Opinion
Decided June 1, 1938.
After a motor vehicle accident in this state, a foreign corporation owning the truck involved therein, upon notification filed certain proof of financial responsibility for accidents in this state pursuant to Laws 1937, c. 161, s. 6, which was rejected by the Commissioner of Motor Vehicles. The subject of the financial responsibility of interstate motor-carriers having been fully dealt with by the federal statute and the rules promulgated thereunder by the Interstate Commerce Commission, supplementary as well as conflicting regulations of the same subject by the states are precluded by the Federal Constitution. Held that a requirement of insurance approved by the Commissioner of Motor Vehicles against liability for the results of operations in a foreign state demanded by him under Laws 1937, c. 161, ss. 1, 6 is an unconstitutional attempt to regulate interstate commerce. An insurance corporation actually doing business in its home state is presumably authorized to do so until the contrary appears.
BILL IN EQUITY, praying that the defendant be enjoined from suspending or cancelling the New Hampshire registrations of the plaintiff's motor vehicles because of its failure to furnish evidence of financial responsibility after an accident, in accordance with Laws 1937, c. 161, hereinafter called the Financial Responsibility Act. After hearing upon an agreed statement of facts, the Superior Court, (Johnston, J.) granted an interlocutory injunction and transferred without ruling the question "whether the said Chapter 161 may be applied and enforced against the petitioner."
From the agreed statement of facts it appears that the plaintiff, a Massachusetts corporation, is a common carrier by motor truck operating in New Hampshire solely in interstate commerce. Its petition for a certificate of public convenience has been granted by the Interstate Commerce Commission and it has fully complied with the rules and regulations of said commission promulgated in accordance with the federal motor carrier act, 1935, (49 Stat. 543-567, 49 U.S.C.A. 1938 Supp.) requiring interstate motor carriers to furnish insurance, bonds or other securities for the protection of the public.
Section 6 of the financial responsibility act, Laws 1937, c. 161 contains the following provisions:
"6. SECURITY AND PROOF REQUIRED FOLLOWING ACCIDENT: Upon receipt by him of the report of an accident which has resulted in bodily injury or death, or in damage to property in excess of twenty-five dollars, the commissioner shall forthwith suspend the license of any person operating, and the registration certificates and registration plates of any person owning, a motor vehicle, trailer or semi-trailer in any manner involved in such accident unless and until such operator or owner or both shall have previously furnished or immediately furnishes sufficient security to satisfy any judgment or judgments for damages resulting from such accident as may be recovered against such owner or operator by or on behalf of the aggrieved person or his legal representative, and unless and until such owner or operator or both shall immediately give and thereafter maintain proof of financial responsibility in the future."
Section 1 of the same act provides, in effect, that insurance policies and liability bonds, in order to be acceptable as security in accordance with the requirements of section 6 above quoted, shall cover all liabilities incurred "within the limits of the United States of America or the Dominion of Canada."
On December 29, 1937, one of the plaintiff's motor vehicles was involved in an accident in the town of Derry, which resulted in property damage to the amount of $35. Thereafter the defendant, acting under the terms of section 6 of the Financial Responsibility Act, served a notice upon the plaintiff that he would suspend the New Hampshire registrations of its motor vehicles unless, within ten days, it should file proof of financial responsibility as required by said act. In accordance with said notice, the plaintiff offered to the defendant proof that it has filed with the Interstate Commerce Commission a surety bond executed by the Peerless Casualty Company, a New Hampshire corporation doing business in the city of Keene, securing the payment of any judgments recovered against it for personal injury or property damage caused by the operation of its trucks at any place outside of Massachusetts, its liability in the Commonwealth of Massachusetts being covered by a policy of liability insurance issued by an insurance company not authorized to do business in New Hampshire. This proof was rejected by the commissioner as not in compliance with the New Hampshire statute and solely for this reason he now threatens to suspend the New Hampshire registrations of all of the plaintiff's motor vehicles and put a stop to all its operations in New Hampshire.
Other facts are stated in the opinion.
John R. Goodnow and Horace P. Moulton (of Massachusetts), (Mr. Moulton orally), for the plaintiff.
Thomas P. Cheney, Attorney-General, Frank R. Kenison, Assistant Attorney-General, and J. Blanche Newhall, (Mr. Kenison orally), for the defendant.
