Menderson v. City of Phoenix

• Decision Date: 16 February 1938
• Docket Number: Civil 3928
• Parties: C. M. MENDERSON, Appellant, v. CITY OF PHOENIX, a Municipal Corporation, JOHN H. UDALL, as Mayor of City of Phoenix, a Municipal Corporation, and E. E. READING, C. G. SULLIVAN, J. R. FLEMING, HARRY T. DUFFY, as City Commissioners of the City of Phoenix, a Municipal Corporation, EVAN S. STALLCUP, as City Manager of the City of Phoenix, a Municipal Corporation, and JAMES GIRAND, as Superintendent of the Street Railway of City of Phoenix, and City Engineer of the City of Phoenix, a Municipal Corporation, Appellees
• Court: Arizona Supreme Court

76 P.2d 321

51 Ariz. 280

C. M. MENDERSON, Appellant, v. CITY OF PHOENIX, a Municipal Corporation, JOHN H. UDALL, as Mayor of City of Phoenix, a Municipal Corporation, and E. E. READING, C. G. SULLIVAN, J. R. FLEMING, HARRY T. DUFFY, as City Commissioners of the City of Phoenix, a Municipal Corporation, EVAN S. STALLCUP, as City Manager of the City of Phoenix, a Municipal Corporation, and JAMES GIRAND, as Superintendent of the Street Railway of City of Phoenix, and City Engineer of the City of Phoenix, a Municipal Corporation, Appellees

Civil No. 3928

Supreme Court of Arizona

February 16, 1938

APPEAL from a judgment of the Superior Court of the County of Maricopa. E. W. McFarland, Judge. Judgment affirmed.

Messrs Baker & Whitney and Mr. Lawrence L. Howe, for Appellant.

Mr. I A. Jennings, City Attorney, and Mr. Hess Seaman, his Assistant, for Appellees.

OPINION

LOCKWOOD, J.

C. M Menderson, hereinafter called plaintiff, brought suit against the City of Phoenix, a municipal corporation, and various and sundry of its officers, hereinafter called defendants seeking an injunction preventing defendants from operating a municipal bus line within the corporate limits of the City of Phoenix. The complaint, after the various necessary formal allegations, set up that plaintiff was operating certain bus lines within the City of Phoenix, under a certificate of necessity and convenience issued by the Corporation Commission, and that the defendants, although possessing no such certificate, operated a municipal bus line paralleling and competing with plaintiff's lines, to his great damage. A temporary injunction was issued, and thereafter defendants demurred to plaintiff's complaint. The demurrer was sustained by the court, and, plaintiff declining to amend further and standing upon the allegations of his complaint, the temporary injunction was dissolved, and judgment rendered dismissing the action, whereupon this appeal was taken.

The facts are not in dispute, there being but one ultimate question of law presented by the record for the determination of this court, which is,

"has a municipal corporation the right to own and operate a bus line for the common carriage of passengers within its corporate limits, without first obtaining a certificate of necessity and convenience from the Corporation Commission?"

In answering this question, there are three points which require consideration: (a) Does the Constitution of Arizona confer jurisdiction upon the Corporation Commission to regulate the operation of a municipally owned transportation system for hire by a municipal corporation within its own limits? (b) If the Constitution does not directly confer such jurisdiction, may the legislature, under the provisions of section 6, article 15, of the Constitution, confer it upon the commission? And (c) If it may do so, has it done so as far as motorbuses are concerned, by virtue of chapter 100 of the Regular Session, 1933?

The constitutional powers, and limitations of the Corporation Commission are set forth in article 15 of the Constitution. Section 2 thereof defines public service corporations in the following language:

"All corporations other than municipal engaged in carrying persons or property for hire; or in furnishing gas, oil, or electricity for light, fuel, or power; or in furnishing water for irrigation, fire protection, or other public purposes; or in furnishing, for profit, hot or cold air or steam for heating or cooling purposes; or in transmitting messages or furnishing public telegraph or telephone service, and all corporations other than municipal, operating as common carriers, shall be deemed public service corporations."

And all regulatory powers over public utilities granted the commission by the balance of article 15 are expressly referred to as being over "public service corporations."

