Petition for a Writ of Certiorari — Georgia Power Co. v. Decatur

AUG 80 1929

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Supreme Court of the United States

OCTOBER TERM 1929

563

GEORGIA POWER COMPANY

Petitioner

vs.

CITY OF DECATUR

Respondent

PETITION FOR CERTIORARI

AND

BRIEF IN SUPPORT THEREOF

—

Supreme Court of the United States

OCTOBER TERM 1929

GEORGIA POWER COMPANY, PETITIONER

vs.

CITY OF DECATUR, RESPONDENT

PETITION FOR WRIT OF CERTIORARI

10 THE HONORABLE THE CHIEF JUSTICE AND THE

ASSOCIATE JUSTICES OF THE SUPREME COURT OF

THE UNITED STATES OF AMERICA:

May it please the Court:

The petition of the Georgia Power Company respectfully

shows this Honorable Court:

1.

The City of Decatur (a municipal corporation of the State

of Georgia) brought an equitable petition against the Georgia

Railway & Power Company and the Georgia Railway & Elec-

tris Company (subsequently consolidated into the Georgia

Power Company) to enjoin the street railway companies from

ceasing to operate its lines (known as the North Decatur line)

within the limits of the Town of Decatur and to perpetually

compel operation thereof at a five cents rate of fare per pas-

senger; claiming that:

(a) The Town of Decatur (now the City of Decatur)

granted a franchise to the Collins Park & Belt Railroad Com-

pany on the 4th day of September 1899 (set out in full on

pages 6-8 original record and pages of printed record)

and the line in question was constructed and operated there.

under within the said municipality. Said line and franchise

was conveyed to the Georgia Railway & Electric Company;

and on April 1, 1903 said Company and the City of Decatur

amended the said franchise grant and entered into a contract

which bound the street railway company to perpetually operate

the said line in Decatur and “never charge more than 5 cents

for one fare for one passenger thereon.” (Said contract set

(b) That the street railway companies by corporate action

sought to end, terminate and surrender its franchise in De-

catur and the right to operate thereunder; and did on the 25th

day of September 1925 notify the City of Decatur in writing

of the surrender of its permits, franchises and contracts with

the Town of Decatur under and by virtue of which its North

Decatur line was constructed and operated therein; and that

they would discontinue operation on the 30th day of Septem-

ber 1925 The City of Decatur refused to accept said surrender

and notified the street railway companies of its refusal.

(c) The City of Decatur brought its equitable action to

prevent the termination, ending and surrender of the fran-

chises and contracts and to compel continued and perpetual

operation at a five cents rate of fare, basing its said action

upon the contract of April 1, 1908; alleging that the action

of the street railway company in ending, terminating «nd sur-

rendering the franchises and contracts was a breach of the

contract of April 1, 1908, and prayed that by vitue of said

contract the defendents be perpetually compelled to operate

said North Decatur line as at present operated, and at a five

cents per passenger rate of fare, and that by injunction the

street railway companies be forever and perpetually compelled

to operate under said contract; and perpetually restrained

from claiming that it had expired; and be perpetually restrained

from terminating or surrendering it; and that said contract

8

be held to be a perpetual never ending binding contract, which

defendants could never terminate or surrender.

2.

The Street Railway Companies, Georgia Railway & Electric

Company and Georgia Railway & Power Company (subse-

quently consolidated into the Georgia Power Company) showed

by answer and cross bill substantially as follows:

(a) The street railway lines in question within the Munici-

pality of Decatur were constructed and being operated under

the franchise of September 4th, 1899 granted to the Collins

Park & Belt Railroad Company, which franchise was by deed

of March 28th, 1902 acquired by the Georgia Railway & Elec-

trie Company; that on the Ist day of April 1908 the Georgia

Railway & Electric Company and the Town of Decatur entered

into the contract referred to, but that neither the franchise nor

the said contract placed a never ending obligation on the street

railway companies to perpetually operate thereunder; that by

proper corporate action the street railway companies had

ended, terminated and surrendered the said franchise and con-

tract in question and had surrendered all its rights to operate

thereunder; and that the Municipal action in refusing to ac-

cept said termination and surrender was illegal and unconsti-

tutional; and if said action was upheld would result in a

continual never ending confiscation of the property of the

street railway companies, in contravention of the 14th Amend-

ment of the Constitution of the United States.

(b) The franchise and contract did not require eternal and

perpetual operation thereunder; and that the property of the

street railway companies would be confiscated in violation

of the 14th Amendment of the Constitution of the United

States, if the action brought by the Municipality was up-

held and the street railway companies were perpetually re-

strained from and denied the right to end, terminate or

surrender the franchise or permit and cease operation

thereunder; that the rate of fare which the street railway

companies could charge (if the street railway companies were

4

perpetually compelled to operate thereunder) did not even

pay the operating expenses and would forever be confiscatory

and discriminatory; that such fact had been expressly held

by the Georgia Public Service Commission; but said Commis.

sion, under the Georgia law, had not been given the power

to relieve the same or to pass upon the right to discontinue

service. While seeking to compel continued and perpetual

operation under said contract, the said City of Decatur was

proceeding to pave the streets occupied by the line in question

and by virtue of and because of such continued operation

would proceed to collect special ping assessment against the

street railway company to the amount of $14,000 which would

further confiscate the property of the street railway company

in violation of the 14th Amendment of the Constitution of the

United States if the street railway companies were denied the

right to cease operation; and that the street railway companies

did not and could not receive any benefit from the street pav-

ing; the street railway companies had both the legal and

constitutional right to cease operation and to end, terminate

or surrender the franchise and contract; that neither the fran-

chise nor the contract compelled perpetual, never ending

service, that they had been ended, terminated or surrendered;

and to compel continued perpetual, never ending operation

thereunder would deprive the street railway companies of their

property without due process of law in contravention of the

14th Amendment of the Constitution of the United States.

(c) In former litigation the street railway companies,

while continuing to operate under the said franchise or con-

tract in question, had undertaken to compel the Georgia Public

Service Commission to fix a reasonable fare to be charged,

but the Supreme Court of Georgia held that the line in ques-

tion was a separate and distinct classification from the other

lines placed under said Commission’s jurisdiction and that it had

been given no jurisdiction over the fare to be charged thereon.

(b) Subsequently the street railway companies, while

operating under the said municipal franchise or contract,

undertook to raise the contract rate of fare. The Town of

5

Decatur brought suit against the street railway company t

t it from changing the rate provided for in the contract

in that litigation the controlling question was the power 0

authority of the Municipality to make a rate contract, and the

courts held that the Municipality possessed such authority.

(e) After the said decision the City of Decatur procured

a legislative amendment to its municipal charter, giving it the

power and authority to lay or construct street paving upon

and along the streets of the Municipality occupied by the

street railway companies under the said franchise in question ;

and assess part of the costs of such street paving against the

street railway companies; which it could collect by levy on and

sale of any property of the street railway companies, whether

benefited by or located on or adjacent to the streets paved.

