UNITED STATES ET AL. v. CAROLINA FREIGHT CARRIERS CORP.
No. 197
Supreme Court of the United States
March 2, 1942
315 U.S. 475
Argued January 16, 1942. Decided March 2, 1942.
came committed to insure the bank—not later when, as a step to working its way out of loss, it took assets already equitably its own as a pledge and put up money for a plan to continue banking facilities to the community. To say that the note had been charged off is to stress the irrelevant. This was, admittedly, long after the Corporation had become bound as the bank‘s insurer. It also attributes to the “charge-off” an unwarranted significance. The classification of this paper as inadmissible for a commercial bank would have been justified by its obvious “slow” character, or may have been due to mere lack of information as to the ability of a nonresident debtor to meet it. It is no acknowledgment or notice of a legal defect in the paper.
Mr. Wilmer A. Hill, with whom Mr. Harry C. Ames was on the brief, for appellee.
Messrs. Luther M. Walter, John S. Burchmore, and Huel D. Belnap filed a brief on behalf of the Irregular Route Common Carrier Conference of the American Trucking Assns., Inc., as amicus curiae, urging affirmance.
MR. JUSTICE DOUGLAS delivered the opinion of the Court.
This is an appeal under
Appellee‘s predecessor applied for such a certificate authorizing operation as a “common carrier” by motor
“We find that applicant‘s predecessor in interest was on June 1, 1935, and continuously since it and its predecessor have been, in bona fide operation as a common carrier by motor vehicle, in interstate or foreign commerce (1) of cotton yarn from all points in Gaston, Lincoln, Cleveland, Rutherford, McDowell, Burke, Catawba, Alexander, Iredell, Rowan, Davidson, and Davie Counties, N. C., to Hagerstown, Md., New York, N. Y., Pawtucket and Providence, R. I., all points in Pennsylvania on and east of U. S. Highway 11, and points in Middlesex, Union, Essex, Hud-
son, Passaic, Bergen, Somerset, and Morris Counties, N. J., (2) of asbestos textile products from Charlotte, N. C., to Philadelphia and North Wales, Pa., Trenton, Newark, Passaic, and Paterson, N. J., New York, N. Y., Middletown, Conn., Providence and Pawtucket, R. I., and Boston and Hudson, Mass., (3) of supplies and materials used in the manufacture of asbestos textile products from Harrison and Perth Amboy, N. J., to Charlotte, N. C., and empty spools and boxes in the reverse direction, (4) of petroleum products in containers from Sewaren, N. J., and Marcus Hook, Pa., to Columbia and Greenville, S. C., and to all points in North Carolina, (5) of linoleum from Paulsboro, N. J., Marcus Hook, Pa., and East Walpole, Mass., to points in North Carolina and to Spartanburg and Greenville, S. C., (6) of canned goods from Baltimore, Md., to Shelby, N. C., (7) of beer and ale from Newark, N. J., to Gastonia and Wadesboro, N. C., and (8) of roofing and screen wire from York, Pa., to all points in North Carolina, all over irregular routes; that applicant is entitled to a certificate authorizing continuation of such operation; and that the application in all other respects should be denied.”
The District Court held that such restrictions were not authorized by the statute. It said:
“It is, of course, reasonable to limit the certificate to the type of service rendered by the carrier during the grandfather period, and to limit the territory to that within which substantial service of that type has been rendered; but it is unreasonable to limit the certificate of one who has functioned as a general carrier to the specific commodities carried and the specific points served. The law cannot reasonably be construed as authorizing such limitation.”
It further noted that such restrictions have not been imposed on regular route carriers and that Congress has
I. We think the Commission was justified in the restrictions which it placed on the geographical scope of appellee‘s operations.
As we indicated in Alton R. Co. v. United States, supra, the purpose of the “grandfather clause” was to assure those to whom Congress had extended its benefits a “substantial parity between future operations and prior bona fide operations.” We cannot say that that was denied in this case, if the limitations on the territorial scope of the operations are alone considered. While service to and from all points in the States included in the application was not allowed, the reduction was determined by the standard of substantiality of service. And considera-
II. We have doubts, however, as to the restrictions which the Commission has placed on the articles which appellee may carry.
