Utah Light & Traction Co. v. Public Service Commission

118 P.2d 683, 101 Utah 99, 1941 Utah LEXIS 79

• Court: Utah Supreme Court
• Decided: November 7, 1941
• Docket: No. 6255.
• Status: Published

Opinions

LARSON, Justice.

The plaintiff, hereinafter called the Traction Company, brings this action for a statutory review, pursuant to Section 76-6-16, R. S. U. 1933, of a report and order of the defendant Public Service Commission of Utah, hereinafter called the Commission, issuing a certificate of convenience and necessity to Airway Motor Coach Lines, Inc., hereinafter called the “Airways,” to render service as a common carrier of passengers between Salt Lake City and some nine smaller communities in the south end of Salt Lake County. On January 24, 1940, Airways filed with the Commission its application for a certificate of convenience and necessity to render the service authorized by the above order. The Traction Company in writing protested the application. At the hearing the Salt Lake City and Utah R. R. Company, and some individuals, joined in the protest. The geographical facts involved in the application and the protest briefly stated reveal: Salt Lake City, population 149,934, has for many years through the Traction Company been served by an electric street railway, and later by motor bus service and in connection with that service it for many years prior to 1933 operated a line for common carrier passenger service between Salt Lake City and Murray, Midvale, and Sandy, smaller communities lying to the south. Such service, schedules, and fares have since 1917 been under the general supervision and operated pursuant to order of the Commission. Murray, population 5,740, is seven miles south of Salt Lake City; Midvale, population 2,875, is about ten miles south and 2.5 miles west; Sandy, population 1,487, about 15 miles south of Salt Lake City. Communities in the south end of Salt Lake County, not served by bus or street railway, are Crescent, south of Sandy; West Jordan, west of Midvale and to the south thereof; South Jordan, and Riverton, and Taylorsville, about three miles west of Murray. Airways were operating a bus line into Holladay, nine miles southeast, along 9th East Street into Draper, 18 miles south of Salt Lake City under a certificate previously issued.

After hearing the Commission filed its findings and order granting the certificate, called in the files “Report and Order of Commission.” The Traction Company seeks review alleging:

A. That the Commission failed to make findings of fact on issues material to the hearing.

B. That some of the findings of fact are not supported by any substantial evidence.

C. That the Commission acted contrary to law and in an arbitrary and capricious manner. We note them seriatim.

A. Complaint is made that the Commission did not make findings as to the extent of existing service being rendered by the Traction Company into the territory affected by the application; as to whether such service is inadequate, and if so, in what particulars it is inadequate; and as to whether or not the Traction Company is willing to render more service. As to territory not being served by the Traction Company it is argued that there are no findings as to what service is necessary and convenient to such territory, and as to whether the Traction Company is now ready and willing to render such service.

The Commission expressly found that the Traction Company “operates a bus service southward on State Street serving Murray, Midvale, and Sandy, on a schedule of 221/2 minutes during peak periods, and 45 minutes at other times” and that the “Salt Lake and Utah R. R. Corporation operates in the territory adjacent to Redwood Road [through the west side of Salt Lake Valley] with five trains north into Salt Lake City and five trains south each day.” Of course the Commission need not descend to such details as to find the number of people riding each bus or train daily. The Commission did find that the new service would stimulate the use of public carriers rather than private cars and that such service as the Airways would give would meet the demands of the public more adequately. It found that the territory above set forth as without bus service is in need of bus service both intercommunity, and into Salt Lake City, such as Airways offers it. It found that this new service was in the public welfare; that it would tend to develop new homes and new enterprises in the territory beyond Salt Lake City limits, and that general development of that area would be promoted and stimulated by the new service. Such are proper matters for the Commission to consider. Mulcahy v. Public Service Commission, 101 Utah 245, 117 P. 2d 298. It found that the part of the territory to be served by the Airways is new territory being pioneered; and that the roads are not overburdened with traffic, and the new service will not interfere with the use of the roads by the general public. It found that new service is needed, at least to the extent set forth in the application, and therefore to that extent the service now rendered is inadequate. It found that the Airways permit will not substantially detract from, nor impair existing common carrier service ; that it will not be detrimental to the people of the State of Utah or the localities to be served. These findings are not set forth in the detail and particularity used by courts of law whose judgments determine ultimate rights of life and property, title, nor need they be so definite nor orderly. These determinations of the Commission involve questions of license, or privilege between the sovereign people and the individual who seeks to obtain or enjoy such right or privilege in the common good. The welfare of the public is the paramount issue. These rights are given and regulated to protect the people generally and to insure an opportunity for all individuals, and each community, to grow and develop and assure its inhabitants the most complete and abundant life possible, commensurate with equal privileges for all others. Mulcahy v. Public Service Commission, supra; North Bend Stage Line v. Denney, 153 Wash. 439, 279 P. 752; Campbell v. Illinois Commerce Commission, 334 Ill. 293, 165 N. E. 790. Without discussing at this point the question as to whether and to what extent the Commission is required to make finding on all matters which may be disputed or inquired into at the hearing, the findings are clearly sufficient to cover all points urged except that there is no finding as to whether the Traction Company is willing to render the new or added service now to be performed by the Airways. This specific point will be disposed of by what is said later in connection with another question.

