No. MC-787271

INTERSTATE VAN LINES, INC., COMMON CARRIER
APPLICATION

Submitted June 30, 1942. Decided August 27, 1943

1. In No. MC-73727, applicant found to have failed to establish that on June 1, 1935, it was in bona fide operation as a common carrier by motor vehicle, in interstate or foreign commerce. Application denied.

2. In No. MC-73728, operation by applicant as a broker of transportation by motor vehicle, in interstate or foreign commerce, found not shown to be consistent with the public interest and the national transportation policy. Application denied. Prior report, 26 M. C. C. 853.

Appearances as shown in prior report, and additional appearances: Albert F. Beasley for protestants and Bernard Reich for intervener. REPORT OF THE COMMISSION ON FURTHER HEARING

DIVISION 5, COMMISSIONERS LEE, ROGERS, AND PATTERSON

BY DIVISION 5:

In the prior report, 26 M. C. C. 853, and order herein, it was found in No. MC-73727 that applicant had failed to establish that it was entitled to a certificate under the "grandfather" provisions of the act, and in No. MC-73728 that it had not been shown that applicant was engaged in operation as a broker under the act, and the applications were accordingly denied. On October 30, 1940, the Commission, division 5, reopened the proceedings for further hearing, vacating and setting aside its prior order insofar as it denied the authority sought in Nos. MC-73727 and MC-73728. Exceptions to the recommended order of the examiner on further hearing were filed by applicant, and Aero Mayflower Transit Company and Household Goods Carriers' Bureau replied.

By application, in No. MC-73727, under the "grandfather" clause of section 206 (a) of the Interstate Commerce Act, filed February 11, 1936, as supplemented, Interstate Van Lines, Inc., formerly United Transit Lines, Inc., of New York, N. Y., seeks a certificate of public convenience and necessity authorizing continuance of operation, in interstate or foreign commerce, as a common carrier by motor vehicle

1 This report also embraces No. MC-73728, Interstate Van Lines, Inc., Formerly United Transit Lines, Inc., Broker Application.

* On July 26, 1937, applicant corporation changed its name to Interstate Van Lines, Inc., and the application was amended accordingly on September 7, 1937.

of household goods, as defined in Practices of Motor Common Carriers of Household Goods, 17 M. C. C. 467, between all points in Alabama, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, New Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Vermont, Virginia, West Virginia, Wisconsin, and the District of Columbia, over irregular routes.

By application, in No. MC-73728, also filed February 11, 1936, the same applicant seeks a license authorizing operation as a broker at New York, N. Y., in arranging transportation by motor vehicle, in interstate or foreign commerce, of general commodities, except livestock and explosives. Both applications were opposed by Aero Mayflower Transit Company, Household Goods Carriers' Bureau, and New Jersey Furniture Warehousemen's Association. Interstate Movers Tariff Bureau, Inc., entered its appearance as intervener but later withdrew.

Applicant was incorporated on January 21, 1935. Its original stockholders and officers were Charles B. Carroll, Jr., Hans J. Jenkins, and Samuel Kochansky. Jenkins has since withdrawn and the stock is now held equally by Carroll and Kochansky. The latter is applicant's president and Carroll is the secretary-treasurer and active manager of the business. Applicant has never owned any equipment. All motor vehicles used in the claimed operations have been owned by Empire Moving & Storage Company, hereinafter referred to as Empire, a partnership composed of Samuel Kochansky, Abraham Kochansky, and Bessie Kochansky, of Bayonne, N. J., engaged in operation as a motor carrier in the transportation of household goods.3

The first question presented is whether applicant was, on June 1, 1935, and since that time has been, a common carrier by motor vehicle within the meaning of the act. The answer to this question is dependent on whether the vehicles owned by Empire have been operated under applicant's direction and control and under its responsibility to the general public as well as to the shipper to such extent as to make it the dominant carrier. Dixie Ohio Exp. Co. Common Carrier Application, 17 M. C. C. 735. The ultimate finding as to who has exercised the direction, control and responsibility depends upon consideration of all of the facts concerning the methods of operation and the relations between applicant and Empire and the shipping public. No

In No. MC-10185, the Commission, division 5, on July 10, 1939, authorized the issuance to Empire of a certificate for the transportation of household goods between all points in Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Vermont, Virginia, Wisconsin, and the District of Columbia.

single fact is controlling. Crooks Term. Warehouse, Inc., Contr. Car. Application, 34 M. C. C. 679.

Empire does not oppose applicant's claims under the "grandfather” provision of the act. As seen, Empire has already been granted operating authority for the transportation of household goods between all points in the District of Columbia and 24 of the 32 States claimed by applicant. We think that the relation between applicant and Empire has been such as to require careful consideration of whether applicant has been sufficiently independent of Empire to warrant a finding that operating rights should be issued to it.

In a number of cases, we have found that two applicants, engaged in what would appear to be separate operations but having common owners, are in reality conducting but one business and are entitled only to one operating authority. See Arizona Pacific M. Freight Lines Com. Car. Application, 33 M. C. C. 773, and cases cited therein. National Van Lines, Inc., Common Carrier Application, 33 M. C. C. 59.

The evidence pertaining to the arrangements between applicant and Empire and the manner in which operations were conducted consists of the testimony of Carroll, Samuel Kochansky, and John Etter, a solicitor for applicant, who were the only witnesses.

