Cleveland Elec. Ry. Co. v. Cleveland
204 U.S. 116 (1907)

Annotate this Case

U.S. Supreme Court

Cleveland Elec. Ry. Co. v. Cleveland, 204 U.S. 116 (1907)

Cleveland Electric Railway Company v. Cleveland

Nos. 197, 321

Argued November 12-13, 1906

Decided January 7, 1907

204 U.S. 116

Syllabus

Grants of franchises are usually prepared by those interested in them and submitted to the legislatures with a view to obtain the most liberal grant obtainable, and for this and other reasons such grants should be in plain language, certain, definite in nature, and contain no ambiguity in their terms, and will be strictly construed against the grantee. Blair v. Chicago,200 U. S. 400, 200 U. S. 471.

The Ohio Legislature has granted the City of Cleveland comprehensive power to contract with street railroad companies with regard to the use of its streets and length of time, not exceeding twenty-five years, for which such franchise may be granted. Cleveland v. City Railway Co.,194 U. S. 517; Cleveland v. Electric Railway Co.,201 U. S. 529.

The action of the City Council of Cleveland, and the acceptance by the Cleveland Electric Railway Company of the various ordinances adopted by the council did not amount to a contract between the city and the company extending the time of the franchise involved in this action, and a later ordinance affecting that franchise after its expiration as originally granted is not void under the impairment clause of the federal Constitution.

In the absence of any provision to that effect in the original franchise, the city granting a franchise to a street railway company cannot, on the expiration of the franchise, take possession of the rails, poles and operating

Page 204 U. S. 117

appliances; they are property belonging to the original owner, and an ordinance granting that property to another company on payment to the owner of a sum to be adjudicated as its value is void as depriving the owner of its property without due process of law.

This bill was filed in the United States Circuit Court for the Northern District of Ohio on the twenty-first of March, 1905, against the City of Cleveland and the Forest City Railway Company for the purpose of obtaining an injunction to restrain the city from carrying out a certain ordinance relating to the Garden Street branch of complainant's railroad, passed by the City Council January 11, 1904, on the ground that it was null and void because it impaired the obligations of various contracts which the complainant alleged had been entered into between the complainant and the city, providing for the use until either July 13, 1913, or July 1, 1914, of certain streets by the railroad owned by the complainant, and known as the Garden Street or Central Avenue branch, and hereafter called the Garden Street branch. The ordinance granted to the Forest City Railway Company (a stranger to the original grants) the renewal right to maintain and operate the existing street railroads through the streets named therein, which were the same streets theretofore granted to the Garden Street Railroad. The right was granted upon condition that the grantee should pay to the owners of the poles and other property being in the streets an amount to be agreed upon therefor or such sum as should be finally adjudicated upon by a court. A temporary restraining order was granted. The defendants made separate answers, denying the existence of any contract between the complainant and the city upon the subject of the Garden Street branch subsequent to March 22, 1905, and the Forest City Railway Company claimed under the ordinance of January, 1904, the right to take possession of such Garden Street branch after March, 1905, and to use the tracks of the complainant's railroad. The case was heard upon the pleadings and various ordinances and resolutions of the council of the city.

Page 204 U. S. 118

After hearing, a decree was made by the circuit court (137 F. 111) which decreed that the right claimed by the complainant to operate its Garden Street branch railroad in the streets named in the bill expired on the twenty-second day of March, 1905. It was also decreed that the ordinance of January 11, 1904, was inoperative so far as it assumed to confer upon the defendant the Forest City Railway Company any legal right to take the tracks, poles, wires, and appliances erected and maintained by the complainant in the streets, because such ordinance authorized the taking of the property of complainant without due process of law. The railroad company therefore was enjoined from interfering with the complainant in the peaceable possession of the property mentioned, and the city was enjoined from attempting in any manner, by virtue of the ordinance, to put the defendant the Forest City Railway Company into possession of the same. From the decree, the complainant and both of the defendants appealed directly to this Court, as involving questions arising under the Constitution of the United States. The complainant's appeal is No.197, and is from that portion of the decree which adjudges that the right of the complainant to maintain and operate its Garden Street branch railroad expired on the twenty-second of March, 1905. The cross-appeal of the defendants is from that portion of the decree which enjoins the Forest City Railway Company from taking possession of the property described, and which also enjoins the city from in any manner attempting to put that company into possession thereof. It thus appears that the whole controversy turns upon the question whether the right of the Garden Street Railroad terminated March 22, 1905, or lasts until July 1, 1914, or possibly only until July 13, 1913.

