Beard-Laney, Inc. v. Darby

• Decision Date: 24 September 1948
• Docket Number: 16130.
• Citation: 49 S.E.2d 564,213 S.C. 380
• Parties: BEARD-LANEY, Inc., et al. v. DARBY et al.
• Court: South Carolina Supreme Court

49 S.E.2d 564

213 S.C. 380

BEARD-LANEY, Inc., et al. v. DARBY et al.

No. 16130.

Supreme Court of South Carolina

September 24, 1948

Odom, Bostick, Littlejohn & Nolen and E. W Johnson, all of Spartanburg, John M. Daniel, Atty. Gen., and Irvine F. Belser, of Columbia, for appellants.

Frank A. Graham, Jr., of Columbia, and Robert McC. Figg, Jr., of Charleston, for respondents.

BAKER Chief Justice.

The principal question involved in this case is whether it is within the power of the Public Service Commission to approve after a hearing, the transfer by a motor freight carrier to another freight carrier of a portion of a certificate of convenience and necessity held by the former.

The franchise or certificate in question in this case was held by appellant Sanders Truck Transportation Co., Inc. (which for convenience will hereinafter be referred to as the Sanders Co.). The proposed transferee of a portion of such franchise or certificate was appellant Associated Petroleum Carriers (which for convenience will hereinafter be referred to as Associated Carriers). The portion of the franchise or certificate proposed to be transferred in this case is described as follows:

'Petroleum Products in Bulk: From Belton and Camp Croft pipeline outlets, and from points and places in Charleston County to points and places in South Carolina with occasional transfers from one agency to another within South Carolina.'

The certificate of public convenience and necessity held by Sanders Co., and which hereinafter for convenience will be called the franchise, was granted to that concern on a printed form in use by the Commission for a number of years wherein the Commission sets forth its finding 'that public convenience and necessity require' the proposed operation under the terms of Chapter 162, Secs. 8507 to 8530 of the Code. And the franchise is expressed to be conditioned as follows:

'That all motor vehicles operated by virtue of this Certificate shall be so operated in accordance with the said Motor Vehicle Carriers' Law and the Rules and Regulations issued thereunder' and

'conditioned further:

'That neither this Certificate nor the rights granted therein shall be sold, assigned, leased, transferred, mortgaged, pledged or otherwise hypothecated, unless first approved by the Commission.' (Emphasis added)

Under date of October 17, 1944, Sanders Co. and Associated Carriers applied to the Public Service Commission for authority to make the transfer above referred to. Following certain procedural matters the Commission held a hearing and on the testimony taken granted an order under date of April 11, 1945, approving the transfer.

Thereupon, in a class action brought by respondents Beard-Laney, Inc. and others for themselves and other motor carriers having similar interests, against the Public Service Commission, the Sanders Co. and Associated Carriers, the validity of the above mentioned order of the Commission was challenged, and an order vacating the same and revoking the certificate issued thereunder was sought.

After the service of answers by the respective defendants (appellants here), the cause was referred to the Master for Richland County, who recommended that the order of the Commission be approved and the complaint dismissed. Upon exceptions to the findings and conclusions of the Master the Circuit Judge held the order of the Commission to be invalid and vacated the same. The matter comes before this Court upon appeal from this order.

None of the testimony taken before the Master is incorporated in the record. From the specific findings of fact made by the Master, however, it is apparent that there was no testimony before him reflecting upon the elegibility of Associated Carriers to take over the franchise in question or its capacity and purpose to adequately serve the public thereunder.

As presented by the pleadings and by the recitals of fact in the Master's report the clear-cut issue is one of power on the part of the Commission to grant the order above referred to.

The contention of the respondents is in effect that the Commission as a governmental agency is a creature of statute; that it has only such powers as are expressly or by necessary implication conferred upon it by legislative act; and that in the legislation under which the Commission operates there is no provision authorizing it to grant permission to the holder of a franchise to transfer the same in whole or (as in this case) in part to another carrier. They rely upon such cases as Piedmont & N. R. Co. v. Scott, 202 S.C. 207, 24 S.E.2d 353.

Respondents recognize the power of the Commission to grant or refuse franchises in the first instance, under rules and regulations prescribed by it within the terms of the statutes under which it operates. But they take the position that this broader power does not encompass the lesser power of authorizing the transfer of a portion of a franchise already outstanding, and as their chief reason for this position they contend that on an application for an original franchise the scope of the hearing extends to a consideration of the whole subject of public convenience and necessity, whereas in the consideration of an application for approval of the transfer of a franchise the scope of the Commission's consideration is limited to the determination of the qualifications of the proposed transferee.

We have given careful consideration to the positions thus taken by the respondents, and to others which will be hereinafter referred to, and we have reached the conclusion that the action of the Commission in the present case was taken within the scope of its authority and that there is nothing in the record to justify us in reviewing the Commission's order upon which the present appeal is based.

Among the statutory provisions which delimit the powers and jurisdiction of the Commission in connection with the matter now under consideration are the following: Section 8508 prohibits the operation of motor bus lines except in accordance with statutory provisions relating to the granting of certificates of public convenience and necessity by the Public Service Commision, and ' such operation shall be subject to control, supervision and regulation by the commission in the manner provided by' the governing statutory provisions relating to the granting of such certificates. (Emphasis added.)

Section 8510 provides for the granting by the Public Service Commission of different classes of certificates of public convenience and necessity, provided the applicant proposes 'to comply with the other provisions contained in sections 8507 to 8524 and the rules and regulations which may be made by the commission respecting holders of this class of certificates.' (Emphasis added.)

Section 8516. 'The commission is hereby vested with power and authority and it shall be their duty to supervise and regulate every motor carrier in this State.' (Emphasis added.)

Section 8518. 'The commission may, at any time, by its order, duly entered after a hearing had upon notice to the holder of any certificate hereunder, and an opportunity to such holder to be heard * * *,' if it be the holder has wilfully misrepresented any fact in obtaining a certificate or wilfully violated or refused to observe the applicable laws of this State, ' or any of the commission's proper orders, rules or regulations, suspend, revoke, alter or amend any certificate,' for any of the causes encompassed within the regulations contained in the statutes. (Emphasis added.)

Section 8204 of the Code provides that

'The public service commission is hereby vested with power and jurisdiction * * * to fix such just and reasonable standards, classifications, regulations, practices and measurements of service to be furnished, imposed or observed and followed by every public utility in this State.' (As to applicability of this Statute, see Piedmont & Northern Ry. Co. v. Scott, supra% i.)

Purporting to act under its statutory powers, the Commission has expressly recognized the transferability of franchises and 'rights thereunder' if 'first authorized by the Commission' on forms prescribed and furnished by the Commission. Commission Rule No. 37, Code, Vol. 4, p. 886.

A further rule of the Commission deals with the procedure to be followed by the transferee 'in case of change of ownership or control of the motor vehicle carrier's property, facilities and services.' Commission Rule No. 38, Ibid.

We think that the regulations of the Commission above referred to, including the provision in the application for transfer adopted as a part of the general procedure of the Commission, are well within the legislative contemplation of the powers to be exercised by the ...