Detroit v. Detroit Citizens' Street Railway Co.

after making the foregoing statement of facts, delivered the opinion of the court.

' A question has arisen at the outset as to the jurisdiction of a court of equity over a case like the one now presented. Assuming the right to relief in some form, has the complainant a plain and adequate remedy at law, or is the case such in its na

The averments in the complainant’s bill upon this subject, which are set forth in the above statement of facts, show the additional and special grounds upon which the jurisdiction in equity is invoked. Of course, if the complainant obey these ordinances, no controversy can arise, but if in good faith it believe them to be invalid and hence not binding upon it, and without resorting to the courts for equitable relief, it refuses to obey them, the consequences may be not only embarrassing but may lead to much unnecessary and expensive litigation. Continuous demands for the tickets mentioned in the ordinances at the reduced price therein provided for. maybe made by passengers while in the cars of complainant, and they may refuse to pay fare at the old rate, and may carry such refusal to the point of suffering removal from the cars on account of nonpayment of faré. "What amount of force would be necessary in the opinion of the various passengers to demonstrate that their going was not voluntary would of course give rise to disputes between them and the conductors, and would possibly, if not probably, lead to frequent breaches of the peace in the course of these attempts at removal. If not removed, then the passengers would either pay no fare or the complainant would have to accept the fare as provided in the ordinances of 1899, and that would be the same in fact as submitting to their enforcement.

The roads operated by complainant are also indebted to an extent of over eight million dollars, secured by mortgages upon the railways, their franchises, rights and privileges, together with the tolls and fares, earnings and profits arising therefrom,

The ability of the complainant' to renew or extend its mortgage indebtedness might depend upon belief in the validity of the contracts as to the rates of fare agreed upon before the attempted alteration thereof by the ordinances of 1899. The immediate enforcement of these later ordinances might result in such a decrease of income as to seriously imperil the solvency of the complainant. An equitable action. like this would certainly be more adequate and offer more effective and immediate relief than for the complainant to await the various actions at law to which it would otherwise be subjected b}A the defendants and the individuals demanding the reduced rates for transportation.

The mayor and corporation counsel have, as is seen, been joined with the city as defendants in the suit. The reason for the joining of the individual defendants would seem to be that they are the officers upon whom would devolve the execution of the ordinances passed by the common council, and in the answer of the defendants it is admitted that they intend to enforce obedience by the company to such ordinances. The case is similar in some of its aspects to that of Smyth v. Ames, 169 U. S. 466 . It is true there are no penalties fixed in the ordinances for disobedience to their commands on. the part of the company, but the bill shoAvs that there are a large number bf passengers carried over the roads of the complainant daily, amounting to many thousands, each of Avhom would have the right to demand transportation at the rates provided for by the ordinances in case they were valid. As is said in Smyth v. Ames, page 518, “ The transactions of a single Aveek Avould expose any company questioning the validity of the statute to a vast number of suits by shippers, to say nothing of the heavy

It is a matter of general public interest, as well as of vital importance to the complainant, that the question involved in this litigation should be determined at the earliest possible moment, and once for all, and thus a multiplicity of suits and other complications prevented.

Talcing all these facts into consideration, and bearing in mind that the answer does not set up any defence of the lack of jurisdiction of a court of equity'over the subject-matter, and does not insist that there is an adequate and plain remedy at law, (and no such objection has'been taken at anytime, and has not been insisted upon before us,) we do not feel compelled, under the peculiar circumstances of the case, to ourselves take notice of it.

It is not such a case as on its face equity could have no jurisdiction over, such as an action to recover damages for an assault, or for a libel or slander, but the question between the parties as to the validity of various ordinances and the right of the city to enforce them, involving, as they may, the credit and possibly the solvency of the complainant, and taking into consideration the public interests involved in a speedy and final determination of the question, all these as well as other facts already mentioned, we think, make out a case for following the' general rule, that a defence of this nature will not be recognized where it has not been taken by answer or in any other manner and is not insisted upon on the hearing before the court. Reynes v. Dumont, 130 U. S. 354 ; Kilbourn v. Sunder land, 130 U. S. 505 ; Brown v. Lake Superior Iron Co., 134 U. S. 530 .

.. We do not mean to assert that in all cases of this nature,.in

This brings us to a consideration.of the questions argued at the bar.

