Mckennie v. Charlottesville & A. Ry. Co

• Decision Date: 09 September 1909
• Citation: 110 Va. 70,65 S.E. 503
• Court: Virginia Supreme Court
• Parties: McKENNIE et al. v. CHARLOTTESVILLE & A. RY. CO. et al.

65 S.E. 503

(110 Va. 70)

McKENNIE et al.

v.CHARLOTTESVILLE & A. RY. CO. et al.

Supreme Court of Appeals of Virginia.

Sept. 9, 1909.

1. Municipal Corporations (§ 1011^*)—Contracts—Arbitration.

Code 1904, § 3000, permits poisons to submit a controversy between them to arbitration and agree to enter such submission of record in any court, and upon proof thereof it shall be entered in the proceedings of such court and a rule made requiring the parties to submit to the award. Section 3009, Code 1904. provides that such award shall not be set aside, except for errors apparent on its face, unless it was procured by undue means, or the arbitrators were partial, etc. Held that, both under the statutes and the general rules of law, a city could adjust disputed claims made against or by it as an incident to its right to contract, sue, etc., and hence an agreement between a city and a street railroad company to arbitrate a dispute as to the latter's liability for the cost of paving a street was within its power.

[Ed. Note.—For other cases, see Municipal Corporations, Cent. Dig. § 2183: Dec. Dig. § 1011.*]

2. Arbitration and Award (§ 76*)—Award— Conclusiveness—Grounds for Vacating.

In equity, as well as at law, the reason for vacating an award must appear on its face, or there must have been a palpable mistake or misconduct of the arbitrators.

[Ed. Note.—For other cases, see Arbitration and Award, Cent. Dig. §§ 399-402; Dec. Dig. § 76.*]

3. Street Railroads (§ 37*)—Repair of Paving.

Where a city and a street railroad company, upon disagreeing as to the amount due the city from the company for its part of the expenses of repairing a street, referred the dispute to arbitrators, who found for the city for half the amount claimed, a decree sustaining the validity of the arbitration, but holding a provision in the contract invalid which made payment of a certain amount a discharge of all liability for further street paving under the company's charter, as well as a provision of the award releasing the company for five years from its obligation of paving on each side of its rails as required by its charter, did not compromise or diminish the city's authority to require the performance of the company's legal duties, within section 1033f, cl. 5, Code 1904, forbidding the release of the holder of any franchise from any duty imposed on him without 10 days' notice to the public by advertisement in a local paper.

[Ed. Note.—For other cases, see Street Railroads, Dec. Dig. § 37.*]

4. Arbitration and Award (§ 6*) — Agreements—Consideration.

A bona fide difference of opinion between a city and street car company as to the latter's liability under its charter and under a contract was a sufficient consideration for their agreement to arbitrate.

[Ed. Note.—For other cases, see Arbitration and Award, Dec. Dig. § 6.*]

Appeal from Corporation Court of Charlottesville.

Suit by one McKennie and others against the Charlottesville & Albemarle Railway Company and another. From a decree dismissing the bill, plaintiffs appeal. Affirmed.

George E. Walker and C. W. Allen, for appellants.

Harmon & Walsh and Moon & Fife, for appellee Charlottesville & A. Ry. Co.

KEITH, P. A bill was filed by McKennie and others, citizens and taxpayers of the city of Charlottesville, against the city of Charlottesville and the Charlottesville & Albemarle Railway Company, which was taken for confessed as to the city, and to which the railway company filed its demurrer and answer.

The material facts appearing in the record are as follows: As early as 1886 a franchisewas granted to the Charlottesville & University Street Railway Company to operate a street railway over and upon the streets of Charlottesville. One of the conditions of the grant was that the space between the rails and for one foot on each side of the track should be kept in order by the railway company. In January, 1894, a right of way and franchise was granted to the Piedmont Construction & Improvement Company, upon the condition, among others, that the said company would build and continuously operate the line described, and that "the said company shall be required to keep in order the streets within their rails and for 18 inches on the outside with same materials as is used in the streets, or equal to that the city uses, with the consent of the council and under the direction of the street commissioner, " and that "at the intersection of each and every cross street that crosses their track said track shall be so ballasted and maintained that easy and safe crossing is assured to all vehicles."

