Barton Trucking Corp. v. O'Connell

• Decision Date: 30 December 1959
• Citation: 165 N.E.2d 163,7 N.Y.2d 299,197 N.Y.S.2d 138
• Parties: , 165 N.E.2d 163 In the Matter of BARTON TRUCKING CORP., Respondent-Appellant, v. Bernard J. O'CONNELL, as Commissioner of Licenses of the City of New York, Appellant-Respondent.
• Court: New York Court of Appeals Court of Appeals

Page 138

197 N.Y.S.2d 138

7 N.Y.2d 299, 165 N.E.2d 163

In the Matter of BARTON TRUCKING CORP., Respondent-Appellant, v. Bernard J. O'CONNELL, as Commissioner of Licenses of the City of New York, Appellant-Respondent.

Court of Appeals of New York.

Dec. 30, 1959.

Charles H. Tenny, Corp. Counsel, New York City (Edward A. Doberman and Seymour B. Quel, New York City, of counsel), for appellant-respondent.

Asher Marcus, Forest Hills, and Irving bick, New York City for respondent-appellant.

FROESSEL, Judge.

Petitioner is a domestic trucking corporation with offices in midtown Manhattan, and its trucking services are carried on in New York City's garment industry. It was incorporated in 1955, and consists of four persons who are its officers and directors, each of whom owns 25% of the corporate stock. Petitioner employs nine persons, other than its principals, and does a gross annual business of $90,000.

In July, 1957 petitioner filed an application for public cart licenses for its five trucks, pursuant to section B32-93.0 of article 15 (ch. 32) of the Administrative Code of the City of New York, which makes it 'unlawful for any person to operate or cause the operation of any public cart without a license therefor'. A 'public cart' is defined as 'every vehicle, either horse-drawn or motor-driven, which is kept for hire or used to carry merchandise, household or office furniture or other bulky articles within the city, for pay' (§ B32-92.0). The annual license fee for a motor-driven public cart is $5 (§ B32-94.0). Section b,32-96.0 regulates the rates to be charged by public cartmen and the number of persons to be employed on a particular hauling job. It provides that the rates may be agreed upon in advance, provided the public cartman furnishes his customer with a written memorandum upon blanks to be furnished by the Department of Licenses which clearly sets forth the terms of the contract. In the absence of a special agreement, a schedule of controlling rates is provided. The code further limits the number of men to be employed on any one job to four, including the driver, 'except when specially agreed upon by the person hiring the public cart'. A violation of any of the provisions of article 15 is made punishable by a $25 fine, a 30-day jail term, or both (§ B32-96.1).

The licensing of public cartmen and the regulation of their rates is deeply rooted in the Charter of New York City (L.1897, ch. 378, § 49, subd. 20, re-enacted as L.1901, ch. 466, § 51, p. 30) and in the ordinances passed in pursuance thereof (see Cosby's Code of Ordinances, 1914, ch. 7, tit II, §§ 305-314, pp. 69-71), and antedates the unification in 1897 of the present five boroughs of New York City into one municipality (L.1854, ch. 384, tit. II, § 13, subd. 4, p. 840; Ferdon v. Cunningham, 1860, 20 How.Prac. 154; City of Brooklyn v. Breslin, 1874, 57 N.Y. 591). The present provisions of article 15 of title B of chapter 32 of the code are drawn almost verbatim from a city ordinance passed in 1914 (see Cosby's Code of Ordinances, 1915, ch. 14, art. 11, pp. 246-248).

The application for the licenses was denied by the Commissioner of Licenses of the City of New York (hereinafter called the Commissioner) on the ground that petitioner was not a fit and proper party to be licensed to operate public carts. The finding of unfitness was based on the fact that petitioner's treasurer, James Plumeri, had been convicted of extortion in 1937 in connection with garment trucking racketeering and sentenced to 5 to 10 years' imprisonment, together with the fact 'that the carting intended to be carried on is in the garment center district which has been under investigation with reference to the racketeering that has been alleged to be rampant in that district'. The act of extortion for which Plumeri was convicted was connected with his activities as business agent of a garment center trucking association. The Commissioner took the position that it was his duty to require that 'licensees be of good and reputable character to insure the public safety and morals of the public with whom such individuals do business and come in contact by reason thereof', and that in refusing to issue the licenses he 'acted in good faith for the safety and welfare of the general public'.

