Summary
In New York Cent. R. Co. v. Public Utilities Comm. 121 Ohio St. 588, 170 N.E. 574, a motor transportation operation similar to that in the instant case was held to be a common carrier service under a statute similar to L. 1925, c. 185.
Summary of this case from State and R. R. W. H. Comm. v. R.I. M. T. Co.Opinion
No. 21981
Decided February 5, 1930.
Public Utilities Commission — Railroads — Jurisdiction to determine whether within motor transportation act — Railroad operating motor vehicles a motor transportation company, when — Operations as private contract carrier, question of fact — Order to cease operating until certificate of public convenience and necessity obtained — Not void as to intrastate traffic because part of traffic interstate — Order not void as impairing contract between railroad and trucking company.
1. Under Sections 614-2 and 614-84, General Code, (111 O. L., 513), the Public Utilities Commission has jurisdiction to determine whether a common carrier railroad company, engaged in the business of carrying and transporting property for hire in motor-propelled vehicles over the public highways of Ohio, is a motor transportation company subject to the provisions of the motor transportation act.
2. Where a common carrier railroad company owns, controls, operates or manages any motor-propelled vehicle not usually operated on or over rails, used in the business of transportation of persons or property or both as a common carrier for hire over any public highway in this state, this constitutes such railroad company a motor transportation company.
3. Whether or not such railroad company is engaged as a motor transportation company or a private contract carrier is a question of fact.
4. An order requiring such carrier to cease and desist from maintaining and operating, or attempting to maintain and operate, such motor transportation company service without first obtaining from the Public Utilities Commission a certificate declaring that public convenience and necessity require such operation, is not void as to intrastate traffic because of the fact that part of the traffic thus maintained and operated is an interstate traffic.
5. An order which requires a common carrier railroad to cease and desist from such traffic is not void upon the ground that it impairs the obligation of a contract between such common carrier railroad and a trucking company which owns the trucks employed in such motor transportation service.
ERROR to the Public Utilities Commission.
This case arises upon a complaint filed with the Public Utilities Commission by the Ohio Association of Commercial Haulers against the New York Central Railroad Company, wherein it was alleged that:
"Defendant is now and has been for a long period of time operating illegally and unlawfully as a motor transportation company in Ohio, in that it is now and has long been engaged in the business of carrying property for hire in motor propelled vehicles over the public highways of the state of Ohio, to wit: Between the municipalities of Toledo, Fremont, Elmore, Lindsay, Clyde, Bellevue, Norwalk, Monroeville, Elyria, Cleveland, Oberlin, and each of them.
"4. That defendant is not the holder of a certificate of public convenience and necessity from the Public Utilities Commission of Ohio."
The complaint prayed that the Public Utilities Commission order the New York Central Railroad Company to cease such operation, and that other orders be made such as are proper in the premises.
The complaint came on for hearing upon the merits, and at the hearing testimony was adduced, practically without contradiction, showing that upon April 20, 1925, the railroad company made a contract with a company known as the A. B. Peek Company, under which the Peek Company agreed to transport from station to station between Cleveland and Toledo all such freight as the New York Central Railroad Company might deliver to such company. The evidence further showed that following the execution of the contract, and in operation thereunder, the New York Central Railroad Company delivered freight to the Peek Company at various of its stations between Cleveland and Toledo, which the Peek Company thereupon transported in trucks upon the public highways between such stations. The trucks and trailers used for this operation are owned by the Peek Company. The freight thus carried was transported under bills of lading and regular freight waybills such as are used by the railroad in all other freight operations.
Under the contract for such transportation, the Peek Company received a fixed compensation for such haulage, at the rate of 15 cents per hundredweight, with a guaranty of $30 per day, i. e., $25 per truck and $5 per trailer, for the five regular trucks and four trailers used between Cleveland and Toledo, with provision for a flat rate of $5 per day for each additional trailer and $15 per day for each additional truck used.
The contract further provided that the Peek Company should be responsible for all loss or damage to freight in its charge or while being handled by it, and should assume all liability for the payment of damages on account of injuries or death to its employees or to others, or damages to property by reason of the performance of the services required by the agreement, with the further provision that the agreement should be terminable by either party on 30 days' written notice; the railroad company, however, to have the right to terminate the agreement at any time if the service performed should in its judgment be deemed unsatisfactory.
The agreement further provided that the contractor should have no right to assign the contract and that it should not use its trucks or any of them in performing any trucking service for any other person or corporation.
The evidence showed that of all freight hauled, 74.4 per cent. of the number of shipments was interstate and about 70 per cent. of pounds weight was also interstate.
