Opinion — Packard v. Banton

140 OCTOBER TERM, 1923.

Statement of the Case. 264 U.S.

PACKARD v. BANTON, AS DISTRICT ATTORNEY

IN AND FOR THE COUNTY OF NEW YORK,

ET AL.

APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES

FOR THE SOUTHERN DISTRICT OF NEW YORK.

No. 126. Argued January 2, 1924—Decided February 18, 1924.

1. The amount in controversy in a suit to enjoin enforcement of a

statute alleged to be unconstitutional in relation to the plaintiff's

business, is the value of his right to carry on the business free from

the restraint of the statute. P. 142.

2. When prevention of criminal prosecutions under an unconstitu-

tional statute is essential to protect property rights, equitable

jurisdiction exists to restrain them. P. 143.

3. A New York statute requires persons engaged in the business of

carrying passengers for hire in motor vehicles, upon public streets,

to file security or insurance for payment of judgments for death,

or injury to person or property, caused in the operation or by

defective construction of such motor vehicles. Held:

(a) Not in violation of equal protection of the laws, either because

it applies only in cities of the first class, or because it does not

apply to persons operating motor vehicles for their own private

ends, or because it does not apply to street cars and omnibuses,

which are regulated under another law. P. 143.

(6) Not so burdensome in this case as to amount to confiscation, in

violation of due process of law—in view of the opportunity

allowed to file a corporate or personal bond, if the cost of insurance

be excessive compared with the returns from plaintiff's business.

P. 145.

(c) Inability of a party to comply with the statute without assuming

an excessive burden does not render the requirement unconstitu-

tional if due to his peculiar circumstances. Id.

4. The regulatory power over an activity carried on by government

sufferance or permission is greater than over one engaged in by

private right. Jd.

Affirmed.

APPEAL from a decree of the District Court, which dis-

missed a bill to enjoin enforcement of a New York statute

regulating carriers of passengers for hire by motor vehicle.

Seether Sohne ere AMES

LOT VN LAPT GIS SE ee ET Le

Dh ARR RAIN ARAL ABE mee ho Rater ate Pang Sl Ob AS FRCR hiCA el ate yD

PACKARD v. BANTON. 141

140 Opinion of the Court.

Mr. Avel B. Silverman, with whom Mr. Lows J.

Vorhaus, Mr. Elijah N. Zoline and Mr. Frederick Hemley

were on the briefs, for appellant.

Mr. Carl Sherman, Attorney General of the State of

New York, with whom Mr. Edward G. Griffin and Mr.

Claude T. Dawes, Deputy Attorneys General, were on the

brief, for the Attorney General of New York, appellee.

Mr. Felix C. Benvenga, with whom Mr. John Caldwell

Myers was on the brief, for Banton, District Attorney,

appellee.

Mr. Louis Tyroler, by leave of Court, filed a brief on

behalf of the Allied Taxi Owners Association, as amicus

curnae.

Mr. Justice SUTHERLAND delivered the opinion of the

Court. ;

This is a suit to enjoin the enforcement of a statute

of New York (Laws, 1922, c. 612, p. 1566) alleged to be

in contravention of the equal protection of the laws and

due process clauses of the Fourteenth Amendment. The

statute requires every person, ete., engaged in the busi-

ness of carrying passengers for hire in any motor vehicle,

except street cars and motor vehicles subject to the

Public Service Commission law, upon any public street

in a city of the first class, to file with the State Tax Com-

mission, either a personal bond with sureties, a corporate

surety bond or a policy of insurance in a solvent and re-

sponsible company, in the sum of $2,500, conditioned for

the payment of any judgment recovered against such

person, etc., for death or injury caused in the operation

or [by] the defective construction of such motor vehicle.

