#### STATE OF NORTH CAROLINA Ex Rel. NORTH CAROLINA UTILITIES COMMISSION, v. CAROLINA COACH COMPANY.

(Filed 2 June, 1944.)

1. Utilities Commission § 3—

The granting of a franchise for the operation of any motor vehicle upon the public highways of North Carolina, for the transportation of persons and property for compensation, must be predicated upon public convenience and necessity and a determination made by the Utilities Commission is *prima facie*just and reasonable. G. S., 62-21.

2. Same—

The Commission may, in its discretion, grant a franchise which would duplicate, in whole or in part, a previously authorized similar class of service; and, when it is shown to the satisfaction of the Commission that the existing operations are not providing sufficient service to reasonably meet the public convenience and necessity, and the existing operators, after thirty days notice, fail to provide the service required by the Commission, it would be its duty to do so. G. S., 62-105.

3. Utilities Commission § 4—

In the absence of a showing that the decision of the Utilities Commission was clearly unreasonable and unjust, the appellee, on appeal to the Superior Court, is entitled to an affirmance of the decision of the Commission.

Devin, J., concurring in result.

Seawell, J., dissenting.

Appeal by Carolina Coacb Company, Protestant, from *Phillips, J.,*at March Term, 1944, of Guilford (High Point Division).

Proceeding before the North Carolina Utilities Commission, involving applications for franchise, by The City Transit Company, and Community Transit Lines.

The City Transit Company operates the bus service authorized by the North Carolina Utilities Commission in the city of High Point and *391suburban, areas. Tbis company filed witb tbe North Carolina Utilities Commission, on 23 January, 1943, an application to operate between High Point and Jamestown over U. S. Highway No. 70, thence over Oakdale Cotton Mills Road one mile to Oakdale Mill village and return to High Point over the same route.

The Community Transit Lines operate a passenger bus service out of High Point on Kivett Drive, a highway lying south of U. S. Highway No. 70. The company also operates a passenger bus line between Greensboro and Kernersville *via*Guilford College, Guilford College Station, Friendship (Greensboro Airport), and Oak Ridge. This company filed an application with the North Carolina Utilities Commission, 16 March, 1943, for a franchise to permit it to connect its operations on Kivett Drive with the Greensboro-Kernersville line, through Oakdale Cotton Mill village to Jamestown, crossing U. S. Highway No. 70 to Guilford College, a distance of about nine miles.

A hearing on the application of the City Transit Company was begun before the Full Commission in Raleigh on 25 February, 1943, and was concluded before one member of the Commission at High Point, on 11 May, 1943, at which time and place both applications referred to herein were consolidated for hearing by mutual consent. The Commission, on 16 June, 1943, issued its Order, the pertinent parts of which are as follows:

*“Application of City Transit Company.*This application was supported by a large number of witnesses from all points along the proposed route whose testimony was to the effect that present transportation facilities between High Point and Jamestown are inadequate; that the buses of the Carolina Coach Company are loaded to capacity by through passengers, and cannot and do not adequately serve local needs between said points, and that employees working in plants at High Point and at plants along said route between High Point and Jamestown cannot depend upon existing transportation facilities because of the present unusual congestion incident to war conditions. It also appears from the testimony that Oakdale Mill village, a community of some 400 people, located about one mile southeast of Jamestown, has no public transportation facilities. The proposed route is densely populated, and it appears from the testimony that public convenience and necessity exists for the local service proposed by this application.

*“Application of Community Transit Lines..*The applicant herein now operates out of High Point over Kivett Drive serving the section east of High Point and south of Jamestown; and also operates from Friendship to Greensboro serving the Guilford College section. Said applicant proposed to operate from its route on Kivett Drive to its route through Guilford College Station serving Oakdale Mill village, James*392town and Guilford College. Tbe application, if granted, will co-ordinate tbe applicant’s transportation system, give tbe Oakdale Mill village and tbe Jamestown community transportation service north and south with connections to High Point and Greensboro. It will tend to relieve tbe over-crowded condition of tbe buses of Carolina Coach Company operating through Jamestown.

