claims for theft; accounts payable, including claims, were restored to a current basis; and an increase in rates on intrastate traffic was obtained. As above indicated, these remedial measures resulted in converting a business, which consistently had been operating at a deficit into one making a small profit.sti tidob anosmail. As already mentioned, the partnership and E. B. Clanton emerged as the largest stockholders of Sooner, each with 857 shares (41.7 percent), following the redistribution of its capital stock early in 1947. The transfer by the partnership of its shares to Clanton on March 28, 1947, on a temporary basis, and without consideration, in no way affected the actual control or management of Sooner's operations. Its officers are R. W. Lee, president, E. B. Clanton, vice president, and Herman Roof, secretary and treasurer, and the directors are R. W. Lee, E. BaClántón, B. H. Clanton, and Doane Farr The Lee family resides in Oklahoma City, headquarters of Sooner, and E. B. Clanton resides in Lawton, where he has other interests. The latter has not actively participated in the control or management of Sooner since early in 1947, and he has no desire to do so in the future. It is apparent that R. W Lee and his son dominate the affairs of Sooner and that its operations and those of Lee Way have been controlled and managed in a common interest at least since early in 1947, and probably before. Our approval is herein sought for the mere formality of the retransfer to the partnership of the 857 shares temporarily held for it by Clanton. Actually, the transaction involved occurred over ǎ period of time, culminating in the purchase by the partnership of 542 shares of treasury stock, which gave it a total of 41.7 percent of the outstanding stock. In a number of proceedings we have withheld approval of applications covering transactions which were unlawfully consummated without prior approval by us, particularly where there were other objectionable factors involved, and we were unable to find that the transactions would be consistent with the public interest. See Richards Purchase Sunset Transp., Inc., 38 M. C. C. 651, Queen Trucking Co-Purchase Bishop, and McNeill, 39 M. C. C. 123, and Nevada Consolidated Fast Frt.-Control-Fleetlines, Ind., 40 M. C. C. 499. We would not hesitate to deny the instant application on the basis of the facts surrounding the unlawful control in this instance if our action would not adversely affect the public, whose interest is paramount to that of the parties to this proceeding. The facts of record, however, demonstrate the need for continuance of Sooner's service, which depends upon the management and assistance of the Lee family and impel us to approve the application. Compare American Liberty Pipe Line Co.-Control and Merger, 40 M. C. C. 745. We are not to be understood as sanctioning the methods used by those parties through which control was secured by degrees, and over a period of time, without seeking our authority until the control was an accomplished fact. Under the provisions of section 5 (3) we may subject the partnership, a noncarrier, to the accounting, reporting, and securities provisions of the act. The The reason for for its holding of the stock in Sooner, while actual control would be exercised by B, who controls note W. Lee, whe the partnership although not a member thereof, is not disclosed by the record. As previously indicated, however, the partnership, as such, has other interests not connected with transportation. At this time, in our opinion, it is not necessary that we require that the partnership be subjected to the accounting, reporting, and securities provision of the act. H uhend gieb dovod sirotl murrik. Yo We find that the acquisition by Bessie L., Betty Lou, Robert E., and Stanley Lee, partners, doing business as L. & E. Investment Company, and, in turn, by R. W. Lee, of control of Sooner Freight Lines through ownership of 41.7 percent of its capital stock by the partnership, and through management, upon the terms and conditions above set forth, which terms and conditions are found to be just and reasonable, constitute a transaction within the scope of section 5 (2): (a), and will be consistent with the public interest. btwrow evolowo zd [a. I We further find that the application of Lee Way Motor Freight, Inc., for authority to acquire control of Sooner Freight Lines through ownership of its capital stock and of R. W. Lee to acquire control of Sooner Freight Lines through the acquisition by Lee Way Motor Freight, Inc., should be dismissed. vou mal, bold rods, daqs mioj s An appropriate order will be entered. 1 & moltsa rubar 50 M. C. C. Månot quitel odt to enign patroago nation to rool sit No. MC-F-3386 J. M. GROVE AND F. E. SIRBAUGH-PURCHASE Submitted July 31, 1947. Decided October 28, 1947 Application of J. M. Grove and F. E. Sirbaugh, partners, doing business as Allegheny Freight Lines, for authority to purchase certain operating rights of Abram Jerome Novick, doing business as Novick Transfer Company, denied. Glenn F. Morgan for applicants. Spencer T. Money and Frank X. Masterson for protestants. REPORT OF THE COMMISSION DIVISION 4, COMMISSIONERS MAHAFFIE, MILLER, AND MITCHELL BY DIVISION 4: Exceptions were filed by applicants to the examiners' proposed report, and protestants replied. J. M. Grove and F. E. Sirbaugh, partners, doing business as Allegheny Freight Lines, of Winchester, Va., and Abram Jerome Novick, doing business as Novick Transfer Company, also of Winchester, by a joint application filed January 27, 1947, as amended, seek authority under section 5 of the Interstate Commerce Act for the purchase by the former of certain operating rights of the latter for $10,000. Hearing has been held, at which Charlton Brothers Transportation Company and Masser Motor Express, motor common carriers of property, herein called Charlton Brothers and Masser, respectively, and rail carriers in trunk-line territory, except The Chesapeake and Ohio Railway, opposed the application, the first two of which introduced evidence and cross-examined the applicants' witnesses. Applicants operate in excess of 20 motor vehicles. Pursuant to authority granted in No. MC-1074 on November 9, 1944, vendees operate in interstate or foreign commerce, as a motor common