Burton v The Wilmington Parking Authority Appellants Brief and Appendix

    I n  t h e

infirm ? ( ta r t  nf thT Hutted

October Term, 1960 

No. 164

W illiam II. B urton, 

—v.—
Appellant,

T he W ilmington P arking A uthority, a body corporate and 
politic of the State of Delaware, and

E agle Coffee Shoppe, Inc., a corporation of the 
State of Delaware,

Appellees.

on appeal from the supreme court of
THE STATE OF DELAWARE

APPELLANT’S BRIEF AND APPENDIX

Louis L. R edding 
Leonard L. W illiams 

923 Market Street 
Wilmington 1, Delaware

Counsel for Appellants

JA M E S M. NASRiiT, M



I N D E X
PAGE

Opinions B elow ....................................................................  1

Jurisdiction ..........................................................................  1

Questions Presented ..........................................................  2

Statutes Involved ..............................................................  3

Statement ..............................................................................  3

Summary of Argum ent......................................................  8

A rgument............................................................................ -..... 9

I— This Court Has Jurisdiction of the A ppeal.... 9

II— The Judicial Construction Below of the Stat­
ute as Sanctioning Racial Discrimination Is 
State Action Repugnant to the Fourteenth 
Amendment ........................................................  11

III— The Court Below Improperly Absolves an 
Agency of State Government from Responsi­
bility for Denial of Equal Protection of the 
Laws to Appellant............................................... 13

a. The Court Below Reasons from Assump­
tions of Fact Not in the Record hut 
Imported from an Earlier Case to Which 
Appellant Was Not a P a rty ...................  14

b. The Court Below Departs from Prac­
tically Unanimous Authority as to the 
Responsibility to Preserve Equal Pro­
tection in the Leasing of Places of Public 
Accommodation in Government-Owned 
R ealty ........................................................ -  15

Conclusion 18



11

Table of Cases
page

American Federation of Labor v. Swing, 312 U. S. 321 
(1941) ........................................................................ - .....  13

Bridges v. California, 314 U. S. 252 (1941) — ........ ....  13
Brown v. Board of Education of Topeka, 347 U. S.

483 .................................-..... -........... -................................9,13

City of Greensboro v. Simkins, 246 F. 2d 425 (4th Cir.
1957) ......... ....... ..................... ...........  ~ ............-.....-....  15

Coke v. City of Atlanta,------ F. Supp. ——  (N. D. Ga.,
Jan. 6, 1960) ............................................ .........................  16

Cooper v. Aaron, 358 U. S. 1 (1958) ...... ..................... . 15
Culver v. City of Warren, 84 Ohio App. 373, 83 N. E.

2d 82 ............................................................. .. ...... - - ......  18

Derrington v. Plummer, 240 F. 2d 922 (5th Cir. 1956) 17

Gayle v. Browder, 352 U. S. 903 ........ ............. ................  9

Jones v. Marva Theatres Inc., 180 F. Supp. 49 (D. C.
Md. 1960) ............. ....................... -........... -.......................  15

Kern v. City Commissioners, 151 Kans. 565, 100 P. 2d 
709 (1940) ............. ....... ............... ............................... -  16

Lawrence v. Hancock, 77 F. Supp. 1004 ------------ ------- 18

Marsh v. Alabama, 326 U. S. 501 (1946) .......... .......... . 16
Muir v. Louisville Park Theatrical Ass’n, 347 U. S. 971 15

Nash v. Air Terminal Services, Inc., 85 F. Supp. 554 
(E. D. Va., 1949) 16



I ll

PAGE

Pennsylvania v. Board of Directors of City Trusts,
353 U. S. 230 (1957) ............................................... .......11,15

Rice v. Elmore, 165 F. 2d 387 (4th Cir. 1947), cert. den.
333 XL S. 875 ............................................................... ......  17

Shelley v. Kraemer, 312 U. S. 321 (1941) ........._...... ...... 12
Smith v. Allwright, 321 IT. S. 649 ..... ........................... .....  18
Strauder v. West Virginia, 100 U. S. 303 (1880) ___ __  11

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 ................................................ _. 15

Terry v. Adams, 345 IT. S. 461 ........ ....... ....... ................  18

Wilmington Parking Authority v. Ranken, 34 Del. Ch.
339, 105 A. 2d 614......... ............ ..... ......... ............. ...4,14,17

Statutes:

22 Delaware Code Ch. 5 ........ ............. .......................... ..... 3,17

24 Delaware Code §1501 ..........................................3, 5, 6, 7, 9

28 U. S. C. §1257(2) ............. ...............................................2,10

Other Authority.