Upon August 22, 1929, the commission entered an order in which it notified and required the New York Central Railroad Company directly, or through the A. B. Peek Company, or any other agent not certificated by the commission, "forthwith to cease and desist from maintaining and operating, or attempting to maintain and operate" such unlawful motor transportation company service.
The material part of the finding of the commission is as follows:
"The respondent is a corporation engaged in the operation of a railroad. It accepts and transports freight for the public generally and indiscriminately as a common carrier at the rates specified in its tariffs on file with this Commission. Since April 18, 1925, less than carload freight thus accepted by respondent has been transported between certain points in Ohio in motor propelled vehicles. Instead of transporting such less than carload freight by rail this freight, between certain points in Ohio, is moved in motor propelled vehicles over the public highways. Respondent does not have a certificate of public convenience and necessity for such operation and does not pay the special tax exacted by the State for such use of the highways.
"Five motor vehicles and five trailers daily and one additional motor vehicle and one additional trailer when required are used between respondent's stations on its Norwalk division between Cleveland and Toledo, Ohio, both inclusive, and likewise between Toledo, Ohio and Danbury, Ohio, on its main line.
"The respondent accepts such freight and transports it under its bills of lading and way bills, being the uniform bills of lading and way bills in general use by the respondent and other railroad companies.
"The motor vehicles used in these operations are owned by The A. B. Peek Company and used in the transportation of this freight under and by virtue of the contract or contracts with The A. B. Peek Company. * * *
"In accordance with the terms of the contracts the railroad company determines the time at which the trucks shall run, the route over which they shall travel and generally supervises the operation of the trucks just as they would the operation of trains. The A. B. Peek Company, as provided in the contracts, does not haul any other freight. * * *
"So far as the contract or contracts between The A. B. Peek Company and the respondent are concerned they speak for themselves. By these contracts the railroad company has secured to itself the exclusive use of these motor propelled vehicles in its common carrier business. While it does not own the trucks and trailers it does completely control their operation. It directs the property to be conveyed by them; it determines the times when and the routes over which the trucks shall travel; it retains complete supervision of their operation; the property transported is at all times under the control of the respondent; the transportation is a consummation of the contracts between the respondent and the shippers; the property is handled through the use of bills of lading and waybills exactly as any other freight which moves upon the respondent's road. In short, the respondent has made this truck operation a part of its common carrier business."
Further facts are stated in the opinion.
Mr. C.C. Handy and Mr. C.T. Lewis, Jr., for plaintiff in error.
Mr. Gilbert Bettman, attorney general, Mr. T.J. Herbert, Mr. E.J. Shover and Mr. A.M. Calland, for defendant in error.
The plaintiff in error contends that the order of the commission is unlawful and unreasonable for the following reasons:
"1. The commission was without jurisdiction to hear and determine said complaint, for the following reasons:
"(a) The complainant was without standing and the complaint was unauthorized.
"(b) The complaint presented no issue for the determination of the commission.
"(c) If any issue was presented, it was legal or judicial in character.
"2. Defendant railroad company did not violate the motor transportation law.
"3. That the order was void in that it required the respondent to cease and desist from the haulage of interstate traffic.
"4. That it was void in that it impaired the obligation of the contract between plaintiff in error and The A. B. Peek Company, and invaded constitutional provisions both Federal and State."
Proceeding to consider whether the commission was without jurisdiction to hear and determine such complaint, the court overrules this objection for the reason that the statute specifically vests such jurisdiction in the Public Utilities Commission. The case was tried under the statute as it was enacted in 111 Ohio Laws, 513. The amendments in 113 Ohio Laws, 482, do not affect this particular controversy.
Under Section 614-2, General Code, the Legislature provided that any company or corporation, "when engaged in the business of carrying and transporting persons or property, or both as a common carrier, for hire, in motor propelled vehicles of any kind whatsoever, * * * over any public street, road or highway in this state, except as otherwise provided in Section 614-84, is a motor transportation company." The exception provided in Section 614-84 includes private contract carriers and companies and corporations which are operated exclusively within the territorial limits of a corporation, or within such limits and the territorial limits of municipal corporations immediately contiguous thereto, and also operation by taxicabs, hotel busses, school busses or sight-seeing busses. The New York Central Railroad Company does not come within any of these exceptions.
Section 614-84, par. c, provides that whether or not the operator or carrier is engaged as a motor transportation company, or as a private contract carrier, shall be a question of fact, and the finding of the commission thereon shall be a final order which may be reviewed as provided in Section 614-89, General Code.
