Northern P. Ry. Co. v. Bennett
| Citation | 272 P. 987,83 Mont. 483 |
| Decision Date | 27 December 1928 |
| Docket Number | 6330. |
| Parties | NORTHERN PAC. RY. CO. v. BENNETT. |
| Court | United States State Supreme Court of Montana |
Appeal from District Court, Missoula County; Theodore Lentz, Judge.
Suit by the Northern Pacific Railway Company against E. W. Bennett for an injunction. From a judgment for defendant, plaintiff appeals. Reversed and remanded, with direction.
F. A Silver, of Helena, Murphy & Whitlock and Howard Toole, all of Missoula, and Gunn, Rasch, Hall & Gunn, of Helena, for appellant.
Edmond G. Toomey, of Helena, and E. C. Mulroney and Walter L. Pope both of Missoula, for respondent.
Appeal from a judgment of dismissal in a proceeding instituted by the Northern Pacific Railway Company to enjoin the operation of a bus line for hire over a route served by the company.
On May 2, 1927, defendant, E. W. Bennett, applied to the State Railroad Commission for permission to carry persons and property for compensation in a motor vehicle from Missoula through Drummond to Philipsburg and return; his application fully complied with the legal requirements therefor, and with it he filed such a surety bond as is required on the granting of such a permit, and deposited with the commission the amount of the annual fee fixed for the operation of such a vehicle as he proposed to use. On receipt of the application the commission gave it some formal consideration without notice to the applicant, and, on information acquired in connection with prior applications by other parties to operate over the route prescribed, theretofore rejected, the commission tentatively determined that the route was adequately served and the business available would not warrant the establishment of the bus line and that the application should be rejected, but no record was made to that effect, and no notice thereof was given to the applicant, as no action was, in fact, taken.
On May 5, the commission notified defendant that his application had been received, and that it had been reported to that body that he had already commenced operations and advised him that he had no legal right to operate until the board had passed upon his application, and he had received a certificate authorizing him to operate, and on May 12 returned to him the amount deposited, with the information that no fee was due, as no certificate had been issued. No correspondence thereafter passed between the defendant and the commission; no hearing was ever had or action taken.
Notwithstanding the information received by defendant, he continued to operate as though licensed, and on June 3, 1927, the Northern Pacific Railway Company commenced proceedings to enjoin such operation on the ground that it was furnishing regular service over the route described and the unauthorized operation by defendant was injuring its business and causing it irreparable damage for which it has no plain, speedy, or adequate remedy in the ordinary course of law.
Defendant answered, setting up his application for a permit, alleging compliance with all of the requirements of the law and that the commission arbitrarily neglected and refused to take any action; that he is willing and able to comply with all conditions which might be imposed upon him and is entitled to operate his bus line over the route described, as it is not served by any other motor vehicles transportation company. The allegations of the answer were denied by reply.
The plaintiff applied for a temporary restraining order which was denied, and the final hearing was had on December 2, 1927, before the court sitting without a jury; it resulted in a judgment of dismissal entered in February, 1928, from which plaintiff in due time perfected its appeal. Plaintiff's assignments of error are to the effect that the trial court erred in deciding the issues in favor of defendant, in denying the injunction, and in entering judgment of dismissal.
The court made no findings of fact nor conclusions of law, but defendant's counsel contend that the judgment may be upheld upon the theory that a finding that the board acted capriciously and arbitrarily is justified by the showing made, and, with such a finding implied, the judgment must be affirmed on authority of Interstate Transit Co. v. Derr, 71 Mont. 222, 228 P. 624; or, secondly, that such a judgment was compelled by a proper construction of the Motor Vehicle Act. Chapter 154, Laws of 1923.
The provisions of chapter 154, Laws of 1923, applicable here are as follows:
Section 1 defines the term "transportation company" as including persons.
Section 2 prohibits any corporation or person from operating in the manner described, except in accordance with the act.
Section 3 places the supervision of transportation companies in the Railroad Commission, and contains a final clause which will later be discussed.