carrier of general commodities, with exceptions, over regular routes, principally between Winchester and Charleston, W. Va., via Clarksburg and Parkersburg, W. Va., serving all intermediate points and three off-route points, and between Winchester and Lancaster, Pa., via Hagerstown, Md., and York, Pa., serving intermediate points between Hagerstown and Winchester, including Hagerstown; and of linoleum and such articles as are used in laying linoleum, over irregular routes, from Lancaster to Charleston and Parkersburg, and post hole diggers and scoops, shovels, scrapers, spades, and handles therefor, over irregular routes, from Parkersburg to Lancaster and York, and return. Vendees have pending an application under No. MC-1074 (Sub-No. 2) seeking an extension of their present operations. On February 3, 1945, in No. MC-7450, a certificate was issued to vendor authorizing operations in interstate or foreign commerce, as a motor common carrier principally of general commodities, with exceptions, over numerous regular routes in Maryland, Pennsylvania, Virginia, New Jersey, and New York, including three routes between Winchester and Baltimore, Md., (1) over U. S. Highways 340 and 40 via Berryville, Va., and Frederick and Ellicott City, Md., 99 miles, (2) over U. S. Highway 50, Virginia Highway 236, and U. S. Highway 1 via Fairfax, Va., and Washington, D. C., 115 miles, and (3) over Virginia Highway 7 and U. S. Highway 29 via Berryville, Washington, and Ellicott City, 118 miles, serving all intermediate points and Herndon, Va., as an off-route point. Under an agreement dated November 1, 1946, as amended, vendees would purchase for $10,000 that portion of vendor's operating rights between Winchester and Baltimore, over Virginia Highway 7 and U. S. Highway 29 via Berryville, Washington, and Ellicott City. The purchase price, less $1,000 paid upon execution of the agreement and which would be refunded in the event the application is denied, would be payable within 10 days after consummation of the transaction. Vendees' balance sheet as of December 31, 1946, shows assets aggregating $59,312, consisting of: Current assets $22,184, principally accounts receivable $20,833; carrier operating property, less depreciation, $31,123; and prepayments $6,005. Their liabilities were: Current liabilities $32,104, principally notes payable $15,000 and accounts payable $15,466; and partnership capital $27,208. Their income statements for 1944, 1945, and 1946, show net incomes of $3,901, $4,205, and $9,045, respectively. Vendees would be willing to write off immediately the amount assigned to their "Other Intangible Property" account as a result of the instant transaction. Vendor's balance sheet as of December 31, 1946, shows assets aggregating $647,144, including current assets $126,823. Current liabilities were $245,513, and sole-proprietorship capital $106,502. His income statements for 1944, 1945, and 1946, show a deficit of $17,800, net income of $5,124, and a deficit of $2,721, respectively. Vendees' operations consist almost wholly in the handling of traffic moving between points in West Virgina, on the one hand, and points north and east of Winchester, on the other. The bulk of their traffic, of which approximately 25 percent moves to and from Baltimore, is interchanged almost exclusively with vendor at Winchester. Because, at times, traffic is congested at his terminal in Winchester, vendor is unable to handle promptly all the traffic offered by vendees. Vendees desire to acquire the considered operating rights from vendor in order to eliminate interchange at Winchester and thereby effect a saving of at least 1 day in transit time. They are of the opinion that, by providing a single-line service between the West Virginia points served by them, on the one hand, and Washington and Baltimore, on the other, they would be able to obtain considerably more traffic. Had the transaction been consummated as of January 1, 1946, they estimate that, for the 9 months ended September 30, 1946, they would have increased their revenue approximately 33 percent and their net income approxi mately 18 percent. wird boken daar Protestant motor carriers transport general and specified commodities in the general territory served by applicants. One of Charlton Brothers' regular routes duplicates vendor's Baltimore-Winchester route via Frederick, serving all-intermediate points. Their irregularroute operations embrace a portion of the West Virginia territory served by vendees. Masser's operations include a regular route between Washington and Winchester via Frederick and Hagerstown, and irregular-route service throughout West Virginia. Both carriers maintain terminals at Baltimore and Winchester, and Masser also has a terminal at Washington. Charlton Brothers interchange a small amount of traffic with vendees at Winchester. Masser formerly interchanged with vendees at Winchester traffic which it originated at Baltimore, but discontinued the interchange when it learned that vendees were soliciting the traffic for movement by vendor from Baltimore to Winchester. They and the rail carriers oppose the application on the ground that approval would result in the creation of two independent and competitive operations performing identical service between a number of common points where only one carrier operated before. Domt og b In their exceptions to the examiners' proposed report, which recommended denial of the application, applicants argue principally that the sale by vendor of one of his three routes between Baltimore and Winchester would not adversely affect protestants because what is proposed is a single-line operation by vendees of a service which at present is being performed by applicants through interchange at Winchester. In support of their argument, they contend that the transactions approved and authorized in Elmer C. Breuer, Inc., of Mich. Pur-Wilson Motor Lines, 40 M.-C. C. 713, herein called the Brewer-Wilson case, are similar in many respects to the transaction here proposed and that that report is a precedent for approval herein. The vendor in that case had authority to operate over four routes between Cleveland, Ohio, and Pittsburgh, Pa.. It was authorized to sell route 2 to one carrier and a portion of route 4 to another carrier and to |