Crawford, The Construction of Statutes ......................  11



1st th e

(Em trl u f  tin* lu ttp fr  S ta t e s

October Term, 1960 

No. 164

W illiam H. B urton,
Appellant,

T he W ilmington P arking A uthority, a body corporate and 
politic of the State of Delaware, and

E agle Coffee Shoppe, I nc., a corporation of the 
State of Delaware,

Appellees.

ON APPEAL FROM THE SUPREME COURT OF 

THE STATE OF DELAWARE

APPELLANT S BRIEF

Opinions Below

The opinion of the Supreme Court of Delaware is re­
ported at 157 A. 2d 894 (1960) (R. 42-54). The opinion of 
the Court of Chancery of the State of Delaware, in and 
for New Castle County, is reported at 150 A. 2d 197 (1959) 
(R. 36-39).

Jurisdiction

Appellant brought a class action in the Court of Chan­
cery of the State of Delaware for a declaratory judgment 
and injunctive relief against Wilmington Parking Au­



2

thority, a public agency of the State of Delaware, and its 
lessee, Eagle Coffee Shoppe, Inc., a Delaware corporation, 
to restrain, as a denial of equal protection of the laws 
secured by the Fourteenth Amendment, the racially dis­
criminatory refusal of food service to him in a restaurant 
operated in a public parking facility maintained by the 
Authority in downtown Wilmington.

The judgment of the Supreme Court of Delaware, re­
versing the declaratory judgment and injunction granted 
by the Court of Chancery, was entered on January 12, 1960, 
and on February 4, 1960, without opinion, the Supreme 
Court of Delaware denied reargument. Notice of appeal 
to this Court was filed in the Supreme Court of Delaware 
on April 28, 1960, and the jurisdictional statement of 
appellant was filed in this Court on June 22, 1960. On 
October 10, 1960, this Court postponed further considera­
tion of the question of jurisdiction to the hearing of the 
case on the merits. The jurisdiction of this Court is in­
voked under 28 U. S. C. §1257(2).

Questions Presented

1. Whether this Court has jurisdiction of the appeal.

2. Whether the court below is involved in state action 
repugnant to the Fourteenth Amendment when it construes 
a state statute, which on its face imposes no racial test, 
as authorizing racial discrimination in a state-owned public 
facility.

3. Whether the court below, by assuming facts outside 
the record of the case and failing to recognize the inter­
relationship of a public lessor of a state-owned public 
facility with its lessee, improperly absolves the lessor of 
the duty to accord equal protection of the laws.



3

Statutes Involved

This case involves the validity of Title 24, Delaware Code 
of 1953, §1501, as construed and applied in this case by 
the Supreme Court of Delaware to authorize racial dis­
crimination. The text of the statute is as follows:

§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 of 1953, Chapter 5, also per­
tinent, but the validity of which is not involved, is reprinted 
in the Appendix, infra, pp. 19-45.

Statement

Appellant, a Negro, resident in Wilmington, Delaware, 
on August 14, 1958, parked his automobile in the public 
parking structure of appellee Wilmington Parking Au­
thority (Authority) and then proceeded into a restaurant 
operated in the parking facility, or building. There he 
sought food service and was refused, solely because of 
his race (R. 1-3, 28-29, 37, 43).

The Authority is a public body corporate and politic, 
established by the City of Wilmington, pursuant to 22 
Delaware Code, Ch. 5 (Appendix), to construct and oper­



4

ate a facility for off-street parking of automobiles. The 
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 the facility is erected, however, was acquired through 
negotiated purchases, the purchase money coming from 
three sources: revenue bonds issued on the credit of the 
Authority, cash donated by the City of Wilmington, and 
a bank loan to the Authority (R. 12). 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 (R. 12). The structure itself was erected 
solely from the proceeds of the Authority’s revenue bonds 
(R. 1-2, 5, 7, 11-13).

