Arkansas State Highway Commission v. Butler, 11325.

• Decision Date: 16 September 1939
• Docket Number: No. 11325.,11325.
• Citation: 105 F.2d 732
• Parties: ARKANSAS STATE HIGHWAY COMMISSION v. BUTLER.
• Court: U.S. Court of Appeals — Eighth Circuit

105 F.2d 732 (1939)

ARKANSAS STATE HIGHWAY COMMISSION v. BUTLER.

No. 11325.

Circuit Court of Appeals, Eighth Circuit.

August 1, 1939.

Rehearing Granted September 16, 1939.

Walter L. Pope and Herrn Northcutt, both of Little Rock, Ark. (Jack Holt, Atty. Gen., on the brief), for appellant.

Harry B. Solmson, Jr., of Little Rock, Ark. (Joe W. House, of Little Rock, Ark., and Max F. Goldberg, of Chicago, Ill., on the brief), for appellee.

Before GARDNER and WOODROUGH, Circuit Judges, and OTIS, District Judge.

OTIS, District Judge.

The White & Black Rivers Bridge Company (the receiver of that company is the appellee) owns a franchise to operate a toll bridge in Arkansas over White River and another franchise to operate a toll bridge in Arkansas over Black River. The franchises were granted to the company's predecessors in title by the county courts of the two counties in which the bridges are located. The Arkansas State Highway Commission has purchased a ferry and ferry rights and has operated that ferry and proposes to continue to operate it as a free ferry over Black River, at a point called Spring Ferry, a short distance from the company's toll bridge over Black River. The Commission also has removed signs from the highway calling attention to the toll bridge over Black River and the advantages of its use and has erected other signs intended to direct traffic from the toll bridge and to the free ferry. The operation of the free ferry will certainly greatly lessen the value of the company's franchise to operate a toll bridge over Black River. The court below enjoined the operation by the Commission of the free ferry and enjoined also the maintenance of signs directing traffic away from the bridge. The prime question presented on the merits is: Does the maintenance and operation of the free ferry by the State Highway Commission infringe the company's franchise rights? There is, however, a preliminary question of jurisdiction.

1. It is contended by appellant — The Highway Commission — that the court below had no jurisdiction of the suit for a decree of injunction because it was in reality a suit against the state to which, perforce the Eleventh Amendment, the judicial power of the United States does not extend. The Highway Commission, so it is urged, when acquiring and operating a ferry on a state highway, is a mere agency of the state and is the state. And it must be admitted that if the Highway Commission in acquiring and operating the ferry here in question acted within lawful authority conferred upon it by the state, then it was acting as a state agency and was the state. But there are two questions to be answered before it can be said that the Commission had such lawful authority: (1) Did the Commission generally have authority to operate ferries as parts of state highways? (2) If it had general authority, was this particular ferry excepted from that general authority?

We are convinced that the Commission had general authority to operate ferries on state highways. An Arkansas statute, Section 53, Act 65, page 326, of 1929, Section 6903, Pope's Digest, provides — "The State Highway Commission is hereby vested with all powers necessary to accomplish the purpose of this Act and is hereby specifically authorized to employ labor, buy or lease equipment, buy supplies and material, and to enter into any and all contracts necessary for the construction, reconstruction, and maintenance of state highways."

So the Commission, speaking generally, has authority to acquire and operate a ferry which is a part of any state highway as the ferry here was. But that general authority has this implied exception: the authority may not be so exercised as to violate constitutional rights. When constitutional rights are invaded by a given action, lawful authority for that action cannot be present. In a situation of that kind the acts of agents are not the acts of the state but of individuals, subject to injunctive restraint notwithstanding the Eleventh Amendment, U.S.C.A.Const. Greene v. Louisville & I. R. Co., 244 U.S. 499, 37 S. Ct. 673, 61 L.Ed. 1280, Ann.Cas.1917E, 88; Ex parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714, 13 L.R.A.,N.S., 932, 14 Ann. Cas. 764; Hopkins v. Clemson Agricultural College, 221 U.S. 636, 31 S.Ct. 654, 55 L. Ed. 890, 35 L.R.A.,N.S., 243; Looney v. Crane Co., 245 U.S. 178, 38 S.Ct. 85, 62 L. Ed. 230; Houston v. Ormes, 252 U.S. 469, 40 S.Ct. 369, 64 L.Ed. 667; Old Colony Trust Co. v. Seattle, 271 U.S. 426, 46 S.Ct. 552, 70 L.Ed. 1019; Terrace v. Thompson, 263 U.S. 197, 44 S.Ct. 15, 68 L.Ed. 255; Smyth v. Ames, 169 U.S. 466, 18 S.Ct. 418, 42 L.Ed. 819; Cargile v. New York Trust Co., 8 Cir., 67 F.2d 585. So here, if the operation of the free ferry was a violation of the constitutional rights of appellee, it, and its incidents, may be restrained in a federal court. We turn then to a consideration of the merits.

