Burton v The Wilmington Parking Authority Jurisdictional Statement

    I n  the

fhtpnnue (Umirt of Xl 12 ImtTfc
October Term, 1959

W il l ia m  H . B urton ,
Appellant,

—v.-

T he  W ilm in gton  P arking  A u th o rity , a body corporate and 
politic of the State of Delaware, and

E agle C offee S ho ppe , I n c ., a  corporation of the 
State of Delaware,

Appellees.

o n  a p p e a l  f r o m  t h e  s u p r e m e  c o u r t  of

THE STATE OF DELAWARE

JURISDICTIONAL STATEMENT

L ouis L. R edding 
L eonard L. W illiam s  

923 Market Street 
Wilmington 1, Delaware

Counsel for Appellants



I N D E X
PAGE

Opinions Below ..................................................  2

Jurisdiction ......................................................................  2

Questions Presented ......................................................  3

Statutes Involved ............................................................  4

Statement ..........................................................................  4
How the Federal Questions Are Presented.......  7

The Questions Are Substantial..................................... 9

A ppendices

Appendix A—Opinions ........................................— 23

Appendix B— Statutes ..........................................  43

Appendix C—Mandate ..........................................  70

T able of C ases

Aaron v. Cooper, 261 F. 2d 97 (8th Cir. 1958) ........... H

Brown v. Board of Education, 347 U. S. 483 ...........  10

City of Greensboro v. Simkins, 246 F. 2d 425 (4th 
Cir. 1957), affirming 149 F. Supp. 562 (M. D. N. C.
1957) ........................................................................ ------ 11

City of St. Petersburg v. Alsup, 238 F. 2d 830 (5th
Cir. 1956), cert. den. 353 U. S. 922 ........................ -  21

Civil Rights Cases, 109 U. S. 3 ......................................  12,19



Coke v. City of Atlanta,------F. Supp. -------- (N. D.
Ga., Jan. 6, 1960) ..... ..................................................  11, 20

Cooper v. Aaron, 358 IT. S. 1 ...................................10,16, IS
Culver v. City of Warren, 84 Ohio App. 373, 83 N. E.

2d 82 (1948) ......... ....................................................... 11

Dahnke-Walker Milling Co. v. Bondurant, 257 U. S.
282 .................................................................................  3

Derrington v. Plummer, 240 F. 2d 922 (5th Cir. 1956), 
cert. den. 353 U. S. 924 .......................................... 11,19, 20

Gayle v. Browder, 352 IT. S. 903 ................. .................  10
Gibson v. Mississippi, 162 IT. S. 565 ........................... 10

Henry v. Greenville Airport Commission,------ F. 2d
------  (4th Cir. 1960) ..................................................  11

111. ex rel. McCollum v. Board of Education, 333 
U. S. 203 ......................................................................  3

Jones v. Marva Theatres Inc., 180 F. Supp. 49 (D. C.
Md. 1960) ............................................... .................. 18,19, 20

Jones v. IT. S .,------ U. S .------- , 4 L. ed. 2d 697, 705 .... 18

Kern v. City Commissioners, 151 Kans. 565, 100 P.
2d 709 (1940) ................................................................

Kerr v. Enoch Pratt Free Library, 149 F. 2d 212 
(4th Cir. 1945), cert. den. 326 U. S. 721...................

Lawrence v. Hancock, 76 F. Supp. 1004 (S. D. W. Va.
1948) .............................................................................. 11

Lincoln Park Traps v. Chicago Park District, 323 111.
A pp. 107, 55 N. E. 2d 173, 175, 176 (1944) ...........  11

Muir v. Louisville Park Theatrical Ass’n, 347 U. S. 
971, vacating and remanding 202 F. 2d 275 (6th 
Cir. 1953) ......................................................................

11

17

11



Ill
PAGE

Napue v. Illinois, 360 U. S. 264 ..................................... 15
Nash v. Air Terminal Services, 85 F. Supp. 545

(E. D. Va. 1949) ..................................-............. - .... -  U , 20
Niemotko v. Maryland, 340 U. S. 268 ....................-.....  15
Norris v. Alabama, 294 U. S. 587 ....................-.......... — 15

Pennsylvania v. Board of Directors of City Trusts,
350 U. S. 230 ....................- ........... -............................  3,16

Poulos v. New Hampshire, 345 IT. S. 395 ...................  3

Rice v. Elmore, 165 F. 2d 387 (4th Cir. 1947), cert, 
den. 333 U. S. 875 ........................................................  21

Shelley v. Kraemer, 334 U. S. 1 - ..................................  12
Smith v. Allwright, 321 U. S. 649 .............-.... -............  21
Spano v. New York, 360 U. S. 315............................... 15

Tate v. Department of Conservation, 133 F. Supp.
53 (E. D. Va. 1955), aff’d 231 F. 2d 615 (4th Cir.
1956), cert. den. 352 U. S. 838 ........... ................. .....  11

Terry v. Adams, 345 U. S. 461............... .......................  21

Union National Bank v. Lamb, 337 U. S. 38, 39-40 .... 3

Wilmington Parking Authority v. Ranken, 34 Del.
Ch. 439, 105 A. 2d 614, 618 (1954) ...... .................... 5,15,16



I n th e

GJmrrt of tip? ilmti'ii §tati>B
October Term, 1959 

No.................

W illiam  H. B u rton , 

—v —
Appellant,

T he  W ilm ington  P arking  A u th o rity , a body corporate and 
politic of the State of Delaware, and

E agle C offee S ho ppe , I n c ., a corporation of the 
State of Delaware,

Appellees.

ON APPEAL FROM THE SUPREME COURT OF 
THE STATE OF DELAWARE

Jurisdictional Statement

Appellant, William H. Burton, appeals from the judg­
ment of the Supreme Court of the State of Delaware of 
January 11, 1960, reversing a judgment of the Delaware 
Court of Chancery, which had enjoined the Wilmington 
Parking Authority, an agency of the State and its lessee, 
Eagle Coffee Shoppe, Inc., from refusing food service to 
appellant because he is a Negro. Appellant submits this 
statement to show that the Supreme Court of the United 
States has jurisdiction of this appeal and that substantial 
questions are presented. In the alternative, should this 
Court deem appeal to be an inappropriate mode of review,



2

appellant prays that this jurisdictional statement be con­
sidered as a petition for writ of certiorari.

Opinions Below

The opinion of the Supreme Court of Delaware is re­
ported at 157 A. 2d 894 (1960). The opinion of the Court 
of Chancery is reported at 150 A. 2d 197 (1959). These 
opinions are reprinted herewith in Appendix A.

Jurisdiction

This suit was brought by appellant, William H. Burton, 
as a class action in the Court of Chancery of the State of 
Delaware, in and for New Castle County, for a declaratory 
judgment and injunctive relief against the Wilmington 
Parking Authority, a public agency of Delaware, which 
owns and operates a large public garage in downtown 
Wilmington, and its lessee, Eagle Coffee Shoppe, Inc., to 
restrain, as a denial of equal protection of the laws secured 
by the Fourteenth Amendment, the refusal to serve appel­
lant, solely because he is a Negro. The judgment of the 
Supreme Court of Delaware,1 reprinted infra Appendix C, 
reversing the declaratory judgment and injunction granted 
by the Court of Chancery, was entered on January 11, 1960; 
and on February 4, 1960, the Supreme Court of Delaware 
without opinion denied reargument. Notice of appeal was 
filed in the latter court on April 28, 1960. The jurisdiction 
of this Court to review by appeal is conferred by 28 United 
States Code §1257(2). Alternative grounds for review by 1

1 The decision of the Supreme Court of Delaware, as will appear 
later, sustained the validity of a statute of the State of Delaware, 
viz., 24 Delaware Code, §1501, upon which appellees justified the 
racial discrimination which the Court of Chancery had held for­
bidden by the Fourteenth Amendment to the Constitution of the 
United States.



3

Writ of Certiorari are found in 28 U. S. C., §§1257(3) and 
2103. The following decisions sustain the jurisdiction of 
this Court to review the judgment by appeal in this case: 
Dahnke-Walker Milling Co. v. Bondurant, 257 U. S. 282; 
Poulos v. New Hampshire, 345 U. S. 395; III. ex rel. Mc­
Collum v. Board of Education, 333 U. S. 203. For authority 
to consider this appeal as petition for writ of certiorari, 
see Pennsylvania v. Board of Directors of City Trusts, 
353 U. S. 230; Union Nat’l Bank v. Lamb, 337 U. S. 38, 
39-40.

Questions Presented

Appellees admit that refusal to serve appellant, a Negro, 
in a restaurant operated under lease from the Wilmington 
Parking Authority and located in its public garage was 
“ because of his [appellant’s] race, color and ancestry.” 
(Record: Document #10  in Court of Chancery.) Appellees 
defend this racial discrimination as authorized and justified 
by Title 24, Delaware Code 1953, Section 1501, which 
provides that a restaurateur shall not be obliged “ to fur­
nish entertainment or refreshment to persons whose re­
ception or entertainment by him would be offensive to the 
major part of his customers and would injure his business.” 
There was no showing at all concerning offense to cus­
tomers or injury to business. Against appellant’s insistence 
that, if interpreted and applied to permit discrimination 
against him solely because of race, the statute was uncon­
stitutional, the court below affirmed such interpretation and 
application. The questions presented in this context are:

1. Whether Title 24, Delaware Code, Section 1501, con­
strued and applied by the Supreme Court of the State of 
Delaware to authorize and permit a restaurateur to dis­
criminate solely on the ground of race, is repugnant to the 
Fourteenth Amendment to the Constitution of the United 
States.



4

2. Whether where this statute is construed and applied 
to authorize racial discrimination in a restaurant leased 
within the garage of the Wilmington Parking Authority, a 
publicly owned entity of the state, Fourteenth Amendment 
rights are denied.

Statutes Involved

Title 24, Delaware Code, §1501 and Title 22, Delaware 
Code, Chapter 5, are set forth herein in Appendix B.

Statement

Appellant, a Negro resident in Wilmington, Delaware, 
on August 14, 1958, parked his automobile in the public 
parking structure of appellee Wilmington Parking Author­
ity (Authority) and then proceeded into a restaurant oper­
ated in the parking facility. There he sought food service 
and was refused, solely because of his race (Complaint and 
amended answer, Record: Documents # 1  and #10  in 
Chancery).

The Authority is a public body corporate and politic, 
established by the City of Wilmington, Delaware, pursuant 
to 22 Delaware Code, Ch. 5, to construct and operate a 
facility for off-street parking of automobiles. That statute 
declares that the purposes for which a parking authority 
shall exist and operate are “ public” uses. The Authority 
has the power of eminent domain. The land on which this 
facility is erected, however, was acquired through nego­
tiated purchases, the purchase money coming from three 
sources: revenue bonds issued on the credit of the Au­
thority, cash donated by the City of Wilmington, a bank 
loan to the Authority. Later the City of Wilmington gave 
the Authority $1,822,827.69 which was applied to redemption 
of revenue bonds and to repayment of the bank loan. The 
structure itself was erected solely from the proceeds of the



5

Authority’s revenue bonds (Affidavit of Jay C. Pownall, 
Authority chairman, Record: Document # 1  in Court of 
Chancery).

Title 22, Delaware Code, Ch. 5, §504(a) (Appendix R, 
infra) provides that the Authority may lease portions of 
the first floor of the facility for commercial use where such 
leasing is necessary and feasible for the financing and oper­
ation of such facilities. The Authority is required to be 
financially self-sustaining (Wilmington Parking Authority 
v. Eanken, 34 Del. Ch. 339, 105 A. 2d 614, 1954). The Au­
thority determined that it would be feasible to erect and 
operate the structure only if, in addition to fees from park­
ing, there was income from commercial leasing of space in 
the structure.

Appellee Eagle Coffee Shoppe, Inc. (Eagle), a Delaware 
corporation, leased certain space from the Authority in 
April, 1957, for twenty years with a ten year option to 
renew. This lease required Eagle to operate a restaurant, 
dining room, banquet hall, cocktail lounge and bar and to 
engage in no other business (Affidavit of Jay C. Pownall, 
Authority chairman, Record: Document # 7  in Court of 
Chancery)- Eagle covenanted to “ occupy and use the leased 
premises in accordance with all applicable laws of any fed­
eral, state or municipal authority.”  The Authority has 
the right to enforce the provisions of the lease in strict 
accordance with its terms. (Record: Document # 6 , i.e., 
appendix of appellant, appellee below, in Supreme Court of 
Delaware.)

Appellant, on August 20, 1958, filed in the Delaware 
Court of Chancery a complaint in a class action against the 
Authority and Eagle. This complaint alleged that the Au­
thority, “ acting through the instrumentality of its lessee,” 
Eagle, “ using and occupying a portion of said public facil­
ity,” had refused food service to appellant, solely because 
of his race. This refusal the complaint alleged to be con­



6

duct of an agency of the State of Delaware, depriving appel­
lant of the equal protection of the laws in violation of the 
Fourteenth Amendment.

When the Vice Chancellor rendered the decision of the 
Court of Chancery, there had been filed in that court the 
complaint, answers by appellees, which included an admis­
sion by Eagle that appellant was refused service because 
of his race, color and ancestry (Eagle’s amended answer, 
Record: Document #10, in Chancery); motions for sum­
mary judgment by the Authority and Eagle, a countermo­
tion for summary judgment by appellant, and affidavits in 
support of the motions. Appellees’ motions for summary 
judgment set forth, in essence, two grounds: (1) that
operation of the restaurant in the parking facility was the 
private business of Eagle and independent of control by 
the Authority; (2) that under a Delaware statute, 24 Dela­
ware Code §1501, Eagle was permitted to refuse service to 
appellant.

