Grant of the authority here sought would not expand applicant's present authority territorially or with respect to commodities but would enable it to eliminate gateways in Iowa and Illinois when providing service between certain western States, including California, on the one hand, and, on the other, such States as Alabama and Louisiana. In a companion proceeding, No. MC-C-2996, Republic Van and Storage Co., Inc., Investigation of Operations, heard on a joint record with this application, the examiner found that applicant was not observing these gateways between points in California, on the one hand, and, on the other, points in Alabama, Connecticut, Delaware, Florida, Georgia, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Mississippi, Missouri, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, Tennessee, Virginia, West Virginia, and the District of Columbia; and he recommended that a cease and desist order be entered in consequence. This order was not excepted to, and it became the order of the Commission by operation of law on January 30, 1961. The examiner further found, with reference to the application proceeding, that applicant has not made a showing that the involved traffic was transported by it through the required Illinois and Iowa gateways; in fact, he found, as noted above, that the record discloses that none of this traffic was so transported. Consequently he recommended that the application be denied. In addition he found specifically that applicant's operations avoiding these gateways were conducted openly and under the belief that they were not contrary to the Commission's rules.

Tennessee, Virginia, West Virginia, Wisconsin, and Washington, D.C. (hereinafter called its "Owl rights").

The Zephyr rights were obtained in No. MC-FC-53190, Republic Van and Storage Co., Inc., Transferee, and Zepher Van Lines, Inc., Transferor, decided April 9, 1951, and the Owl rights were obtained in No. MC-F-4724, Republic Van and Storage Co., Inc.-Purchase De Smet, 58 M.C.C. 801 (not printed in full), decided July 28, 1952.

By certificate issued February 2, 1960, in No. MC-110585 (Sub-No. 8), it is authorized, as pertinent here, to transport household goods, over irregular routes, as follows:

Between points in Connecticut, Delaware, Illinois, Indiana, Kentucky, Louisiana, Maine, Maryland, Massachusets, Michigan, Minnesota, Mississippi, New Jersey, New York, New Hampshire, Ohio, Pennsylvania, Rhode Island, Tennessee, Vermont, Virginia, West Virginia, Wisconsin, and the District of Columbia; and

Between points in New York, Pennsylvania, and Tennessee, on the one hand, and, on the other, points in Alabama, Arkansas, Florida, Georgia, Iowa, Missouri, North Carolina, South Carolina, and Texas.

This authority was obtained in No. MC-F-6691, Republic Van & Storage Co., Inc.Pur.-Eastern Van Lines, 80 M.C.C. 87, decided March 16, 1959.

These gateways result from the combination of the various authorities set forth in footnote 1 above. The Commission in a number of cases has held that separate grants of authority may not be combined or joined where the separate grants do not contain overlapping service points through which such operations are in fact operated. See Transport Corp. of Virginia Extension-Maryland, 43 M.C.C. 716, Aetna Freight Lines, Inc., Interpretation of Certificate, 48 M.C.C. 610, M. I. O'Boyle & Son, Inc., Interpretation of Certificate, 52 M.C.C. 248, and Zirbel-Investigation of Operations, 53 M.C.C. 684 and 54 M.C.C. 409.

On exceptions applicant represents that it is now in compliance with the cease and desist order entered in No. MC-C-2996. It asserts that the instant application should be granted as an operation conducted bona fide under "color of right," with no harm ensuing to protesting carriers consequent on a grant of this authority, citing No. MC-40215 (Sub-No. 7), Ray Richardson Extension-Kansas, 71 M.C.C. 803 (not printed in full), decided June 28, 1957, as a case on all fours with the instant situation, and No. MC-8989 (Sub-No. 5), Howard Sober, Inc., Extension-Various States, 42 M.C.C. 809 and 83 M.C.C. 361. In addition it points to the substantially enhanced revenues of all protestants (except United, for which no figures are available) during the years 1955-59 and the first 6 months of 1960 during which its unauthorized operations are being conducted. It contends further that the greater safety involved in the routing over the "southern route," that is, avoiding the gateways, of itself indicates a public need for grant of this application, and that the testimony of shippers and agents here establishes a similar public need for the proposed service, which would eliminate 1 day in transit as compared to the authorized service through the gateways.

In reply United urges the correctness of the examiner's findings and general conclusions. It questions, however, the bona fides of applicant's operation avoiding the gateways, pointing to the fact that applicant did observe such gateways during its operation of the authority involved under temporary authority prior to its acquisition thereof in Republic Van & Storage Co., Inc.-Purchase-De Smet, supra, and that two of the Commission's field staff advised applicant of the questionable nature of the operation avoiding the gateways, thereby placing it clearly on notice.

Bekins and Lyon in their joint reply assert that the Commission's joinder rules are so fundamental that applicant's claim of color of right and good faith here cannot be credited. Further, on the facts, they assert that applicant has failed to make out a case of good faith operations and in fact has admitted that it was put on notice, which is assertedly at odds with the examiner's express finding to the contrary. They contend that in these circumstances applicant's prior unlawful operations cannot be used to justify a subsequent grant of authority.

In reply Allied, separately, and AM and NA, jointly, largely reiterate the points made by other protestants.

The evidence adduced, the examiner's recommendation, the excep tions, and the replies thereto have been considered. We find the examiner's statement of the facts to be correct in all material respects except as to that portion thereof dealing with the bona fides of its operations found unlawful in No. MC-C-2996, and we adopt it as

our own except as to such portion. We also adopt his conclusion that no need was shown for the proposed service.

