Fort Smith Light & Traction Company v. Bourland

• Decision Date: 18 June 1923
• Docket Number: 46
• Citation: 254 S.W. 481,160 Ark. 1
• Parties: FORT SMITH LIGHT & TRACTION COMPANY v. BOURLAND
• Court: Arkansas Supreme Court

254 S.W. 481

160 Ark. 1

FORT SMITH LIGHT & TRACTION COMPANY v. BOURLAND

No. 46

Supreme Court of Arkansas

June 18, 1923

Appeal from Sebastian Circuit Court, Fort Smith District; John E Tatum, Judge; affirmed.

Judgment affirmed.

Hill & Fitzhugh, for appellant.

A public service corporation, we know, can not select and serve only the portion of the territory covered by its franchise which it is profitable for it to serve, and abandon or restrict the service to the remaining portions. 245 U.S. 345 62 L. ed. 337. But property invested in public service corporations is fully protected as other private property and the owners cannot be deprived of it without just compensation, or due process of law. The evidence shows there is no probability of the service on Greenwood Avenue ever becoming profitable, that it is operated at a loss, and that appellant is making less than 2 per cent. return upon its entire property devoted to the street-car service. 244 U.S. 388, Law. ed. 1216; 252 U.S. 100, 64 L. ed. 476; 251 U.S. 393, 64 L. ed. 323; 119 Ark. 239; 105 Ark. 314; 254 U.S. 513, L. ed. 380. Requiring a company to keep on at a loss would be an unconstitutional taking of its property. 199 Mass. 394, 19 L. R. A. (N. S.) 865; 113 F. 823, 145 F. 281; note 11 A. L. R. 252; 1918-E, 748. The circuit court quoted from §§ 791-2, 834, 836, Digest of City Ordinances, which were not introduced in evidence or not part of the record, and of which the court does not take judicial cognizance. 68 Ark. 483; 108 Ark. 24. These sections, except 791, are the same as sections of the franchise ordinance. The appellant surrendered its franchise and was issued an indeterminate permit in lieu thereof. The court erred in holding, after the act of 1919 divested the city of Fort Smith of the right to enforce the terms of the franchise against appellant, that it was not absolved from performance of its contractual obligation. 145 Ark. 205; 148 Ark. 260; 149 Ark. 509. The surrender of the franchise and receiving in lieu thereof an indeterminate permit was a mutual rescission of the old contract and the making of a new one in its place.

Fadjo Cravens and Daily & Woods, for appellee.

Appellant attempted by the proceeding to abandon the 1,620 feet on Greenwood Avenue of one of the best paying lines of its entire street railway system, and this court should affirm the judgment of the circuit court denying its right to do so. Appellant's case is presented on the erroneous theory that it should be tried de novo here under § 21, act 124 of Acts of 1921. No motion in writing praying an appeal was filed as required by said act, and the Legislature was without power to enlarge the jurisdiction of the Supreme Court thereby. This question was suggested in Ry. v. Stewart, 150 Ark. 590, but had already been decided in Harding v. State, 94 Ark. 65; §§ 4 and 15, art. 7, Constitution of Arkansas. In discussing the case on its merits, however, we assume that this court will try it as it does chancery cases, de novo. Appellant was not relieved of its obligation to supply service to the people of the city by securing an indeterminate permit. Act 1919, §§ 15 and 17, act 124, Acts of 1921. The action refusing permission to appellant to abandon the service on its line on Greenwood Avenue was not unreasonable nor arbitrary. 245 U.S. 345, 62 L. ed. 337. 119 Ark. 239 has no application here. No question of rates comes into this case. Even if appellant could make a showing, which it can not, that would warrant the abandonment of its entire street railway system, or the discontinuance of service on the line of which the tracks on Greenwood Avenue is a part, it would not be entitled to select this Greenwood Avenue part of the line or system for abandonment.

Hill & Fitzhugh, in reply.

