Sioux City Street Ry. Co. v. Sioux City, 138 U.S. 98 (1891)
U.S. Supreme CourtSioux City Street Ry. Co. v. Sioux City, 138 U.S. 98 (1891)
Sioux City Street Railway Company v. Sioux City
Submitted January 8, 1891
Decided January 26, 1891
138 U.S. 98
On December 12, 1883, the City of Sioux City, in Iowa, by ordinance, conferred on a street railway company, incorporated December 6, 1883, under the general laws of Iowa, the right of operating a street railway, with the requirement that it should pave the street between the rails. Subsequently, under an act of 1884, the city, by ordinance, required the company
also to pave the street for one foot outside of the rails, and assessed a special tax against it for the cost of the paving outside of the rails. Held that there was no contract between the company and the state or the city the obligation of which was impaired by the laying of the tax.
Under section 1090 of the Code of Iowa, which was in force when the company was incorporated, its franchise was subject to such conditions as the legislature should thereafter impose as necessary for the public good.
The Sioux City Street Railway Company became a corporation on December 6, 1883, under the general incorporation laws of the State of Iowa. On the 12th of December, 1883, the City of Sioux City, by an ordinance of the city council, conferred upon the company the right to locate, operate, construct and maintain street railways upon and along certain streets in the city on the terms and conditions specified in such ordinance. Section 11 of the ordinance was as follows:
"SEC. 11. Whenever, by resolution of common council, any street or part of street on which said track shall be laid and operated shall be ordered paved or macadamized, either at the expense of the city or owners of abutting property, then the said proprietors of said street railway shall pave or macadamize in the time and manner directed the space between the rails, and shall thereafter keep the same between the rails in good repair, and shall keep in good condition and repair the space between the tracks on all bridges that they cross."
On the 18th of December, 1883, the company accepted the ordinance. Prior to March 18, 1884, the company had expended over $10,000 in constructing tracks on certain streets and for other purposes, and had contracted for material and supplies for constructing other tracks, and had its street railway in operation on certain streets, in accordance with the terms of the ordinance.
On March 15, 1884, the legislature of Iowa passed an act entitled
"An act granting additional powers to certain cities of the first class, with reference to the improvement of streets, highways, avenues, or alleys and to provide a system for payment therefor."
The 6th section of that act provided as follows:
"All railway companies and street railway companies in cities of the first class, as provided in section one of this act,
shall be required to pave or repave between rails and one foot outside of their rails at their own expense and cost. Whenever any street, highway, avenue, or alley shall be ordered paved or repaved by the council of any such city, such paving or repaving between and outside of the rails shall be done at the same time and shall be of the same material and character as the paving or repaving of the street, highway, avenue or alley upon which said railway track is located, or of such other material as said council may order, and when said paving or repaving is done, said companies shall lay in the best approved manner the strap or flat rail. Such railway companies shall keep that portion of the streets, highways, avenues, or alleys between and one foot outside of their rails up to grade and in good repair, using for such purpose the same material with which the street, highway, avenue, or alley is paved upon which the track is laid, or such other material as said council may order.
Laws of 1884, p. 22.
On January 15, 1886, the City of Sioux City became a city of the first class under the statutes of Iowa, and has continued to be such.
On the 11th of May, 1886, the city council passed an ordinance entitled
"An ordinance providing for tie paving of the streets between the rails of railways and street railways located thereon, and defining the manner of making special assessments to defray the cost and expenses thereof and the manner of enforcing and collecting the same,"
the first section of which provided as follows:
"SEC. 1. That whenever the city council, etc., shall cause to be paved any street, avenue, or alley whereon any railway has or shall be located and laid down, they shall also order and provide by resolution that the company or persons owning said railway or street railway, pave said street, avenue, or alley between the rails of said railway or street railway, and one foot each side the rails thereof at their own expense and cost, provided that the provisions of this section shall not in any manner be construed to affect any rights accrued or existing in favor of said railway companies or street railway company under any franchise or license heretofore granted under any ordinance heretofore
adopted by said city council."
Under this ordinance and a subsequent one passed May 25, 1886, and a resolution passed August 31, 1886, the city council ordered certain streets to be paved, including those parts as to which the assessments involved in this suit were imposed, and provided for assessing to the street railway company the cost of paving the space between the rails and one foot outside thereof.
