Court Opinion

ID: 3301791
Source: CourtListenerOpinion
Date Created: 2016-07-05 17:18:01.788265+00
Date Added: 2024-06-11T13:37:34.760392
License: Public Domain

I cannot agree with the reasoning and conclusion of the prevailing opinion. It appears that the petitioners had applied to the Commission for a certificate of public convenience and necessity. By that application they impliedly consented to subject themselves to the jurisdiction of the Commission and to comply with the conditions which the law and the Commission might impose. Included in those conditions under section 4 of the Auto Stage and Truck Transportation Act would be that the Commission should have the power to fix their rates, regulate their service, and in general provide that the applicant operate as a common carrier in the event that the certificate be issued. The application, however, was denied. Such action was within the power of the Commission under section 7 of the act, which provides that the Commission may grant or deny such a certificate "with or without hearing." The petitioners established themselves as a private carrier. The respondent certificated carriers filed a complaint against them before the Commission, alleging that the petitioners were a transportation company as defined by the Auto Stage and Truck Transportation Act and as such were operating in direct competition with the complainants and were injuring and damaging their business. The petitioners were summoned before the Commission and in an answer filed by them they denied that they were a transportation company as defined by the act. After notice and an extended hearing the Commission found that the petitioners were a transportation company, operating as a private carrier and issued an injunction directing them "to cease and hereafter to desist from any and all such transportation unless and until they have secured from this Commission a certificate declaring that public convenience and necessity require the resumption or continuance thereof." The effect of the decision *Page 643 
and order of the Commission is to put the petitioners out of business, for it enjoins them from operating "unless and until" they obtain a certificate and on application the Commission denies the certificate.
Under sections 22 and 23 of article XII of the constitution and the decisions of this court the Commission has jurisdiction only of the regulation and control of public utilities and matters which are germane to such regulation and control. This is conceded in the prevailing opinion but it is held, following the Frost case, that the regulation of such a private carrier is so germane because forsooth the private carrier is in competition with the public carrier. This conclusion in my opinion is not supported either by reason or authority. If that conclusion be sound the result would be that the Commission may now require a truck owner, engaged exclusively in the business of operating his truck for transportation of freight on the public highways under contract with the sole owner of a chain of stores, to apply for a certificate of public convenience and necessity or go out of business, and by denying his application put him out of business. To pursue the subject still further it would logically follow that the Commission could be endowed by the legislature under the present constitutional grant with the power to say that no one may use the public highways for the transportation of his own goods because by so doing he would take from the certificated operator a revenue which the latter might otherwise receive. By the same reasoning the legislature could vest the Commission with power to prohibit the use of private passenger automobiles operating on the public highway because such use would be in competition with regulated common carriers of passengers with possible destruction of the business of the latter. Such a result may not be contemplated as within the power of the state and more particularly within the constitutional powers of the Railroad Commission as defined and limited by this court.
Nor is the action of the Commission authorized by the Public Utilities Act or the Auto Stage and Truck Transportation Act. The power of the Commission to entertain complaints under the Public Utilities Act, under sections 60 and 61a, is with reference to "any act or thing done or omitted to be done by any public utility." Section 7 of the Auto *Page 644 
Stage and Truck Transportation Act provides that in all respects in which the Railroad Commission "has power and authority under the Constitution of this state or this act" complaints may be filed with the Commission and disposed of "in the manner, under the limitations and with the effect specified in the public utilities act." In Motor Transit Co. v. Railroad Com.,189 Cal. 573 [209 P. 586, 588], this court said at page 578: "By specific reference to the public utilities act the commission is given power to hear and determine complaints against transportation companies in exactly the same manner and to the same extent as it has of complaints against other public utilities. This power is conferred by section 7 of the `Auto Stage and Truck Transportation Act.' . . . It obviously follows that sections 60 and 61 (a) of the public utilities act, as originally enacted and still in force, which prescribe the power of the commission to hear and determine complaints against public utilities make [mark] and measure the power of the commission to proceed in the instant case." Said section is not merely procedural. It vests power in the Commission to entertain complaints and to take action thereon. The restrictions and limitations specified in the section are that, for the purpose of procedure, the terms of the Public Utilities Act shall apply.