B. It is next urged that four findings of the Commission are not supported by any substantial evidence. Two of the statements claimed to lack support in the evidence have to do with the matter of rates, one historical in nature, and the other a comparison in percentage of the difference between the rates now charged by the Traction Company and the corresponding schedule proposed by the Airways. The historical recital is not made as a finding of fact but merely to indicate why the Commission views the rate structure as entering into consideration of the question as to this permit. The argument as to the other one admits a very substantial difference in rates as shown by the evidence but argues that in one instance the percentage difference is not as great as the figure recited by the Commission. The variance in the percentage may be accounted for by the method of computation. If the difference is figured as percentage of Traction Company charge the result differs from that reached when figured as percentage of the proposed Airways charge for the service. Complaint is next made that the finding, “The granting of this application will not substantially detract from nor impair existing common carrier service * * *” lacks support in the evidence. The Commission found, and there is evidence to support it, that the more frequent trips, the lower fares, the type of service, the enlarged territory served, and such factors would stimulate and increase the volume of common carrier traf fic. There is also evidence to show, and a finding that the rate structure and the advantages of transfer will be such as to probably keep for the Traction Company most of its business from people who ride regularly. The law does not require that the revenues of an operating company must be guaranteed at its existing figure before another company may enter the field. We think it unnecessary to review each of the matters considered and found in the report of the Commission. The order may still be valid though the correctness of certain findings cannot be sustained. The ultimate question is whether there was substantial evidence on all points essential to support the order of the Commission. Application of Dakota Transportation, (S. D.), 291 N. W. 589. We cannot say that the finding is without support in the evidence.

C. We come now to the Traction company’s third point of attack, that the action of the Commission is is arbitrary, capricious and contrary to law. Four points are here made (1) That the Airways had not obtained franchises or licenses from the local county and city authorities; (2) That the Commission issued the certificate after finding the Airways was financially unable to perform the proposed service; (3) That the issuance of the certificate was based upon the “lower fare” schedule offered by Airways rather than upon “convenience and necessity”; (4) That the existing carriers should have been given the privilege of furnishing such part of the added service as they may be willing to furnish.

1. The argument that the Commission acted contrary to law as to point (1) is predicated upon subsection 3 of Section 76-4-24, R. S. U. 1933, which in part reads:

“Every applicant for such a certificate shall file in the office of the commission such evidence as shall he required by the commission to show that such applicant has received the required consent, franchise or permit of the proper county, city, municipal or other public authority.”

If we read only that part of the subsection it would appear that before the Commission issues a certificate of convenience and necessity the applicant must show he has received a franchise from the county or city in or through which he proposes to operate. But such provision has no application to a situation such as here presented. The section provides:

76-4-24.

