Continental Baking Co. v. Woodring
Opinion of the Court
Chapter 236, of the Laws of 1931, lays a special tax, based on truck capacity and mileage, upon carriers which carry for hire (public and contract carriers) and upon those who are engaged in the transportation by motor vehicle of property sold in furtherance of any commercial enterprise (private carriers). Such taxes must be used for the maintenance, repair, and reconstruction of public highways, and the administration of the act. It requires a public carrier to procure a certificate of convenience before doing an intrastate business; it requires all carriers to procure a license, and to carry liability insurance. It authorizes the Public Service Commission to promulgate regulations looking to the safe operation of the vehicles of all carriers. Certain carriers are exempted from the act.
The plaintiffs are “private motor carriers of property” as the same are defined by the act; they operate bakeries both within and without the state of Kansas, and use the highways of Kansas to deliver them products to customers within and beyond a radius of 25 miles from the corporate limits of cities of the state. The plaintiffs seek to enjoin the enforcement of the statute on the ground that it is arbitrary and discriminatory, and that it compels private! carriers to assume the burdens of common carriers. A motion of the defendants to dismiss the bill for’ want of equity is now for decision.
A similar attack was made upon this statute by a “contract carrier,” and the statute was held to be good as against that attack by this court, Judges Phillips, Symes, and Hopkins sitting. Louis v. Boynton et al., 53 F.(2d) 471. We will adhere to the rulings of that court, as far as pertinent, not only because we agree with them, but for the more fundamental reason that courts of co-ordinate jurisdiction sitting in the same district must not attempt to overrule the decisions of each other, except for the most cogent reasons. This rule, and its careful observance, are, to use the words of Judge Walter H. Sanborn, “essential to the prevention of unseemly conflicts, to the speedy conclusion of litigation, and to the respectable administration of the law, especially in the national courts, where many judges are qualified to sit at the trials, and are frequently called upon to act in the same eases.” Plattner Implement Co. v. International Harvester Co. (C. C. A. 8) 133 E. 376, 378; Shreve v. Cheesman (C. C. A. 8) 69 F. 785; Boatmen’s Bank v. Fritzlen (C. C. A. 8) 135 F. 650.
The state of Kansas has constructed at great expense a system of improved highways. These have been built in part by special benefit districts and in part by a tax
The constitutional questions presented cannot be decided until the statute has been construed. This statute has not yet been construed by the state courts; nor are we aided by any administrative interpretation of the department charged with its enforcement. The statute was construed in Louis v. Boynton, supra, as far as was necessary for the determination of that ease; but there remains for this court to construe several sections of the statute.
As in the case of most legislation which is the subject of wide interest and which is amended on the floor and in conference, many questions of construction are raised. Counsel for tho plaintiffs make many suggestions which would improve the draftsmanship of the bill, as doubtless they will be able to do as to any bill that may be later enacted. We are not aided in our efforts to construe the law by tho hypothetical absurdities which are suggested by counsel and which have come to be the conventional method of presenting constitutional questions, for, as was said by the Supreme Court of Oregon in State v. Kozer, 116 Or. 581, 242 P. 621, 624, the constitutionality of a statute cannot be tested by isolated cases conjured up by fertile imagination; it must be tested by “its general application to the classes affected, and not to certain individuals belonging to such classes. Exact equality is not possible. Practical equality is constitutional equality. Tho human mind has not yet been able to devise any scheme of taxation which will operate with unerring certainty and equality to all situations that may arise. Southwestern Oil Co. v. Texas, 217 U. S. 114, 30 S. Ct. 496, 54 L. Ed. 688; Bell’s Gap R’d Co. v. Pennsvlvania, 134 U. S. 232, 10 S. Ct. 533, 33 L. Ed. 892.”
