State ex rel. North Carolina Utilities Commission v. Carolina Coach Co., 451
| Decision Date | 04 March 1964 |
| Docket Number | No. 451,451 |
| Citation | 261 N.C. 384,134 S.E.2d 689 |
| Parties | STATE of North Carolina ex rel. NORTH CAROLINA UTILITIES COMMISSION v. CAROLINA COACH COMPANY and Queen City Coach Company. |
| Court | North Carolina Supreme Court |
Edward B. Hipp, Raleigh, for the Commission.
Allen, Steed & Pullen and Joyner & Howison, Raleigh, for respondents Carolina Coach Co. and Queen City Coach Co.
The judge below concluded that the Commission erred (1) in holding that the proceeding before it was tantamount to a hearing upon an application for a franchise and that the proposed through service should not be allowed in the absence of a showing by Carolina and Queen of 'public convenience and necessity' or the essential elements thereof, such as public demand and positive need for the service, and (2) in that the findings of the Commission that the proposed service is 'unduly competitive' and 'not in the public interest' are not supported by competent, material and substantial evidence.
The granting of franchise authority for the operation of buses over the highways of North Carolina, for the transportation of persons and property for compensation, must be predicated upon public convenience and necessity. The burden of proof is upon the applicant for franchise authority to show public convenience and necessity. G.S. § 62-121.52 ().
The rendering of the new service by Carolina and Queen under the Lease of Equipment Agreement does not involve any new or additional franchise. It is perfectly clear from all of the evidence, and appellant does not contend otherwise, that the contracting parties propose to maintain this service in connection with their already established franchises.
The Lease of Equipment Agreement and the proceeding before the Commission with respect thereto were respectively executed and instituted pursuant to Rule 14 of the rules and regulations of the Commission promulgated under authority of G.S. § 62-121.45 (now G.S. § 62-31), entitled 'Interchange of Equipment,' which is as follows:
'Common carriers may interchange equipment for the purpose of providing through service without change of passengers from one bus to another, but no such interchange agreement shall become effective unless the parties thereto shall file a true copy thereof with the Commission and give notice thereof to all common carriers operating to, from or through the interchange point at least twenty (20) days prior to the effective date of such agreement; provided, the Commission may upon its own motion, or upon protest, suspend or disapprove the agreement for reasons considered to be in the public interest.'
The carriers have legal right to contract inter se, and the law encourages cooperation and agreements between them respecting their service to the public. G.S. § 62-121.64(a) (now G.S. § 62-146); State ex rel. Utilities Commission v. Carolina Coach Co., 260 N.C. 43, 132 S.E.2d 249. And Rule 14 authorizes carriers to interchange equipment 'for the purpose of providing through service without change of passengers from one bus to another'--the very purpose for which the Carolina-Queen agreement was made. Affirmative approval of the agreement by the Commission is not required by Rule 14. The only conditions precedent to putting the agreement into effect is that 20-days notice be given all carriers 'operating to, from or through the interchange point,' and that the agreement be filed with the Commission. There is no contention that Carolina and Queen failed to comply with these conditions. '* * * (T)he Commission may on its own motion, or upon protest, suspend or disapprove the agreement for reasons considered to be in the public interest.' This places no burden on the parties to the interchange agreement. The presumption is that through service is in the public interest. In the absence of 'reasons,' based on evidence in the record, that the agreement is detrimental to the public interest, the agreement may not be suspended or disapproved.
The Commission's order is erroneous in that it places the burden on Carolina and Queen to show an affirmative public demand and need for the through service. The order declares, in effect, that where through service, without change of buses, is proposed by interchange of equipment between carriers, it is tantamount to an application for new franchise authority if the proposed service is competitive with another carrier, and to be permitted to institute such service the interchanging carriers must show public convenience and necessity. Rule 14 is not susceptible of such construction.
The sole issue before the Commission was whether the public interest would be adversely affected by the proposed service. Transportation of passengers by motor carriers for compensation is a business affected with a public interest. G.S. § 62-121.44 (now G.S. § 62-2). The Commission concluded that the proposed service could be 'unduly competitive' and would tend 'to create an unsavory situation between carriers.' These findings if supported by competent, material and substantial evidence, are binding on appeal. State ex rel. Utilities Commission v. Champion Papers, Inc., 259 N.C. 449, 130 S.E.2d 890; State ex rel. Utilities Commission v. Ryder Tank Line, Inc., 259 N.C. 363, 130 S.E.2d 663; State ex rel. Utilities Commission v. Southern Ry. Co., 256 N.C. 359, 124 S.E.2d 510. The Utilities Commission, and not the courts, is authorized to regulate utilities. State ex rel. Utilities Commission v. Champion Papers, Inc., supra.
There is no public policy condemning competition as such in the field of public utilities; the public policy only condemns unfair or destructive competition. G.S. § 62-121.44. 'The public is best served in many circumstances where destructive competition has been removed and the utility is a regulated monopoly. ' Whether there shall be competition in any given field and to what extent is largely a matter of policy committed to the sound judgment and discretion of the commission. The commission must maintain a reasonable balance to see that the public is adequately served and at the same time see that the public and the public utilities involved are not prejudiced by the effects which flow from excessive competition brought about by excessive services. 73 C.J.S. Public Utilities § 42, p. 1099; * * * .'' State ex rel. Utilities Commission v. Carolina Coach Co., supra. The judgment and discretion of the Commission in this regard must, however, be based on facts.
We do not find any evidence in the record tending to show that the services proposed by Carolina and Queen will result in unfair and destructive competition. Competition will be involved to be sure, and the competitive position of Carolina and Queen will be improved...
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