ABANDONMENT. See LEASE; MERGER; OPERATION; PURCHASE; THROUGH ROUTES (Single-Line Service).
ACCOUNTS. See INTANGIBLE PROPERTY; NONCARRIERS.
ADEQUACY OF SERVICE. See COMPETITION (Rights of Competitors); CONVENIENCE AND NECESSITY; HOUSEHOLD GOODS; INTERCHANGE; PURCHASE (Abandoned Operations); SPECIAL SERVICES (Drive-Away or Truck-Away); TRANSPORTATION.
AFFILIATION. See also COMMON CONTROL, MANAGEMENT, OR ARRANGE- MENT; NONCARRIERS; VIOLATION OF ACT. Father and son ceased to be affiliated within sec. 5 (6) when the father divested himself of all stock in carrier of which the son then became majority stockholder, and resigned as officer and director; and the son purchased the father's shares at a price comparable to net book value, financing the purchase through a loan obtained on his sole credit and responsibility, and agreed to divest himself of all interest in two noncarrier companies controlled by the father. Their financial interests were thus no longer identical or even parallel. Rodgers Motor Lines, Inc.-Purchase-Ovens, 11 (17).
Although three of seven directors of vendee and its controlling noncarrier, re- spectively, were officials of a railroad, and a subsidiary of the railroad owned 30 percent and vendee's parent company 70 percent of stock of another carrier, which performed service for the railroad, vendee was not affiliated with the rail- road within the proviso of sec. 5 (2) (b), since none of its administrative officers or employees were selected by or connected with the railroad, and it was managed and operated without regard to the railroad. Motor Frt. Exp.-Purchase-Alko Exp. Lines, 143 (145).
Although railroad subsidiary would receive 39.1 percent of vendee's stock and debentures as payment for its passenger operating rights, vendee would not become affiliated with a railroad within sec. 5, since neither the railroad nor its subsidiary had any interest in two other companies which would hold the remain- der of the securities, and the subsidiary would name only two of vendee's nine directors. Transcontinental Bus System, Inc.-Control-Continental, 193 (212). Vendee of operating rights and properties of railroad's subsidiary bus line would not become affiliated with the railroad within sec. 5 although vendor would receive 39.08 percent of vendee's stock, since only 2 of vendee's 9 directors would be representatives of vendor, there was no evidence that vendee would be operated in the railroad's interest or that the railroad intended to participate in any material degree in its management, and vendee's acquisition of substantial independent bus operations indicated the contrary. Transcontinental Bus System, Inc.-Control-Continental, 305 (308).
Conditions on purchase of operating rights and properties of railroad's sub- sidiary bus company, for which latter would receive stock and debentures of vendee, that the stock be trusteed and that the railroad should have no repre- sentation on vendee's board of directors or in management, could not be imposed without a finding of control or affiliation with the railroad. Id. (309).
Individual carrier applicant and his mother and sister were affiliated, and would jointly control carrier corporation all of whose stock was owned by his deceased father, except 5 shares each held by the sister and her husband, when each would inherit equal shares of the father's stock, and applicant had been selected by the family to succeed his father in active management. Elliott-Control-Elliott Delivery Service, Inc., 562 (565).
AGENTS. See also EQUIPMENT (Lease); HOUSEHOLD GOOds; Purchase (Con- sumation). Arrangement whereby independent carriers leased equipment from agents of Allied Van Lines and performed service as subagents was a subterfuge contravening letter and spirit of decision in 40 M. C. C. 557, which disclaimed approval of addition of other hauling agents by Allied without prior authority. Such practices should be discontinued. Allied Van Lines, Inc.-Purchase-
Allied Van Line's approved agents are merely its employees to move its traffic; and arrangements made by them in its behalf must be imputed to its knowledge. Id. (286). APPEARANCES.
See AsSOCIATIONS; WITNESSES.
See also PURCHASE.