In conformity with such charter amendment, the City of De-

catur, in 1925, passed certain paving ordinances under which

said municipality could proceed to pave its streets along which

the line in question had been constructed and was being

operated, and then collect the costs of such paving by levy upon

any street railway property; that after the passage of such

ordinances (but prior to the beginning of the municipal pav-

ing) the street railway companies notified the City of Decatur

that they were operating said lines in said Municipality at a

loss; that the five cent rate of fare did not even pay bare

operating expenses; that further continued operation would

be made the occasion to subject the street railway companies

to a confiscatory street paving assessment; that under the

facts in this case neither the street railway companies nor the

property of the street railway companies in Decatur could re-

ceive any benefit from street paving; that continuing to

operate would confiscate the property of the Railroad Com-

panies and that to continue operation and be subject to paving

assessment would additionally confiscate their property. There-

fore, a request was made that the street railway companies

be relieved from such additional confiscatory burdens; other-

wise the companies would be compelled to cease further opera-

tion within the Municipality. The City of Decatur refused such

request and passed ordinances to pave its streets occupied by

the said street railway lines and to assess part of the costs

thereof against the street railway companies and collect the

same out of the street railway property, other than that along

or adjacent to the streets paved. The street railway company

then took proper corporate action ending, terminating and

surrendering the said franchise or contract and served written

notice thereon on the City of Decatur, notifying the Munici.

pality that the street railway companies would cease operation

thereunder at a certain time; the street railway companies

also offered to surrender to the said Municipality its entire

street railway property within the said Municipality cop.

structed or operated under the franchise or contract; the

Municipality refused all the said offers or tenders. The street

railway companies set up that the equitable suit brought by

the Municipality to compel perpetual and continual street

railway operatoin was based upon a municipal franchise or

contract which did not require continued or perpetual

operation and which had expired or been terminated or sur.

rendered; that to refuse the street railway companies the

right to cease operation within the said Municipality of De-

catur and compel perpetual c tinued and never ending opera-

tion at the five cents rate of fare as provided in said expired,

ended or surrendered contract, would be a denial to the com-

panies of their constitutional rights as guaranteed to it by

the 14th Amendment of the Constitution of the United States

and would result in continual and perpetual confiscation of

the property of the street railway companies in contraven-

tion of said Constitutional provision.

The street railway company also prayed in its answer

and cross bill, that under the facts as herein set out, the Court

declare said contract or franchise ended, terminated or sur-

rendered and that it be relieved from further operation there-

under.

8.

The case came on for final hearing before the Superior

Court of DeKalb County.

7

(a) The evidence in the case was undisputed and showed

that the five cents rate of fare was both confiscatory and dis-

criminatory; and that compelled continued operation there-

under would confiscate the property of the street railway

companies; the street railway companies had taken corporate

action terminating, ending and surrendering all the rights to

further operation in the Municipality of Decatur. The allega-

tions of fact as set out in the answer and cross bill of the

street railway company were proved either by an agreed

statement of fact or by undisputed evidence.

Under the undisputed evidence; the question for decision

became a question of law, to wit; whether the franchise of

September 4th, 1899 and/or the Municipal rate contract of

April Ist, 1908, compelled perpetual never ending ‘treet rail-

way operation within the Municipality of Decatur; and were

such perpetual contracts as could never be ended, terminated

or surrendered by the street railway company.

The trial court entered a final decree and adjudged and

decreed that the street railway companies be and are hereby

enjoined as prayed for in the petition (thus giving effect to

every one of the prayers of the petition.)

The effect of this decree was to hold that, under the

municipal rate contract in question, the street railway com-

panies were perpetually compelled to operate its street railway

lines within the Municipality of Decatur; that said contract

was a perpetual never ending contract; that it had not been

performed, expired or been terminated or legally surrendered ;

and that it could not be ended, terminated or surrendered by

the street railway companies.

5.

The final decree of the trial court was carried, by writ of

error, to the Supreme Court of Georgia, the highest Court

of the State in which a decision could be had.

On the 28th day of June 1929 the said Supreme Court of

8

Georgia finally affirmed and sustained the judgment and de.

cree of the trial court.

6.

Petitioner submits the following reasons why the writ of

certiorari should be allowed:

Throughout the proceeding in this case petitioner has

specifically set up and eee and now contends that it js

being deprived of its property without due process of law, in

violation of the 14th Amendment of the Constitution of the

United States, in that the final judgment or decree, affirmed

by the Supreme Court of the State of Georgia, perpetually

requires petitioner to operate its street railway lines in the

City of Decatur and perpetually requires petitioner to render

service at a confiscatory and discriminatory rate of fare; and

that such compelled perpetual and never ending operation is

required under a municipal ordinance, franchise or contract

which petitioner specifically claims has been fully performed,

has expired or been terminated or ended or surrendered; that

where such questions are raised, this Court should determine

for itself the extent, terms and duration of the said municipal

ordinance, franchise and contract.

(a) That the municipal franchise of September 4, 1899,

under which the street railway lines in the City of Decatur

were constructed and being operated had expired, been ter-

minated, ended or surrendered by timely written notice; and

that such franchise does not require perpetual, never ending

operation.

(b) The municipal contract of April 1, 1903 referred and

applied to the line as operated under the franchise of Septem-

ber 4, 1899; that said contract taken in connection with said

franchise, or said municipal contract taken alone, did and does,

not require perpetual never ending street railway operation

and that said contract had been fully performed, ended, termi-

nated or surrenderer by timely written notice:

(c) That applying to the municipal franchise of September

9

4, 1899 and the municipal contract of April 1, 1903 the prin-

ciple of law as held in numerous decisions of this Court, neither

the said franchise nor the said contract taken together or

taken alone required perpetual, eternal and never ending street

railway operation.

(d) That this Court in a number of cases stated the prin-

ciple, that a municipality possessing the power and authority

to make rate contracts can only make them for a definite time

“not grossly unreasonable in point of time,” and that peri-

tioner is entitled to have this Court determine, whether the

municipal rate contract in question compels perpetual street

railway operation at the confiscatory and discriminatory rate

of fare therein provided, when petitioner has specifically raised

the question that such compelled continued and perpetual op-

eration thereunder is and would perpetually deprive it of its

property without due process of law in violation of the 14th

Amendment of the Constitution of the United States, and that

the contract, under which such perpetual operation is required

has been performed, has expired, been ended or surrendered.

(e) To compel continued and perpetual street railway op-

eration in the City of Decatur and to deny the street railway

companies the right to cease all operation therein would com-

pel petitioner to perpetually operate its property in said

Municipality at a never ending loss and because of such com-

pelled operation petitioner and its property would be subjected

to further confiscation by virtue of confiscatory paving assess-

ments; and a denial of the Company’s right to entirely cease

operation and surrender its franchise and contract within said

Municipality would unconstitutionally deprive it of its property

in contravention of the 14th Amendment of the Constitution

of the United States as such compelled perpetual operation

is not required under any contract.

(f) Petitioner respectfully submits that the questions

specifically raised in the instant case involve federal questions ;

and are not only of great importance to petitioner, involving

the never ending confiscation of its property in violation of

10

the 14th Amendment of the Constitution of the United States;

but questions of general importance; and that the decision

of the Supreme Court of Georgia sought to be reviewed, is in

conflict with the principle of law as laid down in a number

of cases heretofore decided by this Court.

