City of Manitowoc v. Manitowoc & N. Traction Co.

• Decision Date: 31 January 1911
• Citation: 145 Wis. 13,129 N.W. 925
• Court: Wisconsin Supreme Court
• Parties: CITY OF MANITOWOC v. MANITOWOC & NORTHERN TRACTION CO.

145 Wis. 13

129 N.W. 925

CITY OF MANITOWOC

v.MANITOWOC & NORTHERN TRACTION CO.

Supreme Court of Wisconsin.

Jan. 31, 1911.

Appeal from Circuit Court, Winnebago County; George W. Burnell, Judge.

Action by the City of Manitowoc against the Manitowoc & Northern Traction Company. Judgment for defendant. Plaintiff appeals. Reversed and remanded, with directions.

This action was brought to perpetually enjoin and restrain the defendant from increasing its rates for carrying passengers on its interurban road between the cities of Manitowoc and Two Rivers. On October 15, 1900, the city of Manitowoc passed an ordinance granting to Thomas Higgins the right to operate a street railroad upon certain streets in the city of Manitowoc upon certain prescribed conditions. By the same ordinance permission was granted to said Higgins to run interurban cars upon certain streets in the city of Manitowoc, which cars were to be operated along an interurban line which Mr. Higgins proposed to build to Two Rivers. One of the conditions upon which the right was given to run interurban cars on the streets of the city was that the rate of fare to be charged between said cities should not exceed ten cents for a single trip, during the life of the franchise, which was 35 years, and the ordinance provided that it should have no force or effect until its terms and conditions were accepted by the grantee. Such grantee did accept the conditions of the ordinance and constructed the street and interurban railroad contemplated therein. Thereafter the defendant corporation was organized and succeeded to all the rights and property to which said franchise pertained, and on November 24, 1902, at the instance of the traction company, and with the consent of Mr. Higgins, an ordinance was passed granting to the traction company the same rights and privileges that had been granted by the former ordinance to Mr. Higgins, subject, however, to the same conditions and liabilities that were contained in the original ordinance. The traction company accepted the terms and conditions of the ordinance of November 24, 1902, and until the year 1909 continued to charge an interurban fare of 10 cents between the cities of Manitowoc and Two Rivers. On April 25th of that year it made a public announcement that on and after May 1, 1909, it would raise the charge to 15 cents. This action was commenced to prevent such raise and to compel the defendant to abide by its contract. The defence in substance was that the city in the first instance had no power or authority to exact such a condition, and that the portion of the ordinance relating to interurban fares was ultra vires. Further, that the ordinance in any event had been superseded and repealed by subsequent legislative action, and that a fare of 10 cents was not compensatory and one of 15 cents was reasonable. The trial court found that 10 cents is not now a reasonably sufficient fare for travel upon said interurban railway in consequence of increased taxes and other expenses between said cities and that 15 cents is not an unreasonable fare. As a conclusion of law, the court found that the defendant was bound by the stipulation contained in the ordinance, and that it could not exact to exceed a 10-cent fare, and that the temporary injunction issued in the action should be made permanent. As a condition of making it permanent, however, plaintiff was required to file a bond with sufficient surety to indemnify the defendant against loss if the judgment should be reversed on appeal. The plaintiff refused to file the bond, and on proof of such failure judgment was entered dismissing the complaint, from which judgment this appeal is taken.A. L. Hougen, for appellant.

Nash & Nash, for respondent.

BARNES, J. (after stating the facts as above).

The trial court found as a conclusion of law that the plaintiff was entitled to the permanent injunction prayed for. As a condition of granting such relief it required the plaintiff to file within 15 days an undertaking in the sum of $5,000 with sufficient surety, conditioned that, if on appeal to this court judgment should be awarded to the defendant, the plaintiff would pay such damages as the defendant sustained by reason of the injunction. The plaintiff refused to file the undertaking, and on proof of such fact judgment was entered dismissing the complaint. The court was in error in awarding any such conditional relief. The case had been fully tried on its merits, and the findings of fact and conclusions of law on the litigated issues made and found by the court formed the basis for the final judgment that should be entered. Either the plaintiff was entitled to relief or it was not. If it was, the granting of that relief should not be made dependent on its ability to furnish a bond, or even on its willingness to assume the liability exacted, if it could furnish the bond. Section 9 of article 1 of our Constitution provides: “Every person is entitled to a certain remedy in the laws for all injuries or wrongs which he may receive in his person, property or character; he ought to obtain justice freely, and without being obliged to purchase it, completely and without denial, promptly and without delay, conformably to the laws.” It seems quite clear that this provision of the Constitution was overlooked, and was violated in the instant case.