DENIAL: Commission may not deny an application merely to relieve vendor from effects of a bad bargain or from result of its failure to protect itself appro- priately in purchase contract against protracted proceedings. Marion Trucking Co., Inc.-Purchase-Harwood Trucking, Inc., 613 (632).
SERVICE: Although copy of purchase application which had been mailed to State commission about 3 months before hearing could not be located when pro- testant's counsel sought to examine it 3 days before hearing, applicants' counsel, when notified, immediately mailed another copy, which was made available to protestant's counsel at hearing, and as he had received adequate notice of hearing, any lack of opportunity to prepare additional evidence was due to his own delay. Marcell-Purchase-Rowley, 699 (706).
ASSIGNMENTS. When Reconstruction Finance Corp. bid in vendor's oper- ating rights in foreclosure proceeding and the court confirmed the sale, it acquired power to assign the right to purchase them. Breeding Motor Frt. Lines, Inc.- Purchase-Lee Way Motor Frt., Inc., 447 (455).
ASSOCIATIONS. Applicants' objection to intervention by motor carrier asso- ciations on ground that they did not show that any of their members had a direct interest in the issues, overruled, since 14 carriers who were directly interested in the applications because they operated in territory involved had requestea formal hearing, and they chose to be represented by the associations of which they were members, instead of appearing individually. Emery Transp. Co.-Control and Merger, 43 (44).
BACK HAULS. See THROUGH ROUTES (Irregular-Route Service) BURDEN OF PROOF. See also LEASE (Renewal); SPECIAL SERVICES (Drive- Away or Truck-Away). In every sec. 5 proceeding, burden is on applicants to submit evidence to support a finding that the transaction will be consistent with public interest. Fleet Carrier Corp.-Lease-George F. Burnett Co., Inc., 489
CAPITALIZATION. See also WORKING CAPITAL. Merger could not be approved when survivor's capitalizable assets would amount to only $393,362, against proposed capitalization of $731,000, consisting of $261,000 in stock and $470,000 in long-term notes, and even if valuation of its operating properties was increased by $152,093 to reflect claimed true value, capitalization would still exceed supporting assets by $185,545. Moreover, reduction of working capital from $278,457 to $80,000, maximum allowance justified by the old company's monthly
operating expenses, would further increase the excess of capitalization. Southern Stages Co.-Control and Merger, 21 (38, 39).
CERTIFICATES. See CONVENIENCE AND NECESSITY; OPERATING RIGHTS; PURCHASE (Consummation); ROUTES (Scope of Operation). CHARTER SERVICE. See EXEMPTIONS; PASSENGERS.
COMMODITIES. See DUAL OPERATION; MERGER (Abandoned Operations); OPERATING RIGHTS (Split).
COMMON CARRIERS. See LEASE (In General).
COMMON CONTROL, MANAGEMENT, OR ARRANGEMENT. AFFILIATION; CONTROL; DUAL OPERATION; EXEMPTIONS; LEASE (Term); PURCHASE (Consummation).
IN GENERAL: When father and son who each controlled a carrier had terminated their affiliation within sec. 5 (6) by divestiture of all financial interest in each other's carrier or noncarrier enterprises, and the son was an experienced operator, the two carriers were not under common control, notwithstanding family relation- ship and past business association of their stockholders. Rodgers Motor Lines, Inc.-Purchase Ovens, 11 (17, 18).
When operations of a family partnership were managed by one of its members, who also conducted individual operations, acquisition of a third carrier entity, to be controlled in common interest through a noncarrier corporation created by the partnership, would be inconsistent with policy of encouraging corporate simpli- fication. Southern Stages Co.-Control and Merger, 21 (40).
When three individuals, of whom one was sole stockholder and others managerial employees of one carrier, acted together with a fourth in acquiring joint control of a second carrier, there was a conclusive presumption under sec. 5 (5) (c) that the two carriers would be controlled in common interest. Donohue-Control- Charlton Bros. Transp. Co., Inc., 259 (265).