The assessment of a special tax against the company for the cost of paving the space outside of the tracks was made December 27, 1886. Prior to that time, the company had paid for so much of the paving as lay between the rails of its tracks. In proper time after the resolution of August 31, 1886, was served upon the company, it filed its written objections thereto, as follows:
"The Sioux City Street Railway Company objects to the resolution ordering the assessment of a special tax against said company for the cost of paving one foot outside of its railway tracks in improvement districts 2 and 3. It objects to having the cost of paving one foot outside of the railway track charged to it, or to have same in any manner assessed against it or against its property, and to having any resolution or ordinance passed charging the cost of said paving to it, or making any assessment against it or against its property, or seeking in any manner to collect said cost from it, or making same a lien upon the title to any of the property, by any ordinance, resolution, or confirmation purporting to charge such cost against the said company or its property; that, by the terms of the charter granting the company the right to locate, construct, and maintain its said railway, it was expressly provided that the company should only be required to pave so much of the street wherein the track was constructed as should lie between the rails of said track, that the City of Sioux City thereby expressly contracted and agreed that this company should have the right to locate, construct, operate and maintain its said track in said streets, and should only be required to pave or keep in repair that portion thereof lying within the rails of its said tracks; that the said company, relying upon the charter and the ordinance granting it the right to locate and construct the tracks on the said
streets herein named and the provisions and conditions thereof, located, constructed, and has since operated its track and railway on the said streets, and has in all respects complied with all the conditions and requirements imposed upon it by said city by the said ordinance, and that said assessment of costs of paving one foot outside the rails of said railway tracks is a violation of the grant and contract of said city to and with this company, and is illegal and void.
Notwithstanding this, the city council, on the 15th of March, 1887, overruled the objections of the company and confirmed the assessment.
Under this state of facts, the company, on the 30th of May, 1887, filed in the District Court of the County of Woodbury, in the State of Iowa, its petition against the City of Sioux City and the City Council of Sioux City, setting forth the foregoing facts and averring as follows:
"That, by the terms of the charter granting to the plaintiff the right to locate, construct, and maintain said street railway, it was expressly provided that plaintiff should only be required to pave so much of the street whereon it constructed and operated its street railway as should lie between the rails of its said track, and the city thereby expressly contracted and agreed with plaintiff that, in consideration of its constructing and operating the said street railway over said streets, it should have the right so to do, and only be required to pave and keep in repair so much of the street as lies between its rails, and said company, relying on the ordinance and contract of said city, located and constructed at great expense said track, and has ever since operated and maintained the same, and the said ordinance and resolution requiring plaintiff to pay the cost of paving one foot outside of the track of the railway is a violation of said contract granting it the right to locate and construct the said railway. The said city council erred in passing said ordinance and resolution requiring plaintiff to pay the cost of paving one foot outside of their tracks, and erred in overruling their objections to the special charges and assessments made against said company for said cost of such paving and in determining that the said cost of such paving should be charged to said plaintiff and against the property, and erred
in confirming said special assessments.
The petition prayed for the issuing of an order for a writ of certiorari to the city council and for a reversal of its action.
On the 11th of February, 1889, the petition was amended by averring that section 6 of the Act of March 15, 1884, insofar as it sought to impose upon the company the paving of one foot outside of its track or to impose upon it the cost thereof, was a violation of Subdivision 1 of Section 10 of Article I of the Constitution of the United States, as impairing the obligation of a contract, and that the ordinances of May 11, 1886, and May 25, 1886, and the resolutions of August 9, 1886, and December 27, 1886, were a violation of the same subdivision.
The defendants filed a demurrer to the petition and amendment, as follows:
"That the facts stated herein do not entitle the plaintiff to the relief demanded, for that: 1. The said ground for relief, as stated in said petition and amendment thereto, is that the action of said city and its city council, in assessing the cost of paving of one foot outside the rail of the tracks of plaintiff's railway, impairs the obligation of the contract made between said city and plaintiff, while said petition and amendment thereto disclose that such is not the effect of said action of the city. 2. That said petition and amendment thereto show that, in making said assessment, the City of Sioux City, by its common council, only complied with the provisions of the law of the Iowa authorizing said assessment, and then in force. 3. That the said plaintiff took its charter as a corporation from the state subject to the reserved power of the state to abridge or modify said charter, and to regulate, withhold or impose any other conditions upon any franchise obtained by said corporation, and the said plaintiff took said franchise and ordinance from said city subject to the rights of said city to make any charge or assessment against its property which the legislature might provide by statute."
The district court sustained the demurrer, dismissed the petition, and confirmed the assessments. The plaintiff appealed to the Supreme Court of Iowa, which affirmed the judgment, its opinion being reported in 78 Ia. 367.
Section 1090 of the Code of Iowa, which was in force when the railway company became incorporated, provided as follows:
"SEC. 1090. The articles of incorporation, bylaws, rules, and regulations of corporations hereafter organized under the provisions of this title, or whose organization may be adopted or amended hereunder, shall at all times be subject to legislative control, and may be at any time, altered, abridged, or set aside by law, and every franchise obtained, used or enjoyed by such corporation may be regulated, withheld, or be subject to conditions imposed upon the enjoyment thereof, whenever the General Assembly shall deem necessary for the public good. "