Schmidbauer v. Baltimore & Pittsburgh Motor Express Co.
639 Prescott, J., delivered the opinion of the Court. This is an appeal by William T. Schmidbauer and his employer’s workmen’s compensation insurer, plaintiffs below, from a judgment entered in the Baltimore City Court in favor of the appellee, Baltimore and Pittsburgh Motor Express Co. (Company or appellee), one of the defendants below, after the court granted appellee’s motion for a directed verdict in its favor. The principal question involved is a claim by the appellants that the trial court erred in refusing to‘ submit to the jury the issue of appellee’s responsibility as a common carrier franchised and duly certificated by the Interstate Commerce Commission (l.C.C.) for the negligence of one Selle, an unfranchised owner-operator, whose motor tractor was allegedly under lease to appellee at the time of a motor vehicle collision, in which Schmidbauer was injured. On May 16, 1956, at about 1:40 a. m., Schmidbauer, while in the course of his employment, was operating a taxicab east on Baltimore Street, approaching its intersection with Gay Street.
He entered the intersection on a green light, and a motor tractor, being operated in a northerly direction on Gay Street by Selle, came through a red light and collided with the taxicab (there is no controversy concerning the fact that Selle was negligent). The tractor was registered in Selle’s name, and bore Pennsylvania license plates. Selle was a resident of that State, and had an operator’s license therefrom. Selle first began to haul freight for the appellee in June, 1955, under what he, Selle, referred to several times as a written lease, 1 whereby he “leased” his tractors to appellee to pull its trailers.
Selle was an unfranchised owner-operator, who held no certificate from the l.C.C. to operate motor vehicles or perform transportation services in interstate commerce. The appellee was a common carrier of freight, duly franchised and certificated by the l.C.C. to operate in Maryland, Ohio and Pennsylvania. In order to render efficient and 640 ■economical service, appellee employed salaried drivers of its ■own, and, in addition, augmented its own equipment and personnel by acquiring the services and equipment of others, this practice being quite prevalent in the industry. Selle testified that he owned no trailers but hauled ap•pellee’s trailers.
His tractor bore appellee’s decals issued by •appellee, and owner-operators were instructed to “X-out” appellee’s name after arrival at their destinations. He was paid ■once a week on the basis of the number of tons of freight hauled during the week, and the longer the trip the more per ton he received. Appellee had no ownership interest in Selle’s tractor. He serviced and greased his own vehicle and paid for his repairs.
Appellee paid Selle only for the tonnage he hauled, and for nothing else. Selle stated that he entered into only the one written lease ■of his equipment during the entire period of his relationship with appellee, and he carried this lease with him all the time. He and appellee did not execute a trip lease for each trip made by Selle; rather, he leased his tractor to appellee at times -when appellee would require it. The lease he signed was not for any specified period of time and it did not have to be renewed; rather it was good until Selle “left the company •* * * they didn’t have to be renewed.” No period of 30 days ■was mentioned, and, during the time that Selle was under lease to appellee, he would have to make his tractor available to •appellee at any time appellee wanted it.
Selle testified that ■appellee would contact him when it had a load of freight, and Tie would be given a manifest covering the load from the point ■of departure to the point of destination. Appellee dispatched from its terminals at S :30 every evening. When Selle did not have a further run scheduled he would go home with his tractors if he were in Pittsburgh, but in other places he would let them “set at the terminals.” James F. Erb, appellee’s Director of Safety, stated that generally when his company used non-owned equipment, the owner-operators contacted appellee by phone. Appellee dispatched from its terminals every afternoon at 5:30.
The owner-operators were given a waybill and a manifest at the terminal ■from which they departed, and these documents were turned 641 in at their destination. He said that appellee had no jurisdiction “over the drivers” after they had turned in their manifest. August H. Plitt, former Baltimore terminal manager of appellee, testified that there was no Company rule known to him which precluded persons like Selle from using their vehicles between actual hauls, “they were more or less on their own. We had no jurisdiction over them; at least we didn’t maintain any jurisdiction” over them.
From the time Selle first began to haul for appellee, he worked for it steadily, averaging four or five trips a week; he, alone, drove his tractors, and he worked for nobody else during this period. On his last haul prior to the collision he was dispatched by appellee out of Ohio or Pennsylvania on the evening of May 14, 1956, with a load of miscellaneous freight, and he arrived in Baltimore on May 15, at approximately 9:00 to 9:30 p. m. He was hauling for appellee, and proceeded to appellee’s terminal where he dropped the trailer, and turned in his manifest and bills to appellee’s office. At that time, he knew there would be no dispatch until the following evening, and that until then he would be unable to get another trip out of appellee’s terminal.
No receipts for the equipment were exchanged between Selle and appellee at that time, or at any time prior to the collision. Since there was no one else at the terminal, Selle drove downtown in his tractor, alone, and went to a movie. From the movie, he went to get a sandwich and a couple of bottles of beer at a place where he used to go “once in awhile.” He then started back to appellee’s terminal where it maintained a bunk room that drivers were permitted to use for sleeping when in Baltimore. While proceeding toward the bunk room, the collision occurred.