The precise point in controversy between the parties is, upon the record, curiously obscure. Just why the defendant rejected the plaintiff's proof of financial responsibility is not definitely stated. The general statement that it was rejected "as not in compliance with the provisions of the Financial Responsibility Act" carries no enlightenment as to the specific deficiency upon which the action of the commissioner was predicated. A similar lack of detail pervades the defendant's brief. We are there told that "The question transferred in this case is whether the State of New Hampshire may require a common carrier, engaged in interstate commerce and licensed under the Motor Carrier Act, 1935 to (a) file a proof of financial responsibility after an accident in New Hampshire, (b) file proof in a form specified in the New Hampshire Financial Responsibility Act and in a surety bond to be written by a company licensed to do business in New Hampshire." Clause (a) of this statement is obviously inaccurate. No question as to the plaintiff's obligation to furnish proof of financial responsibility has been raised. The controversy rather involves the sufficiency of the proof offered by it in performance of this obligation. The precise basis for the commissioner's decision is, therefore, left to be inferred from the facts set forth in the agreed statement.
It appears that the plaintiff's liability for accidents occurring anywhere except in Massachusetts was covered by a surety bond executed by a New Hampshire corporation doing business in this state. In the defendant's brief we read that "it does not affirmatively appear that the surety bond which the petitioner has posted with the Interstate Commerce Commission is written by a company authorized to do business in the state of New Hampshire." It cannot be inferred, however, that this was the basis of the commissioner's action. The assumption that a New Hampshire corporation actually doing business in this state is not authorized so to do, would be so obviously contrary to reason that it could not be accepted as a legitimate basis for an administrative judgment such as was entered in this case and a drastic order vitally affecting the interest of a party such as is threatened. On the contrary, the inference would seem to be plain that such a corporation actually doing business in its home state is more probably than otherwise authorized to do so. At any rate, failure to furnish formal proof of a fact so easily ascertainable upon inquiry from another department of the state government could not be regarded as an adequate ground for the action taken by the commissioner herein. It must, therefore, be assumed that the action of the commissioner was not based upon any such technical absence of proof and that his ruling rested upon some other ground.
The only other ground suggested in argument or disclosed by the record is the possible inadequacy of the plaintiff's insurance against liability accruing in Massachusetts. This insurance was carried in a Massachusetts mutual company not licensed to do business in New Hampshire. For this reason it may properly have been regarded by the commissioner as unacceptable evidence of financial responsibility for accidents happening in Massachusetts, and in the following discussion it is assumed that this is the ground upon which his ruling was based.
The foregoing definition of the point at issue is important with reference to the argument of the defendant that although Congress has undertaken to regulate interstate transportation by motor carriers, "the State of New Hampshire can provide additional rules to promote safety upon its highways." This is the only substantial ground of justification advanced by the defendant. We are unable to see how safety upon New Hampshire highways will be promoted by a requirement of insurance against liability for accidents happening in Massachusetts. For this reason the requirement in question bears no resemblance to regulations of width and weight of motor vehicles such as were sustained in South Carolina State Highway Department a. v. Barnwell Brothers, Inc. decided February 14, 1938, by the Supreme Court of the United States ( 58 Sup. Ct. Rep. 510). As applied to this defendant, requirement of approved insurance against liability for the results of its operations in Massachusetts can be regarded as nothing more or less than a regulation of interstate commerce. This field of regulation has already been preempted by Congress. The subject of the financial responsibility of interstate motor carriers has been fully dealt with by the federal statute and the rules promulgated by the Interstate Commerce Commission in accordance therewith. Supplementary as well as conflicting regulations of the same subject by the states are, therefore, precluded by the Federal Constitution as it has been interpreted by the Supreme Court. "Congress having entered this field of regulation, it follows from the paramount character of its authority that state regulation of the subject-matter is excluded." Texas Pacific Railway Co. v. Rigsby, 241 U.S. 33, 41. "The elementary and long settled doctrine is that there can be no divided authority over interstate commerce, and the regulations of Congress on that subject are supreme." Chicago R. I. P. Ry. Co. v. Company, 226 U.S. 426, 435. "When Congress has taken the particular subject-matter in hand coincidence is as ineffective as opposition." Charlestown Western Carolina Ry Co. v. Company, 237 U.S. 597, 604. The multiplication of citations in support of these principles would serve no useful purpose.
We therefore hold that the particular provisions of the Financial Responsibility Act which appear to be involved in this proceeding, i.e. those requiring security for liabilities incurred outside of this jurisdiction, cannot be applied and enforced against the plaintiff. With the conclusions of the Supreme Court of Connecticut in a similar case we are generally in accord. University Overland Express, Inc. v. Alsop, 122 Conn. 275.
Decree for the plaintiff.
All concurred.