tion with Illinois Highway 31, thence over Illinois Highway 31 to its junction with U. S. Highway 20, thence over U. S. Highway 20 to its junction with U. S. Highway 41, north of Chicago, including all points on highways and that portion of the commercial zone of Chicago in Indiana within this area, over irregular routes; (3) between all points on regular routes described in appendix II of the prior report, over said routes, including commercial areas described in appendix I in such report, in the States of Illinois, Indiana, Kentucky, Michigan, Ohio, and Wisconsin, with the exception of routes 2 (c), (d), and (e), excluding from this exception that part of route 2 (c) from Chicago, Ill., to St. Joseph, Benton Harbor, and Niles, Mich., over U. S. Highway 12 to St. Joseph or Benton, Harbor, thence over U. S. Highway 31 from its junction with U. S. Highway 12 to Niles, also serving points between the junction of U. S. Highway 12 and Michigan Highway 30, over Michigan Highway 40 to Niles; and (4) between points in commercial and suburban areas described in the findings 1 and 2 above, and all points on regular routes, on the one hand, and Toledo, Cleveland, Akron, Mansfield, Columbus, and Springfield, Ohio, and Coal City, Ill., on the other hand, limited to truckloads only, over irregular routes. In all other respects, the application was denied.

Upon petition of the Public Service Commission of Indiana to intervene and to reopen the proceeding for further hearing, division 5 reopened the matter for further hearing with respect only to the bona fides of the operations conducted in the State of Indiana. The Public Service Commission of Indiana and certain rail carriers opposed the application as reopened.

The facts concerning applicant's operations as a whole are adequately set forth in the prior report. Inasmuch as the proceeding was reopened only for the purpose of determining whether or not applicant's operations in Indiana, on and continuously since June 1, 1935, have been bona fide, we will confine our discussion to this matter.

The question to be determined arises out of the wording of section 206 (a) of the act, which reads as follows:

Except as otherwise provided in this section and in section 210a, no common carrier by motor vehicle subject to the provisions of this part shall engage in any interstate or foreign operation on any public highway, or within any reservation under the exclusive jurisdiction of the United States, unless there is in force with respect to such carrier a certificate of public convenience and necessity issued by the Commission authorizing such operations: Provided, however, That, subject to section 210, if any such carrier or predecessor in interest was in bona fide operation as a common carrier by motor vehicle on June 1, 1935, over the route or routes or within the territory for which application is made and has so operated since that time *. [Emphasis supplied.]

*

It is the contention of the Indiana authorities that certain of applicant's operations in Indiana have not been bona fide, inasmuch as no

authority was ever obtained from the duly authorized authorities of that State for such operations.

Applicant began operations as a motor carrier of property in Chicago in 1917. These operations were extended to Indianapolis in the early part of 1930. In the latter part of 1930, an office and terminal in Detroit was opened and operations to that city instituted. In March 1933, the Indianapolis operation was extended to Cincinnati, Dayton, and other points in Ohio, a terminal being established at Cincinnati. In 1935, a terminal was established at Dayton. Applicant now conducts its operations between all of these points in accordance with the authority granted in the prior report. No intrastate operations are performed.

Prior to the enactment of part II of the Interstate Commerce Act, there had been legislation by various States with respect to the regulation of motor carriers of passengers and property. The State of Indiana had such legislation as early as 1925. On May 13, 1932, the Public Service Commission of Indiana authorized the issuance to applicant of a certificate to operate in interstate commerce only, in the transportation of property, from the Indiana-Illinois State line adjacent to the city of Chicago, over and along U. S. and Indiana Highways 41 and 52 to Indianapolis, and from said Indiana-Illinois State line to the Indiana-Michigan State line over and along U. S. and Indiana Highways 20 and 112, conditioned upon compliance by the applicant with certain conditions. Pursuant to the provisions of the Motor Vehicle Act of Indiana of 1935, applicant was again issued a certificate covering the above operation. The bona fides of these operations in Indiana are not questioned and will not be discussed further. It is, rather, with respect to the extensions from Indianapolis to points in Ohio, and with respect to additional service rendered to points in Ohio over different routes, that the question of bona fide operations arises. All of such routes are set forth in the appendix hereto.

Applicant applied to the Indiana Public Service Commission on August 22, 1933, for authority to operate over the first two routes described in the appendix hereto and two other routes not here involved. The application was denied by order of that commission on May 4, 1934. A petition for rehearing of that application, filed May 14, 1934, was denied. On August 5, 1935, applicant again filed an application with the Indiana commission for authority to conduct these operations, and that application was denied on October 28, 1935. A petition for rehearing with respect to this application was denied on November 27, 1935. A third application was submitted by applicant on January 25, 1936, requesting authority to operate over all routes set forth in the appendix. That application was denied on May 15,

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1936, and a petition for reconsideration and oral argument on said petition was denied on August 27, 1936.

