State ex rel. Utilities Commission v. Atlantic Coast Line Railroad , 268 N.C. 242 ( 1966 )

Lake, J.

A railroad or other public utility corporation is engaged in the operation of a privately owned business. By virtue of the nature of the services it undertakes to render, certain exceptional duties are imposed upon it by the common law and by statute, and the Utilities Commission is authorized by statute to regulate its activities. In other respects, the company has the same freedom as does any other corporation in the management of its properties and in the employment and assignment of the duties of its employees.

The Utilities Commission has no authority to regulate, or impose duties upon, a railroad company except insofar as that authority has been conferred upon the Commission by Chapter 62 of the General Statutes, liberally construed to effectuate the policy of the State announced therein. With reference to the matters involved in this appeal, that policy is declared as follows in G.S. 62-2:

“ [I] t is hereby declared to be the policy of the State of North Carolina to provide fair regulation of public utilities in the interest of the public, * * * to promote adequate, economical and efficient utility services * * * and to these ends, to vest authority in the Utilities Commission to regulate public utilities generally and their rates, services and operations, in the manner and in accordance with the policies set forth in this chapter.” (Emphasis added.)

G.S. 62-131 (b) provides, “Every public utility shall furnish adequate, efficient and reasonable service.” The term “public utility” includes a railroad corporation. G.S. 62-3 (23a).

G.S. 62-32(b) provides:

“The Commission is hereby vested with all power necessary to require and compel any public utility to provide and furnish to the citizens of this State reasonable service of the kind it undertakes to furnish * * *”

G.S. 62-118 provides:

“Upon finding that public convenience and necessity are no longer served, or that there is no reasonable probability of a public utility realizing sufficient revenue from a service to meet its expenses, the Commission shall have power, after petition, notice and hearing, to authorize by order any public utility to abandon or reduce such service. * * *” (Emphasis added.)

G.S. 62-247 provides:

“(a) The Commission is empowered and directed to require, where the public necessity demands, and it is demonstrated that the revenue received will be sufficient to justify it, the establishment of stations or terminals by any railroad company * * * (Emphasis added.)

“(c) A railroad company which has established and maintained for a year or more a passenger station or freight depot * * * shall not abandon such station or depot, nor substantially diminish the accommodation furnished by the stopping of trains, except by consent of the Commission. * * *”

G.S. 62-75 provides that in all proceedings before the Commission, except those instituted by the Commission, itself, the burden of proof shall be upon “the complainant.”

G.S. 62-65(a) provides:

“When acting as a court of record, * * * no decision or order of the Commission shall be made or entered * * * unless the same is supported by competent material and substantial evidence upon consideration of the whole record.”

G.S. 62-94 (b) provides that upon appeal from an order of the Commission, this Court may reverse or modify the decision if the substantive rights of the appellant have been prejudiced because the Commission’s findings, inferences, conclusions or decisions are “unsupported by competent, material and substantial evidence in view of the entire record as submitted,” or are “arbitrary or capricious.”

A liberal construction of these statutory provisions, so as to effectuate the policy of the State as therein declared, compels the conclusion that when a railroad corporation has established and maintained a freight depot or passenger station pursuant to the order of the Commission, or has established and maintained for a year or more such depot or station on its own initiative, it may not, without first obtaining an order from the Commission authorizing it to do so, substantially reduce the number of hours per day during which such station shall be kept open for the service of the public and attended by an agent of the railroad. However, when the railroad company applies for such an order, the Commission may not withhold its approval unreasonably and arbitrarily. It may deny such permission only after a hearing and only if it finds and concludes, upon competent, material and substantial evidence in view of the entire record, both that the public convenience and necessity requires the station or depot to be so kept open for a greater portion of the day, and that the railroad, by so doing, will not incur costs out of proportion to any benefit to the public. Corporation Commission v. R. R., 139 N.C. 126, 51 S.E. 793; Utilities Com. v. R. R., 233 N.C. 365, 64 S.E. 2d 272; Utilities Commission v. R. R., 254 N.C. 73, 118 S.E. 2d 21.

A railroad may, of course, be required to keep a station open, with an agent in attendance, if the public convenience and necessity requires such service, even though this can be done only at a loss to the railroad, provided such loss is not so great as to be unreasonable in comparison with the public’s benefit from the service. Utilities Com. v. R. R., 233 N.C. 365, 64 S.E. 2d 272. Conversely, a railroad may not be denied the right to curtail, or abandon, a service for which there is no substantial public need, even though, upon its entire business, the company is earning a fair rate of return. Though prosperous, a railroad or other utility company may not be denied the right to effect economies in its operation, so as to increase its earnings, unless it may reasonably be found, upon the evidence before the Commission, that the public convenience and necessity requires the continuation of the service in question. An occasional inconvenience to a shipper, which is trivial in comparison with the saving to the railroad from the elimination of the service, will not suffice to show such public convenience and necessity. See Utilities Com. v. R. R., 233 N.C. 365, 64 S.E. 2d 272. Waste of a utility’s manpower, or other resources, with no substantial resulting benefit to the public, is not in the public interest and is not required by these statutes.

The Railroad introduced undisputed evidence that, upon a normal day, the full time agent at Burgaw has nothing to do for more than half of the day and is in communication with members of the public not more than 30 minutes throughout the entire day. Its evidence is also undisputed that at Atkinson, on a normal day, the agent has nothing to do for more than six of the eight hours when he is on duty, and is in communication with the public no more than 19 minutes throughout the entire day. The evidence shows that in order for a shipper or consignee to deliver to or receive from the depot at Atkinson a less-than-carload shipment, he must, as a practical matter, go to the depot while the agent is present. Obviously, it is somewhat more convenient to make such trip to the depot if it is kept open eight hours a day than if it is kept open only for an hour and a quarter. However, the evidence of the Railroad is undisputed, and the Commission found, that in the entire 12 months ending 31 March 1965 only 20 less-than-carload shipments, inbound and outbound combined, were handled at the Atkinson depot.

The protestants offered evidence showing that the Brown Lumber Company finds it desirable, if not necessary, to make out, itself, the bills of lading covering its carload shipments of lumber from Ivanhoe and to carry them in person to the depot at Atkinson for the signature of the agent. Obviously, this can be done only when the agent is at the depot. However, there is no dispute of the Railroad’s evidence showing that in this entire 12 months’ period the Brown Lumber Company shipped only eight carloads of lumber. The undisputed evidence shows that in these 12 months the total shipments, inbound and outbound, carload and less-than-carload, handled by the Atkinson depot, including those moving to and from Ivanhoe and Currie, numbered only 237, an average of substantially less than one shipment per day, Saturdays and Sundays excluded. There was no evidence whatever of any protest by any shipper or consignee at Burgaw, or that anyone using that depot would be inconvenienced to any degree whatever by extending the lunch hour absence of the agent from that station to cover the proposed hour and 15 minutes at Atkinson.

The Commission’s findings and conclusions that a full time agent is needed to meet the public convenience and necessity at Burgaw and that the public convenience and necessity at Atkinson cannot be met and provided under the proposed plan are not supported by the evidence in the record and are, therefore, arbitrary and capricious. The order based thereon is beyond the statutory authority of the Commission.

The judgment of the superior court is, therefore, reversed, and this proceeding is remanded to the superior court for the entry of its judgment reversing the order of the Utilities Commission and remanding the matter to the Commission for the entry of an order in accordance with this opinion.

Reversed and remanded.