John J. McCarthy Co. v. Alsop

• Decision Date: 01 December 1936
• Citation: 122 Conn. 288,189 A. 464
• Court: Connecticut Supreme Court
• Parties: JOHN J. McCARTHY CO. v. ALSOP et al., Public Utilities Commission.

189 A. 464

122 Conn. 288

JOHN J. McCARTHY CO. v. ALSOP et al., Public Utilities Commission.

Supreme Court of Errors of Connecticut.

December 1, 1936

Case Reserved from Superior Court, Hartford County; John Rufus Booth, Judge.

Appeal by John J. McCarthy Company from an order and decision of J W. Alsop and others, the Public Utilities Commission, denying plaintiff's application for a permit to engage in the transportation of property as an intrastate motor carrier taken to the superior court and reserved for the advice of the Supreme Court of Errors.

Order in accordance with opinion.

Martin E. Gormley, of New Haven, and Horace P. Moulton, of Boston Mass., for plaintiff.

Charles J. McLaughlin, Deputy Atty. Gen. (Edward J. Daly, Atty. Gen., on the brief), for the defendants.

Argued before MALTBIE, C.J., and HINMAN, BANKS, AVERY, and BROWN, JJ.

HINMAN, Judge.

This case involves, as in different aspects does University Overland Express, Inc., v. Alsop, 122 Conn. 275, 189 A. 458, chapter 126 of the Public Acts of 1935 (part 4a of chapter 82 of the General Statutes, Cum. Supp. §§ 575c to 605c, inclusive, entitled " Regulation of Trucks" ), and proceedings thereunder. The stipulated facts include the following: The plaintiff is a Massachusetts corporation conducting, since prior to December 31, 1934, the operation of a transportation service over regular routes between points within the State of Connecticut as a " motor carrier" as that term is defined in that act. On August 7, 1935, it made application to the defendants for a permit authorizing it to transport property as a motor common carrier, and its operation prior to December 31, 1934, was such as to entitle it to a permit as a matter of right under section 581c, which is printed in a footnote,^[1] provided it complies with the provisions of that section, including that relating to financial responsibility. On August 29, 1935, and on December 13, 1935, the defendants held public hearings upon the application. On December 12, 1935, the defendants promulgated an order, known and referred to as Docket 6253, establishing minimum requirements as to insurance which must be carried by holders of permits except in cases where adequate financial responsibility of the applicant is shown. The provisions thereof are summarized in University Overland Express, Inc., v. Alsop, supra, one of them being that the insurance shall be " in a company licensed to do an insurance business in the State of Connecticut."

At the hearing of December 13th the plaintiff offered evidence of insurance by a Massachusetts mutual, liability insurance company, licensed to do business in Massachusetts but not in Connecticut, although it had appointed an agent in Connecticut solely for the purpose of service of process in this state. In all other respects the insurance complied with the requirements of Docket 6253. On January 20, 1936, the defendants denied the plaintiff's application for a permit unless and until it gives evidence of insurance in a company licensed to do business in this state, and the plaintiff brought this appeal.

The first question presented by the reservation is: " a. Is the order and decision of the defendants denying the plaintiff's application unlawful and in excess of the authority vested in the defendants by sections 575c to 605c, inclusive, Cumulative Supplement to the General Statutes 1935?" The contention of the plaintiff in support of an affirmative answer thereto is that the statute " does not vest the defendants with power or authority to make requirements of insurance such as those contained in *** Docket 6253." It appears from the memorandum of decision of the public utilities commission denying the application that the commission regarded " the order *** contained in Docket 6253 [as] made pursuant to the specific provisions of section 598c and inferentially of section 581c." Section 581c has already been quoted. Section 598c reads as follows: " Any person subject to the provisions of this part shall be subject to such orders, rules and regulations as shall be adopted and promulgated by the commission under authority of this part and to the general supervision and jurisdiction of the commission." Another section, 605c, is: " The commission is authorized to make such regulations, to hold hearings and to issue such permits as may be required under the provisions of this part. Any such permit shall not become effective until August 6, 1935."

