Corporation Commission v. Pacific Greyhound Lines

For convenience we will style the parties herein as they were in the superior court.

On the 30th day of November, 1942, L.A. Tanner made application to the Corporation Commission of Arizona for a certificate of convenience and necessity to operate motor vehicles in the common carriage of passengers and baggage for compensation over U.S. Highway 80-89 between a certain government cantonment camp, which is a few miles north of Florence, Arizona, and Florence and Tucson, Arizona, and to serve all intermediate points. On the 12th day of January, 1943, the Corporation Commission after hearing, at which plaintiff appeared, issued and entered its opinion and order granting the application of said Tanner and granting a certificate of convenience and necessity as requested in his application, but not including service between the cantonment camp and Florence. After denial of motion for rehearing the plaintiff filed an action in the superior court of Maricopa County, Arizona, asking that the said order made by the Arizona Corporation Commission be set aside and vacated.

After filing of answer by defendant and after trial, judgment was rendered for plaintiff following which defendant filed its motion for rehearing and upon its denial, brings this appeal.

Defendant's assignments of error are: (1) That the court erred in rendering judgment for plaintiff "for the reason that appellee failed to introduce any evidence to sustain the burden of proof, showing that the order of the Corporation Commission was unreasonable, or unlawful." (2) The court erred in its judgment since "Appellee has no rights over U.S. Highway 80-89 from Tucson to Florence via Oracle Junction and Cantonment Camp near Florence, and further that L.A. Tanner does not operate over Appellee's route or render duplicate service thereon, nor does Tanner encroach upon the territory of appellee as an existing certificated carrier."

The plaintiff called but one witness in the hearing before the defendant, and by stipulation the transcript of evidence taken before the defendant Corporation Commission was submitted in the case in the superior court, no new evidence being introduced.

Defendant cites Section 69-249, A.C.A. 1939, from which we quote: "* * * In all trials, actions and proceedings the burden of proof shall be upon the party adverse to the commission or seeking to vacate or set aside any determination or order of the commission to show by clear and satisfactory evidence that the same is unreasonable or unlawful * * *".

In this respect from our case of Corporation Commission v. Southern Pacific Co., 55 Ariz. 173, 99 P.2d 702, we quote: "Under section 720, supra (Sec. 69-249, A.C.A. 1939), it was necessary for the company to establish that the order of the commission denying the application to discontinue the service in question was unreasonable. We have considered the meaning of this section and its application in the case of Corporation Commission v. People's Freight Line, Inc., 41 Ariz. 158, 16 P.2d 420, 421. Therein we said: ``It will be seen, upon examining the language of this section, that the proceeding is not an appeal from the decision of the commission, but it is a new and independent action. The case is heard de novo upon such evidence as may be proper, and not merely upon a review of the evidence taken before the commission. Such being the case, the trial court is not bound by the rule followed on an appeal by this and by most appellate courts to the effect that, if any reasonable evidence sustains the order of a lower tribunal, an appellate court will not consider and review the weight of the evidence, or the inferences drawn therefrom by the trial court. The superior court in this proceeding had the right to form its own judgment as an independent tribunal as to the conclusion to be drawn from the evidence, subject only to the rule laid down in section 720, supra, that the burden of proof is on the plaintiff to show by clear and satisfactory evidence that the order of the commission is unreasonable or unlawful.'"

At the time of the hearing before the Corporation Commission the only means of travel between Florence and Tucson, except by private conveyance, was by the Greyhound route, from Florence to Coolidge, then to Tucson by the way of Picacho, Red Rock and Marana. Mr. Bobo, the superintendent for plaintiff, in his testimony before the Corporation Commission which was adopted by the superior court stated that the traffic conditions were very poor, that his line, the Greyhound, was operating to capacity and was taxed beyond capacity. Witness Bobo also testified as follows: "Commissioner Wright: Do you have any rights over this route? (Meaning the route from the government cantonment to Tucson by the way of Oracle junction.) A. No, sir."

