that applicant served only one receiver thereat: namely, Panama Banana Distributing Company, hereinafter called P.B.D.C. They argue that applicant's operations were not "bona fide" because they involve willful evasion of the Federal Transportation Tax and State laws regulating for-hire motor carrier and because applicant carried no public-liability insurance before the effective date of the Transportation Act of 1958; and that, therefore, the application should be denied, citing McDonald v. Thompson, 305 U.S. 263, D. L. Wartena, Inc., Common Carrier Application, 4 M.C.C. 619, Peterson Common Carrier Application, 14 M.C.C. 443, Winton Contract Carrier Application, 17 M.C.C. 451, and Crouch Transp. System, Inc., Common Carrier Application, 26 M.C.C. 433. They also urge that should any authority be granted applicant to serve Chicago, it be limited to that of a contract carrier authorized to provide service for P.B.D.C.

In reply applicant asserts that he was and is a common carrier, and that there is no indication that any Chicago receiver would be willing to enter into a contract with him. He argues that it was common practice among for-hire motor carriers of bananas to carry false documents describing the lading as the driver's property in order to evade State laws, to fail to register with the U.S. Internal Revenue Service, and to refrain from collecting the Federal transportation tax; and that the evidence warrants a grant of the authority sought. The evidence adduced, the examiner's recommendations, the exceptions, and the reply thereto have been considered. We find the examiner's statement of facts to be adequate; and, as supplemented herein, we adopt it as our own. No exception is taken to the partial denial of the application recommended by the examiner, and since the examiner's finding in this respect is amply supported by the evidence, we adopt it as our own and shall confine our discussion to the matters raised on exceptions.

Applicant transported numerous shipments of bananas from New Orleans to points in various States both before and after May 1, 1958. These operations are shown in detail in the appendix to the examiner's report, and a copy of such appendix, with one correction, is attached hereto. Most of these trips were performed by applicant under a so-called lease arrangement with other persons. The only destination point applicant served in his own operation was Chicago, to which he moved two shipments in 1957, two in 1958 prior to the critical date, eight in 1959, and four in 1960. The considered banana traffic from New Orleans to Chicago was consigned primarily to P.B.D.C.; however, the shipment of March 1, 1958, was destined to Certified Grocers of Illinois. When transporting bananas in interstate commerce in or through Texas, Missouri, and Illinois, applicant admits that he carried false bills of sale identifying him as the pur

84 M.C.C.

chaser of the bananas in order to evade State regulations by posing as a private carrier; and there is no indication that applicant has discontinued this practice. He also admits that he failed to register as a for-hire carrier with the United States Internal Revenue Service and to collect the Federal transportation tax on the involved shipments. He did not purchase public-liability insurance until some time after August 12, 1958.

Inasmuch as applicant states in his application that he held himself out and now holds himself out to serve the general public, within the limits of his capacity, as a transporter of bananas from New Orleans to Chicago and has handled traffic for two receivers at that point without assigning his motor vehicles to the exclusive use of either of them or furnishing transportation service designed to meet their distinct needs, we conclude that applicant is acting as a common carrier by motor vehicle rather than as a contract carrier.

We are convinced also that applicant has conducted substantial and continuous, as distinguished from sporadic or infrequent, service as a motor carrier of bananas from New Orleans to Chicago and, to that extent, was in operation on and since May 1, 1958, in accordance with the provisions of section 7(c) of the 1958 act. However, there remains the question of whether this operation constitutes a "bona fide operation" as required by those provisions. Bona fide operation also was required as a basis for "grandfather" rights under comparable provisions of the Motor Carrier Act of 1935 and this Commission found that, to be bona fide, operations cannot be conducted surreptitiously or in disguise or involve some other element of pretense or concealment for the purpose of preventing State authorities from having the opportunity of enforcing statutory requirements. Slagle Contract Carrier Application, 2 M.C.C. 127. The cases cited by protestants are illustrative of a line of similar decisions, of which Slagle Contract Carrier Application, supra, is the first, construing the "grandfather" clauses of sections 206(a) and 209(a) of the 1935 act. Peterson Common Carrier Application, supra, is particularly pertinent here because Peterson's operation was found not to be bona fide on the basis of his affidavit stating "that in the absence of a Texas permit it is necessary to have a bill of sale for the loads in order to eliminate delays account of being stopped by Texas authorities and that accounts for the large number of loads appearing to be the property of the affiant."2 Applicant's testimony in the instant proceeding concerning his transportation of bananas in Illinois on movements from New Orleans to Chicago is almost identical to the testimony of Peterson in the cited case. In constru

