Opinion
Nos. 18787 and 18853
Decided June 9, 1925.
Public Utilities Commission — Motor transportation companies — Certificate of convenience and necessity a revokable license — Certificates issued upon affidavit or application may be changed, when — Certificate holder entitled to notice and hearing — Moot question — Certificate changed by commission while error proceedings pending.
1. A certificate of convenience and necessity issued to a motor transportation company by the Public Utilities Commission is a revokable license, which confers no property rights upon the holder thereof, and, for good cause shown, the same may at any time be revoked, altered, or amended by the Commission.
2. Such right to revoke, alter, or amend applies equally to a certificate issued by virtue of an affidavit filed by motor transportation companies operating on or before April 28, 1923, and a certificate issued upon the written application of motor companies beginning operations after that date.
3. Any such order revoking, altering, or amending a certificate may be entered upon good cause shown upon not less than five days notice to the holder thereof, and an opportunity to be heard.
4. Where a judgment has been entered by a court of competent jurisdiction in favor of a motor transportation company, based upon the operative provisions of a certificate of convenience and necessity issued by the Public Utilities Commission, and thereafter and during the pendency of error proceedings such certificate is altered or amended by the Commission in such manner as to nullify those provisions upon which the judgment is founded, a reviewing court is not authorized to further proceed. ( Miner v. Witt 82 Ohio St. 237, 92 N.E. 21.)
ERROR to the Court of Appeals of Mahoning county.
ERROR to the Public Utilities Commission.
These two causes, one coming on error from the Court of Appeals of Mahoning county, the other on error proceeding from the Public Utilities Commission of Ohio, were heard jointly, by agreement. The two cases are so linked together that they could not otherwise be disposed of.
On December 14, 1918, the city of Youngstown renewed a franchise to the street railroads, and fixed rates of fare for transportation of passengers. On July 10, 1924, Hogan and other owners and operators of busses who had been operating prior to April 28, 1923, were granted certificates of public convenience and necessity to operate over certain streets in the city of Youngstown, without any restrictions as to places of loading and unloading passengers; such certificate containing the following condition:
"And conditioned that local subdivisions may make reasonable local police regulations within their respective boundaries not inconsistent with the provisions of Sections 614-84 to 614-102 of the General Code of Ohio."
Thereafter, on July 17, 1924, the city of Youngstown passed a traffic ordinance, as an emergency measure, which ordinance established a congested district in and surrounding the public square, otherwise known as the "Diamond," and provided, in another part of the ordinance, that busses should not receive or discharge passengers at any place within the congested district, except within certain narrow and restricted limitations, the result of which was that passengers were unloaded at points far distant from the Diamond, which is the central part of the city of Youngstown. Thereupon, on July 23, 1924, an injunction suit was filed by Hogan against the city authorities in the common pleas court of Mahoning county, and the same was heard on August 7, 1924, and on that day the petition was dismissed. The case was promptly appealed to the Court of Appeals, and heard on appeal on September 12, 1924, and decided on that day in favor of the bus owners, and a permanent injunction was issued restraining the city officials from interfering with the certificate of convenience and necessity theretofore granted by the Utilities Commission. The only evidence introduced before the Court of Appeals was the certificate of convenience and necessity, the jitney ordinance, the franchise ordinance of the street railroad, the city charter, and the very brief testimony of John H. Hogan, who gave it as his opinion that the restrictions governing the receiving and discharging of passengers within the congested district would render his business wholly unprofitable. Thereupon, within 10 days after that decision, the law department of the city of Youngstown filed a complaint before the Public Utilities Commission, under the provisions of Section 614-87, General Code, and after 5 days notice that complaint was heard on September 29, on evidence, and the Utilities Commission modified its former order, changing the routes of the busses and establishing restrictions governing receiving and discharging passengers within the congested district more favorable to jitney owners than the ordinance, and yet wholly unsatisfactory to them. That order was entered on September 29, 1924. The final order of the Commission was not entered until November 28, 1924. In the meantime a motion to certify the injunction suit from the Court of Appeals to this court was allowed on November 26, 1924. In due course, a petition in error from the order of the Utilities Commission was filed in this court by the bus owners.