Section 504(a) (Appendix, p. 23) of the act under which 
the Authority is established provides that the Authority 
may lease portions of the first floor of the facility for com­
mercial use where such leasing is necessary and feasible 
for the financing and operation of such a facility. The 
Authority is required to be financially self-sustaining. See 
Wilmington Parking Authority v. Banken, 34 Del. Ch. 339, 
105 A. 2d 614, 622 (1954). The Authority determined that 
it would be feasible to erect and operate the structure only 
if, in addition to fees from parking, there was income from 
commercial leasing of space in the structure (R. 2, 5, 7, 
12).

Appellee Eagle Coffee Shoppe, Inc. (Eagle) leased from 
the Authority certain space in the building in April, 1957, 
for twenty years, with an option to renew for an additional 
ten years (R. 2, 5, 7, 14, 26). This lease required Eagle 
to operate a restaurant, dining room, banquet hall, cocktail 
lounge and bar and to engage in no other business (R. 21). 
Eagle covenanted to “ occupy and use the leased premises 
in accordance with all applicable laws . . .  of any federal,



5

state or municipal authority” (R. 19). The Authority has 
the right, under the lease, to enforce its provisions in 
strict accordance with its terms (It. 25).

Appellant, on August 20, 1958, filed in the Court of 
Chancery his complaint against the Authority and Eagle, 
alleging that the Authority, “ acting through the instru­
mentality of its lessee,” Eagle, “ using and occupying a 
portion of said public facility,” had refused food service 
to appellant, solely because of his race, color and ancestry. 
The complaint alleged this refusal to be conduct of an 
agency of the State of Delaware depriving appellant of the 
equal protection of the laws, in violation of the Fourteenth 
Amendment (R. 1-4).

When the Vice Chancellor rendered the decision of the 
Court of Chancery, there had been filed in that court the 
complaint, answers by both appellees, including an admis­
sion by Eagle that appellant was refused service in the 
restaurant only because of his race (R. 28-29), motions for 
summary judgment by the Authority and Eagle, a counter- 
motion for summary judgment by appellant, and affidavits 
in support of the motions. Appellees’ motions set forth, in 
essence, two grounds as the basis for summary judgment: 
(1) that operation of the restaurant in the parking facility 
was the private business of Eagle and independent of con­
trol by the Authority; (2) that under 24 Delaware Code 
§1501, supra, Eagle was permitted to refuse service to 
appellant (R. 9-11).

The Vice Chancellor denied appellees’ motions and 
granted appellant’s. He concluded that because rental in­
come was a substantial and integral part of the means of 
financing this “vital public facility,” the Authority was ob­
ligated to enter into leases which would require the tenant 
to carry out the Authority’s duty under the equal protec­
tion clause. He deemed the Fourteenth Amendment to ap­



6

ply to the operation of all aspects of the structure and to 
forbid racial discrimination in the restaurant. Having thus 
decided, the Vice Chancellor stated it was not necessary to 
consider appellees’ reliance on 24 Delaware Code §1501 (R. 
39).

The Supreme Court of Delaware, on appeal by the Au­
thority and Eagle, was of the opinion (R. 42-54) that the 
only concern the Authority had with Eagle was the receipt 
of rent, “without which it [the Authority] would be unable 
to afford the public the service of off-street parking.” It 
concluded that Eagle’s discriminatory act was not that of 
the Authority; it deemed Eagle to be acting in a “ purely 
private capacity.” The record contained no evidence of ap­
pellant’s offensiveness to other customers or of injury to 
business, requisites under the terms of the statute to bring 
it into operation, but the record did contain appellees’ ad­
mission that service was refused appellant only because of 
his race. Conjoined with this was appellees’ briefed argu­
ment that, dispensing with proof, judicial notice could be 
taken of the offensiveness of members of the class to which 
appellant belongs. In this state of the record, the court 
below held that 24 Delaware Code §1501 applied and au­
thorized Eagle to refuse to serve appellant; and the court 
reversed the Vice Chancellor.

As the gravamen of the complaint, appellant sets up, or 
claims, a federal right, in that he alleges that the Authority, 
a public agency of the State of Delaware, acting through the 
instrumentality of its lessee, Eagle, in refusing appellant 
food service in the restaurant located in the governmentally- 
owned public facility, solely because of race, violated ap­
pellant’s right to constitutional equal protection of the laws.