WHEREFORE your petitioner prays that a writ of cer.

tiorari may be issued out of and under the seal of this

directed to the Supreme Court of the State of Georgia, to the

end that the judgment and decree of the Supreme Court of

Georgia may be reviewed and reversed by this Honorable

Court.

WALTER T. COLQUITT

BEN J. CONYERS

Counsel for Petitioner

BRIEF IN SUPPORT OF

PETITION

FOR CERTIORARI

13

INDEX

Pages

List of cases in brief u 14-16

Statement of case — alll 17-18

Opinion of Supreme Court of State of Georgia 18

Jurisdiction of this court. : 18-21

Specifications of error 21-22

Construction of Municipal Franchise of September

4, 1899, and Municipal Rate Contract of April 1,1903.... 23-33

What was decided in former litigation 22-23

Municipal Franchise of September 4, 1899 has been

performed, has expired or been terminated 23-28

Municipal Rate Contract of April 1, 1903 did not

extend the duration of the Municipal Franchise 27-28-29

Discussion of Municipal Rate Contract of

April 1, 1903 28-33, 35

Principle of law as announced by this Court for the

construction of Municipal Rate Contracts 33-35

Municipal Rate Contracts cannot by implication be

held to be contracts requiring perpetual service 28, 33

14

LIST OF CASES CITED IN BRIEF

Pages

Barney vs. Indiana Ry. Co. et al 61 N. E. 194 (Note b). 95

4 ae 8 20, 25, 27, 28, 29, 82

Brooks-Scanlon Co. vs. Railroad Commission of

, ̃ 0... 30, 89

Borough of Bellevue vs. Ohio Valley Water Co.

91 Atl. Rep. 286 (Note b) . 96

Central R. & B. Co. vs. State of Ga.

SS 25

Charleston Isle of Palms Traction Co

vs. Shealey, 266 Fed. Rep. 40060 80, 81

City & County of Denver vs. N. Y. Trust Co.

, ...... 26

City of Texas vs. Eastern Texas R. Co.

e es eee PCO 19, 30, 88, 86

Cleveland Elec. R. Co. vs. Cleveland,

204 U. S. 116. 20, 22, 27, 29, $2, 88

Columbus Railway, Power & Lt. Co. vs.

Columbus, 249 U. S. 399, 406, 407... 20, 84

Crawford vs. Crawford,

189 Ga. 894 (4), 396, 8999 „

Denver vs. Denver Water Co.

246 U. S. 178. 21, 26

Detroit U. R. Co. vs. Detroit,

D 20, 26, 27, 28, 29, 80, 82

Detroit vs. Detroit City R. Co.

184 U. S. 868 (Note a) $4

Elliott on Contracts, Sec. 1871 (Note b) $5

15

Pages

Erie Board of Pub. Utility Commissions,

5 30

Fort Smith Lt. & Traction Co. vs. Fargan

. 2. 8

vs. Freeport Water Co.

SOO TT, BD, BUG, GOO (ete 0.L!!!!Lłßͤßsx.4ꝗ 34

Georgia Code Section 221. 25

Gilschrist vs. ee 21 Co.

246 Fed. Rep. 952... 3 .

Home Tel. & Tel. Co. vs. City of Los *

ß ——— 34

Knoxville Water Co. vs. Knoxville, 189 U. S.

1 —— K 34

Jones vs. Newport News, 65 Fed. 786, 741 (2).................... 35

Joilet Bottling Co. vs. Joilet Citizens Brewing

re 36

Munn vs. Illinois, 94 U. S. 113, 192————(———————— 30, 36

McCullough-Dalzell Crucible Co. vs.

Philadelphia, 72 Atl. Rep. 688..............----..---ceeee 35

Omaha Electric Light & P. Co. vs. City of

Omaha, 179 Fed. 455 (8), 460 — 26

Railroad Commission of Ga. vs. Macon

Ry. & LA. Co. 151 da. 286 —7r——7r—— 39

Railroad Commission of Texas vs. Eastern

Texas Rd. Co. 264 U. S. 79, 86.................... 19, 80, 38, 86

Rokworth vs. St. Road Bridge Co. 108 N. W. 785................ 25

Risley vs. City of Utica,

179 Fed. 885 EW eee EAE EAE? 26

San Antonio Street Ry. Co. vs. State of

Texas, 85 L. R. A. 662, 80 S. W. 92. 31

*

16

Southern Bell Tel. & Tel. Co. vs. Railroad Commis- 1

sion of S. C. 280 Fed. Rep. 901, 902 (7) 31

Stanley vs. Stembridge, 140 Ga.

750 (5) 754, 757 26

State of Iowa vs. Old Colony Trust Co.

215 Fed. 307, 318 20

State of Montana & Knight vs. Power Co.

44 L. R. A. 692, 22 Montana 391, 65 Pac. 685 81

Stiles vs. Citizens Elec. Co.

19 L. R. A. (N. S.) 865; 199 Mass. 294

85 N. E. 419

Sutton vs. Hiram Lodge, 83 Ga. 770

Southern Iowa Electric Co. vs. City of Chariton,

255 U. S. 359 (Note a)

Texas & R. P. Co. vs. Marshall, 136 U. S. 398............ 33, 35,

Texas & P. R. Co. vs. Scott, 77 Fed.

726 (2) 730

Turnpike Co. vs. Illinois, 96 U. S. 63

Turtle Creek Borough vs. Penn Water Co.

99 Atl. 199 (Note b)

United States Judicial Code Sec. 344 (b)

Virginia Cannon Toll Rd. Co. vs. People,

22 Col. 429; 87 L. R. A. 711, 718, 719

West End & Atlanta St. Rd. Co. vs. Atlanta

St. Rd. Co. 49 Ga. 151 (1)

Western U. Tel. Co. vs. Fain & Parrott,

52 Ga. 19, 22.

Wyandotte Elec. Lt. Co. vs. Wyandotte,

124 Mich. 48; 82 N. W. 821

17

GEORGIA POWER COMPANY,

Petitioner

vs. 6

CITY OF DECATUR,

Respondent.

OCTOBER TERM 1929

BRIEF IN SUPPORT OF PETITION FOR CERTIORARI

A full statement of the case appears in the petition for

writ of certiorari.

The undisputed facts established the proposition that to

compel perpetual and continued operation at the five cents

rate of fare, as required by the decision of the Supreme Court

of Georgia, the highest Court of the State in which a decision

could be had, would require petitioner to perpetually render

a Public Utility service at a confiscatory and discriminatory

rate of fare.

Petitioner has specifically set out and claimed that it is

being deprived of its property without due process of law in

violation of the 14th Amendment of the Constitution of the

United States, in that the judgment and decree of the Supreme

Court of Georgia requires petitioner to operate its street rail-

ways in the Municipality of Decatur at a confiscatory and

discriminatory rate of fare; and that such compelled, perpetual

and continued operation is required under a municipal fran-

chise or contract, which petitioner claims has been fully per-

formed or has expired or been terminated or surrendered;

and that the Municipality by virtue of such compelled con-

18

tinued operation is further confiscating petitioner’s property

in violation of the 14th Amendment of the Constitution of

the United Staes by levying paving assessments against the

street railway company for which no benefit will or can be

received by the street railway companies.

