People's Transit Co. v. Louisville Ry. Co.
| Decision Date | 24 June 1927 |
| Citation | 220 Ky. 728 |
| Parties | People's Transit Company v. Louisville Railway Company. |
| Court | United States State Supreme Court — District of Kentucky |
1. Municipal Corporations. — Street railway company held authorized, as taxpayer of city, to maintain suit to restrain operation of bus line over city streets without franchise, suing for itself and for the use and benefit of other taxpayers.
2. Carriers. — Street railway, which had obtained franchise pursuant to Constitution, section 164, held entitled to maintain suit to restrain operation of bus line not complying with such law, on ground that competing carrier on highways between fixed termini may maintain action to prevent rival transportation company from operating similar and competing business without obtaining right to do so as prescribed by law.
3. Equity. — Street railway, operating bus lines on some streets without obtaining specific franchise, is not precluded by "clean hands" doctrine from bringing suit to enjoin operation of another bus line for failure to obtain franchise.
4. Municipal Corporations. — Bus line, operating on city streets, held required to obtain franchise as provided in Constitution, section 164; "franchise" being privilege of doing something which does not belong to citizens generally by common right, since services rendered, rather than facilities employed, determine whether such section is applicable.
5. Constitutional Law. — In interpretation of Constitution, intention of makers, as gathered from employed language and purpose to be accomplished, should be applied.
6. Constitutional Law. — In arriving at intention of makers of Constitution, courts are not confined to actual words employed, but to effectuate evident purpose intended to be accomplished analogous situations and facts may be considered.
7. Appeal and Error. — It is duty of appellate court to decide case before it and take care of consequences afterwards.
Appeal from Jefferson Circuit Court
ROBERT L. PAGE and ALLEN P. DODD for appellant.
ALFRED SELLIGMAN, CHAS. W. MILNER and CHURCHILL HUMPHREY for appellee.
O'NEAL & O'NEAL and RODMAN W. KEENON, amici curiae.
Affirming.
The parties to this litigation (the appellant and defendant below, People's Transit Company, and the appellee and plaintiff below, Louisville Railway Company) are corporations, and will be hereinafter referred to as the Transit Company and the Railway Company, respectively. The Railway Company owns and operates on the streets of the city of Louisville a street railway system for the transportation of passengers. Its cars run upon a fixed track, consisting of two rails laid on cross-ties at a fixed place in the streets it traverses, and it operates its vehicles (cars) between fixed termini on schedule time and with a uniform schedule of rates, and it obtained its franchise for such operation, in the manner indicated, pursuant to the provisions and requirements of section 164 of the present Constitution of the commonwealth.
The Transit Company, at the time of the filing of this action, operated on some of the streets of the city a number of busses in the same manner and for the same purpose, and which were propelled by motor power generated by gasoline. They were not run upon a fixed track located in the street, but upon any portion thereof that was the most convenient, and the wheels of the busses were rubber-tired instead of iron, with flanges to hold the vehicle on the fixed track, as is true with the cars of the Railway Company. As in the case of the Railway Company, a once-paid fare entitled the passenger of the Transit Company to travel from one terminus to another one, and there was no scaling of rates proportioned to the distance traveled.
As a citizen and taxpayer, and also for the protection of its acquired franchise rights, the Railway Company filed this action against the Transit Company in the Jefferson circuit court, seeking to enjoin it from operating its auto busses on the streets of the city, upon the ground that such operation was one coming within the provisions of section 164 of the Constitution, and also, as it contends, under the provisions of its section 163. The substance of the defense was that defendant's business, conducted in the manner it was being operated, did not come within the provisions of either of those sections, and that the city of Louisville by its legislative department had enacted an ordinance prescribing for such operations by means of auto busses from year to year, upon the operator complying with certain prescribed conditions and paying a prescribed nominal annual fee, all of which it had done. Appropriate pleadings and steps presented the issues, and upon final submission the court perpetually enjoined defendant from further engaging in its described operation until it obtained a franchise right to do so, as is prescribed by section 164 of our Constitution, and which was an express holding that defendant, while prosecuting its business as stated, was exercising a special and peculiar right in and to the use of the streets, and designated in the law as a "franchise," and which it must obtain in the legal manner, and, until done, it was operating without right, and the injunction was therefore issued.
On this appeal from that judgment, defendant makes two primary contentions, which are: (1) That plaintiff cannot maintain this action; and (2) that a proper interpretation and application of the two sections of the Constitution, supra, does not require it to obtain a franchise in order to prosecute its passenger transportation business upon the streets within the city, and in which it was engaged before it was enjoined. Other subsidiary contentions are made by it, but they are all in aid of and look to the establishment of the two primary ones mentioned above, and when thought to be of sufficient materiality they will receive due consideration in the course of this opinion.
1. Contention (1) is not very difficult of solution. It is shown in the record and admitted in briefs that the
Railway Company is a very large taxpayer in the city of Louisville, and we held in the case of Hilliard v. Fetter, 127 Ky. 95, 105 S.W. 115, that such a taxpayer might maintain for himself and for the use and benefit of other taxpayers an action on all fours with this one; i.e., to enjoin the unlawful exercise of a franchise without first complying with the constitutional requirements in its obtention; and to the same effect is the case of Merchants' Police & Telephone Co. v. Citizens' Telephone Co., 123 Ky. 90, 93 S.W. 642.
In addition to its right to maintain the action as a taxpayer, as was held in those cases, we held in the two recent cases of Reo Bus Lines v. Southern Bus Line Co., 209 Ky. 40, 272 S.W. 18, and Harrison v. Big Four Bus Lines, 217 Ky. 119, 288 S.W. 1049, that a competing carrier on the highways in Kentucky between fixed termini, and who has qualified and equipped himself under the law for the conducting of transportation business, may maintain an action to prevent a rival transportation company from operating a similar and competing business without first obtaining the right to do so, as is prescribed by the prevailing law. Other jurisdictions with apparent unanimity appear to have adopted the same rule of practice, and we deem it unnecessary to incumber the opinion with a recitation of the foreign cases so holding.
A subsidiary contention in substantiation of this one is the invoking by defendant of what is known as the "clean hands" doctrine; i.e., that plaintiff is and was itself engaged in operating bus lines on some of the streets within the city without having obtained a specific franchise for the purpose, and that its hands were thereby rendered unclean, and for that reason it cannot maintain this action; but we are not so impressed. The "clean hands" doctrine is a wholesome tool of equity, and will always be applied to accomplish the purpose of its original creation in cases and transactions where it was made to serve; but it was never employed to sanctify litigants, or to repel all sinners from courts of equity. As said in the case of Dunscombe v. Amfot Oil Co., 201 Ky. 290, 256 S.W. 427:
Upon the same point as to the limitation of the application of the doctrine we said in the case of American Ass'n v. Innis, 109 Ky. 595, 60 S.W. 388, that:
"
The subject-matter involved in that case was title to certain real estate. One of the litigants sought to defeat his adversary because he had acquired his title from the commonwealth through some kind of alleged fraud, but which did not grow out of any transaction between the litigants themselves. The court denied the applicability of the doctrine and said:
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