the timber of others for compensation over the highways, even if such hauling is only a portion of a combination of services for which he receives compensation under his contract. The highways are built primarily for use of the general public in hauling their own goods or in transportation of themselves from place to place. When one hauls passengers or the freight of others for compensation, he makes the highways his place of business and therefore is subject to regulation under the statute. The appellants have by their contracts brought themselves within the classification of a carrier for compensation as distinguished from owners who transport their own goods or products.
The judgment is affirmed.
Blake, C. J., Main, Beals, and Jeffers, JJ., concur.