THE STATE at Relation and to Use of MISSOURI PACIFIC RAILROAD COMPANY and MISSOURI PACIFIC TRANSPORTATION COMPANY v. PUBLIC SERVICE COMMISSION OF MISSOURI
Division Two
March 25, 1931
37 S. W. (2d) 576
Appellant
“First. Oil from defendant‘s pipe line has escaped since January 1, 1922, and on plaintiffs’ farm.
“Second. The escape of said oil was occasioned and caused by reason of the negligent and careless maintenance of said pipe line by defendant.
“Third. Said oil so escaping since January 1, 1922, occasioned and caused whatever loss or damage, if any, plaintiffs have sustained since January 1, 1922.
“And the court further instructs the jury that the burden is upon plaintiffs to prove each of the above allegations by the preponderance or greater weight of the evidence, and in the event you believe and find from the evidence that plaintiffs have failed to sustain said burden as to all or any one of the above-mentioned items, towit, first, second and third, that then, and in that event, plaintiffs are not entitled to recover, and you will find your verdict for the defendant.”
The trial court heard and saw the witnesses and is in a much better position to judge the weight of the evidence than this court. The trial court is authorized to sustain a motion for new trial, if, in its judgment, the verdict is against the weight of the evidence. The court in this case exercising its discretion ordered a remittitur of $1,000 and entered judgment for the balance of $1500, indicating that in its judgment the evidence justified a verdict for plaintiff for a substantial amount.
Finding no reversible error, the judgment of the circuit court is affirmed. Davis, C., not sitting; Cooley, C., concurs.
PER CURIAM: - The foregoing opinion by WESTHUES, C., is adopted as the opinion of the court. All of the judges concur.
Applicant railroad company operates a line of railroad extending from Joplin, Missouri, northward to Pleasant Hill, Missouri, where it connects with the company‘s main line running westward into Kansas City. Applicant transportation company is a Delaware corporation, authorized to do business in Missouri, with a paid-up capital stock of $100,000, and though a separate corporate entity is referred to as a subsidiary of the railroad company, being owned by stockholders and officers of the railroad company.
Applicants presented to the commission a joint application for permission for the railroad company to withdraw from service its trains Nos. 212 and 215, operating between Joplin and Pleasant Hill, which have been operating at a loss, and for a certificate of convenience and necessity to the transportation company to operate as a motor bus carrier between Joplin and Kansas City, Missouri, over State highways Nos. 71 and 66, for the purpose, as stated in the application, of taking care of the passenger business then and theretofore handled by said two trains. Highways Nos. 71 and 66 are coincident from their junction at Carthage southwestward to Joplin, and for convenience the whole route will be referred to as 71. The highway practically parallels the railroad from Joplin to Harrisonville, some ten miles south of Pleasant Hill. From Harrisonville it runs northwestward to Kansas City, not paralleling the railroad and touching only one town on the railroad, viz., Dodson, near Kansas City. The application names two other towns, Peculiar and Belton, through
Train 212 operates from Joplin to Pleasant Hill and from the latter point it constitutes part of train No. 47 on the main line into Kansas City. No. 212 is a local train leaving Joplin at 5:30 A. M. and reaching Kansas City at 11:30 A. M. Train 215 is operated from Kansas City to Pleasant Hill as part of main-line train No. 48 and from Pleasant Hill to Joplin as train 215. It leaves Kansas City at 5:30 P. M. It stops only at the larger places, reaching Joplin at 10:50 P. M.
Illustrative of the relative train and proposed bus schedules, applicants propose to substitute for train 215 a bus service leaving Kansas City at three P. M., and another leaving there at five P. M. The bus line now serving that part of the route has buses leaving Kansas City at 10:15 A. M., two P. M. and four P. M., eight A. M. 5:15 P. M. and 11:30 P. M., the three first named daily and the others daily except Sundays and holidays.
