Knoxville Ice & Cold Storage Co. v. City of Knoxville

• Decision Date: 07 June 1926
• Citation: 284 S.W. 866,153 Tenn. 536
• Parties: KNOXVILLE ICE & COLD STORAGE CO. ET AL. v. CITY OF KNOXVILLE ET AL.
• Court: Tennessee Supreme Court

284 S.W. 866

153 Tenn. 536

KNOXVILLE ICE & COLD STORAGE CO. ET AL. v. CITY OF KNOXVILLE ET AL.

Supreme Court of Tennessee.

June 7, 1926

Appeal from Chancery Court, Knox County; Chas. Hays Brown Chancellor.

Injunction suit by the Knoxville Ice & Cold Storage Company and another against the City of Knoxville and others. Bill dismissed, and complainants appeal. Affirmed.

HALL J.

The original, amended, and supplemental bills in this cause were filed by complainants, Knoxville Ice & Cold Storage Company (a corporation) and John Shea, against the city of Knoxville (a municipal corporation) and its city council, to enjoin them from passing an alleged illegal and ultra vires ordinance closing the east end of McGhee street in said city and to particularly enjoin said defendants from entering into any contract or agreement with the Southern Railway Company to close said street.

Complainants sue in a twofold relationship: First, as parties who, the bill alleges, will be specially damaged by the closing of the east end of McGhee street; and, second, as citizens and taxpayers of the city who will be injured by the alleged unlawful expenditure of money in the construction of a viaduct over Broadway (another street in the city of Knoxville), which crosses the tracks of the Southern Railway Company, by the building of which it is proposed to close the east end of McGhee street.

On the ______ day of ______, 1925, the following contract was entered into by and between the city of Knoxville, of the first part, and the Southern Railway Company, a corporation organized and existing under the laws of the state of Virginia, and qualified to carry on the business of a common carrier in the state of Tennessee, party of the second part:

"Whereas, the city of Knoxville, in the years 1919 and 1920, caused to be constructed a viaduct along Gay street in the city of Knoxville, and extending from Depot street across the tracks of the railway company southwardly to the north line of Vine avenue, with ramps on the east and west side of the viaduct leading to Jackson avenue, all of which construction was completed and the bridge accepted by the city on June 2, 1920; and

Whereas, in 1921, the city of Knoxville brought suit against the Southern Railway Company et al. in the United States District Court at Knoxville, Tenn., for the entire cost of construction of the said Gay street viaduct spanning the tracks of the railway company at the point where the tracks are crossed by Gay street, in the city of Knoxville, Tenn.; and

Whereas, the United States District Court for the Northern Division of the Eastern District of Tennessee, in the case of City of Knoxville v. Southern Railway Company et al. (No. 1819), rendered judgment on January 10, 1924, for the principal sum of $182,359.47, with interest at the rate of 6 per cent. per annum from June 2, 1920, from which judgment both parties appealed to the United States Circuit Court of Appeals, Sixth Circuit, where said cause is now pending; and

Whereas, the city of Knoxville desires the construction of a viaduct over the tracks of the railway company and along Broadway, from Jackson avenue on the south to Depot street on the north, and will by ordinance to be duly and legally passed, undertake the construction thereof at an estimated cost of $250,000, in which cost the railway company should and is willing to share:

Now, therefore, in order to settle and adjust the said suit and the differences between the parties as to the proportion which each should bear of the cost of the Broadway viaduct and to agree on the obligations of the parties in all the said premises, the parties do covenant and agree as follows:

The railway company, in consideration of the covenants of the city, agrees:

1. That it will, in the manner and at the times hereinafter indicated, pay to the city of Knoxville, Tenn.:

(a) The principal sum of $182,359.47, for which judgment was rendered in said Gay street case, less the cost of installation of lighting system on the viaduct, which amounts to the sum of $3,611.64, making the amount the railway company is to pay on this account $178,747.83.

(b) Interest on $178,747.83 from date of completion of viaduct, June 2, 1920, to February 1, 1925, at 6 per cent. amounting to $49,989.74.

