Summary
In Motor Freight, Inc., v. Public Utilities Commission, 120 Ohio St. 1, 165 N.E.) 355, decided February 13, 1929, it was held that the contract to provide for transportation is equivalent to a contract to transport, but that in order to constitute a "motor transportation company," as defined in the General Code, the transportation company must own, control, manage, or operate the motor vehicles used in transportation.
Summary of this case from Larkin v. Pub. Util. CommOpinion
No. 21396
Decided February 13, 1929.
Public Utilities Commission — Motor transportation companies — Common carriers defined — Contract to provide transportation, equivalent to contract to transport — Company must own, control, manage or operate equipment used in transportation — Sections 614-2 and 614-84, General Code — Carriers operating under private contracts, not subject to public regulation.
1. A contract to provide for transportation is equivalent to a contract to transport, but other elements than the fact of transportation are necessary to constitute a common carrier.
2. By the provisions of Sections 614-2 and 614-84, General Code, only a "motor transportation company" as defined therein is subject to public regulation; such definition requires that the transportation company must own, control, manage or operate the motor vehicles used in transportation.
3. Carriers operating under private contracts of carriage are not subject to public regulation unless such carriers hold themselves out as willing to serve the public indiscriminately.
ERROR to the Public Utilities Commission.
This is an error proceeding to review an order of the Public Utilities Commission of Ohio.
Motor Freight, Inc., is a corporation organized under the laws of the state of Michigan, with principal office in Detroit, engaged in the business of furnishing transportation for freight between Michigan and certain cities in Ohio. Whatever service it is rendering is interstate in character. It has no certificate of convenience and necessity from the Public Utilities Commission of Ohio, and desires none. The Northern Ohio Power Light Company and the Lake Shore Electric Railway Company have protested against the service rendered by Motor Freight, Inc., without being certificated by the Public Utilities Commission, and have filed a complaint with the commission charging that Motor Freight, Inc., is a common carrier and a motor transportation company, as defined by the laws of Ohio.
Several hearings were had before the Public Utilities Commission, which finally resulted in an order and finding that Motor Freight, Inc., is a common carrier and a motor transportation company and therefore not permitted to further operate in the state of Ohio without a certificate of convenience and necessity. The only testimony offered was that of one Frank R. Joseph, president of Motor Freight, Inc., who was called for cross-examination by the complainants, and two exhibits were offered, one of which was a letterhead and the other a copy of a blank delivery receipt ordinarily used by respondent. Joseph testified that the company was rendering service as haulage contractors, under private contracts with firms to provide transportation of freight between Detroit, in the state of Michigan, and Akron and Cleveland, in the state of Ohio; that it did not own, control, operate, or manage any motor propelled vehicle; that it contracted to provide transportation at rates ranging from 22 1/2 cents to 60 cents per hundredweight, depending upon the length of haul, the character of service, the volume of business furnished by the patron, the time of delivery, and perhaps other features. It was free to move the freight by any existing means of transportation. It might move the freight by rail or water transportation, either public or private, but in nearly all cases employed truck owners not certificated as motor transportation companies. Its contract with independent truck owners was to pay a flat rate per ton for the merchandise transported. All such independent truck owners were free to haul merchandise for others. No particular route was designated. The only supervision exercised over the independent truck owners was that they should check at certain gasoline filling stations as they passed, so that respondent might know the whereabouts of the freight. Truck owners furnished their own drivers, and the drivers were not in any way subject to the orders of the respondent. Truck owners insured the goods during the course of transportation. In some instances respondent gave financial assistance to truck owners in purchasing equipment, but never at any time held a lien upon such equipment. At the time of the hearing, respondent was not obligated as indorser or otherwise for such truck owners. Respondent employed no solicitors and did not accept all business offered, though Joseph testified that he was constantly seeking new business and would make contracts with any one who had merchandise to be transported where the business could be transacted with a profit. It was desired to do business for regular customers, but freight was sometimes moved for casual patrons, where it did not interfere with the service regularly contracted for. It does not do business with certain classes of people, nor for those having only a small volume of business. There is no limit to the capacity of the respondent, except the limitations of the number of trucks available for hire. The distinctive feature of the service rendered is quick transportation and delivery to the place of business of the consignee.
It being inquired along what lines respondent's business was built up, the answer was: "On good service and taking care of our regular customers that have real tonnage to handle."
