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Corporation Commission of State of Arizona v. Pacific Greyhound Lines

Supreme Court of Arizona

October 2, 1939

CORPORATION COMMISSION OF THE STATE OF ARIZONA, WILSON T. WRIGHT, W. M. COX, and AMOS A. BETTS, as Members of the Corporation Commission of the State of Arizona, Appellants,
v.
PACIFIC GREYHOUND LINES, a Corporation, Appellee

APPEAL from a judgment of the Superior Court of the County of Maricopa. M. T. Phelps, Judge. Judgment affirmed.

Mr. Joe Conway, Attorney General, Mr. Earl Anderson and Mr. W. E. Polley, his Assistants, and Messrs. Fennemore, Craig, Allen & Bledsoe, Special Assistants, for Appellants.

Messrs. Baker & Whitney and Mr. Lawrence L. Howe, for Appellee.

OPINION

Page 444

[54 Ariz. 162] LOCKWOOD, J.

This is an appeal from a judgment of the superior court of Maricopa county, vacating and setting aside an order of the Arizona Corporation Commission, hereinafter called the commission, made on June 12, 1937, and amending a certificate of convenience and necessity held by Central Arizona Transportation Lines, Incorporated, hereinafter called the applicant. The facts necessary for a consideration of the issues involved may be stated as follows:

On June 27, 1927, the commission issued a certificate of convenience and necessity to the Pickwick Stages Corporation, authorizing it to operate motor vehicles for the common carriage for hire of passengers, baggage and express between Phoenix and Ehrenburg, Arizona, by way of Wickenburg, serving all intermediate points. On January 16, 1931, the commission, pursuant to an assignment made by Pickwick Stages, transferred this certificate to Pacific Greyhound Lines, a corporation, hereinafter called plaintiff, and at all times since such certificate has been owned and held by plaintiff. On June 13, 1928, the commission issued a certificate of convenience and necessity to one Roy Hahnenkratt, authorizing the operation of motor vehicles in the common carriage of passengers, baggage and express for hire, between Phoenix and Prescott, by way of

Page 445

Wickenburg, but expressly excluded any service between Wickenburg and Phoenix, and points intermediate thereto. In February, 1933, this certificate was assigned by Hahnenkratt to the applicant.

[54 Ariz. 163] The Pickwick Stages and plaintiff, its assignee, commenced operations and furnished service in accordance with the certificate first above mentioned up to and including the present time, with the exception of a period from February, 1931, to September, 1932, when the commission permitted suspension of the service because of poor road conditions between Wickenburg and Ehrenberg, and lack of traffic between Phoenix and Ehrenberg. To August 1, 1933, this service was somewhat irregular, but was made approximately weekly. Beginning with August 1, 1933, the plaintiff operated one schedule daily each way between Phoenix and Ehrenberg, by way of Wickenburg, and continued this until May 25, 1935, when two schedules daily in each direction were installed. From April 1, 1936, to August 1, 1936, three of these schedules were operated in each direction. From that date to December 31, 1936, the schedules were increased to four, while on January 1, 1937, and since, plaintiff has been operating five schedules daily each way.

At some time in 1928, an oral understanding was had between Pickwick Stages and Hahnenkratt, under which the latter began to, and did, render service as a common carrier, by motor vehicle, of passengers, baggage and express, for hire, between Phoenix and Wickenburg, serving all intermediate points, although he had no certificate of convenience and necessity to perform that service, the only certificate which he did have expressly excluding local service between Phoenix and Wickenburg and intermediate points. There was no agreement as to how long this service should continue, but Hahnenkratt did actually furnish it without objection from anyone until the transfer of his operating rights to the applicant in February, 1933, as above, and the applicant has continued it without objection by plaintiff until December 28, 1936. The fact that this service was being rendered by Hahnenkratt and [54 Ariz. 164] applicant was known to the members of the commission at all times, but no formal consent nor permission so to operate was ever given by the commission or by any member thereof.

