Court Opinion

ID: 3583317
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:33:58.402152+00
Date Added: 2024-06-11T13:38:12.297348
License: Public Domain

The appellant, The Motor Haulage Company, Inc. (hereinafter also referred to as Applicant), made application to the Public Service Commission of the State of New York for a permit to operate as a contract carrier pursuant to section 63-n of the Public Service Law. That section provides, in part, that "No person shall engage in the business of a contract carrier by motor vehicle on any public highway in this state unless there is in force with respect to such carrier a permit issued by the commission authorizing such person to engage in such business". Section 63-k is to the same effect but refers to a certificate for common carrier by motor vehicle. Both sections contain so-called "grandfather clauses" providing that carriers in bonafide operation on February 1, 1938, were entitled to permits or certificates without further proceedings.
Hearings on the application were held on two days before a principal law clerk. The only witness who gave testimony was a vice-president of Motor Haulage. No one testified on behalf of the Commission and no evidence in contradiction of the testimony was presented. Thereafter a report, which was adopted by the Commission, with one dissenting vote, was submitted by *Page 342 
the principal law clerk. By the Commission's order, the applicant was granted a certificate of public convenience and necessity as a common carrier by motor vehicle for the transportation of "General Commodities:
"From New York City to all points in the following counties: Nassau, Orange, Rockland, Suffolk, Sullivan, Westchester.
"From all points in the following counties to New York City: Rockland, Suffolk."
The order further provided: "That as operations wholly within the commercial zone of the city of New York, as fixed by this Commission, which are not under a common control, management or arrangement for a continuous carriage or shipment by motor vehicle to or from a point without said zone are not subject to regulation, a certificate is not required therefor."
Thereafter this proceeding was instituted, pursuant to article 78 of the Civil Practice Act. It was transferred to the Appellate Division, Third Department, where by a closely divided court, the conclusion reached by the Commission was upheld.
Public Service Law, section 63-i is entitled "Declaration of policy and delegation of jurisdiction." It is not necessary to quote it here.
Section 63-j, subdivision 2, reads as follows: "2. The commission may from time to time establish such just and reasonable classification of brokers or of groups of carriers included in the term common carrier by motor vehicle, orcontract carrier by motor vehicle as the special nature of theservices performed by such carriers or brokers shall require,
and such just and reasonable rules, regulations and requirements, consistent with the provisions of this article, to be observed by the carriers and brokers so classified or grouped, as the commission deems necessary or desirable in the public interest." (Emphasis supplied.)
Public Service Law, section 2, is entitled "Definitions." Subdivision 30, clause (b) of that section provides: "The term `common carrier by motor vehicle' means any person who or which undertakes, whether directly or by lease or any other arrangement, to transport property, or any class or classes of property, for the general public by motor vehicle for compensation, whether over regular or irregular routes, or within a defined territory, including such motor vehicle operations of *Page 343 
carriers by rail or water, and of express or forwarding companies to the extent they are not otherwise included within the provisions of parts one and two of the interstate commerce act of the United States and the laws of this state."
Subdivision 30, clause (d) reads: "The term `contract carrier by motor vehicle' means any person, not included in (b) of this paragraph, who or which under special and individual contracts or agreements, and whether directly or by lease or any other arrangement, transports property by motor vehicle for compensation."
Reference has already been made to Public Service Law (§§ 63-k and 63-n). It is not necessary to quote them in full here.
The vice-president-witness of Motor Haulage gave testimony as to the different types of contracts used by the Applicant and in general the modus operandi of the corporation. Motor Haulage was incorporated back in 1916 and its equipment consists of 154 motor trucks with capacities ranging from 550 pounds to 15 tons, 69 tractors and 116 semitrailers with capacities up to 20 tons. Its trucks and semitrailers embrace the following types of equipment:
1. Station wagons, rack platforms and van body trucks and semitrailers for general merchandise.
2. Van body trucks equipped with armored cabs and Babaco alarms for transporting valuable products.
3. Insulated van bodies for handling fresh meats.
4. Insulated and heated bodies for handling wines and liquors in the winter time.
5. Winch trucks for handling large and bulky pieces.
6. Bodies equipped with special racks and scaffolding for handling metal car signs.
7. Small delivery trucks for handling express shipments.
8. Reach semitrailers, 48 feet long for handling aeroplanes.
9. Tank trucks for syrups, liquid sugar, and other fluids.
That list shows the special character of the equipment required for the contract operations.
