Northern Pacific Rallway Company v. State of Minnesota Ex Rel City of Duluth

• Decision Date: 24 February 1908
• Docket Number: No. 92,92
• Citation: 28 S.Ct. 341,208 U.S. 583,52 L.Ed. 630
• Parties: NORTHERN PACIFIC RALLWAY COMPANY, Plff. in Err., v. STATE OF MINNESOTA EX REL. CITY OF DULUTH. ,
• Court: U.S. Supreme Court

208 U.S. 583

28 S.Ct. 341

52 L.Ed. 630

NORTHERN PACIFIC RALLWAY COMPANY, Plff. in Err.,

v STATE OF MINNESOTA EX REL. CITY OF DULUTH.

No. 92,

Argued December 20, 23, 1907.

Decided February 24, 1908.

Mr. Charles W. Bunn for plaintiff in error.

[Argument of Counsel from pages 583-585 intentionally omitted] Mr. Bert Fesler for defendant in error.

[Argument of Counsel from pages 585-587 intentionally omitted] Mr. Justice Day delivered the opinion of the court:

This case comes here from the supreme court of Minnesota, to review a judgment of that court affirming a judgment in mandamus of the St. Louis county court in that state, which required the Northern Pacific Railway Company, plaintiff in error, to repair a certain viaduct in the city of Duluth, carrying Lake avenue over the railway company's tracks. 98 Minn. 429, 108 N. W. 269. The Northern Pacific Railway Company is the successor in title of the St. Paul & Duluth Railroad Company, which derived its title from the Lake Superior & Mississippi Railroad Company. The Lake Superior & Mississippi Railroad Company, whose rights and obligations have devolved upon the Northern Pacific Railway Company, had the following provisions in its charter:

'Sec. 6. The said company may construct the said railroad across any public or private road, highway, stream of water, or water course if the same be necessary: Provided, That the same shall not interfere with navigation; but said company shall return the same to their present state, or in a sufficient manner so as not to impair the usefulness of such road, highway, stream of water, or water course, to the owner or to the public.'

'Sec. 17. This act is hereby declared to be a public act, and may be amended by any subsequent legislative assembly in any manner not destroying or impairing the vested rights of said corporation.'

The Lake Superior & Mississippi Railroad laid its first track across what is now Lake avenue in 1869. Lake avenue was graded and improved for public traffic in the winter and spring of 1871, and since that time it has been in continuous use as a public street. In the year 1891 the amount of business on Lake avenue and the number of tracks therein had become so great that the constant passage of cars and engines endangered the safety of the public. The city of Duluth thereupon prepared plans and specifications for the construction of the viaduct upon Lake avenue, and made a demand upon the railroad company to construct the same. The railroad company, after considerable negotiation, in which it denied its obligation to build the viaduct, entered into a contract with the city of Duluth, which is set up in its answer in this case as a full defense to the right of the city of Duluth to require the repair of the viaduct at the railroad company's expense. This contract was dated September 2, 1891, and provided that the city should build the bridge or viaduct upon Lake avenue to carry that street over the railroad tracks which had theretofore crossed said avenue at grade. The railroad was to contribute to the expense of the construction in the amount of $50,000, and the city undertook, for the period of fifteen years, to maintain the part of the bridge over the railroad's right of way, and to perpetually maintain the approaches. The city built the bridge at an expense of $23,000, in addition to the $50,000 which was paid by the railroad company.

In 1903, the viaduct and its approaches having become dangerous for public use, the city of Duluth acted within the power conferred on it by law to require railroad companies to construct bridges and viaducts at their own expense at public railroad crossings, and, having investigated the subject, approved the plans prepared by the city engineer, and on the 13th of July, 1903, passed the following resolution:

'Resolved, That the repairs set forth in said specifications are necessary and proper, and are demanded by the public safety and convenience.

'Resolved, further, That said repairs are reasonable and practicable for the repairs of said viaduct and its approaches; and that said repairs as set forth in said specifications are hereby adopted and approved.

'Resolved, further, That this council does hereby demand that the Northern Pacific Railway Company immediately proceed to repair said viaduct and approaches in accordance with said specifications.

'Resolved, further, That a copy of this resolution be forthwith served upon the Northern Pacific Railway Company in the same manner as service may be made of summons in a civil action by the city clerk.

'Resolved, further, That, in the event of the failure or refusal of said company to comply with such demand, that the city attorney be and he is hereby instructed to institute such action or actions as to him may seem proper to compel the said railway company to make such repairs, or such portion thereof as the court may determine it is legally liable to make.'

