Arizona Corp. Commission v. Continental Security Guards

443 P.2d 406, 103 Ariz. 410, 1968 Ariz. LEXIS 283
CourtArizona Supreme Court
DecidedJuly 12, 1968
Docket9020-PR
StatusPublished
Cited by13 cases

This text of 443 P.2d 406 (Arizona Corp. Commission v. Continental Security Guards) is published on Counsel Stack Legal Research, covering Arizona Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Arizona Corp. Commission v. Continental Security Guards, 443 P.2d 406, 103 Ariz. 410, 1968 Ariz. LEXIS 283 (Ark. 1968).

Opinion

McFARLAND, Chief Justice:

This case is before us upon a petition for review of a decision of the Court of Appeals. 5 Ariz.App. 318, 426 P.2d 418.

A complaint was filed with the Arizona Corporation Commission, hereinafter called the Commission, by Armored Motor Service of Arizona and Securities Transport Company, hereinafter called intervenors. They alleged that Continental Security Guards, a corporation hereinafter called Continental, was operating an armored-car service without either a permit or a certificate of convenience and necessity, and was soliciting business in competition with the intervenors who previously enjoyed a monopoly in Arizona by virtue of their certificates of convenience and necessity. After a hearing, the Commission issued a cease-and-desist order against Continental, and Continental brought this action in superior court, pursuant to A.R.S. § 40-254, to set aside the Commission’s order.

The superior court found that Continental was engaged in the business of protecting, in transit, money and valuables transported by it in armored cars, but that “the function of transportation is incidental to the prime function which is the physical protection of the property transported,” held that the Arizona Corporation Commission acted in excess of its jurisdiction, and set aside the Commission’s order. From this judgment, the Commission and the intervenors appealed. The court of appeals reversed the superior court, and reinstated the findings of the Commission.

The answer to' the question of whether the Arizona Corporation Commission has jurisdiction over the business of transporting money and valuables in armored cars, for hire, has its roots in the nation’s history —particularly that of the last half of the 19th century — the era of railroad-building and of the “Robber Barons.”

“The construction of the railroads in the United States was typically American: As soon as it was generally recognized how excellent a highway the railroad afforded, the problem was how to get the most possible railroads built in the shortest possible time. Great inducements were held out to encourage railroad building. The laws with reference to their construction and operation were made very broad. The promoter of railways was looked upon as a public benefactor and under an imperative popular demand, general laws were enacted in many states enabling projectors of roads to organize at pleasure and to select their own lines. After construction was completed the directors were also permitted to operate practically as they saw fit, and with *412 almost the same freedom as in an ordinary private business. The builders of a new road assumed great risks, and when their venture proved successful, having conferred a very great benefit upon the public, they were properly entitled to charge, if they saw fit to do so, such rates as would net them a handsome return.
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“Capitalists would not have put their money into the building of railroads if their operation had been governed by the detailed regulations now in force. In 1840 the question was how to get railroads, not how to control them.” Drinker: A Treatise on the Interstate Commerce Act, p. 54

At first every new road was a boon to everyone, and, in comparison with the old wagon rates, almost any rate was reasonable. About 1880, even though in many places the existing roads were sufficient to serve the public, new lines were built for speculative purposes, resulting in wholesale cutting of rates and many railroad bankruptcies.

Unrestrained competition among the railroads developed, which in turn gave rise to kickbacks, rebates, favoritism and discrimination. A railroad would make a concession in rates to a large shipper to get his business. The concession could mean the difference between success and failure for that business, and frequently led to the destruction of its competitor. This made the survivor even stronger and larger and gave him the means to demand even larger concessions. In this way many of the great trusts of those days obtained their power and great size.

Another abuse that arose started when the railroads began to acquire interests in enterprises along their rights-of-way. This led naturally to concessions and preferences for those businesses in which the railroads were interested at the expense of their competitors.

In like manner, it was to the railroads’ interests to concentrate traffic at large cities where it could be handled more cheaply in large quantities than in small cities for handling in small quantities. As a result, the railroads gave lower rates to certain cities than to others which were closer, resulting in favoring the growth of some cities over others.

Bankruptcies among the railroads, favoritism to powerful shippers, and rate preferences to some cities over others, eventually brought the people to a realization that the railroads must somehow be controlled, so as to make them serve the public to the best advantage. The result was the Interstate Commerce Act, followed by the great body of case law decided under it, and its subsequent amendments.

“At the bottom of this legislation, there is a * * * S0Cia]iSf;ic principle. In a new community natural resources are best developed by allowing great individual liberty. When, however, this development has been allowed to go on for a certain time, the fittest soon begin to prove their right to survive, and to assert their superiority in a more and more marked degree, reaping the results of their ability in ever-increasing additions of wealth and power. This excites the jealousy of the poorer classes, who begin to realize that when extreme liberty has reached the point of having subjected the many to the few, it is of doubtful advantage to the community. * * * This is the whole problem of modern legislation — how far the times warrant the legislators in letting the people alone * * * old laws must be modified for the protection of the many. This modification should properly be a gradual one, but in this country nothing is done gradually. The carriers were permitted to rest secure in their arbitrary attitude until the abuses became so extravagant as to beget laws in some instances perhaps more radical than necessary.” Drinker, Op. Cit., pp. 58 and 59

*413 In Interstate Commerce Commission v. Chicago Great Western Railway Company, C.C., 141 F. 1003, 1014, the court stated:

“The principal objects of the interstate commerce act, * * * were to secure just and reasonable charges for transportation; to prohibit unjust discriminations in the rendition of like service under similar circumstances and conditions; to prevent undue or unreasonable preference to persons, corporations, or localities; to inhibit greater compensation for a shorter than for a longer distance over the same line; and to abolish combinations for the pooling of freight. It was not designed to prevent competition between different roads, but rather to encourage competition. * * * ”

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Bluebook (online)
443 P.2d 406, 103 Ariz. 410, 1968 Ariz. LEXIS 283, Counsel Stack Legal Research, https://law.counselstack.com/opinion/arizona-corp-commission-v-continental-security-guards-ariz-1968.