At the hearing before the commission applicants stated that the application for permission to the railroad company to withdraw the trains was contingent upon the granting of the application for certificate of convenience and necessity to the transportation company to install the bus service, and that if such certificate was not granted the application for permission to discontinue the trains should be considered withdrawn “so far as this hearing is concerned.”
After a full hearing the commission found that public convenience and necessity did not require the granting of a certificate to the transportation company and denied the application of both applicants. Upon certiorari the circuit court set aside the order of the commission “as being unreasonable” and remanded the cause to the commission for further proceedings. It was shown at the hearing and not controverted that the transportation company was able and willing to render adequate and efficient service as a motor bus carrier if granted a certificate.
The city of Pleasant Hill filed a petition signed by seventy-nine residents protesting the abandonment of the trains and the granting of the requested certificate.
The transportation company‘s application for a certificate was protested by the following holders of certificates on various portions of the route, viz.: R. A. McCartney; Pickwick Stages, Inc. (interstate only); Brown Bros. Bus Lines; Capitol Stage Lines; Coin Combs,
In its report the commission states, inter alia, the following:
“The testimony and exhibits on the part of the railroad company show that the revenues derived from the operation of the trains sought to be withdrawn are less than the cost of operating them. Applicants’ Exhibit 1 shows that for the year 1926, the average earnings per train-mile of trains 212 and 215 was $1.32 per mile; in 1927 it was $1.08 per train-mile, and for the ten months of 1928 it was 67 cents per train-mile. Applicants’ Exhibit 2 shows that for the past ten months of 1928 it cost an average of $6,460 per month to operate the two trains, or an average expenditure of 79.6 cents per mile, as against an average revenue of 67 cents per mile, or an average revenue per month of $5,461 per month, and if all expenses were included the deficit would even be greater.
“Applicants’ testimony further shows that the subsidiary company was organized in order to conserve the revenues of the railroad and coordinate transportation in the territory that it serves; that by the substitution of buses it might avoid the necessity of asking for increased rates in order to overcome the losses incurred in passenger business. The evidence discloses that the cost of operation of buses would be from 25 cents to 30 cents per bus-mile, as against 79.6 cents per mile for the operation of the trains. A number of witnesses testified on behalf of applicants that in their opinion it would be a convenience and necessity to the traveling public if the transportation company was permitted to operate buses, and more particularly would this be so since the patrons would be privileged to buy tickets on the train which would entitle them to have their baggage carried by rail and the advantage of going by bus on the transportation line.
“A considerable portion of applicants’ testimony was to the effect that if the railroad company is permitted to withdraw its trains, it
“The route over which the transportation company proposes to operate being U. S. Highway No. 71 from Joplin to Kansas City, is now and has been for some time served by bus operators duly certificated by this commission. The Brown Brothers Bus Line operates between Nevada and Kansas City, R. S. McCartney Bus Lines between Joplin and Nevada, and Coin Combs between Joplin and Carthage. The testimony on behalf of the protesting bus lines is uncontradicted that the service rendered is of a high standard of excellency, and that each of said operators is willing and financially able to add to the equipment and furnish any and all additional service that may be necessary for the convenience of the traveling public. In fact, applicants in this case make no claim of any failure upon the part of any of the certificated motor carriers to render adequate and sufficient service along the route served by each particular carrier. At page 5 of applicants’ brief the following statement appears:
“‘Applicant Missouri Pacific Transportation Company is not contending that existing motor carriers do not give convenient, efficient and sufficient motor-coach service between their respective termini in accordance with the orders of the Public Service Commission.’
“The inadequacy of the existing service, and the convenience and necessity of the proposed service, should affirmatively appear from the evidence, to warrant the granting of a certificate to the applicants. On the contrary the record in this case establishes, as an evidential fact, that the existing carriers serve the general public adequately. In the case of Egyptian Trans. System v. Railroad Company, 321 Ill. 580, the court says:
“‘Appellants have stated that they are willing and able to give such service, and it appears clearly that the commission is not justified in granting a certificate of convenience and necessity to a competing line, until the utility in the field has had an opportunity to demonstrate such truth of its statement and to give the required service.’
