Title: Missouri Pacific Rld. Co. v. State Corporation Comm.

State: kansas

Issuer: Kansas Supreme Court

Document:

192 Kan. 575 (1964)
389 P.2d 813
MISSOURI PACIFIC RAILROAD COMPANY, a Corporation, and RAILWAY EXPRESS AGENCY, INC., Appellants,
v.
THE STATE CORPORATION COMMISSION OF THE STATE OF KANSAS, Appellee.
No. 43,491

Supreme Court of Kansas.
Opinion filed March 7, 1964.
Ralph M. Hope, of Wichita, argued the cause, and W.F. Lilleston, George C. Spradling, Henry V. Gott, George Stallwitz, Richard W. Stavely, Charles S. Lindberg and Ronald M. Gott, all of Wichita, were with him on the briefs for the appellants.
Charles R. Escola, of Topeka, argued the cause, and Robert C. Londerholm and Glenn D. Young, both of Topeka, were with him on the briefs for the appellees.
The opinion of the court was delivered by
HATCHER, C.:
This is an appeal from a judgment of the district court approving an order of the State Corporation Commission which denied the application of the Missouri Pacific Railroad Company and the Railway Express Agency, Inc., to operate the station at Stilwell, Kansas as a non-agency station.
The application to dispense with the agency at Stilwell stated in part:
The facts as disclosed by the evidence will be summarized.
Stilwell, Kansas is a community of 159 people and has only two principal businesses. The agency there now handles the railroad business for the stations at the towns of Redel and Bucyrus, Kansas. These are two non-agency points on the railroad, five miles north and south respectively from Stilwell. In the event the Stilwell agency is discontinued, the agency at Dodson, Missouri, which is 16.6 miles north of Stilwell, will handle the business now handled at Stilwell, including the non-agency business handled by Stilwell for Redel and Bucyrus. The shippers could also use the railroad's agency at Paola, which is 19.6 miles south of Stilwell. There is no passenger service at either of the three points. The freight service is furnished by a tri-weekly train. The business at Stilwell consists mostly of less-than-carload lots which is small in quantity. There is a small amount of carload business. The business handled by the Stilwell agency for Redel and Bucyrus consists only of carload business. There is a telephone in each of the stations at Dodson, Paola and Stilwell. Shippers and consignees of freight may call either of those agencies concerning any railroad business and the railroad will pay the toll charges.
The manner of handling shipments through the Dodson and Paola agents made or received by the residents of Stilwell, Redel and Bucyrus, if Stilwell is discontinued, will be the same as the present handling by the Stilwell agent except that telephone calls will be at the expense of the railroad. The station building at Stilwell will be left unlocked for l.c.l. shipments.
*577 During the past six years preceding the application, the cost of operating the agency at Stilwell exceeded the revenue from incoming and outgoing business at the Stilwell station by three to four thousand dollars per year. If the revenue from the incoming and outgoing business at the towns of Redel and Bucyrus were credited to the Stilwell station, the revenue would be in excess of the expense of the station. The agent at the Stilwell station is occupied but one or two hours each day in performing his duties.
The representatives of the railroad contacted the principal shippers which might be affected by the dispensation of the agency at Stilwell and received no objection. The only protestant that appeared at the hearing was a salesman for the Brown Shoe Company. He stated that he received four or five express shipments of sample shoes from his company each year and returned them about three times a year.
The Commisssion, after considering the evidence, found:
The applicants in due course filed their petition for review in the district court. The reviewing court found the order of the commission to be lawful and reasonable and sustained it.
The applicant has appealed contending that the record contains no evidence to support a finding that public convenience and necessity require the operation of the Stilwell station as an agency station, and the Commission's order is therefore unreasonable.
After a careful examination of the record, we are forced to agree with appellant as to the absence of evidence to support a finding of public convenience and necessity.
It is not contended that public necessity requires an agent at the Stilwell station. It is conceded that stations at Redel and Bucyrus can be operated as conveniently by the agency at Dodson as at Stilwell.
