State Ex Rel. Utilities Commission v. Queen City Coach Co.

63 S.E.2d 113 (1951) 233 N.C. 119

STATE ex rel. UTILITIES COMMISSION
v.
QUEEN CITY COACH CO.

No. 680.

Supreme Court of North Carolina.

February 2, 1951.

Brooks, McLendon, Brim & Holderness, Greensboro, Shearon Harris, Charlotte, and Vaughan Winborne, Raleigh, for defendant-appellant.

Atty. Gen. Harry McMullan and Asst. Atty. Gen. John H. Paylor, for plaintiff-appellee.

Welch Jordan, Greensboro, for appellee Gate City Transit Lines, Inc.

BARNHILL, Justice.

The Legislature, by c. 989, Session Laws 1949, revamped Art. 2 of c. 62 of the General Statutes prescribing the procedure in hearings before the Utilities Commission. The statute, as revised, makes substantial changes in the method of procedure before this agency of the State.

Likewise the law controlling the granting of certificates for the operation of buses for the transportation of passengers was completely revised by c. 1132, Sessions Laws 1949. Art. 6 of c. 62 of the General Statutes was repealed and a new statute, now G.S. c. 62, Art. 6C, was enacted. The provisions of these new statutes render some of our former decisions of doubtful value.

The policy of the State in respect of the transportation of passengers for hire as declared in § 2 of c. 1132, Session Laws 1949, now G.S. § 62-121.44, is to provide adequate, economical, and efficient bus service at reasonable cost to all the communities of the State, without discrimination, undue privileges or advantages or unfair or destructive competitive practices. The dominant object of the legislation is to promote the public interest.

Appeals from the Utilities Commission are confined to questions of law, and on appeal the appellant may not rely upon any grounds for relief which are not set forth specifically in his petition for rehearing by the Commission. G.S. § 62-26.10.

Any holder of a certificate now operating buses which serve communities included in the proposed bus route may intervene and protest the granting of the application, G. S. § 62-121.52(5), and the Commission "shall give due consideration to * * * (b) whether the proposed operations will unreasonably impair the efficient public service of carriers operating under certificates." G.S. § 62-121.52(10). "No certificate shall be granted to an applicant proposing to serve a route already served by a previously authorized motor carrier unless and until the commission shall find from the evidence that the service rendered by such previously authorized motor carrier or carriers on said routes is inadequate to meet the requirements of public convenience and necessity;" and in no event before the certificate holder operating on said route or routes shall be given reasonable time to remedy such inadequacy. G.S. § 62-121.52(7).

The applicant must show that "public convenience and necessity" requires additional service over the proposed route. If that fact is made to appear, then the Commission must first afford the protesting bus company operating over the same route an opportunity "to remedy such inadequacy." If the authorized carrier refuses, or is financially unable, or otherwise disqualified, to render the service "found by the commission (to be necessary) to meet the requirements of public convenience and necessity" then, and only then, may the Commission issue a certificate to the applicant to operate over the route already served by the protesting carrier. G.S. § 62-121.52(7).

The petition of appellant for a rehearing by the Commission is bottomed squarely on the contentions that (1) the evidence discloses that it now serves the Ramseur-Greensboro, Liberty-Greensboro, and Julian-Greensboro territories over its bus lines operated on Highways 421 and 22; that G. S. § 62-121.52(7) relates to point-to-point service; and that therefore the Commission erred in authorizing additional service between these points "without a finding of fact that the existing service is inadequate and affording this protestant an opportunity of remedying the inadequacy"; (2) the Commission authorized a duplication of service over one of its routes between Liberty and Julian upon the finding "that the revenue derived between said points would be insufficient to adversely affect the overall operation of the protestant or enhance the over-all operation of the applicant" when the statute makes inadequacy of existing service and refusal to remedy such inadequacy the basis for granting a certificate to the applicant; and (3) the Commission failed to give consideration to its exceptions to the recommended order of the examining commissioner.

The appellant is limited to these contentions on this appeal. G.S. § 62-26.10. Any other question of law raised by its exceptions entered in the court below may not be considered here.

Thus it appears that the appellant relies on the assertion that the order of the Commission is in excess of statutory authority and affected by errors of law. G.S. § 62-26.10.

It is true the statute affords authorized carriers serving the communities which compose links in the proposed route an opportunity to intervene and oppose the application, and requires the Commission to consider whether the proposed operations will unreasonably impair the efficient public service of other carriers. But the effect upon other carriers is directed to the question of public convenience and necessity. It is not determinative of the right of the Commission to grant the application.

