Restivo v. Public Service Commission

Some time prior to March 12th, 1925, the appellant was engaged in operating certain automobile busses between Gwynn Oak Junction and the Sykesville Sanatorium, and had a permit from the Public Service Commission of Maryland authorizing him to so operate them. Shortly before the date above mentioned he sold the good will of his business over this route to the Blue Ridge Transportation Company for $6,000. and thereafter his permits to use this route were transferred to that company. The appellant owned a garage located at Gwynn Oak Junction, in which garage he kept his busses and cars and, shortly after the sale of the good will, he began to run his busses and cars to the sanatorium on Sundays over the same route, the plan being to sell tickets to persons who came to the junction on those days for the purpose of visiting the sanatorium, which tickets entitled the parties holding them to ride on the busses and cars of the appellant. He was indicted for this method of operation because he did not have any permit from the Public Service Commission, as required by the "Public Passenger Motor Vehicle Law" (sections 251 to 257 of article 56 of the Code), and, on March 12th, 1925, he was convicted. On Sunday, March 15th, 1925, he again ran one of his busses carrying nineteen persons from the junction to the sanatorium, and also ran a touring car with two passengers. On the following Sunday two touring cars carrying a total of ten persons were used, and on the last Sunday in March one bus, carrying seventeen passengers, and a touring car, carrying three passengers, were used. On all of these occasions the passengers signed a paper stating that they were "chartering" the vehicle used, a charge of thirty dollars was made for each bus, and varying charges were made for the cars. All of the vehicles left between noon and 1:30 P.M., all of them were driven by employees of the appellant, and all of them, save one of the touring cars used on March 22nd, went from the junction to the sanatorium over the route sold by the appellant to the Blue Ridge Transportation Company.

While this operation was being carried on, the appellant was notified by officials of the Public Service Commission that he was violating the "Public Passenger Motor Vehicle Law," and that if he did not cease his operations he would be arrested by the State police for such violation. The appellant thereupon filed a bill in the Circuit Court of Baltimore City, alleging that his operations did not constitute a violation of the law above mentioned, and asking that the Public Service Commission and the commissioner of motor vehicles he restrained from preventing the appellant "from operating said busses and said touring cars in the manner aforesaid or from interfering in any way with the said plaintiff or with the said busses and touring cars or with the agents and servants of the plaintiff in operating said busses and touring cars." An answer to this bill was filed by the Public Service Commission and the commissioner of motor vehicles, testimony showing substantially the facts above set forth was taken, and after hearing and argument the learned court below dismissed the bill of complaint, and the plaintiff appealed.

The law of Maryland divides passenger motor vehicles operated for gain into two classes. One of these is governed by Class F of section 182 of article 56 of the Code (section 182 being originally chapter 687 of the Acts of 1916), which provides for the payment of a license fee of one dollar and twenty cents per horsepower or fraction thereof in the case of all motor vehicles operating for the purpose of transporting persons for hire upon any of the public highways of this State other than motor vehicles operating on fixed schedules, the registration fees of which are fixed by other specific provisions of law, and the other is governed by the "Public Passenger Motor Vehicle Law" (sections 251 to 257 of article 56 of the Code, originally chapter 610 of the Acts of 1916), the first section of which provides that: "It shall be the duty of each owner of a motor vehicle to be used in the public transportation of passengers for hire operating over State, State aid, improved county roads and streets and roads of incorporated towns and cities in the State of Maryland to secure a permit from the Public Service Commission of Maryland to operate over said roads and streets and present same to the motor vehicle commissioner annually at the time and according to the method and provisions prescribed by law for owners of all other motor vehicles, to make an application in writing for registration with the commissioner of motor vehicles, and to state in said application besides the other matters by law provided, the seating capacity for passengers of said motor vehicle, the route in which said motor vehicle is to be used," etc.

These two statutes were first considered by this Court in the case of Smith v. State, 130 Md. 482, and, in delivering the opinion of the Court, Judge Stockbridge said: "The intent of the legislative enactment is perfectly clear. What that body was attempting to do, was to distinguish as between motor vehicles operated as common carriers, and those not regularly so operated; the former would be subject to the provisions of chapter 610; the latter governed by the provisions of chapter 687." And in the later case of Towers et al. v. Wildason, 135 Md. 677, 682, this construction of the two acts was approved.

It is difficult to determine with exactness just when the owner of a motor vehicle is operating as a common carrier, as that term is ordinarily understood in the law, but the courts have not been inclined to excuse the increasing number of those who earn their livelihood by transporting persons or goods for hire in motor vehicles, from the responsibilities of common carriers simply on technical grounds, and they have been particularly slow to excuse them when their plan of operation bore evidence of being a studied attempt to reap the rewards of common carriers without incurring the corresponding liabilities.

In the case of Smith v. State, supra, this Court, in holding the operator of a "jitney bus" amenable to the statute under consideration, said: "That the owner of a motor vehicle who regularly transports passengers for hire between given termini for a fixed compensation may, by varying his route from time to time between such termini, change his classification, amounts to a scheme to evade the provisions of law and can not find countenance at the hands of the courts."

And in the case of Goldsworthy v. Pub. Serv. Commn.,141 Md. 674, 683, a plan whereby the owner of a motor vehicle entered into a written agreement with another person, under the terms of which the owner was to transport, for a varying consideration, such passengers as the other person designated, was held to be an evasion of the statute, and Chief Judge Boyd in the course of the opinion said: "The use of motor vehicles in carrying passengers and property has become very general in this state, as well as elsewhere, and while such business should not be unnecessarily interfered with, the protection of the public demands careful supervision and proper control over them, in so far as they are brought within the statutes. The owners certainly should not too readily be permitted to enter into contracts, or adopt measures, which will enable them to readily evade the letter or the spirit of the statutes intended to govern them."