“Tbe testimony offered supports a finding of public convenience and necessity for tbe proposed service.

“It Is Therefore Ordered: . . . (2) That tbe application of K. Herman Eulk, trading as City Transit Company, for motor vehicle franchise rights to transport passengers from High Point to Jamestown over H. S. Highway No. 70, thence over an unnumbered county highway to Oakdale Cotton Mill village, and return, be and the same is hereby granted.

“(3) That the application of P. Gilmer and Mrs. P. Gilmer, trading as Community Transit Lines, for motor vehicle franchise rights to transport passengers over an unnumbered road leading from Kivett Drive through Oakdale Mill village and Jamestown to Guilford College Station, and return, be and the same is hereby granted.”

In apt time the Protestant, Carolina Coach Company, filed exceptions to the findings and Order of the Commission. These were overruled and the Protestant appealed to the Superior Court of Guilford County.

At the hearing in the Superior Court, it was agreed by all parties *to*waive trial by jury and that the court should hear the evidence and find the facts. Accordingly, the court found the facts and entered judgment as follows :

“1. The Court finds as a fact that the Commission in granting the application as contained in the Order in this cause did not act in a capricious, unreasonable or arbitrary manner or in disregard of the law.

“2. The Court further finds as a fact that the Order of the Commission in granting the application in this cause was not unreasonable and unjust.

“It is, therefore, Ordered and Adjudged that each of the exceptions and. each of the assignments of error as filed by the Carolina Coach Company is overruled and each case is dismissed as of judgment of nonsuit,” etc.

Protestant, Carolina Coach Company, excepted to the signing of the foregoing judgment and appealed to the Supreme Court, assigning errors.

*Gold, McAnally & Gold for City Transit Company.*

*Ratcliff, Vaughn, Hudson & Ferrell for Community Transit Company.*

*Cooper & Sanders and Bryon Haworth for Carolina Coach Company, Protestant.*

*393DeNNy, J.

Tbe appellant presents for our determination only two questions. 1. Under wbat circumstances should tbe Utilities Commission permit tbe establishment of a passenger bus line in North Carolina? 2. Did tbe court below err in granting tbe appellee’s motion for judgment as of nonsuit?

Tbe answer to tbe first question is contained in tbe statute, G. S., 62-105; C. S., 2613 (1). Tbe application for a franchise to operate any motor vehicle upon tbe public highways of North Carolina for tbe transportation-of persons and property for compensation, must be made to tbe North Carolina Utilities Commission. Tbe Commission may, in its discretion, fix a time and place for bearing of said application. Subsection (c) of G. S., 62-105, in part, is as follows: “After such bearing, tbe Commission may issue tbe license certificate, or refuse to issue it, or may issue it with modifications and upon such terms and conditions as in its judgment tbe public convenience and necessity may require”; and subsection (f) of G. S., 62-105, contains tbe following: “Tbe commission may refuse to grant any application for a franchise certificate where tbe granting of such application would duplicate, in whole or in part, a previously authorized similar class of service, unless it is shown to tbe satisfaction of tbe Commission that tbe existing operations are not providing sufficient service to reasonably meet tbe public convenience and necessity and tbe existing operators, after thirty days’ notice, fail to provide tbe service required by tbe Commission,” etc. ,

Under tbe provisions of tbe foregoing statute, tbe Commission may in its discretion grant a franchise which would duplicate in whole or in part a previously authorized similar class of service, and when it is shown to tbe satisfaction of tbe Commission that tbe existing operations are not providing sufficient service to reasonably meet tbe public convenience and necessity, and tbe existing operators, after thirty days’ notice, fail to provide tbe service required by tbe Commission, it would be its duty to do so. Tbe language is that tbe Commission may refuse 'to grant tbe additional franchises unless it is shown to tbe satisfaction of tbe Commission that certain facts exist as set forth in tbe statute. However, tbe granting of a franchise for tbe operation of any motor vehicle upon tbe public highways of North Carolina, for tbe transportation of persons and property for compensation, must be predicated upon public convenience and necessity. Tbe Commission has held that tbe testimony offered herein supports tbe finding of public convenience and necessity for tbe proposed service to be rendered by tbe respective applicants, and has issued its Order accordingly.

