Where the complainant does not base the contract alleged to have
been impaired upon the original ordinance granting the franchise
which reserved the power of altering fares, but asserts that the
contracts impaired resulted from subsequent ordinances which
deprived the municipality of exercising the rights reserved in the
original ordinance, the circuit court has jurisdiction of the suit
as one arising under the Constitution of the United States.
The passage by the municipality of an ordinance affecting
franchises already granted in prior ordinances amounts to an
assertion that the legislative authority vested in it to pass the
original ordinance gave it the continued power to pass subsequent
ordinances, and it cannot assail the jurisdiction of the circuit
court on the ground that its action in impairing the contracts
which resulted from prior ordinances was not an action by authority
of the state.
In view of the continuous confusion, risks, and multiplicity of
suits which would result from, and the public interests and vast
number of people which would be affected by, the enforcement of an
ordinance reducing the rates of fare of street railways, which
ordinance the companies claim is unconstitutional as impairing the
obligation of the contracts resulting from the ordinances granting
the franchises, a court of equity has jurisdiction of an action to
enjoin the enforcement of the ordinance, especially when the
ordinance affects only a part of the system, and would engender the
enforcement of two rates of fare over the same line, leading to
dangerous consequences.
In this case, it was held that the consolidated ordinance of
February, 1885, of the City of Cleveland, and ordinances thereafter
passed by the municipality and accepted by the companies,
constituted such binding contracts in respect to the rate of fare
to be exacted upon the consolidated and extended lines of the
railway companies as to deprive the city of its right to exercise
the reservations in the original ordinances as to changing the
rates of fare, and the ordinance of October 17, 1898, reducing the
rate of fare to be charged, was void and unconstitutional within
the impairment clause of the Constitution of the United States.
This suit was brought in the circuit court to restrain the
Page 194 U. S. 518
enforcement of an ordinance of the City of Cleveland, passed
October, 1898, fixing the rates of fare to be charged by the
appellee on a portion of its line of street railroad.
The bill based the right to relief upon two grounds -- that is,
a violation of the contract clause of the Constitution of the
United States, and of the due process clause of the Fourteenth
Amendment, the latter because the rates fixed by the ordinance, if
enforced, would be confiscatory.
After hearing, a temporary injunction was allowed. The court, in
stating its reasons, confined them exclusively to the alleged
impairment of the obligations of contracts, and decided that it was
unnecessary to consider the rights alleged under the Fourteenth
Amendment. 94 F. 385.
Both parties thereupon amended their pleadings so that, upon the
face of the record, the facts concerning the alleged impairment of
contract rights appeared as found by the court in awarding the
temporary injunction. The bill as amended, however, also reiterated
the facts originally claimed to constitute a violation of the due
process clause of the Fourteenth Amendment. The pleadings being
thus amended, the complainant moved as follows:
"The above-named complainant, The Cleveland City Railway
Company, now comes and moves the court to enter final decree in its
favor as prayed for in the amended bill of complaint herein,
adjudging the ordinance in said amended bill of complaint
described, entitled "An Ordinance to Provide for a Diminution of
the Rate of Fare under section 7 of an Ordinance Passed August
25th, 1879, entitled
An Ordinance Granting a Renewal of
Franchise to the Kinsman Street Railroad Company to Reconstruct,
Maintain and Operate its Street Railroad in and Through Certain
Streets of the City of Cleveland,'" passed October 17, 1898, to be
null and void and of no effect in that, as appears by the amended
bill of complaint and the admissions of the amended answer herein,
said ordinance is in violation of the contract obligations existing
between the complainant and the defendant herein, and impairs the
contract rights of the
Page 194 U. S.
519
complainant, in violation of the Constitution of the United
States."
"Complainant further shows that, upon the amended bill, amended
answer, and replication, it is entitled to the decree without a
determination of any of the matters in respect to which issues are
raised by the amended answer of the defendant herein."