The letterhead contains the following statements:
"Complete insurance protection for the shipper."
"Transportation between Akron, Cleveland, Toledo and Detroit."
"Special service on full load movements to all midwest points."
"No tariff published."
"Haulage contractors."
"Regular 24-hour plant to plant service all year."
Respondent had a limited number of patrons in Akron, and a larger number in Cleveland and Detroit. It had no uniform contract. Its contract with the Detroit Brass Malleable Works was an elaborate contract calling for a variety of service upon a variety of compensations, which contract had no definite period of duration, but might be terminated by either party at the expiration of 60 days, or at any time upon 30 days notice. Its contracts with the Goodyear Tire Rubber Company and the B. F. Goodrich Company, of Akron, were very simple, and in the following language:
"This will confirm our verbal contract for the handling of shipments between Akron and Detroit at a rate of sixty cents per hundred pounds."
Respondent published no tariff schedules, and it was frankly stated that its business was purposely so organized and conducted as to avoid the many liabilities which it would incur if it operated as a common carrier, or were actually engaged in the transportation of freight; that it particularly desired to avoid such conduct in its business as would bring it within the definition of Section 614-84, General Code, or the rules and regulations, published by the Public Utilities Commission of Ohio, covering the transportation of persons and property for compensation over public highways, at page 5, in paragraph G, under Section 2, entitled "Definitions," which states in part:
"The term motor transportation company means every * * * company * * * when engaged in the business of carrying and transporting persons or property or both in motor propelled vehicles of any kind whatsoever for hire over any public street, road or highway in this state."
Upon this testimony the commission found that it was a common carrier and a motor transportation company and therefore subject to regulation.
The Motor Freight, Inc., prosecutes error from that order to this court.
Messrs. Geddes, Schmettau, Williams, Eversman Morgan, for plaintiff in error.
Mr. Gilbert Bettman, attorney general, and Mr. Thomas J. Herbert, for Public Utilities Commission.
Messrs. Tolles, Hogsett Ginn, for Lake Shore Electric Ry. Company.
Messrs. Mather, Nesbitt Willkie, for Northern Ohio Power Light Company.
The issues involved in this error proceeding raise mixed questions of law and fact and require this court to judicially review the evidence to determine whether the findings of fact of the commission are reasonable and lawful, and also whether legal principles governing the same have been properly applied.
In the last analysis the question for determination is whether Motor Freight, Inc., so conducts its business as to constitute it a common carrier, and whether it is a motor transportation company, as defined by Section 614-84, General Code of Ohio. That section provides, in part, as follows:
"The term 'motor transportation company,' when used in this chapter, means every corporation, company, association, joint stock association, person, firm or copartnership, their lessees, trustees, receivers or trustees appointed by any court whatsoever, owning, controlling, operating or managing any motor propelled vehicle not usually operated on or over rails, used in the business of transportation of persons or property, or both, as a common carrier, for hire, under private contract or for the public in general, over any public highway in this state; provided, however, that the term 'motor transportation company' as used in this chapter shall not include any private contract carrier, as defined in Section 614-2 * * *."
This statute and Section 614-2, General Code, were under interpretation, and were discussed at length in Hissem v. Guran, 112 Ohio St. 59, 146 N.E. 808, and the general principles of law applicable to this controversy were considered and decided in that case and need not be repeated here. The facts of that case differ from the facts in the instant case, in that Hissem had certain fixed patronage, and served no other patrons, while Motor Freight, Inc., has a limited number of patrons, but is willing to serve others within well-defined limitations as to the character and volume of the merchandise to be transported and the character of service to be rendered. The cases differ also in the fact that Hissem owned and operated the trucks, while Motor Freight, Inc., neither owns nor operates any motor-propelled vehicles. Reaffirming the doctrine of the Hissem case and its interpretation of the statutory definitions of a motor transportation company, it must be held that, unless Motor Freight, Inc., is a common carrier of freight, within the common-law definition of that term, it is not subject to regulation by the Public Utilities Commission. Following the reasoning of the Hissem case, Motor Freight, Inc., cannot be held to be a common carrier, because it does not hold itself out to the public as willing to carry property for all persons indiscriminately to the limit of its capacity. Its service is limited to certain classes of persons, certain classes of freight, and service of a certain kind and character.
