Source: http://openjurist.org/201/us/400
Timestamp: 2015-03-26 23:59:36
Document Index: 539801559

Matched Legal Cases: ['Art. 4', '§ 7', '§ 4', '§ 7', '§ 10', '§ 705', '§ 1081']

201 US 400 Henry Blair v. City of Chicago | OpenJurist
201 U.S. 400 - Henry Blair v. City of Chicago	Home201 us 400 henry blair v. city of chicago
201 US 400 Henry Blair v. City of Chicago 201 U.S. 400
26 S.Ct. 427
50 L.Ed. 801
HENRY A. BLAIR and Marshall E. Sampsell, as Receivers of the North Chicago Street Railroad Company, and James H. Eckels and Marshall E. Sampsell, as Receivers of the Chicago Union Traction Company, Appts.,v.CITY OF CHICAGO et al. NO 331. NORTH CHICAGO CITY RAILWAY COMPANY, Appt., v. HENRY A. BLAIR et al., etc. NO 332. CITY OF CHICAGO, Appt., v. JOHN C. FETZER et al., etc. NO 333. HENRY A. BLAIR and Marshall E. Sampsell, as Receivers of the West Chicago Street Railroad Company, and James H. Eckels and Marshall E. Sampsell, as Receivers of the Chicago Union Traction Company, Appts., v. CITY OF CHICAGO et al. NO 334. CHICAGO WEST DIVISION RAILWAY COMPANY, Appt., v. HENRY A. BLAIR et al., etc. NO 335. CITY OF CHICAGO, Appt., v. JOHN C. FETZER et al., etc. NO 336.
Nos. 331, 332, 333, 334, 335, 336.
Argued January 11, 12, 15, 1906.
[Syllabus from pages 400-404 intentionally omitted]
These are appeals from the decree of the circuit court of the United States for the northern district of Illinois. The origin of the cases dates from April 22, 1903, when the Guaranty Trust Company of New York, a corporation and citizen of that state, filed three suits in the circuit court of the United States for the northern district of Illinois against the Chicago Union Traction Company, the North Chicago Street Railroad Company, and the West Chicago Street Railroad Company, corporations and citizens of the state of Illinois. On the day the declaration was filed the general issue was joined, the jury waived, and, upon trial, judgment was rendered against the respective defendants for $318,690.66, $565,052.66, and $270,440. Executions having been awarded and returned 'no property found,' bills were filed by the Guaranty Trust Company, and receivers appointed for the property of each and all of those companies. Under the order of the court of July 18, 1903, the receivers filed two ancillary bills, one against the city of Chicago, the Chicago West Division Railway Company, the Chicago Union Traction Company, and the West Chicago Street Railroad Company; the other against the city of Chicago, the Chicago Union Traction Company, the North Chicago Street Railroad Company, and the North Chicago City Railway Company. They were afterwards amended by leave of the court. These bills state, among other things (having reference now to the west side case), that, as receivers, and under the order of the court, the complainants were in possession of the system of street railroads; that the property included the rights, privileges, and franchises originally granted to the Chicago West Division Railway Company by the state of Illinois; that on October 20, 1887, the Chicago West Division Railway Company leased the property to the West Chicago Street Railroad Company for the full term of nine hundred and ninety-nine years; that on June 1, 1889, that company transferred and conveyed to the Chicago Union Traction Company all its property, franchises, and rights, which were taken possession of by that company and were possessed and enjoyed by it with the consent of the city council, until the appointment of complainants as receivers; that since the appointment they have been directed by the court to make expenditures of about $580,000 in procuring new equipment; for that purpose it was necessary to issue receiver's certificates to borrow money, which they alleged they were unable to do, because of the hostile acts of the city of Chicago, its mayor, its council committees and representatives, which amounted to an impairment of the contract rights and franchises secured to the complainants and granted by the acts of the general assembly of Illinois, passed February 14, 1859, and February 6, 1865. They received a notice from the superintendent of streets, dated July 16, 1903, addressed to them as receivers, and stating that all permits issued to the Chicago Union Traction Company to do work and make repairs upon the streets, alleys, or public places in the city of Chicago were to be revoked on July 30, 1903. The bill sets out a large number of ordinances of the city and acts of the state of Illinois, under which acts, it was alleged, privileges and franchises were granted on fifty-six of the streets of the city, for the period of ninety-nine years from February 14, 1859.