In furtherance of the claim by defendants that the ordinances of 1899 reducing the rates of fare are valid, it is urged that express authority from the legislature is required to enable the common council of a city to pass ordinances such as those described in this case, providing for the consent of the city to the laying of tracks and the running and operation of a ..railroad through its streets and the fixing of rates of fare, and that no such power was granted in this case, and if there were, there has been no agreement made by the passage of the ordinances referred to in the statement of facts. It may be conceded that clear authority from the legislature is needed to enable the city to make a contract or agreement like the ordinances in question, including rates of fare. But there can be no question in this court as to the competency of a state legislature, unless prohibited by constitutional provisions, to authorize a municipal corporation to contract with a street railway company as to the rates of fare, and so to bind during the specified period any future common council from altering or in any way interfering with such contract. New Orleans Gas Company v. Louisiana Light Company, 115 U. S. 650 ; New Orleans Waterworks Company v. Rivers, 115 U. S. 674 ; St. Tammany Waterworks v. New Orleans Waterworks, 120 U. S. 64 ; Walla Walla City v. Walla Walla Water Company, 172 U. S. 1 , 9; Los Angeles v. Los Angeles City Water Company, 177 U. S. 558 , 570; Freeport Water Company v. Freeport City, 180 U. S. 587 , 593. The contract once having been made, the power of the city over the subject, so far as altering the rates of fare or other matters properly involved in and being a part of the contract, is suspended for the period of the running of the contract.

It is, however, urged that the terms employed in the ordi-.

It will be seen that under section 34 of the Tram-railway Act, as it was enacted in 1861, a railway corporation organized under the act could not construct a railway through the streets of a city without the consent of the municipal authorities, “and under such regulations and upon such terms and conditions as said authorities may from time to time prescribe.'” Hence, it is argued that any terms or conditions under which the railway company obtained the consent of the municipal authorities might'by the same authorities be from time to time altered as they should in their discretion think fit.

In Pingree v. Michigan Central Railroad Company, 118 Mich. 314 ; also 76 N. W. Rep. 635 , decided in 1898, the Supreme Court of Michigan held that section 15 of the laws of 1846, relating to the incorporation of the Michigan Central Railroad Company and other sections mentioned in the act, which provided that the company might fix, regulate and receive tolls taken for the transportation of passengers or property on the railroad subject only to the limitation, as to passengers, of three cents per mile, etc., the company having the power to charge for tolls and transport-atAn such sums as might be lawfully established by the by-laws of the company, and the board of directors having power to pass all by-laws necessary .for carrying into execution all powers vested in the company, conferred a contract right on the corporation to fix tolls within the limits of three cents per mile, 'which right could not be violated by the acts of-a succeeding legislature.

These agreements had express legislative authority, not only under the Tram-railway Act, but also and particularly under the Street-railway Act of 1867. By the twentieth section of the latter act it was provided that the rates of toll or fare, which any street railway may charge for the transportation of persons or passengers over its road, should be established by-agreement between the company and the corporate authorities of the city or village where the road is located, and should not be increased without the consent of such authorities. The provisions of this section, among others, were by the twenty-ninth section of the act transferred to “ all companies and corporations heretofore organized in this State for the purpose of building and operating street railways under the statutes then in force, and shall have the same powers, rights of protection and privileges and shall be subject to all the liabilities as hereby provided for companies organized under the provisions of this act.”

It is plain that the legislature regarded the fixing of the rate of fare over these street railways as a subject for agreement between the parties ar d not as an exercise of a governmental

Coming to a consideration of the effect of the language used, we think it amounted to a contract as’ to rates of fare. The ordinance of 1879 and the similar ordinances thereafter passed relating to the other corporations, together with the Street-railway Act of 1867, and sections 20 and 29 thereof, make out plain agreements entered into between the parties in- relation, among other things, to-the rates of fare to be charged by those companies.. In the ordinance of 1879 and in the other ordinances under consideration, there were provisions made for special taxation of the companies which the Supreme Court of Michigan in Detroit Citizens’ Street Railway Company v. Common Council of the City of Detroit, 125 Mich. 673 , has held amounted to a contract between the parties which was as binding as though made by the legislature itself. Such decision by the Supreme Court of Michigan is entitled to very great respect and weight. If the ordinance constituted a contract between the parties in relation to taxes which were to be levied upon the company, we do not see any reason, in the language used providing for the rates of fare, for not holding that there is a contract as to those rates equally binding with that in regard to taxes.

