additional operation; (6) that neither Interstate, which owns approximately one third of Consolidated's outstanding capital stock, nor the former's vice president, who is also a member of the latter's board of directors, received notice of the board of directors' meeting at which Consolidated was authorized to sell the rights to Bridgeways, and that Consolidated was not represented at the instant hearing either by counsel or by one of its officers so that a development of facts concerning the board of directors' action was not possible; (7) that the rights involved were sold by Consolidated to Interstate in 1937 and that, therefore, Consolidated has no legal title thereto; and (8) that the planned method of operation by Bridgeways following the purchase is not distinguishable from that disapproved in Commercial Carriers, Inc.-Lease-Boutell, 40 M. C. C. 345, herein called the Boutell case. In connection with the first contention, John Bridge, the real party in interest in control of Bridgeways, executed the application as a joint party applicant for authority under section 5, to acquire control of the rights through the proposed purchase, in conformity with the principle enunciated in Refiners Transport & Term. Corp.-Purchase-Marshall, 39 M. C. C. 271, which principle does not require that the real party in interest appear at a hearing as a witness, nor does this Commission ordinarily require any specific person to testify in these proceedings. Had protestants desired Bridge to appear as a witness at the hearing, they should have requested issuance of a subpoena for his appearance as provided by rule 56 of the Commission's General Rules of Practice.

Upon presentation of transactions of this character, consideration is given to the manner of payment, the fixed charges, and the effect the purchase would be likely to have on the carrier's ability to continue affording an adequate service to the public. Consideration is also given to the value of operation to be acquired in relation to the purchaser's existing operations and the method in which it would be utilized to the public benefit. Taking into account Bridgeways' resources, the small purchase price, improved earnings, and the length of the route, approximately 35 miles, there is no reason for believing that the proposed investment or continued operation will prove improvident. As previously indicated, Bridgeways is already operating over the route under temporary authority, and the evidence shows that there is a need for continuance of the service which is now being provided.

Protestants' contention that Consolidated has not operated over the considered route since 1937, apparently is correct. However, as above stated, Consolidated holds an unrevoked certificate issued by this Commission authorizing the operations, and its possession thereof, without the performance of any transportation service thereunder, whatsoever, nevertheless constitutes it "a motor carrier subject to part II."

Quaker City Bus Co.-Purchase-Black Hawk Line, Inc., 38 M. C. C. 603. It follows that we have jurisdiction to consider the application on its merits and may properly approve the proposed purchase if we should find it to be consistent with the public interest. The evidence submitted showing the affirmative public benefits which would flow from the unification of, and the need for the service, warrants the finding that the transaction would be consistent with the public interest.

The four protestants previously named introduced evidence intended to show that their operating facilities are more than ample to provide adequate service between Grand Rapids and Muskegon and other points. Based on such evidence, they contend that the proposed unification would deprive them of needed traffic and revenue to their mutual detriment. The extent of the possible loss of traffic to Bridgeways and the resulting possible impairment of the service of these protestants can only be determined on the basis of the record and evidence adduced. Other than evidence of a general nature, these protestants adduced no evidence as to the amount of freight handled by them between the considered points either on a tonnage or revenue basis, or evidence showing the results of their entire operations. In our opinion, the instant record does not support a finding that the operation under these rights by Bridgeways would have an adverse effect on protestants, bearing in mind that it has been providing competition under temporary authority for some time.

5

Two motions were made by protestants at the hearing. The first motion, overruled by the examiner, related to protestants' sixth contention and requested postponement of the hearing until such time as Don. B. Smith and A. F. Mathews would be available to testify regarding the board of directors' meeting at which the sale of Bridgeways was authorized. It is sufficient to state that it is not for us to question the legality of the board's action in authorizing the sale which, if questioned, is more properly for settlement in the courts. The instant application is signed and verified by Smith as secretary of Consolidated and contains a copy of a resolution adopted by the board, also signed and certified by Smith, authorizing the sale. The agreement is executed by Smith on behalf of Consolidated. Authority granted under section 5 is permissive only and may or may not be exercised at the election of the parties. It is not for us to assume, in the face of the foregoing evidence, that the parties have failed to take appropriate corporate steps to consummate the transaction or that authority therefor, if granted, would be futile. Compare Watson

These individuals are officers and directors of Consolidated and in control thereof through ownership of about 66% percent of its outstanding capital stock, the remaining 33% percent, as previously stated, being owned by Interstate.

Bros. Transp. Co.-Purchase-Terminal Whse. Corp., 39 M. C. C. 747. Protestants' motion was properly overruled.

The second motion requested dismissal of the application, based on protestants' contention that Interstate had purchased the rights over the route involved from Consolidated in 1937, and that, therefore, Consolidated has no legal title thereto. An examination of Consolidated's "grandfather" application in No. MC-30897, filed February 10, 1936, as first amended May 12, 1938, discloses that it claimed rights to operate over the considered route and, following a hearing in May 1939, and the report of division 5 in Consolidated Freight Co. Common Carrier Application, 27 M. C. C. 806, decided January 14, 1941, a certificate was issued to Consolidated on February 16, 1942, which was superseded by the certificate of October 17, 1944, previously mentioned. Both certificates included the route and, so far as we are able to determine, no authority was sought by Interstate to acquire these rights. Although it is contended that Associated, in February 1945, filed a petition with this Commission for reconsideration of the proceeding wherein the certificate was issued with respect to this route, a search of the files therein fails to disclose the petition. In any event, as previously stated, Consolidated's present outstanding certificate authorizes the considered operation. This proceeding is not the proper one to determine the question whether or not the certificate should have excluded the route. That question is more properly for determination in the proceeding where the right was initially granted. The motion to dismiss is overruled.