It is averred that the city denies any contract right with the complainants under and by virtue of the said laws and ordinances, and, for the purpose of coercing the railroad companies to surrender their franchises, received from the state, asserts and claims that the act of 1865 is unconstitutional and void; that, if valid, it only operates to the extent of such lines as were authorized and consented to before its passage; that, if valid, the railroads could only operate their lines by animal power; that by force of the ordinance of July 30, 1883, the right to operate lines constructed prior thereto was absolutely limited to July 30, 1903, and that thereafter the railroad company would be a trespasser upon the streets of the city; that, by messages and official declarations of the mayor and council of the defendant city, it was given out that, unless the railroad company would surrender its franchises and rights to occupy the streets of the city, the city would oust the railroad company therefrom and pass an ordinance granting the right to operate street railways upon the streets now occupied by the railroad company, to other persons or corporations. That unless an injunction is granted, the city will, after July 30, 1903, proceed, by declaration of forfeiture or otherwise, to interfere with and prevent the occupation and enjoyment of the fifty-six railway routes described in the bill. That as to the street railroads where ordinances provided for possession until the city shall purchase the lines, the city has never made an offer to purchase, and seeks to force a surrender of the franchises and privileges, and to compel the railroad company to accept a twenty years' license, at an oppressive and ruinous annual rental. That if the claim and contentions of the city are sustained, the entire system of the railroad company will be destroyed and its charter rights illegally confiscated.
The prayer for relief is that the Chicago West Division Railway Company be decreed to be vested by the state of Illinois with the franchises and right to own, maintain, and operate fifty-six street railway routes, described in the bill, until 1960, and until such time thereafter as the city shall purchase the lines and pay for them in cash at their then appraised value, according to the terms of the ordinance contract; that it be decreed that the claim of the city of Chicago that the rights of the companies will expire on July 30, 1903, impairs the obligation of the charter subsisting between the state of Illinois and the said companies, and constitutes an unlawful taking of the rights and property of the company without compensation, and an unlawful interference with the property in the custody of the court; that the charter rights of the companies to maintain, operate, and enjoy the lines described in the bill until the year 1960, and thereafter until the city purchases the same, be established and quieted as against the hostile claims of the city, and that such claims be declared and decreed unconstitutional, contrary to law, and exist as clouds upon the title of the company, and for a perpetual injunction against the city from asserting the claims aforesaid, or interfering with the possession, occupation, and enjoyment of the railroad's property, except in the proper exercise of its police power, until the lwful determination of the charter rights.
The city answered and set up, among other things, that the suits wherein the receivers were appointed were collusive and in pursuance of a scheme concocted by the West Chicago Street Railroad Company, the North Chicago Street Railroad Company, the Chicago Union Traction Company, and the Guaranty & Trust Company of New York for the purpose of conferring jurisdiction upon the circuit court of the United States on the ground of diverse citizenship; that the Guaranty Trust Company was not a bona fide owner of the judgment upon which the suits were brought; and that the evidences of indebtedness upon which that company brought suit and obtained judgment as a colorable basis for the allowance of creditor's bills and appointment of receivers were not in fact owned by the Guaranty Trust Company, but were owned by divers persons and corporations of the state of Illinois.
The answer then sets up the claims of the city concerning the legislative acts and ordinances pleaded in the bill, admits the passage or attempted passage thereof, but denies that the same has resulted in investing the railroad companies with a franchise from the state, to maintain and operate the system of railroads for ninety-nine years, and avers that the rights under certain of the ordinances set up in the bill expire on July 30, 1903. Defendant denies that it unlawfully or oppressively injured the lawful rights of the company; admits that it has contended and now contends that the alleged act of 1865 is unconstitutional and void as construed by the company; that the said act, when properly construed, did not operate to extend the duration of time beyond that fixed in various ordinances respectively relating to said lines; that the said companies have no right to operate street railway lines by other than animal power; and that the time for operation of certain of the lines existing under ordinances passed prior to July 30, 1883, expired on July 30, 1903, by reason of the time limits prescribed in said ordinances, as extended by the ordinance of July 30, 1883, and by reason of the limitation in the power of the city by the city and village law of the state of Illinois, passed July 1, 1872. It avers that it has never claimed or asserted that the time for the operation of lines constructed under ordinances passed prior to July 30, 1883, absolutely ceased and determined, but, on the contrary, has recognized and conceded the existence of the purchase clause contained in certain of said ordinances as affecting the time limitations therein, and has endeavored to procure proper fiscal legislation by the general assembly of the state, which would enable the city to avail itself of said ordinance provisions with reference to purchase, and has frequently proposed and desired negotiations with the companies to provide new ordinances for the purchase by the defendant of the tangible property of said companies. The answer denies the allegations of the bills as to unlawful threats and compulsions, but admits that it does intend to enforce its rights in its streets against the unlawful claims of the companies, and admits that, unless restrained by injunction, it will proceed by every proper and lawful method to enforce its rights in its streets as set up in the answer, and to procure necessary street railway facilities for the citizens of Chicago, and to prevent the companies from unlawful usurpation of rights in the streets or from continuing to occupy the same after the right so to do has ceased and determined. It admits that as early as 1883 a serious difference as to the nature and extent of the legal and contract rights of the street railway companies in certain of the streets of the city arose between the companies and defendant. It sets up the messages of the mayor and copies of the various resolutions of the council with regard to opening negotiations with the companies for the ascertainment of their rights and those of the city.
