ANNOTATION.

State regulation of carriers by motor vehicle as affected by interstate com

merce clause.

[Commerce, §§ 57, 59.]

license fee did not constitute a burden on interstate commerce, the court said: "In the absence of legislation by Congress it has been uniformly held that a state or municipality may prescribe uniform regulations for the use of its highways by motor vehicles, and charge license fees graduated according to the horse power of the engines, or weight or seating capacity of the vehicle, so long as such regulations and fees are reasonable, although they may incidentally affect interstate commerce. The right of a state or municipality to regulate the use of its highways and to impose a license fee for the use thereof is recognized by the courts on the ground that such regulation and licensing are proper exercises of its police power, and, further, that it has

right to exact a reasonable compensation for the use of its highways."

And see Barrows v. Farnum's Stage Lines (1926) Mass. -, 150 N. E. 207, in which it is said that those engaged in interstate commerce cannot use the highways of the state except subject to such reasonable regulations in the interest of public safety as the statutes require.

Likewise motor transportation companies operating in interstate traffic are subject to the provisions regulating motor transportation and governing the operation of motor vehicles, except in so far as the application involves a direct burden upon interstate commerce. And a condition imposed on an interstate carrier by motor vehicle, in a certificate of convenience and necessity granted by the public utilities commission, that passengers may not be received within the state whose destination is within the state, is not unreasonable and does not operate as a direct burden upon interstate commerce, such condition being imposed because of a grant to an intrastate company over the same lines. Cannon Ball Transp. Co. v. Public Utilities Commission (1925) 113 Ohio St. 565, 149 N. E. 713.

So, in the reported case (HASELTON V. INTERSTATE STAGE LINES) it was held that depriving an interstate carrier by motor bus of incidental profits

which might be derived from conducting intrastate business is not an interference with interstate commerce within the prohibition of the Federal Constitution.

And in Barrows v. Farnum's Stage Lines (1926) Mass. -, 150 N. E. 206, in holding that a motor vehicle carrier engaged in both interstate and intrastate commerce could not avoid the regulations required of intrastate vehicles engaged in transporting passengers, on the ground that it was engaged also in interstate commerce, the court said: "If it be thought that, because the defendant is conducting interstate commerce as a part of its business, the effect of the statute is to regulate that interstate commerce by depriving it of the advantage or profit which it might derive from conducting purely intrastate commerce at the same time, by the same employees, vehicles, and other instrumentalities, the answer seems plain. The state has the power to pass general police regulations, although indirectly interstate commerce may be affected thereby."

This case was followed in Boston & M. R. Co. v. Cate (1926) Mass. 150 N. E. 210, holding that the statutory requirement of licenses from local authorities and a certificate from the state department is not avoided by the fact that the motor vehicle carrier who is engaged in intrastate business is also engaged in interstate business, and has established a continuous route for his vehicles in two states. See also Boston & M. R. Co. v. Hart (1926) Mass. 150 N. E. 212, in which the question of whether an interstate carrier also engaged in intrastate business was subject to the regulations of the state as to intrastate transportation of passengers by motor vehicle arose before an amendment to the statute exempting carriers engaged solely in interstate business; the court, following the rule laid down in the two preceding cases, was of the opinion that the statute should be construed as applying only to intrastate commerce, although no exception was made as to interstate business.

The provisions of the state statute, in so far as they required a certificate that public convenience and necessity require operation over the route, and the further provision that no such certificate shall be issued to any person who is not a citizen resident within the state, were held in Newport Electric Corp. v. Oakley (1925) — R. I. —, 129 Atl. 613, supra, when applied to persons and vehicles engaged in interstate commerce, to amount to regulations of interstate commerce, and for that reason to be void. The court said that the certificate required by the statute-which is to specify the route, the number of passengers to be carried at any one time, and the service to be furnished, as well as state that the public convenience and necessity require its operation over such route-could not be withheld from a person about to engage in interstate commerce, on the ground that the public is being adequately served over the proposed route, or that public convenience and necessity do not require the contemplated service; a state cannot regulate competition in interstate commerce.

The invalidity of those provisions as applied to interstate carriers did not, however, invalidate as to such carriers the other provisions of the same section, to the effect that a certificate must be obtained from the public utility commission, specifying the route, the number of passengers to be carried at any one time, and the service to be furnished. Ibid. The statute in this case expressly declares that each section, and every part of each section, are independent, and that the holding of a section, or a part thereof, void, ineffective, or unconstitutional, shall not be deemed to affect any section or part thereof.

