34 N.W.2d 238 | Wis. | 1948
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *399 Gateway City Transfer Company, hereinafter referred to as "petitioner," commenced this proceeding on August 2, 1947, to review an order entered on May 29, 1947, in a proceeding begun by the petitioner before the commission. The petitioner sought authority to render additional service by its truck lines as stated in its petition. Objections were filed by other common motor carriers whose routes would be affected if the petition were granted. There was a trial which occupied twenty-two days. The record comprises some twenty-three hundred forty-nine pages, and forty numbered exhibits. The petitioner is the holder of certificates authorizing its operation as a common motor carrier between various points in Wisconsin, and over several routes. The petitioner sought to extend these routes and to have certain restrictions, exceptions, and limitations upon its authority removed by order of the commission. The petitioner has stated the substance of the petition, which we adopt as presenting with substantial accuracy the matter before the commission:
"Case 1. Service between Beloit, Janesville, Edgerton, Stoughton, and Madison and other points served by Carl Timm, a common motor carrier doing business as Timm Transit.
"Case 2. Service between points such as Kenosha and Racine on the one hand and on the other Milwaukee, Beloit, Janesville, and other points served by Motor Transport Company, another common motor carrier.
"Case 3. Service between LaCrosse and Milwaukee. These points are now served by Service Transfer Storage Company, a common motor carrier.
"Case 4. Service between La Crosse and Madison. These points are now served by Standard Freight Lines, a common motor carrier.
"Case 5. Service between points which is not afforded by any single-line common motor carrier; e.g. La Crosse-Beloit, La Crosse-Janesville, La Crosse-Racine, La Crosse-Kenosha, Racine-Kenosha, Racine-Stoughton, etc. *401
"In general, the service proposed between Racine, Kenosha, Milwaukee, Beloit, and Janesville and Madison would be competitive with single-line common-motor-carrier service provided now only by Motor Transport Company. The proposed service between La Crosse and Milwaukee would be competitive with single-line common-motor-carrier service providedonly by Service Transfer Storage Company; the service between La Crosse and Madison proposed would be competitive with the single-line service provided only by Standard Freight Line; the service proposed between Beloit, Janesville, and Madison would be competitive only with the service of Carl Timm; all other proposed services would be competitive only with joint-line operations of those carriers and others."
The hearings were had before an examiner. At the close of the evidence and after argument by counsel the examiner summarized the evidence and recommended findings of fact as follows:
It is recommended that the commission find:
1. That the applicant is fit, willing, and able to render the proposed service.
2. That applicant has failed to show that the grant of the application is required by public convenience and necessity.
3. That protestants have shown that the grant of the application will unduly interfere with their ability to continue the proper rendition of adequate service to the public; and recommended that the application be denied.
The summary of the evidence covers the entire record and consists of twenty-eight typewritten pages, — too long to be set out in full in this opinion.
The report of the examiner was dated September 11, 1946. Copies of the examiner's report were mailed to all parties of record on November 16, 1946. Exceptions to the report were filed. Parties in opposition to the application were granted an extension of time within which to file reply briefs, to December *402 6, 1946. The oral arguments were made by petitioner and the objectors at Madison, and on May 29, 1947, the commission filed its findings of ultimate conclusions of fact and conclusions of law, accompanied by a discussion of the evidence, and ordered that the applications of the petitioner should be denied, Commissioner Whitney dissenting.
There was an application for rehearing which was denied July 3, 1947.
Petition for review was filed by the applicant, hereinafter referred to as the "petitioner," in the circuit court on August 2, 1947. On the hearing the petitioner and the interested objectors appeared by counsel. The matter was submitted to the circuit court. The circuit court took up and considered every contention of the petitioner, and on March 26, 1948, pursuant to order of the circuit court, a final order was entered affirming the order of the commission, from which the petitioner appealed on the 26th day of April, 1948. Additional facts will be stated in the opinion. The first contention made by petitioner is that the conclusion of the commission was affected by error in holding that a presumption against competition between common motor carriers was created by ch. 194 of the *403 statutes. The chapter relates to motor transportation. This contention is based upon the following statement found in the opinion of the commission:
"Counsel for applicant argue that the statutes set up a presumption in favor of competition. The contrary is the fact. Section
We can discover nothing in this discussion bearing upon the question of presumption in favor of either monopoly or competition. It relates to the procedure, which the commission correctly stated. The commission said in effect, in response to the argument of counsel, that the statutes do not set up a presumption in favor of competition. An allegation that the statute does not set up a presumption in favor of competition is not an assertion that the commission favored monopoly or indulged in a presumption in favor of it.
