General Transp. Co. v. United States

• Decision Date: 29 March 1946
• Docket Number: Civil Action No. 3683.
• Court: U.S. District Court — District of Massachusetts
• Parties: GENERAL TRANSP. CO. et al. v. UNITED STATES et al.

65 F. Supp. 981

GENERAL TRANSP. CO. et al. v. UNITED STATES et al.

Civil Action No. 3683.

District Court, D. Massachusetts.

March 29, 1946.

James J. Weinstein, of Boston, Mass., for plaintiffs.

Edward Dumbauld, Sp. Asst. to Atty. Gen., for the United States.

Edmond J. Brandon, U. S. Atty., of Boston, Mass., and Daniel H. Kunkel, of Washington, D. C. (David K. Knowlton, of Washington, D. C., of counsel), for Interstate Commerce Commission.

Before WOODBURY, Circuit Judge, and SWEENEY and HEALEY, District Judges.

WOODBURY, Circuit Judge.

This is a suit brought under § 24 of the Judicial Code, 28 U.S.C.A. § 41(28), to enjoin, set aside and annul an order of the Interstate Commerce Commission approving the purchase of the operating rights of Clarence L. Hardy of Boston, Mass., by Beacon Fast Freight Co., Inc., of New York, N. Y. The standing of the plaintiffs to sue under the rule of Alton Railroad Co. v. United States, 315 U.S. 15, 19, 62 S.Ct. 432, 86 L.Ed. 586, is conceded. The jurisdiction of this court in the premises is unquestioned and unquestionable.

The facts necessary for a decision of the issues presented are not in dispute and may be found as follows:

Beacon Fast Freight Company, Inc., is a common carrier by motor vehicle of general commodities, with the usual exceptions, operating over a regular route between Cambridge, Mass., and Jersey City, N. J., under a certificate of convenience and necessity issued to it under the "grandfather" clause on October 15, 1943. It serves Boston and New York as intermediate points.

Clarence L. Hardy, on May 1, 1941, was issued a certificate, also under the "grandfather" clause, authorizing him to operate in interstate or foreign commerce as a common carrier by motor vehicle of general commodities, with the usual exceptions, over irregular routes between Boston on the one hand and all points and places in Massachusetts on the other. His principal business in former years consisted in the transportation of property in truck load lots from the docks in Boston to various interior Massachusetts points. He seldom was offered return loads to Boston and he had no interchange arrangements with other carriers. After the outbreak of the European war the movement of import traffic largely ceased and when this country entered the war ocean borne traffic from the Pacific coast also ceased. However, Hardy continued some operations until the Office of Defense Transportation issued a general order on July 13, 1942, relating, among other things, to the performance of transportation service by motor truck solely in one way loadings, and then, finding it difficult to comply with that order, he ceased all operations. This occurred on or about August 15, 1942. From that date until about December 15, Hardy leased his equipment to a private contractor, but he continued to pay rental on a terminal at Malden, Mass. until March 1943, by which time he had sold all his motor vehicles. In May 1943, he applied to the Commission for authority to suspend operations for the duration of the war, but his request was denied. As of the date of the Commission's hearing, February 7, 1944, he had cargo and liability insurance in effect, and tariffs on file with the Commission. Since June 1943 he has been employed by the United States Government.

On January 31, 1944, Beacon and Hardy entered into an agreement for the sale of the latter's operating rights to the former for $1800 payable upon approval of the transaction by the Commission.¹ Thereupon Beacon and Hardy filed a joint application with the Commission for such approval under § 5(2) (a) (i) of Part I of the Interstate Commerce Act, 49 U.S.C.A. § 5(2) (a) (i), and in the proceedings before the Commission on that application the present plaintiffs appeared as party protestants. They confined themselves, however, to the cross-examination of witnesses and to argument. Before it their contentions, as found by the Commission were: "(1) that vendor wilfully abandoned his operations and that therefore his certificate is voidable and not the fit subject of sale under section 5; and (2) that, in any event, it would not be consistent with the public interest to authorize purchase by vendee, a regular-route operator, of irregular-route operating rights which clearly were not used by vendor in the performance of a through service in the manner proposed by the vendee."

The Commission, however, on November 1, 1944, ruling in accordance with its decision in Quaker City Bus Co.-Purchase-Blackhawk Line, Inc., 38 M.C.C. 603, 606, that "Possession of a certificate, in and of itself, and without performance of any transportation, constitutes the holder thereof `a motor carrier subject to Part II'" and finding that the proposed purchase would be consistent with the public interest and would not "materially affect the present competitive situation or injure protestants in such a way as to threaten continuance of their operations or impair their ability to perform their common carrier obligations to the shipping public," approved the purchase subject to usual conditions.

Thereupon the Protestants as plaintiffs brought the instant suit in which they make three points. They say (1) that the Commission had no jurisdiction under § 5(2) (a) (i) to approve Beacon's application to purchase Hardy's certificate of public convenience and necessity for the reason that the latter had voluntarily ceased all operations under his certificate and therefore was no longer a "carrier" within the meaning of Part II of the Act; (2) that the Commission erred in approving the application for the reason that Hardy did not possess any "transferable right" to operate in interstate commerce because his operations brought him within the second proviso of § 206(a) of the Act, 49 U.S.C.A. § 306 (a);² and (3) that the proposed transaction of purchase and sale, if consummated, would be inconsistent with the public interest.

Only the plaintiffs' first point merits extended consideration.

Their second point was not made before the Commission but is made for the first time here. Therefore, upon the authority of United States v. Hancock Truck Lines, 324 U.S. 774, 779, 780, 65 S.Ct. 1003, 89 L.Ed. 1357, we rule that it is not properly before us for consideration. To be sure the plaintiffs here, when appearing as protestants before the Commission, did not expressly waive the point they now make, and in this respect the case at bar differs from the Hancock case. Nevertheless the reasoning of that case is applicable, and furthermore, although strictly speaking we are not an appellate court, we in reality are called upon to exercise appellate functions, and from this we think it follows that we should apply general principles applicable on review.

Their...