1. Assuming that the use of its highways by private carriers for
hire is a privilege which the state may deny, it cannot
constitutionally affix to that privilege the unconstitutional
condition precedent that the carrier shall assume against his will
the burdens and duties of a common carrier. P. 271 U. S.
2. Under the Auto Stage and Truck Transportation Act of
California, as amended in 1919, and as construed and applied by the
state supreme court in this case, private carriers by automobile
for hire cannot operate over the state highways between fixed
termini without having first secured from the Railroad Commission a
certificate of public convenience and necessity, and therein they
not merely become subject to regulations appropriate to private
carriers, but submit themselves to the condition of becoming common
carriers and of being regulated as such by the Commission.
violative of the due process clause of the Fourteenth
Amendment. P. 271 U. S.
70 Cal.Dec. 457 reversed.
Error to a judgment of the Supreme Court of California which
sustained an order of the Railroad Commission directing the
plaintiffs in error to suspend operations under a single private
contract for the transportation of fruit over public highways,
between fixed termini, unless and until they should secure from the
Commission a certificate that public convenience and necessity
required the resumption or continuance thereof.
Page 271 U. S. 589
MR. JUSTICE SUTHERLAND delivered the opinion of the Court.
This case involves the constitutional validity of the Auto Stage
and Truck Transportation Act of California, c. 13, Statutes of
California 1917, p. 330, as construed and applied to plaintiffs in
error by the state supreme court. The specific challenge is that,
as so construed and applied, it takes their property for public use
without just compensation, deprives them of their property without
due process of law, and denies them the equal protection of the
laws in violation of the Fourteenth Amendment to the federal
Constitution. The Act provides for the supervision and regulation
of transportation for compensation over public highways by
automobiles, auto trucks, etc., by the Railroad Commission. The
term "transportation company" is defined to mean a common carrier
for compensation over any public highway between fixed termini or
over a regular route. By § 3(a), no corporation or person is
permitted to operate any automobile, auto truck, etc.,
"for the transportation of persons or property as a common
carrier for compensation on any public highway in this state
between any fixed termini . . . unless a permit has first been
secured as herein provided."
Permits are issued upon application by the incorporated city or
town, city and county, or county within or through which the
applicant intends to operate. By § 4, the Railroad Commission is
empowered to supervise
Page 271 U. S. 590
and regulate such transportation companies, and to fix their
rates, fares, charges, classifications, rules, and regulations, and
generally, to regulate them in all matters affecting their
relationship with the traveling and shipping public. Section 5
requires, in addition to the permit, that the applicant must obtain
from the Railroad Commission a certificate declaring that public
convenience and necessity require the exercise of such right or
privilege, and it provides that the Commission may attach to the
exercise of the rights granted such terms and conditions as in its
judgment the public convenience and necessity may require.
Operation under a permit without such certificate is prohibited. In
1919, the Act was amended, Statutes 1919, c. 280. p. 457, so as to
bring under the regulative control of the Commission automotive
carriers of persons or property operating under private contracts
of carriage, and the term "transportation company" was enlarged so
as to include such a carrier. It was further provided that no such
transportation company shall operate for compensation over the
highways without first having secured from the Commission a
certificate of public convenience and necessity so to do.
Plaintiffs in error were engaged under a single private contract
in transporting, for stipulated compensation, citrus fruit over the
the public highways between fixed termini. They were brought before
the Commission charged with violating the Act for the reason that
they had not secured from the Commission a certificate of public
convenience and necessity. The Commission, while agreeing that
plaintiffs in error were, in fact, private carriers, held that they
were subject to the provisions of the Act and directed them to
suspend their operations under their contract unless and until they
should secure a certificate that public convenience and necessity
required the resumption or continuance thereof. The Commission's
order was upheld by the state supreme court. 70 Cal.Dec. 457.