The case having been tried, the circuit court rendered a decree holding that the legislative acts of 1859, 1861, and 1865 constituted a grant to the companies to use the streets of the city to be designated by the council, but that the franchise to use the streets was a grant from the state; that the acts of 1859, 1861, as amended in 1865, extended the franchises of the companies for ninety-nine years, the extended life of the corporation; that the Constitution of Illinois of 1870 prohibited the further creation of corporations by special laws, and decreed that the general assembly should not grant the right to construct any street railways in the city without acquiring the consent of the local authorities then having control over the streets; that the cities and villages act of 1872 empowered cities organized under that act to permit, regulate, or prohibit the locating, laying, or constructing of tracks of horse railroads in any street, alley, or public place, but such permission was limited to a period not to exceed twenty years; that the acts of 1859, 1861, as amended in 1865, did not constitute a grant by the legislature of streets which were authorized to be used and occupied by the city after it adopted and elected to be governed by the city and village act, and that after date of May 3, 1875, as to such streets, the street railway companies' rights were regulated by the city ordinances affecting the same; that the act of 1859, under the 10th section of which the North Chicago City Railway Company was incorporated, amended by the act of February 21, 1865, extended the life of the corporation for ninety-nine years; and held that said amendment applied not only to the Chicago City Railway Company, but as well to the rights conferred by the act of 1859 on the North Chicago City Railway Company. The case is reported in 132 Fed. 848.
Pertinent parts of the ordinance of August 16, 1858, the acts of February 14, 1859, February 21, 1861, and February 6, 1865, are given in the margin.
[Argument of Counsel from pages 411-430 intentionally omitted] Page 430
[Argument of Counsel from pages 430-447 intentionally omitted]
The jurisdiction of the circuit court to render the original judgments against the companies and to maintain the ancillary bill is challenged at the outset. These objections require notice before considering the controversy upon its merits. It is insisted that the circuit court had no jurisdiction to render the judgments at law because of the provisions of the act of August 13, 1888 (25 Stat. at L. 433, 434, chap. 866, U. S. Comp. Stat. 1901, p. 508), providing that no circuit court shall have cognizance of any suit to recover the contents of any promissory note in favor of any assignee or subsequent holder if such instrument be payable to bearer, unless such suit might have been prosecuted in such court to recover, if an assignment or transfer had not been made. As the notes were made payable to the order of 'Markham B. Orde, Treas.,' and there is no allegation that Orde was not a citizen of the state of Illinois, of which state the defendant fendant companies were corporations and citizens, it is insisted that the jurisdiction must fail, under the provisions of the statute just referred to. Assuming, without deciding, that this question could be raised by way of defense to the ancillary bill, we think the objection must fail, for, under the allegations of the declaration, the money was furnished directly to the defendants by the Guaranty Trust Company, and that company was the first taker of the notes. In Falk v. Moebs, 127 U. S. 597, 32 L. ed. 266, 8 Sup. Ct. Rep. 1319, it was held that notes made in this form, payable to the treasurer, indorsed before delivery by him, are the notes of the company. And when it appears that the indorser is not in fact an assignee of the paper, suit may be brought in a Federal court by a holder having the requisite diverse citizenship, notwithstanding the indorser might have been a citizen of the same state with the defendant. Holmes v. Goldsmith, 147 U. S. 150, 37 L. ed. 118, 13 Sup. Ct. Rep. 288.
