Pub. Utilities Comm'n v. Utterstrom Bros., Inc.

• Decision Date: 12 September 1939
• Parties: PUBLIC UTILITIES COMMISSION v. UTTERSTROM BROS., Inc., et al.
• Court: Maine Supreme Court

8 A.2d 207

PUBLIC UTILITIES COMMISSION

v. UTTERSTROM BROS., Inc., et al.

Supreme Judicial Court of Maine.

Sept. 12, 1939.

Proceeding by the Public Utilities Commission against Utterstrom Brothers, Incorporated, and others, to compel respondents to cease and desist from transporting freight and merchandise as contract carriers at rates less than common carriers' minimum rates prescribed by the commission. On respondents' exceptions to the commission's rulings and decision.

Exceptions sustained in part.

Argued before DUNN, C. J, and STURGIS, BARNES, THAXTER, HUDSON, and MANSER, JJ.

Frank M. Libby, of Portland, for plaintiff.

Albert E. Anderson, of Portland (Locke, Campbell & Reid, of Augusta, and Raymond S. Oakes, of Portland, of counsel), for defendant.

MANSER, Justice.

On exceptions to rulings and decision of the Public Utilities Commission.

The Great Atlantic and Pacific Tea Company, hereafter called by its more familiar designation, A. & P., maintains numerous retail stores throughout the State of Maine. It owns and operates a warehouse at Portland and employs several contract carriers to transport over the highways merchandise to its stores. These contract carriers are the respondents in the present case. On its own intiative, the Public Utilities Commission ordered a hearing upon the rates charged for transportation service by the respondents upon the ground that they were less than those prescribed by a general order adopted by the Commission under authority of Sec. 5 (D) P.L.1933, c. 259, as amended by P.L.1935, c. 146.

The Commission ruled that the respondents were operating in competition with common carriers and were performing substantially the same or similar service, and the respondents were ordered to cease and desist from transporting freight and merchandise unless at rates not less than the minimum rates of common carriers.

Two classes of service to shippers for the transportation of goods by the use of motor trucks on the highways are recognized and provided for by the laws of our State. P. L.1933, c. 259, as amended by P.L.1935, c. 146. One is the transportation by trucks operated by common carriers. Such carriers are required to serve the general public. They operate over designated routes and upon fixed schedules and transport the goods of any shipper. The other is the transportation service furnished to an individual shipper by a private contract carrier.

Common carriers must secure permission from the Commission to operate upon the highways, and must show that public necessity and convenience require and permit such operation. They must file schedules of rates, which are subject to the approval of the Commission, and which rates so fixed must be paid by the shipper.

Contract carriers must likewise obtain a permit from the Commission. When the provisions of P.L.1933, c. 259, became effective these respondents by its terms became entitled as a matter of right to such permit, as they were engaged in the business of contract carriers, as defined in the act, prior to March 1, 1932.

Sec. 5 (D) of said c. 259 provides:

"The commission is hereby vested with power and authority and it is hereby made its duty to prescribe rules and regulations covering the operation of contract carriers in competition with common carriers over the highways of this state, and the commission shall prescribe minimum rates and charges to be collected by contract carriers which shall not be less than the rates charged by such common carriers for substantially the same or similar service."

The position of the respondents is that they are not in competition with common carriers as described in the section quoted above, that they do not render substantially the same or similar service as a common carrier and are, therefore, not within the purview of the Act with relation to rates.

It is contended by the respondents that there are fundamental distinctions' between the service rendered by them to the A. & P. and the service of common carriers. Being under no obligation to serve any one but the A. & P., an entirely different scheme of transportation is set up. The facilities which would be necessary if the general public were to be served, and the expense attendant thereon, are eliminated. They serve but one shipper. They are provided with full employment for their trucks by that shipper. The compensation paid is a matter of private contract mutually agreed upon and satisfactory to both parties. There is but one paymaster. The work is more efficiently carried on. The respondents are not required to operate over regular routes or on fixed schedules. The trucks are operated upon a schedule to meet the shipper's needs, and practically 24 hour service is provided. Bread, fruit and perishable goods are routed for quick delivery to the stores of the shipper in various localities. The A. & P. maintains an organization and adopts methods to facilitate the transportation, which lessen the cost of operation to the contract carrier. The public is protected by the same regulations as to safety appliances, equipment, weight, height, load, and operation of the trucks as apply to common carriers. The number of trucks on the highway is not increased, and may well be less. It is urged that the convenience of highway transportation direct from warehouse to the various stores, with no other goods carried, and no other deliveries to make, places the service upon an entirely different plane, which could not be provided by common carriers. These distinctions, with other elements mentioned and recognized by the Commission in its findings, it is claimed demonstrate that there is no competition and no substantial similarity; and that to compel higher rates will not transfer the business to common carriers as their service is not adapted to the needs of the A. & P., but will force the shipper to transport the goods himself, via the highways, to the destruction of the respondents' business, or if such transportation proves in-feasible, to needlessly add to the cost of goods to the consumer.

The respondents contend that certain statements of the Commission in its findings, and upon which its conclusion that competition and similarity of service are shown, demonstrate exactly the opposite. They call attention in particular to the following excerpts:

"The contract type of carrier service is better adapted to the need of The Great Atlantic and Pacific Tea Company." Again: "It is perfectly true that it is probably more convenient for the Company to use contract carriers which it can order in at various hours of the day, as the shipments are made up and prepared for delivery to the carrier." And again: "It is probably doubtful if the business could be expedited nearly as satisfactorily as under the present contract carrier method." Again, the respondents assert that loading is as much a part of transportation as is movement. The A. & P. dealing with contract carriers has adequate room in its warehouse to load vehicles, because trucks arc supplied as and when needed, while the Commission finds that such room is not available when dealing with common carriers unless such carriers depart from their present service.

Respondents acknowledge that certain trucking concerns operating as common carriers furnish transportation to the A. & P. but assert that the record shows that they are used but little as compared with the total volume of transportation, and such use is at considerable inconvenience in order to care for stores in a few scattered localities and in areas not adequately served by the contract carrier system, while the contract carriers are used to provide the great volume of transportation in other areas because the flexible nature of the system is peculiarly adaptable to the needs of the shipper.

Reference is also made to the findings by the Commission that the personal relations between contract carriers and the company enable delivery of merchandise in the absence of the consignee, and that the system in general provides a saving of costs to the carriers in bookkeeping, collection of accounts, operation of terminals and solicitation of business, and comment is that all these elements show substantial dissimilarity of service.

These contentions of the respondents must be sustained. The finding of the Commission is based solely and squarely upon...