State Ex Rel. Utilities Commission & Wachovia Courier Corp. v. American Courier Corp.

174 S.E.2d 814 (1970)

STATE of North Carolina, ex rel. UTILITIES COMMISSION and Wachovia Courier Corporation
v.
AMERICAN COURIER CORPORATION.

No. 7010UC97.

Court of Appeals of North Carolina.

June 24, 1970. Certiorari Denied August 28, 1970.

Edward B. Hipp and Larry G. Ford, Raleigh, for the Utilities Commission. James M. Kimzey, Joyner & Howison, Raleigh, for applicant-appellee.

Allen, Steed & Pullen, by Thomas W. Steed, Jr., Raleigh, for protestant-appellant.

HEDRICK, Judge.

The order of the Commission contained the following findings of fact and conclusions:

"FINDINGS OF FACT

"1. The Applicant, Wachovia Courier Corporation, is a duly organized North Carolina corporation and subsidiary of the Wachovia Corporation, authorized by its charter to engage in the business of general transportation.

"2. The proposed operations of Wachovia Courier Corporation conform with the definition of a contract carrier by motor vehicle; will not unreasonably impair the efficient service of carriers operating under certificates or rail carriers; will not unreasonably impair the use of the highways by the general public; and the applicant is fit, willing and able to perform the proposed service as a contract carrier.

"3. The proposed operation will be consistent with the public interest and the policy declared in Chapter 62 of the General Statutes of North Carolina.

"4. Applicant, Wachovia Courier Corporation, has entered into bilateral contracts for the proposed services with Bank of Reidsville, Commercial and Farmers Bank, The Planters National Bank and Trust Company, Southern National Bank of North Carolina, First National Bank of Eastern North Carolina, Waccamaw Bank and Trust Company, Wachovia Bank and Trust Company, N.A., and Wachovia Services, Inc.

"5. The Protestant, American Courier, is a contract carrier by motor vehicle operating under a permit issued by the Utilities Commission under the provisions of GS 62-262(h) (i) and performs services in North Carolina as a contract carrier as defined in GS 62-3(8) and GS 62-3(9), and as a contract carrier, does not hold itself out to serve the public generally as a common carrier and is not a carrier operating under a certificate of the Commission within the provisions of GS 62-262(i) (2).

"Based upon the foregoing Findings of Fact, the Commission makes the following:

"CONCLUSIONS

"We deem it sufficient to recite in this Docket the following language contained in the conclusion of the Order dated August 1, 1969 in Docket No. T-1445, a case almost identical to the present case:

"``Applicant, First Courier Corporation, has borne the burden of proof that there is a public need by several shippers for the proposed service which conforms to the definition of a Contract Carrier by Motor Vehicle contained in GS 62-3(8). Bilateral contracts between the applicant and shippers have been filed in accordance with Commission Rule R2-15. The Commission is of the opinion and concludes that the applicant has fulfilled the requirements of the Public Utilities Act and the rules and regulations of the Commission and is entitled to a contract carrier permit authorizing it to perform the proposed transportation service.

The Commission has given consideration to the protest of American Courier and to the testimony offered by American Courier with respect to its operations in North Carolina and cannot find that the proposed operations of the applicant will improperly or unlawfully interfere with or impair any rights granted to existing contract carriers under the Public Utilities Act. Contract carriers holding permits under GS 62-262 are not afforded the same protection in their permit authority from subsequent applications as the Public Utilities Act affords to common carriers operating under certificates issued under the Public Utilities Act. A common carrier is given certain protection in its franchise area consistent with the duty and obligation of the common carrier to provide service to the public under rates and charges on file with the Utilities Commission and regulated by the Utilities Commission. The common carrier must provide service on call and demand to all of the public at published regulated rates and in return for the obligation and duty to provide such service the common carrier is granted certain franchise protection of the Public Utilities Act so long as it is able to adequately serve the public. The contract carrier, on the other hand, is not required to serve anyone and does not serve anyone except those that it voluntarily enters into contracts with for motor carrier service. The contract carrier's minimum rates are on file with the Commission, but it is not required to provide service at such minimum rates and may decline to enter into a contract except at such rates as it desires to negotiate in any particular contract. The Public Utilities Act does not place the same burden and obligation upon contract carriers as it places upon common carriers to provide service in their service area and, by the same token, it does not provide the same franchise protection afforded to common carriers. A protesting contract carrier is permitted to intervene and its protest is heard primarily under the provisions of GS 62-262(i) (5) on the requirement that the Commission give consideration in permit applications to "whether the proposed operations will be consistent with the public interest and the policy declared in this chapter."

