Respondents Brief — Broad River Power Co. v. South Carolina Ex Rel. Daniel
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OCTOBER TERM, 1929
No. 528
BROAD RIVER POWER COMPANY, COLUMBIA
RAILWAY, GAS AND ELECTRIC COMPANY,
anw F. D, CAMPBELL, Petirionrrs,
versus
STATE OF SOUTH CAROLINA, Ex Ret, Jonn M.
Danre., ATTORNEY GENERAL, Crry of CoLuMatiaA,
Town or Arpen, Town or Eau Carre, Co-
LuMaBIA CoLLEGE, Curcora COLLEGE FOR
Women, Dr. W. B. Burney, Nortn
Corumara Lanp Company, THE
RAILROAD COMMISSION AND THE
Coiumaia Scnoor Boarp
BRIEF FOR RESPONDENTS
* Joun M. Dantet,
Attorney General,
‘ Coaprr Pacer,
Asst, Attorney General,
/ Irvine F. BEvser,
C. T, Graypon,
~ W. S. NELson,
E. W. MuLuins,
H. N. Epmunps,
Solicitors for Respondents.
THE R. L. BRYAN CO,, COLUMBIA, 8. Cc.
4-86.20.60
SYNOPSIS AND INDEX
Broad River Power Company Organized 1924 to
Acquite Columbia Railway, Gas & Electric Co.
Columbia Railway, Gas & Electric Co. Chartered
1891 to Conduct Electric Street Railway, Light
«chalice Bbetwa ca ah CF ae te
City Franchise Ordinances Require Daily Oper-
iis re rishi seks ckees oie eens
tric Railway Neglected ....................
Review of Legal Proceedings ....................
he oss oes oo eos co ia.
braced Electric Street Railway, Light and Power
RHEE ESET te Sires NC Rear eee
Pace
Beery SUMAMATY ooo oko cece ccc cccne 4
CE PRD cies inks 6
S7 .
INDEX OF CASES CITED
PacE
Atlantic & Gulf R. R. Co, v. State of Georgia, 98 U. S.,
Cay Oe Bh Ws BOP Se ic Cee 21
Attorney General, Ex Rel. Corp. Com. v. Elaverhill Gas
Light Co., 215 Mass., 394, Ann. Cas., 1514-C, 1266 23
Atlantic Coast Line R. Co. v. North Carolina Corp. Com.,
PION: By 0, OF Sn MA 98S oe 24
American Railway Express Co. v. Kentucky, 273 U. S.,
gtk ed Lice th sag ROR SOP Peg ei TES 51
Arkansas So. R. R. Co. v. German Nat’! Bank, 207 U.
Oy an oe by OR, OO ee 65
Atlanta v. Gate City Gas Light Co., 71 Ga., 106 ...... 56
American Railway Express Co. v. Commenwealth of
Kentucky, 273 U. S., 269, 71 L. Ed., 639. ...... 65
Bullock v. State of Florida, 254 U. S., 513, 65 L. Ed, 380 42
Brooks-Scanion v. Railroad Commission, 251 U. S., 396,
OPM MR WEE ae cries si enkcs hee: 23
Brooklyn L. Ins. Co. v. Dutcher, 95 U. S., 269, 24 1.
spe, tg ET FOIE cheGe LSE 52
Index of Cases Cited (Continued)
Consolidated Turnpike Co. v. Norfolk, etc., R. Co., 228
a ee oe es as Oe a
Chenango Bridge Company v. Binghamton Bridge Co., 18
L. Ed., 137, 70 U. S., OE as dds ps CRAKS Fie
L. Ed., 576 . RELL RKO SaE SEAMS LER SATbeebec ike <
Cleveland v. Cleveland City R. Co., 194 U. S., 517, 48 L.
WO I 56 8 As pk i vate bss Uo na
L. Ed., "854 SS BE a ea eg eee T OS a
Charleston Consolidated Ry. & Lighting Co. v. City Coun-
cil of Charleston. 92 S. C., 127. 20... cece cacs,
City R. Co. v. Citizens St. Ry. Co., 166 U. S., 557, 41
Re MUNG RINE see ane 04 hii Ki es Wei chs
City of Portsmouth v. Va. Ry. & Power Co., 141 Va., 54,
39 ALL. R., 1510 Oe GES She 50 5565 6 URS AAKSD dp
Central Railroad, etc., Co. v. Georgia, 92 U. S., 665, 23
Be OR DS POE ii ek ee
Chicago Title, etc., Co. v. Doyle, 259 Ill, 489, 102 N. E,
7 ee, B,C SD, AO. Se.
Toe.
Chicago M. & St. Paul R. R. Co, v. Minneapolis C. & C.
_ Asso., 247 U. S., 490, 62 L. Ed, 1229 ..........
L. Ed., 170 Gk s UC KNeRRS ica awl oho Cock.
Chicago v. Sheldon, 9 Wall., 50, 19 L. Ed., 594 ......
Chicago Bus Co. v. Chicag:: Stage Co., 287 Ill., 320, 122
EY SES |: ESS Ren EI cre Tce ears
C. & N. W. Ry. Co. v. R. R. Com. of Wisconsin, 156
Wes, Oy tee a Oe oh ea
Kaen Oe oe ee es
Christman v. Miller (Cal. 1905), 107 U. S., 313, 49 L.
WRG OE 6s ooo ep ak Fd
se
Pacs
37
37
Index of Cases Cited (Continued)
District of Columbia v. Gallaher, 124 U. S., 505, 31 L.
MME PPS Ss oe iaks See voli vi dieee se.
Detroit v. Detroit Citizens’ St. Ry. Co., 184 U. S., ....,
-sclo-otrnoon nacelle ETT Ee te re
Day v. United States, 245 U. S., 159, 62 L. Ed., 219 ..
Edwards v. Kearzey, 96 U.S., 601 ..................
Franklin Telegraph Co. v. Harrison, 145 U. S., 459, 37
as yang. Cal aa Ce een ee ee
Mee Oe We ONL ee
Gibbs v. Consolidated Gas Co., 130 U. S., 396, 32 L. Ed.,
Great Northern R. Co. v. Donaldson (Wash. 1918), 246 .
U. S., 121, 38 S. Ct., 230, 62 L. M4, G06. 3.
Georgia Railway & Power Co. vy. Decatur, 262 U. S.,
sue, tachi, apna Canna BEE EO TEED EEC a
Gates v, Boston & N. Y. A. L. R. R. Co., 53 Conn., 333,
Pe Si ie er ea
Interstate Consol. St. R. Co. v. Massachusetts, 52 L. Ed.,
BP ee vs bons crane cdkey
Pace
22
71
Index of Cases Cited (Continued)
Pace
Illinois Trust & Saving Bank v. Doud, 105 Fed., 123, 52
Se Sey Sake | Ar oer er eer y ere 42
Jack v. Williams, 113 Fed., 823 (145 Bg BOR) wwedess 23
Jolly v. Martin, 120 S. C., 317 2... cc cee eens e eens 55
Jackson v. State, 280 S. W., 202, 103 Tex. Cr., 318,
certiorari denied, 46 S. Ct., 474, 271 U. S., 661,
ee A eM ey wath deseo - 71
Keokuk & W. R. Co. v. Missouri, 152 U. S., 301, 38 L.
SENSE A ee A eter ye ora ame 38
Lincoln & K. Bank v. Richardson, 1 Me. 79 (10 Am.
RE apne hee ene ory Ter ee 56
Lake Shore & M. S. R. Co. v. Ohio, 173 U. S., 285, 43
ES Se Rr ee eee 54
Lenawee County Gas & E. Co. v. City of Adrian, ....
Mich., ...., 176 N. W., 590, 10 A. L. R., 1328... 53
Louisville Water Co. v. Clark, 143 U. S., 1, 36 L. Ed., 55 38
Milwaukee Electric Ry. & Light Co. v. State of Wis-
consitt, 25210. S., 100, 64 L. Ed. 476 ..........6. 24
Municipal Securities Corp. v. Kansas City, 246 U. S., 63,
re OO 8. i ics ass paca o. 65
Muscatine Lighting Co. vy. Muscatine, 256 Fed., 929 ... 62
Michigan R. Co. v. Lansing, 260 Fed., 322 .......... 58
Moorehead v. Union Light, Heat & P. Co., 225 Fed.,920 61
Memphis, etc., Ry. Co. v. Berry, 112 U. S., 609; 28 L.
FR - LAASses eraser gine Cee tC tee aoe 37
Mercantile Trust Co. v. Denver et al., 161 Fed., 769 .. 56
Minneapolis v. Minneapolis St. Ry. Co., 215 U. S., 417,
OE eS RCH pet pane args ere Gn rs ae 56
Missouri Pac. R. R. Co. v. Kansas, 216 U. S., 262, 54
Be WE oa Sse pees es
Minneapolis & St. Louis Ry. Co. v. Minnesota, 186
U. S,, 257, 46 L. Ed, TS) 2.2... ec cess, aes ae
Mt. Carmel Public Utility & S. Co. v. Public Utility
Com., 297 Ti., 303, 21 A. L. R., 132. 6... cease. 43
Minneapolis, etc., R. Co. v. Gardner, 177 U. S., 332, 44 ata
U. B. GLa By 798 ccc icc teeseeesete cess $B 4
Maine Cent. R. Co. v. Maine, 96 U. S., 499, 24 U. S. (L.
iv
McKell v. C. & O. Rwy., 175 Fed., 321 .
McCandliss v. R. R. Co., 38 S. C., 103
Morawetz, Priv. Corp., S., 23.
New York Elec. Co. v. Empire City Subway Co., 235 U.
S., 179, 59 L. Ed., 184
Newton v. Carbery, 5 Cranch, C. C., 632
Northern Illinois L. & T. Co. v. Illinois Commerce Co.,
302 Ill., 11, 234 N. E., 132
Norfolk & W. R. Co. v. West Virginia, 236 U. S., 605,
59 L. Ed., 745
Northern R. R. Co. v. North Dakota, 59 L. Ed., 735 .
New Orleans Gas Light Co. v. La. Light, etc., Mfg. Co.,
U. S., 29 L. Ed., 516
New York ex rel. New York & Queens Gas Co. v. Mc-
Call et al., 245 U. S., 345, 62 L. Ed., 337
New York ex rel. Woodhaven Gas Light Co. v. Public
Service Com., 269 U. S., 244, 70 L. Ed., 255 ....
Newton v. Consolidated Gas Co., 258 U. S., 165, 66 L.
Ed., 538
Ottumwa R & Light Co. v. Ottumwa, lows, 173 N. W.,
270
Old Colony Trust Co. v. Omaha, 230 U. S., 100, 57 L.
Ed., 1410
Pomeroy Eq. Jur., Sec. 446
Perkins v. Sanders, 56 Miss., 732
Ed., 647
Peo. v. Colo. Title & Trust Co. (Colo.), 178 Pac., 6 es
Potwin Place v. Topeka R. Co., 51 Kan., 609, 37 Am.
Index of Cases Cited (Continued)
Paige v. Schenectady R. Co., 178 N. Y., 102 .........
Pullman’s Palace Car Co. v. Missouri Pac. R. Co., 115
U. S., 587, 29 U. S. (L. Bd.), 499 «2.020005...
Puget Sound Traction, Light & Power Co. v. Reynolds,
244 U. S., 574, 61 L. Ed, 1325 ... 6... cece ees
Potter-Matlock Trust Co. v. Warren County, Ky., 207
FO ik Soe pV hae s 63 Oh CEE eines
Prentis v. Atlantic Coast Line Ry. Co., 211 U. S., 210,
53 U.S. (Le. Ed.), 190 2... cece ewe ese eee eeees
Pendergast v. N. ¥. Tel. Co., 262 U. S,, 43, 67 L.
Quinby v. Public Service Commission, 3 A. L. R., 685,
Be ee | epee ree rere terres
Railroad Commission v. Eastern Texas Railroad Co.,
264 U. S., 79, 68 L. Ed., 569 2.0... cece n eee eees
R. R. Commission of California v. Los Angeles R. Corp.,
74 L. Ed., 113 (No. 4, Adv. Opinion) ........
Railroad Company v. Gibbes Treasury, 27 S. C., 385 ..
Rochester R. R. v. City of Rochester, 205 U. S., 236, 51
he Re Rr terre TRO Sry rere er
Railroad Commission v. Railroad Co., 74 S. C., 80 ....
Rutland Marble Co. v. Ripley, 10 Wall. (U. S.), 339, 19
ig” Ck... ager eee ere tear e st yee
St. Louis & San Francisco Ry. Co. v. Gill, 156 U. S., 649,
Doe Re | eee ee errr se eee ree
South Bound Railway Co. v. Burton, 67 S. E., 515, 46
1 ATT iii c. Gara segs
Spartanburg v. S. C. Gas & Elec. Co., 130 S. C., 125...
hts Pinte Ah OBR Cask hie
Shields v. Ohio, 95 U. S., 319, 24 U. S. (L. Ed.), 357
St. Louis, etc. Ry. Co. v. Berry, 113 U. S., 465, 28 U. S.
i MS OS ci Ge
Index of Cases Cited (Continued)
vii
Pace
Slidell v. Crumdjean, 111 U. S., 412... ccc cecseceeeee
State v. Dodge City, M. & T. Ry. Co., 53 Kan., 377, 36
Ae ae eee cine ck obbsandesbucieess | we
Southern Railway Co. v. Hatchett, 174 Ky., 463, 192 .
S. W., 695, L. R. A., 1917-D, 1105 ...... 6.0 0ees 46
State ex rel. Bridgeton v. Bridgeton & M. Trac. Co., 62
N. J. L., $92,458 L. R. A., 887 occ ces e eee caees 46
State ex rel. Grinsfelder v. Spokane St. Ry. Co., 19 Wash.,
BE EE as GO vac pa ve cWe Ure bixaeneben 46
St. Cloud Public Service Co. v. City of St. Cloud, 265
ie ROU gp | Se ee 53
Sumter Gas & Power Co. v. Sumter, 282 Fed., 931 .... 54
State, Carlton v. Dawson, 22 Ind., 272 .........0.0005 56
St. Clair County Turnpike Co. v. Illinois, 96 U. S., 63,
Oe UE ek ao civ dagn de bon wa ca vbas KS 56
Southern Wis. Ry. Co. v. Madison, 59 L. Ed., 739 ..... 57
Southern Iowa Electric Co. v. Chariton, 255 U. S., 539,
OD Ea Pe abd} chew aentcss \edsaiueesees se 58
‘Tomlinson v. Jessup, 82 U. §., 454, 21 L, Ed, 204 .. 32
Texas v. Central Oil Co. (C. C. A. 8th) 914 Fed., 1, 25
Se Gh, PE a veh nc hbNh cb cde enteuwueesss 70
Texas & Pac. v. City of Marshall, 136 U. S., 393 ...... 69
Thompson v. Schenectady R. Co., 65 C. C. A., 325, 131
Pee ois tda kone sacked bho ken ebeuls geese 47
Terry v. Sou. Express Co., 141 S. E., 144 .......00055 50
Thomas v. West Jersey R. R. Co., 101 U. S., 71 ....... 51
peed Hee. See By. & Gas o., P. U. R., 1922-C.,
MO Gee ee iens ccep wens ss pase ¥eancaund cokes 48
Tomlinson v. Branch, 15 Wall., 460 ............00085 38
United Fuel Gas Co. v. Railroad Commission of Ky.
BF Bij es Oo be Bg SOO 6 i cu edkce Soy seces +
United States v. Lehigh Valley R. Co., 220 U. S., 357,
SP ta: MURS s vac web vKA GAs Kae wud ce Ee eaee hawk 49
United States v. Delaware L. & W. R. Co, 238 U. S.,
Bal, OP ha Ts BOOS ois os bi MRWiaaeeaebeyawes oo. 49
Index of Cases Cited (Continued)
Pag
U. S. v. Johnston (N. Y.), 45 S. Ct., 496, 268 U. S., 220,
fae, eee ey ere re ee ee Eee 71
United States v. Gleason, 175 U. S., 588, 44 L, Ed., 284 59
Sais Hanke & RR cM ARePReb aces poo SERRE ACERS 70
Union Pac. R. v. C, R. I. & P., 163 U. S., 564, 41 L. Ed.,
Uniee Pac R. Co. v. Chicago, R. I. & P. R. Co., 163 U.
De BA G0 Es TAA Se i svaxsiicscsecasesscctecs 55
Van Hoffman vy. City of Quincy, 4 Id., 535 ........... 57
Wabash, St. Louis, etc. Ry. Co. v. Ham, 114 U. S., 587,
Be i Bi oka deh aks ia ptecndho dey css 38
White v. Hart, 13 Wall., 653 .......ccccceeeeeeees 56
Whalen v. Baltimore & Ohio Ry. Co., 112 Md., 197, 12
Bi Bs Tag PE 5 1A 65508 Ce ND Pee sanc cu ane sess 56
Western Union Tel. Co. v. Pen. Co. (C. C. A.), 129 Fed.,
eA LAA ONS op KdSY EAEAHAN ROADS hohe 8000 66
Weld v. Gas & Elec. Light Com., 197 Mass., 556, 84 N.
ee PE AA Shi oi do ekas CAN cb hss h eked £0455 00> 23
Woodhaven Gas Light Co. v. Public Service Commission
of N. Y., 269 U. S., 244, 70 L. Ed., 255 ......... 24
Yazoo, etc., R. C. v. Adams, 180 U. S. L., 45 U.S. (L.
gO scab U1 capdee Cheese niebugars doavess 38
viii
Supreme Court of the United States
OCTOBER TERM, 1929
No. 528
BROAD RIVER POWER SOMPANY, COLUMBIA
RAILWAY, GAS AND ELECTRIC COMPANY,
ano F. D. CAMPBELL, Perrrionsrs,
versus
STATE OF SOUTH CAROLINA, Ex Ret., Jonn M.
Dantex, Arrornty Genera, Crry or CoLumaia,
Town oF Arpen, Town or Eau Carre, Co-
LuMBIA CoLLEecr, Curcora COLLEGE FOR
Women, Dr. W. B. Burney, Nort
Conrumara Lanp Company, THE
RarLRoaD COMMISSION AND THE
Co.umsBra ScHoor Boarp
Joun M. Dantet,
Attorney General,
Corprz Pacs,
Asst. Attorney General,
Irvine F. Betser,
C. T, Graypon,
W. S. Neuson,
E. W. Mutuins,
H. N. Epmunps,
Solicitors for Respondents.
A
INTRODUCTORY SUMMARY
The issue in this case is whether the City of Columbia and
vicinity shall be deprived of electric street railway service.