Secondly, a federal question was raised by appellant in 
the trial court on appellees’ motions for summary judgment 
claiming that the statute permits refusal of service to ap­



7

pellant, a Negro, on the ground of race1 (E. 9, 10). Appel­
lant’s brief, in reply, which was the mode appropriate under 
Delaware practice to raise the issue, argued that:

“ [ I ] f  the statute . . .  be regarded as giving carte 
blanche authorization to the keeper of an inn or other 
place of public entertainment mentioned in the section 
to make discriminatory regulations based on race or 
color alone, this would not be private action, immune 
from the Fourteenth Amendment, but discriminatory 
state action which is barred by that Amendment.”

In the Supreme Court of Delaware, the constitutional 
validity of the statute was again drawn into question by this 
appellant on appeal by the Authority and Eagle from the 
Vice Chancellor’s decision. On that appeal, the Authority’s 
brief2 made a contention based on the statute and identical 
with that advanced in the trial court in appellees’ joint brief. 
Again, in the Supreme Court, appellant’s brief insisted that 
if the statute be construed as authorizing a restaurateur 
to discriminate because of race, the legislation would be 
discriminatory state action which the Fourteenth Amend­
ment prohibits. However, the Supreme Court of Delaware

1 In accordance with Delaware practice, appellees’ motions were 
briefed and orally argued. The joint brief of the Authority and 
Eagle made the point, stated verbatim, that: “A Delaware inn­
keeper may refuse service to Negroes by reason of the provisions 
of 24 Delaware Code of 1953 Section 1501.” This was developed 
to support one of the two grounds on which the Authority’s motion 
for summary judgment was based.

2 The Authority’s brief gave recognition of the necessity under 
the statute of establishment of operative terms of the statute, viz., 
“ offensive to the major part of his customers” and injury to busi­
ness and argued that “no issue of fact is raised by application of 
Section 1501 because this Court can take judicial notice whether 
a member of a class is offensive to a ‘major part’ of Eagle’s cus­
tomers. The rule of judicial notice is a judicial short cut which 
dispenses with proof of a notorious and self-evident fact.”



8

held the Authority not answerable for the admitted racial 
discrimination; and it construed and enforced the statute as 
authorizing exclusion of appellant because of race.

Summary of Argument

A statute of the State of Delaware relieves the proprietor 
of a place of public refreshment, specifically a restaurant, 
of obligation to receive in his place any person whose re­
ception would be offensive to the majority of the persons 
having occasion to use the restaurant and would injure the 
business. The statute is construed by the Supreme Court 
of Delaware to authorize exclusion of appellant because he 
is a Negro without any evidence of his offensiveness to 
other customers or of injury to business. Appellant chal­
lenges the statute as thus construed and applied to exclude 
him from a restaurant operated in a state-owned public 
garage and the court below sustains the statute in the face 
of appellant’s challenge. This Court has jurisdiction be­
cause the appeal draws in question the validity of the stat­
ute, the decision below being in favor of validity.

Inasmuch as the application of the statute to authorize 
appellant’s exclusion because of race from the restaurant 
in the government-owned facility derives solely from the 
construction and enforcement given the statute by the state 
court below, such discriminatory construction and enforce­
ment is state judicial action repugnant to the equal pro­
tection clause of the Fourteenth Amendment.

The court below indulged in erroneous assumptions of 
facts outside the record before it and from these assump­
tions drew the legal conclusion that there was an absence 
of state action in the leasing of a restaurant in a state- 
owned public facility. The court below also improperly



9

assessed the relationship between the state-agency lessor 
and its lessee and the responsibilities flowing from this rela­
tionship. These errors by the court below have invalidly 
deprived appellant of the equal protection of the laws.

ARGUMENT

I
This Court has jurisdiction of the appeal.

