Opinion ID: 1681791
Heading Depth: 1
Heading Rank: 2

Heading: the case on its merits.

Text: The only ultimate question before the Court of Civil Appeals and before this Court is whether the trial court abused its discretion in granting a temporary injunction to prevent enforcement of the Commission's rate order until the case can be tried on the prayer for permanent injunction. Texas Foundries v. International Moulders & F. Wkrs., 151 Tex. 239, 248 S.W.2d 460, 462. There was no abuse of discretion in the issuance of the writ if Haulers pleaded and offered evidence tending to prove a cause of action, that is, a probable right to a permanent injunction and a probable injury. Southwestern Greyhound Lines, Inc. v. Railroad Commission, 128 Tex. 560, 99 S.W.2d 263, 109 A.L.R. 1235; Transport Co. of Texas v. Robertson Transports, 152 Tex. 551, 261 S.W.2d 549, 552. The Court of Civil Appeals found that the evidence adduced on the hearing established probable injury, but held that as a matter of law Haulers did not and could not show a probable right to a permanent injunction. We disagree; and, accordingly, we reverse the judgment of the Court of Civil Appeals and reinstate the temporary injunction. Haulers' application for writ of error contains six points of error. The first point asserts that the Court of Civil Appeals erred in holding that the Commission's order was not suspended by the filing of Haulers' suit. We have held in our discussion of procedural matters that this question was not properly before the Court of Civil Appeals and is not properly before this Court for determination. With that problem put aside, we have only to decide whether any one of the other points presents a legal basis for the granting of a permanent injunction and whether the evidence adduced tends to establish Haulers' right thereto. We have concluded that the sixth point presents a legal basis for the trial court's finding of probable right. The point asserts, in effect, that the Commission's order may be declared invalid because of the hurtful effect of the prescribed rates on competing carriers and on the needs of commerce in this State. The Court of Civil Appeals held that the order cannot be declared invalid if the prescribed rates are fairly compensatory to the railroads, even if enforcement of the order should result in financial ruin of competing carriers. That Court put its thinking in these words (369 S.W.2d 941-942): It is our opinion that their [motor carriers] right to avoid these injuries, or even their right of survival, must be viewed from the standpoint of public interest, free enterprise, and our competitive economic system.    We believe that the injuries to be sustained by appellee motor carriers represent the price they must pay for their confessed inability to be competitive in this area. We do not share that view of the controlling law. While we can agree that Haulers' right of survival must be viewed from the standpoint of public interest, we are unable to agree that under governing regulatory legislation the public interest turns alone on low rates for one segment of the transportation industry. Power to adopt, prescribe and change rates to be charged by railroads was first conferred on the Railroad Commission by an Act of the Legislature passed in 1891 creating the Commission. See Gammel's Laws of Texas, vol. 10, p. 57. The Legislature was not concerned at that time with the effect that regulated or unregulated rail rates might have on intrastate carrier competition. It was concerned, rather, with protecting passengers and shippers against exorbitant and discriminatory charges. Heavy duties were laid upon the Commission to prevent those practices and heavy penalties were prescribed for failure of the railroads to comply with Commission orders and regulations. Provision was made for an appeal to the courts by any railroad company or other party at interest dissatisfied with a Commission order, and the burden was placed on the plaintiff in the trial of any such suit to show that the rates, orders, etc., complained of were unreasonable and unjust to it or them. The appeal provisions of the Act remain in substantially the same form today, and are to be found in Articles 6453 and 6454. [3] By the end of the first quarter of the twentieth century, motor vehicle transportation of both passengers and freight, unregulated either in its use of public roads or in passenger fares and freight charges, had begun to clog the highways, posing at the same time a threat of destructive competition to railroads. State regulation of motor vehicle transporation began with enactment by the Legislature in 1927 of a law regulating motor-bus transportation of passengers on the public highways. See Acts 1927, 40th Leg., ch. 270, p. 399. It continued with enactment by the Legislature in 1929 of a law regulating motor carriers transporting property over public highways. See Acts 1929, 41st Leg., ch. 314, p. 698. These acts as subsequently amended now appear in our statutes as Articles 911a and 911b. From the beginning these regulatory acts have conferred upon the Railroad Commission authority to adopt and prescribe passenger fares and freight charges as well as authority to limit the number and type of vehicles using the highways through a system of certificates and permits. When the Act of 1929 regulating motor carriers transporting property was largely rewritten in 1931, it included a declaration of public policy, now shown as Sec. 22b of Art. 911b, which reads in part as follows:    The rapid increase of motor carrier traffic, and the fact that under existing law many motor trucks are not effectively regulated, have increased the dangers and hazards on public highways and make it imperative that more stringent regulation should be employed, to the end    that the use of the highways for the transportation of property for hire may be restricted to the extent required by the necessity of the general public, and that the various