At the time of the collision, the tractor had both the name of the appellee and its I.C.C. permit number displayed on its side, and Selle was carrying a copy of his “lease” with appellee in his cab. At 5 :30' p. m., on the date of the accident, he picked up, at its terminal in Baltimore, a load of freight for the appellee and carried it to Pittsburgh. 642 There can be little doubt that even after the enactment of the Motor Carrier Act of 1935, many evils existed in the motor carrier industry. 51 M.C.C. 461; 52 M.C.C. 675; 64 M.C.C. 361; 68 M.C.C. 553. In 1950, after a nationwide investigation of this complex industry, Division 5 of the I.C.C. published a report and recommendations in 51 M.C.C. at page 461. Some of the evils in this area of commerce arose out of the practice of authorized carriers using vehicles that belonged to others.
The use of these nonowned vehicles was made under a great variety of arrangements, ranging from loose, informal oral agreements, made over the telephone or on the spot, between a franchised carrier, or someone for him, and the owner of the vehicle (who might or might not intend to be its operator), in many instances for a single-haul or round-trip movement, to formal written instruments applying for definite periods of time. (The single-haul arrangement is generally referred to as a trip lease, or one-trip lease.) Because of the looseness and informality of the arrangements for the use of equipment, questions frequently arose as to liability for accidents resulting in injuries to the public, and as to what insurer was liable at a particular time, the insurer of the authorized carrier or the insurer of the owner, and when the liability of one ended and the other began. In order to cure some of the complexities then existing in the industry and to protect the public more securely and more certainly, the I.C.C., effective as of September 1, 1953, fortified the Motor Carrier Act of 1935 ( 49 U.S.C.A. § 301 et seq.) with important Regulations governing motor carriers of interstate and foreign commerce. (Effective as of April 2, 1957, the short-term, or trip lease was abolished, but that was after the date of the collision here involved. 2 ) The pertinent provisions of Title 49 C.F.R. Transportation, Part 207, at the time of the accident, read as follows: “§ 207.1 Applicability.
The rules and regulations in this part apply to- the augmenting of equipment * * * in interstate or foreign commerce * * 643 “§ 207.4 Augmenting equipment. * * * authorized carriers may perform authorized transportation in or with equipment which they do not own only under the following conditions: (a) The contract, lease, or other arrangement for the use of such equipment: (1) Shall be made between the authorized carrier and the owner of the equipment. (2) Shall be in writing and signed by the parties thereto, * * *. sj« ;¡< 5{í >fc >jc (4) Shall provide for the exclusive possession, control, and use of the equipment, and for the complete assumption of responsibility in respect thereto, by the authorized carrier, as follows: (1) For the duration of said contract, lease or other arrangement, * * *. 5{i >*£ J-Í íjí (6) Shall specify the time and date or the circumstances on which the contract, lease, or other arrangement begins, and the time or the circumstances on which it ends. The duration of the contract, lease or other arrangement shall coincide with the time for the giving of receipts for the equipment, as required by paragraph (b) of this section; and SjC 5fC (b) Receipts. When possession of the equipment is taken by the authorized carrier or its regular employee or agent authorized to act for it, said carrier, employee or agent shall give to the owner of the equipment, or the owner’s employee or agent a receipt specifically identifying the equipment and stating the date and the time of day possession thereof is taken; and when the possession by the authorized carrier ends, it or its employee or agent shall obtain from the owner of the equipment, or its regular employee or agent duly authorized to act for it, a receipt specif 644 ically identifying the equipment and stating therein the date and the time of day possession thereof is taken. * H: * * * (d) Identification of equipment.
The authorized carrier acquiring the use of equipment under this section shall properly and correctly identify such equipment as operated by it when such equipment is operated by or for such carrier, during the period of the lease, contract, or other arrangement, in accordance with the Commission’s requirements in Ex Parte No. MC-41; Part 166, Identification of Motor-Carrier Vehicles. * * *. (1) The authorized carrier operating equipment under the rules in this part shall remove any legend, showing it as the operating carrier, displayed on such equipment, and shall remove any removable device showing it as the operating carrier, before relinquishing possession of the equipment.” (Emphasis ours.) The appellants were unable to prove (and the appellee did not produce) any written agreement between the carrier and the owner-operator, other than the “Memorandum of Agreement” referred to above, which dealt only with the question of liability, as between the parties to the agreement, for damages to their respective equipment. Appellee contends this was the only written agreement between it and Selle, and concedes that no receipts were exchanged by it and Selle as anticipated by § 207.4 (b) and that it did not require him to remove its legend as called for by § 207.4 (d) (1) (Erb testified these regulations were just not enforced at the time, and the Company did not comply with them) ; but appellee claims its arrangement with Selle was for a one-trip hauling, which was legal at the time of the collision, and its responsibility for his tractor ceased when he delivered its trailer to the terminal and turned in the manifest. Appellants counter by contending, inter alia, that Selle had been hauling, exclusively, for the appellee nearly a year; that it only had one written contract with him; that he had hauled, under it, on the average 645 of four or five trips a week for the appellee; that the provisions of the above quoted Regulations were, by law, made a part of any agreement or arrangement between appellee and Selle; that the evidence permitted a rational inference that Selle, at the time of the accident, was awaiting a return haul for the appellee; and, as a consequence of the above, a jury question was presented as to whether or not Selle was hauling for the appellee under a long-term arrangement, or a one-trip lease.
The appellants further contend that, if the Court disagrees with the aforesaid claim, the evidence, conclusively, shows that Selle was operating under a one-trip lease, with the Regulations made a part thereof by law, and this lease had not been terminated at the time of the collision, due to appellee’s failure to comply with § 207.4 (b) and (d) (1). It will not be necessary to elaborate upon these contentions. For the purposes of our decision, we shall assume without deciding, that
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