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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