Summary
In McGehee v. Wolchansky, supra [ 217 Miss. 88, 63 So.2d 551], the latter applied to the Public Service Company of Mississippi for approval of his offer to purchase the certificate held by Young and Chamberlain for intrastate transportation between all points in Mississippi of household goods, furniture and fixtures.
Summary of this case from Bekins Van Storage Co. v. State Corporation Com'nOpinion
No. 38707.
March 23, 1953.
1. Carriers — unrevoked certificate of public convenience a necessity — validity of.
Although a carrier, holding a certificate of public necessity and convenience, has not operated thereunder for two or three years it remains valid and outstanding until revoked and may be transferred to another carrier with the adjudged permission of the Public Service Commission. Sec. 7651, Code 1942.
2. Carriers — service consistent with the public interest — transfer of certificate.
Where the evidence is ample to support the finding of the Public Service Commission that the transfer of an existing certificate of public convenience and necessity would result in improved service to the public and would therefore be consistent with the public interest, the order of the Commission authorizing the transfer will be affirmed, and the fact that the transfer would have an unfavorable result on the revenues of competing lines is not available as an objection. Sec. 7652, Code 1942.
Headnotes as approved by Hall, J.
APPEAL from the circuit court of Hinds County; M.M. McGOWAN, Judge.
Stevens Canada, for appellants.
I. Under Sec. 7652, Code 1942 the Public Service Commission cannot lawfully approve the sale and transfer of a certificate of public convenience and necessity without first finding that the proposed transaction is "consistent with the public interest."
A finding by the Commission that is not based upon substantial evidence is invalid. Magee Truck Lines v. Bond, 190 Miss. 428, 200 So. 586.
II. Origin and meaning of the phrase "consistent with the public interest." Secs. 7633, 7649, 7651, Code 1942; Transportation Act of 1920; 49 U.S.C.A., Secs. 301, et seq., 312(b); Baltimore Ohio R.R. Co. v. United States, 264 U.S. 258, 44 S.Ct. 317, 68 L.Ed. 667; Dixie Greyhound Lines v. American Buslines, 209 Miss. 874, 48 So.2d 584; Dixie Greyhound Lines v. Mississippi Public Service Comm., 190 Miss. 704, 200 So. 579, 1 So.2d 489; New York Central Securities Corp. v. United States, 287 U.S. 12, 53 S.Ct. 45, 77 L.Ed. 138; Southern Bus Lines, Inc. v. Mississippi Public Service Comm., 210 Miss. 606, 50 So.2d 149; Teche Lines, Inc. v. Board of Supervisors, 165 Miss. 594, 142 So. 24, 143 So. 486; Texas v. United States, 292 U.S. 522, 78 L.Ed. 1402; Tri-State Transit Co. of Louisiana, Inc. v. Dixie Greyhound Lines, 197 Miss. 37, 19 So.2d 441; Tri-State Transit Co. of Louisiana, Inc. v. Gulf Transport Co., 201 Miss. 744, 29 So.2d 825; United States v. Lowden, 308 U.S. 225, 84 L.Ed. 208.
III. The proposed transaction is not consistent with the public interest. Campbell v. Tri-State Transit Co. of Louisiana, Inc., 196 Miss. 367, 17 So.2d 327; Dixie Greyhound Lines v. Miss. Public Service Comm., 190 Miss. 704, 200 So. 579, 1 So.2d 489.
IV. Interstate Commerce Commission decisions. Secs. 7640, 7641, Code 1942; Adkins — Purchase — Star Transit, Inc., 38 M.C.C. 240; Bowman — Purchase — Brown, 38 M.C.C. 783; Fish Transport Co., Inc. — Purchase — Aiello, 50 M.C.C. 729; Holloway — Purchase — Valley Truck Lines, Inc., 56 M.C.C. 441; Interboro Trucking Co. — Purchase — McDermott Estate, 56 M.C.C. 400; Kenosha Auto Transport Corp. — Purchase — Frey and Witt, 55 M.C.C. 76; Loo-Mac Freight Lines — Purchase — Gordons Transports, Inc., 55 M.C.C. 196; New York Central Securities Corp. v. United States, 287 U.S. 12, 53 S.Ct. 45, 77 L.Ed. 138; Pacific Intermountain Exp. Co. — Purchase — Keeshin Freight Lines, 57 M.C.C. 341; Pelletier Trucking Co. — Purchase — Saw Mill Supply, Inc., 57 M.C.C. 115; Sentle — Purchase — Great Lakes Motor Dispatch, Inc., 38 M.C.C. 445; Transcon Lines — Purchase — Anderson Motor Service Co., 50 M.C.C. 749.
