Retail Stores Delivery, Inc. v. Department of Public Utilities

• Decision Date: 24 June 1959
• Citation: 159 N.E.2d 646,339 Mass. 441
• Parties: , 30 P.U.R.3d 327 RETAIL STORES DELIVERY, INC. et a. v. DEPARTMENT OF PUBLIC UTILITIES and an intervener.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 646

159 N.E.2d 646

339 Mass. 441, 30 P.U.R.3d 327

RETAIL STORES DELIVERY, INC. et a. v. DEPARTMENT OF PUBLIC UTILITIES and an intervener.

Supreme Judicial Court of Massachusetts, Suffolk.

Argued May 5, 1959.

Decided June 24, 1959.

Herbert Burstein, New York City (William H. Marx, New York City, and John J. Carty, Cambridge, with him), for plaintiffs.

Bernard G. Segal, Philadelphia, Pa. (Irving R. Segal, Philadelphia, Pa., Philip R. White and Norman Landstrom, Boston, with him), for intervener.

Nathan S. Paven, Asst. Atty. Gen., for Dept. of Public Utilities.

Before WILKINS, C. J., and SPALDING, COUNIHAN, WHITTEMORE and CUTTER, JJ.

WHITTEMORE, Justice.

This is a bill in equity under G.L. c. 25, § 5, as amended by St.1953, c. 575, § 1, and St.1956, c. 190. The plaintiffs are carriers of property by motor vehicle which are subject to G.L. c. 159B. Retail Stores Delivery, Inc., is a contract carrier, and Stone's Express, Inc., and Railway Express Agency, Incorporated, are common carriers. The bill seeks the annulment of an order of the department of public utilities dismissing the appeals of the plaintiffs from orders of the commercial motor vehicle division. The principal appeal concerns the order entered May 29, 1956, which authorized United Parcel Service of America, Inc., the intervener, to acquire all the stock of Mann Forwarding Company, Inc., which had a contract carrier permit and an irregular route common carrier certificate. We will use abbreviated titles of the parties and the division. The department, acting through the division, held hearings, although not required by the statute to do so. In view of the result we reach, we do not need to consider whether persons participating therein may bring before us by way of statutory appeal (G.L. c. 25, § 5) alleged errors of law in its rulings and order.

The consent of the department to the stock transfer was required by G.L. c. 159B, § 11, fourth paragraph (the statute), added by St.1951, c. 158. The statute provides that no one subject to the jurisdiction of the department shall acquire any of the capital stock of a motor carrier subject to the chapter unless authorized by the department; that no one not so subject, unless so authorized, shall acquire more than fifty per cent of the voting capital stock of such a carrier; and that '[n]o consent shall be given * * * unless it shall have been shown that such acquisition is consistent with the public interest, and if such consent is given in whole or in part the department may impose such terms and conditions as it shall deem to be in the public interest.' The first paragraph of § 11 authorizes the transfer of an irregular route certificate or any permit and any regular route certificate or license in whole or in part 'with the approval and consent of the department after public notice * * * and a public hearing [emphasis supplied] at which the proposed transferee shall have established to the satisfaction of the department his willingness, fitness and ability to perform or furnish transportation for compensation under such certificate, permit or license and under this chapter * * *.' A transfer must be in connection with the bona fide sale of the business.

The statute was adopted in 1951 pursuant to recommendation of the department in 1951 House Doc. No. 101, wherein amendment was requested '[i]n order that the department may pass upon the fitness of new management of a corporation in the same manner that it now passes upon the fitness of an individual transferee.'

The division found that United's acquisition of Mann's stock would be 'consistent with the public interest.' There were subsidiary findings as follows: Mann was in precarious financial condition; its principal officer and stockholder had entered the armed services and wished to sell his stock; United through subsidiaries had much experience in motor carrier operation and retail delivery service; it had ample ('vast') assets and is 'qualified financially, by experience and otherwise to operate the business of Mann'; it proposed to expand the operations to give a State wide service not otherwise available; and the probability existed that Mann under new ownership would provide improved service.

The department on the plaintiffs' appeal from the order of the division (see A. B. & C. Motor Transp. Co., Inc. v. Department of Pub. Util., 327 Mass. 550, 100 N.E.2d 560) ruled that it was not required to give considered to the effect of the acquisition on other carriers and to the usefulness of the type of service proposed by United; that no broader (and if anything different, a narrower) inquiry was required on acquisitions than on transfers of permits or certificates (that is, 'willingness, fitness and ability'); and that the requirement is to decide whether 'such acquisition affects the shipping public favorably or adversely.'