_ The Columbia Railway, Gas & Electric Company (chartered
. as “The Columbia Electric Street Railway, Light & Power Com.
pany”) carried on the combined electric street railway, light
and power business, under said charter from the date of its in-
corporation in 1891, until shortly after its stock was acquired
by the Broad River Power Company in 1924. In July, 1925, the
companies had the old company execute a deed purporting to
transfer to the Power Company all the so-called electric light
and power (and gas) properties—thus taking approximately
$6,000,000.00 net worth of property from the old company,
without consideration, and leaving it with only the street cars
and railway tracks—and thereafter, in March, 1927, abandoned —
the electric railway service altogether.
- The Railroad Commission (in July, 1927), and the Supreme
Court of South Carolina (in July, 1929), ordered the com- |
panies to restore the service.
We submit that this judgment should be affirmed, upon the
ra aeeteay oie’. Aedes 7 pala ma
gem The Companies, which must be treated as one public
service corporation, are under charter obligation to operate the
service, in that the charter, especially as supplemented by the
City franchise, imposes a duty on the company to operate said
service, and embraces the electric railway as well as the electric
light and power service, the attempted separation being merely
pretensive and fictitious; hence the companies are bound to
perform all the services authorized as long as they retain any
of the benefits of the charter-franchise. (United Fuel Gas Com-
pany v. R. R. Com. of Ky., 278 U. S., 300; 73 L. Ed, 390,
and cases cited; also Sporiaxburg v. S.C. Gas & E. Co., 130
S. C., 125.) Be
4
Broap Riv. Pwr. Co., Erc., et al. v. Statgor S.C. 5
(2) The companies are bound by franchise contract with the
City of Columbia to operate the service, as directed by City
Council, regardless of alleged losses. (Henderson Water Power
Co. v. Corp. Com. of N. C., 278 U. S., 282; 70 L. Ed., 273.
Columbus R. P. & L. Co. v. Columbus, 249 U. S., 399; 63 L.
Ed., 669, and cases cited. Sportanburg v. Spartanburg Gas &
Elec. Co., 130 S. C., 125.)
(3) The companies are bound by express contract with the
various development companies providing for the continued
of the service. (Franklin Tel. Co. v. Harrison, 145
U. S., 459; 36 L. Ed., 775. McKell v. C. & O. R. R., 175 Fed.,
321 [C. C. A., 6th].)
(4) The Street Railway service need not be operated at a
loss, but could be made to yield a fair return if honestly operated,
the attempt to ab-ndon the street railway service being the cul-
mination of a well-designed scheme to get rid of this branch of
the franchise—so as to sell securities at a better rate, and to make
increased profits fron the electric light and power phase of the
franchise.
We submit that these positions are overwhelmingly sustained
by the record and by the authorities.
This case does not involve rates. It involves the bold, deter-
mined, high-handed attempt of a public service corporation to
abandon an entire branch of the service authorized by its char-
ter—in violation of charter and contract obligations, against the
protest of the State and in disregard of the Railroad Commis-
sion.
RR tae OE, RS mate
6 Broap Rwv. Pwr. Co., Erc., et al. u State or S. C.
B
STATEMENT OF FACTS
(Power Company Organized in 1924 to Acquire Colum-
bia Railway, Gas & Electric Company and Then Aban-
don Street Railway Service.)
The Broad River Power Company was organized in 1924 for
the purpose of acquiring and holding the stock in the Columbia
Railway, Gas & Electric Company (R., 837), (Ex. 27), which
had operated the combined electric street railway, light and
power business in the City of Columbia, S. C., and vicinity,
under State and City franchise, since 1891 (R., 873), (Ex.
27). This purpose was accomplished by the General Gas &
Electric Company of New York, which had acquired the stock
in the Columbia Railway, Gas & Electric Company, contributing
said Columbia Railway, Gas & Electric Company stock as a
capital stock contribution to the Broad River Power Company,
and receiving in exchange therefor stock in the Power Com-
pany (R., 672-676).
During this period (1923-1924) the annual operating reve-
nue attributed to the so-called “Electric Department” (about $1,-
000,000.00), in statements published by the Broad River Power
Company, was approximately four times the operating expenses
(about $250,000.00) for such department (Ex. A-25, R.,
1122).
After this period the companies had the same officers from
President on down through bookkeeper, and also the same of-
fices in the City of Columbia and in the City of New York (R.,
1049-1057), (Ex. 6-7-8-9, McF.).
The Broad River Power Company then undertook to separate
the electric street railway branch of the business by having the
Columbia Railway, Gas & Electric Company transfer to the
Broad River Power Company, in July, 1925, without valuable
consideration (R., 418, 634-635), all the so-called electric light
and power (and gas) properties, having a net equity in ap
praised value of approximately $6,000,000.00, thus leaving
a Broap Riv. Pwr. Co., Erc., et al. v. Statzor S.C. 7
only the street cars and tracks in the name of the Columbia
Railway, Gas & Electric Company (R., 1070-1118), (Ex.
A-11). This transfer purported to have been made in pursu-
ance of the so-called Merger Act, which was passed in March
of the 1925 session of the South Carolina Legslature, at the
instance of the companies, for the ostensible purpose of au-
thorizing the Columbia Railway, Gas & Electric Company and
its subsidiaries to merge into the Broad River Power Com-
pany (R., 806). Thereafter the Broad River Power Company
claims to have advanced operating funds to the Columbia Rail-
way, Gas & Electric Company, without security (R., 398,
1024).
After this the Columbia Railway, Gas & Electric Company in
March, 1927, ceased electric street railway service altogether,
later advancing upon the plea of lack of funds (R., 1048), and
excessive competition from jitneys and buses (R., 21, 1048).
It was afterwards discovered that the Broad River Power
Company had during this period contributed at least $19,000-
.00 in cash to the supposedly competing bus company (R., 408,
776-778).
During the progress of this suit the appellant companies had
the Columbia Railway, Gas & Electric Company file a voluntary
petition in bankruptcy, listing its assets at $50,444.09, and its
liabilities at $3,267,978.75, and obtained a temporary stay or-
der against the prosecution of this suit (R., 101). The District
Court, and also the Circuit Court of Appeals of the Fourth
Circuit, ruled that the company had no right to go into bank-
ruptcy, and revoked the temporary stay order. (See 25 F. [2nd]
329, and 27 F. [2nd] 52.)
Under these circumstances it was found and ruled by the
South Carolina R. R. Commission, by the Special Referee, and
also by the South Carolina Supreme Court, that the Columbia
Railway, Gas & Electric Company had been converted into a
mere instrumentality or agency of the Broad River Power Com-
pany, and that the two corporations, for the purposes of this
case, must be treated as having been merged into one public
service corporation.
|
EERE
Re ST sa tae
8 Broap Rw. Pwr. Co., Erc., et al. vu Stare or S. C.
(Columbia Railway, Gas & Electric Company Oran- oe
ized in 1891 to Carty on Electric Street Railway, Light
and Power Business.) ;
The Columbia Railway, Gas & Electric Company was created
by Special act of the South Carolina Legislature, dated De-
cember 16, 1891, under the name of Columbia Electric Street
Railway, Light & Power Company (R., 809), the name being
thereafter changed by amendment in 1911 to Columbia Rail-
way, Gas & Electric Company (R., 15, F., 20).
This act authorized the company, as its name implied, to
carry on the electric street railway, electric light, electric power
(and gas) business in the City of Columbia and vicinity (R.,
809). These powers in part had formerly been conferred upon
different companies for various periods, but this act authorized
the consolidation of two of these companies and the purchase of
the other, and conferred upon the one company for a period of
fifty years all these powers which had formerly been granted to
the several companies (R., 809-819).
The powers thus acquired by the Columbia Electric Street
Railway, Light & Power Company included the powers (for-
merly conferred upon the Congaree Gas & Electric Company) to
make, manufacture, sell and distribute electricity (and gas)
and to erect the necessary poles and wires and other equipment
therefor (R., 813-817) ; also the powers (formerly conferred
upon the Columbia Electric Street and Suburban Railway and
Electric Power Company) to operate electric street railway
service in the City of Columbia and vicinity with electric power,
with consent of Columbia City Council, and to provide or con-
tract for electric power for any and all purposes (R., 811-813).
The power to carry on the electric street railway and power
branch of its operations was conditioned, among other things,
upon the company’s commencing operations within five years
and upon obtaining the consent of Columbia City Council (R.,
812). This consent was obtained under ordinances expressly |
providing it should be the duty of the company to run their cars
daily and/or as required by City Council (R., 835).
Broap Riv. Pwr. Co., Erc., et al. v. Stateor S.C. 9
The original authorized capital stock of the company was
__ * $75,000.00, and the duration of the charter granted by this act
was fifty years.
The company duly accepted the charter, effected the con-
solidation and the purchase authorized, and commenced its
operations thereunder, and the old companies ceased to exist
(Ex. 10, p. 13). Under this charter the company acquired and
constructed electric power plants and sub-stations, electric street
railway lines, electric poles and wires and rights-of-way (R.,
653-656), always using the electric poles and wires and rights-
of-way in connection with the electric light and power business
as well as for the electric street railway service (R., 300-372,
405-406), and generally developed and conducted its electric
street railway, light and power business as one public utility
business, up to the time of the alleged separation above men-
tioned (R., 17, 489-510). The company also increased its capi-
tal stock under this charter from time to time—$500,000.00 in
1899; $1,600,000.00 in 1905, and to $3,000,000.00 in 1911
(that is, twenty thousand shares of common, $2,000,000, and
one thousand shares of preferred $1,000,000) (Ex. 10).
Throughout this period and down to the alleged separation
above referred to, the income from all sources of the com-
panies’ operations was carried in a common fund, and all ex-
penditures were made from this common fund (R., 654-656).
It is now impossible to ascertain whether the companies’ power
plants and electric system were constructed more from the pro-
ceeds of the so-called electric railway department or from the
so-called electric department (R., 656).
The consolidated company was also . ranted the right by
special act of the South Carolina Legislature to construct and
maintain a dam across the Congaree River near the confluence
of the Broad and Saluda Rivers at Columbia (S. C. Stat. 1912,
p. 779, Ex. 10, p. 55).
Exhibit 10, which is the report on the Columbia Railway, Gas
& Electric Company, prepared by the counsel for the purchasers
in 1924, particularly called attention at page 10 under the gen-
eral discussion of “Primary Franchise” to the ordinance pro-
viding the obligation to run the cars.
~-
10 Broap Riv. Pwr. Co., Erc., et al. v. State or §. C.
Since the Act of 1891, there has been no other public utility
operating in this community.
Hence, it is our contention—and it was so found by the South
Carolina Supreme Court and also by the South Carolina Rail-
road Commission—that the charter, especially when taken in
connection with city ordinances and development company con-
tracts, imposes a positive duty to operate the electric railway
service, and also that, under the charter, and in view of the
operation and development of the system, the electric railway
is inseparably linked with the electric light and power phases
of the franchise.
(Franchise For Operation in Columbia Obtained Under
Ordinances Specifically Requiring Daily Operation.)
The fifty (50) year state charter as above explained required
the consent of Columbia City Council, as a condition for the op-
eration of the electric street railway service. The Company, by its
president, filed a written application on September 13, 1892,
asking for such consent (R., 832-833), and submitted an ordi-
nance to accomplish that purpose. City Council granted the
petition and by ordinance dated October 11, 1892, prescribed
the terms upon which such consent was given. This ordinance
complete is embodied in the Record in Section 561 (old Section
360), Section 562 (old Section 361), p. 838, and Section 565
(old Section 362), p. 840.
This ordinance in effect reapplied the old ordinances regu-
lating the Columbia Street Railway Company (Section 360),
and authorized the use of electricity as motive power (Section
361) and the erecting of poles and the hanging of wires thereon,
and expressly reserved to the City Council “the right to regulate
by ordinance the manner of operating said electric railway . . .
by such further enactments as by their judgments the public
welfare may demand.” (Section 362, p. 840.)
The ordinances which were thus reapplied for the Columbia
Electric Street Railway, Light and Power Company, provided
for the laying of the tracks and the paving as directed by City oe
Council (Section 560 [old Section 349]), and also “that it
should be the duty of the Company on week days to run a cat”
Broap Riv. Pwr. Co., Erc., et al. v. State or S.C. 11
for: at least every hour from 7 A. M. to 9 P. M.”
- (Section 553 [old Section 352], R., 835), and specially pre-
scribed a “Penalty for Failure to Run” “if the said company
should neglect or refuse to run their passenger cars as herein
. « .” (Section 555 [old Section 354], R., 836),
and also reserved the right of amendment of the ordinance to
City Council (Section 560 [old Section 359], R., 837).
- From time to time thereafter various ordinances were enacted
by City Council regulating the operation of the street railway
service, some being according to our view of a police nature and
some of a contractual character (R., 839-845).
Under these ordinances, many of which are set forth in the
record on pages 830 to 845, the Company constructed and
operated its electric railway tracks, together with the electric
poles and wires comprising its electric street railway system
(R., 490-492). The poles and wires constructed and acquired
under this franchise, and used in connecton wth the electric
street railway operations, are now being used by the Broad River
Power Company in connection with its electric light and power
business (R., 405-406, 396).
The last ordinance apparently granting to the company the
right to lay tracks on the City streets was enacted on the 23rd
day of August, 1921 (R., 845). This ordinance, as was the case
with all prior ordinances of the same character, contained the
provision : “Provided further that the above privileges are upon
the express condition that the said company shall comply with
all the rules, regulations and ordinances of the City of Columbia,
now of force or hereafter to be enacted, relating to the con-
struction of street railways and the operation of the same” (R.,
845).
‘On January 24, 1928, during the progress of this suit, Co-
lumbia City Council passed an amendatory ordinance directing
the companies to run their cars on all their lines leading into and
from the City of Columbia at least on a thirty minute schedule
from 6 A. M. to 11 P. M. daily, and to institute and maintain
the said schedule in constant operation (R., 849-850).
- It is our contention and it was so found by the S. C. Supreme
Court; that these ordinances and the operation under them. by
42 Broap Rwv. Pwr. Co., Erc., et al. vu. State or S.C.
the Company, particularly when coupled with the provisions of
the state charter, constitute a supplementary and secondary
franchise contract with the City of Columbia specifically re-
quiring the operation of the electric railway service, at least for
the fifty year charter life of the company, regardless of alleged
losses. sities
(Electric Railway System Extended under Contracts
with Development Companies Providing for Continued
Operation. )
In the extension and development of its electric railway,
light and power business, which occurred coincidentally with
the growth of the community, the Company acquired various
suburban lines and rights-of-way, and entered into various
contracts with land development companies requiring opera-
tion of the electric railway service.
In 1900 the Company acquired the line of railway with its
rights-of-way, privileges and appurtenances which had been
constructed about 1896 by the Columbia and Eau Claire Elec-
tric Railway Company to serve the adjacent communities of
Hyatts Park and Eau Claire (R., 297, 848). In 1902 the Com-
pany leased from the Columbia Land and Investment Company
a line of electric railway, constructed into the village of Shan-
don, for a period of 99 years from date. This lease provided,
among other things, that the Company would “during said
period continuously operate said line of railway by running at
least one car per hour each way over the same between 7 :30 a.
m. to 8 p. m. daily” (R., 864-868). The Company afterwards
acquired this tract of land in fee by deed executed in pursuance
of said lease.
In 1906 the Company entered into a contract with the North
Columbia Land Company for the acquisition of a line which
had been constructed by the Hyatt Improvement Company,
and for the construction and maintenance of a proposed exten-
sion to said line. This contract provided that after such convey-
ance and construction the Company would “thenceforth main-—
tain and keep it in good condition and repair and run and
operate street railway cars over the said line and extension
connection with its lines of street railway in and near the said
S BRroap Rrv. Pwr. Co., Erc., et al. v. Stavtor S.C. 13
City of Columbia on convenient and reasonable schedules of
got less than one car for every hour from eight o’clock in the
- mofning to eight o'clock at night, and as much later and
oftener:as travel will warrant of each day . . .” (R., 851-
854). A subsequent similar contract was entered into with the
Shandon Annex Company May 30, 1910 (R., 855-857). In re-
liance upon this contract and agreement Dr. W. B. Burney
gave the right-of-way through his property and contributed
$6,000 in cash to the expenses of the construction of the line
(R., 858-860).
In 1912 also the Company acquired the line of electric rail-
way, together with all franchises, righ‘s-of-way, and appurte-
nances, which had been constructed by the Suburban Transit
Company into the community then known as Colonial Heights,
now a part of the village of Eau Claire (R., 869-870). This
Suburban Transit Company line had been constructed and oper-
ated in connection with the sale and development of the said
community by the Suburban Homes Company, which had sold
the lots under guarantee to furnish electric railway transporta-
tion (R., 353-363). The Suburban Transit Company had also
obtained a special grant from the City of Columbia under ordi-
nances providing among other things that “in consideration of
the privileges and franchises herein granted, the Suburban
Transit Company hereby covenants and agrees to conform to
all the regulations and ordinances of the City of Columbia”
(R., 840-842).
All these various lines of electric railway were operated by
the company from the dates of their acquisition as parts and
parcel of their one system, the charter having authorized the
extension of the lines “five miles into the country.” The rights
of-way and poles have always been used and are now being used
for carrying the electricity sold for light and power, as well as
for the operation of the electric railway system.
Practically all of the surrounding communities of the City
of Columbia were built up along these lines of electric railway
and are dependent thereon for public transportation. Much of
the property in these communities was bought and sold in
ee reliance upon the continuance of the electric railway service in
14 Broap Rw. Pwr. Co., Erc., et al. v. State or S.C.
accordance with the contracts above mentioned. (See Test. —
C. M. Scott, R., 309-321; Mrs. S. Y. Riddle, R., 336-341; W.
M. Addison, R., 353-363; W. F. Cleveland, R., 372-380; W.
M. Mason, R., 382.) tt
The Columbia College and Chicora College for Women
chose college sites relying upon the continuance of the electric
railway service under these contracts. (Test. of E. O. Watson,
R., 346 and Dr. S. C. Byrd, R., 321.)
It is our position, and it was so found by the South Carolina
Supreme Court, that these contracts, having been made in pur-
suance of its charter purposes, were intended for the benefit of
the public, were relied upon by the public, are valid and subsist-
ing and enforceable in this proceeding.
Company’s General Business Profitable, but Electric
Railway Service Neglected.
The company’s public business as a whole has always been
successful (See Exhibits A-28, A-25, R., 1122, A-41, R,
1126).
