Georgia Public Service Commission v. Saye & Davis Transfer Co.

Russell, C. J. The Saye & Davis Transfer Company brought a petition'to enjoin the Public-Service Commission of Georgia from “attempting to regulate the business of petitioner and from prosecuting petitioner or any of its agents, employees, or officers for alleged violation of” the motor-carrier act of 1929. Ga. L. 1929, p. 293. The general purposes of the act are fully indicated in the title: “An act to regulate the business • of transporting ' for hire persons and property by motor-vehicles on the public highways of this State; to define motor-carriers and to subject them to the jurisdiction and regulatory powers of the Georgia Public-Service Commission, also to the laws applicable to common carriers of goods and carriers of passengers; to prohibit the operation of vehicles by motor-carriers unless they obtain a certificate of public necessity and convenience, and to prescribe the conditions on — 874 — which such certificates shall be issued and continued in force, and the fees to lie paid therefor; to authorize the commission to proscribe just and reasonable rates, fares, and charges oC motor-carriers, and the form, filing, and publication of tariffs therefor; to prohibit motor-carriers from charging or receiving greater, less, or different compensation than that prescribed; to prevent unjust discriminations; to make provision with reference to proceedings before the commission and review of its orders; to make provisions concerning the carrjdng of white and colored passengers, the carrying of baggage, discontinuance of operations; to give the commission power to require motor-carriers to erect, use, or lease depots, to fix schedules, or the number, kind, or character of equipment used; to authorize railroad companies to operate on the public highways as motor-carriers, and to own stock in corporations organized or operating as motor-carriers; to provide how motor-carriers shall be taxed for ad valorem property taxes; to prescribe registration and license fees to be paid by motor-carriers; to prohibit any political subdivision of- the State from imposing registration or license fees on any motor-carrier licensed under this act; to prescribe punishment for violations of this act and of the orders of the commission; to authorize the commission to employ such persons as may be necessary for the enforcement of this act; to provide compensation for the members of the Georgia Public Service Commission for the extra duties required by this act; and for other purposes.” The act is attacked as unconstitutional, (a) because it violates article 1, section 1, paragraph 3, of the State constitution (Code, § 6359), relating to due process of law; (b) because it violates the same provision of the Federal constitution; (c) because it violates article 1, section 3, paragraph 1, of the State constitution (Code, § 6388), -which prohibits property being taken or damaged for public uses without adequate compensation being first paid, in that it converts petitioner’s business from that of private to that of common carrier; (d) because it violates article 1, section 3, paragraph 2, of the State constitution (Code, § 6389), forbidding any retroactive law or law impairing the obligation of contracts, in that it makes unlawful the operation of petitioner’s business which was in existence before and at the time the act was passed. Eules and regulations of the commission adopted pursuant to said act, — 875 — and to carry out same, are attacked as unconstitutional, “in that they attempt to subject petitioner’s business to public control and to convert its business as a private carrier into 'that of a public utility without just compensation.” Other facts are stated hereinafter. It appears from- the record that the Saye & Davis Transfer Company is a corporation created by the superior court of Morgan County for the purpose of doing business • as a common carrier. Before incorporation there was a partnership existing between the applicants for charter. Upon learning that the Public-Service Commission of Georgia proposed to take jurisdiction of their business, Saye & Davis filed a petition in Fulton superior court for injunction. A temporary restraining order was issued, and upon a hearing an interlocutory injunction was granted on November 22, 1929. The exception is to that judgment. In the petition it is contended, that, regardless of its corporate character, the petitioner is not a common carrier but a private carrier; that it does not engage in the business of a common carrier nor hold itself out as such, and for a considerable period of time has not transported any goods except for five customers, who are Sears, Roebuck and Company, Rogers Stores Inc., Gulf Refining Company, Wofford Oil Company, and McConnell & Sons Company, and has neither the intention nor the facilities for transporting goods for any additional customers. It is therefore insisted that this carrier is not under the jurisdiction of the commission. In an answer filed by the commission it is insisted that petitioner is a common carrier; but that if it were a private carrier only, it would be subject to regulation by the commission under the act approved August 29, 1929, and known as the motor-carrier act of 1929. The commission further contends that petitioner is subject to regulation because its business is affected with a public interest. Besides the immediate parties, some 25 short-line railways of the State have filed a brief as amici curise. The defendant in error relies upon the case of Frost &c. Co. v. Railroad Commission of California, 271 U. S. 583 (46 Sup. Ct. 605, 70 L. ed. 1101). We think, however, that the controlling point is not one of differentiation but public interest. If this transfer company can make contracts as a private