The court granted this motion for the reasons which it had
expressed in the opinion by it delivered on the allowance of the
temporary injunction. A final decree was thereupon entered
perpetually enjoining the enforcement of the assailed ordinance.
Because of the constitutional question, the case was then appealed
directly to this Court.
Page 194 U. S. 523
MR. JUSTICE WHITE, after making the foregoing statement,
delivered the opinion of the Court.
As will appear by the statement just made, whilst two grounds
under the Constitution of the United States were asserted in the
bill as originally filled and as amended, the cause was in effect
submitted to the court for decree upon one of the constitutional
grounds alone -- that is, the alleged impairment of the obligations
of certain asserted contracts. Conceding that the alleged rights
based on the due process clause were not waived, but were merely
reserved for future action, it is manifest that the motion of the
complainant for decree on the face of the pleadings confined the
controversy exclusively to the alleged contract rights, and we
shall therefore treat the case as if it solely involved such
rights. The facts necessary to a determination of the question of
contracts
Page 194 U. S. 524
and their impairment appear on the face of the pleadings, and
may be summarized as follows:
On August 25, 1879, an ordinance was passed by the City Council
of Cleveland granting to the Kinsman Street Railroad Company, an
Ohio corporation, a renewal franchise for twenty-five years from
September 20, 1879, to reconstruct, maintain, and operate its
street railroad in and through certain streets of the City of
Cleveland. The ordinance was duly accepted. A section of the
ordinance was as follow:
"SEC. 7. Said company shall not charge more than five cents fare
each way for one passenger over the whole or any part of its line,
but said company may charge a reasonable compensation for carrying
packages; the council, however, reserves to itself the right to
hereafter increase or diminish the rate of fare as it may deem
justifiable and expedient."
In 1880, another Ohio corporation, known as the Woodland Avenue
Railway Company, then operating a line of street railroad under
several grants from the City of Cleveland, became, by purchase, the
owner of the Kinsman Street Railroad, and thereafter operated such
road.
The Woodland Avenue Railway Company, in May, 1883, was granted
by ordinance the right to construct an extension of its line, and
provision was made in the ordinance for a charge of one fare over
the entire line, including the extension. The extension was built
and operated as required by the ordinance.
At the time the ordinance extending the Woodland Avenue road
just referred to was passed, there was in existence another Ohio
corporation, styled the West Side Street Railroad Company,
operating a line of railroad in Cleveland under a franchise granted
by the City Council of Cleveland for a term of twenty-five years
from February 10, 1883. This road was independent of the Woodland
Avenue Railway Company, and operated its cars chiefly upon the west
side of the Cuyahoga River, the Woodland Avenue line being upon the
east side. There was no exchange of traffic between the roads by
way
Page 194 U. S. 525
of transfers, and each was charging a fare of 5 cents over its
line. In 1885, with this condition of affairs existing, the roads
named were consolidated as the Woodland Avenue & West Side
Street Railroad Company, and the consolidated company became vested
with all the property, rights, and privileges of the two
constituent companies. The ordinance, the acceptance of which
accomplished such consolidation, was as follows:
"An Ordinance to Fix the Terms and Conditions Upon Which the
Railway Tracks of the West Side Street Railroad Company and the
Tracks of the Woodland Avenue Railway Company and Said Companies
May Be Consolidated."
"SEC. 1. Be it ordained by the City Council of the City of
Cleveland that the consent of the city is hereby given to the
consolidation of the West Side Street Railroad Company and the
Woodland Avenue Railway Company on the following conditions:"
"The said consolidated company to carry passengers through
without change of cars by running all cars through from the
workhouse on the Woodland Avenue Railway to the point on the West
Side Street Railroad where Condon Avenue crosses Lorain Street,
and, when practicable in the judgment of the council, to do
likewise on the branches of the consolidated line, and that for a
single fare from any point to any point on the line or branches of
the consolidated road no greater charge than five cents shall be
collected, and that tickets at the rate of eleven for fifty cents
or twenty-two one dollar shall at all times be kept for sale on the
cars by conductors."