“(1) No railroad corporation, street railroad corporation, aerial bucket tramway corporation, gas corporation, electrical corporation, telephone corporation, telegraph corporation, heat corporation, automobile corporation or water corporation shall henceforth establish, or begin construction or operation of a railroad, * * * without having first obtained from the commission a certificate that present or future public convenience and necessity does or will require such construction * * *.

“(2) No public utility of a class specified in subsection (1) hereof shall henceforth exercise any right or privilege under any franchise or permit hereafter granted * * *.

“ (3) Every applicant for such a certificate shall file in the office of the commission such evidence as shall he required by the commission to show that such applicant has received the required consent, franchise or permit of the proper county, city, municipal or other public authority. The commission shall have power, after a hearing, to issue said certificate as prayed for or to refuse to issue the same, or to issue it for the construction of a portion only of the contemplated railroad, street railroad, aerial bucket tramway, line, plant or system, or extension thereof, or for the partial exercise only of said right or privilege and may attach to the exercise of the rights granted by said certificate such terms and conditions as in its judgment public convenience and necessity may require. * * *” (Italics added.)

It is evident that the provisions of the subsection do not apply to certificates such as that here involved but only to the classes specified in the subdivision itself: This is further evident from the fact that a city or municipal corporation has no power under our statutes to grant to or require an automobile corporation (defined in subdivision 12, Section 76-2-1, R. S. U. 1933), to have a local franchise to engage in business. Cities and incorporated towns have no general grant of power to require or grant franchises. They may grant franchises to railroads, street railways, tramways, and union railroad depot companies (Section 15-8-33), to waterworks companies, gas companies, electric light and telephone lines (Section 15-8-14) ; to telegraph and all wire lines and pole lines (Section 15-8-21) ; to gas, electric or lighting works (Section 15-8-20). And there is a special provision as to railroads in Section 77-0-8. The Constitution, Article 12, Section 8, reserves to cities and incorporated towns the franchise power of street railway, telegraph, telephone and electric light companies. These sections cover all the franchise powers of cities and towns as set forth and granted by the statutes. That an automobile corporation such as this is not a street railway was held in Utah Rapid Transit Co. v. Ogden City et al., 89 Utah 546, 58 P. 2d 1. See, also, subdivisions 8 and 12 of Section 76-2-1, R. S. U. 1933, defining both terms. As to motor transport companies (automobile corporations), the cities* power is found in Section 15-8-39, R. S. U. 1933, providing

“they may license, tax and regulate * * * stages and busses, sight-seeing and touring cars or vehicles, cabs and taxicabs, * * * haekmen, draymen, and drivers of stages, busses, sight-seeing and touring cars, cabs and taxicabs and other public conveyances.” (Italics added.)

There is no power granted to require or grant a franchise for the use of the streets and highways for the purpose of traveling thereon as used by the public generally. A franchise is the privilege of doing that which does not belong to the citizens generally by a common right. 12 R. C. L. p. 174. As to streets, it is the right to do something in the public highway which except for the grant would be a trespass. People v. State Board of Tax Com’rs, 174 N. Y. 417, 67 N. E. 69, 63 L. R. A. 884, 105 Am. St. Rep. 674; 12 R. C. L. p. 175. Thus the right to lay rail, or pipes, or string wires or set poles along a public street is not an ordinary business in which everyone may engage, or a use everyone may make of the street, but is a special privilege, a franchise to be granted for the accomplishment of public objects. They are required only in cases in which it is sought to impose upon the street a special burden which cannot be imposed generally, that is, to burden the street with a special privilege which the public generally may not likewise enjoy. Business such as that of the Airways does not so burden the street. It uses the streets only for purposes of travel and transport in the same manner as the public generally. It is a business not subject to franchise requirements.

Does the use of the words, consent, franchise or permit in the section require any further showing of some other right or grant from the cities less than a franchise, such as a license or other consent or permission ? The section provides that the

“applicant * * * shall file in the office of the commission such evidence as shall be required by the commission * * * that such applicant has received the required consent, etc.” (Italics added.)