It is further argued that the entire proceedings were fraudulent and collusive; that no money was in fact loaned, and that they were the result of a conspiracy between corporations of Illinois, to obtain the jurisdiction of the Federal court, and its decision on the controverted rights of the parties under the statutes of the state. We have examined the supplemental records submitted since the argument in this court, on this branch of the case, and think the charges of bad faith and conspiracy are not sustained. We have no doubt that the money was loaned by the Guaranty Trust Company to these corporations, and that the original judgments were bona fide. As to the conspiracy to get the case into the Federal court, with a view to the decision of the rights of the parties therein, we are not aware of any principle which prevents parties having the requisite citizenship and a justiciable demand from seeking the Federal courts for redress, if such be their choice of a forum in which to have contested rights litigated. Having a proper cause of action and the requisite diversity of citizenship confers jurisdiction upon the Federal courts, and in such cases the motive of the creditor in seeking Federal jurisdiction is immaterial. South Dakota v. North Carolina, 192 U. S. 286, 310, 48 L. ed. 448, 457, 24 Sup. Ct. Rep. 269; Dickerman v. Northern Trust Co. 176 U. S. 181, 190, 44 L. ed. 423, 430, 20 Sup. Ct. Rep. 311; Lehigh Min. & Mfg. Co. v. Kelly, 160 U. S. 327, 336, 40 L. ed. 444, 447, 16 Sup. Ct. Rep. 307; Crawford v. Neal, 144 U. S. 585, 36 L. ed. 552, 12 Sup. Ct. Rep. 759; Cheever v. Wilson, 9 Wall. 108, 123, 19 L. ed. 604, 608; Smith v. Kernochen, 7 How. 198, 216, 12 L. ed. 666, 673.
It is true that the judgments were taken and the receivers appointed on the same day, and it is quite likely that the receiverships were in view when the judgments were taken, and that preparations had been made in that direction, but we perceive in this no legal objection to the jurisdiction of the court. It is further insisted by the counsel for the city that the ancillary bills cannot be sustained upon their merits. But we think a case was made out by the allegations of the bills, especially when considered with reference to the admissions of the answer, which showed that the extent and character of the property rights of the corporations whose rights and franchises were the subjects of the receivership were in direct and serious controversy between the company and the receiver on the one hand and the city on the other. While it may be that there would have been no interference on the part of the city with the property while it was in the hands of the court's receivers, still the record shows that the city strenuously contested the asserted rights of the corporations to the franchise to use the streets of the city for ninety-nine years, the term claimed to have been granted to them by the act of February, 1865. It was the claim of the city that as to many of the ordinances granting rights in a number of the streets, the right to the use and occupancy of them would expire July 30, 1903. The city had asserted in a number of ways its purpose to treat the rights of the companies and whatever franchises they had as terminated at that date. It declares its purpose to treat the rights of the comstreets and resort to all legal means to protect its rights against what were deemed the unfounded claims of the companies as to the extended franchises. Without going into further detail upon this branch of the case, we think that the attitude and claims of the city cast a cloud upon the title to this property which was in the hands of the receivers to be administered under the orders of the court, and that in such case the receivers may, with the authority of the court, proceed by ancillary bill to protect the jurisdiction and right to administer the property, and to determine the validity of the claims of the parties which cast a cloud upon the franchises and rights claimed by the companies and the receivers, and that in such case it was proper to grant an injunction until the rights of the parties could be determined. Detroit v. Detroit Citizens' Street R. Co. 184 U. S. 368, 46 L. ed. 592, 22 Sup. Ct. Rep. 410; Re Tyler, 149 U. S. 164, 37 L. ed. 689, 13 Sup. Ct. Rep. 785; Rouse v. Letcher, 156 U. S. 47, 39 L. ed. 341, 15 Sup. Ct. Rep. 266; White v. Ewing, 159 U. S. 36, 40 L. ed. 67, 15 Sup. Ct. Rep. 1018. We think, then, that the court had jurisdiction of the case made in the ancillary bills.
A further preliminary question is made in the contention that the leases under which the various transfers were made, and which are supposed to have vested title in the Chicago Union Traction Company, are void for want of corporate power in the companies to make or receive the same. We do not think the city of Chicago is in a position to raise that question. The corporations have undertaken to transfer the rights of the lessor companies, and the lessees have gone into possession thereof, and the same are now in possession of the receivers under authority of the court. All of the companies are parties to the suit, and the rights and franchises of all are, by order of the court, vested in the receivers. They hold the title to all these rights to be sold at judicial sale, or otherwise dealt with, as the court may direct. In this view we cannot see that it is material to inquire into the validity of the intermediate transfers between the companies. No contract is undertaken to be enforced with the city of Chicago which depends upon the validity of these transfers. The city has no power to invalidate them, and the state has not attempted to inquire into their validity by a proceeding in quo warranto. In such case, we think, the principle laid down in Fritts v. Palmer, 132 U. S. 282, 293, 33 L. ed. 317, 321, 10 Sup. Ct. Rep. 93, 96, is controlling: 'The question whether a corporation having capacity to purchase and hold real estate for certain defined purposes or in certain quantities has taken title to real estate for purposes not authorized by law, or in excess of the quantity permitted by its charter, concerns only the state within whose limits the property is situated. It cannot be raised collaterally by private persons unless there is something in the statute, expressly or by necessary implication, authorizing them to do so.'
