Petition for a Writ of Certiorari — Broad River Power Co. v. South Carolina Ex Rel. Daniel

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INDEX.

Supyect INpEx.

Summary statement of the matter involved........... mais

Reasons relied on for the allowance of the writ..........

ition for writ of certiorari: Page

1

5

TaBLe or Cases CITep,

Ancrum y. Camden Water, etc., Co., 82 S. G., 284............ 10

Bluefield Water Works and Imp. Co. v. Public Service Commis-

EE: Sie: Pg UO: o és anecdb Wardeecs cvecs WeRSCA SS ANE Gee 12

Branch vy. City of Chacteston, 92 vU. WG PRR sa ech er ebeaeans 7

Brooks-Scanlon Co. vy. Railroad Commission, 251 U. S., 393,

ALES RSG REE ol oR eas cena cae aea 6, 8, 9, 10, 12

Bullock v. Florida Railroad Commabeben, 254 U. S., 513. 6, 7,9, 10,12

Central Railroad, etc., Co. v. Georgia, 92 U. S., 665.......... 7

Charleston-Isle of Palms Traction Co. vy. Shealy, 226 Fed., 406. 10

Chesapeake, etc., R. Co. v. Virginia, 94 U. S., 716, 718........ 7

Columbus Railway, etc., Co. v. Columbus, 249 U. S., 390..... ‘ 10

Ft. Smith, L. & T. Co. vy. Bourland, 267 U. S., 330........ 4, 6, 10, 12

0

Georgia Ry. & P. Co v. Decatur, 262 U. S., 482............. a 7

Greene County v. Conness, 109 U. S., 104................0855 7

8

ay me a, OR; OS. Wed, TOG... ccc cc cevewcecnsssveceuetes 10

ge Se Aeerrev eens ere prasddeibene een teek 8, 10

“Munn y. Minois, 94 U. S., 118, 126; 24 L. Ed. 77, 84.......... 9

Norfolk & W. R. Co. vy. Conley, 236 U. S., 605............0055 8

8

Northwestern Electric iiieetse Co., 17 Pa. Cine, ‘tn. 246.... 8

- Ohio Valley Water Co. vy. Ben Avon Borough, 253 U. S., 287.... 12

oma Operating Company v. Love, 252 U. S., 331........ 12

—1049

Philadelphia & W. R. Co. y. Maryland, 10 How., 374, 376... .

Potter-Matlock Trust Co. v. Warren County, 182 Ky., 840; 207

8. W., Dei cents .

Wolff Packing Co. v. Court of Industrial Relations, 262 U. 8.,

622

SUPREME COURT OF THE UNITED STATES.

OCTOBER TERM, 1929.

No, 528

BROAD RIVER POWER COMPANY, COLUMBIA

RAILWAY, GAS AND ELECTRIC COMPANY,

anv F. D. CAMPBELL, Perrrioners,

vs.

STATE OF SOUTH CAROLINA ex Rev. Joun M.

Danre., Arrorney GENERAL,

PETITION FOR WRIT OF CERTIORARI.

To the Honorable the Chief Justice and the Associate

Justices of the Supreme Court of the United States:

The petition of Broad River Power Company, Co-

lumbia Railway, Gas and Electric Company, and F. D.

Campbell respectfully shows to this Honorable Court:

A.

Summary Statement of the Matter Involved.

I. This is a petition for a writ of certiorari, under

Section 344 of the Judicial Code, to review a judgment

2

of the Supreme Court of South Carolina in favor of

the State in a mandamus proceeding instituted by the

Attorney General against the petitioners herein to

compel them to operate a street-railway system which

had been abandoned because of losses sustained in the

operation thereof. (The judgment is contained in the

opinion of the Court, R. 251.) The date of the judg-

ment to be reviewed is July 9, 1929. A petition for a

rehearing was filed on July 18, 1929, and was dismissed

on September 25, 1929 (R. 272). The opinions of the

State court have not yet been officially reported. (See

R. 203, 251.)

II. The proceedings were instituted to require the

petitioners herein to maintain and operate the street-

railway system inj the City of Columbia, S. C., and

vicinity, operation of which was ebandoned on March

11, 1927. The petitioner Columbia Railway, Gas and

Electric Company (hereinafter called the railway

company) was the owner of the street-railway system,

F. D. Campbell was the manager of the company, and

Broad River Power Company (hereinafter called the

power company) was the purchaser of the gas and

electric properties formerly belonging to the railway

company and was the owner of its common stock. As

such it was claimed that the power company was liable

for the obligations of the railway company, including

any obligation to operate the street-railway system.

