State v. Cater's Motor Freight System, Inc., 30097.

• Citation: 27 Wn.2d 661,179 P.2d 496
• Decision Date: 17 April 1947
• Docket Number: 30097.
• Court: United States State Supreme Court of Washington
• Parties: STATE v. CATER'S MOTOR FREIGHT SYSTEM, Inc.

179 P.2d 496

27 Wn.2d 661

STATE v. CATER'S MOTOR FREIGHT SYSTEM, Inc.

No. 30097.

Supreme Court of Washington

April 17, 1947

Department 1

Action by the State of Washington against Cater's Motor Freight System Inc., a corporation, to recover a penalty imposed upon defendant by the Department of Public Service. From an adverse judgment, defendant appeals.

Judgment affirmed.

Appeal from Superior Court, Thurston County; D. F Wright, judge.

Charles P. Lund, of Spokane, and Brodie & Brodie, of Olympia, for appellant.

Smith Troy and Stanbery Foster, both of Olympia, for respondent.

SCHWELLENBACH Justice.

This is an appeal from a judgment rendered in the sum of five hundred dollars and costs, in favor of respondent against appellant. The case was heard upon an agreed state of facts.

Cater's Motor Freight System, Incorporated (hereinafter called Cater's), was for several years prior to September 11, 1944, a common carrier of freight, and a holder of common carrier permit No 46 issued by the Department of Public Service of the State of Washington (hereinafter called the Department), under the provisions of chapter 184 of the Laws of 1935, as amended Rem.Rev.Stat. vol. 7A, § 6382-1 et seq., and was subject to, and was regulated by the Department.

During this period the Department had promulgated rules and regulations governing motor freight carriers, among which was Rule 45(g), which reads as follows:

'Every common carrier receiving property for shipment accompanied by a shipper's invoice showing the amount to be collected on delivery (C.O.D.) upon collection of this amount from consignee shall within 5 days remit to the shipper or to the originating carrier, and the originating carrier shall within 5 additional days remit to the shipper the amount so collected, excluding Sundays and holidays.'

It is admitted and agreed that Cater's was required by law to observe the foregoing rule.

On July 1, 1944, the Fruit Delivery Freight Lines, Incorporated (hereinafter called Fruit Delivery), originated a shipment of one carton of washing machine parts in Seattle for the Appliance Parts and Service Company, as shipper, consigned to Fred S. Bunch, Kennewick, Washington. Fruit Delivery undertook to collect from the consignee on behalf of the shipper, funds in the amount of $42.45, designated as C.O.D. funds. Fruit Delivery transported the shipment to Yakima, and there delivered it to Cater's, who in turn delivered it to the Pasco Transfer Company, who delivered it to Bunch, the consignee, and collected the $42.45 and remitted the same to Cater's.

Similar transactions were had (all originating from Fruit Delivery), on July 8, 1944, on a shipment to Pioneer Iron Works, Kennewick, on which $190.99 was collected; July 17, 1944, to R. J. Schultz, Pasco, on which $42.24 was collected; June 23, 1944, to United Builders' Service, Pasco, on which $263.05 was collected; and on June 30, 1944, to Bills Place, Pasco, on which $306.24 was collected.

These total collections amounted to $844.97. Carter's did not remit this amount to Fruit Delivery because its books reflected an amount in excess of the above sum then owing to it by Fruit Delivery, and it therefore credited this sum to Fruit Delivery's account. After deducting the amount of these C.O.D. funds, Cater's books showed a balance of $265.30 due from Fruit Delivery, which disputed Cater's records in their entirety.

Effective September 11, 1944, an order was issued by the Department authorizing the transfer of Cater's permit to C. Paul Sandifur and Charles H. Sandifur. Prior to the issuance of the order, the Department required Cater's and the Sandifurs to agree to deposit with the Spokane branch of the Seattle First National Bank the sum of seven thousand dollars. This fund was to be disbursed on the joint order of Cater's and a representative of the Department in payment of all claims existing, or thereafter arising against Cater's on account of any liabilities or C.O.D. shipments, or for any other claim by shippers. The Department, through its representative, made demand on Cater's to disburse from this fund the sum of $844.97, in payment of these C.O.D. claims, but Cater's disregarded the demand in view of its dispute with Fruit Delivery.

On October 11, 1944 the Department issued Notice of Penalties Incurred and Due for Violation of Law and Rules and Regulations of Motor Freight Carriers as authorized in § 21, chapter 166, Laws of 1937, Rem.Rev.Stat. Vol. 7A, § 6382-31, which notice showed a penalty of five hundred dollars. On November 15, 1944, Carter's filed an application for mitigation which was denied December 7, 1944. This amount remaining unpaid, on April 12, 1945, the state of Washington, through the attorney general, filed the complaint in this action alleging in detail each of the transactions hereinBefore mentioned. By answer the defendant denied liability as to each of the transactions, and as an affirmative defense, alleged that, at the times alleged, Fruit Delivery had money in its possession belonging to defendant which it refused to credit to the account of defendant. Defendant, as a further defense, alleged that upon the entry of the order of the Department on September 11, 1945, permitting the transfer of its certificate to the Sandifurs, defendant ceased to be a common carrier, and the Department had no right, authority or jurisdiction to assess any penalties against the defendant.

Three questions are raised in this appeal: That the action of the Department was in violation of the due process clause of the state constitution; that the Department is estopped because it had insisted upon the fund of seven thousand dollars being deposited for the benefit of any claims of shippers; and that the Department had lost jurisdiction over appellant at the time the penalty was imposed.

Article I, § 3, of the state constitution provides:

'No person shall be deprived of life, liberty, or property without due process of law.'

Rem.Rev.Stat. Vol. 7A, § 6382-31 provides:

'In addition to all other penalties provided by law every 'motor carrier' subject to the provisions of this act and every officer, agent or employee of any such 'motor carrier' who violates or who procures, aids or abets in the violation of any provision of this act or any order, rule, regulation or decision of the department shall incur a penalty of one hundred dollars for every such violation. Each and every such violation shall be a separate and distinct offense and in case of a continuing violation every day's continuance shall be and be deemed to be a separate and distinct violation. Every act of commission or omission which procures, aids or abets in the violation shall be considered a violation under the provisions of this section and subject to the penalty herein provided for.

'The penalty herein provided for shall become due and payable when the person incurring the same receives a notice in writing from the department describing such violation with reasonable particularity and advising such person that the penalty is due. The department may, upon written application therefor received within fifteen days, remit or mitigate any penalty provided for in this section or discontinue any prosecution to recover the same upon such terms as it in its discretion shall deem proper and shall have authority to ascertain the facts upon all such applications in such manner and under such regulations as it may deem proper. If the amount of such penalty is not paid to the department within fifteen days after receipt of notice imposing the same or application for remission or mitigation has not been made within fifteen days after violator has received notice of the disposition of such application, the attorney general shall bring an action in the name of the State of Washington in the...