The bill alleges that the rate of premium for the required

policy is fixed by the insurance companies at $960; that

the net income from the operation of a motor vehicle is

PRS Sct Semin a eet

; ee ee ee ee a ee er eee re Se ie

142 OCTOBER TERM, 1923.

Opinion of the Court. 264 U.S.

about $35 a week, which would be reduced by the op-

eration of the law to $16.50 per week, resulting in con-

fiscation of the earnings of appellant for the benefit of

the insurance companies. The statute makes it a mis-

demeanor to operate such motor vehicle without having

furnished the required bond or policy; and appellant

avers that appellees, as prosecuting officers of the State,

have threatened, and, if not enjoined, will proceed to

prosecute him, unless he complies with the law. The

court below was constituted of three judges, under § 266

of the Judicial Code. Upon the return of the order to

show cause a hearing was had, and the court denied a

motion for an injunction pendente lite, and dismissed the

bill for want of equity, without handing down an opinion.

1. Appellees insist that the District Court was with-

out jurisdiction because the matter in controversy does

not exceed the value of $3,000. Judicial Code, § 24, subd.

1. The bill discloses that the enforcement of the statute

sought to be enjoined will have the effect of materially

increasing appellant’s expenditures, as well as causing in-

jury to him in other respects. The allegations, in general

terms, are that the sum or value in controversy exceeds

$3,000, which the affidavits filed in the lower court tend

to support; that appellant is the owner of four motor

vehicles, the income from which would be reduced, if

the law be enforced, to the extent of $18.50 each per

week; and that his business would otherwise suffer. The

object of the suit is to enjoin the enforcement of the

statute, and it is the value of this object thus sought

to be gained that determines the amount in dispute.

Mississippi & Missouri R. R. Co. v. Ward, 2 Black, 485; .

Texas & Pacific Ry. Co. v. Kuteman, 54 Fed. 547, 552;

Nashville, C. & St. L. Ry. Co. v. McConnell, 82 Fed.

65, 73; Scott v. Donald, 165 U. S. 107, 114; City of ;

Hutchinson v. Beckham, 118 Fed. 399, 402; Evenson v.

Spaulding, 150 Fed. 517, 520; Hunt v. New York Cotton

Exchange, 205 U. S. 322, 336.

Jp aeAR AP a — Shad ee OR Es Le SON et a IE Rome SSeS Sn te Ra BR TS ee BOC AO) at i wines a

PACKARD v. BANTON. — 143

140 Opinion of the Court.

Counter affidavits were filed, tending to show that

the expenses incident to compliance with the statute

would be less than alleged; but it sufficiently appears that

the value of the right of appellant to carry on his busi-

ness, freed from the restraint of the statute, exceeds the

jurisdictional amount.

2. Another preliminary contention is that the bill can-

not be sustained because there is a plain, adequate and

complete remedy at law; that is, that the question may

be tried and determined as fully in a criminal prosecution

under the statute as in a suit in equity. The general rule

undoubtedly is that a court of equity is without juris--

diction to restrain criminal proceedings unless they are

instituted by a party to a suit already pending before it

to try the same right that is in issue there. Jn re Sawyer,

124 U. S. 200, 209-211; Davis & Farnum Manufacturing

Co. v. Los Angeles, 189 U. 8. 207, 217.

But it is settled that “a distinction obtains, and equi-

table jurisdiction exists to restrain criminal prosecutions

under unconstitutional enactments, when the prevention

of such prosecutions is essential to the safeguarding of

rights of property.” Truaz v. Raich, 239 U. 8. 33, 37-38.

The question has so recently been considered that we

need do no more than cite Terrace v. Thompson, 263 U.S.

197, where the cases are collected; and state our con-

clusion that the present suit falls within the exception

and not the general rule. Huston v. Des Moines, 176 Ia.

455, 464; Dobbins v. Los Angeles, 195 U.S. 223.

3. We come, then, to the question whether the statute

assailed contravenes the provisions of the Fourteenth

Amendment. That the selection of cities of the first class

for the application of the regulations and the exclusion

of all others, is not an unreasonable and arbitrary classi-

fication does not admit of controversy. Hayes v. Mis-

sourt, 120 U. S. 68. We cannot say that there are not

reasons applicable to the streets of large cities—such as

Set OTA TEES Ne ~ BE RIES LET. PLINER ARG ON. Pht np 2 0 BR te Do > el elites oe

i44 OCTOBER TERM, 1923.