“The net earnings” of the company (that is, as we under-
stand, the net operating earnings) during the last few years of
operation of the combined electric street railway, light and
power (and gas) service, as stated in Broad River Power
Company advertisements for the sale of its bonds (Exhibits
27-30, 14-16 McF.) were as follows:
Year ending June 30, 1923 .........+- $661,501.00
Year ending June 30, 1924 .......-.+> 759,516.00
Year ending Dec. 31, 1924 ........-+- 876,382.00
Year ending Dec. 31, 1925 ......++++s 937,740.00
At the time of the so-called transfer and separation berein-
above mentioned, that is, in July, 1925, the appraised value
of the property sought to be transferred amounted to $11,406,-
723.43 against which the liabilities amounted to $7,053,211.88,
thus leaving a net equity in the property of $4,353,511.55
(R., 635). Also the franchises were valued at $1,561,000.0, |
thus making the total equity in the assets so attempted tobe
conveyed $5,914,511.55 (R., 635). For this equity no :
able consideration was paid (R., 418, 635).
Broa Rw. Pwr. Co., Erc., et al. v. State or S.C. 15
After this transfer the Columbia Railway Gas & Electric
_ Company was left with total current assets amounting to $75,-
145.00, with current liabilities of $99,224.48, thus leaving a
net deficiency of $24,078.56 (See Ex. A-26, R., 1123).
_ Following the deflation of 1920-1921 the Columbia Rail-
way, Gas & Electric Company had a strike in 1922 of its
motormen and conductors (R., 731). After this strike the
company allowed its system to be seriously undermaintained
(R., 735), and the gross income attributed to the service
immediately decreased by approximately one-half (R., 732).
The record contains no evidence that the company made any
_ effort to conciliate its workmen or the people who largely patron-
ized the service (See R., 731-732).
After the so-called transfer and separation above mentioned
the companies began an active campaign to abandon the electric
railway service.
While the companies were complaining to the Railroad Com-
mission that it was impossible to operate the service success-
fully, on account of the jitney and bus competion their of-
ficers were at the same time encouraging the citizens of the
adjacent communities of Colonial Heights and Eau Claire to
allow the bus company to enter (R., 356-7), and also actually
contributed cash amounting to at least $19,000.00 to the oper-
ating expenses of the supposedly competing bus company (R.,
774-781). The company was also declining to receive patro-
nage offered (R., 363-365) and charging electric power to the
so-called railway department at a rate of 36 2/3% higher than
the rate charged to other power customers (R., 624).
The effect of these causes is shown by the following state-
ment of the gross income of the so-called railway department
taken from the companies’ ee ene: (Ex.
A-19, J. W. W.).
16 Broap Rwv. Pwr. Co., Erc., et al. v. State or S. C.
Year Income
DO se vic ds Hine G aed SHS $158,000.00
MODE ii5 eek Seika a en Bas gen woken eh 100,000.00
Throughout this period the income attributed to the so-
called electric department steadily and rapidly decreased (R.,
872) (Ex. 29). The population of the City of Columbia has
increased from approximately ten or fifteen thousand in 1890
(R., 508) to something over fifty thousand (50,000) at the
present time in the City proper with a total population of some-
thing over seventy thousand (70,000) in the territory which
would be served by the street railway system.
During the years 1923 and 1924 the operating revenue
attributed to the so-called electric department as compared with
the operating expenses was as follows (Ex. A-25, R., 1122):
1923 , 1924
Operating revenue ........-- $955,734.00 $1, 139,678.00
expenses ........:: 249,252.00 253,092.00
No part of the income derived from the fixed assets belong-
ing to the company was credited to the so-called “railway de-
After the so-called separation the Broad River Power Com-
pany charged the Columbia Railway Gas & Electric Company
not only for power consumed but also for “pole rental,” that is,
for the use of the poles which had formerly been constructed for
the benefit of the electric railway service (R., 396). But no
credit was given to the Railway Department for the $6,000,-
000.00 net worth of property which the Broad River Power
Company had taken from the Columbia Railway, Gas & Elec-
tric Company without consideration (Ex. A-12-19, R., 1118
1119).
Mr. J. P. Campbell, Treasurer of the companies, also testi-
fied that from the very outset they determined to eliminate
the street railway branch of the service, if they found they
could not operate it at a profit, “if it were possible to do 30”
(R., 678-679).
After this alleged separation the Broad River Power Com-
pany claims to have advanced op~..iting funds totalling ap
proximately $115,000.00 to the Columbia Railway, Gas &
Broap Rv. Pwr. Co., Erc., et al. v. Srare or S. Cc FF
Electric Company (R., 1024) for power and other expenses.
_ "These advances were made apparently by exchange of checks
but were simply charges on the books and no evidence of the
indebtedness or due date or rate of interest was agreed upon
or fixed as between the companies (R., 398, 414, 1024).
The “net earnings” attributed to the Broad River Power
Company, as shown by its statements published in connection
with the sale of its bonds, covering largely the period since the
so-called separation were as follows (See Exhibits 29, 31, A.,
10, R., 1070):
Year ending March 31, 1926
Year ending August 31, 1926
Year ending December 31, 1927
Throughout the period during which the company claims
to have sustained operating losses on the so-called Railway
Department the company’s own statements, as published, upon
analysis show that the earnings have been amply sufficient to
pay handsome dividends on the stock.
The balance available (after paying operating and mainte-
nance expenses, taxes and interest) for the years 1920 and
1921 (See Ex. A-29 J. W. W. and A-30 J. W. W.) and for the
years 1922, 1923 and 1924 (Ex. 27) ; for the Columbia Rail-
way, Gas & Electric Company, and the dividends actually paid
and surplus set aside by the Broad River Power Company in
1925-1926 (Ex. A-41 J. W. W.) were as follows:
$ 121,159.16
236,028.36
215,072.00
364,403.00
1924 (June 30th) 418,751.00
1925 (Dividends—Common and Preferred) .. 334,545.00
1926 (Dividends—Common and Preferred) .. 349,682.00
$ 2,667,043.11
Based upon the foregoing facts and upon the Record herein
it is our contention, and it was so found by the South Carolina
Supreme Court and by the Railroad Commission, that the Elec-
18 Broap Rw. Pwr Co. Erc., etal. vu. Srateor S.C
tric Railway service in itself could with proper management be
made to yield a fair return, but that the companies have sought
to separate and abandon that branch of its service for the rea-
son that the same is relatively more troublesome and less profit-
able, and at the same time to retain the extraordinarily easy and
profitable electric light and power phases of its franchise.
REVIEW OF LEGAL PROCEEDINGS
The Company ceased the electric railway operations on
March 11, 1927. This action was taken without making any
application to the Railroad Commission or to any public body
whatsoever (R., 413).
The Railroad Commission after several hearings handed
down an order on July 28, 1927, directing the restoration of
service. The Commission found among other things that the
alleged separation and transfer was an act of bad faith and
invalid, and that the companies had not made an honest effort
to operate the electric railway service (R., 930-831).
No petition for a rehearing from this final order of the
Railroad Commission was ever filed by the Companies, as re-
quired by the South Carolina Act regulating the procedure be-
fore the public utility commission. (See S. C. Acts of 1922,
p. 938.) The Columbia Railway, Gas & Electric Company,
however, instituted a suit in the United States District Court
for the Eastern District of South Carolina for an injunction
against the enforcement of the Railroad Commission’s order
and for a temporary restraining order. The temporary restrain-
ing order sought was refused by Judge Cochran, upon the
ground among others that the Company had failed to make the
application for rehearing as required by this Act. (See Co-
lumbia Railway, Gas & Electric Company v. Blease, et al. [U.
S. D. C. E. D. S. C., 1927].)
This case was commenced on July 19, 1927. After certain
motions and demurrers had been argued at the October, 1927,
term of the Supreme Court, an order of reference was made
by the Court on January 11, 1928, and the referee fixed Jan-
uary 25, 1928, for the first reference. )
‘Broa Riv. Pwr. Co., Erc., et al. v. State or §.C. 19
On January 24, 1928, the Columbia Railway, Gas & Electric
~ Company, as hereinbefore stated, attempted to go into volun-
tary bankruptcy and obtained a temporary stay order against
this suit. The Broad River Power Company likewise appeared
and joined in the relief prayed for by the attempted bankrupt.
Among the liabilities listed were “contracts to operate with the
North Columbia Land Company, Columbia Land and Invest-
ment Company and Shandon Annex Company.”
These attempts were finally defeated by the decision of the
District Court (25 F. (2nd), 329), which was subsequently
affirmed by the Circuit Court of Appeals of the Fourth Circuit
rendered in June, 1928 (27 F. (2nd), 52), to which we
earnestly invite the attention of this Court as admirably stating
the duties and functions of this public service corporation.
The evidence was then taken, the case was argued at the Oc-
tober, 1928, term, the Court handed down its decision on July
9, 1929, ordering the restoration of service upon the grounds
hereinbefore stated in the Introductory Summary. A petition
for rehearing filed by the companies was dismissed on Septem-
ber 25, 1929.
It was not held by the Supreme Court, and it is not contended
by us—as is suggested by petitioners—that the usual permis-
sive charter alone, of an insolvent railroad or street railway
company, requires continued operation at a loss. We submit,
however, that we have no such situation in this case. We have
here a solvent, prosperous, corporation, chartered as an electric
street railway, light and power company, and bound by charter
and contract obligations to operate its electric railway service,
seeking to evade the more troublesome but to keep the more
profitable phases of its business.
a
20 Broan Riv. Pwr. Co., Erc., et al. v. STATE OF co >
c
ARGUMENT
We will discuss the legal questions involved herein in the
following order :
. I. Charter Franchise Obligation to Operate, Arising from
Retaining Benefits of Charter.
II. The Obligation to Operate Created by the City Ordi-
nances.
III. The Obligation under the Development Company Con-
tracts.
IV. The Question of the Necessity of Operation at a Loss,
While we discuss these grounds separately they should all be
considered together. Any one is sufficient to sustain the judg-
ment, but they should also be considered as mutually supple-
mentary.
We are attaching hereto in the Appendix the companies’
charter franchise, granted by the Act of 1891 and supplemented
by the City ordinances and other contracts, as we conceive it
should be construed. :
_ Broap Riv. Pwr. Co., Erc., et al. v. Sratz or S.C. 21
The Act of 1891 conferred not only (1) the right to be a
corporation, but (2) also the right to do the things therein au-
thorized, that is, to carry on the Electric-street-railway-light-
and-power (and gas) business for a period of fifty years.
That is, it conferred a franchise both (1) to be a corporation,
and also (2) to carry on these public services,
Of course this was, in effect, the creation de novo of a new
corporation deriving all its powers and franchises from this
Act. (12 R. C. L., 220; 7 R. C. L., 1770; Atlantic & Gulf R.
R. Co. v. State of Georgia, 98 U. S., 359; 25 L. Ed., 185;
Rochester R. R. v. City of Rochester, 205 U. S., 236; 51 L.
Ed., 784; Railroad Company v. Gibbes Treasury, 27 S. C.,
385 ; Interstate Consol. St. R. Co. v. Massachusetts, 52 L., Ed.,
111.)
This Act was not in any sense “the usual permissive charter
of a Railroad Company” referred to in the T'exas case (264
U. S., 79), and the other cases (254 U. S., 513, 65 L. Ed.,
380), relied upon by appellants. It was an act of incorporation.
It was a franchise to carry on the electric street railway, light
and power (and gas) business. It was a franchise to Operate an
electric street railway service in the City of Columbia and vi-
cinity in connection with such business. It bore an intimate re-
lationship to the City of Columbia (which was the State’s
capital city), and was subject to the ordinances enacted by City
Council, which expressly imposed tie duty on the company to
operate the electric railway service.
(Public Service Corporations Bound to Perform Serv-
ices Authorized as Long as Charter Retained. )
_ The principle that a public service corporation is bound, if
required by the State, to perform all the public services au-
thorized by its charter franchise, as long as it retains any of
the benefits of said franchise, is well established and recog-_
nized by all the authorities,
22 Broap Riv. Pwr. Co., Erc., et al. v. State or S. C.
See United Fuel Gas Co. v. R. R. Com. of Ky., 278 U. S,,
300, 73 L. Ed., 390, and cases cited.
26 C. J., 1014; 14 C. J., 110; 12 R. C. L., 199-200; Me.
Candless vu. R. R. Co., 38 S. C., 103; Harmon v. Cola. &
Greenville R. R. Co., 28 S. C., 401; C. & O. R. R. Co. v. Pub,
Serv. Com., 242 U. S., 603. 61 L. Ed., 603.
“The primary duty of a public utility is to serve on
reasonable terms all those who desire the service it ren-
ders. This duty does not permit it to pick and choose and
to serve only those portions of the territory which it finds
most profitable, leaving the remainder to get along with-
out the service which it alone is in a position to give.”
United Fuel Gas Company v. Railroad Commission
of Ky., 278 U. S., 300, 73 L. Ed., 390.
“This duty,” said the United States Supreme Court in
Chesapeake & O, R. R. Co. v. Public Service Commission,
242 U. S., 603, 61 L. Ed., 603, “arises out of the acceptance
and enjoyment of the powers and privileges granted by
the state, and endures so long as they are retained. It
represents a part of what the company undertakes to do
in return for them, and its performance cannot be
avoided merely because it will be attended by some pecu-
niary loss . . .” (Pages 522-523.)
“When a railroad company accepts a charter,” as our own
Court said in the case of Harmon v. Columbia & Greenville
Railroad Co., 28 S. C., 401, “it assumes the performance of
all the duties to the public which are imposed upon it by the
charter or the general laws of the State. . . . It cannot
be permitted to enjoy the benefits conferred by its char-
ter without incurring the responsibilities incident there-
to” (page 404).
“Such companies,” as was said by this Court in Gibbes v. Con-
solidated Gas Co., 130 U. S., 396, 32 L. Ed., 979 and 985,
“entered the streets . . . , under their charters, in the ex-
ercise of the equivalent of the power of eminent domain, and
are to be held as having assumed an obligation to fulfill
the public purposes to subserve which they were incor: _
porated.” 2
‘Broap Riv. Pwr. Co., Erc., et al. v. Strate or S.C. 23
“A public service corporation, by accepting the rights and
privileges conferred by its act of incorporation and by entering
into the enjoyment of its franchises, undertakes to perform
all the public duties required of it. . . .”
Weld v. Gas & Elec. Light Com., 197 Mass., 556, 84 N. E.,
101, quoted in Attorney General v. Haverhill Gas Light Co.,
215 Mass., 394, Ann. Cas., 1914-C., 1266.
The principle really involved in this case is that a public
service corporation may be required to perform or maintain
a service embraced within its charter, even at a loss if need be,
as long as it retains any of the benefits of the cha. ver. (245 U.
S., 345; 62 L. Ed., 337; 269 U. S., 244, 70 L. Ed., 255; 216
U. S., 262, 54 L. Ed., 472; 206 U. S., 1, 51 L. Ed., 933.) It
does not question the principle that an insolvent railroad com-
pany with a purely permissive charter, when it can only operate
at a continued loss, and when it has entirely given up its charter
rights, cannot be required to continue operation—which prin-
ciple so strenuously contended for by appellants, is cheerfully
conceded by us. This concession fully explains all the cases
chiefly relied on by appellants where abandonment was really
allowed. (The Texas case, 254 U. S., 79, 68 L. Ed, ——,
Jack v. Williams, 145 Fed., 281; Charleston ‘Isle of Palms
Tr. Co. v. Shealy, 266 Fed., 406.) We are not unmindful of
the decision in the Brooks-Scanlon case, 251 U. S., 396, 64
L. Ed., 323, but that case did not involve a public service cor-
poration. This of course makes a vital difference. Where how-
ever a public service corporation retains the benefits of its
franchise, it is uniformly held that it may be compelled to per-
form, the question of profit or loss being referred to its opera-
tions, as a whole.
This principle is illustrated by the following among innu-
merable other cases :
United Fuel Gas Company v. Railroad Commission of Ky.,
278 U. S., 300, 73 L. Ed., 390; New York ex rel. New York
& Queens Gas Co. v. McCall, et al. (Public Service Commis-
24 Broap Riv. Pwr. Co., Erc., et al. vu. Stare or S. C.
sion of the State of N. Y.), 245 U. S., 345, 62 L. Ed., 337;
Missouri Pac. R. R. Co. v. Kansas, 216 VU. S., 262, 54 L. Ed.,
472; A. C. L. R. Co. v. North Carolina Corp. Commission,
206 U. S., 1, 51 L. Ed., 933; Woodhaven Gas Light Co. v. ©
Public Service Commission of N. Y., 269 U. S., 244, 70 L.
Ed., 255; Puget Sound Traction, Light & Power Co. v.
Reynolds, 244 U. S., 574, 61 L. Ed., 1325; St. Lowis & San
Francisco Ry. Co. v. Gill, 156 U. S., 649, 39 L. Ed., 567;
Fort Smith Light & T. Co. v. Bourland, 267 U. S., 330, 69
L, Ed., 631; Milwaukee Electric Ry. & Light Co. v. State of
Wisconsin, 252 U. S., 100; 64 L. Ed., 476; Chesapeake & 0.
R. Co. v. Public Serv. Com., 242 U. S., 603; 61 L. Ed., 520:
Brownell, et al. v. Old Colony R. R. Co. (Mass.), 29 L. R. A,
169; Gibbes v. Consolidated Gas Company, 130 U. S., 396, 32
L. Ed., 979; Attorney General, ex rel. Corporation Com. v.
Haverhill Gas Light Co., 215 Mass., 394, Annotated cases
1914-C, p. 1266; Harmon uv. Columbia & Greenville R. R. Co.,
28 S. C., 401; McCandliss v. R. R. Co., 38 S. C., 103; Spar-
tanburg v. S.C. Gas & E. Co., 130 S. C., 125,
In the above cited United Fuel Gas Company case, 278 U. S.,
300; 73 L. Ed., 390, the appelant company was a West Virginia
corporation, which also did a gas business in the State of Ken-
tucky. After an order had been passed by the Railroad Com-
mission of Kentucky reducing the previous prevailing rates in
certain cities in Kentucky to 80% of the former rate, the com-
pany then organized a subsidiary company in Kentucky known
as the Warfield Company, which thereafter petitioned the com-
mission to permit higher rates or in the alternative to permit it
to withdraw such service from these cities. The Commission
denied the petition, and the District Court affirmed the action
of the Commission.
It was claimed by the company that this required it to operate
at a loss and deprived it of its property without due process.
This Court held that the Company could lawfully be required
to continue to perform the public service in question as long as
it continued to do business in the State.
“The primary duty of a public utility,” said the Court, “is
to serve on reasonable terms all those who desire the service
Broap Ruv. Pwr. Co., Erc., et al. v. Stare or S.C. 25
‘it renders. This duty does not permit it to pick and choose
and to serve only those portions of the territory which
it finds most profitable, leaving the remainder to get
along without the service which it alone is in a position
to give.” . . . and if a public service company may not
refuse to serve a territory where the return is reasonable, or
even in some circumstances where the return is inadequate,
but that on its total related business is sufficient (Atlantic
Coast Line R. Co. v. North Carolina Corp. Com., supra, at p.
