Joint Application of Fort Wayne Transit, Inc. v. Indiana Motor Bus Co.

302 N.E.2d 786, 158 Ind. App. 290, 1973 Ind. App. LEXIS 920
CourtIndiana Court of Appeals
DecidedOctober 29, 1973
Docket2-972A63
StatusPublished
Cited by8 cases

This text of 302 N.E.2d 786 (Joint Application of Fort Wayne Transit, Inc. v. Indiana Motor Bus Co.) is published on Counsel Stack Legal Research, covering Indiana Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Joint Application of Fort Wayne Transit, Inc. v. Indiana Motor Bus Co., 302 N.E.2d 786, 158 Ind. App. 290, 1973 Ind. App. LEXIS 920 (Ind. Ct. App. 1973).

Opinions

SHARP, J.

We must here interpret the Urban Mass Transportation Act of Indiana, hereinafter called UMT Act, IC 1971, 19-5-2-1 to 19-5-2-38, Ind. Ann. Stat. §§ 48-8801 (Burns 1972 Supp.), to determine whether the Public Service Commission, hereinafter called PSCI, has jurisdiction to approve the sale and transfer of Indiana Certificates of Public Convenience and Necessity to operate motor vehicles as a common carrier of persons intrastate.

At the very threshold of this case we are confronted with the question of whether the PSCI had any jurisdiction over [292]*292the Fort Wayne Transit, Inc., hereinafter referred to as Fort Wayne Transit, operating rights to the Fort Wayne PTC.

The sale was made pursuant to the UMT Act of 1965, IC 1971, 19-5-2-1—19-5-2-38, Ind. Ann. Stat. §§ 48-8801—48-8838 (Burns 1972 Supp.), hereinafter referred to as the UMT Act, which contains provisions for the benefit of urban mass transportation systems in financial difficulties. The system seeking such benefits must initiate action. It may do so in one of two ways. Its management may apply to the common council of a city within which it serves for assistance and, if said council finds that the financial position of the system is such that the “system is unable to render adequate service within the city or that there is imminent danger the system will be unable to render such service, the management of the system may apply to the common council of the city for assistance under the provisions of this act.” IC 1971, 19-5-2-4, Ind. Ann. Stat. § 48-8804 (Burns 1972 Supp.). The council may make grants in aid to the system, it may purchase real or personal property from the system (at a price to be determined by appraisers) for lease to the system; it may purchase buses or real property from other services for lease to the system, or it may engage in a combination of such methods of assistance, IC 1971, 19-5-2-5—19-5-2-7, Ind. Ann. Stat. §48-8805 (Burns 1972 Supp.).

If the management of the system believes that its situation is so precarious as to call for more desperate measures than public assistance—or, in the statutory language, “Whenever the management of an urban mass transportation system in any city shall be of the opinion that public acquisition of the system is necessary to enable the system to render adequate service within the city, the management of the system may request the common council to determine whether the public is to acquire the system.” IC 1971, 19-5-2-8, Ind. Ann. Stat. § 48-8808 (Burns 1972 Supp.).

If the council shall so find, “it may adopt an ordinance [293]*293declaring that public acquisition of the system is in the public interest of the city, providing for the creation of a public transportation corporation, as hereinafter provided, specifying the number of directors of such corporation and setting forth the boundaries of such corporation . . .” IC 1971, 19-5-2-9, Ind. Ann. Stat. § 48-8809 (Burns 1972 Supp.).

The statute further requires that the council adopt such an ordinance within six months or the system may withdraw its request for public acquisition. IC 1971, 19-5-2-9, Ind. Ann. Stat. § 48-8809 (Burns 1972 Supp.). Once the request has been withdrawn, the system would be free to take the necessary steps to discontinue operation, leaving the public without service.

If the council does adopt such an ordinance, a board of directors is appointed for the public transportation corporation, IC 1971, 19-5-2-11, Ind. Ann. Stat. § 48-8811 (Burns 1972 Supp.). The board is required to begin the necessary steps leading to acquisition of the system:

“The board of directors of the public transportation corporation and the management of the urban mass transportation system shall negotiate for the purchase of the property of the system by the public transportation corporation.” IC 1971, 19-5-2-20, Ind. Ann. Stat. §48-8820 (Burns 1972 Supp.).

If the negotiations are fruitless, the board is given the power to acquire the property by eminent domain. IC 1971, 19-5-2-20, Ind. Ann. Stat. § 48-8820 (Burns 1972 Supp.). Such power is to be exercised through the general statutes dealing with eminent domain. IC 1971, 32-11-1-1—32-11-1-13, Ind. Ann. Stat. §§3-1701—3-1712 (Burns 1968 Repl.). The eminent domain proceedings may not begin until the board

“. . . has adopted an ordinance declaring that the public interest and necessity require the acquisition by the public transportation corporation of the property involved * * * and that such acquisition is necessary for the establishment, development, extension or improvement of the system.” IC [294]*2941971, 19-5-2-22, Ind. Ann. Stat. § 48-8822 (Burns 1972 Supp.)
Further, the ordinance
“. . . shall be conclusive evidence of the public necessity of such proposed acquisition and that such proposed acquisition is planned in a manner which will be most compatible with the greatest public good and the least private injury.” ibid.

There is nothing in the statutory machinery dealing with the acquisition of a system by a public transportation corporation which makes it necessary for the PSCI to approve the transfer of the system’s operating rights to the public transportation corporation. The decision to acquire, or otherwise assist, an ailing system is a legislative decision, placed by the Act in the hands of the common council. The process of negotiating the purchase price is placed in the hands of the board of directors of the public transportation corporation. Even the determination of necessity is to be made by that board rather than by a court in the event condemnation becomes necessary.

In the present case, the result of the PSCI order is that the Fort Wayne Public Transportation Corporation finds it bought the tangible property of Fort Wayne Transit, Inc., but not the operating rights. After spending over one-half million dollars, it finds itself in the position of holding property which it may or may not have the right to use and which would undoubtedly be of much greater value to the Fort Wayne Public Transportation Corporation if it could be used by that Corporation than if it had to be sold piecemeal on the open market.

Insofar as the purpose of UMT Act may have been to aid the owners of distressed transit systems, it has been fulfilled. Insofar as the purpose of the UMT Act was to assure the continuance of operations it has been thwarted. Further, the Fort Wayne Public Transportation Corporation has no recourse against its seller which has long since dissolved. [295]*295(The decision to dissolve Fort Wayne Transit, Inc. was made upon the independent advice of one of Indiana’s most experienced utility lawyers with much expertise in PSCI practice.)

It may be said that the Fort Wayne Public Transportation Corporation could have protected itself by refusing to pay the money to the seller unless and until the PSCI had approved the transfer of the operating rights. However, such protection would not have been available if the Fort Wayne Public Transportation Corporation had proceeded by the exercise of eminent domain since the seller could have taken down its damages at any time, IC 1971, 32-11-1-8, Ind. Ann. Stat. § 3-1707 (Burns 1963 Repl.) and since any condemnation case could well have been concluded long before the PSCI had finally ruled on the transfer.

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Joint Application of Fort Wayne Transit, Inc. v. Indiana Motor Bus Co.
302 N.E.2d 786 (Indiana Court of Appeals, 1973)

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Bluebook (online)
302 N.E.2d 786, 158 Ind. App. 290, 1973 Ind. App. LEXIS 920, Counsel Stack Legal Research, https://law.counselstack.com/opinion/joint-application-of-fort-wayne-transit-inc-v-indiana-motor-bus-co-indctapp-1973.