Ferguson-Steere Motor Co. v. State Corp. Commission

• Decision Date: 10 June 1957
• Docket Number: FERGUSON-STEERE,No. 6053,6053
• Citation: 314 P.2d 894,63 N.M. 137,1957 NMSC 50
• Parties: , 21 P.U.R.3d 285 MOTOR COMPANY, a corporation, and E. B. Law and Son, Inc., a corporation, Plaintiffs-Appellees, v. STATE CORPORATION COMMISSION of New Mexico, John Block, Jr., James F. Lamb, and Ingram B. Pickett, Members of said Commission, Defendants-Appellants, and Whitfield Tank Lines, Inc., a corporation, Intervenor-Appellant.
• Court: New Mexico Supreme Court

Page 894

314 P.2d 894

63 N.M. 137, 21 P.U.R.3d 285

FERGUSON-STEERE MOTOR COMPANY, a corporation, and E. B. Law and Son, Inc., a corporation, Plaintiffs-Appellees, v. STATE CORPORATION COMMISSION of New Mexico, John Block, Jr. James F. Lamb, and Ingram B. Pickett, Members of said Commission, Defendants-Appellants, and Whitfield Tank Lines, Inc., a corporation, Intervenor-Appellant.

No. 6053.

Supreme Court of New Mexico.

June 10, 1957.

Rehearing Denied Sept. 20, 1957.

Jack L. Smith, Asst. Atty. Gen., for State Corp. Commission,

O. Russell Jones, Santa Fe, William J. Torrington, Albuquerque, for Whitfield Tank Lines, Inc.

Robert E. Fox, Santa Fe, for Ferguson-Steere Motor Co.

Donovan N. Hoover, Robert D. Nordstrom, Santa Fe, for E. B. Law and Son, Inc.

GARNETT R. BURKS, District Judge.

Where it is necessary herein to distinguish between the appellants, State Corporation Commission of New Mexico will be referred to as the Commission, John Block, Jr., James Lamb and Ingram B. Pickett as the Commission members, and Whitfield Tank Lines, Inc., a corporation, as the intervenor. Otherwise the parties will be referred to as appellants and appellees.

This action was commenced before the Commission by the intervenor filing an application for a Certificate of Public Convenience and Necessity to transport petroleum and petroleum products in bulk in tank trucks and trailers over irregular routes and under non-scheduled service between all points and places in New Mexico.

A hearing on intervenor's application was held before the Commission commencing December 14, 1954, at which appellees appeared and protested the granting of the certificate. Following the conclusion of such hearing the Commission, by order dated January 20, 1955, ordered the granting of authority to intervenor to transport petroleum and petroleum products as requested in the application therefor, excluding therefrom, however, crude oil and liquefied petroleum gases. Appellants appealed to the District Court of Santa Fe County from the Commission's order pursuant to the provisions of Section 64-27-68 [63 N.M. 141] et. seq., 1953 Comp., naming the Commission and Commission members as defendants. The intervenor was allowed to intervene in the action before the District Court. The lower court rendered judgment in favor of the appellees and ordered the Certificate of Public Convenience and Necessity granted by the Commission to the intervenor pursuant to the Commission's Order of January 20, 1955, vacated and set aside, and from this judgment the appellants have appealed to this Court.

Prior to, and at the time of, the filing of its application for such certificate, intervenor has engaged in transporting gasoline, diesel, coal oil and petroleum products over irregular routes and under non-scheduled service from Artesia, New Mexico, to points in twenty-seven counties in this state, including Bernalillo County, under a Certificate of Public Convenience and Necessity previously issued to it by the Commission. It was anticipated that the completion and use of a pipeline proposed to be constructed by the Standard Oil Company of Texas from El Paso, Texas of Albuquerque, New Mexico, would have the effect of moving the intervenor's source of supply from Artesia to Alburquerque. At the time of the hearing before the Commission, construction of the pipeline had not been completed and no part of the pipeline was in use.

In the lower court, the appellees sought to have the order of the Commission of January 20, 1955, vacated and set aside, and also sought an injunction pendente lite against the appellants. The injunctive relief prayed for was denied and no appeal having been taken therefrom, the matter is now before this Court solely on the District Court's action vacating and setting aside the certificate issued by the Commission pursuant to its said order of January 20, 1955.

Appellants set forth twenty-five assignments of error presented under four separate points:

'1. The Court erred in finding that the Commission's order was based on surmise, conjecture and speculation and was not supported by competent and substantial evidence.

'2. The Court erred in finding that the Commission's order was arbitrary, capricious, and confiscatory.

'3. The Court erred in finding that the Commission had not substantially complied with existing statutes and requirements.

'4. The Court erred by completely misconceiving the nature of the proceedings contrary to the laws applicable to such cases and the manner and conduct therein.'