First looking at tho statute as a whole: It is immediately observed that it draws no distinction between residents and nonresidents. Next, it discloses a general intent to levy a reasonable tax for the use of its highways by those who habitually use the highways for business purposes. It divides .such users into two general classes, the so-called “public” and “contract” carriers, who are engaged in the business of transportation of property by motor vehicle for hire; and “private” carriers, to which class the plaintiffs belong, who axe defined to include “any person engaged in the transportation by motor vehicle of property sold or to be sold by him in furtherance of any private commercial enterprise.” The act requires intrastate public carriers to obtain a certificate of convenience and necessity, and provides for the regulation of their charges for services. It requires that private carriers shall apply for a license and furnish certain information, and that, upon tho receipt of such information and compliance with the regulations, tho license shall be issued. It requires that both public and private carriers conform to certain regulations concerning the safety of the operation of their ve
Two principal questions are The first is whether certain exemptions contained in section 2 of the act are so arbitrary and discriminatory that the entire act must' fall; and, second, whether the act imposes upon private carriers duties and obligations which can only lawfully be imposed upon public carriers. Frost v. Commission, 271 U. S. 583, 46 S. Ct. 605, 70 L. Ed. 1101, 47 A. L. R. 457; Smith v. Cahoon, 283 U. S. 553, 51 S. Ct. 582, 75 L. Ed. 1264. But see, Stephenson v. Binford (D. C. S. D. Tex., three-judge court) 53 F.(2d) 509.
We will treat first the question of exemptions. Section 2 of the act provides: “That this act shall not apply to motor earriers who shall operate wholly within any city or village of this state, or private motor carriers who operate within a radius of twenty five miles beyond the corporate limits of such city, or any village, nor to the transportation of live stock and farm products to market by the owner thereof or supplies for his own use in his own motor vehicle; or to the transportation of children to and from sehool.”
There can be no serious question as far as the exemption applies to those veincles operating wholly within any city or village of the state. As to private carriers, this is primarily a taxing statute, and since city streets axe neither constructed nor maintained by the state, there is no reason why the state should exact a charge for vehicles which do not use the state highways; nor is there as much occasion for the state to enad; statutes looking toward their safe operation in localities where such operation may be controlled by city ordinance; nor can there be any serious question about the exemption as to the transportation of ehildren to and from schools. ' This public ageney can be fairly exempted from taxation for the same reason that municipal bonds are; the question of the safe operation of such vehicles can be properly left to the sehool authorities who are directly responsible therefor. Louis v. Boynton, supra, and many state decisions collected in Carley & Hamilton v. Snook, 281 U. S. 66, 50 S. Ct. 204, 74 L. Ed. 704, 68 A. L. R. 194, and note appended thereto, p. 200.
It is .strenuously argued that the Legislatm6 hag n0 r ^ e t veHeles used ^ ^ transportation of live stoek and farm produots to market b tbe owner tkereof Qr supplies for Hs own use ^ bis owrt mo_ tor veMde. It is said that flour miI]s and packing houses might employ a fleet of trucks and send them to the farm to trans-port wbeat and live stock to the mill or the packing house. They might, but they do not. Tbe Legislature knew that as a mat-£er 0f £acf¡ £arm products are transported town by the farmer, or by a nonexempt «contract carrier” employed by him. The Legislature knew that as a matter of fact £be use 0£ £be kjghways for the transportation of farm products by the owner is casuai and infrequent and incidental; farmers the highways to transport their prod-ucts to market ordinarily but a few times a year. The Legislature rightly concluded that the use of the highways for carrying home his groceries in his own automobile is adequately compensated by the general tax imposed on all motor vehicles. It is strenuously urged that Smith v. Cahoon, 