The Justices of the Supreme Judicial Court respectfully submit these answers to the questions set forth in the order numbered House 1194 and received on March 20,1925, copy whereof is hereto annexed.
The questions are propounded with respect to a draft of a statute entitled “An Act requiring owners of certain motor vehicles and trailers to furnish security for their civil liability on account of personal injuries caused by their motor vehicles and trailers. ’ ’ That draft of statute is an appendix to a report of a joint legislative committee appointed in 1924 to study various problems relating to motor vehicles and their use on the highways, a copy of which was transmitted with the questions. It is stated in that report that in this Commonwealth the motor vehicle “causes death or injury to more than 20,000 persons in a single yеar” and that “550 fatal accidents, causing 578 deaths,” occurred in the year 1923 from that cause alone. The report refers to an analysis showing that blame for substantially two thirds of those casualties rests on the operator of the motor vehicle. It also is stated in the report that owners of about thirty per cent of the registered automobiles have protected themselves
1. The power of the General Court to regulate travel over the public ways of the Commonwealth for the general welfare is extensive. It may be exercised in any reasonable manner to conserve the safety of travellers. No one has a o right to use streets and other public places as he chooses without regard to the presence of others. It is an underlying conception of streets and highways that they shall at all times be reasonably safe and convenient for public travel and that travellers thereon in the exercise of due care may be secure from preventable danger. Numerous statutes to that end have been enacted from early times to the present. All highways now are laid out and established by public authority. Initial costs of construction and subsequent expenses for care, repair and replacement are charges against the public treasury. The Commonwealth itself, directly or through its governmental subdivisions of counties, cities, towns and districts, all subject to legislative control, is the ' owner either of the easement constituting the highway or of the fee, when that has been acquired. The Commonwealth as the sovereign power and the proprietor may do with its own as the General Court may direct, provided its action can be said to be in the public interest and not violative of constitutional guarantees. Boston Fish Market Corp. v.
The most important is the great uncompensated damage now caused by motor vehicles to innocent travellers upon the public ways. It is a part of the Declaration of Rights of our Constitution that “Every subject of the Commonwealth
Another ground upon which the validity of the proposed statute may rest is that the motor vehicle is itself a dangerous instrumentality. Unless kept in good repair and equipped with adequate brakes and then driven on public ways with a high degree of care and skill, it is bound to become a source of imminent danger to other travellers. Chief Justice Shaw said in Commonwealth v. Alger,
Liability has been imposed, sometimes by the common law and sometimes by statute, for the harmful consequences of conduct not founded on negligence but flowing from the possession or control of dangerous instrumentalities. It is a doctrine of the common law that “the person, who for his own purposes brings on his lands and collects and keeps there anything likely to do mischief if it escapes, must keep it in at his peril; and, if he does not do so, is prima fade answerable for all the damage which is the natural consequence of its escape.” Gorham v. Gross,
The presence of an unregistered motor vehicle on the highways has been outlawed and declared a nuisance. G. L. c. 90, § 9. Dudley v. Northampton Street Railway,
The statute G. L. c. 159, § 46, already requires, from the licensee of a motor vehicle operated upon a public way for the carriage of persons for hire under the special circumstances there described, a bond conditioned to pay any final judgment obtained against the principal named in the bond for causing the death of or injury to any person by reason of the negligence in the operation of such motor vehicle. The constitutionality of this and of like statutes has been upheld. Commonwealth v. Slocum,
The extension of liability of the owner of a motor vehicle so as to include personal injuries caused by it while being negligently operated by his express or implied consent, even though not by himself, his servant or agent, violates no constitutional provision. Under the common law of this Commonwealth mere- ownership of a motor vehicle without evidence that it is being driven by his servant is not enough to fasten on the owner liability for its negligent operation. Trombley v. Stevens-Duryea Co.
The general principle which sustains this aspect of the proposed bill is that, when the general welfare of travellers on the highway in the opinion of the Legislature is threatened by and demands protection against a specific evil, any rational means may be adopted to remedy the evil. John P. Squire & Co. v. Tellier,
The conclusion that this requirement may be made is supported in our opinion by the reasoning of Hendrick v. Maryland,
It follows that the answer is, Yes, to question 1 and its subdivisions (a) and (b).