“In the present case the motor carriers in the field have given their assurance of being able and willing to render any and all additional service necessary for the traveling public.”
The finding of facts in the above excerpt is sustained by the evidence. It is conceded that there is no need of additional bus service if the two trains are not discontinued. It appears from protestants’ evidence, and we think it true from all the evidence, that there is
In regard to checking of baggage, applicants’ testimony was: “If it was not checked on the train ahead (of the bus taken by the passenger) the baggage would follow the next day. It would be worth something to a traveling man under this circumstance as he does not need big heavy trunks in the small towns and he checks them ahead of him.”
The evidence does not indicate that there had been serious complaint of the present bus lines not handling baggage transportation satisfactorily.
Applicants’ evidence was that there was no agreement or understanding between them that losses, if any, sustained by the transportation company in operating its proposed bus line would be compensated or shared by the railroad company, or that profits, if any, would go to or be shared by the railroad company.
The Motor Bus Act, Laws 1927, page 402, et seq.,
If this were a case in which a railroad company, directly or through a subsidiary, and one or more independent motor carriers were each applying for a certificate to operate over a highway paralleling the railroad and on which duly certificated motor carriers were not already operating, we would have a different situation with which to deal. Such was the situation in most of the cases cited and relied upon by respondents, and in such case there is strong and appealing argument in favor of giving preference to the railroad company or its subsidiary. As argued by respondents, the railroads have helped greatly to develop the country, they have large investments, can assure permanency of service and satisfaction for injuries from accidents, and they pay large sums in taxes. But, while such is true, other duly authorized public utilities are also entitled to consideration. As said in Monongahela West P. S. Co. v. State Road Commission (W. Va.), 139 S. E. 744, 748: “The holder of the permit over the established route is entitled to the same protection and consideration as any other public utility.” To hold otherwise would be unwise policy as well as unjust.
We have not such situation in this case. Here we have duly certificated motor carriers already in the field, furnishing adequate and satisfactory service, willing and able to furnish any additional facilities and service which may be needed or which the commission may order. They began, under certificates from the commission, when the highway was not so good and the demand for bus service less and they have built up their transportation system to a high state of efficiency, serving and evidently capable of continuing permanently to serve the public adequately. Applicant transportation company now seeks to enter the field in competition with the existing motor carriers, because, while applicants disclaim a desire to compete for business now done by the certificated carriers, there can be no doubt that there would be such competition. If granted a certificate the transportation company would inevitably take an appreciable amount of such business, enough, we are satisfied, to reduce the profits of the present motor carriers to the vanishing point. The transportation company, while it has little or no expectation of making a profit out of the motor carrier business if granted a certificate, would of course endeavor to do so. It is willing to operate without profit if no profit can be made, in order to save to the railroad company the cost of operating the trains. The present carriers cannot do that. Either rates would have to be raised to compensate for the loss of their passengers or these carriers would be forced to quit. Should the certificate applied for be granted, then, in order that all certificated carriers operating over the route might make a reasonable profit, rates would inevitably have to be raised.
“This is an era in which we, in a large measure, if not fully, realize a necessity for the conservation of energy and of natural resources. Such conservation is better secured by the regulation of public utilities than by their duplication . . . And the requirement of a finding of necessity, as well as of public convenience, further implies that if another utility is adequately rendering the service proposed, or is able and willing or may be required to do so, then the necessity would not exist and the certificate should be refused.”
In the same case, 275 Mo. l. c. 337, it is further said that, conceding that the Public Service Commission Act is indicative of a policy designed in every proper case to substitute regulated monopoly for destructive competition, the “spirit of this policy is the protection of the public. The protection given the utility is incidental. The policy covers a particular case when competition would impair or destroy a utility and, as a consequence, eventually entail an increase of rates charged the public. There are other considerations, of course, but that mentioned forms the principal basis of the rule.”