In sustaining the Commissioner's determination, Special Term held (10 Misc.2d 717, 173 N.Y.S.2d 466): 'Implicit in the requirement of a license, there is not only an authorization but a command to take reasonable steps to see that the applicant is a fit and proper person to engage in the licensed business'. The court dwelt at length on the infiltration of criminal elements into New York City's garment industry, and concluded that the Commissioner's 'refusal of a license to this applicant, far from being capricious and unreasonable, is sound and salutary. * * * It is manifest that the License Commissioner has acted with propriety and within his competence; his action must be sustained'.

In reversing Special Term, the Appellate Division reasoned that any discretionary powers exercised by a licensing official must be delegated by statute, expressly or by clear implication, and must be accompanied by express or implied standards to guide the administrator's exercise of discretion. The court recognized (7 A.D.2d 36, 180 N.Y.S.2d 690) 'certain special circumstances in which an administrative official charged with the duty of granting licenses may nevertheless deny the license even though delegations and standards of the kind just referred to have not been expressly provided', namely, where the license would be used in violation of law, or 'where the use would patently deny a public policy for which the licensing statute is evidently, from its history or from its face, the implement of execution (Rosenberg v. Moss, 296 N.Y. 595, 68 N.E.2d ,880; People ex rel. Schwab v. Grant, 126 N.Y. 473, 27 N.E. 964 * * *)'. However, it felt that 'the statutes applicable to public cartmen suggest licensing only for * * * identification, collection of revenue, and control of the stipulated fees chargeable to the public' (emphasis supplied), and that the Commissioner had no power to withhold public cart licenses 'on the basis of general character and fitness of the applicant or for other arrogated qualifications' in the absence of exporess statutory authority.

Even assuming that the Commissioner did have power to pass upon character and fitness, the court felt that 'the evidence before him was utterly insufficient to sustain his conclusion of present unfitness. An old conviction and some old arrests, without more, does not establish unfitness.' It reasoned, however, that the Commissioner 'might have the power' to withhold the license if petitioner were likely to use it to engage in illegal activities, and hence concluded: 'Because the Commissioner may be able, with diligent effort, to establish the fact of recent relevant illegal activity by applicant, and the likelihood of such activity in the future, if it should obtain a license, the proceeding should be remanded to him for appropriate action rather than to direct the granting of a license forthwith.' The Commissioner appeals from 'each and every part' of the Appellate Division's order, whereas petitioner appeals from only that part of the order which remanded the proceedings and failed to direct the Commissioner 'to forthwith issue the public cart licenses'.

The issue before us on this appeal, as framed by the Appellate Division, is 'whether the Commissioner of Licenses, under the City statutes which apply to him, has the power to consider the character of an applicant for a cartman's license, and whether, if he has such power, the information adduced supported his determination.' There can be no disputing the general rule that any discretionary powers exercised by an administrative officer must be delegated to him by statute, and that such delegation must be accompanied by standards to guide the exercise of administrative discretion. With respect to licensing officials, however, it is equally well settled that the power to withhold a license for good cause, as well as the standards defining good cause, need not be expressly delegated where, by fair implication, in light of the statutory purpose, such power has been implicitly delegated. As this court noted in People ex rel. Schwab v. Grant, 126 N.Y. 473, 481, 27 N.E. 964, 967, in construing a provision of the New York City Consolidation Act authorizing the Mayor of New York to grant licenses to auctioneers upon the filing of a bond (L.1882, ch. 410, ch. V, § 113, pp. 29-&30), 'The * * * act does not, in terms or by fair implication, require the mayor to grant such licenses; but, by necessary implication, confers the power to refuse them when, in his judgment, he thinks the public interest requires it. A power to grant a privilege by one is inconsistent with the possession on the part of another of an absolute right to exercise such privilege.' (Emphasis supplied.) See, also, People ex rel. Cumisky v. Wurster, 14 App.Div. 556, 561, 43 N.Y.S. 1088, 1091; Barresi v. Biggs, 203 App.Div. 2, 4-5, 196 N.Y.S. 376, 379, 380.

In addition to the general proposition that power to grant a license necessarily implies power to withhold it for good cause, a further source of discretionary power implicitly delegated to the Commissioner is to be found in the general licensing provisions of the City Charter and the Adminstrative Code. Section 773 of the charter vests in the Commissioner 'cognizance and control of the granting, issuing, transferring, renewing, revoking, suspending and cancelling of all licenses and permits', except insofar as such powers have been placed within the jurisdiction of other officials, and subdivision c of section 773a-7.0 of the Administrative Code authorizes him 'in his discretion to take such testimony as may be necessary on which to base official action * * * when investigating...