174 A. 826 | Pa. Super. Ct. | 1934
Argued May 4, 1934. These three appeals involve the same questions and *103 will be disposed of in one opinion. The proceedings were initiated by a complaint against J.L. Townsend and Son and two complaints against W.E. Burket. The complainants, holders of certificates of public convenience issued by the Public Service Commission authorizing the transportation of merchandise and goods between various points in the vicinity of Pittsburgh, charged, in substantially the same language, that the respondents were operating as common carriers in their territory without procuring a certificate of public convenience. The commission, after hearings, sustained the charges and issued an order directing the respondents to desist from transporting property as common carriers until they received a certificate. The Dairymen's Co-operative Sales Association was permitted to intervene in the proceedings before the commission on behalf of the respondents, and the Tri-State Milk Haulers' Association was permitted to intervene in support of the order.
The Dairymen's Co-operative Sales Association, a corporation organized under Act of Assembly approved April 30, 1929, P.L. 885 (
The producer, upon becoming a member of the association, enters into an agreement with it whereby, inter alia, he agrees to consign to the association all the milk and cream produced upon his farm, except such as he might give away or retain for home consumption, and the association undertook to find a market for the products. The contract contained this provision: "The Producer agrees to make delivery of said milk and cream by such haulers or carriers and by the use of such hauling equipment and facilities as are approved by said Association."
In April, 1933, the association, after advertising for bids, entered into three-party agreements with a number of its stockholders located in a district and certain truckers including Townsend and Son and Burket. The stockholders by executing the agreement indicated their assent to the terms of the particular agreement, although such written assent was not a necessary condition in the making of a hauling agreement by the association. The hauling contracts were for periods of one year and provided that the hauler should collect daily the milk and cream consigned for sale, by such of the stockholders as the association designated and who accepted the contracts, and deliver the same to the buyer or buyers designated by the association, and thereafter return to the stockholders the containers, for which service the trucker was to receive eighteen *105 cents per hundred weight. The association, on sale of the milk and cream, had the right to receive the price paid for account of the producer but, to save expense, had the buyer remit directly to the producer on apportionments made by the association. The buyer deducted from the amount due the producer the hauling charges and a commission due the association. Of such hauling charges, six-tenths of one per centum were retained by the association and the balance paid by it to the trucker. As a result the producer actually paid the hauling charges. The hauling contract also provided that the carrier should not "solicit or receive for transportation or sale milk from stockholders or others not specifically designated by the first party [the association]," and the trucker agreed to "haul, handle or transport while in the performance of this contract, no produce, commodities or articles not specifically provided for under the terms of this contract."
It is a matter of common knowledge that milk is a fertile medium for the development of bacteria and that to meet proper sanitary requirements, it is essential that the transportation of milk be expedited and its quality thus preserved. These facts necessitate the use of special equipment and other safeguards not only in the production, but also in the transportation of milk for human consumption. To accomplish the purposes of the association it must be in a position to protect the price of milk and make possible the prompt and effective diversion or transfer of milk from one market to another in order to guard against surpluses that accumulate in seasons of plenty. The parties recognized these conditions in their contracts when they became members of the association and authorized the association, under certain circumstances, to divert the milk so that it would not be used as fluid milk, but sold and delivered at different places to *106 dairies and other buyers who manufacture the milk into such products as cheese, ice cream, powdered milk, and the like. This made necessary, the association contends, the securing of a means of transportation which was more flexible than was provided by common carriers with fixed routes or who operated in restricted territory.
There was some evidence offered as to hauling done for others than members of the association, but the commission in its opinion based its conclusions largely, if not entirely, on the dealings of respondents with the members, saying: "Although there is some evidence that both of the respondents have hauled milk for producers which were not members of the Association, the commission is of the opinion that even though the carriage were restricted to the hauling of milk for members only, a sufficiently large portion of the public would be served and offered the service of the respondents to constitute them common carriers." We will, therefore, first examine the dealings among the association, the respondents, and the members of the association.
