McCarthy v. Public Service Commission

PRATT, Justice. *490 This case comes before the court on a writ of certiorari to review orders issued by the Public Service Commission (hereinafter referred to as the commission). The plaintiff is a railroad operating through a large part of Utah. The defendants are eight trucking concerns. The Public Service Commission issued to each of the eight defendants a certificate of convenience and necessity to operate as “common carriers of sand, gravel, loose earth, and cement in bulk to and from all points in the State of Utah.” The undisputed facts are these: The defendants are all engaged in the business of hauling sand, gravel, and cement throughout Utah. They have operated in the past mainly within cities and towns under statutory exemption, which covered both common carriers and contract carriers. In every case the sand and gravel is hauled from the closest pit to the point of construction or use, and usually the haul is under 30 miles. The operation methods of all eight concerns seem to be essentially similar. The truckers haul for several building contractors and others who do substantial trucking of sand, gravel, loose earth and/or bulk cement in their businesses. They enter into an individual contract for each job. The rates charged depend on the distances involved, type of roads that must be used, and size of the job. The contracts usually provide for an amount to be paid for waiting time. The defendants furnish the driver and truck with gas and oil. The defendants voluntarily submitted themselves to the jurisdiction of the commission and requested to be issued the certificates and classified as common carriers. The plaintiff railroad has a certificate of convenience and necessity to operate as a common carrier of sand, gravel and cement in bulk and claims its standing to object to the Public Service Commission’s actions because said actions create competing common carriers. There is no doubt that the plaintiff has an adequate interest to appear and protest. State v. Nelson, 65 Utah 457, 238 P. 237, 42 A. L. R. 849. It is the primary contention of. the plaintiff that under the Utah law the Public Service Commission has no power *491 to classify the defendants as common carriers. The only question we have is: Did the commission by its order convert “private contracts or a mere private business into a public utility or make its owner a common carrier?” State v. Nelson, cited above 65 Utah at page 462, 238 P. at page 239, 42 A. L. R. 849. Or in issuing these orders did the commission act “arbitrarily or capriciously ?” Gilmer v. Public Utilities Comm., 67 Utah 222, at page 238, 247 P. 284, at page 290. Defendants assert that, because they have voluntarily submitted to the jurisdiction of the Public Service Commission, this court should apply different law than we would apply if defendants resisted the jurisdiction. We cannot so hold. As far as classifying defendants correctly is concerned it makes no difference whether defendants object to the classification or some one else objects so long as the party objecting has standing before this court to object. The U. C. A., 1943 classifies motor carriers as common motor carriers and contract motor carries. Sec. 76-5-13 defines them as follows: “ ‘Common Motor Carrier of Property’ means any person who holds himself out to the public as willing to undertake for hire to transport by motor vehicle from place to place, the property of others who may choose to employ him.” si! * ij: * * “ ‘Contract Motor Carrier of Property’ means any person engaged in the transportation by motor vehicle of property for hire and not included in the term common motor carrier of property as hereinbefore defined.” The defendants have all been engaged in the transportation of property for hire. But we can find no evidence in the record which tends to prove that they have held themselves out “to the public as willing to undertake for hire to transport.” The fact that each of them engages in transportation for hire is not sufficient evidence that they hold themselves out to the public to do so. Such a holding would make it possible to convert all contract carriers into common carriers, a result which obviously is not intended by our code. *492 There is little or no conflict in the evidence submitted. It seems clear therefrom that defendants do not hold themselves out to the public generally for hire. For example: (By witness M. K. Moffat) “Q. Now how do the demands come to you for this type of service if there is any demand for it? A. As a rule, before a contract is ever let, we are notified and asked to submit bids on it. “Q. Do you submit the contractor a bid for the amount of the carrying? A. That’s right. “Q. And upon what basis is that customarily computed? A. A lot of it at the present time on the work here in the city is by the hour. The biggest part of it is by the ton.” (By witness W. H. Harmon) “Q. State to the commission the nature of how your business arises from time to time. A. Well we would have a telephone call probably from companies, big contractors that we had worked for previously, or if there is a contract let we will get out on the