State Ex Rel. Puget Sound Navigation Co. v. Department of Public Works

On the former appeal (Puget Sound Navigation Co. v.Department of Public Works, 156 Wn. 377, 287 P. 52), the judgment was reversed and the cause remanded for rehearing by the department on the question of whether the Ballard-Ludlow Ferry Company was seeking a certificate to operate a ferry in territory already served.

The steamboat certificate statute (ch. 248, Laws 1927) provides that

". . . the department shall not have power to grant a certificate to operate between districts and/or into any territory already served. . . ."

In protecting from competition an established carrier occupying a given territory, it was the legislative purpose, as plainly expressed by the language of our statute regulating common carriers, to enable the established carrier to more efficiently and at a more reasonable rate serve the public than it could do if other competing lines were authorized to serve the public in the same territory. An apt statement of the policy of such enactments was made by the supreme court of Illinois in West Suburban Transportation Co. v. C. W.T. Ry. Co., 309 Ill. 87, 140 N.E. 56, as follows:

"It is not the policy of the Public Utilities act to promote competition between common carriers as a means of providing service to the public. The policy established by that act is, that through regulation of an established carrier occupying a given field and protecting it from competition it may be able to serve the public more efficiently and at a more reasonable rate than would be the case if other competing lines were authorized to serve the public in the same territory. Methods for the transportation of persons are established and operated by private capital as an investment, but as they are public utilities the state has the right to regulate them and their charges, so long as such regulation is reasonable. . . . Where one company can serve the public conveniently and efficiently it has been found from experience that to authorize a competing company to serve the same territory ultimately results in requiring the public to pay more for transportation, in order that both companies may receive a fair return on the money invested and the cost of operation."

The ascertainment of whether a proposed new service is between districts already served is the decision of an issue of fact. The determination of that question must be made by the department in the first instance. The findings of the department are presumptively correct.

"The question, what is territory already served, is a question of fact. Before that fact can be determined, it requires consideration of economic conditions, ofttimes involving expert testimony; a consideration of the kinds, means and methods of travel; the question of population warranting additional facilities for transportation, or the possibilities of the additional means of transportation increasing the population so as to ultimately make the venture a success. . . . All such questions must be determined in the first instance by the department. . . . `Such decisions are peculiarly within the province of the commission to make, and its findings are fortified by presumptions of truth due to the judgment of a tribunal appointed by law and informed by experience.'" PugetSound Navigation Co. v. Department of Public Works, 152 Wn. 417,278 P. 189.

Though the findings of the department are presumed to be correct, it must be borne in mind that on appeal the evidence will be considered de novo, and if, upon consideration of all the evidence, we determine the facts are contrary to the conclusions arrived at by the department, the cause will be remanded with directions to the superior court to reverse the order of the department. Pacific Northwest Traction Co. v.Department of Public Works, 151 Wn. 659, 276 P. 566.

Do the facts afford a reasonable basis for the order made by the department? Unless the facts clearly disclose that the certificate was granted for the rendering of ferry service in territory already served by the appellants, that question must be answered in the affirmative, and the judgment should be affirmed.

The department found that the territory proposed to be served by the Ballard-Ludlow Ferry Company was not served by the Edmonds-Ludlow Ferry and by the Seattle-Port Townsend-Port Angeles ferries of the Puget Sound Navigation Company and the Sound Ferry Lines; that, while Port Ludlow, Port Townsend and Port Angeles are all located on the Olympic Peninsula, and a traveler could reach that peninsula by taking either the Bremerton ferry or the Seattle-Port Townsend-Port Angeles ferry, those routes were entirely distinct from the route proposed by the applicant and the service was radically different.

