Fulmer v. Board of Railroad Commrs. , 96 Mont. 22 ( 1934 )

I dissent. Heretofore this court has held that Chapter 184, Laws 1931, is valid as against certain constitutional objections. (Barney v. Board of Railroad Commissioners, 93 Mont. 115,17 P.2d 82, 88.) The majority opinion in that case sustained the Act, saying: "In our opinion the Act constitutes a proper exercise of the police power of the state in the regulation of the use of the public highways by contract carriers, and is not to be condemned under the provisions of the Fourteenth Amendment to the Constitution of the United States, or like provisions embodied in section 27 of Article III of the Constitution of the state of Montana." I thought the Act was unconstitutional, as disclosed by my dissenting opinion in that case. I have not receded from the views there stated.

But if we treat the statute as one regulating the use of the highways as held by the majority opinion in the Barney Case, there are certain portions of the statute that cannot stand under any conceivable theory. The act contemplates that all motor carriers for hire shall be placed under the jurisdiction of the board of railroad commissioners, and none shall be permitted to operate for hire without first obtaining a certificate of public convenience and necessity. The rates to be charged for the services rendered are to be fixed by that board, and, in so doing, "the board shall take into consideration the kind and character of service to be performed, the public necessity therefor, and the effect of such tariff and rates upon other transportation agencies, if any, and as far as possible avoid detrimental or unreasonable competition with existing railroad service." (Sec. 3.)

And the board, in determining whether to issue a certificate of public convenience and necessity, is commanded to "give reasonable consideration to the transportation service being furnished or that will be furnished by any railroad, or other existing transportation agency, and shall give due consideration to the likelihood of the proposed service being permanent and continuous throughout twelve (12) months of the year and the effect which such proposed transportation service may have upon other forms of transportation service which are essential and indispensable to the communities to be affected by such proposed transportation service or that might be affected thereby." (Sec. 11.)

It is, of course, obvious that provisions in the Act designed to secure railroads against harmful competition have nothing to do with regulating the use of the highways in the interest of their preservation or the safety of the public. Such provisions have but one object, and that is to place a protecting mantle over the business of the railroad companies.

It is true that rail carriers, in common with other forms of business, have suffered financially during the period of the financial depression. It may be that the rail carriers as a matter of public policy should be protected against competition by motor carriers. That is a question not before us. My position in that regard is that, if this is a matter that may be accomplished by legislative action without constitutional amendments, it still must be done in a constitutional manner.

The title to Chapter 184 reads: "An Act Providing for the Supervision, Regulation and Control of the Use of the Public Highways of the State of Montana by Motor Carriers Engaged in the Transportation by Motor Vehicles of Persons and Property for Hire Upon the Public Highways of the State of Montana; Conferring Certain Jurisdiction Over Such Transportation, Motor Vehicles and Their Operations, Upon the Board of Railroad Commissioners; Providing for the Enforcement of This Act and the Punishment for Violation Thereof; and Repealing Chapter 154, Laws Eighteenth Legislative Assembly, 1923, as Amended by Chapter 103, Laws Nineteenth Legislative Assembly, 1925, and as Amended by Chapter 141, Laws Twenty-first Legislative Assembly, 1929." It will be seen that there is not the slightest intimation or suggestion in the title that the Act would deal with the question of whether railroads should be protected against competition by motor carriers.

Section 23, Article V, of the Montana Constitution, provides: "No bill, except general appropriation bills, and bills for the codification and general revision of the laws, shall be passed containing more than one subject, which shall be clearly expressed in its title; but if any subject shall be embraced in any Act which shall not be expressed in the title, such Act shall be void only as to so much thereof as shall not be so expressed."