The traffic ordinance adopted July 17, 1924. classified public motor vehicles into street railway busses, interurban busses, jitneys, and taxicabs. No restrictions were made as to the place where taxicabs and interurban busses might receive and discharge passengers, but each of the other classes of vehicles was circumscribed by definite limitations as to places of receiving and discharging passengers within the congested district. It is claimed by the bus owners that street railway busses were favored in designating stands where passengers might be received and discharged, and this is charged as a discrimination in the petition filed in the common pleas court. It further appears by the record that the Youngstown Street Railway Company is operating upon a service at cost basis, and is practically operated by the city under direction of a public official, known as the city street railroad commissioner, and that the street railway busses are operated as a part of the same system, with universal transfers, under like supervision of the city commissioner. The record before the Utilities Commission also discloses that an initiative petition was filed, whereby it was sought to enact a city ordinance by that method, providing different places for receiving and discharging passengers, and that, upon submission to a vote of the people, that ordinance was defeated by a vote 7,375 for and 8,270 against the ordinance. This was introduced for the purpose of showing the wishes of the people of Youngstown. The order of the Commission created 11 bus routes, and provided places where each of the routes might receive and discharge passengers within the congested district. These places were not identical with the places allowed by the city ordinance, but, on the contrary, were very much more favorable to the bus owners than the ordinance. The places for discharging passengers under the order of the Commission ranged from 1,200 feet to 2,000 feet from the Diamond, and the places allowed by the ordinance ranged from one-half to two-thirds of a mile.
The city authorities were apparently satisfied with the modified certificates of the Commission, because neither the city authorities nor the street railway company applied for a rehearing before the Commission, nor have they filed a petition in error in this court. The bus owners are therefore in a position of being complainants of both the city ordinance and the order of the Commission. The petition in error of the bus owners from the Commissioner's order likewise claims discrimination against them and in favor of the street railway busses, and also claims that the modified certificates are unreasonable and unlawful, in that they render the operation of the busses unprofitable and amount to a confiscation of their property.
Mr. C.C. Crabbe, attorney general; Mr. John W. Bricker, Mr. Wm. K. Lewis, city solicitor, and Mr. Clyde W. Osborne, for plaintiffs in error.
Mr. H.P. McCoy and Messrs. Wilson, Hahn, Henderson Wilson, for defendant in error in cause No. 18787.
Mr. H.P. McCoy and Messrs. Wilson, Hahn, Henderson Wilson, for plaintiff in error.
Mr. C.C. Crabbe, attorney general, Mr. John W. Bricker, Mr. Wm. K. Lewis, city solicitor, and Mr. Clyde W. Osborne, for defendants in error in cause No. 18853.
Mr. Carl F. Shuler, law director of city of Cleveland, amicus curiae.
The Court of Appeals of Mahoning county heard this case upon evidence and made a general finding in favor of the plaintiffs. It does not appear by the journal entry on file whether this conclusion was reached upon evidence establishing the fact of interference with property rights, or whether it may have been reached upon evidence establishing the fact of unlawful discrimination, or whether, upon the other hand, that court merely decided as a legal proposition that, where there is a conflict between a city ordinance and an order of the Utilities Commission, the order of the Utilities Commission shall prevail. It is professionally stated in the briefs that the court merely decided the legal question of conflict. Inasmuch as this case involves motor transportation entirely within the city of Youngstown, the principles declared in the case of Lorain Street Ry. Co. v. Public Utilities Commission mission, ante, 68, 148 N.E. 577, decided this day, must be held to be controlling. Having read all of the evidence in the case, and especially that portion of the traffic ordinance which defines the different characters of motor vehicles, and which fixes the places where each class may receive and discharge passengers, we are of the opinion that a clear case of discrimination has not been made. It must be borne in mind that the busses owned by the street railway company are operated in conjunction with the street cars, under municipal supervision through the city street railway commissioner, with universal transfers, and it will be therefore presumed that they are operated on harmonious schedules, thereby avoiding the congestion which must necessarily be caused where they are operated by different owners and upon schedules which might easily conflict. The courts may properly take into consideration the fact that the street railway company is operated by a city street railway commissioner, on a service at cost basis, which operation includes street railway busses, in which all of the people are interested, and the city therefore entitled to reasonably regulate its major municipal transportation service. If the judgment of the Court of Appeals is based upon unwarranted interference with a property right, that proposition has also been met in recent cases decided by this court, where it has been shown that a certificate of convenience and necessity is not property. There being no property in a certificate of convenience and necessity, there can be no confiscation.
