Fulmer v. Board of Railroad Com'rs

Decision Date09 January 1934
Docket Number7132.
Citation28 P.2d 849,96 Mont. 22
PartiesFULMER v. BOARD OF RAILROAD COM'RS et al.
CourtMontana Supreme Court

Appeal from District Court, Yellowstone County; Robert C. Stong Judge.

Action by Harry W. Fulmer against the Board of Railroad Commissioners of the State and others. Judgment for defendants, and plaintiff appeals.

Affirmed.

ANGSTMAN J., dissenting.

Toomey & McFarland, of Helena, and Brown, Wiggenhorn & Davis, of Billings, for appellant.

Raymond T. Nagle, Atty. Gen., Francis A. Silver, of Helena, Johnston Coleman & Jameson, of Billings, and Gunn, Rasch, Hall & Gunn of Helena, for respondents.

S. C. Ford, of Helena, amicus curiae.

STEWART Justice.

This action was instituted in the district court of Yellowstone county by virtue of the provisions of sections 3803-3810, Revised Codes 1921, for a review of acts of the board of railroad commissioners.

On February 28, 1931, Harry W. Fulmer, plaintiff and appellant, filed with the board his application for a certificate to authorize him to operate motor vehicles for the transportation of freight over the highway between Billings and Miles City and intermediate points. Before his application was acted upon, the law under which he filed (chapter 154, Laws 1923) was repealed and a new law known as chapter 184, Laws 1931, was enacted by the Twenty-Second Legislative Assembly. The application was never acted upon by the board before the effective date of the new law, July 1, 1931.

On July 6, 1931, Fulmer began to operate over the route, as he testified, "to determine whether or not the route was practical." He operated until about August 17, 1931. On July 20, 1931, he filed another application under the provisions of the new law. This application was noticed and a hearing thereon was held by the board on August 21, 1931. On the day of the hearing the Northern Pacific Transport Company, one of the respondents herein, filed an application to operate motor trucks over the same line for the transportation of freight. Subsequently, and before either application was acted upon, both applicants amended to include passenger service.

Fulmer's application was designated as docket No. 1105, and the application of the transport company was numbered 1162. Announcement of the transport company filing was made at the beginning of the Fulmer hearing, and a request was made that no final action be taken in the Fulmer matter until the other application could be considered by the board. Fulmer's attorney objected to hearing the transport application at that time, for the reason that no notice thereof had been given, and requested the board to move to a determination of the Fulmer application without reference to the other application. The examiner for the board ruled that no evidence would then be received concerning the transport company application. The hearing proceeded solely upon the Fulmer application, and at the close thereof the matter was taken under advisement.

On September 10th the application of the transport company was heard and evidence received. On October 30th the board made an order denying the Fulmer application and finding that public convenience and necessity did not require the proposed motor freight operation by Fulmer. At the same time and in the same order the board stated that because the proposal of the transport company involved a curtailment of passenger train service, a matter not before the board in the instant proceeding, but one which under the established practice of the board could only be determined in a direct proceeding for that purpose, further proceedings in the transport company application were continued and postponed.

On November 4th the railway company filed application to discontinue two of its trains, Nos. 187 and 188, between Billings and Forsyth. This application recited that it was made for the purpose of accomplishing large economies in operating costs and as a part of the general plan of the company to accomplish all possible economies in its operating department, and that, if permission for the discontinuance was granted and a permit issued to the transport company to operate motor freight and passenger service over the highway between the points mentioned above pursuant to the application of the transport company, the railway company would substitute train service for motor service at any and all times the motor service could not be operated by reason of weather or other conditions. The application was heard on November 13th and on the 30th thereafter the board made an order permitting the discontinuance of the trains upon the institution by the transport company of motor vehicle highway service for the transportation of persons and property between Billings and Miles City, the same to be effective December 20, 1931. On the same date, "on further consideration," the board ordered a certificate of convenience and necessity to issue to the transport company. It is admitted that the transport company is a subsidiary of the railway company and all of its stock is owned by the latter company.

Thereafter Fulmer instituted this action in the district court against the board, the Attorney General, the railway company, and the transport company. The complaint contains two causes of action. It recites a history of the matters involved in the several applications and orders, and in addition thereto contains allegations to the following effect:

That the board found that public convenience and necessity required an authorization of the freight, express, and passenger service proposed by the plaintiff, but instead of awarding the certificate therefor to him, it awarded a certificate to the transport company without any showing that the service proposed by that company would better meet the requirements and needs of the public or would be in any way superior to that offered by plaintiff; that the board capriciously, arbitrarily, and in defiance of the requirements of the law awarded the certificate to the transport company, and that such act was an unjust and unwarranted preferment of the transport company; that the service proposed by the transport company was wholly impractical as a passenger service and was not a substitute for the previously existing passenger service afforded by trains Nos. 187 and 188; that by awarding the certificate to the transport company the board denied to plaintiff the right to install and operate motor service because it would unduly compete with existing rail service, and at the same time permitted the removal of the obstacle of the competing rail service to justify the allowance of inferior motor service to the railway company's subsidiary; that there was no evidence in the record to support the order; that the evidence proved that plaintiff's application was grounded on public convenience and necessity; that the board acted arbitrarily and capriciously in favor of the railway company and the transport company, and only considered their interests and desires, and refused to consider the interests of plaintiff or the public.

The complaint contained allegations to the effect that chapter 184, Laws 1931, did not require or permit the board, in passing upon matters and elements of public convenience and necessity, to consider or give heed to the financial necessities of the railway company or to apply as a test of public convenience and necessity for motor vehicle operation in a given territory, the fact that a rail carrier may operate motor vehicles through a subsidiary agency in such a manner as to decrease the losses, if any, from the rail carrier's operation, and that no showing of such facts was made, and that consideration of the financial necessities of the railway company was without warrant or authority of law, without proof thereof, and without regard for the rights of the public.

It is further alleged that chapter 184, Laws 1931, violates section 27, article 3, of the Constitution of Montana and the Fourteenth Amendment of the Constitution of the United States, in that there is no provision therein for a judicial review of the acts and determinations of the board and the decisions thereof; that the chapter as interpreted by the board violates section 6, article 15, of the state Constitution, in that it attempts to accomplish by evasion the requirement that parallel transportation companies shall be competitive in fact; that the act violates section 27, article 3, of the Constitution of the state and the Fourteenth Amendment of the Federal Constitution, in that it exempts motor vehicles and operators transporting school children and those engaged exclusively in logging or mining operations under certain circum-stances enumerated in the act.

Separate answers were filed by each of the defendants and issues thereby joined. Before trial the parties entered into a stipulation whereby it was agreed that the cause should be submitted to the court upon the transcripts, records, and files of the board of railroad commissioners in the applications and dockets of the parties to the action as heretofore set out. The cause was submitted on such transcripts, records, and files, but before decision plaintiff, over the objection of defendants, was permitted to reopen his case for submission of further testimony to the effect that on July 1, 1932, a bridge on the highway over which the transport company operated its trucks was condemned and motor transportation by that company discontinued over part of the route from that day to about August 25, 1932, and that during that time no through substituted rail service was established. Defendants, however, showed to the court that motor vehicles were operated over part of the route and regular railway trains were utilized as substitutes.

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