This proceeding, therefore, is not a proceeding to decide whether a private contract operation by the Peek Company has become a common carriage operation. The sole question presented is whether the New York Central Railroad Company constitutes a motor transportation company because of its common carriage operation in motor-propelled vehicles upon the public highways of the state. This being the case, the complainant has standing, and the complaint is authorized, for the statute which provides for the institution of complaints against motor transportation companies is not limited, but applies to any company or corporation.
The issue presented for the determination of the commission was whether the New York Central Railroad Company, at the time charged in the complaint, owned, controlled, operated, or managed any motor-propelled vehicle used in the business of transportation of persons or property, or both, as a common carrier for hire, over any public highway in this state.
It was conceded that the transportation was over the public highways. It was conceded that the transportation was transportation of property in common carriage for hire. The only issue of fact was whether the New York Central Railroad Company owned, controlled, operated, or managed the trucks used in the transportation of such freight.
It is conceded by the Public Utilities Commission that the railroad company does not own, nor operate, such motor-propelled vehicles; but it was found by the commission specifically that the railroad does control and manage the vehicles.
Hence there was an issue presented for the determination of the commission which issue was by it decided.
The railroad company urges that whatever issue was presented was legal or judicial in character, and that the commission had no jurisdiction to make a determination upon that issue. Like many determinations of administrative boards, the decision of the commission involved certain legal aspects; but that fact does not necessarily make the issue presented judicial rather than administrative, nor, necessarily, does it deprive the commission of jurisdiction. The statute specifically provides that whether or not the operator or carrier is engaged as a motor transportation company or a private contract carrier shall be a question of fact. Certainly the test of private contract carriage laid down in the case of Hissem v. Guran, 112 Ohio St. 59, 146 N.E. 808, made such question one of fact. It is not contended that the Legislature does not have the power to declare this question to be a question of fact, and since it was the sole question determined by the commission, we are compelled to overrule both this objection and also the entire objection as to jurisdiction.
Proceeding to consider whether the defendant railroad company in this operation violates the Motor Transportation Law, we also decide that the Public Utilities Commission was justified in its finding upon the facts. It is conceded by the railroad company that, while it does not own the trucks and trailers, it selects the property which shall be conveyed in the motor vehicles, it picks out the routes which shall be traveled, and indicates the times and schedules under which the vehicles shall travel. Complete supervision of the operation is in the New York Central Railroad Company. The trucks are used exclusively for the railroad, and at every minute of the time of carriage the property transported is under the railroad's control, being handled through the use of bills of lading and waybills, exactly as all other classes of freight. By the use of these trucks the New York Central Railroad Company cannot and has not divested the carriage of the features of a common carrier transaction. It still holds itself out to the public as a common carrier of this freight, which it transports upon motor vehicles. It receives this freight in exactly the same way at its freight stations that all other freight transported by its railroad is received. As between the public and the New York Central Railroad Company the transaction differs in no essential from transportation by rail. Hence the New York Central Railroad Company under this record is not only a common carrier for hire, but with reference to this particular freight it is a common carrier for hire, and the contract of carriage never ceases to be a contract of common carriage.
It is further urged that the order was void in that it required the respondent to cease and desist from the haulage of interstate traffic. We do not so read the order. The order compels the New York Central Railroad Company to comply with the statutes with reference to certificate and taxes if it transports its freight by motor vehicles. It has been held by this court that while the states may not shut out from interstate traffic motor transportation companies which operate in such traffic, they may require such operators to obtain certificates, pay taxes for the use of the highways, carry insurance, and comply with other police regulations in so far as the same do not involve a direct burden upon interstate commerce. Cannon Ball Transportation Co. v. Public Utilities Commission, 113 Ohio St. 565, 149 N.E. 713. The syllabus of this case reads as follows:
"1. Sections 614-86 to 614-102, inclusive, of the General Code of Ohio, are designed to regulate motor transportation, governing all motor vehicles operating over the highways of the state, but do not authorize the Public Utilities Commission to exclude motor transportation companies operating in interstate traffic from such highways.
"2. Motor transportation companies operating in interstate traffic are subject to the provisions of said sections and the regulations therein provided may be applied to all interstate operators, except in so far as such application would involve a direct burden upon interstate commerce.
"3. A condition in a certificate of convenience and necessity granted to an interstate operation that passengers may not be received within the state of Ohio whose destinations are also within the state of Ohio is not an unreasonable condition, and does not operate as a direct burden upon interstate commerce."
