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Arizona Corp. Commission v. Gibbons

Supreme Court of Arizona

September 24, 1959

ARIZONA CORPORATION COMMISSION, and Intervenor C. R. Maddux, Appellants,
v.
G. L. GIBBONS, Appellee.

Rehearing Denied Oct. 27, 1959.

Page 168

[86 Ariz. 211] Robert Morrison, Atty. Gen., and Frederick E. Kallof, Asst. Atty. Gen., and Langmade & Sullivan, Phoenix, for appellants.

Evans, Kitchel & Jenckes, Earl H. Carroll, Phoenix, for appellee.

UDALL, Justice.

This is a joint appeal by the Arizona Corporation Commission, and C. R. Maddux, from a judgment of the superior court of Maricopa County, vacating and setting aside an order of the Commission granting an amended certificate of convenience and necessity to intervenor Maddux to haul 'ore and ore concentrates' state-wide within Arizona. G. L. Gibbons, a certificated common carrier, was one of the plaintiffs below and is the sole appellee here. We shall refer to the individual parties by surname, and the regulatory body as the Commission.

The facts necessary for a consideration of the issues involved may be stated as follows:

Prior to the year 1955, the Commission had issued to Maddux a certificate of convenience and necessity authorizing a limited transportation of 'ores and are concentrates' (principally under contract), but confined to certain areas in Mohave and Yuma counties. On September 6, 1955, Maddux filed with the Commission an application for an amended certificate for a state-wide privilege of handling ores and ore concentrates. After proper notice a hearing was had thereon on September 21, 1955, and the matter taken under advisement.

In the year 1953 the Commission had issued to Gibbons a certificate or certificates of convenience and necessity authorizing a limited transportation of 'ores and ore [86 Ariz. 212] concentrates' within a radius of 25 miles of Patagonia and within a radius of 50 miles of Tucson. On September 17, 1955, Gibbons filed with the Commission an application for an amended certificate for a state-wide privilege of handling such products; a hearing was had thereon on October 19, 1955, and the matter taken under advisement.

Later, at an executive meeting of the Commission, both the Maddux and Gibbons applications for state-wide certificates were granted, and the Secretary of the Commission was directed to issue the necessary amended certificates. The Secretary, in carrying out the Commission's instructions in preparing the certificates, somehow dated the Gibbons certificate December 1, 1955, and dated the Maddux certificate December 2, 1955. This consecutive dating forms the basis for certain contentions which will be hereinafter noted. It should also be stated that at approximately the same time, similar state-wide certificates to haul ore and ore concentrates were issued by the Commission to James Bond and Al Mann; however, the validity of these latter certificates is not here drawn in question.

A copartnership, d. b. a. the R. E. Canion Construction and Trucking Company, was, on November 16, 1955, issued a corrected certificate of convenience and necessity to transport state-wide, over the public highways, 'sand, tock, gravel, road mix, plant mix, and earthy materials' (emphasis supplied). This copartnership joined with Gibbons in opposing granting by the Commission of a state-wide certificate to Maddux to transport ores and ore concentrates, this upon the theory that the words 'earthy materials' contained in their certificate--which was a renewal of a prior certificate--embraced ores and ore concentrates. After the Maddux certificate had been granted, Gibbons and the Canions joined in

Page 169

an application for rehearing on the grounds that (1) there was insufficient evidence of the need for operating rights granted to Maddux; and (2) there were common carriers duly certified, including these protestants, willing and able to serve the territory, and the Commission had failed to observe the requirements of section 66-506, A.C.A.1939 (hereinafter referred to as A.R.S. § 40-607, subd. C) by first offering them an opportunity to furnish such service. While this application for rehearing was not specifically ruled upon, it was denied by operation of law; and such application necessarily formed the basis for the subsequent court action. See A.R.S. § 40-253, subd. C.

Thereafter Gibbons and the Canion co-partnership, as plaintiffs, timely filed in the superior court of Maricopa County a civil complaint against the Corporation Commission, asking that the Maddux certificate dated December 2, 1955, be cancelled and held for naught. The court permitted Maddux, who it was shown was the real party [86 Ariz. 213] in interest, to intervene as a defendant. At the trial no evidence was offered by plaintiffs in support of the first ground for rehearing. Furthermore the court, invoking the ejusdem generis rule, held, as a matter of law, that the phrase 'earthy materials' contained in the Canion certificate 'does not include ores and concentrates'. The copartnership did not appeal from this ruling, nor has it made an appearance as an appellee in the instant case.

The issue, therefore, was finally narrowed down to the proposition--upon which Gibbons rested his case--that he, having a certificate dated one day prior to the Maddux certificate, was entitled as a matter of law to an opportunity to furnish such service before the Commission could properly approve the Maddux application. The learned trial court by its judgment resolved this issue in favor of Gibbons and against Maddux. This appeal followed.

In the final analysis, the case must turn upon whether or not the Corporation Commission acted beyond its statutory authority in granting a certificate of convenience and necessity to Maddux without extending to Gibbons the protection afforded by section 40-607, subd. C, supra. This in turn will depend upon a determination of whether Gibbons was within the terms of the statutory language, i. e., was already 'operating over the route or serving the territory' at the time when the Maddux application was docketed with the Commission. This court held, in Whitfield Transportation Co. v. Tucson Warehouse & Transfer Co., 78 Ariz. 136, 276 P.2d 954, that the question of whether the service proposed by the applicant would conflict with operations under an existing certificate is a question of jurisdictional fact, i. e., until a finding has been made that there would be no conflict, the Commission is without jurisdiction to grant the proposed certificate.

The crucial question then arises, at what point in time is the Commission to consider the facts in order to determine whether a conflict exists? It has been pointed out by this court that the Commission, in determining whether or not a certificate of convenience and necessity is to be granted, is sitting as a quasi-judicial body. Its function is to hear the evidence, weigh the facts, and arrive at a determination based upon those facts, Pacific Greyhound Co. v. Sun Valley Bus Lines, 70 Ariz. 65, 216 P.2d 404. This being the case, the point of view of the Commission in such a proceeding must of necessity be retrospective. Its decisions must rest upon those facts existing at a time prior to the hearing and order. Obviously an attack upon the orders of the Commission cannot be grounded upon facts and occurrences which arose subsequent to the time of that tribunal's hearing and findings. The statute does not specify the precise point in time at which the then-existing facts are to be [86 Ariz. 214] considered. However, the language of the statute is significant:

'* * * when an applicant requests a certificate to operate over a route, or in a territory already served by a common motor carrier, the commission may, after hearing, issue a ...


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