V. Federal Court decisions. Folwell v. United States, 69 F. Supp. 71, affirmed per curiam, 330 U.S. 807, 67 S.Ct. 1087, 91 L.Ed. 1264; Herrin Transportation Co., Inc., et al. v. United States, 9 F.C.C. Para. 80, 822; Herrin Transportation Co. — Purchase — Mobile Express, Inc., 58 M.C.C. 59, 8 F.C.C. Para. 32, 229; Houff Transfer, Inc. v. United States, 105 F. Supp. 851; Rapid Transportation Co. v. United States, 91 F. Supp. 509; Shein v. United States, 102 F. Supp. 320, affirmed per curiam, 72 S.Ct. 1043, 343 U.S. 944, 96 L.Ed. 1349; Shein's Express — Purchase — Stillwell, 56 M.C.C. 711; Willett v. United States, 79 F. Supp. 854.
VI. Interpretation of phrase "consistent with the public interest" under contract carrier section of Motor Carrier Act. Secs. 7633, 7634, 7639, 7641, 7648, 7649; 49 U.S.C.A., Sec. 309(b); Arthur Anthony Lopes, Extension, 5 F.C.C. 437; C. D. Oil Co., Contract Carrier Application, 1 M.C.C. 329; Ingham Brokerage, Inc., Extension, 12 M.C.C. 607; Izadore Karzen, Contract Carrier Application, 31 M.C.C. 613; Louis Jagel and Louis A. Jagel, Extension, 5 F.C.C. 94, 44 M.C.C. 839.
VII. The burden of proof is upon the applicants before the Commission. Fleet Carrier Corporation — Lease — George F. Burnett Co., Inc., 50 M.C.C. 489; Shein v. United States, 102 F. Supp. 320, affirmed per curiam, 72 S.Ct. 1043, 343 U.S. 944, 96 L.Ed. 1349; Willett v. United States, 79 F. Supp. 854.
VIII. Commission erred in finding appellee Wolchansky fit and able properly to perform the proposed service. Sec. 7652, Code 1942.
IX. Absence of specific findings of fact makes commission order invalid. Baltimore Ohio R.R. Co. v. United States, 264 U.S. 258, 44 S.Ct. 317, 68 L.Ed. 667; Inland Motor Freight, et al. v. United States, 60 F. Supp. 520; Magee Truck Lines v. Bond, 190 Miss. 428, 200 So. 586.
X. The exceptions contained in the transfer sections of the Interstate Commerce Act are immaterial to the issues involved. Code of Federal Regulations, Vol. 49, Sec. 179.1(c); Sec. 7652, Code 1942; 49 U.S.C.A., Sec. 312(b); Stearn v. United States, 87 F. Supp. 596.
The issue here presented may be summarized as follows: Should motor carriers be permitted to traffic and trade in certificate rights, provided only that the purchasers or lessees involved be fit and able to operate? Or, should transfers be permitted only in those cases where the proposal would be of benefit to the public? We submit that the Legislature, in enacting the Motor Carrier Act, adopted the latter policy, and that, in approving the transfer here involved, the Public Service Commission flagrantly disregarded such policy.
Clearly, the burden of proof was upon the applicants before the Commission to show by a preponderance of the evidence that they come within the standards set forth in the statute. Here, the applicants made no attempt to meet this burden, insofar as proof of consistency with the public interest is concerned.
If the criterion "consistent with the public interest" has any meaning whatsoever, this case certainly must be reversed. To hold otherwise would mean that certificates of public convenience and necessity may be bought and sold, leased, or assigned, provided only the proposed transferees are fit and able to operate thereunder and to comply with the Commission's rules and regulations.
