State Ex Rel. Utilities Commission v. Fox , 239 N.C. 253 ( 1954 )

79 S.E.2d 391 (1954) 239 N.C. 253

STATE ex rel. UTILITIES COMMISSION
v.
FOX.

No. 540.

Supreme Court of North Carolina.

January 15, 1954.

Harry McMullan, Atty. Gen., John Hill Paylor, Asst. Atty. Gen., for North Carolina Utilities Commission.

Arch T. Allen, Raleigh, for Great Southern Trucking Co.

J. Ruffin Bailey, Raleigh, for Helms Motor Express, Inc., Miller Motor Express and Fredrickson Motor Express.

J. Wilbur Bunn, Raleigh, for Overnite Transp. Co.

Basil L. Whitener, Gastonia, for applicant, Julius M. Fox.

DENNY, Justice.

The North Carolina Truck Act, being Chapter 1008 of the Session Laws of North Carolina 1947, in Section 1 thereof, codified as G.S. § 62-121.5, contains a declaration of policy which reads in pertinent part as follows: "* * * that the transportation of property by motor carriers for compensation over the public highways of the State is a business affected with the public interest; that there has been shown a definite public need for the continuation and observation of all existing motor carrier service, and to that end, it is hereby declared to be the policy of the State of North Carolina to preserve and continue all motor carrier transportation services now afforded this State, and to provide fair and impartial regulations of motor carriers of property in the use of the public highways in such a manner as to promote, in the interest of the public, the inherent advantages of highway transportation; * * * to encourage and promote harmony among motor carriers of property, between such carriers and carriers of property by rail or water, and between all carriers of property and the shipping public; to foster a co-or-dinated State-wide motor carrier service; to conform with the national transportation policy and the federal motor carrier acts insofar as the same may be found practical and adequate for application to intrastate commerce; and to co-operate with other states and with the federal government in promoting and co-ordinating intrastate and interstate commerce by motor carriers."

Section 2 of the Act, codified as G.S. § 62-121.6, vests in the Commission authority to administer and enforce the provisions of the Act and to make and enforce reasonable rules and regulations to that end.

Section 7 of the Act, codified as G.S. § 62-121.11, contains, among other things, the following; "Subject to § 62-121.20, if any carrier or predecessor in interest was in bona fide operation as a common carrier by motor vehicle on January 1st, 1947, over the route or routes or within the territory for which application is made under this section, and has so operated since that time, * * * except * * * as to interruptions of service over which the applicant or its predecessor in interest had no control, the Commission shall issue a certificate to such carrier without requiring further proof that public convenience and necessity will be served by such operation * * *;" provided, such carrier furnished certain information to the commission on or before the effective date of the Act. The applicant herein duly qualified as an irregular route common carrier in the manner prescribed by the foregoing statute.

The ordinary meaning and effect of a grandfather clause contained in an act authorizing the transportation of passengers or property by motor vehicle is to preserve substantial parity between future and prior operations. State ex rel. Utilities Commission v. Fleming, 235 N.C. 660, 71 S.E.2d 41; Crescent Express Lines v. United States, 320 U.S. 401, 64 S. Ct. 167, 88 L. Ed. 127; United States v. Carolina Freight Carriers Corp., 315 U.S. 475, 62 S. Ct. 722, 86 L. Ed. 971; Goncz v. Interstate Commerce Commission, D.C., 48 F. Supp. 286; Chicago, St. P., M. & O. Ry. Co. v. United States, D.C., 50 F. Supp. 249, affirmed 322 U.S. 1, 64 S. Ct. 842, 88 L. Ed. 1093; Transamerican Freight Lines v. United States, D.C., 51 F. Supp. 405; Peninsula Corp. v. United States, D.C., 60 F. Supp. 174.

There can be no legitimate dispute about the facts involved in this proceeding. It was clearly established in the hearing before the Commission that the applicant, prior to the adoption of the North Carolina Truck Act in 1947, and until the receipt of the notice from the Interstate Commerce Commission, dated 5 December, 1951, was engaged as an irregular route common carrier of property by motor vehicle in the identical manner he now seeks to continue. He has not applied for any additional rights, but merely requests that those rights preserved to him by Section 7 of the Truck Act, known as the "grandfather clause," be kept inviolate.

The Commission, in recognition of the applicant's rights under the grandfather clause contained in the Act, expressly authorized and approved the operations carried on by him as an irregular route common carrier from the effective date of the Act on 1 October, 1947 until the effective date of its Rule 44, 1 July, 1951.

We are, therefore, confronted with this question: Does the Commission have the power to promulgate a rule, pursuant to the provisions of G.S. § 62-121.6, purporting to regulate common carriers of property by motor vehicle under the North Carolina Truck Act, and then to interpret or enforce the rule in such manner as to deny the exercise of rights which the Legislature in clear and express terms preserved to all motor vehicle carriers of property who were in bona fide operation on 1 January, 1947, and who have met the additional requirements contained in Section 7 of the Act? The answer must be in the negative.

There is nothing in the North Carolina Truck Act which prohibits the interchange of freight between intrastate carriers or between an intrastate carrier and an interstate one. In fact, the Congress of the United States has recognized the existence of the right of the States acting through a proper agency to authorize the interchange of freight between an intrastate and an interstate carrier. Section 306, Title 49 of the U.S.C.A., points out the manner in which a common carrier by motor vehicle may obtain a certificate under the grandfather clause contained in part two of the Interstate Commerce Act, and also upon a showing of public convenience and necessity. The section, however, contains this significant proviso: "And provided further, That this paragraph shall not be so construed as to require any such carrier lawfully engaged in operation solely within any State to obtain from the Commission a certificate authorizing the transportation by such carrier of passengers or property in interstate or foreign commerce between places within such State if there be a board in such State having authority to grant or approve such certificates and if such carrier has obtained such certificate from such board. Such transportation shall, however, be otherwise subject to the jurisdiction of the Commission under this chapter."

We think the above proviso clearly shows that the intent of Congress was to leave the question of the interchange of freight between an intrastate and an interstate carrier to the State commissions, even though the property or the passengers were being moved in interstate commerce, provided the intrastate carrier was transporting the property or passengers between places within the State.

In our opinion, there is error in the judgment entered below in so far as it remands the cause to the Commission to determine whether under the facts appearing on the record the public interest and the North Carolina Truck Act require that the relief sought by the applicant be granted, and the judgment is modified to that extent. The applicant herein was not required under the provisions of the North Carolina Truck Act to show public convenience and necessity in order to obtain his certificate pursuant thereto as an irregular route common carrier. Neither will he be required to do so in order to preserve such rights.

We do not express an opinion as to the validity or reasonableness of Rule 44, in so far as its provisions may be applicable to intrastate carriers of property by motor vehicle pursuant to a certificate granted by the Commission upon a finding of public convenience and necessity. However, if the applicant, a holder of a franchise or certificate pursuant to the grandfather clause contained in the North Carolina Truck Act, in light of the provisions contained in Rule 44, must have permission or approval of the Commission to interchange freight with other intrastate carriers, whether he intends to exercise such right or not, in order to retain his right to interchange freight with interstate carriers, he is entitled to such permission or approval. Moreover, he is entitled to this permission or approval not as a matter of discretion or as an act of grace, but as a matter of law.

Let this opinion be certified to the Superior Court immediately, to the end that the cause may be remanded to the Commission for disposition in accord with this opinion.

Modified and affirmed.