OPINION OF THE COURT BELOW

The dicision of the Supreme Court of the State of Geor.

gia is set out in full in the record (pages 146-158 original

record. Pages printed record.) Said decision was

handed down on April 15th, 1929; but, within the time allowed

under the rules of practice in the Supreme Court of the State

of Georgia a petition for a rehearing and motion in the nature

of a rehearing was granted. (See page 158 original record,

8 printed record.)

Thereafter a part of the decision as originally prepared

by the Supreme Court was changed and on the 28th day of

June 1929 a final judgment was rendered by the Supreme

Court of the State of Georgia affirming the judgment there.

tofore rendered. (See pages 158 and 159 original record. Pages

8 printed record.)

The dicision of the Supreme Court of the State of Georgia

affirming the decree and judgment of the lower court was

based upon the municipal rate contract of April 1, 1908. (See

page 150 original record. Pages printed record.)

JURISDICTION

The jurisdiction of this Court is sought by virtue of the

present judicial Code Section 844 (b) (Former Judicial Code

Section 237 as amended by the Act of February 18th, 1925)

which provides:

“It shall be competent for the Supreme Court, by

certiorari, to require that there be certified to it for

review and determination, with the same power and

authority and with like effect as if 2 by

writ of error, any cause wherein a final ju c or

decree has been rendered or passed by the highest

19

court of a State in which a decision could be had...

where any title, right, privilege or immunity is

specially set up or claimed by either party under the

Constitution ...of the United States; — the power

to review under this paragraph may be exercised as

well where the Federal claim is sustained as where it

is denied.”

This Court has repeatedly held that where questions

similar to the one just heretofore stated are specifically raised

and the question sought to be brought to this Court for re-

view involves the duration and the present existence of a

municipal ordinance or contract, or whether such contract

has been performed, expired, terminated or surrendered and

petitioner will be deprived of its property without due process

of law in violation of the 14th Amendment of the Constitu-

tion of the United States, if the decree of the Court as

rendered required continued operation under such claimed

municipal franchise or contract, it will determine for itself

the extent, terms and duration of such Municipal franchise

and contract.

In the Railroad Commission of Texas vs. Eastern Texas

Railroad Company, 264 U. S. 79, 76, this Court held:

“Where it becomes necessary to consider whether a

state is depriving, or attempting to deprive, a litigant

of S without due process of law, in violation

of the 14th Amendment, and the question turns on

the existence and terms of an asserted contract, this

court determines for itself whether there is a con-

tract and what are its ternis, Louisville & N. R. Co.

vs. Palmes, 109 U. S. 244, 255, 27 L. ed. 922, 929, 3

— Ct. Rep. 193; Stearns vs. Minnesota, 179 U. S.

„232, 45 L. ed. 162, 169, 21 Sup. Ct. Rep. 78.

The principle is general and necessarx. Ward v.

(87) Love County, 253 U. S. 17, 22, 64 L. ed. 751,

758, 40 Sup. Ct. Rep. 419. If the Constitution and

laws of the United States are to be enforced, this

court cannot accept as final the decision of the State

tribunal, as to what are the facts alleged to give rise

to the right, or to bar the assertion of it even upon

local grounds. Davis vs. Wechsler, 268 U. S. 22, 24,

ante, 184, 145, 44 Sup. Ct. Rep. 13.”

To the same effect see

Columbus Railway, Power & L. Co. vs. Columbus 249 U. 8.

899, 406, 407.

See also the following cases decided by this Court in which

exactly similar questions to the one involved in the case at

bar were brought to this Court for review; and the decision

rendered in each case is controlling in favor of petitioner's

contention hereafter discussed.

Cleveland U. R. Co. vs. Detroit, 204 U. S. 116;

Detroit U. R. Co. vs. Detroit, 229 U. S. 89;

Blair vs. Chicago, 201 U. S. 400.

In said cases it was the street railway company which

contended that certain municipal rate contracts (entered into

between the street railway company and the Municipality)

had the effect of extending former municipal franchises; and

that under such municipal rate contract the street railway

company had been given the right and authority to continue

operation upon the streets in the Municipality. We respect-

fully submit, that the municipal rate contracts under con-

sideration in each of said cases were more susceptible of such

construction, than the municipal rate contract in the case

at bar (hereinafter discussed). This Court, however, held that

under the principle of law as repeatedly announced by it, it

was impossible to hold that the municipal rate contract ex-

tended the franchise; and therefore the street railway com-

pany only had the right to operate within the Municipality for

and during the definite franchise period. For instance see the

case of Detroit U. R. Co. vs. Detroit, 229 U. S. 39, 48-45,

(where former cases of this Court are quoted and discussed).

It is, of course, immaterial, that in the case at bar, it is the

street railway company which contends that the municipal

rate contract in question does not extend the duration of its

franchise; and that, therefore, under such municipal rate con-

tract it cannot be required to render perpetual never ending

operation and service.

21

Such municipal rate contracts are to be similarly construed,

whether the street railway company is contending that it

has the right to further operate thereunder, or is denying

the Municipality's right to compel perpetual never ending

operation thereunder. “

Applying the principle of law (as announced in the cases

of this Court just heretofore cited) to the Municipal Rate Con-

tract involved in the case at bar, then as held by this Court

in the case of Denver vs. Denver Union Water Company, 246

U. S. 178, 184; “It is a necessary corollary that the Company

may discontinue its service at will.”

SPECIFICATIONS OF ERROR

The specifications of error are set out in the petition for

certiorari under the 6th Paragraph, heading “Reasons Why

the Writ of Certiorari Should Be Allowed,” and are as fol-

lows, to wit:

(1) The Supreme Court of the State of Georgia erred in

finding and holding that the municipal rate contract of April

1, 1908 requires perpetual, never ending street railway service

within the Municipality of Decatur and that said contract

was a perpetual never ending one.

(2) The Supreme Court of the State of Georgia erred in

not holding that the contract of April 1, 1903 had been per-

formed, expired or terminated or legally surrendered and erred

in holding that said contract*could not be terminated, ended

or surrendered by the street railway companies ceasing to

operate within the Municipality.

(8) The Supreme Court of the State of Georgia erred

in not holding that the municipal rate contract of April 1, 1903

should be construed in connection with the franchise of Sep-

tember 4, 1899 and that said franchise and contract had been

performed, expired, terminated or legally surrendered.

(4) The Supreme Court of the State of Georgia erred in

not holding and finding that said contract of April 1, 1908

22

referred and applied to street railway lines as operated under

the franchise of September 4, 1899, and that said contract

taken in connection with said franchise, or said municipal

contract taken alone, did not require perpetual never ending

street railway operation within the Municipality of Decatur,

ARGUMENT

The legal argument with reference to said specifications

of error involve the construction of the franchise of September

4, 1899 and the construction of the municipal rate con-

tract of April 1, 1903. We respectfully submit that the decision

of the Supreme Court of Georgia is in conflict with the deci-

sions of this Court just heretofore cited, and with the prin-

ciples of law as laid down therein and the other decisions

hereafter cited.