Sometime about 1949 the Commission's district supervisor in California advised applicant that in its operations between points in its nonradial Zephyr authority, it could not operate traversing other than the States named therein. That is, for example, in operations between California and Illinois, it was advised it must operate, in that order, through Nevada, Utah, Colorado, or Wyoming, Nebraska, and Iowa. However, late in 1950 he corrected this advice, informing applicant (correctly) that operations between any points specified in a single grant of nonradial authority could be routed through any States, whether or not specified in the nonradial authority under discussion. After this, and assertedly relying on this advice, applicant apparently commenced operating between specified service points in its several nonradial authorities without any regard to its gateways. However in the report in Republic Van & Storage Co., Inc.-Purchase-De Smet, supra, decided July 28, 1952, the statement was made that

During the period December 4, 1950, when operations under temporary authority were commenced [by applicant] and April 7, 1951, [applicant] transported 268 shipments in so-called transcontinental service via points in Illinois and Iowa as gateways of which 241 shipments originated at points in California and were destined to points in the Owl territory, and 27 shipments moved in the reverse direction, principally to California points. [Italics added.]

Later, in the report in Dean-Purchase-Knowles Vans, Inc., 60 M.C.C. 527 (decided October 12, 1954) the statement was made that—

Republic has its principal office in Los Angeles and maintains nine other offices ***. In conducting operations in 25 states and the District of Columbia, it must operate between eastern and western points through gateway points in Illinois and Iowa. [Italics added.]

Subsequently, late in 1956 a new district supervisor challenged applicant's operation avoiding the gateways, and gave as his opinion that such operation was unauthorized.

Thereafter applicant's witness asserts he obtained oral advice from an attorney and practitioner, now dead, to the effect that applicant was not required to observe its gateways.

In December 1957 or January 1958 another district supervisor again challenged applicant's operation, and again in the winter of 1959. Thereafter, on May 12, 1960, the companion complaint proceeding was instituted.

DISCUSSION AND CONCLUSIONS

We find applicant's claim of good faith operations in avoiding its gateways not to be credible in the factual circumstances here. Apart from the widespread currency of knowledge of the Commission's rule

that authorities can be combined only through service points common to both authorities (see footnote 2 above), with which applicant can be charged in this instance, applicant was apprised specifically at least twice in reports of the Commission of its obligation to observe its Illinois and Iowa gateways, as well as by the numerous challenges by our field personnel.

The arguments applicant advances to rebut this conclusion are its misapplication of the corrected advice of the district supervisor and the asserted advice from its counsel. In our opinion, neither argument is convincing when viewed in the light of the specific language quoted above from two reports of proceedings in which applicant was a party and the several warnings of the Commission's field staff that direct operations were not permissible under its authority without operating through the Iowa or Illinois gateways. Thus, we conclude that the application should be denied.

We find that applicant has failed to establish that the proposed operation is required by the present and future public convenience and necessity; and that the application should be denied.

An order will be entered in denying the application.

84 M.C.C.

CASES DISPOSED OF BY THE COMMISSION WITHOUT PRINTED REPORT DURING THE TIME COVERED BY THIS VOLUME

COMPLAINTS AGAINST AND INVESTIGATIONS INTO MOTOR CARRIER PRACTICES BY DIVISION 1, COMMISSIONERS MURPHY, WEBB, AND HERRING

MC-C-2990, DEATON TRUCK LINE, INC., v. R. J. COKER. Decided March 9, 1961. Transportation by defendant of certain pipe and pipefittings found not to be or to have been beyond the scope of defendant's authority and complaint dismissed. John W. Cooper for complainant. H.A. Lloyd for defendant. BY DIVISION 1, COMMISSIONERS WALRATH, MURPHY, AND WEBB

MC-C-2681, SAMPLE TRUCK LINE v. T. R. SHUMPERT. Decided April 17, 1961. Defendant found to have served Nettleton, Miss., in interstate commerce, as a common carrier by motor vehicle without appropriate authority and cease and desist order entered. John Paul Jones for complainant. Rubel L. Phillips for defendant.

APPLICATION CASES-COMMON AND CONTRACT CARRIERS AND BROKERS BY DIVISION 1.

GRANTED IN WHOLE OR IN PART

MC-453 (Sub-No. 17), THE GRAY LINE, INC., EXTENSION-WEST VIRGINIA RACETRACKS. Decided April 10, 1961.

MC-531 (Sub-No. 103), YOUNGER BROS., INC., EXTENSION-METAIRIE TO FLORIDA. Decided January 10, 1961.

M C-1096 (Sub-No. 3), CANADA COACH LINES, LIMITED, EXTENSIONSPECIAL OPERATIONS ERIE COUNTY TO NIAGARA FALLS. Decided December 16, 1960.

MC-1124 (Sub-No.143), HERRIN TRANSPORTATION COMPANY EXTENSION— CARBON BLACK. Decided April 25, 1961.

MC-2202 (Sub-No.186), ROADWAY EXPRESS, INC., EXTENSION-CARTON PRODUCTS CORP., MANTUA TOWNSHIP, OHIO. Decided December 22, 1960. MC-2860 (Sub-No. 4, VICTORY TRANSPORTATION, INC., COMMON CARRIER "GRANDFATHER" APPLICATIONS. Decided January 26, 1961.

MC-3647 (Sub-No. 253), PUBLIC SERVICE COORDINATED Transport ExtenSION- -MYSTIC, CONN. Decided March 9, 1961.

MC-3647 (Sub-No. 283), PUBLIC SERVICE COORDINATED TRANSPORT EXTENSION-NEW York and Elmont, N.Y., RACETRACKS. Decided April 12, 1961. MC-7746 (Sub-No. 95), UNITED TRUCK LINES, INC., COMMON CARRIER "GRANDFATHER" APPLICATION-BANANAS. Decided February 14, 1961. MC-7746 (Sub-No. 103), UNITED TRUCK LINES, INC., EXTENSION-GRAYS HARBOR. Decided March 29,1961.