Schisler v. Merchants Trust Co. of Muncie

• Citation: 228 Ind. 594,94 N.E.2d 665
• Decision Date: 31 October 1950
• Docket Number: No. 28677,28677
• Parties: SCHISLER v. MERCHANTS TRUST CO. OF MUNCIE et al.
• Court: Supreme Court of Indiana

Page 665

94 N.E.2d 665

228 Ind. 594

SCHISLER v. MERCHANTS TRUST CO. OF MUNCIE et al.

No. 28677.

Supreme Court of Indiana.

Oct. 31, 1950.

Byron Emswiller, Albert Stump, Indianapolis, for appellant.

Scotten & Hinshaw, New Castle, George H. Koons, Muncie, for appellees George S. Koons and John R. Hines.

White & Haymond, Marshall E. Hanley, William H. Bales, Warner, Clark & Warner, Muncie, Ind., for appellees City Officials.

Warner, Clark & Warner, Muncie, for appellee Merchants Trust Co.

Thomas M. Scanlon, Jerry P. Belknap, Indianapolis, (Brown & Edwards, New Castle, Barnes, Hickam, Pantzer & Boyd, Indianapolis, of counsel), for appellee Wesson Co.

GILKISON, Judge.

This action was brought in two paragraphs by appellant to collect damages alleged to have resulted to her from the execution of an alleged civil conspiracy by appellees. It is alleged that this conspiracy wrongfully deprived her of a right to operate jitney busses on Congerville Route or Routes one and two, in the city of Muncie, Indiana, these routes being particularly described in the complaint. This alleged right is based upon the averred facts that on April 16, 1941 she was and had been the holder and owner of a certificate of public convenience and necessity to operate busses on these routes, and that she then held, and for many years prior thereto she had held a license to operate such busses, and had operated the same under such certificate and license, and was so operating the same at that time. That the city of Muncie by ordinance enacted in 1921 and an amendment thereto enacted in 1923; and by an ordinance enacted in 1925 among other things regulated the operation of jitney busses within the city, and the granting of certificates of public convenience and necessity after hearing by the Common Council, and provided that any jitney bus owner who had operated over a fixed route upon a regular schedule for ninety days prior to November 26, 1925, should be entitled to such certificate as a matter of right.

That appellant's husband shortly after the enactment of the 1925 ordinance, duly obtained from the city council a certificate of public convenience and necessity and a license to operate jitney busses on said routes, and immediately entered upon the operation of the jitney bus routes in accordance with the terms thereof and of the laws of the state, and purchased busses and other equipment therefor. These facts, it is averred, constituted a franchise or contract between the city and appellant's husband, John M. Schisler, now deceased, carrying with it the duties and obligations pertaining thereto as set forth in the ordinances and as fixed by law; that this alleged franchise or contract constituted a property right of great value. That plaintiff does not have and cannot obtain the original or a copy of such franchise or contract, and cannot make the same a part of the complaint for that That she believes the defendants have the original or copies thereof.

That John M. Schisler died August 26, 1934 testate, and bequeathed and devised to plaintiff, who is his widow, all his property. That on September 3, 1934 the Common Council of the city, by resolution, which is made Exhibit 'B' in the complaint, transferred to the executor of the will the certificate of convenience and necessity granted to John M. Schisler with authority in the executor to transfer it to plaintiff agreeable with the will, subject to the approval of the Probate Court of Delaware County. That in due time the executor transferred the alleged franchise to plaintiff with the approval of said Probate Court; that she accepted the same and thereafter regularly paid all the license fees required and continued to operate the jitney busses on the routes, expending large sums of money for busses and equipment. That she performed all the duties, obligations and covenants incumbent upon her under her contract, the several city ordinances, and the laws of the state until prevented therefrom by the appellees late in 1941. The acts of such alleged prevention are fully alleged in the complaint.

General demurrers by Merchants Trust Company, executor; George S. Koons, executor and John R. Hines; John D. Lewis, H. Lester Janney and William H. Bayles; Orville Sutton, Samuel L. Cunningham, Harold Stanley, Ora T. Shroyer, Ray Langdon, Kenneth Rutledge and Albert Stephens; and Wesson Company, were sustained by the court. Appellant refused to plead over and judgment was rendered against her that she take nothing and that appellees recover their cost. From this judgment the appeal is taken.

The first important question raised by the several demurrers is: Do the licenses alleged to have been granted appellant and her predecessors in manner and form as alleged in the complaint amount to a contract or franchise for any determinate or indeterminate period?

