Title: City and County of Denver v. Thrailkill
Citation: 125 Colo. 488, 244 P.2d 1074
Docket Number: 16698
State: Colorado
Issuer: Colorado Supreme Court
Date: May 19, 1952

244 P.2d 1074 (1952) 125 Colo. 488 CITY AND COUNTY OF DENVER et al. v. THRAILKILL et al. No. 16698. Supreme Court of Colorado, en Banc. May 19, 1952. *1075 Leonard M. Campbell, Burton Crager, Denver, for plaintiffs in error. Nathan R. Kobey, Ivor O. Wingren, Albert T. Frantz, Denver, for Publix Cab Co. John F. Mueller, Denver, for Zone Cab Co. Dickerson, Morrissey &amp; Zarlengo, Denver, for individual named defendants in error. MOORE, Justice. We will hereinafter refer to the parties as they appeared in the trial court where defendants in error were plaintiffs and plaintiffs in error were defendants. The individual plaintiffs earn their livelihoods as taxicab drivers who own their equipment and operate under contracts with the companies with which they are severally affiliated. These companies are the corporate plaintiffs. The method of operation carried on by the plaintiffs is called the owner-driver system and is identical with that which we described at length in the case of International Brotherhood v. Publix Cab Company, 119 Colo. 208, 202 P.2d 154. It is not disputed that this system of taxicab operation was firmly established in Denver for many years prior to 1947 when Ordinance No. 165, Series of 1947, was adopted by the city council. This ordinance was a licensing and regulatory measure under the terms of which driverowner system taxicabs, as well as company owned employee driven cabs, continued to operate in Denver. It provided for the issuance of master licenses, and under said provision such licenses were issued to the corporate plaintiffs as well as to the companies which owned their cars and employed drivers. It also provided for the issuance of licenses to drivers of taxicabs; for the suspension, revocation and renewal of licenses; and imposed reasonable and necessary restrictions upon the use of taxicabs within the city; all within the unquestioned power of the city council to subject the operation of taxicabs to reasonable regulation in the exercise of the police power. Ordinances No. 53 and No. 109, Series of 1950, were thereafter adopted by the city council. The former, in so far as pertinent to this action, amended section 4 of the 1947 ordinance by adding thereto the following: In addition to the foregoing, section 4 was amended further by substituting the word "may" for the word "shall" in the clause relating to renewals of licenses. The said clause as amended reads as follows: Ordinance 53, Series of 1950, did not in express terms abolish, authorize or recognize the owner-driver system then prevalent in the cab business. Ordinance No. 109, Series of 1950, did, in positive terms, purport to prohibit the owner-driver system in which plaintiffs were engaged. It amended section 15 of the 1947 ordinance to provide that: Other changes were made in the ordinance making clear the intent of the city council to prohibit the business operated by plaintiffs; thus, section 18 was amended to read in part as follows: Plaintiffs brought this action for declaratory judgment. They challenged the legality of ordinances No. 53 and No. 109, Series of 1950, upon constitutional grounds, and sought a decree "declaring said ordinances or the illegal parts thereof, invalid and unconstitutional, and further that the Court define and determine the rights, duties or status of the parties hereto," Plaintiffs further sought relief by injunction restraining defendants from acting pursuant to the provisions of the ordinances thus assailed. The trial court held the ordinances un-constitutional in certain particulars; adjudged that all sections of ordinance No. 109, supra, were so interdependent and inseparably connected in substance that the city council would not have passed said ordinance without including all of the sections thereof; and that no part of said ordinance could be upheld upon the ground that it was severable from unconstitutional provisions. Judgment accordingly was entered as prayed for by plaintiffs, and defendants bring the case here for review by writ of error. By Ordinance No. 53, Series of 1950, section 4 of the 1947 ordinance was amended to read: With reference to this provision the trial court held, inter alia: The trial court also held that the amendments to be made by Ordinance 109, Series 1950, could not be sustained and pointed out four distinct provisions thereof which in its opinion were in violation of the constitutional rights of plaintiffs. *1077 It will not be necessary to separately consider each of these points upon which the trial court based its judgment. As we view the case, they are consumed and fully disposed of in connection with the second question hereinafter stated and answered. We agree with the trial court that the provisions of said ordinance, to which objections are made, arc not severable under the rule announced in City and County of Denver v. Lynch, 92 Colo. 102, 18 P.2d 907, 86 A.L.R. 907. Certainly, if the main object to be accomplished by Ordinance 109, namely, the destruction of the ownerdriver system, is without validity, the other amendments which clearly were incidental thereto cannot properly be sustained. This question is answered in the affirmative. The taxicab business unquestionably is subject to reasonable regulation in the proper exercise of the police power admittedly possessed by the City and County of Denver. It unquestionably is true that the operation of taxicabs is a convenience which the public demands, and such business is harmless in itself and useful to the community. However the nature of the business is such that reasonable regulation is permitted in the public interest. It cannot successfully be questioned that the municipality has power