283 U. S. 553, 51 S. Ct. 582, 586, 75 L. Ed. 1264, is contrary. The statute there involved dealt only with carriers engaged in the business of transportation for hire between fixed termini or over regular routes. That statute undertook to exempt from its operation such public carriers as were engaged in the ^sin®ss of transportingfarm products, The Supreme Court held that there was no reasonable gronnd for distinguishing between two public transportation companies, °ae o£ Jasengaged m transporting farm Products for hire, and another of which was engaged m transporting other products £or ^r.e' _®ut, because there is no ration-distinction between two public carriers because of the nature of the products carvied, it does not follow that no rational distinction may exist between two private ear-riers. Whatever may be the metaphysics of the situation, it is a fact that there is an actual distinction between carriers in the position of plaintiffs, who operate fleets of trucks in the conduct of their business and who use the highways daily in the delivery of their products to-their customers, and a farmer who hauls his wheat or live stock
When the Legislature acts within the scope of its legislative power, when no facts are disclosed as to the reasons which actuated the legislation, the presumption of constitutionality stands, unless no fair reason can he ascribed for the • legislative action. Hardware Dealers’ Ins. Co. v. Glidden, 52 S. Ct. 69, 76 L. Ed.-; O’Gorman v. Hartford Ins. Co., 282 U. S. 251, 51 S. Ct. 130, 75 L. Ed. 324; Standard Oil Co. v. Marysville, 279 U. S. 582, 49 S. Ct. 430, 73 L. Ed. 856. That a legislative classification should stand, “if any state of facts reasonably can he conceived that would sustain it”; that the burden is on the assailant to show that the classification is “essentially arbitrary”; that the Legislature has a “wide scope of discretion” in classification; that “mathematical nicety” is not required; and that “some inequality in practice” is not fatal — see Lindsley v. Natural Carbonic Co., 220 U. S. 61, 78, 31 S. Ct. 337, 340, 55 L. Ed. 369, Ann. Cas. 1912C, 160; State Board of Tax Commissioners v. Jackson, 283 U. S. 527, 537, 51 S. Ct. 540, 75 L. Ed. 1248, 73 A. L. R. 1464; Brown-Forman Co. v. Kentucky, 217 U. S. 563, 573, 30 S. Ct. 578, 54 L. Ed. 883; Munn v. Illinois, 94 U. S. 113, 132, 24 L. Ed. 77. It is abundantly settled that the Legislature may consider the difficulties of administration in the enactment of statutes. In Purity Extract & Tonic Co. v. Lynch, 226 U. S. 192, 33 S. Ct. 44, 57 L. Ed. 184, it was held that the difficulties besetting the administration of a law were sufficient to authorize the placing of an innoeent article within a proscribed class. See, also, Ruppert v. Caffey, 251 U. S. 264, 283, 40 S. Ct. 141, 64 L. Ed. 260; Hebe Co. v. Shaw, 248 U. S. 297, 303, 39 S. Ct. 125, 63 L. Ed. 255; Euclid v. Ambler Co., 272 U. S. 365, at page 389, 47 S. Ct. 114, 71 L. Ed. 303, 54 A. L. R. 1016; Tyler v. United States, 281 U. S. 497, 505, 50 S. Ct. 356, 74 L. Ed. 991, 69 A. L. R. 758.
One reason for this exemption, and the exemption next discussed, immediately occurs to us. It is a matter of common knowledge that one of the most serious problems connected with legislation such as this is the problem of administration and the cost thereof. One of the reasons for exempting small incomes from taxation was the cost and expense of collection. If laws are placed upon statute hooks, they should be enforced. The problem of enforcing such statutes as the one now before us is not a simple one, and the cost of collection of the tax is an item that must be considered. It is a well-known fact that business concerns, such as plaintiffs, keep books, and it is comparatively simple to ascertain the mileage of their trucks. A different problem is presented if an effort is made to require a record of the mileage of the trucks of farmers and others incidentally using the highways. It is undoubtedly true that it would require a veritable army of inspectors if a sincere effort was made to ascertain the mileage of every farmer’s truck in Kansas. The cost of collection might exceed the tax. We are not prepared to say that the Legislature, which presumably has considered all of these elements and has made a serious effort to meet this problem, has exceeded its powers in exempting such casual uses from the operation of this law.