Shortly before 1937 the control of the applicant passed through various intermediaries into the hands of the Atchison, Topeka and Santa Fe Railway Company, hereinafter called the Santa Fe. At the time this control was taken over, the Santa Fe was advised by an officer and director of applicant that the latter had no legal right to furnish service between Phoenix and Wickenburg and intermediate points, and an inspection of the records of the commission, which showed this fact was made by a representative of the Santa Fe. The Santa Fe, however, did know that the applicant had been rendering service between Phoenix and Wickenburg and intermediate points without objection from plaintiff, under the oral understanding or agreement above referred to.

On December 28, 1936, the plaintiff sent to applicant the following letter:

"Due to the present service of Pacific Greyhound Lines between Phoenix and Wickenburg, the reason for the oral agreement made with Mr. Hahnenkratt of your predecessor company, Black Canyon Line, whereby that line was permitted to carry local passengers between Phoenix and Wickenburg and intermediate points, no longer exists.

"Therefore, please be advised that effective January 1, 1937, this permission will be withdrawn and this agreement terminated."

Thereupon, and on January 4, 1937, applicant filed a request with the commission, praying either for an amendment to its then certificate of convenience and necessity, or, in the alternative, for a new certificate, authorizing it to operate motor vehicles in the transportation for hire of passengers, baggage and express to, from, and between Phoenix and Wickenburg, serving [54 Ariz. 165] all intermediate points, and by an amended application thereafter claimed that it could and would coordinate its bus service with the rail service of the Santa Fe. This latter company has for many years continuously conducted a daily rail service in the transportation of passengers, baggage and express from Phoenix to Ehrenberg and points west, via Wickenburg, and from Phoenix to its main line system at Ash Fork, via Wickenburg and Prescott. This main line system, as is well known, is one of the principal transcontinental lines between the Pacific and Atlantic coasts. The applicant and the

Page 446

Santa Fe offered and were willing to provide coordination of rail and bus service between Phoenix and Wickenburg and intermediate points through the complete interchangeability of bus tickets issued by the applicant and rail tickets issued by the Santa Fe, and of incidental service, such as the carriage and storage of baggage of passengers. They also offered a lowering of rail fares to the level of bus fares between all points jointly served by the Santa Fe and the applicant. Up to January 4, 1937, the services and facilities furnished by plaintiff and its predecessor in interest had never been complained of by any person, and no order was ever issued directing them to enlarge, better or change their service. Plaintiff is financially able to comply with any order that might be made by the commission requiring an improvement of service now conducted by it, and is, and always has been, able, ready and willing to do so.

At a hearing held before the commission, at which plaintiff appeared in opposition to the granting of the request of applicant, and represented that it was ready, able and willing to furnish any service required, order and decision No. 8940 was made, which amended the certificate of convenience and necessity then held by the applicant by granting its petition in [54 Ariz. 166] full, without first ordering plaintiff to improve its service over the said route between Phoenix and Wickenburg and intermediate points in any manner whatever. Thereupon a motion for rehearing was made by plaintiff and denied, and the present case was filed in the superior court of Maricopa county, attacking the order of the commission as being unlawful and unreasonable. After various preliminary motions and demurrers were settled, the case was tried to the court without a jury, and a judgment was finally rendered in favor of plaintiff and against the commission, whereupon this appeal was taken.

There are thirteen assignments of error, which raise a number of propositions of law. The first is whether the concluding proviso of section 6, chapter 100, of the session laws of 1933, is constitutional. Chapter 100, supra, is a general statute regulating the transportation of passengers and property by motor common carriers for hire and private commercial carriers over the public highways of Arizona. Section 6 thereof reads, so far as material to this case:

"Common Motor Carrier Certificates; Application Therefor. No common motor carrier shall operate within this state as such carrier without first having obtained from the commission a certificate of public convenience and necessity....

"... provided, that when an applicant requests a certificate to operate over a route, or routes, or in a territory already served by a common motor carrier, the commission shall have power, after hearing, to issue such certificate only when the existing common motor carrier operating over such route, or routes, or serving such territory, ...


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