Brief for the Appellee — Chicago, St. Paul, Minneapolis & Omaha Railway Co. v. United States

IN THE

Supreme Court. of the United States 2

OCTOBER TERM, 1943.

nate, Fo. 482)

3

CHICAGO, | SAINT Pact L., MINNBAPOL IS AND Gul RAUL WAX

COMPANY, ET AL., 3 ; ee,

3 | 1

I'rrxo STATES OF AMERICA; INTERSTATE COMMERCE CoM-

_~ MISSION; AND ConNEAU s W. STYER, DON BUSINESS AS

FJouriux TRANSPORTATION Company; Appellees,

and

GLENDENNING Mororw AYS .

Jule rrener-A ppellee,

APPEAL Ir ROM THE Districr. Cov RT OF THE UNITED 87. ATES

FOR THE DIsTRICT OF MINNESOTA, af

/

BRIEF FOR APPELLEE, CORNELIUS W. STYER > \

Doing Business as Northern Transportation Comipany

AS “2g eo

1 „ Perry R. MORE, — 4

sh a FREDERICK II. STING HFIELD, 0

i a oe Counsel for Appellee,

oer

Cornelius N'. Stier,

1100 First National- Soo Line Building,«

- Minneapolis, Minnesota. *

STINCHFIELD, ACKALL, „ : 25

CROUNSE & Moonx, 5

„ ‘duns, as

1100 Fi rht Vational- Noe

» Line Building, é

Min neqoli is, Vin cu.

Ph

Hayward Brief Co. 601-7 Fourth Ave. Sd. Minneapolis

. . : ers * 88

* * 4 5 3 ° 98 0

8

INDEX

Page

I. Corrections and Additions to Appellants’ Statement of the

II.

II.

1. The Lower Court's and the Commission’s Findings an

Decisions Upon the Issue of Evidence of Bona Fide, Op-

erations During “Grandfather” Period..... ieee 7

2. The Record Upon This Issue and — tnan,: 10

3. The Commission's Rule and Reasons ‘Therefor len d. 16

4. Responsesto Appellants’ Argument.. 19

J b 23

6. The Statute Empowers ‘the -Commission to Authorize

Service to Intermediate Minnesota Route Points 5 6 60 20 27

j. . „„ „„ 00

IV. Argument Upon the Public Convenience and Necessity Case. 35

V. Appellants Are Guilty of Lachee s 37

— „eee alen sees ,

*

TABLE OF CASES CITED

. Page

ARea &.:Ge. a. GU. &, SPS DB. BG. BbecccceocceveSeccecccvscece 20

Crescent Express Lines, Inc., vs. U. S., 88 L. ud. Adv. 143. 22. 30

In re Dardis’ Will, 135 Wis. 457. 115 N. W. 33·ei . 32

Denver- Chicago Trucking Company, Common Carrier Application,

ee Gk a Os SS LAK Ae Akiba Os she ews een 22

Federal Radio Commission vs. Nelson Bros., etc., 389 . S. 266,

en eee 18

Galliher vs. Cadwell, 145 U. 8. BOG, OS Be, TR. GOB. nc cccccers » &

W. D. Gill Common Catrier Application, 29 M. C. C. > . . ee 828

* Gregg Cartage & Storage Co. vs. U. S., 316 U. S. 74, 3. 30

8 City So. Ry. Co. vs. U. S., 231 U. 8. 423, 58 L. Ed. 296. 18

ursen vs. O’Brien: — Cartier N 90 Fed. (24)

3 ) ͤ ͤ A CTC EP TT 38

Lochhard vs. People, 65 Colo. 568, 178 Pac. 666 lll e 32

Loving vs. U. S., 32 Fed. Supp. 464, 310 U. 8. 6000 .. 20

McCracken vs. U. S., 47 Fed. Supp. 444 (D. c. Ore.)../....... 27, 30

McDonald vs. Thompson, 305 U. S. 263, 266............. 20, 21, 30.

Mills vs. Bd. of Commrs., 35 Idaho 7, 204 Pac. 876............

Penn Mutual Life Insurance Co. vs. Austin, 168 U. 8. 685. . 33. 39

Rochester Telephone Corp. vs. U. S., 307 U. 8. 128. 59 sup. “Ct.

P. , ³¹w-ww ̃ •¹w A ͤ . nr

St. Paul vs. ‘Chicago, etc., R. Co., 135 Minn. 322, 166 N. W. 335.

Tarbet Common Carrier Application, 31 M. C. C. 63, 66-677

U. S. vs. American Railway Express (1924), 265 U. 8. 425. 68 L.

Ed. 1087 ... VPV 4.

U. S. vs. Carolina Freight Garviere 63 815 U. 8. 475, 15

U. 8. Sup. Ct. Rep. 722....... S NS 6604084658 .-18,

U. S. vs. Maher, 307 U. 8. 148....... Se cee

STATUTES CITED ;

Interstate — Aet. Part: I, Sec. 1 (21), 49 U. 8. 0. 1

210 „„ . ã Ä . ĩ ĩͤ—7]³ßŕ¼g n er pore 30.

Interstate Commerce Act, Part II, Sec. 206 (a) U. 8. C. 49. 308

Co ²˙ ü; —˙ A ͤ—TPQ—— Ä ee . 16.

Interstate Commerce Act, Part II, Sec. 207 (a) U. S. C. 307 (a) . 28.

Interstate Commerce Act, Part II. Sec. 208 (a) U. 8. C. 49, 308

VPV „ 28. 29, 30. 31,

SO Ge BG. Gi, ee ens

IN THE

Supreme Court af the Antted States

OCTOBER TERM, 1943,

No. 482.

v

CHCAGO, SAINT PAUL, MINNEAPOLIS ‘AND OMAHA RAILWAY

COMPANY, ET AL, - Appellants,

ee rs. f

Unrrep. STATES OF AMERICA; INTERSTATE COMMERCE CoM-

MISSION; AND CORNELIUS W. STYER, DOING BUSINESS AS

Nonrnzux TRANSPORTATION Cor xx, N Appellees,

* and

GLENDENNING Mororw AYS, INC.

: Interr ener- Appellec.

Arrhal. FroM THE DisTaict Court or THE UNITED STATES

FOR THE DISTRICT OF MINNESOTA.

BRIEF: FOR APPELLEE, CORNELIUS w. STYER

Doing Business as Northern Transportation Company

CORRECTIONS AND ADDITIONS TO APPELLANTS’

STATEMENT or THECASE |

We make the following corrections of certain inaccura-

cies and omissions in appellants’ Statement of the Case:

1

On page 5, it is ‘said:

“Styer offered no er * as to any operations dur-

ing the ‘grandfather’ period tron any Minnesota point

to any Minnesota point.“ -

*

2

Styer. offered evidence of bona’ fide 3 during the

“grandfather” period over the whole of each. of the three

routes involved and including all intermediate points on each

route. The Commission found that Styer was in bona fide |

operation on June 1, 1938, to and from these intermediate

Minnesota points. Whether the evidence sustains that and

ing is one of the principal issues of the case. a3

2. On page 5, appellants also say:

“Sty er made the claim through counsel, and testified

and presented evidence in support of such claim, that his

eastbound ‘grandfather’ operation from South. Dakota

to Minnesota consisted of an irregular route operation

to widely. scattered Minnesota points, none of which

were on the regular ‘grandfather’ routes * by the

Commission“ (R. 97-98, 102-106). N

The statement conveys the erroneous impression that the :

eastbound irregular route operation was the onty eastbound

operation claimed. Later ‘appellants so argue. .

Styer made claim to two types of operations. The first

was the ordinary regular route operation over three routes

with Minneapolis and St. Paul, Minnesota,! the eastern- ; '

most terminus, and Mitchell, South Dakota, the western

terminus, serving all intermediate points on the routes in

both Minnesota and South Dakota, both westbound and’ east-

bound. mato

The second operation claimed: was characterized by Styer +

as an “irregular route” or. “territorial” operation from a

large area in South Dakota to any point in a described terri-

‘tory in Minnesota. Styer claimed he was entitled to a cer

tificate authorizing both types of “operations, viz., regular ere

route and “irregular reute” or “territorial.” Contrary to ap-

pellants’ statement and later argument, ‘he did not claim that

his eastbound operation was solely territorial in nature nor

iHereinafter called the Twin Cities.

r eee — —

did his claim exclude the eastbound movement upon his regu-

lar routes. 1 ee

The Commission found that he was in bona fide regu-

lar route operation, including all intermediate points, in

both directions, i. e., eastbound ‘and westbound, stated that

his eastbound irregular route operation was such that it

might be warranted in granting irregular route or territorial”

‘authority. Because, however, after June 1, 1935, his enst-

bound operations of an irregular route nature had evolved

into a regular route operation in the main, the Commission.

denied the wann route authority.

