B. O. Ry. Co. v. Road Commission , 104 W. Va. 183 ( 1927 )

When the parties to these appeals were before this court in prohibition, I dissented from the holding of my associates on the ground that the statute vesting in the Road Commission the power of granting certificates of convenience was not subject to review — the act being governmental in its nature and not judicial. Nor was I able to agree to the doctrine there announced that existing carriers by rail possess a property right to be considered in their favor over other applicants for certificates of convenience. As I view it, there is no express or implied legislative policy in this state which gives support to that doctrine.

Whether the Court has jurisdiction to review the action of the Road Commission in granting certificates of convenience, is now water over the wheel. So I will simply re-affirm my belief in the soundness of my original view on that question and confine this note to the question of whether there is a property right in the existing rail carriers to a right of priority in favor of them over other applicants for bus service, on hearing by the commission for the purpose of granting certificates of convenience. The language of the statute regulating the issuance of certificates of convenience limits the commission to the inquiry whether the service proposed to be rendered by the applicant is "necessary or convenient for the public" and whether it is being "adequately performed at the time of such application by any other person, partnership or corporation." The Supreme Court of Michigan, inRapid Railway Co. v. Michigan Public Utilities Commission,225 Mich. 425, 196 N.W. 518, expressly held that the commission, in passing on applications for permission to engage in the business of transporting passengers in motor vehicles between certain points, providing for the issuance of such permit in accordance with public convenience and necessity, cannot consider other transportation facilities, such as railroads, in passing on question of convenience and necessity, but must limit inquiry to the motor vehicle business. The following excerpts from the Court's opinion is apropos to the situation in this state: "The grant of the power to determine whether, in view of the service rendered by other means of transportation, a necessity exists, or the public convenience requires, that a new system of transportation should not be permitted in competition with those operating between certain points, should not be inferred unless the language is fairly expressive of such an intent on the part of the Legislature. This is an age of evolution in the transportation business. Steam railroads service greatly reduced the earnings of the vessels carrying passengers and freight, and put the stagecoach out of business. Electric cars have much affected the business of the steam roads between certain points. The use of motor vehicles will doubtless decrease the earnings of the electric roads. If it be desirable to clothe the commission with the power to prevent such competition by refusing to permit motor vehicles to operate, when the service rendered by the steam and electric roads is adequate to the needs and convenience of the public, we think the Legislature should so provide in no uncertain language."

The purpose of our statute, as disclosed by its title, is to regulate the use of such motor vehicles on the highways. I find no intention in its language to do more than this. Our Legislature sought to restrict the number of motor vehicles using the highways for the conveyance of persons and property for hire by imposing a privilege tax on them, and required a finding by the Road Commission of the public convenience and necessity — thus empowering said commission in the public interest to determine the number of persons, firms, or corporations who should be permitted to so operate. A sound policy is thus disclosed of the state demanding, as the first consideration, adequacy of service of the traveling public, rather than the protection of carriers by rail against motorbus carriers. In McLain v. Utilities Commission, 110 Ohio St. 1,143 N.E. 381, which involved a construction of the Ohio act of 1923 (110 Ohio Laws, p. 211), requiring certificates of convenience of motor vehicle transportation, the court said: "Nor do we concur in the view of those courts who have expressed the view that any public utility requirement has for its purpose 'the establishment of a policy of protecting existing railroad transportation as against motor transport interest.' Nor, indeed, do we concur in any policy of protecting any existing public utility against competing public utilities, but consider rather that it is the policy of the federal government and the government of the various states by legislation to secure to the general public, through Public Utility Commissions, or similar administrative bodies, adequate service from public utilities, which of course includes price, character of service, and continuity, that regulation through commissions is for the purpose of accomplishing the ultimate object, adequate service, and that the benefits, if any, by way of restricted competition, etc., which inure to established public utilities, are incidental to such regulation, but not its object or purpose."

The Supreme Court of Virginia has recently decided in accord with the view expressed by the Ohio court. Norfolk SouthernRailroad Co. v. Commonwealth, 141 Va. 179, 126 S.E. 82. The service rendered by a new means of transportation frequently is so different from the existing means of transportation that it can be considered only incidentally competitive with it. It was thus when the railroads supplanted the stagecoach; the traction system, the railroad; and now the motorbus, the field of its predecessors.

