128 trips were made by applicant using trip-leased equipment belonging to 26 nonauthorized carriers; and equipment of 29 lessors were used during this time for a total of over 140 trips where no pretrip inspection had been made. In the last named group of movements the removable devices on the equipment were not serially numbered as required.

DISCUSSION AND CONCLUSIONS

Section 207(a) of the act provides that we may issue a certificate authorizing operation for which a need has been established, only if the applicant is found to be fit, willing, and able properly to perform the proposed service and to conform to the provisions of the act and our rules and regulations thereunder. Applicant's past failure to adhere to the requirements of our safety regulations has been firmly established and in most cases admitted by applicant. Where, as here, a considerable portion of applicant's operations are conducted by means of leased equipment, strict observance of the safety regulations is particularly important. Failure to observe them is inexcusable and cannot be condoned. Despite the findings of numerous infractions of the regulations transmitted by our Bureau of Motor Carriers to applicant by letters in 1956 and 1957, we note that numerous serious violations of our safety regulations thereafter occurred. Convictions in the district court, as heretofore described, do not appear to have deterred applicant in its unlawful operations, but, on the contrary, they were continuing through the first 3 months of 1960. Applicant's continued violations, in the face of repeated warnings, are not to be viewed lightly and, we find no excuse for such violations. We are persuaded that applicant has been given a fair opportunity to establish its fitness. Since it was unable to show that it was in substantial compliance with our safety regulations at the time of the further hearing in the title proceeding, bearing in mind the long history of violations it has committed in the past several years, we conclude that applicant has failed to establish its fitness to conduct the operations proposed in the title proceeding. In view thereof, no affirmative finding may be made in No. MC-46737 (Sub-No. 36), as required by section 207(a) of the act, that applicant is fit to conduct the operations proposed therein. Accordingly, both applications must be denied.

In No. MC-46737 (Sub-No. 35), on further hearing, and in No. MC-46737 (Sub-No. 36), we find that applicant has failed to show that it is fit properly to conduct the proposed operations or to conform to the requirements of the Interstate Commerce act and our rules and regulations thereunder; and that the applications should be denied.

An appropriate order will be entered.

84 M.C.C.

No. MC-117915 1

M & G PRODUCE CARRIERS, INC., COMMON CARRIER "GRANDFATHER" APPLICATION

Decided March 17, 1961

1. In No. MC-117915, applicant found entitled to continue operation as a common carrier by motor vehicle, over irregular routes, of bananas, from and to specified points, by reason of its having been engaged in such operations on and continuously since May 1, 1958.

2. In No. MC-117999 applicant found entitled to continue operations, in interstate or foreign commerce, as a common carrier by motor vehicle, over irregular routes, of bananas, from New York, N.Y., to Schenectady, N.Y., by reason of its having been engaged in such operation on and continuously since May 1, 1958.

3. Issuance of certificates approved upon compliance by applicants with certain conditions, and applications in all other respects, denied.

Edward M. Alfano for applicant in No. MC-117915 and a protestant in No. MC-117999.

John J. Brady, Jr., for applicant in No. MC-117999.

Kenneth J. McAuliffe, Alfred A. Green, Floyd B. Piper, and Bert Collins for protestants and interveners in one or both of the proceedings.

REPORT OF THE COMMISSION

DIVISION 1, COMMISSIONERS WALRATH, MURPHY, AND WEBB BY DIVISION 1:

These applications were heard on a consolidated record and were the subject of a single report and recommended order of the examiner." As they involve related issues, we will dispose of them in a single report. In the M & G proceeding, exceptions to the order recommended by the examiner were filed by Harold R. Rosenthal, and M & G replied. In the Gallo proceeding, exceptions to the order recommended by the examiner were filed by applicant, and M & G replied. Our conclusions in No. MC-117915 differ somewhat from those recommended.

1 This report also embraces No. MC-117999, Tom Gallo Common Carrier "Grandfather" Application. Applicant in the title proceeding is hereinafter called M & G and applicant in the subtitled proceeding is hereinafter called Gallo.

