Hunter v. City of Roseburg

Citation156 P. 267,80 Or. 588
PartiesHUNTER ET AL. v. CITY OF ROSEBURG ET AL.
Decision Date21 March 1916
CourtOregon Supreme Court

In Banc.

Appeal from Circuit Court, Douglas County; G. F. Skipworth, Judge.

Suit by John Hunter and others against the City of Roseburg and others. From a decree in favor of defendants, plaintiffs appeal. Reversed and rendered.

This is a suit by several taxpayers to cancel two contracts entered into on July 15, 1915, between the city of Roseburg, party of the first part, the Roseburg & Eastern Railroad Company, a corporation, party of the second part, and the Kendall Lumber Corporation, party of the third part, and to enjoin the issuance of $300,000 in bonds. From a decree in favor of the defendants, plaintiffs appeal.

On June 3, 1915, the legal voters of the city of Roseburg amended the charter of that city. Section 156 thereof reads as follows:

"The common council is hereby granted the power, in addition to all the other power granted by the municipal charter of the city of Roseburg, to construct a standard gauge railroad from the city of Roseburg to a point on the North Umpqua river at its intersection with the western boundary of the Cascade Range Forest Reserve. Said railroad shall be a common carrier for both freight and passenger service."

Section 157 states:

"For the purpose of raising the necessary funds to construct said railroad the common council, is hereby authorized to issue and sell the bonds of the city, bearing five per cent. interest per annum, in a sum not to exceed three hundred thousand dollars. Said bonds shall mature and become payable thirty years from the date of their issue and may be paid at any time, the interest is payable after ten years from the date said bonds are issued, at the option of the city of Roseburg."

The amendment further provides that the common council of the city of Roseburg is directed to enter into a contract for the construction of the railroad mentioned, and to lease the same on such terms and for such periods of time as to it may seem for the best interests of the city; and that the lease shall prescribe that there shall be no discrimination as to either rates or service in the carrying of freight or passengers. The levy of an annual tax is authorized to pay the interest on the bonds, and, thereafter, a further levy for their payment at maturity.

After the commencement of this suit the case of Pearce v. City of Roseburg, which was instituted in the circuit court on June 8, 1915, for the purpose of testing the validity of the special election mentioned, was decided by this court. See 150 P. 855. The decree of the circuit court sustaining the demurrer to the complaint was affirmed. Those matters therefore, which were included in the complaint in the former case will not be particularly mentioned herein.

The plaintiffs allege that the contracts entered into by the city and the corporations named are not valid, for the reason that they are not authorized by the charter amendment and are repugnant to article 11, § 9, of the Constitution of Oregon. It is specified that the contract does not provide for the construction of a standard gauge railroad from the city of Roseburg to a point on the North Umpqua river at its intersection with the western boundary of the Cascade Range Forest Reserve, and that the city has no authority to attempt to enter into an agreement for the construction of only a part of such railroad; that the contracts attempted to be entered into with the corporations named are illegal, an abuse of the power vested in the defendant officers of the city, and an attempt by subterfuge to tax the taxpayers of the municipality, including the plaintiffs, for private purposes, in violation of the Constitution of the state of Oregon, and that of the United States; also, that they are for the purpose of raising money for, or loaning credit of the city to or in aid of Kendall Bros., or the Roseburg &amp Eastern Railroad Company, or other owners of timber land along the route of the proposed railroad, in violation of article 11, § 9, of the Constitution. The prayer of the complaint is that the contracts be canceled, held for naught and that the city be enjoined from attempting to issue or sell the bonds mentioned.