"SEC. 2. Said consolidated company shall be subject to all the
liabilities, conditions, and penalties to which said several
companies are liable, and said consolidated company and its tracks
shall at all times, be subject to the control, regulation, and
supervision of the city council, to the same extent that the same
several companies and their tracks are now liable."
"SEC. 3. This ordinance shall take effect and be in force from
and after its passage and legal publication, the filing with
Page 194 U. S. 526
the city of a written agreement accepting and agreeing to the
terms thereof, signed by the proper persons for the companies
consolidated, and the payment to the City of the expenses of
printing and publishing this ordinance."
"Passed February 16, 1885."
By ordinance dated April 8, 1887, duly accepted, the Woodland
Avenue and West Side Street Railroad Company was authorized to lay
an additional track and extend its line of railroad. The first
section of the ordinance reads as follows:
"SEC. 1. Be it ordained by the City Council of the City of
Cleveland that the Woodland Avenue and West Side Street Railroad
Company, its successors and assigns, be and the same is hereby
authorized and empowered to lay an additional track in Franklin
Avenue, between Pearl Street and the westerly line of Franklin
Circle, and to extend its line of railroad to Franklin Avenue from
the westerly line of Franklin Circle to Kentucky Street, as a
single track railroad, and connect with the tracks of said company
in Kentucky Street, as shown on a plan accompanying the petition of
said railroad company, and referred to the board of improvements
March 14, 1887, and to equip and operate said extension as herein
provided, but on the express condition that no increase of fare
shall be charged by said railroad company on any part of its main
line or on said extension, and so that but one fare, not to exceed
five cents, shall be charged between any points on said company's
main line or extension, including the extension herein granted, and
said company shall sell tickets on its cars as follows: Eleven (11)
tickets for 50 cents, and twenty-two (22) for one dollar. And the
right herein granted shall terminate with the present grant of the
main line, to-wit, on the tenth day of February, 1908."
By ordinance dated August 12, 1887, duly accepted, the Woodland
Avenue and West Side Street Railroad Company was authorized to
build, equip, and operate an extension of its road therein provided
for, the first section containing a provision as to rates of fare
and the time of expiration of the right
Page 194 U. S. 527
granted, similar to that contained in the first section of the
ordinance of April 8, 1887, above quoted. The said railroad company
also duly accepted an ordinance, passed on or about June 20, 1892,
by the City Council of Cleveland, relating to the laying of an
additional track on Kinsman Street, and the first section of the
ordinance contained a similar provision to that embodied in the two
ordinances last referred to, respecting rates of fare and the time
when the right granted should expire.
Prior to May, 1893, besides the Woodland Avenue and West Side
Street Railroad Company, there existed in Cleveland a railroad
corporation known as the Cleveland City Cable Railway Company. This
corporation, as the successor in right of previous corporations,
operated two street railroad lines, one by horsepower and the other
by cable, and each of said lines charged a cash fare of five
cents.
In June, 1893, with the approval of the Common Council of the
City of Cleveland, the Cleveland City Cable Railway Company and the
Woodland Avenue and West Side Street Railroad Company became a
consolidated corporation under the name of the Cleveland City
Railway Company, the complainant in this cause. By the
consolidation, it was provided that the lines should be operated as
one system, that proper transfers should be issued, and that but
one fare should be charged for a continuous passage upon any
portion of the consolidated lines.
It is admitted that, as the result of the various ordinances and
consolidations above referred to, the corporations ceased to charge
a cash fare of five cents for riding over the roads embraced in the
Kinsman Street Railroad ordinance of 1879, and on the other roads
which had been at that time in existence, and, on the contrary, in
consequence of the ordinances and authorized consolidations, there
was charged only five cents for a ride over the whole system or
systems, and tickets were sold and transfers issued as provided in
the various ordinances. It is not asserted that the corporations at
any time failed to perform the additional obligations imposed upon
them by the various ordinances passed subsequently to 1879.
