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Erie Rd. Co. v. Pub. Util. Comm

Supreme Court of Ohio
Mar 8, 1933
184 N.E. 849 (Ohio 1933)

Opinion

No. 23815

Decided March 8, 1933.

Public Utilities Commission — Error proceedings — Supreme Court considers all questions, including weight of evidence, when — Motor transportation companies — Revocation of certificate — Repeated and flagrant law violations — Error to consider bankruptcy trustee's application to transfer certificate.

1. In proceedings in error to the Public Utilities Commission of Ohio this court is required to pass upon all questions disclosed by the record, including the weight of the evidence.

2. In determining whether the conduct of the carrier has been such as to warrant a revocation of its certificate it is prejudicial error for the commission to consider the application of a subsequently appointed trustee in bankruptcy for leave to transfer the certificate as an asset of the bankrupt estate.

ERROR to the Public Utilities Commission.

All five plaintiffs in error are common carriers who filed complaints with the defendant in error asking that it revoke certificate No. 303 held by The Patton Motor Trucking Company, a corporation. The two grounds upon which the revocation is sought are that the respondent has violated the motor transportation laws of Ohio and also the terms of its certificate.

On March 18, 1932, defendant in error issued the following interlocutory order:

"This day after full hearing, due notice of the time and place of which was given to all parties in interest, this matter came on for consideration upon the complaint, the answer of the defendant, and the testimony and exhibits offered and introduced in evidence upon such hearing.

"The commission, being fully advised in the premises, finds:

"That the defendant, The George Patton Trucking Company is the holder of Certificate of Public Convenience and Necessity No. 303, which authorizes the operation of a motor transportation company, carrying property as a common carrier upon call, upon and over irregular routes to and from Akron, Ohio, in intrastate service, and Certificate No. 3021, which authorizes the operation of a motor transportation company carrying property, as a common carrier, in interstate commerce only, upon and over a regular route extending between the Ohio-Pennsylvania state line, near East Palestine, or Lowellville, and the Ohio-Michigan state line near Toledo, via Youngstown, Warren, Ravenna, Salem, Canton, Akron, Medina, Cleveland, Norwalk, Fremont, Toledo and other intermediate points;

"That the defendant on May 18th, 1931, in proceeding No. 6693, among other things, was formerly ordered by this Commission:

" 'To forthwith cease engaging in the practice of soliciting or accepting freight, the movement of which is inconsistent with the terms of Certificates 303 and 3021; to forthwith cease transporting property within Ohio at rates less than or different from the tariff rates voluntarily fixed in the schedules filed with this Commission; to establish a system of accounts and adequate records and charge to a specific certificate each movement of freight; to cease the regular employment of equipment not listed with or authorized to be used by this Commission and hereafter report promptly the use of equipment in cases of emergency or unusual temporary demands, such report to be accompanied by the proper fee.'

"That the defendant has failed and neglected to comply with the said provisions of said order; and

"That subsequent to said May 18th, 1931, the defendant established terminal facilities and branch offices in various cities in the state of Ohio for the purpose of maintaining regular service between points in Ohio without first obtaining from this Commission authority to maintain and operate such service.

"The Commission, however, considering the recent reorganization of the managerial and operating departments of the defendant, the extended period in the past during which the defendant has provided and furnished transportation service for the public, the serious inconvenience which would be imposed upon that part of the public now being served by the defendant, and the representations and assurances of the defendant and its new manager that all services heretofore performed in contravention of the terms of Certificates 303 and 3021 will be immediately discontinued and all directions of the Commission hereafter strictly observed, as well as its assurance that in the future it will refrain from providing or attempting to provide any service except such as authorized by the terms of said Certificates 303 and 3021, is of the opinion that the final action hereof should be deferred until May 16th, 1932, at which time a searching inquiry into the business of the defendant will be made and a final order entered. It is, therefore,

"Ordered, That said The George Patton Motor Trucking Company, be, and hereby it is notified, directed and required forthwith to make its operations lawful in accordance with the foregoing provisions of the order in proceeding No. 6693, of May 18th, 1931, to forthwith abandon all terminal facilities, contacts, and contracts at points other than Akron or at points along the regular route described in certificate No. 3021, to prepare and forward weekly to this Commission, until further notice, a complete statement of equipment used, shipments received and transported, and definite information as to what has been done to comply with the order of this Commission. It is, further,

"Ordered, That further hearing in this proceeding be, and hereby it is assigned for Monday, May 16th, 1932, at ten o'clock a. m., Eastern Standard Time, at the hearing room of this Commission, in the State Office Building, Columbus, Ohio."

Then on September 9, 1932, the following final order was made:

"This day after further hearing, this matter came on for further consideration upon the complaint, the answer of the defendant, and the testimony and exhibits offered and introduced in evidence upon all hearings in this matter, together with the interlocutory order made and entered herein May 16th, 1932.