It is unnecessary to consider the ordinance of October 15, 1900, whereby certain rights and privileges were granted to Thomas Higgins, or the subsequent ordinance of November 24, 1902, whereby like privileges were granted to the Manitowoc & Northern Traction Company, except in so far as these ordinances relate to the rate of fare to be charged between Manitowoc and Two Rivers. Both of these ordinances granted the right to run interurban cars over the streets of the city of Manitowoc, on the condition that the rate charged for a single fare between the two cities should not exceed 10 cents. Each provided that it should not have any force or effect until its provisions were accepted by the grantee of the privilege, and Mr. Higgins accepted such condition in the first instance and the traction company accepted the condition of the second ordinance. The language of the last acceptance is in part as follows: “The Manitowoc & Northern Traction Company * * * does * * * accept all and each and every of the grants, privileges and franchises created, granted or conveyed to said traction company by said ordinance, and you, the said mayor, and board of aldermen, and the said city of Manitowoc, are hereby notified that it is the intent of said traction company * * * to accept said ordinance and all the grants, rights, privileges and franchises therein specified, * * * and to become and be and remain bound by the contract effected by said ordinance and this acceptance thereof according to the true intent and purpose of said ordinance.” We shall waste no time in discussing the proposition that this ordinance and the acceptance of it constituted a contract in form. The real questions involved in the case are three in number: (1) Did the parties have the power to make the contract? (2) If so, to what extent is it binding and enforceable? (3) Has it been lawfully superseded or nullified?

1. That the traction company had the right on its part to make a contract fixing the rate of charge for a given service, provided such contract violated no law and was not inimical to public policy, is clear enough. By so doing it could not forestall the state and prevent it from exercising its governmental function regulating rates. But until the state sees fit to interpose, the carrier ordinarily may exercise a free hand in fixing rates, subject to the qualification that they must not be unreasonably high and must not be unjustly discriminatory. In order to have a binding contract there must be mutuality of obligation, and whatever doubt arises on the branch of the case we are considering arises in reference to the right of the city to make the particular contract before us.

There was no law inhibiting the making of the contract involved, at the time it was entered into, and there is nothing to show that it was discriminatory or against public policy. It was no doubt contemplated by the city that its residents would be liberal patrons of the road, and the consideration which it gave for the rate of fare fixed was the right to run the interurban cars in the streets of the city. The right of the city to make the contract which it did, in so far as it had any statutory right to do so, is found in section 1863, St. 1898, as amended by chapter 425, Laws 1901. It was held in Milwaukee L. H. & T. Co. v. M. N. Ry. Co., 132 Wis. 313, 112 N. W. 663, that section 1862, St. 1898, applied only to street railway companies, and that section 1863, St. 1898, applied to both street and interurban railways. Prior to the passage of chapter 425, Laws of 1901, section 1863 contained no provision to the effect that interurban railways might pass through cities by obtaining the consent thereof. That law amended section 1863 so as to provide that: “Any street railway corporation may extend its railway to any point within any town adjoining a municipality from which it derived its franchise. * * * Corporations may be formed and governed in like manner as is provided in section 1862 for the purpose of building, maintaining, and using railways, * * * in any city, village or town or to extend from any point in one city, village or town to, into or through any other city, village or town, * * * and for that purpose, with the consent of the common council of any city, the board of trustees of any village and the written consent of a majority of the supervisorsof any town in, into or through which such railway * * * may extend, may lay and operate their railways * * * upon, across and along any highway. * * * In any city or village the consent of the common council or board of trustees shall...