City and County of Denver v. Thrailkill

• Decision Date: 19 May 1952
• Docket Number: No. 16698,16698
• Parties: CITY AND COUNTY OF DENVER et al. v. THRAILKILL et al.
• Court: Colorado Supreme Court

Page 1074

244 P.2d 1074

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.

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 & 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:

'No master license nor any part thereof nor any authority claimed thereunder shall be saleable, transferable or assignable whether by act of the parties or by operation of law.'

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:

'All master licenses shall expire on December 31 of each year unless sooner revoked, and may be renewable from year to year * * *.' (Italics supplied.)

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:

'No person shall drive or be permitted to drive a taxicab on the streets of the City and County of Denver for business purposes unless such person is a licensed driver who either is an operator or an employee of an operator who is paid a fixed definite wage and/or a fixed commission based on the gross amount of fares received from passengers. The Master License of any operator who shall violate this Section may in the discretion of the Manager be revoked or suspended in whole or in part as provided in Section 6 hereof.'

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:

'No taxicab license shall be granted to any operator unless such operator is the bona fide, beneficial owner of the taxicab. * * * No taxicab license shall be issued to any operator where such taxicab is to be hired, leased, rented, or made the subject of a rental and purchase arrangement to or with any driver thereof.'

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 unconstitutional 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:

'The Manager shall cause to be made such investigation of each applicant and of the correctness of each application for a master license as in his judgment is necessary to determine whether the applicant is qualified, fit, able and suitable to engage in the business of operating taxicabs in the method proposed. If the determination of the Manager shall be in favor of the applicant, he shall issue the master license, evidenced by a signed certificate, upon receipt of such license fee. If the determination of the Manager shall be against the applicant, the Manager shall by registered mail inform said applicant or the duly authorized agent thereof that the application has been denied, briefly stating the reason therefore. All master licenses shall expire on December 31 of each year unless sooner revoked, and may be renewable from year to year by filing a written application for renewal and making payment of the annual license fee herein provided on or before that date. No master license nor any part thereof nor any authority claimed thereunder shall be saleable, transferable or assignable whether by act of the parties or by operation of law.'

With reference to this provision the trial court held, inter alia:

'(1) That Section 4 of Ordinance 53, Series 1950, is beyond the power of the City Council to enact for the reason that the section arbitrarily prohibits the transfer or sale or assignment by operation of law of a master license or any part thereof or any authority claimed thereunder and that said Section 4 leaves the issuance or renewal of master licenses to the Manager without any standards for his determination as to whom he grants a license or to whom he denies the same and grants him arbitrary power thereover and is unconstitutional, ultra vires and void.'

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. 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, are 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.

Questions to be Determined

First: Does the city council have the power, in the regulation of the taxicab business, to provide that no master license nor any authority claimed thereunder shall be saleable or transferable; and further, to provide that renewals thereof shall lie within the discretion of the licensing authority?

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.

'One of the methods most frequently used by municipal corporations for the exercise of their powers of regulation is to require permits to be obtained from the council or a public board or other official for the doing of certain acts, and it is generally held that this is a proper method and within the powers of the corporation.' 62 C.J.S., Municipal Corporations, § 167, p. 327.

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 non-transferable, 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...