job and see if they need our services on it.” The trend of the testimony is all toward individually negotiated contracts. The evidence before the commission is very similar to the evidence in the very well reasoned case of Motor Haulage Co. v. Maltbie, 293 N. Y. 338, 57 N. E. 2d 41, 161 A. L. R. 401, wherein it was held that the carrier was a contract carrier. There the court stated in 293 N. Y. 338, 57 N. E. 2d at page 45, 161 A. L. R. at page 407: “The uncontradicted and undisputed testimony is that Applicant has always negotiated an agreement for even individual shipments and has never undertaken to handle any freight if unable to arrive at some mutually satisfactory arrangement to make the transportation. Applicant has never held itself out to carry for anybody that might call upon it to transport goods. An agreement is made for each individual movement.” The United States Code Annotated, Title 49, § 303(a) (15), defines a contract motor carrier as follows: “The term ‘contract carrier by motor vehicle’ means any person which, under individual contracts or agreements, engages in the *493 transportation * * * by motor vehicle of passengers or property * * * for compensation.” This definition seems to be in conformity with what was meant by the term “contract or private carrier” at common law. Jones v. Ferguson, 181 Ark. 522, 27 S. W. 2d 96; Pond, Public Utilities, 4th ed., Vol. 3, Sec. 732, P. 1468; State v. Nelson, 65 Utah 457, 238 P. 237, 42 A. L. R. 849; Garkane Power Co., Inc. v. Public Serv. Comm., 98 Utah 466, 100 P. 2d 571, 132 A. L. R. 1490; Michigan Public Utilities Comm. v. Duke, 266 U. S. 570, 45 S. Ct. 191, 69 L. Ed. 445, 36 A. L. R. 1105; Ney v. Haun, 131 Va. 557, 109 S. E. 438, 18 A. L. R. 1310. The defendants are rendering a private service to their customers. They are not engaged in a public service inviting an indefinite public generally to hire them; nor does the public have a legal right to the use of their facilities. There being no evidence that they have held themselves out to such a public, the action of the commission in classifying defendants as common carriers was error in law and without proper foundation. Having held that the carrier-defendants here cannot be classified as common carriers on the basis of the type of services they have rendered in the past we now consider whether or not the evidence they presented to the Public Service Commission is sufficient to establish a basis for a finding that there is a public need for the services of a common carrier of sand, gravel, etc. The applicable provision of our law is Sec. 76-5-18, U. C. A., 1943, which reads: “It shall be unlawful for any common motor carrier to operate as a carrier in intrastate commerce within this state without first having obtained from the commission a certificate of convenience and necessity. * * * If the commission finds from the evidence that the public convenience and necessity require the proposed service or any part thereof it may issue the certificate as prayed for, or issue it for the partial exercise only of the privilege sought * * *. Otherwise such certificate shall be denied. * * *” *494 To comply with the above quoted provision the Public Service Commission must deny the carrier-defendant’s applications for certificates of convenience and necessity unless presented with evidence from which it could find that there is a public need for the services of a common carrier of sand, gravel, etc. Was there such evidence? We believe not. The carrier-defendants offered a great deal of evidence to the effect that there is a great need for the type of service which they render. It would appear that by this evidence they were attempting to qualify under section 76-5-18 quoted above for their certificates of convenience and necessity. Assuming that there is a great need for the type of service the carrier-defendants render, they presented testimony that they had no intention of changing the way they carried on their business. We have explained above that their business as it has been rendered in the past could not be classified as public in nature. Thus the need, if need there be, would not qualify them for common carrier certificates. All the representatives of the public for whom the carrier-defendants served, testified that they were completely satisfied with the service rendered at the present time. We find no evidence that there is a need to change these contract carriers into common carriers. Section 76-5-21 U. C. A., 1948, provides for the issuance of permits to intrastate contract carriers. The legislature has distinguished between contract motor carriers and common motor carriers. When there is evidence which tends to prove that the public need is for the service of a common carrier, then the commission under Sec. 76-5-18 U. C. A. 1948 has the power to issue certificates of convenience and necessity, and not until then. If the need is for contract carriers, that is not a foundation for action such as was taken by the commission in this case. The commission should recall the common carrier certificates issued to each of the defendants. The orders of the commission are set aside. LATIMER, J., concurs.