City of Spartanburg v. S. C. Gas & Electric Co.

The opinion of the Court was delivered by

Mr. Justice Fraser.

This is a proceeding in mandamus. The City of Spartanburg passed an Ordinance which granted to F. D. Mc-Eowen and his associates and assigns the right to construct, maintain, and operate a street railway through, on, and along the streets and avenues in said city. The ordinance provided for the extension of its lines beyond the city limits, to some suburban cotton mills. The ordinance further .provided a franchise for the use of its streets for electric lights and power lines, and the operation of gas conduits, etc. The ordinance was accepted by McEowen, and it is admitted that the respondent here is operating under that franchise, which was accepted in writing. The suburban lines were not completed for a while, and the Spartanburg Railway & Gas Company, then the owner of the franchise, refused to complete it. Action for specific performance was brought, and this Court held in Thomas v. Spartanburg Railway & Gas Company, 114 S. C., 74; 103 S. E., 149, that the accepted ordinance was a contract and required the suburban lines to be completed under it.

I. It has been adjudged by this Court that the ordinance accepted in writing is a binding contract and must be enforced, even as to the suburban lines which lie outside of the city.

II. The respondent claims that the Legislature has passed an Act putting electric railways under the jurisdiction of the Railroad Commission, and this Court has no jurisdiction in the matter: In its argument the respondent thus states its claim:

“On February 3, 1923, an Act was duly approved, amending, and to some extent modifying, the original Act. This modification first excludes from the jurisdiction of the railroad Commission public utilities owned by municipalities or any agency thereof; secondly, it takes from the said Commission the right to> alter any charge for service that is the subject of any existing contract, franchise, or ordinance, etc. Neither section of this modification of the acts empowering said Commission has any bearing whatever on this proceeding. The clear object and intent of the Legislature was to create a commission with the necessary machinery to enable it to regulate, supervise, and control the public utilities within the State, other than those owned by municipalities.”

It will be observed that the power claimed is to “regulate, supervise, and control.” That refers, and can only refer, to a going concern. It does not, in any way, pretend to give the Commission the power to annul or destroy the operation of public utilities. The Legislature did not pretend to give to the Railroad Commission nor could it have given to the Railroad Commission, or to the Courts, the power to destroy or impair the obligations of a contract.

III. The respondents claim that the street railway can only be operated at a loss, and, therefore, it would amount to a confiscation of private property to require it to operate at a loss. The respondent’s statement before the Railroad Commission is:

“Q. What does your franchise embrace? A. The franchise embraces the right to manufacture and sell gas, electric power, electric lights, electric energy, I might say, and engage in the business of transportation.”

“Q. How is it you contend that the railroad can go into bankruptcy without these other subsidiary lines? How is it when you discontinue railway service you do not discontinue gas and electric service? A. No question of bankruptcy is involved. Finding one of the departments absolutely useless to the people, they ask the privilege of cutting off that arm of its service. It is merely a question of abandonment. Now, the other question was: Why do we not also ask the same as to the other branches of service? We are not asking any favors at all. We would not ask you to consider our petition relative to this railroad company, were we in a different financial position. This company, as a public utility, has got to go on operating, but the law does not require it to operate at a loss. We haven’t asked t-o discontinue the gas for this reason. The gas company is growing all the time. Everybody that builds a new house wants gas and electric service. If we cannot give it to a man, he will go to you. We are not asking you to cut out the gas. We could not show you the people had abandoned the use of gas. The gas is paying its way, and it has a future before it. In the old times, people did not use gas stoves, but in the modern homes they all put in gas stoves. We can make that go by great economy and hard work. Now, the electric light business — there is a great demand for electricity. People are availing themselves of all sorts of modern conveniences. We can make money on these two things, because there is a demand for them. There is no demand for the street railroad, except by 3 per cent of the people, and we ask to cut off that dead arm of our service. That is the basis we are here on.”

It will be observed that three businesses are included in this one ordinance, and they are linked together in 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 admits 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 electric railway alone must fail. 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 contract 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 business cannot be separated.

IV. The proposition of respondents, that a bus line had been substituted for the street railway, is ineffective. Neither the Railroad Commission nor the Courts are authorized to substitute for-the thing contracted for something else that is “just as good,” if it be just, as good. Governmental agencies have no right to substitute one contract for another. It is adjudged that the showing of the relators is sufficient, and that the writ of mandamus do issue, requiring the respondent to restore its lines and operate the same according to law.

Mr. Ci-iiep Justice Gary and Mr. Justice Watts concur. J''