Paulson v. Schirmer Transportation Co.

81 N.W.2d 875, 249 Minn. 236, 1957 Minn. LEXIS 565
CourtSupreme Court of Minnesota
DecidedMarch 15, 1957
DocketNo. 36,921
StatusPublished
Cited by4 cases

This text of 81 N.W.2d 875 (Paulson v. Schirmer Transportation Co.) is published on Counsel Stack Legal Research, covering Supreme Court of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Paulson v. Schirmer Transportation Co., 81 N.W.2d 875, 249 Minn. 236, 1957 Minn. LEXIS 565 (Mich. 1957).

Opinion

Murphy, Justice.

Irvin Paulson of Alexandria, Minnesota, made application to the Railroad and Warehouse Commission for a certificate authorizing his operations as a petroleum carrier. This application was made pursuant to M. S. A. 221.47 which relates to “any person * * * engaged in the business of transporting for hire over the public high[238]*238ways of this state petroleum products in bulk in quantities in excess of 2,000 gallons per load.” The territory sought embraced the two pipeline origin points of Alexandria and the Twin Cities and the destination area was 15 counties north, east, and west of Alexandria, Minnesota. The application was denied, but on appeal to the District Court of Douglas County, an order was made granting judgment for the petitioner and vacating and setting aside the commission’s order of denial. This case is here on appeal from the judgment of the district court.

A review of the record shows that the applicant, Irvin Paulson, from 1918 to 1951 owned his own equipment, consisting of three tractors and two 7,200-gallon trailers, which equipment he leased to authorized carriers who paid him on a percentage basis. In late 1953, Paulson purchased additional equipment in reliance on continuing one such lease for a year. In March 1951, however, the commission issued a directive prohibiting the percentage basis by which the applicant was paid. Paulson and his principal lessee, Schirmer Transportation Company, could not agree on an approved method of compensation to be computed on a mileage basis and the lease was cancelled. Thereafter, Paulson applied for a certificate to operate in his own right as an authorized carrier.

Eleven bulk jobbers testified in behalf of Paulson, indicating that they liked the service he provided while he was operating as a lessor and that they would do some of their business with him if he were granted the certificate.

The principal protestant, Schirmer Transportation Company, is a carrier presently authorized to serve the same Alexandria area which Paulson wishes to serve. The volume of Schirmer’s business is about $1,500,000 per year, Alexandria being only one of the company’s terminals. Its president, Mr. Schirmer, testified (1) that his company could not economically maintain its terminal in Alexandria unless it has enough business to maintain the three trucks it now operates there; (2) that the granting of the application would affect Schirmer’s ability to maintain their equipment in the Alexandria terminal in good condition since each Schirmer terminal should [239]*239carry itself; (3) that Schirmer can maintain safe equipment if the applicant is granted a certificate but it will be done at a loss; (4) that the 26 existing carriers in Alexandria create too much competition even though there has been an increase in the petroleum carrying business in that area; (5) that it would be in the public interest to only have three or four carriers in that area rather than the 26 existing carriers because costs and rates can be lowered if more use can be obtained from each piece of equipment; and finally (6) that it is unknown whether the applicant could actually take any of Schirmer’s accounts.

Another protesting carrier also testified that there are “far too many” carriers doing business in Alexandria to have a profitable operation. The protestants also introduced testimony tending to establish that five of the witnesses who testified for the applicant were Shell Oil Company jobbers who, under the terms of their contract with Shell, were not free to change carriers, and that Shell would not be expected to honor the jobbers’ request to change if the existing carriers were doing a satisfactory job.

There was testimony from a representative of the bus and truck division of the Eailroad and Warehouse Commission to the effect that the result a new permit would have on existing carriers, while not necessarily controlling, is an important element in the commission’s determinations as to whether or not an application will “not be contrary to public interest” (§ 221.49) and that it is the commission’s policy to deny applications unless it is shown that existing carriers are unwilling or unable to take care of any present or increased needs. It appeared from the testimony that it was the local effect on the protestant’s business, rather than the overall state-wide effect, that was controlling in the commission’s consideration of the case.

In its findings upon which its order was based the commission noted “Applicant appears to have been a careful and conscientious man who has won the good will of the trade he served, * * The findings indicated that the applicant would not be able to hold the Shell company business and noted “Without the business of the Shell [240]*240dealers, applicant would have very little prospective business on which to rely,” and “could not expect to build up a self-sustaining operation in competition with long-established carriers for a very considerable period of time.” The findings also noted that the applicant’s current financial statement indicated that “unless he can commence such operations with the expectation of obtaining profitable hauling without delay, he cannot continue to operate.” The commission found that “Need was not shown for applicant’s services,” and that it appeared “that if applicant is to obtain business, it will have to be at the expense of existing carriers.” While observing that the Great Lakes Pipeline which brings petroleum products to Alexandria has increased its facilities and that there has been a healthy increase in the use of petroleum products in the State of Minnesota and in the Alexandria destination area, the commission nevertheless stated that “this is not proof that the existing carriers are unable to meet the needs of the public, and there was nothing in the testimony to show that applicant’s services were required.” The findings concluded “That the granting of the application would reduce the income of the presently authorized carriers and render them less able to furnish the service required under their certificates.”

On appeal to the district court further evidence was taken, and on review of the entire record the district court made its order vacating the order of the Railroad and Warehouse Commission and remanding the matter to it for further action pursuant to its judgment. The district court concluded that the commission applied an erroneous rule of law which, in effect, required the applicant to prove public convenience and necessity as required by the Common Carrier Act, § 221.08, rather than the less restrictive rule applicable to petroleum carriers as set forth in § 221.49. The district court further determined that the only evidence to show that the permit would be contrary to the public interest was testimony that profits of one or more existing carriers might be affected to a small extent and that no evidence was presented to reasonably support the findings that the carriers would be less able to render the service required by their certificates or that the public would be adversely affected.

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Related

Mitchell Transport, Inc. v. Railroad & Warehouse Commission
137 N.W.2d 561 (Supreme Court of Minnesota, 1965)
Briggs Corporation v. Public Utilities Commission
174 A.2d 529 (Supreme Court of Connecticut, 1961)
In Re Application of Paulson
249 Minn. 236 (Supreme Court of Minnesota, 1957)

Cite This Page — Counsel Stack

Bluebook (online)
81 N.W.2d 875, 249 Minn. 236, 1957 Minn. LEXIS 565, Counsel Stack Legal Research, https://law.counselstack.com/opinion/paulson-v-schirmer-transportation-co-minn-1957.