Abbildungen der Seite
PDF
EPUB

United States has imposed this additional limitation, that the legislature of a State shall pass no act "impairing the obligation of contracts." It was further declared that the Federal Constitution provides that no State shall by legislation impair the obligation of contracts. It is more than possible that the preservation of rights, such as those contended for in this case, was not particularly in the view of the framers of the Constitution. when the clause under consideration was introduced into that instrument, but a case being within the words of the rule must be within its operation likewise, unless there be something in the literal construction so obviously absurd or mischievous or repugnant to the general spirit of the instrument as to justify those who expound the Constitution in making it an exception.44

313. Obligation of Contract-Statutes-OrdinancesDelegated Authority-Easements in Streets.-The rule that the accepted grant of a corporation or franchise constitutes a contract is peculiarly and emphatically applicable in the case of railroad corporations which are created upon public considerations and clothed with extensive and extraordinary powers and are bound to the discharge of public duties.45 So a contract exists between the State and a railroad corporation organized under a general incorporation law; 46 and an exercise by a city, through the proper authority, of its power to grant franchises becomes a law of the State so as to prohibit it from passing any law impairing the obligation of the contract.47 A railroad

"Dartmouth College v. Woodward, 4 Wheat. (17 U. S.) 518, 4 L. ed. 629, commented on and explained in Stone v. Mississippi, 101 U. S. 814, 25 L. ed. 1079, distinguished in Watson Seminary v. Pike County, 149 Mo. 57, 50 S. W. 880, 45 L. R. A. 675.

45 Pierce v. Emery, 32 N. H. 484, 508, per Perley, C. J. See also State of Minnesota v. Duluth & I. R. Co., 97 Fed. 353; Smead v. Indianapolis, P. & C. R. Co., 11 Ind. 104; State v.

Noyes, 47 Me. 189; Houston & T.
Cent. R. Co. v. Texas & Pac. R. Co.,
70 Tex. 649, 8 S. W. 498; Attorney
Genl. v. Chicago & Northwestern Rd.
Co., 35 Wis. 425.

46 Central Trust Co. v. Citizens' St. Rd. Co. (C. C.) 82 Fed. 1, 83 Fed. 529, 14 Nat. Corp. Rep. 770, 15 Nat. Corp. Rep. 529. See §§ 147 et seq., herein.

47 Citizens' St. Ry. Co. v. City Ry. Co., 56 Fed. 746. See §§ 185 et seq., herein.

company's right to use city streets may also rest upon statute or indirectly upon legislative grant through delegated power and constitute an unimpairable contract.48 So the right to supply gas or water through pipes and mains laid in city streets is, after acceptance of the grant, a contract which is protected by the Constitution of the United States.49 And where a telephone company accepts and acts upon a grant, under an ordinance permitting it to place its lines and poles in the streets, and complies with all the conditions specified and constructs an expensive plant, such rights so granted and acted upon constitute a contract which cannot be impaired by subsequent legislation or unless the grantee consents; especially where the grant is without limitation as to time, nor can the city impose new and

48 Louisville Trust Co. v. Cincin- Crescent City Gas Light Co. v. New nati, 76 Fed. 296, 22 C. C. A. 334; Orleans Gas-Light Co., 27 La. Ann. Birmingham & P. M. S. R. Co. v. 138, 147. It is true that in these Birmingham, S. R. Co., 79 Ala. 465. cases the franchise was granted diSee Mercantile Trust & Deposit Co. of rectly by the state legislature, but it Balt. v. Collins Park & B. R. Co., 99 is equally clear that such franchises Fed. 812. See §§ 147 et seq., herein. may be bestowed upon corporations by the municipal authorities, provided the right to do so is given by their charters. State legislatures may not only exercise their sovereignty directly, but may delegate such portions of it to inferior legislative bodies as, in their judgment, is desirable for local purposes. As was said by the Supreme Court of Ohio in State v. Cincinnati Gas Light and Coke Co., 18 Ohio St. 262, 293: 'And assuming that such a power' (granting franchises to establish gas works) may be exercised directly, we are not disposed to doubt that it may also be exercised indirectly, through the agency of a municipal corporation, clearly invested, for police purposes, with the necessary authority.' This case is directly in line with those above cited. See also Wright v. Nagle, 101 U. S. 791, 25 L. ed. 921;