In City Railway Company v. Citizens' Street Railroad Com p any, 166 U. S. 557 , the common council of Indianapolis, on January 18,1864, adopted an ordinance which said : “ Consent, permission and authority are hereby given, granted to and duly vested in the company organized with E. B. Catherwood as president, a body politic and corporate by the name of the Citizens’ Street Eailway of Indianapolis, and their successors, to lay a single or double track for passenger railway lines,” etc., under which ordinance the railway was built. This court

Although in that case there was no provision in the statute directing that the rates of fare should be established by agreement, yet nevertheless it was held that the language used amounted to an agreement upon the subject matter which could not be altered during its continuance by either party.

Upon this question considerable stress has been laid in the brief and in the arguments of counsel for the defendants upon the case of Georgia Railroad & Banking Company v. Smith, 128 U. S. 174 . The twelfth section of the charter to that company declared, among other things, that it should have the exclusive right of transportation or conveyance of persons, merchandise, etc., over the railroad to be constructed, and it provided that the charge of transportation or conveyance should not exceed fifty cents per one hundred pounds for heavy articles, and ten. cents per cubic foot on articles of measurement for every one hundred miles, and five cents per mile for every passenger. Permission was granted the company to rent or farm out any part of their exclusive right of transportation to any individual on such terms as might be agreed upon. Pursuant to that authority the company leased to one "Wadley for the term of ninety-nine years such privileges. Afterwards the legislature of Georgia created a board of railroad commissioners, (Laws of Georgia, 1879, p. 125,) and gave the board power to prevent

In the case at bar, however, the rates are fixed under the provisions of q. statute which declares that they shall be so fixed by agreement between the parties. The ordinance of 1879 adopts that of 1862 and reaffirms it. The rate of fare therein provided is made a rate under the ordinance of 1879, and that ordinance was adopted while the Street-railway Act was in force, and which specially provided for an agreement as to rates of fare, and the provisions of that act were transferred to the companies organized under the Tram-railway Act. It may very ' well be that language'uséd by a legislature in merely conferring authority upon a company to fix certain charges for fare might not be regarded as amounting to a contract, when the same language used by parties in fixing rates under a legislative authority and direction to agree upon them, would be regarded as

Nor does the language of the ordinance,- which provides that the rate of fare for one passenger shall not be more than five cents, give any right to the city to reduce it below the rate of five cents established by the company. It is a contract which gives the company the right to charge a rate of fare up to the sum of five cents for a single passenger, and leaves no power with the city to reduce it without the consent of the company. The language of section 20 in the Street-railway Act of 1867, which provides that the rate of fare agreed upon shall, not be increased without the consent of the city authorities, does not mean that the rate may be reduced without the consent of the railway companies, nor does it show the parties did not suppose there was a contract between them as to rates. That provision does not seem to perform any material function, because without it, the parties having agreed upon the subject of rates, it would follow that the agreement could not be altered by either party without the consent of the other. It may be that it was meant that the company, while unable to increase the rates of fare without the consent of the city authorities, had the right to reduce the rates afe it might please without consulting the city.

It was probably inserted from abundant caution, but in no event can it properly or fairly be regarded as an implied permission to the city authorities to reduce the rates of fare as agreed upon without the consent of the railway company. The reasons are obvious and need not be restated.

The amendment made to section 34 of the latter act in 1867 has been set forth in the statement of facts above made, but for convenience will be repeated here, as follows :

“ Provided further, that after such consent shall have been. given and accepted by the company or corporation to which the same is granted, such authorities shall make no regulations or conditions whereby the rights or franchises granted shall be destroyed or unreasonably impaired, or such company or corporation be deprived of the right of. constructing, maintaining and operating such railway in the streets in such consent and grant named pursuant to the terms thereof.”

Referring to this amendment, it is argued that the city had the right to pass these ordinances of 1899 as a regulation and condition for the operation of the road, unless the rights or franchises already granted to the company should thereby be destroyed or unreasonably impaired, or unless the company would be thereby deprived of the right of constructing, maintaining and operating its railway pursuant to the terms of the original consent, and such impairment is not alleged in the complainant’s bill. It is obvious that the additions to the original Tram railway Act made in 1861 and 1867 were laws in pari materia with the Street-railway Act passed in 1867, and should therefore be construed together to obtain the legislative meaning. _ -

_ Bearing in mind the provision of section 29 of the Street-railway Act, granting to other corporations the same powers as are given to the companies organized under that act, and coming to a consideration of the amendment to section 34 of the Tram-railway Act made in 1867, we find no inconsistency or contradiction between the two acts. The amendment to the thirty-fourth section prohibited the city from making any regulations or conditions whereby the rights or franchises of the company should be destroyed or unreasonably impaired, or whereby it

But the defendants raise the objection that section 29 of the Street-railway Act cannot be applied -to companies formed under any other act for the reason that to apply it to such companies would violate the state constitution, section 20 of article 4, which provides that “ no law shall embrace more than one object which shall be expressed in its title.”

