Lake Shore Motor Coach Lines, Inc. v. Welling , 9 Utah 2d 114 ( 1959 )

CROCKETT, Chief Justice.

Review of an order of the Public Service Commission granting defendant David M. V/clling an increase in authority to operate a taxi service between Ogden, Utah and the Salt Lake City Airport by adding nine additional points of pickup and delivery.

Plaintiff, operator of a bus service between Salt Lake City and Ogden, and intermediate points, contests the order on two grounds: that there is no competent evidence to support a finding of public convenience and necessity for the service; and that the Commission did not give proper consideration to the protection of existing carrier services.

It is to be kept in mind that the functions of common carriers affect the public interest in such a way that the legislature has deemed it proper to grant monopolistic franchises and consequently subject them to general supervision and control of the Public Service Commission.¹ Upon the assumption that the Commission is staffed by personnel of training and experience in this field, it is vested with broad powers and its decisions and orders are endowed with considerable verity. They are subject to review by this court but the review is limited:

“ * * * The review shall not be extended further than to determine whether the commission has regularly pursued its authority, * * * The findings and conclusions of the commission on questions of fact shall be ■final and shall not be subject to review. * * *”²

Notwithstanding the above limitation, it must be recognized that the review provided for has a definite and useful purpose, and that the duty and prerogative of the court are something more than a mere perfunctory rubber stamping of actions of the Commission. The latter must fall within the framework of the powers and duties conferred upon the Commission consistent with its purpose of regulating the utilities in question, or powers reasonably and necessarily implied as incidental thereto. Obviously it cannot properly act outside the scope of such authority. Likewise, it cannot obdurately refuse to believe competent, credible and uncontradicted evidence;³ nor can it make findings of fact unless there is some competent evidence to support them.⁴

The purpose of the review is to determine whether the Commission has acted outside of its jurisdiction, or in excess of its powers, or in a manner which would properly be regarded as capricious, arbitrary or wholly unreasonable in view of the record before it.⁵ Except for the basic limitations just stated, the Commission is given broad powers both in the manner of conducting its proceedings and in its decisions.

Plaintiff makes this bold attack upon the evidence: “In this record there is not a single shred of competent evidence on which a finding of need for this service could be based.” This is grounded upon the assertion that, “No shipper (sic) witnesses were introduced by Welling.” and that the testimony of Mr. Welling himself amounts to nothing because it was based upon “hearsay statements by Welling of requests he claims had been made.”

It is to be remembered that there is considerable difference between court trials and proceedings before administrative agencies. It is undisputable that the legislature intended that the latter should not be burdened with undue formality. Section 54-7-1 states that in the conduct of hearings, “ * * * the technical rules of evidence need not be applied”; and that, “no informality in any hearing, investigation or proceeding, or the manner of taking testimony, shall invalidate any order * * [of] the commission.” Under a statute ⁶ similar in meaning this court has uniformly held that hearsay testimony is admissible before the Industrial Commission. However, it is also held that a finding of fact cannot be based solely on hearsay evidence, but it must be “supported by a residuum of legal evidence competent in a court of law.”⁷ There appears to be no reason why the same rule should not be applicable to proceedings before the Public Service Commission.

The-problem raised by the plaintiff is whether the evidence of Mr. Welling was wholly hearsay and thus not capable of supporting the Commission’s finding of convenience and necessity. A review of his testimony shows plainly that the greater jpart of it simply reflects knowledge gained in his activities in carrying on his carrier services. His testimony as to the need for direct service to the airport was naturally based upon his observations of the activities of others and in part upon their requests for and statements about desiring such service. His testimony did not purport to assure the truth of these statements but was a report about the conduct of people, including some of their verbal acts, as observed by him. He is an experienced operator in the type of business involved acquainted with the population, industry, business and potential travel in those areas and thus competent to give an appraisal of the need for the service he proposes. It cannot properly he said that his testimony is wholly hearsay.

A moment’s reflection makes plain that a very high proportion of the knowledge of mankind is acquired through sharing of the experiences of others from sources which, in one sense, might he considered as hearsay. We do not, and could not, experience everything firsthand. But we do obtain much credible evidence and knowledge from many sources other than experiencing the primary facts themselves.