The Vice Chancellor’s decision, 150 A. 2d 197, Appendix 
A, infra, denying appellees’ motions for summary judgment 
and granting appellant’s motion, held the Authority to be 
an agency of the State engaged in furnishing a public park­
ing service in a public facility, and that the Fourteenth 
Amendment is applicable to all aspects of the structure and 
forbids discriminatory practices in the restaurant. It was 
“ incumbent on the Authority,” the Vice Chancellor con­
cluded, “ to negotiate and enter into leases on terms which 
would require the tenant to carry out the Authority’s duty 
not to deny to Delawareans the equal protection of the 
laws” (150 A. 2d 197, 199). Deciding thus, the Vice Chan­
cellor stated it was unnecessary to consider appellees’ re­
liance on 24 Delaware Code, §1501.

The Supreme Court of Delaware was of the opinion (157 
A. 2d 894, Appendix A, infra) that the only concern the



7

Authority had with Eagle was the receipt from Eagle of 
rent, “without which it [the Authority] would be unable to 
afford the public the service of off-street parking.” It 
therefore concluded that Eagle’s discriminatory act was not 
that of the Authority. Accordingly, having decided that 
Eagle, lessee of the Authority, was acting in a “ purely 
private capacity,”  the Supreme Court, in the face of Eagle’s 
admission that it refused to serve appellant because of his 
color, and because of color alone, with no evidence at all 
before it on the question of “ offense” to other customers, 
or “ injury” to business (operative terms of the statute), 
held that 24 Delaware Code §1501 authorized Eagle to 
refuse to serve appellant solely on the basis of race, and 
reversed the Vice Chancellor.

Hoiv the Federal Questions Are Presented

The federal questions in this case are presented and 
were disposed of in the courts below in the following 
manner:

a. Initially, a Federal question is presented by the com­
plaint which alleges that the Wilmington Parking Authority 
in the operation of a publicly owned structure and the 
Authority’s lessee, Eagle, discriminated against appellant 
on the ground of race in violation of the equal protection 
clause of the Fourteenth Amendment to the Constitution 
of the United States. Pursuant to regular state practice 
appellant’s trial court brief (Beeord: Document #11  in 
Chancery) opposing appellees’ brief in support of their 
motion for summary judgment, argued that Eagle was so 
closely identified with the Authority in effectuating its 
public purpose that the Fourteenth Amendment rules ap­
plicable to the state agency applied. Appellant’s argument 
was sustained by the judgment of the trial court.

b. Second, a federal question was raised by appellant in 
the trial court on appellees’ motion for summary judgment



8

based on the ground that 24 Delaware Code §1501 permits 
Eagle to refuse service to appellant on the ground of race. 
In accordance with Delaware practice, appellant’s brief 
urged that, if the Delaware statute were applied to authorize 
Eagle to make discriminatory regulations based solely on 
race, the discriminatory exclusion by Eagle emanated not 
from its private action but under the aegis and sanction 
of discriminatory legislative action, which is state action 
of a kind prohibited by the Fourteenth Amendment.

c. Again, in the Supreme Court of Delaware, defending 
the judgment below, each of the above arguments raising 
a federal question was made by appellant’s brief (Record: 
Document # 7  in Supreme Court of Delaware) in. the mode 
appropriate to raise such questions under state law. In that 
court also, consonant with the admission in the record that 
appellant was refused food service only because of his race, 
appellees argued that 24 Delaware Code §1501 permits 
Eagle to exclude appellant although none of the factors 
enumerated in the statute (i.e. offensiveness and injury to 
business) were established in the record. The Authority 
argued below that “ no issue of fact [was] raised by applica­
tion of Section 1501” and that the Court below could, as a 
“ short cut,” take judicial notice that appellant is “ a member 
of a class of persons offensive to a ‘major part’ of cafe 
customers . . .  a notorious and self-evident fact” (Brief of 
Wilmington Parking Authority, Record: Document # 3  in 
Supreme Court of Delaware, p. 15). Appellant insisted 
below that the statute so construed would violate the Four­
teenth Amendment (Record: Document # 6  in Supreme 
Court of Delaware, p. 22). However, the Supreme Court 
of Delaware held that Eagle was a private enterprise im­
mune from the Fourteenth Amendment, that the Authority 
was not constitutionally answerable for the racial discrimi­
nation of which appellant complains ; and it applied and en­
forced the statute as authorizing Eagle to exclude appellant



9

because of Ms race notwithstanding complete absence of 
evidence as to appellant’s offensiveness or any injury he 
would do Eagle’s business.

The Questions Are Substantial

Appellant submits that the questions involved herein are 
substantial and merit plenary consideration by this Court. 
The opinion below conflicts with a consistent line of deci­
sions by this Court, United States Courts of Appeals, Dis­
trict Courts, and the highest courts of several states on 
important federal constitutional questions. Because ap­
pellant prays that this jurisdictional statement be con­
sidered in the alternative as a petition for a writ of certio­
rari pursuant to 28 U. S. C. §§2103, 12o7(3) in the event 
that appeal is deemed an inappropriate mode of review, 
it is suggested respectfully that the conflict of decisions 
and the public importance of the questions involved afford 
sound basis for the exercise of this Court’s certiorari 
jurisdiction.

This case involves questions of the responsibility of a 
state government agency and the lessee of a portion of a 
building owned and maintained by it to accord equal treat­
ment to Negro citizens as well as the constitutionality of 
a state statute interpreted by the court below to authorize 
appellant’s exclusion from such facility solely because of 
his race.

It is plainly of great public importance to our nation 
that our courts, both state and federal, give full and fair 
implementation to the equalitarian principles of the Four­
teenth Amendment to the Constitution of the United States 
and protect all citizens from racial discrimination at the 
hands of governmental agencies. The freedom of citizens



10

from racial discrimination by the state is of fundamental 
importance to our system and basic in our national ideals.2

I

This case presents the question of whether the Supreme 
Court of Delaware may employ 24 Del. Code §1501 as 
justification for appellee Eagle’s exclusion of appellant from 
its restaurant. After arriving at the conclusion that Eagle 
is a private enterprise immune from the Fourteenth 
Amendment, the court below turned to the statute which 
justifies barring a would-be patron if he is offensive to a 
majority of an establishment’s patronage and his presence 
would injure the business. There was not a whit of evi­
dence on offensiveness or injury to business. There is only 
the admission that appellant was excluded solely because 
of his race. Appellee’s brief merely prayed that the state 
Supreme Court take notice of the “notorious” and “ self- 
evident” fact that Negroes are offensive. On this founda­
tion and nothing more, the Delaware Supreme Court held 
that Eagle was exonerated by the statute. It is now too 
well established to require any extended argument that a 
statute which authorizes racial distinctions is patently vio­
lative of the Fourteenth Amendment. Brown v. Board of 
Education, 347 U. S. 483; Gayle v. Browder, 352 U. S. 903.

This case also presents the racial discrimination question 
in a context that has recurred in litigation over a number 
of years, as the list of authorities cited below indicates. 
The overwhelming weight of authority in cases involving 
racial discrimination in state-owned leased property is that 
governmentally owned properties and facilities managed by 
lessees and concessionaires, holding no governmental office,

2 See, e.g.: Cooper v. Aaron, 358 U.S. 1, 19, 20; Gibson v. Mis­
sissippi, 162 U.S. 565, 591-592.



11

are subject to the restraints of the Fourteenth Amendment 
against racial discrimination. Muir v. Louisville Park The­
atrical Ass'n, 347 U. S. 971, vacating and remanding 202 
F. 2d 275 (6th Cir. 1953) (leased open air theater); Tate 
v. Department of Conservation, 133 F. Supp. 53 (E. D. Va. 
1955), aff’d 231 F. 2d 615 (4th Cir. 1956), cert. den. 352 
U. S. 838 (leased beach) ; Derrington v. Plummer, 240 
F. 2d 922 (5th Cir. 1956), cert. den. 353 U. S. 924 (leased 
cafeteria) ; City of Greensboro v. Simians, 246 F. 2d 425 
(4th Cir. 1957), affirming 149 F. Supp. 562 (M. D. N. C. 
1957) (leased golf course); Aaron v. Cooper, 261 F. 2d 97 
(8th Cir. 1958) (leased school); Lawrence v. Hancock, 
76 F. Supp. 1004 (S. D. W. Va. 1948) (leased swimming 
p o o l); Jones v. Marva Theatres Inc., 180 F. Supp. 49 (D. C. 
Md. 1960) (leased motion picture theatre); Nash v. Air 
Terminal Services, 85 F. Supp. 545 (E. D. Va. 1949) (leased
restaurant); Coke v. City of Atlanta, ------  F. S u p p .------
(N. D. Ga., January 6, 1960) (leased restaurant), cited with
approval in Henry v. Greenville Airport Commission,------
F. 2d — — (4th Cir. 1960); Culver v. City of Warren, 84 
Ohio App. 373, 83 N. E. 2d 82 (1948) (leased swimming 
p o o l); Kern  v. City Commissioners, 151 Kans. 565, 100 
P. 2d 709 (1940) (leased swimming pool). Cf. Lincoln Park 
Traps v. Chicago Park District, 323 111. App. 107, 55 N. E. 
2d 173, 175, 176 (1944) (leased sheet shooting range). II

II

Both appellees justified the racial discrimination prac­
ticed against appellant by Title 24 Delaware Code §1501, 
which provides that a restaurant proprietor may exclude 
anyone “ whose reception or entertainment by him would 
be offensive to the major part of his customers, and would 
injure his business.” Appellant contended below that this 
statute would be unconstitutional under the Fourteenth



12

Amendment if applied to permit his exclusion on the basis 
of race alone. The Supreme Court of Delaware upheld the 
appellees’ argument finding that the statute justified the 
exclusion of appellant on the record presented.

In this connection it must be noted that there was no 
allegation, proof, or suggestion that appellant was “ offen­
sive” to any of appellees’ customers in any way or would 
have any effect on appellees’ business. Appellees admit 
that the exclusion was solely because of race and rely simply 
on appellant’s presumed offensiveness because of his race 
to establish their right to exclude him. The Court below 
adopted this construction of the statute, thus interpreting 
the statute to specifically provide for the exclusion of 
Negroes as such. So interpreted and applied to the appel­
lant the statute patently violates the Fourteenth Amend­
ment, for that amendment prohibits not only legislation 
which explicitly works a racial discrimination but “ state 
action of every kind, which impairs the privileges and im­
munities of citizens of the United States, or which injures 
them in life, liberty or property without due process of 
law, or which denies to any of them the equal protection 
of the laws.” Civil Rights Cases, 109 U. S. 3, 11. It matters 
not that this racial proscription was read into the statute 
by judicial construction, rather than written into it by the 
legislature. Racial discrimination by judicial action is as 
unconstitutional. Shelley v. Kraemer, 334 U. S. 1.

Here one state statute created a governmental agency 
and authorized it to acquire property and lease portions 
of it to private businesses, and another statute authorized 
the exclusion of plaintiff from the leased premises owned by 
the government simply upon the basis of race and nothing 
more. The hand of government weighs heavily indeed in 
the racial discrimination imposed upon appellant. Under 
well settled principles he is entitled to relief against state 
conduct of this sort.



13

III

Moreover, the decision below upholds racial discrimina­
tion in a state-owned facility contrary to well settled in­
terpretations of the Fourteenth Amendment. The court 
below has reached a result contrary to that in all of the 
cases cited above, supra, p. 11, plainly a gross departure 
from the law. Beyond this, the opinion below rests on 
standards which, if not overruled, will not only deprive 
countless Delaware citizens of constitutional lights, but 
will introduce a standard corrosive of the well settled 
“ state action” rule governing state-owned leased property. 
The decision below appears to rest on the following con­
clusions pertinent to this aspect of the case:

1. Although the Wilmington Parking Authority is a crea­
ture of the state and performs a public function as an 
agency of the state, only $934,000, “approximately 15% of 
the total cost is represented by the public ‘advance’ of 
money” (157 A. 2d at 901). Such “ a slight contribution is 
insufficient” to warrant a finding of state action (id. at 
901). Moreover, “ Eagle at its own expense installed the 
major portion of the furnishing of its restaurant” while 
“ the Authority installed a bare minimum [of fixtures] in 
the space ultimately leased to Eagle” (id. at 899).

2. The eating-place, which is a part of the structure 
built, owned, and operated by the Wilmington Parking 
Authority and from which appellant was excluded because 
of his race, is operated by a private lessee. It was, the 
Court below held, entirely “ immaterial to the Authority 
what type of business should occupy the space now occu­
pied by Eagle. The Authority’s sole interest was in ob­
taining money in the form of rent.” Further: “ It is thus 
apparent that this case completely lacks the element of 
furnishing service to the public through the means of a



14

lease to private enterprise. The only purpose for this lease 
is to supply a portion of the additional money required 
to permit the Authority to furnish the only public service 
it is authorized to furnish, viz., public off-street parking” 
(id. at 901).

3. The Court below took judicial notice of the fact 
that the “main and marked public entrance” to the Eagle 
restaurant is from the street and not within the garage 
(id. at 899), and concluded that the Authority does not 
operate the business of Eagle, “has not located the business 
of Eagle within the facility for the convenience and service 
of the public using the parking service, and has not finan­
cially enabled the business of Eagle to operate” (id. at 902).

4. The judicial philosophy, which compelled the result 
in the light of the above, was stated as follows:

. . .  We apply the law, whether or not that law fol­
lows the current fashion of social philosophy.

Particularly, is this true of a state court which is 
called upon in this field to apply rules made for us by 
the Supreme Court of the United States which, in the 
case of this state, have resulted in the discard of a 
large portion of our local law dealing with the emo­
tional subject of racial relations. We are, of course, 
bound to follow the Federal decisions, but wTe think we 
are equally bound, when they erode our local law, 
not to extend them to a point beyond which they have 
not as yet gone (id. at 901-902).

