State ex rel. Puget Sound Nav. Co. v. Department of Transp. of Wash.

• Citation: 33 Wn.2d 448,206 P.2d 456
• Decision Date: 13 May 1949
• Docket Number: 30568.
• Parties: STATE ex rel. PUGET SOUND NAVIGATION CO. et al. v. DEPARTMENT OF TRANSPORTATION OF WASHINGTON et al.
• Court: United States State Supreme Court of Washington

206 P.2d 456

33 Wn.2d 448

STATE ex rel. PUGET SOUND NAVIGATION CO. et al. v. DEPARTMENT OF TRANSPORTATION OF WASHINGTON et al.

No. 30568.

Supreme Court of Washington, En Banc.

May 13, 1949

Proceeding by the State on relation of Puget Sound Navigation Company and C. R. Lonergan, agent, against the Department of Transportation of Washington and Paul Revelle, director of such department, for review of an order of the department fixing rates, wherein Northwest Washington Community Council and others intervened. The proceeding was consolidated with a review, taken by Northwest Greyhound Lines, of the order so far as it pertained to such carrier. From a judgment affirming the rate order, except as it applied to Northwest Greyhound Lines, Inc., Pudget Sound Navigation Company appeals.

Reversed and remanded with directions.

SCHWELLENBACH and MALLERY, JJ., dissenting.

Appeal from Superior Court, Thurston County; John M. Wilson, judge.

Bogle Bogle & Gates, Edward G. Dobrin and M. B. Crutcher, all of Seattle, and Hart, Spencer, McCulloch & Rockwood, and Fletcher Rockwood, all of Portland, Ore., for appellants.

Smith Troy, Atty. Gen., Jess N. Rosenberg, of Olympia, and E. K Murray, of Tacoma, for respondents.

Hile, Hoof & Shucklin, of Seattle, paid an appearance fee, but did not file a brief.

BEALS Justice.

The appeal in this case brings Before us for review a judgment of the superior court affirming, with one exception, an order of the department of transportation of Washington, dated July 3, 1947, entered in departmental cause No. T-8100, which order fixed rates to be paid by patrons of appellant Puget Sound Navigation Company (which will hereafter be referred to as the company or appellant), an intrastate common carrier engaged in the business of transportation of passengers, vehicles, and freight.

The judgment appealed from was entered in a proceeding instituted by the company Before the superior court, which brought the order of the department Before that court for review.

Northwest Greyhound Lines, Inc., a corporation, was also doing business as a common carrier, operating motor busses which were transported across Puget Sound by appellant's vessels. This corporation did not appear Before the department, but, feeling aggrieved by the action of the department above referred to, also brought the order Before the superior court for review, contending that, as to it, the order was void because entered without due process of law.

The two matters were consolidated for hearing Before the superior court, which upheld this contention of Northwest Greyhound Lines, Inc., and reversed the order as to that company. From this portion of the judgment of the superior court, respondent department prosecuted no appeal.

On the hearing Before the department, the following persons represented the department: Paul Revelle, director; Joseph Starin, chief examiner; F. L. Jager, rate expert and chief of tariff section, and Stewart Krieger, chief accountant. The department was also represented by Frederick J. Lordan, Esquire, and Frank W. Foley, Esquire, members of the staff of the attorney general.

Appellant Puget Sound Navigation Company was represented by Fletcher Rockwood, Esquire (of Hart, Spencer, McCulloch and Rockwood), and Edward G. Dobrin, Esquire (of Bogle, Bogle and Gates), its counsel, and by Captain Alex M. Peabody, its president.

Several interveners appeared Before the department, including Northwest Washington Community Council, by Hile, Hoof and Shucklin, its attorneys; Masters, Mates and Pilots, and Inlandboatmen's Unions, by Captain John M. Fox, business manager, Clifford D. O'Brien, Esquire, economic counsel, and Carl Luckerath, Esquire, attorney; Bremerton Central Labor Council, by John C. Merkel, Esquire, its attorney; Peninsula Tariff Bureau, by H. D. Williams, Esquire, traffic advisor; Boilermakers' Local 104, by W. G. Nadeau, and R. James Malone, delegates; Sexton Auto Freight, by J. R. Sexton, its owner, who also represented the Bremerton Chamber of Commerce; Vashon-Maury Island residents, by Charles H. Law; Tacoma Chamber of Commerce, by Donald Wallace, its traffic manager, and Bremerton Chamber of Commerce, by Ralph Purvis, Esquire, its attorney.

