State ex rel. Utilities Commission v. Southern Ry. Co., 457

• Citation: 254 N.C. 73,118 S.E.2d 21
• Decision Date: 03 February 1961
• Docket Number: No. 457,457
• Court: North Carolina Supreme Court
• Parties: STATE of North Carolina ex rel. UTILITIES COMMISSION, and State of North Carolina, City of Durham, a municipal corporation, Duke University, Erwin Mills, Incorporated, County of Durham, Liggett & Myers Tobacco Company, Mrs. Mary Trent Semans, the Durham Chamber of Commerce, the American Tobacco Company, Research Triangle Institute, the Durham Merchants Association, Intervenors, v. SOUTHERN RAILWAY COMPANY.

Page 21

118 S.E.2d 21

254 N.C. 73

STATE of North Carolina ex rel. UTILITIES COMMISSION, and State of North Carolina, City of Durham, a municipal corporation, Duke University, Erwin Mills, Incorporated County of Durham, Liggett & Myers Tobacco Company, Mrs. Mary Trent Semans, the Durham Chamber of Commerce, the American Tobacco Company, Research Triangle Institute, the Durham Merchants Association, Intervenors, v. SOUTHERN RAILWAY COMPANY.

No. 457

Supreme Court of North Carolina.

Feb. 3, 1961

Atty. Gen. T. W. Bruton and Asst. Atty. Gen. F. Kent Burns, for the State.

Claude V. Jones, Durham, for City of Durham, appellee.

E. C. Bryson, Durham, for Duke University, appellee.

R. P. Reade, Durham, for County of Durham, appellee.

A. H. Graham, Jr., Durham, for Erwin Mills, Inc., and Liggett & Myers Tobacco Co., appellees.

E. C. Brooks, Jr., Durham, for Mrs. Mary Trent Semans and the Durham Merchants Ass'n, appellees.

Victor S. Bryant, Durham, for the Durham Chamber of Commerce and American Tobacco Co., appellees.

Victor S. Bryant, Jr., Durham, for Research Triangle Institute, appellee.

Joyner & Howison, Raleigh, Arthur J. Dixon and Earl E. Eisenhart, Washington, D. C., for defendant, appellant.

BOBBITT, Justice.

Under G.S. § 62-39, the Commission has power to require all transportation companies 'to establish and maintain all such public service facilities and conveniences as may be reasonable and just.' Also, see G.S. §§ 62-30, 62-37, 62-46, 62-48 and 62-74.

A 1933 Statute, Public Laws of 1933, c. 307, § 32, now codified as G.S. § 62-96, provides: 'Upon finding that public convenience and necessity are no longer served, or that there is no reasonable probability of a utility realizing sufficient revenue from the service to meet its expenses, the Commission shall have power, after petition, notice and hearing, to authorize by order any utility to abandon or reduce its service or facilities.'

Another 1933 statute, Public Laws of 1933, c. 528, § 1, amended C.S. § 3481 by providing, in pertinent part: 'The Corporation Commission, or its successor, however, shall have and it is hereby vested with the power in any case in which the convenience and necessity of the traveling public do not require the running of passenger trains upon its railroad to authorize such railroad company to cease the operation of passenger trains as long as the convenience and necessity of the traveling public shall not require such operation.' C.S. § 3481, as amended, is now codified as G.S. § 62-47.

A public service corporation has no legal right to discontinue an established service unless and until the Commission authorizes it to do so. Sweetheart Lake, Inc., v. Carolina Power & Light Co., 211 N.C. 269, 189 S.E. 785. The hearing, after notice, was on Southern's petition that the Commission authorize the discontinuance of passenger trains Nos. 13 and 16.

The power conferred by G.S. § 62-96 and G.S. § 62-47 to authorize such discontinuance indicates the General Assembly intended that the Commission exercise this power in large measure according to its judgment and discretion. Even so, an order allowing or denying a petition for such continuance is subject to judicial review and reversal if it is 'arbitrary or capricious' or if the essential findings of fact on which it is based are 'unsupported by competent, material and substantial evidence.' G.S. § 62-26.10. However, G.S. § 62-26.10 provides that '(u)pon any appeal to the superior court, the rates fixed, or any rule, regulation, finding, determination, or order made by the Commission * * * shall be prima facie just and reasonable.'

In North Carolina Utilities Comm. v. Kinston, 221 N.C. 359, 20 S.E.2d 322, it was held that protestants who were not parties to the proceeding before the Commission had no right to appeal from the Commission's order authorizing the discontinuance of designated trains. The appeal presented no question as to the validity of the Commission's order.