"In order to subject the appellant [respondent] to the jurisdiction of the commission, it must be made to appear that he is a common carrier; that is, that he undertakes to carry for hire all persons indifferently who apply to him": Harder v. P.S.C.,
In Gordon v. Hutchinson, 1 W. S. 285, Chief Justice GIBSON said that "any man undertaking to carry the goods of all persons indifferently" is a common carrier. A similar definition and the one usually accepted is that given by the Chief Justice of Massachusetts in Dwight v. Brewster,
In order to bring the respondents within the purview of the Public Service Commission Act of 1913 and its amendments, it must, as we have seen, be made to appear that they have voluntarily devoted their transportation facilities to the indiscriminate use, at least within the limits of the facilities possessed by them, by the public for hire and have thus become common carriers, for they do not possess the right of eminent domain or possess other similar characteristic which would of itself indicate that their properties had been devoted to a public service. As was pointed out in the case of Hostetter v. P.S.C.,
The undertaking of these respondents to haul the milk consigned by members to the association for sale is not of itself, as we see it, an undertaking to haul milk even from that fixed territory to the place of *109
delivery for all indifferently who may wish to have such service: Toth v. P.S.C.,
But it is suggested that the respondents were hauling not for the association but for the individual members, since the producer paid the transportation charges, and that this service constituted such a substantial portion of the traffic that it amounted to an offer to serve all. The prime purpose of such organizations as the Dairymen's Co-operative Sales Association, as expressed in its title and the title to the act under which it is organized, is co-operation. For that purpose, such organizations are chartered with the power as agents for their stockholders to sell and market as a unit. The relationship created is not that of buyer and seller who deal as strangers, but rather one where many small producers are brought together for the express purpose of common action. Such is the very essence of the transaction. *110
In determining the character of a carrier's operations, the courts have frequently taken into account the number of persons accommodated by the carrier and the proportion of the available business which the carrier enjoys (The Pipe Line Cases, Ohio Oil Co. v. U.S.,
As we have pointed out, a carrier, by entering into special written contracts or refusing to serve some persons, may not by such subterfuges avoid regulation, but there is here no evidence of any such plan. The association sought individuals to carry the goods furnished by the producers. It, not the carriers, devised the plan adopted. It entered into contracts in which the carrier was required to agree that while in the performance of the contract he would not haul products, commodities, or articles not provided for under the terms of the contract, and that he would not solicit or receive such articles for transportation from persons not designated by the association. This rebuts any possible inference of an attempt to conceal the true nature of the transaction and is inconsistent with the carrier being a common carrier, for it must be borne in mind that when one becomes a common carrier he is not only subject to regulation but owes a duty to the public by way of service. In addition, it appears that for the purpose of effecting the primary objects of the association it is necessary that the service be more flexible than that which would in practice be furnished by a common carrier where the territory served and the facilities furnished are necessarily controlled by certificates of public convenience with special provisions and limitations. Finally, as suggested by counsel for the association, *112 it is doubtful whether in many places the association could function without some such arrangement as has been here undertaken. It would not be practicable for a farmer in Butler, Mercer, or Crawford County to transport his own milk to Pittsburgh unless he produced large quantities. Perhaps there might be a common carrier operating from some points in each county to Pittsburgh, but the others would not be accommodated and if, as occurs three hundred times each month, it should become necessary to shift the delivery to another dairy or cheese factory, a special arrangement would necessarily have to be made as to each shipment. Remembering the perishable qualities of milk and cream, it becomes evident that the arrangement is a reasonable one vitally essential to the successful operation of the co-operative plan without a suggestion of a scheme to avoid a public duty. Insofar as the evidence concerned the services furnished by the carrier to the stockholders of the association, it furnished no basis for a finding that the respondents were common carriers.
The conclusion at which we have arrived is precisely the same as that reached by the Supreme Court of Ohio in Hissem v. Guran,
The cases from other states cited by the appellees are easily distinguished from the case we are considering. Goldsworthy v. Maloy, supra, presented a situation where the defendant was holding himself out as a common carrier and is in precise agreement *113
with cases heretofore decided by this court, such as Piercely v. P.S.C., supra; Keystone Warehousing Co. v. P.S.C.,
In referring to testimony showing that respondents had transported merchandise other than milk, the commission said: "However, the commission is of the opinion that this testimony is not conclusive of the fact that the respondents have transported for hire anything other than milk, and has, therefore, given no weight to it in reaching its conclusion in these cases." In the case of Townsend, it appeared that milk was transported by him for three producers who had not signed a contract with the hauler, but who were members of the association. Such contracts, as we have pointed out, were not necessary under the agreement between the producer and the association. There is also some evidence that on several occasions the carrier, as an accommodation to a customer, brought from the city freezers of ice cream for which, it is asserted, no charge was made.
In the case of Burket, there was positive testimony that he had not hauled for any persons who were not *114 members of the association, but there was evidence that he solicited, at the request of the association, certain persons who were members of the association to sign a hauler's agreement, and that he called on a number of them to ascertain whether the milk would be delivered to him before the hauler's contracts were signed. The commission was undoubtedly correct in disregarding this testimony as it falls far short of showing any course of conduct that would amount to an offer to the public to carry indiscriminately.
The orders of the Public Service Commission at Nos. 268, 269, and 270 April Term, 1934, are reversed and it is directed that the complaints in each case be dismissed.