The record shows that there are, among others, two lines of railroad belonging to the complainant, one of which is known as the Euclid Avenue, sometimes called the "main" line, and the other the Garden Street branch. Both lines run from east to west through the city in different, though generally parallel, streets up to the point of their intersection at Erie Street and

Page 204 U. S. 119

Euclid Avenue (or Prospect Street) from which point west, for a short distance, to the public square and Water Street, the Garden Street branch is authorized to use the Euclid Avenue tracks.

The following (among many other) ordinances and resolutions of the council of the city were put in evidence on the trial, together with the various resolutions of complainant, in which it accepted such ordinances and resolutions. These constitute the case between the parties, and there is no contradictory evidence. Complainant contends that the Garden Street grant must be measured in time by that provided for the termination of the Euclid Avenue grant.

The ordinances and resolutions relating to the Euclid Avenue line will be first stated. The first is a resolution which granted to the East Cleveland Railroad Company, a corporation incorporated February 28, 1859, for that purpose, the right to construct and operate a railroad from a point on Prospect Street at its intersection with Erie Street, to the eastern terminus of Prospect Street, which grant was for the term of twenty years from September 20, 1859. The company, having obtained the necessary consents of the property owners along the line, duly located, constructed, and operated the road under that resolution and within a short time after it was authorized so to do.

This was the commencement of what is known as the Euclid Avenue, or sometimes (after 1868) the main line of one of the roads owned now by the complainant.

By ordinance, April 15, 1862, the company was authorized to extend its line from the intersection of Erie and Euclid Streets west to the public square.

September 15, 1879, an ordinance was passed which granted a renewal of the franchise to the East Cleveland Railroad Company to maintain and operate its whole Euclid Avenue street railroad as far as Willson Avenue, on the east, for a period of twenty-five years from September 20, 1879 (September 20, 1904). This ordinance makes no reference to the Garden Street line, which had then been built and was in operation, and does not mention any of the streets through which that line passed,

Page 204 U. S. 120

although the Garden Street line had the right, under the ordinance of 1868, hereinafter mentioned, to use the tracks of the Euclid Avenue line from the point of junction therewith westerly to its terminus.

On the fourth of April, 1883, another ordinance was passed, granting to the East Cleveland Railroad Company the right to extend, lay, and operate its double track on Euclid Avenue from the west line of Willson Avenue easterly to the east line of Fairmount Street, the right granted to terminate on the twentieth of September, 1904, "with the said renewal of that part of said company's line lying west of Willson Avenue." Ordinance of September 15, 1879, above referred to.

By ordinance of March 15, 1886, another grant was made to the Euclid Avenue line east of Fairmount Street, which grant was to cease and terminate upon the twentieth of September, 1904, "as provided for said company's tracks in Euclid Avenue, west of Fairmount Street."