It is claimed here also on behalf of the defendants that these sections authorize them to " make such regulations as may be required under the provision of *** section 581c," and the main contention of the plaintiff is that no such authority is to be derived from these sections or is conferred elsewhere in the statute. It is true that to attain to the status of a regulation of the commission having the force of law, such as that involved in Hyde v. Connecticut Co., 122 Conn. 236, ___, 188 A. 266, it must be promulgated under and by virtue of authority " conferred by express provisions of law, or such as is by fair implication and intendment incident to and included in the authority expressly conferred." Backus5BFBrooks Co. v. Northern Pac. Ry. Co. (C.C.A.) 21 F.(2d) 4, 19; Siler v. Louisville & N. R. Co., 213 U.S. 175, 194, 29 S.Ct. 451, 53 L.Ed. 753; Root v. New Britain Gas Light Co., 91 Conn. 134, 99 A. 559. In the statutes providing for the regulation of common carriers of passengers by motor vehicles for hire (Public Acts 1921, chap. 77, § 2), the public utilities commission " is given express authority to make regulations as to the operation of motor busses, including such as concern the convenience and safety of passengers and the public." Roden v. Connecticut Co., 113 Conn. 408, 416, 155 A. 721, 724; General Statutes 1930, § 3850. Similar provision was made regarding operation of taxicabs. Public Acts 1929, chap. 292, § 2; General Statutes, Cum. Supp. 1935, § 1425c. Section 3624 of the General Statutes confers upon the commission authority to make rules on numerous specified subjects concerning maintenance and operation of railroads, and section 3718 authorizes general orders regarding grade crossings. Section 3785 provides that the commission may make regulations controlling the movements of cars of street railways. In the statute now under consideration, section 575c contains a provision that " the commission shall have authority to prescribe regulations for motor private carriers who occasionally offer themselves for hire or to transport goods other than their own," section 582c authorizes " reasonable regulations and rates or charges covering the operations of motor common carriers," and section 590c empowers the commission to prescribe " regulations, minimum rates and charges covering the operation of motor contract carriers in competition with motor common carriers" ; but it is doubtful if these provisions may be construed as conferring authority to make regulations other than concerning rates or charges, to which these sections, respectively, pertain.

The power conferred by section 581c, " to decide the question of financial responsibility on the individual merits of the applicant and to require that such financial responsibility be adequate," affords no authority, expressly or by admissible inference, to make general regulations governing the subject. Section 605c is similar in wording to section 9 of chapter 77 of the Public Acts of 1921 and section 9 of chapter 292 of the Public Acts of 1929, above referred to; but, as we have noted, both these acts contained express provision for rules and regulations, which therefore were " required under the provisions of [the] act." The sufficiency of section 605c or section 598c to confer power to make such regulations without specific provisions authorizing them, such as those above mentioned, and which we are not able to insert or to supply by inference, is at least open to doubt. However, this does not compel or, of itself, warrant a conclusion that denial of the plaintiff's application was " unlawful and in excess of the authority vested in the defendants" which is the specific question we are considering. Although Docket 6253 be not effective as an order or regulation so authorized as to be entitled to the force and effect of law, yet the commission, under its expressly conferred powers to require adequate financial responsibility of each applicant, could impose any reasonable requirements regarding insurance which it would accept in lieu of a showing of adequate financial responsibility of the applicant. Such requirements, obviously, may include both amount of insurance and financial stability of the insurer, and there is no unreason in an insistence, further, that the insurance be by a policy issued by a company authorized to do business in this state. University Overland Express, Inc., v. Alsop, supra; Sprout v. City of South Bend, 277 U.S. 163, 168, 48 S.Ct. 502, 503, 72 L.Ed. 833, 62 A.L.R. 45. The reason for the latter requirement is not fully satisfied by the appointment of an agent for service of process in this state. Important as it is that an injured party have the right to sue the insurer in this state upon a judgment obtained here against the insured who inflicted the injury, the financial responsibility of the insurer is a paramount consideration. Substantial safeguards in this respect are afforded by the conditions under which, only, nonresident and foreign insurance companies are licensed by the insurance commissioner to do business in this state. E. g. sections 4114, 4121, 4122, 4215 of the General Statutes.

It appears from the record that the question of the financial responsibility of the plaintiff was decided on the individual merits of the...