City of Indianapolis v. Central Trust Co.

• Decision Date: 10 December 1897
• Docket Number: 439.
• Citation: 83 F. 529
• Parties: CITY OF INDIANAPOLIS v. CENTRAL TRUST CO. OF NEW YORK.
• Court: U.S. Court of Appeals — Seventh Circuit

83 F. 529

CITY OF INDIANAPOLIS v. CENTRAL TRUST CO. OF NEW YORK.

No. 439.

United States Court of Appeals, Seventh Circuit.

December 10, 1897

The appellee has entered a special appearance, and moved, in writing, to dismiss the appeal, for want of jurisdiction of this court over the subject-matter. The particular grounds on which the jurisdiction is denied are: First, that the case involves a question of the impairment of a contract, in violation of section 10 of article 1 of the national constitution, and a question of the denial of the equal protection of the laws, under section 1 of the fourteenth amendment to that constitution; and, second, that in this case a law of the state of Indiana is claimed to be in contravention of the constitution of the United States in the two particulars above stated. The appeal is from an interlocutory order for an injunction pendente lite. The suit was brought by the appellee, the Central Trust Company of New York, against the city of Indianapolis, the Citizens' Street-Railroad Company, and Charles S. Wiltsie, all citizens of Indiana. The bill, briefly stated, shows that the complainant is the trustee in mortgages made by the Citizens' Street-Railroad Company upon its franchises and plant to secure the payment of bonds to the amount of $4,000,000, with interest, of which bonds one-fourth are held in reserve, to take up earlier mortgages, and three-fourths have been issued, and are in the hands of innocent purchasers for value; that Wiltsie is the prosecuting attorney of Marion county, Indiana, charged with the enforcement of the criminal laws of the state; that the street-railroad company is a corporation organized under the general statute of the state approved June 4, 1861, and is the owner in possession of all the street-railroad property in and about Indianapolis having purchased the same in April, 1888, of its predecessor the Citizens' Street-Railway Company, with all the privileges granted, and subject to the obligations imposed by various ordinances (which are set out in the bill) enacted by the common council of the city before and since the present company came into possession; that by section 9 of the act of 1861 (section 4151, Rev. St. Ind.1881; section 5458, Rev. St. 1894) the directors of the company are given power 'to make by-laws,' among other things, for regulating the running time of cars and the rate of fares on the road; that, by the original ordinance under which the Citizens' Street-Railway Company entered upon the streets of the city and constructed its plant, it was provided that 'the rate of fare upon any line or route of railway shall not exceed five cents for each passenger for any distance'; that under the statute and the ordinance the rate of fare was first fixed by the company at five cents for each route, but afterwards was so modified as to give transfers from one line or route to another, and on that basis the cars of the company were run, without question concerning the rate of fare, from 1864 to 1897; that by section 11 of the act of 1861, which, it is said, is the only act ever passed in the state providing for the incorporation of street-railroad companies, and under which all such companies in the state were organized, it is provided that the act may be amended or repealed at the discretion of the legislature; that, by section 13 of article 11 of the constitution of Indiana, it is provided that 'corporations other than banking shall not be created by special act but may be formed under general laws'; that on March 6, 1897, an act of the legislature of Indiana was approved by the governor of the state, whereby it was attempted to so amend section 9 of the act of June 4, 1861, as to require, among other things, that, in cities having a population of 100,000 or more by the census of 1890, 'the cash fare shall not exceed three cents for any one trip or passage,' etc., and to provide penalties and forfeitures for noncompliance with the requirement; that the enactment is in violation of the constitutions of the state and of the United States, in this: that, Indianapolis being the only city in the state which by the census of 1890 had a population of 100,000 or more, the statute is local and special, and it impaired the contract between the defendant company and the city of Indianapolis, and between that company and the state of Indiana, under the act of 1861, and the ordinances thereunder passed and accepted by the company and its predecessor,-- the amendatory act being in conflict, it is alleged, not only with section 13 of article 11, but with section 23 of article 1, of the constitution of the state, touching the granting of special privileges and immunities, and also in violation of section 1 of the fourteenth amendment, as well as section 10 of article 1 of the national constitution. The motion for a preliminary injunction was granted on April 23, 1897, the court holding the act of 1897 to be invalid because in conflict with the constitution of the state. For the opinion of the court, see 80 F. 218. On June 15, 1897, the city of Indianapolis demurred to the bill, and entered a motion in writing to dissolve the injunction, one of the grounds alleged being 'that it is plain upon the face of the complainant's bill that it was not entitled to the injunction.' In support of the motion to dissolve was presented a decision of the supreme court of Indiana, rendered in a case begun and carried to that court after the granting of the injunction by the court below, whereby the act of 1897 was declared to be, in all respects, constitutional and valid. City of Indianapolis v. Navin, 47 N.E. 525. The court overruled the motion to dissolve, delivering an opinion, which is reported in 82 F. 1.