In order to change from animal power to electricity an ordinance was passed July 13, 1888, granting to the East Cleveland Street Railway Company the right to construct and operate an electric street railway on Euclid Avenue from Willson Avenue easterly to the city limits, and on Cedar Avenue from a point near the Cleveland & Pittsburg Railway, company's right of way in that avenue, easterly to a point about 1,500 feet east of Fairmount Street. The permission was given on the condition that the grant was to be exercised within six months from the passage of the ordinance. The grant was also upon condition that, if the company, from any cause, should fail to extend the electric system over its entire main and Cedar Avenue lines within eighteen months from the date of the passage of the ordinance, then the ordinance should be void. Nothing in the ordinance was to be construed as authorizing any increase in the fare for transportation over any portion of the company's line. The sixth section of the ordinance stated that the privilege of constructing the electric system, as provided in the ordinance, was granted

"in consideration of the improved facilities

Page 204 U. S. 121

hereby contemplated and the large expenditures necessary to secure the same, and shall be in force for the period of twenty-five years from and after the date of the passage of this ordinance, upon its main and Cedar Avenue lines."

The right to change to electric power, as given by the foregoing ordinance, was confined, it will be observed, to that portion of the Euclid Avenue line east of Willson Avenue, and on Cedar Avenue to that part lying between the Cleveland & Pittsburgh Railway Company's right of way and a point 1,500 feet east of Fairmount Street. Nothing west of Willson Avenue is included in that grant.

On May 13, 1889, a resolution was adopted which authorized and required the railroad company, "as soon as practicable, to extend the use of such motive power over its main and Cedar Avenue lines to the westerly termini thereof." This included those lines west of Willson Avenue, and under the ordinance and resolution the Euclid Avenue line was changed to an electric street railroad within the times mentioned in the ordinance and resolution.

There was no extension of time granted by the resolution of 1889 for the termination of the grant on any portion of the Euclid Avenue line.

On July 17, 1893, the right was given to the company to extend its road at the intersection of Prospect and Erie Streets to the intersection of Prospect and Ontario Streets, and also at the intersection of Superior and Seneca Streets, thence along Seneca, Lake, and Ontario Streets, and the council imposed upon it the duty, if required by the council, of operating its cars over the entire length of any of the lines. Other duties were imposed upon it. Complainant contends that some part of this ordinance refers to a portion of the Garden Street extension, and that it requires the operation of all the Garden Street cars over these tracks, and the grant is to terminate at the time mentioned in the 1888 ordinance -- July 13, 1913.

The above list includes the material ordinances and resolutions pertaining particularly to Euclid Avenue.

Page 204 U. S. 122

After the Euclid Avenue line had been built, the council, on the fourteenth of January, 1868, passed a resolution granting its consent to the East Cleveland Street Railroad Company to lay down its tracks from the intersection of Prospect and Brownell street, "to connect with the main line of its railroad," running thence through Garden and other streets to and across Willson Avenue, to the eastern boundary of the city, during the period of twenty years. Willson Avenue was then the eastern boundary of the city. The road could continue to use and occupy the streets, avenues, and public grounds over which its main line was then constructed and operated westerly from the junction (at Brownell and Prospect Streets) of said road with the main line to its westerly terminus, for the same length of time.

This Garden Street line was thereafter built, and it is asserted that it was the inception of a new and separate street railroad. It has been extended at various times since, and forms, with its various extensions, what is called the Garden Street branch, and is the railroad in question.

On the thirtieth of March, 1868, the railroad company was permitted by ordinance of the Village of East Cleveland to construct a branch railroad on Garden Street, which would form an extension, in fact of the Garden Street line easterly through the village to the line of Wade Street. The grant was for twenty years from the time of the completion of the work, which was to be completed within five years from the date of the passage of the resolution granting the right -- March 30, 1868.

On the twenty-fifth of March, 1873, the council passed a resolution, in the preamble of which it was stated that the East Cleveland Railroad Company desired and proposed to connect their Garden Street branch with the main line of their road at the intersection of Erie and Prospect Streets, and thereupon the council granted to the railroad company the

"right to lay down a double track street railroad in Ohio street from their present track in Brownell Street to Erie Street, and in Erie Street,

Page 204 U. S. 123

from Ohio Street to Prospect Street, to connect with their main track at this point."