THE DECATUR MUNICIPAL FRANCHISE OR CONTRACT

HAVE BEEN FULLY PERFORMED, ENDED, EXPIRED

OR BEEN SURRENDERED

In former litigation the power and authority of the parties

to enter into a rate contract has been upheld. The record

in such former litigation was not introduced in evidence and

formed no part of the record in this case; as, what was there

adjudicated goes not affect the questions herein raised.

In the present litigation the power and authority of the

parties to enter into a rate contract is not raised and neither

is the street railway company, while continuing to operate

under the franchise or contract, undertaking to charge a rate

of fare different from that therein provided.

The present litigation involves the questions of the right

to surrender the franchise or contract; whether or not it

has expired, been terminated or ended, and whether the street

railway company can perpetually be compelled to operate

thereunder at a confiscatory rate of fare.

A similar situation existed in the case of Cleveland Elec-

tric R. Co. vs. Cleveland, 204 U. S. 116, 180. There it appeared

23

that the Supreme Court of the United States had twice there-

tofore rendered opinions upholding the validity of the munici-

pal rate contract and when the case was again brought before

this Court it said: Therefore, in deciding this case, we assume

the validity of the contract whatever it is that was made.

The only question involved herein is one of construction and

intent.” This Court then decided for itself the duration of the

various municipal franchise and rate contracts therein in-

volved.

The question now sought to be brought to this Court for

decision is not one in which petitioner is seeking to continue

to operate under a municipal franchise or contract and at the

same time contest the validity or extent of its rate of fare

provision. By proper corporate action petitioner has sur-

rendered all its rights to operate thereunder; and also con-

tends that the municipal franchise and contract in question

have been terminated, ended, been performed or surrendered

and that to compel continued and perpetual operation there-

under; at the discriminatory and confiscatory rate of fare,

would deprive it of its property without due process of law

in violation of the 14th Amendment of the Constitution of

the United States.

The action brought by the City of Decatur to compel

perpetual continued street railway operation of the line in

question is based entirely upon the contract of April 1, 1903

(See paragraph 31 of the petition, page 90 of the original

record. Page printed record.) In considering whether

such contract requires perpetual and never ending operation

it will first be considered in connection with the municipal

franchise under which the line in question was constructed

and operated.

THE FRANCHISE UNDER WHICH THE LINE IN QUES-

TION WAS CONSTRUCTED AND BEING OPERATED HAS

EXPIRED AND BEEN TERMINATED BY TIMELY

WRITTEN NOTICE

The line in question was built, constructed and being.

24

operated under a franchise from the City of Decatur to the

“Collins Park & Belt Railroad Company,” granted September

4, 1899. (Agreed statement of facts Original Record pages 6-8,

printed record pages where the entire franchise is

set out.)

In 1900 the name of the “Collins Park & Belt Railroad

Company” was changed to “Atlanta Rapid Transit Company.”

In 1902 the franchise in question was conveyed by deed

from “Atlanta Rapid Transit Company” to “Georgia Railway

& Electric Company.”

(Agreed statement of facts Original Record pages 6, 14,

printed record pages 57

The change of the name of Collins Park & Belt Railroad

Company to Atlanta Rapid Transit Company and the deed

from Atlanta Rapid Transit Company to Georgia Railway &

Electrie Company are only material as showing the chain of

title of the franchise in question into the Georgia Railway

& Electric Company.

On April 1, 1903 the Georgia Railway & Electric Company

entered into a contract with the Town of Decatur, fixing a

five cents contract rate of fare to be charged on the said

line, designated therein as the Rapid Transit Line.

The franchise in question expired August 16, 1919 and

thereafter continued operation thereunder since said date has

been similar to a tenancy at will or at sufferance.

The Collins Park & Belt Railroad Company was incor-

porated under the Acts of the General Assembly approved

August 16, 1889.

(Agreed statement of facts Original Record pages 1-6,

printed record pages ........ where the entire act is set out.)

The duration of its charter was not therein specially set

out, therefore, under the law of Georgia, its charter expired

30 years from the date of its grant or 30 years from August

16, 1889, or August 16, 1919.

25

Georgia Code 2215 provides:

“Corporations have continuous succession during

the time limited by their charter, notwithstanding

the death of their members. Should any charter

granted in future by the General Assembly to a pri-

vate corporation be silent as to its continuance, such

charter shall expire at the end of 80 years from date

of its grant.”

See also

West End & Atlanta St. Rd. Co. vs. Atlanta St. Rd. Co.

49 Ga. 151 (1).

The Central R. & B. Company vs. State of Georgia, 54

Ga. 404, 420; 422.

The franchise in question was granted to the “Collins Park

& Belt Railroad Company.”

(Original Record pages 6-8. Printed Record pages )

Under all the authorities the duration of such franchise

is for and during the charter life of the Company, therefore,

the municipal franchise of the said Rapid Transit line in

Decatur expired August 16, 1919.

Turnpike Co. vs. Illinois, 96 U. S. 63.

Blair vs. Chicago, 201 U. S. 400;

Omaha Electric Light & P. Co. vs. Omaha, 179 Fed. 455

(8), 460.

Wyandotte Elec. Lt. Co. vs. City of Wyandotte, 124 Mich.

48; 82 N. W. 821.

Rokworth vs. St. Road Bridge Co. 108 N. W. 785.

The conveying of this franchise to successive street rail-

way companies does not change its duration and is im-

material except as showing title thereto.

Virginia Cannon Toll Road Co. vs. People, 22 Col. 429;

37 L. R. A. 711, 718, 719.

Blair vs. Chicago, 201 U. S. 400, see pages 481, 482.

The said Decatur franchise by its terms expired on August

16, 1919. Subsequent to that date the continued operation of

said line thereunder constituted a relationship between the

municipality and the operating street railway company similar

to that of tenancy at will.

Omaha Electric Light & Power Company vs. City of

Omaha, 179 Fed. 455 (8), 460

Detroit United Ry. Co. vs. City of Detroit, 229 U. S. 89, 42,

City and County of Denver vs. New York Trust Company,

229 U. S. 123; 142.

Or a tenancy at sufferance.

Sutton vs. Hiram Lodge, 88 Ga. 770.

Standley vs. Stembridge, 140 Ga. 750 (5), 754, 757.

Crawford vs. Crawford, 189 Ga. 894 (4), 896, 399.

Either of such tenancies can be terminated by either party

by reasonable notice.

Denver vs. Denver Union Water Co. 246 U. S. 178; 184

Western U. Tel. Co. vs. Fain & Parrott, 52 Ga. 19, 22.

On the question of notice see also

Risley vs. City of Utica, 179 Fed. 885, and cases there

cited.

In a tenancy at will or a tenancy at sufferance a party

while continuing to occupy the premises cannot escape the

burdens incident thereto; but either party can terminate such

burdens and put an end to such further continued relation-

ship by notice.