In Clintonville Transfer Line v. Public Service Comm.
"Agencies shall not be bound by common law or statutory rules of evidence. They shall admit all testimony having reasonable probative value, but shall exclude immaterial, irrelevant *404 or unduly repetitious testimony. They shall give effect to the rules of privilege recognized by law. Basic principles of relevancy, materiality and probative force, as recognized by equitable proceedings, shall govern the proof of all questions of fact."
Sec.
". . . If the substantial rights of the appellant have been prejudiced as a result of the administrative findings, inferences, conclusions or decisions being: . . . (d) unsupported by substantial evidence in view of the entire record as submitted."
By statute, in reviewing administrative decisions the court is to give due weight to the experience, technical competence, and specialized knowledge of the agency involved, as well as discretionary authority conferred upon it. The statute definitely limits the review by the court in matters relating to evidence, to the question whether the finding is supported by substantial evidence or is "(e) arbitrary or capricious." If the decision of the commission is supported by substantial evidence in view of the entire record, then the decision is to be affirmed if not otherwise contrary to law.
Sec.
"The commission, upon the filing of an application for such license, shall have power as the public interest may require, upon a finding of public convenience and necessity . . . to. grant or deny the license prayed for . . . and may attach to the exercise of the privilege granted by such license such terms and conditions as in its judgment the public interests may require."
The term "public interest" is a very broad and comprehensive one. It means different things in different connotations. For instance, it is in the public interest that healthy cattle be produced and kept free from disease. Stickley v. Givens
(1940),
Hearings before the Public Service Commission under the Common Motor Carriers Act are not to be treated as civil actions. They are legislative in character and while they are, because of the fact-finding powers of the commission, quasi-judicial, nevertheless they operate in the legislative field. When the statute says that on review the decision of the commission may be affirmed if there is substantial evidence to support it, it means exactly what it says. The court is not authorized to inquire where the burden of proof lies further than may be necessary to determine whether there is substantial evidence to support the decision or whether it is capricious or arbitrary. Upon the record the commission is to determine whether in the public interest a certificate of convenience and necessity should be issued.
The term "substantial evidence" has been employed in a considerable number of states, defining the powers of administrative boards and agencies. In Edison Co. v. National L. R.Board (1938),
"The companies contend that the court of appeals misconceived its power to review the findings and, instead of searching the record to see if they were sustained by `substantial' evidence, merely considered whether the record was `wholly barren of evidence' to support them. We agree that the statute, in providing that `the findings of the board as to the facts, if supported by evidence, shall be conclusive,' means supported by substantial evidence. Washington, V. M. Coach Co. v.National Labor Relations Board,
"The companies urge that the board received `remote hearsay' and `mere rumor.' The statute provides that `the rules of evidence prevailing in courts of law and equity shall not be controlling.' The obvious purpose of this and similar provisions is to free administrative boards from the compulsion of technical rules so that the mere admission of matter which would be deemed incompetent in judicial proceedings would not invalidate the administrative order. [citing cases.] But this assurance of a desirable flexibility in administrative procedure does not go so far as to justify orders without a basis in evidence having rational probative force. Mere uncorroborated hearsay or rumor does not constitute substantial evidence."
In 40 Words and Phrases (perm. ed.), p. 499, under the title "Substantial Evidence," and particularly in 1948 Cumulative Annual Pocket Part, p. 62, are to be found many illustrations in cases arising since 1938.
That the term "substantial evidence" does not include the idea of weight of evidence is illustrated very clearly in the final report of the Attorney General's Committee on Administrative Procedure, p. 91, where it is said:
"Suggestions for legislative change in the scope of judicial review have related chiefly to administrative findings of fact. It has been suggested that the scope of review of these findings be enlarged to include inquiry as to whether the findings are supported by the weight of the evidence. Assuming that such a change may be desirable with respect to special administrative determinations, there is serious objection to its adoption for general application.