Tbe determination made by tbe Commission is *prima facie*just and reasonable. G. S., 62-21; C. S., 1098; *Utilities Com. v. Trucking Co.,*223 N. C., 687, 28 S. E. (2d), 201. While tbe appellant denies tbe *394existence of public convenience and necessity for tbe proposed services, it seriously contends that if tbe services are to be established tbe Commission must give it tbe opportunity to establish them, and only upon its failure to do so does tbe Commission have tbe right under tbe statute to grant tbe franchises sought in this proceeding. This position is based upon tbe contention that tbe services now furnished by tbe appellant are reasonably adequate to meet tbe public convenience and necessity and that it stands ready, able and willing to provide additional services, and further that tbe granting of tbe proposed franchises will result in a duplication in whole or in part of existing services. We think tbe contention is untenable. Tbe facts do not warrant tbe conclusion that tbe services of tbe appellant are being duplicated within tbe meaning of this statute. Tbe City Transit Company now operates tbe bus service authorized by tbe North Carolina Utilities Commission in tbe city of High Point and suburban areas. Tbe additional franchise sought by this company would enable it to operate local buses from High Point to Jamestown over U. S. Highway No. 70, thence to Oakdale Cotton Mills, a village one mile southeast of Jamestown, and to return to High Point over tbe same route, a service purely local in character. Tbe Community Transit Lines seek an additional franchise to permit it to connect its present line on Kivett Drive, east of High Point, with its Greensboro-Kernersville line, to Jamestown, crossing U. S. Highway No. 70 to Guilford College, a distance of 9.1 miles. Tbe appellant operatés a passenger service over U. S. Highway No. 70 between High Point and Greensboro, but does not render any service to tbe local communities to be served under tbe franchise sought, except by its through bus service from High Point to Greensboro over U. S. Highway No. 70, which highway passes through Jamestown. The contention that the operation of a circuitous bus line from High Point over Kivett Drive, thence to Oakdale Cotton Mills, thence to Guilford College, thence to Greensboro, over the Greensboro-Kernersville line, of the Community Transit Lines, is a duplication of the existing services of the appellant, is not persuasive, the Commission found otherwise.

We now come to the second question. At the threshold of the hearing in the Superior Court, the appellant was- confronted with the determination of the Utilities Commission, which is by law presumed to be *prima facie*just and reasonable. The appellant contends that in the hearing below the court erred in requiring it to go forward with evidence since on appeals from the Utilities Commission to the Superior Court, the trial is *de novo.*In the absence of a showing that the decision of the Commission was clearly unreasonable and unjust, the appellee on appeal to the Superior Court is entitled to an affirmance of the decision of the Commission. *Corp. Com. v. R. R.,*170 N. C., 560, 87 S. E., 785. *395As pointed out in *Utilities Com. v. Trucking Co., supra, Stacy, C. J.,*speaking for the Court, said: “It is to be remembered that what constitutes ‘public convenience and necessity’ is primarily an administrative question with a number of imponderables to be taken into consideration, *e.g.,*whether there is a substantial public need for the service; whether the existing carriers can reasonably meet this need, and whether it would endanger or impair the operations of existing carriers contrary to the public interest. Precisely for this reason its determination by the Utilities Commission is made not simply *prima facie*evidence of its validity, but *'prima facie*just and reasonable.’ It is not the intent of the statute that the public policy of the State should be fixed by a jury. The court’s jurisdiction in the premises is neither original nor wholly judicial in character, and so the weight to be given the decision or determination of the Utilities Commission in any given case is made an exception to its usual procedure.” Therefore, upon appeal from the Commission to the Superior Court, the duty of going forward with evidence rests on the appellant, if the appellee elects to stand upon the presumption that the determination of the Commission is *prima facie*just and reasonable. McIntosh on Procedure, 608, where it is said: “If a plaintiff has introduced sufficient evidence of facts giving rise to a presumption, or a conclusion which the court will draw, and not the jury, . . . it is necessary for the defendant to go forward with evidence to meet this presumption; otherwise, he will lose.”