The same principle has been enunciated by the Supreme Court of the United States: Clark v. Poor, 274 U.S. 554, 47 S.Ct., 702, 71 L.Ed., 1199; Sprout v. City of South Bend, 277 U.S. 163, 48 S.Ct., 502, 72 L.Ed., 833, 62 A. L. R., 45; Interstate Busses Corp. v. Holyoke Street Ry. Co., 273 U.S. 45, 47 S.Ct., 298, 71 L.Ed., 530. In the opinion in the Clark case, at page 556 of 274 U.S. 47 S.Ct., 703, the court says:
"The plaintiffs claim that, as applied to them, the Act violates the commerce clause of the Federal Constitution. They insist that, as they are engaged exclusively in interstate commerce, they are not subject to regulation by the State; that it is without power to require that before using its highways they apply for and obtain a certificate; and that it is also without power to impose, in addition to the annual license fee demanded of all persons using automobiles on the highways, a tax upon them, under Section 614-94, for the maintenance and repair of the highways and for the administration and enforcement of the laws governing the use of the same. The contrary is settled. The highways are public property. Users of them, although engaged exclusively in interstate commerce, are subject to regulation by the State to ensure safety and convenience and the conservation of the highways. Morris v. Duby (No. 372), 274 U.S. 135, 47 S.Ct., 548, 71 L.Ed., 966 * * * Hess v. Pawloski (No. 263), 274 U.S. 352, 47 S.Ct., 632, 71 L.Ed., 1091 * * *. Users of them, although engaged exclusively in interstate commerce, may be required to contribute to their cost and upkeep. Common carriers for hire, who make the highways their place of business, may properly be charged an extra tax for such use. Hendrick v. Maryland, 235 U.S. 610, 35 S.Ct., 140, 59 L.Ed., 385; Kane v. New Jersey, 242 U.S. 160, 37 S.Ct., 30, 61 L.Ed., 222. Compare Packard v. Banton, 264 U.S. 140, 144, 44 S.Ct., 257, 68 L. Ed., 596."
In Interstate Busses Corp. v. Holyoke Street By. Co., supra, the Massachusetts law required a license and a certificate of public convenience and necessity for operation of motor vehicles on public highways for intrastate carriage of passengers for hire. The Supreme Court of the United States held that the law was not shown in that particular case to work a direct interference with or burden upon the interstate business of the bus company, which carries both interstate and intrastate passengers. It decided that the state has power reasonably to regulate and control the use of its public highways in the public interest, not directly burdening or interfering with interstate commerce, and held that the burden was upon the plaintiff to prove that the enforcement of the act would prejudice its interstate passenger business.
It is further urged that the ruling of the Public Utilities Commission impairs the obligation of the contract between the railroad company and the Peek Company and invades constitutional provisions. No specific authorities upon these points are given, and indeed could not be found. The courts have never held that a contract between private parties which would permit the evasion of a state statute will protect those parties from the operation of state law upon the ground of interference with the obligation of contracts. The statute itself is read into and becomes a part of the contract.
It is urged that this holding runs counter to the decision in Motor Freight, Inc., v. Public Utilities Commission, 120 Ohio St. 1, 165 N.E. 355. Certain pronouncements in that decision squarely support the holding here, for in the second paragraph of the syllabus it was declared:
"By the provisions of Sections 614-2 and 614-84, General Code, only a 'motor transportation company' as defined therein is subject to public regulation; such definition requires that the transportation company must own, control, manage, or operate the motor vehicles used in transportation."
The facts in that case are squarely distinguishable from the facts in this case, and the pronouncement of law as to control is exactly the same. In that case the only testimony in the case established that the Motor Freight Company did not own, control, operate, or manage any motor propelled vehicles. Moreover, the third paragraph of the syllabus and the statement of facts show that in that case the carrier did not hold itself out as willing to serve the public indiscriminately. The truck owners furnished their own drivers, and the drivers were not in any way subject to the orders of the respondent. No particular route was designated. It is to be observed that in the Motor Freight case the transportation was purely interstate. No intrastate question was involved. Moreover, a number of private truck owners were employed to do the haulage, while here only one truck owner was employed. All of the truck owners in the Motor Freight case were free to haul merchandise for others, while here the Peek Company hauled solely for the railroad and was so obligated under its contract with the railroad.
Under the sharp differentiation of the facts, we conclude that the doctrine of Motor Freight, Inc., v. Public Utilities Commission is in no way infringed by the holding in this case.
Order affirmed.
MARSHALL, C.J., KINKADE, ROBINSON, JONES, MATTHIAS and DAY, JJ., concur.