Source: https://supreme.justia.com/cases/federal/us/208/583/
Timestamp: 2019-04-26 01:49:55+00:00

Document:
In cases arising under the contract clause of the federal Constitution this Court determines for itself, irrespective of the decision of the state court, whether a contract exists and whether its obligation has been impaired, and if plaintiff in error substantially sets up a claim of contract with allegations of its impairment by state or municipal legislation, the judgment of the state court is reviewable by this Court under § 709, Rev.Stat.
Municipal legislation passed under supposed legislative authority from the state is within the prohibition of the federal Constitution and void if it impairs the obligation of a contract.
While an ordinance merely denying liability under an existing contract does not necessarily amount to an impairment of the obligation of that contract within the meaning of the federal Constitution, where the ordinance requires expenditure of money by one relieved therefrom by a contract, a valid contract claim is impaired, and this Court has jurisdiction.
The right to exercise the police power is a continuing one that cannot be limited or contracted away by the state or its municipality, nor can it be destroyed by compromise, as it is immaterial upon what consideration the attempted contract is based.
The exercise of the police power in the interest of public health and safety is to be maintained unhampered by contracts in private interests, and uncompensated obedience to an ordinance passed in its exercise is not violative of property rights protected by the federal Constitution; held that an ordinance of a municipality of that state, valid under the law of that state as construed by its highest court, compelling a railroad to repair a viaduct constructed, after the opening of the railroad, by the city in pursuance of a contract relieving the railroad, for a substantial consideration, from making any repairs thereon for a term of years was not void under the contract, or the due process, clause of the Constitution.
shall return the same to their present state, or in a sufficient manner so as not to impair the usefulness of such road, highway, stream of water, or watercourse to the owner or to the public."
"SEC. 17. This act is hereby declared to be a public act, and may be amended by any subsequent legislative assembly in any manner not destroying or impairing the vested rights of said corporation."
The Lake Superior & Mississippi Railroad laid its first track across what is now Lake Avenue in 1869. Lake Avenue was graded and improved for public traffic in the winter and spring of 1871, and since that time it has been in continuous use as a public street. In the year 1891, the amount of business on Lake Avenue and the number of tracks therein had become so great that the constant passage of cars and engines endangered the safety of the public. The City of Duluth thereupon prepared plans and specifications for the construction of the viaduct upon Lake Avenue, and made a demand upon the railroad company to construct the same. The railroad company, after considerable negotiation, in which it denied its obligation to build the viaduct, entered into a contract with the City of Duluth, which is set up in its answer in this case as a full defense to the right of the City of Duluth to require the repair of the viaduct at the railroad company's expense. This contract was dated September 2, 1891, and provided that the city should build the bridge or viaduct upon Lake Avenue to carry that street over the railroad tracks which had theretofore crossed said avenue at grade. The railroad was to contribute to the expense of the construction in the amount of $50,000, and the city undertook, for the period of fifteen years, to maintain the part of the bridge over the railroad's right of way, and to perpetually maintain the approaches. The city built the bridge at an expense of $23,000, in addition to the $50,000 which was paid by the railroad company.
"Resolved, That the repairs set forth in said specifications are necessary and proper, and are demanded by the public safety and convenience."
"Resolved, further, That said repairs are reasonable and practicable for the repairs of said viaduct and its approaches, and that said repairs as set forth in said specifications are hereby adopted and approved."
"Resolved, further, That this council does hereby demand that the Northern Pacific Railway Company immediately proceed to repair said viaduct and approaches in accordance with said specifications."
"Resolved, further, That a copy of this resolution be forthwith served upon the Northern Pacific Railway Company in the same manner as service may be made of summons in a civil action by the city clerk."
"Resolved, further, That, in the event of the failure or refusal of said company to comply with such demand, that the city attorney be and he is hereby instructed to institute such action or actions as to him may seem proper to compel the said railway company to make such repairs, or such portion thereof as the court may determine it is legally liable to make."
It was in pursuance of this resolution that this action in mandamus was begun and the writ issued requiring the railroad company to make the repairs in accordance with the plans adopted and approved by the city council.
Constitution of the United States. In cases arising under this clause of the federal Constitution, this Court determines for itself whether there is a contract valid and binding between the parties, and whether its obligation has been impaired by the legislative action of the state. Stearns v. Minnesota, 179 U. S. 223, 179 U. S. 233. If the plaintiff in error set up a claim of contract upon substantial grounds and with allegations showing an impairment of its obligation by state or municipal legislation, a case was presented which might be brought to this Court in event such legislation was upheld. Chicago, Burlington & Quincy R. Co. v. Nebraska, 170 U. S. 57.
of the ordinance reduces itself at once to the proposition that, wherever it is asserted, on the one hand, that a municipality is bound by a contract to perform a particular act and the municipality denies that it is liable under the contract to do so, thereby an impairment of the obligations of the contract arises, in violation of the Constitution of the United States. But this amounts only to the contention that every case involving a controversy concerning a municipal contract is one of federal cognizance, determinable ultimately in this Court. Thus to reduce the proposition to its ultimate conception is to demonstrate its error."
And such was the effect of the ordinance in the subsequent case of Dawson v. Columbia Avenue Saving Fund, Safe Deposit, Title & Trust Co., supra.
merits. For the judgment of mandamus against the railroad company could not have been rendered in this case without the prior legislation by the city ascertaining the necessity for repairs upon the viaduct, the character and extent of the same, and imposing upon the railroad company the duty to enter upon the street and construct the improvement.