Protestants argue further that what Bridgeways proposes is nothing more than to "tack" on a dormant operating right to its large network of routes for the avowed purpose of performing a through service and not for the purpose of providing a service between Muskegon and Grand Rapids. This, it is contended, would be a new service having no relationship to the operations while under separate ownership and would be contrary to the principle enunciated in the Boutell case. The facts in that case are unlike those here present. The lessee there proposed to lease and couple initial-movement rights to transport automotive equipment with secondary-movement rights owned, for the performance of a new through transportation service from the points of origin under the initial-movement rights, to points throughout the territory served under the secondary rights and thus, in effect, to convert the secondary-movement rights to initial-movement rights, in a transportation service of a specialized nature. In the instant proceeding, the new through service which would result would be that which normally follows the unification of existing separately owned rights to transport ordinary freight. See supplemental report in No. MC-F-3199, Union Transfer Co.-Purchase-Ash Truck Lines,

Inc., 45 M. C. C. 815, wherein a similar contention was rejected. There is no basis in this record for concluding that Bridgeways would refuse to handle local traffic between Muskegon and Grand Rapids, if requested, as well as the through traffic.

We find that the purchase by Bridgeways, Inc., of the previously described operating rights of Consolidated Freight Company between Grand Rapids and Muskegon, Mich., over U. S. Highways 16 and 31, and the acquisition of control of the operating rights by John Bridge, through the purchase, 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, and that, if the transaction is consummated, Bridgeways, Inc., will be entitled to a certificate covering the described portion of the operating rights granted in No. MC30897, which rights are herein authorized to be unified with rights otherwise confirmed in it, with duplications eliminated; provided, however, that, if the authority herein granted is exercised, Bridgeways, Inc., shall amortize in equal monthly amounts over a maximum period of 2 years, commencing with the date of consummation of the purchase, the amount assigned to its "Other Intangible Property" account as a result of the instant transaction, or in lieu of amortization in any month of the 2-year period, Bridgeways,. Inc., may write off the unamortized balance of the amount so assigned, such amortization or write-off to be accomplished in the manner to be determined upon submission of the journal entries proposed to record the purchase, as required by our order herein; and provided further, that concurrently with consummation of the purchase herein authorized, that portion of the retained operating rights granted to Consolidated Freight Company under its certificate in No. MC-30897, on October 17, 1944, authorizing the transportation of general commodities, with exceptions, between the junction of U. S. Highway 16 and Alternate U. S. Highway 16 and the junction of Alternate U. S. Highway 16 and U. S. Highway 31, over Alternate U. S. Highway 16 (Michigan Highway 104), shall be canceled.

An appropriate order will be entered.

50 M. C. C.

No. MC-F-34761

PORTER ANDREW SMULCER-PURCHASE-H. P.

SMULCER

Submitted August 20, 1947. Decided October 24, 1947

1. Acquisition by Porter Andrew Smulcer of the operating rights of H. P. Smulcer, approved and authorized.

2. Application of W. S. (Bill) Bristow for authority to purchase operating rights of Porter Andrew Smulcer, denied.

Rush H. Record for applicants.

REPORT OF THE COMMISSION

DIVISION 4, COMMISSIONERS MAHAFFIE, MILLER, AND MITCHELL BY DIVISION 4:

Porter Andrew Smulcer and his son, H. P. Smulcer, herein called the father and son, both of Wichita Falls, Tex., by joint application filed May 9, 1947, in No. MC-F-3476, seek authority under section 5 of the Interstate Commerce Act for the acquisition by the father of the operating rights of the son. W. S. (Bill) Bristow, of Kamay, Tex., and the father by joint application filed May 12, 1947, in No. MC-F3477, seek authority under the same section for the purchase by Bristow of the operating rights of the father. As a matter directly related to the application in No. MC-F-3477, by amendment filed June 9, 1947, Bristow requests that a certificate of public convenience and necessity be issued to him covering his operations, which have been and are now conducted under the exemption from the certificate requirements of the act contained in the second proviso of section 206 (a), herein called the proviso. The notice assigning the applications for hearing stated that the question of authorization of such a certificate was in issue. Hearing has been held on a consolidated record, at which applicants waived service of an examiner's proposed report. Applicants in each proceeding operate more than 20 motor vehicles.

On September 20, 1940, in No. MC-79999, a certificate was issued to the father, authorizing operations in interstate or foreign commerce as a motor common carrier of machinery, materials, supplies, and equipment, incidental to, or used in, the construction, development, operation and maintenance of facilities for the discovery, development, and

1 This report also embraces No. MC-F-3477, W. S. (Bill) Bristow-Purchase-Porter Andrew Smulcer.