2. We understand the inquiry presented by the second question to mean, whether the selection of owners of motor vehicles as alone required to prоvide security for injuries caused by such property violates the Constitution. The proposed statute omits from such requirement the owners of horse drawn vehicles and of electric railways and steam railroads and the operators of motor vehicles who are not also owners. Reasonable classification in the selection of sub
The answer to the second question is, No.
3. The kind of security for the payment of liability arising from the operation of motor vehicles on public ways within reasonable limits may be established by the General Court. An option to the owner of the motor vehicle between the deposit of cash or securities with a public officer and the furnishing of a surety bond or a policy of insurance offends no provision of the Constitution. The primary object is to afford security to the traveller injured on the public way through the negligent operation of the motor vehicle. The difference between these diverse methods of furnishing security is not an inequality of law in a constitutional sense.
The answer to the third question is, Yes.
4. (a) The proposed bill if enacted into law would not be unconstitutional in our opinion because it does not apply to nonresident owners or operators of motor vehicles not registered under our laws. The use of such motor vehicles may be found by the Legislature to be small in comparison with that of such vehicles registered in accordance with our laws. The expense of enforcing the law with respect to them may be found to be excessive. It may be that there are other difficulties in the way. Moreover, a classification including only motor vehiclés registered under our statutes cannot be pronounced unreasonable. Nonresident owners of motor vehicles or motor vehicles not registered under our laws doubtless might be included within the law. Hendrick v. Maryland,
(b) The exclusion of motor vehicles owned by the Commonwealth, or “by a corporation subject to the supervision and control of the department of public utilities, or by a street railway company under public control,” cannot be denounced as arbitrary. It has a reasonable relation to the public safety. It does not destroy equality before the law nor create special privilege. It is a classification which may be thought to rеst on sound judgment. This classification falls within the authority of Packard v. Banton,
(c) The requirement that persons operating motor vehicles as common carriers of passengers for hire as described in G. L. c. 159, § 45, shall furnish both a liability bond or policy as security for the benefit of those suffering personal injury or entitled to recover damages for death and also a bond as security for property damages, is not open to objection on constitutional grounds. Common carriers of passengers may
(d) The bill is not unconstitutional because excluding from its benefits such employees of the owner of the motor vehicle or of any person responsible for its operation as are entitled to benefits under the workmen’s compensation act. Such employees are already afforded a kind of relief under the law, which, when applicable to the conditions of injury, well may be thought more advantageous, in certainty of payment and exoneration from expenses and delay incident to an action at law, than that provided by the proposed statute. There would be strong resemblance to inequality in permitting such employees a double remedy and double damages for the same injury.
(e) No constitutional infirmity in the proposed bill arises from its omission to provide security for personal injury or death occurring on private property. The principle upon which the proposed statute rests is the protection of travellers upon public ways. Different questions of policy might be involved with respect to injuries sustained on private property, such as diversity in dangers and conditions, unlikeness in rights, risks and obligations, and other dissimilarities in circumstances.
(f) Restriction of security to claims for personal injuries and death and exclusion of those for damage to property violates no constitutional provision. Under art. 10 of the Declaration of Rights, “Each individual of the society has a right to be protected by it in the enjoyment of his life, liberty and property, according to standing laws.” But the Legislature is not thereby prohibited from making special provision for the security of life and limb, and leaving prop
(g) It is provided in the proposed act that an applicant for the registration of a motor vehicle must either (1) procure a motor vehicle liability bond or policy, or (2) deposit cash or securities with a public official. The liability bond or policy must furnish security for the satisfaction of all judgments against the obligor or insured arising from his motor vehicle on the public ways “to the amount or limit of at least five thousand dollars on account of injury to or death of any one person, and, subject to such limits as respects injury to or death of one person, of at least ten thousand dollars on account of any one accident injuring more than one person.” The applicant for registry may, at his option, in place of procuring a motor vehicle liability bond or policy, deposit with the division of highways of the department of public works “cash in the amount of five thousand dollars or bonds, stocks or other evidences of indebtedness satisfactory to the division of a market value of not less than five thousand dollars as security for the payment” in like manner of all such judgments “to the amount or limit of at least five thousand dollars on account of bodily injury or death.” Provision is made for the payment by the division of any execution issued on such judgment, but not in excess of $5,000, out of such cash or the proceeds of sale of such securities. Further provision is made that the “division shall, whenever the amount of such deposit from any cause falls below” the specified amount, require at the option of the registrant the deposit of additional cash or securities or a motor vehicle liability bond or policy. We interpret these provisions as to deposit of cash or securities in place of bond or policy to mean that whenever the payment of an execution or executions or any other cause reduces such cash or securities below $5,000, new cash or securities shall be forthwith demanded and deposited in order to maintain the required sum of $5,000 as security. It also is provided that additional deposit of cash or securities may be required whenever an action is commenced, payment of judgment in which is secured by such deposit.