The principal defense set up in the proceedings was

that the railway system had been operated for many

years at an operating loss, amounting over the period

of about 7 years preceding the abandonment of opera-

3

tions to about $675,000, without any allowance for de-

preciation or return on the investment (R. 1129),

which amounted to $175,000 and $875,000, respectively,

on a minimum basis (R. 159, 154), and that to require

continued operation would deprive the petitioners

herein of their property without due process of law,

in violation of the Fourteenth Amendment to the

United States Constitution (R. 24). These losses were

in part due to jitney competition, the city having

licensed jitneys in large numbers (R. 522). Even

prior to this competition, however, losses had been

regularly incurred (R. 1129). The referee to whom

the case was referred found that the railway had been,

and could only in the future be, operated at a loss, and

that under the Fourteenth Amendment to the United

States Constitution operation could not be compelled

(R. 195, 196). He recommended that the proceedings

be dismissed (R. 196). The Supreme Court of South

Carolina disapproved the conclusions of the referee

and rendered judgment that the writ of mandamus

issue as prayed for (R. 203). Cothran, J., dissented

from the decision of the Court (R. 251).

III. The Supreme Court of South Carolina based its

decision on the following grounds:

(a) That the statute of South Carolina (R. 809)

under which the railway company was organized by a

consolidation of an electric and gas company with a

street-railway company created a single and indivisible

franchise for the rendition of street-railway, electric,

and gas services, which was not severed by a sale of

4

the gas and electric property pursuant to legislative

authority, and that if the business as a whole was

profitable, the abandonment of the street-railway serv-

ice (without the abandonment of the other services)

could not be sustained, reliance for this proposition

being placed on Ft. Smith Light and Traction Co. v.

Bourland, 267 U. S. 330, and similar cases involving

attempts to abandon part of a line of railway covered

by a single franchise (R. 218).

(b) That the statute creating the street-railway com-

pany constituted a contract with the State to operate

the street| railway, even though its operation could

only be had at a loss (R. 221).

(c) That the ordinances of the City of Columbia

granting the right to operate a street railway on the

streets of the city constituted a contract to operate the

same, and that the fact that operation could not be had

except at a loss was no defense (R. 235, 237).

(d) That certain contracts between the street-rail-

way company. and land-development corporations (R.

851, 885, 864, 1063), under which extensions were built

to the railway lines, required operation of the entire

street-railway system, to the enforcement of which

loss was no defense, and created public duties which

could be enforced in these proceedings (R. 239, 241).

(e) That right-of-way grants made in consideration

of ‘‘the advantage and benefit of the intervening

lands’’ constituted contracts for operation to the en-

forcement of which loss was no defense, and created

5

public duties which could be enforced in these pro-

seedings (R. 240, 241).

(f) That the evidence as to past losses did not con-

clusively show that with proper management the sys-

tem could not be operated at a profit in the future (R.

250), and that great weight should be attached to the

finding of the railroad commission (made after the in-

stitution of these proceedings) that if properly man-

aged the railway could be made to yield a fair return,

which conclusion was adopted by the court (R. 243).

(g) That the power company, as the purchaser of

the electric and gas properties of the railway company,

took the same burdened with the obligations of the

railway franchises retained by the railway company,

both by virtue of the provisions of the act authorizing

the sale (R. 806) and because, under the evidence show-

ing that the power company owned the stock of the

railway company and controlled it, the companies must

be treated as one entity (R. 205).

B. 7

Reasons Relied on for the Allowance of the Writ.