3. On page 5, appellants state that they filed a petition -

for reconsideration of the order of Division 5 of the Commis-

sion. For purposes later appearing, we ask the Court to-

note that appellants did not ask the Commission for a fur-

ther hearing or for a rehearing, which, if requested. and meri-

torious, would have been granted. It is our point that appel-

lants cannot now complain they have been denied a “full and

fair”. hearing (page 13, Appellants’ Brief ) when, with oppor:

tunity prov ided by the ‘Commission’ s rules, they might. nave

received it.

4. Both Appellee Styer a the Intervener, Glendenning,

pleaded and submitted evidence to the lower Court in sup-

port of the claim that appellants, by their delay in bringing

this action for seven months after the Commission’ s denial

of their petition for reconsideration, during which time a

certificate of public convenience and necessity had been is-

‘sued to Styer and Styer had sold his business and rights i

to Glendenning for 706,0 000.00, are guilty of laclies fatal to—

their claim here.

A In connection with that issue, we add the followi ing to the

Statement of the Case: 5 .

- _ _ Pursuant to the “Agreement of Lease,” including option

4

for sale later exercised by Glendenning, and pursuant to the

‘applicable statute requiring Interstate Commerce Commis-

3 sion approval of the transfer of the certificate and properties,

Styer and Glendenning applied to the Commission for ap-

proval of that transaction.

Hearing upon that application was held before the Com-

mission's Examiner on Oetober 31, 1942, two days before the

service of a summons in this case upon Styer. Neither Glen

denning nor Styer had any knowledge of this action hereto-

fore. te: ES aie aa phe

On March 13, 1943, and while this case was pending before

the lewer Court after trial, the ‘Commission, in its order of

that date (R. 80), found that the sale by Styer to Glenden-

ning was consistent with the public interest (R. 88) and

entered its order for approval.

The lower Court, sustaining the Commission’ 8 order tor

other reasons, found it unnecessary to consider our plea of

laches. We may urge it in this Court upon “the authority.

U. S. vs. American Ky. Express —, 265 U. S. 425,

68 L. Ed. 1087. ye

It may a the Court to here identify by numbers the

routes described on the maps—Styer Exhibit Nos. 1 and 2

(R. 126-A, 90) and the map attached to the appellants’ brief.

Throughout the Commission’s and lower Court’s decisions,

the routes involved herein are designated as Routes 1, 2

and 3. These route nuinbers may be identified by reference

to the Commission s decision (R. 8, paragraph 2) and Appen-

dix (R. 16 and 27). ‘For purposes here, it is sufficiently:

accurate to say that the topmost route appearing on the

maps running west from the Twin Cities to Huron, South si

Dakota, and thence south to Mitchell, South Dakota, is

Route No. 2. f i

Route No. 1 is the “middle” route extending west from the

2

Twin Cities duplicating Route No. 2 as far as Winthrop,

Minnesota, extending south from Winthrop to New Ulm,

Minnesota, thence west through Brookings, South Dakota, to

Huron, South Dakota, and thence south. to W South

Dakota. f ö :

Route No. 3 is the. route. appearing nearest the bottom of

the maps, extending from the Twin Cities south through

Mankato to Fairmont, Minnesota, thence through Sioux

Falls, South Dakota, to Mitchell, South Dakota.

SUMMARY OF ARGUMENT ° .

“In the ‘Grandfather’ Case.” |

1. There was evidence fully sustaining the Commission's’

finding and conclusion that Styer was in bona fide operation

on June. 5, 1935, over the whole of the two regular routes, .

Nos. 1 and 2, including the intermediate points in Minne-

sota, thus satisfying the statutory command.

2. As to eastbound operations from South Dakota points

to Minnesota points. the evidence clearly shows that Styer

was in bona fide operation over the whole of Routes 1 and 2

a. as a regular route operator, serving both eastbound and west-

bound, and to and from all intermediate points on said regu-

„ lar routes without reference to whether such intermediate

- points were in Minnesota or South Dakota; that in addition

to such full regular route operation, Styer claimed that he

was operating both an additional South Dakota origin terri-

tory and an additional large Minnesota territory embracing

points of origin and destination not located on his regular

routes. This additional operation Styer himself character-

‘ized as an “irregular. route” or territorial“ operation and

claimed that his certificate, in addition to regular route

operations to and from all intermediate points in both direc-

tions, should also include the authority for this “territorial”

operation. Whether, under the facts, this portion of his east

bound operation was of the character Styer ascribed to them,

was. for the Commission to say. The Commission said that

these eastbound irregular operations, separate and apart

from the eastbound on his regular routes, were, in the early

stages, of dn irregular route or a territorial nature but that,

the eyidence of his operations: since the “grandfather” date

_ showed transportation, in great part, between ‘points upon

his regular routes only. The Commission thus denied hi his i

claim to irregular route authority and granted, and properly

so, the regular route authority to serve all intermediate

points both westbound and eastbound. |

3. The Commission’s disregard of the e of the

parties was 7 within its power ‘under Section 208 (a),

and, at all events, the parties to a proceeding involving the

‘ public interest, here a public transportation service, could

not so tie the hands-of a. public regulatory body.

4. Even absent ev iderice of shipments to these interne |

diate route points, the statute empowers the Commission to

authorize service thereto under Sectien 208 (a), U. 8. C. 49,

308 (a).

8. Appellants are . of ‘laches. They 0

delayed assertion of their action for seven and one-half

months after the denial of their petition for reconsideration

_ by the Commission. During the delay and after the issu-

ance of a final certificate to Styer, Styer sold his business,

Properties, and the rights in question to Intervener Glen-

: denning, for some $66,000.00. Styer and. Glendenning

changed their positions ‘during the delay such that an ad-

verse decision here’ would . inequity and —

: ‘

ad

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.

ARGUMENT

There was evidence fully sustaining the. findings and deci- ;

sions of the lower Court and of the Commission holding that

Styer was in bona fide operation on June 1, 1935, to and from

the intermediate route gas lying i in Minnesota. ;

The Lower Court’s Findings sii Decision Upon This ‘issue.

The determining portions of the lower Court's findings -

and decision are not fully: quoted by appellants. They are: i

„4. There was no ev idence adduced before the Com-

mission that prior to June 1, 1935, Styer had trans-

, ported: any commodities to or from intermediate points

in Minnesota on routes 1 and 2. The evidence was t

. prior-to that date Styer had transported commodities |

from the Twin Cities (St. Paul and Minneapolis) in

Minnesota to Huron and Mitchell in South Dakota over -

routes 1 and 2, had served intermediate points in South

Dakota thereon, and had transported commodities from ° —

South Dakota points to points in Minnesota which were

not on routes 1 and 2. 8

„. There was ev idence before the’ oe suffi-

cient to justify the inference that prior to June 1, 1935,

Styer was able to serve intermediate points in Minne-

sots on routes 1 and 2, and had held out service to Nuc h

points“ (R. ö of 3

In its decision, the lower Court ‘said:

“The broad question which the Commission was re-

Auired to determine in the ‘grandfather’ proceeding was:

‘What grant should be mode to Styer under the grand-

* father’ clause of 5206 (a), in order to assure him a sub-

stantial parity between ‘his future operations and his

prior bona fide operations? See United States rs. Cara-

_ dina Freight Carriers Corp., 315 U. S. 475, 481. The

Commission was not compelled to limit Styer to the ,

act pattern of his operations prior to June 1, 1935, and,

in determining the scope of. his ‘grandfather’ rights, it

could take into . the service which he was

Y *

a )

158

5 i 8 :

offering, as well as that which had actually been per. ;

formed by him, prior to that date. United States v

3 . 00 Carriers Corp., supra, pages 483-484’

a (R. 61)

And again: 3

Et must be true, however, that the Commission, in

determining the nature and’ extent of the. ‘grandfather’

rights of a carrier in a particular case, is not requi

to do so with mathematical precision, and that, withi

reasonable bounds, its estimate of the character —

scope of the carrier’s bona fide operation on and. prior

to June 1, 1935, must ‘be accepted by the courts, whieh —

cannot substitute their judgment ‘for that of the 28

mission“ (R. 62) ee .

The Court then . the Commission's long ¢ established

rule: as

3 Commission. has, in effect, ruled in similar pro-

‘ceedings that proof of actual operations as a common

carrier to and from termini and some intermediate

points on a regular route, e hpled with evidence of a-

holding out of service and offa willingness and ability

to serve all points on the rou™ whenever shipments are

offered, will justify a finding of bona fide operation to

i and between all points on the route. See Nevitt Common

Carrier Application, 4 M. C. C. 298, 299-300; Consoli-

dated Freight Lines, Inc., Common Carrier Application,

11 M. C. C. 131, 136; Knaus Common Carrier Applica-

tion, 20 M. C. C. 669, 671; Los Angeles- Seattle Motor

Express, Inc. Common Carrier Application, 24 M. C. C.