In the present case the testimony shows that the appellant formerly operated over the route in question under permits duly issued by the Public Service Commission. Later on he sold his rights to this route and his permits were given to the purchaser. The appellant's garage happened to be located at the initial terminal of the route, and after selling out his franchise he continued to operate his busses and cars over the same route, adopting the expedient of selling tickets to his former customers. For this he was indicted and convicted for operating without a permit in violation of the Public Passenger Motor Vehicle Law. He thereupon devised the plan of having his passengers sign a chartering agreement, and in pursuance of this plan he hauled twenty-one passengers on March 15th, 1925, ten passengers on March 22d 1925, and twenty passengers on March 29th, 1925, for an alleged total consideration of ninety-one dollars. With the exception of one touring car, which carried four passengers to the sanatorium from a point other than the junction, all of these vehicles operated over the same route, they were all driven by employees of the appellant, they all left between the hours of noon and 1:30 P.M., and they all returned about the same time. The people who used these vehicles varied in many instances from Sunday to Sunday, the alleged price received for the two busses was the same, $30, but the prices charged for the touring cars were $5, $6 and $10. The appellant only operated on Sunday, but it is clear from the evidence that it was chiefly on Sunday that people visited the sanatorium, and by only running his vehicles on that day of the week the appellant was securing the remuneration derived from transporting the peak loads, without having the expense of maintaining any regular service for the benefit of the public. The appellant stated that he did not solicit passengers, and alleged that they came to his garage for the busses and cars, but only once was any effort made to engage a car ahead of time. Whoever happened to be at the junction made up the charter party, and the first members of the party apparently waited until a sufficient number had been obtained to fill the bus or other vehicle.

There are, it is true, some features in this case which differentiate it from the cases heretofore decided by this Court, but we think all of these different features are simply part and parcel of a flagrant scheme to evade the provisions of the law, and as such they are entitled to no consideration in a court of equity. We are not required in this case to say to what extent the owner of a motor vehicle having a hiring license can be prohibited from hauling passengers for hire over any route in Maryland, but where, as in this case, the cry of "property rights" is used to cloak an obvious effort to circumvent the provisions of a law designed to promote and protect the public interest, a court of equity will not aid the attempt by the use of the extraordinary remedy of injunction.

Nor do we find any merit in the appellant's contention that the regulations imposed by the Public Passenger Motor Vehicle Law are unconstitutional, or that the refusal to grant an injunction in this case will permit a taking of the appellant's property without due process of law within the meaning of the Fourteenth Amendment of the Constitution of the United States.

The growth of automobile traffic in this country during recent years has been enormous, and no doubt can be entertained that the State, in the exercise of its police power, has the right to impose reasonable regulations upon the conduct of this traffic. The payment of license fees varying in amount with the kind and character of the motor vehicle and the use to which it is to be put, the registration of drivers and the determination of their competency, the designation of routes and establishment of schedules for those undertaking to haul the public, the control of those engaged in public transportation, and the requirement that they secure a permit before beginning operations, have uniformly been held "reasonable regulations" by the courts, on the ground that their enforcement promotes the public safety and welfare. See Ruggles v. State, 120 Md. 553; Hendrick v.Maryland, 235 U.S. 610; Kane v. New Jersey, 242 U.S. 150; Nolen v. Riechman, 225 Fed. 812; Hadfield v. Lundin,98 Wash. 657; West v. Asbury Park, 89 N.J. Law, 402; Jitney BusAssoc. v. Wilkes-Barre, 256 Pa. 642; Houston v. Des Moines,176 Iowa 455; Memphis v. Tennessee, 133 Tenn. 83; MotorTransit Co. v. Railroad Commission, 189 Cal. 573; Gizzarelhi v.Presbery, 44 R.I. 333.

And in our opinion the provisions of the Maryland Public Passenger Motor Vehicle Law come well within the rules regarding "reasonableness" established by the foregoing authorities.

The argument that the refusal to grant the relief asked in this case will result in a taking of the appellant's property without due process of law is equally untenable. We are not deciding that the appellant cannot make a bona fide agreement for the use of his motor vehicles; we simply decide that his present method of operating, looked at as a whole, is not bona fide, but constitutes a studied and fraudulent effort to evade the statute, and for this reason a court of equity will not aid him in carrying out his plan. This refusal of the court obviously does not in itself subject the appellant to any "taking of property without due process of law."

At the trial below the appellant objected to all the testimony regarding his sale of the sanatorium route to the Blue Ridge Transportation Company, and also to the testimony regarding his conviction in the Criminal Court of Baltimore City. We think the testimony on both these points was admissible. The appellant was asking a court of equity to enjoin certain public officials from causing his arrest for acts which, the officials alleged, constituted a violation of the law, and it would seem to be obvious that under these circumstances the court was entitled to know all the facts surrounding the appellant's conduct, so that it could intelligently determine whether or not the appellant's operation did constitute a violation or evasion of the law. His conviction by a court of competent jurisdiction for a very similar operation just a few weeks before the filing of the bill was certainly admissible, and in our opinion the sale to the company reflected very materially on the appellant's knowledge of the situation regarding the route he was using, and his motive in arranging his operation as he did.

Finding no error in the action of the lower court, the decree appealed from will be affirmed.

Decree affirmed, with costs to the appellees.