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No. MC-FC-16717 FEDERAL STORAGE WAREHOUSES, INC.-PURCHASE
WILLIAM SCHAFER & SON, INC.
Submitted June 11, 1943. Decided September 1, 1944
Proposed transferee of certificate authorizing operation as a common carrier by
motor vehicle of household goods found not fit or willing properly to perform
REPORT OF THE COMMISSION
Exceptions were filed by protestant to the order recommended by the examiner, and applicants replied. Our conclusions differ from those recommended.
Federal Storage Warehouses, Inc., of Newark, N. J., and William Schafer & Son, Inc., of Orange, N. J., herein called respectively, Federal and Schafer, by joint application filed May 22, 1942, seek approval under section 212 (b) of the Interstate Commerce Act and our rules and regulations promulgated thereunder, of a transfer from Schafer to Federal of a certificate of public convenience and necessity heretofore issued to the former. New Jersey Furniture Warehouseman's Association of Jersey City, N. J., opposes the application, and since the hearing, Aero Mayflower Transit Co., Allied Van Lines, Inc., and Greyvan Lines, Inc., have been permitted to intervene also in opposition.
Section 212 (b) of the act provides that: “Except as provided in section 5, any certificate or permit may be transferred, pursuant to such rules and regulations as the Commission may prescribe.” Effective September 1, 1938, rules and regulations governing transfers under this section, of rights to operate as a motor carrier were prescribed, among which is rule 2 (c), reading as follows:
The transfer described in any such application shall be approved if it appears from the application or from any hearing held thereon or from any investigation thereof that the proposed transaction is one which is not subject to the provi
sions of section 213 of the Motor Carrier Act, 1935, and that the proposed transferee is fit, willing, and able properly to perform the service authorized by the operating rights sought to be transferred, and to conform to the provisions of the Motor Carrier Act, 1935, and the requirements, rules, and regulations of the Commission thereunder. Otherwise the application shall be denied. (Emphasis supplied.]
On February 13, 1942, Schafer was issued a certificate of public convenience and necessity in No. MC-74651, authorizing operation as a common carrier by motor vehicle of household goods, in interstate or foreign commerce, between points in Essex, Hudson, Union, Passaic, and Bergen Counties, N. J., on the one hand, and, on the other, points in New York, Connecticut, Rhode Island, Massachusetts, Maryland, Delaware, Virginia, and the District of Columbia, over irregular routes. The aggregate number of vehicles owned, leased, controlled, or operated by Federal and Schafer for purposes of transportation does not exceed 20. The transaction, therefore, is not subject to the provisions of section 5 of the act, but is subject to the regulations governing transfers under section 212 (b) including the requirement of rule 2 (c) quoted above, that applicant shall be fit, willing, and able properly to perform the service, authority for which is sought to be transferred and to conform to the provisions of the act and all rules and regulations thereunder.
Since 1938, Federal has been engaged in the storage warehouse business. It utilizes three buildings with a total storage space of 45,000 feet. It is also engaged in intrastate commerce as a common carrier by motor vehicle of household goods within New Jersey. Its balance sheet as of April 30, 1942, shows assets aggregating $10,310 consisting of: Current assets, $6,578, principally accounts receivable, $5.693; vehicles and office equipment, less depreciation, $2,475; intangible property, $535; and deferred debits, $722. Its liabilities were: Current liabilities, $3,820; loans payable to its president, Frank Visceglia, $2,862; capital stock, $1,000; unearned surplus $600; and earned surplus $2,027. Its income statement for the year ended April 30, 1942, shows a net income of $2,090.
Federal's president owns or controls all of its capital stock, and has had over 12 years' experience in the storage and moving of household goods. There is no question of its ability, financially and otherwise, properly to conduct the motor-carrier operations, authority for which it proposes to acquire, but facts about to be stated cast serious doubt on its fitness and willingness properly to conduct such operations, and to conform to the requirements of the act and the Commission's rules and regulations thereunder. For this reason the application, contrary to the usual practice in proceedings under section 212 (b), was set for hearing.
Federal is a New Jersey Corporation. It was organized in 1938 by Frank Visceglia, its president, to acquire and take over the storage and household goods moving business of Albert F. Wentzel of Newark, who had been doing business as Federal Storage Warehouses. Wentzel, in No. MC-43580, originally claimed interstate "grandfather” rights as a common carrier by motor vehicle, of household goods in New Jersey, New York, Pennsylvania, and Connecticut, but Federal, after succeeding to Wentzel's business, made no effort to support these claimed carrier rights, and that application has been dismissed. Federal now confines itself to storage and intrastate hauling. It has 10 shares of stock outstanding, 7 of which are held by its president, 2 by his wife, and 1 by his secretary.
Federal's organizer and president, is the same Frank Visceglia who, as applicant in Nos. MC-45400, MC-46743, and MC 49177, was discussed in United Van Service Common Carrier Application, 3 M. C. C. 589, and therein denied a broker license, in part, at least, because he had failed to show that he was fit, willing, and able properly to perform such operations and to conform to the applicable provisions of the act.
The tests of fitness and willingness for a motor common carrier are similar to and certainly no less exacting than those for a broker. It follows that Federal, which, though a separate entity, is admittedly nothing more than the instrumentality through which Frank Visceglia does business, cannot now be found to be fit and willing unless it should appear that its alter ego, Frank Visceglia, has justified a conclusion as to his fitness, different from that reached in the report just cited.
