1. A contract between a city and a railroad company the
enforcement of which would hamper the state's power reasonably to
regulate the construction and use of a crossing of the railway by a
city street would be void. P.
271 U. S.
307.
2. A contract between a city and a railroad company, whereby the
company (owning the fee) granted the city the right of way for a
street under its railroad, and the city agreed to pay the cost of
construction, and which contained other stipulations made for the
sake of doing away with unauthorized crossings and arranging for
further street extensions, but none involving any surrender by the
city of police power or eminent domain,
held valid. P.
271 U. S.
308.
3. An order of a state commission ignoring such a contract and
requiring the company to construct the crossing and share the
expense with the city, receiving from the city compensation for the
right of way, impaired the obligation of the contract and deprived
the company of property without due process of law. P.
271 U. S.
306.
107 Okla. 23
reversed.
Error to a judgment of the Supreme Court of Oklahoma denying a
petition by the railway company to set aside an order of the
Oklahoma Corporation Commission, made on petition of the City of
McAlester, and requiring the Company to provide a street
crossing.
MR. JUSTICE BUTLER delivered the opinion of the Court.
The railroad of plaintiff in error runs through the City of
McAlester, Oklahoma. At Comanche Avenue, the main
Page 271 U. S. 304
line is on a fill, and at least one industrial or side track is
on a lower level. In September, 1921, the city applied to the state
Corporation Commission for an order requiring the railway company
to provide at that place a pass under its tracks and a highway
across its right of way. The commission ordered that the company
prepare a plan and an estimate of quantities and cost for a
reinforced concrete subway, having two openings of specified
dimensions; that the plan show the location of industrial tracks,
and that these tracks conform to the street grade; that the plan
and estimate be filed with the mayor of the city and the
Corporation Commission, and that, if the company and the city
failed to agree on an apportionment of cost of the underpass, the
commission would hear evidence on that subject. The company was
ordered to have the underpass constructed and open for traffic
within 90 days after arrangement by the city to pay its portion of
the cost. The company filed its petition in the supreme court to
have the order set aside on the grounds, among others, that it is
repugnant to the due process clause of the Fourteenth Amendment,
and impairs the obligation of a contract, in violation of § 10 of
Article I of the Constitution of the United States. The court
affirmed the order (107 Okl. 23), and the case is here on writ of
error. Section 237, Judicial Code.
The line was built about 1873 on land granted by Congress to the
company, then known as the Union Pacific Railroad Company, Southern
Branch, for the construction of its railroad. Act July 26, 1866, §
8, c. 270, 14 Stat. 289, 291. The City of South McAlester and the
townsite of McAlester were laid out subsequently, pursuant to the
Act of Congress of June 28, 1898, § 14, c. 517, 30 Stat. 495, 499.
In platting these town sites, streets were laid out to the boundary
line on each side of the land constituting the company's right of
way. November 8, 1901, the city passed Ordinance No. 74. At
Page 271 U. S. 305
that time, there were a number of unauthorized crossings in use
by the public, but the city had not acquired by purchase or
condemnation the right of way for the extension of any street
across the railroad. The ordinance was accepted by the company, and
is in form a contract. It provided for the immediate extension of
certain platted streets across the right of way, tracks, and
station grounds of the company in lieu of the unauthorized
crossings then in use. Some of the new crossings were to be
constructed by the company at its own expense, and the cost of
others was to be borne equally by the parties. Terms and conditions
for the construction of other crossings were set forth in the
ordinance. It was declared that thereafter, the city would open no
other street across the right of way and tracks of the company,
except upon payment of amounts specified in the ordinance as
stipulated damages for a right of way across the railroad, any
determination in condemnation proceedings instituted by the city,
whether more or less than the agreed sum, to the contrary
notwithstanding. It was stated that nothing contained in the
ordinance should constitute a waiver of the company's right to
contest the opening of additional streets. But there is no
provision purporting to limit power or authority of the city to
establish or regulate street crossings over, under, or upon the
tracks and other property of the company. And it was specifically
agreed that, if at any time the city should desire to extend and
open Comanche Avenue across the company's right of way and station
grounds, the crossing should be constructed under the tracks
located upon the fill and at grade across tracks laid at the street
level, according to plans and specifications approved by the
company and at the sole cost and expense of the city. The company,
for this and other considerations mentioned in the ordinance,
agreed to waive all claims for damages caused by the opening and
establishing of this crossing.