The grant of a franchise is predicated upon public convenience and necessity, as that term is defined in Utilities Commission of North Carolina v. Great Southern Trucking Co., 223 N.C. 687, 28 S.E.2d 201. An affirmative finding thereof is a condition precedent. If the proposed operations would endanger or seriously impair the operations of existing carriers contrary to the public interest, the certificate should not be issued. But here we have passed that hurdle. The Commission found that the proposed service is in the public interest.

That Queen City now serves the same communities over routes other than the one proposed by the applicant does not require the Commission, upon the finding of public convenience and necessity, to afford the authorized carrier, protestant, an opportunity to remedy the inadequacy. That is, service of the same communities between the same points but over different routes does not constitute service of a route already served, within the meaning of the Act.

The original bill which, as revised in the Legislature, became c. 1132, Session Laws 1949, required the Commission to deny duplicate service in the same territory, but "territory" was stricken and "route" was inserted in its stead. For us now to construe the Act to accord with the contention of Queen City would necessitate the adoption of the identical meaning which the Legislature expressly rejected. The General Assembly fixes the policy of the State, and it was unwilling to go further than to prohibit a duplication of service over the same route unless the existing authorized carrier is unwilling to remedy the inadequacy found by the Commission. The policy as thus expressed must control decision here.

"Route" as used in the statute means the course of way which is traveled; the road. Webster's New Int. Dic., 2d ed. "Route" is the direction of travel from one place to another. Virginia Stage Lines v. Commonwealth, 186 Va. 1066, 45 S.E.2d 318. As used in statutes regulating motor carriers "route" means the highway or highways over which motor vehicles operate and not areas between terminal points. Consolidated Freightways v. U. S., 8 Cir., 136 F.2d 921.

Carriers are not certified to operate in a certain "territory" but over a designated "route." The route or road to be traveled serves the communities, districts, or territories adjacent to it. It follows that "route" and "territory" are not synonymous. Virginia Stage Lines v. Commonwealth, supra.

The area of protection against duplication afforded by the statute is the specific route covered by the certificate of the authorized carrier rather than the territory it serves.

So then, the Commission, having found that public convenience and necessity require the additional service, was not required to give Queen City an opportunity to render the additional service between the Ramseur-Greensboro, Liberty-Greensboro, and Julian-Greensboro points, which are common to both routes.

While the statute is designed to protect authorized carriers against ruinous competition, it does not purport to protect against all competition. There is nothing in the statute to prohibit the service of the same points by different carriers over separate routes when it is found by the Commission that such duplicate service is in the public interest.

But there is a duplication of routes as well as of service between Liberty and Julian. The Commission has found that existing conditions do not demand this duplication. "All the testimony indicates an adequacy of service between Liberty and Julian." This being true, the Commission was without statutory authority to permit the duplication. The prohibition is positive. "No certificate shall be granted to an applicant proposing to serve a route already served by a previously authorized motor carrier unless and until the commission shall find from the evidence that the service rendered by such previously authorized motor carrier * * * on said routes is inadequate * * *." G.S. § 62-121.52 (7).

To hold that this provision applies only when there is a duplication over the same route from terminus to terminus would require an unrealistic construction of the statute. If other carriers can invade the route of an authorized carrier, piecemeal fashion, then the Legislature completely failed to accomplish one of its declared objectives —the prevention of destructive competition. If the statute authorizes a duplication between points only 7.5 miles apart, it likewise permits such duplication between points 50 or 100 miles apart, including all intermediate points. Considering the provision in the light of the policy set forth in the Act, any such construction is precluded.

The revenue derived from passengers traveling between these two points is nominal. Only a very short distance is involved. Neither carrier would be seriously affected if it lost all the business the two points provide. Therefore, frankness compels us to say that if this case stood alone we would be strongly inclined to pass the question as too insignificant to command our attention. But such is not the case. Our decision here will become a precedent and control decision in other cases of much greater moment. No doubt this is what Queen City had in mind in contesting the decision of the Commission.

The mere fact that the two carriers will use the same highway for a short distance does not require the denial of the application in toto. A traversing of the same highways for certain distances by competing carriers may readily become necessary in the public interest and in such an instance, more than one certificate may be granted, subject to such restrictions as will protect the authorized carrier in respect of that part of the highway to be traversed by both. G.S. §§ 62-121.53 and 54. Under a proper construction of the statute, with public convenience and necessity for bus service from Ramseur to Greensboro over the proposed route fully established, grounds for granting of the proposed application, subject to the indicated restrictions, are made to appear.

The exception for that the Commission failed to give consideration to its exceptions to the report of the examining commissioner, contained in its petition for a rehearing, is not brought forward. In any event, on this record, it is without substantial merit.

The cause is remanded with instructions that the proceeding be recommitted to the Commission for consideration of the proper restrictions to be imposed upon the proposed certificate in accord with this opinion.

Error and remanded.