Passing now to the merits of the case, we will first notice the objection that the acts of 1859, 1861, and 1865 are unconstitutional. The Illinois Constitution of 1848 contained the provision that no private or local law shall embrace more than one subject, and that shall be expressed in the title. The acts are attacked upon the ground that they are violations of this requirement. But we do not think that these objections are tenable. The title of the act of February 14, 1859, is 'An Act to Promote the Construction of Horse Railways in the City of Chicago;' the title of the act of February 21, 1861, is 'An Act to Authorize the Extension of Horse Railways in the City of Chicago;' the title of the act of February 6, 1895, is 'An Act Concerning Horse Railways in the City of Chicago.' In People ex rel. Deneen v. People's Gaslight & Coke Co. 205 Ill. 482, 98 Am. St. Rep. 244, 68 N. E. 950, the Illinois cases were reviewed and the conclusion reached that the purpose of the constitutional provision is accomplished if the title is comprehensive enough as reasonably to include within the general subject or the subordinate branches thereof, the several objects which the statute seeks to effect. And it was held that generality of the title is no objection to a law so long as it is not made to cover legislation incongruous in itself, and which by no fair intendment can be included as having necessary or proper connection. In the case of Montclair Twp. v. Ramsdell, 107 U. S. 147, 27 L. ed. 431, 2 Sup. Ct. Rep. 391, a statute of New Jersey was before this court which was claimed to be unconstitutional because it embraced more than one subject, not expressed in its title. The provision of the New Jersey Constitution was 'To avoid improper influences which may result from intermixing, in one and the same act, such things as have no proper relation to each other, every law shall embrace but one object, and that shall be expressed in the title.' [Art. 4, § 7.] The Montclair Twp. Case held: 1. That this provision does not require the title of an act to set forth a detailed statement or an index or abstract of its contents; nor does it prevent uniting in the same act numerous provisions having one general object, fairly indicated by its title. 2. That the powers, however varied and extended, which a township may exercise, constitute but one object, which is fairly expressed in a title showing nothing more than the legislative purpose to establish such township. In the late case of Detroit v. Detroit Citizens' Street R. Co. 184 U. S. 368, 46 L. ed. 592, 22 Sup. Ct. Rep. 410, the court had occasion to deal with a similar provision in the Constitution of Michigan. In it the language of Judge Cooley in People ex rel. Secretary of State v. State Ins. Co. 19 Mich. 392, was quoted with approval: 'We must give the constitutional provision a reasonable construction and effect. The Constitution requires no law to embrace more than one object, which shall be expressed in its title. Now, the object may be very comprehensive and still be without objection, and the one before us is of that character. But it is by no means essential that every end and means necessary or convenient for the accomplishment of the general object should be either referred to or necessarily indicated by the title. All that can reasonably be required is that the title shall not be made to cover legislation incongruous in itself, and which by no fair intendment can be considered as having a necessary or proper connection.' Applying this principle, we do not think that any of the subjects treated were so far foreign to the title of the several acts as to be open to this constitutional objection. See also upon this subject: Independent School District v. Hall, 113 U. S. 141, 28 L. ed. 956, 5 Sup. Ct. Rep. 371; Jonesboro v. Cairo & St. L. R. Co. 110 U. S. 192, 198, 28 L. ed. 116, 118, 4 Sup. Ct. Rep. 67; Otoe County v. Baldwin, 111 U. S. 1, 28 L. ed. 331, 4 Sup. Ct. Rep. 265; Mahomet v. Quackenbush, 117 U. S. 508, 29 L. ed. 982, 6 Sup. Ct. Rep. 858; Carter County v. Sinton, 120 U. S. 517, 30 L. ed. 701, 7 Sup. Ct. Rep. 650.