This case involves the question of the validity, under 
the Fourteenth Amendment, of a Delaware statute, Title 24, 
Delaware Code §1501, which, as construed and applied by 
the Supreme Court of Delaware to the facts of this case, 
authorizes the operator of a restaurant located in a public 
structure, conceived as a public facility by the Delaware 
General Assembly and constructed and maintained by a 
public agency of that state as a public facility, to deny 
service to appellant solely because he is a Negro. It is now 
established beyond meaningful dispute that a statute which 
requires or permits racial distinctions patently violates the 
Fourteenth Amendment. Brown v. Board of Education of 
Topeka, 347 U. S. 483, Gayle v. Browder, 352 U. S. 903.

That the constitutional validity of this statute was drawn 
in question in this case and that the statute was sustained 
by the court below is inescapable in the aggregate context 
of the case: a suit to enjoin refusal of service to appellant 
because of his race; the admission of such refusal in the 
pleadings (R. 28-29) ; appellees’ motions for summary judg­
ment, pleading the statute as giving the right to refuse 
service to appellant (R. 9-11); the total absence in the rec­
ord of facts to evidence the existence of requisites of the 
statute, viz., offensiveness of appellant to other customers 
and injury to business; appellees’ briefs in support of their



10

motions urging judicial notice of the “notorious and self- 
evident fact” that appellant’s being a Negro dispensed 
with proof of the statutory grounds for refusal of service 
(See fn. 2, supra) ; appellees’ further contention, definitively 
arguing that “ a Delaware innkeeper may refuse service to 
Negroes by reason of the provisions of” this statute (See 
fn. 1, supra) ;  appellant’s attack under the Fourteenth 
Amendment on the validity of the statute, given the con­
struction and application appellees advanced; the ruling 
of the court below that on the basis of the statute, restau­
rant service to appellant could be refused.

As initiated, appellant’s action was not framed in terms 
of a challenge to the statute, for the statute does not spe­
cifically or by implication authorize racial discrimination. 
Moreover, in the 83 years of its existence prior to the filing 
of appellant’s action, there are no reported cases dealing 
with the statute and no discoverable record of its applica­
tion. When, however, it was advanced to justify the racial 
discrimination of which appellant complained, his attack on 
its constitutional validity was clear and in a mode appro­
priate in the context of the case. That challenge, or attack, 
is the basis of this Court’s jurisdiction under 28 U. S. C. 
§1257(2).

In the face of that challenge the court below has sus­
tained the statute. Its ruling should not be suffered to 
escape review merely because it does not contain language 
explicitly declaring the statute impervious to constitutional 
attack. The reference in the opinion below to erosion of 
“ our local law” by Federal decisions and the holding that 
the statute “ does not compel the operator of a restaurant 
to give service,” under the facts presented in this case, 
amply demonstrate the decision of the court below to uphold 
the statute against the attack made upon it. The issue 
therefore is an appropriate one for consideration under



11

28 U. S. C. 1257(2), because the court below has construed 
the state statute to authorize discrimination against ap­
pellant on the ground of his race and has upheld the stat­
ute against his constitutional attack.

In the event that this Court should determine that an 
appeal will not lie under 28 IT. S. C. 1257(2), it is respect­
fully submitted that the case should be treated as an appro­
priate one for certiorari. Pennsylvania v. Board of Di­
rectors of City Trusts, 353 U. S. 230 (1957).

II

The judicial construction below of the statute as sanc­
tioning racial discrimination is state action repugnant 
to the Fourteenth Amendment.

The statute invoked by appellees to exclude appellant, 
as enacted by the Delaware General Assembly, contains no 
racial test or standard, as clearly it could not. Strauder 
v. West Virginia, 100 U. S. 303 (1880).

It may be that the statute is so vague, indefinite and un­
certain in its terms that it cannot be given intelligible mean­
ing and therefore would be inoperative. See Crawford, 
The Construction of .Statutes, §198. No guidance is given 
by the statute as to when or how the offensiveness of a 
prospective patron “ to the major part of his [the restau­
rateur’s] customers” is to be ascertained. It is not indicated 
whether the ascertainment is to be made by a poll of, in 
the language of the statute, “ all who have occasion for 
entertainment or refreshment,” irrespective of whether that 
occasion was simultaneous with the appearance of the sus- 
pectedly offensive character or prior thereto or at some 
indefinite future time when the suspect is not presenting 
himself for service.