This constitutional provision has been before this court on many occasions. Its purposes are "to restrict the legislature to the enactment of laws the objects of which legislators and the public as well may be advised of, to the end that any who are interested, whether as representatives or those represented, may be intelligently watchful of the course of the pending bill. The limitation is likewise designed to prevent legislators and the people from being misled by false or deceptive titles, and to guard against fraud in legislation by way of incorporating into a law provisions concerning which neither legislators nor the public have had any intimation through the title read or published." (State v. Anaconda Copper Min. Co., 23 Mont. 498,59 P. 854, 855.)

As was said in State ex rel. Holliday v. O'Leary, 43 Mont. 157,115 P. 204, 206, it "was early discovered that ambitious or designing legislators, prompted by selfish motives or motives of less merit, procured the enactments of measures by reason of their high-sounding or popular titles, when in fact the title merely cloaked a purpose contrary to that expressed; and it was to prevent the members of the Legislature and the people generally from being thus imposed upon that these provisions have been adopted."

To summarize, then, it is my opinion that, if Chapter 184 is valid as a statute designed for the purpose of regulating the use of the highways, as held in the majority opinion in the BarneyCase, only such portions of the Act as are germane to the subject expressed in the title can be sustained.

Incongruous matters, such as the effect upon the profits of rail carriers and prevention of competition to railroads, cannot be sustained, because they are entirely foreign to the purpose of the Act as disclosed by its title. They inject into the Act a subject matter which, if it stood alone, would render the Act invalid on other constitutional grounds. They have nothing to do with the safety of the public or the excessive use of the highways, which is the only foundation upon which any part of the statute can rest.

But if we treat the Act as valid in all respects, it does not, in my opinion, justify the action of the board of railroad commissioners in this proceeding. It must be conceded, of course, that the Act has for one of its purposes that of protecting railroads against detrimental competition. Sections 3 and 11 of the Act make this apparent. But it should be noted that the Act does not deal with railroads as motor carriers. It specifically defines "railroad" as a road for the "movement of cars on rails." (Subd. (k), sec. 1.)

The Act does not in set terms command that foreign corporations, subsidiary of a railroad company or otherwise, shall have preference over Montana citizens in the right to use the highways or to obtain a certificate from the board of railroad commissioners. It is silent as to the priority of rights of rival applicants for a certificate of public convenience and necessity. Ordinarily, the priority of time in making application, while not controlling in the absence of statute on the subject, is an element to be considered by the board. (Chicago Motor Bus Co. v. Chicago Stage Co., 287 Ill. 320,122 N.E. 477; State v. Department of Public Works, 165 Wash. 556,6 P.2d 64; 3 Pond on Public Utilities, sec. 823.)

The action of the board in this case is based upon the supposition that the railroads have a monopoly on the transportation business. That this is so is seen from the fact that the board assumed that the transport company, a subsidiary of the railway company, had the right to base its application for a certificate upon the condition that trains Nos. 187 and 188 would be discontinued. If these trains were operating at a loss, application to discontinue such service was, of course, a proper matter to be submitted to the board. (Compare State ex rel. andto Use of Missouri P. R. Co. v. Public Service Com.,327 Mo. 249, 37 S.W.2d 576, 75 A.L.R. 232.)