141, 145; Turbet Common Carrier Application, 31 M. C.

C. 63, 66. 67. In the instant case, it is apparent that the

Commission regarded the proof of actual service be-

tween termini and to intermediate points in South Da-

kota, together with the evidence which tended. to prove

that Styer was offering and was able to serve interme-

diate points, whether in Minnesota or South Dakota, on

the ‘grandfather’ routes, as sufficient to justify the grant

which it made to Styer. Proper deference must be paid.

to the Commission’s interpretation of the law which it

a Gregg Cartage c Storage 12 v8. United States, *

* © *

PE OSS , lee,

316 U. S. 74, 88. and, if ace’ is any wartent in the ree-

ord for the judgment of the Ceniniission, it must stand. ö „

‘ Rochester Telephone Corp. rs. United States, 307 U. 8 : *

125, 145146. We think that the Commission“, Aer f

mination that Stxer was entitled to the rights granted

because of his bona fide operations as a common carrier

on and prior to June, 1935, did not. amount to an abuse

of por * ioe * and 63). (Our 1 &

; The Sais are the principles invoked and applied by the

: ; ny Court upon the issue of the nature of the evidence an | /

which warranted the granting of authority to serve the in-

‘termediate points upon these routes. Whether the points

lay in Minnesota or South Dakota was of no consequence,

Upon the same issue, the Commission found:

When applicant started his own peration he util-

ized two trucks. On April 9, 1935, 1 added two tractor

and semi-trailer units. On June 1, 1935, he operated

no other equipment. There is no doubt that. applicant

transported commodities of a general nature between „ 1

Minneapolis and St. Paul, hereinafter called the Twin

Cities, within which term we shall also include. South |.

St. Paul, Minn., on the one hand, and, on the other.. be

Brookings, Huron und Mitchell, 8. Dak. ” (R. 9, Com-

mission’s 2 atcha N

The above 3 substantiate the Commission's grant of

a authority to transport between the termini of Styer's routes.

This finding i is not attacked, hence: virtually conceded. ;

pon the question of intermediate point service upon

Routes 1 and 2, the Commission found: \ — 75

“Prior to June 1, 1935, applicant served the inter-

mediate points on routes 1, 2, 4 and 5 of Brookings,

Iroquois, Forestburg and Madison. | Applic ant does not

claim the right to transport interstate shipments from’ .

the Twin Cities to points on his routes in Minnesota,

but claims that such points were served eastbound from

South Dakota. Although the proof of service at inter- .

mediate poinjs on the above routes is not impressive, ae

: ‘oes 2 f |

Pe een! 5 +

Phe gs So

enen in en with the fact that opera -

_ tions by applicant were instituted only 2 months prior

to the statutory date and the testimony of applicant: °

that he did not limit his service to terminal points but

held out service at all intermediate points and actually

_ solicited such business, we are convinced that he should

be authorized to serve all intermediate points on routes

1, 2, 4 and 5, and that a restriction to serve certain

intermediate points in one direction only would make

the authority granted unnecessarily complicated and it

will not be imposed” (R. 10 and il, 9832 — Re.

The e of the findings of the Commission and of

the lower Court that Styer should be anthorized to serve

intermediate points on these routes in South Dakota is not

questioned: and hence virtually conceded. | a

| With respect to the remaining. intermediate points, those

lying upon the routes in Minnesota, the Commission took a.

realistic view of the. facts. It recognized that on April 1,

1935, two months prior to the. “grandfather” date and at the

threshold of his venture, Styer designed and ‘projected: a

‘business which encompassed operation over the whole of

these routes with service to and from all points’ cine

terminal and intermediate. The Commission found that he

did not limit or confine his proffered service to terminal

points. It found that he held. himself out to serve all in-

termediate points and a solicited business to and from

cm points.

The innit Upon This Issue and Argument Thereon. _

This finding is * supported by the record. Btyer te tes-

tified :. 3

*

Between April 1 and June 1, 1935, my facilities were

such as to pérmit carrying shipments to the intermedi- |

ate points not covered by Exhibit 3. There was actual

space in my trucks which would have allowed me to ac-

cept, carry and deliver shipments to these intermediate

points had I recéived any during the period prior to

June 1, 1935. Never at any time did I intend or offer

to the public simply a non-step operation between the

Twin Cities and Huron prior to June 1, 1935” (R. 93).

Styer's statement concerning the intermediate points “not

covered by Exhibit 3” was meant by Styer to include all inter- f

mediate points on all rontes even though those points were

not named in Exhibit 3. Exhibit 3 (R. 131-132, 127) covers i

the period from April 1 to October 15, 1935, and sets forth

in great part South Dakota points. The „partial abstract

of Exhibit 3” (R. 132) sets forth thie Minnesota points served

during that period. His statement ‘that. he had space to

carry any proffered shipments “to. or from intermediate

points“ not covered by Exhibit 3 refers to other intermedi-

\ ate points. not named in Exhibit 3 whether in South Dakota 5

or Minnesota. The points not there named, of necessity, in-

cluded ali South Dakota and Minnesota intermedizite ponte

not there set forth., ee 5

At no time did Sty er offer or inténd | to offer “simply a non-

stop operation.” A non stop operation implies an operation

between terminals only, not to, from, or betw een intermedi-

ate points on read routes.

And again:

The drivers were tastrected to solicit We from

all towns through which they passed, to solicit freight

in either direction” (R. 94). . (Our emphasis.)

“On and prior to June 1, 1935, I solicited business

for intermediate points on the regular routes I operated .

over. I contacted poy quite a few shippers” (R.

da-.

“It was my purpose from the beginning to solicit and

render service to the intermediate points. What I at-

tempted to do was get a truck service comparable to that

that Crabb had been giving. It was a daily.service to a

number of points in South Dakota; to any of the points

along the routes. We accepted any freight we were able

+

a .

to — * the hie we started. We solicited freight for

‘ all points along the route. Because of the various von-

- tacts at some of these towns, we got much more freight

there, I was born at Huron and was weil-acquainted

there and consequently Huron developed faster than

some of the other points, but at no time did we turn

down freight for any of these points along the routes

in South Dakota. I am referring to the towns shown

by Exhibit 5” (R. 93). ‘ :

All of his sworn testimony stands uncontradicted.

To us it has always been perfectly clear that Styer, in this -

| testimony, was referring to all intermediate points and with-.

out reference to whether those points lay in South Dakota

or Minnesota. There were, as a matter of fact, some small

South Dakota points which were not named in. Exhibit 3

and which, prior to the critical date, he had not served. He

had not “served” them in the sense that he had not picked.

up or delivered a shipment at er to such points. In his

testimony there was no occasion for him to distinguish the

intermediate point operation as between South Dakota and

Minnesota points.

At all events, there is not one word in such testimony in-

dicating that he was. referring to South Dakota points only

or, conversely stated, that when he said “intermediate

points” he was excluding the Minnesota points upon his ;

; regular routes. He was, of course, referring to intermedi-

ate points upon all three routes. He was making no con-

seious distinction between Minnesota intermediate points *

and. South. Dakota intermediate points. When he said prior

thereto that he solicited business for intermediate points on

his regular routes “that I operated over” (R. 92), he was

not referring, even by inference, to South Dakota or Minne-

sota intermediate points singly. He was referring to both.

When he instrueted his drivers to solicit business “at all

towns through which they passed in either direction”

(R. 94), he was making no distinction concerning the state

\

e

in which such intermediate points lay. He meant precisely

what he said, viz., ail intermediate points upon the routes,

whether in Minnesota or South Dakota. He was engaged

in interstate commerce and so far as his business was con-

= cerned, it made no ‘difference whether the revenues originat-

ed at or out of a Minnésota or South Dakota intermediate

g point. :

Ner ertheless, out of this testimony, appellants would have

the Court believe that Styer was there referring, when he

mentioned “intermediate points,“ to South Dakota points

only and to the utter exclusion of Minnesota intermediate

points. We submit that there is no basis in the ordinary

* interpretation of the English language for such argument :

and when all other facts and circumstances are considered, ‘

no basis or reason exists for such a position.

Appellants seek to interpret his testimony so as to leave

the inference that he was attempting to emulate Crabb's

g service and that Crabb's service embtaced South Dakota

points only. (From the Twin Cities.) Actually no special

or other inquiry was made as to whether Crabb’s service em-

braced Minnesota and South Dakota points or South Dakota

points only. It is true that Styer speaks of Huron, South

~ Dakota, as the point where his business dev eloped more rap-

idly than elsewhere—a natural statement in view of not only

the fact of the matter but because. also he was talking about

South Dakota points as well as Minnesota points.