If the Auto Stage and Truck Transportation Act purports to vest in the Commission jurisdiction over private carriers, in my opinion it is to that extent contrary to the constitution. Such a conclusion would not deprive the Commission of the power to entertain complaints against transportation companies which are common carriers in fact but are seeking to avoid the requirements of the act by masquerading as private carriers. If the petitioners had been found to be a common carrier in fact, the Commission would have had jurisdiction over them and could have properly exercised its authority in prohibiting their operations. But when the Commission found the petitioners to be a private carrier, and it did so find, the jurisdiction of the Commission over them was at an end. It seems to me that the prevailing opinion has misconceived the real purpose and object of the Auto Stage and Truck Transportation Act. The opinion fails to distinguish between regulation looking to safety and the conservation of the highways and the regulation of persons *Page 645 
by whom the highways may be used. As to regulations concerning safety and the conservation of the highways they must be uniform and apply equally as between those similarly situated and may comprehend all uses both public and private. The Motor Vehicle Act is a familiar example of such regulation. But such an act necessarily prescribes a uniform course of conduct to which all must conform and when its requirements are met must be available to all. Use of the highways under such an act may be regulated, but not prohibited, with certain exceptions not material here. Concerning the regulation of the persons who may use the public highways it is unquestionably true that the state may not only regulate but may prohibit the use thereof by persons, firms or corporations engaged in the business of a common carrier. It may grant the privilege to one carrier and deny it to another. It may regulate the charges and service of a common carrier and it may prevent other common carriers from competing with a privileged carrier. Such is the purpose of the Auto Stage and Truck Transportation Act. In other words, the purpose of the regulatory provision here in question is to prevent, in the public interest, ruinous competition as between concerns engaged in a like public business. With reference to a similar act in the state of Washington the supreme court of the United States in Buck v.Kuykendall, 267 U.S. 307 [38 A.L.R. 286, 69 L.Ed. 623, 45 Sup. Ct. Rep. 324], said: "Its primary purpose is not regulation with a view to safety or to conservation of the highways, but the prohibition of competition. It determines not the manner of use but the persons by whom the highways may be used." In determining the persons by whom the highways may be used the state has no power, in my judgment, under the guise of prohibiting competition, to deny to its citizens the right to use the public highways for their own private purposes, whether for business or for pleasure. But assuming that it has that right, and particularly the right to prohibit a private business use of the highways, as announced by the opinion, it would necessarily be true that such regulatory prohibitions must be uniform and apply to all similarly situated and be enforced through the medium of a state agency duly constituted for that purpose. But in this case a state agency whose judicial powers extend only to the regulation *Page 646 
and control of public utilities and matters properly germane thereto proceeds to hale before it a concern using the highways for its own private purposes, its private rights are adjudicated, it is found to be engaged in a private business and it is put out of business because, forsooth, its private business diminishes the revenues of a certificated common carrier. That the Commission acted judicially in determining, after notice and hearing and on evidence, the status of the defendants before it and in issuing the injunction cannot be denied. That the Commission may act judicially when legally authorized so to do is likewise beyond question. Its authority to act in that capacity, however, cannot be determined alone from a consideration of the amendment to the statute in 1919. Such a grant of power must come from the constitution or from some act of the legislature which is constitutionally authorized. It is not contended, as indeed it may not be, that the Commission has direct grant from the constitution to regulate private business. True, this Court compelled the Commission to assume jurisdiction of transportation companies prior to any legislative enactment on the subject. (Western Association etc. R.R. v. Railroad Com., 173 Cal. 802
[1 A.L.R. 1455, 162 P. 391]), but the transportation companies before the Commission in the proceeding involved in that case and over which the Commission was required to take jurisdiction were admittedly common carriers and, as such, public utilities within the definition of section 23, article XII, of the constitution. The whole purpose of that section and of the preceding section 22 in re-establishing the Railroad Commission and endowing it with extensive powers was to regulate and control public utilities privately owned (City of Pasadena v. Railroad Com., 183 Cal. 526, 534 [10 A.L.R. 1425, 192 P. 25]), and it is settled by the decisions of this court beyond question that such additional powers as the legislature may confer upon the Commission must be "germane to the subject of regulation and control of public utilities." (Pacific T.  T. Co. v. Eshleman, 166 Cal. 640
[Ann. Cas. 1915C, 822, 50 L.R.A. (N.S.) 652, 137 P. 1119];City of Pasadena v. Railroad Com., supra; Motor Transit Co.