The statute does not say the applicant must file the franchise or consent or permit, but only that it must furnish ■“such evidence as shall be required by the commission.” There is neither in the record nor the briefs any reference to any rule or order of the commission indicating what evidence on such matters the commission requires. We must assume therefore that any rule the commission had on the matter was complied with, especially as the question was raised and presented in the “Petition for Rehearing” before the commission. The Traction Company in its brief on that petition states that the evidence supports the allegation that applicant had made arrangements for all necessary franchises or licenses required by local communities. The evidence showed that Airways had a franchise in Salt Lake City where it had some local intracity routes; that it had consent and permission of Murray City and promise of any desired franchise (testified to by Davis, president of applicant and two of the three commissioners of Murray) ; that it had contacted the proper city officials of Midvale; and it had made arrangement for all necessary franchises in all towns where it proposed to operate. Furthermore the statute says it shall make proof that it has “received the required consent, franchise or permit.” If no license or permit is required by the local authority of course no proof need be made that such consent or permit has been obtained. We cannot assume that any or all of the local authorities-have any ordinance requiring any license or other consent or permit to operate as an intercity motor transport of persons. And in the scope of our reviewing power we cannot indulge in presumptions against the regularity of the commission’s actions.

2. That under the law the commission should not issue a certificate to a party financially unable to perform the service permitted will not be disputed. But the question of financial ability is one to be determined by the commission. Section 6, Chapter 65, Laws of Utah, 1935. The matter of financial ability was gone into on the hearing, and the Commission made findings thereon which reflect that it sensed the importance of this matter, and that it investigated the financial condition of the Airways. It declared its purpose to “be sure that the applicant [Airways] is financed at least to the extent necessary to carry the proposed operation through the pioneering period,” and directed that the Airways furnish not less than $15,000’ additional in cash for the benefit of these operations before issuance of the permit. The findings with respect to financial ability finds support in the evidence. We cannot disturb it.

3. Is the order for issuance of the certificate based upon a difference in rate rather than upon convenience and necessity? The Report and Order

[Findings] of the Commission states:

“The Commission is of the opinion that even though some of the territory is now being given common carrier service, public conven ience and necessity would justify the issuance of the authority requested by the applicant so that the aforementioned territory which does not now have common carrier service might he afforded the opportunity of such service.

“Further, it appears proper to grant to the public in the remainder of the territory the privilege of enjoying more adequate facilities at such savings to themselves as this applicant proposes. * * *”

This finding answers the point. True, the commission in its report devotes some space and attention to the matter of rates. Certainly the question of rates to be charged under the certificate is a proper element to take into consideration. We will discuss its relationship further in connection with the remaining point urged by the Traction Company.

4. It is vigorously asserted that the basis of the utilities regulation act is controlled monopoly, and that no new entry should be permitted in a field in which an existing utility is operating, unless and until such utility refuses to furnish any new or further service ordered by the commission, and then only to the extent that the existing utility is not willing to undertake the service. But such is not the foundation upon which our act for the control of public utilities is founded, nor should it be a primary governing principle in the action of the commission. The commission was established, and authority over utilities vested in it, for the purpose of assuring the public an adequate service at reasonable rates. A detailed analysis of the nature, purpose and controlling principles of our Public Utilities Act is made in the case of Mulcahy v. Public Service Commission, [101 Utah 245, 117 P. 2d 305], cited supra. Discussing the same question we there said:

“Should such new service be rendered by existing carriers or by the new applicant? This question poses for the commission, not the finding of a factual answer, but the determination of a matter of policy. Which in the opinion of the commission will best subserve the public convenience, necessity and welfare? And in determining this matter the commission under the statute may and should take into consideration the existing transportation facilities, their invest ment, the taxes they pay, the services they have rendered and are now rendering; the need oí a continuation of such services, the effect upon such services of a new obligation to serve; the effect upon such services of a new competitor in the transportation field; the effect of a new competitor or carrier upon the economic, industrial, social and intellectual life of the territory, and other matters which may affect the public welfare, and the growth and development of the life in, and resources of the state. That existing carriers engaged in transportation to and from a certain field or territory, rendering the service it is permitted or ordered to do, reasonably, adequately and efficiently, is not lightly or ruthlessly to be interefered with, or subjected to needless competition, is evident from the provisions of the statute. Section 5 of Chapter 65, Laws of Utah 1935 * * *.