The main purpose of the statute is to afford security to those of the public who suffer injury of the kind described. From that standpoint it is to be observed that the result of these several provisions is that, in case of a deposit of securities, the original judgment is satisfied at once out of such deposit; while in the case of a liability bond, the holder of the judgment may be obliged to bring an action against the surety company on the bond, or, in the case of an insurance policy, to enforce the liability of the insurance company.
No discussion is required to demonstrate that an instantly available fund of cash or its equivalent is better security for the satisfaction of a judgment than a bond or even an insurance policy. Moreover, sometimes, though rarely, surety companies or insurance companies become bankrupt. Some concession in face value may be made by the Legislature on account of the superior quality of cash security over any form of suretyship or insurance.
■ The proposed statute further undertakes to provide that, in case of a deposit, there shall always be a minimum of at least $5,000 available as security. It may be that there is an overwhelming likelihood that registrants making a deposit rather than.furnishing the bond or poliсy will be possessed of other financial resources, so that a personal judgment or judgments against them aggregating $5,000 might be collectible, and so that further deposit would be made on demand. The General Court within reasonable limits may judge of these matters and act accordingly. These provisions are somewhat analogous to the exemption of certain banks, banking institutions and loan companies from the provisions of St. 1908, c. 605, § 6 (see now G. L. c. 140, § 114), respecting the making of small loans, which was upheld as not obnoxious to the Constitution in Mutual Loan Co. v. Martell,
(h) The reasons already stated are sufficient to show that no constitutional objection can be urged soundly on the ground that the bill is made applicable indifferently to all classes and kinds of motor vehicles. The danger tо the public safety may be thought by the Legislature to inhere in the operation of all such vehicles and to require the same kind of security with respect to all.
(i) Regulations of the kind prescribed by the proposed bill may apply to interstate commerce on the same terms as to domestic travellers. The States cannot enact laws for the specific end of regulating interstate commerce; but they may enact laws for the protection of the general public, against apprehended harm including that caused by those engaged in interstate commerce. The power of the several States to “ provide for the establishment, maintenance, and control of public highways, turnpike roads” and like conveniences and necessities has been recognized in numerous decisions of the United States Supreme Court. New Orleans Gas Co. v. Louisiana Light Co.
There is nothing inconsistent with the conclusion that the proposed statute would be valid in this respect in the recent decisions of Michigan Public Utilities Commission v. Duke,
We answer, No, to the fourth question including all its subdivisions.
5. The Legislature has large powers in the regulation of the business of insurance. That business is of a peculiar nature. It affects large numbers of people and is intimately connected with the general welfare. The form of fire insurance policies has been prescribed by statute in this Commonwealth for many years. Regulation of the business of insurance may be supported both as an exercise of the police power for the common good and on the ground that corporations, foreign and domestic, being creatures of legislative power, are subject to reasonable control as conditions of transacting business. Policies of insurance indemnifying owners against losses due to the negligence of themselves or their servants in the operation or use of vehicles may be enforced for their own benefit by or in behalf of persons injured by such negligence. These principles are settled by numerous authoritative decisions. Lorando v. Gethro, 228 Mass.