There are certain radical variances between allegations in the supplemental application filed February 17, 1937, and Carroll's testimony. The application recites that in January 1935, Carroll, Hans. J. Jenkins, and Abraham Kochansky (a brother of Samuel Kochansky), as copartners, entered into a written agreement with United Van Lines, Inc., a copy of which is attached to the application, under which they agreed to form a corporation which would become a representative of United Van Lines, Inc.; that, pursuant to such agreement, applicant was formed, and thereafter solicited the transportation of household goods under the moving agreements of United Van Lines, Inc., which agreements constituted the only shipping papers used by applicant. It is further recited that 55 to 65 percent of the "transportation" obtained by applicant was transported by it under leasing arrangements with Empire or with Red Ball Moving & Storage Co., Inc., which arrangements vested in applicant the complete and exclusive supervision over the drivers and equipment. The balance of the business obtained by applicant, it is stated, was surrendered for a commission to carrier members of United Van Lines, Inc. The application further recites that applicant continued operations in the manner described until about March 1936, when it ceased doing business under the name of United Van Lines, Inc., and began operating exclusively as United Transit Lines, conducting its operations under leasing arrangements with Empire, Red Ball, and other common

carriers. The agreement between United Van Lines, Inc., and Carroll, Hans. Jenkins, and Abraham Kochansky referred to above specifically excepted Empire and Red Ball from the payment of commissions to applicant for shipments surrendered by it to them.

Carroll claims that, through the inadvertence of attorneys who prepared the application, the recital therein is not entirely accurate. It is noted, however, that in May 1938 an identical statement of applicant's history was set forth in an affidavit made by Carroll and filed with us in support of applicant's "grandfather" claims.

Carroll was the New York manager for United Van Lines, Inc., prior to January 1, 1935. Determining to go in business for himself, he, Jenkins, and Abraham Kochansky entered into a partnership which, according to Carroll, terminated upon the incorporation of applicant. Carroll insists that Abraham Kochansky has never been an officer of applicant even though he was a member of the partnership. As previously stated, Abraham Kochansky is one of the copartners in Empire.

Carroll contends that, following the organization of applicant on January 21, 1935, the existence of the above-mentioned agreement with United Van Lines, Inc., was not recognized by applicant and that applicant never became a part of the organization of United Van Lines, Inc. He tacitly discredits the statement in the application to the effect that applicant leased vehicles from Red Ball by the assertion that all vehicles have been obtained from Empire.

Certain testimony of Carroll and Samuel Kochansky indicates that no relationship whatsoever has existed between Empire and applicant, except for the mere rental or leasing of equipment from the former by the latter, and that applicant has always maintained complete domination and control over the "leased" vehicles and their drivers and responsibility for the operations performed with such vehicles. Other testimony by these witnesses, however, raises considerable doubt about the matter.

At the time of applicant's incorporation, the officers, Carroll, Samuel Kochansky, and Jenkins, decided to utilize unused vehicles belonging to Empire. Kochansky's admitted interest in applicant's formation was for investment of funds and also as an outlet for, and source of revenue from, vehicles of Empire which were not being used. Prior to June 1, 1935, applicant "leased" two vehicles from Empire. The agreement between Empire and applicant concerning the use of the equipment was oral until March 28, 1936, at which time a written agreement was made.

John Etter first entered the employ of applicant in the latter part of January 1935, as a "lone lance" solicitor and estimator. Goods were assigned by him to other carriers as well as to applicant for transpor

tation, and he received a commission for such business. He became a permanent employee of applicant in the fall of 1935. From February 1935 through June 1935, he booked business for applicant to points in States east of the Mississippi River. Applicant advertised in local newspapers and distributed cards to prospective shippers, to assist in his solicitation. Prior to his employment by applicant, Etter solicited for Red Ball Moving & Storage Company. Prior to June 1, 1935, joint offices of United Van Lines, Inc., and applicant were maintained and Etter also solicited for United Van Lines, Inc. He received a commission on business obtained whether or not applicant turned the traffic over to another carrier. He rarely knew when the traffic was dispatched, or whether it was transported in vehicles operated by applicant or by some other person. He did not arrange for return loads.

The first written lease agreement between Empire and applicant was executed on March 28, 1936, by Samuel Kochansky on behalf of Empire and by Carroll, secretary of applicant. It covered a 1932 tractor and trailer, and a 1935 van. The term of the lease was 3 years, and the lessee agreed to pay a stipulated monthly rate for each vehicle, to operate the vehicles in a careful, prudent, and cautious manner, and to pay for any repairs due to any cause other than that of ordinary wear and tear. The lessor agreed to carry public-liability, property-damage, and cargo insurance, and, whenever repairs were necessary by reason of breakage or accident, to turn over to the lessee any money collected from said insurance. The lessor also reserved the right to hire from the lessee at a stipulated daily rate the aforementioned vehicles at such times as they were not in actual use by the lessee. According to Carroll and Kochansky, however, none of the leased vehicles have ever been used by the lessor during the period of the lease.

In a second lease agreement dated June 23, 1939, Empire, as lessor, was represented by Abraham Kochansky. This lease purports to vest supervision of and control over the vehicles in the lessee as the motor carrier performing the service. However, the lessor reserved the right to designate all chauffeurs and helpers to be employed in the operation of the leased vehicles, subject to the further approval of the lessee. The lessee agreed to insure the vehicles for public liability and property damage and to reimburse the lessor to the full extent of payments made each week by the lessor for wages and salaries of drivers and helpers engaged in the operation of the vehicles. Although he had dealt with both Samuel and Abraham Kochansky in his capacity as applicant's secretary, Carroll disclaims any particular knowledge concerning the affairs of Empire.

The record is fairly clear as to certain of the incidents pertaining to the operations of applicant. For example, there appears to be no