Motor Haulage is engaged in both interstate and intrastate business. A large portion of its business is interstate. The company maintains two garages in Brooklyn, one in New York City, two in Jersey City and one each in Harrison, Newark *Page 344 
and Long Island City. From its organization, its business has primarily been that of furnishing, under special contracts, trucks for handling and transporting goods and merchandise within a radius of fifty to sixty miles of Columbus Circle, New York City, although trucks operate to some extent to points much more distant.
Approximately 95% of the transportation performed is under contracts of a special nature, the terms of such contracts ranging from one to five years. Those contracts, in most instances, have been secured by taking over the trucking equipment and personnel of industrial and merchandising companies and substituting therefor, under contract, motor haulage service for such companies in lieu of that previously performed by them with their own trucks. Under the contracts, Applicant undertakes to provide identically the same character of service which its patrons formerly provided for themselves by the use of their own trucking equipment and personnel. In order to do that, Applicant is obliged to conduct the operations under each contract as a separate unit. With very few exceptions, the equipment used for transporting the products of a particular patron is exclusively assigned to that patron, so that there is no intermingling of freight on a single truck or unit for several patrons.
At the time of the hearings, Applicant had contracts covering both intrastate and interstate operations with approximately forty-nine customers. In addition, it had contracts with five or six customers covering operations only within the State of New York, although the transportation covered by some of these may be interstate commerce. Applicant's proof included the presentation in evidence and reference to numerous contracts totaling one hundred in number.
The contracts entered into between applicant and its customers do not contain uniform provisions and rates, but vary according to the nature and requirements of the particular customer. They may be roughly divided into the following categories:
1. Contracts of rental without responsibility. Under these contracts, Applicant furnishes trucks, with or without drivers, to customers to be used by customers as they may see fit. Applicant assumes no responsibility for goods handled in the trucks. *Page 345 
In some instances it agrees to furnish chauffeurs to operate the trucks. In other instances, the drivers are supplied by the lessee. When chauffeurs are furnished, Applicant is reimbursed by its patrons for their wages. As a general rule the contracts do not specify the nature of the commodities to be transported. The trucks are operated by the lessees in the same manner as if they were owned by them. Applicant usually agrees to maintain the leased equipment in good repair, to maintain personal injury and property damage insurance, and to garage and fuel the trucks. The lessee directs the operation of the vehicles. At the time of the hearings Applicant was a party to seven such contracts, three of which related to intrastate commerce in New York.
Applicant contended and the Commission has held that this type of contract does not constitute transportation subject to the Public Service Law and, therefore, is not subject to regulation by the Commission. Therefore, no issue is presented here as to that phase of the Commission's decision.
A part of the Applicant's operations lies within the New York commercial zone and is therefore exempted from regulation under the statute. [Public Service Law, § 63-i, subd. 3, cl. (c).] The New York commercial zone has been defined by the Commission as embracing the whole of the City of New York and certain towns and cities in Nassau and Westchester Counties, which are contiguous to the City of New York. A part of the operations is interstate and that part is subject to regulation by the Interstate Commerce Commission under the Federal Motor Carrier Act. That Act is similar to the one under consideration.