25 (51 L. Ed., 944; 27 Sup. Ct. Rep., 585; 11 Ann. Cas., 398).
Missouri P. R. Co. v. Kansas, supra, at p. 277 (54 L. Ed., 478;
30 Sup. Ct. Rep., 330), it goes without saying that it may not
use its privileged position, in conjunction with the demand
which it has created, as a weapon to control rates by threatening
to discontinue that part of its service if it does not receive the
rate demanded. The powers of the state, so far as the Federal
Constitution is concerned, were not exceeded by the action of
the commission, in compelling appellants to continue their serv-
ice in the cities named so long as they continued to do business
in other parts of the state, and to there avail of the extraordinary
privileges extended to public utilities” (p. 396).
In this case the Court also held that in calculating the rate
to be allowed, the regulated gas business should be credited
with 50% of the proceeds of the sale of the gasoline extracted
in the earlier stages of its production, though the company
had organized a subsidiary company to handle such gasoline
and had reserved for itself only one-eighth of the profits
from the gasoline end of the business. This ruling was based
upon the ground that there was a joint use made of the prop-
erty of the company in the production of the different phases
of its operation, and that consequently the profits therefrom
must be fairly prorated. “In the production of this gasoline.
therefore, joint use is made of the gas, gas field and certain
facilities of the gas company. This joint use requires a pro-
rating of joint investment and expenses, and of the re-
turn from the enterprise” (page 400-401).
This case is important not only as showing the obligation of
a public service company to continue its service, but as showing
26 Broap Rw. Pwr. Co., Erc., et al. uv. State or S, C.
the duty of such a company to prorate the income to the various
branches of its operation from property jointly used for such
branches,
’ The principles of the foregoing cases were applied by the
South Carolina Supreme Court in the case of Spartanburg v.
S. C. Gas & Electric Company, 130 S. C., 125, the case which
in principle is on all fours with the case at bar. In that case the
company was denied the right to abandon the electric railway
‘service because the franchise to carry on the several services
had been originally granted by one ordinance.
The ordinance conferring the franchise in that case was in
all essential respects identical with the State charter (particu-
lariy when supplemented by the Columbia City ordinances) con-
ferring the franchise in the case at bar. The ordinance in Section
1 conferred the right “to construct, maintain and operate a
street railway” in Spartanburg and “to operate the same by
electricity . . ., including erection and building of poles
sad: wired ie the street,” and in Section 12 also granted “the
right and authority to lay, construct, erect, maintain and oper-
ate, pipes, poles and wires through . . . the streets of the
City of Spartanburg for the purpose of supplying light, power
and heat through the nieans of electricity, gas, or either of them,
to the public . . .,” and in Section 15 provided that the
duration of the grant “should continue for the period of forty
years from the date hereof.” (Rates were apparently also pro-
vided for in the said ordinance and an acceptance was required,
but for the purposes of this question these facts appear to us to
be entirely immaterial. )
In that case the Company undertook to abandon the electric
railway service alone on account of alleged losses extending
over the period of years from 1918 through 1922 amounting
to ritarly $400,000.00. —
The Supreme Court of South Carolina notwithstanding issued
the writ of mandamus directing the resumption of service, bass
ing its decision upon the inseparability of the electric railway _
from the electric light and power franchise, arising both from
the contract and also from the physical connection of
branches of the service.
Broap Riv. Pwr. Co., Erc., et al. v. Starz or S.C. 27
will be observed,” said the Court, “that three businesses
im its contract. Whatever may be said about the separateness of
the gas franchise, the electric light and power business is linked
to its electric railway business. The respondent admtis that its
electric light and power franchise is valuable and it is a paying
business.
“If the street railway does not pay with all the advantages it
derives from its electric light and power adjunct, then an elec-
tric railway alone must fall. It is inevitable that Spartanburg
must be without a street railway, if the respondent be allowed
to keep the one and destroy the other. They stand or fall together
as an entire contract. It could not be held that if A makes a con-
tract to buy from B a certain tract of land of 100 acres, at
$100.00 per acre, A could force B to reserve 10 acres of bone
and pay him only $9,000.00 for the 90 acres of good land. The
contract is one transaction, and the $1,000.00 paid for the 10
acres of worthless land is not confiscation. The 10 acres may be
separated from the 90 acres, but the railway and power busi-
ness cannot be separated” (pp. 129-130).
We earnestly submit that the reasoning of that case is en-
tirely sound and should be adopted by this Court as it was in the
instant case by the South Carolina Supreme Court.
This decision of the Supreme Court of South Carolina is
entitled to peculiar weight in this case. It was evidently in view
of this decision that the appellant companies, which also ac-
quired the Spartanburg properties there involved (R., 408),
undertook to effect a separation of the electric railway from the
electric light and power business in this case.
The writ of error in this Spartanburg case was dismissed by
the United States Supreme Court on the company’s motion on
November 20, 1924. (See 266 U. S., 639; 69 L. Ed., 482.)
The same principle was applied in the other cases cited above
in the Chesapeake & O. R. Co. case, supra, in which an order
of the commission requiring the company to install and maintain
_ @ passenger service on the branch line was sustained, notwith-
standing the operation of such line would result in a loss,
28 Broap Rwv. Pwr. Co., Erc., et al. vu. State oF S. C.
In the Atlantic Coast Line case, supra, which is one of the _
leading cases on this subject, this Court upheld the power of
the Commission to order the company to put on and maintain
a train so as to make connections with the Southern Railway
at Selma, notwithstanding it was conceded that the operation
ef such connecting train in itself would necessitate a daily loss,
“That power as we have seen,” said the Court, “takes its
origin from the quasi public nature of the business in which the
carrier is engaged, and embraces that business in its entirety
“This is so because, as the primal duty of a carrier is to fur-
nish adequate facilities to the public, that duty may well be com-
pelled, although, by doing so, as an incident some pecuniary loss
from rendering such service may result . .. . As the duty
to furnish necessary facilities is coterminous with the powers
of the corporation, the obligation to discharge that duty must
be considered in connection with the nature and productiveness
of the corporate business as a whole, the charter of the services
required, and the public need for its performance.”
So, we submit that under the principle of this decision the
duty to furnish the electric railway transportation is “cotermin-
ous with the powers of the corporation,” and in considering the
question of whether the company should be ordered to restore
the electric railway business, the Court must consider the “pro-
ductiveness of the corporate business as a whole.”
This decision had followed the case of Minneapolis & St.
Louis Ry. Co. v. State of Minnesota, 186 U. S., 257 ; 46 L. Ed,
1151, in which the Court had upheld a rate on carload lots “pro-
vided the companies are able to earn a fair profit upon their
entire business.”
In the Missouri P. R. Company case, supra, which was also
one of the leading cases on this subject, the Company was
ordered to install a passenger service on a line from Madison,
Kansas, to the Missouri State line, even though such line
could be operated only at a loss. The decision was placed upon
the ground that the duty to operate such service was incidental
Senan Rav. Pwr. Co., Erc., et al. v. Strate or S.C. 29
to the corporate existence of the Company, and the question of
loss must be referred to the entire system. The Court said that
it was not necessary to review the finding of fact by the State
Court as to the earnings of the entire system, even if it had the
power to do so, adding:
“We say this because, when the controversy here pre-
sented is properly analyzed, the first and pivotal question
arising is whether the order complained of did anything
more than command the railroad company to perform a
service which it was incumbent upon it to perform as the
necessary result of the possession and enjoyment of its
charter powers, and which it could not refuse to perform
as long as the charter powers remained and the obliga-
tion which arose from their enjoyment continued to ex-
ist. My
The Court then after comparing the decision in the Atlantic
Coast Line case above discussed, concluded by saying:
“But where a duty which a corporation is obliged to
render is a necessary consequence of the acceptance and
continued enjoyment of its corporate rights, those rights
not having been surrendered by the corporation, other
considerations are, in the nature of things, paramount,
since it cannot be said that an order compelling the per-
formance of such a duty at a pecuniary loss is unreason-
able. To conclude to the contrary would be but to declare
that a corporate charter was purely unilateral ; that is, was
binding in favor of the corporation as to all rights con-
ferred upon it, and was devoid of obligation as to duties
imposed, even although such duties. were the absolute cor-
relative of the rights conferred. . . .” (54 L. Ed,
479-480. )
This case shows the inherent obligation of a public service
corporation to perform the services authorized as the correlative
of the rights conferred. It also indicates the force and effect,
which we submit should be given to the findings of fact by the
State Supreme Court.
30 Broan Riv. Pwr. Co., Erc., et al. v. State or S. C.
In the Puget Sound case, supra (244 U. S., 574), this
Court upheld the order of the Commission, though it was con-
ceded that the order would require the street railway com-
pany to operate certain lines at a loss. The company contended
that it could not be required to operate under the order, par-
ticularly as these lines had formerly belonged to other com-
p»nies whose property had been taken over and consolidated.
“But,” the Court held, “we cannot accede to the suggestion
that the question whether the Commission’s order is confis-
catory or otherwise arbitrary within the inhibition of the 14th
Amendment is to be determined with reference alone to the
Alki, the Fauntleroy, or the Ballard beach lines, These are
and long have been operated by plaintiffs as parts of a
system comprising 200 miles of tracks.”
The Court then held the Northern P. R. Co. v. North
Dakota case inapplicable, saying the case was controlled rather
by St. Louis & S. F. R. Co. v. Gill, 156 U. S., 649, 39 L. Ed.,
567, where it was held:
z . . that the correct test was as to the effect of
dus tet on is Aetenincts anita thon, endl och egce teat
part which was formerly a part of one of the consolidating
roads ; that the company cannot claim the right to earn a
net profit from every mile, section, or other part into
which the road might be divided, nor attack as unjust a
regulation which fixed a rate at which some such part
would be unremunerative; . . .”
This principle was also illustrated and applied in the above
cited Fort Smith case (supra), in which the Company was
required to rebuild and regrade a line even at a loss; also in the
New York & Queens Gas Company case (supra), in which the
Company was required to extend its gas service into a com-
would be inadequate to meet the expenditure required, the
Court saying:
“Corporations which devote their property to a public
use may not pick and choose, serving only the portions of =
Broad Riv. Pwr. Co., Erc., et al. v. S atgor S.C. 31
the territory covered by their franchise which it is pres-
ently profitable for them to serve, and restricting the de-
velopment of the remaining portions by leaving their in-
habitants in discomfort without the service which they
alone can render.”
In this case the Court commented on the fact that it was one
of the “important purposes” of the Commission “to correct
this disposition (of such companies) to serve where it is profit-
able and to neglect where it is not,” and that Courts were
“without authority to substitute for its (the Commission’s)
judgment their views of what may be reasonable and wise.”
To the same effect see the similar Woodhaven Gas Light Co.
case, 269 U. S., 244, 70 L. Ed., 255.
(Charter of 1891 Embraced Electric Railway-Light-
and-Power Service. )
Applying these principles to this case we see that the com-
panies cannot be allowed to abandon the electric railway serv-
ice.
First, the charter, particularly when taken in connection
with the City ordinances enacted in pursuance of its require-
ments, imposed a positive duty to operate. (Clearly the State
charter-franchise must be construed in connection with the
City ordinances. The right to operate in Columbia granted by
the State was conditioned upon obtaining the City’s consent.
This consent was sought and obtained pursuant to said char-
ter, and the charter and ordinances accepted and acted upon
by the company. This of course made the ordinances a part of
the charter powers and obligations. )
_ Now the right acquired by the company ( formerly conferred
upon the Columbia Electric Street and Suburban Railway and
Electric Power Comnpany) “to . . . provide electric power
for any . . . purposes” (Section 5, page 812) and “to
Operate their cars . . . with electric power . . .”
(Section 6) was expressly made subject to the proviso “that
32 Broap Riv. Pwr. Co., Erc., et al. v. State or S. C.
said company begins to operate its railway in said ct; _
within five years” (Section 8).
The ordinances expressly provided, among other things “It
shall be the duty of the company on week days to run a car for
passengers at least every hour from 7:00 a. m. to 9:00 p. m.
. .” and also prescribe a penalty for neglect or refusal
“to run their passengers care as herein provided” (Section 555,
page 836). They further, particularly reserved the right to
City Council to regulate by ordinances the manner of operating
said electric railway and to alter and amend the ordinances re-
lating thereto as in their judgment the public welfare might
demand (Section 565, page 840).
The Act of 1920 (31 Stat., 741-742) now appearing as
Section 5059 of the Code of 1922, Chap. 54, entitled “Street
and Suburban Railways,” provides inter alia, under the cap-
tion “Conditions of Cars—Number—Duties of Railway Com-
mission—Tracks and Structures”—‘“All corporations operat-
ing electric railways shall have and keep im constant oper-
ation a sufficient number of cars, convenient, comfortable and
clean cars, to transport the usual number of persons desiring
transportation.” (Code of 1922, p. 1532.)
The original charter granted to this company was subject,
under the Constitution of 1868 to amendment (Art. 12, Sec.
1), and also likewise under the statutes then in force. (19
Stat., 546) Code 1922, Sec. 4250.
This provision, therefore, became a part of the charter obli-
gations of the company.
See Tomlinson v. Jessup, 82 U. S., 454, 21 L. Ed,
204.
McCandliss v. R. R. Co., 38 S. C., 103 at 113.
Also the effect of the Act of 1891, creating the Columbia
Electric Street Railway, Light & Power Company, was to
confer upon one corporation the consolidated public utility
privileges for this community, the electric railway, electric
light and electric power (and gas). It was a consolidated grant
of electric privileges, street railway, light and power, insepara-
bly linked.
Broap Riv. Pwr. Co,, Etc., et al. . Stare of S.C. 33.
The object of this consolidation was that the public might be
better served with these public utilities. The object was pri-
marily the public benefit. The electric railway privileges were
granted in order that the electric light and power business
might more usefully serve the public; the electric light and
power privileges were granted in order that the electric rail-
way phase might better serve the public. “These special privi-
leges,” as was said by the Circuit Court of Appeals about this
very company (27 F. (2nd) 52, “were conferred upon them
. . + im consideration of their providing facilities for
communication and intercourse with the public.”
Whatever may have been the case before acceptance, we sub-
mit that when the corporation accepted these consolidated
privileges and acted upon them, and built and constructed its
electric power plants, sub-stations, electric lines, poles and other
electric railway facilities, all as parts of one electric business,
it can not now be permitted to separate the electric railway
from the electric light and power phases of the franchise.
Moreover, the acceptance of this charter-franchise from the
State for the operation of this combined public service cer-
tainly created a contract between the State of South Carolina
and the company.
“All Courts at this day are estopped from questioning the
ee
Chenango Bridge Company v. Binghamton Bridge Co., 18
L. ed., 137, at 142, 70 U. S., 51; New Orleans Light Com-
pany v. La, Light, etc., Mfg. Co., 115 U. S., 650, 29 L. Ed., 516.
This being true, it necessarily follows from the nature of a
contract that the company must perform all the services. It is
elementary that a contract must be treated as an entirety.
Thus if a School Board should employ one to teach the sub-
jects of Latin, History, and Mathematics, and furnish to such
teacher a building in which to carry on such instructions, can
it be supposed that the teacher would have the right thereafter
toabandon the teaching of Mathematics if he should find it more
burdensome and less profitable, and yet be allowed to continue
the privilege of teaching Latin and History? The situation
34 Broap Riv. Pwr. Co., Erc., et al. v. State oF S. C.
here is analogous. The company was employed for the purpose
of carrying on the electric street railway, light and power serv-
ices in this community, and the State furnished the company
with the facilities and with its patronage. Can it now reason-
ably be supposed that the company shall be allowed to abandon
the electric street railway branch of its obligations at its option,
and yet continue the privilege of supplying electric light and
power, and still make use of the State franchise and of the
assets and property furnished by the State?
“When a special act of incorporation has been accepted ac-
cording to its terms, . . . a binding contract between
the state on the one hand and the incorporators and cor-
poration on the other results, so that all the rights, duties,
and liabilities expressed or implied in the act attach, and
cannot thereafter be withdrawn or impaired by the state
in violation of the grant or cast off by the incorporators or
the corporation without the consent of the state . . .”
(14 C. J., 110).
Also the record shows, and the South Carolina Supreme
Court found, that the electric railway is inseparably connected
with the electric light and power business, by the manner of
its physical construction and operation as well as by the char-
ter franchise contract.
During the thirty years of joint operation the company
has constructed and/or acquired power plants, sub-stations,
poles and wires and rights-of-way. This property was con-
structed with funds from the joint operation. It obviously can-
not now be separated and used exclusively for electric light
and power purposes.
“This joint use requires a prorating of joint investment
and expenses, and of the return from the joint enter-
prise.”
United Fuel Gas Company v. Railroad Commission of Ky.,
278 U. S., 300, 73 L. Ed., 390.
On account of such construction and joint operation all this
electric system has, we submit, as was said in the Chesapeake
& Ohio case (supra) (about passenger and freight service)
Era
come “devoted to the transportation of passengers as well
as” to the distribution of light and power. “The obligation to
use it for both was imposed by law, and so could not be
ee en ee
. . Company” (page 522).
"We therefore submit that the company is under an obligation
to continue the service—both on account of the language of
the charter (and ordinances) and of the nature and insepara-
bility of the services authorized.
. “To conclude to the contrary would be but to declare
that a corporate charter was purely unilateral ; that is, was
binding in favor of the corporation as to all rights con-
ferred upon it, and was devoid of obligation as to duties
imposed, even although such duties were the absolute cor-
relative of the rights conferred . . . (216 U. S.,
262, 54 L. Ed., at 479).”
If there were any doubt about the construction of this charter,
then we submit that “Grants of franchises are strictly con-
strued in favor of the public . . . Where a grant is sus-
ceptible of two meanings, one restricting and the other extend-
ing the powers under a franchise, that construction is to be
adopted which works the least harm to the state . . .” (26
C. J., 1031-1033).
Cf. Blair v. Chicago, 201 U. S., 400; 50 L. Ed., 801.
FRANCHISES CONSOLIDATED BY ACT OF 1891
We submit there is no merit in the company’s present con-
tention that the franchises were not combined or consolidated
by the Act of 1891.
In this connection we have this striking situation: That
whereas the companies by their joint answer admitted that the
franchises had been consolidated by the Act of 1891 (R., 14),
but claimed that they had been separated under the Merger Act
(R., 23), the companies seem now—after the adverse ruling
by the Referee and the Court as to the attempted separation—
to rely principally on the contention, first injected into the
Ae ete: ENGR she oe
36 Broap Riv. Pwr. Co., Erc., e¢ al. v. Stats or S. C.
case by the report of the Referee, that the franchises were
never consolidated and combined by the Act of 1891. This
represents a significant change of front.
