The State ex rel. Kansas City v. East Fifth Street Railway Co.
| Citation | 41 S.W. 955,140 Mo. 539 |
| Parties | The State ex rel. Kansas City v. East Fifth Street Railway Company et al., Appellants |
| Decision Date | 06 July 1897 |
| Court | United States State Supreme Court of Missouri |
Appeal from Jackson Circuit Court. -- Hon. J. H. Slover, Judge.
Affirmed.
Johnson & Lucas for appellants.
(1) The corporation franchise may exist in full force, even though the corporation never acquires any property, or rights, and this corporate franchise is not property in the ordinary sense of the term, and can not be transferred by voluntary conveyance, or by sale under execution unless the statutes of the State so provide. Angell & Ames on Corp. [8 Ed.], secs. 4 and 737; 1 Waterman on Corp., sec. 4; 1 Woods' Railway Law, sec. 13; Stewart v. Jones, 40 Mo. 140; Bank v. Earle, 13 Peters (U.S.), 595; Morgan v Louisiana, 93 U.S. 223; People ex rel. Mayberry v Mutual Gas Light Co., 38 Mich. 154. (2) The ordinances set out in the information are simply contracts between the relator and the defendant, in which the State has no interest whatever, and may be canceled by a court of equity at the instance of the relator without the intervention of the State. State ex rel. v. Railroad, 85 Mo. 282; Railroad v. Springfield, 85 Mo. 674; City of Kansas v. Corrigan, 86 Mo. 67; Hovelman v Railroad, 79 Mo. 643; People v. M. G. Co., 38 Mich. 154; Att'y-Gen. v. Albion A. & N. Ind., 52 Wis. 469. (3) An information in the nature of a quo warranto can not be maintained to divest a corporation of its property rights, whether such rights were obtained by municipal ordinance or other contract. State ex rel. v. Hannibal G. R. Co., 37 Mo.App. 496; State ex rel. v. Miller, 66 Mo. 344; Railroad v. People, 73 Ill. 541; State v. Smith, 55 Texas, 447; People v. M. G. L. Co., 38 Mich. 154. (4) The opinion of the trial court and its judgment herein is predicated on the insolvency of the defendants alone, and on this fact the court finds and declares a forfeiture of contract rights. (5) Mere non-user for any length of time does not of itself work an abandonment. Roanoke Investment Co. v. Railroad, 108 Mo. 62; Barlow v. Railroad, 29 Iowa 276. (6) The defendant was subjected to annoyance, harassments and litigation, preventing the operation of its road, both by relator and third parties, and this was a sufficient excuse therefor. State ex rel. v. Cochrens, 25 La. Ann. 356; City of Chicago v. Railroad, 105 Ill. 73.
H. C. McDougal and C. O. Tichenor for respondent.
(1) That there is a difference between the charter and a franchise independent of it, there is no question, and this proceeding is based upon that distinction. Railroad v. Commissioners, 112 U.S. 619; Morgan v. Louisiana, 93 U.S. 223; California v. Railroad, 127 U.S. 40; City v. Wheeler, 88 Wis. 615; New Orleans v. Delamore, 114 U.S. 501; Wheat v. City, 88 Va. 743; Mobile v. Railroad, 84 Ala. 119; Williams v. Railroad, 130 Ind. 71. (2) These franchises must be of a public character as the city has no authority to grant its streets for a private use, and for private gain alone. Railroad v. Railroad, 105 Mo. 581; State v. Murphy, 34 S.W. 51. (3) These franchises come (indirectly, it is true) from the State. City of St. Louis v. Boffinger, 19 Mo. 13; Taylor v. City, 22 Mo. 105; Railroad v. Railroad, 105 Mo. 592; Transportation Co. v. Chicago, 99 U.S. 641; Port of Mobile v. Railroad, 84 Ala. 120. (4) To us it seems strange that one may contract for a proceeding in equity, when the facts demand a suit at law, or for a proceeding by mandamus when the facts call for a suit by replevin. If this be so, we can not see why parties can not contract, that in case of litigation upon the same, the appeal shall go to this court when the law says it shall go to the court of appeals. Fath v. Railroad, 105 Mo. 545; The Pres., etc. v. The State, 19 Md. 239; Capitol City Water Co. v. State ex rel., 102 Ala. 231. (5) Equity is not the remedy to enforce a forfeiture of a franchise, and cases cited by appellant do not show it to be so. Republican v. Brown, 19 U.S. App. 203; Att'y-General v. Tudor Ice Co., 104 Mass. 340; National Bank v. Matthews, 98 U.S. 628; Neiser v. Thomas, 99 Mo. 224; People ex rel. v. Hall, 80 N.Y. 117; Ames v. Kansas, 111 U.S. 459; Reed v. C. & O. Canal, 65 Me. 134; Chesshire v. The People, 116 Ill. 493; The State ex rel. v. Boal, 46 Mo. 531; The State ex rel. v. Jenkins, 25 Mo.App. 484; Kayser v. Trustees of Bremen, 16 Mo. 90; State ex rel. v. Westport, 116 Mo. 582; State ex rel. v. McReynolds, 61 Mo. 212. (6) Non-user of a franchise is ground for its forfeiture in a direct proceeding for that purpose. Counsel say that the court below gave judgment "on the insolvency of the defendants alone." This is not so. If a corporation does its duty to the public, lives up to the conditions of its franchises, it makes no difference to the public whether it is solvent or insolvent. Distilling, etc. Co. v. People ex rel., 156 Ill. 448; State ex rel. v. Meek, 129 Mo. 436; Roanoke Co. v. K. C. & Co., 108 Mo. 64. (7) Counsel says that there has been a waiver by the city. The city had no power of waiver. State v. Murphy, 34 S.W. 51; I. C. & B. R. Co. v. Railroad, 20 N.J.Eq. 69.