I am of the opinion that the territory proposed to be served is now served by the Edmonds-Ludlow ferry, and that the installation of the proposed service would have the effect of dividing the business. The evidence is clear that only about two per cent of the traffic handled by the Edmonds-Port Ludlow ferry is local traffic to or from Edmonds and Port Ludlow. More than ninety per cent of the traffic originates in Seattle, and approximately an equal percentage of the Edmonds-bound business is destined for Seattle. Ballard is the nearest portion of Seattle to Edmonds, and is within the district served by the Edmonds-Ludlow ferry. The terminals of the Ballard-Ludlow Ferry Company will be Port Ludlow, on the Olympic Peninsula, and Ballard, which is a part of the city of Seattle. The termini of the appellants are Port Ludlow, on the Olympic Peninsula, and Edmonds, Snohomish county. One of the terminals of each of the ferries is Port Ludlow.

The distance from Edmonds to Port Ludlow is sixteen nautical miles; from Ballard to Port Ludlow twenty-two or twenty-three nautical miles. A twelve-knot ferry requires an hour and twenty minutes to traverse the distance from Ludlow to Edmonds, and one hour and fifty-seven minutes from Ludlow to Ballard. Edmonds is about fourteen miles north of the main portion of Ballard, or about twenty-one minutes distance by car. Edmonds is sixteen miles north of the downtown section of Seattle, or twenty-nine minutes by car. From the main portion of Ballard to the central part of the downtown section of Seattle, the distance is seven miles, or, measured by time, seventeen minutes by car.

"A ferry in its ordinary sense is but a substitute for a bridge where a bridge is impractical, and its end and use is the same.

"In State ex rel. United Rys. Co. v. Wiethaupt, 231 Mo. 449,133 S.W. 329, it is said:

"`The idea of a ferry presupposes a road traveled by the public which is bisected by the watercourse, the ferry serving in a different way, the same purpose that is served by a bridge. As the bridge is made for the road, not the road for the bridge, so is the ferry made for the road, not the road for the ferry; the ferry is the incident, the road is the principal.'" Puget SoundNavigation Co. v. Department of Public Works, 156 Wn. 489,287 P. 672.

The proposed Ballard-Ludlow ferry would be a substitute for a bridge between those two points. Treating the Edmonds-Ludlow ferry as a substitute for a bridge, the evidence discloses that the two ferries, or substitutes for bridges, are sixteen miles apart, and that they practically parallel each other. It will not be denied that they both serve the Olympic Peninsula, the same territory. Substantially all of the traffic originates in Seattle and practically all of the traffic from the peninsula is for Seattle. On the Olympic Peninsula, the respondent ferry company and the appellants operate into the same territory, and on the main land, although the termini are not identical in location, they are identical in that they would draw the same traffic both as to origin and destination.

Similar in principle to the case at bar is Pacific NorthwestTraction Co. v. Department of Public Works, 151 Wn. 659,276 P. 566, in which was involved the "territory" provision of the automobile transportation certificate act. In that case, the appellant traction company held a certificate to supply motor vehicle service over the old Pacific highway from Seattle to Everett. When the new Pacific highway from Seattle to Everett was completed, the appellant traction company and respondent Krakenberger applied for a certificate to operate over the new Pacific highway. The department granted the certificate to Krakenberger. The order was affirmed on review by the superior court, but on appeal was reversed by this court. We said:

"Under this statute, a certificate holder in territory already served is entitled to priority as to a certificate in that territory. State ex rel. United Auto Transp. Co. v. Dept. ofPublic Works, 119 Wn. 381, 206 P. 21; Yelton McLaughlinv. Dept. of Public Works, 136 Wn. 445, 240 P. 679.

"Inquiry must then be directed to whether the Pacific Northwest Traction Company was, when it made its application for a certificate over the new highway, serving the territory which would be served under the new certificate. This requires a statement of the situation. . . .