I. The question involved in this case is one of na-

tional importance in view of the precarious financial

condition of street-railway systems throughout the

United States (which is a matter of common knowledge)

and is one which vitally affects the right of those who

have invested large sums in such enterprises to salvage

s portion of their investment. It is also a question

¢

which, wrongly decided, will seriously impede the ex-

pansion of the electric industry, many electric prop-

erties being now, or having been at some time in the

past, connected with a street-railway system.

II. The judgment of the State court requiring your

petitioners to operate the railway system in question

deprives them of their property without due process

of law, in violation of the Fourteenth Amendment to

the United States Constitution, which was specifically

set up and pleaded, and such judgment and decision is

in direct conflict with the decisions of this Court in

the following cases:

Brooks-Scanlon Co. v. Railroad Commission,

251 U. S. 393;

Bullock v. Florida Railroad Commission, 254

U. S. 513;

Texas v. Eastern Texas Railroad Company, 264

U. S. 79;

Wolff Packing Co. v. Court of Industrial Rela-

tions, 262 U. S. 522;

Ft. Smith L. &é T. Co. v. Bourland, 267 U. 8. 330.

“‘Apart from statute or express contract

people who have put their money into a railroad

are not bound to go on with it at a loss if there

is no reasonable prospect of profitable opera-

tion in the future. Brooks-Scanlon Co. v. Rail-

road Commission, 251 U. S. 396, 64 L. ed. 323,

P. U. R. 1920 C, 579, 40 Sup. Ct. Rep. 183. No

implied contract that they will do so can be

elicited from the mere fact that they have ac-

cepted a charter from the State, and have been

7

allowed to exercise the power of eminent

domain.’’ . Bullock v. Florida Railroad Com-

mission, 254 U. 8. 513, 520, 521.

III. In a case of this character this Court has de-

cided that it will determine for itself whether any con-

tract exists which can sustain what would otherwise

amount to a confiscation, and that it is not concluded

by the decision of the State court. Georgia Ry. & P.

Co. v. Decatur, 262 U. S. 482; Texas & Eastern Texas

R. Co., 264 U.S. 79.

IV. The decision of the State court that the act

under which the railway company was incorporated

constituted a grant of a combined franchise for street-

railway, electric and gas service (R. 218), based on

extracts from other statutes interpolated by the court

into the Consolidation Act (R. 215) which are not in

the act itself (R. 809), is in direct conflict with the

decisions of this Court in Philadelphia & W. R. Co. v.

Maryland, 10 How. 374; Tomlinson v. Branch, 15 Wall.

460; The Delaware Railroad Tax, 18 Wall. 206; Cen-

tral Railroad, etc., Co. v. Georgia, 92 U. S. 665; Branch

v, City of Charleston, 92 U. S. 677; Greene County v.

Conness, 109 U. S. 104; New Orleans Gas Co. v.

Louisiana Light Co., 115 U. S. 650; Chesapeake, etc.,

R. Co. v. Virginia, 94 U. S. 718, which hold that in

such a case the franchises of the constituent companies

continue as separate franchises in the consolidated

company. In Greene County v. Conness, 109 U. S..104,

the court said:

‘Tf only a sale of the road to another com-

pany had been authorized and made, then it

POET ar OE

8

might very plausibly have been contended that

the purchasing “ompany took and held it under

its owa charter only, without the franchises and

privileges connected with it in the hands of the

vendor company ; but ‘consolidation’ is not sale,

and when two companies are authorized to con-

solidate their roads, it is to be presumed that

the franchises and privileges of each continue

to exist in respect to the several roads so con-

solidated.’’

V. The decision of the State court that the fact that

the electric and gas business was being conducted by

the power company at a profit precluded an abandon-

ment of street-railway service by the railway com-

pany on account of losses, which should be met out of

the gas and electric earnings (R. 218), is in direct con-

flict with the decision of this Court in Brooks-Scanlon

Co. v. Railroad Commission, 251 U. S. 396; Northern

Pac. R. Co. v. North Dakota, 236 U. 8. 585; N orfolk &

W. R. Co. v. Conley, 236 U. S. 605, as well as with the

decisions of other courts in well reasoned opinions.