(c) One-half of the cost to the city of construction by the city of the said Broadway viaduct, estimated to cost a total of $250,000, Southern Railway's proportion estimated $125,000.

Southern Railway's proportion of total cost of construction of viaduct at Gay street, with interest to February 1, 1925, and viaduct at Broadway (Broadway estimated) $353,737.57.

2. That it will pay the above set forth total sum of $353,737.57 (subject to correction when the actual cost of Broadway viaduct is ascertained), with interest thereon, at the rate arrived at as hereinafter set forth, in twenty-five (25) annual installments.

The first installment on account of the adjustment of the Gay street viaduct judgment will be due February 1, 1926, and will be made up of one twenty-fifth of the principal and interest on the principal for one (1) year at the average rate of interest arrived at as hereinafter set forth; and thereafter, on the 1st day of February of each succeeding year, until the twenty-four (24) remaining annual payments have been made, the railway will pay a like sum of the principal and interest for one (1) year at the average rate on the principal sum remaining due on the 1st of February preceding.

The first installment on account of the Broadway adjustment is to be due one year from the date of completion and acceptance of the viaduct by the city, and will be for one twenty-fifth of one-half of the cost of construction of the viaduct and appurtenances, interest during construction being included therein, with interest at the average rate per annum ascertained as hereinbelow set forth on said one-half of the total cost from the date of completion and acceptance to the day of payment, and thereafter it will make similar annual payments for the remaining twenty-four (24) years until the sum agreed to be paid by the company is fully paid, the amount of principal upon which the interest is to be calculated being reduced year by year as payments of principal are made until all payments on account of principal are made.

The interest to be paid on the above set forth total of $353,737.57 (which total is subject to correction when the actual cost of Broadway viaduct is arrived at) is to be ascertained in the following manner:

The principal sum paid on account of the Gay street viaduct, with interest to February 1, 1925, as set forth above, is to be calculated at six per cent. (6%). The interest on the ascertained proportion of the cost of the Broadway viaduct is to be calculated at the rate of interest which the city has to pay for the money it secures with which to construct the Broadway viaduct. The total of the principal, to wit, $353,737.57, is to be divided into the total of the interest charges thus arrived at, and the average rate of interest thereby secured is to be the rate of interest to be paid on the total principal sum for the said twenty-five (25) years.

4. That it will pay upon the execution of this agreement one-half of the costs incurred in the Gay street case, cause No. 4209 in the Circuit Court of Appeals, and the entire costs in the district court.

The city of Knoxville, in consideration of the covenants of the railway company, agrees on its part:

1. To accept payment by the Southern Railway Company in the manner hereinabove stated in settlement of the said judgment in the Gay street case, being No. 1819 in the District Court of the United States for the Northern Division of the Eastern District of Tennessee, and to dismiss its appeal therefrom and have the said judgment marked satisfied by execution of this agreement.

2. To pass all proper and necessary ordinances for closing Broadway (or Broad street, as shown on the blue print) as a street at grade from approximately the north line of Jackson avenue northwardly to approximately the south line of Depot street, and for the construction by the railway company, as agent for the city in so doing, of a viaduct along Broadway from, to wit, the north line of Jackson avenue, to wit, the south line of Depot street, together with the necessary track changes, and generally in accord with the general plan hereto attached and made a part hereof, the work on the viaduct to begin within sixty (60) days from the date of the final passage and approval of the necessary ordinances.

3. The city agrees to provide the money to pay the total cost of the said Broadway viaduct and to accept from the railway company, in full and final release of all obligation of the railway company to construct or contribute toward the construction of the said Broadway viaduct, the payment by the railway company of one-half of the total cost of the said Broadway viaduct, with interest at said average rate per annum, the railway's one-half to be paid at the times and in the manner heretofore stated. There shall be no obligation on the part of the railway to begin the construction until the city has made provision for the funds with which to meet the payments for the construction, as the same may become due during construction on estimates or partial completion reports, duly approved by the representative of the city and the representative of the railway company.

4. To pass all necessary ordinances to close and forever abandon McGhee street, from that point on the west where McGhee street enters the property of the railway company; thence eastwardly across the tracks of the railway company to the west line of Broadway.

5. The city has the option to...