We find no evidence of public inconvenience to the shippers at Stilwell by dispensing with the agency at that point. The two principal shippers expressed no inconvenience or opposition to dispensing with the agency. The only protestant that appeared at the hearing was a Brown Shoe Company salesman who received four or five shipments of sample shoes each year and returned them about three times a year.
Public convenience, as the term is used in the public utility act, *578 means the convenience of the public, not the convenience of an individual doing a very limited business. The operation of a service requiring a substantial expenditure cannot be justified by a showing that the service has been convenient to a single individual. This is a well established principle of law applicable to public utility regulation. (Ill. Central R.R. v. Commerce Com., 399 Ill. 67, 77 N.E.2d 180; Arizona Corporation Com'n v. Southern Pacific Co., 87 Ariz. 310, 350 P.2d 765; Chicago, B. & Q.R.R. Co. v. Drayton, 172 Neb. 321, 109 N.W.2d 369; Alabama Public Serv. Com'n v. Western Ry. of Ala., 264 Ala. 619, 89 So. 2d 64; Illinois Central R. Co. v. Louisiana Public Serv. Com'n, 240 La. 769, 125 So. 2d 159; Utilities Com. v. R.R., 233 N.C. 365, 64 S.E.2d 272; Atchison, T. & S.F.R. Co. v. State, 189 Okla. 485, 118 P.2d 202, and W.M. Ry. Co. v. Pub. Ser. Comm., 144 W. Va. 110, 106 S.E.2d 923.)
In the absence of public convenience or necessity the maintenance of an agency primarily involves a question of business policy with which the commission should not interfere.
The briefs devote much space to a discussion as to whether the Stilwell station is operating at a loss or a profit. The controversy involves the questions of considering allocated expense as well as the direct expense of operation of the station, and whether the business at the Redel and Bucyrus stations should be credited to the Stilwell station. The issues in this case do not require a consideration of loss or profit. Any unnecessary expenditure results in an economic loss. It is the function of the commission to aid in the elimination of unnecessary expenditures, not to perpetrate them. In the absence of any question of convenience and necessity, the manner or method of rendering service should be left to the discretion of the management without interference by the Commission.
The Commission, in its presentation to this court, makes no attempt to justify its finding that public convenience and necessity requires the maintenance and operation of a station and agency at Stilwell.
Other than its contentions that the station at Stilwell is operating at a profit if allocated expenses are disregarded and the business at the Redel and Bucyrus stations are credited to the Stilwell station, a contention which we have passed as unnecessary to the determination of the case, the Commission contends:
"G.S. 1949, 66-187 provides in part:
It should first be noted that the statutory provision relied on by the Commission which was enacted in 1905, was abrogated by the comprehensive public utility act of 1911. (G.S. 1949, 66-101, et seq.)
The act of 1905 contained a mandatory requirement that freight depots be maintained at such cities and places in the state as the Commission should designate. No measure of reasonableness for the designation was provided. Relief was available only in the form of mandamus or injunction. Under the public utility act of 1911 the question of what facilities will be reasonably adequate are questions of fact to be determined after an investigation.
In State, ex rel., v. Railway Co., 117 Kan. 86, 230 Pac. 333, this court, in considering a statute enacted in 1905, relating to stopping passenger trains and building passenger depots in certain cities, stated at page 87 of the opinion:
*580 A similar conclusion was reached in Missouri-Kansas-Texas Rld. Co. v. Standard Industries, Inc., 192 Kan. 381, 388 P.2d 632 recently decided.
The Commission's fear that it will lose jurisdiction to require the appellant to furnish necessary facilities for shippers at the towns of Redel, Bucyrus and Stilwell is not well founded. If changed conditions require additional service at either of the towns, the Commission has ample authority to require it. The authority to require reasonably efficient and sufficient service is granted by the provisions of G.S. 1949, 66-107 which reads in part:
The Commission may order improvements in public service or facilities at any time when public convenience and necessity so demand.
The Commission appears to recognize its general authority. It states in its brief:
A careful examination of the record forces us to conclude that the Commission's order denying the appellant the right to dispense with its agent at the Stilwell station is unreasonable.
The judgment of the district court is reversed with instructions to set aside the Commission's order.
APPROVED BY THE COURT.
FONTRON, J., not participating.