None of these isolated remarks upon which appellants: seem —

to hang much of their cake can overcome the effect of the

general statements of Sty er which, of necessity, contem: .

plated all intermediate points whether in Minnesota or South

a Dakota. W hen at the outset of the quoted testimony that

“he says it was his purpose to “solicit and render service to

intermediate points,” there is. nothing in this record before

/ or after which would warrant the argument that he was re-

a

— 5

145

ferring to South Dakota points only and to the exclusion of

Minnesvca points. At a later point i in the testimony he said:

We accepted freight for.all points along the route” (R.

93); that his facilities were such that he could accept, carry

„

7

‘and deliver shipments to intermediate points not covered —

i by’ Exhibit 3.” :

The argument in our 8 is crowned by his last state;

ment that at no time did he intend or offer “a non- -stop op-

eration” meaning to the exclusion of all intermediate points.

If there should be any donbt about the proper interpre-

tation of this testimony, the lower Court wisely and in ac-

cordance with proper principles of the law, said:

The Commission was free to place its own interpre

tation upon his testimony as to the extent of the service

tendered” (R. 60).

The lower Court states that it was “probate” that Sty er

might have been referring to South Dakota points only be-

cause “his tariffs apparently covered no other intermediate

points on his routes“ (R. 60).

The Court, however, elearly resolved the matter by stating

in substance that the Commission must be free to weigh the

evidence and that the Commission's estimate of the charae-

ter and scope of the operation within reasonable bounds

should be accepted: by the Courts.

We believe that the Court was influenced by a fact that

the Commission «more fully understood and appreciated,

The “tariffs,” of which the Court speaks, was not a tariff in

the present day sense. The time was before regulation: The

Court's referenge is to Exhibit 5 (R. 134, 93) . This exhibit

was merely a card which contained the names -of certain

South Dakota towns ‘and rates thereto from the Twin Cities

only. It was used by J. W. Crabb for service into South

Dakota“ (R. 93), before Styer started into business? (R.

2Styer had previously worked for Crabb.

15

75 98). It was circulated by Styer’ s Twin Cities . con-

nection— The National Truck Terminals, Inc. This terminal

company furnished dock space, pick-up and delivery service, ee

and a to- N for all carriers v egqnneeted therewith.

— a

— — —

terminal company, on behalf of Crabb and Styer among Twin

Cities shippers. Neither Crabb nor Styer had intrastate

rights in Minnesota and could not transport shipments from

the Twin Cities destined to a Minftesota point. They could

accept, in the Twin Cities, only, shipments which moyed into

South Dakota or shipments received by, them from connect-

ing carriers at the Twin Cities, which shipments: originated

without the state of Minnesota and were destined either to

Minnesota points or to South Dakota points. 4 N

Twin Cities shippers, therefore, amongst whom this

card was. circulated, could ship South Dakota shipments

only over Styer's line. Clearly, therefore, there was no

reason why Crabb or Styer should circulate in the. Twin

Cities a card naming Minnesota ‘points intermediate upon

their routes. Such effort could have gotten them no busi-

ness because they could not have accepted the shipments

because of lack of intrastate authority to do so. .

_ Styer solicited “various truck lines serving points east of

the Twin Cities“ R. 94). East of the Twin Cities included

Chicago, Milwauk Akron, Ohio; Oshkosh, Wisconsin; New.

. Connecticut; and many others 3 in Exhibit

3 (R. 127).

The Commission, we aubmit; with its daily acquaintance

with this type. of fact situation, was in much better position

than the Court to understand and evaluate the significance.

of the circulation of Exhibit 5. Its circulation had little,

ik any, bearing upon the interpretation to be placed on

Sty er's testimony, viz., whether he was talking about South

Dakota points only or whether he was talking about all in-

Bo ae

termediate points upon the routes. The inclusion’ of Minne

sota intermediate ‘points upon 2 25 ‘card * have been

meaningless. f a

Thus, the Commission had ample basis in the — to find”

ee

Chiat Styer had been but two months in business, did not at

any | time limit his service to terminal points and had held

ont ‘service to all intermediate points, including Minnesota

points, . aad had actually’ solicited such business. In thé

short spate of time between the beginning of his venture

and the “grandfather” date, he could not reasonably be ex-

pected to liave initiated actual shipments to or from all in-

termediate peints on his routes (R. 92). The absence, how-

ever, of shipments to these intermediate points makes him

nonetheless a carrier thereto—nonetheless in bona fide ap-

eration thereto. It may well be that the Omahn Railroad :

passes through Podunk, Minnesota, for two months without

picking up or deliv ering a shipnient vet no one can contend

that the railroad was not in bona: fide operation to that

point. It was ready, willing and able to serve it and held

itself out to do so and would stop there tomorrow to deliver

a chipmen The principle here is not different. They are

both public carriers. ce :

x 3 . .

The Commission’s Rule and Reasons Therefor.

The lower Court announced and applied the rule the Com-

mission has long followed respecting the “grandfather” au-

’ thority respecting intermediate points upon a regular route.

Were proof of bona fide operation between termini and

some intermediate points is, as here, undoubted, the Com-

mission has viewed the applicant’s operation as an enden vor

_to serve a route. Significantly in the “grandfather” clause |

itself, ‘Section 206 (a), the statute * of r

et points. = |

6

17 5 i x

The reason for the ‘Commission's. position is well stated’

6. in Tarbet Common Carrier Application, 31 M. C. C. 63, at

g 66 and 67. * that case the applicant could show no trans-

e “grandfather” period between St. Louis,

f Missouri, and Indianapolis, Indiana, a segment of the longer

route from Muncie, Indiana, to St. Louis. The applicant,

2 however, rendered a daily service from e and St. Louis 5 x

'. _ through Indianapolis. The Commission sai

To require an applicant under. the 3

clause to prove service between every combination of

points sought in the application would not only prove

an insuperable burden but would result in restrictions

which would choke the development of motor carrier

operations over the routes which a carrier serves, and

‘thus prevent the development: of an efficient and eco-

nomical transportation system contrary to the national

transportation policy as expressed in the Act. We are

of the opinion that such restrictions should sae be im-

\ posed”.

The ons and W of this rule is hardly 1 be argued.

It was not the intent of Congress under the “grandfather”

clause that the ‘Commission should be compelled to grant

certificates. authorizing service ‘only to those intermediate

points to or from which a carrier could produce a receipted

3 freight: bill evidericing such transportation. If that rule pre- 5

vailed, transportation chaos would result. It would mean

that carrier Jones would be authorized to serve points X,

C and Dall on the same route; that carrier Smith, oper-

“ating over the same highway, woul be authorized to serve

points B, E and F, and that carrier Brown could serve :

points G and H—all on the same highway. Such a pulveriza-. :

2 tion o “grandfather” rights is far beyond the intent of Con-

. gress. We cannot easily imagine a railroad carrier service ‘

which stops atꝰ every other point only, even though its trains

Pass through them daily.. ie Sena

—

| pew . . Ne

-— The e Commission also refused to Sines a e wth ser-.

vice to these. intermediate Minnesota points and this hot f

withstanding Styer’s claim. or stipulation (R. 11). The.

lack of transpSrtation efficiency in a “one direction“ move.

ment is apparent. It promotes the ultimate in transpor-

tation waste. In these days of scarcities of gasoline, tires,

steel; ete., or at any time, such restrictions do not make

ee transportation sense. Most important of. all’ the restrictioris 5

here contended for by the appellants run counter to the na-

tional transportation policy?’ An efficient and economical

transportation system cannot be achieved by imposing re-

strictions which prev ent good. public service. It is the Com-

mission's duty, under the policy, to promote the inherent

advantages of motor transportation service—not to deny

them. 0

The e exercise of the discrétion to impose or refuse to im-

pose all such restrietions is for the Interstate Commerce

Commission. It. i is the exercise of an administrative disere-

tion. It will not be disturbed by the Commission so long -

as the Commission stays within the bounds ‘of its statutory

4

powers.

Rochester Telephone Corp. vs. . S., 307 v. S. 125, 59

Sup. Ct. 754. ——

Kansas City So. Ry. On. vs. U. 8, 231 v. 8. 423, W a.

Ed: 296.