This municipal action is more than a mere denial of the obligation of the contract; it affirmatively requires that certain improvements shall be made upon the viaduct by the railroad company which the council deemed to be necessary. It required legislative action to determine the nature and character of these improvements. The mandamus issued by the court is but the carrying of the ordinance into effect. If the contract was of binding force and effect, it would relieve the railroad company from making such improvements within the right of way for the period of fifteen years, and permanently relieve it of other improvements upon the viaduct. To require that it shall make these improvements within the period named, as this legislation does, is to require the railroad to incur expenses for things which the city had expressly contracted to relieve it from during the period mentioned. Assuming, for jurisdictional purposes, that the company had a valid claim of contract, it was impaired by the legislation of the city in question; we therefore think there is jurisdiction in the case.
Passing to the merits, it is the contention of the railroad company that, when this contract was made, the Supreme Court of Minnesota had decided that, as to highways which were constructed after the railroad was built, there was no obligation upon the company to construct overhead bridges or crossings, and whatever the rule might be as to requiring a railroad company to construct such overhead bridges in the interest of public safety as to streets in existence when the railroad was built, it could not be required so to do when the highway was constructed after the railway had acquired its right of way and laid its tracks.
the railroad company could not be charged with the expense of such structures as this viaduct as to streets laid out after the railroad was built could have induced the agreement to pay $50,000 towards the improvement in question in a street first occupied by the railroad company. And the recitals of the contract of September, 1891, are to the effect that the payment of the $50,000 was in lieu of assessments for benefits in excess of damages for the taking of property of the railroad company to be caused by said public improvement, which might be imposed upon the property of the railroad company.
"When the railroad company accepted its charter, it received its franchises subject to the authority and power of the state to impose such reasonable regulations concerning the use, in matters affecting the common safety, of its dangerous engineery, and not merely subject to the then-existing regulations as applicable to then-existing conditions, and whether the obligation now in question had been imposed at this time by direct act of the legislature, or, as is the case, arises from the laying out of a new highway, to which the previously existing law becomes applicable, can make no difference."
Bridgeport v. New York & New Haven R. Co., 36 Conn. 255."
As the Supreme Court of Minnesota points out in the opinion in 98 Minn. 380, above referred to, the state courts are not altogether agreed as to the right to compel railroads, without compensation, to construct and maintain suitable crossings at streets extended over its right of way, after the construction of the railroad. The great weight of state authority is in favor of such right. See cases cited in 98 Minn. 380.
"It is likewise thoroughly established in this Court that the inhibitions of the Constitution of the United States upon the impairment of the obligation of contracts, or the deprivation of property without due process, or of the equal protection of the laws, by the states, are not violated by the legitimate exercise of legislative power in securing the public safety, health, and morals. The governmental power of self-protection cannot be rights granted, nor the use the exercise of rights granted, nor the use of property, be withdrawn from the implied liability to governmental regulations in particulars essential to the preservation of the community from injury. Beer Co. v. Massachusetts, 97 U. S. 25; Fertilizing Co. v. Hyde Park, 97 U. S. 659; Barbier v. Connolly, 113 U. S. 27; New Orleans Gas Company v. Louisiana Light Company, 115 U. S. 650; Mugler v. Kansas, 123 U. S. 623; Budd v. New York, 143 U. S. 517."
& Quincy R. Co. v. Chicago, 166 U. S. 226, where it was held that the expenses incurred by the railroad company in erecting gates, planking at crossings, etc., and the maintenance thereof in order that the road might be safely operated must be deemed to have been taken into account when the company accepted its franchise from the state, and the expenses incurred by the railroad company, though upon new streets, might be required as essential to the public safety. In Detroit Railroad Co. v. Osborn, 189 U. S. 383, it was held that the State of Michigan might compel a street railroad to install safety appliances at an expense to be divided with a steam railroad company occupying the same street, notwithstanding the steam railroad was the junior occupier of the street. The subject was further under consideration in New Orleans Gas Light Co. v. Drainage Commission of New Orleans, 197 U. S. 453, where it was held that, although the gas company had permission from the city to lay its pipes under the streets, it might be required to remove the same at its own expense, in the exercise of the police power in the interest of the public, in order to make way for a system of drainage which was required, in the interest of the public health, without compensation to the gas company, and that uncompensated obedience to regulations for public safety under the police power of the state was not a taking of property without due process of law.
The same principles were recognized and the previous cases cited in Chicago, Burlington & Quincy Ry. Co. v. Illinois ex Rel. Drainage Commissioners, 200 U. S. 561, and again in Union Bridge Co. v. United States, 204 U. S. 364. The result of these cases is to establish the doctrine of this Court to be that the exercise of the police power in the interest of public health and safety is to be maintained unhampered by contracts in private interests, and that uncompensated obedience to laws passed in its exercise is not violative of property rights protected by the federal Constitution.
the charter of the company, as well as the common law, required the railroad, as to existing and future streets, to maintain them in safety, and to hold its charter rights subject to the exercise of the legislative power in this behalf, and that any contract which undertook to limit the exercise of this right was without consideration, against public policy, and void. This doctrine is entirely consistent with the principles decided in the cases referred to in this Court. But it is alleged that, at the time this contract was made with the railroad company, it was at least doubtful as to what the rights of the parties were, and that the contract was a legitimate compromise between the parties which ought to be carried out. But the exercise of the police power cannot be limited by contract for reasons of public policy; nor can it be destroyed by compromise, and it is immaterial upon what consideration the contracts rest, as it is beyond the authority of the state or the municipality to abrogate this power so necessary to the public safety. Chicago, Burlington & Quincy R. Co. v. Nebraska, 170 U. S. 57.

References: § 709
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