A more troublesome question concerning exemptions is that provision which exempts private carriers “who operate within a radius of 25 miles beyond the eorpo
We have little doubt of the power of the Legislature to add to the city limits this twilight zone of trade territory both because of the problems of administration presented, and because of the fairness of it; and, as long as residents and nonresidents are treated alike within this twilight zone, we think the Legislature did not exceed its powers. In our opinion the decision of the Supreme Court of the United States in Clark v. Maxwell, 282 U. S. 811, 51 S. Ct. 211, 75 L. Ed. 726, is conclusive. That ease involved the North Carolina statute which levied a tax on all carriers for hire which operated between fixed termini that were more than 50 miles apart. The plaintiff in that case was a carrier which operated between termini some of which were less than 50 miles apart, and some more than 50 miles apart. He attacked the law on the ground that there was an arbitrary discrimination in favor of carriers who used the highways for less than 50 miles and as against those who used the highways for more than 50 miles, and made many of the same arguments that are presented here, to the effect that the wear and tear on the highways is quite as serious where a dozen trucks operated less than 50 miles as one truck that operated 55 miles. The Supreme Court of North Carolina sustained the tax, holding that, since all were treated alike within and without the 5'0-mile zone, the Legislature had a right to say that the privilege of operating a truck for more than 50 miles was greater than the privilege qf operating a truck for less than that distance, and that such a distinction was sufficient to support the classification. Clark v. Maxwell, 197 N. C. 604, 150 S. E. 190. The Supreme Court of the United States affirmed without opinion. Clark v. Maxwell, 282 U. S. 811, 51 S. Ct. 211, 75 L. Ed. 726. If the Legislature has the power to exempt a class that uses the highways for less than 50 miles, it has a right to exempt a class that uses the highways within a radius of 25 miles. Both exempt a local use.
A ease squarely in point is that of State v. Kozer, 116 Or. 581, 242 P. 621, 622, where the Oregon statute exempted vehicles which operated “exclusively within the boundaries of incorporated cities or towns of the state of Oregon or within five miles beyond the boundaries of such cities or towns” and also exempted trucks “used ex-
Of eourse, 25 miles is further than 5 miles; and it does seem that a 25-mile exemption, even for facility of administration, is pretty far. But, if the state has the power to create this penumbra about the city, the question of the distance must be loft to the Legislature, unless it is clearly arbitrary. The language of Justice Holmes, while in a dissenting opinion, is an apt statement of a familiar principle of law: “When a legal distinction is determined, as no one doubts that it may be, between night and day. childhood and maturity, or any other extremes, a point has to be fixed or a line has to he drawn, or gradually picked out by successive decisions, to mark where the change takes place. Looked at by itself without regard to the necessity behind it the line or point seems arbitrary. It might as well or nearly as well be a little more to one side or the other. But when it is seen that a line or point there must be, and that there is no mathematical or logical way of fixing it precisely, the decision of the Legislature must he accepted unless we can say that it is very wide of any reasonable mark.” Louisville Gas & Electric Co. v. Coleman, 277 U. S. 32, 41, 48 S. Ct. 423, 426, 72 L. Ed. 770.
A recent case that distinctly recognizes the propriety of a classification predicated upon difficulty of administration and accounting is Chicago, 11. I. & P. Ry. Co. v. United States, 52 S. Ct. 87, 91, 76 L. Ed.-. There railroads of less than 100-mile length were exempted from certain features of the car rental order of ihe Interstate Commerce Commission; this exemption was sustained because it relieved the small carriers “from the burden of keeping account of a multitude of separate per diem charges, and reporting them separately to the various trunk lines.” It was noted that the longer lines maintained large accounting forces. So hero the bakeries keep books; the farmers do not. Long hauls are easily recorded, and the tax will pay for the inspection; but the burden ol: computing and collecting a tax from the delivery truck which occasionally crosses the city limits is disproportionate to the tax involved.
