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U.S. Supreme Court

Broad River Power Co. v. South Carolina, 281 U.S. 537 (1930)

Broad River Power Co. v. South Carolina

No. 528. Argued May 2, 1930

Decided May 19, 1930

281 U.S. 537


1. Upon review of a decision of a state court denying the existence under the load law of a right alleged to exist under that law and for which protection was claimed under the federal Constitution, the province of this Court is to inquire whether the decision rests upon a fair or substantial basis, and if there was no evasion of the constitutional issue, and the nonfederal ground has fair support, this Court will not inquire whether the rule applied by the state court is right or wrong, or substitute its own view of what should be deemed the better rule for that of the state court. P. 281 U. S. 540.

2. Two South Carolina corporations, one of them with a franchise to establish and operate an electric street railway and power system upon condition that the railway be in operation within five years, and the other with a franchise to sell and distribute electricity for light and power and for that purpose to erect poles and conductors, were consolidated under a special act of the legislature, in a new corporation whose franchises and privileges were granted for its corporate life, extending beyond the lives of the other companies. Under the consolidation act, the franchises of the old companies were consolidated, and became vested in the new one. The new company established a street railway and an electric power and lighting plant, using, so far as practicable, the same poles, wires and rights of way for both systems, and for forty years operated the properties as one business. In a suit brought by the state, the South Carolina Supreme Court decided that, by virtue of the consolidation, the privilege of operating the street railway was inseparable

Page 281 U. S. 538

from that of operating the electric power and light system; that together they constituted a unified franchise, which could not be abandoned in part and retained in part without the consent of the state, and that, so long as the company retained and operated its electric power and light system, it could not be permitted to abandon its street railway system.

Held, that it cannot be said that this interpretation of the state statutes so departs from established principles as to be without substantial basis. P. 281 U. S. 541.

3. Franchises are to be strictly construed, and that construction adopted which works least harm to the public. P. 281 U. S. 543.

4. A corporation operating an electric railway and an electric power and light plant under an inseparable franchise from a state, may constitutionally be forbidden by the state to abandon the railway while continuing the other business. Id.

5. The order compelling the operation of the railway in this case does not involve a determination whether or not the rate is confiscatory, nor does it foreclose a consideration of that question upon appropriate proceedings. P. 281 U. S. 544.

6. A legislative act (So.Car.Acts of 1925, p. 842) whose dominant purpose was to effect a merger or consolidation of named corporations, and which authorizes the transfer of all or any part of their franchises, providing, however, that the company acquiring any franchise shall take it subject to the restrictions, requirements, and conditions therein contained, reasonably may be deemed to preclude the breaking up of a unified franchise in such manner as to do away with obligations imposed by it, no purpose to permit this being disclosed in the body of the Act. Pp. 281 U. S. 544-547.

7. The fact that Acts for the merger of corporations and transfers of franchises are commonly prepared by those interested in the benefits to be derived from them, and that the public interest requires that they should be in such unequivocal form that the legislative mind may be impressed with their character and import so that privileges may be intelligently granted or purposely withheld, has firmly established the rule that they must be strictly construed, and that any ambiguity or doubts as to their meaning and purpose must be resolved in favor of the public interest. P. 281 U. S. 548.

8. Writ of certiorari to review a judgment of a state court, dismissed because the judgment was supported by a substantial, nonfederal ground. Id.

Writ of certiorari to 157 S.C. 1, dismissed.

Page 281 U. S. 539

Certiorari, 280 U.S. 551, to review a judgment of the Supreme Court of South Carolina, in the nature of mandamus, to compel the operation of an electric street railway. [Rehearing granted, October 13, 1930.]

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