Dakota Transportation, Inc., of Sioux Falls, Application of

• Decision Date: 17 April 1940
• Docket Number: 8278.
• Citation: 291 N.W. 589,67 S.D. 221
• Parties: Application of DAKOTA TRANSPORTATION, INC., OF SIOUX FALLS.
• Court: South Dakota Supreme Court

291 N.W. 589

67 S.D. 221

Application of DAKOTA TRANSPORTATION, INC., OF SIOUX FALLS.

No. 8278.

Supreme Court of South Dakota

April 17, 1940

Appeal from Circuit Court, Lyman County; John G. Bartine, Judge.

Proceeding in the matter of the application of the Dakota Transportation, Inc., of Sioux Falls, S. D., for authority to operate as a class A motor carrier, wherein the Chicago & North Western Railway Company and the Chicago, Milwaukee, St Paul & Pacific Railway Company resisted the granting of the application. The Public Utilities Commission made an order denying the application, and the applicant appealed to the circuit court. From a judgment reversing Commission's order and remanding the cause to the Commission with instructions to grant a class A certificate with certain specified restrictions, the Chicago & North Western Railway Company and the Chicago, Milwaukee, St. Paul & Pacific Railway Company appeal.

Judgment reversed and cause remanded, with directions.

Churchill & Benson, of Huron, for appellant, Chicago & N. W. Ry. Co.

Fuller & Campbell, of Aberdeen, for appellant Chicago, M., St. P. & P. Ry. Co.

M. Q Sharpe, of Kennebec, for respondent Dakota Transportation Inc.

ROBERTS Judge.

The Dakota Transportation, Inc., respondent herein, made application to the Board of Railroad Commissioners (changed by SDC 52.0101 to Public Utilities Commission) for a class A certificate of public convenience and necessity to operate trucks for carrying property for hire between Sioux Falls and Rapid City. The proposed route was to extend through the intermediate points of Mitchell, Chamberlain, Kadoka and Philip. Respondent operates over this same general route under an interstate permit, and has operated as an intrastate carrier since March 22, 1935, having obtained a class A certificate designed to furnish service to towns between Oacoma and Kadoka.

The Black Hills Transportation Company made application for a class A certificate for the portion of the route from Philip to Rapid City.

The Commission caused notice of hearings upon the applications to be served upon the motor carriers that in the opinion of the Commission might be affected by the granting of a certificate and upon the railway companies operating through any town or city located on the proposed routes. Representatives of the Chicago & N. W. Ry. Co. and the Chicago, M. St. P. & P. Ry. Co. appeared and resisted the granting of the applications. The record shows that the Commission held hearings at Rapid City and Philip on the two applications and a third hearing at Mitchell on the application of the respondent. At these hearings numerous witnesses testified as to the existence or nonexistence of a public necessity for additional transportation service. Numerous exhibits including maps, time and rate schedules, traffic reports and tabulations were introduced in evidence and petitions signed by residents residing along the proposed route of the Dakota Transportation, Inc., were submitted to the Commission.

The Commission made an order granting the application of the Black Hills Transportation Company, and denied the application of the respondent, finding that present service is adequate and sufficient and that public convenience and necessity had not been shown. Rehearing on the application of respondent was granted and additional evidence was submitted. The Commission thereafter affirmed its order denying a certificate. From this order there was an appeal to the Circuit Court of Lyman County, and the cause was tried on the record made before the Commission. The Circuit Court rendered judgment reversing and remanding the cause to the Commission with instructions to grant a class A certificate with certain specified restrictions.