All the authorities hold that operation under an expired

municipal franchise creates an exactly similar relationship.

See cases heretofore cited.

Plaintiff in error took proper corporate action terminating

and surrendering the franchise in question.

(Original Record pages 51-57. Printed Record pages.)

Proper and reasonable notice of such action was given to

27

the municipality, the only party upon whom such notice could

be served.

(Original Record pages 51-57. Printed Record pages.

The franchise having expired by its terms and the holding

over having been terminated by due and reasonable notice,

it is inconceivable how respondent can sustain the decree per-

petually enforcing continued street railway operation there-

under.

It certainly would not be held that a landlord could suc-

cessfully maintain a suit in equity and by injunction per-

petually compel a tenant at will or sufferance to continue to

occupy his premises because the landlord desired to enjoy

for all time to come the benefits he was receiving by such

continued occupancy; yet, that is exactly what is done by the

decision in question.

We have found no case in conflict with the legal principles

just heretofore discussed,

We respectfully submit, that the Supreme Court of Georgia

in effect, admits the legal contention just heretofore stated,

to wit; that the franchise in question has expired, terminated

and ended; for, that Court in its opinion said “It is not so

much the franchise we are dealing with, but the specific con-

tract made in pursuance thereof;” and then based its opinion

upon the contract of April 1, 1903.

We submit that under a number of decisions of this Court

the duration of the franchise and the right to surrender it,

is decisive of the duration and the right to surrender a con-

tract made with reference thereto.

Cleveland E. R. vs. Cleveland, 204 U. S. 116, 180.

Detroit U. R. Co. vs. Detroit, 229 U. S. 39.

Blair vs. Chicago, 201 U. S. 400.

The contract of April 1, 1908 in referring to the Rapid

Transit line did not undertake to change the duration of the

franchise under which said line was being operated or the

rights of the parties to terminate it or cease operation there.

under.

This Court has repeatly held that the duration of munici-

pal franchises and contracts cannot be extended by implication.

Detroit U. R. Co. vs. Detroit, 229 U. S. 39; 43; 44.

Blair vs. Chicago, 201 U. S. 401, 471, 474.

MUNICIPAL CONTRACT OF APRIL 1, 1903

Said municipal contract is set out in full on pages 14-22

of the original record. Pages

The municipal contract of April 1, 1903 did not expressly

or by implication extend the duration of the franchise, under

which the line in question was constructed and being operated

within the City of Decatur; and did not and could not affect

franchises from other municipalities.

This contract first de Js with discontinuance and removal

from the streets of Decatur of a line of track known as the

Atlanta Railway Company and required the street railway

company upon such removal to restore the surface of the

streets in good condition. There is no contention that the

franchise of the Atlanta Railway Company in Decatur had

not expired long prior to the present litigation. The discon-

tinuance of the Atlanta Railway Company's line 26 years ago

(in 1908) does not affect the duration of the franchise of the

Atlanta Rapid Transit line.

The other parts of the said contract by actual terms and

description relate and refer to “Atlanta Rapid Transit Line.”

There is not a word or line which, either expressly or by

implication, deals with or undertakes to extend the duration

of the franchise of said Rapid Transit line. The length of

time said line must operate in Decatur is not extended. When

the contract of April 1, 1903 was made it did not and was

not intended to cover or deal with such questions. The City

of Decatur’s Municipal franchise under which the Atlanta

Rapid Transit line was being operated had not expired; by

its own terms it was to continue for a further duration of

16 years. The said contract of April 1, 1908 was not intended

to and did not (either expressly or by implication) undertake

to modify, enlarge or change or deal with that question.

In the cases in which this Court has had municipal con-

tracts, (with much broader provisions than those contained

in the contract of April 1, 1908) before it for consideration;

it has in every case held that such contracts did not extend

or enlarge the duration of the former municipal franchise.

Cleveland Electric R. Co. vs. Cleveland, 204 U. S. 166.

Detroit U. R. Co. vs. Detroit, 229 U. S. 39.

Blair vs. Chicago, 201 U. S. 400.

We respectfully submit that the contract of April 1, 1903

in no way changed the duration of the municipal franchise

of Atlanta Rapid Transit Company line (heretofore discussed)

or the rights of the parties with reference to its termination

or surrender.

The Supreme Court of Georgia largely relied upon the

expression of the contract “to never charge more than five

cents for one fare.”

The provision of the contract is “to never charge more than

five cents for one fare, upon its Decatur line above referred

to as the Rapid Transit Line.” (The said line in Decatur is

then described in detail.) °

It will be seen that said provision or contract as to the

rate of fare was made with reference to the line already

constructed and in operation. It fixed the rate of fare while

the line was operating. Such provision did not undertake to

compel perpetual and never ending operation.

This exact question was before this Court in the case of

Cleveland E. R. Co vs. Cleveland, 204 U. S. 116 in which it

was held that the municipal rate contract did not change the

duration of the franchise.

See also

Detroit U. R. Co. vs. Detroit, 229 U. S. 89; 48; 44; 45.

In Charleston Isle of Palms Traction Co. vs. Shealey, 266

Fed. Rep. 406 the Court held that a five cents rate of fare

was fixed by contract; and that the street railway company

was bound thereby while it operated thereunder; but, also

further held; that the street railway company had the con-

stitutional right to cease operation thereunder and thus avoid

the confiscatory rate.

As to such right to discontinue operation.

See also

Railroad Commission of Texas vs. Eastern T. R. Co. 264

U. S. 79, 85, 86.

In the case of Brooks-Scanlon Co. vs. Railroad Commission

of La. 251 U. S. 396 this Court held: “A carrier cannot be

compelled to carry on even a branch of business at a loss.”

In the case of State of Iowa vs. Old Colony Trust Company,

215 Fed. 307, 813 (cited approvingly by this Court in many

cases) the Court held that “A railroad company may abandon

an unprofitable and irreclaimable part of its road and neither

the State nor unfortunate investors along the line can justly

complain.”

In the case of Munn vs. Illinois, 94 U. S. 118, 192, this

Court said:

“The tor may withdraw his grant by discon-

tinuing the use; but so long as he maintains its use,

he must submit to the control.”

To the same effect see

Erie Board of Public Utility Commissioners, 254 U. 8.

$94, 411.

It has been repeatedly held that e ~creet railway company

can surrender such a franchise as ty. one in question to the

$1

municipality which granted it and discontinue operation over

the tracks within the municipality covered by it.

Stiles vs. Citizens Electric Street Railway Co. 19 L. R. A.

(N. S.) 865; 199 Mass. 294, 85 N. E. 419.

State of Montana & Knight vs. Power Company, 44 L. R.

A. 692, 22 Montana 391, 65 Pacific 685.

San Antonio Street Railway Company vs. State of Texas,

$5 L. R. A. 662, 30 S. W. 926.

Charleston Isle of Palms Traction Co. vs. Shealey, 267

Fed. 406.

Southern Bell Tel. & Tel. Co. vs. Railroad Commission of

South Carolina, 280 Fed. Rep. 901, 902 (7).

Gilschrist vs. Waycross Street & Suburban Railroad Co.

