Clark v. Public Service Commission

Delaplaine, J., delivered the opinion of the Court. Francis Woodrow Clark, doing business as Baltimore-Washington Express Company, holds a certificate of convenience and necessity from the Interstate Commerce Commission authorizing him to transport freight in inter ¹²⁵ state commerce between Baltimore and Washington. In 1953 the Public Service Commission ordered him to cease transporting between Baltimore and Annapolis. He has appealed here from two orders of the Circuit Court of Baltimore City affirming orders of the Commission.

The first appeal, No. 94, arose from a complaint filed by City Express, Inc., on July 17, 1952, that appellant was infringing upon its permit to transport freight between Baltimore and Annapolis. The second appeal, No. 103, arose from the Commission’s refusal to grant a permit to appellant to operate as a common carrier of freight between Baltimore and Annapolis. No. 9U. Complaint Case.

On March 25, 1941, appellant took charge of the freight business of F. E. Douglas and J. K. Schilling, a partnership operating between Baltimore and Washington. The Interstate Commerce Commission had granted the partnership a certificate of convenience and necessity under the “grandfather clause” of the Federal Motor Carrier Act of 1935. That clause provides that any carrier who was in bona fide operation on June 1, 1935, and who filed an application with the Commission together with proof of such operation, was entitled to receive a certificate of public convenience and necessity without further proof. 49 U. S. C. A., sec. 306. On May 9, 1942, appellant was issued a new certificate authorizing him to transport general commodities, with some exceptions, in interstate commerce between Baltimore and Washington over designated regular routes, and to give service to and from all intermediate points and the off-route points of Fort George G. Meade, Gambrills, Millersville and Odenton, all in the State of Maryland.

Appellant admitted that for 11 years, from March 25, 1941, to April 1, 1952, he hauled freight from Baltimore to Annapolis, not only by way of Washington, as authorized by the Interstate Commerce Commission, but ¹²⁶ also by direct route over Maryland Highway 2. He said that he started using the direct route during the Second World War when the Federal Government, on account of the shortage of gasoline, ordered motor carriers to use the most direct routes. He admitted that he had •never applied to the Public Service Commission for a permit, but he claimed that on the advice of counsel he discontinued intrastate operations on April 1, 1952. He asserted that he gave instructions to his drivers to cross the District of Columbia line before going to Annapolis, and he thought that he was thereby complying with his certificate from the Interstate Commerce Commission.

The Commission’s Director of Transportation requested three of his assistants to make an investigation of the route taken by appellant’s truck from Baltimore to Annapolis. They followed the truck on August 29, September 2, and September 3, 1952. On August 29 the investigators followed the truck on the Washington Boulevard to the Old Bladensburg Road, and then across the District of Columbia line three-tenths of a mile. The truck, without making any delivery in the District, then returned over the Old Bladensburg Road and the Defense Highway to Annapolis.

On September 2 the investigators followed the truck on Maryland Highway 2 and U. S. Route 301 to Glen Burnie, then to Parole, and then over the Defense Highway to Annapolis. The truck did not go into the District. On September 3 the investigators followed the truck on U. S. Route 1 to the intersection of the Old Bladensburg Road at the Peace Cross, and then over the Defense Highway to Annapolis. Again the truck did not go outside the State.

On July 2,1953, the Commission reached the conclusion that appellant’s operations were not bona fide interstate commerce, and thereupon passed an order requiring him to cease such operations. On August 23, 1953, appellant filed his first bill of complaint praying the Circuit Court to declare the Commission’s order illegal, null and void, and to enjoin the ¹²⁷ Commission from enforcing it. The Commission and City Express, Inc., demurred to the bill. The Court passed an order sustaining the demurrers and dismissing the bill.