Northwest Washington Community Council and other groups appeared Before the superior court in support of the departmental order, and Before this court are named as additional respondents.

Before the superior court, the respondent department was represented by the attorney general and members of his staff, and by E. K. Murray, Esquire, special assistant attorney general.

C. R. Lonergan, the company's 'tariff agent,' was also a party Before the superior court and is an appellant Before this court, but, in this opinion, we shall refer to the company as though it were the sole appellant.

Appellant is a Nevada corporation, maintaining an office at Carson City, Nevada, but conducting its business from an office in Seattle. For some years, it has engaged in business in the state of Washington as a common carrier, within the purview of Rem.Rev.Stat. § 10339 et seq., pursuant to a certificate of public convenience and necessity granted by the department. It is engaged in both intrastate and interstate business, operating boats for the carriage of passengers, vehicles, and freight between many points on Puget Sound, and also between Seattle and Victoria, British Columbia. It conducted a considerable intrastate freight business, operating a fleet of twenty-two vessels and two barges, and, also, under the name of 'Bremerton Transit Lines,' operated ten motor coaches in connection with its ferry service between Seattle and Port Orchard, Bremerton, and various points on Bainbridge Island.

In its proceeding, identified by department No. 7040, the then department of public service, the predecessor of the department of transportation, conducted extensive investigations concerning the company's business and, by an order bearing date September 22, 1937, prescribed intrastate rates to be charged for the services rendered by the company, and other ferry companies, these rates being referred to in the record in the case at bar as the '7040 rates.'

In fixing the rates above referred to, the department considered all of the company's operations as one transportation system, engaged in serving the public, and did not consider each route as an independent operation.

The order referred to contains the following paragraph regarding the Puget Sound transportation situation:

'The transportation problems of the Puget Sound Area generally, are not the problems of any particular locality or of any particular route. Our habit of moving about freely and frequently and the enlargement of the situs of our business and social activities make the resident of Bellingham neighbor to the citizen of Bremerton, and the dairyman at Sequim. All of us need adequate service in all parts of the Sound country. One may travel the Vashon route today, use the Bremerton service tomorrow, the Ballard-Ludlow route another time, and journey to Orcas Island for the week-end. The Vashon Island resident who works in Seattle, or sells his produce in its markets is vitally interested in the development of all the territory which both supports and is dependent upon the metropolis. Whether he realizes it or not he is deeply concerned with the problem of promoting and maintaining adequate transportation facilities in all parts of the Sound country. No one community or area lives in, of, and by itself. This truth is recognized every day when we use general tax money to build expensive roads and bridges in every part of the land without regard to the amounts paid into the Treasury by the people and territory immediately affected.'

The description also applied to the company's boats plying between Seattle and Victoria, in so far as the intrastate business of that route was concerned.

During the late war, the business of the company greatly increased, and the company voluntarily, for a definite period only, reduced its charges for transportation, but the 7040 rates were again put into effect as of January 1, 1947.

During the year 1945, the company transported, in the course of its intrastate operations, 10,160,164 passengers and 1,622,246 automobile units. During the year 1946, passengers carried numbered 7,760,456, and automobile units 1,947,037. It appears that, during the year 1938, the total mileage of the transportation system amounted to 721,177 miles, which figure, during the year 1946, increased to 1,156,359 miles.

After the close of the war, the company's business declined, more particularly in the carriage of passengers, and, at the same time, the operating expenses increased.

At the beginning of the year 1947, the company found the volume of its business declining, while its operating expenses were still increasing, and, accordingly, during January, 1947, filed with the department a new tariff containing rates for passenger and motor vehicle transportation, and for other miscellaneous services over its intrastate routes, the rates in this tariff being approximately thirty per cent higher than the 7040 rates previously in effect.

February 14, 1947, the department, upon complaints by several civic organizations, and upon its own motion, pursuant to Rem.Rev.Stat. § 10422, filed with its appropriate officer a complaint alleging the recent filing of new rates by the company and its tariff agent, C. R. Lonergan, who were made parties respondent in the proceeding.

The complaint alleged that, by the January, 1947, tariff, the company had permanently increased its rates by approximately thirty per cent; that the rates for carriage of passengers vehicles, and freight, and the rules, regulations,...