When two intrastate carriers who each sought to purchase interstate rights had common officers and stockholders, the purchases were in reality a single transaction which would effect common control of two carriers subject to the act, and as they owned more than 20 vehicles the transaction was subject to sec. 5 (2) (a) rather than to sec. 212 (b). Gray Line New York Tours Corp.-Purchase-Gray Line Motor Tours, Inc., 339 (343, 344).
Lack of conflict of interest between vendee corporations and operating com- panies of Greyhound system, of which individuals who controlled vendees were officers, directors, and stockholders, was not controlling on question whether control would be effected to their mutual advantage, which is the "control or management in a common interest" contemplated by sec. 5. Id. (346).
COMPETITIVE OPERATIONS: Although maintenance of multiple corporations for conduct under common control of service which would otherwise be competi- tive is uneconomical and contrary to public interest, creation of a new Greyhound system company to conduct north-south operations in Missouri was consistent with public interest when other system operations in that State were primarily east-west and competition between them would be negligible. Southwestern Greyhound Lines, Inc.-Control-Northeastern Missouri Greyhound Lines, Inc., 441 (445).
VIOLATION OF ACT: Unlawful common control of vendee and two vendors was effected when vendors' respective sole stockholders had purchased the stock with money advanced by the uncle of one and had paid neither principal nor interest thereon, and neither had invested his own funds in vendors' operations or par- ticipated in active management; vendee's general manger supervised operations of both carriers, which used vendee's office, terminal, and employees, advertised
jointly with vendee, and used same vehicles; and operations of all three were conducted in fact as a single carrier. Deaton Truck Line-Purchase-B. C. Truck Lines, Inc., 5 (9).
Acquisition by a family partnership, over a period of time and without prior authority, of 41.7 percent of stock of a carrier, coupled with actual management of its affairs by one partner and his father, effected unlawful common control with a carrier controlled by the father. However, while such unlawful consum- mations should not be sanctioned, control authority was granted the partnership when need was shown for continuance of acquired carrier's service, which depended on management and assistance of the family. L. & E. Investment Co.-Control - Sooner Frt. Lines, 163 (168).
Unauthorized acquisition by a carrier of one-third, and by its two principal stockholders of another third, of stock of company holding all stock of another carrier effected common control of the two carriers in violation of sec. 5 (4); and although, on acquisition of stock control of the first carrier by a third, the first would distribute the holding company's stock pro rata to its stockholders, they would also become stockholders of the third carrier and as a group would still have power to control the second carrier. The first carrier and its stockholders should promptly terminate the unlawful control. Transcontinental Bus System, Inc.-Control-Continental, 193 (217).
Atlantic Greyhound's unauthorized purchase of 40 percent of stock of South- eastern Stages, with right to name one of its directors, restriction of its right to amend charter, create new stock, or increase shares without Atlantic's consent, and promise that Atlantic should have first opportunity to buy any additional stock sold, did not effect unlawful common control, despite their close business relations, when, except for the one director, no one connected with any Grey- hound company had ever attempted to influence Southeastern's policy or interfere in management, and it was still controlled by two closely affiliated individuals who controlled majority of its stock, neither of whom was affiliated with Atlantic. Greyhound Corp.-Control-Southeastern Stages, Inc., 709.
Agreement whereby one of four brothers who lawfully controlled three carriers took over management of a fourth carrier's business, pending purchase of its operating rights by a company created by them for the purpose, unlawfully effected control of the fourth carrier in common interest with the other three. As such control contravened policy against common control of multiple carriers rendering substantially same service, it should be terminated promptly. Prince Whse. Co., Inc.-Purchase-Larson Seed House, 772 (777, 779). COMPETITION. See also COMMON CONTROL, MANAGEMENT, OR ARRANGE- MENT; CONVENIENCE AND NECESSITY (Proof); OFF-ROUTE POINTS; PURCHASE (Abandoned Operations); ROUTES (Restriction); TRANSPORTATION.
IN GENERAL: It is generally true that competitors suffer some loss of revenue following consummation of a sec. 5 transaction when acquiring carrier is better equipped and stronger financially than carrier acquired, and disapproval is not warranted solely for that reason. Michigan Exp., Inc.-Lease-Premier Motor Transp. Co., 401 (406).