Northern Ill. L. & T. Co. v. Illinois Commerce

Com., 302 Ill. 11;

Mt. Carmel Public Utilities & Service Co. v.

Public Utilities Com., 297 Tll. 303;

Illinois Trust & Sav. Bank v. Doud, 105 Fed.

123;

Re Northwestern Electric Service Co., 17 Pa.

Corp. Rep. 246.

In Brooks-Scanlon Co. v. Railroad Commission, 251

U. S. 396, this court said:

‘*The plaintiff may be making money from its

saw mill and lumber business, but it no more

can be compelled to spend that than it can be

compelled to spend any other money to main-

tain a railroad for the benefit of others who do

not care to pay for it. If the plaintiff be taken

to have granted to the public an interest in the

use of the railroad, it may withdraw its grant

by discontinuing the use when that use can be

kept up only ata loss. Munn v. Illinois, 94 U. 8S.

113, 126, 24 L. ed., 77, 84. The principle is

illustrated by the many cases in which the con-

stitutionality of a rate is shown to depend upon

whether it yields to the parties concerned a fair

return.’’

VI. The decision of the State court that the charter

of the railway company constituted a contract with the

State which required operation at a loss (R. 221) is

in direct conflict with the decisions of this Court in

Brooks-Scanlon Co. v. Railroad Commission, 251 U. 8.

396; Texas v. Eastern Texas R. Co., 264 U. S. 79;

Bullock v. Florida Railroad Commission, 254 U. 8. 513.

‘*The usual permissive charter of a railroad

company does not give rise to any obligation on

the part of the company to operate its road at a

loss. No contract that it will do so can be

elicited from the acceptance of the charter or

from putting the road in operation.’’

Texas v. Eastern Texas R. Co., 264 U. S.

79, 85.

VII. The decision of the State court that the ordi-

nances of Columbia (R. 833 et seq.) constituted con-

tracts which required operation of the street railway

at a loss (R. 235, 237) is in direct conflict with the

10.

decisions of this Court in Brooks-Scanlon v. Railroad

Commission, 251 U. 8. 396; Texas v. Eastern Texas R.

Co., 264 U. S. 79; Bullock v. Florida Railroad Com-

mission, 254 U.S, 513; Ft. Smith L. & T. Co. v. Bour-

land, 267 U. S. 330, and is not supported by Columbus

Railway, etc., Co. v. Columbus, 249 U. 8. 399, which

involved an ordinance for a fixed term, at a fixed rate

of fare, an acceptance, and an absence of total opera-

tion at a loss, none of which factors exist in this case.

The decision of the State court also conflicts with the

decisions of other courts in well-reasoned opinions.

Potter-Matlock Trust Co. v. Warren County,

182 Ky. 840;

Mt. Carmel Public Utilities & Service Co. v.

Public Utilities Com., 297 Ill. 303.

Northern Ill. L. & T. Co. v. Illinois Commerce

Com., 302. Ill. 11;

Charleston-Isle of Palms Traction Co. v. Shealy,

266 Fed. 406.

VIII. The decision of the State court that the con-

tracts with land-development corporations (one of

which had heen extinguished by a deed. R. 1066) were

existing agreements which required continued opera-

tion, even at a loss, and created public duties which

could be enforced in these proceedings (R. 239, 241),

is contrary to the decisions of this Court in Texas, etc.,

R. Co. v. Marshall, 136 U. 8. 393; German Alliance

Ins. Co. v. Home Water Co., 226 U. S. 220, and with

the decision in Jones v. Newport News & M. Valley

Co., 65 Fed. 736 (opinion per Taft, J.), as well as with

the previous decision of the same court in Ancrum v.

Camden Water, etc., Co., 82 S. C. 284.

1l

IX. The decision of the State court that there ex-

isted right-of-way agreements which required con-

tinued operation at a loss (R. 240, 241) is without any

evidence to sustain the same.

