United States v. Marshall Transport Co
| Decision Date | 24 April 1944 |
| Docket Number | No. 589,589 |
| Citation | 64 S.Ct. 899,88 L.Ed. 1110,322 U.S. 31 |
| Parties | UNITED STATES et al. v. MARSHALL TRANSPORT CO. et al |
| Court | U.S. Supreme Court |
Appeal from the District Court of United States for the District of maryland.
Mr. Daniel H. Kunkel, of Washington, D.C., for appellants, the United States and Interstate Commerce Commission.
Mr. Charles E. Cotterill, of New York City, for appellants Coastal Tank Lines, Inc., et al.
Mr. Robert C. Winter, of Detroit, Mich., for appellees.
On an application to the Interstate Commerce Commission of two carriers by motor vehicle, appellee Refiners Transport Terminal Corporation and appellee Marshall Transport Compamy, for permission for Refiners to purchase the property and operating rights of Marshall, the Commission found that Refiners, the vendee-carrier, was controlled through stock ownership by a non-carrier, Union Tank Car Company, and that the proposed purchase would result in the acquisition by Union of control of the property and business of Marshall. Construing § 5(2)(a) and (b) of Part I of the Interstate Commerce Act, 24 Stat. 379, as amended by the Transportation Act of 1940, 54 Stat. 905, 49 U.S.C. § 5(2)(a) and (b), 49 U.S.C.A. § 5(2)(a, b), as requiring the application to be made by Union, the non-carrier corporation controlling Refiners, the Commssion denied the application of the carriers for lack of power in the Commission to approve the purchase.
The questions for our decision are (1) whether the acquisition of the property and franchises of one carrier by another, which is controlled by a non-carrier, involves the acquisition of control of the first or vendor-carrier by the non-carrier for which the Commission's approval is required by § 5(2)(a) of the Interstate Commerce Act; and if so (2) whether the Commission rightly held that under § 5(2)(b) of the Act it could not consider the propriety of the transaction in the absence of an application by the non-carrier for the Commission's authority to acquire control.
Appellee Refiners holds certificates of public convenience and necessity from the Interstate Commerce Commission to operate as a common carrier, by motor vehicle, of gasoline and petroleum products in Pennsylvania and eight of the central states. Refiners, as the Commission found, is controlled through ownership of 82.6% of its outstanding common stock by Union Tank Car Company, a non-carrier corporation. Marshall, a corporation, holds a certificate of public convenience and necessity under the grandfather clause § 206 of the Interstate Commerce Act, 49 U.S.C. § 306, 49 U.S.C.A. § 306, authorizing carriage as a common carrier of petroleum products in bulk in tank trucks over irregular routes in Maryland, Delaware, Pennsylvania, Virginia and Washington, D.C. By their joint application Refiners and Marshall sought authority of the Commission under § 5(2)(a) for Refiners to acquire by purchase the operating property and rights of Marshall.
After a hearing on the application, in which nine motor carriers, co-appellants here, appeared as protestants and the Antitrust Division of the Department of Justice intervened, Division 4 of the Commission issued its report finding that the proposed purchase was within the scope of § 5(2)(a) and (b) and would be consistent with the public interest. It overruled contentions of the protestants that the proposed purchase would result in the acquisition of control of Marshall by Union, the non-carrier, through its control of Refiners, the purchaser, so as to require that Union join in the application. 39 M.C.C. 93. On petition for rehearing the Commission reversed the holding of Division 4. It concluded that as Union the non-carrier, already controlled one carrier, Refiners, the purchase of the property and business of Marshall by Refiners would result in their control by Union and that under § 5(2)(a) and (b) and related sections this could not be done without an application by Union for the Commission's authority to do so. 39 M.C.C. 271.