As will be more full}7 indicated infra, appellant contends 
that the exact cost figures and the proportion of funds de­
rived from what the court below deemed “ public” and “non­
public” sources in connection with the Authority’s project 
are unimportant and have no proper bearing upon the deci­



15

sion as to whether or not the Fourteenth Amendment ap­
plies to the appellees. However, it is well to point out 
some subsidiary errors3 made by the court below.

a. The court below said that $934,000 was “ advanced” 
by the City of Wilmington to purchase land for the parking 
facility, and that this was the only “ public” contribution of 
funds. This figure is found in another opinion involving 
the Authority, which was rendered prior to actual con­
struction of the parking facility, Wilmington Parking Au­
thority v. Ranken, 34 Del. Ch. 439,105 A. 2d 614, 618 (1954).4 
However, the figure is in conflict with undisputed facts in 
the present record which go unmentioned in the opinion 
below. It appears from this record that :

Subsequently the City of Wilmington gave the Au­
thority $1,822,827.69 which sum the Authority applied 
to the redemption of the Revenue Bonds delivered to 
Diamond Ice & Coal Co. and to the repayment of the 
Equitable Security Trust Company loan.” (Emphasis 
supplied) (Affidavit of Jay C. Pownall, Chairman of 
appellee parking authority; Record: Document # 7  
in Chancery Court).

b. The court below also said that the $934,000 advance 
(discussed above) was but 15% of the total cost of the 
facility which is reasoned by the court (from facts outside 
this record) to have been $6,100,000. This latter figure

3 Where constitutional rights are involved this Court will make 
its “own independent examination of the record,” Napue v. Illinois, 
360 U.S. 264, 271, 272, and is not hound by the conclusions of the 
court below. Spano v. New York, 360 . U.S. 315, 316; Norris v. 
Alabama, 294 U.S. 587; Niemotko v. Maryland, 340 U.S. 268; and 
cases collected in Napue, supra, at 360 U.S. 264, 272, note 4.

4 In that “test case” the authority sued a taxpayer for a decla­
ration that 22 Del. Code Chapter 5 was valid. Ruling on certified 
questions the court held the statute valid. Appellant Burton was 
not a party to the case.



16

(not mentioned in Ranken) was hypothesized by the court 
from a ratio between the estimated cost of a garage with­
out space for commercial leasing (estimated between 
$3,600,000 and $3,800,000 at the time of Ranken; 105 A. 2d 
at 618), and a planned allocation of costs between parking 
and leased areas, indicated by Ranken to be 38.4% for 
parking spaces and 61.6% for leased areas.

Appellant’s petition for reargument below (Record: 
Document #10  Supreme Court of Delaware) urged that the 
cost figure derived by the court was not only outside the 
record of this case, but was in fact erroneous and very much 
greater than the actual cost of the facility, which error 
thereby minimized what the court below considered to be 
the extent of the “ public” contribution.

Certainly either the court’s figure ($934,000) or the 
figure in the Authority chairman’s affidavit (over $1,800,- 
000) represents a substantial contribution by the public. 
But not only did the court make an unwarranted determina­
tion that the above contribution was “ slight.” In addition, 
the court indulged the erroneous assumption that funds 
derived by the Authority through public sale by it, a gov­
ernmental agency, of its revenue bonds are not “public” 
funds and that their use is not controlled by the Fourteenth 
Amendment. Appellant contends to the contrary that all of 
the funds used in erecting the Authority building were 
“ publicly” raised and administered, and that the rule stated 
in Cooper v. Aaron, 358 U. S. 1, 4, is applicable here, i.e.: 
“ state participation through any arrangement, management, 
funds or property” is sufficient to invoke the Fourteenth 
Amendment’s prohibition of racial discrimination.5 Penn­
sylvania v. Board of Directors of City Trusts, 350 IT. S. 
230, held that public trustees, whose official position made

5 Note the subsequent application of this rule in Aaron v. Cooper, 
261 F.2d 97 (8th Cir. 1958) (leasing arrangement condemned).



17

them agents of the State of Pennsylvania, could not admin­
ister in a racially discriminatory manner even a trust fund 
created by an individual out of his own private fortune. 
The same principle applies to the various funds involved in 
connection with the property of the appellee Authority.

The decision below also rests on the court’s inquiry into 
whether Eagle was established in the parking building in 
furtherance of a specific governmental purpose to provide 
restaurant service for the public. The court concluded that 
the Authority’s purpose was simply to obtain rent needed 
to make the building financially self-sustaining. It held that 
since the Authority’s purpose was not to provide a restau­
rant, the restaurant in its building is immune from the re­
straints of the Fourteenth Amendment.

Appellant urges that the state’s purpose in arranging 
that the restaurant be installed on its property is irrele­
vant. In passing, it should be observed that the holding 
below conflicts with conclusions in the Ranken case where 
commercial leasing of this property was sustained as merely 
an incidental use which “ does not destroy the public char­
acter of the project as a whole,” such leasing being “ deemed 
a use of public property subordinate to the public use” 
(105 A. 2d 614).

But more fundamental, inquiry into the government’s 
purpose, like inquiry into the ratio between the general 
public funds contributed to build the facility and the funds 
raised by the sale of the Authority’s bonds, is beside the 
point. While such factors perhaps have played a part in 
cases of discrimination where government participation 
has not risen to the extent of full ownership, this type of 
analysis lias not been indulged in cases of property owned 
by the government and leased for “private” operation. 
Compare Kerr v. Enoch Pratt Free Library, 149 F. 2d 212 
(4th Cir. 1945), cert. den. 326 U. S. 721, with the lease 
cases cited supra, p. 11. Heretofore it has been plain



18

that governmentally owned property and facilities must not 
be operated so as to work racial discrimination—no matter 
what the property arrangements, financing methods or pur­
poses. Cooper v. Aaron, supra.

To uphold the decision of the Supreme Court of Dela­
ware would encourge a rule requiring inquiries in each case 
of racial discrimination upon government property into the 
government’s purpose, the apportionment of expenditures 
and profits between government and its lessee (and, be­
tween different methods of government financing), and into 
the specific nature of the rights reserved by governmental 
authorities in leases and contracts. Such a rule would intro­
duce confusion into one of the few areas of “ state action ’ 
jurisprudence where the law has heretofore been simple 
and clearly predictable. Negro citizens’ rights to equal 
treatment under such a rule would depend upon chance 
factors such as the refinements of local property and con­
tract law and the ingenuity of governmental officials in 
developing property and financial arrangements in connec­
tion with the use of government facilities. As recently 
stated by this Court in connection with illegal searches and 
seizures, subtle and gossamer distinctions of property law 
ought not be determinative of constitutional rights. Jones 
v. United S ta tes ,------ U. S. --------, 4 L. ed. 2d 697, 705.6

6 At 4 L.ed 2d 705 the Court wrote:
We are persuaded however, that it is unnecessary and ill- 

advised to import into the law surrounding the constitutional 
right to be free from unreasonable searches and seizures subtle 
distinctions, developed and refined by the common law in 
evolving the body of private property law which, more than 
almost any other branch of law, has been shaped by distinc­
tions whose validity is largely historical. Even in the area 
from which they derive due consideration has led to the dis­
carding of these distinctions in the homeland of the common 
law. . . . Distinctions such as those between “lessee” , “ licensee” , 
“ invitee” and “ guest” , often only of gossamer strength, ought 
not to be determinative in fashioning procedures ultimately 
referable to constitutional safeguards.



19

Distinctions between tbe “primary” use and “ subordi­
nate” use of government property, and between money 
from general public treasuries and money raised by the sale 
of the bonds of a public agency, have little relevance to 
the question of whether or not the activities complained of 
are within the reach of the Fourteenth Amendment’s nul­
lification of “ state action of every kind” which denies citi­
zens the equal protection of the laws. Civil Rights Cases, 
109 U. S. 3,11.

The decision below on the question of “ state action” 
conflicts with the decision in Derrington v. Plummer, 240 F. 
2d 922, supra. In Derrington v. Plummer, supra, the cafe­
teria in a county-owned courthouse was held constitution­
ally forbidden to discriminate on the basis of race. The cafe­
teria was operated by a private entrepreneur. If as is sug­
gested by the rationale of the Delaware Supreme Court, the 
cafeteria in Derrington served a governmental purpose only 
in that it was a food service facility provided for the use 
of courthouse personnel, litigants, witnesses and other per­
sons in the building on business, a rule of nondiseriminatory 
service would reasonably extend to such persons alone. 
But it does not appear that the plaintiff in Derrington was 
other than a member of the general public. More recently 
in Jones v. Marva Theatres, Inc., 180 F. Supp. 49 (D. C. 
Md. 1960), a motion picture theatre housed in the city opera 
house of Frederick, Maryland, in which the city hall also is 
situated, was held forbidden to discriminate. It can hardly 
be suggested that the motion picture theatre in Jones ful­
filled any more of a public purpose than the cafeteria here, 
yet Judge Thomsen enjoined the lessee in that case from 
discriminating on the basis of race. Probably an important 
function of the theatre was to furnish the city with revenue, 
as there was another theatre in the town.



20

Certainly the concept of “ public”  purposes has expanded 
greatly in recent years. Yet the reports are replete with 
decisions, cited p. 11, supra, holding that governmen- 
tally-owned golf courses, swimming pools and park facili­
ties may not discriminate on the basis of race, even though 
leased to private operators. But at bottom, even if a public 
purpose test were to be applied in this case, the Eagle res­
taurant does serve a public purpose, and the Supreme 
Court of Delaware has so held, i.e., paying rental which 
permits the parking authority to operate its garage—which 
otherwise would be running a loss—for the benefit of the 
downtown section of Wilmington, Delaware.

The court’s conclusion that the Authority has not “ finan­
cially enabled the business of Eagle to operate” is a mean­
ingless truism if it merely reiterates that the arrangement 
is not unprofitable to the Authority. If the statement im­
plies that Eagle does not also profit from the arrangement, 
it surely has no basis, for there is no suggestion in the 
record that Eagle anticipated and realized no profit from 
its business under the arrangement with the Authority. 
In this case, as in other cases of leased state property such 
as Derrington v. Plummer, supra, Jones v. Marva Theatres, 
Inc., supra, Nash v. Air Terminal Services, supra, and Coke 
v. City of Atlanta, supra, the lease was obviously negoti­
ated with respective expectations that the arrangement 
would be financially profitable to both lessee and lessor.

The Authority cannot excuse itself from obedience to the 
Fourteenth Amendment by arguing that it is powerless 
because it has bartered away for twenty years, with a ten 
year renewal option, to a lessee, its right to insist on equal 
treatment for Negroes. Cf. Cooper v. Aaron, 358 U. S. 1.

Despite the attention which the court below devoted to 
the question of control it ignored one overwhelming and



21

dispositive factor. The authority owns the fee. At the time 
it negotiated the lease it was empowered to impose upon 
the lessee a requirement of nondiscrimination. If the lessee 
would not have agreed to such a clause, the Authority under 
the Fourteenth xlmendment, should have found a lessee 
who would have consented. Clearly in Wilmington, Dela­
ware, the record demonstrates (Record: Documents #12  
and #13  in Chancery), such a lessee would not have been 
difficult to come by.

It is submitted that the Vice Chancellor was eminently 
correct when he wrote that “ it was incumbent on the Au­
thority to negotiate and enter into leases such as the one 
here involved on terms which would require the tenant to 
carry out the Authority’s constitutional duty not to deny 
to Delawareans the equal protection of the laws” (150 A. 2d 
197, 199). Previous attempts by states to divest themselves 
of the power to insist on nondiscrimination have been ex­
posed and state responsibility has been recognized. See 
Rice v. Elmore, 165 F. 2d 387 (4th Cir. 1947), cert, denied 
333 TJ. S. 875 (discrimination in South Carolina primary 
unconstitutional although state had repealed statutory ref­
erences to prim ary); Terry v. Ado,ms, 345 U. S. 461; Smith 
v. Allwright, 321 U. S. 649.

Neither can the Authority’s excuse that it was merely 
engaged in a proprietary or a money-making venture jus­
tify racial discrimination on its property, by removing it 
from the ambit of the Fourteenth Amendment. See City 
of St. Petersburg v. Alsup, 238 F. 2d 830 (5th Cir. 1956), 
cert. den. 353 U. S. 922 where a distinction between “pro­
prietary” functions and “ governmental” functions was re­
jected as a basis for applicability of Fourteenth Amend­
ment safeguards.



22

CONCLUSION

For the foregoing reasons it is submitted that this 
cause presents substantial federal constitutional ques­
tions o f public importance which merit plenary con­
sideration by this Court for their resolution.

Respectfully submitted,

Louis L. R edding 
L eonakd L . W illiam s  

923 Market Street 
Wilmington 1, Delaware

Counsel for Appellant



A P P E N D I X  A

Opinion o f  Chancery Court

IN THE COURT OF CHANCERY 
OF THE STATE OF DELAW ARE

I n  and fob N ew  Castle C ounty

Civil Action No. 1029

W illiam  H. B u rton ,

—vs.
Plaintiff,

T he  W ilm in gton  P arking  A u th o rity , a body corporate and 
politic of the State of Delaware, and

E agle C offee S hoppe , I n c ., a corporation o f  the 
State of Delaware,

Defendants.

(April 15,1959)

M arvel, Vice Chancellor: Plaintiff, admittedly a person 
within the jurisdiction of the State of Delaware and a citi­
zen, brings this class action for a declaratory judgment in 
the form of injunctive relief against the action of the defen­
dant, Eagle Coffee Shoppe Inc., a purveyor of foodstuffs 
and beverages, in refusing to serve him at its restaurant. 
It is admitted that plaintiff was refused service at such 
restaurant solely because he is a Negro, and all parties 
have moved for summary judgment on the basis that there 
is no material fact in dispute.

The Wilmington Parking Authority, which owns the space 
in which the Eagle Coffee Shoppe is located, is alleged to 
be an agency of the State and to have acquiesced in and



24

consented to a discriminatory practice of the restaurant 
violative of the Fourteenth Amendment to the Constitution 
of the United States, and is therefore joined as a defendant 
to this class action.