The Act of 1891 by its terms clearly provided for the con-
solidation of the electric street railway and power franchise,
formerly granted to the “Columbia Electric Street and Subur-
ban Railway and Electric Power Company,” with the gas and
electric franchise, formerly granted to the “Congaree Gas &
Electric Company,” and authorized the consolidated company
to purchase the street railway property and franchise (with-
out any electric features) of the Columbia Street Railway
Company. The Act by its terms says that the two first com-
panies “have agreed to consolidate the property, franchises
and privileges owned and held by them,” and then authorized
them to consolidate their property, franchises and privileges
into a new company, the Columbia Electric Street Railway,
Light and Power Company, an entirely new company. (Sec-
tion 1.) The name is different from that of either of the con-
solidating companies and the name is significant as indicating
the business it is to do. It is to be noted that the Act authorized
the consolidation of the two first companies and the purchase
of the other. The Act then said (Section 2) that upon such
consolidation, the consolidated company should “be vested with
all the rights, franchises, powers and privileges conferred upon
the consolidating companies” by the former Acts, and, upon the
purchase of the old Columbia Street Railway Company, “should
be vested with all the rights, powers, franchises and priv-
ileges” .formerly conferred upon that company. The Act
further conferred all these powers constituting this consol-
idated franchises upon the consolidated company for a period
of fifty years, whereas the franchises granted to the former
companies had been limited to thirty years from the dates of
their incorporation respectively (R. 809).
The companies effected the consolidation and the purchase
authorized (see Exhibit 10, p. 13), and thereupon the old com-
panies, as was stated in the “Report” on the company, went — |
“out of existence by reason of the consolidation.” (See Ex-
hibit 10, p. 9.) |
Broap Riv. Pwr. Co., Erc., et al. v. State or S.C. 37
This Act therefore, we submit, clearly created a new cor-
poration, and hence the company derived and held all its powers
thereafter from said Act of incorporation just as though the
old companies had never been created or existed.
“According to the prevailing view statutes providing
for the consolidation of corporations are to be treated as
acts of incorporation, and on consolidation being effected
under their provisions, the constituant companies, unless
such an intention is excluded by the language of the stat-
ute, are deemed to be dissolved, and their powers and
faculties, to the extent authorized, become vested in the
consolidated company as a new corporation created
by the act of consolidation. The new corporation is an
entity distinct from any of its constituents, and
draws its life from the act of consolidation. The fact
that the powers of the new company are conferred
upon it by a reference to the powers and privileges
of the old companies does not affect this result. The
powers are not for that reason, mere continuations of
the powers of the old corporations, nor is the new
corporation, for that reason, any less an entity dis-
tinct from the constituent companies.” ge SE oe
170.)
Citing the following among other authorities:
Clearwater v. Meredith, 1 Wall., 25, 17 U. S. (L. Ed.),
604. Central Railroad, etc., Co. v. Georgia, 92 S. U., 665, 23
U.S. (L. Ed.), 757. Shields v. Ohio, 95 U. S., 319, 24 U.
S. (L. Ed.), 357. Maine Cent. R. Co. v. Maine, 96 U. S., 499,
24U. S. (L. Ed.), 836, Atlantic, etc., R. Co. v. Georgia, 98
U.S., 359, 25 U.S. (L. Ed.), 185. St. Louis, etc., Ry. Co. v.
Berry, 113.U. S., 465, 5 S. Ct., 529, 28 U. S. (L. Ed.), 1055.
Pullman’s Palace Car Co. v. Missouri Pac. R. Co., 115 U. S.,
587, 6 S. Ct., 194, 29 U. S, (L. Ed.), 499. Minneapolis, etc.,
R. Co. v. Gardner, 177 U. S., 332, 30 S. Ct., 656, 44 U. S.
(L. Ed.), 793. Yazoo, etc., R. Co. v. Adams, 180 U. S., 1,
21 S. Ct, 240, 45 U. S. (L. Ed.), 396. Chicago Title, etc.,
Co. v. Doyle, 259 Ill., 489, 102 N. E., 790, 47 L. R. A. (N.
38 Broap Rrv. Pwr. Co., Erc., et al. v. State or S. C.
S.), 1066. Notes: 89 A. S. R., 612,2 L. R. A, 564;3 L. R.
A., 435; 8 L. R. A., 499. Note: 89 A. S. R.,.613, 614.
This principle of law was announced by this Court many
years ago and has become the settled ruling of this Court.
Atlantic, etc., Railroad Co. v. Georgia, 98 U. S., 359, 25 L,
Ed., 185. Memphis, etc., Railroad Co. v. Berry, 112 VU. S., 609,
28 L. Ed., 837. Chesapeake & Ohio Railroad Co. v. Miller,
114 U. S., 176, 29 L. Ed., 121. Wabash, Saint Louis, etc.,
Railroad Company v. Ham, 114 U. S., 587, 29 L. Ed., 235.
Pullman Palace Car Company v. Missouri Pacific Railroad
Co., 115 U. S., 587, 29 L. Ed., 499. Keokuk and W. R. Com-
pany v. Missouri, 152 U. S., 301, 38 L. Ed., 450. Louisville
Water Co. v. Clark, 143 U. S., 1, 36 L. Ed., 55.
In the above cited Atlantic & Gulf R. R. Co. v. Georgia (25
L, Ed., 185), the Court held that as a result of such an act of
consolidation, the consolidated company held its franchises
solely as a result of such consolidated act.
“Tt is therefore, a vital question,” said the Court as to
the consolidation, “what was its effect? Did the consoli-
dated companies become a new corporation, holding its
powers and privileges as such under the Act of 1863? .. .
Looking thus at the Legislative intent appearing in the
consolidation act, we are constrained to the conclusion
that a new corporation was created by the consolidation
effected thereunder in the place and in lieu of the two
companies previously existing, and that whatever fran-
chises, immunities or privileges it possesses, it holds them
solely by virtue of the grant that Act made. That
generally the effect of consolidation, as distinguished
from an union by merger of one company into an-
other, is to work a dissolution of the companies con-
solidating, and to create a new corporation out of the
elements of the former, is asserted in many cases and |
it seems to be a necessary result.”
This Court also in the subsequent case of Rochester v. City
of Rochester, 205 U. S., 236, 51 L. Ed., 784, pointed out that
where the old companies cease to exist the franchises of the —
consolidated company are to be held as having been conferred
Broap Riv. Pwr. Co., Erc., et al. v. Statgor S.C. 39
by the Act of consolidation. The Court in that case also upon
that ground distinguished Tomlinson v. Branch, 15 Wall., 460;
Central R. & Bkg. Co. v. Georgia, 92 U. S., 665, and the
other cases relied upon by petitioners herein, in that in such
cases the old corporations continued “to exist as a corporation
that ground distinguished Tomlinson v. Branch, 15 Wall., 460;
Central R. & Bkg. Co. v. Georgia, 92 U. S., 665, and the
other cases relied upon by petitioners herein, in that in such
cases the old corporations continued “to exist as a corporation
“ owning and operating its property by virtue of its own shar-
ter.”
Also the South Carolina Supreme Court had previously held
in the case of Railroad Co, v. Gibbes Treas. (27 S. C., 385),
in regard to a similar consolidation Act, “the. consolidation,
however, in 1869 dissolved the two original companies and.
created an entirely new company—the appellant—with rights
and privileges not dependent or derived from the charters
of the original companies, but upon the Act authorizing the
consolidation and the law governing corporations at the time.”
It will readily be seen upon examination that all the cases
cited by the appellants (15 Wall., 460, 21 L. Ed., 757; 10
How., 376, 13 L. Ed., 461; 18 Wall., 206, 21 L. Ed., 888; 92
U.S., ...., 23 L. Ed., 757; 92 U. S., 677, 27 L. Ed., 750; 94
U.S., 714, 24 L. Ed., 310; 109 U. S., 104, 27 L. Ed., 872)
are entirely inapplicable to the case at bar, except so far as
they support our position, and may be distinguished upon the
ground that the consolidating companies were expected to
continue to exist with their separate charters, powers and func-
tions.
In considering this question also we call attention to the
fact that franchises are to be strictly construed, and that con-
struction adopted which works the least harm to the public.
(Blair v. Chicago, 201 U. S., 400, 50 L. Ed., 801; North-
western Fertilizer Co. v. Hyde Park, 97 U. S., 659, 24 L. Ed.,
1036; Slidell v. Grandjean, 111 U. S., 412.)
Also it must be noted that in the Missouri P. R. Co. v.
Kansas, 216 U. S., 262, 54 L. Ed., 472; and Puget Sound T.
L. & P. Co. v. Reynolds, 61 L. Ed., 1325, the Court applied
ya
y
40 Broap Riv. Pwr. Co., Erc., et al. v. State or S. C.
the principles as though the companies held all their privileges
under one charter, without even discussing the effect of the
consolidations therein involved. The same principle was applied
by the Massachusetts Supreme Court in the case of Brownell
et al. v. the Old Colony Railroad Co., 29 L.. R. A., 169, where-
in the Court held that the ferry franchise had been blended
with the Railroad Company franchise, and therefore could not
be separately abandoned.
We submit therefore that the Act of 1891 conferred a com-
bined and consolidated franchise upon the company for the
operation of the electric railway, light and power services, de-
riving all its powers and privileges from such Act.
Clearly it was not necessary for the Act to declare in terms
that one service should not be exercised except in connection
with the others. This followed as a necessary result of the
single grant, to the one company. This was the major purpose
of the consolidation—for the greater benefit of the public.
The South Carolina Supreme Court has construed this Act
of 1891 as granting a consolidated franchise for the operation
of the electric street railway, light and power business as one
business. Construction of such State Statute is “a matter
primarily for determination by the local Courts.”
Gilchrist v. Interborough Rapid Transit Co., 279
U. S., 159, 73 L. Ed., 652 (at 664).
Petitioners’ Cases Inapplicable.
Taking it to be established that the electric railway is an
inseparable part of the business operated under the electric rail-
way, light and power franchise of petitioners, we submit, it
is apparent that none of the cases relied upon by the petitioners
are applicable.
Indeed upon analysis all these cases will be found to recog- —
nize the principle that the grantee of a franchise cannot evade
the responsibilities while retaining the benefits thereof. ;
The language of every decision must be interpreted in the =
light of the facts of the case involved. It will be seen that the —
facts of all the cases relied upon and cited by petitioners are
utterly different from the facts in the case at bar.
" Broap Riv. Pwa. Co., Erc., et ol. v. Grater S.C. 41
The case of the Railroad Commission v. Eastern Texas Rail-
road Co., 264 'U. S., 79, 68 L. Ed., 569, relied upon and quoted
extensively by appellants, dealt only with an ordinary steam
railroad, the charter for which had been taken out under a
general law of the State of Texas, and which, of course, con-
tained no electric light or power or other public utility features.
The company had been organized primarily for the purpose of
developing a lumber industry in the section in question, but
about 1917, some time before the commencement of this action,
the supply of timber had been exhausted, the lumber industry
closed, and the people formerly employed therein moved away.
It was conceded by the State of Texas in the United States
Supreme Court that under these circumstances the road could
not be compelled to operate, and this action was really prose-
cuted to recover damages against the company for failure to
operate the road. The opinion is expressly predicated upon the
company’s having the “usual permissive charter of a railroad
company,” which is certainly not the kind of charter which
the petitioners enjoy.
It is needless to elaborate the points of distinction between
that case and the case at bar. Moreover the case recognized
ee ee ce ee
conferred by its charter, the State has power . ;
. . fequire it to provide ... ain tthe
for serving the public even though compliance be attended by
some pecuniary disadvantage.” The decision was expressly based
upon the ground that the company had entirely ceased to exer-
cise the privileges conferred by its charter.
The Brooks-Scanlon Co. v. Railroad Commission, 251 U. S..,
396, 64 L. Ed., 323, referred to in the above Texas case was
a very similar case. There the company involved was organized
primarily to “manufacture and deal in lumber and to carry on
other incidental business.” “The road,” as the Court said, “was
primarily a logging road, but it nay be assumed to have done
business for third persons as a common carrier.” The company
was therefore not in any sense primarily a public service cor-
poration, but was essentially an ordinary private corporation
doing only a small amount of business as a common carrier
incidental to its lumber and logging business. When therefore
42 Broap Rwv. Pwr. Co., Erc., et al. v. State or S. C.
the timber of the company had been cut and there was no
longer any deed of the railway business as “incidental” to its
lumber business, the company was allowed to discontinue the
railway because it was giving up its entire public service
privileges. The Court expressly said:
“Tt is true that if a railroad continues to exercise the
power conferred upon it by a charter from a State, the
State may require it to fulfill any obligation imposed by
the charter, even though fulfillment in that particular may
cause a loss. Missouri P. R. Co. v. Kansas, 216 U. S.,
262, 276, 278; 54 L. Ed., 472, 478, 479; 30 Sup. Ct. Rep.,
330” (page 326).
The Electric Street Railway-Light-and-Power Company here
involved is certainly continuing “to exercise the powers con-
ferred upon it by its charter from the State” and so falls with-
in this principle recognized in the above case.
The case of Bullock v. State of Florida, 254 U. S., 513;
65 L. Ed., 380, also dealt with a logging road, and merely
involved the question of whether a decree for the foreclosure
of a mortgage on such road could properly provide for the
privilege of dismantling. As a matter of fact the decision of
the Supreme Court of Florida (58 Fla., 321, 8 A. L. R., 322),
prohibiting the sale with the privilege of dismantling was not
disturbed by the United States Supreme Court.
The case of the [Ulinois Trust & Saving Bank v. Doud, 105
Fed., 123, 52 L. R. A., 481, relied upon by petitioners really
involved the question of whether one who had advanced money
for the erection of an addition to the power plant of the com-
pany was entitled to a priority in the distribution of the assets
of the corporation which was in the hands of a receiver under
foreclosure proceedings. Therefore the quotation cited by pe-
titioners was obiter dictum.
It was moreover recognized and stated in the opinion that the
franchise of a corporation may be forfeited “for such a misuse
or nonuse” of the powers or privileges contained in its organic
law as “results in a substantial failure to fulfill the design and
purpose of its organization.” Citing many cases (91 Iowa, 517
cae
~ ___ Broa Riv. Pwr. Co., Erc., et al. v. Starz or S.C. 43
1 $2 Ohio State, 487 ; 10 Ohio, 535; 51 Miss., 602; 73 Ill, 541; 5
Ark., 595; 9 Mo. App., 114).
Under the principle of this case we earnestly submit that
the franchise of respondents can be forfeited because the non-
operation of the electric railway certainly “results in a sub-
stantial failure to fulfill the design and purpose of its organiza-
tion.”
The other cases from the United States Court referred to
in some of the decisions relied upon by petitioners, Northern
P. R. Co. v. North Dakota, 236 U. S., 585; 59 L. Ed., 741;
Norfolk & W. R. Co. v. West Virginia, 236 U. S., 605; 59
L. Ed., 745, merely involve the question of the adequacy of
rates fixed by State statutes, and appear to us to be irrelevant—
they do not touch the question of the abandonment of any of
the primary purposes for which the corporation was created.
The same is true of the subsequent case of Chicago M. & St.
Paul R. R. Co. v. Public Utilities Co., 71 L. Ed., 1085; 274 U.
S., 344.
We do not deem it necessary to discuss in detail the other
cases or authorities cited. Mt. Carmel Public Utility & S. Co. v.
Public Utility Com., 297 Ill., 303; 21 A. L. R., 571; Northern
Minos L. & T. Co. v. Illinois Commerce Company, 302 Ill, 11;
234 N. E., 132; Trinidad Electric Trans. Ry. & Gas Co., P. U.
R., 1922-C, 299, further than to say that in none of them does
it appear that an electric railway constructed and operated for
many years under an electric street railway, light and power
(and gas) franchise from City or State has been allowed to be
abandoned.
As to the Mt. Carmel case, 297 Ill., 303, 21 A. L. R., 372,
it appears from the report of the case that the right of the com-
pany to carry on the heating branch of its service was obtained
under a different ordinance from the right to carry on the
other public services. Moreover the case expressly recognizes
the general principle that “a corporation may be required to
fulfill an obligation imposed by its charter even though it may
be done at a loss.” The decision of the case was also based
in part upon the fact that the order of the commission was
not based upon any findings of fact. Nor is there any showing
s
4
4,
44 Broap Rw. Pwa. ©o., Erc., et al. u State or S. C.
in’ the Northern Illinois L. & T. Co. v. Illinois Commerce
Commission, 302 Ill, 11, that the right to carry on the electric
street railway business was a part of any general franchise
granted by the State to carry on such business as a part of its
general electric street railway and power business.
It may be conceded that there are no decisions of this Court
on the precise question here discussed, that is, as to the aban-
donment of the electric railway phase of an electric street
railway, light and power franchise. The Texas Railway Com-
pany case, sura, did not involve any such consolidated fran-
chise, and the Brooks-Scanlon Company was not even a public
service corporation. We think, however, that the weight and
principle of the decisions of this Court hereinbefore cited by us
are against allowing such abandonment.
Public Utility Canno’ Abandon Branch of Charter Pur
poses Because of Loss.
It is argued that this would require the other branches to
make up the loss, and that under the Northern Pacific (236 U.
S., 585), and the Brooks-Scanlon cases (251 U. S., 296), one
class of patrons of a public utility can not be made to pay a
higher rate for the benefit of another class. But this argument
is, we submit, entirely erroneous—the answer to it is perfectly
clear. The owners of the public utility must accept smaller
dividends, must absorb the loss, if they do not choose to
give up the charter. The other branches need not be required
to make up the loss; the other branches need not be required
to pay any higher rate. The Constitution does not guarantee
the owners of a public utility any particular return on their
investment.
Fort Smith L. & T. Co. v. Bourland, 267 U. S.,
330, 69 L. Ed., 631 (saying) :
“A railway may be compelled to continue service of
a branch or part of a line although the operation im
volves aloss. . . . This is true even where the system
as a whole fails to earn a fair return upon the value of
the property.”
Broap Riv. Pwr. Co., Erc., et al. v. Stare or S.C. 45
See also to the same effect Milwaukee Electric Ry.
& P. Co. v. Wisconsin, 252 U. S., 100, 64 L.
Ed., 476, and Woodhaven Gas Light Co., case
269 U. S., 244, 70 L. Ed., 255.
It may be conceded that, if it were merely a question of
rates, the rates cannot be so adjusted as to favor one class of
patrons at the expense of another—which is all that was really
involved in the Northern Pacific case. But this is not a rate
case. The question here is whether a public utility chartered
for certain purposes can abandon one of those purposes while
retaining the benefit of that charter; whether a public utility
can retain the more profitable but escape the present by less
profitable phases of its franchise; whether a public utility can
abandon a public service which it alone is in position to render
and leave the public to suffer.
