Stephenson v. Binford

• Decision Date: 26 October 1931
• Docket Number: No. 479.,479.
• Citation: 53 F.2d 509
• Parties: STEPHENSON v. BINFORD et al.
• Court: U.S. District Court — Southern District of Texas

53 F.2d 509 (1931)

STEPHENSON v. BINFORD et al.

No. 479.

District Court, S. D. Texas, Houston Division.

October 26, 1931.

Fulbright, Crooker & Freeman and Franklin & Blankenbecker, all of Houston, Tex., for plaintiff.

James V. Allred, Atty. Gen., and Elbert Hooper and T. S. Christopher, Asst. Attys. Gen., W. L. Cook and Andrews, Streetman, Logue & Mobley, all of Houston, Tex., and Albert Reed, of Dallas, Tex., for respondents.

Before HUTCHESON, Circuit Judge, and WEST and KENNERLY, District Judges.

HUTCHESON, Circuit Judge.

Faced with the grave necessity of adequately regulating motor traffic on the highways of Texas in the interest at once of the safety of the traveling public, the protection of the highways, and the maintenance of a safe and dependable transportation system, both by rail and by road for the people of the state, the Forty-Second Legislature of Texas at its regular session enacted into law a legislative program designed and comprehensive enough to deal with and to remedy the mischiefs incident to unregulated use of the highways, including those arising from the unprecedented use of the highways by private contract carriers for hire.

As a part of this program it enacted into law chapter 277, House Bill 335 (Vernon's Ann. Civ. St. Tex. art. 911b). This bill, basing upon the declaration of legislative policy that "the business of operating as a motor carrier of property for hire along the highways of this State is declared to be a business affected with the public interest" (section 22b Vernon's Ann. Civ. St. Tex. art. 911b, § 22b),¹ specifically defined and undertook as to each to regulate the business on the highway of common and contract carriers for hire. It in effect declared the right to operate motor carriers over the highways to be a public franchise, and that no one should engage in that business except in pursuance of a franchise from the state so to do. It fixed the conditions of the franchise to be enjoyed by common carrier and by contract carrier respectively. The evidence of the franchise to be a common carrier was designated a certificate of convenience and necessity; of the franchise to be a contract carrier, a permit.

To the Railroad Commission of Texas, as the body charged under the laws of the state with general supervision over, and as the administrative agent of the state in matters affecting its traffic and transportation laws, it confided, in co-operation with the highway commission, the administration of the act. Before its effective date plaintiff, alleging himself to be a private contract carrier engaged presently and at the time of the enactment of the law in question in hauling freight over the highways of Texas exclusively under a single contract with the Southwest Freight Company, a freight forwarder, and that the act, in violation of the Fourteenth Amendment, denied him due process and the equal protection of the laws, brought this suit to enjoin its enforcement. W. S. Finnegan, P. E. Arnett, and D. A. Beard intervened. All claimed to be similarly situated with the plaintiff; Finnegan as a hauler exclusively for the West Texas Motor Freight Lines; Arnett for the Linde Air Products Line; and Beard for the Peden Iron & Steel Company exclusively and under private contract; and they ask the same relief. Finnegan alone claims to be a hauler in interstate commerce. His allegation in that respect is that, though he hauls between points entirely within the state of Texas, the goods which he hauls have moved into Texas interstate, and that he hauls them as part of their uncompleted movement.

While the prayer is for relief against the act in its entirety, the protest against those features of the bill which are directed to securing traffic safety and highway protection is very mild. Indeed, the validity of these provisions is in effect conceded. Summarized, these require the use on trucks of only competent drivers holding licenses; fix the off and on hours of the drivers; require the carriers to secure the public against loss from personal injuries; authorize the inspection and approval or disapproval by the commission of the equipment to be used by the carriers; the manner of loading, the size and character of the packages, and the weight of loads; authorize the commission to classify the highways as to congestion upon them and as to their character and ability to withstand varying transportation uses, and generally confer upon the commission complete supervision over the highways in the interest of their protection from abuse, and of the public safety.

To defray the expense of administering the act, and as a license or franchise fee, it exacts of the contract carrier a permit fee of $10 of the common carrier a certificate fee of $25 and of both common and contract carriers a license fee of $10.