to limit the number of taxicabs which shall be licensed to operate within the city, and generally to regulate the business in the manner provided by the 1947 ordinance. No fault is found with that ordinance by plaintiffs. They contend however, and the trial court held, that when by an amendment to that ordinance a master license (authorizing the operation of a considerable number of motor vehicles as taxicabs) was declared to be nontransferable, and the renewal thereof was placed within the sound discretion of the licensing authority, the council acted in excess of its powers and in violation of the constitutional rights of plaintiffs. We consider the nature of the "rights" represented by the master license. The license is nothing more nor less than the grant of a privilege to enter upon a business activity which, because of the ordinance, would be unlawful except for the issuance of the permit; it is personal to the grantee; it is revocable for cause; it is renewable within the sound discretion of the licensing official who can be reached by proper proceedings in the event of arbitrary abuse of that discretion; it is evidence of a personal privilege and is not property in a constitutional sense; and no vested rights are acquired when it is obtained. Allen v. City of Kosciusko, 207 Miss. 343, 42 So. 2d 388; Kizee v. Conway, 184 Va. 300, 35 S.E.2d 99; 60 C.J.S., Motor Vehicles, § 159, p. 481; 62 C.J.S., Municipal Corporations, § 173, p. 331. The prohibition of transfers of master licenses to persons unknown to the licensing authority is a reasonable regulation which bears a real and substantial relation to the public safety and welfare. Even in the absence of the prohibition against transfers as contained in the amended ordinance, the city would not be bound by an assignment of such license. One who purchases the tangible equipment with which to operate a taxicab business can make application for a "master license" and subject himself to the investigation essential to the granting thereof. If the discretion vested in the licensing authority is abused, or if his application is arbitrarily rejected, he has recourse to appropriate legal proceedings. *1078 We do not construe the judgment of the trial court to be an absolute prohibition against the transfer of a license or discretionary renewal thereof. It only condemns an ordinance which "arbitrarily" prohibits transfers and renewals, and seems to be based upon the fact that the amended ordinance leaves to the manager, without any standards for his guidance, the power to grant or deny a license, and thus grants him arbitrary control thereover. With this conclusion we agree. People v. Stanley, 90 Colo. 315, 9 P.2d 288. This question is answered in the negative. Counsel for defendants argue that power to prohibit the owner-driver system of taxicab operation rests in the city council and that such power is based upon two fundamental concepts as follows: First, the right of the council to control the use of the streets of the city by private persons for private gain is plenary, and any limitation or restriction may be imposed upon such use whether reasonable or unreasonable; and second, under the police power the city council has authority to regulate and condition the use of the streets in the interest of public safety, morals and health. The following typical statements are cited in support of the first mentioned of these contentions: We quote from 37 American Jurisprudence, page 533, section 18, as follows: Counsel for the city contend that these expressions, and other comparable statements taken from cases cited, indicate that the city council has authority over the use of the public streets above and beyond that which flows from the police power. However, most of the decided cases unquestionably treat the subject in connection with the exercise of the police power, and numerous general statements of legal principles relate to it in that vein. In 25 American Jurisprudence, page 544, section 253, we find the following: Also we find the following in 37 American Jurisprudence, at page 533, section 19: Without attempting to harmonize the expressions contained in opinions from other jurisdictions, or statements of general rules which seem to be in conflict, we limit ourselves to declaring the law for this jurisdiction. We hold that there is no authority in a municipality to prohibit the use of the city streets by any citizen or corporation in the carrying on of a legitimate business, harmless in itself and useful to the community, which is independent of the police power under which reasonable regulations in the promotion of the public order, safety, health and welfare are proper. We further hold that any arbitrary and unreasonable refusal on the part of city officials to permit the use of city streets for business purposes will not be upheld in this jurisdiction. If a restriction upon the use of the streets of the city is to be valid, the restraint upon said use must be based on the proposition that it is a reasonable regulation adopted in the exercise of the police power, and that it bears a fair relation to the public health, safety, morals or welfare, and has a definite tendency to promote or protect the same. The contention, that an unreasonable, arbitrary and capricious prohibition against the use of city streets must be sustained simply because the person against whom the restraint operates is engaged in the business of providing transportation for hire, is completely out of harmony with the American constitutional concept of fundamental freedoms and liberties, under which the individual has the right to engage in a lawful business which is harmless in itself and useful to the community, unhampered by unreasonable and arbitrary governmental interference or regulation. Our court, in Chenoweth v. State Board of Medical Examiners, 57 