Source: https://caselaw.findlaw.com/us-supreme-court/246/413.html
Timestamp: 2019-04-25 20:50:32+00:00

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[246 U.S. 413, 414] Messrs. A. E. Stricklett and Frederick W. Schmitz, both of Covington, Ky., for appellant.
Messrs. Alfred C. Cassatt, Richard P. Ernst, and Frank W. Cottle, all of Cincinnati, Ohio, for appellee.
This is a bill in equity brought by the appellee to restrain the City of Covington from carrying out an ordi- [246 U.S. 413, 415] nance of July 14, 1913, that provides for the grant of a twenty-year franchise for a street railway over certain streets to the best bidder. The plaintiff claims a right by grant and contract over the same streets, which will be interfered with, and sets up article 1, 10, and the Fourteenth Amendment of the Constitution. The defendant says that the plaintiff's grant has expired, and that if it purports to be perpetual it was beyond the power of the city. These are the two propositions argued. The District Court granted the injunction as prayed and the city appealed.
As there is no hint at any limitation of time in the grant to Abbott, and on the other hand the city grants all the right and authority that it has the capacity to grant, there can be no question that the words taken by themselves purport a grant in perpetuity more strongly than those held to have that effect in Owensboro v. Cumberland Telephone & Telegraph Co., 230 U.S. 58 , 33 Sup. Ct. 988. The fact chiefly relied upon to narrow their operation is found in the terms of 'an ordinance prescribing the terms and conditions of street passenger railroads within the City of Covington' passed on December 15, 1864, before the dealings with Abbott. By section 13 'all contracts made under the provisions of this ordinance shall be for the term and period of twenty-five years.' It is contended that this by implication governs later transactions. But there is little ground for even an argument upon the point. The ordinance is providing for proposals and a contract with the best bidder, concerning routes contemplated by a rival of the Covington and Cincinnati, the Covington Street Railway Company incorporated on February 9, [246 U.S. 413, 417] 1864 (afterwards bought up by the appellee). The contracts referred to in section 13 are primarily at least contracts of those who should acquire the franchises offered, such as in fact were made. In no sense is the Abbott contract a contract under that ordinance. It was a contract under the ordinance of 1869, which established its substance and even its form. The ordinance of 1864 did not address itself to the construction or scope of future ordinances, but only of certain contracts of which Abbott's was not one. We regard the matter as too plain to be pursued into greater detail. This part of our decision covers all the grants to Abbott including the right to lay tracks to the suspension bridge.
There were extensions of the plaintiff's rights by acts of the Legislature of March 13, and April 5, 1878 (Laws 1877-78, cc. 423, 813), in general terms that there seems to be no reason for supposing more limited in time than the original grant. See section 3. The only part of this branch of the case needing further discussion concerns the rights acquired by the plaintiff through the purchase of its rival's, the Covington Street Railway's, lines. This company, under the ordinance of 1864 that we have mentioned got a franchise limited to twenty-five years, but with provisions that there should be a new bid after that time and that the successful bidder, if other than the Covington Street Railway Company, should purchase its property upon a valuation. It did not lose the value of that property by the ending of its right of use. On June 8, 1882, the plaintiff, already having a general authority by its charter, was authorized by 'an ordinance granting the right of way over certain streets ... to' the plaintiff, to contract with the Covington Street Railway Company for the right of way held by the latter and to occupy and use the streets specified in the contract of that road with the city 'subject to the conditions, limitations and restrictions contained in the ordinances regulating its (the plaintiff's) right to [246 U.S. 413, 418] the streets now occupied by said South Covington and Cincinnati Street Railway Company.' This grant was on condition that the plaintiff should remove the tracks by which it connected with the suspension bridge under the ordinance of January 28, 1875, and give up its rights to the same, which as we have said were r ghts in fee. It got other access to the bridge over the Covington Street Railway line, but we agree with the district judge that it is not to be supposed that it would give up its perpetual right for a franchise having eight years to run over a less convenient route, so far as this part of its purchase was concerned. We agree also that the language of the ordinance conveys more than a license to purchase what the vendor had. The title and the operative words import a grant and the reference to the ordinances regulating the plaintiff's right in the streets adopts as the measure these, not the contract with the selling road. The ordinance was followed by the contemplated contract in July, 1882. Some further grants need no special mention. We are of opinion that the plaintiff's right in this part of its system also is a right in fee.