Page 271 U. S. 306
Pursuant to the Act of Congress of March 29, 1906, c. 1351, 34
Stat. 91, the City of McAlester was created by the consolidation of
the City of South McAlester and the Town of McAlester. In
performance of the agreements contained in the ordinance, the City
of McAlester in 1909 and again in 1912 assumed and paid portions of
the cost of construction of some of the crossing covered by the
ordinance, and ever since the consolidation it has been recognized
and treated as the successor of the City of South McAlester and as
a party to the contract. The present city is bound to the same
extent as was its predecessor that passed the ordinance.
The court held that the state laws gave the commission full
jurisdiction over all highways where they cross railways; that the
commission had authority to order the crossing in question and to
assess the cost of it against the city and the railway company, but
not more than 50 percent against the city; that the company was the
owner in fee of its right of way lands; that they could not be
appropriated or damaged for public use without just compensation,
and that the commission could not enforce obedience to its order to
construct the grade crossing until the question of damage to the
fee had been determined either by amicable settlement or by
condemnation proceedings.
The order, as interpreted and affirmed, directly contravenes the
provisions of the ordinance in respect of the Comanche avenue
crossing. It sets at naught the undertaking of the city to bear the
cost of construction and the agreement of the company to give the
city the right of way for the street crossing and to waive all
claims for damages. The effect is to require the company forthwith
to prepare the plan and estimate, and to direct the company, upon
the determination of its just compensation and the consummation of
arrangements by the city to pay the portion of the cost, if any,
that may be imposed upon
Page 271 U. S. 307
it, to proceed to construct the underpass and to have it open
for traffic within the time specified. If a contract exists between
the parties in respect of this crossing, it is manifest that it
would be impaired by the enforcement of the commission's order.
But defendants in error contend that the ordinance is void
because it attempts to surrender police power, and therefore that
there is no such contract.
It is elementary that, for the safety and convenience of the
public, the state, either directly or through its municipalities,
may reasonably regulate the construction and use of highways where
they cross railroads. The legitimate exertion of police power to
that end does not violate the constitutional rights of railroad
companies. They may be required, at their own expense, to construct
bridges or viaducts whenever the elimination of grade crossings
reasonably may be required, whether constructed before or after the
building of the railroads.
Northern Pacific Railway v.
Duluth, 208 U. S. 583,
208 U. S. 597;
Chi., Mil. & St. P. Ry. v. Minneapolis, 232 U.
S. 430,
232 U. S. 438;
Mo. Pac. Ry. v. Omaha, 235 U. S. 121,
235 U. S. 127;
Erie R. Co. v. Public Utilities Comm'rs, 254 U.
S. 394,
254 U. S. 409,
254 U. S. 412.
And such costs are not included in the just compensation which the
railroad companies are entitled to receive.
Cincinnati, I.
& W. Ry. v. Connersville, 218 U.
S. 336,
218 U. S. 343;
Chi., Mil. & St. P. Ry. v. Minneapolis, supra,
232 U. S. 440.
If the enforcement of its provisions operates to hamper the state's
power reasonably to regulate the construction and use of the
Comanche Avenue crossing, then undoubtedly the ordinance is void.
Chicago & Alton R. Co. v. Tranbarger, 238 U. S.
67,
238 U. S. 76;
Atlantic Coast Line v. Goldsboro, 232 U.
S. 548,
232 U. S. 558;
Denver & R. G. R. Co. v. Denver, 250 U.
S. 241,
250 U. S.
244.