The provisions of an act requiring transportation companies to apply for and obtain from the railroad commission a certificate of public convenience and necessity as a condition precedent to the use of the highways of the state are invalid as against one who is engaged solely in interstate transportation. People v. Yahne (1925) 195 Cal. 683, 235 Pac. 50, the court saying:

"While appropriate state regulations adopted primarily to promote safety upon the highways, and conservation in their use, may not be obnoxious to the commerce clause where the indirect burden imposed upon interstate commerce thereby is not unreasonable, nevertheless a statute whose primary purpose is not regulation with a view to safety or to conservation of the highways, and which determines, not the manner of use, but the persons by whom the highways may be used, is in effect a regulation of commerce, and an unconstitutional invasion by the state of a field reserved by the commerce clause for Federal regulation."

And see Cannon Ball Transp. Co. v. Public Utilities Commission (1925) 113 Ohio St. 565, 149 N. E. 713, in which the court was of the opinion that the Public Utilities Commission could not entirely exclude motor transportation companies operating in interstate traffic from the highways of the state.

So, a state law which permits the denial of a certificate of public convenience and necessity to a common carrier of passengers and express, engaged purely in interstate commerce, is unconstitutional, but where the power to deny the issuance of such a certificate has not been exercised or threatened, a carrier cannot be heard to complain, if the existence of the law in no way affects its rights. Red Ball Transit Co. v. Marshall (1925; D. C.) 8 F. (2d.) 635.

So, a provision that no certificate of convenience and necessity shall issue until the company shall have filed a satisfactory liability insurance policy or bond upon terms therein specified is invalid in so far as it is applicable to interstate traffic. Ibid. The court said: "While it has been settled beyond peradventure that a state which has furnished special facilities, such as public highways, for the use of those engaged in intrastate and interstate commerce, may exact compensation therefor, and, if the charges are reasonable and uniform, they constitute no burden on interstate commerce, yet, on the other hand, the bur

dens so imposed must of necessity be reasonable. The amount of the license fee or privilege tax imposed by a state statute for the use of its highways need not necessarily be limited, even to those engaged in interstate traffic, to the actual cost of regulation, but may include reasonable compensation for the use of the highways and repairs thereof."

However, an ordinance requiring an indemnity bond conditioned to pay all judgments recovered by passengers for any negligent injuries they may sustain, as a condition of doing the business of a common carrier of passengers with a "jitney bus," does not violate any provisions of the Constitution, state

A.L.R. -, 154 N. E. 369. The court said: "But even if he did receive passengers only for transportation across the state line, the use of the city streets as a place for the indiscriminate solicitation and acceptance of passengers in a jitney bus brought him within the police power of the state to license and regulate both driver and vehicle, by way of providing for the safety, security, and general welfare of the public; so long, at least, as Congress has not legislated on the subject." G. R. B.

A. MONTGOMERY et al.

V.

CITY OF ATLANTA et al.

Georgia Supreme Court - July 15, 1926.

(Ga., 134 S. E. 152.)

Injunction, § 2- public improvements duty to pay for work done. 1. Equity requires every litigant who seeks her aid to do equity; and inasmuch as the construction company has expended large sums of money in making this street improvement, of which the city and the plaintiffs have received the benefit, equity will not interpose in behalf of the plaintiffs to annul and set aside the contract for such improvement and the assessment levied against them as owners of abutting property for their shares of the cost of such improvement, although such contract and assessment are illegal and invalid, unless the plaintiffs shall first do equity; and to do equity the plaintiffs must pay their proportionate shares of the cost of making such improvement, in the absence of actual fraud on the part

of the construction company.

[See annotation on this question beginning on page 248.]

Public improvements, § 73 - validity of ordinance - estoppel to attach. 2. Before the city of Atlanta can pass an ordinance and make a valid contract for the paving or repaving of a street, under an amendment to its charter by the Act of August 19, 1919 (Laws 1919, p. 821), and before it can pass a valid ordinance levying an assessment against owners of land abutting on such street or portion of street for their shares of the cost of such

Headnotes by HINES, J.

street improvement, it must be petitioned in writing for such street improvement by the owners of the majority of the frontage of land abutting on said street or portion of said street. This fact is jurisdictional; and the nonexistence thereof renders an ordi

nance and contract made for such purpose invalid. (a) The owners of abutting property may be precluded from attacking the validity of such ordinance and con

5. Under the contract between the city and the construction company for this street improvement, the city agreed to issue bonds to cover the total cost of such improvement, and thereupon to promptly dispose of these bonds and pay the contractor such sums as might be due it for the paving of this street. The trial judge enjoined the city from paying to the contractor any money other than that received from the property owners, and enjoined the city from pressing proceedings to validate such bonds, pending the final decision of this case. Applying the principle announced in the preceding headnote, the trial judge erred in so enjoining the city at the instance of the plaintiffs, who were seeking affirmative equitable relief.

(Gilbert, J., dissents in part.)

CROSS WRITS of error to the Superior Court for Fulton County (Humphries, J.) to review a judgment in favor of petitioners in a suit brought to enjoin the enforcement of a paving ordinance, a paving contract, assess