"In the first place there is the question of how much change, if any, the amendment would produce. The respect that courts have for the judgments of specialized tribunals which have carefully considered the problems and the evidence cannot *407 be legislated away. The line between `substantial evidence' and `weight of evidence' is not easily drawn — particularly when the court is confined to a written record, has a limited amount of time, and has no opportunity further to question witnesses on testimony which seems hazy or leaves some lingering doubts unanswered. `Substantial evidence' may well be equivalent to the `weight of evidence' when a tribunal in which one has confidence and which had greater opportunities for accurate determination, has already so decided.
"In the second place the wisdom of a general change to review of the `weight of evidence' is questionable. If the change would require the courts to determine independently which way the evidence preponderates, administrative tribunals would be turned into little more than media for transmission of the evidence to the courts. It would destroy the values of adjudication of fact by experts or specialists in the field involved. It would divide the responsibility for administrative adjudications."
While the commission in its decision used the term "burden of proof" in stating which party had the duty of proceeding with the evidence, we find no authority in the statute for the dismissal of a petition at the close of the petitioner's evidence. As already stated, the commission does not proceed as a court, and court practice and court rules do not apply to an administrative hearing unless made so to apply by the statute.
Error is assigned on the ground that the trial court did not examine the whole record. Sec. 194.14(2), Stats., provides:
"Notwithstanding the provisions of chapter 227 the commission, when passing upon an application for a certificate, license or amendment thereto as provided for in this chapter, may, in making its decision thereon, rely on an oral or written summation of the record made by the person who has heard the testimony."
Sec.
In cases arising under ch. 194, sec. 194.14(2), Stats., dignifies the summation of the record made by the person who has heard the testimony and makes it practically equivalent to a finding of the commission unless set aside by the commission on exceptions made by one of the parties, pursuant to the provisions of sec.
In this case the parties and the commission proceeded in accordance with the provisions of sec.
However, in this case the trial court did file an exhaustive opinion which has been of assistance to this court on appeal. The suggestion that the trial court did not fully perform its duty is without foundation in the record.
Sec.
What has already been said answers to a large extent the argument advanced to the effect that the trial court did not give effect to sec.
. . . The court may affirm the decision of the agency, or may reverse or modify it if the substantial rights of the appellant have been prejudiced as a result of the administrative findings, inferences, conclusions or decisions being:
"(a) Contrary to constitutional rights or privileges; or
"(b) In excess of the statutory authority or jurisdiction of the agency, or affected by other error of law; or
"(c) Made or promulgated upon unlawful procedure; or
"(d) Unsupported by substantial evidence in view of the entire record as submitted; or
"(e) Arbitrary or capricious." *410
The petitioner further contends that the commission's finding that the proposed operations of the petitioner, if authorized, would unduly interfere with the ability of existing public carriers to continue the proper rendition of adequate service to the public in the territory proposed to be served, is unsupported by the record. The petitioner did not propose to render service over the entire routes for which it sought a certificate. In Case No. 1, in which it sought to duplicate a part of the service rendered by Timm, petitioner proposed to serve only the larger localities. The granting of the petition would deprive Timm of the more remunerative shipments and leave him to serve the less remunerative. The petitioner is the largest common-motor-carrier operator within the state and already serves a considerable part of the territory covered by its application. It is quite apparent that what it proposes to do is to consolidate the routes over which it is traveling and render additional service thereto, the ultimate effect of which must undoubtedly be to cut down the revenues of those already serving in the same territory. If by reason of the granting of the application the service rendered by Timm would be impaired or rendered inadequate it is clearly within the discretion of the commission to deny the application to that extent. The statute, sec.
The petitioner contends that the order of the commission leaves one common motor carrier with an exclusive franchise to transact transportation service between two definite points, and therefore creates a monopoly, contrary to law.
In the brief the petitioner states the proposition thus:
"The court erred in sustaining the conclusion of the commission which is apparently-based upon the burden of proof *411 imposed upon the applicant where, as here, the monopolistic use of the public highway has been granted, and disregarding the force of the presumption of law as to the benefits to the public of competition."
This seems to be the contention most heavily relied upon by the petitioner on this appeal.
Petitioner bases a good deal of its argument upon the fact that in Case No. 1, Timm is the sole common motor carrier operating between the points named. By denying the application of the petitioner to serve the same route the commission creates a monopoly for that service, contrary to the common law, which favors competition.
