Stephenson v. Binford v. 14 8212 15, 1932

• Decision Date: 05 December 1932
• Docket Number: No. 326,326
• Citation: 287 U.S. 251,77 L.Ed. 288,53 S.Ct. 181,87 A.L.R. 721
• Parties: STEPHENSON et al. v. BINFORD et al. Argued Nov. 14—15, 1932
• Court: U.S. Supreme Court

287 U.S. 251

53 S.Ct. 181

77 L.Ed. 288

STEPHENSON et al.

v BINFORD et al.

No. 326.

Argued Nov. 14—15, 1932.

Decided Dec. 5, 1932.

Appeal from the District Court of the United States for the Southern District of Texas.

[Syllabus from pages 251-253 intentionally omitted] Mr. John H. Crooker, of Houston, Tex., for appellants.

[Argument of Counsel from pages 253-255 intentionally omitted] Mr. La Rue Brown, of Boston, Mass., for intervener appellant D. A. beard.

[Argument of Counsel from pages 255-257 intentionally omitted] Mr. Elbert Hooper, of Austin, Tex., for appellees.

[Argument of Counsel from pages 257-259 intentionally omitted] Mr. Justice SUTHERLAND delivered the opinion of the Court.

This is a suit brought in the court below by Stephenson, one of the appellants, in which the other appellants intervened, against various officials of the state and counties of Texas, among them, the Governor, Attorney General, members of the state highway commission and of the State Railroad Commission, to enjoin the enforcement of certain provisions of a state statute hereafter described. The appellants severally were engaged in transporting freight by means of motortrucks over the highways of the state, between certain cities located within the state, under private contracts made with various named shippers, which contracts, among other terms, fixed the rate to be charged for the transportation services. While these contracts were in force and in process of being performed, the state statute was passed (Acts Tex. 1929, c. 314 as amended by Acts Tex. 1931, c. 277 (Vernon's Ann. Civ. St. Tex. art. 911b, § 1 et seq.)), the effect of which, it is alleged, is to prohibit appellants from carrying out the terms, provisions, and conditions of their contracts; to preclude them from transporting freight over the highways of the state under their contracts as private carriers to their great injury; and to subject them to criminal prosecutions. It is further alleged that an enforcement of the act will destroy the business of appellants, and, unless restrained, will cause them irreparable injury.

The following constitute the salient provisions of the act. Section 1 defines various terms used in the act. Section 3 provides that no common carrier of property for compensation or hire shall operate over the highways of the state without first obtaining a certificate of public convenience and necessity, and that no contract carrier shall thus operate without a permit so to do. Section 4 vests the Railroad Commission with authority to supervise and regulate the transportation of property for compensation or hire by motor vehicle on any public highway of the state; to fix maximum or minimum, or maximum and minimum, rates, fares, and charges in accordance with the specific provisions of the act; to prescribe rules and regulations for the government of motor carriers, for the safety of their operations, and for other purposes; to require each driver to have a license pursuant to an examination as to his ability and fitness. By the same section the commission is given broad powers of supervision and regulation in respect of matters affecting the relationship of the motor carriers and the shipping public, as may be necessary in the interest of the public; and also to supervise and regulate such carriers generally 'so as to carefully preserve, foster and regulate transportation and to relieve the existing and all future undue burdens on the highways arising by reason of the use of the highways by motor carriers, adjusting and administering its regulations in the interests of the public.' The Railroad Commission and the highway commission are directed to co-operate in respect of the condition of the public highways and their ability to carry existing and proposed additional traffic.

Section 5 contains various provisions relating to common carriers over the highways, and among other things requires them to have certificates of public convenience and necessity. Section 6(a) provides that no motor carrier now operating as a contract carrier, or hereafter desiring to engage in so doing, shall operate until it shall have received a permit from the Railroad Commission which shall not be issued until the applicant has complied with the requirements of the act. Section 6(c) directs that such permits shall be granted only after a hearing, and not if the commission be of opinion 'that the proposed operation of any such contract carrier will impair the efficient public service of any authorized common carrier or common carriers then adequately serving the same territory.'