A prohibition against cancellation by the insured or principal of a motor liability policy or bond during its term, except upon transfer, loss, theft or destruction of the motor vehicle or the substitution of a deposit of cash or securities, would not transcend legislative power. When onсe it is established that insurance may be made compulsory for the protection of the public safety, it follows as a necessary consequence that, so long as the ownership of the motor vehicle is retained, the kind of protection afforded by insurance may be required to continue. The maximum period of insurance for a motor vehicle under one policy or bond is the term of registration, which does not exceed one year.
The provision that no statement, made by or on behalf of the insured and no violation of the terms of the policy shall defeat the claim of a judgment creditor, injured by negligence in the operation of the insured motor vehicle, proceeding in accordance with the statute to collect damages permitted by the proposed bill, does not offend against any provision of the Constitution.
The main object of the bill is to protect сareful travellers on the highway injured by negligence in the operation of motor vehicles and to afford them some redress for such injuries. The legislative question involved in this aspect is this: When a financially irresponsible owner or operator of a motor vehicle, insured by a policy or bond procured by some material misrepresentation, negligently injures another traveller on the highway in the exercise of due care, which of two innocent persons must suffer, the injured traveller, or the insurer or surety? The Legislature may believe that the opportunities open to the insurer or surety for inquiry and investigation before issuing the policy or signing the
Statutes rendering irrelevant, even as between the parties, misrepresentations not materially increasing the risk and not made with intent to deceive, have been recognized as valid. Everson v. General Accident, Fire & Life Assurance Corp. Ltd.
This provision is but a slight extension of the principle already estаblished that the rights of a mortgagee under a policy of insurance shall not be affected by defaults of the mortgagor. Palmer Savings Bank v. Ins. Co. of North America,
Giving due weight to all of these factors and not singling out one as decisive, we are of opinion, though with some hesitation that it cannot be said that § 4 of the proposed bill, in amending G. L. c. 175 by the addition of § 113A (4), exceeds the constitutional power of the Legislature.
The manifest purpose of the proposed statute being to protect travellers in the exercise of care upon the highway, the requirement that the liability policy or bond shall cover all claims, irrespective of number-, arising from personal injuries
The same reasoning supports the validity of prohibition of exclusions or exceptions as to specified accidents or injuries or the causes thereof. These questions are to be settled by the practical wisdom of the Legislature applied to the subject matter. National Union Fire Ins. Co. v. Wanberg,
The answer to question 5 in respect both to A with its several subdivisions and to B is, Yes.
6. The sixth question relates in general to the making of classifications of risks and the establishment of premiums and the modification, alteration or revision of the same. The subject of rate making by the Legislature or by public officers or boards has not been discussed in many decisions in this Commonwealth. No question hitherto has arisen respecting insurance premiums or rates. Donham v. Public Service Commissioners,
A fundamental principle of rate making by public authority is that in general the rate so established must be sufficient tb yield a fair return on the reasonable value of the property used or invested for doing the business after paying costs and carrying charges. Rates not sufficient to yield such return are unjust, unreasonable and confiscatory. That is the general rule. The making of rates may be treated as a legislative or executive function. “In all such cases, if the
Whenever heretofore the General Court has made provision for the fixing of rates by public authority, there has always been, so far as we are aware, express provision for such review by the courts as to satisfy constitutional requirements. See G. L. c. 25, § 5; c. 152, §§ 13,11.
Reasonable presumptions are indulged in favor of the constitutionality of any act of a public body brought before the courts for review. But there must be some provision for judicial examination of rates when fixed by public authority. Missouri v. Public Service Commission of Missouri,
The answer to the sixth question and its several subdivisions is that the provisions there enumerated will be constitutional if provision is made for a judicial review of the premiums there to be established by the commissioner of insurance, and not otherwise.
