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Carta-back, Inc. v. Commerce Com.





APPEAL from the Circuit Court of Cook County; the Hon. EDWARD F. HEALY, Judge, presiding.


Carta-Back, Inc. (Carta-Back), a common carrier trucking firm, was issued a certificate of public convenience and necessity by the Illinois Commerce Commission (the Commission) on February 21, 1963, and a certificate of registration by the Interstate Commerce Commission on October 20, 1964. After incurring substantial operating losses during 1965, 1966 and 1967, in December 1967 Carta-Back assigned its assets, including the certificates, to Leonard M. Spira for the benefit of creditors. In liquidating these assets to satisfy claims of Carta-Back's creditors, Spira sold the certificates to Illinois Industrial Transportation, Inc. (the Transferee). On July 23, 1968, pursuant to section 18-309(c) of the Illinois Motor Carrier of Property Law (the Law) (Ill. Rev. Stat. 1975, ch. 95 1/2, par. 18-309(c)), Carta-Back, by Spira, and the Transferee filed a joint application seeking the transfer of Carta-Back's Illinois authority to the Transferee. Neither Carta-Back nor Spira conducted any operations after the assignment of the certificates to Spira.

Hearings on the application commenced in September 1968, and continued until March 1969. In an order filed October 21, 1970, the Commission denied the application for transfer. An application for rehearing was filed and granted by the Commission. Hearings took place in 1971. On August 14, 1974, the Commission entered an order reaffirming the prior denial order.

Carta-Back filed a second application for rehearing, alleging that the Commission erred by failing to address the statutory criteria set forth in section 18-309(c). This application was denied on October 16, 1974, and Carta-Back appealed this denial of a rehearing to the circuit court, placing the propriety of the August 14, 1974, order before that court. The circuit court held the order defective on the grounds it ignored the statutory criteria of section 18-309(c) and was against the manifest weight of evidence, and reversed and remanded the Commission's order. It directed the Commission to enter an order to the effect that the manifest weight of the evidence and Illinois law require a finding that the statutory criteria for a transfer had been satisfied. The Commission has appealed this order of the circuit court.

The issues which the Commission must consider in a transfer application hearing are set forth in section 18-309(c):

"If the Commission finds that (1) the proposed purchaser or lessee is fit, willing and able, (2) that the proposed seller or lessor has not abandoned, suspended, or discontinued operations, and (3) that the transaction proposed will be consistent with the public interest and the policy declared in this Chapter and that the conditions of this Section have been or will be fulfilled, it shall enter an order approving and authorizing such transfer * * * upon such terms and conditions as it finds to be just and reasonable." (Emphasis added.)

Thus, to deny a transfer the Commission needed to determine only that one of these three required findings was not established by the evidence.

• 1 We are confronted with an order which contains several unintegrated conclusory findings. It makes no determination as to the fitness of the Transferee or the public policy declared in the chapter. (Ill. Rev. Stat. 1973, ch. 95 1/2, par. 18-101.) Although not clearly stated, the order indicates that the Commission denied the transfer because it believed Carta-Back had abandoned, suspended or discontinued operations. The evidence which supports this finding must be divided into two separate and relevant time periods: (1) Carta-Back's operations prior to the assignment to Spira and (2) the period subsequent to the assignment. Our conclusion is that the finding of abandonment is supported by the evidence as to the subsequent period which clearly establishes that no operations were conducted after the assignment, even though it is against the manifest weight of the evidence with respect to the period prior to the assignment. Nevertheless, because the Commission's order was primarily concerned with the nature of Carta-Back's operations up to December 1967 when the assignment took place, this opinion will review the evidence covering both periods in order to clarify the Commission's action.

The Commission's denial of the transfer is based in part on the time period subsequent to the assignment of the certificate to Spira. The Commission states in finding 9 of the October 1970 order:

"[T]hat the evidence showed operations were discontinued on the 26th day of December, 1967, and the authority has been dormant since that time."

This clearly indicates that the Commission found Carta-Back had abandoned, suspended or discontinued operations when the assignment was made. This finding was incorporated into the 1974 order by finding 10 of that order which adopted all the findings of fact in the 1970 order for purposes of the 1974 order.

It is undisputed that no trucking operations were conducted after December 26, 1967. The certificate was sold to the Transferee on January 25, 1968, but the transfer application was not filed until July 23, 1968. This application is similar to the one considered in Hamilton v. Illinois Commerce Com. (1970), 47 Ill.2d 264, 265 N.E.2d 156, where the operations of the original licensee ceased upon his death. Six months after the death, the licensee's widow had the authority placed in her name. Then, 10 months after the death, the widow filed an application to transfer the authority. As in the present case, no activity was carried on under the certificate during the period prior to the filing of the transfer application. The court held that the widow's failure to conduct any business after her husband's death justified denying the transfer. The court concluded that the "order was not against the manifest weight of the evidence because there was no proof of continued operation."

Carta-Back contends Hamilton is not applicable to its situation, explaining the 7-month hiatus before the filing of the transfer application in the following manner. It had filed a transfer application on January 26, 1968, the day after the certificate was sold. However, the Commission immediately returned this application to Carta-Back because Carta-Back's certificate of authority had been revoked on November 8, 1967, for failure to pay required franchise fees. Carta-Back filed a petition to reinstate its certificate, and that petition remained pending from February 1, 1968, until July 17, 1968, when the Commission reinstated Carta-Back's authority upon payment of the proper fees. The transfer application was refiled within a week. Carta-Back argues that the need to reinstate its certificate before presenting a transfer application excuses the absence of continued operations in the period after the assignment to Spira, and distinguishes Hamilton where there was no activity for 10 months. We do not agree.

• 2 According to Carta-Back's own explanation, the 7-month delay in filing the transfer application after the undisputed discontinuance of operations on December 26, 1967, is attributable to its failure to keep its operating authority current by paying required franchise fees. The failure to pay required fees cannot be used to excuse the period of inactivity which followed the assignment to Spira. Carta-Back was at fault in neglecting to pay proper fees and it should not be permitted to rely on its own fault to excuse the delay in filing a transfer application with the attendant absence of trucking operations. We, therefore, are unwilling to hold that the absence of operations during the period between December ...

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