This contention was set at rest more than thirty-five years ago, in the case of Calumet Service Co. v. Chilton (1912),
"In consideration of submitting to full control by the commission and the right of the municipality, at its option, to take *412 over the property as indicated, certain conditions and limitations in favor of the grantee are attached to the new privilege. The dominant feature thereof is that the franchise shall not only be perpetual, subject to the conditions and limitations of the law, — indeterminate as it is said, — but shall be subject to such conditions exclusively. In other words, the idea is that the grantee, finder state control, and subject to prescribed limitations and supervision, shall have a `monopoly,' as it has been several times called by the railroad commission, in its administrative work, and by this court, within the field covered by the privilege, as to rendering the particular public utility service, whether directly or indirectly, to or for the public.
". . . A privilege of that sort, where there is a consideration equivalent to the public, though often spoken of as a `monopoly' is essentially different from one of the character regarded as odious at common law and prohibited in many state constitutions; a privilege from the sovereign to the individual as a mere favor, to the latter for his aggrandizement, or as such and the personal advantage of the individual sovereign grantor, the thing granted being by way of limitation, of what would otherwise be of common right, to the particular grantee. The term `monopoly' as it has been used to characterize the privilege in question, has been sanctioned in many jurisdictions, they sometimes differentiating it from `monopoly,' in the offensive sense, and sometimes not, it being assumed, from the very nature of the case, that the word would be taken in its popular and common, rather than in its technical sense. In this line to justify, or rather explain the use of the term by the commission and the court, reference may be had to the following illustrations: [citing a number of cases.] In the latter case [International T. C. Co. v. Hanks D. Asso. 111 Fed. 916] it is said that the word `monopoly' as now commonly used, and used in the patent law, is not a monopoly at all in the ancient sense. According to the logic of Judge STORY in the CharlesRiver Bridge Case [11 Pet. 420], to be such the privilege must not only be made exclusive by sovereign authority but be something theretofore of common right."
The general rule is that a certificate of convenience and necessity may not be granted where there is existing service in operation over the route applied for, unless it is required in *413 the public interest. Anno. 67 A.L.R. 957. Note and cases cited.
In the case of Packard v. Banton (1923),
"If the state determines that the use of streets for private purposes in the usual and ordinary manner shall be preferred over their use by common carriers for hire, there is nothing in the Fourteenth amendment to prevent. The streets belong to the public and are primarily for the use of the public in the ordinary way. Their use for the purposes of gain is special and extraordinary and, generally at least, may be prohibited or conditioned as the legislature deems proper. Neither is there substance in the complaint that streetcars and omnibuses are not included in the requirements of the statute. The reason appearing in the statute itself, for excluding them is that they are regulated by the public service commission laws, and this circumstance, if there were nothing more, would preclude us from saying that their noninclusion renders the classification. so arbitrary as to cause it to be obnoxious to the equal protection clause. [citing.]
". . . Moreover, a distinction must be observed between the regulation of an activity which may be engaged in as a matter of right and one carried on by government sufferance or permission. In the latter case the power to exclude altogether generally includes the lesser power to condition and may justify a degree of regulation not admissible in the former. See Davis v. Massachusetts,
It is clear from the authorities that the refusal to grant a second certificate of convenience and necessity does not offend either the constitution or a valid statute enacted under it, even if such refusal results in the route being served by a single common motor carrier. If the operations of common motor carriers are contrary to the public interest they may be curtailed or prohibited. *414
The argument addressed to this court upon this point might much more properly be addressed to the legislature. The legislature has prescribed a standard for the granting or disallowance of petitions for a certificate, the commission clearly acted within the authority granted to it, and the contention that by such action it disregarded the presumption as to benefits of competition is clearly untenable.
The object of regulation of common motor carriers is to promote the public welfare. A common motor carrier being subject to regulation, if it does not render adequate service it may be compelled to do so, or its license be revoked, or a competing common motor carrier may be licensed. Monopoly signifies the sole power of dealing in an article or doing a specified thing either generally or in a particular place. No common motor carrier has an exclusive right to transport goods between two certain termini. There are other common carriers than common motor carriers competing for the same business.