From the foregoing it is contended by defendant that the plaintiff has failed to carry the burden of proof in this case, the only witness for plaintiff stating that it had no rights over the route that Tanner desired.

Under the second assignment of error of the defendant it quotes Section 66-506, A.C.A. 1939, from which we quote in part: "* * * If, after a hearing on the application, the commission finds from the evidence that the public convenience and necessity required the proposed service, or any part thereof, and that the applicant is a fit and proper person to receive such certificate, it may issue the certificate as prayed for, or issue it for the partial exercise only of the privilege sought, and may attach to the exercise of the right granted by such certificate such terms and conditions as in its judgment the public convenience and necessity may require; provided, that when an applicant requests a certificate to operate over a route, or routes, or in a territory already served by a common motor carrier, the commission shall have power, after hearing, to issue such certificate only when the existing common motor carrier operating over such route, or routes, or serving such territory, will not provide such service as shall be deemed satisfactory by the commission."

Our case of Corporation Commission v. Pacific Greyhound Lines,54 Ariz. 159, 94 P.2d 443, 451, says: "* * * It (Corporation Commission) should first have examined the new service offered by the applicant and determined whether it is more in the interest of the traveling public than that furnished by the plaintiff. If its answer is in the affirmative, it should then offer to the plaintiff an opportunity to furnish such new service, and if plaintiff can, and will, do so, should deny the application. If it cannot, or will not, furnish it, and the new service offered can reasonably be separated into two parts, one being a service which can, and will, be furnished by the plaintiff, and the other one which, for any reason, is beyond its power to furnish, and this separation will not injure the interests of the traveling public, the commission should then issue a certificate authorizing the applicant to carry on such portion of the service as it is beyond the power of the plaintiff to furnish, but prohibiting it from giving such service as can, and will, be given by the plaintiff. If, however, the new service offered cannot thus be reasonably separated, the commission should then issue the certificate of convenience and necessity for the new service to the applicant. This course preserves as the paramount consideration the benefit to the traveling public, while still protecting the interest of the existing certificate holder so far as it can be without injury to that public."

In the denial of the application for rehearing of the instant case before the Corporation Commission the defendant commission said:

"There can be no question as to the need for the service. The record is conclusive that there is such a need. The intermediate area is now wholly without transportation facilities. This condition should not be perpetuated. Our order is fully justified and sustained by the facts.

"The protestant, Pacific Greyhound Lines, does not operate over this route; hence, there is no duplication of service or an encroachment upon the territory of the protestant of which it may complain. We are of the opinion and find that the application for a re-hearing should be denied."

One of the main contentions of the plaintiff as set forth in its complaint filed in the superior court is: "* * * That the plaintiff during all of said times has maintained and operated said common carrier business between said points and stations, and during all of said times its service has been and now is ample, sufficient and adequate to meet all reasonable public requirements; and if any further, additional or enlarged service is reasonably required by the public the plaintiff is ready, willing and able to supply the same."

And a further contention is, taken from plaintiff's argument and not the complaint, as the first contention: "* * * the Commission shall have power to issue such certificate only when the existing common motor carrier operating over such route or routes, or serving such territory, will not provide such service as shall be deemed satisfactory by the Commission. This statute is different from many other state statutes regulating issuance of certificates of convenience and necessity to motor carriers in that it not only prohibits the issuance of duplicate certificates over routes occupied by an existing carrier, but also prohibits the issuance of duplicate certificates to servethe same territory served by an existing carrier."

It therefore may be understood that plaintiff at no time gives service over the route from Florence to Tucson by the way of Oracle Junction, but does say, and it is one of its main points, that the law of Arizona prohibits "the issuance of duplicate certificates over routes occupied by an existing carrier", and "prohibits the issuance of duplicate certificates to serve the same territory served by an existing carrier."

