Eastridge v. Southeastern Greyhound Lines

• Citation: 280 Ky. 392
• Parties: Eastridge v. Southeastern Greyhound Lines et al.
• Decision Date: 24 October 1939
• Court: United States State Supreme Court (Kentucky)

280 Ky. 392

Eastridge v. Southeastern Greyhound Lines et al.

Court of Appeals of Kentucky.

October 24, 1939.

1. Automobiles. — Where a party purchased and leased two certificates of public convenience and necessity, prescribing public bus service routes from two terminal points to a town located between points, party could not, without permission, operate a through bus service between terminal points by combining permits and director of motor transportation could not approve party's application to combine permit without giving notice of application to a competing bus company operating a through bus service between terminal points, in view of statute requiring such notice (Ky. Stats., sec. 2739j-10).

2. Automobiles. — Where director of division of transportation granted permit to operate bus line between two terminal points without requiring that notice of application for permit be given

to competing bus line as required by statute, in injunctional proceedings by competing bus line, trial court had authority under statute to refer case to director for a re-determination as to whether bus line was entitled to a certificate of convenience and necessity (Ky. Stats., secs. 2739j-10, 2739j-14, 2739j-51, 2739j-55).

3. Automobiles. — In proceedings to enjoin a party from furnishing bus line service between certain terminal points, fact that the court erroneously cited certain statutes as requiring a reference to the director of division of transportation would not make the order of re-reference illegal, where such an order was authorized by other statutes (Ky. Stats., secs. 2739j-51, 2739j-55).

4. Automobiles. — Where a party purchased and leased two certificates of public convenience and necessity from two terminal points to a town between such points, and secured permit for a through bus service between the terminal points, which permit was withdrawn after a re-reference of case to director of division of transportation in injunctional proceeding by competing bus line, fact that a denial to operate a through bus service effected a cancellation of the certificates because party was unable to operate under certificates without benefit of fares from through service did not establish party's right to operate through bus service (Ky. Stats., secs. 2739j-10, 2739j-14, 2739j-51, 2739j-55).

5. Highways. — Highways are constructed and maintained at public expense and no person can insist that he has, or may acquire, a vested right to their use in carrying on a commercial business.

6. Automobiles. — It is essential to proper use of highways, and to secure adequate service to public that business of motor transportation for hire should be regulated, and those who avail themselves of regulations and observe them must be protected from unfair competition by those who do neither.

Appeal from Franklin Circuit Court.

C.M.C. Porter and Polk South for appellant.

R.W. Keenon and Hubert Meredith, Attorney General, for appellees.

Before William B. Ardery, Judge.

OPINION OF THE COURT BY JUDGE PERRY.

Affirming.

The appellee, Southeastern Greyhound Lines, holds a certificate of convenience and necessity, issued it by the Director of Motor Transportation, authorizing it to operate motor buses for the transportation of passengers for hire over Highway 60 from Lexington to Louisville, via Versailles and Frankfort.

The appellant, T.W. Eastridge, has acquired by purchase and lease two permits, Nos. 123 and 185, the first authorizing its holder to operate motor bus service for hire from Lexington to Midway, over the route of the Leestown Pike, as therein specified, and the second, No. 185, authorizes a like bus operation from Midway to Frankfort, also over the Leestown Pike to the point of its junction with Highway 60, some four or five miles east of Frankfort, and thence over Highway 60 to its terminal point of Frankfort.

Appellant having bought, on October 6, 1937, from one Wilson the first (No. 123) of these permits and having acquired by lease from one Medley the second (No. 185), respectively authorizing bus service between Lexington and Midway and Midway and Frankfort, he applied to the Division of Motor Transportation for its approval of the through service he proposed to operate thereunder between Lexington and Frankfort, by combining these two permits, which, when linked, together covered the entire Midway route, paralleling Highway 60, between Frankfort and Lexington.

The director approved appellant's application to operate this through service, without notice being given to the parties in interest of the application or the holding of a public hearing on the matter.

Eastridge having then, pursuant to this approval given, begun advertising and operating such through bus service between Frankfort and Lexington, via Midway, the appellee, who was also, it is shown, at the time operating a through bus service between Frankfort and Lexington, via Versailles, over Highway 60 (a parallel route), brought this suit against Eastridge alleging that he was illegally operating a like through bus service, via Midway, between these terminals, basing such allegation upon the ground that the director had improperly approved such through service, and, further, that it was conducted in violation of the express terms and conditions of the sale contract had between plaintiff and Wilson and subject to which the latter had sold its permit No. 123 to Eastridge.

The petition concluded with a prayer that Eastridge be permanently enjoined from operating motor buses between Lexington and Frankfort, via Midway; that a temporary injunction be immediately issued, restraining defendant from such operation; and that D.C. Moore, Director of Motor Transportation, be required to withdraw his earlier approval given Eastridge's application for through service, and that the defendants Eastridge and Medley and defendants Eastridge and Wilson be enjoined from extending his bus line beyond Midway towards Frankfort, or that the sale contract of permit No 123 be annulled and that defendants Wilson and Eastridge be required to reassign it to plaintiff.

The plaintiff having given notice of its motion for a temporary injunction and the case having been set for hearing, defendant filed answer denying the allegations of the petition and pleaded that plaintiff's sale contract and transfer of permit No. 123, subject to the conditions of which it alleged Eastridge had purchased the permit, was void and unenforceable, because made in restraint of trade and against public policy.

The court, after considering the pleadings and hearing arguments of counsel on the motion for a temporary injunction, based upon appellee's contention that Eastridge was illegally operating through buses between Frankfort and Lexington, via Midway, in violation of the sales contract entered into between it and Wilson and subject to which the permit was sold to and bought by defendant and the further contention that the Director of Motor Transportation had improperly approved schedules for through service under the two certificates, the one permitting bus service between Lexington and Midway and the other between Midway and Frankfort, was of the opinion that the through operation, approved by the Director, was in effect a change of route between fixed terminii, which made it necessary for the Director, before granting approval of the through bus service under the combined certificates, to give notice to the parties in interest and hold a public hearing, as provided by Section 2739j-10, Kentucky Statutes. The court therefore ordered that the case be re-referred to the Director and that he have a public hearing, as provided by Section 2739j-14, for the purpose of determining whether or not a public convenience and necessity existed for a through bus service between Lexington and Frankfort, via Midway.

Pursuant to such direction, on November 14, 1938, a rehearing was held by the Director on the application of the defendant Eastridge, at which witnesses were introduced and heard upon the question submitted, of whether a public convenience and necessity existed for through bus service between Lexington and Frankfort, via Midway.

At the close of the hearing, the Director rendered his decision, wherein he set out his findings of fact and law governing the question submitted.

Upon the question of law, the Director found that no public convenience and necessity existed for the additional through bus service between Frankfort and Lexington, via Midway, which appellant proposed to operate under the authority of the combined certificates. Upon the question of fact, he found that the appellee Southeastern Greyhound Lines was at the time operating a through service between Lexington and...