Grand Trunk Western Railway Company v. City of South Bend

• Decision Date: 24 February 1913
• Docket Number: No. 81,81
• Citation: 33 S.Ct. 303,227 U.S. 544,57 L.Ed. 633
• Parties: GRAND TRUNK WESTERN RAILWAY COMPANY, Plff. in Err., v. CITY OF SOUTH BEND et al
• Court: U.S. Supreme Court

227 U.S. 544

33 S.Ct. 303

57 L.Ed. 633

GRAND TRUNK WESTERN RAILWAY COMPANY, Plff. in Err.,

v CITY OF SOUTH BEND et al.

No. 81.

Argued December 10 and 11, 1912.

Decided February 24, 1913.

*In 1866 a charter was granted by the state of Indiana to plaintiff's predecessor in title, whereby it was authorized to build a railroad from the Michigan line west through South Bend to the Illinois line in the direction of Chicago. The city of South Bend was a stockholder in this company, and, in 1868, passed and ordinance granting the company the right to construct its railroad through the streets of the city, no more than one track to be laid, except that the privilege was granted to lay a double track along Division Street, from the bridge over St. Joseph's river to Taylor street. The road was constructed and a single track was built in 1871.

Thereafter, in 1881, the company acquired by condemnation and purchase, from abutting owners on Division street, the right to use a strip 18 feet in width on which to lay a double track, and soon afterward constructed the same on Division street for about half the permitted distance. This double track was constantly used, and in 1901 the business of the company had so increased that it was necessary to double track the entire line; and the company had so built 157 miles from Port Huron westward, and was preparing to construct the balance of the double track on Division street, when the city, on October 14, 1901, repealed so much of the ordinance of 1868 as gave the right to a second track in Division street. Later, when the work of construction was begun, the mayor ordered the employees to desist, and threatened to arrest any who should undertake to construct such double track.

The company thereupon filed a bill, asking that the city be enjoined from interfering with the building of the balance of the double track. It alleged that the city was a stockholder in the original company and in one of the successors, and knew of the acquisition of the 18-foot strip in Division street; that at all times it had recognized the validity of the contract as an entirety, and from time to time required the railroad to incur expenses called for thereunder, and was estopped from denying the validity of the double track privilege.

The bill alleges that when the ordinance of 1868 was passed it understood the double track could be laid whenever the business of the company made it necessary; that in consequence of the increase of business it is now essential to the successful operation of plaintiff's freight and passenger business that it should maintain a second track in Division street, as by said ordinance authorized; and that to facilitate and accommolate the present volume of such traffic, said double line 'is particularly necessary because of the fact that plaintiff's freight and passenger stations in South Bend are located adjacent to Division street, between St. Joseph's river bridge and General Taylor street, and at said station the trains, both passenger and freight, passing over plaintiff's road, have to stop for train orders. The obstructing of the general public in the use of said street by passing trains will be much less when two tracks are used than it now is, when all trains, both ways, have to pass over a single track; that said street is 82 1/2 feet wide, and that there is ample room thereon for general travel and for said double track.'

The plaintiff claims that the 'original ordinance of 1886 constituted a contract in its entirety, . . . is irrepealable by said city, either in whole or in part, and that said ordinance of repeal is void, as violative of said contract and plaintiff's right thereunder, as being in conflict with § 10 of article I. of the Constitution of the United States.'

The city demurred. Later it withdrew the demurrer and filed an answer. Subsequently it withdrew the answer and filed a general demurrer, which was sustained by the circuit court. On appeal the supreme court Indiana held that there was no charge that the city proposed to remove the double track already laid, and that the pleadings, properly construed, only involved the right to construct the balance of the double track; that even if the ordinance of 1866 was a contract, it did not prevent the city from exercising the police power, and affirmed the judgment. (174 Ind. 203, 36 L.R.A.(N.S.) 850, 89 N. E. 885, 91 N. E. 809.

Messrs. G. W. Kretzinger and A. B. Browne for plaintiff in error.

Messrs. Harry R. Wair, Iden S. Romig, and Louis T. Michener for defendants in error.

