City of Minneapolis v. Minneapolis Street Railway Company 1909 1910

• Decision Date: 09 February 1907
• Docket Number: No. 46,46
• Citation: 54 L.Ed. 259,30 S.Ct. 118,215 U.S. 417
• Parties: CITY OF MINNEAPOLIS, Appt., v. MINNEAPOLIS STREET RAILWAY COMPANY. Argued December 2, 3, 1909. Decided January, 3, 1910. Messrs. William A. Lancaster, John F. McGee, and Frank Healy for appellant. Messrs. M. B. Koon, M. D. Munn, and N. M. Thygeson for appellee. : This is an appeal from a decree of the circuit court of the United States for the district of Minnesota, enjoining the city of Minneapolis from enforcing, as against the Minneapolis Street Railway Company, appellee, a certain ordinance of the city of Minneapolis, passed
• Court: U.S. Supreme Court

215 U.S. 417

30 S.Ct. 118

54 L.Ed. 259

CITY OF MINNEAPOLIS, Appt.,

v MINNEAPOLIS STREET RAILWAY COMPANY.

No. 46.

Argued December 2, 3, 1909.

Decided January, 3, 1910.

Messrs William A. Lancaster, John F. McGee, and Frank Healy for appellant.

Messrs.

[Argument of Counsel from pages 418-420 intentionally omitted] M. B. Koon, M. D. Munn, and N. M. Thygeson for appellee.

Mr. Justice Day delivered the opinion of the court:

This is an appeal from a decree of the circuit court of the United States for the district of Minnesota, enjoining the city of Minneapolis from enforcing, as against the Minneapolis Street Railway Company, appellee, a certain ordinance of the city of Minneapolis, passed February 9, 1907, prescribing the rate of fare for the transportation of passengers over any street railway line, or lines, of the company in the city of Minneapolis.

The case was tried upon amended bill and answer. The ground alleged for injunction in the amended bill was in substance that the ordinance of February 9, 1907, violated the terms of a previous and subsisting contract, prescribing the rates of fare to be charged by the company in the city of Minneapolis. It appears in the record that the railway company was organized on July 1, 1873, and that its alleged contract arises from an ordinance of the city of Minneapolis passed July 9, 1875, ratified by an act of the legislature of the state of Minnesota passed March 4, 1879. We shall have occasion later on to deal more specifically with this ordinance and ratifying act.

It is sufficient for the present purpose to say that it is the contention of the company, that, by the ordinance of July 9, 1875, and the ratifying act, it became the owner of an irrepealable contract for the term of fifty years from the date of its organization, by the terms of which it had the right to charge a fare not exceeding 5 cents for each person carried on any continuous line which might be designated by the city council of the city, such continuous line, however, not to exceed 3 miles in length. The contract, it is alleged, is violated by the ordinance of February 9, 1907, requiring the sale of six tickets for 25 cents.

The existence of the alleged contract is denied by the city upon several grounds. It is urged that the complainant company was so organized that its charter, and consequently its corporate life, expired thirty years after the date of its incorporation, that is, on July 1, 1903; and therefore its contract rights ceased and terminated at that time. This contention is based upon the incorporation of the company, which it is insisted, could only be under title 4 of the laws of Minnesota, which includes transportation and other lawful business, and limits corporations organized thereunder to a continuation for not more than thirty years. Bissell's Stat. (Minn.) 1873, p. 443.

It is the contention of the company that it was organized under title 1 of the laws of Minnesota (Bissell's Stat. 1873, p. 419, for a term of fifty years. Title 1 is headed, 'Of Corporations Empowered to Take Private Property for Public Uses,' and includes corporations 'for the purpose of building, improving, and operating railways, . . . and all works of internal improvement which require the taking of private property or any easement therein.' Pertinent provisions of title 1 as to incorporation are given in the margin.

Title 1.

Sec. 1. Any number of persons, not less than five, may associate themselves and become incorporated for the purpose of building, improving, and operating railways, telegraphs, canals, or slack- water navigation, upon any river or lake, and all works of internal improvement which require the taking of private property or any easement therein.

Sec. 2. They shall organize by adopting and signing articles of incorporation, which shall be recorded in the office of the register of deeds of the county where the principal place of business is to be, and also in the office of the secretary of state, in books kept for such purposes.

Sec. 3. . . .

Said articles shall contain:

First. The name of the corporation, the general nature of its business, and the principal place, if any, of transacting the same.

Second. The time of commence and the period of continuance of said corporation.

