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Yellow Cab Co. v. City of Chicago

OPINION FILED NOVEMBER 30, 1961.

YELLOW CAB COMPANY ET AL., APPELLANTS,

v.

THE CITY OF CHICAGO ET AL., APPELLEES.



APPEAL from the Superior Court of Cook County; the Hon. GROVER C. NIEMEYER, Judge, presiding.

MR. JUSTICE SOLFISBURG DELIVERED THE OPINION OF THE COURT:

Plaintiffs Yellow Cab Company and Checker Taxi Company, Inc., brought an action in the superior court of Cook County for an injunction, declaratory judgment and other relief seeking to enjoin the enforcement of and to declare unconstitutional two taxicab ordinances passed by the city council of the city of Chicago on August 24, 1959. The trial court, upon a motion by defendants, dismissed the action and entered its decree, from which this appeal was taken to this court.

The validity of the ordinances being challenged by plaintiffs, and the trial judge having certified that the validity of the ordinances is involved and that the public interest requires an appeal be taken directly to this court, this appeal was taken from the trial court to this court under the provisions of the Civil Practice Act. Ill. Rev. Stat. 1959, chap. 110, par. 75.

It is the theory of plaintiffs that the two taxicab ordinances of the city of Chicago of August 24, 1959, are unconstitutional in that they impaired the obligations of a contract between plaintiffs and the city of Chicago, deprived plaintiffs of property without due process of law, were in violation of certain requirements set forth in the December 22, 1937, taxicab ordinance and restricted plaintiffs' right to assign the licenses once received. The defendants contend that the ordinances are valid, that the plaintiffs are precluded on the basis of estoppel, laches and waiver, and that if the assignability provisions of the ordinances are invalid, the other provisions are separable and valid.

We have heretofore stated the history of the taxicab ordinances of the city of Chicago commencing with the ordinance passed on May 18, 1934, in the cases of Yellow Cab Co. v. City of Chicago, 396 Ill. 388, and People ex rel. Hafer v. Flynn, 13 Ill.2d 368.

The May 18, 1934, ordinance had no limitation as to the number of taxicab licenses that could be issued and vested in the Public Vehicle License Commission the authority to issue licenses, after hearing, as the public convenience and necessity required additional taxicab service. The ordinance set up certain matters which the commission shall take into consideration in determining the convenience and necessity of the public. The licenses issued under this ordinance were not assignable.

By 1937, the Public Vehicle License Commissioner had issued 4108 taxicab licenses under the 1934 ordinance: 2166 licenses were issued to Yellow Cab Company, 1500 licenses to Checker Taxi Company and 442 licenses to others. The operation of taxicabs in the city of Chicago in 1937 resulted in unprofitable operations to the drivers and to the licensees, and in strikes and other violence, which led to the passage of the December 22, 1937, taxicab ordinance, which decreased the number of taxicab licenses in the city of Chicago to 3000. Since the 4108 outstanding licenses did not expire until 1940, the 1937 ordinance could become effective only upon the voluntary surrender of 1108 of the outstanding licenses. The 1937 ordinance extended the expiration date of the outstanding licenses to December 31, 1945, if 616 taxicab licenses were surrendered, and if 1108 licenses were surrendered, to bring the total of outstanding licenses to 3000, the 1937 ordinance gave to the surrendering licensees priority to the number of licenses surrendered over other applicants in the event the public convenience and necessity required the issuance of additional licenses over the 3000. The additional licenses were to be authorized by general ordinance. Yellow Cab Company, under the 1937 ordinance, surrendered 571 of its licenses, Checker Taxi Company 500 licenses and other licensees surrendered the balance of the required reduction to bring the outstanding licenses to 3000.

In 1958, after publication and notice, hearings were had by the Public Vehicle License Commission to determine whether the public convenience and necessity required additional taxicab service in the city of Chicago. The hearings commenced on June 19, 1958, and ended July 24, 1958, at which hearings 3907 pages of testimony were taken, 136 exhibits introduced and 105 persons testified. The commissioner, on December 29, 1958, sent to the city council his written recommendations, concluding that the public convenience and necessity required additional taxicab service and recommended that the number of licenses be increased to 4600. The recommendations set forth the fact that in 1958 there had been issued 3000 taxicab licenses, as follows:

Yellow Cab Company ................ 1595 Checker Taxi Company .............. 1000 Public Taxi Company ............... 60 Other Independents ................ 345 The report of the commissioner recognized the decision of this court in the case of People ex rel. Hafer v. Flynn, 13 Ill.2d 368, and recommended that the surrendering licensees under the 1937 ordinance be given priority over other applicants for the additional licenses to be issued (over 3000) to the extent of the number of licenses so surrendered. Yellow, therefore, was to receive 571 of the additional licenses, Checker 500 and Public Taxi Company 25. Yellow and Checker made timely applications for and received the number of surrendered licenses under the 1959 ordinances.

The city council, on August 24, 1959, passed the ordinance increasing the number of taxicab licenses for the city of Chicago to 4600 and found the increased number of licenses were required for the public convenience and necessity. The ordinance provided that the commissioner shall issue licenses (1) to those licensees who have licenses on the effective date of the ordinance (3000); (2) to those licensees who have surrendered their licenses under the 1937 ordinance; (3) to those applicants who applied for licenses and deposited their fees in 1958, and (4) the balance of the 4600 to other qualified persons who shall make application therefor. The second ordinance of August 24, 1959, imposed limited assignability and for all practical purposes made taxicab licenses issued under the 1959 ordinance non-assignable. The second ordinance also provided that more than 4600 licenses shall be issued only after hearing as to the public convenience and necessity for additional taxicab service and then by ordinance of the city council.

