Lee & Eastes, Inc. v. Public Service Commission, 34603

Citation52 Wn.2d 701,328 P.2d 700
Decision Date07 August 1958
Docket NumberNo. 34603,34603
CourtUnited States State Supreme Court of Washington
PartiesLEE & EASTES, Inc., a corporation; Consolidated Freightways, Inc., a corporation; Inland Motor Freight, a corporation; Manning Freight Lines, Inc., a corporation; Best Way Motor Freight, a corporation; Pacific Intermountain Express, Inc., a corporation; Pacific Highway Transport, Inc., a corporation; Snohomish Auto Freight Co., Inc., a corporation; Black Ball Freight Service, a corporation; Washington State Warehousemen's Association, a corporation, Appellants, v. The PUBLIC SERVICE COMMISSION of the State of Washington; H. Morrison, Inc., a corporation, also known as Harry Morrison, Inc., a corporation, also known as Morrison Truck Lines; Chinook Motor Freight, Inc., a corporation, Respondents.

George H. Hart, Arthur J. O'Sullivan, Henry T. Ivers, Seattle, for appellants.

John J. O'Connell, David S. Black, Olympia, for respondents.

FINLEY, Justice.

This action arose out of an application to sell and transfer a common carrier permit, issued by the public service commission of the state of Washington, pursuant to RCW 81.80.

For many years, H. Morrison, Inc., possessed a common carrier permit, authorizing it to operate intrastate as a carrier of general freight. On July 20, 1955, the state tax commission attached most of the assets of the corporation. On August 4, 1955, Howard J. Martin was appointed temporary receiver, and on September 12, 1955, he qualified as permanent receiver of the corporation. He then set about collecting the freight records and bank account records of H. Morrison, Inc. The receiver found that about $105,000 had passed through the company's bank accounts from January 1, 1955, until the date of the receivership.

On September 18, 1955, the receiver petitioned the superior court for permission to conduct a private sale of the company's common carrier permit and one truck which had not been attached. Permission was granted. The highest bid was submitted by the Chinook Motor Freight Lines in the amount of $18,100. On November 29, 1955, the receiver and the Chinook Motor Freight Lines joined in making application to the public service commission for transfer of the permit.

At the hearing before an examiner in Walla Walla on April 11, 1956, several other permit holders appeared to protest the transfer. But on October 17, 1956, the commission issued an order allowing the sale and transfer. Lee & Eastes, Inc., and other protesting parties obtained a writ of review in the superior court for Thurston county. That court affirmed the order of the commission, and the protestants have appealed.

In this appeal appellants have elected to attack the order of the commission on two points of law: (1) that the commission improperly interpreted RCW 81.80.270--specifically, that it erroneously interpreted the term 'property rights' as used in the statute; and (2) that the commission improperly interpreted the term 'dormant permit' as it is used in the commission's rules.

RCW 81.80.270 reads as follows:

'* * * No permit issued under the authority of this chapter shall be construed to be irrevocable. Nor shall such permit be subject to transfer or assignment except upon a proper showing that property rights might be affected thereby, and then in the discretion of the commission, * * *.'

It is the position of appellants that the term 'property rights' was intended to have reference to (1) a carrier's interstate certificate of public convenience and necessity--which H. Morrison, Inc., did not possess; and (2) the 'good will' or 'going business' value of the carrier. Appellants then argue that property rights are not involved in the transfer under consideration, because the transferor possessed no interstate permit and had no 'good will' or 'going business' value for the reason that it was insolvent. Appellants further contend that the permit itself should not be considered to be a 'property right,' since the permit is merely a personal privilege, prevocable at any time.

RCW 81.80.280 1 requires notice and a hearing before the commission can cancel, suspend, alter or amend any permit; it then authorizes such changes only on the basis of certain violations. Clearly the permits are not subject to the arbitrary whim and caprice of the commission, once they have been issued. In this respect, a permit, once acquired and exercised, becomes a vested right, subject to being divested for cause. See Taylor-Edwards Warehouse & Transfer Co. v. Department of Public Service, 1945, 22 Wash.2d 565, 157 P.2d 309.

'Property is a word of very broad meaning and when used without qualification may reasonably be construed to include obligations, rights...

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