As far as it is deemed necessary to recite, the substance of the main contract of July 15, 1915, now in controversy, is as follows:

"Witnesseth that whereas, the city proposes to construct a railroad of standard gauge and substantial construction from the city of Roseburg, northeasterly to the North Umpqua river and thence up the North Umpqua river to its intersection with the western boundary of the Umpqua National Forest for the purpose of inducing the location of sawmills at or near the said city of Roseburg and the delivery to said sawmills of timber now standing in said National Forest and for sale by the United States government; and also for the purpose of transporting the timber, belonging to private individuals corporations or syndicates tributary to the North Umpqua river and to Little river; and for the further purpose of affording to any and all persons, companies and associations equal transportation facilities for the transportation of all said sawlogs, timber and other products of the forests without discrimination either as to rates or service:

"Now, therefore, in consideration of the railroad company constructing a standard gauge railroad of substantial construction from the city of Roseburg easterly to the North Umpqua river and thence up said river to its intersection with the western boundary of the Umpqua National Forest, the city undertakes and agrees to pay to the railroad company the sum of three hundred thousand dollars ($300,000.00) in lawful money of the United States of America, or in bonds of said city bearing interest at the rate of five per cent. per annum payable semi-annually at the option of the city, and the city further agrees to provide the right of way for said railroad, said right of way to be of the usual width taking into consideration the nature of the ground through which said right of way has been or shall be hereafter located, and further agrees to lease to said railroad company for a period of sixty years said railroad when the same shall have been constructed."

The contract then provides that the city pay to the railroad company $9,000 per mile for every mile of road completed to Rock creek, ready for the rolling stock and general traffic; $4,500 per mile for work done at isolated places and disconnected portions; and $11,000 per mile for that portion of the railroad extending from Rock creek to Umpqua National Forest, when completed. The balance of the sum of $300,000 remaining in the city treasury is directed to be paid to the railroad company as soon as the railroad shall be completed to the National Forest. It is further provided as follows:

"The railroad company for and in consideration of the promises and undertakings of the city agrees to construct a railroad of standard gauge and of substantial construction, with no grade in excess of 2 1/2 per cent. from the city of Roseburg to the western boundary of the Umpqua National Forest at its intersection with the North Umpqua river, and to furnish at its own charge and expense all material, depots, sidings, spurs and other conveniences necessary for the proper operation of said railroad for the accommodation of the public as may be required under the law of the state; to fence said railroad right of way; to place thereon leased steel rails weighing not less than 56 pounds per yard; to equip said railroad with the necessary rolling stock; to maintain and keep said railroad in good repair, and operate the same continuously for both passenger and freight service as a common carrier, and to pay the city as a rental the sum of 25 per cent. of the net profits earned by said railroad during the term of said lease. Said sum of 25 per cent. shall be paid by the railroad company to the city on the first day of August for all sums earned during the six months ending on the 30th day of June of each year, and on the first day of February for all sums earned during the six months ending with the 31st day of December of each year."

In the stipulation, the railroad company also agrees to transport all the sawlogs and other products of the forests delivered to it at any suitable point on the railroad at a reasonable rate without discrimination. The contract then states:

"The railroad company hereby further agrees to pay all taxes and other public charges of every kind and nature which may be lawfully assessed or levied upon or against said railroad or said city on account of said railroad during the term of said lease. And said railroad company hereby agrees to hold and save harmless the city from all liability on account of any such taxes or public charges during the term of said lease."

It is agreed that active work of construction commence within 30 days and be prosecuted diligently and continuously so far as practicable until the completion of the railroad between the city of Roseburg and Rock creek, the same to be continued to the western boundary of the Umpqua National Forest at its intersection with the North Umpqua river, so as to have it completed to that point within five years from the taking effect of the agreement, and as much sooner as there shall be any demand or opportunity for transporting sawlogs or other products of the forest from the National Forest.

It is further specified that the city of Roseburg shall have a voice in fixing the freight rates which may be charged, but does not provide that the municipality shall control the matter. In consideration of the donation of a mill site and the construction of the railroad, the lumber...

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2 cases
  • Mitchell v. Hughes
    • United States
    • Oregon Supreme Court
    • May 23, 1916
  • Hunter v. City of Roseburg
    • United States
    • Oregon Supreme Court
    • June 6, 1916
    ...6, 1916 In Banc. Appeal from Circuit Court, Douglas County; G. F. Skipworth, Judge. Petition for rehearing. Denied. For former opinion, see 156 P. 267. Ralph R. Duniway, of Portland, for appellants. Carl Wimberly and Dexter Rice, both of Roseburg (Albert Abraham, Rice & Orcutt, and O. P. Co......

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