2. Rental contracts with responsibility. Under these contracts Applicant assumes responsibility for goods transported in the trucks leased. The contract does not provide for a detailed description of the territory within which the leased trucks may be operated. Applicant issues no receipts for any goods loaded on the trucks. It does not know what the trucks may be used for or what goods may be transported in them. The routing of the trucks and the nature of the cargo transported is entirely within the direction of the customer. Applicant assumes liability for loss or damage for goods loaded in *Page 346 
the trucks if the customer can prove the loading as to which damage occurs. The majority of the trucks used under these contracts bear the name of the customer. At the time of the hearing, Applicant had nine such contracts, seven of which involve intrastate operations. The Applicant submitted no proof of any operations under these contracts because "We would not be in a position to do so because we don't know what is loaded on the truck or where the truck goes to."
3. Tonnage Contracts. Under this type of contract Applicant assumes responsibility for the transportation of goods. Compensation for the transportation services performed is predicated upon a weight, measurement, gallonage or unit basis. Practically all of these contracts contain an agreement to provide special trucks of varying capacities on an hourly or day basis to handle special deliveries or special commodities that cannot be handled in conjunction with the usual run of commodities handled for the concern under contract, or to provide transportation to or from points for which no tonnage, measurement, gallonage, or unit basis rates have been provided in the rate schedule, or where for other reasons, compensation is determined on an hourly basis. They also contain provisions, in most instances, that in the event that the wages of chauffeurs and helpers or taxes of various kinds are increased during the period of the contract, the increase shall be borne by the customers.
The negotiation of these contracts involved an agreement on the part of Applicant to take over the fleets of trucks of the customers that were being operated by them, including the personnel. The Applicant introduced into evidence eighteen tonnage contracts, all but one of which covered intrastate shipments within and without the exempted intrastate area. In addition Applicant introduced into evidence sixteen contracts with steamship and railroad companies. All of the operations under those sixteen contracts are limited to commercial zone operations insofar as they affect intrastate movements. Applicant also had oral contracts calling for special services in addition to transportation. Examples of these special service contracts are (1) the salvaging of damaged airplanes for Grumman Aircraft Engineering Corporation and (2) the performance *Page 347 
of emergency transportation for such companies as the Western Electric Company, the Jersey Bell Telephone Company, and the New York Telephone Company whenever they may require emergency replacement deliveries of equipment and materials that have been damaged due to floods, storms, et cetera.
Ninety-five per cent of the business of Applicant is performed under contracts of the nature described under the aforementioned categories. The remaining 5% is described as "miscellaneousoperations." Those operations involve transportation of individual shipments which Applicant is requested to perform and the arrangement for which is negotiated by letter or by telephone conversation, subsequently confirmed by letter. In some instances the contract is entirely oral. Transportation of this character is performed between points within a radius of fifty or sixty miles of Columbus Circle, New York City, and to almost any point on Long Island. The uncontradicted and undisputed testimony is that Applicant has always negotiated an agreement for even individual shipments and has never undertaken to handle any freight if unable to arrive at some mutually satisfactory arrangement to make the transportation. Applicant has never held itself out to carry for anybody that might call upon it to transport goods. An agreement is made for each individual movement. The business under these contracts is business outside of Applicant's regular (long term) written contracts. Included in this category are business concerns which, instead of having a regular run of freight, have only intermittent movements. This type of operation is not limited to shippers with whom Applicant already has contracts. These are operations under arrangements made in each instance for the individual operation.
The record also contains a statement summarizing briefly some of the outstanding provisions found in the contracts employed. The purpose of this summary was to point out the special requirements of the various customers. Some of the provisions are as follows:
1. Provision by which Applicant agrees to paint the name of the lessee upon trucks used in performing transportation for it. Under the tonnage contracts 149 automotive units carry the customer's *Page 348 
name; 14 under rental contracts. Under the tonnage contracts 149 automotive units have the customer's name painted in customer's colors; 20 under rental contracts. About 45% of the trucks carry the names of the customers.
