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Ron Smith Trucking, Inc. v. Commerce Com.

OPINION FILED MAY 13, 1983.

RON SMITH TRUCKING, INC., PETITIONER-APPELLANT,

v.

ILLINOIS COMMERCE COMMISSION, RESPONDENT-APPELLEE. — (DOUGLAS TRANSIT, INC., INTERVENOR-APPELLEE.)



Appeal from the Circuit Court of Sangamon County; the Hon. Richard J. Cadagin, Judge, presiding.

JUSTICE TRAPP DELIVERED THE OPINION OF THE COURT:

Petitioner Ron Smith Trucking (Smith) appeals an order of the circuit court of Sangamon County, sitting in administrative review, which affirmed a decision of the Illinois Commerce Commission (Commission) to grant Douglas Transit, Inc. (Douglas), a dismissal of its application for authorization to transfer a controlling stock interest pursuant to section 18-309 of the Illinois Motor Carrier of Property Law (Ill. Rev. Stat. 1981, ch. 95 1/2, par. 18-309). We affirm.

On March 5, 1980, Gary Armstrong, Harold Smith, Fred Andres, and Clarence Alley filed with the Commission a petition for authorization to sell a controlling interest of Douglas Stock to Andres and Alley. The petition alleged that Armstrong and Smith were owners of 55% and 45%, respectively, of the shares of Douglas and were negotiating with Andres and Alley to sell a total of 50% of the stock with the result that all four would own 25% of the shares. Petitioner Smith, along with a number of other regulated motor carriers, was granted leave to intervene in the proceedings, and nine separate hearings were conducted on the application for transfer. The bulk of the evidence received concerned the scope of Douglas' operating authority, its alleged abandonment of such authority, and the alleged unlawful control of Douglas by Harold Smith. On May 29, 1981, the hearings were concluded and the matter was marked, "Heard and taken for decision."

On November 18, applicants Armstrong, Smith, Andres and Alley filed a petition to withdraw the application for acquisition of control with the Commission on the grounds that adverse economic conditions and the financial inability of the purchasers prevented the parties from consummating the sale of the stock. Objections were filed to the petition to withdraw by several intervenors, but the Commission granted the request and dismissed the petition. Smith moved for rehearing which was denied, and the circuit court of Sangamon County affirmed the Commission's decision.

The main contention advanced by Smith on appeal is that the Commission erred in refusing to make findings on its claim that Douglas had abandoned its authority to transport general commodities, had been unlawfully controlled by Harold Smith, and had unlawfully leased its authority in violation of sections 18-309 and 18-308 of the Illinois Motor Carrier of Property Law. Petitioner argues that such violations were shown by the evidence, but whether they were is not at issue in the present appeal. The only issue to be decided by this court is whether the Commission erred in declining to make findings on those issues.

Section 18-309 of the Illinois Motor Carrier of Property Law provides, inter alia, that before a controlling interest in a motor carrier may be transferred to another carrier or person, the parties requesting such action must petition the Commission for authority therefor and demonstrate with affirmative proof that the purchaser is fit, willing, and able, that the operations of the proposed seller have not been abandoned, suspended, or discontinued, and that the transaction proposed will be consistent with the public interest and declaration of policy set forth in section 18-101 of the Illinois Motor Carrier of Property Law (Ill. Rev. Stat. 1981, ch. 95 1/2, par. 18-101). Jenkins Truck Line, Inc. v. Illinois Commerce Com. (1981), 96 Ill. App.3d 650, 422 N.E.2d 640.