Section 4 provides that "no transportation company, as defined in section one of this Act, shall hereinafter operate any motor vehicle, * * * for the purpose of transportation of persons or property for compensation on any public highway of this state without first having obtained from the Railroad Commissioners of Montana a certificate which shall set forth the special terms and conditions under which permission is granted to operate," etc. It further provides that a permit issued "shall not be an exclusive right or license to operate over any route, road, highway or between any fixed terminals, but said commission shall have the power after hearing, when the applicant requests a certificate to operate in a territory already served by a certificate holder or licensee, under this Act, only when the existing auto transportation company or companies serving such territory, * * * does not provide adequate transportation facilities and service to the satisfaction of the commission, and in all other cases with or without hearing, to issue said certificate as prayed for, or for good cause shown to refuse to issue same or to issue it for the partial exercise only of the said privilege sought, and may attach to the exercise of the rights granted by said certificate such terms and conditions as in its judgment the public convenience and necessity may require."
1. The possession of the required certificate is a prerequisite to the operation of a motor vehicle for hire under such an act as ours, and operation without it may be enjoined by the courts (42 C.J. 680 and 699; Western Transportation Co. v. People, 82 Colo. 456, 261 P. 1), and a railway company showing material loss by reason of the illegal operation of a bus line in competition with it has such an interest as entitles it to prosecute such an injunction proceeding. Niagara Gorge R. Co. v. Gaiser, 109 Misc. 38, 178 N.Y.S. 156; Memphis Street R. Co. v. Rapid Transit Co., 133 Tenn. 99, 179 S.W. 635, L. R. A. 1916B, 1143, Ann. Cas. 1917C, 1045; Boston & M. Ry. Co. v. Cate, 254 Mass. 248, 150 N.E. 210.
The fact that the proper authorities fail or neglect to act upon an application does not justify the applicant in taking the law into his own hands by operating in defiances of the authorities; his remedy is by mandamus to compel action. Greeley Transportation Co. v. People, 79 Colo. 307, 245 P. 720; 38 C.J. 657; section 9848, Rev. Codes 1921.
It is true that in Interstate Transit Co. v. Derr, above, the transportation company was held to be entitled to operate in spite of the fact that it held no certificate from the commission, but this holding was based upon the fact that it was clearly entitled to a certificate, and the commission had acted arbitrarily and capriciously in refusing to issue it. While there is certain language in the opinion which counsel for defendant construe as authority for the statement that whenever the commission arbitrarily refuses a certificate, the applicant may proceed to operate without a certificate, we cannot agree that the opinion so holds. The opinion deals solely with the situation of an applicant for a permit to engage in interstate transportation, and holds, in effect, that such an applicant is entitled to a permit, as a matter of right, by reason of the fact that the state cannot prohibit such transportation. In that opinion our distinguished associate, Mr. Justice Galen, points out that the trial court was led astray by following the decision of the federal court in Buck v. Kuykendall (D. C.) 295 F. 197, and expresses grave doubt that the court correctly stated the law when it said that a state, acting through its proper department, could "prevent common carriers engaged in interstate commerce to operate upon sufficient showing made." Since the decision in the Derr Case was rendered (July 12, 1924), the doubt expressed has been justified by the decision of the Supreme Court of the United States reversing the trial court in Buck v. Kuykendall and holding, in that opinion and in another, that statutory provisions empowering state boards or departments to deny a permit on the ground that its granting would be prejudicial to the welfare or convenience of the public, are unconstitutional when applied to an applicant desiring to use the highway in carrying on interstate commerce, as in contravention of the interstate commerce provision. On such an application the commission cannot refuse a permit. Buck v. Kuykendall, 267 U.S. 307, 45 S.Ct. 324, 69 L.Ed. 623, 38 A. L. R. 286; Bush v. Maloy, 267 U.S. 317, 45 S.Ct. 326, 327, 69 L.Ed. 627. The decision in the Derr Case is in conformity with these later decisions of the highest court of the land, and, on the fact conditions presented, is unassailable, but is not controlling here, as this defendant applied for a permit to engage in strictly intrastate transportation which is a proper subject of regulation by the state, and, in this case, the commission did not...
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