The volume of business transacted by Motor Freight, Inc., and the facts that it comes in direct competition with those who are rendering transportation service as common carriers, and that it is free from the duties, obligations, taxes, insurance, and other charges imposed upon common carriers, and that the freight, transportation of which is provided by it, is in fact transported over the highways of the state, all militate strongly in favor of subjecting the company to public regulation as a common carrier. If, on the other hand, its business is so conducted as to create only private contract relations between it and its patrons, in which no detriment accrues to the general public, or, in other words, if its business is conducted in such manner as not to bring it within the purview of the common-law definition of a common carrier, it is beyond the reach of governmental agencies seeking to regulate it. Public regulation exercised over a common carrier of freight and passengers affords a measure of protection to those who deal with such carriers, but if those who have freight to be transported prefer to patronize those who are not regulated, and if they are willing to assume the risks which might be avoided by patronizing common carriers, it is no concern of the state. One of the arguments employed in this case is that the highways of the state should not be utilized for the transportation of a large volume of freight without the charges which would help to build and maintain the highways. We have not considered and do not decide whether the individual truck owners are subject to regulation, leaving that subject for consideration and decision when such truck owners shall be proper parties before the court and where the issues will be properly made.
While counsel for the commission do not criticise the principle declared in the Hissem case, it is argued that Breuer v. Pub. Util. Comm., 118 Ohio St. 95, 160 N.E. 623, is more nearly parallel. That case was decided upon facts essentially different from the instant case. Without detailing the facts recited at page 96 of the opinion, it is sufficient to say that Breuer was the owner of the trucks and operated them upon the highways, that he employed a solicitor, and that he held himself out to the public as being willing to serve the public indifferently to the limit of the capacity of the trucks owned and operated by him. The instant case is also distinguishable from Craig v. Pub. Util. Comm., 115 Ohio St. 512, 154 N.E. 795, where the truck owner was held to be a common carrier, though his trucks were used partly in his own business; all other facts bringing him within the definition of a common carrier.
One of the most potent reasons for the conclusions we have reached in this case is found in the fact that Motor Freight, Inc., does not own any of the motor vehicles employed in the transportation. There is therefore no property which is dedicated to public use. It is difficult to see how the commission would proceed to enforce its order. Ordinarily the commission prescribes the equipment to be used, and exercises a measure of supervision over rates and service. Taxes, charges, and insurance have definite relations to the equipment employed. It is difficult to see how these regulations could be applied or made effective. One of the first orders the commission would have to make would be to require the respondent to acquire title to the equipment, and we know of no principle of common law, or provision of statute law, which would authorize such an order. In the findings of the commission under review in this proceeding, it is stated that the truck owners are agents of respondent and under its management and control. We find no evidence in this record to justify such a finding. It is further stated that the question whether or not a given operator is a motor transportation company does not hinge solely upon ownership or lack of ownership of the vehicles in which the freight is carried, and the case of Northern Ohio Traction Light Co. v. Pub. Util. Comm., 113 Ohio St. 93, 148 N.E. 584, is cited. That decision does not support the conclusions reached, because it was only held in that case that a lessee was an owner within the descriptions of the statute. Our interpretation of the testimony taken before the commission is that the respondent did not own the equipment and did not operate the same; that it did not control or manage the equipment; that the owners of the motor vehicles were independent contractors; that respondent exercised no supervision or control over the vehicles or the persons who drove them; and that therefore this evidence does not bring the respondent within the meaning of the definition of a motor transportation company, as defined in Section 614-84, General Code.
We are not unmindful of the fact that this is an interstate operation, and, while this fact does not militate against subjecting it to public regulation, if it is in fact a common carrier and a motor transportation company, it has called for the exercise of unusual care and diligence in inquiring into the facts and law of this controversy.
If the individual truck owners who are using the highways of this state solely in the transportation of freight for hire are subject to regulation, and can be subjected to proper charges to compensate for such use, the public will have suffered nothing by the method which respondent has adopted in conducting its business, and, if the individual truck owners cannot be so regulated and subjected to charges, that fact is to be deplored. It is not, however, cause for alarm or even regret that some contracts between citizens affecting transportation of freight still remain beyond the reach of governmental regulation.
Order reversed.
KINKADE, MATTHIAS, DAY and ALLEN, JJ., concur.
ROBINSON and JONES, JJ., dissent.