Coast-Line R. Co. v. City of Savannah

• Decision Date: 08 February 1887
• Citation: 30 F. 646
• Parties: COAST-LINE R. CO. v. MAYOR AND ALDERMEN OF THE CITY OF SAVANNAH.
• Court: U.S. District Court — Southern District of Georgia

30 F. 646

COAST-LINE R. CO. v. MAYOR AND ALDERMEN OF THE CITY OF SAVANNAH.

United States Circuit Court, S.D. Georgia, Eastern Division.

February 8, 1887

(Syllabus by the Court.) A city ordinance, authorizing the construction of a street railway, containing, with many other mutual stipulations this clause, 'in the event of the paving by the city of the whole or any portion of the street used by said railway company, the portion of the track between the rails shall be paved and kept in good order and thorough repair by the company at its own expense and cost,' which stipulations are assented to by the railway company, and the railway constructed thereunder, is a contract between the city and the railway company.

An act of the legislature of the state made thereafter, authorizing the mayor and aldermen of the city to compel the railway company to pave, not only between its tracks, but three feet on each side of the track, impairs the obligation of the contract. The Code of Georgia (section 1682) reserves to the state the right to withdraw the franchise of the railway company, and that reservation places under legislative control all rights, privileges, and immunities derived by its charter directly from the state; but the state has no control over vested rights and interests, acquired by the company, and not constituting a part of the act of incorporation.

Where the corporation has made contracts, valid under the laws of the state at the time they were made, the state cannot unmake them, or impose other or different terms on the corporation to its injury, and for the benefit of the other contracting party.

The act of the general assembly of the state of Georgia, approved by the governor September 5, 1885, so far as it attempts to authorize the defendants to compel the complainants to pave three feet on each side of their track, is declared to be invalid and of no effect, as in violation of section 10, art. 1, of the constitution of the United States.

Jas. Atkins, for complainant.

H. C. Cunningham, for respondent.

SPEER J.

The duty to adjudge the questions presented by this argument is at once grave and delicate. In their determination is comprehended the effect of the organic law upon the validity of a legislative act of the state. The court has, it trusts, a clear and ample appreciation of the high and solemn duty imposed upon it by the constitution in cases of this character, and proceeds to its discharge not until it has carefully considered the forcible arguments of counsel, and as carefully examined every authority cited, and the opinion of every text-writer to which reference has been made.

The Coast-Line Railroad Company was chartered by an act of the legislature of Georgia, October 10, 1868, which was amended August 20, 1872. Its corporators were authorized 'to construct a railroad from such point, in the city of Savannah, as may be authorized by the mayor and aldermen, to any point or points on Wilmington island. ' Acts Gen. Assem. Ga. 1868, p. 115. Thereafter the mayor and aldermen designated the initial point in the city of Savannah, viz., the intersection of West Broad and Broughton streets. On September 28, 1873, the city adopted an ordinance, indicating the route for the railroad from the initial point 'along the center of Broughton street,' etc., with many terms and conditions to be complied with by the company, and others by the city. The clause concerning which the present controversy has arisen is in the following language:

'In the event of the paving by the city of the whole or any portion of the streets used by said railroad company, the portion of the track between the rails shall be paved and kept in good order and thorough repair by the company, at its own expense and cost. ' Rebarrer's Digest of City Laws, p. 154.

The company accepted the terms tendered by the ordinance, and constructed, and since that time has operated, the railroad in accordance therewith. It is an ordinary surface street railway.

On September 5, 1875, the legislature of Georgia authorized the mayor and aldermen of the city of Savannah to pave the streets of the city, with the power to assess two-thirds of the cost on the real estate abutting on the streets improved; and in section 2 of the act provided further that any street-railroad company, having tracks running through the streets of said city, shall be required to macadamize or otherwise pave, as the said mayor and aldermen of the city of Savannah may direct, the width of its tracks, and 'three feet on each side of every line of track now in use, or that may hereafter be constructed by such company.'

On the seventeenth and twenty-fourth days of March, 1886, the city having determined to pave Broughton street with asphaltum, directed the railroad company to pave, not only between the rails of the track, but for three feet on each side of the rails, and the company refusing to pave otherwise than between the tracks, the city laid the additional pavement, and, on the seventeenth day of December, 1886, under the provisions of section 5 of the paving act of September 5, 1885, summarily issued an execution, which has been levied on the road-bed, right of way, and superstructure of the railroad lying between Abercorn and West Broad streets, and has advertised it for sale to collect the sum of $3,685.50, expended by the city in the construction of that portion of the pavement in controversy. The company, on December 3, 1886, filed in this court their bill, averring the foregoing facts, and charge that the act of the legislature of September 5, 1885, and the ordinances of the city passed thereunder, are in violation of section 10, art. 1, of the consitution of the United States, which provides that 'no state shall pass any bill of attainder, ex post facto law, or law impairing the obligation of contracts, ' and they pray that the act be declared invalid, and that the city authorities be enjoined from proceeding with the levy and sale. To this bill the city has filed a general demurrer, upon the argument of which this decision is made. It is insisted by the city that the act of September 5, 1885, is authorized by the reservation by the state of the power to withdraw the franchise of a private corporation, unless such right is expressly negatived in the charter. Code Ga. Sec. 1682.

While other questions were mentioned in the argument, it is evident that the true test of the validity of the act is to be found in the determination of these questions: (1) Is the ordinance of September 29, 1873, a contract? (2) If a contract, does the act of September 5, 1885, impair the obligation of the contract? (3) If it does, is such impairment authorized by section 1682 of the Code of Georgia, empowering the legislature to withdraw the franchise of a private corporation, considered with the constitutional inhibition to the state relative to enactments impairing the obligations of contracts?

First. That the ordinance of the city, authorizing the construction of the railroad, is a contract between the two corporations in the opinion of the court, is scarcely susceptible of doubt. Had permission been given by the city simply to build the road, without consideration, and had the company in good faith built it accordingly, it would have been a contract, more properly perhaps a grant, which, in legal effect, Mr. Justice BLACKSTONE tells us, 'differs in nothing from a contract. ' A grant, in its own nature, amounts to an extinguishment of the right of the grantor, and implies a contract not to reassert that right. A party is always estopped by his own grant. Fletcher v. Peck, 6 Cranch, 87-136. But this contract was made with full consideration. Its stipulations were mutual and valuable. It is quite clear that the city desired the railroad as decidedly as the company desired the privilege to build it. If permission was granted by the ordinance to construct the railroad, it was stipulated that corresponding benefits should accrue to the city. And, indeed, so desirable to the city was the railroad, that the company was given an exemption from taxation for four years; and yet it is not necessary to the validity of the contract that the consideration should be a benefit to the grantor. It is sufficient that it import damage or loss, or forbearance of benefit,...