Northern Pac. Ry. Co. v. Washington Utilities and Transp. Commission

• Decision Date: 30 June 1966
• Docket Number: No. 37980,37980
• Citation: 416 P.2d 337,68 Wn.2d 915
• Court: Washington Supreme Court
• Parties: NORTHERN PACIFIC RAILWAY CO., a corporation, Arrow Transportation Company of Delaware, a corporation, Gasoline Tank Service Co., a corporation, Inland Transportation Co., a corporation, Western Tank Lines, Inc., a corporation, and Big Bend Transport Co., Inc., a corporation, Respondents, v. WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION and Contract Carriers, Inc., a corporation, Appellants.

Page 915

68 Wn.2d 915

416 P.2d 337

NORTHERN PACIFIC RAILWAY CO., a corporation, Arrow Transportation Company of Delaware, a corporation, Gasoline Tank Service Co., a corporation, Inland Transportation Co. a corporation, Western Tank Lines, Inc., a corporation, and Big Bend Transport Co., Inc., a corporation, Respondents, v. WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION and Contract Carriers, Inc., a corporation, Appellants.

No. 37980.

Supreme Court of Washington, Department 2.

June 30, 1966.

John J. O'Connell Atty. Gen., Robert E. Simpson, Asst. Atty. Gen., Olympia, Trethewey, Brink & Wilson, Daniel Brink, Seattle, for appellants.

Reaugh, Hart & Allison, George H. Hart, Dean H. Eastman, Roger J. Crosby, Seattle, for respondents.

DONWORTH, Judge.

This is an appeal from an order of the Superior Court of Thurston County, which reversed a modified order of the Washington Utilities and Transportation Commission after a review of the order and record of the commission in Cause No. P--37620. The commission's order M.V. No. 78809 granted a contract carrier permit to Contract Carriers, Inc., which corporation will be hereinafter referred to as the applicant corporation.

The prior proceedings which occurred in 1961, 1962, and 1963 are as follows: The applicant corporation originally made application to the commission on March 13, 1961, seeking authority to operate as a contract carrier of certain commodities for a particular shipper, Yakima Cement Products, Inc. Hearings were held on this application in Yakima on May 6, 1961, and in Seattle on July 6 and September 6, 1961. As a result of these hearings, the Washington Utilities and Transportation Commission, hereinafter referred to as the commission, on July 12, 1962, by its order M.V. No. 77061, granted the applicant corporation the following contract carrier authority:

Intrastate, irregular route, non-radial service as a carrier of Machinery and equipment; Liquid petroleum Products consisting of asphalt and petroleum products only; Building Materials; Cement in bulk in tank trucks, steel, concrete products, calcium chloride and clay products in the State of Washington under contracts with YAKIMA CEMENT PRODUCTS, INC.

Several carriers had appeared at the hearings as protestants against the granting of such a permit. They joined in an application to the Thurston County Superior Court on August 10, 1962, for a writ of review of the commission's order on the grounds (among others) that the commission's order and findings were unlawful, erroneous, arbitrary and capricious. On April 2, 1963, the review of the commission's order was heard by the superior court. April 17, 1963, the superior court entered findings of fact, conclusions of law and a decree which held that the commission's order M.V. No. 77061 was inadequate because its finding of fact and conclusion of law No. 5 failed to state whether the noncompliance with the laws of the state which were referred to therein were willful. The cause was remanded to the commission with directions to make such a finding. The original finding of fact and conclusion of law No. 5 reads:

The applicant has not complied with the laws of the state of Washington in the past, but it appears that the applicant has the ability to and will comply with such laws in the future.

Pursuant to the order of remand, the commission, on May 28, 1963, issued order M.V. No. 78809 modifying order M.V. No. 77061. The new order adopted all of the provisions of the old order except those which were specifically deleted and again granted the permit to the applicant corporation. The deletions from the older order were 2 paragraphs of the opinion portion of the order, and finding of fact and conclusion of law No. 5. The new order added about 2 pages of explanation to its opinion and a new finding of fact and conclusion of law No. 2, which modified the old No. 5. The modification of finding of fact and conclusion of law No. 5 reads:

The applicant has not complied with the law, rules and regulations in the past and it is the finding of the commission some of these violations were willful, but it appears that the applicant has the ability to and will comply with such laws in the future.

