State ex rel. Inman Freight System v. Public Service Commission, W-K

• Citation: 600 S.W.2d 650
• Decision Date: 09 June 1980
• Docket Number: W-K,No. WD,WD
• Court: Missouri Court of Appeals
• Parties: STATE ex rel. INMAN FREIGHT SYSTEM, INC., and Sanders Truck Line, Inc., Relators-Respondents, v. PUBLIC SERVICE COMMISSION of the State of Missouri, Respondent, andWarehouse & Delivery Service, Inc., Intervenor-Respondent-Appellant. 30854.

Page 650

600 S.W.2d 650

STATE ex rel. INMAN FREIGHT SYSTEM, INC., and Sanders Truck Line, Inc., Relators-Respondents, v. PUBLIC SERVICE COMMISSION of the State of Missouri, Respondent and W-K Warehouse & Delivery Service, Inc. Intervenor-Respondent-Appellant.

No. WD 30854.

Missouri Court of Appeals, Western District.

June 9, 1980.

W. R. England, III, Jefferson City, for W-K Warehouse & Delivery service, inc.

Paul W. Phillips, Arthur L. Conover, Jefferson City, for Missouri Public Service Commission.

Herman W. Huber, Jefferson City, for Inman Freight System, Inc., and Sanders Truck Line, Inc.

Before WASSERSTROM, C. J., Presiding, and PRITCHARD and KENNEDY, JJ.

WASSERSTROM, Chief Judge.

The question for determination here is whether the Public Service Commission properly granted a certificate of public convenience and necessity as a common carrier to W-K Warehouse & Delivery Service, Inc. (W-K). On a petition for review, the circuit court held in the negative. We reverse.

W-K is solely owned by its president, Carl H. Kastner. Kastner has been engaged in the trucking industry for twenty-five years, twenty of which was as a truck driver. He began his own trucking business in 1971, and the business was incorporated in 1974. The corporation at the time of the hearing before the Commission owned four trucks, had other trucks readily availably to it for leasing, and operated a warehouse in Crystal City, Missouri.

This company was incorporated upon a very thin financial structure. The initial capital consisted of only $500, with a stockholder loan on the balance in August 1975 was $23,021. In 1975 the company showed a profit of $1,476. However, the retained earnings accounted showed a deficit of $1,862, and the liabilities of the company exceeded its assets by $1,362. It should be noted, however, that the net worth of the company would be positive except for accumulated depreciation in the amount of $27,051.

Prior to 1976, W-K conducted its trucking operation in the St. Louis commercial zone and in the area to the south along Interstate Highway 55. Operations within the St. Louis commercial zone are exempt from regulation and need no certificate of public convenience and necessity from the Public Service Commission. Also exempt is all transportation by trucks of less than 6,000 pounds per vehicle. However, W-K did in fact, and with some regularity, operate on Highway 55 south of St. Louis vehicles which exceeded the 6,000 pound exemption. This resulted in a citation from the Commission to W-K in 1975 and eventuated in the payment of an agreed fine of $200. ¹

On October 20, 1975, W-K filed the present application seeking authority to operate over irregular routes within an area comprised of the St. Louis commercial zone and extending from the limits of that zone southward through a corridor five miles on each side of Interstate 55 to the intersection of that highway and Missouri State Highway 32. Applications to intervene were filed by protesting truck lines, including, among others, Inman Freight System, Inc. (Inman), Sanders Truck Line, Inc. (Sanders) and Truck Transport Inc. (Truck Transport). Those applications for intervention were granted and hearings commenced in January 1976. During the course of the January hearings, Kastner took the stand as a witness and freely admitted that despite the citation which had been issued by the Commission and the fine paid by him, he was continuing to operate trucks in excess of 6,000 pounds south of the exempt St. Louis commercial zone.

At that point, an intermission in the hearing occurred, and W-K filed an application for temporary permit to operate under the pending application. The Commission declined to grant such authority, in large part because of the existing violations of law by W-K; and as part of the order denying the application for temporary authority, the Commission ordered W-K to cease and desist from any further violation. When the hearings resumed in April 1976, Kastner again took the stand and testified that W-K had discontinued any shipments outside of the exempt category. This testimony was confirmed by Mr. Gary Sublett, Chief of Enforcement of the Missouri Public Service Commission.

The affirmative testimony presented by W-K in support of its application went generally to the need of business people in the area desired to be served by W-K for deliveries on the same day on which an order was made for shipment. A considerable number of the W-K customers testified to the essential nature of this service so far as their respective businesses were concerned. These witnesses also testified that no other common carriers offered the same service. They also testified to a considerable amount of delays by other carriers, damages to shipments which occurred on the lines of other carriers, and unsatisfactory handling of claims by these other carriers. These witnesses testified uniformly that they had no such complaints with respect to the service offered to them by W-K.

The witnesses on behalf of the intervenor-protestants testified that it was impractical and uneconomical for them to offer "same-day" service but that the service offered by them was usually over night that is to say, the shipment was delivered the day after the order was received. These witnesses testified that the few delays testified to by W-K witnesses constituted rare exceptions, and that the number of damaged shipments constituted only a very small percentage of the total volume carried by these carriers. Inman testified that the business done by it in the area sought to be served by W-K constituted approximately 10% of the total Inman volume, and Sanders testified that its volume of business in the same area constituted approximately 19% of its total volume. Both of those carriers and also Truck Transport testified that a granting of the W-K application would result in a diversion of business from them which would be detrimental to the protestants.

After considering all of the evidence, the Commission found that there was a public need for the services sought to be provided by W-K:

"The Commission finds that the service which is convenient and necessary for witnesses supporting the application is same day service. This service is not now satisfactorily provided by the carriers presently holding authority to serve the area in question. Some same day shipments required by those in support of the application cannot be carried on vehicles of 6,000 pounds or 9,000 pounds gross weight or under. * * * In this particular case, the presently certificated carriers do not provide same day service from the St. Louis commercial zone to the area desired to be served by Applicant. The present carriers are not providing the service then that is sufficiently convenient and necessary to meet the requirements of the shippers and receivers serving the areas desired to be served by the Applicant. The commission finds that the manner of providing next day or day after service by the presently certificated carriers is satisfactory. In other words, the Commission does not find that the few alleged instances of delay or difficulties with claims justify the granting of additional authority. However, the failure to provide the kind of carriage demanded by shippers, as opposed to the failure to supply that carriage in a satisfactory manner serves as the basis for this Commission's finding that the public convenience and necessity will be served by the addition of another carrier serving between the St. Louis commercial zone and the other territory desired to be served by the Applicant."

The Commission further held that W-K was qualified to perform the services in question. And the Commission still further found that denial of certification to W-K would not be justified on the basis of any adverse effect to the protestants:

"In reaching this decision the Commission finds that while there may be some negative effect on existing carriers, the effect, because of the limiting of the authority as hereinafter set out, will be outweighed by the added convenience to the shipping public and the necessity to provide the service requested."

The Commission therefore granted the application, except that it did not agree to the interlining of W-K with other carriers. The Commission further granted interstate authority to W-K, within the limits of the...