U. 8. vs. Curolina Freight Carriers Corp. „315. U. S. 475.

Federal Radio Commission vs. Nelson Bros., etc., 289

V. 8. 266, 276, 277, TL: Ed. 1166.

* 2

“Response to Appellants’ — ne

The question of bona fide operation is one of fact and · the

3 conclusion must be drawn from all of the facts or eireum-·

stances of the case. * Appellants disregard this view and seek

to isolate certain of the Commission’s statements and build

an argument thereon. *

Appellants say (page 17) that the Commiluies stated that

the proof of service at intermediate points was “not impres-

sive” and then point out that there was no proof of any “ser-

-vice whatsoever” to intermediate Minnesota points, either

westbound or eastbound, prior to June 1, 1935. There were

3 shipments. from South. Dakota points to Redwood Falls and

Marshall, Minnesota, on. Route 2 during the “grandfather”

for which Styer had no bills or manifests (R. 1057.

—"Btyer explained the: reason for the absence sack these ‘ills (R.

. ö

Appellants' statement that there was no For . servi ice

to these intermediate points ascribes. a meaning to the word

_ “gervice” which we. deny. By “service” to a point, appel-

lants apparently mean to say that the proof must show a

' pick-up or delivery of freight to an “intermediate point in

order to sustain “grandfather” rights. he Commission’ 8

statutory duty here is to determine whether an applicant

was in bona fide operation over the route. We do not agree

that proof of bona fide operation must rest solely in a show-

ing of the actual receipt or delivery of freight at a certain

point. In the sense made pertinent by the statute, Styer was

in bona fide operation to all such intermediate points. i

Appellants further claim that there was no evidence that

Styer held himself out to serve these intermediate points 5

8 (page 17). We shall not here repeat the testimony concern-

ing solicitation by Styer and his truck drivers at these points

out.

and in both directions. This is the * kind of holding sae

8 Appelase⸗ farther ‘claim that ‘Sige? testified —

this solicitation before he amended his applicati8n to exclude

the Minnesota points. They urge that his “direct testimony

specifically disclaimed any ‘grandfather’ rights to serve west _

bound intermediate points” (page 17). Styer did not, by

direct testimony, disclaim such “grandfather” rights, and ap-

pellants do not point to the record where such may be found.

He did not, at a later period | in the testimony, deny or qual-

ify any of his previous statements of faéts. In short, his

later amendment did ‘not deny the facts. concerning solicita-

tion or holding out. «No such earlier testimony was. ever.

later repudiated, as appellants claim (pages 18 and 19). :

‘Appellants argue that Styer’s holding out to serve these

intermediate route points without a showing of transporta-

tion of shipments to or from such points: runs afoul of the

_ principles announced in McDonald vs. Thompson, 305 C. 6...

263, 266, wherein the Court held that the bona fide operation

contemplated by the Act required a showing of actual service

rather than potential or simulated service, and that a show-

ing of mere ability to serve was insufficient. The principle

is mentioned in subsequent cases.“ None of the prior deci-

sions bear upon the fact situation here present. In each of

them, the “grandfather” rrier was an “irregular route” or

“territorial” carrier, handling special commodities requir-

, ing special transportation treatment, The instant case, in

the respect under discussion, deals with regular routes and

the transportation of general commodities in 4 manner sim:

lar to railroad carriage. The prior decisions deal with.a

different kind of, service than here presented.

Further, the principle cannot apply in the instant case be

cause Styer’s trucks physically operated through these inter-

mediate points daily. In the cited case ‘(McDonald v.

oe a eh ve, United States, 316 b. 8. 15; U. s. vs. Carolins~

. N 315 U. S. 475, 15 U. 8. Sup. Ct. 1 722:

_ Loving vs. United States, 32 Fed. Supp. 46 i.

— ——

3 Thompson, supra) and others, the claim of ‘ea. fide opera-

tion was unsupported and unateompanied by any actual

i physical operation of the equipment in or out of the involved:

' territories during the “grandfather” period. Styer did some -

thing more than to merely claim orally that he was en-

titled. to serve these intermediate ‘route. points because he

held himself ent. There was an 4 ‘tual physical movement. :

of the trucks through these points. He had: initiated a route

service, and his trucks moved over the routes and through 25

these points daily. The service was present and the mere

failure to have been tendered a 3 does not *

its availability.

- ‘Appellants also argue that mere “physical operations

through these intermediate points is insufficient to establish = = ©

“grandfather” rights, citing two Commission cases. In the

Gill case, 29 M. C. C. 475, Gill proved undoubted bona fide.

operation between terininal points. Because the “grand- ö

. father” clause, provides for a certificate to a carrier if he was

in bona fide operation over the route or routes within the ;

territory claimed,” Gill then contended that he had estab- -

lished a route and that under the statute the Commission‘

was. compelled to grant him all. intermediate points without

proof of service to them or intention to do so.’ The Commis.

sion directed attention to Section 208 (a) which requires the

Commission to specify in certificate “intermediate points; if

any” and said. ORR: 7 oie

In our opinion, we are clearly’ el to determine

+ what intermediate points an applicant under the ‘grand: *

father clause should be authorized to continue to serve,

depending on the facts in the . case, and this

has been our consistent practice“ (476). 15 }

4

\

=

The cited: i aan no rule except that each case

must be determined upon its own’ particular facts and cit-

ie cumstances. The conclusion is to be draw n from, all the facts Bas

un

of the case. In the instant case the “inere 0 opera-

tion” through these intermediate points was accompanied

by. the launching of business in the first instance which. em-

braced all points upon. the routes involved. Buck was. not

: present in the Gill case. 75 :

Denver. Chicago Trucking Company, 0 A. shy 27 M. C., C.

343, cited by appellants, is not applicable. There the appli-

cants had, in a prior informal proceeding, claimed certain

points in Illinois and Towa as intermediate points upon the

route between Chiengo and Denver. At the hearing, how- ;

er er, they admitted that they had abandoned all service Ov er.

the routes upon which these points were located. At the

a hearing they sought to be authorized to serve these points

as “off route” points. The Commission denied the authority,

s first, because appellants have. served ‘them in the past. as

intermediate points upon routes now abandoned, and, second,

because they were too far removed from the principal Chi-

cago to Denv er route to. be properly considered “off route.”

, Appellants: further argue. that authority to serve these

; e points would “vastly increase” the operation. fs

he was: - conducting on the “grandfather” date, thus increns-

ing competition to them. This is claimed to be contrary to the

elaim to this Court in Crescent Express Lines, Ine. 08. es...

88 L. Ed. Adv. 143. Parenthetically, it would be somewhat

difficult to imagine that a beginning trnekline, hauling LCL’

freight ‘only, is in serious competition with these large rail- a

roads.. ‘The answer, however, is that the Commission’ order

does not increase operations not existing on the “grand-

father” date. The “operation” over the ‘routes was con-

ceived by Styer in good faith on April 1, 1935. At that time

he launched his projeet and was transporting freight daily :

over these routes for the two months preceding June 1, 1935.

‘In other words, on June 1, 1935, the operations of which the

3 appellants complain were existent and had been in operation

* * 7

¢ 9

; ; 8

f° N *

for the two a Re months. On June 5 1938, Styer nad

lready established himself as a “railroad competitor. The

Commirgion’s order did not. permit him t to increase com̃peti-

tion except in so far ad any competitor may increasé his ton-

nage or revenues from: tlie business upon the route already

established. This; of course, is tavored by the Act because

Congress provided that the Commission. should not attach

any limitations to certificates which would restrict the. car- 35

rier’s. right to add to his ‘equipment and facilities as the f

developnient of his business: ‘and the demands of the business.

e Section 208 of the Act, 49 U. S. C., Seetion 308.

—

o.+

4 “= Basibound Operations.

wae.

two false premises.

The first, contrary to appellants abe (page 23) is.

that Styet s evidence did not show that “the only eastbound

service he was. holding out or rendering during the ‘grand-

father’ period was an irregular route serv ice to many widely

scattered points in Minnesota, etc.” (Our emphasis.)

On. April 15 1935, Sty er in isputably launclied operations.

ice he contemplated and

“Applicant's entire ‘argiment upon this issue is based 2

‘thereafter performed was both westbound and eastbound.

Moreover, operations over regular routes,” unless specifi-.

cally ‘restricted, imply transportation in both directions.

The Exhibit 3 shows that Styer transported traffic in both

directions prior to the “grandfather” date. (Exhibit 3, R. 90

KR. 127, 128, 90.) For example, the first shipment shown on

Exhibit 3, in April, 1935, is Minneapolis to Mitchell, South

Dakota. The third shipment. is saa to. Minneapolis and,

80 on throughout the exhibit. For = two months prior to

June 1, 1935, Exhibit ‘shows that Stytr transported twenty-

tour — qestbqund from Huren to ) Minneapolis and

. 9 :

. —

K 27 ‘

AN 5 my 8

. —

24

St. Paul or South St. Paul (the Twin Cities area), and

twenty shipments from Mitchell eastbound to the same Twin

Cities area. This constitutes almost one shipment per day

moving east to the Twin Cities area only—exclusive of other

Minnesota points of destination.