Can a railroad company abandon its passenger service on
account of loss while retaining the profitable freight business ?
This question has been answered in Missouri Pacific; the
Chesapeake & Ohio, and other cases. The situation here is in
principle identical. Can this Electric street-railway-light-and-
power company—its primary purpose having been clearly in-
dicated in its original name—abandon the electric railway serv-
ice while retaining all the necessary electrical features for its
operation, and permanently deprive the City of Columbia and
community of this essential service? The answer has been em-
phatically given by this Court in the foregoing Atlantic Coast
Line, Missouri Pacific, New York & Queens Gas Co., Wood-
haven Gas Co., Chesapeake & Ohio, and United Fuel
Gas Company, cases—to the effect that (paraphrasing) “the
primary duty of a public utility to serve does not permit it to
pick and choose and serve only where it is most profitable” ;
“leaving the remainder” “in discomfort” “without the service
whieh it alone is in position to give,” and this duty “cannot be
avoided merely because it will be attended by some pecuniary
loss.”
Moreover, even if this were a rate case, then it would be
necessary to appraise the value of the property now devoted to
the electric light and power business, ascertain the contributions
46 Broan Riv. Pwr. Co., Erc., et al. v. State or S. C.
made towards its construction and development in the thirty-
five years of joint operation by the electric railway patrons, and
give that branch a proportionate share of the income attributed
to that property. For certainly the electric railway is a “related
business”’ to the electric light and power business, and as was
held in the United Fuel Gas Company case “This joint use
requires a prorating of joint investment and expenses and of
the return from the joint investment.” (In this connection we
may say it is common knowledge that up till recent years the
electric railway was the major department of such an electric
street railway, light and power business.) We think it apparent
from the record that an excessive proportion of the income
has been of late years attributed to the so-called electric de-
partment to the prejudice of the railway department, and that
if proper credit were given the so-called railway department
would not show any loss.
But, however that may be, we submit,confidently that the
company cannot be allowed to abandon the railway service even
if it concededly could only be operated at a loss. The question of
loss on this service is immaterial as long as the company re-
tains the benefits of the charter. We say this because as was
said in the Atlantic Coast Line and Missouri Pacific cases,
this is “the primal duty” of this company, “coterminous with
the powers of the corporation” (206 U. S., 1), “which it
was incumbent upon it to perform as the necessary result of
the possession and enjoyment of its charter powers, and which
it could not refuse to perform as long as the charter powers
remained” (216 U. S., 262).
It is moreover, we believe, the generally accepted doctrine
in the State Courts, as well as the Federal Courts, as indicated
in the cases already cited, that a public utility company can
give up its franchise only by consent of the State, unless it
is (1) insolvent, and (2) incapable of being operated ex-
cept at a continuing loss.
22 R. C. L., p. 750; State v. Dodge City M. & T. Ry. Co.,
53 Kan., 377, 36 Pac., 747, 42 Am. St. Rep., 295; Gates v.
Boston & N.Y. A. L. R. R. Co., 53 Conn., 333, 5 Atl., 695;
Peo. v. Colo. Title & Trust Co. (Colo.) 178 Pac., 6; Som
Broap Riv. Pwr. Co., Erc., et al. v. State or S.C. 47
Ry. Co. v. Hatchett, 174 Ky., 463, 192 S. W., 695; L. R. A.,
1917-D, 1105; State ex rel. Bridgeton v. Bridgeton & M.
Trac. Co., 62 N. J. L., 592, 45 L. R. A., 837; State ex rel.
Grinsfelder v. Spokane St. Ry. Co., 19 Wash., 518, 41 L.
R. A., 515; Potwin Place v. Topeka R. Co., 51 Kan. 609,
37 Am. St., 312; Paige v. Schenectady R. Co., 178 N. Y.,
102; Thompson v. Schenectady R. Co., 65 C. C. A., 325, 131
Fed., 577; In Re. Loader, 14 Misc., 208, 35 N. Y., Supp.,
996 (pointing out necessity of company coming to terms with
labor).
In the above cited Southern Ry. Co. v. Hatchett case the
Court pointed out that all the principal cases where abandon-
ment has been actually allowed, particularly Jack v. Williams,
113 F., 823 (145 F., 281), turned upon the insolvency and
worthlessness of the company as a whole. This also applies
to the Teras case.
It was evidently in recognition of this doctrine that the
companies here tried to separate the franchise and destroy the
Columbia Railway, Gas & Electric Company, and have now
as a last resort undertaken to argue that the franchise was
never consolidated.
No Valid Separation Under the Merger Act.
There has been no valid separation under the so-called
Merger Act.
‘(It is interesting to note that petitioners while calling the
Act in their answer the “Merger Act” have now begun refer-
ring to it as the “Enabling Act.”)
We respectfully invite the Court’s attention to the con-
current findings of the referee and of the Supreme Court on
this question, which state the facts fully.
The Merger Act was no part of the Canal Settlement. The
Act creating the Canal Commisdion conferred {no power
whatsoever to deal with any attempted separation of the
company’s franchise (see S. C. Acts 1923, p. 828, Acts of
1924, p. 1839). Mr. Barnett, Secretary of the Canal Commis-
sion, testified that the commission expressly declined to embody
any reference to the Merger Act in the Canal Settlement Bill
(see R. 782-787), the Bill being thereafter duly passed by the
BEI VIM
48 Broap Rw. Pwr. Co., Erc., et al. v. State or S. C.
Legislature and containing no reference to the Merger Act
or any alleged separation (see Acts of 1925, pp. 852-859).
. Moreover the Merger Act itself did not purport to authorize
any alleged separation, but on the contrary expressly provided
that any such merger or sale as authorized should be “made
without prejudice . . . to any rights of any creditors
. . .«,” and also that the transferee of the franchises should
hold them “subject . . . to the restrictions, requirements
and conditions in the said franchises contained” (R. 807).
The Act was plainly intended to authorize the transfer or
merger of the properties and franchise without in any wise re-
leasing the companies from any of their obligations. It was so
found by the South Carolina Supreme Court. No doubt it was
the intention of petitioners to utilize such act as a justification
for the attempted separation and abandonment of the electric
railway service, but such purpose does not appear in the
language of the Act.
But if there was any ambiguity in the Act itself, such
ambiguity should be resolved in favor of the public and
against the company.
“It may be,” as was said by Mf. Justice Day in the case
of Blair v. Chicago, 201 U. S., 400, 50 L. Ed. 801, “that
the very ambiguity of the Act was the means of securing its
passage. Legislative grants of this character should be in
such unequivocal form of expression that the Legislative mind
may be distinctly impressed with their character and import,
in order that the privileges may be intelligently granted or pur-
posely withheld. It is a matter of common knowledge that
grants of this character are usually prepared by those inter-
ested in them, and submitted to the Legislature with a view
to obtain from such bodies the most liberal grant of privileges
which they are willing to give. This is one among many rea-
sons why they are to be strictly construed. . . .
This principle has been declared axiomatic as a doctrine
of this Court. Northwestern Fertilizing Co. v. Hyde Park,
97 U. S., 659, 666, 24 L. Ed., 1036, 1038. In Slidell v. Grand-
jean, 111 U. S., 412, 438, 28 L. Ed., 321, 330; 4 Sup. Ct.
Rep., 475, it is declared a wise doctrine: “It serves to de
feat any purpose concealed by the skillful use of the terms to |
:
4
Broap Riv. Pwr. Co., Erc., et al. v. STATE OF S.C. 49
| accomplish something not apparent on the face of the Act,
and thus sanctions only open dealing with legislatives bodies
” (p. 831).
Moreover under the facts in this case, as shown by the
record, and as found by the South Carolina Supreme Court,
there has clearly been no valid separation, but on the con-
trary a merger of these two companies.
The president of the Broad River Power Company in the
advertisements relative to the sale of bonds referred to the
Broad River Power Company as controlling and operating
the electric railway property and service (see Ex. 27) and
having acquired “through merger” the properties of Columbia
Railway, Gas & Electric Company (see Ex. 15 McF), and
petitioners’ counsel also referred to the transaction as a merger
(see Ex. 2 R., p. 808).
Also the facts that the Broad River Power Company owned
all the common stock, and practically all the preferred stock,
had the same officers and offices and took practically all the
assets from the one company and put them in the name of
the other, without any consideration, leaving the old company
in a helpless condition (Ex. A-26) and then undertook to
advance certain operating funds to the old company, without
security or due date, and thereafter undertook to put the Co-
lumbia Railway, Gas & Electric Company into bankruptcy
so as to put a stop to this proceeding—all these facts show
that the Columbia Railway, Gas & Electric Company has
been treated as a mere instrumentality or agency or depart-
ment of the Broad River Power Company.
Under these circumstances we think there has clearly been
a merger of the two companies in accordance with the fre-
quently expressed opinions of this Court and of the South
Carolina Supreme Court.
Davis v. Alexander (U. S.), 70 L. Ed., 186.
Chicago M. & St. P. R. Co. v. Minneapolis C. &
C. Association, 247 U. S., 490, 62 L. Ed., 1229.
United States v. Lehigh Valley R. Co., 220 U. S.,
357, 55 L. Ed., 458, 463, 31 Sup. Ct. Rep., 387.
50 Broap Riv. Pwr. Co., Erc., et al. v. State oF S. c.
United States v. Delaware L. & W. R. Co., 238 U.
- §., 516, 59 L. Ed., 1438, 35 Sup. Ct. Rep., 873.
Brabham v. So. Express Co., 124 S. C., 157.
Brown v. Am. Ry. Express Co., 128 S. C., 428.
Huggins v. Com. Sav. Bank, 140 S. E., 177.
Terry v. Sou. Exp. Co., 141 S. E., 144.
In the case of Chicago M. & St. P. R. Co. v. Minneapolis C.
& C. Association, 247 U. S., 490, 62 L. Ed., 1229, the Court
applied the above principle and held that two holding corpora-
tions, which owned all the stock in a subsidiary company
operating in the City of Chicago, must be held to direct-
ly own the property which was in the name of the com-
pany so controlled. In other words, the Court completely dis-
regarded the corporate fiction. The Court in that case, after
pointing out that the mere ownership of capital stock alone
did not of itself create an identity of corporate interest be-
tween two companies, or create the relation of principal and
agent or representative between the two, continued: “While
the statements of the law thus relied upon are satisfactory in
the connection in which they were used, they have been plain-
ly and repeatedly held not applicable where stock ownership
has been restorted to, not for the purpose of participating in
the affairs of a corporation in the normal and usual manner,
but for the purpose, as in this case, of controlling a subsidiary
company so that it may be used as a mere agency or instru-
mentality of the owning company or companies. United States
v. Lehigh Valley R. Co., 220 U. S., 357, 55 L. Ed,, 458, 463,
31 Sup. Ct. Rep., 387, and United States v. Delaware L. & W.
R. Co., 238 U. S., 516, 59 L. Ed., 1438, 35 Sup. Ct. Rep,
873. In such a case the Courts will not permit themselves to
be blinded or deceived by mere forms of law, but, regardless
of fictions, will deal with the substance of the transaction in-
volved as if the corporate agency did not exist and as the
justice of the case may require.”
When we take into consideration the principles laid down
in the above case in connection with the facts of this case,
it must be apparent that the two corporations are merged
and the Broad River Power Company is liable for the obliga-
- Broap Riv, Pwr. Co., Erc., et al. v. Strate or S.C. 51
tion to perform the electric railway service. Certainly there
has been either an express or implied assumption of the lia-
bilities of the Columbia Railway, Gas & Electric Company
(as in the Brabham case, 124 S. C., 157, and in the Huggins
case, 140 S. E., 177), or a taking over of its business (as in
the Terry Packing Company case, 141 S. E., 144, and the
American Railway Express Company v. Commonwealth of
Kentucky case, 273 U. S., 269, 71 L. Ed., 639, therein cited)
or the utilization of the electric railway company as a mere
agency or instrumentality of the power company (as in the
Minneapolis case, 62 L. Ed., 1229). Any one or more of these
reasons are sufficient to constitute a legal merger under the
authorities cited.
This Court and other Courts have frequently expressed em-
phatic disapproval of such devices on the part of public service
corporations. See Thomas v. West Jersey R. R. Co., 101 U.
S., 71, 83 (25: 950, 952); Gibbs v. Consolidated Gas Co.,
130 U. S., 396, 32 L. Ed., 985 (saying about a similar device
to be relieved of the obligation to furnish gas service: “There
is nothing upon which to rest the suggestion that the companies
were unable to serve the consumers, while the record shows,
on the other hand, that they simply desired to make
larger profits on whatever gas they might furnish. . . .”
United Fuel Gas Company v. R. R. Commission of Ky., 278
U. S., 300, 73 L. Ed., 390, saying:
“We need not labor the point that a public service corpo-
ration may not make a rate confiscatory by reducing its net
earnings through the device of a contract unduly favoring
a subsidiary or a corporation owned by its own stock-
holders. Cf. Chicago & G. T. R. Co. v. Wellman, 143 U. S.,
339, 345, 36 L. Ed., 170, 179, 12 Sup. Ct. Rep., 400.”
The chief significance in this attempted separation, it seems
to us, consists in the admission thereir. implied that otherwise
the franchise was indivisible—the electric railway and the
Ce AER de dene
52 Broan Riv. Pwr. Co., Erc., et al. v. State or S. C.
that the electric railway is tied to the electric light and
power franchise can be conceived than this unlawful,
fictitious attempt to separate them.
No such desperate effort would have been made to accom-
plish a separation—a similar attempt having just been defeated
in the company’s allied Spartanburg properties by the Spar-
tamburg decision—but that the company realized the unity of
its franchise.
' “Generally speaking, the practical interpretation of a
contract by the parties to it for any considerable period of
time before it comes to be the subject of controversy is
deemed of great, if not controlling, influence. Chicago v.
Sheldon, 9 Wall., 50, 54, 19 L. Ed., 594, 596. Brooklyn
L. Ins. Co. v. Dutcher, 95 U. S., 269, 273, 24 L. Ed., 410,
411. District of Columbia v. Gallaher, 124 U. S., 505, 510,
31 L. Ed., 526, 527,8 Sup. Ct. Rep. 585 . . .”
Old Colony Trust Co. v. Omaha, 230 U. S., 100, 57
L. Ed., 1410, at 1417.
Broan Riv. Pwr. Co., Erc., et al. v. Strate or S.C. 53
THE OBLIGATION CREATED BY THE COLUMBIA
ORDINANCES
We submit that the acceptance of the Columbia Ordinances
also created a supplemental franchise contract to operate, re-
gardless of loss.
The situation was in substance that the company having
received directly from the State by its charter the primary
franchise to operate in the City of Columbia, for a period of
fifty (50) years, provided it could obtain the consent of Co-
lumbia City Council, thereupon applied to Council for such
consent. This consent was given by ordinances granting the
right to the company to operate, provided it should operate
daily and regularly and as directed by City Council. The accept-
ance and operation, under these ordinances, we submit, clearly
constitute a contract on the part of the company to operate at
least for the fifty (50) year period of the company’s charter.
The requirement that the company obtain the consent of
City Council recognized the right of Council to contract as to
the terms upon which such consent should be given. (See Co-
lumbus R. P. & Light Co. v. Columbus, 249 U. S., 399; 63
L. Ed., 669; St. Cloud Public Service Co. v. City of St. Cloud,
265 U. S., ; 68 L. Ed., 1050; Quinby v. Public Service
Commission, 3 A. L. R., 685; 223 N. Y., 244; City of Ports-
mouth v. Va. Ry. & Power Co., 141 Va., 54, 39 A. L. R.,
1510, in which the Court said:
“This power to give such consent necessarily implies
the right to refuse it, and this in turn implies a power
to attach appropriate conditions thereto. . . ” \(p.
1512.)
Lenawee County Gas & E. Co. v. City of Adrian,
Mich., ; 176 N. W., 590; 10 A. L. R., 1328.
Interurban Ry. & Terminal Co. v. Public Utility
Com., 98 Ohio St., 287; 3 A. L. R., 696.
54 Broap Riv. Pwr. Go., Erc., et al. u State or S. C.
Indeed no contest is made in this case about the right and
power of the City of Columbia to make such a contract.
This franchise contract required operation on the part of
the company as the consideration for the grant.
New York Elec. Co. v. Empire City Subway Co.,
235 U. S., 179; 59 L. Ed., 184.
Owensboro v. Cumberland Tel. & Tel. Co., 230 U.
S., 58; 57 L. Ed., 1389, saying:
“Grants like the one under consideration are not nude
pacts, but rest upon obligations expressly or impliedly
assumed to carry on the undertakings to which they re-
late” (p. 192).
“The original ordinance,” as was said by the Court in City
R. Co. v. Citizens St. Ry. Co., 166 U. S., 557; 41 L. Ed,
1114 (quoted in Detroit v. Detroit Citizens’ St. Ry. Co., 184
U.S., ; 46 L. Ed., 592), “was plainly a proposition on
the part of the city to grant to the company the use of its
streets . . . in consideration that the company lay its
tracks and operate a railway thereon upon certain conditions
prescribed by the ordinance. This proposition when accepted
by the company and the road built and operated as specified,
became acontract . . .” (p, 607.)
See also to the same effect Columbus R. P. & Light Co. v.
Columbus, 249 U. S., 399; 63 L. Ed., 669.
Moreover these ordinances expressly required the company
to operate the service daily and thereafter to comply with all
the regulations of Council (R., 840). City Council has enacted
an amendatory ordinance requiring and directing operation
(See Exhibit 35). This, Council, we submit, clearly had the
right to do. (Detroit v. Detroit Citizens’ St. Ry. Co., 184 U.
S., ; 46 L. Ed., 607; Lake Shore & M.S. R. Co. v. Ohio,
173 U. S., 285; 43 L. Ed., 702; Milwaukee Elec. Ry. & L. Co. —
v. State of Wisconsin, 252 U. S., 100; 64 L. Ed., 476; Sum-
ter Gas & Power Co. v. Sumter, 282 Fed., 931; Charleston
Consolidated Railway & Lighting Co. v. City Council of |
Charleston, 92 S. C., 127).
rt
_ _Broap Riv. Pwr. Co., Erc., et al. v. Strate or S.C. 55
In the above-cited Charleston case (92 S. C., 127), the Su-
preme Court of South Carolina had held in effect that such
ordinance made the City Council the agent of the Company
for the purpose of directing the operation, and that the com-
pany was bound by contractual obligation to comply with such
regulations.
Also, the provision of a “Penalty for Failure to Run”
clearly implied an obligation on the part of the company -to
operate. Certainly no such penalty would have been prescribed
unless it was definitely understood that the company was un-
der obligation to operate. The respondents alleged in their
answer and contended before the Referee that this was an ex-
clusive penalty, of which advantage might be taken by the
companies. We assume that they have now abandoned that
position as no exception to the Referee’s adverse finding there-
on was taken. The authorities, however, overwhelmingly
show that said penalty was prescribed for the benefit of the
City to whom the obligation was due, and may not be taken
advantage of by the company by whom the obligation should
be performed.
