Spector Freight System, Inc. v. Herman Bros., Inc.

• Decision Date: 09 March 1977
• Docket Number: No. 40847,40847
• Citation: 197 Neb. 835,251 N.W.2d 376
• Parties: Application of Spector Freight System, Inc., et al. SPECTOR FREIGHT SYSTEM, INC., Chicago, Illinois, et al., Appellants, v. HERMAN BROS., INC., et al., Appellees.
• Court: Nebraska Supreme Court

Page 376

251 N.W.2d 376

197 Neb. 835

Application of Spector Freight System, Inc., et al.

SPECTOR FREIGHT SYSTEM, INC., Chicago, Illinois, et al., Appellants, v. HERMAN BROS., INC., et al., Appellees.

No. 40847.

Supreme Court of Nebraska.

March 9, 1977.

Syllabus by the Court

1. The Public Service Commission may approve a transfer of intrastate operating authority if the proposed transfer is consistent with the public interest, does not unduly restrict competition, and the applicant is fit, willing, and able to properly perform the proposed service.

2. Proof of public convenience and necessity is required if the authority proposed to be transferred is dormant or the transfer will permit or result in a new or different service or operation as to territorial scope.

3. Although the proposed transfer may tend to enlarge competition, proof of public convenience and necessity is required only if the transfer involves passenger motor carriers.

4. The purpose of regulation of motor carriers by the Public Service Commission is to permit regulated competition productive of efficient service at minimum cost.

Rodney Peake, of Peake & Navis, P. A., Chester, Lloyd J. Marti, of Marti, Dalton, Bruckner, O'Gara & Keating, Lincoln, for appellants.

James E. Ryan, Patrick E. Quinn, Lincoln, for appellees.

Heard before WHITE, C. J., and SPENCER, BOSLAUGH, McCOWN, CLINTON, BRODKEY and WHITE, JJ.

BOSLAUGH, Justice.

This is an appeal from an order of the Public Service Commission denying an application to transfer the intrastate operating authority of Hennis Freight Lines, Inc., of Nebraska (Hennis) to Spector Freight System, Inc. (Spector). The application was filed as a result of a merger between several corporations, including Hennis, in which Spector became the surviving motor carrier operating company.

Hennis held the following operating authority which the application sought to transfer to Spector: "SERVICE AUTHORIZED: Commodities generally (including perishables requiring refrigeration) except (1) livestock and (2) liquid bulk products by tank vehicles. ROUTE OR TERRITORY AUTHORIZED: Regular route operations: (1) Between Omaha and Lincoln, Nebraska via US-6. Irregular route operations: Between all points in Nebraska over irregular routes."

The commission denied the application in all respects, one commissioner dissenting. The applicants concede that the intrastate authority of Hennis was dormant as to all service authorized except the transportation of bulk cement, limestone, and limestone products over irregular routes. On this appeal the applicants contend only that the transfer of the authority to transport bulk cement and limestone products by irregular routes should have been approved.

The commission found that the transfer of the authority to transport bulk cement and limestone products should be denied because the applicants failed to prove that Hennis of Nebraska had been an effective competitor for the transportation of these commodities; that a transfer would result in a new or different service or operation as to territorial scope; and the transfer would tend to enlarge competition over that presently existing without any showing that public convenience and necessity required the service.

The applicable statute is section 75-318, R.R.S.1943. It provides, generally, that when two motor carriers propose to consolidate or merge certificates of public convenience and necessity into one ownership they shall present an application to the commission which shall notify interested parties and hold a public hearing. The statute then provides: "If, after such hearing, the commission finds that the transaction proposed will be consistent with the public interest and does not unduly restrict competition and that the applicant is fit, willing, and able to properly perform the proposed service, it may enter an order approving and authorizing such consolidation, merger, purchase, lease, operating contract, or acquisition of control of the properties, or any part thereof, certificates or permits or the whole, or any part thereof, upon such terms and conditions as it shall find to be just and reasonable; Provided, that if any of the certificates or permits proposed to be merged, consolidated, transferred, or leased are dormant the commission may approve an application for consolidation, merger, transfer, or lease only upon proof of and a finding that such merger, consolidation, transfer, or lease is or will be required by the present and future public convenience and necessity, in the same manner as provided in section 75-311; and provided further, that if the proposed merger, consolidation, transfer, or lease of the certificates or permits will permit or result in a new or different service or operation as to territorial scope than that which is or may be rendered or engaged in by the respective parties, or, as to passenger motor carriers, will tend to enlarge competition over that then existing, the...