246 Fed. Rep. 952.

The Supreme Court of the State of Georgia said: “When

this contract was before the Supreme Court of the United

States (262 U. S. 488 supra) the court said with reference to

the duration of this contract, “that this contract would remain

effective until there should be conflicting legislative action.”

That case arose over an endeavor on the part of the street

railway company, while operating under the franchise, to

change the contract rate of fare as added to the franchise by

the contract of April 1, 190%. The street railway companies

served notice on the Municipality of Decatur that on and after

October 20, 1920 it (the street railway company) would charge

a seven cents rate of fare on the said North Decatur or Rapid

Transit Line. The Municipality of Decatur then brought an

equitable suit to enjoin the street railway company, while

operating under the franchise in Decatur, from changing the

rate of fare, as provided in the contract. In answer to such

suit the street railway company contended lack of power and

authority in the Town of Decatur to make a rate contract;

that the rate of fare provision was not a contract.

The decision of this Court shows that it was dealing with

82

such questions and not with the right of the municipality to

compel perpetual never ending operation thereunder.

The question there decided is entirely different from the

one involved in the present litigation. As controlling on this

question see

Cleveland Electric R. Co. vs. Cleveland, 204 U. S. 116, 130,

The Supreme Court says that the contract of April 1, 1903

if not expressly, impliedly gives consent to the operation of the

line in question within the municipality.

The provision of the contract to which the Supreme Court

of Georgia was referring is as follows:

“To gradually from time to time, as it may obtain

permission so to do and may have funds available for

such purpose, double track said * Transit line

from terminus to terminus, the loop already described

in the Town of Decatur being considered a double

track; provided the time within which said double

track s be completed does not exceed five years,

in the event it can obtain permission to construct

said double track, which said double track, when com-

pleted shall be maintained in a substantial safe and

expenditious manner and shall be operated with cars

and rolling stock kept in safe and comfortable condi-

tion. Permission to construct said double track in

the Town of Decatur is hereby granted.”

That such and similar provisions do not extend the dura-

tion of the franchise (the franchise of September 4, 1889

heretofore discussed) was held by this Court in Cleveland

Electric R. Co. vs. Cleveland, 204 U. S. 116.

See also

Detroit U. R. Co. vs. Detroit, 229 U. S. 39; 44, 45.

Blair vs. Chicago, 201 U. S. 400.

The said provision of the contract was not an undertaking

on the part of the parties to change or affect the duration

of the franchise under which the line was being operated.

The agreed statement of facts show that no double track

33

was laid within the Municipality of Decatur under it; how-

ever, this is immaterial for as held in the Cleveland case (204

U. S. 116, 187-140) a right given to construct an additional

track would not affect the duration of the franchise under

which the single line had been constructed. In fact the con-

tract in question, provides that the loop in Decatur (as al-

ready constructed) was to be considered a double track.

Nothing said in said contract was intended to affect the dura-

tion of franchises received from other municipalities. While

operating, a legal duty rests upon the company to maintain its

tracks in a safe and expeditious manner and to keep its cars

and rolling stock in good and comfortable condition. This, how-

ever, does not compel perpetual never ending operation at a

loss.

City of Texas vs. Eastern Texas Rd. Co. 264 U. S. 79, 85.

Also see

Texas & R. P. Co. vs. Marshall, 186 U. S. 393.

Jones vs. Newport News, 65 Fed. 736, 741 (2).

Texas & P. R. Co. vs. Scott, 77 Fed. 726 (2), 730.

In the case of Cleveland E. R. Co. vs. Cleveland, 204 U. S.

116, 188 the grants then being considered by this Court

specifically referred to lines which were to be operated in

connection with other and different lines. Nevertheless this

Court held that such reference did not have the effect of

extending the duration of any line, though the lines referred

to had franchises of longer duration.

THE PRINCIPLE OF LAW REPEATEDLY ANNOUNCED

BY THIS COURT IN CONSTRUING MUNICI-

PAL CONTRACTS

This Court has repeatedly held that municipal rate con-

tracts do not compel perpetual and never ending operation.

In the case of Texas & P. R. Co. vs. Marshall, 136 U. S.

$98 this Court held; that a municipal contract providing that

in consideration of certain donations made by the City, a rail-

34

road agreed that it would permanently establish its terminus

in the City was performed by maintaining it there for eight

years.

Certainly, under the undisputed facts in the case at bar,

the street railway company cannot be compelled to perpetually

operate under the municipal rate contract in question.

In the case of Home Telegraph & Tel. Co. vs. City of Los

Angeles, 211 U. S. 265, this Court expressly held that munici-

palities possessing the power and authority to make rate con-

tracts can only make them for a definite time “not grossly

unreasonable in point of time.“ In subsequent decisions this

Court has restated and followed that legal principle. (For

illustration see cases cited in note (a) ).

The contract of April 1, 1908 was made with reference to

the Rapid Transit line constructed and being operated under

the franchise of September 4, 1899. The duration of said fran-

Note (a) In Southern Iowa Electric Co. vs. City of Charleston, 255 U.

S. 359, the contract fixed a definite period of time, to wit:

25 years. In the decision the Court said no one would con-

tend that a municipality could make “a valid contract fixing

permanent rates.”

In Freeport vs. Freeport Water Company, 180 U. S. 578, 600

the contract was for a definite period—30 years.

In Detroit vs. Detroit City R. Co. 134 U. S. 368, the contract

was fixed for a certain definite period—380 years.

In Knoxville Water Co. vs. Knoxville, 189 U. S. 484, the Knox-

ville Water Company contended that there was a municipal

rate contract for a definite period of 30 years. However, the

Court held that there was not a contract fixing a rate for

a definite term and permitted a change in rates.

In Cleveland vs. Cleveland City R. Co. 194 U. S. 519, see pages

585, 586, the contract was entered into in February 1886,

and continued until February 1908, 23 years. In the opinion

the Court says the provision as to rates of fare were fixed

... for a stated time.

In Columbus R. Co. vs. Columbus, 249 U. S. 399, the rate con-

tract was for a definite time—25 years.

85

chise was not extended by the said contract of April 1, 1908.

If only the said contract itself is considered, then there is no

provision in it that it is to be a perpetual never ending con-

tract.

If it is claimed that no limit as to duration is specified

therein; then the rule of law practically universally followed

is that such contracts can be terminated after reasonable

length of time and upon reasonable notice.

In Jones vs. Newport News & M. Co. 65 Fed. 736, Judge

(now Chief Justice) Taft held:

“The petition makes no better case for the plaintiff

on the theory of a contract than on a common law

liability. It is not alleged that either the defendant

or its predecessor * to keep the switch on the

main line for any definite length of time, or that

either expressly agreed to keep it there forever; the

plaintiff contends, that, nothing having been said as

to the time, the implication is that the switch is to

be maintained at all times — forever. Such a construc-

tion is quite at variance with the views of the

Supreme Court, as expressed in Texas & P. R. Co. vs.

City of Marshall, 186 U. S. 393, 10 Sup. Court 846.”