If this phrase as used in Sec. 7652, our transfer statute, is, in fact, meaningless, then, we must conclude, it is equally meaningless as used in Sec. 7649, the contract carrier section. If we adopt appellees' contentions, it leads us to the conclusion that contract carrier operating rights may be granted upon proof only that the applicant therefor is fit, willing and able to operate.
If "public interest," as used in our state statute, has direct relation to "adequacy of transportation service," as it does under the Federal Act, then the Public Service Commission, like the Interstate Commerce Commission, must be required to consider the factors that involve adequacy of existing service. Certainly, we cannot afford to have one rule followed by the Interstate Commerce Commission and a contrary rule followed by the Public Service Commission in their administration of identical statutory provisions. This is exactly the type of thing that the Legislature condemned in Sec. 7637(c) of the Code. It is the type of thing that this Court has condemned in all of the prior decisions involving appeals under the Motor Carrier Act. The dangers of such a situation become particularly apparent when we realize that a large number of motor carriers operate, at the same time, under both interstate and intrastate certificates. Frequently, interstate and intrastate traffic is hauled in the same vehicle at the same time. Under the ruling of the Public Service Commission in the case at bar, the same circumstances that would require denial of a proposed sale of interstate rights would justify approval of corresponding intrastate rights.
Wells, Thomas, Wells Smith, for appellee.
I. Preliminary statement.
II. Young and Chamberlain, transferors to appellee Wolchansky, own a valid and outstanding certificate of public convenience and necessity, which is a valuable property right. General Transportation Co., et al. v. United States, 65 F. Supp. 981; Sec. 7651, Code 1942; Quaker City Bus Co. — Purchase — Blackhawk Lines, 38 M.C.C. 603; Smith Brothers — Revocation of Certificate, 22 M.C.C. 524, 26 M.C.C. 219, and 33 M.C.C. 465; Teche Lines, Inc. v. Board of Supervisors of Forrest County, 165 Miss. 594, 142 So. 24.
III. Difference between Mississippi statutory requirements respecting issuance of new certificates of public convenience and necessity and such requirements respecting the transfer of existing certificates. Secs. 7640, 7641, 7642, 7652.
IV. The transaction proposed is in good faith. Sec. 7652, Code 1942.
V. The proposed purchaser, appellee Wolchansky herein, is fit and able properly to perform the transportation services authorized by such certificate and to comply with the rules, regulations and requirements of the Commission.
V. The transaction is otherwise consistent with the public interest.
(1) Preliminary remarks. Secs. 7640, 7641, 7642, 7652.
(2) Interstate Commerce Commission and Federal Court cases involving transfer of existing certificates. B. O.R.R. Co. v. United States, 264 U.S. 258, 44 S.Ct. 317; Bowman — Purchase — Brown, 38 M.C.C. 783; Campbell v. Tri-State Transit Co. of La., Inc., 196 Miss. 367, 17 So. 327; Dixie Greyhound Lines v. Miss. Public Service Commission, 190 Miss. 704, 200 So. 579, 1 So.2d 489; Gateway City Transfer Co., Inc. — Purchase — Minert, 15 M.C.C. 749; Houston North Texas Motor Freight Lines, Inc. — Purchase — Interstate Motor Freight Lines, Inc., MCF-14, 1 Fed. Carrier Cases, 187; Merchants Dispatch, Inc. — Purchase — Smathers Padfield, 25 M.C.C. 407; Sec. 7652, Code 1942; New York Central Securities Corp. v. United States, 287 U.S. 12, 53 S.Ct. 45, 77 L.Ed. 138; Spitzer — Purchase — Howe, 15 M.C.C. 331; Texas v. United States, 292 U.S. 522, 78 L.Ed. 1402; Transamerican Freight Lines, Inc. — Purchase — Harold D. Gorman, 5 M.C.C. 712; U.S.C.A. Title 49, Secs. 5 (2) (a), (b), (c), 5 par. 4(a), (b), 213 (a) (1); United States v. Lowden, 308 U.S. 225, 84 L.Ed. 208; Watson Bros. Transportation Co., Inc. — Purchase — West Coast Fast Freight, 57 M.C.C. 745.
