Potter v. Calumet Elec. St. Ry. Co.

• Decision Date: 08 February 1908
• Docket Number: 24,467.
• Parties: POTTER v. CALUMET ELECTRIC ST. RY. CO. et al. CITY OF CHICAGO v. COBE.
• Court: U.S. District Court — Northern District of Illinois

158 F. 521

POTTER v. CALUMET ELECTRIC ST. RY. CO. et al. CITY OF CHICAGO v. COBE.

No. 24,467.

United States Circuit Court, N.D. Illinois, Eastern Division.

February 8, 1908

Theodore J. Brundage, Corp. Counsel, and Charles M. Haff, Asst. Corp. Counsel, for petitioner.

Pam &amp Hurd, for receiver.

SANBORN District Judge.

Petition for the payment by the receiver of the railway company of $18,000, claimed to be due under a contract between the company and the city dated November 18, 1895.

It appears from the petition that on November 11, 1895, the common council of the city of Chicago adopted an ordinance granting the railway company a license to extend its road over certain streets, on terms common to such ordinances, as to the time of completion, manner of construction, rates term of grant, etc. It provided that the company should pay an annual license fee of $50 per car and no more. The mayor was unwilling to approve the ordinance without the company would pay for the franchise, and, in order to induce his approval, the company executed and filed with him a contract reciting the passage of the ordinance by the council, and that the mayor was unwilling to approve it without the same should provide for a compensation to be paid to the city for the privileges under the ordinance granted by the city to the company. It provides that in consideration that the mayor shall approve the ordinance, and not return the same without his approval, the company covenants and agrees to pay $50,000 in certain installments, running through a period of 20 years. It is further provided that, in default of any payment continuing for 90 days, all the rights, privileges, and immunities of the ordinance granted shall at once absolutely cease and determine, the ordinance thereafter having no further force or effect in favor of the company.

The ordinance grants the right to the company to build its roads on 24 streets and avenues, among them 103d street. It appears from the recitals of the contract that a prior license had been granted to the Englewood & Chicago Electric Street Railway Company May 2, 1893, giving that company the right to construct and lay one or more lines of railways on 103d street, between Vincennes avenue and Michigan avenue. The right to lay tracks upon 103d street between such points having been granted by the ordinance to the Calumet Company and there being a question whether the Englewood Company had any prior right to construct a railroad on said street, it was provided in the contract that the Calumet Company would not construct or attempt to construct any tracks on 103d street without the consent and permission of the commissioner of public works, until it should first be judicially and finally ascertained and determined that the rights of said Englewood Company had lapsed and determined; but should the commissioner permit construction in said street by the Calumet Company before such adjudication, it was agreed that the company should remove its tracks upon any final judicial determination in favor of the Englewood Company; and in case said company should refuse to remove its tracks, the commissioner was authorized to do so.

The license to the Englewood and Chicago Electric Railway Company, referred to in the petition and contract, was dated May 2, 1893, and was accepted May 15, 1893. Section 3 provides that one track should be completed and in operation on 103d street (and certain other streets) within two years from the date when the ordinance should take effect; and that if the track was not so laid, and the road operated on such streets within two years, then the rights and privileges granted should, at the expiration of said time, as to any street not so built upon and the road so operated, wholly cease and determine, and revert and vest absolutely in the city. The road was not built on 103d street within the time limited. It was, however, a question of doubt whether the license to build had absolutely determined when the Calumet license was granted November 18, 1895. In Blocki v. People, 220 Ill. 444, 77 N.E. 172, Id., 123 Ill.App. 369, it was said that if the company fails to comply with the conditions of the ordinance as to the time of construction, without justifiable excuse, all its rights and privileges cease. In view of the question as to the prior rights of the Englewood Company in 103d street, the contract referred to was made to provide that the Calumet Company should not build in 103d street until it had been judicially and finally ascertained that the rights of the Englewood Company had lapsed and determined; but should the commissioner of public works permit construction by the Calumet Company before such adjudication, then the latter was to remove its tracks from that street upon any final judicial determination in favor of the Englewood Company.

On November 18, 1895, the same day that the ordinance in favor of the Calumet Company was finally adopted, the Englewood Company applied to the commissioner of public works for a permit to lay its tracks on a large number of streets, including 103d street, without giving any reason in the application for its delay. On December 11, 1895, the corporation counsel advised the issuance of a permit, except as to 103d street. In a communication to the commissioner, the corporation counsel stated that the Calumet Company claimed that the Englewood Company's rights as to 103d street had lapsed, and that the Calumet Company had made an agreement with the mayor that its own ordinance should not include 103d street unless the Englewood Company's rights should be found to have lapsed; and that the question must be determined by judicial proceedings. The communication further stated that it was possible that all the unexercised rights of the Englewood Company to lay tracks had lapsed, but this he regarded as not probable, because the city council had never attempted to declare any forfeiture of such rights, but, on the contrary, had on several occasions directed the Englewood Company to lay tracks on certain streets, thus clearly waiving the forfeiture. For these reasons he advised the issuance of such a permit except as to 103d street. The Englewood Company thereupon executed an agreement that in consideration of the issuance of such permit it would not claim any waiver through the issuance thereof, beyond what existed prior to its issuance, and that it would promptly commence and diligently prosecute a mandamus suit, or other appropriate proceeding, to obtain a judicial determination as to its rights in 103d street; and that the city should not be estopped from asserting a forfeiture of all rights conferred on the Englewood Company by its ordinance in consequence of the issuing of the permit. Pursuant to the advice of the corporation counsel, and the contract just stated, a permit was issued as prayed for December 12, 1895, covering all streets except 103d. On November 19, 1895, the Calumet Company also requested a permit to construct its road in 103d street, under its ordinance. The corporation counsel on December 26, 1895, submitted a communication reciting the agreement of the Englewood Company to obtain a judicial decision as to its rights in 103d street, but stating that no such action had been taken by that company, and that he had reason to believe that none would be taken, at least in the near future. That there was a public demand for street car facilities in 103d street, under one of the ordinances. The communication then proceeds:

'I therefore advise that a permit be now granted to the Calumet Electric Street Railway Company to construct and maintain its tracks in the above mentioned portion of 103rd street, subject to the agreement which the Calumet Company made with the mayor November 18, 1895, and subject, also, to a further condition, to which said Calumet Company should be required to agree, that said Calumet Company shall not have, and will not at any time, nor in any way claim to have, against the city of Chicago in consequence of the issuance of the permit or of any privilege exercised or expenditure made under the permit, any new or further or increased right, privilege, exemption or waiver beyond what it may now have prior to such permit under its ordinances of November 11, 1895, and under its said agreement of November 18, 1895.'

On March 10, 1896, the commissioner issued a permit, pursuant to the advice of the corporation counsel, to the Calumet Company, authorizing the construction of its road in 103d street. This permit contains the following provision:

'This permit is issued and accepted upon the condition that said work shall be done in accordance with and shall be maintained subject to all the conditions, stipulations and requirements of the ordinance hereinbefore mentioned, to all orders and ordinances which have been or which may be passed by the city council pertaining to the same and to all orders of the commissioner of public works; and upon the further express condition that a certain agreement made by said company (and in consideration of the execution of which this permit is granted) shall be considered a part of this permit as fully to all intents and purposes as if the same were here copied at length.'

The ordinance contained a provision that all tracks at all intersections of streets should be paved between the rails. The contract provided that this clause should be construed and made to read that all tracks at the intersection of streets should be paved between the rails and also between the tracks, wherever there should be two or more tracks at any street intersection. It will be noticed that the only provision in the contract which is directly antagonistic to the ordinance is the one in relation to 103d street....