Page 271 U. S. 591
On behalf of plaintiffs in error, the contention is that, in its
application to private carriers, the Act has the effect of
transforming them into public carriers by legislative fiat. Upon
the other side, it is said that the sole purpose of the
"is to impress upon such private carriers certain regulations so
long as they desire to use the publicly built and owned highways as
the chief situs of their business of hauling goods for
and that "they are not, and cannot be, forced, directly or
indirectly, to become common carriers."
It is unnecessary to inquire which view is correct, since the
Act has been authoritatively construed by the state supreme court.
That court, while saying that the state was without power, by mere
legislative fiat or even by constitutional enactment, to transmute
a private carrier into a public carrier, declared that the state
had the power to grant or altogether withhold from its citizens the
privilege of using its public highways for the purpose of
transacting private business thereon, and that therefore the
legislature might grant the right on such conditions as it saw fit
to impose. In the light of this general statement of principle, it
was held that the effect of the transportation act is to offer a
special privilege of using the public highways to the private
carrier for compensation upon condition that he shall dedicate his
property to the quasi
-public use of public transportation;
that the private carrier is not obliged to submit himself to the
condition, but, if he does not, he is not entitled to the privilege
of using the highways.
It is very clear that the Act, as thus applied, is in no real
sense a regulation of the use of the public highways. It is a
regulation of the business of those who are engaged in using them.
Its primary purpose evidently is to protect the business of those
who are common carriers in fact by controlling competitive
conditions. Protection or conservation of the highways is not
involved. This, in effect,
Page 271 U. S. 592
is the view of the court below plainly expressed. 70 Cal.Dec.
Thus it will be seen that, under the Act as construed by the
state court, whose construction is binding upon us, a private
carrier may avail himself of the use of the highways only upon
condition that he dedicate his property to the business of public
transportation and subject himself to all the duties and burdens
imposed by the Act upon common carriers. In other words, the case
presented is not that of a private carrier who, in order to have
the privilege of using the highways, is required merely to secure a
certificate of public convenience and become subject to regulations
appropriate to that kind of a carrier, but it is that of a private
carrier who, in order to enjoy the use of the highways, must submit
to the condition of becoming a common carrier and of being
regulated as such by the Railroad Commission. The certificate of
public convenience, required by § 5, is exacted of a common
carrier, and is purely incidental to that status. The requirement
does not apply to a private carrier qua
but to him only in his imposed statutory character of common
carrier. Apart from that signification, so far as he is concerned,
it does not exist.
That, consistently with the due process clause of the Fourteenth
Amendment, a private carrier cannot be converted against his will
into a common carrier by mere legislative command is a rule not
open to doubt, and is not brought into question here. It was
expressly so decided in Michigan Commission v. Duke,
266 U. S. 570
266 U. S.
-578. See also Hissem v. Guran,
112 Ohio St.
59; State v. Nelson,
65 Utah 457, 462. The naked question
which we have to determine, therefore, is whether the state may
bring about the same result by imposing the unconstitutional
requirement as a condition precedent to the enjoyment of a
privilege which, without so deciding, we shall assume to be within
the power of the state altogether to
Page 271 U. S. 593
withhold if it sees fit to do so. Upon the answer to this
question the constitutionality of the statute now under review will
There is involved in the inquiry not a single power, but two
distinct powers. One of these, the power to prohibit the use of the
public highways in proper cases, the state possesses, and the
other, the power to compel a private carrier to assume against his
will the duties and burdens of a common carrier, the state does not
possess. It is clear that any attempt to exert the latter
separately and substantively must fall before the paramount
authority of the Constitution. May it stand in the conditional form
in which it is here made? If so, constitutional guaranties, so
carefully safeguarded against direct assault, are open to
destruction by the indirect, but no less effective, process of
requiring a surrender which, though in form voluntary, in fact
lacks none of the elements of compulsion. Having regard to form
alone, the Act here is an offer to the private carrier of a
privilege which the state may grant or deny, upon a condition which
the carrier is free to accept or reject. In reality, the carrier is
given no choice except a choice between the rock and the whirlpool
-- an option to forego a privilege which may be vital to his
livelihood or submit to a requirement which may constitute an
It would be a palpable incongruity to strike down an act of
state legislation which, by words of express divestment, seeks to
strip the citizen of rights guaranteed by the federal Constitution,
but to uphold an act by which the same result is accomplished under
the guise of a surrender of a right in exchange for a valuable
privilege which the state threatens otherwise to withhold. It is
not necessary to challenge the proposition that, as a general rule,
the state, having power to deny a privilege altogether, may grant
it upon such conditions as it sees fit to impose. But the power of
the state in that respect is not
Page 271 U. S. 594
unlimited, and one of the limitations is that it may not impose
conditions which require the relinquishment of constitutional
rights. If the state may compel the surrender of one constitutional
right as a condition of its favor, it may, in like manner, compel a
surrender of all. It is inconceivable that guaranties embedded in
the Constitution of the United States may thus be manipulated out
The prior decisions of this Court amply justify this conclusion.