"The Traction Company operates motor stages through Everett and into the territory to the north. It also operates stages to the territory south of the city of Seattle. The great bulk of the transportation between Everett and Seattle is through transportation, terminal to terminal, from one city to the other, or to points beyond. Of the total transportation between the two cities, approximately sixty per cent originates at or is destined to points north of the city of Everett. The amount of the local traffic picked up between the two cities is very small. Almost all of the forty per cent which does not originate at or is destined to points north of Everett originates in one city or the other and is destined to the other city. The country through which the new highway passes is thinly settled, and the amount of traffic to be derived from that territory cannot be said to be more than nominal. From these facts, which are not in dispute, it must be concluded that the Traction Company, under its present certificate, serves, not only the territory between the two cities, but the inhabitants of those cities as well, and the territory to the north of Everett and to the south of Seattle. ...

"The facts stated bring the Pacific Northwest Traction Company within the meaning of the statute which provides that a certificate holder in territory already served by it, has a prior right to another certificate which is to be issued to serve that territory. . . ."

In North Coast Transportation Company v. Department of PublicWorks, 157 Wn. 79, 288 P. 245, the respondent transportation company held a certificate to furnish motor vehicle service over the highway ("High Line route") between Seattle and Tacoma. A new route between those cities was completed, whereupon the respondent transportation company and appellant Krakenberger applied for a certificate to operate over the new route. The department issued the certificate to Krakenberger. On review by the superior court, the order was reversed. On appeal, we affirmed the order of reversal, saying:

"The department of public works is not given unlimited power to grant certificates of convenience and necessity authorizing the furnishing of passenger and express service over a given route to whomsoever it will, regardless of existing conditions. On the contrary, its powers in this respect are governed by statute, and the statute (Laws of 1921, p. 341, chap. 111, § 4) [Rem. Comp. Stat., § 6390] expressly provides that it shall have power to grant a certificate in a territory already served by a certificate holder only when the existing certificate holder will not perform the service to the satisfaction of the department. There is here no question as to the service rendered by the existing certificate holder. . . . It was further shown that between 93 and 94 per cent of the passengers carried by the respondent were through passengers, that is, passengers who rode from terminal to terminal, and that its motor coaches used for the transportation of passengers at the time of the hearing were making an average of sixty trips per day between the terminals. Nor was any formal complaint ever made to the department of the inadequacy of the service. But had there been, it would not alone have been a sufficient reason for granting a certificate to another. As we said in State ex rel. United Auto Transp. Co. v.Department of Public Works, 119 Wn. 381, 206 P. 21:

"`The question of whether the service is inadequate, or whether the rates charged by relator are proper, are questions which, under the law, the relator is entitled to a hearing upon, and it is only after a hearing and an order entered directing the relator to change its schedule or rates, and a refusal by the relator to obey that order, that respondents have power to issue a certificate to some other person to then inaugurate a new service.'

"The appellant Krakenberger has no certificate of convenience and necessity authorizing him to furnish passenger and express service between the cities of Tacoma and Seattle over any route. In fact, he is not engaged in the business of carrying passengers and express matter for hire in motor propelled vehicles in any place or over any route in the state, and the record shows that he never has been so engaged. To him the certificate means the inauguration of an entirely new service.

"If, therefore, there is justification for the order of the department of public works, it must be found in the fact that it authorizes a service in territory not already served by a certificate holder. But the record lends no support to this conclusion. Not only is the territory over the entire route served by the respondent certificate holder, but it is served for a part of its distance by a number of other certificate holders who have authority to operate from the terminals to intermediate points. . . .

"While the new route may be more convenient to some of the local inhabitants and less convenient to others than the old route, both routes serve the same territory. Looking at the application of the appellant in the light of the facts shown, it is at once apparent that the desire for the certificate is not to serve the traffic arising from the local territory. This traffic, as we have shown, is but little more than nominal. Its actual purpose is to serve the traffic arising at the terminals of the route, and this is territory already served."

The judgment should be reversed, and the cause remanded with directions to the superior court to reverse the order of the department.

TOLMAN, C.J., and MITCHELL, J., concur with MILLARD, J.