Detroit United Ry v. City of Detroit

• Decision Date: 28 February 1921
• Docket Number: No. 492,492
• Parties: DETROIT UNITED RY. v. CITY OF DETROIT et al
• Court: U.S. Supreme Court

255 U.S. 171

41 S.Ct. 285

65 L.Ed. 570

DETROIT UNITED RY.

v CITY OF DETROIT et al.

No. 492.

Argued Jan. 5 and 6, 1921.

Decided Feb. 28, 1921.

Messrs. Charles E. Hughes, of New York, City, and Elliott G. Stevenson, of Detroit, Mich., for appellant.

[Argument of Counsel from page 172 intentionally omitted] Messrs. Clarence E. Wilcox and Alfred Lucking, both of Detroit, Mich., for appellees.

Mr. Justice DAY delivered the opinion of the Court.

The appellant, plaintiff below, sets forth in its bill that it is the owner of a system of street railways in the city of Detroit, and suburban lines running from said city. The suit was brought in the District Court, to enjoin the city of Detroit and the other defendants, municipal officials, from acquiring or constructing a system of street railways, which had been provided for by an ordinance of the city, with an issue of $15,000,000 of its bonds for that purpose and approved by the requisite majority at a municipal election. The grounds of relief, briefly stated, are: That establishment of the system and the issue of the bonds should be enjoined at the instance of the plaintiff because the ordinance was not legally adopted by the voters of the city of Detroit and, if carried into effect, as proposed, and by the methods which brought about its adoption, a deprivation of plaintiff's property rights without due process of law in violation of the Fourteenth Amendment to the Constitution of the United States would result.

The District Court maintained the jurisdiction upon the federal ground alleged, and dismissed the bill upon motion in the nature of a demurrer. The case is brought to this court by direct appeal because of the constitutional question involved.

The bill is very voluminous and abounds in argumentative statements attacking the passage of the ordinance, and the good faith of the officials concerned in bringing about its enactment. Among the streets, proposed to be occupied by the city, are those upon which it is alleged the trackage and property rights of the complainants are sought to be acquired, and upon which the franchise grants of the street railway company have expired.

This court in Detroit United Railways v. City of Detroit, 229 U. S. 39, 33 Sup. Ct. 697, 57 L. Ed. 1056, affirming the judgment of the Supreme Court of Michigan in the same case, Detroit v. Detroit United Ry., 172 Mich. 136, 137 N. W. 645, held that where a street railway company, operating in the streets of the city under a franchise granted for a definite period, has enjoyed the full term of the grant, the municipality may, upon failure of renewal of the grant, require the company within a reasonable time to remove its tracks and other property from the streets, without impairing any contractual obligations protected by the federal Constitution or depriving the street railway company of its property without due process of law. We see no occasion to depart from the principles announced in that case. The decree is in the record and, so far as anything appears, is still in full force and effect. If the courts of Michigan shall see fit to carry it into execution we find nothing in the federal Constitution which would make its enforcement a deprivation of due process of law.

The railway company claims to have acquired property rights in the streets of the city, upon which its franchises have expired, by reason of matters set out in the bill and supported in the argument submitted by the appellant. Reference is made to certain so-called day to day arrangements, by which continued operation was permitted notwithstanding the expiration of franchise rights. But an examination shows that construction and operation under such agreements gave the railway company no extended franchises in the streets, because it was expressly provided that the permits granted might be revoked, and that action under the day to day agreement should not waive the rights of either party.

Rights to remain in the streets are also claimed under the so-called Kronk Ordinance, which was before this court in Detroit United Railways v. Detroit, 248 U. S. 429, 39 Sup. Ct. 151, 63 L. Ed. 341 in which this court, while reaffirming the principles laid down in Detroit United Railway Co. v. Detroit, 229 U. S. 39, 33 Sup. Ct. 697, 57 L. Ed. 1056, supra, found that the city had not up to that time availed itself of the right to compel the removal of the tracks in streets where the company had no franchise, but had passed an ordinance looking to the continued operation by the company of the street railway system for a limited period, and that while it acted under this ordinance there was the equivalent of a grant to operate during the life of the ordinance, entitling the company to a fair return; that the ordinance by its express terms provided for its amendment or repeal, and that, unless amended or repealed, it should remain in force for the period of one year. We do not perceive how that ordinance can now give rights to the company in the streets where the franchises have expired.

The chancery suit brought in the Wayne county circuit court in the name of the city of Detroit, in which a decree was granted, is also set up. An examination of that decree, which is attached to the bill, satisfies us that it was intended only to provide a temporary arrangement by which cars might be operated on the street railway system of the complainant. It is expressly stated in the decree that it shall not affect any fundamental rights of the parties in and to the streets of the city of Detroit as they at that time existed; the intention being to provide for the rate of fare at which cars should be operated; the decree being considered only a temporary solution of the problem before the court.

Allegations are made which are supposed to have the effect of estopping the city of Detroit from denying the franchise rights of the plaintiff in the streets of the city because of expenditures of large sums of money with the knowledge and acquiescence of the city authorities and the people of the city since the franchises have expired.

Under the Constitution of Michigan, art. 8, § 25 (as revised 1908), it is provided that no city or village shall grant any public utility franchise, which is not subject to revocation at the will of the city or village, unless such proposition shall first have the affirmative vote of three-fifths of the electors. This phase of the case is covered in principle by our decision in Denver v. New York Trust Co., 229 U. S. 129, 33 Sup. Ct. 665, 57 L. Ed. 1101, in which a similar provision of the Colorado Constitution was under consideration, and...