In Paul v.
8 Wall. 168, 75 U. S. 181
the rule was stated to be that the state, having the power to
exclude foreign corporations from its limits, may admit them upon
such terms and conditions as the state may think proper to impose.
But, in Insurance Co. v.
20 Wall. 445, 87 U. S. 456
it was said that this sweeping language must be understood with
reference to the facts of that case, and that it could not be
extended to include conditions repugnant to the Constitution and
laws of the United States. In Barron v. Burnside,
121 U. S. 186
121 U. S. 197
this limitation was expressly reaffirmed. Mr. Justice Blatchford,
speaking for the Court, said (p. 121 U. S.
"The question as to the right of a state to impose upon a
corporation engaged in interstate commerce the duty of obtaining a
permit from the state as a condition of its right to carry on such
commerce is a question which it is not necessary to decide in this
case. In all the cases in which this Court has considered the
subject of the granting by a state to a foreign corporation of its
consent to the transaction of business in the state, it has
uniformly asserted that no conditions can be imposed by the state
which are repugnant to the Constitution and laws of the United
States. La Fayette Ins. Co. v.
18 How. 404, 59 U. S.
; Ducat v. Chicago,
410, 77 U. S. 415
Insurance Co. v. Morse,
Wall. 445, 87 U. S. 456
; St. Clair
v. Cox, 106 U. S. 350
, 106 U. S.
; Phila. Fire Assn. v. New York,
119 U. S.
, 119 U. S. 120
In Southern Pacific Co. v. Denton, 146 U.
, 146 U. S. 207
there was under consideration a Texas statute requiring
Page 271 U. S. 595
a foreign corporation desiring to do business in the state to
agree that it would not remove any suit from a court of the state
into the circuit court of the United States. This Court held the
statute invalid, saying:
"But that statute, requiring the corporation, as a condition
precedent to obtaining a permit to do business within the state, to
surrender a right and privilege secured to it by the Constitution
and laws of the United States, was unconstitutional and void, and
could give no validity or effect to any agreement or action of the
Corporation in obedience to its provisions."
After the Denton
case came Security Mutual Life
Ins. Co. v. Prewitt, 202 U. S. 246
That decision purported to follow the case of Doyle v.
Continental Ins. Co., 94 U. S. 535
to differentiate Barron v. Burnside, supra,
and it was
thought to have materially modified the rule laid down in the
cases. But, however
this may be, both the Prewitt
have been quite recently overruled, and the views of the minority
therein expressed declared to be now the law of this Court.
Terral v. Burke Constr. Co., 257 U.
, 257 U. S. 533
the light of this declaration, these dissenting views become
pertinent and controlling. In the Doyle
case, Mr. Justice
Bradley, speaking for the minority, said (pp. 257 U. S.
"Though a state may have the power, if it sees fit to subject
its citizens to the inconvenience, of prohibiting all foreign
corporations from transacting business within its jurisdiction, it
has no power to impose unconstitutional conditions upon their doing
so. Total prohibition may produce suffering, and may manifest a
spirit of unfriendliness towards sister states; but prohibition,
except upon conditions derogatory to the jurisdiction and
sovereignty of the United States, is mischievous, and productive of
hostility and disloyalty to the general government. If a
Page 271 U. S. 596
state is unwise enough to legislate the one, it has no
constitutional power to legislate the other. . . ."