The Commission has given due consideration to the proposed operations and finds that they are consistent with the public interest and with the policy declared in the Public Utilities Act, i. e., Chapter 62 of the General Statutes. The Commission concludes that it would not be in the public interest to deny the application based upon the desire of the protestant, American Courier, for protection from another contract carrier of bank documents in securing authority to engage in similar transportation of bank documents as a contract carrier. The protection of one contract carrier of bank documents from any competition when the contract carrier has no duty and obligation to serve the public would be contrary to the public interest. The protestant, American Courier, is free to pick and choose the banks and other customers shipping bank documents which it desires to serve, and it is free under its permit to offer its services to selective banks or bank chains to the exclusion of other banks or bank chains. To deny the applicant's permit for contract authority to contract with such other banks and similar shippers who do not enter into contracts with American Courier would be to authorize arbitrary power of American Courier to confer its services upon such bank or bank chains as it chooses at unregulated contract rates and would leave other banks and banking customers without recourse to for hire motor carrier service as contemplated under the contract carrier permit authority provided in the Public Utilities Act.'

"The foregoing language clearly states the Commission's interpretation of the law as applied to the facts of the present case.

"The contention of the protestant that the proposed operations of the applicant may be in violation of State or Federal banking laws or policies is not properly raised before this forum. It is not the function of this commission to determine nor interpret banking law or policy.

"IT IS, THEREFORE,

ORDERED

"That the application of Wachovia Courier Corporation in this docket be and it is hereby approved and that a contract carrier permit be issued to Wachovia Courier Corporation in accordance with Exhibit A attached hereto and made a part hereof.

"IT IS FURTHER

ORDERED

"That service under the contract carrier permit begin when Wachovia Courier Corporation has filed with the Commission evidence of liability insurance coverage, copies of contracts, not heretofore filed, containing rates and charges which shall be not less than the rates and charges approved or prescribed by the Commission for common carriers performing similar service, and has otherwise complied with the rules and regulations of the North Carolina Utilities Commission all of which shall be done within 60 days from the date of this order."

The evidence at the hearing tended to show that Wachovia Courier Corporation is a North Carolina corporation organized in May, 1969, as a wholly-owned subsidiary of the Wachovia Corporation. Until the formation of Wachovia Courier Corporation, Wachovia Bank and Trust Company, N. A., operated a private courier system by which it transported various commodities between the parent bank and its branches and between Wachovia Bank and Trust Company and its correspondent banks throughout the State.

W. Brooks Mewborn, President of Wachovia Courier Corporation, testified as to the operation of the bank's courier operation and as to the operation of the applicant. He testified that the applicant has an initial capitalization of $200,000 with which to begin business and that the initial investment in vehicles and equipment would exceed $80,000. Wachovia Courier Corporation was formed, according to his testimony, because the operation of the private courier service was becoming too large and complex to be efficiently maintained and it was felt that it could best be operated as an independent subsidiary of the parent corporation. Mr. Mewborn testified that a great deal of difficulty had been experienced in obtaining suitable transportation for this type of material, and that no common carrier transportation was available in North Carolina to provide this type of service. He testified that the only contract carrier operating in North Carolina in any way able to provide the specific service which the applicant sought authority to provide was American Courier Corporation, but that the bank had encountered many problems in dealing with American Courier, and that the service offered by the protestant was not adequate to meet the needs of the banks to be served by Wachovia Courier Corporation. He stated that the service provided by American Courier is mostly "an ``in-conjunction' type service" which means that any service provided one customer must be in conjunction with service provided to another and that this prevents American Courier from having much flexibility and "results in an inability to consistently reach all the computer centers of the customers on time as required to process work." Further, according to the testimony of Mr. Mewborn, the situation becomes worse when Wachovia has a breakdown in its computer centers. He testified that on several occasions this had happened and as the work was not ready for delivery until after American Courier's scheduled time of departure, the delivery was passed up and was left to Wachovia to deliver to the proper destination. According to his testimony, these breakdowns caused them to have to use 508 extra carrier hours in the preceding three months. Mr. Mewborn testified that he had on several occasions contacted American Courier in an effort to obtain this service, but that the protestant was unable to provide the service requested either because American Courier's schedule would not meet the bank's needs, or American Courier did not operate or provide the service in that part of the State.

Burnice W. Nash, Vice President and Branch Coordinator of the First National Bank of Eastern North Carolina, testified that his bank had a need for the specific service to be offered by the applicant, and that so far as he knew no common carrier service is available to fulfill their needs, and that his bank entered into a contract with the applicant because American Courier's schedule of service was not suitable to meet their specific needs.

Hector MacLean, President of Southern National Bank of North Carolina, a witness for the applicant, testified that his bank had a need for the specific transportation service to be provided by the applicant and that this service was not otherwise available by either common carrier or contract carrier at the present time. Mr. MacLean testified that the transportation service offered by American Courier was not satisfactory "due to routes and also price".

American Courier offered testimony in the person of John Sinnott, Regional Vice-President, that his corporation operates in North Carolina under a permit granted in 1958 by the Utilities Commission which authorizes the transportation of the same type of commodities sought to be transported by the applicant. Mr. Sinnott went into considerable detail as to the operations of the protestant in this State. He testified that American Courier is an independent, regulated carrier engaged solely in the transportation business and that they cannot offer banking services or computer processing services to tie in with the transportation. He testified that this was "trapping of traffic" and denied his corporation an opportunity to be competitive in the field. He testified that the position of his company is not that no other contract carrier should be authorized to conduct business but that he felt they were entitled to be protected from what they consider unfair competition.