ELIMINATION: Transactions otherwise consistent with public interest may be approved even though some restraint of competition results. Pacific Greyhound Lines-Control and Merger, 123 (140).
PRESERVATION: While it is Commission's policy to preserve existence of independent carriers to foster competition, it does not follow that every proposal which would eliminate an independent carrier tends to stifle competition or is contrary to public interest. Pacific Greyhound Lines-Control and Merger, 123 (139).
RIGHTS OF COMPETITORS: Competitors which have developed facilities to handle available traffic are entitled to protection against new competitive services, in absence of need therefor, both in their behalf and to promote stability and sound economic conditions in the industry and adequate service for the public. Auto Convoy Co.-Lease-Automobile Shippers, Inc., 61 (69); Fleet Carrier Corp.-Lease-George F. Burnett Co., Inc., 489 (501);
-Thus, although amount of traffic which would be diverted from other carriers through purchase and resumption of abandoned operations could not accurately be determined, all would face keen competition from vendee's additional operation, and approval would penalize carriers, most of whom could ill afford to lose any of the traffic, for continuing their service under adverse conditions and at con- siderable cost over a 4-year period in which vendor elected not to do so. Fish Transport Co., Inc.-Purchase-Aiello, 729 (738);
-And preference of a few shippers for one carrier's service is not sufficient basis for authorization of additional service to detriment of existing carriers. Auto Convoy Co.-Lease-Automobile Shippers, Inc., 61 (68);
-But possible loss of traffic and impairment of service of competing carriers can be determined only on evidence submitted by the parties, and purchase was approved when little such evidence was introduced and record as a whole did not warrant finding that competitors would be harmed. Northern Transp. Co.- Purchase-Mikulich, 375 (382);
-And mere showing by protestants that vendee would directly compete with them after purchase, without any evidence as to results of their operations, density of traffic in the territory, extent to which their traffic and revenues might be affected, or importance of the affected operations to their system operations, did not warrant denial of purchase which on applicant's evidence was consistent with public interest. Hancock Truck Lines, Inc.-Purchase-Spector Motor Service, Inc., 509 (517);
-Especially when vendee had been operating over considered route for some time under temporary authority. Bridgeways, Inc.-Purchase-Consolidated Frt. Co., 175 (181).
TRAFFIC AVAILABLE: Whether sale of one of vendor's routes between same termini to a new competing carrier would be consistent with public interest should be determined on the evidence, with consideration of effect on existing carriers in view of amount of available and potential traffic in the territory. Grove and Sirbaugh -Purchase-Novick, 170 (173).
COMPLAINTS. See PRICES; PURCHASE (Pendency of Other Proceedings). CONDITIONS. See also AFFILIATION; DUAL OPERATION; EMPLOYEES; Exemp- TIONS; OPERATING RIGHTS (Split); PURCHASE (Operating Rights or Property); ROUTES (Regular vs. Irregular). Since special master in foreclosure proceeding was the party with whom vendee should consummate purchase, neither vendor nor Reconstruction Finance Corp., which had bid in vendor's properties, had power to accept or reject such terms and conditions as Commission might impose, although interest of each in the transaction was entitled to consideration. Breed- ing Motor Frt. Lines, Inc. -Purchase-Lee Way Motor Frt., Inc, 447 (458, 459). CONNECTING CARRIERS. See INTERCHANGE.
CONSOLIDATION. See FOREIGN CARRIERS.
Authorizations: Consolidated Truck Lines Ltd.-Consolidation, 230. CONSTRUCTION AND INTERPRETATION. FIFTH-SECTION TRANSACTIONS: "Any carrier," in sec. 5 (2) (a), is the same one referred to in sec. 5 (2) (b) as the carrier seeking approval of a transaction within sec. 5 (2) (a). The person required by the statute to present an application is the acquiring carrier, and such an application must be considered on its merits even though presented only
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