12

However, assuming that the statute as enacted is valid, 
appellees have not shown that they have exercised the tests 
it does contain.3 With these tests unavailed of and no 
showing whatever made with respect to appellant’s effect 
on the customers in the restaurant at the time of his ap­
pearance, the court below, presumably acceding to the Au­
thority’s entreaty that it take judicial notice that members 
of the class of persons to which appellant belongs, i.e., 
Negroes, are offensive, determined that the statute au­
thorized his exclusion.

It has been held constitutionally impermissible for a 
court, an agency of state government, to enforce wholly 
private agreements plainly discriminatory on their face 
against Negroes, or more accurately and inclusively, all 
non-Caucasians, with respect to their right to acquire and 
occupy real property. “ [Jjudicial action . . . bears the 
clear and unmistakable imprimatur of the State,” this 
Court said; and when by such action the state undertakes 
to enforce private racially discriminatory pacts preventing 
acquisition of real estate, Fourteenth Amendment equal 
protection is transgressed. Shelley v. Kraemer, 334 U. S. 
1 (1948). It would seem certainly not less transgressive of 
that constitutional guaranty when the court below construes 
and enforces a statute, which on its face has no racially 
discriminatory provisions, to deprive appellant, because he 
is a Negro, of the use of real property owned and main­
tained by a state governmental agency.

Even if one agrees with the court below that the statute 
is merely a restatement of the common law (R. 54), and

3 In its brief in the court below, the Authority sought to excuse 
its failure to employ the tests thus: They “would involve the 
appearance of an arbitrary number of witnesses to be compelled 
to state their personal predilections upon a delicate and incitatory 
question.”



13

we are not prepared so to agree, this Court has condemned 
state judicial enforcement of common law policy which 
nullifies constitutional freedoms. American Federation of 
Labor v. Swing, 312 U. S. 321 (1941), Bridges v. California, 
314 U. S. 252 (1941).

Ill

The court below improperly absolves an agency of 
state government from responsibility for denial of equal 
protection of the laws to appellant.

That a state, in operating its facilities on a racially segre­
gated basis, violates the constitutional guaranty of equal 
protection of the laws is now definitely established. Brown 
v. Board of Education of Topeka, supra. The court below 
early in its written opinion refers to this decision but in 
a curiously oblique understatement of the principle of the 
Brown case presignifies the departure it is to make from it. 
Says the opinion:

“ [T]he states and their instrumentalities have been 
required to act within the scope of state action in a 
racially non-segregated manner” (E. 44). (Italics sup­
plied. )

The opinion then proceeds ultimately to the conclusion, 
that the Authority, a state agency, in its leasing of space 
for a restaurant in what the trial court called a “vital 
public facility,” is not involved in state action and that its 
lessee acts in a “ purely private capacity” and the constitu­
tional inhibition against racial discrimination does not 
apply. In arriving at this conclusion, the court below not 
only relies on factual information outside the record but 
departs from practically undeviating authority on the sub­
ject of state-owned leased real estate.



14

a. The court below reasons from assumptions of fact 
not in the record but imported from an earlier case 
to which this appellant was not a party.

From Wilmington Parking Authority v. Ranken, supra, 
p. 4, brought by the Authority against a taxpayer, not 
this appellant, to test the constitutionality of the Parking 
Authority Act, the court below imported facts upon which 
it relied for support of its determination that state action 
was absent in the instant case. Because the parking struc­
ture had not actually been erected, many of the cost figures 
used in that case were only the estimates projected by the 
Authority’s consultants. Id. 105 A. 2d at 618. On the basis 
of that case the court below concluded that the only “ public 
money” used in the construction of the parking structure 
was “ $934,000 ‘advanced’ by the City of Wilmington and 
used in the purchase of a portion of the land required” 
(E. 50). This sum the court stated was only “ approximately 
15% of the total cost” ; and it held that a “ slight contribu­
tion is insufficient” to denote state action (E. 53).

The figure used by the court below conflicts with undis­
puted acknowledgment by the chairman of appellee Au­
thority, in the record before the court below, that:

“ Subsequently the City of Wilmington gave the Au­
thority $1,822,827.69, which sum the Authority applied 
to the redemption of the Eevenue Bonds delivered to 
Diamond Ice & Coal Co. and to the repayment of the 
Equitable Security Trust Company loan” (E. 12).