The next contention of the petitioner is that the conclusion of the commission was affected by other errors of law and erroneous inferences of fact which were not supported by the record. We have carefully gone over these criticisms which relate mainly to the statements of fact and mental processes by which the commission arrives at its final conclusions. The case designated as Case No. 1, service between Beloit, Janesville, Edgerton, Stoughton, and Madison and other points served by Carl Timm, a common motor carrier doing business as Timm Transit, illustrates as well as any situation in the record the contentions of the petitioner here. In considering the claim of petitioner to be granted license to compete with Timm upon the route between Madison and Beloit, the commission said:
"Concerning the proposed operation between Madison and Beloit and larger intermediate points, applicant presented testimony of Madison witnesses that Timm's pickups are made too early in the day, are not reliable, and frequently are not made *415 for several days despite complaints to the union terminal where Timm vehicles dock. A Janesville witness representing Janesville's largest industry, called by applicant, said he had no complaint about Timm's service. Testimony of three Edgerton witnesses called by applicant was contradictory, with one satisfied, another dissatisfied with overnight service from Madison, and the third dissatisfied with Timm's service between Stoughton and Edgerton. Beloit witnesses said Timm's service was poor. Stoughton witnesses were indefinite.
"Timm presented testimony that he had received no complaints from the Madison witnesses, that consignees of such shippers had told him his service was satisfactory, that Madison shippers do not always have shipments ready when they say they will, and that only one half the capacity of his northbound trucks and one fifth the capacity of his southbound trucks are used by shippers between Madison and Beloit. He described wartime difficulties in getting adequate truck facilities and experienced drivers due to material and manpower shortages, which have since been relieved. He presented witnesses from Madison, Beloit, and Janesville who testified that his service was satisfactory and gave evidence of complaints he had heard about Gateway's service in this area."
There is substantial evidence to sustain the finding of the commission that the service being rendered by Timm was adequate.
With respect to the effect of the granting of the petition upon already existing services the commission said:
"Applicant's proposed competition, moreover, is, with some exceptions, competition with existing carriers for traffic between key points, earnings on which make it possible for such carriers to provide service to small communities along their routes. For example, it is the proposal of Gateway to compete with the Timm Transfer operation between Madison and Beloit for traffic between the larger points only, with no service proposed to smaller inland and off-route points which Timm also serves. Gateway is primarily a long-distance hauler of large shipments; Timm is a short-line hauler of small package freight. Gateway refuses to accept interstate shipments of *416 less than ten thousand pounds at many points it serves; no Wisconsin intrastate common motor carrier during or since the war has requested or has been authorized by the commission to embargo single-line freight, despite equipment shortages, until recently."
As already stated, sec.
It appears that in the territory under consideration there are available most or all of eight distinct classes of property transportation:
(1) Private vehicles of consignor or consignee.
(2) Parcel post.
(3) Parcel transportation by bus line.
(4) Railway express.
(5) Railway freight service.
(6) Railway supplemental truck service.
(7) Common motor carriers, including both single line and joint line service.
(8) Contract motor carriers.
Of these eight classes of transportation the six last named are subject to regulation by the commission as to service rates.
It is apparent from the record that the commission, in arriving at its determination whether a petition such as that under consideration here should be granted, must consider other factors than the matter of competition between common motor carriers.
First, the petition is not to be granted if the commission does not find that public convenience and necessity requires it.
Second, sec.
". . . The commission shall have power, as the public interest may require, upon a finding of public convenience and necessity, to issue or refuse any such certificate or amendment or to issue it for the partial exercise only of the privilege sought. . . . Before granting a certificate or amendment the commission shall take into consideration existing transportation facilities in the territory proposed to be served, including common and contract motor carriers and steam and electric railways."
The court on review is required by statute to give effect to the legislative command that "upon such review due weight shall be accorded to the experience, technical competence, and specialized knowledge of the agency involved, as well as discretionary authority conferred upon it." Sec.
Whether the granting of the franchise or amendment sought is in the public interest presents a matter for the exercise of legislative discretion by the commission. It cannot be answered by the application of a proposition of law. It is clear therefore that a trial court must have compelling reasons for reversal where the final conclusion of the agency is based upon a determination which is not only highly discretionary but rests upon the agency's finding as to what is necessary and convenient in the public interest, two terms of indefinite and varying content. We concur in the conclusion of the trial court that such reasons are not present in this case. Other questions raised in briefs of counsel have been considered but we find no reversible error.
By the Court. — The order appealed from is affirmed. *418