172 P.2d 452 (Mont. 1946), 8646, Board of R. R. Com'rs v. Aero Mayflower Transit Co.

Docket Nº:8646
Citation:172 P.2d 452, 119 Mont. 118
Opinion Judge:MORRIS, Justice. CHEADLE, Justice.
Attorney:[119 Mont. 119] Paul T. Keller and Edwin S. Booth, Jr., both of Helena, for appellants and for respondents on cross-appeal. Toomey, McFarland & Hall and Edmond G. Toomey, all of Helena, for respondent, and for appellant on cross-appeal.
Judge Panel:LINDQUIST, C.J., and ADAIR and ANGSTMAN, JJ., concur. CHEADLE, Justice (dissenting).
Case Date:June 29, 1946
Court:Supreme Court of Montana

Page 452

172 P.2d 452 (Mont. 1946)

119 Mont. 118




No. 8646

Supreme Court of Montana

June 29, 1946

Dissenting Opinion September 19, 1946.

Rehearing Denied Sept. 19, 1946.

Appeal from District Court, Second District, Silver Bow County; Jeremiah J. Lynch, Judge.

Suit by the Board of Railroad Commissioners of the State of Montana, Paul T. Smith and others, as members of and constituting such board, against the Aero Mayflower Transit Company to restrain defendant from operating its motor vehicles over the state highways until it should comply with the provisions of the Motor Carriers Act, wherein defendant filed a cross-complaint. From a judgment, plaintiffs and defendant appeal.

Affirmed in part, and in part remanded with instructions.

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[119 Mont. 119] Paul T. Keller and Edwin S. Booth, Jr., both of Helena, for appellants and for respondents on cross-appeal.

Toomey, McFarland & Hall and Edmond G. Toomey, all of Helena, for respondent, and for appellant on cross-appeal.

MORRIS, Justice.

This controversy involves the question as to what extent a state may impose burdens in the way of licenses and taxes [119 Mont. 120] upon motor carriers engaged in interstate commerce for operating their vehicles over the highways of the state. Such exactions are imposed upon the presumption that the state owns the highways within its borders, and the exactions are imposed as compensation for their use, and the revenue derived therefrom shall be expended to build, maintain and supervise such highways.

The Board of Railroad Commissioners of the state of Montana, hereinafter referred to as the Board, brought this suit to restrain the Aero Mayflower Transit Company, a Kentucky corporation, hereinafter referred to as the Company, from operating its motor vehicles over the highways of the state until it shall have complied with the provisions of Chapter 310 of the Political Code, known as the Motor Carriers Act, comprising sections 3847.1 to 3847.28 of the Revised Codes, inclusive. A restraining order was issued as prayed for by the Board, and the Company for some months discontinued operations in the state, but later filed a bond with the court and the court made an order permitting the Company to continue operations pending determination of the issues involved.

There is no dispute as to the facts. The Company is engaged in the motor transportation of used or second hand household goods and office furniture from one

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state to another for hire. It does not transport any goods of any nature or kind from one point to another in the same state. The only transportation it engages in, so far as it concerns this state, is the transportation of goods from another state to some point in this state, or it passes through this state to a destination in some third state. It alleges that it operates under permit No. 2934 issued to it by the Interstate Commerce Commission. It appears that in October 1935 the Board issued to the Company a 'Class C' permit. In September 1939 the Board issued an order directing the Company to show cause why its permit to operate its vehicles over the highways of Montana should not be revoked. A hearing followed on October 6, 1939, and on the succeeding 9th of October the Board issued an order cancelling the permit [119 Mont. 121] theretofore issued to the Company on the ground that the Company was using the highways of the state 'In an unlawful and unauthorized' manner. The position of the Board appears to be that the Company may not use the highways of the state until it shall have applied to the Board and been granted a permit and paid the taxes and fees imposed by statute.

To the complaint of the Board in the instant action the Company interposed both a special and general demurrer, and such demurrers being overruled, the Company answered by way of general denial followed by cross-complaint. The cross-complaint at great length sets out the various acts of the parties showing the conflicting views of each which gave rise to the issues involved in the action. Briefly stated the Company contends that the Motor Carriers Act, supra, is not applicable to interstate commerce, but governs those engaged in intrastate commerce only; that sections 3847.16 and 3847.17, if applied to it, violate the equal protection clause of the Fourteenth Amendment to the Constitution of the United States, and sections 1 and 11 of Article XII of the Constitution of Montana.