Appellant’s petition for reargument undertook to point 
out that the error resulting from this venturing beyond 
the record caused the court below to minimize what it con­
sidered the percentage of “ public money” in the project. 
As indicated above, the petition was denied without opinion.



15

Whether the figure be $934,000 or $1,822,000 or, as seems 
more probable from the record, at least the aggregate of 
these sums (R. 12), what the court below regarded as the 
“ public money,” is substantial.

Moreover, it is difficult to understand that any of the 
funds shown by the affidavit of the Authority’s chairman 
as coming to it (R. 12), whether cash donated by the City of 
Wilmington, proceeds from the sale of the Authority’s 
revenue bonds, parking revenues or leasehold rental in­
come, once in the treasury of this public governmental 
agency, are other than public funds. If public property, 
it cannot be used to maintain racial discrimination. Cooper 
v. Aaron, 358 U. S. 1 (1958). If funds constituting a trust 
created by an individual out of his own private fortune, in 
the custody of public trustees whose official position makes 
them agents of the state, cannot be administered in a racially 
discriminatory manner, Pennsylvania v. Board of Directors 
of City Trusts, supra, p. 11, then, a fortiori, the funds 
controlled by the Authority, however derived, cannot be 
used by it to work discrimination against appellant because 
he is a Negro.

b. The court below departs from practically unanimous 
authority as to the responsibility to preserve equal 
protection in the leasing of places of public accommo­
dation in government-owned realty.

That a public lessor and its lessee of government-owned 
realty are so related as to be mutually involved in state 
action is the clear rationale and result of the decided cases.4

4 Muir v. Louisville Paris Theatrical Ass’n, 347 U. S. 971, va­
cating and remanding 202 F.2d 275 (6th Cir. 1953) (leased open 
air theatre) ; 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) ; City of Greensboro v. Simkins, 246 
F.2d 425 (4th Cir. 1957), affirming 149 F. Supp. 562 (M. D. N. C. 
1957) (leased golf course); Jones v. Marva Theatres Inc., 180



16

Although, the court below seeks to distinguish some of these 
cases, they present situations closely corresponding to the 
instant ease. In Nash v. Air Terminal Services, Inc., 85 F. 
Supp. 545 (E. D. Va., 1949), a corporate restaurant con­
cessionaire in an airport in Virginia owned by the national 
government, when sued for damages for refusing to serve 
a Negro, defended on the ground that under Virginia law, 
it was entitled to refuse service to the plaintiff. This con­
tention was rejected. The court identified the private con­
cessionaire with the “ public government” owning the prop­
erty on which the concession was operated, declared that 
the concessionaire was conducting the facility “ in the place 
and stead of the Federal Government” and was “ too close, 
in origin and purpose, to the functions of the public govern­
ment”  to be free of the inhibitions placed on government. 
Close identity between the governmental lessor and the 
private lessee exists also in the instant case and is, in fact, 
so close that the government facility can function only by 
virtue of its lessees. The power to lease portions of the 
first floor of the structure in the instant case is permitted 
to the Authority by the Parking Authority Act only if the 
Authority determines such leasing desirable to assist in de­
fraying the expenses of the Authority, and here it was so 
determined (R. 12). The leasing was necessary to make 
economically feasible the operation of the parking facility 
as a self-sustaining governmental unit. This is admitted by 
the answers of both appellees (R. 5, 7). Private ownership 
itself has been held a mere technicality and constitutional 
liberties are protected on privately-owned property, if that 
property is operated as a municipality, i.e., a governmental 
entity. See Marsh v. Alabama, 326 U. S. 501 (1946).

F. Supp. 49 (D. C. Md. 1960) (leased motion pieture theatre) ;
Coke y. City of Atlanta, ------ F. Supp. ------  (N. D. Ga., Jan. 6,
1960) (leased restaurant) ; Kern v. City Commissioners, 151 Kans. 
565, 100 P.2d 709 (1940) (leased swimming pool).