The widest point between the two routes is about 15 miles; the condition of the country between the two is very rough and there are no public highways between Florence and Tucson on U.S. Highway 80-89 that lead to the route now traversed by the plaintiff. There are some small towns to the east of U.S. Highway 80-89 over which the defendant now seeks a permit, and people coming from those places, unless they have their private cars, would have no means of conveyance to Florence, the county seat of Pinal County, or to Tucson, the second largest city in the State and the county seat of Pima County. Also along the highway 80-89 are ranches and other places where persons come from who are in great need of a method of travel to either Tucson or Florence when they enter said highway.

Through the willingness of counsel on both sides stipulations have been entered into from time to time for extension of time for the filing of various briefs in this case, and since the filing of this case before the Corporation Commission and this time, although the peak of the selective draft system has ended, this court takes notice that travel conditions are crowded over most highways in our state.

The question of what does constitute "territory served" by a transportation system is a question of first impression in this state and whether or not the territory just now mentioned by us is served by the plaintiff herein is the important question for our determination.

Some years ago the route of plaintiff over U.S. Highway 80-89 was abandoned by plaintiff. And now because of the roughness of our country; the great heat of our long summers; and the great number of people who need the services offered by Tanner, it is impossible under the law and facts of the case for us to say that U.S. Highway 80-89 is territory served by the plaintiff.

Among the towns lying in an easterly direction and whose traffic taps U.S. Highway 80-89 are Oracle, Tiger, Winkelman and Hayden.

The case of Gilbert v. Public Utilities Commission of Ohio,131 Ohio St. 392, 3 N.E.2d 46, 48, is an appeal from an order of the Public Utilities Commission of the State of Ohio granting an application for amendment of the regular intrastate certificate of the transportation company to transmit the transportation of property by motor vehicle between the cities of Springfield and Dayton, Ohio, by the way of Xenia over State Routes Nos. 68 and 11. The certificate as originally issued authorized such transportation only between Springfield and Xenia over State Route 68.

While the statement of the case is long for its purpose we feel that the foregoing, together with the following opinion of the court, will suffice:

"3. Section 614-87 General Code, provides in part: ``On finding of the public utilities commission that any motor transportation company does not give convenient and necessary service in accordance with the order of such commission such motor transportation company shall be given a reasonable time, not less than sixty days, to provide such service before any existing certificate is cancelled or a new one granted over the route or for the territory mentioned in the finding and order of or hearing before the public utilities Commission.'

"The commission found such section not to be pertinent because the protestants did not operate over the route or serve the territory that would be served if the application of the transportation company were granted.

"It is pointed out that if the protestants were permitted to provide the service as contemplated by the application in question, they would acquire the arbitrary right to operate between Springfield and Xenia, which is territory foreign to their authorized and established routes.

"Furthermore, the commission reiterated its previous observation that under the circumstances of the case the extension of the motortruck operation between Xenia and Dayton was but an improved and more convenient substitute for the traction service to be abandoned.

"We therefore agree with the commission on the inapplicability of section 614-87, General Code, to the situation under examination."

In addition to the foregoing defendant has cited the cases of Wheeling St. Clarisville Cambridge Transp. Co. v. Public Utilities Commission of Ohio, 125 Ohio St. 209, 180 N.E. 901 and Texas Motor Coaches, Inc. v. Railroad Commission of Texas, 123 Tex. 517, 73 S.W.2d 511.

Arizona is now committed to the rule of controlled monopoly with reference to the issuance of certificates of convenience and necessity to common carriers. It is our view that the permit granted to Tanner over U.S. Highway 80-89 between Florence and Tucson by the way of Oracle Junction is a grant of franchise to operate over an entirely new territory and definitely not over a territory served.

Herein we therefore hold that U.S. Highway 80-89 from Florence to Tucson by the way of Oracle Junction is not a route served by the plaintiff herein, the Pacific Greyhound Lines.

Judgment reversed.