There is no doubt but that the Fourteenth Amendment 
forbids any state action which denies to any person within 
its jurisdiction the equal protection of the laws. However, 
the Parking Authority, while clearly a State agency, dis­
claims any control over the policies of its tenant, the 
restaurant. It contends that it has not purported to dictate 
to the restaurant as to how its business should be run, and 
that the lease granted the Eagle Coffee Shoppe is a strictly 
business transaction between landlord and tenant, con­
summated as a corollary to the creation of rental space 
in the parking facility in question for the express purpose 
of defraying in large part the financing and operation of 
such public facility.

Obviously, the Fourteenth Amendment plays no part in 
purely private acts of discrimination, its force coming into 
play when a state or one of its agencies or subdivisions 
fails to deal equally with any person within its jurisdiction.

In deciding whether or not discrimination violative of the 
Fourteenth Amendment has occurred, Courts make a deter­
mination as to whether or not the property involved in the 
action is in effect publicly owned, and if there is no clear 
showing of public ownership, whether or not state control 
is being exercised over a privately owned facility.

Thus, in Eaton v. Board of Managers (C. A. 4), 261 F2nd, 
the fact that a hospital established pursuant to public law 
was succeeded by a privately built hospital operated by its 
own board, thereby removing the hospital from the category 
of a publicly owned institution,1 compelled a holding that 
Negro doctors did not have a constitutional right to insist

1 The only public moneys currently received by the hospital were 
paid by the County for the care of indigent patients.



25

that they not be barred from hospital staff status solely 
because of their race or color. Compare Mitchell v. Boys 
Club (D. C. Dist. of Columbia), 157 F. Supp. 101, and Kerr 
v. Enoch Pratt Free Library (C. A. 4), 149 F2nd 212.

On the other hand, when a Negro seeks rights in property 
owned by a state agency or by a state political sub-division, 
the device of a lease of such property to a concessionaire 
will not serve to insulate the public authority from the force 
and effect of the Fourteenth Amendment, Lawrence v. Han­
cock (D. C. S. D. W. Va.), 76 Supp. 1009 (a public swim­
ming pool), and there would seem to be no valid basis for 
distinction when the leasing of space by a public authority 
is not a patent attempt at subterfuge but a good faith 
method of furnishing service to the public through a ten­
ancy, Derrington v. Plummer (C. A. 5), 240 F2nd 922, 
cert, denied, 353 U. S. 924 (a restaurant in a county court­
house), and Nash v. Air Terminal Services, Inc. (D. C. E. D. 
Va.), 85 F. Supp. 545 (a restaurant in a federally owned 
airport and so subject to the Fifth Amendment).

Conversely, where there are no public moneys or prop­
erty involved, discrimination may be constitutionally for­
bidden because of the existence of governmental control 
over the operation of a privately owned institution or 
facility, Commonwealth of Pennsylvania v. Board of City 
Trusts, 350 U. S. 230.

There is no doubt but that the Parking Authority is a tax 
exempt agency of the State engaged in furnishing public 
parking service in a facility, the financing of which is being 
borne in large part by rentals received from tenants occupy­
ing other parts of the building, Wilmington Parking Au­
thority v. Randolph (Sup. Ct. Del.) 105 A2nd 614. Because 
these rentals constitute a substantial and integral part of 
the means devised to finance a vital public facility, in my 
opinion it was incumbent on the Authority to negotiate and 
enter into leases such as the one here involved on terms



26

which would require the tenant to carry out the Authority’s 
constitutional duty not to deny to Delawareans the equal 
protection of the laws. To say that the Authority had no 
statutory power to operate the restaurant itself is to beg the 
question in view of the direct relation of rental income to 
the financing of the facility.

The lease here provides that the tenant “ . . . shall occupy 
and use the leased premises in accordance with all appli­
cable laws, statutes, ordinances and rules and regulations 
of any federal, state or municipal authority,” and despite 
the Authority’s disclaimer of control over the policies and 
practices of the Eagle Coffee Shoppe, I am satisfied that 
the Fourteenth Amendment to the Constitution of the 
United States is applicable to the operation of all aspects 
of the structure here involved, and that it forbids discrimi­
natory practices in the restaurant in which plaintiff seeks 
to establish class rights.

Plaintiff is entitled to a declaratory judgment to such 
effect. In view of this holding it is unnecessary to consider 
the common law pertaining to innkeepers or defendants’ 
reliance of §1501 of Title 24, Del. C. as a purported modi­
fication of such common law rule.

An appropriate order may be submitted denying defen­
dants’ motions and granting plaintiff’s motion for a declara­
tory judgment as prayed for in the complaint.



27

Order

IN THE COURT OF CHANCERY 
OF THE STATE OF DELAW ARE

I n  and for N ew  Castle C ounty  

Civil Action No. 1029

W illiam  H. B urton ,

—vs.
Plaintiff,

T h e  W ilm in gto n  P arking  A u th o rity , a b ody  corporate 
and politic of the State of Delaware, and

E agle Coffee S h o ppe , I n c ., a co rp ora tion  o f  the 
State o f  Delaware,

Defendants.

It is  h e r e b y  o r d e r ed  as follows:

1. That the Motions for Summary Judgment filed, re­
spectively, by the defendant, The Wilmington Parking Au­
thority, and the defendant, Eagle Coffee Shoppe, Inc., are 
hereby denied.

2. That plaintiff’s Motion for Summary Judgment is 
hereby granted.

3. That the policy, practice, rules, regulations and usage 
of the defendants, or either of them, denying, by reason of 
color, race or ancestry, to the plaintiff or any other colored 
person or Negro, the right and privilege to use and enjoy, 
to the same extent and in the same manner as other persons, 
the appointments, facilities and services of the restaurant 
operated by the defendant Eagle Coffee Shoppe, Inc., in



28

the parking facility owned by defendant Wilmington Park­
ing Authority and situate on the Southerly side of Ninth 
Street between Orange and Shipley Streets, in Wilmington, 
Delaware, are hereby declared in violation of the equal pro­
tection clause of the Fourteenth Amendment to the Con­
stitution of the United States.

4. The defendants, their officers, agents, members and 
employees are hereby permanently enjoined from denying, 
by reason of color, race or ancestry, to the plaintiff or any 
other colored person or Negro the right to use and enjoy, 
to the same extent and in the same manner as other persons, 
the appointments, facilities and services of the aforemen­
tioned restaurant.

5. That the court costs of this action be assessed against 
the defendant.

s /  W illiam  M arvel 
Vice-Chancellor

A pproved as to F orm

s / Clair Jotm K illoran 
Attorney for Wilmington 
Parking Authority

s/ T homas H erlihy, Jr. 
Attorney for Eagle Coffee 
Shoppe, Inc.

s /  Louis L. B edding

Attorney for Plaintiff



29

Opinion of Supreme Court of Delaware

I n  t h e

SUPREME COURT 
OF THE STATE OF DELAWARE

No. 38, 1959

T h e  W ilm in gton  P arking  A u th o rity , a body corporate 
and politic of the State of Delaware, and E agle C offee 
S ho ppe , I n c ., a corporation of the State of Delaware,

—vs.—
Appellants,

W illiam  H. B u rton ,
Appellee.

(January 11, 1960)

S outherland , C.J.. W alcott and B ram h all , J J sitting.

Appeal from the Court of Chancery in and for New 
Castle County.

W olcott, J.:

This action seeks a declaratory judgment that Eagle 
Coffee Shop, Inc. (hereafter Eagle), the lessee of Wilming­
ton Parking Authority (hereafter the Authority) may not 
operate its restaurant business in the parking structure at 
Ninth and Shipley Streets, Wilmington, in a racially-dis- 
criminatory manner. The action was commenced by the 
plaintiff, a Negro, who was denied service by Eagle solely 
because of his race, color and ancestry, which, plaintiff 
argues, abridged his rights guaranteed by the Fourteenth 
Amendment to the Constitution of the United States.



30

There are no disputed issues of fact. Consequently, all 
parties below moved for summary judgment. The Vice- 
Chancellor granted judgment for the plaintiff, holding that 
the Fourteenth Amendment is applicable to the operation 
of all aspects of the parking structure, and that it forbids 
discriminatory practices in the restaurant of the Author­
ity’s lessee. The defendants appeal.

The plaintiff’s position is that the Authority is per­
forming a public or state function in operating the public 
parking facility in question and, as an instrumentality of 
the state, is required to insure that the operation of the 
public facility shall not be in a racially-segregated manner. 
Plaintiff further argues that Eagle, as lessee, is the instru­
mentality of the Authority, admittedly an agency of the 
state, and that its discriminatory acts are in law the acts 
of the state and, hence, violative of the Equal Protection 
Clause of the Fourteenth Amendment. The court below so 
ruled.

The Authority’s position is that it has not discriminated 
racially against the plaintiff because it has no legal or 
de facto control over the operation of Eagle’s restaurant. 
It argues that its sole interest in the Eagle lease is the 
deriving of rent therefrom in order to defray the expense 
of operating the parking facility, an otherwise unprofitable 
operation required, however, to be self-sustaining. Ac­
cordingly, the Authority argues that Eagle’s refusal to 
serve the plaintiff was private and not state action sub­
ject to the interdict of the Fourteenth Amendment.

Eagle joins in the position taken by the Authority and, 
in addition, relies on 24 Del. C., §1501 which provides that 
no restaurant shall by law be obligated to give service to 
persons if such service would be offensive to the major 
part of its customers to the injury of its business. This 
statute, Eagle argues, is a codification of the common law 
relating to the duties of restaurant keepers.



31

Since the decision of the Supreme Court of the United 
States in Brown v. Board of Education of Topeka, 347 
U. S. 483, 74 S. Ct. 686, the states and their instrumentali­
ties have been required to act within the scope of state 
action in a racially non-segregated manner. If, therefore, 
Eagle is, as plaintiff contends, the ultimate instrumentality 
of the state performing a state function, the Fourteenth 
Amendment requires it to serve the plaintiff and all others 
with his racial background.

The ultimate question for our determination, therefore, 
is whether or not, under the decisions cited to us, the 
Eagle restaurant business is cast with such public char­
acter as to make it in law a state function, carried on 
under the auspices and with the support of the public 
authority. We turn to the authorities cited to us for the 
answer.

Nash v. Air Terminal Services, Inc., et al., 85 F. Supp. 
545, was a case decided under the now discarded doctrine 
of separate but equal facilities for Negroes. The case, 
however, seems pertinent not only because of its factual 
resemblance to the case at bar but, also, as an enuncia­
tion of a test for determining when certain actions may or 
may not be attributed to the public government.

In the Nash case the plaintiff, a Negro using the facilities 
of the Washington National Airport for air transportation, 
sought and was refused service in a restaurant operated 
in the terminal building. The restaurant in question was 
operated on a concession from the public government in a 
building constructed entirely with public money and oper­
ated for the serving of persons using an airport constructed 
entirely with public money. Under these facts it was held 
that the plaintiff had been denied his rights since, at the 
time, there were no separate but equal facilities offered 
for Negro patrons of the airport. A fortiori, if the failure 
to supply separate but equal facilities at a time when that



32

doctrine was part of our constitutional law was a depriva­
tion of the rights of the plaintiff, once that doctrine is 
struck down the plaintiff’s rights would be denied by the 
refusal of any service.

Derrington v. Plummer, 240 F. 2d 922, dealt with the 
refusal of service to a Negro in a cafeteria installed and 
operated in the basement of a county courthouse. The facts 
were that some time in 1953 the county contemplated the 
erection of a new courthouse. In the plans of the building 
a portion of the basement was set aside and reserved for 
a cafeteria to be operated primarily for the benefit of per­
sons having business in the courthouse. The courthouse, 
including the cafeteria facilities, was completed entirely 
with public funds. Thereafter, the cafeteria was operated 
by a private lessee. The cafeteria served persons having 
business in the courthouse and public employees, and, also, 
was open to the public. The plaintiff, a Negro, sought ser­
vice and was refused because of his race.

It was held that the lessee was subject to the prohibitions 
of the Fourteenth Amendment as the agent of the state. 
The rationale of the decision is that the courthouse having 
been built with public funds for the use of the public, the 
original plans having provided for the inclusion of a 
cafeteria for the use of the public, and the cafeteria, itself, 
having been equipped and furnished by the county, the 
state could not avoid the constitutional requirement of non­
discrimination by leasing to a private business.

Culver v. City of Warren, 84 Ohio App. 373, 83 N. E. 
2d 82, was a case in which the plaintiffs, Negro citizens of 
Ohio, sought the right to use and enjoy a municipal swim­
ming pool, built at public expense. It appeared that when 
completed the swimming pool had first been opened on a 
non-discriminatory racial basis but that, from that, trouble 
and disorder had ensued. The city ceased to operate the 
swimming pool and leased it to a veterans organization at



33

an annual rental of 10% of the gate receipts; the city, how­
ever, paying all maintenance costs. The veterans organiza­
tion, the lessee, operated the pool in a racially-discrimina­
tory manner.

It was held that the lease to the veterans organization 
was a subterfuge adopted by the city to avoid the require­
ments of the Fourteenth Amendment. The court was of the 
opinion that, under the circumstances, the veterans organ­
ization was an instrumentality of the city which, in turn, of 
course, was an instrumentality of the State of Ohio and, 
thus, was subject to the provisions of the Fourteenth 
Amendment.

Substantially to the same effect is the case of Kern  v. 
City Com’rs of City of Newton, et al., 151 Kan. 565, 100 P. 
2d 709.

Muir v. Louisville Park Theatrical Assn., 347 U. S. 971, 
74 S. Ct. 783, was a case in which the City of Louisville 
had erected in one of its public parks an amphitheater, 
owned and maintained by the city. It appeared that the 
amphitheater was an appropriate adjunct of the city’s 
park maintained for all the people. The city leased the 
structure to a theatrical association which, under the terms 
of its lease, had the right to charge admission fees and to 
sell refreshments. The plaintiff, a Negro, was denied ad­
mittance to a performance in the amphitheater given by the 
theatrical association.