Colo. 74, 141 P. 132, 133, 51 L.R.A.,N.S., 958, said in part: We quoted this language with approval in Lipset v. Davis, 119 Colo. 335, 203 P.2d 730. The fact that the "calling" or "business" under consideration in the instant case, and the "right to labor and to receive the fruits of such labor," involve the use of the streets of the city over which the commerce and business of the community must flow, does not deprive the citizen of his basic right to demand that governmental regulation of business or restraints upon freedoms must be reasonably essential and necessary in the public interest. We now consider the second ground upon which defendants rely in justification of the ordinance prohibiting driver-owner taxicab operation, namely, that said ordinance is valid as a proper exercise of the police power. At the common law there was a public right to operate stage coaches for hire on the public streets. In City of St. Paul v. Twin City Motor Bus Co., 187 Minn. 212, 245 N.W. 33, 35, the common-law rule is stated as follows: It follows, therefore, that express legislative prohibition is necessary to make plaintiffs' use of the streets unlawful. Since the ordinance under attack, which purports to prohibit the driver-owner system, is in derogation of the common law, it must be strictly construed in favor of the person against whom its provisions are sought to be applied. Hart v. Board of Examiners, 129 Conn. 128, 26 A.2d 780; National Exhibition Co. v. City of St. Louis, 235 Mo.App. 485, 136 S.W.2d 396. The driver-owner method of taxicab operation has been firmly established in Denver since 1932. Full and complete control over the actual operation of the taxicabs involved, in so far as the public interest is concerned, can be accomplished by the reasonable regulatory provisions of the 1947 ordinance. The method of operation has involved the investment of substantial sums of money by both the corporate and individual plaintiffs. Their business is a property right and as such it is entitled to protection against municipal action, the effect of which would be to deprive plaintiffs of their property without due process of law. Liggett Co. v. Baldrige, 278 U.S. 105, 49 S. Ct. 57, 73 L. Ed. 204. Since the ordinance would unquestionably put plaintiffs out of business, it must be declared unconstitutional unless it can be justified as a valid exercise of the police power. An attempt is made to sustain the ordinance upon the ground that it is reasonably calculated to promote the safety, morals, health and welfare of the public at large. If the ordinance can logically be thus supported, it becomes a valid police regulation concerning a business subject thereto, and cannot be assailed upon constitutional grounds. The determination we are called upon to make is whether the ordinance has a real and substantial relation to the accomplishment of those objectives which form the basis of police regulation. As stated by Mr. Justice Butler in his concurring opinion in Sapero v. State Board of Medical Examiners, 90 Colo. 568, 11 P.2d 555, 559: "To be valid, such legislation must bear a fair relation to the public health, safety, morals, or welfare, and tend to promote or protect the same." We are fully satisfied that the record before us fails entirely to show any fair relation between the ordinance in question and the public health, safety, morals or welfare. Said ordinance cannot be said "to tend to promote or protect the same." It is clear to us that at every point where any of these purposes are likely to be involved, or in any manner promoted or protected, the ordinance of 1947 makes complete and adequate safeguards in the public interest. The ordinance under attack deals only with the ownership of the title to automobiles used as taxicabs and with the compensation which shall be received by those who actually drive them. There is nothing whatever in this record to indicate that the mere fact that the title to an automobile, used as a taxicab, is held by an individual driver of the cab rather than by the holder of a master license who owns several other taxicabs, has anything whatever to do with public health, safety, morals, or welfare. The claim rests wholly upon conjecture and is not supported by anything of substance. We cannot follow the reasoning of the Supreme Court of North Carolina as expressed in Victory Cab Co. v. Shaw, 232 N.C. 138, 59 S.E.2d 573, in so far as it tends to uphold such an ordinance as a proper exercise of police power. We think the case is comparable, in so far as the applicable rule is concerned, to that considered by the Supreme Court of the United States in Liggett Co. v. Baldrige, supra. In that case a statute provided that "Every pharmacy or drug store shall be owned only by a licensed pharmacist, and no corporation, association, or copartnership shall own a pharmacy or drug store, unless all the partners or members thereof are licensed pharmacists; * * *." An attempt was made to sustain the statute upon the ground that it was a valid exercise of the police power in that it tended to promote the public health. The court said, inter alia: The court held that there was no substantial relationship between such ownership and the public health. So, in the instant case, the pertinent question is: What is the effect of mere ownership of a motor vehicle in respect of the public safety, morals, health or welfare? We answer the query with the statement that mere ownership of a taxicab, by one not the owner of a taxicab company, has no reasonable relation to public health, safety, morals, or welfare. The trial court, although its judgment was based upon reasons different from those expressed in this opinion, reached the correct result with regard to Ordinance No. 109, Series of 1950; accordingly the judgment is affirmed. HOLLAND, J., dissents. KNAUSS, J., not participating.