Frank Visceglia at the time of the hearing herein was 28 years old. In 1930 when he was 16, he went to work for his brother, Joseph, who, until at least 1936 or 1937, was the dominant figure in the multiple Visceglia family operations described in United Van Service Common Carrier Application, supra. To avoid identification now with any of such operations or the manner in which they were conducted, Frank Visceglia now asserts that he never had any beneficial interest in any of those operations or in any of the operating rights which were claimed or sought in his name, and relies on his youth and his confidence in his older brother to excuse the use which he permitted of
The record herein is replete with excuses, as follows: I signed anything he asked me to, sir. I was only about 16 years old when I started with him, and whatever he told me to do I did. I signed any paper that my brother asked me to sign while I was his employee. At that time I was employed by my brother as an employee, and he made me whatever he saw fit. I signed ang papers he asked me to sign and any statements would be the statements of my brother, not mine, sir. I was an employee of my brother and if
my brother made me, according to record, owner of United Van Service, that is something my brother took care of. As an employee of my brother, I didn't have much authority. I received a salary and done whatever he asked me to do. I was anything that my brother made me. If my brother said I was a stockholder, why, that is the way he wanted it. Up to the time (while) I worked for my brother I followed anything he said. Sir, he never asked my permission or consent on anything. If he asked me to sign a paper, I signed it. I was his employee, and I did what he told me. Yes my brother as he saw fit put me in as the owner, put me in as general manager, he done it as well, and I done as he told me. He was my older brother, and I did what he told me. The things his brother asked him to do he took them for granted to be truthful" and honest.
Despite his repeated statements that he signed any paper his brother, Joseph, put before him, he could not remember signing before a notary (his brother's wife's sister) such important papers as the three applications in his name considered in United Van Service Common Carrier Application, supra, saying that his brother "might have signed them as doing it for me, or I might have signed them. I don't know.” Similarly he could not remember signing before a notary a certificate filed in New York to the effect that he was doing business as United Van Service. Though he recalled the bankruptcy proceedings in 1936 covering Joseph's operations, he did not recall that the assets of the bankrupt, with the approval of the court, has been sold to him. Questioned as to whether he had actually received such assets, he replied, “Personally I did not. My brother might have.” He also denied employing or paying counsel who represented him individually and claimed certain operating rights for him at hearings on the United Van Service applications.
It will be observed that Frank Visceglia's present claims as to his relationship to his brother's operations and his status in connection therewith are wholly inconsistent with his claim in No. MC-49177 of a "grandfather” carrier right based on such operations and his requests in Nos. MC-45400 and MC-46743 for a broker license to permit continuance of his past operations. When questioned as to why, if his present claims are true, he had not apprized the Commission of the facts when the above applications were being heard, he, in effect, denied knowing that such claims had been made by, or were known to him, explaining, “I wouldn't say that I attended strictly that part of the hearings.” At the same time he admitted that he was present throughout “a good bit” of, and that he “attended part of” the hearings. Specifically he denied hearing Joseph Visceglia testify that he was his (Frank's) agent or that he (Frank) was manager of any operations.
In 1937 or 1938, Frank Visceglia left the employ of his brother, not, so far as appears from the present record, because of any disapproval of his brother's business methods but solely because he wanted to be “on his own.” He organized Federal with funds which he claims were strictly his own. He denies categorically that Joseph Visceglia has any interest in or control over Federal. The latter, although at the time of the hearing not authorized to operate in interstate commerce as either carrier or broker of household goods was, nevertheless, doing an apparently substantial long-haul interstate business as a "forwarder" of household goods under the trade name of United Security Associated Warehouses, Inc., hereinafter called United, presumably using the services of authorized carriers.
Despite their claimed independence and despite Frank's efforts in this proceeding to avoid identification with past transactions, friendly relations prevail between Federal and United. Whenever Federal receives a request for long-distance household-goods hauling, which it has no authority to perform, it, or Frank Visceglia, individually, endeavors to turn the business over to United by offering to arrange for the desired service and submitting bids on behalf of United, based on quotations received for it. The following letter is of record:
FEDERAL STORAGE WAREHOUSES
42 ORANGE STREET
NEWARK, N. J.
OCTOBER 1, 1942. MRS. FRED J. Sass,
89 Carteret Street, Glen Ridge, N. J. DEAR Mrs. Sass : Thank you for the courtesy extended our representative when he called regarding the shipping of your goods to Baltimore or the removal of same to storage. We can arrange for the shipping of your goods through the United Security to Baltimore at the rate quoted you of $83.00 which also includes insurance to the extent of $1300.00. Should you wish to store your effects, moving into storage will be $14.00 and storage will be $9.50 per month. Your goods are fully insured while in transit trom your home to our warehouse. Your goods will be triple padded and loaded into a fully padded van. Once packed, your artic.es will remain untouched until they are delivered at their destination. At this point the men will set up your goods exactly as you wish them. You will find the service is most complete; the men both courteous and efficient. We are confident that you will be more than satisfied with the manner in which the work is performed. Upon the arrival of your goods into storage, every piece will be safely stored in our warehouse. Your living room, upholstery and your rugs will be mothprotected while in our care. We thank you for your consideration and shall look forward with pleasure to hearing from you. Very truly yours,
FEDERAL STORAGE WASES., INC.