(3) Applications for new contract carrier permits. Sec. 7649, Code 1942; Scott Bros. Inc., Collection and Delivery Service, 2 M.C.C. 155; U.S.C.A. Title 49, Sec. 309(b).
(4) Intrastate cases involving transfer of existing certificates. Blue Bus Co. v. Marshall, et al., 116 Ohio 116, 155 N.E. 644; Central Truck Lines, Inc., et al. v. Railroad Comm. of Florida, et al., 27 So.2d 658; Ramsey, et al. v. Public Utilities Comm. of Ohio, 115 Ohio 394, 154 N.E. 730; University City Transfer Co. v. Florida Railroad Comm., et al., 168 So. 413.
VI. Burden of proof. Merchants Dispatch, Inc. — Purchase — Smathers Padfield, 25 M.C.C. 407; Sec. 7652, Code 1942; U.S.C.A. Title 49, Sec. 5(2).
VII. Findings by the Mississippi Public Service Commission were sufficient. B. O.R.R. Co. v. United States, 264 U.S. 258, 44 S.Ct. 317; Inland Motor Freight, et al. v. United States, 60 F. Supp. 520; Magee Truck Lines v. Bond, 190 Miss. 428, 200 So. 586; U.S.C.A. Title 49, Secs. 5, 307.
By way of summary, all requirements of Sec. 7652, Code 1942, which is the only statute involved in the case at bar, has been satisfied, and the order of the circuit court of the First Judicial District of Hinds County, Mississippi, should be affirmed. There is no dispute as to the validity of the Certificate of Public Convenience and Necessity sought to be transferred in the case at bar, and said certificate is a valuable property right. Appellees Young and Chamberlain could conduct active operations under said certificate and expand their business as much as public demand for their services would indicate. Their certificate cannot be revoked or cancelled except in strict compliance with Sec. 7651, Code 1942.
There is a vast amount of difference between the requirements in the Mississippi Motor Carrier Act for the issuance of new certificates (Secs. 7640, 7641, 7642, Code 1942), and the requirements contained therein with reference to the transfer of existing certificates (Sec. 7652). The sections respecting the issuance of a new certificate require much more detailed information respecting existing transportation facilities and names of competitors of the applicant. Furthermore, under Sec. 7642, the Mississippi Public Service Commission is required to give consideration to existing facilities and other related factors. By way of contrast, Sec. 7652 has no such requirements in connection with the transfer of an existing certificate. Said Section 7652 simply requires that the Commission, at a hearing before it wherein an existing certificate is sought to be transferred, find that "the transaction proposed is in good faith, that the proposed assignee, lessee, purchaser, or transferee is fit and able properly to perform the transportation service authorized by such certificate or permit, and can comply with the rules, regulations and requirements of the Commission hereunder, and that the transaction is otherwise consistent with the public interest."
No question is raised by appellants as to the good faith of the transfer sought to be made in the case at bar.
There is ample evidence showing that the proposed assignee, appellee Wolchansky, is fit and able properly to perform the services authorized under the certificate in question. The tremendous opposition to the transfer of the certificate to appellee Wolchansky shows that other holders of similar certificates regard him as such a fit and able operator as that he will be a real competitor with whom to contend.
The transfer sought to be made in the case at bar is otherwise consistent with the public interest. It is true, as stated by opposing counsel, that our Mississippi Supreme Court will follow Federal Court decisions under the Interstate Commerce Act where such decisions are as to similar questions under sections in the Federal Act corresponding with particular sections of our Act. However, each Interstate Commerce case and Federal Court case must be carefully analyzed to see that it is in fact a proceeding under a section of the Federal Act which corresponds with the section of our State Act which is before our Supreme Court. Opposing counsel cited numerous Interstate Commerce Commission and Federal Court cases involving proceedings under Sec. 5, Title 49, U.S.C.A. We have heretofore pointed out and quoted the various amendments to said Sec. 5 in connection with a discussion of the cases decided under said section as amended from time to time. We have pointed out that the original Sec. 5 as it appeared in the Transportation Act of 1920 gave no specific criteria for the Interstate Commerce Commission to be guided by, except a requirement that the Commission find that the proposed transfer "will be in the public interest." Likewise, we have pointed out that said Sec. 5 was amended in 1933 so as to require that the Commission find that the proposed transfer "will promote the public interest." Finally, in connection with said Sec. 5, we quoted said section as amended in 1940 and as it now is, and showed thereby that the Interstate Commerce Commission is required under Sec. 5(2), as amended in 1940, to consider adequacy of existing service and other related factors. Opposing counsel conceded, and so stated in their brief, that Sec. 7652, Code 1942, is the approximate counterpart of Sec. 213, Title 49, U.S.C.A., which was in effect from 1935 to 1940. However, appellants failed to cite a single Sec. 213 case to construe the meaning of the clause in question — "and that the transaction is otherwise consistent with the public interest." Cases decided under said Sec. 213 do not require separate, affirmative proof of consistency with the public interest, but interpret the meaning of the phrase "consistent with the public interest," as used in said Sec. 213, to mean "not contradictory or hostile to the public interest."