"Following the second hearing of this matter on May 16th, 1932, the financial condition of The George Patton Motor Trucking Company caused the First Central Trust Company of Akron to petition the Court of Common Pleas of Summit County, Ohio, for an order appointing a receiver for the defendant. A receiver was appointed with full power to conduct and operate the business and in the discharge of his duties did attempt to operate for a short period of time. All attempts to operate at a profit and to discharge obligations proved unsuccessful and business terminated.

"Shortly thereafter a trustee in bankruptcy was appointed by the District Court of the United States for the Northern District of Ohio, Eastern Division. The trustee in bankruptcy never attempted to resume operations, but now has pending before this Commission applications seeking authority to transfer Certificates 303 and 3021. These applications will not be heard until this order becomes final.

"The Commission, coming now to finally determine this matter in view of the facts herein developed, finds:

"That George Patton, as an individual and as President of The George Patton Motor Trucking Company, was personally responsible for the operating practices found by the Commission in the interlocutory order issued March 18th, 1932, to be contrary to the terms of Certificates 303 and 3021;

"That services under neither of these Certificates is now being furnished and that no attempt, since the first attempt of the receiver, has been made to operate under the terms of said Certificates;

"That the present trustee in bankruptcy has an opportunity to dispose of these Certificates for a consideration and has filed applications asking the consent of this Commission to transfer them;

"That the company desiring to acquire these certificates is represented to be deserving and qualified although this has not been finally demonstrated; and

"That the State of Ohio will benefit if these certificates are not revoked but are permitted to be acquired by a purchaser who will furnish service only in accordance with the terms of said Certificates and in accordance with the rules and regulations of the Commission.

"It is, therefore, "Ordered, That the complaint be dismissed."

Later an application for rehearing was filed and denied.

Plaintiffs in error are now in this court seeking a reversal of the foregoing finding and order.

Messrs. Wilson Rector, Mr. D.H. Armstrong, Messrs. Martin Corry, Mr. James W. Huffman, Mr. Harry C. Weaver and Mr. C.T. Lewis, Jr., for plaintiffs in error.

Mr. John W. Bricker, attorney general, and Mr. Thomas J. Herbert, for defendant in error.


Two assignments of error are urged. The first is that "the finding and order of the Commission are unreasonable and unlawful in that they are against the manifest weight of the evidence."

In considering this assignment of error it is unnecessary to indulge in an extended discussion of the evidence. It is sufficient to observe that the findings of the Commission and the transcript of the evidence both show repeated and flagrant violations of the motor transportation laws of Ohio and also of the terms of respondent's certificate. Had these violations — more than one hundred in number — been occasional and minor, there might have been some basis for not disturbing the finding and order of the Commission; but the record conclusively shows a settled course of conduct based upon an utter flouting of both the motor transportation laws and the terms of the certificate. True, the commission found that George Patton as an individual and as president of the respondent was personally responsible for the operating practices mentioned in the interlocutory order; but, even if the correctness of this finding were conceded, it could not serve as a defense in this case, inasmuch as Patton owned the controlling interest in the stock of the corporation and was in full charge of the company's operations. Under such circumstances this court has no alternative but to reverse the finding and order of the commission on the ground that they are unreasonable and unlawful because manifestly against the weight of the evidence.

In his opinion in the case of Hocking Valley Ry. Co. v. Public Utilities Commission, 100 Ohio St. 321, at page 326, 126 N.E. 397, Judge Johnson used this language: "As is well known, this court does not pass upon the weight of evidence in proceedings before it, where that matter has been determined in courts below. But under the new procedure this is the first court to which the proceeding is brought, and the duty is imposed upon us to pass upon all questions disclosed by the record, including the weight of the evidence."

The second assignment of error is that the finding and order of the commission are contrary to law.

It seems that after the second hearing on May 16, 1932, a receiver was appointed by the Court of Common Pleas of Summit County to take charge of the respondent's business. Shortly thereafter a trustee in bankruptcy was appointed in federal court to administer the assets of the company. This trustee filed with the commission an application for authority to transfer the certificate in question as an asset of the bankrupt estate. The commission recognized this application, and used it as a basis for its final order, although no further evidence was introduced. This was prejudicial error inasmuch as the only question properly before the commission was whether the conduct of the respondent in the operation of its motor-trucking business had been such as to warrant a revocation of the certificate. Neither the application itself nor evidence relating to it could have been either relevant or material in deciding this issue.

The finding and order of the commission are reversed and the cause remanded.

Order reversed and cause remanded.

DAY, ALLEN, STEPHENSON, JONES and MATTHIAS, JJ., concur.

KINKADE, J., not participating.


Summaries of

Erie Rd. Co. v. Pub. Util. Comm

Supreme Court of Ohio
Mar 8, 1933
184 N.E. 849 (Ohio 1933)
Case details for

Erie Rd. Co. v. Pub. Util. Comm

Case Details

Full title:ERIE RD. CO. ET AL. v. PUBLIC UTILITIES COMMISSION OF OHIO

Court:Supreme Court of Ohio

Date published: Mar 8, 1933

Citations

184 N.E. 849 (Ohio 1933)
184 N.E. 849

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