The District Court held, and was affirmed on appeal to 
the Court of Appeals, that the city was guilty of no racial 
discrimination because there was no evidence that any com­
parable Negro theatrical association had applied to the 
city for use of the amphitheater. On petition for certiorari 
to the Supreme Court of the United States the judgment in 
the Muir case was reversed and the case remanded for con­
sideration in the light of Broivn v. Board of Education, 
supra.



34

The reason for the reversal is not set forth in full, but 
it seems apparent that the Supreme Court had in mind the 
circumstances that the city had built and maintained from 
public funds an amphitheater for public use and, under 
the circumstances, any lessee operated it as an instru­
mentality of the city.

Pennsylvania v. Directors of City Trusts, 350 IT. S. 230, 
77 S. Ct. 1281, was a per curiam opinion holding that the 
trustees under the will of Stephen Girard, appointed by 
the City of Philadelphia, could not perform their duties 
under the trust created for the education of “white male 
orphans”  in a manner to discriminate against Negro male 
orphans. Plaintiff points out that Stephen Girard, by his 
will, had created a trust out of his private fortune but 
that, nevertheless, the principles of the Fourteenth Amend­
ment were held to apply to the operation of the trust by the 
trustees. The element of public control, apparently, was 
that the trustees of the Girard Trust were publicly ap­
pointed trustees in complete control of the operation of a 
privately endowed trust.

We think a careful consideration of the foregoing cited 
authorities leads necessarily to the conclusion that the 
provisions of the Fourteenth Amendment relating to equal 
protection of the laws apply to the operation of any facility 
or any other thing created at public expense or operated 
by public authority.

In the Nash case, for example, the air terminal at the 
Washington National Airport had been erected solely with 
public funds and the restaurant involved had been con­
templated initially as a service to persons using the Na­
tional Airport. Furthermore, it is not clear that the public 
government did not exercise ultimate control over opera­
tion of the restaurant since it was operated as a concession 
of the public government.



35

Similarly, the Derrington case involved a facility con­
structed entirely with public funds which contained, from 
the planning stage onward, a cafeteria intended for the 
use of the public. The cafeteria, itself, was constructed and 
equipped by public money and was operated primarily for 
the benefit of the persons using the courthouse. Conse­
quently, while technically there may have been no direct 
control over the lessee who operated the cafeteria, the 
lessee was nevertheless operating a facility erected entirely 
by the public treasury for the purpose of serving the public.

The Culver and Kern  cases were cases also of publicly 
paid for facilities. These cases also contain the additional 
circumstance of an attempt by subterfuge to avoid the pro­
hibitions of the Fourteenth Amendment. The Muir case 
similarly is a case of the erection and maintenance entirely 
with public funds of an appropriate adjunct of a public 
park.

The Girard College case apparently falls within the scope 
of the Fourteenth Amendment solely by reason of the fact 
that the trustees administering the trust created by Stephen 
Girard were publicly appointed. It is interesting to note 
that since the per curiam decision of the Supreme Court of 
the United States, the State of Pennsylvania has abrogated 
the right of the City of Philadelphia to appoint the trustees 
administering the Girard Trust, thus, presumably, elim­
inating the requirement that such trust be administered in 
a racially non-discriminatory manner. Cf. In re Girard 
College Trusteeship, 391 Pa. 434, 138 A. 2d 844, cert. den. 
357 U. S. 570.

It thus seems apparent to us from the cited authorities 
that the Fourteenth Amendment is applicable to the opera­
tion of a facility, either public or quasi-public in nature, 
if either the facility has been erected and is maintained 
with public money, or if the operation of such a facility is 
conducted under public auspices or control.



36

We turn now to the particular facts of the case at bar. 
Initially, we should observe that the plaintiff in the case 
at bar has not been discriminated against by the Authority 
in the operation of the public parking portion of the facility 
since the record discloses that at the time this incident 
occurred the plaintiff had parked his car in the public park­
ing portion and, thereafter, proceeded to the Eagle restau­
rant where he was denied service.

The facts surrounding this controversy and the physical 
aspect of the Authority’s facility do not appear in much 
detail in the record before us. However, we think we are 
at liberty to take notice of certain physical facts concerning 
the matter which appear from a casual inspection of the 
facility, itself. We note, therefore, that the space in the 
Authority’s structure leased by Eagle, while located within 
the exterior walls of the structure, has no marked public 
entrance leading from the parking portion of the facility 
into the restaurant proper. The main and marked public 
entrance to Eagle’s restaurant is located on Ninth Street. 
It appears from the record before us, furthermore, that 
Eagle at its own expense installed the major portion of the 
furnishings of its restaurant and all of the necessary fix­
tures to make the leased space suitable for the operation 
of its business. The Authority installed a bare minimum in 
the space ultimately leased to Eagle.

The lease between the Authority and Eagle contains a 
covenant binding Eagle to “ occupy and use the leased prem­
ises in accordance with all applicable laws, statutes, ordi­
nances and rules and regulations of any federal, state or 
municipal authority.” Plaintiff refers to this covenant but 
we think the covenant does not have much bearing on the 
basic question presented to us. We have for decision the 
broad question of whether or not the maintenance of the 
facility by the Authority, admittedly a state instrumental­



37

ity, is in all its ramifications and details, including the 
leasing to private business, state action falling within the 
scope of the protective provisions of the Fourteenth 
Amendment. The referred to covenant is applicable to this 
case only if the answer to the broad question is in the af­
firmative since only under such circumstances would the 
Fourteenth Amendment be applicable to Eagle’s business.

The question is to be decided in the light of the circum­
stances surrounding this entire matter. The nature of the 
enterprise conducted by the Authority is of primary im­
portance to our decision. Unfortunately, the record before 
us is not as complete as we would have desired. We think, 
however, that we may take notice of the facts embodied in 
the opinion in Wilmington Parking Authority v. Ranken, 
34 Del. Ch. 439, 105 A. 2d 614, on which plaintiff relies. 
In that case we upheld against attack the constitutionality 
of the Parking Authority Act of 1951 (22 Del, C., Ch. 5) 
and the legality of the proposed acts of the Authority 
pursuant to it.

In the Ranken case we had before us certain determina­
tions made by the Authority in planning the erection of the 
facility in question. Thus, the Authority determined that 
in order to erect and operate the structure as a self-sus­
taining unit as required by the General Assembly, it would 
be necessary to obtain additional revenue from commercial 
leasing of space, and to utilize the space of the final struc­
ture upon the following ratio: 61% for parking; 39% for 
private leases. We assume that the structure as actually 
completed maintains this ratio. The Authority made a 
further determination that the cost of construction, includ­
ing the cost of land, would be divided upon the following 
ratio: 38.4% to parking space; 61.6% to the leased area. 
We assume that this estimate of division of cost is the fact. 
Finally, the Authority determined that its revenue derived 
from the operation of the facility would come from these



38

sources upon the following ratio: 30.5% from parking; 
69.5% from private leases. We assume this division to be 
the fact.

From the Ranken case it appears that the only public 
money used in the construction of the facility was the 
sum of $334,000 “ advanced” by the City of Wilmington and 
used in the purchase of a portion of the land required. 
It did not appear in the Ranken case, and does not appear 
in the case now before us, what the terms and conditions 
of this “ advance” by the city were.

We have not been furnished with the actual cost figures 
of the construction of the facility but since, in the Ranken 
case, the cost of construction of a parking facility alone 
was estimated to be approximately $3,800,000, and since the 
estimated cost allocated to parking space of a combined 
facility was 38.4%, we assume that the total cost of the 
presently existing facility was in the neighborhood of 
$6,100,000. It does appear as a fact, however, that the 
actual cost of construction was paid from the proceeds of 
the sale of revenue bonds issued by the Authority and, 
accordingly, upon the determined ratios, the public money 
“ advanced” for the project amounts to approximately 15% 
of the total cost of the facility as finally erected.

From the Ranken case, also, it appears that the revenue 
from parking alone was predicted to be $150,000 annually 
which was estimated to amount to 30.5% of the total ex­
pected revenue of the combined facility. Accordingly, the 
facility’s total revenue we assume to be approximately 
$342,000 annually, of which approximately $212,000 is de­
rived from the rentals to commercial enterprises.

In the Ranken case we considered a constitutional attack 
upon the Authority’s proposal on the basis that it had no 
authority to enter into private leases solely for the purpose 
of obtaining revenue to support the operation of the public



39

part of the facility, viz., the furnishing of off-street park­
ing. We held, however, that the authority to lease to private 
business was valid. We held that the furnishing of off-street 
parking was a proper public purpose and met an existing 
need supported by a legislative finding to that effect and, 
since it was the fact that the proper public purpose could 
not be supplied as a self-supporting unit without additional 
revenue to be supplied by commercial leases, we held that 
the entering into such private leases did not destroy the 
public-use character of the facility.

We recognized in the Ranken case that the proposed 
leases to private businesses were wholly unrelated to the 
public purpose to be subserved by the parking facility, ex­
cept as a source of additional revenue to permit the financ­
ing and operation of the parking facility. WTe were of the 
opinion that the supplying of off-street parking services 
occupying 61% of the total space of the structure, despite 
the leasing of the balance of the space to private business, 
was and remained the paramount or primary use of the 
structure. We held, therefore, that the leasing to private 
business, while necessary financially to the project, was 
nevertheless a subordinate or incidental use of public prop­
erty. We, accordingly, upheld the constitutionality of the 
grant of power to lease which, in the absence of such cir­
cumstances, would have been an unconstitutional use of 
public property.

We summed up our holding in the Ranken case in the 
following language:

“ Since the dominant or underlying purpose of the 
contemplated project subserves a public use, commer­
cial leasing of space therein for uses unrelated to the 
public use is permitted to the extent, and only to the 
extent, that such leasing is necessary and feasible to 
enable the Authority to finance the project.”

We think it apparent, therefore, that the only connection 
Eagle has with the public facility operated by the Author­



40

ity is the furnishing of the sum of $28,700 annually in the 
form of rent which is used by the Authority to defray a 
portion of the operating expense of an otherwise unprofit­
able enterprise.

We think the case before us is distinguishable from the 
cases relied on by the plaintiff. In the first place, it is 
quite apparent, nor is there any suggestion to the contrary 
made by the plaintiff, that the establishment of a restau­
rant in the space occupied by Eagle is a pure happenstance 
and was not intended as a service to the public using the 
parking facility. As far as the record before us indicates, 
it was immaterial to the Authority what type of business 
would occupy the space now occupied by Eagle. The Au­
thority’s sole interest was in the obtaining of money in 
the form of rent. That money is thereafter used by the 
Authority to support the public purpose of supplying off- 
street parking from which the plaintiff and the rest of the 
public benefit.

It is further clear from this record, and from the Ranken 
case, that at no time did the Authority contemplate the 
establishment of a restaurant in the structure for the use of 
its parking patrons. On the contrary, the commercial leases 
entered into by the Authority were given to the highest 
bidders in terms of rent after the solicitation of bids by 
public advertisement. The decision to lease to a particular 
lessee was made upon the considerations of the applicants’ 
financial responsibility and the amount of rent agreed to be 
paid. It is thus apparent that this case completely lacks 
the element of furnishing service to the public through the 
means of a lease to private enterprise. The only purpose 
for this lease is to supply a portion of the additional money 
required to permit the Authority to furnish the only public 
service it is authorized to furnish, viz., public off-street 
parking.



41

The plaintiff argues that the use of public money to 
purchase a portion of the land required brings this case 
within the rule of the cited authorities. But we think not. 
At the most, approximately 15% of the total cost is repre­
sented by the public “ advance” of money. To accept the 
plaintiff’s view would require us in all similar cases to 
measure the respective contributions made by public and 
private money and to determine at what point the public 
contribution changes the nature of the enterprise. It is ob­
vious that there is no guide for judicial speculation upon 
such a matter. If it is said that the contribution of any 
public money is sufficient to change the nature of the enter­
prise, the answer is that it has been held that a slight 
contribution is insufficient. Cf. Eaton v. Board of Mana­
gers, 164 F. Supp. 191.

Fundamentally, the problem is to be resolved by con­
siderations of whether or not the public government, either 
directly or indirectly, in reality, is financing and controlling 
the enterprise which is charged with racial discrimination. 
If such is the case, then the Fourteenth Amendment applies ; 
if it is not the case, the operators of the enterprise are 
free to discriminate as they will. Shelley v. Kraemer, 334 
U. S. 1, 68 S. Ct. 842. We neither condemn nor approve 
such private discriminatory practices for the courts are 
not the keepers of the morals of the public. We apply the 
law, whether or not that law follows the current fashion 
of social philosophy.

Particularly is this true of a state court which is called 
upon in this field to apply rules made for us by the Supreme 
Court of the United States which, in the case of this state, 
have resulted in the discard of a large portion of our 
local law dealing with the emotional subject of racial rela­
tions. We are, of course, bound to follow the Federal de­
cisions, but we think we are equally bound, when they erode 
our local law, not to extend them to a point beyond which 
they have not as yet gone.



42

We think the Authority and, through it, the State of 
Delaware does not operate, either directly or indirectly, 
the business of Eagle; has not located the business of Eagle 
within the facility for the convenience and service of the 
public using the parking service; and has not financially 
enabled the business of Eagle to operate. The only concern 
the Authority has with Eagle is the receipt of rent, without 
which it would be unable to afford the public the service 
of off-street parking. This circumstance, we think, is not 
sufficient to make the discriminatory act of Eagle the act of 
the State of Delaware.

It follows, therefore, that Eagle, in the conduct of its 
business, is acting in a purely private capacity. It acts 
as a restaurant keeper and, as such, is not required to serve 
any and all persons entering its place of business, any more 
than the operator of a bookstore, barber shop, or other 
retail business is required to sell its product to everyone. 
This is the common law, and the law of Delaware as re­
stated in 24 Del. C., §1501 with respect to restaurant keep­
ers. 10 Am. Jur., Civil Rights, §§21, 22; 52 Am. Jur., Thea­
tres, §9; Williams v. Howard Johnson’s Restaurant, 268 
F. 2d 845. We, accordingly, hold that the operation of its 
restaurant by Eagle does not fall within the scope of the 
prohibitions of the Fourteenth Amendment.