While the instant case is in many respects similar to Lorain Street Ry. Co. v. Public Utilities Commission, supra, it is in other respects wholly different, and therefore governed, or at least influenced, by different principles. The Youngstown city ordinance in the instant case is wholly different from the ordinance of the city of Lorain, in that the Youngstown ordinance is not distinctly a "contract with others for such product or service," because by the provisions of the ordinance all features of operation of a street railway and the motor busses owned and operated by the street railway company are under complete municipal control, not only as to the rates and fares to be charged, but as to the character and quality of the service to be rendered, all of which is under the immediate supervision and control of the street railway commissioner. The same ordinance makes full provision for valuation of the property, and for acquisition of the property by the city at the expiration of the franchise, if desired by the city. It is therefore to all intents and purposes a municipal enterprise in which all the people of Youngstown have both a personal and a property interest. All these facts bring the instant case clearly within the scope of Section 4, Article XVIII of the Constitution, and thereby cause the controversy to be further removed from the home rule provisions of Section 3, Article XVIII.
Neither the city authorities nor the street railway company having prosecuted error from the order of the Commission, and that order having been made subsequently to the final order entered in the Court of Appeals in cause No. 18787, and the court finding nothing unreasonable or unlawful in the order of the Commission, so far as it affects the bus owners, this court can do no less than affirm the order of the Commission.
Upon the principles declared in Lorain Street Ry. Co. v. Public Utilities Commission, supra, the judgment of the Court of Appeals in No. 18787 must be reversed and the cause remanded for further proceedings in accordance with this opinion.
The city of Youngstown and the Youngstown municipal railway company having both been protestants before the Public Utilities Commission, and both being apparently satisfied with the order of the Commission, and not having prosecuted error therefrom, it may be suggested that they are in no position to complain, upon the state of the record in these two cases, of the order made by the Public Utilities Commission, and it should therefore control, even though it is more favorable to the bus owners than the ordinance of the city of Youngstown.
It only remains to consider whether the procedure of the Motor Transportation Act has been followed. The application for modification was made on September 22, 1924, and heard on September 29. Five days notice was therefore given, as provided in Section 614-87, General Code. It is contended that other provisions of the Public Utilities Act should apply, and that the bus owners were therefore entitled to longer notice. It seems quite clear that the provisions of Section 614-87 apply, and that they control, uninfluenced by other sections of the Public Utilities Act. Section 614-87 makes provision for granting certificates upon affidavits being filed, and the same section provides that when granted such motor transportation company shall be governed in all respects as though the certificate was made upon written application, and the same section further provides for revocation, alteration, and amendment upon 5 days notice. It is therefore not necessary to look to other sections of the Code to find the procedure governing such matters.
The judgment of the Court of Appeals in cause No. 18787 is therefore reversed, and the cause remanded for further proceedings. The order of the Public Utilities Commission in cause No. 18853 will be affirmed.
Judgment reversed. Order affirmed.
JONES, MATTHIAS, DAY, ALLEN, KINKADE and ROBINSON, JJ., concur.