It will be seen thereby that all corporations which are engaged in carrying passengers for hire, and all corporations operating as common carriers, are deemed public service corporations within the meaning of the Constitution, with the express and specific exception of municipal corporations. We think that no plainer language could have been used by the makers of the Constitution to state that the constitutional powers conferred upon the Corporation Commission, in regard to the government and regulation of public utilities, were not intended to, and did not, include those owned and operated by municipal corporations of any character. Indeed, while plaintiff presents an argument which might well have been addressed to the discretion of the Constitutional Convention, pointing out the terrible consequences which he believes will result to the public in case the Corporation Commission is not allowed to regulate municipal corporations operating public utilities, his contention that such constitutional power does exist is not very strenuous. We think it too clear for extended discussion that the Constitution not only does not expressly authorize the Corporation Commission to regulate municipal corporations which are operating public utilities, but that it, by necessary implication, forbids such regulation.

The next question is whether, notwithstanding this fact, the legislature may grant such power to the commission, under section 6, article 15, of the Constitution. This section reads as follows:

"The lawmaking power may enlarge the powers and extend the duties of the Corporation Commission, and may prescribe rules and regulations to govern proceedings instituted by and before it; but, until such rules and regulations are provided by law, the Commission may make rules and regulations to govern such proceedings."

It is urged by plaintiff that under this section the legislature may grant to the Corporation Commission the power to regulate municipal corporations operating public utilities, and that it has done so in chapter 100, Session Laws 1933. The language of the section is general, and not specific, and, were it not for two considerations, a plausible argument along this line might well be maintained. The first is that it was the evident intent of the Constitutional Convention, as expressed in section 2, supra, to exclude municipal corporations from the jurisdiction of the Corporation Commission, and the second, that if we are to follow the argument of plaintiff and give section 6, supra, the wide scope which he contends for, it would, in effect, authorize the legislature to confer jurisdiction upon the Corporation Commission to regulate and govern every department of state, from the highest to the lowest, in the minutest degree, with the exception, perhaps, of the legislature itself. If the legislature may confer jurisdiction upon the Corporation Commission to regulate one subdivision of the state government in its operation, it may equally do so with any other subdivision or branch, and the mere fact that other provisions of the Constitution may have expressly, or by implication, have withheld that power, would be immaterial, for section 2, supra, withheld the power of regulating municipal corporations in their operation of public utilities. If one prohibition of the Constitution may be set aside by the legislature under the general power of section 6, supra, there is no reason why another may not be. We are certain the whole history of the making of our Constitution negatives the idea that it was ever intended that the power of regulating the actions of municipal corporations should be delegated by the legislature to any other body. Such regulatory power lies in the legislature alone, if anywhere, and even it may not delegate that power. The reasonable and natural construction of section 6, supra, is not that the legislature may enlarge the jurisdiction granted by the Constitution to the Corporation Commission to include subject matter obviously intended to be excluded from such jurisdiction, but that it may enlarge or extend the powers and duties of the commission over the subject matter of which it has already been given jurisdiction, and other matters of the same class, not expressly or impliedly exempt by other provisions of the Constitution. Such a construction of section 6, supra, is in harmony with our general scheme of government and with all other provisions of the Constitution. The construction contended for by plaintiff would outrage both.

We have been cited by plaintiff to many cases which he contends intimate that such power does rest in the legislature: Northeast Rapid Transit Co. v. City of Phoenix, 41 Ariz. 71, 15 P.2d 951; Sumid v. City of Prescott, 27 Ariz. 111, 230 P. 1103; Corporation Commission v. People's Freight Line, 41 Ariz. 158, 16 P.2d 420; Van Dyke v. Geary, 244 U.S. 39, 37 S.Ct. 483, 485, 61 L.Ed. 973. We have examined all of these cases carefully and not one of them considers in any manner the right of the Corporation Commission to regulate a municipal corporation operating a public utility. The nearest that the language of any of the cases might come to sustaining the contention of plaintiff is that of Van Dyke v. Geary, supra. The Supreme Court of the United States said:

"Article 15, entitled, 'The Corporation Commission,' consists of nineteen sections, and confers broad powers of regulation. The character of the service, that is, whether it is public or private, and not the character of the ownership determines ordinarily the...