2. We need consider the franchise to operate a toll-bridge over Black River only. In that franchise we need consider one paragraph only which is — "The said franchise to construct, maintain and operate said toll bridge shall be exclusive in the said Harry E. Bovay, his heirs, successors and assigns for the term of forty-nine years, for a distance of ten miles on each side of said bridge, measured along the channel of said river; and said county shall not thereafter, during the life of this franchise, grant to any other person, partnership, company, corporation or association, any rights, privilege, franchise or license to construct, maintain or operate another bridge or a ferry across Black River within the distance above mentioned except at Spring Ferry, nor shall the county within such time construct, maintain or operate a bridge or ferry across said river within said limits to the injury of the holders of the franchise granted herein, provided all ferries licensed by the county court may run until said bridge be opened for traffic."

But since the county court could only grant such a franchise as the Arkansas law authorized it to grant, we must consider what authority the law gave the county court and interpret the franchise undertaken to be granted in the light of that law, in effect removing from it any provisions which the law did not authorize.

The Arkansas law in force when the franchise here involved was granted, so far as it need now be considered, was embodied in two sections of the Arkansas statutes (Sections 10255 and 10258, C. & M. Digest) as follows:

"§ 10255. The several county courts, through whose counties runs any watercourse, lake, bay or swamp which may be too burthensome to bridge and keep in repair by the inhabitants thereof, are hereby fully and exclusively empowered to grant privileges to persons to build toll-bridges over, or turnpikes or causeways along the same, or through any overflowed or wet land, whenever the interest of the county or of the traveling public shall, in their discretion, demand such improvements."

"§ 10258. No county court, after conferring the privileges of this act upon any person, shall again have power to confer the same, or like privileges, upon any other person to the injury of him upon whom such privileges were first conferred."

If we consider these two sections in their texts alone, setting aside for the moment any decisions of the Arkansas Supreme Court construing them, it is clear that Section 10258 does not confer any power upon a county court to grant any exclusive privileges in a toll bridge franchise. The section assumes that a franchise has been granted as provided by Section 10255 and declares that after it has been granted the county court shall not again have power "to confer the same, or like privileges" on another to the injury of the grantee. We must look, therefore, solely to Section 10255 to ascertain what were the franchise granting powers of the county court. And we perceive that the county court was empowered only to grant the privilege of building toll bridges, turnpikes and causeways. It was given no power to grant any exclusive privilege. But, of course, the two sections must be read together. When read together their effect is this: that any franchise granted by a county court under Section 10255 to build a toll bridge has implied in it the statutory obligation that the county court will not thereafter confer "the same, or like privileges" upon any other person to the injury of the grantee of the franchise. Returning now to the franchise actually sought to be granted by the county court, the franchise relied on in this case, we are constrained to the view that it exceeded the powers of the county court which granted it. No statute of Arkansas authorized the county court to agree, as it did agree in this franchise, that the franchise should be exclusive for a distance of ten miles on each side of the bridge to be constructed. The only exclusion provided for in the statutes was that "the same, or like privileges" should not be granted to other persons.

We are bound, of course, by the construction of any Arkansas statute by the Supreme Court of Arkansas. We have found no decisions of the Supreme Court of Arkansas which construe Section 10255, supra (the only section of the statutes of Arkansas purporting to confer any authority on county courts to grant franchises), as empowering the county courts to grant...