It will be of assistance in the understanding of the issues in this case to also note that the last paragraph of the opinion portion of order M.V. No. 78809 reads:

The president of the applicant corporation has indicated a willingness to comply with regulation and has shown sufficient evidence of good faith to negate for purposes of this application the inferences which could be drawn from past conduct. The Commission is of the opinion that the applicant has the ability to and will comply with lawful regulations covering his operation as a contract carrier.

The same protestants again filed an application in the superior court for a writ of review of this modified order of the commission on the ground that the order and findings were unlawful, erroneous, arbitrary, and capricious. After this hearing to review the order granting the permit, the trial court reversed the commission's order and remanded the matter to the commission with directions to cancel the permit granted to the applicant corporation.

The applicant and the commission each appealed to this court from the decree of the superior court and have assigned as error the making of certain findings of fact and conclusions of law.

In considering these assignments, it is important to understand why the superior court reversed the commission and ordered the permit canceled. The protestants (respondents) relied on RCW 81.80.070 and the commission's Rule 5(c) pertaining to qualifications for permits for carriers. RCW 81.80.070 reads, in part:

No permit or extension thereof shall be granted if the commission finds that the applicant is not financially able, properly and adequately equipped, and capable of conducting the transportation service applied for in compliance with the law and rules and regulations of the commission, and The commission may deny an application if the applicant or any of its principal officers or stockholders fails, or has failed, to comply with the laws of this state. (Italics ours.)

Rule 5(c) reads:

Proof will be required to establish that applicant or any of its personnel, officers or stockholders have not willfully failed to comply, and will fully comply, with the laws of the state of Washington and the rules and regulations of the Commission applicable to the proposed service.

It has been the position of the protestants (hereinafter referred to as respondents), both before the superior court and on appeal before this court, that the commission's order was unlawful and not supported by substantial evidence. Respondents argue that, since there was a finding by the commission that the violations of the commission's rules and the state law were in some instances willful, the finding of the commission that the applicant has the ability and will comply with the law, rules and regulations in the future, must be supported by substantial evidence in the record but that the record does not contain such evidence.

The findings of fact, conclusions of law, and decree signed by the trial court were prepared by respondents. Certain of the grounds for reversal urged by respondents were apparently rejected by the trial court, because the record shows that the trial court specifically deleted portions of the proposed findings of fact and conclusions of law submitted by respondents but accepted the balance of their proposed findings of fact, conclusions of law, and decree.

The portions of the findings of fact and conclusions of law which were rejected by the superior court are italicized rather than crossed out, so that the words may be read in their original context. The unitalicized portions were the grounds accepted by the superior court. The significant passages read:

Finding of Fact No. 7.

In its Order M.V. No. 78809 the Commission specifically found in its Finding of Fact and Conclusion of Law No. 2 that applicant has not complied with the law, rules and regulations of the respondent Commission in the past and some of said violations were willful. Therefore said Commission was required by its Rule 5(c) to deny the application, and the Commission's Order M.V. No. 78809 which granted said application, is therefore unlawful, Arbitrary, and capricious and not supported by and contrary to The substantial evidence in the record in said Cause P--37620. Further, the Commission's Finding of Fact and Conclusion of Law No. 2 in said Order M.V. No. 78809 which found that applicant had the ability to and will comply with such laws in the future, is unsupported by and contrary to the substantial evidence of record.

Conclusion of Law No. 2:

That said Order M.V. No. 78809 is unlawful, Arbitrary and capricious and not supported by and contrary to substantial evidence in Cause P--37620. Said Order M.V. No. 78809 shall be reversed and remanded to the respondent Commission with directions to the Commission to enter an order denying the application P--37620 of respondent Contract Carriers, Inc., and cancelling the permit rights which were issued pursuant to the Commission's Order M.V. No. 77061 as reaffirmed in Order M.V. No. 78809.

It is clear from the above italicized deletions and the unitalicized holdings of the superior court that the court ruled, as a matter of law, in effect, that, under Rule 5(c) of the Commission, if an applicant has previously willfully violated any laws or regulations or rules of the commission concerning the operation of carriers, the commission cannot thereafter issue to this applicant another permit, even though the applicant makes a showing by substantial evidence that it has the ability and will comply with the law, rules and regulations of the commission applicable to the proposed service, and the commission makes a finding that the applicant is able and willing to...