The respective rights of Blue Motor Coach Lines and the Louisville Transit Company to maintain bus service in the Camp Taylor area of Louisville are in issue. The state Department of Motor Transportation held that both companies had the right to render such service. The circuit court held that the Louisville Transit Company had such right but that Blue Motor Coach Lines did not. Blue Motor has appealed. The City of Louisville, as one of the appellees, has filed a brief in which it is argued, in effect, that the judgment should be affirmed.
Blue Motor, since 1935, has maintained bus service between Camp Taylor, a suburb of Louisville, and the downtown section of the city, under a certificate of convenience and necessity issued first by the State Tax Commission and later by the State Department of Motor Transportation. No question is raised about the authority of Blue Motor to render such service prior to June 30, 1950. On that date the City of Louisville formally annexed approximately 95% of the Camp Taylor area. Blue Motor, subsequent to the judgment of annexation, made application to the city for a franchise covering the Camp Taylor area, but no franchise has been issued to it.
The Louisville Transit Company or its predecessor has furnished public transportation in the City of Louisville since 1890 under franchise from the city and certificate of public convenience and necessity from the proper regulatory agency of the state. In 1941 Transit purchased from the city, for a substantial consideration, a 20-year franchise under which it is now operating. By the terms of its franchise it is authorized to operate over all streets and highways of the city and is required to furnish city-wide transportation. Subsequent to the annexation judgment Transit applied to the city for authority to extend its service into the annexed portion of the Camp Taylor area. The requested authority was granted and since January, 1951, both Transit and Blue Motor have furnished transportation service in that area.
Blue Motor contends that by reason of the certificate which it holds from the Department of Motor Transportation authorizing such service, it has the right to maintain service in the same area it has served since 1935, regardless of the annexation proceedings by the city.
Transit argues that by reason of its franchise from the city and a certificate which it holds from the Department of Motor Transportation authorizing it to operate busses in the City of Louisville, it alone has the right to render such service within the city limits.
Before attempting to weight these conflicting theories, we look briefly to those sections of the Constitution and statutes which may be applicable:
Kentucky Constitution, sections 163 and 164 as construed by this court in People's Transit Co. v. Louisville Railway Co., 220 Ky. 728, 295 S.W. 1055, confer upon cities the right of final decision as to whether a public utility may use or occupy the city streets for an intra-city service. Kentucky Constitution, section 3, contains, among other things, the provision that "every grant of a franchise, privilege or exemption, shall remain subject to revocation, alteration or amendment.'
KRS 281.010(13) provides:
"(13) (a) A "city bus certificate' means a certificate granting authority only for the operation of motor vehicles carrying passengers for hire between points within the corporate limits of a city and over regular routes.
"(b) A "city bus' is a bus when being operated under one or more city bus certificates.'
"Notwithstanding anything contained in this chapter:
"(1) All cities of the Commonwealth are vested with the power to sell franchises or, where no franchise is sold, grant authorizations for the operation of city busses over their streets and highways; provided, however, no person shall apply for or obtain any such franchise or authorization from any city without a prior finding by the department, after a hearing, that there is a demand and necessity for the service sought to be rendered, * * *. Upon certification by the department to such city that there is a demand and necessity for the service sought to be rendered, any city may award any duly qualified person a franchise or authorization covering the proposed operation. Upon acquiring such a franchise or authorization, the ...