Appellants cited several cases involving applications for the issuance of new contract carrier permits, and called the Court's attention to those cases to aid the Court in determining the meaning of the clause "and that the transaction is otherwise consistent with the public interest," as that clause is used in our Sec. 7652. Those cases, of course, involve the creation of new rights — rights not already in existence. Furthermore, the cases cited must be examined with respect to whether or not the Commission in each case was in fact treating it as though it were an application for the issuance of a new Certificate of Public Convenience and Necessity.
There are several cases involving the transfer of existing intrastate Certificates of Public Convenience and Necessity, all of which hold that there is no burden upon the applicants in such cases to show "public convenience and necessity" and that the Public Service Commission should not inquire, in such proceedings, into the adequacy of existing transportation facilities.
The burden of proof is upon appellees, but this burden does not encompass a requirement that appellees be required to present separate, affirmative evidence that the proposed transfer is consistent with the public interest. Appellees herein fully met the burden of proof which is upon applicants seeking a transfer of existing certificates.
Assuming that our interpretation of the clause, "and that the transaction is otherwise consistent with the public interest," as used in Sec. 7652, Code 1942, is correct, the Mississippi Public Service Commission was not required to make detailed, specific findings of facts such as would be required in connection with a hearing upon an application for the issuance of a new certificate.
Appellee, Howard Wolchansky, applied to the Public Service Commission for authority to purchase a certificate of public convenience and necessity from Young and Chamberlain for intrastate transportation between all points and places in Mississippi of household goods, furniture, fixtures, etc., and any article requiring specialized handling and equipment usually employed in moving household goods.
Due notice was given and a public hearing had at which the appellants herein appeared and protested against approval of the transfer. The Commission entered an order authorizing the sale and transfer of Young and Chamberlain's certificate and on appeal the circuit court affirmed that action and from the judgment of the circuit court this appeal is prosecuted.
It must be noted at the outset that this proceeding is not governed by the law relating to the granting of a new certificate of public convenience and necessity but is controlled by Section 7652, Code of 1942, the applicable portion of which here involved is as follows: "If, after such hearing the Commission finds that the transaction proposed is in good faith, that the proposed assignee, lessee, purchaser or transferee is fit and able properly to perform the transportation services authorized by such certificate or permit and to comply with the rules, regulations and requirements of the Commission hereunder, and that the transaction is otherwise consistent with the public interest" the Commission may approve the sale and transfer.
In its order authorizing the transfer of the certificate the Commission made all the findings set out in the above quotation from the statute. The evidence shows that the proposed transfer is in good faith and that appellee is fit and able to properly perform the transportation services authorized by the certificate and to comply with the rules, regulations and requirements of the Commission, and appellants do not seriously question the sufficiency of the evidence to support such findings. Their main argument is directed to the contention that there is no evidence to show that such transfer would be "consistent with the public interest" for which reason they ask that we reverse the order of the Commission and deny Wolchansky's application for authority to purchase the certificate.