The pertinent findings of fact made by the Commission may be summarized as follows:

'1. That a common carrier pipeline for the transmission of petroleum and/or petroleum products was then under construction between El Paso, Texes and Albuquerque, New Mexico, with a completion date of on or before February 10, 1955.

'2. That completion of said pipeline would result in a shift of the source of the commodities involved moving to points in New Mexico from present sources at Artesia, New Mexico, El Paso, Texas, and other supply points, to the pipeline terminal at Albuquerque, New Mexico, resulting in loss of business to the Intervenor unless it be allowed to follow the traffic to the new source of supply at Albuquerque, New Mexico; that as a result of such loss of business, Intervenor would be forced to curtail its services with a consequent loss thereof to the shipping public.

'3. That a public need exists for the services of the Intervenor in transporting the commodities involved from the new source of supply resulting from the construction of the proposed pipeline.'

The trial court found generally that the pertinent findings and order of the Commission were not supported by substantial or competent evidence, were conjectural and speculative, unlawful, unreasonable, arbitrary and capricious.

Unreasonable was defined by this Court in Harris v. State Corporation Commission, 46 N.M. 352, 129 P.2d 323, as capricious, arbitrary or confiscatory. In Floeck v. Bureau of Revenue, 44 N.M. 194, 100 P.2d 225, we held in effect that an order not supported by substantial evidence was arbitrary or capricious. See also Wisconsin Telephone Co., v. Public Service Commission, 232 Wis. 274, 287 N.W. 122, 593. It appears that an order of an administrative body which is not based on substantial evidence may properly be described as the trial court described the Commission's order in question.

At this point it might be well to review briefly the general rules governing the functions of the courts in matters of this nature.

It was not within the province of the trial court, nor is it within the province of this Court, to consider any evidence other than that introduced at the hearing before the Commission. The Commission is an administrative body and the courts are limited in their review of the actions of such bodies. Harris v. State Corporation Commission, supra; Transcontinental Bus System, Inc., v. State Corporation Commission, 56 N.M. 158, 241 P.2d 829. It is well settled in this state that it is not the province of the trial court to re-try a case brought before it on appeal from an administrative body or agency or to substitute its judgment for that of the agency, but the trial court is limited to a determination of whether the administrative agency's action was legal or reasonable. If the trial court did substitute its judgment and discretion for that of the Commission, the trial court erred and its judgment must be reversed. On the other hand, the courts are vested with the power and authority to set aside an order of such agency if it is unreasonable, unlawful, arbitrary capricious, or not supported by evidence. Transcontinental Bus System, Inc., v. State Corporation Commission, supra; Kopec v. Buffalo Brake Beam Acme Steel & Malleable Iron Works, 304 N.Y. 65, 106 N.E.2d 12; Floeck v. Bureau of Revenue, supra; Yarbrough v. Montoya, 54 N.M. 91, 214 P.2d 769; Spencer v. Bliss, 60 N.M. 16, 287 P.2d 221; Seward v. Denver & R. G. R. R. Co., 17 N.M. 557, 131 P. 980, 46 L.R.A.,N.S., 242; Seaberg v. Raton Public Service Co., 36 N.M. 59, 8 P.2d 100; Wabash R. Co., v. Order of Railway Conductors, 402 Ill. 548, 84 N.E.2d 406; Outboard Marine & Mfg. Co., Johnson Motors Division v. Gordon, 403 Ill. 523, 87 N.E.2d 610.

Bearing in mind the rule that the trial court is not to substitute its judgment and discretion for that of the Commission, and is limited in its review of a determination of whether the Commission's action was reasonable and lawful, we must determine whether the Commission's action was based upon substantial evidence, and such determination disposes of all of the issues involved in this appeal.

Appellees urge the proposition that the Commission's finding that the pipeline was actually under construction at the time intervenor's application was filed was based on hearsay evidence, and that accordingly the Commission's order predicated in part upon such finding was erroneous.

The Commission is an administrative agency and it is well established that the rules governing the admissibility of evidence before administrative boards are frequently relaxed for the purpose of expediting administrative procedure. Consolidated Edison Co., v. National Labor Relations Board, 305 U.S. 197, 59 S.Ct. 206, 83 L.Ed. 126. The rules relating to weight, applicability or materiality of evidence, however, are not thus limited. National Labor Relations Board v. Illinois Tool Works, 7 Cir., 119 F.2d 356. A number of states have enacted statutes governing the admissibility of evidence before such agencies, but New Mexico is not one of them. Sec. 64-27-8, 1953 Comp., N.M. Stats., requires the Commission to base its findings on evidence. Hearings before administrative bodies need not be conducted generally with the formality of a court hearings or trial, but the procedure before such bodies must be consistent with the essentials of a fair trial, Wisconsin Telephone Co. v....