The findings of the Commission include the following:

"The applicant proposes, on its west-bound movement, to pick up freight at any of the towns on its route between Sioux Falls and Oacoma, for delivery to any of the towns on its route located between Oacoma and Rapid City, but not to accept freight from any of the towns located between Sioux Falls and Oacoma for delivery at points or stations located between Sioux Falls and Oacoma. The applicant limited its application in this manner in order to avoid direct competition with Class A motor carrier service now provided between Sioux Falls and Oacoma. The applicant proposes to haul freight locally to, from and between all of the towns on the proposed route, Oacoma to Rapid City; on its eastbound movement, to pick up freight at any of the towns on its route between Rapid City and Oacoma and deliver it at any point between Oacoma and Sioux Falls. The applicant also proposes under this application the establishment of joint through rates and service with all motor carriers operating to and from any of the towns located along the proposed route. A checkup on the carriers operating to and from these various places shows that said carriers are, for the most part, small operators, star-route mail carriers, and others, some of which have proper motor carrier authority, and the rest have either improper authority or no authority at all. The applicant proposes to establish round-trip daily service, the equipment to be properly heated in winter and cooled in summer. * * * The Chicago & North Western Railway Company, hereinafter referred to as the North Western, furnishes service from Sioux City and Sioux Falls to Rapid City, via Huron and Pierre, and the Chicago, Milwaukee, St. Paul and Pacific Railroad Company, hereinafter referred to as the Milwaukee, furnishes service from Sioux Falls to Rapid City, via Chamberlain. The North Western has in effect at this time, and had in effect prior to the filing of this application and during the pendency of this proceeding, pool car service from Sioux Falls to Rapid City. * * * The purpose of the rail carrier in establishing pool car service and the publication of special rates to apply in connection with such service was to meet either actual or potential truck competition between Sioux Falls and Rapid City, and to meet the commercial competition of industries located at the larger jobbing centers outside the State that are doing business in the Black Hills district, such as the Twin Cities, Sioux City and Denver. The commodities covered by the above-mentioned tariff embrace practically all articles which the wholesalers, jobbers and manufacturers of Sioux Falls ordinarily transport by truck. * * *

"A comparison of schedules and rates, as described in this record, clearly shows that it would probably be difficult for any transportation agency to render a more reliable or less expensive service than provided by the pool car arrangement. The pool car traffic is not distributed at points along the proposed route. The entire carload must be moved to Rapid City, and in the event it contains a shipment, for example, to Philip, that particular shipment must be backhauled. The record shows, however, that a very small per cent of the pool car shipments require backhauling, the bulk of the merchandise being consigned either to Rapid City or points beyond. * * *

"It appears that there is sufficient Class A truck service serving all intermediate points between Sioux Falls and Kadoka, via Mitchell and Chamberlain. The jobbers and wholesalers with establishments at Mitchell and Chamberlain, respectively, can ship by truck if they so desire, and they also have rail service if they do not choose to use the truck service. Most of the stations located along the proposed route, with exception of Sioux Falls, Mitchell, Chamberlain and Rapid City, are small towns and their transportation needs are such that they are primarily concerned with service that extends to and from the above-mentioned cities. * * *

"The record herein is entirely void of testimony tending to show that authorized carriers are not fully equipped and otherwise in position to adequately meet all of the reasonable transportation requirements of the shipping public in the territory proposed to be served. In fact, it may be fairly assumed from the record that the carriers in question, both motor and rail, are finding it difficult to obtain sufficient tonnage to warrant continued operation. With the limited tonnage available to authorize an additional agency, the inevitable diversion of traffic, even though such diversion were small in volume, could not be otherwise than harmful to the established carriers.

"The Board, after carefully considering the entire record, finds that the service in effect at the present time is adequate and sufficient to take care of the needs of the public, and that public convenience and necessity have not been shown. We therefore conclude that the application should be denied."

The Circuit Court concluded "that the question of allowing two trucks per day service each way is one upon which under the evidence reasonable minds would probably differ" and that "to deny it was reasonable and that part of the order should be affirmed." The Court, however, determined that public convenience and necessity required the authorization of a part of the proposed service and that a certificate therefor should issue. The judgment of the trial court would require the authorization by the Commission of the service proposed by the daily operation of a truck each way, except that respondent be denied authority to carry freight originating at Kadoka for delivery at Sioux Falls and be denied connections with other common carriers at Rapid City.

The statute relating to motor carriers provides that "no class A motor carriers shall hereafter operate for the transportation of persons or property for hire on any public highway in this state without first having obtained from the Commission a certificate...