City Ry Co v. Citizens St Co

• Decision Date: 19 April 1897
• Docket Number: No. 214,214
• Citation: 166 U.S. 557,41 L.Ed. 1114,17 S.Ct. 653
• Parties: CITY RY. CO. v. CITIZENS' ST. R. CO
• Court: U.S. Supreme Court

166 U.S. 557

17 S.Ct. 653

41 L.Ed. 1114

CITY RY. CO.

v CITIZENS' ST. R. CO.

No. 214.

April 19, 1897.

This was a bill in equity by the Citizens Street-Railroad Company to enjoin the appellant from interrupting or disturbing complainant in the construction, operation, and maintenance of its street-car system in the city of Indianapolis, and for the establishment of complainant's rights, and the quieting of its title in that connection.

The facts of the case are substantially as follows: In 1861 the general assembly of the state of Indiana passed an act authorizing the incorporation of street-railway companies, the second section of which act provided that the stockholders in such companies and their successors should be 'a body politic and corporate in perpetuity, by the name stated in the articles of association,' and the eleventh and twelfth sections which were as follows:

'Sec. 11. This act may be amended or repealed at the discretion of the legislature.

'Sec. 12. Nothing in this act contained shall be so construed as to take away from the common councils of incorporated cities the exclusive powers now exercised over the streets, highways, alleys and bridges within the corporate limits of such cities; and all street railroad companies which may be organized under the provisions of this act shall first obtain the consent of such common council to the location, survey and construction of any street railroad through or across the public streets of any city before the construction of the same shall be commenced.'

Pursuant to this act, the Citizens' Street-Railway Company was organized January 15, 1864, and on January 18, 1864, the common council of Indianapolis passed an ordinance, the first, third, and fifteenth sections of which contained the following:

'Section 1. Be it ordained by the common council of the city of Indianapolis: That under and by virtue of an act of the general assembly of state of Indiana entitled 'An act to provide for the incorporation of street railroad companies,' approved June 4, 1861, and by virtue of the powers and authority of the common council otherwise by law vested, consent, permission, and authority are hereby given, granted, and duly vested unto the company organized with R. B. Catherwood as president, a body politic and corporate by the name of the Citizens' Street-Railway Company of Indianapolis, and their successors, to lay a single or double track for passenger railway lines, with all the necessary and convenient tracks for turnouts, side tracks, and switches, in, upon, and along the course of the streets and alleys of the city of Indianapolis hereinafter mentioned; and to keep, maintain, use and operate thereon railway cars and carriages in the manner and for the time and upon the conditions hereinafter prescribed.'

'Sec. 3. The cars to be used on such tracks shall be operated with animal power only. * * *'

'Sec. 15. The right to operate said railway shall extend to the full time of 30 years from the passage hereof; and the said city of Indianapolis shall not, during all the time to which the privileges hereby granted to said company shall extend, grant to or confer upon any person or corporation any privilege which will impair or destroy the rights and privileges herein granted to the said company. * * *'

The second section of this ordinance named certain streets upon which the company was authorized to lay its tracks, and in the following year (1865) a supplemental ordinance was passed, giving to the company the right to lay its tracks upon all the streets or roads within the the corporate limits of the city, and providing, in section 4, 'that in laying, constructing and operating' the same the company should be governed by the provisions of the ordinance of January 18, 1864.

The Citizens' Street-Railway Company constructed and operated its plant until April 23, 1888, when it was sold and conveyed to the complainant, the Citizens' Street-Railroad Company.

On April 7, 1880, the common council passed another ordinance supplemental to that of 1864, providing that section 15 of that ordinance should be amended so as 'to read thirty-seven years, where same now reads thirty.'

On April 23, 1888, an ordinance was passed approving the sale and transfer of the railway company to the railroad company, and on December 18, 1889, a further ordinance was passed, supplementary to that of January 18, 1864, authorizing the use of electric power, and providing the manner in which it should be applied. This ordinance was formally accepted by the railroad company on January 4, 1890. The company thereupon proceeded at very great expense to build a power house, and change its plant to an electric system.