2 These proceedings were the subject of a single examiner's report and recommended order in No. MC-117703, Harold R. Rosenthal Common Carrier "Grandfather" Application, which was reopened for further hearing by order of November 16, 1960. The examiner's report and recommended order also embraced No. MC-117017, H. G. Snyder Common Carrier "Grandfather" Application, in which the examiner's recommended order denying the application became effective by operation of law in the absence of exceptions. 84 M.C.C.

In No. MC-117915, by application filed November 28, 1958, as amended, and in No. MC-117999, by application filed December 4, 1958, under the "grandfather" provisions of section 7 (c) of the Transportation Act of 1958, M & G, of East Rutherford, N.J., and Gallo, of Ticonderoga, N.Y., respectively, seek certificates of public convenience and necessity authorizing the continuance of operations, in interstate or foreign commerce, as common carriers by motor vehicle, over irregular routes, of bananas. M & G seeks authority from points in the New York, N.Y., commercial zone, Baltimore, Md., and Philadelphia, Pa., to points in New York, Massachusetts, Ohio, Michigan, Illinois, and Pennsylvania and the ports of entry on the international boundary between the United States and Canada located at Rouses Point, Alexandria Bay, Champlain, and Niagara Falls, N.Y., Derby Line, Vt., and Jackman and Calais, Maine. Gallo seeks authority from New York, N.Y,, Baltimore, Weehawken, and the port of Newark, N.J., to Albany, Schenectady, and Menands, N.Y., and the ports of entry on the international boundary between the United States and Canada at Champlain and Derby Line. The New York Central Railroad Company and The Baltimore and Ohio Railroad Company oppose both of the applications; the Boston and Maine Railroad, the Maine Central Railroad Company, Rosenthal, Zavits Brothers, Ltd., J. A. Lincoln, and J. A. Stevens, oppose M & G's application; and M & G opposes Gallo's application. Victor Elting was allowed to intervene in opposition to Gallo's application subsequent to the hearing.

The examiner recommended that M & G be granted authority to transport bananas (1) from New York City to points in New York, except shipments destined to points in Canada; (2) from New York City to Philadelphia, and to Boston, Mass.; and (3) in foreign commerce, restricted to shipments destined to points in the Province of Quebec, Canada, from New York City and Philadelphia to the ports of entry at Rouses Point, Champlain, Derby Line, and Jackman. He also recommended that Gallo be authorized to transport bananas from New York City to Schenectady.

Rosenthal in his exceptions to the recommended grant of authority to M & G contends (1) that applicant failed to submit proper documentary evidence to support the grant of any authority other than that embracing the transportation of bananas from New York City to the ports of entry at Rouses Point, Champlain, Derby Line, and Jackman, (2) that there is no statutory sanction for the examiner to restrict applicant's future operations in foreign commerce to shipments destined to points in the Province of Quebec, and (3) that a portion of the shipments which M & G relied upon to establish its "grandfather" rights was transported in Rosenthal's vehicles. In

reply M & G avers that the origin and destination points listed in the shipping documents it submitted at the hearing were correctly interpreted by the examiner and that the recommended order should be approved.

Gallo maintains on exceptions (1) that he should be granted authority to transport bananas from New York City to ports of entry at Champlain and Derby Line, and (2) that his operations were. those of an independent motor carrier, notwithstanding the relationship between him and M & G, on the movements of bananas to points in Canada. In support of his exceptions, Gallo argues that the test of independence of operation of a common carrier is control of vehicles and drivers, responsibility to the general public, and the payment of insurance, and that an analysis of the evidence will show that he has met these requirements. He further argues that in his relationship with M & G, it acted as a broker and not as a for-hire carrier. In reply M & G takes issue with the matters raised on exceptions and argues that the examiner's recommendation is in accordance with the evidence and the applicable law.