carrier with five customers, it can just as lawfully^ do so with five hundred others, and in each of the additional instances it would be as much a — 876 — private carrier as before. The result would be that the State, which owns the highways, would be compelled to keep up the track used by this private carrier, maintain and repair it, and bo helpless when the carrier should tauntingly say, “I used your road in my business and let the citizens of the State keep up my means of transportation.” Numerous courts have decided that where the use of the highway is by one who conducts a business which affects the public interest, such business is subject to regulation by the State. The State has a proprietary right in and to its highways, and therefore has the power to prohibit or regulate and control the use of its highways for purposes of private gain. In Hazleton v. Allanta, 144 Ga. 775 (87 S. E. 1043), as in other cases, this court has decided that the streets and highways of the State belong to the public, and that it is within the power of the State to prohibit or condition the use of them by carriers for hire, that this power is vested in the legislature and may be given or withheld, 'and no constitutional right, State or Federal, to use the highways for private gain is invaded. This power is upheld in the case of Frost &c. Co. v. Commission, supra, relied on by the transfer company. The business of a carrier for hire is necessarily affected with a public interest. Even if the carrier has not dedicated its property to the public use as a common carrier, the very nature of the business is such that it is affected with a public use. In Rutledge Co-op. Asso. v. Baughman, 153 Md. 297 (138 Atl. 29), a co-operative association was chartered to market and transport milk and other farm produce and procure and deliver for its members such materials and supplies as might be needed, and its business of transportation was restricted to its members. If the defendant in error in this case can say that it is relieved of regulation because it transports only for five customers, with how much more force might this co-operative association insist upon the same when it only transported materials for its members. Yet the Court of Appeals of Maryland held that this association was subject to regulation under an act that was not an unconstitutional exercise of legislative power. The court also held that the State has power to prevent appropriation of highways dedicated to use of public, by persons using them for transportation for hire to such an extent as to render them unsafe for public use. In the opinion, Judge Offutt declared: “Conced — 877 — ing, for the purpose of this opinion, that the appellant is a private carrier in its relation to the general public, and that the legislature had not the power to convert its status as such into that of a common carrier, it does not follow that section 259 is void, because that section does not in terms or by implication affect the status of the appellant as a private carrier, nor does it enlarge or change the scope of its corporate powers, functions, or duties in the operation of the business in which it is engaged. But what it does is to impose upon the operation of that business the same limitations and restrictions which it imposes upon common carriers. And the question therefore is, has the legislature the power to require a private carrier, before operating a business such as that conducted by appellant over the public highways of the State, to first secure the permission of the public-service commission? The power conferred by these two sections is prohibitory, not regulatory; and the question may be further narrowed to this: Has the legislature the power to authorize the public-service commission to prohibit the appellant from transporting freight for hire for its members over the public highways of the State, when in its judgment such prohibition is essential to the public welfare ? We have said that the statute does not change the status of the appellant as a private cagrier at common law in so far as its relations to the general public are concerned, because the test generally recognized for distinguishing a private from a common carrier is that a common carrier is obliged, within the limits of its ability, to serve all who apply, while a private carrier is under no such obligation. Citing Michie on Carriers, 312; Hutchinson on Carriers § 48, etc. Quoting from its former decision in Mayor &c. v. C. & P. Tel. Co., 131 Md. 446 (102 Atl. 751), the court continued: “‘The legislature of 1910 took up, and, for the first time in this State, enacted a law for the purpose of regulating in various ways the class of corporations or firms conducting public utilities. The grant of power as contained in the act, while in general language, was intended to be extremely comprehensive, . . that the commission created by the act might upon its own initiative regulate the changes demanded, . . so that the said commission should, in the interest of the public, be invested with ample powers for regulation, both as to service and charges. . . It was a jurisdiction determined by the subject-matter, rather than any other consideration.’” — 878 — The motor-carrier act now under consideration is very similar to the Maryland statute, and so it can be well said, as was said in the case above, that the jurisdiction of the public-service commission must be determined by the nature of the subject-matter rather than any other consideration. The gist of the decision in the Frost case, supra, so far as the case at bar is concerned, is that it was not within tlie power of the State to convert a private into a common carrier; but, as we have shown, in instances where the public interest is affected by a carrier’s use of the public highways it is