17

The decision of the court below on the question of “ state 
action” is in conflict with the opinion in Derrington v. 
Plummer, 240 F. 2d 922 (5th Cir. 1956). There a cafeteria 
in a county courthouse was held constitutionally prohibited 
from discriminating on the basis of race. The court held 
the building had been erected “ with public funds for the 
use of the citizens generally” and that “diversion of the 
property to purely private use” could not be countenanced. 
In effect, the court coalesces the lessee with the county. 
Discrimination by the latter would violate the Fourteenth 
Amendment and the court held the “ same result inevitably 
follows when the service is rendered through the instru­
mentality of a lessee.” Id. at p. 925.

The court below absolved appellee Eagle from the re­
sponsibility not to discriminate on the theory that the 
public government did not control the restaurant. While 
22 Delaware Code Ch. 5 authorizes leasing of space in a 
portion of the Authority’s building, the General Assembly 
conceived that such leasing was to enable the Authority 
to serve a public purpose, not to divest itself of control. 
Indeed the court below, in the Ranhen case, supra, sus­
tained the leasing of a portion of the building only as inci­
dental to the public uses. Its holding in the instant case 
that the lessee acts in a purely private capacity is cer­
tainly not consistent with a leasing incidental to public 
uses. Having total control, that is ownership of the fee, 
the Authority should have found a lessee who would have 
agreed to operate the restaurant consistently with the con­
stitutional duty which the Vice Chancellor, in conformity 
with all of the cases, recognized was imposed on the Au­
thority itself “not to deny to Delawareans the equal pro­
tection of the laws” (R. 39). Previous attempts by state 
governments at divesting themselves of the power to insist 
on nondiscrimination have been exposed and state responsi­
bility enforced. See Rice v. Elmore, 165 F. 2d 387 (4th 
Cir. 1947), cert, denied 333 U. S. 875 (discrimination in



18

South Carolina primary unconstitutional although state 
had repealed statutory references to primary); Terry v. 
Adams, 345 U. S. 461; Smith v. Allwright, 321 U. S. 649. 
See also Culver v. City of Warren, 84 Ohio App. 373, 83 
N. E. 2d 82 and Lawrence v. Hancock, 77 F. Supp. 1004, 
which pointedly hold that a governmental agency may not 
in leasing a public facility relieve itself of the obligation 
to cause the public property to be operated without racial 
discrimination.

CONCLUSION

The court below has made the observation that appellant 
was not “ discriminated against by the Authority in the 
operation of the public parking portion of the facility.” In 
a single building, erected and maintained with public funds 
by an agency of state government to serve a public pur­
pose, this appellant in one portion of the building serving 
the public can be a Delawarean whose rights are undif­
ferentiated from other citizens and in another portion of 
the building, also ostensibly serving the public, is a demi- 
citizen without rights. This confusing irony now derives 
palpably from the error of the court below in construing 
a statute as permitting discrimination against appellant 
because he is a Negro and in failing to enforce the responsi­
bility of the Authority to accord equal protection of the 
laws to all persons.

The judgment below should be reversed.

Respectfully submitted,

Louis L. R edding 
L eonard L. W illiams 

923 Market Street 
Wilmington 1, Delaware

Counsel for Appellant
Wilmington, Delaware 
December 27, 1960



APPENDIX

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;

(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;



20

(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 pub­
lic;

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.

§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;



21

“ 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;

“ 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.



22

In the event that such ordinance sets forth the proposed 
articles of incorporation in fnll 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—

(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 incur-



23

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 
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 
be 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 be for the purpose of conducting the



24

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 
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 publie 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



25

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
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.



26

(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.

(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



27

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.

(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



28

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 
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 case where the 
owners of lands within the benefit district are tenants in



29

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
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,



30

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 interest 
not exceeding 5 per cent per annum. Any owner 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 owned property in the benefit district. 
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, Vol. 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



31

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
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 be 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



32

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 bearings 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 
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



33

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 
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.



34

(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 
agreement 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



35

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 
cent or such other percentages 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



36

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 
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



37

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, 
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



38

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
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



39

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 agg’regate 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, eft. June 
4, 1953; 50 Del. Laws, Ch. 221, §1, eff. June 8, 1955.

§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-



40

eipal 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
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



41

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.

(c) The terms, advertisement or due 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



42

provisions of this section the same shall he 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.

§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



43

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.

§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 
be 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 
be filed in the office of the Secretary of State. If the cer­
tificate is approved by the city creating the Authority by



44

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 board, 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 be 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 
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



45

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.