State ex rel. Smith v. Duluth Street Railway Company
| Decision Date | 29 January 1915 |
| Docket Number | 19,095 - (20) |
| Parties | STATE ex rel. LYNDON A. SMITH v. DULUTH STREET RAILWAY COMPANY |
| Court | Minnesota Supreme Court |
Upon the relation of Lyndon A. Smith, Attorney General, the district court for St. Louis county granted its writ of quo warranto directing the Duluth Street Railway Co. to show by what warrant it assumed to exercise any right, privilege immunity or franchise under or by virtue of the legislative act of 1881 (Ex. Sess.) c. 200. The respondent answered and alleged that, by resolutions and ordinances and actions brought, the village of Duluth, the city of Duluth and the state of Minnesota repeatedly and in various ways asserted the continued existence and validity of respondent's franchise and enforced its provisions against respondent by requiring it to expend large sums of money thereunder in the construction of new lines and extensions. The matter was heard by Cant, J., who dismissed the writ. From the order denying its motion for a new trial, and from the judgment entered pursuant to the order for judgment, plaintiff appealed. Judgment and order affirmed.
Street railway -- franchise -- condition unfulfilled.
1. The Duluth Street Railway Co. did not construct, equip and have in operation one mile of its street railway within one year after the granting of its franchise, in accordance with the condition expressed in it.
Street railway -- forfeiture of franchise.
2. The franchise granted to the Duluth Street Railway Co. (Sp. Laws [Ex. Sess.] 1881, c. 200, approved November 17, 1881) was upon the express condition that if it failed to construct equip and have in operation one mile of street railway within one year it should, without any act on the part of the state or the village of Duluth, forfeit to the village all of the rights, privileges and immunities granted. It was provided that the grant, when accepted, should be a contract between the state and the village and the company. It is held that the forfeiture was not executed ipso facto upon a failure to perform the condition strictly on time, so that there could be no waiver of the strict performance of the condition, or of a forfeiture, but that the condition was in the nature of a condition subsequent subject to waiver.
Waiver of performance.
3. The village waived strict performance of the condition.
Construction of franchise.
4. The act of 1881 constitutes a valid franchise, exclusive in character, in the Duluth Street Railway Co., and such franchise expires on October 17, 1931.
Lyndon A. Smith, Attorney General, John C. Nethaway, Assistant Attorney General, Francis W. Sullivan, Davis, Kellogg & Severance and Harvey S. Clapp, for appellant.
Washburn, Bailey & Mitchell, N. M. Thygeson, Henry F. Greene and Thomas S. Wood, for respondent.
Quo warranto on the relation of the attorney general questioning the right of the respondent, Duluth Street Railway Co., to occupy the streets of Duluth. There was judgment for the respondent. The state appeals from the order denying its motion for a new trial and from the judgment.
The street railway company claims the right to occupy the streets of Duluth by the grant contained in Sp. Laws 1881, (Ex. Sess.) p. 212, c. 200, approved November 17, 1881.
Section 1 grants to the Duluth Street Railway Co. "during the term of its charter, the exclusive right and privilege of constructing and operating a single or double track for a passenger railway line," etc., in the streets of the village and its suburbs.
Section 2 is as follows:
"The aforesaid grant is upon the express condition that if the said Duluth Street Railway Company shall fail to construct, equip and have in full operation one mile of said street railway within one year after the passage of this act, then and in that case the said Duluth Street Railway Company shall, without any act on the part of the state or the village of Duluth, forfeit to the village of Duluth all of the rights, privileges and immunities granted by this act, and is upon the further express condition, that said company shall build and operate a line connecting Rice's point with the central parts of said village, as soon as there shall be an improved street available for that purpose."
Section 3 provides that, under certain conditions, the village council may designate extensions or new lines, and if not constructed by the company it may grant an exclusive franchise to another company; and if the company neglects to keep a line in operation the council may grant an exclusive franchise to another company to build and operate on such line.
Section 16 provides that upon the company signing and filing an acceptance of the grant with the secretary of state and the village recorder the same shall operate as a contract between the state and the village and the company.
On November 8, 1881, prior to the grant of the franchise, the people had voted upon and adopted an amendment prohibiting the granting of such a franchise by special act. Const. art. 4, § 33. This amendment did not become a part of the Constitution until the January following. City of Duluth v. Duluth St. Ry. Co. 60 Minn. 178, 62 N.W. 267. At the time fixed for the performance of the condition of the grant the legislature was without authority to grant a franchise.
On December 5, 1881, the Duluth Street Railway Co. filed with the recorder of the village, and on December 8, with the secretary of state, its written acceptance in accordance with the provisions of section 16.
The village of Duluth was created by Sp. Laws 1881, p. 49, c. 11, approved March 8, 1881. The authority delegated to it to grant rights in its streets for street railway purposes is as follows:
"To authorize, control and grant the power to construct street railways in the streets and avenues of said village by any private company or companies, and to control and direct the operation of the same by contract or ordinance."
At the time of the forfeiture claimed the village, by virtue of this charter provision, could grant a franchise. It could not grant an exclusive franchise such as the 1881 statute granted. Long v. City of Duluth, 49 Minn. 280, 51 N.W. 913, 32 Am. St. 547; Detroit Citizens' Street Ry. Co. v. Detroit Ry. Co. 171 U.S. 48, 18 S.Ct. 732, 43 L.Ed. 67. And it may be conceded that it could not, under its charter, bind itself to a provision for fares such as was embodied in the 1881 franchise.
By Sp. Laws 1883, p. 219, c. 80, § 3, approved March 5, 1883, the village charter was amended and the provision above quoted was omitted.
The Duluth Street Railway Co. was incorporated under the general laws on October 17, 1881. The period of its corporate existence was fixed at 50 years from that date. By an amendment of its articles adopted on March 18, 1910, the period of its corporate existence was extended to 50 years from July 1, 1908.
The state does not attack the general franchise of the company -- that is, its right to be a corporation and to exercise corporate powers. It attacks its right to use the streets of Duluth under the special grant of 1881; and the proceeding resolves itself into an inquiry into the validity of this grant.
In a general way the questions are these:
(1) Did the company perform the condition contained in its grant to the effect that it should construct, equip and have in operation one mile of its street railway within one year from the date of the grant?
(2) If it did not, was the forfeiture at once executed so that all rights were at an end, with no power in the village to waive strict performance or the right to claim a forfeiture?
(3) If...
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