The title of the Street-railway Act is “ An act to provide for the formation of street railways,” and the claim is made that the-provision of section 29, making the act applicable to other companies, is outside and beyond the object of the act as expressed in its title.

The meaning to be given to the constitutional provision was stated in People ex rel. Secretary of State v. State Insurance Company, 19 Mich. 392 , wherein Chief Justice Cooley, at page 398, said: .

“We must .give the constitutional provision a reasonable construction- and effect. The cohstitution requires no law to embrace more than one object, which shall be expressed in its title. Now, the object maybe very comprehensive and still be

without objection, and the one before us is of that character, Rut it is by no means essential that every end and means necessary or convenient for the accomplishment of the general object should be either referred to or necessarily indicated by the title. All that can reasonably be required is that the title shall not be made to cover legislation incongruous in itself, and which by no fair intendment can be considered as having a nécessary or proper connection.”

Similar provisions are to be found in the constitutions of several of the States, among them that of New Jersey, and the meaning of such provision was brought before this court in Montclair v. Ramsdell, 107 U. S. 147 , and it was held that the provision did not require a detailed statement or index or abstract of its contents in the tibié of an act, and that it did not prevent uniting, in the same act, numerous provisions for one general object fairly indicated by its title.

The constitution of Illinois contains a similar provision, the construction of which also came before this court in Jonesboro City v. Cairo &c. Railway Company, 110 U. S. 192 , 198. In that case this court said, through Mr. Justice Harlan:

“ The title of the act is {An act to amend the charter of the Cairo and St. Louis Railroad Company.’ The contention is, that the legalization of an election previously' held, and at which the people voted in favor of a subscription of stock to that company, and the granting of authority to issue bonds in payment of such subscription, is not a subject expressed by the title of the act. In this view we do not concur, and our conclusion is justified by the latér decisions of the Supreme Court of Illinois construing a similar provision in the state constitution of 1870. It was held in Johnson v. People, 83 Illinois, 431, that the constitution does not require that the subject of the bill must be specifically and exactly expressed in the title; hence we conclude that any expression in the title which calls attention to the subject of the bill, although in general terms, is all that is required.”

We have examined the various cases cited by counsel for the defendants, arising in the State of Michigan under the constitutional provision in question, and it is sufficient to say that

Still another objection is raised by the defendants to the validity of the ordinances passed in 1879 and 1880 and 1885, by Avhich the poAvers and privileges conferred and the obligations imposed upon the railway companies by the former ordinances were extended and limited to thirty years from the date of the supplemental ordinances, the objection being that the extending of

This was matter of agreement between the parties! The franchise to be a corporation came from the State, and all that the company required from the city was its consent to the laying down of the rails and the operation of the road through the streets of the city, and'such consent was to be given upon terms and conditions to be agreed on. This consent, when given, became a privilege or franchise granted to the corporation, and was property belonging to it. By the ordinance of 1879 the ' duties and obligations of the company therein mentioned were largely increased, additional taxes were provided for, and also extensions of its tracks' as stated in the ordinance. The company also agreed to furnish all the materials and do all the paving mentioned at its own expense. One inducement to the company t,o agree upon and accept this ordinance ivas that the term which the city had originally consented to for the use of its streets by the company should be extended to thirty years from the date of the new ordinance. Although the company ' itself, by the act under which it was incorporated, was limited in its corporate life to a term of thirty years from the date of its organization in 1862, the extension of the term of consent by the city cai’ried such.consent about sixteen years beyond its then corporate life. Of course, no one contends that this.extension of the term for the use of the streets of the city in any manner affected the limit of the term of the corporate life of the company,, but the limitation of its life did not prevent it from taking franchises or other property, the title to which would not . expire wit!, die corporation itself. A corporation whose corporate existence was limited to a term of years could always purchase the fee in property which'it needed for the operation of its business. If at the end of its term its life wTere. not extended, the property which it owned was an asset payable to the shareholders after the payment of its debts,- and in a case like the present, where the consent was assignable and transferable, partiéularly by .virtue of section 15 of the Street-railway Act. abové set forth, any company itself having corporate exist

The case above cited in the Circuit Court of Appeals for the Sixth Circuit, it.will be noticed, is between the same.parties as the case at bar, and if the judgment therein had been pleaded or put in evidence .upon the trial of this action, we cannot now see why it would not have been res adjudicata between the parties in this suit upon that question, at least as to the particular road then under discussion.

