Northeast Rapid Transit Company v. City of Phoenix

• Decision Date: 16 November 1932
• Docket Number: Civil 3224
• Citation: 41 Ariz. 71,15 P.2d 951
• Parties: NORTHEAST RAPID TRANSIT COMPANY, a Corporation, Appellant, v. CITY OF PHOENIX, a Municipal Corporation, Appellee
• Court: Arizona Supreme Court

15 P.2d 951

41 Ariz. 71

NORTHEAST RAPID TRANSIT COMPANY, a Corporation, Appellant, v. CITY OF PHOENIX, a Municipal Corporation, Appellee

Civil No. 3224

Supreme Court of Arizona

November 16, 1932

APPEAL from a judgment of the Superior Court of the County of Maricopa. Joseph S. Jenckes, Judge. Judgment affirmed.

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

Mr. L C. McNabb, for Appellee.

OPINION

LOCKWOOD, J.

The city of Phoenix, a municipal corporation, brought suit against Northeast Rapid Transit Company, a corporation, to enjoin it from engaging in intracity business as a common carrier of passengers within the city of Phoenix. The case was tried to the court on an agreed statement of facts certain documentary evidence, and some undisputed oral testimony, and judgment was rendered granting the injunction as prayed for. From such judgment this appeal was taken.

The facts in the case may fairly be stated as follows: The city of Phoenix is a municipal corporation organized under article 13, section 2, of the Constitution. Defendant is a corporation organized under the laws of Arizona and engaged in the business of a common carrier of passengers for hire. On April 17th, 1929, one C. M. Menderson was general manager of defendant, which was then engaged in business as such common carrier between a point within the city of Phoenix and various points without, conducting only intercity and country business. On that date the Phoenix Motorbus Company and defendant made joint application to the city commission of the city of Phoenix for a right to conduct intracity business as common carriers of passengers, which right was duly granted to Menderson individually upon certain terms set forth in the permit. No permit was granted to the motor-bus company or defendant in their corporate capacities, nor was the permit granted Menderson ever transferred to defendant. At some time thereafter Menderson individually made application to the corporation commission for the right to engage in business as a common carrier between Phoenix and the Arizona Biltmore Hotel outside the corporate limits of Phoenix over certain designated routes. On December 31st, 1930, three certificates of necessity and convenience were granted to him, two of which expressly allowed intra-urban service. On April 1st, 1930, upon the petition of Menderson, Order No. 4569 of the corporation commission issued under date of September 8th, 1929, which denied him the right to give intra-urban service, was modified to authorize such service. These orders authorizing intra-urban service were apparently based by the corporation commission upon the fact that the city of Phoenix had agreed that such service might be granted in the permit aforesaid. No certificate of necessity and convenience, so far as the record shows, was ever issued by the corporation commission to defendant in its corporate capacity, nor was one ever assigned or transferred to it, but Menderson has permitted it to operate over the routes set forth in his certificates without objection. Defendant has been engaged in common carrier passenger service, apparently on the theory that it might operate under the various certificates and permits issued to Menderson in his individual capacity, although such permits and certificates were never transferred by him to it and he has always been the individual owner thereof, so far as shown by the record herein. Neither the permit from the city nor the certificates of necessity and convenience could be assigned or transferred without the consent of the city or corporation commission, and no such consent was ever asked or given.

On the 28th of January, 1931, the city commission revoked the permit theretofore granted to Menderson authorizing intra-urban service, and under their instructions on March 6th this action was filed.

On April 18th, 1931, and after the filing of the action, defendant secured from the city tax collector a license to engage in and carry on the business of a "bus line" within the city of Phoenix for the year ending October 1st, 1931, and on the 2d day of October defendant tendered to the city tax collector the sum fixed by the city ordinances for the reissuance of the bus line license aforesaid, which was refused. Defendant has continued to operate its interurban passenger service in the city of Phoenix up to and including the date of trial of this action.

It is further agreed that the city of Phoenix has never applied to the corporation commission or endeavored to procure it to cancel any of the certificates of necessity and convenience issued by it as aforesaid.

It is the contention of plaintiff that no common carrier of passengers for hire may conduct an intracity business within the limits of the city of Phoenix without a franchise or permit therefor being first obtained from such city, and that none such has been held by defendant since before the commencement of this suit. It is the claim of defendant, on the other hand, that the sole and exclusive jurisdiction over common carriers of passengers for hire, whether within or without the limits of a corporate city, is vested by the Constitution and laws in the corporation commission, and that it has been and is operating its business under and in accordance with the provisions of the certificates of necessity and convenience duly issued by such corporation commission, as aforesaid.

Article 15, sections 2, 3 and 6 of the Constitution of Arizona read in part as follows:

"Section 2. All corporations other than municipal engaged in carrying persons or property for hire . . . shall be deemed public service corporations.

"Section 3. The Corporation Commission shall have full power to, and shall, prescribe just and reasonable classifications to be used, and just and reasonable rates and charges to be made and collected, by public service corporations within the State for service rendered therein, and make reasonable rules, regulations, and orders, by which such corporations shall be governed in the transaction of business within the State . . . ; Provided, that incorporated cities and towns may be authorized by law to exercise supervision over public service corporations doing business therein. . . .

"Section 6. The law-making 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. . . ."

In pursuance of section 6, supra, the legislature adopted sections 736 and 741, Revised Code 1928, which read in part as follows:

"§ 736. Certificate of convenience and necessity; application; hearing; terms of certificate. No person shall operate any motor vehicle for the transportation of persons or property as a common carrier for compensation on any public highway, street or alley in the state, or between any fixed termini, without first having obtained from the commission a certificate of public convenience and necessity. Application for such certificate shall be made to the commission in writing, verified by the applicant and shall specify the name and address of applicant and the names and addresses of its officers, if any. . . . No certificate shall issue until the commission finds that the public convenience and necessity requires it.

"Each certificate shall contain the name of the grantee . . . and such additional provisions and limitations as the commission shall deem necessary. Such certificate may not be assigned or transferred without an order of the commission authorizing such transfer."

"§ 741. Violations; penalty. Every person who violates or fails to comply with, or who aids or abets in the violation of any provisions of this article, or who fails to obey, observe or comply with any order, rule, or requirement of the commission, or any provision thereof, or who aids or abets any person in his failure to obey any order, rule or regulation or any provision thereof, is guilty of a misdemeanor."

Upon examining these respective provisions of the Constitution and statute, we think their language is plain and definite to the effect that no person may operate a motor vehicle as a common carrier for hire on any public highway, street or alley within or without an incorporated city or between any fixed termini within the state without first having obtained a certificate of necessity and convenience from the corporation commission. To hold otherwise would require an addition to or subtraction from the precise terms of the law or a highly strained construction of the meaning of simple English words.

Defendant in this case, it is admitted, was operating a motor vehicle for the purpose set forth in the statute. It also appears that the only certificates of necessity and convenience under which it claimed to be operating were those issued to C. M. Menderson, as an individual, and always held by him in that capacity. It seems too clear for argument that those certificates were not sufficient to authorize defendant to engage in the business which it admits it was carrying on.

The statute specifically requires that an application for a certificate of necessity and convenience shall specify the name and the address of the applicant, shall contain the name of the grantee, and may not be assigned or transferred without an order of the commission. We think that only the grantee named in such certificate may engage in business as a common carrier for hire with motor vehicles by virtue thereof. Were this not the case, a certificate might be issued to a person whom the commission believed in every way thoroughly responsible and qualified to operate thereunder and then some utterly irresponsible person or corporation might with the consent of the grantee,...