Once an appeal was taken, the appellant is entitled to have it reviewed under the rule as provided in § 21, act 124, of Acts 1921, regardless of whether a motion for appeal was filed as required by said act. It may be the court could have refused to grant this appeal without such motion filed, but it was granted. 51 Ark. 344; 54 Ark. 554; 94 Ark. 345; 94 Ark. 347; 58 Ark. 446. Act providing such cases shall be reviewed and determined in Supreme Court as are chancery cases, de novo, not unconstitutional, and this complaint states a cause of action independent of the proceeding before the city commission, as well as a cause for relief from the order of the city commission by a review thereof under § 19, act 124, Acts 1921. See 253 U.S. 287; 230 U.S. 352; 230 U.S. 474; 230 U.S. 553; Keller v. Potomac Electric Power Co., 261 U.S. 428. Case of 94 Ark. 65 not applicable here. Public utility not bound by order of Commission, reasonable or fair, irrespective of its financial status. 252 U.S. 10.

MCCULLOCH, C. J. Judges WOOD and HART dissents.

OPINION

MCCULLOCH, C. J.

Appellant is a corporation owning and operating a street-car system in the city of Fort Smith, and this case involves the right of appellant to remove and abandon a portion of its track along one of the streets of the city, contrary to the orders of the city commissioners, the city of Fort Smith being operated under a commission form of government.

Appellant formerly operated under a franchise granted by the city government many years ago, but, during the existence of the Corporation Commission, under the act of April 1, 1919 (Crawford & Moses' Digest, § 1607 et seq.), it surrendered its charter and received what is designated as an "indeterminate permit" (Crawford & Moses' Digest, §§ 1655, 1656), and has continued to operate since that date under said permit.

The act of February 15, 1921 (General Acts, 1921, p. 177) abolished the Corporation Commission and restored to municipal governments the control and supervision of street railroads and certain other public service utilities operating within municipalities.

On November 7, 1922, appellant presented a petition to the city commission of Fort Smith, pursuant to § 10 of the last statute referred to, for permission to abandon and remove its track on Greenwood Avenue and discontinue service to that extent. There was a hearing before the city commission, and permission to remove and abandon the track on Greenwood Avenue was denied, whereupon appellant filed its petition, or complaint, in the circuit court of Sebastian County, setting forth the grounds upon which it claimed the right to discontinue service and remove its tracks on Greenwood Avenue, and praying that the circuit court make an order such as should have been made by the city commission, on petition of appellant, granting permission to appellant to cease operating the line on that street. Appellees, the city commissioners, filed a response denying the allegations of appellant's complaint with respect to the grounds for abandonment of the track on Greenwood Avenue, and, upon the issue thus framed, there was a trial of the cause in the circuit court, which resulted in a judgment denying the relief prayed for by appellant, and affirming the order of the commission. An appeal has been prosecuted to this court.

Section 19 of the act of February 15, 1921, supra, provides that any person, firm or corporation aggrieved by any order made by a municipal council or city commission, pursuant to the authority conferred under that statute, "shall have the right to have said action on the part of such municipal council or city commission reviewed as to its legality, validity, fairness and reasonableness by the circuit court of the county in which said municipal council or city commission is located. * * * Said review, however, by the said circuit court shall be made, provided, and upon condition, that the applicant files in said court or in the office of the clerk thereof, within sixty (60) days after making of such order or ordinance or rate as to which the appeal is desired, its petition or complaint, as in other cases, setting out the order or ordinance or rate or other matter therein complained of, therein alleging, according to the usual rules of pleading, facts showing that the applicant is entitled to the relief therein prayed, upon which complaint summons shall be issued and served in the manner and for the time as in other circuit (court) cases; the said appeal in the circuit court shall proceed de novo."

In the brief of counsel for appellant attention is called to the fact that the complaint filed by appellant is applicable either in an independent action to prevent unlawful restraint by the city commission, or to a complaint, or petition, in the nature of appeal under the statute. No point of objection is made by counsel for appellees to this method of treatment of that subject, as in a review either by the methods prescribed by the statute or by an independent action, if the statute may be ignored and an independent action for relief instituted, there is a hearing de novo, and the same facts are considered and like principles of law are applicable in either case in determining the right of appellant to discontinue service as claimed.

In the case of St. Louis Southwestern Ry. Co. v. Stewart, 150 Ark. 586, 235 S.W. 1003, we decided that a similar provision in the act of 1919, supra, afforded a judicial review de novo of the orders of the commission.

The question presented for our decision on this appeal is whether the order of the commission refusing to grant permission to appellant to abandon the track and service in question is reasonable, or whether it is unreasonable and arbitrary and operates as a confiscation of appellant's property. The first question to be considered in this connection is the extent of and purpose for which we may consider the testimony in the case.

Section 21 of the act of February 15, 1921, supra,...