Minneapolis St. Ry. Co. v. City of Minneapolis
| Decision Date | 16 December 1949 |
| Docket Number | No. 34935,34935 |
| Citation | 229 Minn. 502,40 N.W.2d 353 |
| Parties | MINNEAPOLIS ST. RY. CO. v. CITY OF MINNEAPOLIS et al. |
| Court | Minnesota Supreme Court |
Syllabus by the Court
1. The ordinance of 1875, together with the ratifying legislative act of 1879, granting the right to construct, maintain, and operate a street railway system in the city of Minneapolis, constitutes a valid and subsisting contract between the city and the street railway and, ipso facto, between the state and the street railway.
2. The ordinance of 1890 amending such contractual grant is valid and binding upon the parties.
3. A municipality, though operating under a home rule charter, is merely a department of the state, a political subdivision created as a convenient agency for the exercise of such governmental powers as may be entrusted to it; and pursuant to Minn.Const. art. 4, § 36, the legislature may, by the enactment of General laws, modify or withdraw any powers entrusted to a city with a home rule charter.
4. Since 1872, the city of Minneapolis has been possessed of police powers sufficiently broad to authorize the regulation of all forms of vehicular traffic upon its streets, inclusive of the regulation and licensing of streetcars.
5. In issuing licenses as a means of police power regulation, a license fee may be exacted to reimburse the city for the reasonable cost of issuing the license and for inspecting, supervising, and regulating the use which has been authorized.
6. A license fee under the police power may not be imposed for revenue purposes, but it is not fatal, however, that such license fee may incidentally yield some return in excess of the amount necessary to reimburse the city for its police regulatory service.
7. Where a municipal ordinance is adopted which would be lawful if intended for one purpose and unlawful if for another, the presumption is that a lawful purpose was intended, unless the contrary clearly appears.
8. The imposition of license fees, like taxes, entails one of the great functions of government, and the relinquishment of the power to discharge that function can be derived only from explicit and unequivocal language that is so free from ambiguity as to leave no room for construction.
9. The power to license is not always the power to deny, and thereby the power to destroy the franchise privileges which have been granted, since the exercise of such power may be contractually restricted to the field of police power regulation, which is always subject to a judicially enforceable standard of reasonableness.
10. M.S.A. § 220.09 does not deprive the city of the right to issue licenses and to impose a reasonable license fee, but simply defines the field of local regulation and not the manner of its exercise.
11. Admissions by one who moves for judgment on the pleadings are admissions for the purposes of the motion only, and if the motion is denied or if the motion is granted and later reversed on appeal, the movant is not concluded from trying any issue of fact.
John F. Bonner, City Atty., Palmer B. Rasmusson, Asst. City Atty., Minneapolis, for appellants.
Dorsey, Colman, Barker, Scott & Barber, Leland W. Scott, and Robert J. Johnson, Minneapolis, for respondent.
Defendants appeal from a judgment on the pleadings in an action under the declaratory judgments act, M.S.A. § 555.01 et seq., wherein a 1946 Minneapolis ordinance--purporting to amend an earlier street railway franchise grant by increasing the annual license fee for each car from $25 to $100--was held invalid and void.
Defendants are herein referred to collectively as the city and the plaintiff as the street railway. The following issues are raised: (1) The street railway has challenged the constitutionality--under both the federal and the state constitutions--of the 1946 ordinance, on the grounds that it impairs the obligation of a contract alleged to arise out of the original grant by the city, and in that it works a deprival of property without due process of law. (2) Assuming that the original grant by the city to the street railway constitutes a contract, can the city thereunder, pursuant to an exercise of the police power, increase the annual license fee provided for therein without the consent of the street railway? (3) Further, did the enactment by the legislature of the so-called Brooks-Coleman Act, L.1921, c. 278, codified as M.S.A. §§ 220.01 to 220.19, deprive the city of any police power control over street railways which it had theretofore possessed?
