Detroit United Railway v. City of Detroit

Citation33 S.Ct. 697,57 L.Ed. 1056,229 U.S. 39
Decision Date26 May 1913
Docket NumberNo. 1047,1047
PartiesDETROIT UNITED RAILWAY, Plff. in Err., v. CITY OF DETROIT
CourtU.S. Supreme Court

Messrs. John C. Donnelly, William L. Carpenter, and Fred A. Baker for plaintiff in error.

Messrs. Richard I. Lawson and Alfred Lucking for defendant in error.

Mr. Justice Day delivered the opinion of the court:

This is a suit in equity, originating in the circuit court for the county of Wayne, of the state of Michigan, brought by the city of Detroit against the Detroit United Railway, to determine that certain franchises of the railway have expired, and to require it to pay a temporary rental, or to vacate the streets operated under the franchises. The decree of the circuit court in favor of the city was affirmed by the supreme court of Michigan. The case comes here on writ of error, and is now before us on motion of the city to dismiss, affirm, or advance.

The Detroit United Railway owns and operates all the street railways in Detroit. Its principal east and west line is called the Fort Street Line, in connection with which three franchises have been granted to the railway and its predecessors. One of the franchises was granted by the township of Springwells, part of which has since been annexed to the city of Detroit by legislative act, and the other two were granted by the city. By their terms the franchises expired June 17, June 30, and July 24, 1910, respectively.

The township of Springwells had also granted certain other franchises (the part of the railway system covered by such franchises not being involved in this suit, however) to the railway in 1889 and 1891, to expire in 1921, naming a certain rate of fare, and providing that the tracks constructed under such grants should be deemed, for the purpose of collecting fares, an extension of the tracks theretofore laid in the township and city. Upon the inclusion of that part of the township of Springwells within the city which contained the lines of railway covered by the franchises of 1889 and 1891, the city, which had theretofore made certain contracts with the railway for the reduction of fare upon the lines then within the city limits at certain hours, under a system of tickets called workingmen's tickets, by an ordinance passed May 2, 1906, entitled, 'An Ordinance in Relation to Rates of Fare on Fort Street Lines of the Detroit United Railway,' amended the township franchises so that the agreement between the railway and the city with reference to workingmen's tickets should apply to the lines embraced in the grants of 1889 and 1891 for the term of such grants, but provided that the other provisions of the township grants should remain unchanged.

Shortly before the expiration of the three franchises involved in this suit the city passed three resolutions under date of June 14, June 21, and July 19, 1910, the third being like but superseding the other two. The resolution of July 19, 1910, after reciting the fact that two of the ordinances had expired and the other soon would expire; that, because of the pendency of a certain suit and injunctions issued therein, an ordinance prescribing the terms and conditions under which the railway might continue to operate its lines after the expiration of its franchises could not be enforced; that under the Constitution of Michigan it was impossible for the city to grant a term franchise without the affirmance of the electors of the city, and that the railway was denied the right to operate its lines without a franchise, provided that the railway might temporarily operate under the same terms and conditions as theretofore existed upon the payment of $200 a day to the city, and that, except upon such terms, consent to operate its railway was denied and refused to the railway. The railway, by written communication, denied that the franchises had expired, insisted that the demands of the city were illegal, and declined to pay the sum named in the resolution.

The railway, among other defenses, asserted that the ordinance of 1906 had the effect of extending its franchises to 1921; that, the original franchises being silent on the question of the rights of the parties upon the termination of the grants, an implied contract was created that the railway and other property of the railway should continue in place and in use for the public convenience, on reasonable terms, and in conformity to the rights of the city, public, and railway, and that the resolutions impaired the obligations of the contracts of the railway, in violation of § 10, article I, of the Constitution, and deprived it of its property without due process of law, in contravention of the 14th Amendment.

The circuit court held, among other things, that the franchises had expired, and ordered the railway to accept the terms of the resolution, and comply with its provisions or to vacate the streets. The supreme court of Michigan affirmed the decision of the circuit court, that the franchises had expired, and that all rights of the railway to occupy the streets and to...

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