Northville Coach Line, Inc. v. City of Detroit , 379 Mich. 317 ( 1967 )

Kelly, J.

Plaintiff filed its complaint on August 13, 1964, in the Wayne circuit court, seeking an injunction restraining the city of Detroit and its Department of Street Railways from transporting-passengers for hire from the Detroit city limits to the city of Livonia. The trial court granted Michigan Motor Bus Association’s motion for leave to intervene.

Defendant moved for the entry of an accelerated judgment as a matter of law. In passing on this motion, the trial court denied plaintiffs’ request for injunctive relief on two grounds: First, that the home rule act¹ authorized the city of Detroit so to operate, and second, that such operations were exempt from the provisions of the motor carrier act.²

In a split decision the Court of Appeals (2 Mich App 591) disagreed with the trial court’s interpretation of the home rule act and held that the act limited the DSR operations to suburbs which are contiguous and bordering on the city of Detroit. Defendant appeals from that ruling. The Court of Appeals agreed with defendant that the DSE need not comply with the motor carrier act and plaintiffs cross-appeal.

Question No. 1.

“Are the motor carrier operations of Detroit’s municipally owned transportation system beyond the city limits confined to municipalities and areas having common boundaries with the city of Detroit?”

This question involving interpretation of the home rule act calls for judicial determination of legislative intent as expressed in section 4f, subdivisions (2) and (3) of that act, which provide:

“Each city may in its charter provide * * * for * * * operating transportation facilities within * * * its adjacent and adjoining suburbs within a distance of 10 miles from any portion of its city limits.”

“Each city may in its charter provide * * * for the operation of transportation lines without the municipality and within 10 miles from its corporate limits.”³

The opinions found in 2 Mich App 591-598 explain how two members of the Court of Appeals interpreted the act differently than the trial judge and one member of the Court of Appeals.

After carefully considering these judicial interpretations and the able briefs and oral arguments of opposing parties, we conclude that the home rule act permits and authorizes the DSE to extend its transportation system 10 miles beyond the Detroit city limits.

Question No. 2.

“Are the operations by the DSR as a common motor carrier of passengers for hire outside the corporate limits of the city of Detroit subject to the provisions of the Michigan motor carrier act?”

This Court’s determination of legislative intent as expressed in the following two sections of the act will provide the answer to this question.

CL 1948, §476.1 (Stat Ann §22.534) provides:

“No common motor carrier of passengers * * * shall operate any motor vehicle for the transportation of * * * persons * * * for hire on any public highway in this State except in accordance with the provisions of this act. It shall be unlawful for any common motor carrier of passengers * * * to operate upon any public highway without first having obtained from the commission a certificate of public convenience and necessity.”

CLS 1961, § 479.2 (Stat Ann 1965 Cum Supp § 22.567) [the pertinent exemption section] is as follows:

“This act shall not apply to: * * *

“(c) Vehicles owned or operated by any incorporated city, village or school district, or by any county or township in the State or by any corporation, agency or instrumentality of the same, for governmental purposes(Emphasis ours.)

Referring to the exemption words “for governmental purposes,” plaintiffs state:

“It is appellants’ position that in operating its motor coaches as a common carrier of passengers for hire beyond the limits of the city of Detroit, the DSR is engaged in a proprietary function, not a governmental function. * * * No cqse decided by this Court holds that operation of a bus line in communities outside its corporate limits constitutes the performance by a municipality of a municipal operation ‘for governmental purposes.’ ”

and claim that exempting the DSN from the provision of the act “would introduce chaos into what has been an orderly area of business activity fairly responsive to any public need. The DSN would be permitted to institute and discontinue service at will whenever its fancy suited, charge whatever rates it decided to fix, operate any kind of equipment, and as few schedules as it desired. The only test would be its own self interest.”

Defendant explains its interpretation of the exemption provision by stating:

“Exempting municipally owned and operated transportation systems from the jurisdiction of the Michigan public service commission and from the operation of the ‘motor carrier act’ and thus permitting expansions of their operations as new neighborhoods and areas develop in the surrounding communities, has been and is a legislative device of encouraging and authorizing municipally owned public utilities furnishing motor coach passenger services to become an integral part of the entire metropolitan area.”

Michigan Motor Bus Association’s motion for leave to intervene emphasized the far-reafehing effect of this decision by stating:

“Members of the petitioning association operate over and between various routes both .within and without municipal boundaries through the State of Michigan. A determination in the instant proceeding will be applicable both insofar as the operations of petitioner’s members throughout the State of Michigan operations are concerned, as well as to the operations of motor vehicles in the transportation of passengers for hire by all municipalities throughout the State similarly situated to defendant.”

