State Ex Rel. Utilities Commission v. Atlantic Greyhound Corp. , 252 N.C. 18 ( 1960 )

113 S.E.2d 57 (1960) 252 N.C. 18

STATE of North Carolina ex rel. UTILITIES COMMISSION
v.
ATLANTIC GREYHOUND CORPORATION, a Corporation.

No. 451.

Supreme Court of North Carolina.

February 24, 1960.

Atty. Gen. Malcolm B. Seawell and Asst. Atty. Gen. F. Kent Burns, for State of North Carolina.

Shearon Harris, Raleigh, and Samuel Behrends, Jr., Albemarle, for Queen City Coach Co., Carolina Scenic Stages, and Smoky Mountain Stages.

Arch T. Allen, Raleigh, for Carolina Coach Co.

D. L. Ward, New Bern, for Seashore Transp. Co.

Reade, Fuller, Newsom & Graham, Durham, and Joyner & Howison, Raleigh, for Atlantic Greyhound Corp.

RODMAN, Justice.

The Commission in its order said: "For all practical purposes the material facts are not in dispute. The matter resolves itself into a question of law as to the validity of the rule in question with respect to the operation of a ticket office in Charlotte, separate and apart from the Union Bus Station."

For the purposes of this appeal we accept the Commission's interpretation of the rules promulgated by it as applicable to both interstate and intrastate commerce. Accepting that interpretation, the Commission correctly concluded that the question presented was its power to prohibit a duly licensed interstate carrier from selling its services in a place other than the market house used by all carriers and by an agent other than the agent serving all carriers.

Appellants concede that a regulation which prohibits the free exercise of the respondent's franchise to engage in interstate commerce is void. State v. Mobley, 234 N.C. 55, 66 S.E.2d 12; Castle v. Hayes Freight Lines, 348 U.S. 61, 75 S. Ct. 191, 99 L. Ed. 68; Buck v. Kuykendall, 267 U.S. 307, 45 S. Ct. 324, 69 L. Ed. 623; Shafer v. Farmers' Grain Co., 268 U.S. 189, 45 S. Ct. 481, 69 L. Ed. 909; Lemke v. Farmers' Grain Co., 258 U.S. 50, 42 S. Ct. 244, 66 L. Ed. 458; Hannibal & St. Joseph R. Co. v. Husen, 95 U.S. 465, 24 L. Ed. 527.

While recognizing the supreme power of Congress and the agencies created by it over interstate commerce, appellants assert there is another equally well-settled rule which they say is applicable to this case. That rule is stated by Johnson, J., in State v. Mobley, supra [234 N.C. 55, 66 S.E.2d 19]: "The states in the exercise of the reserved police power may enact statutes in furtherance of the public health, the public morals, the public safety, and the public convenience, which may burden and bear upon interstate commerce,—provided such statutes are local in character and bear upon interstate commerce incidentally only. (Citations.) * * * While it may be conceded that regulations designed to prevent frauds are embraced within the scope of the police power (citations), nevertheless an express purpose to prevent possible frauds does not justify state legislation which really goes beyond the legitimate pale of regulation and interferes with the free flow of interstate commerce."

The State has the right to exercise its police power to require common carriers to provide services reasonably necessary for public convenience which do not unduly burden interstate commerce. North Carolina Corp. Comm. v. Atlantic Coast Line R. Co., 137 N.C. 1, 49 S.E. 191, affirmed Atlantic Coast Line R. Co. v. North Carolina Corp. Comm., 206 U.S. 1, 27 S. Ct. 585, 51 L. Ed. 933; Minneapolis & St. L. R. Co. v. State of Minnesota, 193 U.S. 53, 24 S. Ct. 396, 48 L. Ed. 614.

The Commission has statutory authority, G.S. § 62-121.70, to require bus companies to establish union stations. Such stations are unquestionably convenient to passengers who have to change from one bus line to another. They impose no undue burden on interstate commerce. The State may lawfully require all bus companies, both interstate and intrastate, to use such union stations. Atchison, T. & S. F. R. Co. v. Railroad Comm., 283 U.S. 380, 51 S. Ct. 553, 75 L. Ed. 1128, 1129; State ex rel. Public Service Commission v. Atlantic Coast Line R. Co., 222 S.C. 266, 72 S.E.2d 438. The State may, as it has here, require each bus company to provide for the sale of its tickets at the union station. As an incident to the use of the station, the Commission may prescribe the manner of apportioning the cost of operation among the several bus lines which use its facilities.

