State v. Broad River Power Co.

• Decision Date: 16 December 1931
• Docket Number: 13306.
• Parties: STATE ex rel. DANIEL, Atty. Gen., v. BROAD RIVER POWER CO. et al.
• Court: South Carolina Supreme Court

162 S.E. 74

164 S.C. 208

STATE ex rel. DANIEL, Atty. Gen., v. BROAD RIVER POWER CO. et al.

No. 13306.

Supreme Court of South Carolina

December 16, 1931

Petition by the State of South Carolina, on the relation of John M Daniel, Attorney General, against the Broad River Power Company and others, in which the City of Columbia and others intervened. Both petitioners and respondents excepted to referee's report.

Report modified and affirmed.

See also, 153 S.E. 537, 157 S.C. 1.

The report of the referee and statement of facts directed to be reported are as follows:

Statement of Facts.

I. The following is a brief statement of the facts upon which the petition for counsel fees is based.

The Origin of the Suit.

This suit was first considered about May or June, 1927, by the firm of Melton & Belser, who, realizing, from the premeditated way in which the companies had gone about discontinuing the street railway service, that the case would be difficult and hard fought, associated Messrs. H. N Edmunds, C. T. Graydon, and Nelson & Mullins. The firm of Melton & Belser at that time had several clients who claimed special contractual rights to the continuance of the street railway service, information as to which was furnished by said firm to the Attorney General for use in the hearings being held before the Railroad Commission.

The situation at that time was that the companies, having absolutely abandoned the street railway service in March 1927, in violation of existing orders of the Railroad Commission, were then fighting the efforts of the Attorney General before the Railroad Commission to require them to resume service, claiming among other things: (1) That the Columbia Railway, Gas & Electric Company had in June, 1925, transferred all its electric light, power, and gas assets to the Broad River Power Company; (2) that authority to make such transfer was a part of the canal settlement between the state of South Carolina and the Columbia Railway, etc., Company; (3) that the Columbia Railway, Gas, etc., Company was entirely without funds and insolvent; (4) that the Columbia Railway, etc., Company and the Broad River Power Company were separate corporations; (5) that the street railway service could not be operated except at an enormous loss (of about $100,000 a year); (6) that the competition from jitneys and busses had destroyed the street railway service; and (7) that the Columbia Railway, etc., Company besides being insolvent could not as a matter of law be required to operate the street railway service at a loss.

Under these circumstances, we carefully considered the whole situation, and, after consultation with the Attorney General, decided that it would be necessary to institute a suit in the Supreme Court which would combine the characteristics of (1) a creditor's suit to set aside the so-called transfer from the Columbia Railway, Gas & Electric Company to the Broad River Power Company, and (2) a suit for a writ of mandamus against both companies; and further that the suit should be instituted in the name of the State of South Carolina on the relation of the Attorney General, suing on behalf of all interested parties, and that thereafter the other parties whom we then represented, such as the towns of Arden and Eau Claire, North Columbia Land Company, Columbia College, the Chicora College, and Dr. W. B. Burney, should intervene in this suit. It was also contemplated and considered best that the Railroad Commission, who had already reached an informal decision and with whom we were then advising and co-operating in the preparation of their formal opinion, should likewise intervene in this suit.

Pleadings.

Accordingly the main petition was prepared along these lines. It recited that the petitioner was suing "on behalf of the public and of all municipalities, corporation, citizens, and all who may care to come in and be made parties to this proceeding." It alleged, among other things, that the "ostensible transfer and attempted separation was wholly pretensive *** was without consideration, intended to hinder and delay its creditors and particularly the public, and was illegal, null and void"; and prayed for an order directing the companies to reinstate and resume the operation of their street railway service, and "adjudging *** that the attempted separation of such transportation department from the other branches of their franchise is pretensive, illegal and void." This petition and prayer was, as will be afterwards shown, specifically granted by the court. We presented this petition to Mr. Justice Blease at Newberry on July 19, 1927, obtained from him on that date a rule to show cause based thereon, and on that date had the petition and rule served upon the respondent companies.