1. The plaintiffs' attack on the order and findings is based, in important part, on the contention that the department's order expanded Mann's permit; that there was in substance either a grant of a new permit under G.L. c. 159B, § 4, or an amendment under § 12, both of which sections require notice and hearing. The plaintiffs contend that Mann's contract carrier permit was only for the carriage of goods of one customer, and that the department's order, in stating restrictions on Mann's operation, actually expanded the permit.

The division had found that the proposed expansion of service made a restriction necessary, and that to 'allow the same commodities to be transported in the same territory both as a common and a contract carrier would afford an opportunity for discriminatory practices'; and had ordered that, 'if the transaction is consummated, the contract carrier permit No. 361 be restricted to the retail delivery of retail store merchandise and that the irregular route certificate * * * be restricted to the transportation anywhere in the Commonwealth of general commodities except the retail delivery of retail store merchandise.'

We do not agree that Mann's permit was expanded. The division found that Mann was organized in Massachusetts in 1953 and operated as a common carrier by motor vehicle of general commodities and as a contract carrier by motor vehicle serving one shipper, Standard Grocery Company of Boston, 'under a permit not restricted as to commodities or territory.' General Laws c. 159B, § 4, provides that permits for contract carriers 'shall be in a form prescribed by the department'; that the department 'shall specify in the permit the operations covered thereby, and at the time of issuance, and from time to time thereafter, shall attach to it such terms and conditions, not inconsistent with the status of the holder as a contract carrier, as the public interest may require; provided, that no terms, conditions or limitations shall restrict the right of the carrier to substitute or add contracts within the scope of his permit, or to add to his equipment and facilities over the routes, between the termini, or within the territory, specified in the permit, as the development of his business and the demands of the public shall require.'

A copy of Mann's contract carrier permit is in the record; it includes this sentence: 'This permit is restricted to the transportation of commodities for the concerns described and within the limits set forth in Schedule 'A' * * *.' Schedule A, attached, reads: 'This permit is issued for the transportation of property for: Standard Grocery Co.' There is also attached a paper reading, in type: 'Date of Notice Feb. 12, 1954 Mann Forwarding Company, Inc. * * * [address]. Trans. by A. Allen Berg, Assignee, Mann Forwarding Co., Inc., to the above 2/12/54 Property for: Standard Grocery Co. * * * [address]. Revised in accordance with letter from Rate Div. 6/30/54.' There appear in ink the words 'Contract att.' and a stamp reading 'Tariff Files O.K. 6/30/54.' Below this is the signature 'F. J. Gannon.'

General Laws c. 159B, § 7, requires that every contract carrier by motor vehicle, with inapplicable exceptions, file with the department 'a copy of every contract * * * in effect in connection with its operations, which * * * shall be open to public inspection.' It also provides that the department may in its discretion require all contract carriers to file schedules of their minimum charges which 'shall contain a list of all parties with whom contracts are or may from time to time be in effect, and a statement of the charge for each service performed thereunder * * *.'

We construe the limitation in the outstanding permit for contract carriage to reflect the fact that there was currently only one contract on file with the department. We construe Mann's permit which was 'not restricted as to commodities or territory' to be a permit good throughout the Commonwealth for operations under such contracts as may be on file with the department and from time to time noted on the certificate. ¹ We note the definition of contract carrier by motor vehicle (G.L. c. 159B, § 2) as 'any person, not included in the term 'common carrier by motor vehicle' or in the term 'agricultural carrier by motor vehicle', who, under special and individual contracts or agreements * * * transports property by motor vehicle for compensation upon ways.' The express provision of § 4 that 'no terms, conditions or limitations shall restrict the right of the carrier to substitute or add contracts within the scope of his permit * * * as the development of his business and the demands of the public shall require' controls the form of the permit used by the department. There is nothing in the suggestion that this statutory mandate could have meaningful application to Mann's permit by allowing Mann to add contracts with Standard.

It may be that Mann's prior status as a common carrier and a contract carrier violated G.L. c. 159B, § 8, which provides that '[n]o carrier shall be permitted to hold both a...