Respondent does not here challenge the right of the Commission to promulgate such rules, and, in recognition of the Commission's authority to apportion costs, is paying for the maintenance and operation of the union station the same percentage of receipts from tickets sold at its office which it pays on tickets sold in the union station. The challenge is limited to that portion of the rule which denies respondent the right to select the place or places where it will offer for sale transportation over its lines and which denies to respondent the right to select its agent to promote the sale of its services and the right to limit such agent's authority to act for and only for respondent.

The rule promulgated by the Commission properly requires impartiality by the station manager in the sale of tickets. When he offers for sale, he is the agent for all carriers. But that very requirement effectively stifles competition among the carriers when coupled with the further provision that a carrier may not sell at a place and by an agent of its own selection. The prohibition against proclaiming superior service for the purpose of attracting passengers will, if carried to its logical conclusion, destroy initiative resulting in a uniformly mediocre service to the detriment of the industry, and a resultant reduction in interstate bus transportation.

To limit respondent's right of exercising its franchise as directed by the Commission would not only unduly burden interstate commerce, City of Chicago v. Atchison, Topeka & Santa Fe R. Co., 357 U.S. 77, 78 S. Ct. 1063, 2 L. Ed. 2d 1174; Castle v. Hayes Freight Lines, supra; Nippert v. City of Richmond, 327 U.S. 416, 66 S. Ct. 586, 90 L. Ed. 760; Texas Transport & Terminal Co. v. City of New Orleans, 264 U.S. 150, 44 S. Ct. 242, 68 L. Ed. 611; Real Silk Hosiery Mills v. City of Portland, 268 U.S. 325, 45 S. Ct. 525, 69 L. Ed. 982; Michigan Public Utilities Comm. v. Duke, 266 U.S. 570, 45 S. Ct. 191, 69 L. Ed. 445; Davis v. Farmers' Co-op Equity Co., 262 U.S. 312, 43 S. Ct. 556, 67 L. Ed. 996, but would violate the fundamental and constitutional rights guaranteed to every citizen to contract and to utilize to the fullest extent in a lawful manner one's properties to earn a living. Alford v. Textile Ins. Co., 248 N.C. 224, 103 S.E.2d 8; Stephens v. Hicks, 156 N.C. 239, 72 S.E. 313, 36 L.R.A., N.S., 354; State v. Ballance, 229 N.C. 764, 51 S.E.2d 731, 7 A.L.R. 2d 407; Commonwealth of Massachusetts v. Boston Transcript Co., 249 Mass. 477, 144 N.E. 400, 35 A.L.R. 1; City of Chicago v. Atchison, Topeka & Santa Fe R. Co., supra; Roller v. Allen, 245 N.C. 516, 96 S.E.2d 851; Hudson v. Atlantic Coast Line R. Co., 242 N.C. 650, 89 S.E.2d 441; Lawton v. Steele, 152 U.S. 133, 14 S. Ct. 499, 38 L. Ed. 385, as quoted in State v. Biggs, 133 N.C. 729, at pages 738, 739, 46 S.E. 401, at page 404, 64 L.R.A. 139; Allgeyer v. State of Louisiana, 165 U.S. 578, 17 S. Ct. 427, 41 L. Ed. 832.

Certainly the public health, morals, and safety are not affected by respondent's opening an office where it offers for sale its services and only its services. It declines to furnish information with respect to services provided by the other companies. It cannot be said that this additional office inconveniences the public. The public can, by contacting the union station, still get all of the information with respect to services provided by all of the carriers which it could obtain prior to the opening of respondent's office. This office provides an additional convenience. It is an effort on the part of respondent by its own activities to increase the flow of commerce over its lines, thereby exercising to the full extent the franchise which has been issued to it.

We concur with the conclusion reached by Judge Clark that the rule as applied by the Commission unduly restricts respondent in the exercise of its rights.

Affirmed.