7. The reasons already stated in answering question 6 require that question 7 be answered, Yes.
8. The substance of the eighth question is whether provisions of the proposed bill in §§ 3 and 4 are constitutional to the effect that there shall be a board of appeal on motor vehicle liability policies and bonds with power, after hearing, to make a final decision on the questions, (1) whether a cancellation of a policy or bond by a company liable thereunder, or a refusal to issue a policy or to act as surety on a bond, is proper and reasonable, and (2) whether the applicant for such policy or bond is a proper risk. If such decision,
The proposed act is confined in its scope to motor vehicle liability policies and bonds obligating corporations. No one except a corporation can issue such a policy or become surety on such a bond. That kind of business may be confined to corporations. German Alliance Ins. Co. v. Lewis,
The several features of the proposed bill set forth in the eighth question as provisos constitute serious limitations upon customary methods of conducting the insurance business. .The question whether a particular risk shall be assumed by an insurer or surety is an important factor in the conduct of such business. Health, age, and susceptibility to disease form the basis of acceptance or rejection of most applicants for life insurance. Character, physical capacity, sight, hearing, financial responsibility, record of past conduct, personal habits, nature and extent of business and general reputation are among the elements of essential significance in determining whether motor vehicle liability bonding or insurance for any particular applicant shall be undertaken. To subject the determination of such a vital question by an insurer or surety to review is a great interference with freedom of contract. The right to freedom of contract is secured as a general rule by the constitutions of Commonwealth and Nation; but there are exceptions where legislative interference with that right is permissible. We are of opinion that the proposed bill in this aspect does not transcend legislative power. The right of the citizen to register a motor vehicle whereby he may travel upon the ways is made strictly conditional upon his depositing cash or securities or upon procuring a motor vehicle liability policy or bond. This, too, is a great interference with freedom of action. The refusal by corporations to issue such policy or sign such bond may drive one out of business or seriously impair his convenience. Where such paramount interests are at stake with sole reference to the use of public ways provided wholly at the expense of the government, there is constitutional basis for legislative regulation to the end that no injustice may be done. Unwarranted discrimination may arise against certain applicants. Instances may arise of honest difference of opiniоn whether a policy or bond
That which a State may do with corporations of its own creation, it may do with foreign corporations admitted to do business within its borders as a condition of their continuance of business, provided in other respects no constitutional obstaсle is encountered. These propositions have been-applied to corporations doing business of insurance. Orient Ins. Co. v. Daggs,
The penalties which may be enforced under the proposed act against the company for failure to comply with decision of the board of appeal are not in excess of legislative power to impose. A corporation which refuses to conduct its business in accordance with valid laws cannot complain if its right to transact business is suspended or revoked. National Fertilizer Co. v. Fall River Five Cents Savings Bank,
The provision that the finding of the appeal board shall be “final and binding upon the parties” violates no part of the Constitution. Doubtless that provision means or must be construed to mean that findings of fact are final, not that there is not some means of correcting crucial errors of law.
The board of appeal as constituted by the proposed act is a purely administrative tribunal. It is in no sense a court, although it may exercise quasi judicial functions. There is established by art. 30 of the Declaration of Rights a sharp, mandatory and unescapable division between the executive, legislative and judicial departments of government, and an absolute prohibition against each one from exercising functions of either of the others. In view of this command of the Constitution, it is beyond the power of the Legislature to require any court merely to register a mechanical approval of the doings of an administrative or executive committee, without examination as to the legal merits of such doings. Courts in reaching decisions are bound to exercise an independent judicial function. Simply to set in motion machinery perfunctorily and inevitably leading to a specified final judgment, without first exercising an untrammelled decision in accordance with established constitutional and legal principles, would not be judicial work. A court cannot be made an automatic adjunct of an administrative board. Judicial work to be performed in a judicial manner alone can be required of or performed by courts. Cosmopolitan Trust Co. v. Mitchell,
Thé words of the proposed act, if enacted into law, requiring the Superior Court to enter a decree in accordance with the finding of the appeal board doubtless would be interpreted to mean, in order to save its constitutionality, that such decree should be entered after a judicial examination and inquiry as would be required by the law in the
The provision of the proposed act to the effect that, the decree of the Superior Court “shall be final” presents no сonstitutional difficulty. It was said in Renado v. Lummus,
The answer to the eighth question is, Yes.
9. The answer to the ninth question is, Yes. The reasons leading to that conclusion have been set forth in the answer to the eighth question.
10. All the particular questions contained in the order, aggregating a very considerable number, have been answered to the best of our ability. For the reasons stated at length in Opinion of the Justices,
Arthur P. Pugg.
Henry K. Braley.
John C. Crosby.
Edward P. Pierce.
James B. Carroll.
William C. Wait.
George A. Sanderson.