Section 6(d) authorizes the Railroad Commission to issue special permits to persons desiring to transport for hire over the state highways live stock, mohair, wool, milk, and certain other commodities, upon such terms and under such regulations as may be deemed proper, having in mind the protection of the highways and the safety of the traveling public. Section 6aa gives the commission authority to prescribe rules and regulations governing the operation of contract carriers in competition with com- mon carriers over the highways, and to prescribe minimum rates to be collected by such contract carriers 'which shall not be less than the rates prescribed for common carriers for substantially the same service.'

Section 6bb provides that no permit to operate as a contract carrier shall be granted to any person operating as a common carrier holding a certificate of convenience and necessity, and that no certificate of convenience and necessity shall be granted to any person operating as a contract carrier, and that no vehicle shall be operated by any motor carrier with both a permit and a certificate.

Section 13 requires all motor carriers to give bonds and insurance policies, which among other things shall provide that the obligor will pay judgments recovered against the motor carrier based on claims for loss or damages for personal injuries, or 'loss of, or injury to, property occurring during the term of said bonds and policies and arising out of the actual operation of such motor carrier.' The section contains a proviso directing the commission not to require insurance covering loss of or damage to cargo in amount excessive for the class of service to be rendered by the carrier.

Section 22(b) is a broad declaration of policy. It declares that the business of operating as a motor carrier of property for hire along the highways of the state is one affected with the public interest. It further declares that the rapid increase of motor carrier traffic and the lack of effective regulation have increased the dangers and hazards on public highways and made more stringent regulations imperative to the end that the highways may be rendered safer for public use, the wear and tear upon them reduced, discrimination in rates eliminated, congestion of traffic minimized, the use of the highways for transportation of property for hire restricted to the extent required by the necessities of the general public, and the various transportation agencies of the state adjusted and correlated 'so that public highways may serve the best interest of the general public.'

The case was heard by a statutory court consisting of three judges, under section 266 of the Judicial Code, U.S.C., title 28, § 380 (28 USCA 380), upon the pleadings and affidavits and other evidence. That court delivered an opinion and denied an interlocutory injunction (D.C.) 53 F.(2d) 509. Later, and upon final hearing, the court made findings of fact and entered a decree denying a permanent injunction. The case comes here by appeal from that decree.

Appellants assail the statute upon the following grounds: (1) That as applied to appellants, all of whom are private contract carriers, the result of the statute is to compel them to dedicate their property to the quasi public use of public transportation before they can operate their motors over the highways, and thus to take their property for public use without adequate compensation and to deprive them of their property without due process of law. In other words, the alleged effect of the statute is to convert the private carriers into common carriers by legislative fiat. (2) That the business of appellants is not affected with a public interest, and the provisions of the statute so declaring in terms, or in effect, constitute an attempt to deprive appellants of their property without due process of law, and to abrogate their right of private contract. (3) That the statute by requiring appellants to obtain a permit in the nature of a certificate of public convenience and necessity subjects them to other regulations before they can lawfully operate upon the highways, which regulations are not imposed upon other private carriers similarly situated, and thereby appellants are denied the equal protection of the laws. (4) That other regulations to which appellants are subjected are not made applicable to persons using the highways in transportation of their own commodities under substantially similar conditions and thereby appellants are denied the equal protection of the laws.

To these contentions appellees reply: (a) That the act does not undertake to convert the contract carriers into common carriers, or to require them to devote their property to any different or greater public use than that to which they have already voluntarily dedicated it, or to render any service beyond that which they have contracted to render, but merely fixes reasonable conditions upon the permissive use which they make of public property as a place of business. (b) That the act is bottomed upon the state's power to protect its highways and remove traffic hazards, as well as upon its power and duty to foster and preserve a dependable transportation system for the whole people. (c) That the contract carriers reached by the act are, under conditions, now obtaining upon the highways, engaged in a...