It was in pursuance of this resolution that this action in mandamus was begun and the writ issued, requiring the railroad company to make the repairs in accordance with the plans adopted and approved by the city council.

We are met at the threshold with the question of the jurisdiction of this court. It is the contention of the plaintiff in error that, in requiring the railroad company to repair the viaduct at its own expense, the obligation of the contract of September 2, 1891, has been impaired by legislation of the municipal corporation, in violation of the contract clause of the Constitution of the United States. In cases arising under this clause of the Federal Constitution this court determines for itself whether there is a contract valid and binding between the parties, and whether its obligation has been impaired by the legislative action of the State. Stearns v. Minnesota, 179 U. S. 223, 233, 45 L. ed. 162, 170, 21 Sup. Ct. Rep. 73. If the plaintiff in error set up a claim of contract upon substantial grounds and with allegations showing an impairment of its obligation by state or municipal legislation, a case was presented which might be brought to this court in event such legislation was upheld. Chicago, B. & Q. R. Co. v. Nebraska, 170 U. S. 57, 42 L. ed. 948, 18 Sup. Ct. Rep. 513.

It is no longer open to question that municipal legislation passed under supposed legislative authority from the state is within the prohibition of the Federal Constitution and void if it impairs the obligation of contracts. Mercantile Trust & D. Co. v. Columbus, 203 U. S. 311-320, 51 L. ed. 198-202, 27 Sup. Ct. Rep. 83, and cases there cited. But it is contended that the action of the city in this case amounts to no more than a denial of the validity and binding force of the contract in question and brings the case within St. Paul Gaslight Co. v. St. Paul, 181 U. S. 142, 45 L. ed. 788, 21 Sup. Ct. Rep. 575, followed in Dawson v. Columbia Ave. Sav. Fund, S. D. Title & T. Co. 197 U. S. 178, 49 L. ed. 713, 25 Sup. Ct. Rep. 420. In the St. Paul Case the city refused to pay certain sums claimed to be due on contract of the company, and ordered the gas posts to be removed from the streets. Such a denial of liability on the part of a municipal corporation was contained in an ordinance to that effect, it was held this was not legislation impairing the obligation of the contract, and it was said in that case that the ordinance 'created no new right or imposed no new duty substantially antagonistic to the obligations, of the contract, but simply expressed the purpose of the city not in the future to pay the interest on the cost of construction of the lamp posts which were ordered to be removed. . . . Wheh the substantial scope of this provision of the ordinance is thus clearly understood it is seen that the contention here advanced of the impairment of the obligations of the contract arising from this pro- vision of the ordinance reduces itself at once to the proposition that, wherever it is asserted, on the one hand, that a municipality is bound by a contract to perform a particular act and the municipality denies that it is liable under the contract to do so, thereby an impairment of the obligations of the contract arises, in violation of the Constitution of the United States. But this amounts only to the contention that every case involving a controversy concerning a municipal contract is one of Federal cognizance, determinable ultimately in this court. Thus, to reduce the proposition to its ultimate conception is to demonstrate its error.'

And such was the effect of the ordinance in the subsequent case of Dawson v. Columbia Ave. Sav. Fund, S. D. Title & T. Co. supra.

We think the municipal legislation complained of in this case amounts to more than a mere denial of liability or of the binding force of the former contract. The legislation which deprives one of the benefit of a contract, or adds new duties or obligations thereto, necessarily impairs the obligation of the contract, and when the state court gives effect to subsequent state or municipal legislation which has the effect to impair contract rights by depriving the parties of their benefit, and make requirements which the contract did not theretofore impose upon them, a case is presented for the jurisdiction of this court. New Orleans Waterworks Co. v. Louisiana, 185 U. S. 336, 350, 351, 46 L. ed. 936, 943, 944, 22 Sup. Ct. Rep. 691. And this jurisdiction has been frequently exercised in cases of municipal ordinances having this effect upon prior contract rights. Vicksburg Waterworks Co. v. Vicksburg, 185 U. S. 65-81, 46 L. ed. 808-815, 22 Sup. Ct. Rep. 585; Cleveland v. Cleveland City R. Co. 194 U. S. 517, 48 L. ed. 1102, 24 Sup. Ct. Rep. 756. As was said in Dawson v. Columbia Ave. Sav. Fund, S. D. Title & T. Co. supra, it is not always easy to determine on which side of the line a given case may fall. But, recurring to the resolution in this case, we are of the opinion that it is legislative action...