v. Railroad Com., 189 Cal. 573 [209 P. 586].) The Commission recognizes that such is the rule, but contends "that the regulation of the type of carriage here in question is, *Page 647 
because of its power to destroy regulated carriage, most cognate and germane to the subject of the regulation and control of public utilities [carriers]." I deny that the Commission has power to suppress and destroy a private business because such private business may be in competition with the business of the common carrier. This is, indeed, a curious but nevertheless an effective method of taking private property for public use without compensation. Furthermore, if the question of competition be the test and the elimination of competition be germane to the subject of regulation and control of the public utility it is difficult to conceive why it is necessary to consider the use of the public highways in connection with such competition, for if the power to suppress competition be possessed by the Commission it may be exercised against the outlawed competitor whether he operate on the public highways or elsewhere. If the suppression of competition alone does not make such regulation germane to the subject of regulation and control of public utilities, then it cannot be made so germane under the guise of regulating the use of the public highways. We are here dealing with public and private concerns which use the public highways in their business, but the fact that they are so using them, in so far as competition is concerned, is a mere circumstance.
The prevailing opinion concedes that the conclusions reached are without direct precedent. By reference to the laws and decisions of other states it is found that Michigan, Ohio, Utah, and Washington have statutes similar to our Auto Stage and Truck Transportation Act. The courts of last resort of those states, in construing their statutory provisions, have uniformly reached a conclusion opposed to the prevailing opinion (Hissen v. Guranet al., 112 Ohio St. 59 [146 N.E. 808]; Davis  Banker v.Metcalf, 131 Wn. 141 [229 P. 2]; State v. Nelson, 65 Utah, 457 [238 P. 237]). The declaration of the supreme court of the United States in Michigan Public Utilities Com. v.Duke, 266 U.S. 570 [36 A.L.R. 1105, 69 L.Ed. 445, 45 Sup. Ct. Rep. 191], is directly in point. In that case Duke had employed seventy-five men and forty-seven motor-trucks as a private carrier under three private contracts for the transportation of automobile bodies from Detroit to Toledo. Under the Public Utilities Act of Michigan, which concededly is *Page 648 
essentially similar to our own Auto Stage and Truck Transportation Act, it was sought to subject Duke to regulation as a common carrier. The court said: "Moreover, it is beyond the power of the state by legislative fiat to convert property used exclusively in the business of a private carrier into a public utility, or to make the owner a public carrier, for that would be taking private property for public use without just compensation, which no state can do consistently with the due process clause of the fourteenth amendment. (Producers Transp. Co. v. RailroadCom., 251 U.S. 228, 230 [64 L.Ed. 239, 40 Sup. Ct. Rep. 131, see, also, Rose's U.S. Notes Supp.]; Wolff Co. v. IndustrialCourt, 262 U.S. 522, 535 [27 A.L.R. 1280, 67 L.Ed. 1103, 43 Sup. Ct. Rep. 630].) On the facts above referred to, it is clear that, if enforced against him, the act would deprive plaintiff of his property in violation of that clause of the constitution." The prevailing opinion attempts to distinguish that case from the one at bar on the ground that Duke's contracts were outstanding at the time the Michigan statute took effect and for that reason the statute was not applicable to him. The supreme court of the United States did not base its decision on the impairment of contract clause, but on the fourteenth amendment. Such in my opinion should be the conclusion reached in this case, that is to say, it should be decided that the petitioners, by reason of the act of the Commission, have been deprived of their property without due process of law, have been denied the equal protection of the law, and their private property has been taken for public use without just or any compensation. The order of the Railroad Commission should be annulled. *Page 649