A Texas statute, approved June 11, 1931 (Laws Tex. 1931, c. 282 [Vernon’s Ann. P. C. art. 827a]), reg’ulated the length and width of trucks, hut exempted implements of husbandry, well-drilling and highway construction machinery, trucks operating exclusively within a city, and all vehicles engaged in carrying property from the point of origin to the nearest common carrier loading point, and from such loading point to destination. These exemptions were assailed before the United States District Court of Texas, three judges sitting. The statute was construed by that court as exempting farm machinery only as it moved from field to field, and, as so construed, sustained the validity of that and all other exemptions. The origin-to-common carrier exemption was sustained because of the short haul involved. Sproles v. Binford (D. C.) 52 F.(2d) 730, 734. In 1887, the state of New York passed a statute prohibiting the use of stoves in passenger cars, but exempted railroads of less than 50 miles in length. The Supremo Court of the United States denied the contention that such exemption resulted in an arbitrary classification. New York, etc., Railroad v. New York, 165 U. S. 628, 17 S. Ct. 418, 41 L. Ed. 853.
While the act is primarily a taxing statute, it does contemplate regulations looking to the public safety. The exemption of the farmer from such regulations can be sustained on the familiar ground that he makes but casual use of the highways for transportation of his products. The 25-mile exemption is probably sustainable on the ground that the trucks exempted are domiciled in and generally use the city streets: indeed they must use them to get to the city limits; and such trucks are subject to the control of city authorities in these respects. Again, plaintiffs’ trucks a.re exempted within this zone as are all others like situated.
The point urged by counsel for the plaintiffs that the 25-mile zone is larger around a large eity than around a small city is mathematically hut not legally sonnd. The Supreme Court of the United States in Chicago, R. I. & P. Ry. Co. v. United States, supra, met a similar argument by the simple statement that it is not enough to show that “mathematical accuracy in the adjustment of the burden may not be attained.”
The next claim is that section 5 of the act, which is set forth in the margin,
The ownership and financial condition of the applicant is a matter of interest to the commission in connection with the collection of the tax; the question of the equipment and physical property connected therewith is of interest to the commission in the matter of public safety, particularly with reference to the condition of steering gears and brakes. Until the commission requires information which has no reasonable hearing on the ability of the applicant to pay the ta,x, or has no relation to the safety of his equipment, the plaintiff’s rights have not been invaded.
The next section under attack is section 21, which is copied in the margin.
The next section attacked is section 22, which is in the margin.
The plaintiffs rely principally upon Smith v. Cahoon, supra. That was an appeal from the Supreme Court of Florida (99 Fla. 1174, 128 So. 632), which had denied a writ of habeas corpus to the appellant. The appellant had been arrested for operating a truck without a license. The statute undertook to exempt such public carriers as were engaged in the transportation of agricultural, horticultural, and piscatorial products. To thus distinguish between two public carriers, each of which is engaged in the transportation for hire, and each of which was a habitual and continual user of the highway, on account of the nature of the product carried, was held to be unconstitutional. Moreover, the statute contained provisions which could only be legally applicable to common carriers and other provisions which could be applicable to all carriers, but these provisions were intermingled. When the appellant was arrested, the statute had not been construed. The question to be determined was whether or not the appellant could be restrained of his liberty for violating the statute, the termsi of which were obscure, and which had not been construed by the courts. He was released. But the Supreme Court stated: “It should be observed that this is not an action in equity where the enforcement of a statute awaits the final determination of the court as to validity and scope.” The present case is such an action. The Supreme Court further said that “but, until such separation has been accomplished by judicial decision” the statute remained uncertain. But the provisions of the Kansas statute are not so hopelessly intermingled as the Florida statute; and, in the second place, the statute has now been construed and nobody is deprived of his liberty. We do not believe that the Cahoon Case controls this ease.
Finally it is urged that the statute is in conflict with the interstate commerce clause of the Constitution (art. 1, § 8, cl. 3). As to private carriers, no discrimination is made between those engaged in intrastate and those engaged in interstate commerce. It has been repeatedly held, in the eases heretofore cited, that the exaction of a fair compensation for the use of the highways of the state, and the enforcement of reasonable measures looking toward the safety of the public on such highways, is not an undue interference with interstate commerce.
