State ex rel. Utilities Commission v. Carolina Coach Co., 528

• Decision Date: 29 March 1967
• Docket Number: No. 528,528
• Citation: 153 S.E.2d 461,269 N.C. 717
• Court: North Carolina Supreme Court
• Parties: STATE of North Carolina, ex rel. UTILITIES COMMISSION v. CAROLINA COACH COMPANY, Carolina Scenic Stages, Greyhound Lines, Inc., QueenCity Coach Company, Seashore Transportation Company, Inc., Smoky MountainStages, Inc., Carolina Delivery Service Company, Inc., Overnite TransportationCompany, andThurston Motor Lines, Inc.

Page 461

153 S.E.2d 461

269 N.C. 717

STATE of North Carolina, ex rel. UTILITIES COMMISSION v. CAROLINA COACH COMPANY, Carolina Scenic Stages, Greyhound Lines, Inc., QueenCity Coach Company, Seashore Transportation Company, Inc., Smoky MountainStages, Inc. Carolina Delivery Service Company, Inc., Overnite TransportationCompany, andThurston Motor Lines, Inc.

No. 528.

Supreme Court of North Carolina.

March 29, 1967.

Edward B. Hipp, Raleigh, for North Carolina Utilities Commission, appellee.

Boyce, Lake & Burns, Raleigh, and Schnader, Harrison, Segal & Lewis, Philadelphia, Pa., for Leaseway Transportation Corp. and United Parcel Service, Inc., applicants, appellees.

Allen, Steed & Pullen, Joyner & Howison, Raleigh, Newsom, Graham, Strayhorn & Hedrick, Durham, Ward & Tucker, New Bern, McCleneghan, Miller & Creasy, Charlotte, Bunn, Hatch, Little & Bunn, Raleigh, and Thomas W. Steed, Jr., Raleigh, for protestants, appellants.

BOBBITT, Justice.

Caro-Line, a North Carolina corporation, was chartered on July 8, 1964. It was authorized by its charter to engage in, among other things, the transportation of freight, and to purchase, acquire, hold and sell property. The one hundred shares of stock authorized by its charter were issued to and are now owned by Leaseway.

The Commission by order of September 18, 1964, authorized the sale and transfer by Ed J. Thomas, d/b/a AAA Delivery Service of Greensboro, N.C., of his intrastate operating rights under Permit No. P--168 to Caro-Line. Exhibit A, attached to said order, defined 'Contract Carrier Authority' under Permit No. P--168 as follows: 'Transportation under individual bilateral contract with particular shippers of Group 1, general commodities, and Group 15, retail store delivery service, also manufactured furniture between factories within the State and stores and warehouses of Sears, Roebuck and Company within the State, over irregular routes, between all points and places in the State of North Carolina.'

On May 10, 1965, Leaseway agreed to sell, and United agreed to buy (upon certain conditions), said one hundred shares (all) of the capital stock of Caro-Line.

G.S. § 62--111(a) provides: 'No franchise now existing or hereafter issued under the provisions of this chapter other than a franchise for motor carriers of passengers shall be sold, assigned, pledged or transferred, Nor shall control thereof be changed through stock transfer or otherwise, or any rights thereunder leased, nor shall any merger or combination affecting any public utility be made through acquisition or control by stock purchase or otherwise, except after application to and written approval by the Commission, Which approval shall be given if justified by the public convenience and necessity. Provided, that the above provisions shall not apply to regular trading in listed securities on recognized markets.' (Our italics.)

Protestants assign as error the failure to find that the sale and transfer by Leaseway to United of the stock of Caro-Line (1) is contrary to the public interest and (2) is not justified by the public convenience and necessity.

Under the proposed sale and transfer, United does not acquire, in its own name and right, the title to Permit No. P--168. Upon consummation thereof, United, as sole stockholder, acquires corporate control of Caro-Line and its assets, including its presently existing franchise rights under Permit No. P--168. The extent and scope of Caro-Line's franchise rights are not affected by the fact that United rather than Leaseway is the owner of the stock of Caro-Line.

The balance sheet of United, as of December 31, 1964, shows assets of $29,321,918.00; liabilities of $17,504,993.00; capital stock and surplus of $11,816,925.00. It is wholly owned by United Parcel Service of America, Inc., a Delaware corporation which is the parent of subsidiaries operating in various states from coast to coast. There is evidence that Leaseway, a holding company, has large transportation interests and 'at the present time probably will have a gross of 165 million or something like that.'

Unquestionably, the responsibility of Caro-Line, financially and otherwise, and Caro-Line's ability to exercise its franchise rights will not be adversely affected by the fact that United rather than Leaseway is the owner of its stock. The apprehension of protestants is that Caro-Line will undertake to exercise its franchise rights on a much larger and more varied scale, and in so doing act in competition with protestants and adversely affect their business. The record fails to show that operations by Caro-Line on a larger and more varied scale would be contrary to The public interest as distinguished from interests of protestants.

Protestants contend the applicants (Leaseway and United) were required to show, and that they failed to show, that the proposed sale and transfer of Caro-Line's stock was justified by the public convenience and necessity. They call attention to the fact that the Public Utilities Act of 1963 (Session Laws of 1963, Chapter 1165) enacted G.S. § 62--111(a) as quoted above; and that the corresponding provision (formerly codified as G.S. § 62--121.26) of the Truck Act of 1947 (Session Laws of 1947, Chapter 1008) did not provide that the transfer of a 'certificate or permit' be justified by the public convenience and necessity. In their brief, protestants contend in substance that G.S. § 62--111(a) 'required the Commission to consider similar elements upon a transfer of franchise authority as upon the granting of an application for New authority,' (our italics) including 'public need for the service, the service already provided by existing carriers, and the effect of the service provided by the transferee on the operations of existing carrier.'

G.S. § 62--262(e) provides: 'If the application is for a certificate, the burden of proof shall be upon the applicant to show to the satisfaction of the Commission: (1) That public convenience and necessity require the proposed service in addition to existing authorized transportation service, and (2) (t) hat the applicant is fit, willing and able to properly perform the proposed service, and (3) (t)hat the applicant is solvent and financially able to furnish adequate service on a continuing basis.' Protestants contend in substance that G.S. § 62--262(e)(1) is applicable to the present factual situation. Careful consideration impels a different conclusion.

Under G.S. § 62--262(e)(1), an applicant for New authority must show to the satisfaction of the Commission '(t)hat public convenience and necessity require the proposed service in addition to existing authorized transportation service.' Factors for consideration by the Commission when passing upon such application include the service already provided by existing carriers and the...