Third. The amount of capital stock of said corporation, and how to be paid in.

Fourth. The highest amount of indebtedness or liability to which said corporation shall at any time be subject.

Fifth. The names and places of residence of the persons forming such association for incoproration.

Sixth. The names of the first board of directors, and in what officers or persons the government of the corporation and the man- agement of its affairs shall be vested, and when the same are elected.

Seventh. The number and amount of the shares in the capital stock of said corporation. . . .

Sec. 4. When articles are filed, recorded, and published, as aforesaid, the persons named as corporators therein become a body corporate [provisions follow in this section as to management of business, amendment of articles of incorporation, etc.].

Sec. 5. No such corporation shall be formed to continue more than fifty years in the first instance, but it may be renewed from time to time for periods not longer than fifty years: Provided, that three fourths of the votes cast at any regular election for the purpose are in favor of such renewal, and those desiring a renewal purchase the stock of those opposed thereto at its current value. Title 4 is, 'Of Corporations for Pecuniary Profit Other Than Those Named in Title 1.' The pertinent parts of that title are given in the margin.

Title 4. (This title is title 2 of chapter 34 of the Statutes of 1866.)

Of Corporations for Pecuniary Profit Other Than Those Named in Title 1.

Sec. 98 (45, as amended by act of March 10, 1873). Any number of persons, not less than three, who have or shall, by articles of agreement in writing, associate according to the provisions of this title under any name assumed by them, for the purpose of engaging in and carrying on the business of mining, smelting, or manufacturing iron, copper, or other minerals, or for producing the precious metals, or for quarrying and marketing any kind of ore, stone, slate, or other mineral substances, or for constructing, leasing, or operating docks, warehouses, elevators, or hotels, or as a mutual savings fund, loan, or building association, manufacturing gas, or for any kind of manufacturing, lumbering, agricultural, mechanical, mercantile, chemical, transportation, or other lawful business, and who have or shall comply with the provisions of this title, shall, with their associates, successors, and assigns, constitute a body corporate and politic under the name assumed by them in their articles of agreement; provided, no company shall take a name previously assumed by any other company. Any mutual saving fund, loan, or building association, as authorized to loan funds and to secure such loans by mortgage or other security, and any premiums taken by any such association for the preference or priority of such loans, shall not be deemed interest within the meaning of § 1 of chapter 23 of the general statutes. Any such association is authorized and empowered to purchase at any sheriff's or other judicial sale, or at any other sale, public or private, any real estate upon which such association may have or hold any mortgage, judgment, or lien, or other encumbrance, or in which such association may have an interest, and the real estate so purchased, to sell, convey, lease, or mortgage at pleasure, to any person or persons whatsoever.

Sec. 99. (46, as amended by act of February 28, 1870). The provisions of §§ 2, 3, 4, 7, 8, 9, 10, 11, 42, and 44 of title 1 shall apply to and be observed by corporations organizing under this title.

Sec. 100. (47 . . . The amount of capital stock in any such corporation shall in no case be less than $10,000 nor more than $500,000, and shall be divided into shares of not less than $10 nor more than $50 each, except that the capital stock of mutual building and loan associations may be divided into shares of $200 each, but the capital stock and number of shares may be increased at any regular meeting of the stockholders; provided, the capital stock, when so increased, shall not exceed $500,000.

* * * * *

Sec. 105(52). No corporation shall be formed under this title to continue more than thirty years.#e been organized under title 4. There have been no proceedings, so far as the record shows, to inquire into its corporate existence since the expiration of the thirty years, and this record discloses that a number of ordinances have been passed by the city of Minneapolis since July 1, 1903, requiring of the corporation the construction of additional lines of railway upon certain of the streets of the city of Minneapolis, and to otherwise discharge its duties as a continuing corporation.

Much of the elaborate briefs of counsel in this case is devoted to a discussion of the question of the organization of this corporation, and as to whether it was under the one title or the other. This is not a proceeding in quo warranto, and the jurisdiction of the Federal court rested upon the contention that the company has a contract right, protected from impairment by a legislative act of the state. It is only necessary to examine the question of the incorporation and organization of the company so far as is required to determine whether or not this alleged contract right exists, and whether it has been violated by the ordinance of the city of Minneapolis, attacked in the amended bill.

There can be no question that the attempted incorporation of this company was under title 1 of the statutes already referred to. It was incorporated by five persons. It states the business for which it was formed, 'to construct and operate railways in the streets and highways of the city of Minneapolis and its suburbs...