Many of the decisions hold that perpetual contracts of

this character will not be tolerated, that a court of equity will

not compel perpetual performance.

Texas & P. R. Co. vs. Marshall, 186 U. S. 393.

McCullough-Dalzell Crucible Co. vs. Philadelphia Company,

72 Atl. Rep. 688. (Note (b) ).

Note (b) In 8 Elliott on Contracts, Sec. 1871, the rule is laid down as

follows:

“Even though there is no express provisions for terminating

a contzact which is definite in duration and continuous in its

nature there is usually an implied option in either party

to terminate such a contract as to the part remaining exe-

cutory.”

Barney vs. Indiana Ry. Co. et al 61 N. E. 194.

36

The decree affirmed by the Supreme Court of the State of

Georgia requires perpetual and never ending operation of the

line in question under the Decatur municipal rate contract in

question. Unless the contract in question requires such per.

petual, and never ending operation then under the undisputed

facts, the street railway company’s property will perpetually

be confiscated in contravention of the 14th Amendment of the

Constitution of the United States.

This Court has repeatedly held that railroad legislative

charters (which are contracts) containing much more impera-

tive terms than the municipal contract in question did not

deprive the railroad companies of the constitutional right to

cease operation thereunder when future operation was un-

profitable.

City of Texas vs. Eastern Texas Rd. Co., 264 U. S. 79 and

cases therein cited:

Brooks-Scanlon Co. vs. Railroad Commission 251 U. S. 396;

Munn vs. Illinois, 94 U. S. 113.

We respectfully ask the grant of the writ of certiorari in

order that this Court may consider and determine for itself

whether the City of Decatur municipal rate contract in ques-

tion compels the street railroad company perpetually to devote

its property in the said Municipality to the use of the public;

and perpetually compels it to operate therein at a rate of fare

not sufficient to pay bare operating expenses.

Turtle Creek Borough vs. Penn Water Co. 99 Atl. 199.

In the case a Borough granted a franchise to a water com-

pany providing the company rates for domestic purposes

shall not exceed a certain rate. The contract contained no

definite limitation as to the time. The court held that it was

revocable upon reasonable notice under changed conditions.

Borough of Bellevue vs. Ohio Valley Water Co. 91 Atl.

Rep. 236.

Joilet Bottling Co. vs. Joilet Citizens Brewing Co. 98

N. E. 263.

87

The City of Decatur by virtue of compelled operation of

the line in question is also further seeking to impose paving

assessments against the street railway company amounting to

$14,000 from which the street railway company can receive

no benefits. The pleadings show that the street railway com-

pany tendered to the Municipality its property located therein

along and adjacent to the streets to be paved and its entire

street railway property constructed and located within the

Municipality of Decatur under the franchise and contract

heretofore discussed. The Municipality admits that such prop-

erty is not worth the amount of the assessment by refusing

the tender of such property. We respectfully submit, under

the principle of law laid down by this Court in the case of

Erie Railroad Company vs. Public Utility Commission 254 U.

8. 394, 411, such facts give the street railway company the

constitutional right to surrender said franchise or contract in

the Municipality and cease operation thereunder. In that case

this Court said: “If the burdens imposed are so great that the

railroad cannot be run at a profit, it can stop, whatever mis-

fortune the stopping might produce.” Certainly the munici-

pal rate contract in question does not deny the street railway

company its constitutional right to cease operation under

such facts.

The Supreme Court of Georgia cites the case of Fort

Smith Light & Traction Company vs. Fargan Bourland, 267

U. S. 300. We respectfully submit that that case is not ap-

plicable; the facts in that case were as follows:

The street railway lines within the Municipality of Fort

Smith were constructed and operated under a franchise from

the Municipality. In 1919 the franchise, together with its obli-

gations and requirements, was, pursuant to a statute of the

State of Arkansas, surrendered for an indeterminate permit,

the express provisions of which bound the street railway

company to operate all its lines within the Municipality un-

less permitted to abandon a part thereof with leave of the

38

City Commission, which exercised the powers of a public

utility commission. Upon hearing the said commission refused

to allow the railway company to abandon a part of a line. Not.

withstanding this refusal and its continued operation under

the indeterminate permit the street ra“. ay company sought

to discontinue part of its line. The decision of this Court was

that the street railway company by accepting the indetermj.

nate permit had agreed to operate all of its street railway lines

and could not, therefore, continue operation thereunder and

escape the other burdens which it had agreed to. The con-

cluding paragraph of the said decision is:

“The company is at liberty to surrender its franchise and

discontinue operations throughout the city. It cannot, in the

absence of contract, be compelled to continue to operate its

system at a loss. Brooks-Scanlon Co. vs. Railroad Commis-

sion, 251 U. S. 896. But the Constitution does not confer upon

the company the right to continue to enjoy the franchise or

indeterminate permit, and escape from the burdens incident

to its use.” (Italics Ours)

In the case at bar the street railway company is not under-

taking to operate within the Municipality of Decatur under the

franchise or contract in question; but is seeking to surrender

and cease operation thereunder “throughout the City.”

Whether the Decatur municipal franchise has been per-

formed, ended, terminated or surrendered or whether per-

petual never ending operation thereunde. can be compelled

is not predicated upon the question whether other lines under

other and different municipal franchises are still being

operated,

Cleveland E. & R. Co. vs. Cleveland 204 U. S. 116.

The instant suit brought by the Municipality of Decatur

seeks to compel perpetual operation under and by virtue of

the contract of April 1, 1903. The said contract and franchise

are seperate and distinct from the other franchises and street

railway lines operated in other municipalities under franchises

obtained from them. In fact the franchise in question has been

39

held to be a separate and distinct classification from all the

other lines and franchises of the street railway company.

In Georgia, the Public Service Commission has been given

no jurisdiction over this line and neither has it jurisdiction

to determine the question of discontinuance of service.

Railroad Commission of Georgia vs. Macon Railway &

Light Company, 151 Ga. 256.

The Georgia Public Service Commission has gone as far as

it could; it has expressly held that the contract in question

fixed a confiscatory rate; and, additionally held that said rate

of fare was discriminatory, in so far as all the other lines of

the company are concerned. (Original Record page 50. Printed

record pages ).

To require perpetual never ending operation under said

conditions would, to use the language of this Court in (194

U. S. 517, 534) lead “to consequences dangerous to public in-

terest, peace and tranquility, the extent of which it would be

difficult in advance to see.“

Said fact under the decision of this Court in the case of

Texas & P. R. Co. vs. Marshall, 136 U. S. 393 is an additional

reason why the street railway company should not be com-

pelled to perpetually operate under said contract and should

not be denied the right to surrender all its rights thereunder.

It is respectfully submitted that this case is one calling

for the exercise of this Court of its supervisory powers, in

order that it may determine for itself the duration and termi-

nability of the municipal franchise and the municipal rate con-

tract in question and the right of the street railway company

to end, ter 1inate or surrender said contracts and that to such

an end a vrit of certiorari should be granted and this Court

should review the decision of the Supreme Court of the State

of Georg’a and finally reverse it.

¥ WALTER T. COLQUITT

BEN J. CONYERS

Counsel for Petitioner