Louisiana Railway and Navigation Company v. Martin Behrman

• Decision Date: 30 November 1914
• Docket Number: No. 49,49
• Citation: Louisiana Railway and Navigation Company v. Martin Behrman, 235 U.S. 164, 35 S.Ct. 62, 59 L.Ed. 175 (1914)
• Parties: LOUISIANA RAILWAY AND NAVIGATION COMPANY, Plff. in Err., v. MARTIN BEHRMAN, Mayor of the City of New Orleans
• Court: U.S. Supreme Court

235 U.S. 164

35 S.Ct. 62

59 L.Ed. 175

LOUISIANA RAILWAY AND NAVIGATION COMPANY, Plff. in Err.,

v MARTIN BEHRMAN, Mayor of the City of New Orleans.

No. 49.

Argued November 4 and 5, 1914.

Decided November 30, 1914.

Messrs. R. E. Milling and Mr. M. J. Foster for plaintiff in error.

Mr. I. D. Moore for defendant in error.

Mr. Justice Hughesdelivered the opinion of the court:

The plaintiff in error seeks to review the judgment of the state court upon the ground that it denied a Federal right asserted under the contract clause of the Constitution.Art. 1, § 10.

The suit was brought by the mayor of the city of New Orleans, in his official capacity, to restrain the Louisiana Railway & Navigation Company from proceeding under a municipal ordinance—No. 1997, New Council Series, dated September 4, 1903—to construct and operate tracks over a public belt railroad reservation, and from operating cars, etc., over public belt railroad tracks, and to have the ordinance, so far as it granted to that company such privileges of construction and operation, declared null and void.The facts, so far as it is necessary to state them, are these:

The authorities of the city of New Orleans devised the plan of establishing a public belt railroad along the river front.On March 1, 1899, the city adopted an ordinance (No. 15,080, C. S.) under which, in consideration of certain concessions, the Illinois Central Railroad Company built about 2 miles of the projected system, that is, from the upper limit of the city to the upper boundary of Audubon park.This was followed by ordinance No. 147, N. C. S., adopted August 7, 1900, which created a belt railroad board, composed of the mayor and certain city officials, to construct, control, and operate the belt railroad for the benefit of the city; and on August 12, 1902, the board of commissioners of the port of New Orleans, called the 'dock board,'—a body exercising state authority over a part of the area to be traversed by the proposed road,—approved the dedication for the purpose stated.This approval was to remain in force only so long as the belt railroad was 'operated and controlled by a public commission' in accordance with the provisions of ordinance No. 147.

On February 10, 1903, a further ordinance was adopted—No. 1615, N. C. S.—which, among other things, granted to the New Orleans & San Francisco Railroad Company a right of way over the belt line and reservation from the upper limit of the city to Henderson street.The condition was that the company, at its own expense, should construct and dedicate to perpetual public use the tracks as projected from the end of the line already built, on the upper side of Audubon park, to Henderson street ( a distance of about 5 miles), the construction to be completed before July 1, 1904.Other provisions looked to still further construction through contributions from other railroads.The validity of this ordinance was at once challenged in a suit brought by the mayor, on behalf of the city, which resulted in favor of the railroad company.Capdevielle v. New Orleans & S. F. R. Co.110 La. 904, 34 So. 868.The terms of the ordinance, however, did not conform to the conditions upon which the dock board had consented to the building of the belt road, and, in a suit brought by that board against the railroad company, the carrying out of ordinance No. 1615 was restrained so far as it authorized the construction of the railroad upon the property subject to the board's jurisdiction.New Orleans v. New Orleans & S. F. R. Co.112 La. 1011, 36 So. 837.Following this decision, it appears that the New Orleans & San Francisco Railroad Company abandoned the building of the belt line contemplated by the ordinance; no part of it was constructed thereunder.

On September 4, 1903, while the suit of the dock board was pending, and after the final decision in the Capdevielle suit, the city adopted ordinance No. 1997, N. C. S.,—the ordinance here in question (127 La. pp. 784-792, 54 So. 25).Without passing now upon points in controversy, it may be said that this ordinance, reciting that under ordinance No. 1615 there had already been granted to the New Orleans & San Francisco Railroad Company the right to construct the belt line over the reservation from the place at which the rails then terminated to Henderson street granted to the Louisiana Railway & Navigation Company—the plaintiff in error—a right of way over 'the double track belt line and reservation' to that point, upon stated terms and conditions, among which may be noted the following: That when the plaintiff in error had operated its equipment over the described belt tracks for thirty days, it should pay to the city the sum of $50,000; that in case the New Orleans & San Francisco Railroad company failed 'without legal excuse' to build the described line to Henderson street, as provided in ordinance No. 1615, the plaintiff in error should build that line in place of the first-mentioned company—this construction to be in lieu of the payment of $50,000, and the belt tracks so built, as soon as completed to Henderson street, to be 'turned over to the immediate ownership of the city of New Orleans,' and to be under 'the control and management of the public belt authority;' and, further, that in case the New Orleans & San Francisco Railroad Company should, from any cause, complete only a portion of the described tracks, the plaintiff in error should have the right to use so much of the described belt line as had been built, on payment of a proportionate part of the specified sum.This ordinance the plaintiff in error formally accepted on September 17, 1903.