Appellants argue that decisions affecting interstate carriers are controlling here since there is no Mississippi decision on the precise point presented. They cite numerous cases dealing with "public interest" but the phrase with which we are here concerned is "consistent with public interest." Apparently the first time that "consistent with public interest" appeared in the federal statutes was in Section 213 (2) 1 of Chapter 498, Vol. 49, Part 1, United States Statutes at Large, 74th Congress, approved August 9, 1935, relating to acquisition of motor carrier rights, and a transfer of such rights was therein authorized if, after a hearing, the Interstate Commerce Commission "finds that the transaction proposed will be consistent with the public interest." That was the sole criterion for authorizing a sale and transfer of a permit. The quoted provision was changed in 1940 by the addition of several other requisite findings.
The Mississippi statute is not an exact counterpart of the federal statute but does use the phrase "consistent with the public interest" in addition to the other requirements above noted.
(Hn 1) Appellants showed that Young and Chamberlain have not operated under their certificate since 1949 but the fact remains that it is still valid and outstanding and that no proceeding for its revocation has ever been instituted as might have been done under Section 7651, Code of 1942. Since Young and Chamberlain's certificate has not been revoked it remains an outstanding and valid certificate. This conclusion is in accord with decisions of the Interstate Commerce Commission. Quaker City Bus Company — Purchase — Blackhawk Lines, 38 M.C.C. 603.
(Hn 2) Appellants offered proof to the effect that they have ample facilities for handling all of the intrastate moving for which there is a demand in Mississippi, that they have encountered no competition from Young and Chamberlain, and that competition from appellee would injure their business. They also offered proof that it was necessary, or at least desirable, for carriers by motor vehicle to have available space for storage, and they argue that appellee did not testify whether he would or would not provide such storage space for his operations. He did testify, however, that he had had fifteen years experience in the moving business, that he has certificates of convenience and necessity for interstate operations in eight southern states, three western states and as far east as New York; that he has the facilities, equipment, business and the "know-how" to properly operate under the Mississippi Public Service Commission the certificate which he proposed to acquire from Young and Chamberlain. He also testified that he has not yet determined whether he would open an office in Mississippi but that if the Commission makes such a requirement he would open an office immediately. In short, it appears that Young and Chamberlain have been rendering no service to the public in the past two or three years and that appellee will render such service. We are impressed with the idea that since appellee is experienced in this type of business and is fit and financially able to perform the services authorized by the certificate and that he is willing to comply with the rules, regulations and requirements of the Commission, the conclusion is inescapable from this evidence that his acquisition of the certificate would result in improved service to the public and is therefore "consistent with the public interest." We are not concerned with the interest of other carriers but with the public interest. Our view is amply supported by decisions of the Interstate Commerce Commission dealing with the phrase "consistent with the public interest" as used in the above mentioned Section 213 of the federal statute.
In Transamerican Freight Lines, Inc. — Purchase — Harold D. Gorman, 5 M.C.C. 712, decided in 1938 under the aforesaid Section 213, the Interstate Commerce Commission said: "Obviously the new through service could impair the revenues of protestants only to the extent that it might be used by the public in preference to presently available service. The issue is whether transfer to applicant of vendor's statutory operating rights is consistent with the public interest, and not whether it is required by public convenience and necessity. There is nothing inconsistent with the public interest in providing the public with improved service, even if it should have an unfavorable effect on the revenues of protestants. It must be borne in mind that no creation of operating rights is here proposed, but only the transfer of existing rights to new ownership. A change in ownership which will enable existing rights to be used in a way that will produce better service can hardly be found to be inconsistent with public interest."
The above was quoted with approval in Gateway City Transfer Co., Inc. — Purchase — J.G. Minert, decided in 1939 under said Section 213, 15 M.C.C. 749, and also in Richard G. Spitzer — Purchase — H. Howe, decided in 1938 under said Section 213, 15 M.C.C. 331.
In Houston North Texas Motor Freight Lines, Inc. — Purchase — Interstate Motor Freight Lines, Inc., decided in 1938 under said Section 213, 1 F.C.C. 187, it is said: "Protestants also argue that other rail and motor carriers already furnish adequate through scheduled service between these points, and that there is no need for an additional and competitive service by applicant, which should only be authorized upon a showing of public convenience and necessity. These arguments are untenable in a Section 213 proceeding."
Affirmed.
Roberds, P.J., and Lee, Holmes and Arrington, JJ., concur.