The question of the power of the city to grant a perpetual franchise needs but few words. By statute the streets were 'vested in the city' and the authorities of the city were given 'exclusive control over the same' and in another section the council was given 'exclusive power to establish and regulate ... all sidewalks, streets, alleys, lanes, spaces and commons of the city.' Acts 1849-50, c. 237, art. 1, 2, p. 239, and article 2, 19, p. 247. No decision of the State Court is brought to our attention that calls for any hesitation in following the authority of Owensboro v. Cumberland Telephone & Telegraph Co., 230 U.S. 58 , 33 Sup. Ct. 988, and pronouncing the authority complete. Wolfe v. Covington & Lexington R. R., 15 B. Mon. (Ky.) 404. A street railroad is one of the ordinary incidents of a city [246 U.S. 413, 419] street and stands on a different footing from the steam roads habitually run over separate rights of way. See, also, Act of March 13, 1878, c. 423, and Act of April 5, 1878, c. 813, 1, 3.
I have so recently stated my reasons for not concurring in opinions which seemed to me, by inference and construction, to raise limited, into perpetual, grants of rights in city streets, that I shall not repeat them here (City of Owensboro, Kentucky, v. Owensboro Water Works Co., 243 U.S. 166, 174 , 37 S. Sup. Ct. 322; Northern Ohio Traction & Light Co. et al. v. State of Ohio, decided January 28, 1918, 245 U.S. 574 , 38 Sup. Ct. 196, 62 L. Ed. --), but shall confine myself to a brief statement of the facts and conclusions of law which lead me to dissent from the court's opinion in this case.
And so far as the record shows it has never been repealed.
More than four years later, on May 13, 1869, Abbott and others made an application to the council for a franchise and the company holding the prior grant, which was then operating a railway, protested against the making of a grant to Abbott, and warned the city that it claimed the right to operate on all its streets and that another grant could not lawfully be made.
'Be it ordained by the city council of Covington that all the authority and right that the city of Covington has the capacity to be, and the same is hereby granted to E. F. Abbott et al. ... to construct, hold and operate a street railroad,' upon designated streets.
I cannot bring myself to think that this is the language men would use who were intending to grant perpetual rights in city streets, but rather it seems to be the cautious describing of what the councilmen thought a doubtful right under a doubtful remnant of authority, remaining after the grant to the other company which was threatening litigation if this further grant were made, and that they thought it subject to the limitation of twenty-five years in the general ordinance of 1864. And be it noted that this grant, made without special authority from the Legislature, is dated December 13, 1869; that the Covington & Cincinnati Street Railway Company, the predecessor of the defendant in error, was not chartered for more than a year after the date of this grant to Abbott, from which all the rights of the defendant in error are claimed to flow; and that it did not acquire the grant [246 U.S. 413, 421] until 1875 in which year the first construction work was done under it.
Whether this statement was necessary to the decision of the case then under consideration or not, in the following year it was paraphrased and adopted in a Covington Street Ry. Co. Case, 9 Bush (Ky.) 127, and, almost twenty years after that it was again approved in a Covington Case, 90 Ky. 390, 14 S. W. 361.
That this was also the opinion of the Legislature of the [246 U.S. 413, 422] state and of that part of the bar of the state concerned with the grants here involved is conclusively shown by the fact that in the charter of every one of the three street railway companies concerned herein there is a special grant of power to the city of Covington to make the contemplated contract for the use of its streets for street railway purposes.
This obscurely worded grant, thus made to Abbott without special legislative authority, is not helped out by subsequent recognition by the city, for we find the parties, almost from the beginning of its term, dealing with each other constantly at arm's length, the city claiming that the grant was, at most, limited to twenty-five years, and the railway company claiming it to be perpetual.
Again, in 1892, for a reduction of fare and other considerations the city agrees 'for the period of twenty years after the acceptance of this ordinance' not to offer for sale any of the rights or franchises of the defendant in error in the said streets; and it was not until after the expiration of this period that the proposition to grant a new franchise was made, which the decision of the court permanently enjoins.
This is sufficient of detail to indicate why I am of opinion that the meager and equivocal grant of 1869 should not be regarded as helped out by the subsequent dealings of the assignees of it with the city.
Under the circumstances thus presented, with limited franchises granted before and after this grant to individuals, but never one unlimited in terms with the city contending always that this franchise was for twenty-five [246 U.S. 413, 423] years only, and with the courts, Legislature, and bar of the state united in thinking that there was no power in the municipality to make even a limited street railroad grant without special legislative warrant, I cannot bring myself to consent to construe, as the court does, an obscurely worded clause of a single sentence, found in a grant to individuals, of the right to construct an insignificant horse railroad, which the son of the grantee in an affidavit alleges required an expenditure of only $48,000, so as to impose upon the municipality 'the unspeakable burden' of a perpetual franchise to operate street railroads in its streets.
Believing that the application of this wise rule to the decree before us must result in its reversal, I dissent from the opinion of the court.
Mr. Justice BRANDEIS concurs in this dissent.

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