The suit brought by the dock board against the New Orleans & San Francisco Railroad Company was decided by the supreme court of the state in May, 1904, and, in the October following, the city adopted ordinance No. 2683, N. C. S., which made comprehensive provision for municipal construction and operation of the belt line system.All conflicting ordinances were repealed, and it cannot be doubted that this ordinance, if enforced, would make it impossible for the plaintiff in error to exercise the rights it might otherwise have under ordinance No. 1997.The belt board was reorganized by the establishment of a new public belt railroad commission, com- posed of the mayor and sixteen 'citizen taxpayers,' to whom was confided the necessary administrative authority for carrying out the municipal scheme.This ordinance received the approval of the dock board on stated conditions, and, on July 1, 1905, the new undertaking was formally inaugurated.On November 10, 1905, the plaintiff in error deposited with a trust company, which was one of the fiscal agents of the city, $50,000 in securities in alleged compliance with its contract under ordinance No. 1997.The city, however, went on with its own plan, arranging for bank credits to enable it to carry on the work under ordinance No. 2683, and when, in May, 1906, the plaintiff in error attempted to begin construction under the earlier ordinance, it was stopped by the city authorities.Soon after, the present suit was instituted.

The petition of the mayor, alleging upon various grounds the invalidity of ordinance No. 1997, also averred the adoption of ordinance No. 2683, the irrevocable dedication thereby for the reservation of the public belt railroad, and the undertaking by the city, under that ordinance, of the work of construction.The plaintiff in error, in its answer, set up the unconstitutionality of the later ordinance as one impairing contractual obligations.At the beginning of the suit a preliminary injunction was granted, in accordance with the city's prayer, and the city proceeded with the construction of the public belt railroad, which has since been put in operation.In the court of first instance, judgment went 'in favor of the plaintiff, Martin Behrman, in his official capacity of mayor of the city of New Orleans, and as ex-officio president of the public belt railroad commission of the city,' declaring ordinance No. 1997, so far as it purported to grant the privileges in dispute, to be 'illegal, void, and of no effect,' and making the injunction permanent.This judgment was affirmed by the supreme court of the state upon the ground that the contract was 'subject to a suspensive CONDITION, AND THAT THIS CONDITION HAD BEcome impossible of realization, and the contract had, in consequence, fallen through, when plaintiff made its attempt to begin work and the injunction was taken.'127 La. 775, 795, 796.

The defendant in error moves to dismiss, invoking the established rule that, where the state court gives no effect to the subsequent enactment, the jurisdiction of this court does not attach.Knox v. Exchange Bank, 12 Wall. 379, 383, 20 L. ed. 414, 415;Lehigh Water Co. v. Easton, 121 U. S. 388, 392, 30 L. ed. 1059, 1060, 7 Sup. Ct. Rep. 916;New Orleans Waterworks Co. v. Louisiana Sugar Ref. Co.125 U. S. 18, 38, 39, 31 L. ed. 607, 614, 615, 8 Sup. Ct. Rep. 741;Central Land Co. v. Laidley, 159 U. S. 103, 111, 40 L. ed. 91, 94, 16 Sup. Ct. Rep. 80;Bacon v. Texas, 163 U. S. 207, 216, 219, 41 L. ed. 132, 136, 137, 16 Sup. Ct. Rep. 1023;Fisher v. New Orleans, 218 U. S. 438, 440, 54 L. ed. 1099, 1100, 31 Sup. Ct. Rep. 57;Missouri & K. Interurban R. Co. v. Olathe, 222 U. S. 187, 190, 56 L. ed. 156, 158, 32 Sup. Ct. Rep. 47;Cross Lake Shooting & Fishing Club v. Louisiana, 224 U. S. 632, 639, 56 L. ed. 924, 928, 32 Sup. Ct. Rep. 577.We are of the opinion that the present case is not within this rule.It is equally well settled that, where the state court does give effect to later legislation which operates to impair the obligation of a contract if one exists, this court is not deprived of jurisdiction because the state court has put its decision upon the ground that the contract was not made, or that it was invalid, or that it has become inoperative.In such a case, this court must determine for...