Useless duplication of service tends to destroy itself, to cripple existing systems, commit waste and impair the public service, and fails to furnish permanent satisfactory service at fair rates. [See Pond on Public Utilities (3 Ed.) sec. 731, p. 778.]
The commission‘s power with respect to granting certificates of convenience and necessity to motor carriers is defined by the statute above referred to. In State ex rel. Detroit-Chicago Motor Bus Co. v. Pub. Serv. Comm., 23 S. W. (2d) 115, 117, this court said:
“It will be noted that the Commission‘s discretion is to be controlled by three principal considerations: (1) The transportation service being furnished by other carriers: (2) the permanency and continuity of the proposed service; and (3) the effect which the proposed service may have upon other existing forms of transportation service. The statute in this respect is in complete harmony with the general principles which obtain as to state regulation of public utilities.”
Upon review of an order of the commission refusing a certificate, if the court finds the order of the commission neither unlawful nor unreasonable, it is its duty to affirm the order. [State ex rel. Detroit-Chicago Motor Bus Co. v. Pub. Serv. Comm., supra; State ex rel. Mo. Pac. Railroad Co. v. Pub. Serv. Comm. (Mo), 297 S. W. 47; State ex rel. Power Co. v. Pub. Serv. Comm., 287 S. W. 522.] The question then is, was the order of the commission unlawful or unreasonable?
Neither do we think it was unreasonable or unlawful as to applicant Missouri Pacific Railroad Company. The application for permission to discontinue the trains, the refusal of which is complained of in respondents’ brief here, cannot be considered as a separate and independent proposition because at the hearing before the commission the railroad company expressly made that application contingent upon the granting of the transportation company‘s application for a certificate, stating that if the latter were not granted its application to withdraw the trains would be withdrawn so far as this hearing is concerned.
Applicants’ position seems to be that the joint application was in effect an application by the railroad company for permission to discontinue the trains and, through a subsidiary, to substitute therefor motor bus service. We think it unnecessary to discuss the question whether or not it would be unreasonable to refuse permission merely to substitute for train service operated at a loss a different and cheaper form of transportation when and if such substitution could be effected without increasing existing competitive conditions as to other established transportation agencies. It is clear that granting the application in this case would amount to more than a mere substitution of motor bus transportation for abandoned train transportation. It would, as above pointed out, result in increased competition with established motor-bus service which the business and public necessity do not justify, and would inevitably prove detrimental to and probably destructive of the now established motor carrier agencies, to the ultimate detriment, we think, of the public convenience and interests.
Should the railroad company desire only to discontinue the trains since they cannot be operated without loss, that is a matter to be presented to the commission.
We have not overlooked the authorities cited by respondents, but we think the principles announced in them are not in conflict, the facts considered, with the conclusion we have reached herein. Most of them, as stated above, deal with original applications the granting of which would not conflict with an established service. One, which is cited as being in point, Re Southern Pac. Motor Transport Co. (Cal.), P. U. R. 1929A, 193, was a petition to the railroad commission by a railroad company and a subsidiary corporation the stock of which was owned by the railroad company, to withdraw certain trains and for a certificate to the transportation company to operate motor coaches on certain highways paralleling the railroad on which there was already established motor service. So
It is apparent that the facts as found by the California commission as to the results of granting the certificate, upon which it based its action, differ materially from the situation presented in this case.
We do not regard the fact that the present motor carriers may not now be rendering the identical service applied for as of great importance, in view of the fact that they are willing and able, and may be required, to render such service as will be in all respects adequate.
We are of the opinion that the order of the commission as to both applicants was neither unlawful nor unreasonable and that the judgment of the circuit court setting it aside should be reversed and the cause remanded with directions to that court to enter judgment affirming said order of the commission. It is so ordered. Davis, C., concurs; Westhues, C., not sitting.
PER CURIAM: - The foregoing opinion by COOLEY, C., is adopted as the opinion of the court. All of the judges concur.