"The whole thing, however free from intentional disloyalty, is
derogatory to that mutual comity and respect which ought to prevail
between the state and general governments, and ought to meet the
condemnation of the courts whenever brought within their proper
In the Prewitt
case, Mr. Justice Day, dissenting, said
(pp. 202 U. S.
"In the opinion of the Court in this case, the doctrine that a
corporation cannot be permitted to be deprived of its right to do
business because of the assertion of a federal right is said not to
be denied, because the right of a foreign corporation to do
business in a state is not secured or guaranteed by the federal
Constitution. Conceding the soundness of this general proposition,
it by no means follows that a foreign corporation may be excluded
solely because it exercises a right secured by the federal
Constitution. For, conceding the right of a state to exclude
foreign corporations, we must no overlook the limitation upon that
right, now equally well settled in the jurisprudence of this Court,
that the right to do business cannot be made to depend upon the
surrender of a right created and guaranteed by the federal
Constitution. If this were otherwise, the state would be permitted
to destroy a right created and protected by the federal
Constitution under the guise of exercising a privilege belonging to
the state, and, as we have pointed out, the state might thus
deprive business within its borders except upon the condition that
it strip itself of the protection given it by the federal
"* * * *"
"While we concede the right of a state to exclude foreign
corporations from doing business within its borders for reasons not
destructive of federal rights, we deny that the right can be made
to depend upon the surrender
Page 271 U. S. 597
of the protection of the federal Constitution, which secures to
alien citizens the right to resort to the courts of the United
"In the cases decided in this Court subsequently to Barron
while the general proposition is affirmed that a
state may prescribe conditions upon which a foreign corporation may
do business within its borders, in no one of them is it asserted
that the state may exclude or expel such corporations because they
insist upon the exercise of a right created by the federal
Constitution. On the contrary, this Court has repeatedly said that
such right of exclusion was qualified by the superior right of all
citizens to enjoy the protection of the federal Constitution."
In Western Union Tel. Co. v. Kansas, 216 U. S.
, 216 U. S. 34
upon a full review of the prior decisions, the principles set forth
in the foregoing quotations was again reaffirmed. That case
involved the validity of a Kansas statute which provided that a
corporation of another state, though engaged in interstate
business, must, as a condition of doing local business, pay to the
state certain graduated percentages of its capital stock. It was
held that this requirement operated as a burden on the interstate
business of the company, in violation of the commerce clause of the
Constitution, as well as a tax on its property beyond the limits of
the state, in violation of the due process of law clause; that thus
it was violative of the constitutional rights of the company, and
that the right of the company to continue to do business in Kansas
was not and could not be affected by the condition. The general
principle was again announced in the following words (pp.
216 U. S.
"The right of the telegraph company to continue the transaction
of local business in Kansas could not be made to depend upon its
submission to a condition prescribed by that state, which was
hostile both to the letter and spirit
Page 271 U. S. 598
of the Constitution. The company was not bound under any
circumstances to surrender its constitutional exemption from state
taxation, direct or indirect, in respect of its interstate business
and its property outside of the state, any more than it would have
been bound to surrender any other right secured by the national
Since that decision, the same principle has been reiterated many
times, and never departed from. Pullman Co. v. Kansas,
216 U. S. 56
216 U. S. 63
International Text-Book Co. v. Pigg, 217 U. S.
; Herndon v. Chi., R.I. & P. Ry.,
218 U. S. 135
218 U. S. 158
Harrison v. St.L. & San Francisco R. Co., 232 U.
, 232 U. S. 332
Looney v. Crane Co., 245 U. S. 178
245 U. S. 187
International Paper Co. v. Massachusetts, 246 U.
, 246 U. S.