Page 194 U. S. 528
On October 17, 1898, an ordinance was adopted by the Council of
the City of Cleveland, reading as follows:
"An Ordinance to Provide for a Diminution of the Rate of Fare
Under Section 7 of an Ordinance Passed August 25, 1879, Entitled
'An Ordinance Granting a Renewal of Franchise to the Kinsman Street
Railroad Company to Reconstruct, Maintain, and Operate Its Street
Railroad in and Through Certain Streets of the City of
Cleveland.'"
"Whereas, the city council did, on the 25th day of August, 1879,
pass an ordinance entitled"
"An Ordinance granting a Renewal of Franchise to the Kinsman
Street Railroad Company to Reconstruct, Maintain, and Operate Its
Street Railroad in and Through Certain Streets of the City of
Cleveland,"
"by which ordinance said Kinsman Street Railroad Company, its
successors, and assigns, were authorized to reconstruct, maintain,
and operate its double-track street railroad, commencing on
Superior Street at the intersection of Water Street, thence to and
around the southwest corner of Monumental Square to Ontario Street;
thence through Ontario Street to and through a portion of Broadway
Street to Woodland Avenue (formerly Kinsman Street), thence through
said Avenue to Madison Avenue, subject to certain conditions and
limitations; and"
"Whereas, it was ordained, as part of these conditions and
limitations (section 7), that"
"said company shall not charge more than five cents fare each
way for one passenger over the whole or any part of its line, but
said company may charge a reasonable compensation for carrying
packages, the council, however, reserves to itself the right to
hereafter increase or diminish the rate of fare as it may deem
justifiable and expedient;"
"and"
"Whereas, the council does now deem justifiable and expedient a
diminution of the rate of fare, therefore --"
"SEC. 1. Be it ordained by the City Council of the City of
Cleveland, that the rate of fare for a single continuous passage
over the lines, and all extensions thereof, operated under the
aforesaid grant to the said Kinsman Street Railroad Company,
Page 194 U. S. 529
be, and is hereby, fixed at four (4) cents cash far over the
whole or any part thereof."
"SEC. 2. For the better accommodation of the public, any person,
company, or corporation operating said line of railway under said
grant shall at all times keep on sale on the cars, when in
operation, tickets good for a single continuous passage over said
lines and all extensions thereof at the rate of seven tickets for
twenty-five cents."
"SEC. 3. This ordinance shall take effect and be in force from
and after its passage and legal publication."
And this ordinance is the one complained of, the enforcement of
which the final decree below enjoined.
Bearing the facts above stated in mind, we come to consider the
merits of the case. Before proceeding, however, to do so, we must
dispose of contentions made below and reiterated in the argument in
this Court concerning the jurisdiction of the circuit court.
The alleged want of jurisdiction in the circuit court is based
upon two propositions -- first, that the suit is not one arising
under the Constitution of the United States, and second that the
subject matter of the suit is not within the cognizance of a court
of equity.
The argument in support of the first contention presents a
two-fold aspect: (a) that, as the reduction of fares provided in
the assailed ordinance only related to carriage over that portion
of the consolidated road which was formerly owned by the Kinsman
Street Railroad Company, no impairment of the obligation of a
contract could or did arise, because, in the ordinance of 1879,
there was an express reservation of the right of the city to alter
the rates of fare as to the road affected by that ordinance.
The proposition is without merit. It assumes a false issue, and
upon that erroneous premise the challenge to the jurisdiction is
based. The complainant did not rely upon a contract arising from
the ordinance of 1879, but upon the contracts alleged to have
resulted from the subsequent ordinances which,
Page 194 U. S. 530
it was in substance asserted, had deprived the city of the power
to exercise the right reserved in the ordinance of 1879, and it was
these subsequent contracts which it was contended were impaired by
the assailed ordinance.