The argument of plaintiffs, particularly
It follows that the bill should be dismissed and the temporary restraining order heretofore issued should be dissolved. If the plaintiffs desire to appeal, a stay of this order will be granted for a reasonable time in which to perfect the appeal, and until the appeal is determined, provided that the plaintiffs keep and furnish to the commission a record of the mileage of their trucks subject to taxation, and either pay the taxes under protest, or give a bond to be approved by the clerk of this court in sufficient amount to insure the payment of such taxes if this decision is affirmed. It is so ordered.
Sec. 5. The public service commission is hereby-vested with power and authority and. it shall be its duty to license, supervise and regulate every public motor carrier of property or of passengers in this state and to fix and approve reasonable maximum or minimum or maximum and minimum rates, fares, charges, classifications and rules and regulations pertaining thereto. And the public service commission is hereby vested with power and authority and it shall be its duty to license, supervise and regulate every public motor carrier of property or of passengers, contract motor carrier of property or of passengers and private motor carrier of property in the state and to regulate and supervise the accounts, schedules, service and method of operation of same; to prescribe a uniform system and classification of accounts to be used; to require the filing of annual and other reports and any other data; and to supervise and regulate “public motor carriers of property or of passengers," “contract motor carriers of property or of passengers” and “private motor earners of property,” in all matters affecting the relationship between such “public motor carriers of property or of passengers,” “contract motor carriers of propety or of passengers” and “private motor carriers of property" and the traveling and shipping public. The public service commission shall have power and authority by general order or otherwise to prescribe reasonable and necessary rules and regulations governing all such motor carriers. All laws relating to the powers, duties, authority and jurisdiction of the public service commission over common carriers are hereby made .applicable to all such motor carriers except as herein otherwise specifically provided*
Sec. 21. No certificate or license shall be issued by the public service commission to any “public motor carrier oí property,” “public motor carrier of passengers,” “contract motor carrier of property or passengers” or “private motor carrier of property,” until and after such applicant shall have filed with, and the same has been approved by, the public service commission, a liability insurance policy in some insurance company or association authorized to transact business in this state, in such reasonable sum as the commission may deem necessary to adequately protect the interests of the public with due regard to tho number of persons and amount of property involved, which liability insurance shall bind the obligors thereunder to pay compensation for injuries to persons and loss of or damage to property resulting from the negligent operation of such carrier. No other or additional bonds or licenses than those prescribed in this act shall be required of any motor carrier by any city or town or other agency of the state.
Sec. 22. The commission shall promulgate and publish in tho official state paper, and mail to each holder of a eei*tificate or license hereunder, such regulations as it may deem necessary to properly carry out the provisions and purposes of this act. Tho commission may at any time, for good cause, suspend, and, upon at least five days’ notice to the grantee of any certificate and an opportunity to be heard, revolte or amend any certificate. Upon the commission finding that any public carrier does not give convenient, efficient and sufficient service as ordered, such public carrier shall be given a reasonable time to provide such service before any existing certificate is revoked or a new certificate granted. Any rules promulgated by the commission shall include: (a) Every vehicle unit shall be maintained in a safe and sanitary condition at
Dissenting Opinion
(dissenting).
I concur in the opinion of the majority in so far as the same construes the Kansas Highway Act that the statute has as its purposes the regulation of the highways and taxation.
I dissent from the views expressed by the majority sustaining the constitutionality of the aet. The exemption of motor carriers who operate within radius of 25 miles beyond corporate limits of any village or city is an unreasonable discrimination in favor of such operators. The necessity for the protection of the public on the highways ■within radius of 25 miles is just as great or greater as beyond such radius, as the probabilities of damage to persons or property would be more likely than beyond such radius. The ease of Smith v. Cahoon, 283 U. S. 553, 51 S. Ct. 582, 75 L. Ed. 1264, seems to me to be controlling.
Reference
- Full Case Name
- CONTINENTAL BAKING CO. Et Al. v. WOODRING, Governor of Kansas, Et Al.
- Cited By
- 13 cases
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- Published