Opinion of the Court. 264 U.S.

their use by a great number of persons or the density and

continuity of traffic—justifying measures to safeguard

the public from dangers incident to the operation of

motor vehicles which do not obtain in the case of the

smaller communities.

The contention most pressed is that the act unreason-

ably and arbitrarily discriminates against those engaged

in operating motor vehicles for hire in favor of persons

operating such vehicles for their private ends, and in

favor of street cars and motor omnibuses. If the State

determines that the use of streets for private purposes

-in the usual and ordinary manner shall be preferred over

their use by common carriers for hire, there is nothing

in the Fourteenth Amendment to prevent. The streets

belong to the public and are primarily for the use of the

public in the ordinary way. Their use for the purposes

of gain is special and extraordinary and, generally at

least, may be prohibited or conditioned as the legislature

deems proper. Neither is there substance in the com-

plaint that street cars and omnibuses are not included in

the requirements of the statute. The reason, appearing

in the statute itself, for excluding them is that they are

regulated by the Public Service Commission laws, and

this circumstance, if there were nothing more, would pre-

clude us from saying that their non-inclusion renders

the classification so arbitrary as to cause it to be ob-

noxious to the equal protection clause. Decisions sus-

taining the validity of legislation like that here involved

are numerous and substantially uniform. Among them,

we cite the following: Nolen v. Riechman, 225 Fed. 812,

818; Schoenfeld v. Seattle, 265 Fed. 726, 730; Lane v.

Whitaker, 275 Fed. 476, 480; Huston v. Des Moines, 176

Ia. 455, 468; Memphis v. State, 133 Tenn. 83, 89; Ez

parte Dickey, 76 W. Va. 576, 578; Melconian v. Grand

Rapids, 218 Mich. 397, 403; State v. Seattle Taricab &

Transfer Co., 90 Wash. 416, 423; Donella v. Enright,

POPE PEON SESE AEP SS SE PLE TEES

Pet a,

AS Rene ea ges eh ire ee eT

PACKARD v. BANTON. 145

140 Opinion of the Court.

195 N. Y. S. 217; People v. Martin, 203 App. Div. 423,

where the statute now under review was sustained against

the attacks here made as to its constitutionality. And see

Fifth Avenue Coach Co. v. New York City, 221 U. S.

467; Pacific Express Co. v. Seibert, 142 U. S. 339, 353.

It is asserted that the requirements of the statute are

so burdensome as to amount to confiscation and, there-

fore, to result in depriving appellant of his property with-

out due process of law. The allegation is that the rate

of premium fixed by insurance companies operating in

New York amounts to about $18.50 per week for each

taxicab while the net income from each is about $35 per

week. The operator, under the statute, however, is not

confined to this method of security, but instead may file

either a personal bond with two approved sureties or a

corporate surety bond. Appellant says that he cannot

procure a personal bond, but it does not appear that he

might not procure the corporate surety bond at a less

cost. Affidavits filed below on behalf of appellees tend

to show that insurance policies in mutual casualty com-

panies may be secured for $540 a year; and that oper-

ators of upwards of a thousand ears have furnished

personal bonds. The fact that, because of circumstances

peculiar to him, appellant may be unable to comply with

the requirement as to security without assuming a burden

greater than that generally borne, or excessive in itself,

does not militate against the constitutionality of the

statute. Moreover, a distinction must be observed be-

tween the regulation of an activity which may be en-

gaged in as a matter of right and one carried on by gov-

ernment sufferance or permission. In the latter case the

power to exclude altogether generally includes the lesser

power to condition and may justify a degree of regulation

not admissible in the former. See Davis v. Massachu-

setts, 167 U.S. 43.

97851°—24— —10

Affirmed,