OPERATION OF PUBLIC WAREHOUSE WITHOUT LICENSE

OPERATION OF PUBLIC WAREHOUSE WITHOUT LICENSE

Grandfather rights not applicable to storage warehouse laws.

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                                                                November 2, 1951

Washington Public Service Commission
Insurance Building
Olympia, Washington                                                                                                              Cite as:  AGO 51-53 No. 160

Gentlemen:

            We have your request for an opinion upon the following questions:

            1. May a public warehouseman who operated a public warehouse and accepted goods for storage for compensation prior to the passage of chapter 154 of Laws of 1933 now operate without a storage warehouse license as required by said law by virtue of such prior operations?

            2. If a storage warehouse license is required for such operation, what procedure may be taken to require the warehouseman to cease accepting goods for storage?

            Our conclusions may be summarized as follows:

            1. Your first question is answered in the negative.

            2. A warehouseman operating without a storage warehouse license may be enjoined from accepting goods for public storage.

                                                                     ANALYSIS

            You have advised us that an operator of a public warehouse has been unable to secure the surety bond required under chapter 128, Laws of 1949, and inquire whether his operations prior to the effective date of chapter 154, Laws of 1933 can in any way exempt him from the bond requirement.

             [[Orig. Op. Page 2]]

            Section 2 of chapter 154, Laws of 1933 provides that no one shall hereafter operate any storage warehouse for the storage of property for the public for hire in this state except in accordance with the provisions of that chapter.  Sections 5 and 6 of chapter 154 required an annual license fee to be procured from the Director of Public Works (now public service commission) conditioned on the filing of a surety bond in the sum of $5,000 with the Department of Public Works.

            Chapter 202, Laws of 1937 increased the license fee for storage warehouses but eliminated by repeal the surety bond requirement.  In 1949, the legislature, in chapter 128 of that year's session laws, re‑established [[reestablished]]the surety bond provision and increased the amount of said bond to $10,000.

            While certain privileges called "grandfather rights" have been included in professional licensing and motor carrier laws in this state, neither the 1933 Act nor the 1949 Law excepts persons or corporations operating prior to the effective dates of these statutes from any of their provisions.  In the case of motor transportation, the burden of establishing public convenience and necessity was waived by statute as to those persons or corporations operating prior to the effective date of the Motor Transportation Act.  The waiver provision is typical of the usual statutory exception whose purpose is to avoid the hardship of requiring a carrier to justify an existing business in terms of public convenience and necessity, or, in some cases, of establishing a present financial ability to perform.  Beyond these exceptions, the privilege is not extended.

            A bond or license requirement is a continuing obligation of the right to engage in the business for which said bond or license is required, whereas a grandfather clause merely waives certain conditions precedent to the issuance of the license to engage in said business.  This consideration is borne out by the language of section 2, chapter 128, Laws of 1949, which provides, in part, as follows:

            "Failure to file and maintain in full force and effect the bond herein required shall be cause for the immediate revocation of the storage warehouseman's license and no license for a storage warehouse shall be issued to any person, firm or corporation until such person, firm or corporation has filed the bond herein required."

            Moreover, we are not aware of any instance in this state or elsewhere in which a grandfather rights privilege has been invoked by implication.  Such a privilege has heretofore only been defined by statute.  Accordingly, we are of the opinion  [[Orig. Op. Page 3]] that operations prior to the passage of chapter 154, Laws of 1933 do not exempt any person or corporation from compliance with the provisions of that Act or the amendments thereto.

            In answer to your other inquiry, section 3 of chapter 202, Laws of 1937 provides that operation of a storage warehouse without a license may be enjoined upon complaint of the Director of Public Service, predecessor of the present Commission.

Very truly yours,

SMITH TROY
Attorney General

LAWRENCE K. McDONELL
Assistant Attorney General