Opinion
Opinion filed February 6, 1929.
Automobiles — Public Good Certificates — Contracts — Consideration.
1. Although public good certificates issued by Public Service Commission are personal in form and revokable under Acts 1925, No. 74, contract, whereby partnership, operating motor bus line under such a certificate, transferred all its rights and privileges thereunder, together with its good will, and agreed to discontinue its operation of line and assist assignee in certain specified ways, transfer being approved by Public Service Commission, held not void for want of consideration, there being nothing illegal about contract, defendant having received all that he had bargained for, resulting in an advantage to him and a detriment to assignor, the latter being as good consideration as the former.
ACTION OF CONTRACT to recover rentals claimed to be due on a contract assigning rights and privileges under a public good certificate granted by Public Service Commission for operation of a motor bus line. Plea, general issue. Trial by court at the March Term, 1928, Washington County, Thompson, J., presiding. Judgment for the plaintiff. The defendant excepted. The opinion states the case. Reversed pro forma, and judgment rendered for plaintiff for lesser sum.
W.W. Lapoint for the defendant.
No consideration moved from plaintiff to support the claim, lease and contract, which only purported to give the right to run an automobile over the route mentioned for one year. Of this plaintiff had no ownership or power to give or convey or lease, since he could acquire no vested or inherent right to use the highway for commercial purposes. In re James, 99 Vt. 265, 273, and authorities there cited. Theriault Hunt for the plaintiff.
While a license to engage in the business of transporting passengers for hire on the public highway, like a license to retail spirituous liquors, is not, as against the public right of regulation or revocation, a contract or property, the privilege is nevertheless something of value the surrender of which to another furnishes legal consideration.
Morley v. Wilson (Mass.), 159 N.E. 41, 43; Burgess v. Brockton (Mass.), 126 N.E. 456, 459; Calder v. Kurby, 5 Gray, 597, 598; Fisher v. Cushman (C.C.A.), 51 L.R.A. 292; In re Benz, 218 Fed. 50, 54; In re Doyle Son, 209 Fed. 1, 2; In re Wiesel, 173 Fed. 718, 719; In re Emrich, 101 Fed. 231.
So far as this case is concerned, license to operate a ferry is not distinguishable from the license here in question, and there is nothing in Acts of 1925, No. 74, or in the law relating to license that makes it unlawful for the holder of a public good certificate to surrender it in favor of another and nominate his successor, or to contract to do so for a valuable consideration. Felton v. Deall, 22 Vt. 170; Hackett v. Wilson (Or.), 6 P. 652, 657; Hackett v. Multnomah Ry. Co. (Or.), 6 P. 659; Acts 1925, No. 74; Hall v. Hoaglund, 38 N.J. Law, 350.
Present: WATSON, C.J., POWERS, SLACK, MOULTON, and CHASE, JJ.
The plaintiff, a partnership, operated a motor bus line between White River Junction and Montpelier, under a public good certificate issued to A.I. Case and transferred to the plaintiff with the approval of the Public Service Commission. On April 28, 1926, by a written contract in the form of a lease, the plaintiff transferred to the defendant, subject to the approval of the Commission, all its rights and privileges under the certificate, together with its good will, but not its equipment or any part thereof. By the terms of this contract, the plaintiff was to discontinue its operation of the line and was to assist the defendant in certain specified ways, and the defendant was to pay the plaintiff the sum of twenty-five dollars per week during the life of the contract. The plaintiff has fully performed its part of the contract. The defendant paid the sum specified for twenty-six weeks, since which time he has paid nothing, though he is still operating the line and has made no effort to cancel the contract.
The trial below was by the court, and judgment was rendered for the plaintiff for $625, which was found to be the amount due and unpaid. It is here agreed that this amount is incorrect, and by a stipulation on file, it is agreed that the correct amount is $451.70, as of March 13, 1928. In view of this stipulation, the only exception that requires our attention is the one based on the claim that the contract mentioned was without consideration, because, it is argued, the public good certificate was a mere personal permit, which conveyed no property right and could not be transferred. It is to be observed that we are not concerned with any question as to what the standing of this contract or the rights of the parties thereunder would have been if the Public Service Commission had withheld its approval of the transfer of the certificate. For that approval was promptly granted. There is some question as to the true character of these certificates of public good, which furnish the formal and only authority to operate bus lines like the one here involved. Blue Bus Co. v. Marshall, 116 Ohio St. 116, 155 N.E. 644, 646. They are personal in form and are revokable by the terms of the statute. No. 74, Acts of 1925. It has been said that they are mere personal permits conveying no property or contract rights. Morley v. Wilson, 261 Mass. 269, 159 N.E. 41, and that they are neither vendible nor transferable. Foshee v. State, 15 Ala. App. 113, 72 So. 685. On the other hand, it has been asserted that they convey to the person to whom they are issued a property right of a substantial character. 36 Yale L.J. 163, 168. And it seems assured that, with the rapidly growing importance and extent of this means of transportation, these certificates will come to be recognized as more closely related to technical franchises than mere licenses. Indeed, the Utah Supreme Court now regards them as "limited" franchises. Pub. Util. Com. v. Garviloch, 54 Utah, 406, 414, 181 P. 272.
But however they are to be regarded in this respect, that one operating under a certificate occupies a position of "economic advantage and opportunity" that carries with it a substantial transferable value is shown by the fact that this defendant has already paid $650 under his contract. He knew, as the contract shows, that he did not secure by it the right to operate the line. He knew that he would have to secure the approval of the Commission. But he evidently thought that it would be to his advantage, when he came to apply for that approval, to have in hand an assignment from the plaintiff. No doubt it was. There was nothing illegal about the transaction in question. By it, the defendant obtained all he bargained for. By it, the plaintiff, at the defendant's request, surrendered the privileges and advantages he held. An advantage to the defendant was thus acquired; a detriment to the plaintiff was thus suffered. The latter is as good a consideration as the former. Barlow v. Smith, 4 Vt. 139, 144; Dorwin v. Smith, 35 Vt. 69, 73; Ballard v. Burton, 64 Vt. 387, 393, 24 A. 769, 16 L.R.A. 664.
The result is that, having found no error to the ruling excepted to, by force of the stipulation, judgment is reversed, pro forma, and judgment is rendered for the plaintiff to recover the sum of $451.70, with interest thereon from March 13, 1928, and its costs.
CHASE, J., having resigned, took no part in this decision.