transportation agencies of the State may be adjusted and correlated so that public highways may serve the best interest of the general public. In 1940 the Austin Court of Civil Appeals decided Texas & P. Ry. Co. v. Railroad Commission, 138 S.W.2d 927. The primary question in the case was whether an applicant was required to establish public convenience and necessity to obtain a special commodity permit. The applicant claimed a right to the permit without making that proof, and, incidentally, claimed a right to charge such rates as he saw fit. After an elaborate analysis of the statute, the Court concluded that its primary purpose was to preserve the highways and to protect the public in their use, but added (138 S.W.2d 931): The Act in question clearly discloses the additional purposes of preserving other established lines of transportation, and even though a public need be shown for additional operation, a further studied effort is shown to prevent, through regulation, unfair, discriminatory, or destructive competition between such authorized carriers as would ultimately impair their usefulness. After the case reached this Court by application for writ of error, the applicable statute was amended by Acts 1941, 47th Leg., ch. 442, p. 713 to require expressly that applicants for specialized motor carrier certificates establish public convenience and necessity. This Court reversed the judgments of the lower courts and dismissed the suit for mootness. Railroad Commission of Texas v. Texas & P. Ry. Co., 138 Tex. 148, 157 S.W.2d 622. The act of 1941, supra, now a part of Art. 911b, prohibits the Commission from granting a certificate authorizing operation of a Specialized Motor Carrier unless it is established (1) that the services and facilities of the existing carriers serving the territory or any part thereof are inadequate; (2) that there exists a public necessity for such service, and (3) the public convenience will be promoted by granting said application. See Art. 911b, Sec. 5a(d). Section 1 of the Act makes a legislative Declaration of Policy. A part of the declaration reads: It is hereby declared to be the policy of the Legislature to    provide regulation for all common carriers, without unjust discriminations, undue preferences or advantages, unfair or destructive competitive practices; improve the relations between and coordinate transportation by the regulation of such motor carriers [specialized motor carriers] and other common carriers; preserve the common carriers serving the public in the transportation of commodities generally over regular routes; develop and preserve a complete transportation system properly adapted to the needs of the commerce of this State and of the National Defense Program. A suggestion in an amicus curiae brief of The Texas Railroad Association that the declaration of public policy cannot be given effect because not adequately expressed in the bill's caption is unsound. The declaration is but a statement of the Legislature's reasons for, or purposes in, enactment of the statute. Sec. 35, Art. 3 of the Constitution, Vernon's Ann.St., does not require that the Legislature's reasons or purposes be expressed in the title of a bill; it requires only that the subject of the bill be expressed therein. Cf. Oklahoma Light & P. Co. v. Corporation Commission, 96 Okl. 19, 220 P. 54, and see 50 Am.Jur. 157, Statutes, § 177. In 1946 the Supreme Court of the United States decided Steele v. General Mills, 329 U.S. 433, 67 S.Ct. 439, 91 L.Ed. 402. Basically the case involved the right of a contract carrier to recover from a shipper the difference between their contract rate for transportation services and the rate prescribed by the Railroad Commission. Incidentally, the shipper contended that the Commission was not authorized by Art. 911b to prescribe rates for contract carriers. The Supreme Court recognized the opinion of the Court of Civil Appeals in Texas & P. Ry. Co. v. Railroad Commission, supra, as correctly reflecting the law of Texas with reference to the Commission's authority to prescribe rates, and said (329 U.S. 440, 67 S.Ct. 443, 91 L.Ed. 408): The Texas motor carrier legislation was designed to be a part of a state transportation regulatory system applicable alike to all lines of transportation which represents a `studied effort    to prevent, through regulation, unfair, discriminatory, or destructive competition between such authorized carriers as would ultimately impair their usefulness.' Texas & P. R. Co. v. Railroad Commission, Tex. Civ.App., 138 S.W.2d 927, 930, 931 rev'd on other grounds, 138 Tex. 148, 157 S.W.2d 622. Cf. Stephenson v. Binford, 287 U.S. 251, 272-273, 53 S.Ct. 181, 187, 77 L.Ed. 288 [298, 299], 87 A.L.R. 721. The foregoing brief review of legislative enactments and judicial pronouncements renders inescapable the conclusion that the statutes authorizing regulation of carriers of goods and property in this State have broader objectives than merely providing a particular or limited service to the public at the lowest possible cost. They have objectives also of providing transportation services to all segments of business and industry where such services are necessary and of protecting those services against unfair and destructive practices, thus developing and preserving a complete transportation system adapted to the needs of commerce of this State. These objectives cannot be attained if rates prescribed for one segment of the transportation industry for part of a total service, even though fairly compensatory to that segment, are so low as to destroy another segment of the industry which is necessary to performance of the total service in meeting the needs of commerce. Haulers hold specialized motor carrier certificates. Those applying for such certificates are under a heavy and strict burden of establishing a public necessity for their services, and the Commission must make full and complete findings of fact showing public necessity or an order