This court has held that a franchise is a privilege or immunity which can exist only by special grant of the state government, and is incapable of existing without such grant. It is, therefore, essential that a franchise should be a grant from the sovereign authority. There cannot be a franchise which is not derived from the legislative power of the state. State ex rel. Walker, Prosecuting Attorney v. Green, 1887, 112 Ind. 462, 472, 14 N.E. 352. See also 23 Am. Jur., Franchises, § 10, p. 722; 37 C.J.S., Franchises, § 2, p. 147, § 14(a), p. 156.

By statute every city and town in Indiana is given exclusive power over the streets, alleys, bridges and public grounds within such city or town, except when otherwise provided by law. Sections 48-503, Burns' 1950 Repl. Acts 1905, Ch. 129, § 267, pp. 219, 407, and § 48-7302, Burns' 1950 Repl. Acts 1905, Ch. 129, § 254, pp. 219, 396.

Wherever there is a statutory grant of authority or power to a city or town and no method is provided for the exercise of such authority or power, the common council of any city or the board of trustees of any town, may, by ordinance, provide such method. Section 48-501, Burns' 1950 Repl. Acts 1905, Ch. 129, § 270, pp. 219 409.

The Common Council of every city has power to enact ordinances to regulate, tax and license coaches, hacks, drays, automobiles and all other vehicles. Clause 32nd, Section 48-1407, Burns' 1933; also to license, tax and regulate public hackmen, draymen, omnibus drivers, carters, cabmen, porters, expressmen, bill-posters and all other persons pursuing like occupations for pay or hire and to prescribe their compensation, and to revoke any license for violation of such ordinance. Clause 38th, Section 48-1407, supra. Acts 1905, Ch. 129, § 53, pp. 219, 246, 252. See also Frick v. City of Gary, 1922, 192 Ind. 76, 83, 84, 135 N.E. 346.

Cities are authorized by statute to grant franchises for private gain by proceedings in which taxpayers have an opportunity to be heard thus: 'Whenever * * * the board of public works of any city,' or 'the common council of any city not having a board of public works, * * * desires to enter into a franchise, grant or contract granting the use over, under or along any public highway, street or alley, to any person, persons, firm or corporation, for personal or private gain, * * * such * * * board of public works,' or 'common council * * * shall determine the exact form in which such franchise, grant or contract is to be finally adopted, and thereupon, such * * * board of public works,' or 'common council * * * shall fix the time at which said franchise, grant or contract will be finally considered, which day shall be not less than fifteen (15) days thereafter. At said time and place, a public hearing shall be had, at which any taxpayer of such * * * city * * * may appear and file protest against any or all of the provisions of said franchise, grant or contract.' Publication of the purpose of, and the time and place of, the hearing with a full text of the proposed franchise, grant or contract is provided for. § 48-7303, Burns' 1950 Repl. Acts 1913, Ch. 108, § 1, p. 286. See also § 48-7302, Burns' 1950 Repl. Acts 1905, Ch. 129, § 254, pp. 219, 396 and § 54-601, Burns' 1950 Repl. Acts 1913, Ch. 76, § 97, pp. 167, 200, 1933, Ch. 190, § 9, pp. 928, 942.

Exhibit A of the complaint is an ordinance of the city of Muncie in effect on December 10, 1925, regulating the operation of jitney busses on the streets, avenues or highways in the city. It provided for the filing of an application for a license, the contents thereof, the payment of a yearly license fee and the amounts thereof. It provided that the applicant file a bond, indemnity undertaking, or policy of insurance for the year of the license to be issued, as provided by the ordinance. It provided penalties for violation of the provisions of the ordinance and repealed all conflicting ordinances. Exhibit F is an ordinance of 1935 amending this ordinance of 1925 or Exhibit A, but in all things, retaining its license features and not providing for the granting of any franchise or other contract, Exhibit C of the complaint is an ordinance passed on August 4, 1941 and signed by the mayor on August 5, 1941. Among other things it provides that thereafter no one should operate a bus upon the highways of the city, except pursuant to a franchise contract entered into with the Board of Public Works and Safety, ratified by the Common Council; that persons then operating busses might continue for the current year, if they made written application to do so within five days after the ordinance became effective; and provided for a refund of the unaccrued license fee paid. It also provided for penalties for violation of the ordinance, and for the repeal of all ordinances, resolutions, and action of the Common Council relating to the regulation and licensing of, and issuance of certificate of convenience and necessity for busses theretofore enacted. This ordinance was doubtless enacted to bring the relation between the city and bus operators within §§ 48-7303 to 48-7306, inclusive,...