In January 1939, another application was filed with said commission for authority to operate over the afore-mentioned routes, and that application at the time of the further hearing herein was still pending. Despite the lack of authority from the public service commission, applicant continued operations over the routes set forth in the appendix, and there is no question that such operations have been continuous since prior to June 1, 1935. Applicant paid all required taxes and fees on trucks operated in and through Indiana. Its trucks and tractor-trailer units carried its name prominently displayed. There can be no doubt but that such operations were conducted openly and without any attempt at concealment. There is no evidence that, during such period of operation, applicant or its employees were arrested or prosecuted for operating without proper State authority. In support of their contention that operations over the routes set forth in the appendix were not bona fide, protestants rely principally upon McDonald v. Thompson, 305 U. S. 263, and A. E. McDonald Motor Freight Lines Com. Car. Application, 22 M. C. C. 559. Applicant, in turn, refers us to a number of cases which it claims are analogous to the one at hand and in which we found that the principle set forth in the McDonald case did not apply.

In the McDonald case, the Supreme Court said, at page 266:

The expression, "bona fide operation," suggests absence of evasion, excludes the idea that mere ability to serve as a common carrier is enough, includes actual rather than potential or simulated service, and in context implies recognition of the power of the State to withhold or condition the use of its highways in the business of transportation for hire. Plainly the proviso does not extend to one operating as a common carrier on public highways of a State in defiance of its laws.

Subsequently, in A. E. McDonald Motor Freight Com. Car. Application, supra, page 565, the Commission said:

In our opinion violations of collateral statutes, such as those dealing with taxes, traffic regulations, etc., would not necessarily destroy the bona fides of an operation which had been authorized as such. Slagle Contract Carrier Application, supra [2 M. C. C. 127]. Such violations do not necessarily constitute defiance of State law. However, where the violation of State law, as in this case, constitutes a continuing and persistent disregard of a statute requiring operating authority, without which the carrier had no right upon the highways of a State, such disregard of the law obviously is defiance of the law of the State. It is clear therefore that the question to be decided here is whether or not applicant operated in "defiance" of the laws of Indiana.

Here we have a situation where the applicant, as of the time of the further hearing, has operated over certain routes for a period of 52 years after June 1, 1935, and in some cases for 2 years prior to

the latter date. On August 22, 1933, August 5, 1935, January 25, 1936, and in January 1939, it filed applications for authority with the Indiana Public Service Commission. Applicant was and is of the opinion that it is entitled to such authority, and, upon advice of counsel, it has continued its operations over the routes in question. All during the period of such operations, applicant had been before the Indiana commission in proceedings seeking appropriate operating authority. These proceedings represent a continuous effort by applicant to obtain State operating authority, and obviously the fact that applicant was operating over the routes in question was known to the State authorities. Yet, so far as the record shows, no effort was made by the State authorities to have applicant's motor vehicles stopped by appropriate local law enforcement officers and to have their drivers fined for operating without State authority, or by seeking injunctive relief in the courts. As we see it, applicant's conduct represented continual attempts to meet the requirements of the State laws with respect to interstate operations, rather than actual and open defiance of such laws. The whole course of dealings between applicant and the State suggests a compromising attitude on behalf of the State authorities, with no actual attempt by them to stop or impede the operations. Clearly, their continuance has been tolerated by the State authorities, for what purpose the record does not disclose. The operations have been conducted for a long period of time, even without State authority, but openly and without deceit, and with full knowledge of the State authorities, and, under the conditions above outlined, we do not feel warranted in making findings resulting in their discontinuance, particularly in the absence of affirmative action by the State authorities to stop them. To make such findings would disrupt applicant's operations as a whole, an action we hesitate to take in the absence of definite and compelling evidence that the operations actually have been conducted in defiance of State law. Such evidence is not present here. All circumstances considered, we conclude that it has not been shown that applicant's operations in Indiana here in issue have not been bona fide. Compare Great Central Transport Corp. Com. Car. Application, 33 M. C. C. 407.

Upon further hearing, we affirm the prior findings and find that on June 1, 1935, applicant was, and continuously since has been, in bona fide operation as a common carrier by motor vehicle, in interstate or foreign commerce, with respect to its operations in Indiana, as set forth in the prior report; and that applicant is entitled to a certificate authorizing continuance of such operations.

Upon compliance by applicant with sections 215 and 217 of the act and with our rules and regulations thereunder, an appropriate

certificate authorizing operations granted in the prior report will be issued.

PATTERSON, Commissioner, dissenting:

On authority of the Supreme Court's decision in the McDonald case, this application should be denied.

Applicant never recognized the power of the State of Indiana to condition the use of its highways in the business of transportation for hire and was just as much in defiance of the laws of that State as McDonald was in defiance of the laws of Texas.

APPENDIX

Routes questioned

Between Indianapolis, Ind., and the Indiana-Ohio State line, over U. S. Highway 52.

Between Rushville, Ind., and the Indiana-Ohio State line, over Indiana Highway 44 from Rushville to Liberty, Ind., and thence over U. S. Highway 27 to the State line.

Between the junction of U. S. Highway 52 and Indiana Highway 28 and the junction of Indiana Highway 28 and U. S. Highway 35, over Indiana Highway 28.

Between the junction of Indiana Highway 28 and U. S. Highway 35 and the Indiana-Ohio State line, over U. S. Highway 35.

Between the junction of U. S. Highways 41 and 30 and the Indiana-Ohio State line, over U. S. Highway 30.

Between Indianapolis and the Indiana-Ohio State line, over U. S. Highway 40.

42 M. C. C.