In Frederick v. City of Detroit, 370 Mich 425, we stated that defendant in operating its buses is a common motor carrier of passengers and subject to the rules of law applicable to such carriers.

We considered the motor carrier act in Lafayette Transfer & Storage Co. v. Michigan Public Utilities Commission, 287 Mich 488 (28 PUR NS 455), and there said (p 491):

“PA 1933, No 254, is the only act now in force governing the issuance of permits to motor vehicle carriers for hire. This statute was a consolidation of previous acts, it covered the entire field, it was an original and independent act. It conferred new powers upon the Michigan public utilities • commission, defined those powers, and provided for new regulations for motor vehicle carriers for hire upon the public highways, whether such carriers tuere public or private carriers.” (Emphasis ours.)

In Borski v. City of Wakefield, 239 Mich 656, we decided whether a city was liable in a tort action, and held that, when a city operates a common carrier of passengers for hire, it is engaged in a proprietary function.

The trial court disagreed with plaintiffs’ contention that Borski should be considered as the controlling precedent. The trial judge stated that, although he was aware of the “oft-quoted distinction between the governmental and proprietary functions and operations of a municipality,” yet he disagreed with plaintiffs because “the words ‘governmental purposes’ in the exemption clause of the motor carrier act have a much more general application and meaning.”

We agree -with the trial court’s conclusion in regard to the limited meaning of Borshi. This case only discloses that the facts and circumstances of each case determine whether a city is engaged in a proprietary or governmental function.

In Grand Rapids Motor Coach Company v. Public Service Commission, 323 Mich 624, we construed the words used in the exemption provisions of subdivision (a), which precedes the exemption provisions of subdivision (c) which is at issue in this appeal.

Subdivision (a) provides:

“This act shall not apply to:

“(a) Vehicles operated entirely within any city or village of this State; nor to motor carriers of passengers whose local operations may extend a distance of not to exceed 2 miles beyond the boundary of such city or village in which such local operations are wholly carried on, provided such extension shall not be to or into another city or village.” CLS 1961, § 479.2 (Stat Ann 1965 Cum Supp § 22.567).

The words “wholly carried on” were in dispute in Grand Rapids Motor Coach, whereas the dispute in the present appeal concerns the words “for governmental purposes.”

In construing subdivision (a) in the Grand Rapids case, we held:

(a) That the Court is required to discover the legislative intent and that, if the language is of doubtful meaning, a reasonable construction must be given, looking to the purpose to be served thereby;

(b) That the general rule, that exemptions are carefully scrutinized and not extended beyond theiy plain meaning, should be applied;

(c) That the purpose shall prevail over the strict letter;

(d) That the act as a whole must he considered and especially the. intent of a section listing exemptions from the application of the act.

We have stated that the motor carrier act was enacted to grant the public service commission, and not the common motor carrier of passengers for hire, the right to decide what public service was adequate and proper.⁴

The question in this appeal resolves itself to a determination of whether the legislature intended to grant to cities the right to extend their transportation systems 10 miles beyond the city boundaries, irrespective of whether that extension disrupted or helped the mass transportation plan as it existed in that 10-mile area.

In answering this question we use the rules • of construction of legislative intent that we used to determine législative intent in re the exemption provisions of subdivision (a).⁵ And we conclude that the operations by the DSN as a common motor carrier of passengers for hire outside the corporate limits of the city of Detroit are subject to the provisions of the Michigan motor carrier act.

Question No. 3.

Does PA 1939, No 3, § 6, as amended by PA 1960,..No 44,⁶ which provides:

■ “The Michigan public service commission is hereby vested with complete power and jurisdiction to regulate all public utilities in the- State except any municipally owned utility and • except as otherwise restricted by law,”

exempt the DSR. from the provisions of the motor-carrier act!

In deciding that it did exempt the DSR from the provisions of the motor carrier act,, the trial, court confined its opinion to construing the words,¹ “and except as otherwise restricted by law,” to be words that “refer to the regulatory power of the commission, not to the exemption of municipally, owned utilities.”

Plaintiffs, disagreeing with the trial court’s, interpretation, state:

“Moreover, a contrary holding [to plaintiffs’ position] would ignore the ‘unquestioned rule of grammar, which has been crystallized into a legal-maxim’ that qualifying and relating words ‘must ordinarily be referred to the next .antecedent.,, * * * The last antecedent is the last word whict can be made an antecedent, without impairing the’ meaning of a sentence.’ City of Traverse City v. Blair Township, 190 Mich 313, 323, 324 (Ann Cas 1918E, 81). Clearly the last antecedent in section 6 to which the clause ‘except as otherwise restricted, by law’ can refer is ‘municipally owned utilities.’ Indeed ‘it is the general rule of statutory as well as grammatical construction that a modifying clause is confined to the last antecedent.’ Kales v. City of Oak Park, 315 Mich 266, 271.”