This is a proceeding by the State at the relation of Kansas City, Missouri, by Marcy K. Brown, prosecuting attorney of Jackson county, Missouri, by quo warranto to oust defendants of their corporate franchises granted to them by said city by ordinances, to construct, maintain and operate a street railway on certain streets in said city, upon the ground of their failure to comply with said ordinance, and the consequent forfeiture of their franchise rights under said ordinance.
The petition alleges that the relator was on the ninth day of May, 1889, and ever since has been, a municipal corporation under the laws of the State of Missouri having full power and control over its streets. That defendants are corporations under the laws of this State, except defendant Thornton, who is trustee in a deed of trust executed by the East Fifth Street Railway Company on the first day of November, 1890, on the franchises hereinafter described. That by certain ordinances passed by said city, the right was given and accepted by said defendant railway company to construct, maintain and operate a street railway on certain of its streets. That by reason of said ordinances the defendant railway company claims the right to maintain and operate a street railway over certain streets named in said ordinance, and had in fact laid its tracks on said streets. But that said railway company had failed for eighteen months prior to November 12, 1892, to run cars over said streets, and had never complied with the provisions of said ordinances, although notice was given by relator to said company to run cars over said streets, but that it refused and still refuses so to do. That said railway company has failed and neglected for more than eighteen months prior to November 12, 1892, to keep in repair its tracks and roadbed and permitted its tracks to become a nuisance and has abandoned the rights granted in said ordinances.
The answer admits the acceptance of the ordinances by the railway company and alleges that said ordinances constitute valid and subsisting contracts between said city and defendant railway company. The answer also admits that defendant railway company and defendant trust company are now and were during the dates mentioned in said information, corporations organized under the laws of the State of Missouri, and that the deed of trust mentioned in the information has not been released or satisfied, and that defendants by reason of said ordinances, claim the right to run, maintain and operate a street railway over the streets named in said ordinances. It then alleges that section 17 of ordinance number 42389 requires an action for forfeiture to be brought within six months after cause of forfeiture has arisen, and that causes are alleged in the information to have arisen eighteen months prior to the filing of the information. That defendant railway company was unlawfully prevented by the police of the city of Kansas from constructing its railway on Fifth street from Grand avenue to Main street, and was harassed by litigation, whereby its credit was impaired and its financial operations so embarrassed that it was unable to procure funds necessary to complete its railway, and was compelled to mortgage the same in its uncompleted condition to pay the loss sustained by reason of the acts of the city of Kansas, and to cease, temporarily, the operation of its cars, but intends to resume such operation at the earliest moment the financial condition of the public and itself will permit.
It appears from the record that in December, 1881, by an ordinance of Kansas City a franchise was granted to certain persons named in said ordinance, to construct and operate a street railway on certain streets in that city.
The franchise was to continue for twenty years; the company was to keep the tracks in repair and the spaces between the tracks and for eighteen inches on the outside well paved cars were to be regularly run for not less than sixteen hours per day, "during each and every day of the entire year." With the consent of the grantees of the franchise, a subsequent order was passed whereby the franchise was extended for thirty years from September 1, 1885, and the starting point fixed at Fifth street and Grand avenue, instead of Fifth and Main streets. In June, 1888, another ordinance was passed by said city which recites in its preamble, the following: "Whereas, the East Fifth Street Railway Company is the successor and owner of all franchises and ordinances above granted." This ordinance then, among other things,...
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