State ex rel. Utilities Commission v. Atlantic Coast Line R. Co.

• Decision Date: 28 March 1951
• Docket Number: No. 305,305
• Citation: 233 N.C. 365,64 S.E.2d 272
• Court: North Carolina Supreme Court
• Parties: STATE ex rel. UTILITIES COMMISSION v. ATLANTIC COAST LINE R. CO.

Page 272

64 S.E.2d 272

233 N.C. 365

STATE ex rel. UTILITIES COMMISSION v. ATLANTIC COAST LINE R. CO.

No. 305

Supreme Court of North Carolina.

March 28, 1951

Atty. Gen. Harry McMullan and Asst. Atty. Gen. John Hill Paylor for the State on relation of North Carolina Utilities Commission, appellee.

Charles Cook Howell, Wilmington, and Murray Allen, Raleigh, for Atlantic Coast Line R. Co., appellant.

DEVIN, Justice.

The application of the defendant Railroad Company filed with the Utilities Commission was not for the purpose of obtaining authority to close its railroad station at Stokes, but to close the agency, that is to dispense with the services of a local agent at that station, for the reasons set out in the application.

The facts were not controverted. The question presented to us for decision is whether these facts afford substantial evidence, in view of the entire record, which would support the conclusion reached by the court below that public convenience and necessity warranted the continued operation of the agency, and that the order of the Utilities Commission denying application for discontinuance of this service was reasonable and just.

Stokes is a village of 325 inhabitants, without manufacturing or processing industry, situated in an agricultural community, traversed by paved roads. There are only six business establishments, and these are principally devoted to merchandizing, including the handling and distributing of commercial fertilizers. Railroad freight transportation service is afforded by the defendant's branch line from Parmalee to Washington, North Carolina. No passenger service is maintained. Parmalee is seven miles northwest and Washington is sixteen miles southeast. It appeared that for the twelve months' period ended September 30, 1949, two carloads were shipped from Stokes and ninety received. Of those received seventy-two contained fertilizer or fertilizer material. It was admitted, and so found by the Utilities Commission, that after giving the station of Stokes credit for all railroad revenues derived from shipments originating and received at that station, the loss for the year was $572.90. The expense incurred for the salary and expense of the local agent, which under wage agreement the defendant could not modify, was $3,339.14 per annum. The amount of time necessary for the performance of all the duties of an agent at this station would not exceed on an average thirty minutes per day. There was also uncontradicted evidence that in spite of effort over a period of ten years there had been no increase in freight shipments to and from this station, and that there was no possibility of expanding the railroad business or earnings there, and that on the other hand in small communities like this transportation by rail increasingly suffered from competition with motor vehicles operating over improved highways.

It also appeared that the absence of a local agent at Stokes would not affect freight shipments to and from that station. The same freight service would be available. The same freight trains would run stopping on same schedules at Stokes. The only difference would be that incoming freight must be prepaid, and that notice of arrival would be mailed from Washington instead of Stokes, and that waybills and receipts for freight from Stokes would be handled by the train conductor. Less than carload shipments would be unloaded and deposited in the station building, and consignee notified. It also appeared that a large proportion of freight shipments to Stokes, particularly fertilizer, now arrives prepaid.

After notice of defendant's application was given, only one person appeared in opposition, Mr. W. F. Stokes of the firm of Stokes & Congleton, merchants, who received sixty-six of the ninety cars shipped to Stokes station during the year referred to. Mr. Stokes expressed the opinion that there was public need for the continuance of the agency, and that handling carload and other freight shipments without a local agent would cause inconvenience and sometimes delay, and that if the agency were discontinued it would result in his firm's transferring its freight business to motor carriers.

The Utilities Commission was of opinion that notwithstanding the applicant sustained a loss of $572.90 during the twelve months used as a basis this was not a sufficient showing to deprive the community of agency service to which it had been accustomed, and that if the agency were discontinued there would be no adequate substitute as there were no regular truck routes operating into Stokes, and that handling freight through other agencies and using train conductors would be unsatisfactory from the standpoint of the community. It was concluded that the public convenience and necessity of the agency at Stokes was sufficiently shown to warrant the continued operation of the agency. The application of the defendant was accordingly denied. Defendant filed numerous exceptions to the order of the Commission, and, among others, that there was no substantial evidence that public convenience and necessity warranted continuance of the agency at Stokes, or that the requirement that applicant continue to maintain such agency at a loss, under the circumstances here disclosed, was reasonable and just.

These exceptions having been overruled and petition to rehear denied, G.S. § 62-26.6, defendant appealed to the Superior Court where the order of the Utilities Commission was affirmed. That court in affirming the Commission's order expressed the view that the fact that there were no regular motor carrier routes into the community and the absence of an adequate substitute for the service now rendered by the applicant bore 'heavily upon the question of public convenience and necessity and upon the reasonableness and justice of the order entered by the Utilities Commission.'

By statute, G.S. § 62-26.10, upon appeal the orders made by the Utilities Commission 'shall be prima facie just and reasonable,' Utilities Commission v. Great Southern Trucking Co., 223 N.C. 687, 28 S.E.2d 201, but this does not preclude the appellant from showing that the evidence offered rebuts the prima...