On this record the trial court was justified in the conclusion reached and the judgment entered. The judgment of the court below is

Affirmed.

DeviN, J.,

concurring in the result: The evidence set out in the record was amply sufficient to sustain the findings of the Utilities Commission, and equally so, on appeal, to support the judgment of the Superior Court. dismissing protestant’s case.

The statute (G. S., 62-21) declaring that the determination of the Commission shall be *“prima facie*just and reasonable” established a rebuttable presumption — a rule of evidence. *Meeker v. Lehigh Valley R. R. Co.,*236 U. S., 412. Whether the presentation of the Commission’s decision imposed upon appellant the burden of proof, or of going forward, the findings of the judge, who by consent was exercising also the function of a jury, was in accord with the evidence. No exception is brought forward to the failure to make specific findings of fact. In my opinion a correct result was reached. *Butts v. Screws,*95 N. C., 215.

However, I do not agree as applicable here the statement in the opinion that “in the absence of a showing that the decision of the Commission was clearly unreasonable and unjust, the appellee on appeal to the *396Superior Court is entitled to an affirmance of the decision of the Commission.” This statement of law is derived from an expression in a concurring opinion in *Corporation Commission v. R. R.,*170 N. C., 566 (565), quoted in *Utilities Commission v. Trucking Co.,*223 N. C., 687. I do not regard this as intended to apply to a case where the appeal involves exceptions to the Commission’s findings of fact.

I fear this rule would tend to render nugatory the unlimited right of appeal from an order of the Commission overruling exceptions to its finding of fact, accorded by the statute to “any party affected thereby,” which this Court has construed to mean a trial *de novo.*G. S., 62-20; *Utilities Commission v. Coach Co.,*218 N. C., 233, 10 S. E. (2d), 824.

Seawell, J.,

dissenting: The protestant was entitled to a hearing *de novo*upon the merits — not a mere jaculation from one court to another, in which that hope was born a-dying. *Corp. Com. v. Cannon Mfg. Co.,*185 N. C., 17, 116 S. E., 178. The kind of hearing afforded on this appeal might have been had upon *certiorari*without any statutory appeal. It was neither *de novo*nor upon the merits. The merits are bound up in a factual, not a legal, situation, to be determined upon the existence or nonexistence of public convenience and necessity, which is made the basis of an initial franchise, as well as of the power of the Commission to grant competitive rights where a franchise has already been given. The presumption of *prima facie*reasonableness of the Commission’s order or determination (G. S., 62-21) is to be considered as bearing on the *quantum*of evidence necessary to establish the affirmative of that issue. *Meeker & Co. v. Lehigh Valley R. Co.,*236 U. S., 412, 430, 59 L. Ed., 644; *Utilities Commission v. Trucking Co.,*223 N. C., 687, 28 S. E. (2d), 201.

In the present case the gravamen of the controversy did not engage the attention of the court. The inquiry here was directed entirely to the question whether the Commission had departed from the judicial function, had violated the law, had acted “arbitrarily” or “capriciously,” or had made an unreasonable order — and unreasonableness was obviously understood as coupled with capriciousness, or exceeding some measure of tolerance left undefined. .

I could agree with *Mr. Justice Devin*that a correct result had been reached in the case if it were the province of this Court to act as jurors. But it is not competent for us to say that there is evidence to support the finding when there is no appropriate finding to support.

If, in a case of this kind, it becomes the uniform practice to frame the issue upon the statutory presumption, rather than upon the facts or findings from which the appeal was taken and to which the original *397inquiry was directed, it is scarcely worth while for any litigant to concern himself further after his initial defeat.

Of course, since the trial judge was court and jury, no issue was formally stated, but a perusal of the judgment clearly indicates the diversion from the real issues involved in the controversy. If, in a case of this sort, the issue is to be framed around the statutory presumption alone, the whole purpose of appeal upon the facts is defeated.

There should be a new trial upon the merits of the case.