National Automobile Service Corporation of Pennsylvania v. Barfod
| Decision Date | 21 March 1927 |
| Docket Number | 19 |
| Citation | 289 Pa. 307,137 A. 601 |
| Parties | National Automobile Corporation, Appellant, v. Barfod |
| Court | Pennsylvania Supreme Court |
Argued January 24, 1927
Appeal, No. 19, May T., 1927, by plaintiff, from decree of C.P. Dauphin Co., Sept. T., 1926, No. 841, dismissing bill in equity, in case of the National Automobile Service Corporation of Pennsylvania v. Einar Barfod, Insurance Commissioner. Reversed.
Bill for injunction. Before HARGEST, P.J., FOX and WICKERSHAM, JJ.
The opinion of the Supreme Court states the facts.
Preliminary injunction dissolved. Plaintiff appealed.
Error assigned, inter alia, was, decree, quoting record.
The decree of the court below is reversed, the bill is reinstated and a perpetual injunction directed to issue in conformity to this opinion.
Arthur S. Arnold, with him Harry Goldbacher and Beidelman & Hull for appellant. -- The Act of 1921 is unconstitutional Com. v. Bicycle Assn., 178 Pa. 636; Erdman v. Mitchell, 207 Pa. 79; Adinolfi v. Hazlett, 242 Pa. 25; Com. v. Beatty, 15 Pa.Super. 5; Fetter v. Wilt, 46 Pa. 457; Craig v. Kline, 65 Pa. 399.
Wm. Y. C. Anderson, Deputy Attorney General, with him T. Ewing Montgomery, and George W. Woodruff, Attorney General, for appellee, cited: Bagley v. Cameron, 282 Pa. 84; Com. v. Moore, 5 Pa. D. & C. 738.
Before MOSCHZISKER, C.J., FRAZER, WALLING, KEPHART and SCHAFFER, JJ.
The Automobile Company Operators Association Act of May 10, 1921, P.L. 442, was intended to give the insurance commissioner power to regulate, supervise and control companies issuing contracts guaranteeing certain services to automobile owners, such as towing, legal aid, storage, repairs, gas, etc. It is not an insurance act, and this is admitted on all sides. Appellant is a corporation furnishing services within the terms of the act. Under section 10, in November, 1926, appellant was notified by Einar Barfod, insurance commissioner, that as the liabilities exceeded its assets by $118,324.66, it must repair the same in ten days, or cease to do business. Counsel for the company requested an explanation from Barfod of the examination and report on which his action was based. No reply having been received from Barfod, and as the end of the ten days was approaching, this bill was instituted to restrain the commissioner from further action.
The court below found the assets to be $67,589.57 and the liabilities, $67,868.23, or a difference of approximately $250. In the liabilities are bills payable, $2,100, the balance consisting of refunds, commissions, capital stock, and gasoline book values outstanding. The court made no definite finding of insolvency, but refused to continue the preliminary injunction because no reserve had been set up by the company, semi-annual reports had not been filed, and the tax of two per centum had not been paid to the Commonwealth. It held the act constitutional, dissolved the injunction, and dismissed the bill. This appeal followed.
The controversy here hinges upon the constitutionality of the act. The following reasons for invalidating the act may be stated: (a) The business of appellant not being insurance, the commissioner has no jurisdiction over the company. (b) The act is not in aid of, or in relation to, any recognized object for which the police power may be exercised, having no relation to the public health, morals, safety or general welfare. (c) It makes an arbitrary and unlawful classification. (d) The act delegates legislative power to the commissioner to prescribe rules, the violation of which would be an offense. (e) The act offends against the due process clause of the federal Constitution, and our Bill of Rights.
Interesting as all these questions may be, we will decide the last one only. Appellant contends that section 10, from which the commissioner derives his authority, is unconstitutional and void, in that no provision is made for notice and hearing of the acts that deprive appellant of its property, this being a violation of the due process clause. Section 10 reads as follows:
We have as a fixed principle in our law that no man shall be adjudged in person or property without notice and an opportunity to appear and be heard: Shambe v. D. & H.R.R., 288 Pa. 240. To condemn without a hearing is repugnant to the due process clause: 12 C.J. 1234, section 1009; Riverside, etc., Cotton Mills v. Menefee, 237 U.S. 189. In applying this general rule it must be remembered that there are certain classes of decisions that are not appropriate for a judicial body to make though they vitally affect private rights; this is because of the nonjudicial character of the investigation or proceeding. Therefore, due process is not necessarily judicial process: Reetz v. Michigan, 188 U.S. 505, 507; U.S. v. Ju Toy, 198 U.S. 253; Klafter v. State Board of Examiners of Architects, 259 Ill. 15. The requirement of due process of law, however, applies to administrative as well as to judicial proceedings. The doctrine of notice and hearing thus becomes a more potent force in our land, because it applies to the decisions and acts of administrative officials, and, unless there are extraordinary emergencies, this essential requisite of due process cannot be dispensed with.
While notice and hearing in administrative procedure are generally necessary, they are not always essential to due process. Exceptions are noted in the levy and assessment of taxes, and the summary destruction of offensive property: Buttfield v. Stranahan, 192 U.S....
To continue reading
Request your trial