We agree with plaintiffs’ contention in this regard and, also, with their statement that “had it-been the intent of the legislature by Act 3, PA 1939, .to repeal the provisions of the motor carrier act, such intent ‘would have been made manifest in clear and unmistakable language.’ Rather than so providing, however, the legislature expressly conditioned exemptions with respect to municipally, owned utilities ‘except as otherwise restricted -bylaw.’ ” A clear intention to repeal must be show$v The law does not favor repeals by implication. Yarger v. City of Hastings, 375 Mich 413.

Defendant’s brief does not answer plaintiffs’ contention, nor does defendant comment in its brief on the many reasons plaintiffs set forth in their brief under the chapter heading, “The exemption in section 6 is qualified and is not applicable to the DSR.”

The Court of Appeals gave no reason why it concluded that this section exempts the DSR.

As we concluded above under question 2, the legislature’s intent was to include municipally owned carriers under the regulatory provisions of the motor carrier act.

No legislative intention was manifested to exempt such carriers and repeal any part of the motor carrier act by the enactment of the public service commission act.

In the 1939 public service commission act the legislature abolished the Michigan public utilities commission which had been brought into existence by PA 1919, No 419. The 1919 act that created the public utilities commission gave the commission the right to regulate utilities furnishing steam, power or gas, and provided cities with an exemption by the words: “The power and authority granted by this act shall not extend to, or include, any power of regulation or control of any municipally owned utility.” CL 1948, § 460.54 (Stat Ann §22.4).

In abolishing the Michigan public utilities commission, and creating the commission now in power, the title of the act (PA 1939, No 3) discloses that the act was designed “to abolish the Michigan public utilities commission, and to confer the powers a,nd duties flow vested by law therein, • cm the public service commission hereby created;” and section 4 of the act adds that: “All the rights, powers, and duties vested by law in said Michigan public utilities commission * * . * shall be deemed to be transferred to and vested in the Michigan public service commission hereby created.”

Thus, the title and section 4 of the public service commission act made it clear that the legislature did not by this act intend to repeal any of the pre-existing jurisdiction exercised by the public utilities commission, which included jurisdiction and authority to regulate common motor carriers. (Title, PA 1933, No 254.)

We concur with plaintiffs’ conclusion that:

“PA 1939, No 3, has been before our Court several times, and in each instance has been held to be a mere outline of jurisdiction vesting the commission with no specific powers, Huron Portland Cement Company v. Public Service Commission, 351 Mich 255. If it grants no powers it certainly cannot take away any existing powers.”

“ ‘An act will not be construed to repeal or modify earlier legislation, if, giving such effect to the act, an apparent purpose would appear to disturb an established system of written law, covering a vital field in our system of government.’ 25 RCL p 919.” Attorney General, ex rel. Owen, v. Joyce, 233 Mich 619, 623.

Therefore, we conclude that the operations of the DSR as a common motor carrier of passengers are not exempted from the motor carrier act by provisions of the public service commission act.

The judgment of the Court of Appeals is affirmed but not for the reasons given therein^ and this case is remanded to the Wayne circuit court for-further action in accordance with this opinion. No costs, a public question being involved.

; Dethmers, C. J., and Adams, J., concurred with Kelly, J.

1 PA 1909, No 279 as amended (CL 1948 and CLS 1961, § 117.1 et seq., as amended [Stat Ann 1949 Rev and Stat Ann 1963 Cum Supp § 5.2071 et seq.]).

2 PA 1933, No 254 (CL 1948 and CLS 1961, §475.1 et seq., as amended [Stat Ann and Stat Ann 1965 Cum Supp § 22.531 et seq.] ).

3 CLS 1961, § 117.4f (Stat Ann 1963 Cum Supp § 5.2079).

4 Associated Truck Lines, Inc., v. Public Service Commission, 377 Mich 259.

5 Grand Rapids Motor Coach Co. v. Public Service Commission, supra,

6 CLS 1961, § 460.6 (Stat Ann 1965 Cum Supp § 22.13[6]).

1 We presume that the Court of Appeals did not intend to deprive defendant of a hearing in the circuit court on the merits and that, therefore, by its order of remand for entry of an order granting injunctive relief, it meant an injunction pendente lite.