The above represents admitted and undisputed movements

of traffic eastbound -between points on regular routes. The

' westbound transportation is more voluminous and is not at-

tacked. “Roth establish regular route „ in both

directions.

Appellants 3 to read Styer's. eastbound regular

route mov ement out of the case.

The facts, the actual ‘transportation performed, show.

movements over the rotites and between route points in both

directions and thus dispose of the argument.

The statement of claims appearing in the colloquy of coun-

sel (R. 97) is to the same effect.

“Mr. Janes: But do vou claim ewer in South Da-

’ kota, when you pick up commodities in South Dakota, to

deliver those commodities in South Dakota to points in

Minnesota on those routes? (Our italics. ) :

ur. Moore: to |

An —— of the facts can leave no confusion con-

cerning either eastbound regular or irregular route. service.

One of Styer's problems was that of “balanced traffic,“

i. e., equal loadings in both directions. The westhquad traf.

fic predominated (From the Twin - Cities). (R. 103 and

190.) To avoid and lessen empty eastbound mileage, it was

necessary, that, in addition to his route points in South Da-

kota, he establikh a larger South Dakota area as an origin:

territory for the movement of goods eastbound into Minne-

vota. ‘This South Dakota to Minnesota traffic moved to a

— vary from a few * pounds to a few truckloads at

one time (R. 191). :

sf 25

large — of ante points between, on, and off his

‘regular routes (R. 190 and 191) He named some twenty-

seven points in Minnesota to which he nad delivered ship-

ments originating in this South Dakota aren (R. 125). The

goods included potatoes, farm produce, canned goods, con-

struction: machinery and supplies, building supplies and ma-

; terials, on presses and household goods (R. 11, Commis-

sion's order). ;

Speaking of Minnesota as a destination territory, he said,

We wanted it as a territory to be operated in conjunction

with our regular route operations“ (R. 104). (Our italics. )

The lower Court quoted Sty er’s testimony in full. We re-.

; produce it here in part only: :

A claim to have a regulur operation and an irregular

operatjon in Minnesota * * * J claim to have. regu- .

lar and irregular operations of general commodities. The

regular operation as indicated. by the routes shown on

this map are the routes over which our trucks go daily

and that service is given. The irregular opera-

tion, for example, would be a shipment for Albert Ia ö

(Minn. where we would not go unless we had a ship-

ment. In that nature it is irregular. The regular oper-

ations are more or less on a fixed time schedule. That

is the bulk of our operations. The irregular operation.

is only supplemental to our prince ipal operation. It is

principally for back haul out of South Dakota”, (R. 58,

* /

Mr. Stver further stated, “It is my contention, that prior:

to June J, 1935, and between June ‘. 1935, and April 1, 19. 33,

1 transported shipments from South Dakota ‘to points and

places in Minnesota or from points ‘and places in Minnesota

other than the Twin Cities to South Dakota“ (R. 99, 100).

At the time of his application and upon the hearing before

the Commission, he believed that the nature and scope of his

total operations were such to entitle him toa certificate (1)

as a regular route carrier between all points on his routes,

26

whether in Minnesota or South Dakota, (2) and, in addition,

as an irregular route carrier between points ‘and places in a

South Dakota territory and between -points and places in a

large Minnesota territory. The Commission held that his

irregular route or territorial authority might be properly

’ granted under the ev ‘idence, but that the proof of his oper-

ations since June 1, 1935, showed that his South Dakota to

Minnesota business had evolved considerably into traffic be-

_ tween the points on his routes. The regular route authority

granted would, . more nearly fit his then opera-

tions. 8 ite }

The Cominission recognized, without effort, that the ir-

regular route operations Styer claimed to have were in addi-

tion to the regular route operation. In its order (R. 11 ) after

disposing of the question of regular routes and .

N points thereon, it said,

“In addition to the operations conducted over regular

routes described above, applicant also claims to have

been engaged in the transportation of general commodi-

ties over irregular routes between Points in that part

of South Dakota described in his South Dakota appli-

cation on the one hand and on the other, points it in Min-

nesota“ ( R. 11). (Our italies.)

W ben it is made clear that Styer was clniaing, and be!

lieved he was proving, two types of operation, entitling him

to both types of authority, the Commission’s order ‘with-

stands appellants’ attack. The Commission properly grani-.

ed regular routes with service in both directions. Styer asked

for irregular route authority between points and places in

Minnesota and South ‘Dakota located in “territories” an

lying beyond his regular routes in both states. The Ook

mission denied him the irregular route authority.

Thus appellants’ argument is based upon false premises.

-The eastbound irregular route Operation was not, the only:

eastbound service ‘performed.

The result therefor of which appellants complain, does

not exist. There was no conversion of an irregular route oper-

ation into a regular route operation. The latter existed

independently of the claimed irregular return or eastbound

- moyement. U nder these facts, there can be no conflict with

the U. S. vs. Maher, 307 U. S. 148. Maher conducted an

irregular route service during the “grandfather” period, filed

his application, thereafter abandoned: that type of service,

and without authority commenced, a new and different type

of operation, viz., regular route operation. . In the instant

case, Styer, on the critical date, performed a regular route

service and ‘continued ta do so at all times. He believed and

. attempted to persuade the Commission that, apart from his

regular routes, his eastbound service between territories in

. Minnesota and South Dakota was such that it also entitled

him to an irregular route authority. This was denied him.

The Statute Empowers the Commission to Authorize Service

to Intermediate Minnesota Points.

Because of ample e evidence of bona fide operations sufficient

to sustain the Commission, we are not compelled to wholly

rely upon the argument to follow. It has, however, a sound

basis in the plain. language of the statute, and standing alone,

if need be, could be determinative of the case.

The proposition is: Even if the ev idence of bona fide op-

eratidn were wholly absent, the Commission is empowered

buy Section 308 (a) to require Styer to serve these intermedi-

ate ‘Minnesota points. Such is the holding of a three. ae 4

statutory court in the Oregon District. McCracken vs. U.

47 Fed. Supp. 444 (Dn C. Ore.). The lower Court. in the nt

stant case rejec ‘ted this contention holding that Section 208. .

(a) (C. S. C. 49, 808 (a)) did not confer such power in a

“grandfather” case. It held, ‘however, that in the “Public

Convenience and Necessity” case the Commission, without

doubt, possessed such powers. In this section of our brief,

we discuss the “grandfather” case only. '

Section 208 (a) (49 U. S. C. 308 (a)) provides:

“Any certificate issued under section 206 oF 207 shall

specify theservice to be rendered and the routes over

which, the fixed termini, if: any, between which, and the

intermediate and off-route points, if any, at which, and

in case of operations not over specified routes or bet ween

fixed termini, the territory within which, the motor car-

rier is authorized to operate; and there shall, dt the

time of issuance and from time to time thereafter, be

attached to the exereise of the privileges granted by

the certificate such reasonable terms, conditions, and

limitations as the public convenience and necessity may

from time to time réquire, including terms, conditions,

and limitations as to the extension of the route or tes

_ of the carrier, and such terms and conditions as aré nec-

_ essary to carry out, with respect to the operations of

the carrier, the requirements established by the Com-

mission under section 204 (a) () and (6): Provided,

however, That no terms, conditions, or limitations shall

restriet the right of the carrier to add to his or its equip- .

ment and facilities over the routes, between the termini,

or within the territory specified in the certificate, as the

development of the business and the demands of the

—pablie’ctralll require.“ (Our italics. )-

We invite attention first to the opening words of the

section. They refer. specifically to certificates issued under

Section 206—the “grandfather” clause, and, in addition, to

certificates issued under Section 207—the “public: conveni-

ence and necessity” requirements.

- Secondly, the quoted section. provides that the Commis- -

sion miy attach these conditions at the time of the issuance

of the certificates. Such was done here. ö

/ At is always difficult to avoid the impact of plain and clear 4 :

ambiguous language. Taken as a: whole, or piece by piece,

the language clearly shows that Congress gave the Commis-

—

leser.

sion the power to atiach any ne, conditions, or limita-

tions which, in the Commission’s judgment, the public con-

venience and necessity required. The purpose of the section

was to make the public interests and necessities paramount

at all times. Congress believed the Commission, even after

hearing, bond have the pow er to use terms, conditions, and ;

limitations which would meet the — requirements of the

public.

It may be argued that the “terms, condition, and lim-

itations” are-words of limitation and that the Commission,

therefore, might condition or limit the certificaté to ber is

sued to the end only of granting less than the evidence might

warrant. It was the lower Conrt’s view that “grandfather”

rights, being in the nature of a privilege, and to be Arictiy ö

construed against the applicant, cannot be expanded: by the

Commission under the power in Section 308 (a).