The evidence adduced, the examiner's recommendation, the exceptions, and the replies thereto have been considered. We find the statement of facts in the examiner's report to be correct in all material respects, and we adopt that statement as our own.

M & G holds no authority from this Commission but is authorized to operate as a motor carrier of fruit and fruit produce in the Province of Quebec. It owns and operates about 7 tractors and 10 trailers suitable for such transportation. It has transported bananas in substantial quantities from 1952 to the present. In determining the scope of applicant's operations on and since May 1, 1958, however, we shall not consider shipments transported, prior to January 1, 1957. Compare Refrigerated Dispatch Common Carrier Application, 83 M.C.C. 411.

M & G's exhibit, abstracted in appendix A, shows that from March 15, 1957, to May 1, 1958, it transported about 105 shipments of bananas from New York City and Philadelphia to points in the Province of Quebec, and single shipments from New York City to Philadelphia, Boston, Schenectady, and Troy, N.Y. From May 1, 1958, to December 30, 1959 M & G transported about 740 shipments of bananas from New York City and Philadelphia to the Province of Quebec, 12 from New York City to Rochester, N.Y.; 3 from New York City to Troy; and single shipments from New York City to Buffalo, N.Y., Boston and Philadelphia and from Philadelphia to Albany. All of these shipments except for some of those to Canada, were transported in its own vehicles.

In performing the Canadian operations in issue herein M & G has utilized Gallo's and Rosenthal's vehicles as well as its own. From March 1957 to about April 1959, M & G and Gallo were parties to an oral agreement whereby Gallo would deliver bananas to Canadian consignees for 90 percent of the rate charged by M & G, while the remaining 10 percent would be returned to M & G, allegedly to cover the cost of insurance. Gallo would contact M & G, and if a shipper advised M & G that a load was available, M & G either would instruct Gallo where to pick up the lading or would issue a pickup order authorizing the delivery of the bananas to Gallo. In either instance Gallo would pick up the lading and return to M & G's office. Depending on the personnel available at the time a shipment was ready to be moved, M & G, or in some instances Gallo's drivers, would fill out copies of M & G's freight bill showing the names of the shipper and consignee, and the weight, rate, and total transportation charge. In all instances the rate was based on M & G's rates, and it prepared all the necessary documents for exporting these shipments to Canada. Gallo then transported the traffic to destination in Canada where either he or his driver collected the total transportation charge from the consignee. If the payment was made in cash or by check payable to Gallo, he would remit 10 percent of the total amount to M & G, along with a copy of the delivery receipts, and would retain the balance. If the payment was made by check payable to M & G, the driver would forward the check along with a copy of the signed delivery receipt to M & G, which would in turn retain 10 percent of the transportation charge and remit the balance to Gallo. M & G concedes that the only inspection it performed under this agreement was to determine whether the trailer was suitable for the movement of bananas and whether the tires of the vehicle were adequate. In the conduct of its business, M & G has carried, since 1951, publicliability, property-damage, and cargo-damage insurance.

Beginning in April 1959, M & G required Gallo to enter into a written agreement with it each time Gallo's equipment was used by it. The terms of the argeement provide (1) that M & G will inspect the equipment before use to insure compliance with the pertinent

A number of the shipments listed by M & G as having been transported by it from New York City to Canadian destinations were handled in Rosenthal's vehicles. Apparently Rosenthal has relied upon the same shipments in support of its application for "grandfather" authority (see footnote 2, supra). It is not possible to determine which of the shipments listed in appendix A hereto are those handled in Rosenthal's vehicles, but even if the total number of shipments so transported were deducted from the total claimed by M & G to have been transported by it, M & G would still have transported sufficient shipments from New York City to Canadian points, both before and after the critical date, to justify the grant of authority made herein. As Rosenthal's application proceeding has been reopened for further hearing, we will not attempt at this time and on this record to determine whether the shipments handled in its vehicles for M & G represent transportation performed by Rosenthal or by M & G. Rather, the disputed shipments will not be considered in the disposition of the instant proceedings.