Plaintiffs urge that the August 24, 1959, taxicab ordinances of the city of Chicago are unconstitutional for the reason that they impaired the obligation of a contract between Yellow and Checker and the city of Chicago under the contract ordinances of 1934 and 1937 and that the ordinances deprived plaintiffs of property without due process of law. The argument can not be made that the first 1959 ordinances did not recognize the contractual right of Yellow and Checker to be issued from the additional authorized licenses the equivalent number of the licenses surrendered by the licensees under the 1937 ordinance. This ordinance expressly recognized the priority rights, and Yellow and Checker applied for and received additional licenses to the equivalent of the number surrendered under the 1937 ordinance.

The argument is that the public hearings of the commission did not fulfill the requirements of the 1937 ordinance, were void and deprived plaintiffs of their property without due process of law for the reason that some of the witnesses who testified at the hearing were not required to be sworn and that there was no opportunity given for cross-examination.

The scope of the hearings conducted by the commissioner was to determine the convenience and necessity of the public for additional taxicab service. The hearings were legislative in character and the authority of the commissioner was to make recommendations to the city council for the enactment of an ordinance to increase the number of taxicab licenses if such were the case from the evidence presented. An investigatory legislative hearing, unlike a judicial or quasi-judicial hearing, is not bound to the formality of the law in the introduction of evidence. The ordinances themselves and the law generally do not require that testimony be taken under oath. The hearings are informal in their nature, and wide scope of interrogation and inquiry must be permitted. The conclusions of the commissioner do not result in a final order and there is no judicial review from the record of the hearings before the commissioner where the purpose of such hearings is to recommend legislative action. The city council to whom the recommendations are made may or may not follow the recommendations of the commissioner for proposed legislation. A hearing for recommendation to a legislative body cannot and does not pass upon or directly affect contractual rights of parties who may be interested in the commissioner's recommendations. We are of the opinion that there is no merit in the point that an investigatory hearing for the purpose of recommending to a legislative body proposed legislation for the public welfare must abide by all of the legal formalities of a judicial inquiry or a quasi-judicial hearing of an administrative agency upon which record there is a right to judicial review.

The May 18, 1934, ordinance did not set forth a maximum number of licenses that the commissioner was authorized to issue and the commissioner, up to 1937, had issued 4108 taxicab licenses under its provisions. The ordinance provided that the Public Vehicle License Commission could issue any number of taxicab licenses, after a "hearing," by resolution wherein it was found that the public convenience and necessity requires additional taxicab service. The 1934 ordinance further provided that, in determining whether the public convenience and necessity required the licensing of any taxicab, the commission shall take into consideration certain enumerated factors. The ordinance further provided that the commission shall hold public hearings from time to time for the purpose of consdering any objections or evidence pertaining to the question of the public convenience and necessity for the issuance of licenses for taxicabs and also provided for notice of public hearings. The contractual ordinance of 1937, reducing the number of taxicab licenses to 3000 upon the voluntary surrender of 1108 existing taxicab licenses outstanding and to expire in 1940, not only provided for the contractual priority of the surrendering licensees to any additional licenses that may be issued in the future in excess of 3000 to the extent of the number of licenses surrendered but also took away from the commission the authority to issue taxicab licenses in excess of 3000. The 1937 ordinance provided that public hearings be held upon the question of the public convenience and necessity for the issuance of licenses for taxicabs, but provided that any licenses to be issued in excess of 3000 may be issued only when authorized by general ordinance of the city council. The commission's role in the conduct of the public hearings was therefore changed from the actual issuance of taxicab licenses under the 1934 ordinance, if it concluded after hearing that the public convenience and necessity required additional taxicab service, to that of conducting public hearings which had for their purpose under the 1937 ordinance an investigation to determine the needs of the public for taxicab service and to make recommendations for proposed legislation on that subject by the city council. The city council is under no obligation to follow the recommendations, but subsequently enacts an ordinance, if such should be the case, in accordance with the public needs as it shall find for taxicab service. The hearings conducted by the commissioner for the purpose of submitting his recommendations for legislation should be as informative and as broad as possible and all parties interested in such legislation should be given the fullest opportunity to present evidence before the commission which would aid the commission in coming to an informed opinion as to the public convenience and necessity for additional taxicab service. The testimony presented to the commission is not required to be under oath and to make such requirement might restrict the witnesses testifying as to general facts, as well as specific facts, which may be of great assistance to the commission in recommending proposed legislation. There is no appeal from the record as established by the commission in its recommendations. The commission cannot and does not enter any final orders as a result of the hearings conducted by it and neither the hearings nor its conclusions affect in any way the contractual rights of third persons. The commission's findings are merely advisory to the legislative body for proposed legislation. The legislative body, in turn, cannot be required and is not bound to follow the recommendations of the commission in any subsequent legislation. The legislative body acts within its sole discretion and determines for itself the public convenience and necessity for additional taxicab service. There is no complaint in this case that the commission restricted the ...


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