Pomeroy Eq. Jur., Sec. 446.
First Trust & Savings Bank v. Pruitt, 121 S. C.,
484.
Jolly v. Martin, 120 S. C., 317.
Union Pac. R. Co. v. Chicago, R. I. & P. R. Co.,
163 U. S., 564; 41 L. Ed., 265.
25 R. C. L., 205.
36 Cyc., 570.
This franchise contract was effectually accepted by the opera-
tion of the company thereunder. No further formal acceptance
was necessary.
“No formal resolution of acceptance is necessary in any
case,” said this Court in the City R. Co. v. Citizens St. Ry.
Co., 166 U. S., 558; 41 L. Ed., 1114, “if the facts show an
actual, practical acceptance by the company, or action which
would be only explicable in case the amendment were ac-
cepted” (p. 1118). In that case this Court further said with
56 Broap Rw. Pwr. Co., Erc., et al. uw State or S. C.
regard to the effect of the company’s application for the pass-
age of an ordinance:
“This was sufficient, as it is universally held that a
previous request for an ordinance obviates the necessity
of a subsequent acceptance. Atlanta v. Gate City Gas-
light Co., 71 Ga., 106; IMinois River R. Co. v. Zimmer,
20 IIl., 654; Lincoln & K. Bank v. Richardson, 1 Me., 79
(10 Am, Dec., 34); State, Carlton v. Dawson, 22 Ind.,
272; Newton v. Carbery, 5 Cranch, C. C., 632; Perkins
v. Sanders, 56 Miss., 732, 739; 1 Morawets, Priv. Corp.,
S. 23.” ‘
This franchise contract was necessarily binding on both par-
ties at least for the 50 year term of the State charter franchise.
The State charter had expressly given the primary franchise
to operate in the City of Columbia for a period of fifty years
“with consent of City Council.” This consent must, therefore,
necessarily have been applied for and granted for the said
50 year term.
This principle was applied in the case of Minneapolis v.
Minneapolis Street Ry. Co., 215 U. S., 417, 54 L. Ed., 259, in
which the Court held that the City “was bound to take notice
of the company’s charter,” and adopted the following quota-
tion from Duluth v. Duluth Gas & Water Co., 45 Minn., 210;
47 N. W., 781:
“The council must be held, when dealing with defend-
ant, to know its character, its purposes and powers, as
disclosed by its articles of incorporation” (p. 268).
It is also generally held that a franchise of this sort granted
to such a corporation, and without words authorizing trans-
fer, would be binding at least for the charter life of the cor-
poration. (St. Clair County Turnpike Co. v. Illinois, 96 U. S.,
63; 24 L. Ed., 657; 26 C. J., 1041; Mercantile Trust Co. v.
Denver, et al., 161 Fed., 769; Blair v. Chicago, 201 U. S., 400;
50 L. Ed., 800 at 831-835.)
See also Whalen v. Baltimore and Ohio Ry. Co., 112 Md,
197; 12 R. C. L., 193; White v. Hart, 13 Wall., 653; Vow
Broap Riv. Pwr. Co., Erc., et al. v. Stargor S.C. 57
Hoffman v. City of Quincy, 4 Id., 535; Edwards v. Kearsey,
96 U. S., 601; McCandliss v. R. R. Co., 38 S.C., 103 at 113.
For the purposes of this case there was no need for this
franchise contract between the city and the company to con-
tain any provisions as to rates. This case does not involve the
matter of rates at all. The State charter had provided that the
company should have the right to operate “at such rates as
may be fixed upon in the by-laws of the same,” and this pro-
vision, of course, left the right to regulate the rates in the
State of South Carolina.
The contract, however, had provided for the maintenance
of a schedule of operation and for compliance with the regu-
lations and ordinances of City Council. This is the issue which
is involved in this case from the standpoint of such contract.
Certainly no schedule of rates is necessary to the existence
of the contract to operate. (Fort Smith L. & T. Co. v. Bowr-
land, 69 L. Ed., 631; Milwaukee case, 64 L. Ed., 476; Detroit
case, 46 L. Ed., 592; City R. Co. v. Citisens St. Ry. Co., 41
L. Ed., 1114; Charleston Consolidated Ry. & L. Co. v. Charles-
ton, 92 S. C., 127.)
City Ordinances Granting Electric Street Railway
It is uniformly held that city ordinances granting the right to
a street railway company to use the city streets, constitute a
franchise contract (N. Y. Elec. Lines Co. v. Empire City Sub-
way Co., 253 U. S. 179; 59 L. Ed., 184. Cleveland v. Cleveland
Electric Co., 201 U. S., 529; 50 L. Ed., 854. Cleveland v. Cleve-
land City R. Co., 194 U. S., 517; 48 L. Ed, 1102. Southern
Wis. Ry. Co. v. Madison, 59 L.. Ed., 739. Minneapolis v. Minne-
apolis St. Ry. Co., 215 U. S., 417; 54 L. Ed., 259. Detroit v.
Detroit Citizens’ St. R. Co., 184 U. S., 368; 46 L. Ed., 592.
City R. Co. v. Citizens St. R. R. Co., 166 U. S., 558; 41 L. Ed.,
1114), requiring operation regardless of loss. (Henderson
Water Company v. Corporation Commission of North Carolina
etal., 278 S. C. R., 282; 70L. Ed., 273. Fort Smith & T. Co. v.
Bowrland, 267 U. S., 330; 69 L. Ed., 631. St. Cloud Public Serv-
58 Broap Riv. Pwr. Co., Erc., et al. « State or S. C.
ice Co. v. City of St. Cloud, 265 U.S. ....; 68 L. Ed., 1050,
Paducah v. Paducah Railway Co., 261 U. S., 267 ; 43 Sup. Ce.
Rep., 335; 67 L. Ed., 647. Georgia Railway & Power Co. v.
Town of Decatur, 262 U. S., 431; 67 L. Ed., 1065. Southern
lowa Electric Co. v. Chariton, 255 U. S., 539; 65 L. Ed., 754.
Milwaukee Elec. Ry. & L. Co. v. State of Wisconsin, etc., 252
U. S., 100; 64 L. Ed, 476. Columbus R. P. & Light Co. v.
Columbus, 249 U. S., 399; 63 L. Ed., 669. Michigan Ry. Co. v.
Lansing, 260 Fed., 322. Spartanburg v. Spartanburg Gas &
Elec. Co., 130 S. C., 125. Charleston Consolidated Ry. & Lighi-
ing Co. v. City Council of Charleston, 92 S. C., 127. Sumter Gas
& Power Co. v. Sumter, 283 Fed., 931 [4th Circ., 1922], 10
A. L. R. [note], 897.)
The above-cited Columbus R. P. & Light Co. v. Columbus
case (249 U. S., 399; 63 L. Ed., 669), is in principle, we sub-
mit, on all fours with the case at bar. In that case the company
had applied for and accepted a 25 year ordinance granting the
right to operate (also prescribing rates). Following the war the
company claimed that it could not operate except at a heavy
loss amounting to somewhat over $250,000 annually. The com-
pany sought to abandon the entire operations covered by the
ordinances in question, which it tried to surrender im toto.
This Court, however, required the company to continue
operation, dismissing the company’s contention that the ord.-
nance merely granted a permissive right to use the streets.
“We can have no doubt,” said this Court, “that under
the authority of the laws referred to, and in view of the
terms of the ordinances in question, and the acceptances
by the grantees, the City of Columbus made valid and
binding contracts with the companies, binding for the
term of twenty-five years. By these contracts, obligatory
alike upon the city and the company, the city granted the
right to use the streets and the company bound itself to
furnish the contemplated service at the rates of fare fixed
in the ordinances. We cannot agree with the conten-
tion of the appellant that these were permissive
franchises, granted and accepted with the right up-
on the part of the company to abandon the uses and
Broap Riv. Pwr. Co., Erc., et al. v. Stare or S.C. 59
purposes for which the franchises were granted be-
cause the rates fixed became unremunorative, as al-
leged in the amended bill. The authority under which
the city acted came from the State, and was granted by
proper statutes passed for that purpose, The contracts
were made between the city and the company, and
became mutually binding for the period named in
the ordinances.”
“We come, then, to consider whether the amended bill
shows the happening of an event or events which have re-
leased the company from the obligations of the contract,
and authorized it to cancel the same upon the surrender of
its franchise. Justification for that course is said to exist
in the conditions following the World War (411) and re-
sulting therefrom, particularly, in the great increase in
wages by the arbitral award of the War Labor Board,
which was due to the necessity of meeting the high cost
of living as a direct result of war conditions. This, it is
contended, presents a situation that made the subsequent
keeping of the contract practically impossible except at a
ruinous loss to the company.”
The Court then emphatically dismissed the contention that
such alleged loss would constitute any defense, basing its deci-
sion upon “the principle, frequently declared in decisions of this
Court, that if a party charge himself with an obligation possible
to be performed, he must abide by it unless performance is ren-
dered impossible by the act of God, the law, or the other party.
Unforeseen difficulties will not excuse performance. Where the
parties have made no provision for a dispensation, the terms of
the contract must prevail.” United States v. Gleason, 175 U. S.,
588, 602; 44 L. Ed., 284, 289; 20 Sup. Ct. Rep., 228, and au-
thorities cited. Carnegie Steel Co. v. United States, 240 U. S.,
156, 164, 165; 60 L. Ed., 576, 578, 579; 36 Sup. Ct. Rep., 342.
The latest utterance of this Court upon the subject is found in
Day v. United States, 245 U. S., 159; 62 L. Ed., 219; 38 Sup.
Ct. Rep., 57, in which it was said :
6 Broan Riv. Pwr. Co., Erc., et al. vu. State or S. C.
“One who makes a contract can never be absolutely cer-
tain that he will be able to perform it when the time comes,
and the very essence of it is that he takes the risk within the
limits of his undertaking. But when the scope of the un-
dertaking is fixed, that is merely another way of saying
that the contractor takes the risk of the obstacles to that
extent.”
We earnestly invite the Court’s attention to that case, and sub-
mit that it is conclusive in the case at bar. In that case there was
no provision in the ordinance expressly providing that the com-
pany should continue to operate for the full period of the grant.
The company was, however, as was commented upon by the
Court, “required to run cars upon certain streets not in excess of
certain intervals.” This provisions was similar to the ordi-
nances in the case at bar. The duty to operate was enforced
by this Court as a necessary consequence of the right to operate
under the ordinances.
The principle of the foregoing Columbus case has been uni-
formly recognized and applied by this Court in many subsequent
cases.
In the Decatur case, supra (262 U. S., 431; 67 L. Ed., 1065),
the company contended that the enforcement of the franchise
contract would necessitate operation at a loss and confiscate his
property. The Court, however, said that it would “lean to an
agreement with the state court,” as to the construction of the
ordinances involved (citing 50 L. Ed., 170; 45 L. Ed., 679; 46
L. Ed., 592), and “considering the question in this light, we see
no reason to differ with that court in its view of the validity and
binding quality of the contract. The contract being valid, we
are confiscatory. Southern Iowa Electric Co. v. Chariton, 255
U. S., 539, 542; 65 L. Ed., 764, 776; 41 Sup. Ct. Rep., 400.
Paducah v. Paducah R. Co., decided February 19, 1923 (261
U. S., 267, ante, 647; 43 Sup. Ct. Rep., 335).” (67 L. Ed,
1074.)
In the St. Cloud case, supra (68 L. Ed., 1050), this Court said
that the enforcement of such franchise contract rates “is con-
trolled by the obligation resulting from the contract, and the
Broap Riv. Pwr. Co., Erc., et al. v. Sratzor S.C. 61
question whether they are confiscatory is immaterial. Southern
lowa Electric Co. v. Chariton, 255 U. S., 539, 542; 65 L. Ed.,
.764, 775; 41 Sup. Ct. Rep., 400, and cases there cited. Paducah
v. Paducah R. Co., 261 U. S., 267, 273; 67 L. Ed., 647, 651;
43 Sup. Ct. Rep., 335. Georgia R. & Power Co. v. Decatur, 262
U. S., 434, 438; 67 L. Ed., 1065, 1073; 43 Sup. Ct. Rep., 613.”
. « + (Page 1054.)
The principle was also applied in the Milwaukee case, supra,
(64 L. Ed., 476), in which the company was required to re-
pave under the municipal franchise contract regardless of al-
leged loss ; and in the Fort Smith case (69 L. Ed., 631), already
discussed, in which the company was required to rebuild and re-
grade a line; and also in the subsequent case of Henderson
Water Co. v. Corporation Commission of North Carolina (70
L. Ed., 273), as to a water franchise; and in the Sumter case
(288 Fed., 931), as to a gas franchise.
Most of the above cases dealt with rates, but the principle, we
submit is the same, whether the provision of the contract in
question involved rates or merely involved operation as in the
case at bar. Many of the cases in which such contracts have been
held not binding have turned upon the absence of the munici-
pality to make binding contracts for rates.
See R. R. Commission of California v. Los Angeles,
Ry. Corp., ....U.S., ....;74L. Ed, 113 (No. 4
Adv. Opinions).
This case, however, merely involves operation and this fran-
chise contract in the case at bar clearly provided for such opera-
tion. Hence, alleged losses as a defense to the obligation to
Operate constitutes no defense.
See also to the same effect the following among many other
cases (many of which are cited in 6 A. L. R., 1659 and 10 A.
L. R., 897) :
Berg v. Erickson (1916), L. R. A., 1917-A, 648; 148
C. C, A., 415; 234 Fed., 817.
Ottumwa R. & Light Co. v. Ottwmaa (1919), ....
lowa ...; 173 N. W., 270 (street railways).
Moorhead v. Union Light, Heat & P. Co. (1918),
255 Fed., 920 (gas company).
“ise
Den as eee
62 Broap Rw. Pwr. Co., Erc., et al. v. State oF S. C.
Michigan R. Co. v. Lansing (1919), 260 Fed., 322.
Bismarck Gas Co. v. District Court (1919, .....N.D.,
..+.3P.U.R, 1919-C, 394; 170 N. W., 878.
Interurban R. & Terminal Co. v. Cincinnati (1915),
93 Ohio St., 108; 112 N. E., 186.
Musca:ine Lighting Co. v. Muscatine (1919), 256
Fed., 929.
Many of the principles discussed in the foregoing portion of
this argument, dealing with the charter obligation to operate,
are equally applicable to this portion of the argument dealing
with the City franchise obligation. The principles involved are
in many respects identical, and the charter from the State created
the primary contract of the company. The franchise from the
City constituted a supplemental or secondary franchise. The two
franchises are to be construed together, and are complementary
with respect to each other and are interdependent.
This is particularly true in the case at bar since the State of
South Carolina owns the fee to the streets in the original City
of Columbia (South Bound Railway Co. v. Burton, 67 S. E.,
$15; 46 S. E., 340), but has delegated the City of Columbia the
power to regulate and control the streets (see S. C. Acts 1871),
‘and also Columbia is the State's capital city.
Franchises from municipalities are, however, somewhat more
definite and specific, and perhaps more valuable, than many of
the general permissive charters obtained under the general state
laws. They create a very intimate and vital relationship between
such municipalities and the companies to whom they are granted.
The Circuit Court of Appeals in dismissing the company’s at-
tempt at bankruptcy (27 F. [2nd] 52) commented forcibly upon
this fact. For this reason such franchise contracts, as was said
in many of the foregoing cases, relate to the city’s proprietary
character, and are enforcible according to the common law of
contracts. (See the Columbus case, the St. Cloud case, and many
of the foregoing cases. )
. The poles and wires erected under these franchise ordinances
throughout the City of Columbia are now being used by the
Broad River Power Company in connection with its electric
light and power business. .
Broap Riv. Pwr. Co., Erc., et al. v. Statzor S.C. 63
We believe no case can be found where a company which has
obtained the right to operate an electric street railway system
under such ordinances has been allowed to abandon the service.
The Texas case, supra (68 L. Ed., 561), which seems to be
relied upon, involved merely the abandonment of a purely
permissive charter taken out by a railroad company under a
general state law, is obviously inapplicable. The case of Potter-
Matlock Trust Co. v. Warren County, Ky., 207 S. W., 709
(1919), relied upon by appellant, was expressly limited “to a
state of facts similar to that presented by the record” (which
were quite different from those here), and was held not to
apply “where there was a contract obligation on the part of
the company to operate its railway for a specified time,” and
is otherwise apparently in conflict with the decisions of this
Court and other Courts and of the State of South Carolina.
(See Spartanburg case, 130 S. C., 125).
_ Finally, in many of the cases already cited, and in many others
where the City has tried to terminate the grant, such ordinances
have been held to create the absolute right to operate (57 L.
Ed., 1389; 59 L. Ed., 184; 50 L. Ed., 854; 59 L. Ed., 739; 54
L. Ed., 259; 46 L. Ed., 592; 41 L. Ed., 1114; 10 A. L. R., 897;
Cook, Corp. p. 3700, S., 913; 161 Fed., 769) ; these decisions
being based upon the ground that the consideration for the grant
was the duty of the company to operate. Fairness of construc-
tion and the mutuality of contracts, we submit, require that in
the case at bar the company be held bound by the duty to operate.
“The impairment of contract and the due process of law
clauses of the Constitution,” as was said by the District Court in
the Columbus case (253 Fed., 504-5) afterwards affirmed by
the Supreme Court, “have often been invoked to prevent cities
from impairing franchise grants, or forcing a reduction in the
contract rate, and the courts have uniformly, despite all criti-
cism, sustained and upheld them, and, in so doing, have vindi-
cated the law. It is equally the duty of the courts to uphold these
contracts and vindicate the law when it is the grantee therein,
‘and not the city, which is seeking to change the terms thereof
without the consent of the other party. It is of primary impor-
tance that contracts should be upheld by the courts, for the right
64 Broan Rvv. Pwr. Co., Erc., et al. vu. State or S. C.
to contract and the binding obligation of contracts once made
lie at the foundation of all public and municipal law.”
Columbus Ry. Power & Light Co. v. City of Columbus,
253 Fed., 504-505.
We, therefore, submit that these ordinances, either endorsed
alone or as supplementary to the state charter franchise, con-
stitute a contract requiring operation.
Broap Riv. Pwr. Co., Erc., et al. v. Starz or S.C. 65
THE OBLIGATION CREATED BY DEVELOPMENT
COMPANY CONTRACTS REQUIRING
OPERATION
As hereinbefore stated a considerable portion (approximately
one-third) of the electric railway trackage was acquired under
contracts expressly requiring continued operation.