It should be noted that the board of railroad commissioners has, in a case such as this, two functions to perform: First, it must determine whether public convenience and necessity require motor service; second, if the first question is answered in the affirmative, then the board must determine which of two or more rival applicants is entitled to the certificate. Here the board never reached the second question. It determined, as to Fulmer, that public convenience and necessity did not require motor service. It specifically held that the application of the transport company stands on a different basis from that of Fulmer. In this, I think, the board was in error. The board acted on the theory that it had a right to issue a certificate to the transport company because it was offering motor service in lieu of, or as a substitute for, train service furnished by trains Nos. 187 and 188. The statute does not authorize this to be done. The only justification under the statute for issuing a certificate to any motor carrier is because public convenience and necessity so require. And in determining whether public convenience and necessity require it, the board is commanded to give reasonable consideration "to the transportation service being furnished or that will be furnished by any railroad." This, of course, as applied to a railroad, means rail service and not motor service. It means that the paramount consideration is the convenience and necessity of the public. Service to the public, and not the profits of the railroads, becomes the pole-star. The board, however, in disposing of Fulmer's application, of its own motion continued hearing on the application of the transport company until the Northern Pacific Railway Company had its application heard to discontinue trains Nos. 187 and 188. It based its order upon the ground "that the proposed substitution of service would result in a marked decrease in operating costs and at the same time provide more efficient service." The "more efficient service" referred to is that furnished by the railroad company and not that proposed by Fulmer. It found specifically that, if it denied the right to the railroad company to abandon its train service on trains Nos. 187 and 188, it would be obliged to deny the application of the transport company. It found, in effect, that, if the converse were true and it allowed the discontinuance of these trains, the certificate would be issued to the transport company as a substitute service for the trains. The statute does not make provision for substituting motor for rail service. It does not give the railroads, or their subsidiaries, a right of priority over other applicants for motor service. To confer such extraordinary privilege, the statute should so provide in no uncertain terms. (Rapid R. Co. v. Michigan Public UtilitiesCom., 225 Mich. 425, 196 N.W. 518; and compare McLain v.Utilities Com., 110 Ohio St. 1, 143 N.E. 381.

The case of New York Central R. Co. v. Public UtilitiesCom., 123 Ohio St. 370, 175 N.E. 596, 598, involved a statute substantially the same as ours. There, as here, the railroad company sought the right of motor service as a substitute for rail service, on the ground that it would result in better service at less cost. The court disposed of the contention by saying: "These and other arguments made by the applicant should be addressed to the Legislature rather than to the Public Utilities Commission and this court. The New York Central Railroad Company as an applicant for a certificate * * * to operate a line of motortrucks over the highways of the state, and thereby transport freight from place to place within the state, is in no better or different situation under the statute than any other applicant for such right and privilege."

But if the implied authority exists for permitting substituted service, it is still difficult to understand upon what theory the board denied Fulmer's application and granted that of the transport company. Fulmer's original application proposed freight service by motor-bus between Billings and Miles City. This was also the original proposal of the transport company, coupled with the condition that trains Nos. 187 and 188 be discontinued. These trains were not freight trains; they were passenger trains carrying some property by express. They did not run between Billings and Miles City, but between Billings and Forsyth — an intermediate point. Both applications were subsequently supplemented to include passenger service. Fulmer in his application offered store — door pick-up and delivery service. The transport company only offers station to station service.

I fail to see how under any conceivable theory the application of the transport company stood on any different basis from that of Fulmer as to that segment of the proposed route from Forsyth to Miles City. Between these points there was no train service discontinued, and the certificate to the transport company, as to this segment of the proposed route, cannot rest on substituted service. Also I fail to see how the discontinuance of passenger trains would give rise to a necessity for the substitution of freight motor traffic. In any event, if the discontinuance of these trains gave rise to a new condition affecting the question of public convenience and necessity, then final ruling on Fulmer's application should have been postponed on the board's own motion, in like manner as was the transport company's application, until such time as the question of the discontinuance of the trains was ruled upon. In other words, until that time the application of the transport company stood in exactly the same situation as did that of Fulmer. After permitting the discontinuance of the train service, the board should then have determined which of the two rival applicants was entitled to the certificate, where, as here, it holds in effect that public convenience and necessity require motor service. This, as above pointed out, the board did not do.

I concede, of course, that under the statute, where a certificate has been issued to a motor carrier and it is rendering adequate service to the public, the board has the right to exclude other motor carriers from the field, and to that extent regulated monopoly has been substituted for unrestricted competition. But that is not the situation here. I find nothing in the statute from which it can be said that the legislature intended to confer upon the railroads the right to a preference over other applicants for certificates for motor service, whether the question is presented on application for substituted service or otherwise. The majority opinion fails to recognize the distinction between the exercise of reasonable discretion by the board and the granting of unwarranted favoritism.