The Charlottesville & Albemarle Railway Company acquired the property and franchises of the two companies named above, is entitled to enjoy the rights conferred, and is charged with the burdens imposed by the franchises aforesaid.

By an act approved March 3, 1900, the council of the city of Charlottesville was given the power to negotiate loans for the purpose of improving and lighting its streets, buying necessary real estate, erecting public buildings, and supplying the city with sewerage. Under this statute an election was held, and a bond issue of $80,000 was decided upon by the voters and taxpayers of the city to carry out these improvements. The city council appointed a committee, consisting of four members of the council and three citizens, whose duty it was to make all contracts for street improvement. The committee was required to employ a competent engineer to supervise said improvements, and to submit its acts to the council for ratification or rejection. This committee was known as the "Special street Improvement Committee."

The engineers employed to supervise the work, in February, 1903, reported to the committee that in their opinion the whole street improvement would cost the sum of $77,000; but from this sum should be deducted the sum of about $14,000, which would be due from the street car company for its portion of the work. The railway company denied that there was any liability upon it to do any part of the said work, or that the city had any claim on it by reason of or growing out of the said street improvement, representing that in 1896 it had paid its portion of the cost of macadamizing Main street and had procured from the city a receipt in full for all claims for such work in the future.

Negotiations were then entered into between the street committee and the railway company, then known as the Charlottesville City & Suburban Railway Company, which resulted in a contract being entered into between the city and the company, which was agreed upon and formally executed on October 9, 1903, and formally ratified by the council on October 10, 1903. By the terms of this contract it was agreed, among other things, that "when the work of paving Main street shall be completed in accordance with the plans and specifications of the city engineer, and as hereinbefore provided, the company will pay the city the sum of $5,000, and the payment of the same will be in full satisfaction and discharge of all obligation and liability of the company for street paving under its franchise, but will not, of course, affect its obligation as to keeping in order the portion of the streets occupied by it as provided in said franchise."

Upon the completion of this work, the street car company refused to pay the $5,000 agreed upon, upon the ground that the work had not been done in accordance with the contract; and thereupon negotiations between the company and the city were set on foot, and on the 23d of March, 1905, the whole matter in controversy between the railway company and the city was submitted to arbitration.

The terms of submission were as follows:

"The city of Charlottesville and the Charlottesville & Albemarle Railway Company are at issue on the following questions:

"(1) What damage, if any, has resulted to the city of Charlottesville from the injury to Its Main street pavement adjacent to the rails of the said railway from the wheels of the cars?

"(2) What amount is due the city of Charlottesville for paving the track of said railway within the corporate limits of said city under contract of the 9th of October, 1903, taking into account such offsets and deductions, if any, as the railway company may be entitled to?

"The said city of Charlottesville and the said Charlottesville & Albemarle Railway Company desire to end all said controversies between them by referring all of their said differences, as set out above, or such of them as may exist on the 30th day of March, 1905, to arbitration.

"Therefore this agreement between the said city of Charlottesville, of the first part, and the said the Charlottesville & Albemarle Railway Company of the second part:

"Witnesseth, that the matters in controversy between the said parties are hereby referred to the arbitrament and award of Judge John M. White and Col. T. M. R. Talcott, with liberty to said arbitrators, before they enter on the said arbitration, to choose an umpire, who shall decide any and all of the questions of difference between the parties hereto, if said arbitrators fail to agree.

"Said arbitrators and their umpire shall meet in the council chamber in Charlottesville, at some time to be fixed by them, not later than the 10th day of May, 1905, and.after hearing such evidence as the parties hereto may adduce, and making such examinations as they may wish, the said arbitrators or their umpire shall decide all of the matters in controversy between the parties hereto according to the legal rights of the parties as speedily as may be. Such final award not to be delayed beyond 30 days from said 10th of May, 1905.

"The award shall be made in writing, and as soon after being made as possible it shall be filed by the arbitrators with the clerk of the corporation court of Charlottesville, who shall thereupon and...