' The North Columbia Land Company contract required the
company to operate and maintain the system from its date,
August 12, 1906, “thenceforth” (R., 851-854). The Shandon
Annex Company contract required maintenance and operation
in effect “in perpetuity” (R., 855-862). The Columbia Land
and Investment Company 99-year lease of October 23, 1902
(R., 864-869) provided for continuous operation “during said
period.” (The subsequent acquisition of this last line by the
company did not in anywise purport to affect or extinguish this
obligation to operate [R., 1066] but was merely in pursuance
and in consideration of the terms of the foregoing lease. )
The North Columbia Land Company is one of the parties to
this suit.
The Supreme Court of South Carolina held, rightly as we
submit, that these contracts were valid and subsisting and re-
quired the operation of the system regardless of alleged loss
(R., 239-241). This finding of the State Supreme Court pre-
sents no question which this Court will review.
Arkansas So. R. R. Co. v. German Natl. Bank, 207 U. S..
270, 52 L. Ed., 201. Consolidated Turnpike Co. v. Norfolk,
etc., K. Co., 228 U. S., 596, 57 L. Ed., 982. Municipal Se-
curities Corp. v. Kansas City, 246 U. S., 63, 62 L. Ed., 579.
Bilby v. Stewart, 246 U. S., 255, 62 L. Ed., 701. Am. Ry. Ex-
press Co. v. Kentucky, 273 U. S., 269, 71 L. Ed., 639.
In American Raikway Express Company v. Kentucky, the
Court, speaking through Mr. Justice McReynolds, said:
“Save in exceptional circumstances not now present we
must accept as controlling the decision of the State Courts
upon questions of local law, both statutory and common.
66 Broap Rw. Pwr. Co., Etc., et al. v. State oF S. C.
“The due process clause does not take up the laws of the
several states and make all questions pertaining to them
constitutional questions, nor does it enable this Court to
revise the decisions of the State Courts upon questions of
State Law.’”
However that may be we submit the finding is fully sup-
ported by the authorities.
The chief contention of appellants in this regard, as we
understand, is that these contracts are no longer subsisting
but have been fully performed and, impliedly, that their en-
forcement would work a hardship.
In considering this question regard must be had to the
circumstances and purpose of the contracts; and they must be
construed as of the time when they were made.
Franklin Telegraph Co. v. Harrison, 36 L. Ed., 776;
Western U. Tel. Co. v. Pen. Co., 129 Fed., 849; Moorehead v.
Union Light, Heat & P. Co. (1918), 225 Fed., 920; Rutland
Marble Co. v. Ripley (1870), 10 Wall. (U. S.), 339; 19 L.
Ed., 955; 3 Mor. Min. Rep., 291; Ottumwa R. & Light Co. v,
Ottumwa (1919), Iowa, 173 N. W., 270; Interurban R. &
Term. Co. v. Cincinnati (1915), 93 Ohio St., 108; 112 N. E,,
186.
‘The contracts were made by the company for the purpose of
extending its system and acquiring patronage, and by the de-
velopment companies to furnish a means of transportation for
the communities which they were developing (R., p. 300-
382). These companies and communities have contributed
substantially, in cash and in patronage as a consideration for
such contracts. Clearly, their purpose has not yet been fulfilled
(R., 300-382).
Such contracts, we submit, under all the authorities, includ-
ing the authorities cited by respondents, cannot be held to have
terminated or to have been performed so as to give the com-
pany the right to quit in March, 1927.
We will quote only a few of the pertinent authorities as the
matter seems to us to be clear.
In Franklin Telegraph Co. v. Harrison, 145 U. S.—
36 L. Ed., 776, this Court held in effect that such contracts in
Broap Riv. Pwr. Co., Erc., et al. v. Sratzor S.C. 67
the absence of a provision expressly fixing their duration con-
tain a continuing obligation.
The facts were that the appellant Telegraph Company had
agreed with the defendants in 1867, in consideration of the de-
fendants erecting at their own expense a telegraph line between
New York and Philadelphia for the joint use of both plaintiffs
and defendants, “to keep and maintain at their own expense the
said wire in good working order,” and after ten years from
date to allow the defendant the use of the wire for the sum of
$600.00 per annum. No term for the duration of this right
was expressed in the contract itself. In 1882 the Telegraph
Company claimed that the contract had been fully performed
and terminated and threatened to deprive the defendants Har-
rison of their rights to use the wire as provided under the terms
of the contract. This action was brought to enjoin the threat-
ened action of the Telegraph Company. The injunction was
granted in a strong, clear opinion, to which we invite this
Court’s attention.
In the case of McKell v. C. & O. Rwy., 175 Fed., 321, it
was held by the Circuit Court of Appeals of the Sixth Circuit
that (quoting syllabus) :
“A contract between the owner of a tract of coal | land
and a railroad company, by which the landowner agreed
to develop mines on his land to a stated capacity, and the
company agreed to build a branch line to the mines and to
purchase the coal, produced at the ruling price of a certain
other coal, which contained no provision as to its duration,
was not terminable at the will of one party, but was per-
manent so long as the stipulated production was main-
tained, unless sooner terminated by consent of both
parties.”
“That question is,” said the Court, speaking through
Mr. Justice Lurton: “What was the intended duration of
the contract? No limitation is expressed in the agree-
ment. And in such case the rule seems to be that
neither party can terminate it without the consent of
the other, unless the nature of the contract itself in-
68 Broap Riv. Pwr. Co., Erc., et al. v. Stare oF S. C.
dicates with sufficient clearness that the parties must _
have intended some other determinaion. Turning
again to the stipulations of the contract, we see how im-
possible it is to believe that the parties intended that it
should be terminable at any time, when either party should
be so minded. On the contrary, it seems perfectly clear
that they intended it should have a permanent duration.
Its objects could not otherwise be fulfilled. . . .”
In Western Union Telegraph Company (C. C. A.), 129
Fed., 849, the Court enjoined the defendant railroad company
from breaking its contract made in 1856, providing that “after
the telegraph line is completed . . . same is to be kept in
repair by the railroad company and maintained in first rate
working order.”
In this case the Court said:
“If a contract is not revocable at the will of either
party, or otherwise limited as to its duration, by its
express terms, or by the inherent nature of the con-
tract itself, with reference to its subject-matter or its
parties, it is presumably intended to be permanent
and perpetual in the obligation it imposes. .. . Apart
from those contracts, which, from their inherent na-
ture, imply a power of revocation, it would seem that
the intention of parties to an agreement, that it
should be perpetual and without limit as to duration
could not be more properly expressed than by silence
as to any time limit, or power of revocation. Reason
and authority would seem to concur in support of
this doctrine, and we find no direct and controlling
authority to controvert it. . . .”
These cases are indeed much stronger than is necessary for
the case at bar. In them the intention that the contracts should
run in perpetuity was inferred from the absence of any dura-
tion fixed in the contract. In the case at bar, however, the lan-
guage used clearly shows an intention that the contracts should
endure in perpetuity. The Shandon contract was for the ex-
Broap Riv. Pwr. Co., Erc., et al. v. Stateor S.C. 69
press term of 99 years. The words “in perpetuity” used in the
Shandon Annex contract in close context with the word “main-
tain,” clearly shows that the “in perpetuity” emphasizes and
limits the word “maintain” as applied to the obligation of the
Electric Railway Company. In the North Columbia Land
Company contract the obligation of the company to “maintain”
service is directly limited by the word “thenceforth,” meaning
“from that time forward.” No better words can be found in
the English language to express the idea of unlimitedness in
time.
The petitioners cited many cases before the Referee and the
state Court in the effort to show that the above contract has
been terminated or performed :
(87 S. C., 566; 136 U. S., 393; 244 Fed., 650; 108 Wash.,
348; 270 S. W., 58; 130 Fed., 438; 59 Ark., 66; 89 Ind., 375;
110 Md., 510; 2 Tenn., C. C. A., 644; 7 Ont. App. Rep., 128;
16 Ont. App. Rep., 52; 112 Md., 187; 65 Fed., 736.)
We do not deem it necessary to discuss these cases in detail.
They do not seem to us to conflict with the rule recognized and
applied in the foregoing cases. (36 L. Ed., 776; 175 F., 321;
129 F., 849.) Most of them appear to deal with the establish-
ment of stations or sidings. None of them were contracts for
the maintenance of electric street railway service with land de-
velopment companies, and in none of them were the words
“thenceforth” or any other language which implied in per-
petuity.
The Childs case, 87 S. C., 566, was apparently cited in sup-
port of the contention that the contract should be terminable
upon giving notice of the intention so to de. The very idea, we
submit, is, as was said in Schiller Piano, 11 A. L. R., 454,
“jars unpleasantly on one’s sense of justice” and “would of-
fend against good morals and common honesty.”
The Texas & Pacific v. City of Marshall case, 136 U. S.,
393, appears to have turned upon the construction which the
Court gave to the words “permanently established.” ‘The Court
simply held that this expression was fulfillea by actually
establishing the shops with no intention at the time of remov-
ing or abandoning them. The Court also pointed out and
70 Broap Riv. Pwr. Co., Erc., et al. v. State oF S, C.
being mentioned) by the comparatively recent case of Inter. &
Gt. Northern R. Co. v. Anderson County, et al, 246 U.S,
—., 62 L.. Ed., 807, in which it was held that the contracts of
the railroad company “in consideration of the issue of bonds
by the County to maintain its general offices ee
place” were binding in perpetuity.
In reply to the implied suggestion of the companies (and of
the Referee), that the sole remedy with regard to these con-
tracts would be an action for damages for the breach, we need
only quote the language of this Court in the case of Union
Pac. R.v.C. R.1. & P., 163 U. S., 564, 41 L. Ed., 265:
“The jurisdiction of Courts of Equity to decree the
specific performance of agreements is of a very ancient
date, and rests on the ground of the inadequacy and in-
completeness of the remedy at law. Its exercise prevents
the intolerable travesty of justice involved in permitting
parties to refuse performance of their contracts at pleas-
ure by electing to pay damages for the breach.”
See, also, to the same effect Texas v. Central Oil Co. (C.¢
A., 8th), 194 Fed., 1, 25 R. C. L.. 205, 36 Cyc., 570.
Phe contracts being valid and subsisting, it goes without
saying that alleged losses constitute no defense to the obliga-
tion imposed by them.
In any event these contracts, and the circumstances under
which they were made (R., 300-383), strongly reinforce the
charter franchise obligation to operate.
Gates v. Boston & N. Y. R. Co., 53 Conn., 323,
5 Ii, 695,
Bedap Riv. Pwr. Co., Erc., et al. v. State or S.C. 71
Iv
THE SGED NECESSITY FOR OPERATING AT A
LOSS
The record shows, and the Supreme Court of South Caro-
fina, as well as the Railroad Commission, so found, that the
electric street railway °° ~ice need not be operated at a loss
-bat could be made to yield fair returns if honestly operated.
We submit that this finding should be sustained by this
Court.
‘
It is the general rule that findings of fact of this nature by
the State Court, where there is evidence in the record to sup-
port such finding, will not be reviewed by this Court.
U. S. v. Johnston (N. Y., 1925), 45 S. Ct, 496,
268 U. S., 220, 69 L. Ed. 925, reversing (C.
C. A., 1923), 290 F., 120. _
Jackson v. State (1926), 280 S. W., 202, 103 Tex.
Cr. R., 318, certiorari denied (1926), 46 S. Ct.,
474, 271 U. S., 661, 70 L. Ed., 1138.
“Tt is not the province of this Court to weigh conflict-
ing testimony. The record shows testimony supporting
the verdict, and this is as far as this Court enters upon a
consideration of that question.”
Great Northern R. Co. v. Donaldson (Wash., 1918),
246 U. S., 121, 38 S. Ct. 230, 62 L. Ed. 616.
“In cases coming from a State Court we do not review
questions of fact, but accept the conclusions of the State
tribunals as final.”
Christman v. Miller (Cal., 1905), 107 U. S., 313,
25 S. Ct, 468, 49 L. Ed., 770, a chancery case.
Also the companies failed to make any petition for rehear-
ing-from such finding of fact on the part of the Railroad Com-
mission as is required by the South Carolina Act regulating
72 Broan Riv. Pwr. Co., Erc., et al. vu. State or S. C.
procedure before the commission. The Acts of 1922 provide in
effect that within twenty days after the handing down of an
order by the Commission any party may apply for a rehear-
ing “in respect to any matters determined in any action or pro-
ceeding,” and that “no cause of action . . . shall accrue
in any Court to any corporation . . . umiess such cor-
porations shall have made application to the commission for a
rehearing within the time specified” (Acts of 1922, p. 941).
Now the commission having found after due hearing that
“the system could be made to yield a fair return” the duty
was placed upon the company by this Act to make an applica-
tion for rehearing on this point; otherwise they are estopped
from questioning such findings and the order based thereon,
but are bound thereby.
Acts of 1922, pp. 940-942.
Prentis v. Atlantic Coast Line Ry. Co. (1908), 211
U. S., 210, 29 S. Ct., 67, 53 U. S. (L. Ed.), 150.
Pendergast v. N. Y. Tel. Co., 262 U. S., 43, 67 L.
ee
Palermo Water Co. v. Railroad Commission (D.C.),
227 Fed., 708.
Columbia Rwy. Gas. & Elec. Co. v. Sam C. Blease,
et al., U. S. D. C. Eastern Dis. S. C. Manuscript
Opinion, dated 13 August, 1927.
In the above-cited Columbia Rwy. Gas & Elec. Co. case,
Judge Cochran, of the Eastern District of South Carolina,
based his order, denying the injunctive relief sought, in part
upon the ground that the company had failed to make this
application for rehearing.
The companies evidently calculated that a further hearing
on this question would probably develop all the evidence which
was actually developed in the subsequent hearings before the
Referee as to their financing the Bus Company and other like
conduct. They, therefore, probably chose not to have any
further hearing on this question.
In any event we submit that the findings of the Railroad
Commission as a body of experts, familiar with conditions in jd
Columbia and vicinity, are entitled to great weight.
Broap Riv. Pwr. Co., Erc., et al. v. State or S.C. 73
C. & N. W. Ry. Co. v. R. R. Com. of Wis., 156
Wis., 47, 145 N. W., 216 (p. 396).
“Commission findings on cases of fact are prima facie
correct and shall not be set aside unless clearly against
the weight of the evidence or without the jurisdiction of
the commission.”
Chicago Bus Co. v. Chicago Stage Co., 287 Il., 320,
122 N. E., 477 (p. 401).
“Findings of fact by the commission based upon evi-
dence are not reviewable.”
N. & W. Ry. Co. v. Pub. Ser. Com., 82 W. Va., 408,
96 S. E., 62 (p. 404).
Also Railroad Commission v. Railroad Co., 74 §&.
C., 80.
Moreover we submit that the findings of the South Caro-
lina Supreme Court and of the Railroad Commission are fully
sustained by the record.
The real reason for the companies’ desire to abandon the
electric railway service is, as we have already indicated, that
they found the electric light and power phase of the business
relatively much more profitable and less troublesome. We
have already shown that the operating revenue from this so-
called electric department is approximately four times the
operating expense. While we submit the railway department
can be made to yield a fair return we are prepared to concede
that it cannot be made to yield in return four dollars for every
dollar spent. The electric light and power business is probably
the easiest, surest and most profitable business imaginable out-
side of tax collecting, to which it is in many respects quite
similar.
We do not deem it necessary to discuss in detail in this
argument the evidence on this question.
The record shows, however, that after the strike of 1922
the service was neglected (R. 735), and the patronage ma-
terially decreased (R. 732). No evidence was offered by the
74 Broap Rrv. Pwr. Co., Erc., et al. v. State or S. C.
companies to show any effort to conciliate the striking laborers
or remove the evil effects from the strike, or to increase the
rates, or otherwise to take any steps to make the service pay,
as it should have done. (See N. Y. ex rel. Woodhaven Gas
Light Co. v. Pub. Serv. Com., 269 U. S., 244, 70 L. Ed., 255;
Newton v. Consolidated Gas Co., 258 U. S., 165, 66 L. Ed,
538). At most the strike was merely a temporary condition
and its effects could and should have been removed by proper
attitude on the part of the company. (/n re Loader, 14 Misc.,
35 N. Y., Supp., 996).
The undermaintenance of the system was freely admitted
by the company and conclusively shown by the evidence. (R.
363—367-372, 439-735). Such undermaintenance can not be
justified, for the earnings of the company during this period:
$555,557.00 for 1922, $699,920.00 for 1923, $759,515.00 for
1924 (see Ex. 27-31 and 14-16 McF.), were amply suffi-
cient to enable the company to keep its system properly and
adequately maintained. It is apparent that the earnings of the
service in such undermaintained condition can be no proper in-
dex as to the possible earnings of the company.
Also the Broad River Power Company interests determined
to eliminate the street railway from the outset (R. 678-679),
and thereafter, while appealing to the public for relief on ac-
count of alleged bus competition, were negotiating with
the White Motor Company to extend credit to the bus com-
pany (R. 374-399), and actually contributing at least $19,000.-
00 in cash to the operating expenses of the supposedly compet-
ing Bus Company (R. 776-778). The buses so encouraged took
the bulk of the traffic and helped to make the company show a
loss (R. 375-377, 734-735). The company also engaged in
other deceitful practices towards the same end (R. 356) (Exh.
McF. 17, p. 1060).
It was, therefore, a monumental fraud for the companies to
claim before the Railroad Commission—that it was impossible
to operate the service successfully, because of the competition
from the buses, which it was impossible to regulate. The real
reason for their bringing the Bus Company into the com-
munity, and assisting it in its operations, was to impose upon
Broap Riv. Pwr. Co., Erc., et al. v. State or S.C. 75
and deceive the public and the Railroad Commission on this
plea of competition.
The fact that the income attributed to the service decreased
from $430,000.00 in 1921, to $100,000.00 in 1926, while the
population of Columbia was rapidly increasing, shows con-
clusively that the company must have deliberately discouraged
the available patronage. It is significant that the company of-
fered no local witnesses whatsoever to testify that any effort
had ever been made to revive the service after the strike
of 1922, or that any earnest effort had been made to make the
service pay. It is apparent that the strike of 1922 was seized
‘upon, if not engineered, as an excuse for the abandonment of
the relatively less profitable branch of the business.
However the relatively insignificant losses claimed to have
been sustained during 1926, coupled with other circumstances,
shown by the record, conclusively show, we submit, that the
service can be successfully operated.
For the year 1926 the alleged losses amounted to $47,630.35,
In this sum is included power amounting to $27,504.60, charged
at a rate 36 2/3 per cent higher than the rate charged to the
Pacific Mills (R., 624). Also there is a charge for “pole rental”
of $2,133.40 (R. 396)—this charge being for the use of poles
erected under the electric railway franchi
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