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

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for a Writ of Certiorari
- **Published:** January 1, 1930
- **Citation:** 281 U.S. 505

## Text

AUG 80 1929

FILE COPY ery

— SESE
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0

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

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386007_0394%3A2. Public record. Not legal advice.