It can hardly be doubted that if some disinterested motor carrier operator had been called as a witness, he could have testified to the existing conditions and to the need for such service. The fact that Mr. Welling testified in his self-interest may be a basis upon which the Commission could have disbelieved him, had it desired.⁸ But it also had the prerogative of believing him, as it did. His testimony, being competent, provided a basis for the finding of public need for the service.

In regard to its second point: that the Commission did not give proper consideration to the protection of existing carriers: the plaintiff makes the argument, not unfamiliar in cases of this character, that the granting of Mr. Welling’s application will cut into and destroy its business. It urges that the Commission was under a misconception of the law as shown by a recital in its Report and Order that “Evidence that the route is not at present adequately served is not necessary to the granting of an application for authority to institute an improved service.” It may be that such a statement, excerpted from context and given a literal meaning, would be wrong under some circumstances. However, it is not upon any particular portion of the Commission’s report and order that an analysis of its action should rest, but upon its entirety and its relation to the record upon which it is based.

The Commission is charged with the responsibility of over-all planning so that the public will be furnished with the most frequent, economical and convenient service possible, not only presently, but in the long run. This involves consideration of all of the pertinent factors bearing upon the advisability of authorizing additional service: it includes protection of existing carriers whose services may become impaired or even destroyed by permitting competition, the potential of business, the ability, financial and otherwise, of the applicant to render the proposed service, and the burdening of the highways.⁹ The Commission must weigh all of such matters in determining whether public convenience and necessity require the proposed service. This is true whether it is a “new” service as insisted by the plaintiff, or an “improved” service as implied by some language in the order. The fact that the continued well-being of existing carriers must be taken into account does not mean that once a carrier such as plaintiff is granted a franchise it acquires an inviolable and exclusive right to render a public service merely because it meets its own standard of adequacy.

It is clear that the Commission did in fact consider the existing services and the effect the new operation would have upon them and upon the public. It found that, “There is no service similar in character to that proposed by applicant.” This accords with the facts. Although the plaintiff has bus service between Salt Lake City and Ogden and intermediate points, it operates no direct service to the Salt Lake Airport, which is about three and a half miles west of its terminal in downtown Salt Lake. Thus passengers to and from the airport must utilize a limousine or taxi service in connection therewith. Mr. Welling’s service affords a single continuous trip from Ogden to and from the airport without the necessity of transferring from one carrier to another. Formerly he had no authority to serve intermediate points. The new order authorizes him to now serve Hill Field Main Gate, Naval Supply Depot, Roy, Sunset, Clearfield, Kaysville, and Lay-ton; and also Perry and Brigham City north of Ogden, for hauls only to and from the Salt Lake Airport. The added convenience to the public, justifying the Commission’s view that “public convenience and necessity require the institution of such service,” is obvious. It is not the prerogative of this court to pass upon the wisdom of the determination made nor to substitute its judgment for that of the Commission. Only if on the basis of the record its action appears to be capricious, arbitrary or wholly unreasonable will it be disturbed.

Affirmed. No costs awarded.

WADE and McDONOUGH, JJ., concur.

1 . 54-6-4, U.C.A.1953; see discussion in Lake Shore Motor Coach Lines, Inc. v. Bennett, 8 Utah 2d 293, 333 P.2d 1031.

2 .54-7-16, U.C.A.1953.

3 . See Jones v. Calif. Pack. Corp., 121 Utah 612, 244 P.2d 640.

4 . Utah Light & Traction v. Public Service Comm., 101 Utah 99, 118 P.2d 683.

5 . See Mulcahy v. Public Service Comm., 101 Utah 245, 117 P.2d 298 for full discussion of powers of Public Service Commission and scope of review by Supreme Court.

6 . Sec. 35-1-88, U.C.A.1953.

7 . Ogden Iron Works v. Industrial Comm., 102 Utah 492, 132 P.2d 376, 377, and cases cited therein.

8 . See Page v. Security Ins. Co., 8 Utah 2d 226, 332 P.2d 666.

9 . 54-6-5, U.C.A.1953 sets forth factors to be considered.