A consideration of these issues requires an examination of certain legislative enactments, both municipal and state. In 1875, the Minneapolis city council enacted an ordinance 1 which granted to the street railway the exclusive right to construct, maintain, and operate a street railway system. This grant, which was accepted by the street railway, was ratified by the state legislature. Sp.L.1879, c. 299. Section 8 of the 1875 ordinance states that the street railway in establishing passenger rates shall fix them in such amount as the city council may deem just and reasonable, 'provided, that the city shall not reduce the passengers' fare below five cents over any one continuous line, * * *.' Section 9 thereof reads as follows: (Italics supplied.)
In 1890, the city council adopted another ordinance, 2 which, in modification of the original grant, authorized the street railway to use electricity instead of animals or pneumatic power to propel its cars. This latter ordinance in part provides:
'Sec. 7. This ordinance is Granted upon the express condition and requirement that said Minneapolis Street Railway Company shall pay to the City Treasurer * * * An annual tax or license fee of twenty-five dollars ($25) per car for the average number of cars operated * * *. (Italics supplied.)
1-2. Basic to a consideration of issues herein is the established legal proposition that the ordinance of 1875, together with the ratifying act of 1879, granting the right to construct, maintain, and operate a street railway system in the city of Minneapolis, constitutes a valid and subsisting contract between the city and the street railway and, ipso facto, between the state and the street railway. City of Minneapolis v. Minneapolis St. Ry. Co.,215 U.S. 417, 30 S.Ct. 118, 54 L.Ed. 259. The ordinance of 1890 amending such contractual grant has been accepted, and relied upon by both the city and the street railway, and the material changes thereby effected were all within the scope of the provisions made in the original grant in recognition of the need for future change. It constituted a valid amendment of the contractual relation between the city and the street railway. See, Ordinance of 1875, §§ 4 and 9; City of Minneapolis v. Minneapolis St. Ry. Co., 215 U.S. 417, 30 S.Ct. 118, 54 L.Ed. 259; and Minneapolis St. Ry. Co. v. City of Minneapolis, C.C., 155 F. 989.
3. Prior to, and separate and apart from a consideration of any changes that may have been effected in the contractual relation of the parties by the Brooks-Coleman Act, we proceed to determine what powers, if any, the city possessed and which could be exercised without impairing the obligations of the contract embodied in the ordinances of 1875 and 1890, to increase the annual license fee from $25 to $100 per car for the average number of cars operated. It is conceded that if any power to do so exists it must be a police power. Whatever police powers the city possesses are those conferred upon it by the state. A municipality, though operating under a home rule charter, is merely a department of the state, a political subdivision created as a convenient agency for the exercise of such governmental powers as may be entrusted to it. Pursuant to Minn.Const. art. 4, § 36, M.S.A., the legislature may, by the enactment of General laws, modify or withdraw any powers entrusted to a city with a home rule charter. Monaghan v. Armatage, 218 Minn. 108, 112, 15 N.W.2d 241, 243. Apart from any grant to the city by virtue of the contract itself and the ratification thereof by the legislature, it is clear that since 1872 the city has been possessed of broad police powers. The following provisions, quoted in part from the home rule charter of the city of Minneapolis, adopted November 2, 1920, have been in effect in substantially their present forms since 1872, when they were first enacted by the state legislature as a part of Sp.L.1872, c. X, subchapter I, § 1:
General Powers
Chapter I, § 1. '* * * the 'City of Minneapolis,' * * * shall have all the general powers possessed by Municipal Corporations at common law, and in addition thereto shall possess all powers hereinafter specifically granted, * * *.'
Chapter IV, § 5. 'The City Council shall have full power and authority to make, ordain, publish, enforce, alter, amend or repeal all such ordinances for The government and good order of the city, * * * as it shall deem expedient, * * * and all such ordinances are hereby declared to be and to have the force of law.' (Italics supplied.)
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