2. Furnishing by Applicant of specially built trucks to fit the peculiar requirements of the commodities transported. An illustration of this service is found in the contract with Swift Company. The trucks used under that contract were specially built in accordance with the drawings and specifications of Swift Company and the bodies of the trucks are similar to the bodies that are used by other companies in the same line, which transport similar commodities for Swift  Company. Under that contract, Applicant transports fresh meats and the trucks are equipped with insulated bodies to transport the meat safely at low temperatures. Applicant has the exclusive contract with Swift as far as the Harrison plant is concerned. Although Applicant's trucks leave from Harrison, New Jersey, they may pick up goods for Swift in New York and take them to a customer in New York, or to another branch house. Applicant possesses keys to the premises of the various customers of Swift so that when deliveries are made at night Applicant's employees "open the premises and put the meat in the icebox, close the icebox, and lock up the premises." The men employed by Applicant to handle this type of work must not only be trustworthy but must possess exact knowledge of particular types of cuts of meat.
3. Provisions under which the lessee agrees to pay any increase in the chauffeurs' wages or any increase in taxes, such as unemployment insurance taxes, etc. Practically all of the contracts, other than rental contracts under which no agreement is made to supply chauffeurs, contain provisions of this character.
4. Provisions by which the lessee agrees to pay a stated amount for excess miles over and above the normal mileage upon which the compensation provided for in the contract is predicated.
5. Provisions under which Applicant agrees to equip trucks transporting valuable cargo with protection devices such as Babaco alarms or armored cabs. *Page 349 
6. Provisions by which Applicant agrees to provide trucks for transportation at all times, including Sundays and holidays, and at all hours of the day. Such a provision is found in the Colgate-Palmolive-Peet Company contract. Under that contract Applicant undertakes to provide the company with all the trucks necessary to meet its requirements whatever they may be from day to day — and the company has a great fluctuation in its unit requirements.
Applicant also maintains a fleet of tank trucks for the transportation of beverage syrups, liquid sugar, and other liquids. These tank trucks are equipped with power take-off pumps for the pumping of liquid into tanks approximately twenty-five feet high.
Applicant also transports car signs in trucks which have built-in pigeon hole racks. The signs can be set in position on pins without the necessity of boxing.
Under its contract with the American Express Company, Applicant maintains one truck which is known as the valuables or money truck, and that truck is equipped with a safe and money wagon guard, and it transports money, valuables and securities It is used in interstate movements.
In addition to the foregoing special features of contracts, varied services are rendered which, although in all cases express provision is not made for their rendition, their performance is nevertheless implied and necessary in order that the terms of the contract may be properly carried out. Some of these are:
1. Handling and delivery of goods at the direction of the lessee in the same manner as if the trucks were owned and operated by such lessee. Thus, the witness Hoffman testified that Applicant took over the chauffeurs, dispatchers and operating personnel of Colgate, as well as its trucks, and performed the service required exactly as Colgate had theretofore.
2. Handling and transporting goods without the issuance by Applicant of receipts or bills of lading, delivery and distribution being made by quantity and kind of product on receipts signed by consignees at the time of delivery.
3. Maintenance by Applicant of its own employees at the plants of its customers to control the flow, routing and the distribution of the products transported. *Page 350 
4. The making of inside deliveries and in many instances that of placing the goods or products on shelves of stores or in storage rooms. Under the Colgate contract, the soap products are taken from the trucks by the drivers and stored in linen rooms of hotels. Under the Swift  Company contract, meats are taken from racks on the trucks and hung in the storage rooms of meat shops.
Hoffman testified that at no time had Applicant ever held itself out to serve all shippers of freight and that if a shipper should drive up to any of the loading platforms at any one of its garage locations and offer freight for transportation as to which no previous agreement had been made, such freight would not be accepted. He testified without contradiction that no exceptions were ever made to that rule and that Applicant never held itself out to serve the public generally. He testified that Applicant "could not do so because with such an undertaking it would have to accept freight when and if offered to it to the extent of its available equipment. This would involve risks of violating its contracts with its contract customers under which it is obligated to provide them with either a specified amount of equipment daily or weekly, as the case may be, or with whatever equipment may be necessary to meet their varying shipping requirements by motor vehicle." The only advertising done by Applicant was a listing in the telephone company's red book, and that, it felt, it was obligated to do because it did work for the telephone company.