G.S. § 62-262(i) sets forth six factors to be considered by the Utilities Commission when it passes on an application for a permit as a contract carrier. They are:

"(1) Whether the proposed operations conform with the definition in this chapter of a contract carrier,

"(2) Whether the proposed operations will unreasonably impair the efficient public service of carriers operating under certificates, or rail carriers,

"(3) Whether the proposed service will unreasonably impair the use of the highways by the general public,

"(4) Whether the applicant is fit, willing and able to properly perform the services proposed as a contract carrier,

"(5) Whether the proposed operations will be consistent with the public interest and the policy declared in this chapter; and

"(6) Other matters tending to qualify or disqualify the applicant for a permit."

G.S. § 62-3(8) defines a contract carrier as:

"* * * any person which, under an individual contract or agreement with another person and with such additional persons as may be approved by the Utilities Commission, engages in the transportation other than the transportation referred to in subdivision (7) of this section, by motor vehicle of persons or property in intrastate commerce for compensation, except as exempted in G.S. 62-260."

In addition to the statutory requirements set forth above, an applicant for a permit to operate as a contract carrier in North Carolina must conform to the standards set forth by the Utilities Commission in Rule R2-15(b). State ex rel. Utilities Comm. v. Petroleum Transportation, Inc., 2 N.C.App. 566, 163 S.E.2d 526 (1968). Rule R2-15(b) provides:

"If the application is for a permit to operate as a contract carrier, proof of a public demand and need for the service is not required; however, proof is required that one or more shippers or passengers have a need for a specific type of service not otherwise available by existing means of transportation, and have entered into and filed with the Commission, prior to the hearing or at the time of the hearing, a written contract with the applicant for said service, which contract shall provide for rates not less than those charged by common carrier for similar service."

The protestant contends that the Commission did not set forth findings and conclusions and reasons or bases therefor upon all the material issues of fact, law, or discretion presented in the record and that the order entered by the Commission was erroneous as a matter of law and unsupported by competent, material and substantial evidence in view of the entire record.

It is basic law that on appeal to a reviewing court, findings of fact made by the Commission are conclusive and binding if they are supported by competent, material, and substantial evidence in view of the record as a whole. Utilities Comm. v. Petroleum Transportation, Inc., supra; State ex rel. Utilities Commission v. Radio Service, Inc., 272 N.C. 591, 158 S.E.2d 855 (1968); State ex rel. Utilities Commission v. Champion Papers, Inc., 259 N.C. 449, 130 S.E.2d 890 (1963); State ex rel. Utilities Commission v. Towing Corp., 251 N.C. 105, 110 S.E.2d 886 (1959); State ex rel. Utilities Commission v. R. R., 238 N.C. 701, 78 S.E.2d 780 (1953). It is our opinion that the Commission did make sufficient findings and conclusions as to all the material issues of fact and of law, and that the facts found are supported by competent, material and substantial evidence. The Commission, in its order, set forth the evidence presented at the hearing, which evidence showed that the applicant, Wachovia Courier Corporation, was seeking to gain authority to operate as a contract carrier by permit in the State of North Carolina and that a need existed for the specific service offered by the applicant. Several witnesses testified that they had entered contracts with the applicant in behalf of their banks and that they were unable to obtain the specific service from any existing means of transportation.

The protestant, American Courier Corporation, bases much of its opposition to the granting of the permit to the applicant on the ground that if the permit were granted it would then have competition in the area of transportation. Protestant contends that such competition should not be allowed since the granting of the proposed application would adversely affect the business of American Courier. We do not feel that this is a sufficiently compelling reason to prohibit the entrance of other contract carriers into the field of transporting bank documents and other commodities. In State ex rel. North Carolina Utilities Commission v. Coach Co., 261 N.C. 384, 134 S.E.2d 689 (1964), our Supreme Court, speaking through Moore, J., said: "There is no public policy condemning competition as such in the field of public utilities; the public policy only condemns unfair or destructive competition." This Court, in the recent case of State ex rel. Utilities Comm. v. Petroleum Carriers, 7 N.C.App. 408, 173 S.E.2d 25 (1970), citing the above passage from the Coach Co. case, stated: "The possibility that a transfer of authority to a more competitive carrier will adversely affect existing carriers does not make such a transfer contrary to ``the public interest' as a matter of law." So, too, in the present case, the Utilities Commission's action in authorizing the granting of the permit to the applicant does not denominate the competition generated by that action unfair or against the "public interest". The testimony contained in the voluminous record indicates that the field of commodity transportation is still open and has not been closed out by the granting of this permit.

For the reasons given in the above opinion, the order of the North Carolina Utilities Commission granting Wachovia Courier Corporation's application for a permit authorizing it to transport bank commodities is

Affirmed.

MALLARD, C. J., and PARKER, J., concur.