The argument, however, overlooks a * inclusion in

the quoted section, as follows: ,

« “Including terms, conditions, and limitations as to

the extension of the route or routes of the carrier.

* * ** 5 l ;

This inclusion empowers the Commission to compel a car-

rier to extend his route. It may say to the carrier, “Your reg-

is ular route. terminates at Mitchell, but it happens that there

are a dozen. small points beyond Mitchell which need your

service. You serve them.” If he may be compelled to extend

a route, with its attendant expense of running trucks through

them daily, it must surely be said that the Commission is

“empowered to compel him to serve a few intermediate points

upon his already established route through which his trucks

daily run to reach terminal points. The power to compel

the greater * includes aed power to compel the

5

The ä of * power as affects Failroads may be

*

— oni

a * 2 * n 5

JJC. · m c PPC ir LF OLR es LP TE

— . *

a,

30

. found in part One, Section 1 421). A bearing is not made

compulsory in either section. g

Present the power, the wisdom of the matter is for the

Commission not the Courts. . 5

The lower Court quotes the McDonald ease, supra, and

Gregg Cartage ck Storage Company.vs. U. S., 316 U. S. 74,

83. These decisions view the “grandfather” clause as con-

terring a special privilege and indicating that it should be

extended only to carriers: plainly within its terms. Some-

thing of the same attitude is expressed in Crescent Express |

Lines, Inc., vs. U. S., 88 L. Ed. Adv. 143, wherein the thought

is expressed that Congress did not intend, by the “grand-

father“ clause, to pooner more competition than already

existed. |

The response is that the Commission has not here granted

Sty er “grandfather” rights beyond the reasonable limits of g

proof. It followed a long established and proper rule where- -

in authority to intermediate route points, although not

served on the “grandfather” date, ifa part of a route and ö

other intermediate points were served, would be. granted, ae

a part of the full route authority, intermediate point if the

evidence showed that the carrier had held himself out to

serve all intermediate points and was able to do so. The

application of that principle. does not umount to an unwar-.

ranted expansion of the “grandfather” clause.

‘The Commission had the power, under Section 208 (a)

(49 U. S. C. 308 (a)) to authorize the service to these inter-

2 mediate Minnesota points even if proof of bona fide opera -

tions had been absent. It used it wisely. ; ae

McCracken vs. U. S., supra, supports the position f an-

nounced’ Above. We note that ‘appellants declare it to be

erroneous but do not attack the decision itself. The facts

of the two cases are comparable. The lower Court. in that

case squarely held that Section 308 (a) empowered the Com-

31

mission to compel the carrier to serve intermediate route

points to which no service had been shown during the e *

father“ period. 0

Appellants argue that the Oregon District: Gant over-

looked the fact that express power, in different lang nage,

was' given the Commission in Part One (21) to compel rail-

roads to construct extensions. They claim that such power

was not given in Part Two, applicable to motor carriers.

We have already pointed out that Section 308 (a), in our

opinion; was intended to be the counterpart of Section 1 (21).

Part One. Part Two, as we view it, was intended to be a

‘complete act, embodying the lessons” learned froth a piece-

meal railroad regulation over a long period of years. Also we

see no reason why Congress should deal differently with mo-

tor carriers than with railroads. Both are public utilities,

and if the public need requires, both should be n to i

fulfill the public’s need. fe —

Appellants also too greatly emphasize their position ‘as

“parties” to a “grandfather” _ case before the Commission.

The “grandfather” case essentially concerns the Commission

and the applicant. Protestants,’ appellants here, are not

parties to the same proceeding as are adversaries in private

litigation over private rights. In such position, they are not

entitled, as a matter of. law, to object to requirements im-

posed by the Commission upon another carrier in the publie

interest. We understand that this subject is to be. treated

8 in full by another appellee.

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32

The Stipulation.

Appellants argue that Styer, by himself and thromgh coun-

sel, by stipulation in the “grandfather” case and by amend-

ment in the public convenience and necessity case, withdrew .

from the Commission the pow er to make such disposition of

the question of such intermediate Minnesota points as it

deemed warranted by the evidence or in the public interest.

They elaim (page 12 ) that the stipulation and amendment

had the effect of withdrawing that issue from the case.

The difficulty with appellants’ argument is fundamental.

Where a controversy embraces a matter of public interest, 7

public right, or public policy, the law is tlear that the Court

may disregard stipulations of the parties.

St. Paul vs. Chicago, etc., R. Co., 139 Minn. 322, 166 N.

. „ . e 2

Mills vs. Bd. of Gommrs., 35 Idaho 7, 204 Pac. 876.

225 Lockhard vs. People, 65 Colo. 558, 178 Pac. 565.

In re Dardis* Will, 135 Wis. 457, 115 N. W. 332.

We need only state that a matter before the Interstate

Commerce Commission under the Motor Carrier Act is one of |

public interest. The very essence of the ad apart from

, regulatory features, is public convenience and necessity.

There are, in a real sense, three parties to a proceeding before

the Commission, viz. >the applicant, the Commission, and the

public. If protestants are parties, there are four. The appili-

eant and the protestants could not stipulate away ‘the power

or duty: of the Commission to protect the public or to dis-

charge any of its statutory duties. They could not in any

way tie its hands in the performance of aps statutory fune-

tome.

In the public convenience and: necestity, e case, the stipula-

tion took the form of an amendment to the application,

—

5 |

\ 838

4

Whatever the form, the principle « still applies. If the ieee:

mission were bound strictly by the contents of an applica- |

tion or became bound by virtue of amendments thereto,

which deleted certain segments of route or certain points,

the result would be this: every applicant carrier would apply

for the profitable points of origin and destination of freight

and thus avoid the burden incident to ‘service to smaller

- localities. We insist that ‘Congress did- not intend this re-

ult, and the Commission is empow ered to av i it—whether

pleasing to operators or not.

Appellants further argue that Section 207 (a),.U. S. C.

307 (a), provides that the Commission is empowered to

grant the whole or any part of an “application” and deduce

therefrom that it is without power to grant authority beyond

the application in amended and final form), This view is too

legalistic. It emphasizes the literal language of the statute -

to the exclusion of the context and purpose of thie Act as

a whole. It disregards Section 308 (a) empowering the

Commission to add terms, conditions, and limitations deemed

\

desirable to the public interest. 59 700 \

Appellants contend that the result of the apa es was

to deny them a full and fair hearing, elaiming tliat they were

deprived of the opportunity to introduce evidence.

The answers are three: 2 . : N

i. No error is here assigned to the ‘effect. that appellants.

were deprived of a full hearing or deprived of any constitu-

tional rights. Lacking any such assignment, the Oburt win

not ener the plea. ee

2. The point cannot be ail here because it was not

raised before the Commission. Appellants petitioned tothe —

full Commission for a reconsideration of the case upon

the record there made. There was no petition for further

hearing. The Commission’ s rules provide that a party may

33 =e bone ear

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34

‘tthe for further hearing after Division. decision. 9

they may have had.

their failure to request a hearing before the Commission

After Division 5’s order came down, and if it were apper-

ent to appellants that they had been denied the. right to be

fully heard on any issue, they should then have requested

a further hearing for purpose of introducing any evidence

3. The constitutional point was not raised in the ‘lower

Court. J „„

The appellants’ failure to here assign the point as error,

when ‘opportunity was provided, and their failure to raise

the same before the lower Court, deprives the point of con-

sideration in this Court. .

The authority cited by appellants, as we 1 ‘them, do Ps

not hold that the Commission ‘is bound by stipulations in

publie proceedings. The Commission may receive stipula-

tions. It may consider them, but it is not bound by them.

The disposition made by the Commission of the stipulations

in this case will not pring about the dire results appellants

picture on page 13. \

2

6(a) In General. A petition seeking any change in a decision or-

der. or requirement of the Commission should specify whether the

prayer is for reconsideration, reargument, rehearing, further hearing,

‘modification of effective date, vacation, suspension, or otherwise.

() Reliearing or Further Hearing. When in a petition filed under

this rule opportunity is sought to introduce evidence to be adduced

must be stated briefly, such evidence must not appear to be cumula-.

tive, and explanation must be given why such evidence was not pre-

viously adduced.

35

In the Public Convenience and Necessity Case, the Commis -

_ sion Was Warranted by the Evidence and the Power in the

Statute to Grant Authority to Serve t the Intermediate Min-

nesota Points on ‘Route 3.

2 The Commission, as babes granted authority to serve in-

termediate Minnesota points on Routes 1 and 2 under the

- “grandfather” clause application. Under that application, *

denled authority to serve the intermediate Minnesotu points

on Route 3 (Exhibits 1 and 2 2, R. 126-A and 90). In the

public convenience and, necessity ease, the Commission

granted authority to serve intermediate points on Route 3

and it is this grant of which appellants complain.