-143; Western Union Tel. Co. v. Foster,
247 U. S. 105
247 U. S. 114
Public Utility Commrs. v. Ynchausti & Co.,
251 U. S. 401
251 U. S. 404
Terrall v. Burke Constr. Co., supra; Burnes Nat. Bank v.
Duncan, 265 U. S. 17
265 U. S. 24
Fidelity & Deposit Co. of Maryland v. Tafoya et al.,
270 U. S. 426
And the principle that a state is without power to impose an
unconstitutional requirement as a condition for granting a
privilege is broader than the applications thus far made of it. In
Western Union Tel. Co. v. Foster, supra,
companies were engaged in transmitting the quotations of the New
York Stock Exchange among the states. This was held to be
interstate commerce, and an order of the Public Service Commission
of Massachusetts requiring the companies to remove a discrimination
was held to infringe their constitutional rights. One of the
grounds upon which the order was defended was that it rested upon
the power of the state over the streets which it was necessary for
the telegraph to cross. That contention was answered broadly (p.
247 U. S.
"But, if we assume that the plaintiffs in error under their
present charters could be excluded from the streets,
Page 271 U. S. 599
the consequence would not follow. Acts generally lawful may
become unlawful when done to accomplish an unlawful end (United
States v. Reading Co., 226 U. S. 324
, 226 U. S.
), and a constitutional power cannot be used by way
of condition to attain an unconstitutional result (Western
Union Telegraph Co. v. Kansas, 216 U. S. 1
Pullman Co. v. Kansas, 216 U. S. 56
; Sioux Remedy
Co. v. Cope, 235 U. S. 197
, 235 U. S.
). The regulation in question is quite as great an
interference as a tax of the kind that repeated decisions have held
void. It cannot be justified 'under that somewhat ambiguous term of
And, in almost the last expression of this Court upon the
subject, Burnes Nat. Bank v. Duncan, supra,
the rule is
nonetheless broadly but more succinctly stated to be (p.
265 U. S.
"The states cannot use their most characteristic powers to reach
unconstitutional results. Western Union Telegraph Co. v.
Kansas, 216 U. S. 1
; Pullman Co. v.
Kansas, 216 U. S. 56
; Western Union
Telegraph Co. v. Foster, 247 U. S. 105
, 247 U. S.
We hold that the Act under review, as applied by the court
below, violates the rights of plaintiffs in error as guaranteed by
the due process clause of the Fourteenth Amendment, and that the
privilege of using the public highways of California in the
performance of their contract is not and cannot be affected by the
unconstitutional condition imposed. Western Union Tel. Co. v.
p. 216 U. S. 48
The court below seemed to think that, if the state may not
subject the plaintiffs in error to the provisions of the Act in
respect of common carriers, it will be within the power of any
carrier, by the simple device of making private contracts to an
unlimited number, to secure all the privileges afforded common
carriers without assuming any of their duties or obligations. It is
enough to say that no such case is presented here, and we are not
Page 271 U. S. 600
understood as challenging the power of the state, or of the
Railroad Commission under the present statute, whenever it shall
appear that a carrier, posing as a private carrier, is in substance
and reality a common carrier, to so declare and regulate his or its
MR. JUSTICE HOLMES (dissenting).
The question is whether a state may require all corporations or
persons, with immaterial exceptions, who operate automobiles, etc.,
for the transportation of persons or property over a regular route
and between fixed termini on the public highways of the state, for
compensation, to obtain a certificate from the Railroad Commission
that public necessity and convenience require such operation. A fee
has to be paid for this certificate, and transportation companies
are made subject to the power of the railroad Commission to
regulate their rates, accounts, and service. The provisions on this
last point are immaterial here, as the case arises upon an order of
the Commission under § 5 that the plaintiffs in error desist from
transportation of property as above unless and until they obtain
the certificate required, and, by the terms of the statute, every
section and claim in it is independent of the validity of all the
rest. § 10. Whatever the Supreme Court of California may have
intimated, the only point that is decided, because that was the
only question before it, was that the order of the Commission
This portion of the Act is to be considered with reference to
the reasons that may have induced the legislature to pass it, for
if a warrant can be found in such reasons, they must be presumed to
have been the ground. I agree, of course, with the cases cited by
my brother SUTHERLAND, to which may be added American Bank
& Trust Co. v. Federal Reserve Bank, 256 U.