“An applicant desiring to enter a new territory, or to enlarge the nature or type of the service he is permitted to render must therefore show that from the standpoint of public convenience and necessity there is need for such service; that the existing service is not adequate and convenient, and that his operation would eliminate such inadequacy and inconvenience. He must also show that the public welfare would be better subserved if he rendered the service than if the existing carrier were permitted to do so. The paramount consideration is the benefit to the public, the promotion and advancement of its growth and welfare. Yet the interests of the existing certificate holder should be protected so far as that can be done without injury to the public, either to its present welfare or hindering its future growth, development, and advancement. * * * Having given due consideration to those matters the commission determines whether the existing carriers or a new one should be permitted to render the proposed service. If the commission’s determination finds justification in the evidence, it is not a law question and we cannot review or modify it or set it aside.” (Italics added.)

If the need for new or additional service exists, it is the duty of the commission to grant certificates of convenience and necessity to qualified applicants, but when a territory is satisfactorily serviced, and its transportation facilities are ample, a duplication of such service which unfairly interferes with the existing carriers may undermine and weaken the transportation setup generally and thus deprive the public of an efficient permanent service. True, existing carriers benefit from the restricted competition, but this is merely incidental in the solution of the problem of securing adequate and permanent service. The public interest is paramount. Application of Dakota Transportation, Inc., (S. D., 291 N. W. 589. Of course the public interest may well be subserved by preventing waste. See dissenting opinion of Brandéis in New State Ice Company v . Liebmann, 285 U. S. 262, 52 S. Ct. 371, 376, 76 L. Ed. 747. But the waste must be such as would injure the public or interfere with its interests, growth and development. It must not be a prevention of waste carried to the extreme where it prevents or interferes with progress in equipment or methods or ways of serving the public. And the determination as to whether waste would result, or whether the waste which did result would be so against the public welfare and interest that it should be prevented, are questions for the commission to determine. It may be that in some cases the public welfare or interest would require, or be better subserved by the elimination of existing service or equipment. This too is for the commission to decide.

In cases such as this, where there is an extensive new territory to be served, which would continue without bus service unless the application be granted, and the service to such communities would be impracticable and of only half its public value, if rendered, unless it had a direct connection with the larger centers, such service should not be denied because in a limited territory it came into competition with an existing carrier. These services must be so rendered as to promote the public welfare, and the first determination of that matter rests with the commission. On the record in this case we cannot say that the determination of the commission was arbitrary or capricious. This court has held that it cannot substitute its judgment for that of the commission and disturb its findings where there is any substantial basis in the evidence for the finding or where the order of the commission is not unreasonable or arbitrary. In a proceeding to review an order of the commission judicial action cannot supplant the discretionary authority of that body. The review by this court, exercising judicial functions only, cannot extend beyond the questions as to whether the commission acted within its constitutional and statutory powers, and whether its determination and order is supported by the evidence and is reasonable and not arbitrary. Section 76-6-16, R. S. U. 1933; Fuller-Toponce Truck Co. v. Public Service Commission, 99 Utah 28, 96 P. 2d 722; Mulcahy v. Public Service Commission, supra; 57 C. J. 82; Oro Electric Corp. v. Railroad Commission, 169 Cal. 466, 147 P. 118. As we have pointed out, there can be no substitution of the judgment of the reviewing court for that of the Commission, acting within the field of administrative discretion. The judicial review of the evidence and findings is merely to determine whether the Commission has exceeded its authority by making a determination which is unreasonable or arbitrary. Upon a careful consideration of the record and the statute defining the considerations which shall control the determination of the Commission, we do not find that the order of the Commission herein is either unreasonable or arbitrary and without substantial support in the evidence.

The order of the Public Service Commission is affirmed.

McDonough, j„ concurs.