Appellant contends on his first appeal here that his certificate from the Interstate Commerce Commission gives him the authority to engage in interstate commerce, and that his operations are beyond the jurisdiction of the Public Service Commission. The Federal Motor Carrier Act defines the term “interstate commerce” as commerce between any place in a State and any place in another State or between places in the same State through another State. The term “State,” as used in the Act, means any of the several States or the District of Columbia. 49 U. S. C. A., sec. 303. In Eichholz v. Public Service Commission of State of Missouri, 306 U. S. 268, 622 , 59 S. Ct. 532, 535 , 83 L. Ed. 641 , the carrier, who had been hauling freight from St. Louis, Missouri, to Kansas City, Missouri, went a half mile beyond the state line to the terminal in Kansas City, Kansas, before going to Kansas City, Missouri.

It appeared that the Public Service Commission of Missouri had promulgated a rule, designed to promote proper and safe use of the state highways, requiring motor carriers operating under interstate permits to refrain from doing intrastate business. The carrier had obtained a permit from the Commission to operate in interstate commerce, but the Commission revoked it on the ground that he had engaged in intrastate commerce. It was held by the United States Supreme Court that the Commission’s rule was not an improper burden upon interstate commerce, and that the Commission’s authority to revoke a carrier’s interstate permit was not superseded by the Federal Motor Carrier Act where the Interstate Commerce Commission had not acted upon the carrier’s application for a permit. In that case the carrier relied upon the decision in Missouri Pacific R. Co. v. Stroud, 267 U. S. 404 , 45 S. Ct. ¹²⁸ 248, 69 L. Ed. 683 , that transportation between two cities in the same State partly within and partly outside of the State was interstate commerce.

He contended that the. hauling from St. Louis over the state line to Kansas City, Kansas, of merchandise consigned to persons in Kansas City, Missouri, and hauling it back again to its intended destination in Kansas City, Missouri, was interstate transportation. Chief Justice Hughes, in delivering the unanimous opinion of the Court, refrained from stating that Congress could not regulate transportation of that sort, inasmuch as such a ruling was not necessary for the decision of the case. However, the Chief Justice made the following comment: “We may assume that Congress could regulate interstate transportation of the sort here in question, whatever the motive of those engaging in it. But in the absence of the exercise of federal authority, and in the light of local exigencies, the State is free to act in order to protect its legitimate interests even though interstate commerce is directly affected. * * * If appellant’s hauling of the merchandise in question across the state line was not in good faith but was a mere subterfuge to evade the State’s requirement as to intrastate commerce, there is no ground for saying that the prohibition of the use of the interstate permit to cover such transactions, and the application of the Commission’s rule prohibiting them in the absence of an intrastate certificate, was an unwarrantable intrusion into the federal field or the subjection of interstate commerce to any unlawful restraint.

And if the prohibition of such transactions was valid, the Commission was undoubtedly entitled to enforce it by revoking appellant’s permit for breach of the condition upon which it was issued and accepted by appellant.” In Ryan v. Pennsylvania Public Utility Commission, 143 Pa. Super. 517 , 17 A. 2d 637 , certiorari denied 314 U. S. 640 , 62 S. Ct. 80 , 86 L. Ed. 514 , the Public Utility ¹²⁹ Commission found that the carrier was hauling freight from Pittsburgh to Washington, Pennsylvania, by way of Wheeling, West Virginia, a distance of 90 miles, while the direct route was only 29 miles; and from Pittsburgh to Uniontown, Pennsylvania, by way of Wheeling, a distance of 128 miles, while the direct route was only 52 miles. The Court found that the transportation was actually intrastate, and was routed through Wheeling as a subterfuge to avoid the jurisdiction of the Commission. The Court accordingly held that the certificate from the Interstate Commerce Commission authorizing the carrier to operate in interstate commerce could not be construed to grant authority to engage in that sort of transportation.

In Atlantic Freight Lines v. Pennsylvania Public Utility Commission, 163 Pa. Super. 215 , 60 A. 2d 589 , certiorari denied 336 U. S. 925 , 69 S. Ct. 643 , 93 L. Ed. 1087 , the Court held that where the Interstate