Georgia Power Co. v. City of Decatur

• Decision Date: 15 April 1929
• Docket Number: 6849. [*]
• Citation: Georgia Power Co. v. City of Decatur, 168 Ga. 705, 149 S. E. 32 (Ga. 1929)
• Parties: GEORGIA POWER CO. v. CITY OF DECATUR.
• Court: Georgia Supreme Court

149 S.E. 32

168 Ga. 705

GEORGIA POWER CO. v. CITY OF DECATUR.

No. 6849. ^[*]

Supreme Court of Georgia

April 15, 1929

Judgment adhered to on Rehearing. June 28, 1929.

Syllabus by the Court.

Except the question made as to the effect upon the contract involved in this case between the city of Decatur and the predecessor of the Georgia Power Company, by the offer to surrender to the city the franchise or permit now held by the Georgia Power Company under that contract, the issues in the instant case were involved in Georgia Railway & Power Co. v. Town of Decatur, 153 Ga. 329, 111 S.E. 911, and were passed upon by this court in the decision rendered in that case.

To allow the Georgia Power Company to surrender its franchise or permit and to tear up its tracks would in effect be to allow that company to terminate a contract which has been held valid and which is binding upon the power company because of its relation to the corporation which entered into the contract and received the benefits thereof; and this cannot be done, because of the law which makes a valid contract effective according to its terms. And that principle is especially applicable in this case, because, if the contract is set aside or ignored, the situation of the parties anterior to the contract and at the time of making the same cannot be restored, inasmuch as the predecessor of the Georgia Power Company, which is now enjoying the benefit of the franchise or permit granted in pursuance of the contract was permitted to take up and remove another street railway to Decatur, which served that city and which would probably have continued to be operated had not the predecessor of the Georgia Power Company been permitted to remove the tracks of that railway and substitute therefor the present street railway; and this permission to remove the tracks of the former railway was a part of the consideration of the contract now under review.

Error from Superior Court, De Kalb County; John B. Hutcheson Judge.

Equitable petition by the City of Decatur against the Georgia Power Company, in which defendant filed a cross-bill. Judgment for plaintiff, and defendant brings error. Affirmed.

Colquitt & Conyers, of Atlanta, and Hugh Burgess, of Decatur, for plaintiff in error.

Alexander & McLarty, of Atlanta, for defendant in error.

STARK J.

This suit had its origin in the decision of the city of Decatur in 1925 to pave its streets in accordance with an act of the Legislature of Georgia, and to assess certain of the expenses of paving against the street railway. On July 9, 1925 plaintiff in error notified the city of Decatur that, unless it was relieved of the burden of this paving expense, it would be "willing to surrender to the City of Decatur the franchise for this line and remove the tracks from the streets." The city refused this proposition. On September 26, 1925, a communication was addressed to the mayor and commissioners of Decatur stating, among other things, that the "Georgia Railway and Power Company, as the lessees thereof, concurring herein, hereby formally surrenders the said permits and franchises granted by the Town and City of Decatur for the construction and operation of the said electric railway hereinbefore referred to." Attached to this notice was a certified copy, or copies, of the resolutions by the board of directors of the Georgia Railway & Electric Company and the Georgia Railway & Power Company. The notice recited when the discontinuance would be put in operation On September 28, 1925, the city of Decatur by proper resolution refused to accept the surrender of the said franchise, or permit, tendered to it by the street railway companies, as it would not be to the interest of the city to accept the same. The city of Decatur then filed this equitable petition against the Georgia Railway & Electric Company and the Georgia Railway & Power Company, to prevent the abandoning of these lines, setting up the contract made and entered into between the city and said street railway companies. Pending this litigation, the Georgia Railway & Electric Company and the Georgia Railway & Power Company have been consolidated and merged into the Georgia Power Company. In further discussion of this case, we will refer to the ordinance of March 3, 1903, of the city of Decatur and the contract entered into in pursuance thereof, dated April 1, 1903, as if made with the Georgia Power Company instead of Georgia Railway & Electric Company and Georgia Railway & Power Company.

It would seem that every attack that could be made upon this contract of April 1, 1903, has been made by the Georgia Power Company. When it was before this court the last time ( Georgia Railway & Power Co. v. Decatur, 153 Ga. 329, 111 S.E. 911), it was stated by Wright, Judge: "While the plaintiff in error now insists that some ten distinct points of attack upon the validity of the contract are made in the present appeal that were not made in the mandamus case (149 Ga. 1 [98 S.E. 696, 5 A.L.R. 1]), it is not and cannot be insisted that the identical questions of law were not involved upon the first hearing of the interlocutory injunction (152 Ga. 143, 108 S.E. 615) as are now involved upon this second appeal."

We have examined the original record in this court when the case was here before that we might again have before us the "ten distinct points of attack upon the validity of the contract" referred to in the decision; and every controlling issue was distinctly made and passed upon in that case that is made in the case now before us, unless it be the offer to surrender back to Decatur the franchise, or permit. In paragraph 37 of the company's answer it said: "Defendants show and allege that said so-called contract is indefinite as to the time it is to run; said provision contains no definite or fixed time during which a fare of five cents is to be charged, and because of said indefiniteness said so-called contract provision is revokable on notice, and as shown by exhibit 'D' attached to the petition defendants have served notice on petitioner, terminating said contract on the twentieth day of October, 1920, and so-called contract, if it ever had any force and effect, is now terminated." The company further set out in its answer and cross-bill a copy of the order of the Railroad Commission of the state of Georgia, dated September 22, 1920, among other things stating: "The five-cent fares now in effect on the main Decatur line, *** contracted for under vastly different conditions than now exist, are not fairly compensatory, and as to the patrons of the company on other routes, and on intermediate territory on these routes, are discriminatory. This Commission is without power to increase them."

"Defendants further allege that provisions, or contracts, with reference to rates, or fare, being with reference to a legislative or police power, must be for a definite term, not grossly unreasonable, and that...