granting an application is void. See Art. 911b, Sec. 5a(d); Thompson v. Railroad Commission, 150 Tex. 307, 240 S.W.2d 759. It would be paradoxical to say that the Commission is authorized to put in a transportation service, demanded by public necessity, with its right hand and to destroy it with its left, and that both acts are in the public interest. We therefore hold that Haulers are parties at interest within the meaning of Art. 6453 authorizing appeals from orders of the Commission prescribing and adopting rail freight rates, and that they may enjoin enforcement of prescribed rates if they can discharge the burden placed on them by Art. 6454 of showing that the rates are unjust and unreasonable to them in that there is a reasonable likelihood that their businesses and their services, for which there is a public necessity, will be destroyed or substantially curtailed. We are not persuaded to a contrary conclusion by the opinions in Thompson v. Railroad Commission, Tex. Civ.App., 232 S.W.2d 139, reversed on other grounds, 150 Tex. 307, 240 S.W.2d 759, and Texas Motor Coaches v. Railroad Commission, Tex.Civ.App., 59 S.W.2d 923, affirmed, 123 Tex. 517, 73 S.W.2d 511, cited by the Court of Civil Appeals. Both cases involved matters to be considered by the Commission in the granting of certificates. Neither involved rate-making destruction of a service theretofore found to be a public necessity. The parties and amici curiae cite many decisions of courts of other states, of United States District Courts and Courts of Appeal, and of the Supreme Court of the United States construing other and different legislative regulatory enactments. None of the enactments are shown to be similar in content or purpose to Texas statutes. It would serve no good purpose to analyze and distinguish them further. The only question which remains is whether Haulers pleaded and adduced evidence tending to prove its probable right to a permanent injunction. Its pleading contains the following allegations: The Order of December 18, 1962, would impose rail pipe rates which would be discriminatory against plaintiff and its members. If put into effect, it will cut the rail rates on pipe to such an extent that the oil field carriers will no longer be competitive. As a result, plaintiff and its members will not participate in the transportation of pipe between any two points in Texas which can be served by railroad. And not only will the Order of December 18, 1962 have the effect of diverting intrastate shipments of pipe to the rail carriers, but it will also divert interstate ex-barge traffic to intrastate rail routes. The long-haul transportation of pipe is a main source of revenue to plaintiff and its members, and the Railroad Commission erred in ignoring the disastrous effect that its Order of December 18, 1962, will have on the oil field carriers of this State. The trial court tried the right to a temporary injunction upon the sworn pleadings and affidavits. The affidavit of Edgar P. Hardin, a witness for Haulers, states: If the rates prescribed by the Commission in the order of December 18, 1962, become effective, the over-the-road pipe traffic, now being handled by oilfield carriers will be diverted almost entirely to the railroads. The order of December 18, 1962, cuts the rail pipe rates so greatly that oilfield carriers will be unable to compete for the transportation of pipe between points and areas in Texas    As an example of severe rate cutting, note the comparison at 300 miles: At the present time the rail rates are only 3½¢ per Cwt. below those of the oilfield carriers; under the order of December 18, 1962, they would be 28¢ per Cwt. below the oilfield carrier rates. The oilfield carriers cannot compete under such conditions.   ; the net effect of the Commission's order will be to reduce oilfield carriers to short-haul field operators insofar as pipe traffic is concerned. As a result, the oilfield carriers of Texas will be deprived of a substantial portion of the revenue upon which they now depend. The affidavit then summarized reports from 14 carriers for the year 1962 showing total revenue of $8,463,164.00, of which pipe shipments provided $1,658,213.00, and that the pipe shipment revenue would have been reduced 19.6% by the Commission's order. The affidavit also referred to attached exhibits and continued:    As is indicated in these Exhibits, the financial condition of the oilfield carrier industry is now extremely precarious; the reduction in traffic and revenue which unquestionably will result from the order of December 18, 1962, would be disastrous to this industry. Other affidavits were presented, but we need not examine them as we regard the affidavit just quoted as tending to prove that the businesses and services provided by Haulers will be destroyed, and thus as satisfying the requirement of showing a probable right to a permanent injunction. It must be remembered that one is not required to prove that he will prevail on final trial in order to invoke the trial court's discretion to grant a temporary injunction. Transport Co. of Texas v. Robertson Transports, 152 Tex. 551, 261 S.W.2d 549, 552. Some of the crucial factual statements in Haulers' pleading and in the affidavit are somewhat in the nature of conclusions, but we regard them as sufficient to support the trial court's order in the absence of special exception and objection. In conclusion, it will perhaps be well to state what we have not held. We have not held that a permanent injunction should issue if the evidence on final trial establishes merely that Haulers will suffer some loss of profits or revenue if the Commission's order is enforced. Our order granting Hill & Hill's application for writ of error is set aside and the application is dismissed for want of jurisdiction. The judgment of the Court of Civil Appeals is reversed and the temporary injunction granted by the trial court is reinstated. SMITH, CULVER and NORVELL, JJ., concurring in the result.