. Route 3 is the southernmost route from the Twin, Cities to

Mitchell, South Dakota, and return. The principal inter-

mediate point is Sioux Falls, South Dakota. Because Sioux

Falls is South Dakota’s largest center, much. of the evidence

centered about the convenience and necessity: for service

thereto. The evidence supporting the grant of authority to

Sioux Falls, to the intermediate South Dakota points be-

. tween Sioux - Falls and Mitchell, was abundant and is not

here attacked (R. 190 to 195), and Exhibits 3 (R. 127, 90),

7 (R. 135, 94), 14 (R. 165, 96), 17 (R. 167, 101), 18 (R. 169,

101), 19 (R. 171, 101), 20 (R. 176, 101), 21 (R. 181). The

‘cited exhibits show extraordinary growth and voluminous

- tonnage over the three-year period following June 1, 1935,

thus indicating the public’s need for the service.

The Commission had ample evidence before it concerning

the need of service at many of the intermediate points upon

the route. The issue with the Commission was whether the

remaining intermediate points, located in Minnesota, should

be included in the authority or a restriction imposed which

would increase “empty miles“ to the carrier and deny

the public an existent sérviee. It deemed it to be in the

rr ꝙ˙Üumi r ³⁰ A LONE ˙(• ee II TR TS

public interest to include all intermediate poin nts. | e

Appellants emphasize that the “public witnesses” referred

to need for Styer’s transportation to South Dakota points

only. It must be remembered that their businesses are lo-

cated in the Twin Cities and that the only interstate trans-

portation material in this proceeding was interstate, viz. :

Minnesota to South Dakota and return. Movement of goods

originating in their plants in the Twin ‘Cities destined to

Minnesota points ane intrastate in nature and immaterial a

to the isdues. Direct proof of the need for interstate service

to these Minnesota points from the east must come from“

Chicago, Milwaukee, or other eastern centers. Witnesses

trom such far off points: are not easily accessible for hear-

ings of this nature.

. Appéllants place entirely too much 3 ‘Bon the Be

argument that authorities ire to be granted from “point. to

point” to the exclusion of consideration of a “route.” Even

though the Commission mbst. name in ermediate points in

its certificate, the “grandfather” ela se, the source of.

“grandfather” authority, authorizes certificates to thoge who |

were in “bona fide operation over the route or routes or

within the territory. No reference is made to points.

If the Commission is tp f follow principles which will ulti-

mately “bring about a national transportation gokart as

the national transportation policy requires, 49 U. S. C., See-

tion 1 (301 and 901) if should, as it did here, avoid the split.

ting of routes into many parte te be served by many

carriers. 25 ; Petia .

ee lower Court adequately peter of plaintiff's argn-

ment upon this Phasq of the case (R. 64). Its view accords

with the OIA principle relating to publie utilities,

Viz. : the public interest is * the carrier's interest

is. ‘secondary.

5 |

— Are Guilty of Laches.

In affirming the Commission’s order, the lower Court found @

it un essary to consider the pleas of laches asserted. by

Appellee Styer and Intervener Glendenning. We may urge

the point here under: authority of U. S. vs. American Ry. Ea-

press (1924), 265 U. S. 425. This phase of the case will be

~ fully presented by Intervener Glendenning. Our comment,

therefore, will be brief, , 5

The pertinent factg are: on April 6, 1942, the Commission

denied appellants’ 7 for reconsideration. No action

having been commenced, and: in its ordinary course, the Com-

mission issued a certificate on July 1 some three months

Natter. the last Commission action. Prior thereto, Styer and

vt Glendenning Itad négotiations concerning a purchase and

sale (R. 76). After. the issuance of the certificate to styer

and after Glendenning independently verified. its contents,

negotiations were commenced in earnest. They resulted in

: an “Agreement of Lease” (B. 30, 73—Exhibit A to Styer's

answer, paragraph one) including an option to purchase

(at R. 35, paragraph eight) dated September 22, 1942 — over

two months after the issuatice of the certificate. There fol-

lowed application by both parties. to the Commission tor

; temporary authority in Glendenning to oper ate Styer’ 8 prop-

erties and a supplemental lease. (Exhibit Al to Styer’s an-

swer, R. 47, 74), the exercise by Glendenning of his option

to purchase on October 23, 1942 (R. 49, Exhibit A2, 74), an

amendment to Glendenning’ s application to the Commission

for lease approval so as to request approval of the pr urchase

6 (R. 74, 75) and a hearing before a Commission Examiner

on October 31, 1942 (R. 75). ; TE i

Styer was served with summons in this action on Novem-

ber 2nd or ord. = first heard of this action on October

Bist (*. 79). efit

Oe ed

7

38

The appellant railroads, had three months in which to

present this action before the ‘issuance of the certificate

(July 11). It was not brought within that period. When

the certificate was issued Styer. regarded it as final (R. 73).

Equally as important. the appeltant rested unother 3%

months after the issuance of the certificate. (July 11 to Oc.

tober 31) before bringing the action. In the meantime, and

on September 22nd, Styer had made a favorable sale and

* Glendenning had obligated himself to the extent of $66,000

before either of them had any knowledge that the original

rights would be assailed in an action of this kind.

On March 13, 1943, the Commission found the transfer

from Styer to Glendenning to be in the. public interest and

guve most adequate reasons therefor (R. 80 through h 88).

The law respecting laches is familiar to the Court. The

question is one of fact.“ :

“They all proceed upon ‘the theory that laches is not

like limitation, a mere matter of time but principally

a question of the inequity of permitting the claim to be

enforced—an inequity founded upon some change in the

condition or relation of the property or the parties.”

_ Galliher vs, Cadwell, 145 U. S. 368, 36 L. Ed. 738.

In Penn Mutual sie Insurance Co. vs. 3 168 U. S.

685, the Court said:

Where a court of 2 finds that the position of the

parties has so changed thet. equitable relief cannot be

afforded without doing injustice, or that the interven-

ing rigpts of third persons may be destroyed or seriously

impaf¥ed, it will not exhaust its equitable powers in

order to save him from the consequences of his own

neglect.”:

Pertinent here is the following: gh 8

“The requirement of diligence, and the loss of the

right to invoke the arm of a court of equity in case of

sLaursen vs. O’Brien (cc. 0. A. 7), 90 Fed. (24) 792.

laches, is particularly applicable where the subject mat-

ter of the controv ersy is a om work. 1% Ibid.

- Appellants’ * has always remained unexplained and

“unexcused. .

During the delay, St yer jinn his position 80 that ad-

verse decision upon the merits of the Comimission's order

will greatly prejudice him. He expended moneys to build

up his Sioux City, Iowa. business (R. 71-72). He endeavored: .

to develop business at the Minnesota’ points upon the routes x

granted (R. 72). Thereafter he borrowed $6,000 from his

brother and gave these rights as security. Before doing So,

ne was advised by counsel and :the Commission’s regional .

Minneapolis office that the Commission was “definitely final.“

In addition, and while appellants slept upon their rights,

Styer perfected a favorable sale te Glendenning receiving

Glendenning’s promise to. pay him $51,485.57 for his trucks

and equipment and $15,000 for his rights here assailed. The

sale preserved to him the rights for which he is promised

$15,000 by Glendenning. Such sum is the. sum total of al-

most eight years. of effort. |

Both. Glendenning and Styer have so changed positions

during the unexplained delay that if the rights were now set

aside, it would produce the greatest injustice and inequity

to each of them. In a most real and genuine sense, there

came inte the existence during the delay the “intervening

rights of third persons.” (Penn Mutual Life Insurance Co.

vs, Austin, supra.) These would be destroyed if the Court

should now find the Commission's order unsupported or un-

lawful. Such would be of most serious consequence both to

Glendenning and Styer, and the net result would be —

tice, not juatice.

40

CONCLUSION

As urged i in our motion to affirm, we continue to insist

that. the questions raised by appellants are not substantial.

They involve the weighing of the evidencé by the Commis- N |

sion and the exercise of an administrative discretion pur-,

suant to full and clear statutory power.

There was ample evidence i in support of the Commission’s

disposition of the issues before it. The stipulations of the

parties, | in so far as material, could not, as a matter of law, 5.

tie the hands of the Interstate Commerce Commission. N

At all. events, the unexplained delay in commencing this

action to review the Commission’ * order, and the events

transpiring between the termination of Commission proceed-

ings and the service of summons herein revealing undisputed

changes of position by ‘Styer and Glendenning, should bar

appellants’ right to assert tlie cause. Any other result *

produce injustice.

Respectfully submitted,

_ PERRY R. Moonz,

FREDERICK H. STINC HFIELD,

Counsel for Appellee,

: _ Cornelius W. Ster.