(b) That there was no jurisdiction, even although the
complainant relied upon contracts arising from the ordinances
adopted subsequent to that of 1879. To constitute the impairment of
a contract within the sense of the Constitution, it is correctly
argued, requires that some subsequent action taken by the state or
under its authority should have been given effect as against the
contract. The argument is that, as there had not been delegated by
the State of Ohio to the City of Cleveland independent authority to
reduce rates of fares on street railroads, and as the power
asserted by the assailed ordinance was based solely on the right
reserved in the ordinance of 1879, it follows that the assailed
ordinance, even if unwarranted, was not an impairment of a contract
right in the constitutional sense.
This proposition is in conflict with the one just considered,
and in effect assumes that the defense of the city was without
merit, and hence there was no jurisdiction. But, irrespective of
the assumption upon which it rests, the proposition is untenable,
and the argument by which it is sought to be sustained is somewhat
wanting in consistency. The passage by the city of the assailed
ordinance necessarily amounted to an assertion on its part that the
legislative authority vested in it to pass the ordinance of 1879
gave the continued power to pass subsequent ordinances executing
the rights initiated by the ordinance of 1879, despite the
ordinances which had supervened. This, in its very essence, was the
assertion of a delegated power to legislate against the contracts
embodied in the ordinances relied upon. We have said that the
argument is somewhat wanting in consistency, because the contention
of the city on the record is that the ordinances asserted as
contracts, passed subsequently to 1879, did not deprive the city of
the continued power to exert authority as to rates, because
Page 194 U. S. 531
the statutes of Ohio prevented the city from abrogating, by the
subsequent contracts, the rights reserved in the ordinance of 1879.
And this is but to assert that, as a consequence of the continued
effect of the legislation of the State of Ohio, the city had the
power to pass the assailed ordinance even although it had
apparently disabled itself from so doing by the passage of many
ordinances adopted after 1879 and up to the time when the assailed
ordinance was passed. These considerations distinguish this case
from
Hamilton Gas Light & Coke Co. v. Hamilton,
146 U. S. 258, and
St. Paul Gas Light Co. v. St. Paul, 181 U.
S. 142, relied upon by the appellant.
Respecting the contention that the case presented by the record
was not within the jurisdiction of a court of equity, it suffices
to say that, in view of the controversies, confusion, risks, and
multiplicity of suits which would necessarily have been occasioned
by the resistance of the complainant to the enforcement of the
ordinance, and in view of the public interests and the vast number
of people to be affected, the case was one within the jurisdiction
of a court of equity. This conclusion is, we think, besides,
inevitable when it is borne in mind that the ordinance in question
did not purport to reduce rates of fare upon the consolidated line,
but was made operative alone upon a section of that line, and
therefore necessarily would have engendered the enforcement of two
rates of fare over the same line, leading to consequences dangerous
to the public interest, peace, and tranquillity, the extent of
which it would be difficult in advance to perceive. And this, we
think, brings the case directly within the principle by which
jurisdiction in equity was maintained in
Detroit v. Detroit
Citizens' Street Railway Co., 184 U.
S. 368.
We come, then, to the merits. For convenience of reference, we
copy in the margin
* pertinent
sections of the Revised Statutes
Page 194 U. S. 532
of Ohio, embracing all which, either directly or indirectly,
during the period covered by the ordinances set out in the bill,
vested the Municipal Council of Cleveland with power to
regulate
Page 194 U. S. 533
or to contract in respect to the rates of fare to be charged by
street railways.
The statutes show that there was lodged by the legislature
Page 194 U. S. 534
of Ohio in the Municipal Council of Cleveland comprehensive
power to contract with street railway companies in respect to the
terms and conditions upon which such roads might be constructed,
operated, extended, and consolidated, the only limitation upon the
power being that in case of an extension or consolidation no
increase in the rate of fare should be allowed.
That, in passing ordinances based upon the grant of power
referred to, the Municipal Council of Cleveland was exercising a
portion of the authority of the state, as an agency of the state,
cannot in reason be disputed. If, therefore, the ordinances passed
after August, 1879, and referred to previously, which ordinances
were accepted by the predecessors of the complainant, with whom it
is in privity, constituted contracts in respect to the rates of
fare to be thereafter charged upon the consolidated and extended
lines (affected by the ordinances) as an entirety, it necessarily
follows that the ordinance of October, 1898, impaired these
contracts.