In City of Detroit v. Ellis, Attorney General, 103 Michigan,

The further objection is made that under the power of alteration and repeal, provided for in the constitution of Michigan and under the terms of the various ordinances giving power to the common council in certain cases to provide for further rules and regulations, the right is reserved to the common council to alter the rates of fare provided for in the various- ordinances under consideration, as it alone may regard reasonable and just, without the consent of the company.

The constitution of the State of Michigan, article 15, section 1, provides: “ Corporations may be formed under general laws, but shall not be created by special act except for municipal purposes. All laws passed pursuant to this section may be amended, altered or repealed.” Counsel for the defendants contends “ that the regulation of rates of fare or toll upon the street railway is a governmental function, delegated by the legislature of the State of Michigan to the municipalities, and no matter in what form-such delegation of power may be exercised, whether by ordinance or an assumed contract, it is nevertheless a law, subject to alteration, amendment or repeal. It has not been the policy of the State of Michigan since the adoption of the present constitution to permit irrevocable legislation. The State cannot do it itself, and if it cannot, surely one of its creatures, like a city, cannot-be permitted to do that'which its creator is prohibited from doing.”

We haye already-seen that the legislature was competent to

The legislature has not attempted to- interfei’e with the rights of the street railway companies in Detroit, and hence the extent of its- power so to do is not involved in this case.

We are then- brought to the question of the reservations in the ordinances themselves. An examination of. them leads us to the conclusion that not one provided or was intended to pro.vide for a power to alter an agreement in relation to the rates of. fare entered into between the parties. The right from time to time to make such further rules, orders or regulations as to the common council may seem proper, cannot be held to extend to the alteration of a contract as to the rate of fare which shall be charged for the transportation of passengers. We think, as was stated by the court below,, that this reservation permitted the city to make further rules or regulations than ’those contained in the ordinances, in regal’d “ to all matters incident to the construction and operation of the road, such as the location of the tracks in the streets, the placing of switches and turn tables, the repair of the pavement between the tracks,. the removal or limitation of the number of tracks, in the interest of public travel, the frequency with which cars should be run for the public convenience, the stopping of cars at street crossings, the use of fenders, the rate of speed to be maintained, the sale of tickets, and generally to details of the conduct and operation of the railway, which experience might show to be necessary, in addition to or in amendment of those specified in the consent, for the protection of life, the accommodation of the pub-

The fixing of rates is, as we have already said, among the most vital portions of the agreement between’the parties contained in thé ordinances. It cannot be supposed for one moment, with regard to a right so fundamental in its nature, that there was any intention to permit the common council in its discretion to thereafter make an alteration which might be fatal to the pecuniary success of the company. For the reasons already given, we think the language used does not, in fact, give any such power to the common council. The ordinances of 1899 are, so far as this record shows, the first wherein the common council has assumed to make any change in the rates of fare without the assent of the company to be affected thereby. From 1862 until 1899 there seems to have been no attempt to exercise this alleged power of alteration by the common council without the consent of the railway company. While the rate of fare existed as agreed upon between the city and" the railway company', expenditures involving millions of dollars -were entered upon, changing the mode of transportation from animal to electric power, and no claim seems ever to have been made on the part of the city of a right of alteration to be exercised in accordance only with its own views of reason and propriety. This in itself is a strong implication of the want of any süch power under the various reservations set forth in the foregoing statement of facts and contained in the ordinances specified. But aside from that and considering only the nature of the right itself growing out of the agreement as to fares, we áre of the opinion that not one of the reservations of the right to make further rules or regulations could by any fair construction' be held, to include the right on the part of the city at its own pleasure to reduce the rates of fare agreed upon in those.ordinances.

We have thus answered the chief objections of the city to. the maintenance of this action. Some others have been made, which we have examined, but do not think it necessary to fur

¥e think the conclusions arrived at by thé court below are correct, and its judgment is, therefore,

Affirmed.