This Court, in Carson v. Woodram, 95 W. Va. 197,120 S.E. 512, in construing that portion of the statute which requires a certificate of convenience, held that persons operating automobiles under such license or permit for the carriage of passengers for hire over public highways between fixed termini may enjoin others without such license or permit from engaging in a like service. In Quesenberry v. Road Commission, 103 W. Va. 714,138 S.E. 362, this Court expressly held that the action of the commission is ministerial and administrative, and does not come within the realm of the judiciary only where the granting or the refusing of the certificate of convenience affects a right of property of existing carriers. I am in accord with that view aside from the limitation. Princeton Power Co. v. Calloway, 99 W. Va. 157,128 S.E. 89, cited to support the doctrine announced in the prohibition proceeding involving the parties to this appeal, held that the illegal operation of motor vehicles for compensation between fixed termini may be enjoined by a paralleling carrier by rail, and that the injunction in favor of the traction company would remain in force only until the operators of such motor vehicles "shall have acquired authority and have qualified * * * in the manner provided by law" for the operation of their motor vehicles over the route and between the termini in question. Instead of being an argument in favor of the doctrine announced that existing railroads had a prior right to be considered on application for motorbus transportation over other applicants, the question submitted considered and determined in that case argues strongly to the contrary.

The Illinois Supreme Court, in Egyptian Transportation System v. Railroad Co., 321 Ill. 580, 152 N.E. 510, is relied on in the opinion of this Court to sustain the position that, before a competing utility is allowed to parallel existing rail lines and take their business from them, said rail carriers should be given the opportunity to supply all needed service. However, this case is robbed somewhat of its value as a precedent governing here by the same court in the later case ofBartonville Bus Line v. Eagle Motor Coach Line, 326 Ill. 200,157 N.E. 175, wherein it is stated that in the former case the decision was based on a policy of the state "established by legislation." As we have shown, there is no such legislative policy, either express or plainly implied, in our state. In theBartonville Bus Line case, the Illinois court modified its former decision in the Egyptian case by expressly holding that, while priority in the field is an element to be considered, it will not of itself govern the granting of a certificate of convenience and necessity for the operation of a motorbus line. It will be noted also that the state of Illinois has unified control over all public utilities in its "Commerce Commission", and it is provided in that state that no public utility will be permitted to enter upon any new proposed service until it shall have obtained from the commission a certificate that public convenience and necessity require it. This is the case in quite a number of other states of the Union. So, before fastening upon decisions from any of those states as authorities in determining the public policy of our state, as expressed in legislative enactments, we must take into consideration the fact that our Legislature has seen fit to create a "Road Commission" in addition to the already existing Public Service Commission, and has endowed the former with power to pass upon the necessity of proposed bus lines between designated points and to issue certificates of convenience, if they deem the same "necessary or convenient for the public, and that the service so proposed to be rendered", etc. It is an attempt on the part of the state to control its highways, so that there may be ordered and regulated bus service over the same as among bus lines, and it excludes the idea of a legislative intent to establish a right of priority in favor of existing carriers by rail.

Even though it be admitted that the defendants in error have a right of priority to pre-empt the field of motorbus service, that right does not necessarily extend to their subsidiaries. These subsidiaries are separate and distinct corporate entities, possessing their own rights, powers and duties. While the rail carriers perform their services under the limitation of their charters (transportation by rail), their subsidiaries only perform such service as they may obtain from the statute governing motorbus transportation. Such subsidiaries stand in the position of the ordinary applicant for a certificate of convenience. "The use of the highways for the public transportation of freight and passengers belongs to the public. This use may therefore be completely regulated and controlled by the Legislature in the interest of the public welfare," says this Court in Carson v. Woodram, supra. There being no express or implied legislative policy in this state to support the doctrine of a property right in the railroad to priority over other competitors in motorbus transportation, the holding of this Court in the several prohibition cases, and in the present cases, is an invasion of the legislative field.