The question for decision, then, is did the consolidated
ordinance of February, 1885, and the ordinances thereafter passed
and accepted, already referred to, constitute binding contracts in
respect to the rates of fare to be thereafter exacted upon the
consolidated and extended lines of the complainant?
That, in the courts of Ohio, the acceptance of an ordinance of
the character of those just referred to is deemed to create a
binding contract is settled.
Railway Co. v. Village of
Carthage, 36 Ohio St. 631, 634;
Columbus v. Street
Railroad Co., 45 Ohio St. 98. But let us consider the question
without
Page 194 U. S. 535
treating the Ohio decisions as conclusive. It is undoubtedly
true that, immediately before, and for a long time prior to, the
passage of the ordinances concerning the various consolidations and
extensions referred to, the respective roads affected thereby were
charging a cash fare of five cents over their respective lines, and
that the effect of the consolidations and extensions was to secure
to the public the benefit of a cash fare of five cents over the
whole length of the consolidated and extended lines.
Now, undoubtedly, the Common Council of Cleveland, in
authorizing the extension and consolidation of the lines of street
railroads in question, did so because, in its opinion, such
extensions and consolidations would operate beneficially to the
public.
See, near the close of section 2505, Ohio
Rev.Stat., previously inserted in the margin. That, in exercising
these powers, it was the intention of the city to avail of the
authority conferred by section 3443 of the Revised Statutes of
Ohio, "to fix the terms and conditions upon which such railways may
be constructed, operated, extended, and consolidated," and that it
was also the intention of the city to execute binding agreements in
respect to the rates of fare to be thereafter charged by the
railroad companies, will, we think, become clearly apparent by
considering the language employed in the ordinances. Thus, in the
Ordinance of February 16, 1885, fixing the terms and conditions
upon which the West Side Street Railroad Company and the Woodland
Avenue Railway Company, and the tracks of those companies, might be
consolidated, it was specifically provided
"that, for a single fare from any point to any point on the line
or branches of the consolidated road, no greater charge than five
cents shall be collected, and that tickets at the rate of eleven
for fifty cents or twenty-two for one dollar shall at all times be
kept for sale on the cars by conductors."
The acceptance of this ordinance by the railroad companies
affected thereby was required to be in writing, and filed with the
city. Like provisions were contained in the ordinance of April 8,
1887, authorizing the laying
Page 194 U. S. 536
of an additional track and the extension of the lines of the
Woodland Avenue & West Side Street Railroad Company, and there
was also a declaration, following the authorization of the
extension and the rates to be charged on the whole line, that "The
right herein granted shall terminate with the present grant of the
main line, to-wit, on the tenth day of February, 1908." The
ordinance of August 12, 1887, authorizing a further extension, and
the ordinance of June 20, 1892, authorizing the double-tracking of
a portion of the line, contained similar language.
In reason, the conclusion that contracts were engendered would
seem to result from the fact that the provisions as to rates of
fare were fixed in ordinances for a stated time, and no reservation
was made of a right to alter; that, by those ordinances, existing
rights of the corporations were surrendered, benefits were
conferred upon the public, and obligations were imposed upon the
corporations to continue those benefits during the stipulated time.
When, in addition, we consider the specific reference to
limitations of time which the ordinances contained, and the fact
that a written acceptance by the corporations of the ordinances was
required, we can see no escape from the conclusion that the
ordinances were intended to be agreements binding upon both
parties, definitely fixing the rates of fare which might be
thereafter charged. Taking all the circumstances above referred to
into account, the case before us clearly falls within the rule as
to the binding character of agreements respecting rates applied in
Detroit v. Detroit Citizens' Street Railway Company,
184 U. S. 368, and
approvingly referred to in
Knoxville Water Co. v.
Knoxville, 189 U. S. 437.
This being the case, the question is whether the ordinance of 1898
impaired the obligations of those contracts.
