State Ex Rel. Utilities Commission v. Thurston Motor Lines, Inc.

81 S.E.2d 404 (1954) 240 N.C. 166

STATE ex rel. UTILITIES COMMISSION
v.
THURSTON MOTOR LINES, Inc.

No. 452.

Supreme Court of North Carolina.

April 28, 1954.

Lucas, Rand & Rose, Wilson, Ruark, Young & Moore, Raleigh, for appellant.

J. Ruffin Bailey, Raleigh, for Helms Motor Express, Inc.

BARNHILL, Chief Justice.

If the Utilities Commission possessed authority to enter the order which is the subject matter of this appeal, we might well affirm. The record discloses a controversy between Thurston and Helms that warranted the investigation instituted by the Commission. Its findings of fact—except as to whether the shipments involved in this controversy are subject to solicitation—are supported by competent evidence, and it is not made to appear that the Commission acted arbitrarily, capriciously, or in disregard of law in entering the order from which Thurston appealed.

But the state of the record is such that we must withhold decision on the merits and remand the cause for further findings of fact which are jurisdictional in nature.

The Utilities Commission is a creature of the Legislature. It may exercise only such authority as is vested in it by statute. And such authority must be exercised by it in accord with the standards prescribed by law. Carolina-Virginia Coastal Highway v. Coastal Turnpike Authority, 237 N.C. 52, 74 S.E.2d 310; Kinston Tobacco Board of Trade v. Liggett & Myers Tobacco Co., 235 N.C. 737, 71 S.E.2d 21; State v. Harris, 216 N.C. 746, 6 S.E.2d 854, 128 A.L.R. 658; Hamlet Hospital & Training School for Nurses v. Joint Committee, 234 N.C. 673, concurring opinion, at page 684, 68 S.E.2d 862.

The rights of motor truck carriers of freight, and the power and authority of the Utilities Commission in respect to the division of charges made for the transportation of freight, where there has been an interchange of such freight between two carriers in the process of delivery, are prescribed in G.S. § 62-121.28. The pertinent parts of said section read as follows:

"(2) Except under special conditions and for good cause shown every common carrier by motor vehicle authorized to transport general commodities over regular routes shall establish reasonable * * * joint rates, charges, and classifications with other common carriers by motor vehicle * * *. In case of joint rates and charges between common carriers of any class or kind whatsoever, it shall be the duty of the carriers parties thereto to establish * * * just, reasonable, and equitable divisions thereof as between the carriers participating therein, which shall not unduly prefer or prejudice any of such participating carriers."

"(5) Whenever, after hearing, upon complaint or upon its own initiative the Commission is of the opinion that the divisions of joint rates or charges applicable to the transportation of property in intrastate commerce by common carriers by motor vehicle * * * are or will be unjust, unreasonable, inequitable, or unduly preferential or prejudicial as between the carriers parties thereto (whether agreed upon by such carriers or any of them or otherwise established), the Commission shall by order prescribe the just, reasonable, and equitable division thereof to be received by the several carriers; * * *. The order of the Commission may require the adjustment of divisions between the carriers in accordance with the order from the date of filing the complaint or entry of order of investigation or such other dates subsequent as the Commission funds justified, and in the case of joint rates prescribed by the Commission, the order as to divisions may be made effective as a part of the original order."

Thus it appears that carriers of freight in intrastate commerce who exchange freight in the course of delivery not only may but they "shall" establish reasonable joint rates and "just, reasonable, and equitable divisions thereof as between the carriers participating therein * * *."

The practices, agreements and contracts thus authorized and required relate to the division of the revenue derived by carriers from shipments interchanged in the course of delivery. The one condition attached to the right to so contract is the provision that the contract "shall not unduly prefer or prejudice any of such participating carriers."

But common carriers are quasi-public corporations. A contract between two or more of them respecting the division of revenue might well adversely affect the public interest by unduly preferring or prejudicing one of the parties to the contract, or in some other manner. Therefore, the Legislature vested in the Utilities Commission authority, either upon complaint filed or on its own initiative, to investigate contracts and agreements providing for the divisions of revenue; to vacate such agreements; and to establish reasonable and equitable divisions thereof.

The authority thus conferred upon the Commission, however, is not the unlimited blanket power to vacate and set aside agreements duly and lawfully made by parties possessing the capacity to contract.

When and only when, after hearing, it is made to appear to the satisfaction of the Commission, and it finds as a fact, that the agreed basis of division of revenue derived from interchanged shipments is or "will be unjust, unreasonable, inequitable, or unduly preferential or prejudicial as between the carriers parties thereto * * *" may it intervene, vacate the existing arrangement or agreement and substitute a reasonable and just basis for division of its own choosing.

This is the finding which vests it with the power to modify, vacate, or set aside the arrangement, agreement, or contract under attack. Common carriers and all other corporations and all persons sui juris have the legal right to contract, and a contract, once made, may be vacated or annulled by a stranger thereto, even though it be a State agency, only in the manner and method provided by law.

We are advertent to the fact the Commission found or concluded that it "does not accept such a practice as being equitable." But this anemic, negative finding is a far cry from the positive conclusion required by the statute and is wholly insufficient to vest the Commission with authority to vacate the existing agreement between Helms and Thurston and substitute its own plan of division. It could not accept. Neither did it reject. This will not suffice

It follows that the order entered by the Commission and the judgment of the court below affirming the same must be vacated. The cause is remanded with direction that the proceeding be sent back to the Commission for further proceeding in accord with this opinion.

If the Commission finds as a fact that the written agreement and informal understanding or custom existing between Helms and Thurston is "unjust, unreasonable, inequitable, or unduly preferential or prejudicial as between the carriers parties thereto," it may vacate such contract and agreement and prescribe the rule for division contained in its former order or such other rule as may appear to it to be reasonable and just.

We are advertent to the provision contained in G.S. § 62-121.28(2) which reads as follows: "Upon investigation and for good cause, the Commission may, in its discretion, prohibit the establishment of joint rates or service." But that provision does not affect the question here presented. In the first place it relates to the establishment of joint rates—not to the division of revenue. In the second place, the decision to prohibit such rates is to be made "in the discretion" of the Commission without any rule or standard to guide it. Whether this is an unlawful delegation of authority—for want of a standard prescribed by the Legislature—we do not decide. It must remain an open question until it is properly presented for decision.

For the reasons stated this cause is remanded for further proceedings in accord with this opinion.

Error and remanded.