Case Title: Fargo Freight Truck v. North Dakota Pub. Serv. Com'n

Citation: 129 N.W.2d 368

Docket Number: 

State: north-dakota

Court: North Dakota Supreme Court

Date: 1964-07-09T00:00:00Z

Document:
129 N.W.2d 368 (1964) FARGO FREIGHT TRUCKING, INC., Appellant, v. NORTH DAKOTA PUBLIC SERVICE COMMISSION, Midwest Motor Express, Inc., Hansen Transfer, E. O. Kavli, M. & R. Transfer, Fritz Truck Line, and Erickson Trucking Service, Respondents. No. 8128. Supreme Court of North Dakota. July 9, 1964. *369 Wheeler, Daner & Glaser, Bismarck, for the appellant. Fleck, Smith, Mather & Strutz, Bismarck, for respondent Midwest Motor Express, Inc. John C. Stewart, Commerce Counsel, Bismarck, for respondent North Dakota Public Service Commission. Gene P. Johnson, Fargo, for Van Osdel & Foss, attorneys for respondents Fritz Truck Line and Hansen Transfer. ERICKSTAD, Judge. This is an appeal from a judgment of the District Court of Cass County dated December 14, 1962, sustaining the order of the Public Service Commission dated January 30, 1961, revoking and cancelling Special Certificate No. 235 of the appellant, Fargo Freight Trucking, Inc. The order of the Public Service Commission resulted from a hearing before the Commission on the complaint of Midwest Motor Express, Inc. and Buckingham Freight Lines, Inc. dated March 8, 1960, alleging, among other things, that both petitioners were authorized to transport general commodities between points located within the State of North Dakota; that Fargo Freight Trucking, Inc. held Special Certificate No. 235 issued by the North Dakota Public Service Commission, which authorized the transportation of various commodities from Walcott and Fargo and points within fifteen miles thereof to any point in the State of North Dakota and from any point in the State of North Dakota to Walcott and Fargo and points in North Dakota within fifteen miles thereof; that Fargo Freight Trucking, Inc. ceased to do business on or about January 1, 1960, and that thereafter it rendered none of the services authorized by the special certificate, and thus that its right to own and hold the special certificate had lapsed; and that control of Fargo Freight Trucking, Inc. had been acquired by another carrier, Hart Motor Express, *370 Inc. of St. Paul, Minnesota, without prior approval of the Public Service Commission, in violation of Sections 49-0405 and 49-0406 of the North Dakota Revised Code of 1943. The Public Service Commission made findings of fact to the effect that Hart Motor Express, Inc. entered into an agreement with the principal stockholder of Fargo Freight Trucking, Inc. on November 28, 1959, whereby the former was to purchase the stock of the latter; that on December 11, 1959, Hart Motor Express, Inc. and Fargo Freight Trucking, Inc. entered into a "lease agreement," which in substance provided that Fargo Freight Trucking, Inc. would lease all of its rights and properties to Hart Motor Express, Inc., and that Hart Motor Express, Inc. would take over the management and control of Fargo Freight Trucking, Inc. in consideration of a "rental payment" of $100.00 per month, to be paid by Hart Motor Express, Inc. to Fargo Freight Trucking, Inc., with any other gains or losses from the operation of Fargo Freight Trucking, Inc. accruing to Hart Motor Express, Inc. and with rental payments being deducted from the purchase price as set forth in the stock purchase agreement; that approval of the "lease agreement" was not sought from the Public Service Commission; that after the execution of the "lease agreement," which continued in force until June, 1960, Fargo Freight Trucking, Inc. no longer maintained any terminal or office space, maintained no trucks in Fargo (which previously had been its main base of operations), and had no employees, with the exception of a woman who answered the telephone in the name of Fargo Freight Trucking, Inc.; that the telephone was located in the offices of Hart Motor Express, Inc. and the woman who answered it was under the supervision of said company's employees; that shipments were accepted in the name of Fargo Freight Trucking, Inc. but were picked up and delivered by employees of Hart Motor Express, Inc. on its trucks; that freight bills for such shipments were issued in the name of Fargo Freight Trucking, Inc. but carried the notation "Hart Motor Express Manager and Lessee"; and that the parties to the lease had not determined how the revenue from such shipments was to be divided. From the aforesaid findings of fact, the Public Service Commission concluded: In considering this appeal the following sections of our Administrative Agencies Practice Act apply: Appellant's arguments supporting the many specifications of error may be summarized as follows: first, that the findings of fact do not support the Public Service Commission's