X. The decision of the State court cannof be sus-

tained on the theory that private contracts were en-

forced in favor of private corporations and individuals,

involving no constitutional question, for the reason

that the judgment of that court grants to the attorney

general and all interveners the relief ‘‘as prayed for’’

(R. p. 251, fol. 287), and the relief prayed for by the

attorney general was that the respondents be directed

“to furnish and maintain adequate and satisfactory

street-car service thereon in the city of Columbia and

its environs permanently in accordance with the pro-

visions of their charters, contracts, and provisions of

law applicable thereto’’ (R. p. 8, fol. 11), and this is

the prayer which is joined in by the interveners. (See,

e. g., R. p. 47, fol. 62.) In other words, ‘‘adequate

and satisfactory street-car service * * * in the city

of Columbia’’ could not have been adjudicated under

alleged contracts having reference only to detached

portions of the system and not providing for ‘‘ade-

quate and satisfactory service.’’

XI. The decision of the State court that evidentiary

effect should be given the finding of the Railroad Com-

mission, which is a legislative body, that the railway

could, if properly managed, be operated in the future

at a profit (R. 243), which finding was made after

the commencement of these proceedings, in which the

Railroad Commission later joined as a party, is in

12

direct conflict with the decisions of this Court in Ohio

Valley Water Co. v. Ben Avon Borough, 253 U. 8. 287;

Prendergast v..N. ¥. Tel. Co., 262 U. S. 43; Oklahoma

Operating Co. v..Love, 252 U. 8. 331; Bluefield Water

Works and Imp. Co. v. Public Service Commission,

262 U. S. 679; and was without evidence to support it,

as the evidence before the Railroad Commission, which

is a part of the record (R. 884 et seq.), was uncon-

tradicted and was to the effect that losses had been

and must be incurred in such operation.

XII. The decision of the State court that the power

company could be compelled to operate the railway

system of the railway company, even though such

operation must be carried on at a loss (R. 205), is

violative of the Fourteenth Amendment to the United

States Constitution and in direct conflict with the de-

cisions of this Court in Brooks-Scanlon Co. v. Railroad

Commission, 251 U. S. 396; Bullock v. Florida Rail-

road Commission, 254 U. S. 513; Texas v. Eastern

Texas Railroad Co., 264 U.S. 79; Wolff Packing Co. v.

Court of Industrial Relations, 262 U. 8. 522; Ft. Smith

L. € T, Co. v. Bourland, 267 U. S. 330; and there was

no evidence, statute, ordinance, or contract which justi-

fied such a judgment.

XIII. The decision sought to be reviewed is a final

judgment passed by the highest court of the State of

South Carolina in which a decision could be had and

in which a title, right, privilege, or immunity was

specially set up and claimed by your petitioners under

the Constitution of the United States, the decision of

said court denying such claim.

13

WaeEREFoRE your petitioners respectfully pray that

a writ of certiorari be issued out of and under the seal

of this Honorable Court, directed to the Supreme

Court of South Carolina, commanding that court to

certify and to send to this Court for its review and

determination, on a day certain to be therein named,

a full and complete transcript of the record and all

proceedings in the case numbered and entitled on its

docket No. 360, in the Original Jurisdiction; Ex Parte:

State of South Carolina ex Relatione John M. Daniel,

Attorney General, Petitioner, against Broad River

Power Company, Columbia Railway, Gas and Electric

Company, and F. D. Campbell, Respondents, and that

the said judgment of the Supreme Court of South

Carolina may be reversed by this Honorable Court,

and that your petitioners may have such other and

further relief in the premises as to this Honorable

Court may seem meet and just; and your petitioners

will ever pray.

BROAD RIVER POWER COMPANY,

COLUMBIA RAILWAY, GAS AND

ELECTRIC COMPANY,

F. D. CAMPBELL,

By WILLIAM MARSHALL BULLITT,

Counsel for Petitioners.

C. EDWARD PAXSON,

GEORGE M. LePINE,

W. C. McLAIN,

Of Counsel.

(1049)