Kinder v. Looney

Hart, J., (after stating the facts). The Arkansas Railroad Commission gave J. P. Looney what was termed a certificate of public convenience and necessity to operate motor busses over the same route and practically under the same schedule as attempted to be operated by the Union Bus Line. In 5 Pomeroy’s Eq. Jur. (2 ed. § 2016), it is said that an injunction is the appropriate remedy to protect a party in the enjoyment of an exclusive franchise against continuous encroachments. Prof. Pomeroy said that “the jurisdiction rests on the firm and satisfactory ground of its necessity to avoid a ruinous multiplicity of suits, and to give adequate protection to the plaintiff’s property in his franchise.” In § 2017, Prof. Pomeroy says that it is not necessary, “to entitle the owner to relief in equity, that the franchise should be an exclusive franchise in the sense. that the grant of another similar franchise to be exercised and enjoyed at the same place would be void.” The reason given is that, “as to the one who is invading his rights without legal sanction, the franchise is an exclusive franchise, although the owner of it might not be entitled to any protection as against the granting of a similar franchise to another.” This brings us to the question of whether or not the Union Bus Line, for which appellants were working, was acting in violation of law in operating its motor 'busses, and also to a consideration of the interpretation of our statute establishing the Arkansas Railroad Commission and giving it power to regulate public utilities and service corporations, and the rules and regulations adopted by the said Commission. The act in question was passed by the Legislature of 1921, and comprises twenty-seven sections. General Acts of 1921, p. 177. Section 5 of the act provides that the jurisdiction of the Commission shall extend to and include all matters pertaining to the regulation and operation of all common carriers, etc., and this court has held that motor busses operating' as public carriers between municipalities are included in the words “all common carriers.” Mason v. Intercity Terminal Ry. Co., 158 Ark. 542. Section 6 provides that those engaged in public service business shall establish and maintain adequate and suitable facilities and shall perform such services in respect thereto as shall be reasonable, safe and sufficient for the security and convenience of the public. This section and others also gives the Commission authority to establish rates and maintain: the same. Section 20 provides for an appeal to the circuit court from any order made by the Commission. Among other rules promulgated by the Arkansas Railroad Commission is the following: “(1). No person or motor transportation company shall begin to operate any motor-propelled vehicle for the transportation of persons or property, or both, for compensation between fixed termini or over a regular or irregular route in this State, without first obtaining from the Railroad Commission a certificate declaring that a public convenience and necessity require such operation.” We all agree that the States have the undoubted right to regulate motor vehicles operating for hire as common carriers within the State, and that the statutory regulation of motor vehicles varies in the different States. The statutes of many States creating public service commissions require certificates of public convenience and necessity before any such company can begin or carry on business. Other statutes give public service commissions the power and authority to limit or restrict the number of motor vehicles operating as public carriers’ over given routes to a number sufficient to meet the public convenience and necessity. Such legislative enactments have commonly been sustained in the courts. The statute under consideration in this case does not confer express authority upon the Arkansas Railroad Commission to establish a rule that no automobile transportation company shall operate for the transportation of persons for hire over a regular route in this State without first having obtained from the Commission a certificate declaring’ the public convenience and necessity require such operation. It is claimed, however, that such authority in the Commission is-necessarily implied by the language of -§ 5, providing that the jurisdiction of the Commission shall extend to and include all matters pertaining to the regulation and' operation of all common carriers. In other words, it is claimed that giving the Commission jurisdiction over all matters relating to the operation of common carriers gives it the right to promulgate a rule that no motor busses shall operate as common carriers over a given route until they have obtained a certificate of public convenience and necessity, and that this requirement is a prerequisite to their operation. No adjudicated case has been cited in support of this contention, and a májority of the court expressly reserves this question for future determination, for the reason that the conclusions we have reached under the facts of this case render it unnecessary for us to decide the question. Assuming that the Legislature had passéd a statute in the language of the rule promulgated by the Commission and copied above, we do not think that it would give the Commission the power to arbitrarily decline to issue a certificate of public convenience and necessity, or to restrict and limit the number of corporations desiring to operate over a given route without a hearing. All the authorities hold that statutes regulating public service corporations are enacted to promote the common welfare as well as to protect parties who invest money in such public service corporations. It is true that laws regulating them are primarily based on the public needs, and not to promote the desire of such corporations, to serve the public. Now, if it be conceded that the rule promulgated by the Commission is necessarily implied under the terms of the act creating the Commission and defining its powers, it follows that the Commission could not decline to issue a certificate of public convenience and necessity to a company applying in good faith therefor and offering to comply with the rules of the Commission with respect to bonds and other conditions imposed upon such applicants, without adequate reason therefor. A certificate of public convenience and necessity is nothing more than written evidence that the party obtaining it has complied with the provisions of the statute and the reasonable rules and regulations of the Commission. It will be noted that the rule itself does not restrict the number of certificates of public convenience and necessity which may be issued to companies operating motor busses for hire over a given route. If the Commission may limit the number, it mnst act in a reasonable manner and upon evidence. It must determine the question with justice and fairness to the public, as well as to the public service corporations. It cannot restrict the number of certificates of public convenience and necessity issued to companies over a given route without reasonable evidence tending to show that such restriction would result in a benefit to the public. The decision of the Commission limiting the number of such certificates must in any event be based upon a finding that the public needs in the premises will be best served thereby. In the case at bar, the Union Bus Line had an established station, and was operating a bus line over the route in question during the year 1925. Application was made to the Commission for a certificate to operate during the year 1926, and the conditions prescribed by the rules and regulations of the Commission had-been complied with. Owing to the crowded condition of the docket of the Commission, the hearing of the application was postponed until the 29th day of March, 1926. In the meantime the applicant desired to operate motor busses over the route and under the schedule set forth in its application. J. P. Looney had already obtained a certificate of public convenience and necessity over the same route and under the same schedule as that applied for by the Union Bus Line. The record shows that the rules promulgated and adopted by the Commission require a hearing to be had upon every application filed covering a route upon which a previous permit had been granted, and that, owing to the number of cases before the Commission, it could not hear this application before March 29, 19'26, and it was therefore set down for hearing on that date. The record also shows that the Commission expressed the view that it was a violation of its rules and regulations for any applicant to operate a bus line until it was issued'a permit to do so, but that it has been the custom with all applicants running competitive lines to continue their operations until a final hearing should be had upon their case. Under the facts stated, the majority of the court is of the opinion that J. P. Looney had no right to an injunction against the Union Bus Line, or its employees, until after the final hearing by the Commission of its application and the rejection of the same. If the Commission, on final hearing, had denied the application of the Union Bus Line for a certificate of public convenience and necessity, and the company itself, or through its employees, had- attempted to operate in violation of the orders of the Commission, then Looney, under the principles of law above announced, would have had a right to enjoin them from so operating. If the Union Bus Line had deemed itself aggrieved by the ruling of the Commission on final hearing, it would have had an appropriate method of review under § 20 of the act in question. Until there was a final hearing in the matter, the Commission could not intelligently determine whether or not public necessity and convenience required it to limit or restrict the number of companies operating over the route in question. The result of the views of a majority of the court is that the decree of the chancellor was wrong and should be reversed, and the complaint of the plaintiff will be dismissed here.