Visco v. State ex rel. Pickrell

• Decision Date: 26 December 1963
• Docket Number: No. 7679,7679
• Citation: 95 Ariz. 154,388 P.2d 155
• Parties: John VISCO, and Arizona Mill Supply, Inc., a corporation, Appellants, v. STATE of Arizona ex rel. Robert PICKRELL, Attorney General, Appellee, Downtown Merchants Association, Intervenor.
• Court: Arizona Supreme Court

Page 155

388 P.2d 155

95 Ariz. 154

John VISCO, and Arizona Mill Supply, Inc., a corporation, Appellants, v. STATE of Arizona ex rel. Robert PICKRELL, Attorney General, Appellee, Downtown Merchants Association, Intervenor.

No. 7679.

Supreme Court of Arizona, In Banc.

Dec. 26, 1963.

Rehearing Denied Jan. 28, 1964.

R. G. Langmade, Phoenix, for appellants.

Powers & Rehnquist, Phoenix, for intervenor.

Robert Pickrell, Atty. Gen., for appellee.

WILLIAM W. NABOURS, Superior Court Judge.

This action was brought in the lower court by the Attorney General of the State of Arizona at the request of the Arizona Corporation Commission. The complaint alleged that the appellants Visco, and Arizona Mill Supply, Inc., a corporation, were either operating as a common carrier or contract carrier of property without having first obtained the necessary certificate or permit from the Corporation Commission. It asked that appellants be enjoined from continuing such operations.

The appellants have for many years engaged in the business of scavenging. Visco is the president and general manager of Arizona Mill Supply. It has a plant in which it processes, classifies and reclaims for sale and shipment certain waste materials discarded by the merchants, principally paper and cardboard.

The appellants operate trucks for the purpose of picking up cardboard and paper and transporting it directly to a purchaser or to the appellant's plant for processing. In this operation it is conceded by the State that appellants are operating as private carriers and are not subject to any control by the Corporation Commission. Appellants have also entered into agreements with various merchants to clean up the alleys when they haul away this material and have rented large bins to the merchants for the storage of this material until picked up by appellants. This bin rental and cleaning up operation now constitute a large part of the business of appellants in addition to the sale of the salvageable material. The State admits that appellants have the right to pick up salvageable cardboard and paper, to clean the alleys in hauling away this salvageable material and have the right to rent bins to the merchants. However, the State contends appellants have not limited their activites to such salvage operations but have now progressed to the point where they will haul trash, refuse or garbage for the merchants directly to the dump in the same manner as the certificated carriers.

Appellants deny this statement and allege that all of their operations are as a private carrier, that all materials are given to them by the merchants and are then transported by them to the dump as their own property.

Because of the action of the Corporation Commission as applied to the business of this state, a detailed examination of the facts and principles of law applicable is necessary. In 1955 appellant Arizona Mill Supply applied for a Certificate of Convenience and Necessity from the Corporation Commission to engage in the business of a common motor carrier of trash and garbage. That permit was not granted and in 1956, appellant Visco organized a corporation known as Benz Disposal Company for the purpose of obtaining a contract carrier's permit to haul for Arizona Mill Supply. In late 1956 a permit 'authorizing the transportation of Number 2 dry trash over all highways of the City and County within a 25 mile radius of the Phoenix City Hall' was granted. In 1957, the contract carriers' permit of Benz Disposal Company was canceled. Benz, and the two appellants in this action were ordered to cease and desist common carrier operations by motor vehicle. This order was appealed to the Superior Court of Maricopa County but later the appeal was abandoned.

In 1959, Arizona Service Company, a certificated common carrier of trash and other such items of 'property', filed a complaint before the Corporation Commission against Benz, it appearing that Benz had Visco. At the hearing no action was taken against Benz, it appearing thta Benz had forfeited or abandoned its corporate charter, but the Commission found that Visco was operating as a common carrier of property and ordered him to cease and desist such operations. Arizona Mill Supply was not a party to that action and no action was taken against it. Visco filed a petition for rehearing and upon its denial thereafter appealed to the Superior Court of Maricopa County. Judgment was entered setting aside the Order of the Corporation Commission. This judgment was not appealed.