conclusion that Fargo Freight Trucking, Inc. abandoned or discontinued service or business contrary to Section 49-18-17 of the North Dakota Century Code; second, that it is immaterial that Hart Motor Express, Inc. leased or acquired control of Fargo Freight Trucking, Inc. without prior approval of the Public Service Commission in violation of Section 49-04-05 of the North Dakota Century Code, since it subsequently obtained the approval of the Commission to purchase all the stock of said company; and third, that the only reason authority was given the Public Service Commission to regulate transfers of utility property and to prevent discontinuance of utility services was to foster efficient and convenient public service and that there was no showing that public service had been interrupted or that the public interest had been adversely affected by the activities of Fargo Freight Trucking, Inc. or Hart Motor Express, Inc. In considering the first contention, Section 49-18-17 of the North Dakota Century Code is relevant: In the case of In re Superior Service Company, N.D., 94 N.W.2d 84, this court found that a motor carrier had ceased operation and abandoned its certificate contrary to Section 49-1817 of the North Dakota Revised Code of 1943 and that this constituted good cause, under the provisions of Section 49-1816 of the North Dakota Revised Code of 1943, for the revocation of its certificate. Said statute, with a slight amendment, is now contained in Section 49-18-16 of the North Dakota Century Code and reads as follows: The appellant contends that this case may be distinguished from the Superior Service case, supra, in that in the Superior Service case there was an actual cessation of public service, whereas in the instant case there *372 was no cessation of public service and thus no abandonment or discontinuance of public service. A review of the facts in light of this contention, however, discloses that the only part that Fargo Freight Trucking, Inc. had in the rendition of this service was that its freight bills were used and that it supplied a telephone operator at the offices of Hart Motor Express, Inc. for part of the day to receive orders. The record does not clearly disclose who actually paid this operator for services rendered. This was public service in name only and cannot be said to have been compliance in substance with the statute. We believe that this statute requires, not only that the public be served, but that it be served by the certificate holder. Such construction of the statute is essential if proper and reasonable supervision and control of common carriers for the public good is to be attained. This construction is consistent with Sections 49-04-05 and 49-04-06 of the North Dakota Century Code, which require that consent of the Commission be obtained before a public utility be sold, assigned, leased, transferred, mortgaged, or otherwise disposed of or encumbered and before any public utility, directly or indirectly, acquire stock or business of any other public utility. We therefore find that Fargo Freight Trucking, Inc. abandoned or discontinued service contrary to Section 49-18-17 of the North Dakota Century Code and that this constituted good cause for the revocation of its special common motor carrier certificate of public convenience and necessity. We do not believe that this is inconsistent with the declaration of public policy contained in Section 49-18-06 of the North Dakota Century Code. Having so found and concluded, it is unnecessary for us to discuss at length the appellant's second and third contentions. It is sufficient to point out that, although the Public Service Commission approved the purchase of all the stock of Fargo Freight Trucking, Inc. by Hart Motor Express, Inc. on December 19, 1960, months after said company had assumed control of Fargo Freight Trucking, Inc. but shortly prior to the revocation of the certificate of Fargo Freight Trucking, Inc., said approval was made conditionally. The words of the order are as follows: It should be further noted that in the hearing on the matter of the question of approval of the stock transfer, objection was made by counsel for Fargo Freight Trucking, Inc. to consideration of issues involving the transfer of the certificate. That being the case, counsel cannot now validly contend that the issues contained in this proceeding were determined in the previous one. As for the contention that there is no showing that public interest was adversely affected, it seems to us that public interest is adversely affected when laws designed to protect the public interest are violated. For the reasons stated in this opinion, the judgment of the district court affirming the order of the Public Service Commission is affirmed. MORRIS, C. J., and BURKE and TEIGEN, JJ., concur. STRUTZ, J., did not participate.