By the assailed ordinance the City of Cleveland, assuming to
assert continuing delegated power, and upon the theory that the
subsequent contracts were void as to that power, disregarded the
provisions for consolidations, extensions, etc., and
Page 194 U. S. 537
whilst retaining all the benefits procured by the ordinances for
the public, reduced the cash and ticket fares over the portions of
the line embraced in the ordinance of 1879, of the Kinsman Street
Railroad, which had long since lost its identity and become merged
with other roads. That this was an impairment of the contracts
embodied in the prior ordinances we think is free from doubt.
Finally, it is contended that the ordinances embodying the
contracts were void insofar as they attempted to deprive the city
of the continuing legislative power to act on the reservation
contained in the ordinance of 1879. This is based on the assumption
that the right reserved in that ordinance to increase or reduce
rates of fare was an obligation and liability imposed upon the
railroad corporation within the meaning of section 2502 of the
Revised Statutes of Ohio, declaring that a municipal corporation
should not, during the term of a grant or renewal thereof, release
the grantee from any obligation or liability imposed by grant. But
it has been held in Ohio, on reasoning commending itself, that a
modification of a contract between a municipality and the owner of
a street railroad, made in good faith, for the better accommodation
of the public, is not void by virtue of said section 2502 of the
Revised Statutes of Ohio.
Clement v. Cincinnati, 16 Weekly
Law Bulletin 355 (decided June 14, 1886, by the General Term of the
Superior Court of Cincinnati; leave to file a petition in error
refused by the Supreme Court of Ohio, on January 17, 1888. 19
Weekly Law Bulletin 74).
It is further contended
"that any attempt to treat the consent to extensions,
consolidations, or change of motive power as renewals of the rights
renewed by the ordinance of 1879, must be nugatory in view of the
positive provisions of the statute above cited, which confer upon
municipal corporations power to make such renewals only at the
expiration of existing grants."
This contention has also been passed upon by the courts of Ohio,
construing the provisions of the Revised Statutes of that state
relied upon, and it has been held that renewals
Page 194 U. S. 538
may be made before the expiration of the original grant.
State v. East Cleveland Railroad Company, 6 Ohio Circuit
Court Rep. 318, affirmed by the Supreme Court of Ohio without
opinion, 27 Weekly Law Bulletin 64.
Concluding, as we do, that the ordinance of 1898 impaired the
obligations of contracts entered into by the City of Cleveland
fixing the rate of fare to be charged on the lines of railroad
operated by the complainant, the decree of the circuit court
adjudging the nullity of this ordinance was right, and it is
therefore
Affirmed.
MR. JUSTICE HARLAN took no part in the decision of this
cause.
Copied from Bates' Annotated Statutes of Ohio -- Revision of
1897.
"SEC. 2501. (Terms and conditions of construction and operation
to be fixed by council; renewal of grant.) -- No corporation,
individual, or individuals shall perform any work in the
construction of a street railroad until application for leave is
made to the council in writing, and the council by ordinance shall
have granted permission and prescribed the terms and conditions
upon, and the manner in which, the road shall be constructed and
operated, and the streets and alleys which shall be used and
occupied therefor, but the council may renew any such grant at its
expiration upon such conditions as may be considered conducive to
the public interest."