Peterson Common Carrier Application, supra, pages 445-446.

ing the term "bona fide operation" as used in section 7(c) of the 1958 act we should look to the corresponding similar term in the 1935 act. Compare Long Common Carrier Application, 81 M.C.C. 689. Thus operations by an applicant for "grandfather" authority under the 1958 act, as under the 1935 act, cannot be deemed to be "bona fide" when they are conducted, as here, in disguise for the purpose of preventing State authorities from having the opportunity of enforcing statutory requirements. In the circumstances, we conclude that applicant's operations were not bona fide within the meaning of that term in the Transportation Act of 1958 and the application must be denied. In view of our conclusions herein, the other contentions raised on exceptions need not be discussed.

We find that applicant has failed to establish that he was on May 1, 1958, engaged in bona fide operation, in interstate or foreign commerce, as a common carrier by motor vehicle, of bananas from and to the points described in the instant application, and has so operated since that time; that applicant has failed to establish a right to a certificate under the "grandfather" provision of section 7(c) of the Transportation Act of 1958; and that the application should be denied. An appropriate order will be entered.

COMMISSIONER GOFF did not participate.

(L) refers to shipments moved by applicant under lease of equipment to other parties. With the exception of two shipments on August 21, 1957, to Chicago, all dates refer to single shipments. This shipment was under an equipment lease arrangement rather than a movement by applicant alone as shown in the examiner's report.

No. MC-112908 (SUB-No. 2)

KINGSWAY TRANSPORTS, LIMITED, EXTENSIONNIAGARA FALLS, N.Y.

Decided December 7, 1960

Public convenience and necessity found not shown to require operation by applicant as a common carrier by motor vehicle of general commodities, with exceptions, between New York, N.Y., and Niagara Falls, N.Y., over a described regular route, serving specified intermediate and off-route points, restricted to traffic to and from Canada. Application denied.

S. Harrison Kahn for applicant.

A. Robert Bamonte, G. Donald Bullock, Rex Eames, Morton E. Kiel, Blair Moody, Jr., Edward L. Nehez, Floyd B. Piper, and William D. Traub for protestants.

P. Bateman Ennis and Benjamin Solomon for interveners in opposition to the application.

REPORT OF THE COMMISSION

DIVISION 1, COMMISSIONERS MURPHY, GOFF, AND HERRING BY DIVISION 1:

By application filed January 3, 1958, Kingsway Transports, Limited, a corporation, of Montreal, Quebec, Canada, seeks a certificate of public convenience and necessity authorizing operation, in interstate or foreign commerce, as a common carrier by motor vehicle of general commodities, except those of unusual value, class A and class B explosives, household goods as defined by the Commission, commodities in bulk, and those requiring special equipment, between New York, N.Y., and Niagara Falls, N.Y., from New York City over approach highways and roads to the New York Thruway, thence over the New York Thruway to approach roads and highways at Niagara Falls, and thence over approach roads and highways to Niagara Falls, and return over the same route, serving all intermediate and off-route points in New York and New Jersey within 15 miles of New York City, restricted to the transportation of traffic originating at, or destined to, points in Canada. The New York Central Railroad Company and a number of motor carriers1 oppose

1 Maislin Bros. Transport, Limited; Maislin Bros. Transport, Limited, operator of Maislin Transport, Inc.; Interstate Motor Freight System; Kramer Bros. Freight Lines, Inc.; Consolidated Truck Lines, Limited; Direct-Winters Transports, Limited; Inter-City Truck Lines, Limited; Wallace Transport, Limited; Penn Yan Express Inc.; and Mushroom Transportation Company, Inc., hereinafter called Maislin Bros., Maislin Transport, Interstate, Kramer, Consolidated, Direct-Winters, Inter-City, Wallace, Penn Yan, and Mushroom, respectively.