The Commission in this case authorized the carriage of about a dozen kinds of commodities, though in prior operations about three times that number had been carried. It is not our function to weigh the evidence. Hence we intimate no opinion as to whether more commodities should have been included had the proper criterion been employed. But we conclude that there is no
“Authority to transport general commodities throughout a wide territory over irregular and unspecified routes pursuant to the ‘grandfather’ clause of the act should be granted to a carrier only when such carrier‘s right thereto has been proved by substantial evidence. To do otherwise would create the very ills which regulation is designed to alleviate, namely, congestion of highways, destructive rate practices, and unbridled competition. Common carriers which are expected to maintain regular service for the movement of freight in whatever quantities offered to and from all points on specified routes cannot operate economically and efficiently if other carriers are permitted to invade such routes for the sole purpose of handling the cream of the traffic available thereon in so-called irregular-route service.”
And see Merchants Parcel Delivery Co., 21 M. C. C. 93; Langer Transport Corp., 23 M. C. C. 302; Lett & Co. of Indiana, 26 M. C. C. 159.
Insofar as that view establishes a different test for commodities which may be carried by irregular route operators than for commodities which may be carried by
III. It follows from what has been said that a restriction on commodities which may be carried between specified points may not always be justified. If the applicant had established that it was a “common carrier” for a group of commodities or for an entire class or classes of property and was in “bona fide operation” during the critical periods in a specified territory, restrictions on commodities which could be moved in any one direction or between designated points would not be justified. The fact that a particular commodity had never been transported between certain points in that territory would not mean that authority to haul it between them should be withheld. Likewise, if the applicant could establish that it was a “common carrier” only of a limited number of commodities, there would normally be no statutory sanction for limiting the carriage of particular commodities in that group to specified points in the authorized area. Presumptively, one who had established his status of “common carrier” would be entitled to carry all of the commodities embraced in his undertaking to all points to which any shipments of any articles were authorized. On the other hand, an applicant‘s status may vary from one part of the territory to another or be different in northbound shipments than in southbound shipments. Thus in this case the Commission found that practically all of appellee‘s northbound shipments consisted of cotton yarn, though a few shipments of other commodities such as tires and tubes, asbestos textile products, spools and empty boxes were also made northbound. With the exception of tires and tubes,
IV. To appellee such matters involve life or death. Empty or partially loaded trucks on return trips may well drive the enterprise to the wall. A restriction in this case of the commodities which may be carried from any one point on southbound trips is a patent denial to appellee of that “substantial parity between future operations and prior bona fide operations” which the Act contemplates. Alton R. Co. v. United States, supra. Its prior opportunity should not be restricted beyond the clear requirements of the statute. For this Act should be liberally construed to preserve the position which those like appellee have struggled to obtain in our national transportation system. To freeze them into the precise pattern of their prior activities, as was done here, not only may alter materially the basic characteristics of their service, it also may well be tantamount to a denial of their statutory rights.
The precise grounds for the Commission‘s determination that only certain commodities could be carried and that only a few could be transported between designated points are not clear. It is impossible to say that the standards which we have set forth were applied to the facts in this record. Hence, as in Florida v. United States, 282 U. S. 194, 215, the defect is not merely one of the absence of a “suitably complete statement” of the reasons for the deci-
We express no opinion on the scope of the certificate which should be granted in this case. That entails not
Affirmed.
MR. JUSTICE JACKSON, dissenting:
MR. JUSTICE FRANKFURTER and I are unable to agree with this disposition of the case.