W. H. H. Miller, for appellant.

John H. Kern, for appellee.

Before WOODS and JENKINS, Circuit Judges, and BUNN, District Judge.

WOODS Circuit Judge, after stating the case, .

The right of appeal to this court from interlocutory orders of injunction is given by the seventh section of the judiciary act of 1891 only 'in a cause in which an appeal from a final decree may be taken under the provisions of this act to the circuit court of appeals'; and it is well settled by the language of the act, and by numerous decisions, that, 'in any case that involves the construction or application of the constitution of the United States,' the only appeal allowed is to the supreme court, and under existing statutes that cannot be had until after final decree or judgment. Hamilton v. Drisdale's Ex'rs, 2 U.S.App. 540, 3 C.C.A. 639, and 53 F. 753; World's Columbian Exposition v. U.S., 18 U.S.APP. 42, 6 C.C.A. 58, and 56 F. 654; Railway Co. v. Evans, 7 C.C.A. 290, 58 F. 433; Green v. Mills, 25 U.S.APP. 388, 16 C.C.A. 516, and 69 F. 852; Hastings v. Ames, 32 U.S.APP. 485, 15 C.C.A. 628, and 68 F. 726; Barr v. City of New Brunswick, 39 U.S.App. 187, 19 C.C.A. 71, and 72 F. 689; Holt v. Manufacturing Co., 25 C.C.A. 301, 80 F. 1.

The contention of appellee is, and the decision of the court below (in part, at least) was, that by force of the statute providing for the organization of street-railroad companies, and by force of the requirement of the constitution of Indiana (section 13, art. 11) that all such corporations shall be created or formed under general laws:

'The state entered into a contract with this corporation whereby it was stipulated and agreed that, while that statute might be either amended or repealed, such amendment or repeal should only be compassed by a general law, applicable alike to all similar corporations throughout the state, and that thus the parties investing money in such an enterprise did so with the assurance that no legislation should be taken with reference to them which did not apply alike to all persons interested in property similarly situated. Western Paving & Supply Co. v. Citizens' St. R. Co., 128 Ind. 525, 26 N.E. 188, and 28 N.E. 88; City R. Co. v. Citizens' St. R. Co., 166 U.S. 557, 17 Sup.Ct. 653.'

This proposition assumes that the company had a vested right or privilege, within the meaning of the contract clause of the national constitution, not in the subject-matter of the contract (that is to say, not in the right to construct and to operate a line or lines of street railroad, and to charge fares, in accordance with the terms of the accepted ordinances of the city), but in the process or form of legislation by which it might be proposed to modify or annul the contract. It acquired no right, under the contract, which the state might not modify, abridge, or annul, by amending or repealing the act of 1861; but it is insisted that the amendment or repeal, by reason of section 13 of article 11 of the state constitution, can be effected only by a general law, applicable alike to all similar corporations throughout the state. And so the court below held, saying, among other things:

'This right (to charge a five-cent fare) cannot be modified otherwise

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