Finally, plaintiff contends that 24 Del. C.. §1501, has no 
application in the case at bar because Eagle, since it serves 
alcoholic beverages to its patrons, is a tavern or inn and 
not a restaurant. It is argued that, at common law, an inn 
or tavern could deny service to no one asking for it. We 
think, however, that Eagle is primarily a restaurant and 
thus subject to the provisions of 24 Del. C., §1501, which 
does not compel the operator of a restaurant to give service 
to all persons seeking such.

For the foregoing reasons, the judgment of the court 
below is reversed.



A P P E N D I X  B 

Statutes

Title 24 Delaware Code, Section 1501:

§1501. Exclusion of customers; definition

No keeper of an inn, tavern, hotel, or restaurant, or other 
place of public entertainment or refreshment of travelers, 
guests, or customers shall be obliged, by law, to furnish 
entertainment or refreshment to persons whose reception or 
entertainment by him would be offensive to the major part 
of his customers, and would injure his business.

As used in this section, “ customers” includes all who have 
occasion for entertainment or refreshment.

Title 22 Delaware Code, Chapter 5, Sections 501-515:

§501. Findings and declaration of policy

It is determined and declared as a matter of legislative 
finding that—

(1) Residential decentralization in incorporated cit­
ies has been accompanied by an ever increasing trend 
in the number of persons entering the business sections 
by private automobile as compared with other modes 
of transportation;

(2) The free circulation of traffic of all kinds through 
the streets of cities is necessary to the health, safety, 
and general welfare of the public whether residing in 
the city or traveling to, through, or from the city, in 
the course of lawful pursuits;

(3) The greatly increased use by the public of motor 
vehicles of all kinds has caused serious traffic conges­
tion on the streets of cities;



44

(4) The parking of motor vehicles on the streets has 
contributed to this congestion to such an extent as to 
interfere seriously with the primary use of such streets 
for the movement of traffic;

(5) Such parking prevents the free circulation of 
traffic in, through, and from the city, impedes rapid 
and effective fighting of fires and the disposition of 
police forces in the district and endangers the health, 
safety, and welfare of the general public;

(6) Such parking threatens irreparable loss in valu­
ations of property in the city which can no longer be 
readily reached by vehicular traffic;

(7) This parking crisis, which threatens the welfare 
of the community, can be reduced by providing suffi­
cient off-street parking facilities properly located in the 
several residential, commercial, and industrial areas of 
the city ;

(8) The establishment of a parking authority will 
promote the public safety, convenience, and welfare;

(9) It is intended that the parking authority coop­
erate with all existing parking facilities so that private 
enterprise and government may mutually provide ade­
quate parking services for the convenience of the 
public;

therefore it is declared to be the policy of this State to pro­
mote the safety and welfare of the inhabitants thereof by 
the creation in incorporated cities of bodies corporate and 
politic to be known as “ Parking Authorities” which shall 
exist and operate for the purposes contained in this chapter. 
Such purposes are declared to be public uses for which 
public money may be spent and private property may be 
acquired by the exercise of the power of eminent domain.



45

§502. Definitions

As used in this chapter, unless the context requires a 
different meaning—

“ Authority” means a body politic and corporate created 
pursuant to this chapter;

“Board” means the governing body of the Authority;

“ Bonds” means and includes the notes, bonds and other 
evidence of indebtedness, or obligations, which the Author­
ity is authorized to issue pursuant to section 504 of this 
title;

“ City” means incorporated city or town;

“ Construction” means and includes acquisition and con­
struction, and “ to construct” means and includes to acquire 
and to construct, all in such manner as may be deemed 
desirable;

“ Facility” or “ facilities” means lot or lots, buildings and 
structures, above, at, or below the surface of the earth, 
including equipment, entrances, exits, fencing, and all other 
accessories necessary or desirable for the safety and con­
venience of the parking of vehicles;

“ Federal agency” means and includes the United States 
of America, the President of the United States of America, 
and any department or corporation agency or instrumental­
ity heretofore, or hereafter created, designated, or estab­
lished by the United States of America;

“ Improvement” means and includes extension, enlarge­
ment, and improvement, and “ to improve” means and in­
cludes to extend, to enlarge, and to improve, all in such 
manner as may be deemed desirable.

“ Municipality” means any county, incorporated city or 
incorporated town of this State;



46

“ Persons” means and includes natural persons;

“ Project” means any structure, facility, or undertaking 
which the Authority is authorized to acquire, construct, 
improve, maintain, or operate under the provisions of this 
chapter.

§503. Method of incorporation

(a) Whenever the city council or other governing body 
of a city desires to organize an Authority, under the pro­
visions of this chapter, it shall adopt an ordinance signify­
ing its intention to do so.

In the event that such ordinance sets forth the proposed 
articles of incorporation in full it shall not be required, 
any law to the contrary notwithstanding, in publishing such 
ordinance, under the provisions of existing law, to publish 
such proposed articles of incorporation in full, but it shall 
be sufficient compliance with such law in such publication 
to set forth briefly the substances of such proposed articles 
of incorporation and to refer to the provisions of this chap­
ter. Thereafter the city council shall cause a notice of such 
ordinance to be published at least one time in a newspaper 
published and of general circulation in the county in which 
the Authority is to be organized. The notice shall contain 
a brief statement of the substance of the ordinance, includ­
ing the substance of such articles, making reference to this 
chapter, and shall state that on a day certain, not less 
than three days after publication of the notice, articles of 
incorporation of the proposed Authority will be filed with 
the Secretary of State of this State.

(b) On or before the day specified in the notice the city 
council shall file with the Secretary of State articles of in­
corporation together with proof of publication of the notice 
referred to in subsection (a) of this section. The articles 
of incorporation shall set forth—



47

(1) The name of the Authority;

(2) A  statement that such Authority is formed under 
the provisions of this chapter;

(3) The name of the city, together with the names 
and addresses of its council members ;

(4) The names, addresses and term of office of the 
first members of the board of the Authority.

All of which matter shall be determined in accordance 
with the provisions of this chapter. The articles of incor­
poration shall be executed by the incorporating city by its 
proper officer and under its municipal seal.

(c) If the Secretary of State finds that the articles of 
incorporation conform to law he shall forthwith, but not 
prior to the day specified in the notice, endorse his ap­
proval thereon, and when all proper fees and charges have 
been paid shall file the articles and issue a certificate of 
incorporation to which shall be attached a copy of the 
approved articles. Upon the issuance of such certificate of 
incorporation by the Secretary of State, the corporate ex­
istence of the Authority shall begin when such certificate 
has been recorded in the office for the recording of deeds 
in the county where the principal office of the Authority 
is to be located. The certificate of incorporation shall be 
conclusive evidence of the fact that such Authority has 
been incorporated, but proceedings may be instituted by 
the State to dissolve any Authority which shall have been 
formed without substantial compliance with the provisions 
of this section.

(d) When the Authority has been organized and its of­
ficers elected, the secretary shall certify to the Secretary 
of State the names and addresses of its officers, as well as 
the principal office of the Authority. Any change in the



48

location of the principal office shall likewise be certified 
to the Secretary of State within 10 days after such change.

§504. Purpose and powers

(a) The Authority, incorporated under this chapter, shall 
constitute a public body corporate and politic, exercising 
public powers of the State as an agency thereof, and shall 
he known as the Parking Authority of the city, but shall 
in no way be deemed to be an instrumentality of the city 
or engaged in the performance of a municipal function. 
The Authority shall he for the purpose of conducting the 
necessary research activity, to maintain current data lead­
ing to efficient operation of off-street parking facilities, for 
the fulfillment of public needs in relation to parking, es­
tablishing a permanent coordinated system of parking fa­
cilities, planning, designing, locating, acquiring, holding, 
constructing, improving, maintaining and operating, own­
ing, leasing, either in the capacity of lessor or lessee, land 
and facilities to be devoted to the parking of vehicles of any 
kind.

The Authority shall not have the power to directly en­
gage in the sale of gasoline, the sale of automobile acces­
sories, automobile repair and service or any other garage 
service, other than the parking of vehicles, and the Au­
thority shall not directly engage in the sale of any com­
modity of trade or commerce; provided, however, that the 
Authority shall have the power to lease space in any of its 
facilities for use by the lessee for the sale of gasoline, the 
sale of automobile accessories, automobile repair and ser­
vice or any other garage service and to lease portions of 
any of its garage buildings or structures for commercial 
use by the lessee, where, in the opinion of the Authority, 
such leasing is necessary and feasible for the financing and 
operation of such facilities. Any such lease shall be granted 
by the Authority to the highest and best bidder, upon terms



49

specified by the Authority, after due public notice has been 
given, asking for competitive bids; provided, however, that 
if after such public notice no bid is received and/or the 
Authority rejects any bid or bids received, thereafter the 
Authority may negotiate any such lease or leases without 
further public notice but on a basis more favorable than 
that contained in any bid or bids rejected, if any. The 
phrase “ due public notice,” as used in this section, shall 
mean a notice published at least 10 days before the award 
of any such lease in a newspaper of general circulation 
published in a municipality where the Authority has its 
principal office, and if no newspaper is published therein, 
then by publication in a newspaper of general circulation 
in the County where the Authority has its principal office. 
The Authority may reject any or all bids if, in the opinion 
of the Authority, any such lease granted as a result of any 
such bid or bids would not be adequate or feasible for the 
financing and operation of such facilities.

(b) Every Authority may exercise all powers necessary 
or convenient for the carrying out of the aforesaid pur­
poses including, but without limiting the generality of the 
foregoing, the rights and powers described below.

(1) To have existence for a term of 50 years as a 
corporation and thereafter until the principal and in­
terest upon all of its bonds shall have been paid or 
provisions made for such payment, and until all of its 
other obligations shall have been discharged.

(2) To sue and be sued, implead and be impleaded, 
complain and defend in all courts.

(3) To adopt, use and alter at will a corporate seal.

(4) To acquire, purchase, hold, lease as lessee, and 
use any franchise, property, real, personal, or mixed, 
tangible or intangible, or any interest therein, neces­



50

sary or desirable for carrying out the purpose of the 
Authority and to sell, lease as lessor, transfer, and 
dispose of any property or interest therein at any 
time required by it.

(5) To acquire by purchase, lease or otherwise, and 
to construct, improve, maintain, repair, and operate 
projects.

(6) To make by-laws for the management and regu­
lation of its affairs.

(7) To appoint officers, agents, employees, and ser­
vants, to prescribe their duties, and to fix their com­
pensation.

(8) To fix, alter, charge, and collect rates and other 
charges for its facilities at reasonable rates to be de­
termined exclusively by it, subject to appeal as pro­
vided in this paragraph, for the purposes of providing 
for the payment of the expenses of the Authority, the 
construction, improvement, repair, maintenance, and 
operation of its facilities and properties, the payment 
of the principal of and interest on its obligations, and 
to fulfill the terms and provisions of any agreements 
made with the purchasers or holders of any such ob­
ligations or with the city. Any person questioning 
the reasonableness of any rate fixed by the Authority 
may bring suit against the Authority in the Superior 
Court of the county wherein the project is located. 
The Superior Court shall have exclusive jurisdiction to 
determine the reasonableness of rates and other charges 
fixed, altered, charged, or collected by the Authority. 
Appeals may be taken to the Supreme Court within 
30 days after the Superior Court has rendered a final 
decision.



51

(9) To borrow money, make and issue negotiable 
notes, bonds, refunding bonds, and other evidences of 
indebtedness or obligations of the Authority; the bonds 
to have a maturity date not longer than forty years 
from the date of issue, except that no refunding bonds 
shall have a maturity date longer than the life of the 
Authority; and to secure the payment of such bonds or 
any part thereof by pledge, or deed of trust of all, or 
any of its revenues and receipts, and to make such 
agreements with the purchasers or holders of such 
bonds, or with others in connection with any such 
bonds, whether issued or to be issued, as the Authority 
deems advisable, and in general to provide for the se­
curity for the bonds and the rights of the holders 
thereof.

(10) To make contracts of every name and nature, 
and to execute all instruments necessary or convenient 
for the carrying on of its business.

(11) Without limitation of the foregoing to borrow 
money and accept grants from, and to enter into con­
tracts, leases, or other transactions with, any Federal 
agency, State of Delaware, municipality, corporation 
or authority.

(12) To have the power of eminent domain.

(13) To pledge, hypothecate, or otherwise encumber 
all or any of the revenues or receipts of the Authority, 
as security for all or any of the obligations of the 
Authority.

(14) To do all acts and things necessary for the pro­
motion of its business and the general welfare of the 
Authority to carry out the powers granted to it by this 
chapter or any other law.



52

(15) To enter into contracts with the State of Dela­
ware, municipalities, corporations or authorities for 
the use of any project of the Authority and fixing the 
amount to be paid therefor.

(16) To enter into contracts of group insurance for 
the benefit of its employees, and to set up a retirement 
or pension fund for such employees, similar to that 
existing in the municipality where the principal office 
of the project is located.

(c) The Authority shall not at any time, or in any man­
ner, pledge the credit or taxing power of the State of 
Delaware or any political subdivision, nor shall any of its 
obligations be deemed to be obligations of the State of 
Delaware, or of any of its political subdivisions, nor shall 
the State of Delaware or any political subdivision thereof 
be liable for the payment of principal or of interest on 
such obligations.

(d) In addition to the provisions in this chapter pro­
vided for the financing of the costs of acquiring lands and 
premises and for the construction and improvement of 
parking projects, the Authority may by resolution, as pro­
vided in this subsection, establish a benefit district.

(1) One benefit district may be designated for the con­
demnation of lands for one or several parking stations. 
The Authority shall determine the percentage of the costs 
of condemnation which shall be assessable to such benefit 
district. Not more than 80 per cent of such costs shall be 
assessable to such benefit district or benefit districts.