In June 1960, Arizona Service Company filed a complaint before the Corporation Commission alleging that Arizona Mill Supply had for six months prior thereto been acting as a common motor carrier of 'property' in the transportation of garbage and trash as defined by the Commission. An Order to Show Cause was issued by the Superior Court and a hearing date set, and on September 9, 1960, a permanent Writ of Prohibition was issued to the Commission ordering it to 'desist and refrain from assuming jurisdiction, by directing Arizona Mill Supply, Inc., a private carrier, to appear and show cause why its operations should not cease and desist, or to undertake and assume jurisdiction to determine the legal status of the Arizona Mill Supply, Inc.' That judgment is now on appeal to this Court as Cause No. 7227, and is consolidated for hearing with this matter.

In late 1960, Garbage Service Company, Inc. and Arizona Service Company, certificated common carriers of trash and similar property, filed complaints in the Superior Court of Maricopa County. Both cases are now awaiting trial.

On September 25, 1961, the appellee, State of Arizona, filed this action against the appellants, John Visco and Arizona Mill Supply, Inc. As its outcome appellants were enjoined from operating as common motor carriers of property by transporting for compensation trash, garbage, refuse, paper, cardboard or any other such property on the public highways in and about the City of Phoenix, Arizona, and from directly or indirectly collecting or receiving any money or thing of value whatever from cleaning up, loading or transporting by motor vehicle over said public highways any trash, garbage or refuse, use, except paper or cardboard. The decree expressly declared that nothing contained therein 'shall be construed to affect or impair in any way the transportation by appellants over the public highways of material, such as paper and cardboard, which is actually salvaged by appellants and used or sold in their private business operations.'

Throughout all of these proceedings the crux of the controversy between Visco and Arizona Mill Supply on the one hand and the Arizona Corporation Commission on the other has been the question whether Arizona Mill Supply has been operating as a private carrier as it claims, or as a common or contract carrier of property by motor vehicle as claimed by the Commission.

First, was the action properly brought by the Attorney General?

The Attorney General is acting under A.R.S. § 40-422 which provides in part:

'When the commission is of the opinion that a public service corporation is failing or about to fail to do anything required of it by law * * * it shall direct the attorney general of the state to commence a proceeding * * *.'

This action under § 40-422 is an appropriate one in which to decide the question of whether the defendant is a public service corporation. The 'law' alleged to be violated may be any law the Corporation Commission is empowered to enforce. As here used, 'law' includes more than the Public Service Corporation Act. The situation is essentially the same as in Corporation Commission v. Southern Pac. Co., 67 Ariz. 87, 191 P.2d 719, where an action was brought by private interests under the then § 69-249 (now § 40-254) to set aside a commission order under § 66-506. (now 40-607)

It would be well to commence this decision by explaining in detail why the statute A.R.S. § 40-607 does not require a certificate of public convenience and necessity of any except 'common motor carriers.' In this case the appellant had neither a motor carrier's permit under A.R.S. § 40-607 or § 40-608. As a private carrier he needs neither, (A.R.S. § 40-601(8)). It should be pointed out that the certificate under § 40-607 is in fact a grant of monopoly, and that no competitor can enter the field unless the certificate holder 'will not provide service.' The certificate under A.R.S. § 40-608, however, is not a grant of monopoly, and, if the law is properly administered, new persons can enter the field of contract motor carriage. The monopolistic feature formerly in this section was eliminated by Laws 1949, Ch. 106, Sec. 1.

In his complaint the Attorney General confused the issues by charging appellants had acted as 'common contract carriers', a phrase unknown to the statutes which use 'contract carrier' and 'common carrier' as contrasting classifications with different certificates required. The court below found appellants to be operating as a 'common motor carrier' and enjoined them from operating without a certificate of convenience and necessity, meaning one under A.R.S. § 40-607. This was the certificate which could not possibly be secured. If a certificate under A.R.S. § 40-608 had been the one required, presumably, if the law is properly administered, it would have been granted upon application. Consequently, what is said herein does not apply to A.R.S. § 40-608, and no opinion is intended to be expressed relating to that statute. The 'contract carriers' covered by that section, are for the purposes of most of the constitutional decisions discussed herein, included within the term private carriers, and the regulation provided in A.R.S. § 40-608, if not administered as to be in fact a cloak for monopoly, is an example of the type of regulation to which any uses of the highways may be subjected.

When read in the light of the applicable constitutional...