In State ex rel. North Carolina Utilities Comm. v. Atlantic Coast Line R. Co., 233 N.C. 365, 64 S.E.2d 272, 274, the railroad's petition was for authority to close its agency at Stokes, that is, to dispense with the services of a local agent at the Stokes station. Railroad freight transportation service was afforded Stokes by a branch line. Stokes had no passenger service. The railroad did not seek authority to close its freight station at Stokes or to discontinue its freight service. As stated in the opinion: '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.' In reversing the Commission's order, this Court said: 'We think the finding of the Utilities Commission affirmed by the court below is not supported by material and substantial evidence, and that the order denying application for discontinuance of agency service at Stokes under the evidence did not measure up to the standard of reasonableness and justice required by the statute.' Two excerpts from the opinion of Devin, J. (later C. J.), are quoted below:

'The power conferred by statute upon the Utilities Commission to require transportation companies to maintain substantial service to the public in the performance of an absolute duty will not be denied even though the service may be unremunerative when singled out and related only to a particular instance or locality, if the loss be viewed in relation to and as a part of the over-all operations of transportation, rather than as incidental and collateral thereto.

'Questions of convenience to individuals and to the public find their limitations in the criterion of reasonableness and justice. No absolute rule can be set up and applied to all cases. The facts in each case must be considered to determine whether public convenience and necessity require the service to be maintained or permit its discontinuance. The benefit to the one of the abandonment must be weighed against the inconvenience to which the other may be subjected. The question to be decided is whether the loss resulting from the agency is out of proportion to any benefit to an individual or the public.'

Applying these legal principles, this Court, in State ex rel. Utilities Comm. v. Atlantic Coast Line R. Co., 235 N.C. 273, 69 S.E.2d 502, held the evidence sufficient to support the Commission's order denying the railroad's petition for authority to discontinue agency service at Lucama; and, in State ex rel. Utilities Commission v. Atlantic Coast Line R. Co., 238 N.C. 701, 78 S.E.2d 780, 783, this Court held the evidence sufficient to support the Commission's order denying the railroad's petition for authority 'to change Fremont, North Carolina, from a regular stop to a flag stop for its passenger trains 48 and 49.'

'The doctrine of convenience and necessity has been the subject of much judicial consideration. No set rule can be used as a yardstick and applied to all cases alike. This doctrine is a relative or elastic theory rather than an abstract or absolute rule. The facts in each case must be separately considered and from those facts it must be determined whether or not public convenience and necessity require a given service to be performed or dispensed with. * * * The convenience and necessity required are those of the public and not of an individual or individuals.' Illinois Cent. R. Co. v. Illinois Commerce Commission, 397 Ill. 323, 74 N.E.2d 545. Quoted with approval in State ex rel. North Carolina Utilities Commission v. Casey, 245 N.C. 297, 302, 96 S.E.2d 812, and in cases cited therein.

In Utilities Commission of North Carolina v. Great Southern Trucking Co., 223 N.C. 687, 690, 28 S.E.2d 201, 203, Stacy, C. J., said: 'It is to be remembered that what constitutes 'public convenience and necessity' is primarily an administrative question with a number of imponderables to be taken into consideration, e. g., whether there is a substantial public need for the service; whether the existing carriers can reasonably meet this need, and whether it would endanger or impair the operations of existing carriers contrary to the public interest. Precisely for this reason its determination by the Utilities Commission is made not simply prima facie evidence of its validity, but 'prima facie just and reasonable."'

'Necessity means reasonably necessary and not absolutely imperative. * * * The convenience of the public must not be circumscribed by holding the term 'necessity' to mean an essential requisite. * * * It is necessary if it appears reasonably requisite, is suited to and tends to promote the accommodation of the public.' Mulcahy v. Public Service Commission, 101 Utah 245, 117 P.2d 298, 300. Quoted with approval in Seaboard Air Line R. Co. v. Commonwealth, 193 Va. 799, 71 S.E.2d 146.

In determining whether a railroad should be required to continue to operate trains, these criteria are controlling: '(1) The character and population of the territory served; (2) the public patronage or lack of it; (3) the facilities remaining; (4) the expense of operation as compared with the revenue from it; and (5) the operations of the carrier as a whole.' Southern Railway Company v. Commonwealth, 196 Va. 1086, 86 S.E.2d 839, 841; Annotation, 10 A.L.R.2d 1143 et seq., and cases cited. As to the fifth criterion, see Railroad Connection Case, 137 N.C. 1, 15, 49 S.E. 191, affirmed Atlantic Coast Line R. Co. v. North Carolina Corporation Comm., 206 U.S. 1, 27 S.Ct. 585, 51 L.Ed. 933.

In 10 A.L.R.2d 1143, this statement appears: 'The great weight of the decisions, both court and commission, is to the effect that, in considering the question whether or not a public utility company should be compelled to continue the operation of a branch line, the...