Opinion
No. 20751
Decided December 28, 1927.
Public Utilities Commission — Motor transportation companies — Receiver cannot dismiss company's application to sell certificate, when — Receiver cannot operate vehicles except in accordance with motor transportation act — Section 614-85, General Code — Receiver cannot transfer certificate without commission's consent, after public hearing — Section 614-87, General Code.
1. The duly appointed and qualified receiver of a motor transportation company, which has no assets whatever, either real or personal, cannot, without the consent of the Public Utilities Commission, dismiss an application to sell the certificate of public convenience and necessity of such motor transportation company filed with the Public Utilities Commission of Ohio prior to his appointment.
2. Under Section 614-85, General Code, the receiver of a motor transportation company cannot operate any motor propelled vehicle for the transportation of persons or property or both for hire on any public highway in the state of Ohio except in accordance with the motor transportation act.
3. Under Section 614-87, General Code, the receiver of a motor transportation company cannot transfer a certificate of public convenience and necessity except with the consent of the Public Utilities Commission after a public hearing had thereon.
ERROR to the Public Utilities Commission.
This case arises upon a petition in error to an order of the Public Utilities Commission granting the joint application of the Cleveland-Lorain-Sandusky Bus Company to sell, and the Lake Shore Coach Company to buy, certificate of public convenience and necessity No. 263, under which certificate the Cleveland-Lorain-Sandusky Bus Company had theretofore operated.
The application to sell and to purchase was made upon June 7, 1927. On July 2, 1927, William C. Blackmore was appointed receiver of the Cleveland-Lorain-Sandusky Bus Company. The receiver later asked leave of the Public Utilities Commission to withdraw the application of the Cleveland-Lorain-Sandusky Bus Company to sell its certificate of public convenience and necessity No. 263, which application the Public Utilities Commission refused.
It is the refusal of the Public Utilities Commission to permit the withdrawal of the application and its order approving the transfer of the certificate in question which the plaintiff in error attacks herein.
Mr. Arthur E. Griffith, for plaintiff in error.
Mr. Edward C. Turner, attorney general, and Mr. A.M. Calland, for Public Utilities Commission of Ohio.
Messrs. Tolles, Hogsett Ginn, for Lake Shore Coach Co. and Cleveland-Lorain-Sandusky Bus Co.
The plaintiff in error claims that, under the statute governing receivers (Section 11894 et seq., General Code), a receiver has the sole right to transfer a certificate of public convenience and necessity; that he has the right to operate a motor transportation company irrespective of the approval of the Public Utilities Commission; and that, when an application to sell the certificate has been filed with the Public Utilities Commission prior to the receiver's appointment, he has a right, without the approval of the commission, to dismiss such application and to operate such motor transportation company.
The plaintiff in error does not cite the specific statute under which he claims, but we assume that it is Section 11897, General Code, which defines the powers of a receiver. It reads as follows:
"Under the control of the court, the receiver may bring and defend actions in his own name, as receiver, take and keep possession of the property, receive rents, collect, compound for, and compromise demands, make transfers, and generally do such acts respecting the property as the court authorizes."
Under this section the powers of the receiver all relate to acts respecting the property or funds in custodia legis. But in this case the record discloses that the utility had no assets whatever. The motorbusses which constituted its main assets had been repossessed by the chattel mortgagee of the busses under the terms of an existing chattel mortgage, the obligation of which greatly exceeded the value of the cars, and the mortgagee had sold the busses to the Lake Shore Coach Company. The record shows that the liabilities of the company were far greater than its assets, and the receiver was appointed at the instance of a judgment creditor, whose judgment was not satisfied because of the specific fact that the bus company had no property upon which levy of execution could be made. Therefore the receiver had no property in his hands to administer. He had in effect no company to operate. The certificate of public convenience and necessity was not property. Estabrook, Recr., v. Public Utilities Commission, 112 Ohio St. 417, 147 N.E. 761; Pennsylvania Rd. Co. v. Public Utilities Commission, 116 Ohio St. 80, 155 N.E. 694; Hogan v. Public Utilities Commission, 113 Ohio St. 83, 148 N.E. 581. Hence the transfer of the certificate was not governed by the statutes relating to property in the hands of the receiver.
Moreover, the motorbus statute (Section 614-84 et seq., General Code) enacted subsequent to the statutes governing receivers, including Section 11897, above quoted, specifically provides that no certificate can be transferred except by authority of the commission. Unless this is a vain provision, the receiver has not the sole and unlimited right to transfer the certificate. The statute also states that no receiver can operate a motor transportation company except subject to the provisions of the act, and hence the receiver cannot operate the company irrespective of the approval of the commission.
It is the general rule that it is the primary duty of a receiver to wind up the affairs of an insolvent corporation, and not to operate the business. The court may permit continuance of the business by the receiver temporarily in the interest of the parties, but should exercise the power only with great caution. 23 R. C. L., Section 78; Peter v. Foundry Co., 53 Ohio St. 534, at page 550, 42 N.E. 690.
We make no holding upon the question which would arise if the receiver in this case had had in his hands property, real or personal, to administer; but under the decisions of this court and the precise wording of the motorbus statutes (Sections 614-84 to 614-88, General Code, inclusive) we hold that the receiver could not, upon this record, as a matter of right, compel withdrawal of the application to sell the certificate, and that the Public Utilities Commission did not act unreasonably or unlawfully in refusing the withdrawal.
Order affirmed.
MARSHALL, C.J., DAY, KINKADE, ROBINSON, JONES and MATTHIAS, JJ., concur.