(2) After a benefit district has been established, no fur­
ther proceedings shall be taken unless there is filed with the 
secretary of the Authority, within sixty days of the passage 
of the resolution creating the benefit district, a petition



53

requesting the establishment of such public parking station 
or stations. Such petition shall be signed by the resident 
owners of real estate owning not less than 51 per cent of 
the front feet of the real estate fronting or abutting upon 
any street included within the limits of the benefit district. 
In determining the sufficiency of the petition, lands owned 
by the city, county, State or United States or by nonresi­
dent owners of real estate within the benefit district shall 
not be counted in the aggregate of lands within such benefit 
district. After any petition has been signed by an owner 
of land in the benefit district, the change of ownership of 
the land shall not affect the petition. In any ease where the 
owners of lands within the benefit district are tenants in 
common, each co-tenant shall be considered a landowner 
to the extent of his undivided interest in the land. The 
owner of a life estate shall also be deemed a landowner for 
the purpose of this chapter. Guardians of minors or insane 
persons may petition for their wards when authorized by 
the proper court so to do. Resident owner of land, as de­
fined in this paragraph, shall be any landowner residing in 
the city and owning land in the benefit district. No suit 
shall be maintained in any court to enjoin or in any way 
contest the establishment of such parking stations or the 
establishment of a benefit district unless the suit be insti­
tuted and summons served within 30 days from and after 
the date of the filing of such petition with the secretary 
of the Authority.

(3) Whenever the Authority shall have acquired lands 
for public parking stations and shall have declared and 
ordered that not more than 80 per cent of the cost of estab­
lishing or improving public parking stations, as provided 
in this subsection, will be paid by the levy of special assess­
ments upon real estate situate in any one or more benefit 
districts, it shall cause to be made by some competent per­



54

son an estimate, under oath, of the cost thereof, which esti­
mate shall be filed with the secretary of the Authority. The 
assessment against the benefit district shall be apportioned 
among the various lots, tracts, pieces, and parcels of land 
within the benefit district in accordance with the special 
benefits accruing thereto, this apportionment of benefit 
assessments to be made by three disinterested property 
owners appointed by the mayor of the city or if such city 
has no mayor, by its chief executive officer within 30 days 
after the filing of the estimate of the cost of the improve­
ment with the secretary of the Authority. As soon as the 
amount chargeable against each piece of property is ascer­
tained, the Authority of such city shall by resolution levy 
such amount against this real estate in the benefit district, 
which resolution shall be published once in a newspaper 
of general circulation in such city. No suit to question the 
validity of the proceedings of the Authority shall be com­
menced after 30 days from the awarding of a contract for 
such improvements and until the expiration of the 30 days 
the contractor shall not be required to commence work un­
der his contract. If no suit shall be filed within such 30 
days then all proceedings theretofore had shall be held to 
be regular, sufficient, and valid.

(4) The cost of condemnation and improvement of such 
public parking stations may be levied and assessed in not 
to exceed 10 installments, with interest on the whole amount 
remaining due and unpaid each year at a rate of inteiest 
not exceeding 5 per cent per annum. Any OAvner of land 
within the benefit district may, within 30 days after the 
assessment resolution is passed, pay the entire amount 
assessed against the land. The Authority of such city may 
assess, levy, and collect the cost of condemnation and im­
provement of such public parking stations as is assessed 
against the privately OAvned property in the benefit district.



55

The assessment shall constitute a lien from the date the 
same is assessed by resolution, as provided in this para­
graph, against the respective premises against which the 
same is levied, in the same manner as city taxes on real 
estate are constituted a lien, and shall be collectible in the 
manner provided for the collection of taxes assessed against 
the real estate of the City of Wilmington by monition 
process, as provided in Chapter 143, Yol. 36, Laws of 
Delaware.

(e) When any real property or any interest therein here­
tofore or hereafter acquired by the Authority is no longer 
needed for the purposes defined in this chapter, or when, in 
the opinion of the Authority it is not desirable or feasible 
to hold and use such property for said purposes, the Au­
thority may sell the same at private or public sale as the 
Authority shall determine, granting and conveying to the 
purchaser thereof a fee simple marketable title thereto. 
The Authority may make such sale for such price and upon 
such terms and conditions as the Authority deems advisable 
and for the best interests of the Authority and may accept 
in payment, wholly or partly, cash, bonds, mortgages, deben­
tures, notes, warrants, or other evidences of indebtedness 
as the Authority may approve. The consideration received 
from any such sale may be applied by the Authority, in its 
discretion, to the repayment, in whole or in part, of any 
funds contributed to the Authority by a municipality under 
the provisions of section 508 of this title or retained by the 
Authority for the purposes of this chapter. Without limita­
tion of the foregoing, the Authority may accept as con­
sideration in whole or in part for the sale of any such real 
property, a covenant, agreement or undertaking on the part 
of any purchaser to provide and maintain off-street park­
ing facilities on such property or a portion thereof for the 
fulfillment of public parking needs for such period and un­



56

der such terms and conditions as the Authority shall deter­
mine. Any such covenant, agreement or undertaking on the 
part of the purchaser as aforesaid and the right of the Au­
thority to fix and alter rates to he charged for any such 
parking facilities as well as the right of appeal as in this 
section provided, shall be set forth and reserved in the 
deed or deeds of conveyance. Any such covenant, agree­
ment or undertaking may be enforced by the Authority in 
an action for specific performance brought in the Court of 
Chancery of this State. As amended 49 Del. Laws, Ch. 72, 
eff. May 14, 1953; 50 Del. Laws, Ch. 222, §1, eff. June 8, 
1955; 50 Del. Laws, Ch. 279, §§1, 2, eff. June 13, 1955.

§505. Bonds

(a) The bonds of any Authority referred to and au­
thorized to be issued by this chapter shall be authorized 
by resolution of the board thereof, and shall be of such 
series; bear such date or dates; mature at such time or 
times not exceeding 40 years from their respective dates; 
bear interest at such rate or rates, not exceeding 6 per cent 
per annum payable semi-annually; be in such denomina­
tions; be in such form, either coupon or fully registered, 
without coupons; carry such registration, exchangeability, 
and interchangeability privileges; be payable in such me­
dium or payment and at such place or places; be subject to 
such terms of redemption, not exceeding 105 per cent of the 
principal amount thereof; and be entitled to such priorities 
in the revenues or receipts of such Authority, as such reso­
lution or resolutions may provide. The bonds shall be 
signed by such officers as the Authority shall determine, 
and coupon bonds shall have attached thereto interest 
coupons bearing the facsimile signature of the treasurer of 
the Authority, all as may be prescribed in such resolution 
or resolutions. Any such bonds may be issued and delivered 
notwithstanding that one or more of the officers signing



57

such bonds, or the treasurer whose facsimile signature shall 
be upon the coupon, or any officer thereof, shall have ceased 
to be such officer or officers at the time when such bonds shall 
actually be delivered.

The bonds may be sold at public or private sale for such 
price or prices as the Authority shall determine. The inter­
est cost to maturity of the money received for any issue 
of the bonds shall not exceed 6 per centum per annum. 
Pending the preparation of the definitive bonds, interim 
receipts may be issued to the purchaser or purchasers of 
such bonds and may contain such terms and conditions as 
the Authority may determine.

(b) Any resolution or resolutions authorizing any bonds 
may contain provisions which shall be part of the contract 
with the holders thereof as to (1) pledging the full faith 
and credit of the Authority for such obligations or restrict­
ing the same to all or any of the revenues of the Authority 
from all or any projects or properties; (2) the construction, 
improvement, operation, extension, enlargement, mainte­
nance, and repair of the project, and the duties of the Au­
thority with reference thereto; (3) the terms and provisions 
of the bonds; (4) limitations on the purposes to which the 
proceeds of the bonds then, or thereafter to be issued, or 
of any loan or grant by the United States, may be applied;
(5) the rate of tolls and other charges for use of the facili­
ties of, or for the services rendered by the Authority; (6) 
the setting aside of reserves or sinking funds and the regu­
lation and disposition thereof; (7) limitations on the issu­
ance of additional bonds; (8) the terms and provisions of 
any deed of trust or indenture securing the bonds, or under 
which the same may be issued, and (9) any other additional 
agreements with the holders of the bonds.

(c) Any Authority may enter into any deeds of trust 
indentures, or other agreements, with any bank or trust



58

company or other person or persons in the United States 
having power to enter into the same, including any Federal 
agency, as security for such bonds, and may assign and 
pledge all or any of the revenues or receipts of the Au­
thority thereunder. Such deed of trust, indenture, or other 
agreement, may contain such provisions as may be cus­
tomary in such instruments, or as the Authority may au­
thorize, including provisions as to: (1) the construction, 
improvement, operation, maintenance, and repair of any 
project and the duties of the Authority with reference 
thereto; (2) the application of funds and the safeguarding 
of funds on hand or on deposit; (3) the rights and remedies 
of the trustee and holders of the bonds which may include 
restrictions upon the individual right of action of such bond­
holder, and (4) the terms and provisions of the bonds or the 
resolutions authorizing the issuance of the same.

(d) The bonds shall have all the qualities of negotiable 
instruments under the law merchant and the negotiable in­
struments law of the State of Delaware.

§506. Remedies of bondholders

(a) The rights and the remedies conferred upon or 
granted to the bondholders in this section shall be in addi­
tion to, and not in limitation of, any rights and remedies 
lawfully granted to such bondholders by the resolution or 
resolutions providing for the issuance of bonds, or by any 
deed of trust, indenture, or other agreement under which 
the same may be issued. In the event that the Authority 
shall default in the payment of principal of, or interest on 
any of the bonds, after the principal or interest shall be­
come due, whether at maturity or upon call for redemption, 
and such default shall continue for a period of 30 days, or 
in the event that the Authority shall fail or refuse to comply 
with the provisions of this chapter, or shall default in any



59

agi'eement made with the holders of the bonds, the holders 
of 25 per cent in aggregate principal amount of the bonds 
then outstanding by instrument or instruments filed in the 
office of the recorder of deeds of the county, and proved or 
acknowledged in the same manner as a deed to be recorded, 
may appoint a trustee to represent the bondholders for the 
purpose provided in this section.

(b) Such trustee, and any trustee under any deed of 
trust, indenture or other agreement, may, and upon written 
request of the holders of 25 per cent or such other per­
centages as may be specified in any deed of trust, indenture, 
or other agreement, in principal amount of the bonds then 
outstanding, shall, in his or its own name—

(1) By mandamus, or other suit, action or proceed­
ing at law or in equity, enforce all rights of the bond­
holders, including the right to require the Authority to 
collect rates, rentals or other charges adequate to carry 
out any agreement as to or pledge of the revenues or 
receipts of the Authority, and to require the Authority 
to carry out any other agreements with, or for the 
benefit of the bondholders, and to perform its and 
their duties under this chapter;

(2) Bring suit upon the bonds;

(3) By action or suit in equity require the Authority 
to account as if it were the trustee of an express trust 
for the bondholders;

(4) By action or suit in equity enjoin any acts or 
things which may be unlawful or in violation of the 
rights of the bondholders;

(5) By notice in writing to the Authority declare all 
bonds due and payable, and if all defaults shall be made 
good, then with the consent of the holders of 25 per



60

cent or such other percentage as may be specified in any 
deed of trust, indenture, or other agreement, of the 
principal amount of the bonds then outstanding, to 
annul such declaration and its consequences.

(c) The Court of Chancery in and for the county where­
in the Authority is located shall have jurisdiction of any 
suit, action or proceedings by the trustee on behalf of the 
bondholders. Any trustee when appointed or acting under 
a deed of trust, indenture, or other agreement, and whether 
or not all bonds have been declared due and payable, shall 
be entitled as of right to the appointment of a receiver, 
who may enter and take possession of the facilities of the 
Authority or any part or parts thereof, the revenues or 
receipts from which are, or may be, applicable to the pay­
ment of the bonds in default, and operate and maintain 
the same, and collect and receive all rentals and other 
revenues thereafter arising therefrom, in the same manner 
as the Authority or the board might do, and shall deposit 
all such moneys in a separate account and apply the same 
in such manner as the court shall direct. In any suit, action 
or proceeding by the trustee the fees, counsel fees and ex­
penses of the trustee, and of the receiver, if any, and all 
costs and disbursements allowed by the court shall be a 
first charge on any revenues and receipts derived from 
the facilities of the Authority, the revenues or receipts 
from which are or may be applicable to the payment of the 
bonds in default. The trustee shall, in addition to the fore­
going, have and possess all of the powers necessary or ap­
propriate for the exercise of any functions specifically set 
forth in this section, or incident to the general representa­
tion of the bondholders in the enforcement and protection 
of their rights.

(d) Nothing in this section, or any other section of this 
chapter, shall authorize any receiver appointed pursuant



61

to this chapter for the purpose of operating and maintain­
ing any facilities of the Authority to sell, assign, mortgage, 
or otherwise dispose of, any of the assets of whatever kind 
and character belonging to the Authority. It is the inten­
tion of this chapter to limit the powers of such receiver to 
the operation and maintenance of the facilities of the Au­
thority as the court shall direct; and no holder of bonds of 
the Authority, nor any trustee shall ever have the right in 
any suit, action or proceedings at law or in equity to compel 
a receiver, nor shall any receiver ever be authorized, or any 
court be empowered to direct the receiver to sell, assign, 
mortgage, or otherwise dispose of, any assets of whatever 
kind or character belonging to the Authority.