Meanwhile we had prepared intervention petitions on behalf of the city of Columbia, the towns of Arden and of Eau Claire, and of W. B. Burney, and presented these to the Supreme Court of South Carolina at a special term on August 3, 1927, and obtained orders allowing these parties to intervene, as well as a general order allowing any other interested parties to intervene in the suit. Subsequently from time to time during August and September, 1927, we prepared and filed intervention petitions on behalf of the board of trustees of Chicora College, Columbia College, the school board of the city of Columbia, and also, under circumstances hereinafter mentioned, for the Railroad Commission.

The companies filed (1) a demurrer upon various grounds to the main petition, also (2) a motion to strike out parts thereof, and also (3) a return and answer. In this return and answer, the defendant set up all the defenses and contentions which they had been making before the Railroad Commission. We thereupon filed a reply to the said petition. The companies also filed a reply to the said petition. The companies also filed substantially like demurrers and answer to all of the intervention petitions. The companies also filed a motion to vacate all the orders allowing the intervention petitions and to remand the entire case to the court of common pleas.

The companies' demurrers raised principally the points that the Attorney General had not the legal capacity to maintain the action; that the intervention petitions could not be properly joined in the suit; and that the petition did not state a proper case for mandamus against the companies.

We thereupon filed on behalf of all the petitioners in the case a motion to strike out all the demurrers, motions, answers, and returns of the respondent companies upon the ground that the same were sham and frivolous.

These motions, demurrers, and counter motions arising on the pleadings were set for hearing before the Supreme Court of South Carolina at its October, 1927, term.

The printed pleadings in the case in the transcript of record for the United States Supreme Court covered 100 pages.

THE SUIT IN THE UNITED STATES DISTRICT COURT TO Enjoin the Enforcement of the Order of the Railroad Commission.

Meanwhile the formal opinion and order of the Railroad Commission, in the preparation of which we had co-operated, was filed July 28, 1927, directing the Columbia Railway, Gas & Electric Company to restore the service. Soon thereafter the Columbia Railway, etc., Company instituted a suit in the United States District Court for the Eastern District of South Carolina under section 266 of the Judicial Code (28 USCA § 380) to enjoin the enforcement of the Railroad Commission's order, and for a temporary restraining order. We appeared along with the Attorney General and Assistant Attorney General in Charleston before Judge Cochran in opposition to the application for a temporary restraining order. As a result of this hearing, Judge Cochran made and filed an order on August 13, 1927, refusing the application for a temporary restraining order, but saying that he would call to his assistance a three judge court to consider the matter.

We thereupon in accordance with our previously laid plans prepared a petition for the Railroad Commission to intervene in the main suit, and at the same time obtained a stay order against the enforcement of the Railroad Commission's order except in and through that suit; this being done for the purpose of preventing the necessity of having a hearing before a three judge court under section 266 of the United States Judicial Code. We presented this petition and order to Mr. Justice Blease at Newberry on September 7, 1927, and obtained from him an order allowing the Railroad Commission to intervene and enforce its order in the main suit, in the meantime staying the enforcement of said order.

As a result of this action on our part and of Mr. Justice Blease's order, the injunction suit then pending in the federal court was suspended.

THE HEARING BEFORE THE SUPREME COURT ON THE MOTIONS to Dismiss and the Order of Reference.

Our motion to dismiss and for judgment upon the pleadings, and the motions and demurrers of the company, came on for hearing before the South Carolina Supreme Court at the October, 1927, term. We appeared and made an oral argument, and also prepared and filed a printed argument (22 pages) and a transcript of the "Charters, Contracts and Other Documents" (47 pages) in support of the motion. The companies also made an oral argument and filed a printed brief (51 pages) at this hearing."

The court took the matter under advisement, and on January 11 1928, handed down an order substantially overruling the companies' demurrers, and referring the issues of law and fact to L. D. Lide as special referee. The court held substantially that the intervention petitions could properly be tried in this suit, but that there were questions of fact raised by the respondents'...