It appears that the state has heretofore and for some years collected two separate exactions from the Company; The Registration License Tax authorized by sections 1760-1760.10, Revised Codes; and the tax on sales of gasoline, authorized by sections 2381.1 to 2396.9, Revised Codes. The further exactions challenged by the Company in this action are (a) the 'Ten Dollar per vehicle 'straight' or 'flat' tax,' authorized by sections 3847.16 and 3847.17, Revised Codes, and (b) 'The tax of one-half of one per cent of the amount of gross revenue, from wherever derived by the defendant in the United States, under section 3847.27,' which is the construction the Company places upon that section, with a minimum fee of $15.00 for each vehicle operated by the Company in Montana.

While there is but one set of findings of fact, conclusions of law, and a single judgment, two separate actions were entered on the docket in the lower court, action No. 38175 in [119 Mont. 122] which the Board was the complainant, and action No. 38765 in which the Company was the complainant. When the actions came on for hearing the parties stipulated in open court that the actions might be combined and tried as one, it being agreed that the issues in the two actions were practically the same.

The combined action was tried to the court sitting without a jury. The pleadings by the Company contained practically all the record facts involved in the controversy between the parties relative to the orders made by the Board and sundry hearings had before it. All the evidence adduced at the hearing before the trial court consisted of a brief examination of the counsel and chairman of the Board and the examination of the Vice-President and Manager of the Company. When both parties rested, the matter was submitted on briefs, and both parties later submitted proposed findings of fact and conclusions of law. The court made and entered its own findings of fact and conclusions of law, and made and entered its amended judgment, it having been found that the judgment first entered did not follow the findings of fact and conclusions of law. By conclusion of law number 2 the court held that section 3847.16, Revised Codes, 'is a valid exercise of legislative authority and should be obeyed.' By the amended judgment the Company was restrained and enjoined from operating its motor vehicles over the highways of the state of Montana until it shall have paid the amounts due the state as demanded

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under section 3847.16, Revised Codes, as follows: For the year 1938, $250; for the year 1939, $400; for the year 1940, $440, with interest on the respective amounts from the first day of January of each year mentioned until paid, with costs to the Board. It was 'further ordered, adjudged and decree that said Board be and it is enjoined and restrained from enforcing or applying against defendant any of the provisions of section 3847.27, Revised Codes of Montana, 1935, and in particular from exacting any of the fees and taxes therein specified.' Both the Board and the Company appealed from that part of the judgment adverse to it. The effect of the [119 Mont. 123] judgment of the trial court is to overrule the Company's contention that section 3847.16 is invalid as in conflict with the commerce clause of the Federal Constitution, and the Constitution of Montana.

The effect of the trial court's order enjoining the Board from enforcing any of the provisions of section 3847.27, Revised Codes, is to relieve the Company from the obligation to comply with the Board's demand to pay the tax of one-half of one percent of its gross revenue or the minimum fee of $15.00 on each vehicle operated over the roads of the state.

Of the nine specifications of error assigned by the Company, the first is upon the court's overruling its demurrer to the complaint. The Company by its demurrer contends that as the Board is purely a creature of statute it has no power to sue; that by reason of the provisions of section 3806, Revised Codes, the state is a necessary party to these actions. The Board of Railroad Commissioners is created and its powers enumerated by Chapter 309 of the Political Code, comprising sections numbered 3779 to 3847, Inc., Revised Codes, and Chapter 310 as heretofore mentioned is the Motor Carriers Act. By section 3847.3 of the latter chapter the enforcement of the Motor Carriers Act is vested in the Board of Railroad Commissioners. It is true, as contended by the Company, that section 3806 provides actions to enforce the Board's regulations under the law shall be brought by the Attorney General in the name of the state, but section 3847.14 of the Motor Carriers Act provides in part, 'Orders and final determinations of the board in all proceedings pursuant to the provisions of this act shall be enforced in the manner provided for the enforcement of orders of the board of railroad commissioners by the provisions of chapter 309 of the political code, and laws amendatory thereof. Provided, further, that if any motor carrier shall operate in violation of the provisions of this act, or shall fail or neglect to obey any lawful order of the board, the board or any party injured may apply to any court of competent jurisdiction, in any county where such motor carrier is...

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