Baltimore Tank Lines v. Public Service Commission

Hammond, J., delivered the opinion of the Court. Motor carriers of flammables operating intrastate over Maryland roads became subject to regulation by the Public Service Commission for the first time in 1954. In all there are some twenty such carriers. Two, the appellants Baltimore Tank Lines and Hahn Transportation Company, have for years operated in part as common carriers and in part as ¹²⁷ contract carriers.

All of the others have operated as common carriers only. In the order here appealed from, the Commission said that appellants could continue their divided operations under the permits issued them and honor their existing annual contracts but that, at their expiration or at the end of a year, whichever came first, the rates under future contracts or renewals must conform to the trucker’s current common carrier schedule of rates on file with the Commission. Baltimore and Hahn appealed to the Circuit Court of Baltimore City, contending that the Commission had no power to regulate their contract rates. Appellees, all members of the same trade association, intervened to urge upon the Court their economic philosophy that to permit the same motor carrier to do both a contract and a common carrier business would, as they said it had, produce “chaos” (by which they seemed to mean a distressing competition) and that the Commission was right in its conclusion that its ruling would result in “* * * eventual uniformity of rates and services which should benefit the public welfare and convenience.” Judge Harlan held that under Chap. 441 of the Laws of 1955, which re-enacted and completely revised the Public Service Commission Article of the Code and was in effect when the permits were issued, the Commission has full jurisdiction of appellants as “carriers of flammables” and could forbid them to discriminate as to rates and service, and could regulate their contract rates.

If the 1955 revision of the Public Service Commission law is to be read with perceptive accuracy, the statutes that it replaced must be taken into account. Pursuant to a resolution of the House of Delegates of the 1951 Legislature that a committee should revise and recodify but not change the substance of the law, the Governor appointed a committee of lawyers experienced in that field of law to carry out the legislative mandate. Its report of February 28, 1955, explained that it had carried out the recommendation of the House of Delegates. Its introduction to the proposed draft said: “The emphasis in the proposed draft has been on the aim stated in the resolution creating this Commission, namely, to ‘revise and recodify the laws concerning the Public Service Com ¹²⁸ mission in order that such laws may be enacted in more orderly and comprehensible fashion’.

There has, accordingly been no desire to introduce any substantial changes in the pattern of public utilities regulation, except in a very few instances, each of which is considered at length in the reporter’s explanatory notes accompanying each section of the draft. * * *. In general, changes in phraseology of the present law are not intended to effect any change in meaning unless such intention is specifically stated in the explanatory notes, or the clear language of the draft leads inescapably to the conclusion that some change in meaning must have been intended.” In Public Service Commission v. Baltimore Transit Company, 207 Md. 524, 536 , the Court construed the prior law in a certain fashion in part because that construction conformed to the meaning of the revised law and the Committee had said no change of substance was intended. Chapter 58 of the Laws of 1954 added a new section to Art. 78 of the Code of 1951, Sec. 19A: (a) to provide that motor carriers of flammables in bulk using the public roads of Maryland were made subject to the jurisdiction and authority of the Commission; (b) to forbid operation without a permit that was to be granted only after the Commission was satisfied that it was expedient and that the applicant had met all safety requirements prescribed and had taken out either a satisfactory liability policy or a surety bond to protect the public from the negligence of the carrier; (c) to require the filing of schedules of rates and to make carriers subject to the provisions of Secs. 29, 30 and 31 of Art. 78: (the sections subjecting common carriers .and public service companies to rate regulation) “provided, however, that any carrier of inflammable or combustible liquids, in bulk, in tank vehicles, and for - compensation as defined herein, who or which does not desire to operate as a common carrier serving the general public, shall list in addition in its schedule or schedules the shippers to be served”; and (d) to direct the Commission if it deems it best for the public welfare and convenience to grant a permit; “provided, however, that the Commission shall issue a permit to any such carrier in operation as a carrier of inflammable or combustible liquids, in ¹²⁹ bulk, in tank vehicles, using the public streets and highways within the State of Maryland on June 1, 1954, if such carrier files an application, as provided herein, within ninety days of the effective date of this section, and furnishes proof of compliance with the insurance or bond, as well as the safety requirements established by the Commission.” Baltimore and Hahn duly applied for permits to continue their same operations, as did the appellees. After a hearing at which the testimony was limited almost to the formal reports of its investigators as to the character and extent of the business of the applicants as of June 1, 1954, the Commission, on December 8, 1954, ruled that one a common carrier on June 1st could not become a contract carrier under the grandfather clause but only upon a showing that the “public welfare and convenience” would be served but that Baltimore and Hahn could continue to do both common and contract business.

Upon appeal to the Circuit Court of Baltimore City, Judge Nice noted that the protestants before him, the appellees here, contended that the law permitted operations only as a common carrier and complained that the Commission had arbitrarily denied them the right to offer evidence in support of their contention. Judge Nice held that the 1954 statute covered both common and contract carriers and that Hahn specifically (and Baltimore by necessary implication) was entitled, as the Commission had found, to one permit entitling him to operate both as a common and contract carrier. The court’s decree of November 14, 1955, remanded the case to the Commission to permit the introduction by the original applicants “of any relevant evidence pertaining to all the issues of this case”, including the granting of the permits to those carriers named in the Commission’s order of December 8, 1954. The order of the Commission setting the case for rehearing gave no notice that rates were to be dealt with.

It said only that the applicants could offer additional testimony, and that unless cause to the contrary were shown, permits would be issued in conformity with its order of December 8, 1954. At hearings which began on December 15, 1955, and ended on April 11, 1956, Hahn showed that three-fifths of its reve ¹³⁰ nues came from common carrier business and two-fifths from contract business. He had contracts with some twelve or fifteen shippers. Baltimore derived about half its revenue from contract carriage although it had but one contract customer.

Both of them defended the economic desirability and business need for contract. service and offered evidence of the difference between it and common carrier service. A common carrier must serve all of the general public who seek its service on an equal basis. It may not set aside part of its equipment for certain customers to the exclusion of others. Its liability as to the freight it transports is that of an insurer.

Its contracts, usually consist of the terms and conditions in the uniform bill of lading plus the provisions of its published tariffs. A contract carrier on the other hand can devote equipment to the exclusive needs of one shipper. His liability is that of a bailee unless modified by special contract. He can guarantee a rate for a fixed period and so enable the shipper to bid on contracts to furnish the commodity to be hauled on the basis of a known freight charge over the period of the contract.

He can offer special service, such as that at unusual hours or that of insuring complete performance of the shipper’s contract by personal attention to recurring need for shipments. He can become, to some extent, an integral part of the shipper’s organization. The effort of the appellees was to show that they, as common carriers, do exactly the same things and supply the same services for their customers that appellants do for their contract shippers. They urged that in the nature of the business no real distinction between common and contract service can exist and that appellants’ claims as to the business needs and usefulness were but shams to justify the charging of rates lower than those of the common carriers.

If the law gives the Commission the power to decide the answer to the respective contentions, the courts, including this Court, can decide only whether there was evidence to support whatever conclusion the Commission reached, and judicial opinion as to the validity or soundness of that conclusion would be entirely immaterial. We pause in the consideration of the legal power of the Commission long enough to note that the ¹³¹ position and claims of appellants are not far fetched or novel. Found convincing by the Commission were similar claims by City Express, Inc., as to the need for contract carriage in the face of identical charges by competitors of sham and ruinous competition, and its decision was