Union having failed to apply for that authority within the twenty days allowed for that purpose by the Commission's order, the Commission dismissed the pending application of Refiners and Marshall. Upon the suit of appel- lees the District Court for Maryland, three judges sitting, set aside the Commission's order, Circuit Judge Soper dissenting, 52 F.Supp. 1010, and the case comes here on appeal under 28 U.S.C. §§ 47a, 345, 28 U.S.C.A. §§ 47a, 345.
Section 5(2)(a) of the Act, makes it 'lawful, with the approval and authorization of the Commission * * * for two or more carriers to consolidate or merge their properties or franchises * * * into one corporation for the ownership, management, and operation of the properties theretofore in separate ownership; or for any carrier * * * to purchase * * * the properties * * * of another; * * * or for a person which is not a carrier and which has control of one or more carriers to acquire control of another carrier through ownership of its stock or otherwise'.
Section 5(2)(b) provides that 'Whenever a transaction is proposed under subparagraph (a), the carrier or carriers or person seeking authority therefor shall present an application to the Commission * * *.' And § 5(3) provides that 'Whenever a person which is not a carrier is authorized, by an order entered under paragraph (2), to acquire control of any carrier or of two or more carriers, such person thereafter shall, to the extent provided by the Commission in such order, be considered as a carrier subject to' specified provisions of the Act, relating mainly to the keeping of accounts, the making of reports, access to records, the issuance of securities and the assumption of liabilities.
Section 5(4) makes it
In determining whether, under the non-carrier control clause of § 5(2)(a), Union, the non-carrier here, is required to file an application with the Commission, the issue turns on the questions whether, within the meaning of the statute, Union is by the proposed transaction attempting to 'acquire control' of Marshall and, if so, whether Union is within the requirement of § 5(2)(b) that the person seeking the authority of the Commission to acquire such control shall present his application to the Commission. In answering these questions the District Court thought that the several instances specified by § 5(2)(a), in which the Commission is authorized to permit acquisition of carrier control, are separate and independent of each other so that, the Commission having full authority to authorize Refiners to purchase Marshall under the merger and purchase provisions of § 5(2)(a), its authority in that respect is not limited or superseded by the non-carrier control provision appearing later in the subparagraph and that provision is therefore inapplicable.
In any case the District Court concluded that these provisions are permissive only, giving the Commission authority to act with respect to any one without regard to the restriction imposed by any other. Since Refiners' and Marshall's application to the Commission for approval of Refiners' purchase of Marshall's property and operating rights are within the permissive authority of the Commission under the purchase provision of § 5(2)(a), the Court thought that it was not necessary for Union to comply with the non-carrier provision and with the requirement of § 5(2)(b) by joining in the application even though the non-carrier provision would otherwise be applicable to the transaction.
But this overlooks the fact, which the Commission thought controlling, that the present transaction may fall within both the purchase provision and the non-carrier control provision of the statute since it involves not only the purchase of Marshall by Refiners but also the acquisition of control of Marshall by Union, through its control of Refiners. The question then is not whether the non-carrier control provision limits or supersedes the purchase provision but whether, as the Commission thought, both apply, and if so the extent to which they restrict the Commission's authority to approve the acquisition of control by a non-carrier which has not filed an application pursuant to § 5(2)(b).
As a matter of statutory construction it does not follow that such parts of the proposed transaction in this case as are subject to the requirement of the non-carrier control provision can escape that requirement because the transaction also involves a purchase which falls within and satisfies the requirement of the purchase provision of the statute. Section 5(4) prohibits each of the transactions enumerated in § 5(2)(a) unless approved by the Commission. And it is plain that if the proposed transaction involves Union's non-carrier control of Marshall within the meaning of § 5(2)(a), appropriate application to the Commission for its approval must be made in conformity to § 5(2)(b). Hence our inquiry must be directed to the nature of the requirement of the non-carrier control provision of the statute and to the question whether if applicable it is satisfied by appellees' application to the Commission in which Union did not join.
It is not doubted that if Union, having control of Refiners, sought to acquire stock control of Marshall, Union would be...
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