The power of the state to regulate and control the movements of motor vehicles over its highways in the interest of public convenience and safety, and for the protection of the highways, for the proper use of which it is the trustee to the public, is of the widest scope, and provisions of this kind have been uniformly sustained. Buck v. Kuykendall, 267 U. S. 314, 45 S. Ct. 324, 69 L. Ed. 623, 38 A. L. R. 286; Packard v. Banton, 264 U. S. 140, 44 S. Ct. 257, 68 L. Ed. 596; Johnson v. Perry (D. C.) 47 F.(2d) 900, and three cases decided by this court McLeaish v. Binford, 52 F.(2d) 151, 52 F.(2d) 737, two cases, and Sproles v. Binford, 52 F.(2d) 730.

We find no difficulty then in sustaining against the attack of the suit, and denying the prayer for injunction as to all of the provisions above referred to, since each of them has direct relation to highway control and regulation; in fact, speaks the very language of such power.

The real attack of plaintiff and interveners is pressed against those provisions of the act which, based upon considerations of the public interest in the establishment and maintenance of a dependable transportation system for the state, authorize the commission to grant or refuse permits to contract carriers upon consideration, not only of questions of congestion upon the highways, the fitness and capacity of the contract applicant to conduct the business which he offers to do, but of conditions prevailing along the route proposed as to already existing adequate service by common carriers.

Especially is the attack pressed against the right accorded by the act to the commission to grant or refuse the permit upon consideration of the whole transportation and traffic structure of the state, and upon a determination of whether the stability and integrity of that structure will be bettered or injured by the grant. They take as their shibboleths the pronouncements of the Supreme Court in Michigan v. Duke, 266 U. S. 571, 45 S. Ct. 191, 69 L. Ed. 445, 36 A. L. R. 1105; Buck v. Kuykendall, 267 U. S. 314; Frost v. Commission, 271 U. S. 583, 46 S. Ct. 605, 70 L. Ed. 1101, 47 A. L. R. 457; and Smith v. Cahoon, 283 U. S. 553, 51 S. Ct. 582, 75 L. Ed. 1264, that a Legislature may not by its fiat convert a contract carrier into a common carrier, and that, while the state may regulate the highways, it may not regulate private business done upon them.

They say that the terms of the act authorizing the refusal of a permit, if "the Commission shall be of the opinion that the proposed operation of any such contract will impair the efficient public service of any authorized common carrier then adequately serving the same territory," authorizing it to fix minimum rates to be charged by contract carriers in no event less than those charged by common carriers, forbidding rebates and discrimination, and the making of contract charges less than those fixed by the commission, requiring contract as well as common carriers to keep books of account and make reports to the commission, and contract as well as common carriers to make bonds for the protection of shippers, are in the very teeth of these pronouncements.

The state replies that the great issues of public policy and sovereign power with which this bill deals may not be so naively disposed of with a phrase; that the act in question here avoids the rock and whirlpool of the Frost Case, the charge of uncertainty and indefiniteness of the Cahoon Case; that by its declaration of policy and the clear distinction made and preserved in the act between common and contract carriers it has escaped altogether the confusion and uncertainty in point of view which has manifested itself in the decisions of so many of the state courts and commissions in their efforts to sustain state action in the face of the confident invocation of the phrase, the Legislature may not by fiat convert a private into a common carrier, first used broadly in the Duke and Buck Cases of interstate carriers, and later in the Frost and Cahoon Cases given limited application to the intrastate carriers there involved.²

The state insists here that the oversimplification of highway problems for the irresponsible and unregulated private carrier, which those who invoke this magic phrase assert must come about under its aegis, may not in fact be accomplished; that the phrase has, by its overemphasis upon the limitations on state power given to the purely permissive status of a private carrier for hire, the false appearance of a status as of right at the expense of the power of sovereign states to govern men and things; that at last the effective solution of intrastate highway problems may be correctly approached only from the standpoint of the undoubted power possessed by a sovereign state to withhold entirely from carriers for hire the privilege of using its roadways as a place of business (Packard v. Banton, 264 U. S. 140, 44 S. Ct. 257, 68 L. Ed. 596; Frost v. Comm., 271 U. S. 583, 46 S. Ct. 605, 70 L. Ed. 1101, 47 A. L. R. 457), or to grant a franchise to use them (Frost v. Okla. Comm., 278 U. S. 515, 49 S. Ct. 235, 73 L. Ed. 483), affixing to the grant...