"SEC. 2502. (Proceedings to establish a street railroad route;
grant not valid for more than twenty-five years.) -- Nothing
mentioned in the next preceding section shall be done; no ordinance
or resolution to establish or define a street railroad route shall
be passed, and no action inviting proposals to construct and
operate such railroad shall be taken by the council, except upon
recommendation of the board of public works in cities having such a
board, and of the board of improvements in other municipalities
having such a board, and no ordinance for the purpose specified in
said preceding section shall be passed until public notice of the
application therefor has been given by the clerk of the corporation
in one or more of the daily papers, if there be such, and if not,
then in one or more weekly papers published in the corporation, for
the period of at least three consecutive weeks, and no such grant
as mentioned in said preceding section shall be made, except to the
corporation, individual, or individuals, that will agree to carry
passengers upon such proposed railroad at the lowest rate of fare,
and shall have previously obtained the written consent of a
majority of the property holders upon each street or part thereof,
on the line of the proposed street railroad, represented by the
feet front of the property abutting on the several streets along
which such road is proposed to be constructed; provided, that no
grant or renewal of any grant for the construction or operation of
any street railroad shall be valid for a greater period than
twenty-five years from the date of such grant or renewal, except in
cities of the second grade of the second class, in which no grant
or renewal of any grant for the construction or operation of any
street railroad shall be valid for a greater period than fifty
years from the date of such grant or renewal, and after such grant
or renewal of a grant is made, whether by special or general
ordinance, the municipal corporation shall not, during the term of
such grant or renewal, release the grantee from any obligation or
liability imposed by the terms of such grant or renewal of a
grant."
"SEC. 2504. (Pavement of streets where railroads are
constructed; proviso.) -- The council may require any part or all
of the track between the rails of any street railroad constructed
within the corporate limits, to be paved with stone, gravel,
boulders, or the Nicholson or other wooden or asphaltic pavement,
as may be deemed proper; but without the corporate limits, paving
between the rails with stone, boulders, or Nicholson, or other
wooden or asphaltic pavement, shall not be required; provided, that
in cities of the second grade of the first class the council may
require of any street railroad company to pave and keep in constant
repair, sixteen feet for a double track or seven feet for a single
track, all of which pavement shall be of the same material as the
balance of the street is paved with."
"SEC. 2505. (Council of city or village may grant extension of
street railroad.) -- The council of any city or village may grant
permission, by ordinance, to any corporation, individual, or
company owning, or having the right to construct, any street
railroad, to extend their track, subject to the provisions of
sections three thousand four hundred and thirty-seven, three
thousand four thousand and thirty-eight, three thousand four
hundred and thirty-nine, three thousand three hundred forty, three
thousand four hundred and forty-one, three thousand four hundred
and forty-two, and three thousand four hundred three, on any street
or streets where council may deem such extension beneficial to the
public, and when any such extension is made, the charge for
carrying passengers on any street railroad so extended, and its
connections made with any other road or roads by consolidation
under existing laws, shall not be increased by reasons of such
extension or consolidation."
"
* * * *"
"SEC. 2505
b. (Consolidation.) -- Wherever the lines or
authorized lines of road of any street railroad corporations or
companies meet or intersect, or whenever any such line of any
street railroad corporation or company, and that of any inclined
plane railway or railroad company or corporation, or any railroad
operated by electricity or other means of rapid transit may be
conveniently connected, to be operated to mutual advantage, such
corporations or companies, or any two or more of them, are hereby
authorized to consolidate themselves into a single corporation; or
whenever a line of road of any street railroad company or
corporation organized in this state is made, or is in process of
construction to the boundary line of the state, or to any point
either within or without the state, such corporation or company may
consolidate its capital stock with the capital stock of any
corporation or company, or corporations or companies, in an
adjoining state, the line or lines of whose road or roads have been
made or are in process of construction to the same point or points,
in the same manner, and with the same effect as provided for the
consolidation of railroad companies in sections 3381, 3382, 3383,
3384, 3385, 3386, 3387, 3388, 3389, 3390, 3391, and 3392 of the
Revised Statutes, and any and all acts amendatory and supplementary
to said sections and each of them, and the said sections, including
these so amended and supplemented, are adopted and made a part of
this section."
"
* * * *"
"SEC. 3443. (Council, &c., may fix terms and conditions.) --
Council, or the commissioners, as the case may be, shall have the
power to fix the terms and conditions upon which such [street]
railways may be constructed, operated, extended, and
consolidated."
"
* * * *"
"(3443-12.) SEC. 5. (Consolidation.) -- Such street railroad
companies may consolidate on the terms and conditions applicable to
the consolidation of railroad companies; provided, however, no
increase of fare shall be allowed on any street railroad route by
reason of such consolidations."