Under section 18-309, the Commission's jurisdiction to make findings on these issues is conditioned upon the presence of, inter alia, an application to transfer a controlling interest. As set forth in section 18-309(3):

"When a transaction is proposed under this section, the carrier or the person seeking authority therefor shall present an application to the Commission. The application shall contain a copy of the contract, including the terms of the proposed transaction, and an abstract of shipments performed by the transferring party within the last year prior to the date of such contract. The Commission shall, after due notice, set the application for a public hearing to determine whether the findings specified below may properly be made. When the Commission finds that (a) the purchaser or lessee is fit, willing and able, (b) that the operations of the proposed seller or lessor have not been abandoned, suspended, discontinued or dormant and (c) that the transaction proposed will be consistent with the public interest and the declaration of policy set forth under Section 18-101, it shall enter an order approving and authorizing the transaction, upon the terms and conditions, and with the modifications, so found to be just and reasonable." Ill. Rev. Stat. 1981, ch. 95 1/2, par. 18-309(3).

It is Smith's contention that notwithstanding the abandonment of the proposed transfer by the applicants the Commission was required to make those findings required by statute as a condition of transfer. It relies on Salon Trucking Co. v. Illinois Commerce Com. (1980), 84 Ill. App.3d 604, 406 N.E.2d 46; sections 18-201(5) and (6) of the Illinois Motor Carrier of Property Law (Ill. Rev. Stat. 1981, ch. 95 1/2, pars. 18-201(5), (6)), and section 79 of the Public Utilities Act (Ill. Rev. Stat. 1981, ch. 111 2/3, par. 83).

In Salon, Salon Trucking and Salon Piggyback Service filed an application for the transfer of a certificate of public convenience and necessity with the Illinois Commerce Commission pursuant to section 18-309. Following hearings on the transfer, the Commission granted the request but modified the scope of operating authority originally contained in the certificate to reflect the abandonment of some operations by Salon Trucking. Both the transferor and the transferee subsequently moved to vacate the transfer order and reinstate in full Salon's operating authority because the sale was not completed. The Commission vacated the transfer order but declined to reinstate Salon's original authority. Salon then filed a petition for rehearing which was granted but, before the hearing, the Commission issued a rule to show cause why Salon's certificate to operate should not be revoked for failing to obtain the Commission's approval to abandon authority as required by section 18-308. (See Ill. Rev. Stat. 1981, ch. 95 1/2, par. 18-308.) Following rehearing, the modified order limiting Salon's operating authority was affirmed.

Salon then sought review in the circuit and appellate courts> on the theory that the Commission lacked the authority to modify its operating authority under section 18-309 when the proposed transfer had been abandoned. The appellate court disagreed, holding that since the Commission could, on its own initiative, enforce the provisions of the Act under section 18-307 (Ill. Rev. Stat. 1973, ch. 95 1/2, par. 18-307), the fact that the sale had not been completed did not impair the Commission's jurisdiction to modify Salon's certificate. The appellate court's rationale was that the Commission possessed the authority to investigate violations under section 18-307 and no purpose would be served by holding the present order unlawful only to require another hearing at which the same issues would again be litigated.

Smith argues that Salon is controlling and requires the Commission to make findings on the issues presented in the proceeding to transfer control under section 18-309. We disagree.

• 1 At bar, it is also clear that a proceeding under section 18-307 could be brought by the Commission. The fact which distinguishes Salon from the present proceeding, however, is simply that the question in Salon was whether the Commission had jurisdiction to decide the issues, whereas at bar petitioner asserts that the Commission had a duty to exercise its jurisdiction. Neither section 18-309 nor Salon indicates that the Commission has a duty to make the findings requested by petitioner.

Further support for the Commission's position is found in this court's decision in Service Transportation Lines, Inc. v. Illinois Commerce Com. (1979), 77 Ill. App.3d 52, 395 N.E.2d 1119, which also addressed a contention that the Commission was required to make findings under section 18-309 of the Illinois Motor Carrier of Property Law. In that case, certain applicants filed a petition with the Commission requesting approval of a sale of a 40% interest in a motor carrier. Several intervenors appeared before the Commission and requested the hearing examiner to make findings under section 18-309 regarding the applicant's abandonment of certain operating authority. The Commission found that it was not necessary that it make the findings ...


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