We quoted section 2, subdivision 30, of the Public Service Law (supra). Under that subdivision, one is not a common carrier unless he has undertaken to transport property for the generalpublic. It cannot be doubted that there must be an undertaking to transport property for the general public. The Legislature so provided. There is no testimony in this record that there ever was any such undertaking. The Commission made no finding that the Applicant ever made such an undertaking. The nearest approach to such a finding was the statement in the report of the principal law clerk that "applicant's operations more closely approximate
those of a common carrier than of a contract carrier." (Emphasis supplied.)
To understand the meaning of the words "undertakes to transport property for the general public" it might be well to *Page 351 
go back to the common-law definition of a common carrier. It will be noted from the following cases that the term "common carrier" was clearly defined at common law, and that the language employed by the Legislature in Public Service Law, section 2, subdivision 30, is similar to that found in the common-law definition.
In fact, we are agreed that the term "common carrier" is used in the statute in its common-law sense.
In Anderson v. Fidelity  Casualty Co. (228 N.Y. 475) (1920), ELKUS, J., writing for this court, said at page 480:
"The term `common carrier' is not of statutory origin. Its meaning is to be found in the history of the law of the early days when means of travel and communication were slow and uncertain and innkeepers and carriers were restrained from the robbery and ofttimes murder of those to whom they offered their hospitality or service, only by the imposition of heavy penalties and responsibility for the safekeeping of their patrons' goods and persons. (Nugent v. Smith, L.R. 1 C.P.D. 423; Coggs v.Bernard, 2 Ld. Raym. 909, 1 Smith's L. Cas. 199.)
"With the development in traveling facilities from the post horse to the chaise, the stage coach and to the modern railroad train or steamboat, the term `common carrier' has been applied to each new development catering to the public generally, and the strict rules of the old law have been relaxed but little, for with the development came new dangers of a mechanical sort inherent to swiftly-moving machines. * * *"
And at pages 481-2:
"Definitions are fundamental. Their application to any given state of facts, therefore, must be by analogy. Moore on Carriers (2nd edition, page 19) defines a common carrier as `one who, by virtue of his business or calling undertakes for compensation to transport personal property from one place to another either by land or water and deliver the same for all such as may choose to employ him; and every one who undertakes to carry and deliver for compensation the goods of all persons indifferently, is, as to liability, a common carrier.'
"A common carrier was defined, in Gisbourn v. Hurst (1 Salk. 249), to be `any man undertaking, for hire, to carry the goods of all persons indifferently,' and in Dwight v.Brewster (1 Pick. *Page 352 
50), to be `one who undertakes, for hire, to transport the goods of such as choose to employ him from place to place.'
"In Bank of Orange v. Brown (3 Wend. 161), Chief Justice SAVAGE said: `Every person who undertakes to carry, for a compensation, the goods of all persons indifferently, is, as to the liability imposed, to be considered a common carrier.' `The distinction between a common carrier and a private or special carrier is, that the former holds himself out in common, that is, to all persons who choose to employ him, as ready to carry for hire; while the latter agrees, in some special case, with some private individual, to carry for hire.' (Story on Contracts, sec. 752-a.) The employment of a common carrier is a public one, and he assumes a public duty, and is bound to receive and carry the goods of any one.
"`On the whole,' says Prof. Parsons, `it seems to be clear that no one can be considered as a common carrier, unless he has, in some way, held himself out to the public as a carrier, in such manner as to render him liable in an action if he should refuse to carry for any one who wished to employ him.' (2 Pars. on Cont. [5th ed.] 166, note; Allen v. Sackrider, 37 N.Y. 341, 342.)" (Italics the court's.)
Judge ELKUS quoted the following from Jackson A. Iron Works
v. Hurlbut (158 N.Y. 34, 38), at pages 482-3: "A common carrier is one who, by virtue of his calling, undertakes, for compensation, to transport personal property from one place to another for all such as may choose to employ him, and every one who undertakes to carry for compensation the goods of all persons indifferently is, as to liability, to be deemed a common carrier."