This made a junction at Erie and Prospect Streets, with the Euclid Avenue Railroad, instead of at Brownell and Prospect Streets -- a small difference as to length of road.

On the twenty-third of May, 1876, the council authorized the East Cleveland Railroad Company to extend the Garden Street branch of its road at the easterly end thereof along Garden Street to Baden Avenue thence to Quincy, along Quincy to New, and along New Street to Garden Street, there to connect with the Garden Street tracks. The ordinance provided that the right therein granted should continue for twenty years from that date.

This extension placed a track in Quincy Street from Baden to New Street, which was a very short distance. It did make a different date for the termination of the grant than was provided for the rest of the branch, and it was to be operated "in connection with said branch and its main line." No increase of fare was to be charged by the company on any part of its branch or of its main line or extension by reason of the extension.

In the year 1880, on the twenty-second of March, the council passed an ordinance authorizing the East Cleveland Railroad Company to extend the Garden Street branch of its railway from the then-existing track at the intersection of Baden Avenue and Quincy Street, on and along said Quincy Street, in an easterly direction to the intersection of Quincy Street and Lincoln Avenue,

"and to equip and operate the said extension and its Garden Street branch for the period of twenty-five years from and after the passage of the ordinance."

When this ordinance was passed, the eastern limits of the City of Cleveland had been extended, so that the territory covered by the grants to the Garden Street line was at that time included in the City of Cleveland.

In 1885, February 9, the council passed an ordinance permitting the East Cleveland Railroad Company

"to extend its

Page 204 U. S. 124

Garden Street branch from the intersection of Quincy Street and Lincoln Avenue, in an easterly direction, to Woodland Hills avenue, . . . and equip and operate said extension as a single track railroad, with all necessary switches, turnouts, and turntables"

in connection with said branch and its main line, and terminating with the grant for the main line, but with the express condition that "no increase of fare shall be charged by said company on any part of its main line, or on said extension, by reason of said extension."

On the seventeenth of June, 1887, the council granted another extension to the Garden Street branch on Garden Street from Baden Avenue easterly to Lincoln Avenue, the grant to terminate "with the grant for the Garden Street main line," and no extra fare.

On the tenth of March, 1890, the council passed an ordinance which "granted the right to operate its Garden Street branch by electricity" from and to the points named in the ordinance, and this grant was "to operate by electric power the said Garden Street branch during the term of its present grant for said Garden Street branch." Both roads were thereafter operated as electric street railroads.

On the thirtieth day of March, 1891, another ordinance was passed, authorizing the railroad company

"to operate a second or additional track in and upon Central Avenue (Garden Street) from the east line of Willson Avenue to the Cleveland & Pittsburg Railroad tracks."

It was provided that the "right herein granted shall be valid until the expiration of the grants for the said company's main line."

On the twentieth of April, 1891, an ordinance was passed which authorized the railroad company to "operate a second or additional track in and upon Quincy Street from New Street to Woodland Hills avenue." This was part of the Garden Street line. Section 3 of the ordinance contained the provision that the

"right herein granted shall be valid until the expiration of the grants for said company's tracks on said Quincy Street east of Lincoln Avenue; to-wit, July 13, 1913. "

Page 204 U. S. 125

These are the material ordinances which particularly relate to the Garden Street Railroad.

During March and April, 1893, the complainant herein was organized as a consolidation of several street railroads, which, it is enough to say, included, among others, the Euclid Avenue and the Garden Street lines, and on the twenty-second day of May, 1893, the consolidated railroad company (this complainant), through its vice-president, addressed a communication to the council stating that the various consolidations had been made under advice of counsel, but inasmuch as some question seemed to have arisen as to the intention of the company, it was stated that the company did not claim any rights greater than the constituent companies forming the organization; that it intended to obey all ordinances to which each and all the constituent companies were subject, and that it had, since the consolidation had been effected, issued transfer checks to all persons desiring them, to enable such persons to have a continuous ride from any East Side line to any South Side or West Side line, and from any South or West Side line of the company to any East Side line, for one fare, and would continue such system of transfers where it could not better accommodate its patrons by such through lines as it might establish, and that it disclaimed all intention of charging more than one fare for any such continuous ride, "and that its aim has been and will be to give its patrons vastly improved service and accommodations by reason of such consolidation."