immaterial whether the carrier itself be public or private. In the Frost case the Supreme Court of the United States had under review the decision of the Supreme Court of California construing the auto stage and truck act of California, as amended in 1919, and held: “Assuming-that the use of its highways by private carriers for hire is a privilege which the State may deny, it can not constitutionally afíne to that privilege the unconstitutional condition precedent that the carrier shall assume against his will the burdens and duties of a common carrier.” It was further held that the requirement that private carriers should become common carriers was a violation of the due-process clause of the fourteenth amendment. Kecognizing that we are bound by the decisions of the Supreme Court of the United States, it does not appear that the decision of the case at bar is.affected by the ruling last stated, for the reason that there is no requirement in the Georgia motor-carrier act that the carrier, in order to receive a certifícate of convenience and necessity, shall become a common carrier. On the contrary we are dealing with the question as if the defendant in error were doing business as a private carrier, although it appears that it was incorporated as a common carrier, and we think the act provides for the regulation of this company even as a private carrier. However, even were we to treat it as a common carrier, we should not be within the inhibition of the Supreme Court of the United States against compelling this company to become a common carrier, because it has airead]' asked the superior court of Morgan County to create it as a common carrier and so declare it to be under the law. In Barbour v. Walker, 126 Okl. 227 (259 Pac. 552), dealing with' an Oklahoma statute similar to the Georgia act in that it provided for the regulation of the use of public highways for motor carriage for hire, and there being nothing in that — 879 — act requiring carriers to become common carriers as a condition precedent to obtaining a certificate of public convenience and necessity, tbe court held: “A private motor-carrier operating over the public highways of the State, though without regular or fixed time schedules between fixed points in the transportation of commodities for hire under separate contracts with several principal business concerns located and doing business in one of such points, is a ‘motor carrier/ within the meaning of chapter 113, S. L. 1923, and is subject to control and regulation by the provisions of law therein provided.” So far as we are aware, the Supreme Court of the United States has never held that, where the transportation business of a carrier was affected with a public interest, it was not within the power to regulate it in the use of the State’s own highways. In the Pipe Line Cases, 234 U. S. 548, the Supreme Court held that the Standard Oil Company, which owned and controlled a combination of pipes, though the only oil transported was oil- purchased prior to transportation, was a pipe-line carrier under the provision of law then being construed, and said: “While the control of Congress over commerce among the States can not be made a means of exercising powers not committed to it by the constitution, it may require those who are common carriers in substance to become so in form.” In the Lottery Case, 188 U. S. 321 (23 Sup. Ct. 321, 47 L. ed. 495), the Supreme Court upheld the power of Congress to control matters affected with a public interest; and likewise, or to the same effect, are the rulings in Brass v. North Dakota, 153 U. S. 391, 14 Sup. Ct. 857, 38 L. ed. 757). In that case, it is true, the property had been dedicated to the public use, but the decision was not placed upon the dedication, but was controlled by the 'fact that it was affected with a public interest. In Hammond Packing Co. v. Montana, 233 U. S. 331 (34 Sup. Ct. 596, 58 L. ed. 985), the court held that it was within the power of the State to restrict or even forbid the manufacture of any article of commerce whenever it appeared that it was affected with a public interest. See also Stone v. Farmers &c. Co., 116 U. S. 307 (6 Sup. Ct. 334, 29 L. ed. 636). In that ease the historical background was discussed, and the power to control the transportation business was dealt with. The doctrine there was so thoroughly gone into with respect to railroad carriers that it has not since been seriously — 880 — questioned; and in our opinion it should be applied to all carriers, no matter what the means of locomotion, unless there would be an interference with the property rights of the person or corporation engaged as carrier, as by changing his legal status or by forcing a private carrier to become a common carrier. We think that the principle that the States may exercise the power of regulation, even the fixing of rates, in the conduct of a business is very pointedly illustrated in the case of German &c. Ins. Co. v. Lewis, 233 U. S. 389 (34 Sup. Ct. 612, 58 L. ed. 1011, L. R. A. 19150, 1189), where a State statute regulating rates of an insurance company was upheld. Certainly the property of the insurance company was not dedicated to any public use. The court was obliged to recognize the right of the insurance company to make or decline contracts of insurance at its pleasure; yet it recognized the doctrine that the business was affected with a public interest, and the court upheld the right of the State of Kansas to fix insurance rates. So we are of the opinion that the court below erred in granting the interlocutory injunction, thereby interfering with the exercise of a power lawfully within the jurisdiction of the public-service commission. Judgment reversed. All the Justices concur, Gilbert, J., specially. Beck, P. J., and Atkinson, Hill, and Hines, JTL, concur in the result.