Statement by Mr. Justice Lamar:

[Argument of Counsel from pages 547-551 intentionally omitted] Mr. Justice Lamar, after making the foregoing statement, delivered the opinion of the court:

In 1868 the city council of South Bend, by ordinance, granted plaintiff's predecessor in title the right to lay a double track over a part of Division street. The company built a single track in 1871, and a double track for part of the way in 1881; but, on attempting in 1902 to extend it, for the balance of the authorized distance, was prevented from doing so because the city had repealed so much of the ordinance of 1868 as related to double tracks. In the record here it appears that, in the litigation which followed, the action of the city was sustained on the ground that the repeal was presumptively a reasonable exercise of the police power, and not a legislative impairment of the contract ordinance.

The assignment of error on this ruling presents a question which this court is bound to decide for itself, independent of decisions of the state court. Northern P. R. Co. v. Minnesota, 208 U. S. 590, 52 L. ed. 633, 28, Sup. Ct. Rep. 341. In doing so it is necessary first to determine whether the city had legislative authority to pass the ordinance; for, if there was no such power, the grant was void, and the repeal was not so much the impairment of the obligation of a contract, as the withdrawal of an assent to occupy the streets.

We are, however, relieved of the necessity of making any extended inquiry on this primary question, because the Indiana statute provided that the railroad might be built through any city that would give its consent. In a suit by an abutting owner, the supreme court of the state, construing this very ordinance of 1868, held that the city had power to pass it, 'the laying out and operating of the railway being a new and improved method of using the streets, germane to its principal object.' Dwenger v. Chicago & G. T. R. Co. 98 Ind. 153. In other cases that court held that the statute authorized cities to grant franchises to lay tracks in the streets; that such an ordinance created that which is in the nature of a contract 'which the municipality itself cannot materially impair.' Williams v. Citizens' R. Co. 130 Ind. 73, 15 L.R.A. 64, 30 Am. St. Rep. 201, 29 N. E. 408; New Castle v. Lake Erie & W. R. Co. 155 Ind. 24, 57 N. E. 516. These rulings accord with the decisions in other jurisdictions and by this court in Louisville v. Cumberland Teleph. & Teleg. Co. 224 U. S. 649, 56 L. ed. 934, 32 Sup. Ct. Rep. 572, holding that an ordinance conferring a street franchise, passed by a municipality under legislative authority, created a valid contract, binding and enforceable according to its terms.

2. If, then, the city of South Bend was authorized to pass this ordinance, which granted an easement, the contract cannot be impaired unless, as claimed by the defendant, the railroad took subject to a right to amend or repeal, in the exercise of the police power. And many cases are cited in support of the proposition that the grant of authority to use the streets of a city does not prevent the subsequent passage of ordinances needed for the preservation of the public safety and convenience. Some of the cases turned on the question as to the city's want of legislative power to make the grant in the first instance. Others held that charter grants did not prevent the state from subsequently repealing franchises, which, in their operation, were injurious to the morals or health of the public, as in the lottery, liquor, and fertilizer cases. Stone v. Mississippi, 101 U. S. 814, 25 L. ed. 1079; Boston Beer Co. v. Massachusetts, 97 U. S. 25, 24 L. ed. 989; Northwestern Fertilizing Co. v. Hyde Park, 97 U. S. 659, 24 L. ed. 1036. Others related to the change of paving, grade, and location of viaducts. All of them recognize the municipality's control of the use of the streets by travelers on foot or in vehicles, as well as the use by companies which have a franchise to lay tracks over which to haul cars.

Undoubtedly the railroad here took no vested interest in the maintenance of the laws or regulations of force when the ordinance was passed in 1868, but the rights acquired were subject to the power of the municipality to pass reasonable regulations necessary to secure the public safety. Northern P. R. Co. v. Minnesota, 208 U. S. 583, 52 L. ed. 630, 28 Sup. Ct. Rep. 341. And while the franchise to lay and use a double track was a contract which could not be impaired, yet, as the police power remained efficient and operative, the municipality had ample authority to make regulations necessitating changes of a nature which could not have been compelled if the grant had been from it as a private proprietor. The city could therefore legislate as to crossings, grades, character of rails, rate of speed, giving of signals, and the details of operating track and train, regulating the use of the franchise, and preserving the concurrent rights of the public and the company. And, as in the viaduct cases, it might require these tracks to be lowered or elevated (Chicago B. & Q. R. Co. v. Nebraska, 170 U. S. 57, 42 L. ed. 948, 18 Sup. Ct. Rep. 513); or, the franchise, and not the particular...