It overturns the exercise of a discretion which Congress has delegated to the Interstate Commerce Commission upon grounds which seem to us so unsubstantial as really to be a reversal on suspicion. The function of determining “grandfather” rights delegated in this case is not unlike the function dealt with in Gray v. Powell, 314 U. S. 402, in which we said that Congress could have legislated specifically as to individual exemptions but “found it more efficient to delegate that function to those whose experience in a particular field gave promise of a better informed, more equitable adjustment of the conflicting interests” (p. 412). We held that this delegation will be respected and that, unless we can say that a set of circumstances deemed by the Commission to bring a particular applicant within the concept of the statute “is so unrelated to the tasks entrusted by Congress to the Commission as in effect to deny a sensible exercise of judgment, it is the Court‘s duty to leave the Commission‘s judgment undisturbed” (p. 413). While the Court pays lip service to this principle, the Commission‘s decision is upset because, as the opinion states, “We have doubts“; “We are not confident“; and “We are not satisfied.” The opinion proceeds as it might do with a burden upon the Commission, although we supposed the burden to be upon those who
We do not agree that a remand to the Commission to make specific findings of the kind required in Florida v. United States, 282 U. S. 194, 215, is appropriate. In the Florida case, the Commission undertook to revise intrastate railroad rates under control of the state and over which, as Chief Justice Hughes said, “the Commission has no general authority.” 282 U. S. at 212. It was required to support its jurisdiction to revise rates not within its general control by specific findings as to whether those rates in any way constituted a burden on interstate commerce. The Court had earlier established the rule that an order of the Commission should not be given precedence over a state rate statute otherwise valid “unless, and except so far as, it conforms to a high standard of certainty.” Illinois Central R. Co. v. Public Utilities Commission, 245 U. S. 493, 510. And in this connection the Court pointed out that even an act of Congress is not to be construed to supersede or suspend the exercise of the reserved powers of the state, even where the Constitution permits, “except so far as its purpose to do so is clearly manifested.” It is one thing to require the Interstate Commerce Commission to be explicit in finding jurisdictional facts before it invades conceded state power. It is a wholly different thing to read with a hostile eye the Commission‘s findings that a claim for exemption from conceded federal regulatory authority has not been sustained.
Furthermore, if after this case is returned to the Commission, the Commission should leave no room for doubt that in making the challenged order it acted upon correct notions of law, it may yet be upset because the Court says its findings are not sustained by the evidence, it
Congress by the Motor Carrier Act of 1935 cast upon the Commission the task of regulating the motor carrier industry. By the enactment, Congress asserted that the public interest in the motor carrier enterprise had become paramount to private interests. The highly individualistic nature of the business and the easy terms upon which equipment could be obtained had promoted a quick growth accompanied by intense and uneconomic competition, both within itself and with other transportation systems. It was not expected that a sprawling, chaotic, and cutthroat industry that had developed entirely in the private interest would be reduced to an orderly and regularized system of transportation in the public interest without stepping on a good many individual toes.1
The motor carrier here asked as a matter of right that the Commission certify its “grandfather” privileges to include the carriage of general commodities in a territory comprising substantially the Atlantic seaboard from South Carolina to Massachusetts. That there was some disparity between its hopes and its experience was indicated by the fact that on June 1, 1935, it was operating eight trucks, and by 1936, the number of usable vehicles had fallen to four. After a change of ownership the number was increased, and at the time of hearing the applicant was operating seventeen carrying units.
This carrier did not operate at stated times or over regular routes, but was an irregular route carrier. The backbone of its business consisted of carriage of cotton
The Commission cut down the claims of the applicant by the use of the standard which the Act prescribes: namely, bona fide operation as a common carrier by motor vehicle. The Commission reduced the territorial claim to that which the carrier actually served with some regularity, and lopped off territory which had been served only occasionally or by isolated trips. It limited the commodities to be carried to those carried in substantial volume during the period before and after June 1, 1935. We find no basis upon which we can say as matter of law that these general methods of reducing nebulous and extravagant claims to a compass which the Commission could properly certify as representing bona fide operation are improper or other than those contemplated by the statute.
The Court is “not confident” that the Commission applied to this irregular route carrier the same test as to commodities that is applied to regular route carriers. We cannot be so confidently unconfident. The Commission seems to have made only the distinction between irregular and the regular route carriers that results from the differences inherent in the two types of enterprise. The Commission has tested both by the regularity and substantiality of their actual operations. It is a test with which they may have unequal ability to comply, but to reach different results on such different facts does not imply
The administrators of the Motor Carrier Act must be aware, as the framers of it were, that “the grandfather clause as of June 1, 1935, has been fixed in fairness to bona fide motor carriers now operating on the highway and limited so as to prevent speculation which is highly important.”