49 "This court has too often decided for the rule to be now questioned, that the grant of a right to supply gas or water to a municipality and its inhabitants through pipes and mains laid in the streets, upon condition of the performance of its service, by the grantee, is the grant of a franchise vested in the State, in consideration of the performance of a public service, and after performance by the grantee is a contract protected by the Constitution of the United States against state legislation to impair it. New Orleans Gas Co. v. Louisiana Light Co., 115 U. S. 650, 29 L. ed. 615, 6 Sup. Ct. 252; New Orleans Water Works v. Rivers, 115 U. S. 674, 29 L. ed. 525, 6 Sup. Ct. 273; St. Tammany Water Works v. New Orleans Water Works, 120 U. S. 64, 7 Sup. Ct. 405, 30 L. ed. 563;

[ocr errors]

burdensome conditions.50 If no term is specified, but the laws of the State place a limitation upon the duration of the grant, then during such period there can be no impairment of the contract obligation unless the right is reserved to the city to nullify the grant.51 Again, the right to erect poles and lines in the streets may be derived directly from the legislature and the city's powers be limited, being such only as are delegated and subject to such direct control as the legislature may deem proper to exercise. And the acceptance of a special act giving a telephone company the exclusive right to the use of the streets for its purposes for a term of years does not operate to divest the company of its vested rights under a general statute to exercise its franchises after its exclusive grant has terminated, nor can it be deprived thereof by legislative action of the State or city.52 Unless a municipality is expressly authorized to grant a permanent easement in its streets a license or grant by it to a railroad company to use such streets for tracks and the operation of its road will not constitute a permanent easement.53 Nor does a gas and electric company obtain an irrevocable and indefeasible right to a particular location for each pole because of the original location by the permission of a municipality under a grant of franchise to use the city streets.54

§ 314. Same Subject.-It may be further stated generally, that where a city, vested with the proper authority, grants by a valid legislative enactment authority to a railroad, telephone, electric light or other private corporation to use its streets, and

Hamilton Gas Light and Coke Co. v. Hamilton, 146 U. S. 258, 266, 36 L. ed. 963, 13 Sup. Ct..90; Bacon v. Texas, 163 U. S. 207, 216, 41 L. ed. 132, 16 Sup. Ct. 1023; New Orleans, etc., Co. v. New Orleans, 164 U. S. 471, 41 L. ed. 518, 17 Sup. Ct. 161." Walla Walla City v. Walla Walla Water Co., 172 U. S. 1, 9; 43 L. ed. 341, 19 Sup. Ct. 77, per Brown, J. See 147 et seq., herein.

Teleph. & Teleg. Co., 40 La. Ann. 41, 3 So. 533.

51 Old Colony Trust Co. v. City of Wichita, 123 Fed. 762, 132 Fed. 641. 52 Abbott v. City of Duluth, 104 Fed. 833, aff'd 117 Fed. 137. See §§ 185 et seq., herein.

53 State v. Atlantic & N. C. R. Co. (N. C., 1906), 53 S. E. 290.

54 Merced Falls Gas & Electric Co. v. Turner, 2 Cal. App. 720, 84 Pac.

50 New Orleans v. Great Southern 238. See Joyce on Electric Law

(2d ed.), §§ 229a-229d.

such grant or franchise is accepted and the company proceeds thereunder and obtains vested rights, and there exists no questions of police power or regulation, or of reservations in the grant, the city cannot arbitrarily repeal or change materially such ordinance in any material matter so as to impair the obligation of the contract.55 So in a case of a telegraph company, which occupies an independent post road of the United States, its franchise cannot be destroyed by state legislation.56 If the exclusive right of occupation of city streets is granted, on certain conditions, to an electric light plant, by a city ordinance, as where it is not obligated to furnish light until it can make a certain per cent profit, the grantee must begin preparations for erecting such plant before it can avail itself of the protection against the impairment of obligation of contract provision of the Constitution.57 But there may be a valid grant by a city or town to an intended corporation, of a franchise to use its streets for the public use of electricity, though at its date the corporation is not chartered, but is later chartered and accepts the grant.58 If a town council has no power, either under its

55 United States: Levis v. New- Phillipsburgh, 66 N. J. L. 505, 49 ton (C. C.), 75 Fed. 884. Atl. 445, 8 Am. Elec. Cas. 449.