§507. Governing body

(a) The powers of each Authority shall be exercised by 
a board composed of five members, all of whom shall be resi­
dents of the city creating the Authority. The mayor of the 
city, or if such city or town has no mayor, its chief execu­
tive officer, shall appoint the members of the board, one of 
whom shall serve for one year, one for two years, one for 
three years, one for four years, and one for five years from 
the first day of July in the year in which such Authority is 
created as provided in this chapter. Thereafter the mayor 
shall not sooner than 60 days, nor later than 30 days prior 
to July first in each year in which a vacancy occurs, ap­
point a member of the board for a term of five years to 
succeed the member whose term expires on the first day of 
July next succeeding. Vacancies for unexpired terms that 
occur more than 60 days before the end of a term shall be 
promptly filled by appointment by the mayor. All such ap­
pointments shall be subject to the confirmation of the city 
council or other governing body of the city. Any member 
of the board may be removed for cause by the mayor, or if 
such city or town has no mayor, by its chief executive officer,



62

with the concurrence of two-thirds of all the members of 
the council, or other governing body of the city or town, 
and the person against whom such charges are made shall 
be given a reasonable opportunity to make his defense.

(b) Members shall hold office until their successors have 
been appointed and may succeed themselves. A member 
shall receive no compensation for his services, but shall be 
entitled to the necessary expenses, including traveling ex­
penses, incurred in the discharge of his duties.

(c) The members of the board shall select from among 
themselves a chairman, a vice-chairman, and such other 
officers as the board may determine. The board may employ 
a secretary, an executive director, its own counsel and legal 
staff, and such technical experts and such other agents and 
employees, permanent or temporary, as it may require, and 
may determine the qualifications and fix the compensation 
of such persons. Three members of the board shall consti­
tute a quorum for its meetings. Members of the board 
shall not be liable personally on the bonds or other obliga­
tions of the Authority, and the rights of creditors shall be 
solely against such Authority. The board may delegate to 
one or more of its agents or employees such of its powers 
as it deems necessary to carry out the purposes of this 
chapter, subject always to the supervision and control of 
the board. The board shall have full authority to manage 
the properties and business of the Authority and to pre­
scribe, amend, and repeal by-laws, rules and regulations 
governing the manner in which the business of the Authority 
may be conducted, and the powers granted to it may be 
exercised and embodied.

§508. Acquisition of lands; cost financing by municipality 
# # # * #

The Authority may acquire by purchase or eminent do­
main proceedings either the fee or such rights, title, inter­



63

est, or easement in such lands, as the Authority deems 
necessary for any of the purposes mentioned in this chap­
ter. No property devoted to a public use, nor any property 
of a public service company, property used for burial pur­
poses, places of public worship, nor property which on June 
21, 1951 was used as a facility or facilities for the parking 
of motor vehicles, so long as the property is continuously 
so used, and so long as the operation of the facility complies 
with parking and traffic ordinances of the city shall be taken 
under the right of eminent domain. The right of eminent 
domain shall be exercised by the Authority in the manner 
provided by chapter 61 of Title 10.

The right of eminent domain conferred by this section 
may be exercised only within the city.

Court proceedings necessary to acquire property or prop­
erty rights, for purposes of this chapter, shall take prece­
dence over all causes not involving the public interest in all 
courts to the end that the provision of parking facilities be 
expedited.

Any municipality establishing an Authority under this 
chapter may, under such terms and conditions as it may 
deem appropriate, provide for and pay to such Authority 
such sum or sums of money necessary to acquire in whole 
or in part the lands upon which such Authority may under­
take to erect a parking facility as herein provided and/or 
such sum or sums of money necessary to construct in whole 
or in part a parking facility or facilities as herein provided; 
the municipality for the purpose of providing said money 
may issue its general obligation bonds secured by the faith 
and credit of the municipality. The aggregate amount of 
general obligation bonds issued by a municipality under 
this provision shall be in addition to and not within the 
limitations of any existing statutory debt limitation of the 
municipality. As amended 49 Del. Laws, Ch. 2, eff. June 
4, 1953; 50 Del. Laws, Ch. 221, §1, eff. June 8, 1955.



64

§509. Moneys; examination of accounts

All moneys of any Authority, from whatever source de­
rived, shall be paid to the treasurer of the Authority. The 
moneys shall be deposited, in the first instance by the trea­
surer in one or more banks or trust companies, in one or 
more special accounts. The moneys in the accounts shall 
be paid out on the warrant or other order of the chairman 
of the Authority, or of such other person or persons as the 
Authority may authorize to execute such warrants or or­
ders. Every Authority shall have at least an annual ex­
amination of its books, accounts and records by a certified 
public accountant. A  copy of such audit shall be delivered 
to the city creating the Authority. A concise financial 
statement shall be published annually at least once in a 
newspaper of general circulation in the city where the prin­
cipal office of the Authority is located. If such publication 
is not made by the Authority the city shall publish such 
statement at the expense of the Authority. If the Authority 
fails to make such an audit then the auditor or accountant 
designated by the city may, from time to time, examine 
at the expense of the Authority, the accounts and books of 
the Authority, including its receipts, disbursements, con­
tracts, leases, sinking funds, investments, and any other 
matters relating to its finances, operation, and affairs.

The Attorney General of the State may examine the 
books, accounts and records of any Authority.

§510. Competition in award of contracts

(a) All construction, reconstruction, repairs, or work of 
any nature made by any Authority, where the entire cost, 
value, or amount of such construction, reconstruction, re­
pairs, or work including labor and materials, shall exceed 
$500, except reconstruction, repairs, or work done by 
employees of the Authority, or by labor supplied un­



65

der agreement with any Federal or State agency with 
supplies and materials purchased as provided in this sec­
tion, shall be done only under contract or contracts to be 
entered into by the Authority with the lowest and best 
bidder, upon proper terms, after due public notice has been 
given, asking for competitive bids as provided in this sec­
tion. No contract shall be entered into for construction 
or improvement or repair of any project, or portion 
thereof, unless the contractor shall give an undertaking with 
a sufficient surety or sureties, approved by the Authority, 
and in an amount fixed by the Authority for the faithful 
performance of the contract. All such contracts shall pro­
vide, among other things, that the person or corporation 
entering into such contract with the Authority will pay 
for all materials furnished and services rendered for the 
performance of the contract, and that any person or corpo­
ration furnishing such materials or rendering such services 
may maintain an action to recover for the same against the 
obligor in the undertaking, as though such person or cor­
poration was named therein, provided the action is brought 
within one year after the time the cause of action accrued. 
Nothing in this section shall be construed to limit the power 
of the Authority to construct, repair, or improve any proj­
ect or portion thereof, or any addition, betterment, or ex­
tension thereto directed by the officers, agents, and em­
ployees of the Authority or otherwise than by contract.

(b) All supplies and materials costing $500 or more shall 
be purchased only after due advertisement as provided in 
this section. The Authority shall accept the lowest bid or 
bids, kind, quality, and material being equal, but the Au­
thority may reject any or all bids or select a single item 
from any bid. The provisions as to bidding shall not apply 
to the purchase of patented and manufactured products 
offered for sale in a noncompetitive market, or solely by a 
manufacturer’s authorized dealer.



66

(c) The terms, advertisement or dne public notice, wher­
ever used in this section shall mean a notice published at 
least 10 days before the award of any contract in a news­
paper of general circulation published in a municipality 
where the Authority has its principal office, and if no news­
paper is published therein, then by publication in a news­
paper of general circulation in the county where the Au­
thority has its principal office.

(d) No member of the Authority or officer or employee 
thereof shall either directly or indirectly be a party to, 
or be in any manner interested in, any contract or agree­
ment with the Authority for any matter, cause, or thing 
whatsoever by reason whereof any liability or indebtedness 
shall in any way be created against such Authority. If any 
contract or agreement shall be made in violation of the 
provisions of this section the same shall be null and void 
and no action shall be maintained thereon against such 
Authority.

(e) Subject to the provisions of subsections (a)-(d) of 
this section any Authority may, but without intending by 
this provision to limit any powers of such Authority, enter 
into and carry out such contracts or establish or comply 
with such rules and regulations concerning labor and ma­
terials and other related matters in connection with any 
project or portion thereof as the Authority deems desir­
able, or as may be requested by any Federal agency that 
may assist in the financing of such project or any part 
thereof. The provisions of this section shall not apply to 
any case in which the Authority has taken over by transfer 
or assignment any contract authorized to be assigned to it 
under the provisions of section 515 of this title, nor to any 
contract in connection with the construction of any project 
which the Authority may have had transferred to it by 
any person or private corporation.



67

§511. Use of projects

The use of the facilities of the Authority and the opera­
tion of its business shall be subject to the rules and regu­
lations from time to time adopted by the Authority. The 
Authority shall not do anything which will impair the se­
curity of the holders of the obligations of the Authority, 
or violate any agreements with them or for their benefits.

§512. Limitation of powers

The State of Delaware hereby pledges to and agrees 
with any person, firm or corporation, or Federal agency 
subscribing to, or acquiring the bonds to be issued by the 
Authority for the construction, extension, improvement, or 
enlargement of any project or part thereof, that the State 
will not limit or alter the rights vested in the Authority 
until all bonds at any time issued, together with the interest 
thereon, are fully met and discharged. The State of Dela­
ware further pledges to, and agrees with, the United States 
and any other Federal agency, that if any Federal agency 
constructs or contributes any funds for the construction, 
extension, improvement, or enlargement of any project, or 
any portion thereof, the State will not alter or limit the 
rights and powers of the Authority in any manner which 
would be inconsistent with the continued maintenance and 
operation of the project or the improvement thereof, or 
which would be inconsistent with the due performance of 
any agreements between the Authority and any such Fed­
eral agency, and the Authority shall continue to have and 
may exercise all powers granted in this chapter, so long 
as the same shall be necessary or desirable, for the carry­
ing out of the purposes of this chapter, and the purposes 
of the United States in the construction or improvement 
or enlargement of the project or such portion thereof.



68

§513. Termination of Authority

When any Authority shall have finally paid and dis­
charged all bonds, which, together with the interest due 
thereon, shall have been secured by a pledge of any of the 
revenues or receipts of a project, it may, subject to any 
agreements concerning the operation or disposition of 
such projects, convey such project to the city creating the 
Authority. When any Authority shall have finally paid and 
discharged all bonds issued and outstanding and the in­
terest due thereon, and settled all other claims which may 
he outstanding against it, it may convey all its property 
to the city and terminate its existence. A certificate re­
questing termination of the existence of the Authority shall 
he filed in the office of the Secretary of State. If the cer­
tificate is approved by the city creating the Authority by 
its ordinance or ordinances, the Secretary shall note the 
termination of existence on the record of incorporation and 
return the certificate with his approval shown thereon to 
the hoard, which shall cause the same to be recorded in 
the office of the recorder of deeds of the county. There­
upon the property of the Authority shall pass to the city 
and the Authority shall cease to exist.

§514. Exemption from taxation; payments in lieu of 
taxes

The effectuation of the authorized purposes of the Au­
thorities created under this chapter shall and will he in 
all respects for the benefit of the residents of incorporated 
cities for the increase of their commerce and prosperity, 
since such Authorities will be performing essential govern­
mental functions and for the improvement of their health, 
safety, and living conditions, and, in effectuating such pur­
poses, such Authorities shall not be required to pay any 
taxes or assessments upon any property acquired or used 
by them for such purposes. In lieu of such taxes or special 
assessments an Authority may agree to make payments to



69

the city or the county or any political subdivision. The 
bonds issued by any Authority, their transfer and the in­
come therefrom, including any profits made on the sale 
thereof, shall at all times be free from taxation within this 
State.

§515. Transfer of existing facilities to Authority

(a) Any municipality or owner may sell, lease, lend, 
grant, or convey to any Authority any project, or any part 
or parts thereof, or any interest in real or personal prop­
erty which may be used by the Authority in the construc­
tion, improvement, maintenance, or operation of any 
project. Any municipality may transfer, assign, and set 
over to any Authority any contracts which may have been 
awarded by the municipality for the construction of proj­
ects not begun, or if begun not completed. The territory 
being served by any project, or the territory within which 
such project is authorized to render service at the time of 
the acquisition of such project by an Authority, shall con­
stitute the area in which such Authority shall be authorized 
to render service.

(b) The Authority shall first report to and advise the 
city by which it was created of the agreement to acquire, 
including all its terms and conditions.

The proposed action of the Authority, and the proposed 
agreement to acquire, shall be approved by the city council. 
Such approval shall be by two-thirds vote of all of the 
members of the council.

(c) This section, without reference to any other law, shall 
be deemed complete for the acquisition by agreement of 
projects as defined in this chapter located wholly within 
or partially without the city causing such Authority to be 
incorporated, any provisions of other laws to the contrary 
notwithstanding, and no proceedings or other action shall 
be required except as prescribed in this section.



70

APPENDIX C 

Mandate

THE SUPREME COURT 
OF THE STATE OF DELAWARE

To the Honorable the Chancellor of the State of Delaware 
in and for New Castle County:

G R E E T I N G :

W hereas, b e fo re  yon  or  som e o f  you  in  a cause entitled  
as fo l lo w s :

Civil Action No. 1029 

W il l i a m  H. B u r t o n ,
Plaintiff,

•— v.—

T h e  W il m i n g t o n  P a r k in g  A u t h o r i t y , et al.,

Defendants.

a certain judgment or order was entered on the 11th day of 
May 1959, to which reference is hereby made; and 

W h e r e a s , by appropriate proceedings the said cause was 
duly appealed to this Court, and after hearing has been 
finally determined, as appears from the opinion of this 
Court filed in the cause on January 12, 1960, a certified 
copy of which is attached hereto;

O n  c o n s id e r a t io n  w h e r e o f  it  is  o rd ered  a n d  a d ju d g e d  

that the said judgment or order be and it is hereby re­
versed, with costs, hereby taxed in the sum of Twelve 
Dollars ($12.00) to be recovered by The Wilmington Park­
ing Authority, et al. against William H. Burton, with right



71

of execution; and the said cause is hereby remanded with 
instructions to take such further proceedings therein as 
may be necessary in conformity with the opinion of this 
Court.

W it n e s s  The Honorable Clarence A. Southerland, our 
Chief Justice at Hover, the First day of January, A.D. 1960. 
Issued February 4,1960.

/ s /  T. T o w n s e n d , Jb.
Clerk of the Supreme Court.

c o p y



*