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

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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. 537

## Text

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Summary statement of the matter involved........... mais
Reasons relied on for the allowance of the writ..........

ition for writ of certiorari: Page
1
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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

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Georgia Ry. & P. Co v. Decatur, 262 U. S., 482............. a 7
Greene County v. Conness, 109 U. S., 104................0855 7

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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)

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