The council thereupon, by resolution, consented to the consolidation of the various railroad companies named in the resolution under the name of the Cleveland Electric Railway Company, upon the condition that

"only one fare shall be charged for a continuous ride on or over any line of railway formerly owned by any other of said constituent companies within the limits of the City of Cleveland, and passengers on any of such lines paying one fare shall be entitled, without extra or additional charge, to be transferred to any other of said lines and have a continuous ride thereon for said single fare."

The conditions

Page 204 U. S. 126

contained in the resolution were thereafter accepted by the complainant in writing.

On the nineteenth day of February, 1894, the council adopted

"an ordinance granting permission to the Cleveland Electric Railway and the Cleveland City Railway Company to extend their tracks in Willson Avenue."

This avenue runs north and south and crosses many of the avenues in which some of the constituent companies of the consolidated road had laid their tracks.

The ordinance granted each railroad company the right to extend its double track railroad along Willson Avenue from and to the various points named in the ordinance, and the road was to be constructed and operated in connection with the existing tracks in Willson Avenue as a double track street railroad. The two companies named in the ordinance were to jointly construct and maintain the road, and each was to have the right to occupy and use the track, wires, etc., of the other company then in Willson Avenue on such terms and conditions as the council might deem just and reasonable, unless the companies should otherwise agree. Provision was then made for the running of through cars on Willson Avenue between certain points, and night cars were to be operated by the companies throughout the entire length of Willson Avenue. A passenger on any car operated on any part of said Willson Avenue was to have the right, on the payment of one fare, without additional or extra charge, to be transferred to any other line of either of said companies intersecting or coming to said Willson Avenue, and was to have a continuous ride thereon, with the right, without additional charge, to be transferred from said second line to a car on any other line of either of these companies intersecting or coming to Willson Avenue, and was to be entitled, without additional or extra charge, to be transferred to the Willson Avenue line and to have a continuous ride thereon. Regulations were made for the paving of certain portions of the street by the company under the direction of the city authorities, and provision was made for widening the roadway on Willson Avenue

Page 204 U. S. 127

between certain points named, and for setting back curbs, hydrants, etc., all of which was to be done at the expense of the companies, which were also to comply with and perform all the general ordinances of the city relating to street railroads, then or thereafter in force. By § 10 it was provided that the grant should be in force until the first day of July, 1914.

On the twenty-fifth of June, 1894, the council passed

"An Ordinance Granting the Cleveland Electric Railway the Right to Extend and Operate Its Double Track Street Railroad in Quincy Street from New Street to Willson Avenue."

This ordinance provided for the extension and operation by the Cleveland Electric Railway Company of a double track street railroad on and along Quincy Street, from its then present tracks thereon, westerly to Willson Avenue, connecting by curves with its Willson Avenue tracks. The sixth section provided that "this grant shall terminate with the grant for said company's present line in Quincy Street."

These ordinances and resolutions are those which particularly relate to the extent of the grants to the railroad company for the Euclid Avenue and for the Garden Street lines. Other ordinances and resolutions were passed, showing, in connection with those already in evidence, as insisted upon by the complainant, the existence of a general system for the operation of the roads owned by the complainant, including the Euclid Avenue and Garden Street lines, as a unit, and the necessity existing for operating all of the lines in connection with each other for the life of the longest grant. And it is insisted that this was the obvious intention of the council, to be gathered from the various ordinances, among them those especially above adverted to.

Page 204 U. S. 129

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