Alabama: Port of Mobile v. Louisville & Nashville R. Co., 84 Ala. 116, 4 So. 106, 5 Am. St. Rep. 342. Illinois: Village of London Mills v. Fairview-London Teleph. Circuit, 105 Ill. App. 146, aff'd in Village of London Mills v. White, 208 Ill. 289, 70 N. E. 289.

Michigan: Mahan v. Michigan Teleph. Co., 132 Mich. 242, 93 N. W. 629, 8 Am. Elec. Cas. 38.

Minnesota: Northwestern Teleph. Exch. Co. v. City of Minneapolis, 81 Minn. 140, 83 N. W. 527, 7 Am. Elec. Cas. 168, 86 N. W. 69, 53 L. R. A. 175; Duluth, City of, v. Duluth Teleph. Co., 84 Minn. 486, 87 N. W. 1128, 8 Am. Elec. Cas. 136. New Jersey: Phillipsburg Electric Lighting, Heating & Power Co. v.

Texas: Houston v. Houston City St. R. Co. (Tex.), 19 S. W. 127.

Washington: Commercial Electric Light & P. Co. v. Tacoma, 17 Wash. 661, 50 Pac. 592.

West Virginia: Clarksburg Electric Light Co. v. City of Clarksburg, 47 W. Va. 739, 50 L. R. A. 142, 35 S. E. 994, 7 Am. Elec. Cas. 25.

56 Western Union Teleg. Co. v. New York (C. C.), 38 Fed. 552, 3 L. R. A. 449, 2 Inters. Comm. Rep. 533, 6 Rd. & Corp. L. J. 105. See Joyce on Electric Law (2d ed.), §§ 62–67.

[blocks in formation]

charter or under the general statute law governing towns and cities, to grant an exclusive franchise for a term of years to a private corporation to use its streets for the conveyance of electricity for public use in the city, such exclusive grant is void and not a valid contract protected by the provisions of the Constitution forbidding the passage of any law impairing the obligation of contracts; and such exclusive grant does not prevent the town from granting to another corporation within the term the privilege to occupy its streets for the same purpose. 59 The mayor and city council may be vested exclusively with the power over franchises, and still another statute may vest the right to amend charters in the people through their votes thereon, and such authorization may embrace an amendment to empower the people to grant franchises in the city.60

§ 315. What Is not a Contract-Obligation of ContractWhen not Impaired-Instances.-An executive agency, created by the statute of a State for the purpose of improving public highways, and empowered to assess the cost of its improvements upon adjoining lands, and to put up for sale and buy in for a term of years for its own use any such lands delinquent in the payment of the assessment, does not, by such a purchase, acquire a contract right in the land so bought which the State cannot modify without violating the provisions of the Constitution of the United States. Such a transaction is matter of law and not of contract, and as such is not open to constitutional objections. Even as to third parties an assessment is not a contract in the sense in which that word is used in the Federal Constitution.61 A contract between a city and a waterworks company which is void as being ultra vires, and which the city has repudiated, cannot be set up by it as impaired by subsequent

L. R. A. 142, 35 S. E. 994, 7 Am.
Elec. Cas. 25.

5 Clarksburg Electric Light Co. v.
City of Clarksburg, 47 W. Va. 739, 50
L. R. A. 142, 35 S. E. 994, 7 Am.
Elec. Cas. 25.

60 Hindman v. Boyd (Wash., 1906), 84 Pac. 609.

61 Essex Public Road Board v. Skinkle, 140 U. S. 334, 11 Sup. Ct. 790, 35 L. ed. 446.

« ZurückWeiter »