The precise question is whether the agreement of the city to
bear the cost of construction is inconsistent with the proper
exertion of the police power.
Page 271 U. S. 308
When the ordinance was passed, it was the purpose of the parties
to get rid of unauthorized crossings then in use and to arrange for
the extension of platted streets across the tracks and station
grounds. It was necessary for the city to obtain rights of way for
that purpose, and it was empowered to acquire them by contract,
purchase or condemnation. §§ 11, 14, c. 517, 30 Stat. 498, 499;
Mansfield's Digest of the Statutes of Arkansas (1884) §§ 749, 760,
907-912. It could not take them without making just compensation to
the owner. The company owned its right of way lands and station
grounds in fee.
Missouri, Kansas & Texas Ry. Co. v.
Roberts, 152 U. S. 114. It
was entitled to compensation for any of its property that might be
taken or damaged by the construction and use of the crossings.
Chicago, Burlington, etc., R. Co. v. Chicago, 166 U.
S. 226,
166 U. S. 251;
Cincinnati, I. & W. Ry. v. Connersville, supra.
The ordinance did not purport to limit the number of crossings
that might be opened. Retention by the company of the right to
resort to litigation to determine whether the opening of additional
streets across the railroad is reasonably necessary does not at all
impinge upon police power. Quite independently of the ordinance,
the opening and regulation of such crossings is subject to judicial
scrutiny, and action that is arbitrary or capricious will be held
invalid.
Denver & R. G. R. Co. v. Denver, supra,
250 U. S. 244.
Indeed, the reservation contemplates the exertion of the police
power, and plainly implies that the parties did not intend to
restrict the authority of the city to open crossings.
The agreement of the city to pay the amounts stipulated for the
opening of certain crossings does not involve or contemplate any
surrender of the power of eminent domain. It was authorized to
contract, purchase, or condemn as it saw fit. The opinion of the
state court rightly approves amicable settlement of the
compensation
Page 271 U. S. 309
to be given the owner. The parties were not bound to resort to
litigation. It was competent for them in advance to settle the form
and amount of compensation. The company's agreement to grand a
right of way for the crossing was a valid consideration for the
city's undertaking to bear the cost of construction.
This case is not like
Northern Pacific Railroad v. Duluth,
supra, cited by defendants in error. There, the city had the
right of way for the street, and a grade crossing existed for many
years. The elimination of that crossing became necessary. The
company refused to comply with the city's demands in that respect.
Then a contract was made. The city agreed to build a bridge to
carry the street over the railroad tracks and the company agreed to
contribute $50,000 to its cost. The city undertook to maintain the
bridge over the tracks for 15 years and to maintain the approaches
perpetually. The city built the bridge at a cost of $23,000 in
addition to the amount paid by the company. Years later, when
repairs were needed, the company refused to make them. This Court,
following the decision of the Minnesota Supreme Court (98 Minn.
429), held that the contract was without consideration, against
public policy, and void. The Northern Pacific Company gave up
nothing. The city already had the right of way. The company might
have been required to build the bridge. The contract relieved it of
a part of the cost, and attempted for all time to suspend the
proper exertion of the police power in respect of maintenance. The
ordinance now before us is very different from the situation and
contract considered in that case.
There is nothing in the ordinance that involves any attempt to
interfere with or hinder the proper exertion of police power.
Evidently it was the intention of the parties to make a permanent
settlement in respect of the crossings covered by the ordinance.
The city was empowered
Page 271 U. S. 310
to open the Comanche Avenue crossing at any time without
condemnation or other proceedings. Neither party could terminate
the contract without the consent of the other.
Western Union
Telegraph Co. v. Pennsylvania Co., 129 F. 849, 862. The city's
agreement to bear the cost of construction of the Comanche Avenue
crossing does not infringe the police power. The enforcement of the
commission's order would deprive plaintiff in error of its property
without due process of law, and would impair the obligation of the
contract in violation of the Constitution of the United States.
Judgment reversed.