In 1893 a dispute arose between the board of public works of the city and the president and directors of the complainant over the question whether complainant's franchise would expire on January 18, 1894,—30 years from its date.

On February 6, 1893, a further ordinance was passed, declaring it to be unlawful for any person or corporation to cut or dig into a paved street without first obtaining from the board of public works a written permit so to do.

On April 24, 1893, pursuant to an act of the general assembly of the state, quoted in the opinion, the city, through its board of public works, entered into contract with the defendant—the City Railway Company—giving it permission to lay its tracks for street-railway lines to be operated by electricity, or other improved power, through a large number of streets, most of which were already occupied by the lines of the complainant company. This contract was approved upon the same day be the common council, and was accepted by the defendant.

The bill a averred that it was impossible that electric cars, other than complainant's, could be operated on such streets without their practical destruction as thoroughfares for public travel. It further set forth certain acts on the part of the city, which are alleged to be part of plan of the city authorities, in combination with the defendant, to prevent it from making extensions and improvements and from operating its lines of railway; and that they, the city and the defendant, were asserting the right of the city to disregard and set aside, by the exercise of the legislative power conferred upon its common countil by the legislature of the state in the charter of 1891, a contract duly entered into and existing between the state and the complainant under its charter, and between the city and the complainant, thereby seeking to impair, annul, and destroy the obligation of such contracts, in violation of the constitution of the United States. This bill was filed on May 11, 1893, within a month after the contract and ordinance of April 24th.

A motion was made to dismiss the bill upon the ground of the want of jurisdiction in the circuit court, which was denied. 56 Fed. 746. The bill was subsequently amended, and the case, being put at issue upon an answer and replication, came on to be heard upon the pleadings and proofs, and resulted in a decree in accordance with the prayer of the bill and the opinion of the presiding judge, forever enjoining the defendant from disturbing the complainant in the enjoyment of its rights to the streets occupied by it at the time of the commencement of the suit. and declaring the contract and ordinance of April 24, 1893, to be void, in so far as they attempted to confer upon the defendant company any right to the streets occupied by the complainant at the commencement of the suit. 64 Fed. 647. From this decree an appeal was taken to this court.

Addison C. Harris, for appellant.

P. C. Knox and Benjamin Harrison, for appellee.

Mr. Justice BROWN, after stating the facts in the foregoing language, delivered the opinion of the court.

This case involves the right of the Citizens' Street-Railroad Company of Indianapolis to operate a street railroad upon the streets upon which it had constructed its tracks at the commencement of this suit, as well as the validity of a certain contract and ordinance ratifying the same between the city and the City Railway Company, in so far as the city attempted to confer upon that company a right to lay its tracks upon the streets already occupied by the complainant, or to abridge its rights in the use of such streets.

1. There can be no doubt that the circuit court had jurisdiction of the case, notwithstanding the fact that both parties are corporations and citizens of the state of Indiana. It should be borne in mind in this connection that jurisdiction depended upon the allegations of the bill, and not upon the facts as they subsequently turned out to be. The gravamen of the bill is that under the act of the general assembly of 1861, and the ordinances of January 18, 1864, and April 7, 1880, the Citizens' Railroad Company had become vested with certain exclusive rights to operate a street railway in the cith of Indianapolis, either in perpetuity or for the term of 30 years or 37 years, which the city had attempted to impair by entering into a contract with the City Railway Company to lay and operate a railway upon the same streets.

All that is necessary to establish the jurisdiction of the court is to show that the complainant had, or claimed in good faith to have, a contract with the city, which the latter had attempted to impair. Conceding that the legislature of the state alone had the right to make such grant, 'it may,' as was observed in Wright v. Nagle, 101 U. S. 791, 794, 'exercise its authority by direct legislation, or through agencies duly established, having power for that purpose. The grant, when made, binds the public, and is directly or indirectly the act of the state. The easement is a legislative grant, whether made directly by the legislature itself of by any one of its properly constituted instrumentalities.' 'The complainants claim,' as in the case under consideration, 'they have such a grant through...