, 256 U. S. 358
that even generally
Page 271 U. S. 601
lawful acts or conditions may become unlawful when done or
imposed to accomplish an unlawful end. But that is only the
converse of the proposition that acts in other circumstances
unlawful may be justified by the purpose for which they are done.
This applies to acts of the legislature as well as to the doings of
private parties. The only valuable significance of the much abused
phrase police power is this power of the state to limit what
otherwise would be rights having a pecuniary value when a
predominant public interest requires the restraint. The power of
the state is limited in its turn by the constitutional guaranties
of private rights, and it often is a delicate matter to decide
which interest preponderates and how far the state may go without
making compensation. The line cannot be drawn by generalities, but
successive points in it must be fixed by weighing the particular
facts. Extreme cases on the one side and on the other are Edgar
A. Levy Leasing Co. v. Siegel, 258 U.
, and Pennsylvania Coal Co. v. Mahon,
260 U. S. 393
The point before us seems to me well within the legislative
power. We all know what serious problems the automobile has
introduced. The difficulties of keeping the streets reasonably
clear for travel and for traffic are very great. If a state,
speaking through its legislature, should think that, in order to
make its highways most useful, the business traffic upon them must
be controlled, I suppose that no one would doubt that it
constitutionally could, as, I presume, most states or cities do,
exercise some such control. The only question is how far it can go.
I see nothing to prevent its going to the point of requiring a
license and bringing the whole business under the control of a
railroad commission so far as to determine the number, character,
and conduct of transportation companies, and so to prevent the
streets from being made useless and dangerous by the number and
lawlessness of those who seek to use them. I see nothing in this
act that would
Page 271 U. S. 602
require private carriers to become common carriers, but if there
were such a requirement, it, like the provisions concerning rates
and accounts, would not be before us now, since, as I have said,
the statute makes every section independent, and declares that, if
valid, it shall stand even if all the others fall. As to what is
before us, I see no great difference between requiring a
certificate and requiring a bond, as in Packard v. Banton,
264 U. S. 140
although, as I have said, I do not get much help from general
propositions in a case of this sort, I cannot forbear quoting what
seems to me applicable here. Distinguishing between activities that
may be engaged in as a matter of right and those like the use of
the streets that are carried on by government permission, it is
"In the latter case, the power to exclude altogether generally
includes the lesser power to condition and my justify a degree of
regulation not admissible in the former."
264 U.S. 264 U. S. 145
I think that the judgment should be affirmed.
MR. JUSTICE BRANDEIS concurs in this opinion.
The separate opinion of MR. JUSTICE McREYNOLDS.
Our primary concern is with the decree below, not with the
reasons there advanced to support it. I suppose, if that court had
simply approved the action of the Railroad Commission and had said
nothing more, there would be little, if any, difficulty here in
finding adequate ground for affirmance.
The questions involved relate solely to matters of intrastate
commerce. No complication arises by reason of the power of Congress
to regulate interstate commerce. Having built and paid for the
roads, California certainly has the general power of control.
Plaintiffs in error are without constitutional right to appropriate
highways to their own business as carriers for hire. And if, in
Page 271 U. S. 603
many words, the legislature had said that no intrastate carriers
for hire except public ones shall be permitted to operate over the
state roads, it would have violated no federal law. So far as the
rights of plaintiffs in error are affected, nothing more serious
than that has been done.
The states are now struggling with new and enormously difficult
problems incident to the growth of automotive traffic, and we
should carefully refrain from interference unless and until there
is some real, direct, and material infraction of rights guaranteed
by the federal Constitution.
I think the decree of the court below should be affirmed.