The principal controversy in this case turns upon the construction of the act of 1865, amending the act of 1859. On the part of the companies it is insisted that this act means to give an irrevocable grant from the state of the right to use the streets of the city of Chicago for street railway purposes for a term of ninety-nine years from the passage of the law; that the only right conferred upon the city is one of designation of the streets to be occupied and the regulation by agreement with the companies of what are termed the 'administrative' features of the occupancy. It is insisted that this broad right is derived from the public act of the state legislature, which, upon its acceptance, has become an inviolable contract between the state and the companies. Upon the part of the city it is contended that there has been no grant to the railways to occupy the streets of the city except with the authorization of the city council and upon such terms and conditions, including the term of occupancy, as that body may see fit to fix by contract with the companies; that the only legitimate effect of the act of 1865, other than the extension of the corporate life of the companies, has been to continue the control of the city over the streets, and to reaffirm the contracts theretofore made between the city and the companies. The theory that the franchise to use the streets was derived solely from the state, subject only to the right of the city to designate the streets to be occupied, and to regulate the 'administrative' features of the use, was adopted by the learned circuit court in construing the act in controversy. It is therefore important to consider the nature of the franchises, licenses, rights, and privileges dealt with in the act of 1865, to ascertain, as near as may be, in what sense its terms were used, and with what meaning they are incorporated into the act. In order to construe this act and determine, if possible, its true meaning and the extent of the powers and rights intended to be granted or confirmed, reference may appropriately be had to prior legislation upon the subject, for the act of 1865 is amendatory, and can only be understood if a correct apprehension is first had of the powers previously granted, and the extent and nature of the rights and privileges conferred and the sources from which they severally came. Whether the city charter, granted while the Constitution of 1848 was in force, gave the city the right to grant to railway companies the privilege of using the streets for street railway purposes, is a question much discussed in the briefs and the arguments at bar. The city, by the charter of 1851, and the amendment of 1863, had general power to control the use and occupation of the streets of the city and to regulate the use of horse railways therein and the laying of tracks thereon. It is insisted for the city that, independent of the acts under consideration in this case, the general powers conferred in the city charter, as construed by the supreme court of Illinois, were broad enough to empower it to grant the use of the streets for street railway surposes. See Quincy v. Bull, 106 Ill. 337, 349, and cases cited in the opinion. On the part of the companies it is contended that this right could only come from the state, and that the effect of the act in question was to confer the right upon the companies as a charter right granted by the sovereign power.
It is said to have been the settled understanding of all concerned, and in accordance with the then-existing policy of the state, that the act of 1859 was a franchise directly granted by the state, giving the full right to use the streets of the city for the term of the corporate life of the companies, subject only to the designating power of the city as to streets to be used. In this connection it may be observed that the supreme court of Illinois in Chicago Union Traction Co. v. Chicago, 199 Ill. 484, 525, 59 L. R. A. 631, 645, 65 N. E. 451, 462, distinctly stated that the act of 1859 recognized the power of the common council to pass the ordinance of August 16, 1858. 'There,' it is said in the opinion, 'was no other action of the common council, taken before the passage of the act of February 14, 1859, except the ordinance of August 16, 1858. By the use of the words, 'with such rights and privileges as the said common council has prescribed,' the legislature could not have referred to any other action of the common council than the passage of the ordinance of August 16, 1858. It thereby recognized the power of the common council to pass that ordinance, and the appellant here introduces it and relies upon it. The legislature, by thereby affirming and recognizing the passage of the ordinance of August 16, 1858, also recognized the power of the common council to pass that ordinance under clause 9 of § 4 of chapter 4, of the charter of 1851.' In the act of 1859 the legislature did not assume to fix independently the term for the use of the streets, but affirmed that which the common council had authorized the corporators to do, and gave authority to confer future rights by agreement with the corporations. In the first grants after the passage of the act of February 14, 1859, those of May 23, 1859, to the Chicago City Railway Company and the North Chicago City Railway Company, as we shall have occasion to show later, so far from acting upon the theory that the state had granted to the corporations the full right to use the streets for the corporate life of the companies, and needed no permission from the city council other than such as designated the streets and regulated administrative features, the council made and the companies accepted the ordinances which, on the north side, were for the term of twenty-five years and no longer, and on the south and west sides for the term named in the act of 1859, which had affirmed the grant from the council in the ordinance of 1858. The south and west side ordinance, as its recitals show, was not only passed in pursuance of the act of February 14, 1859, but also by virtue of the power and authority otherwise vested in the common coucil by its charter. Union Traction Co. v. Chicago, supra. Thereafter and frequently until the passage of the act of 1865, the council made and the companies accepted specific ordinances fixing the time of occupancy, as had been done in the original ordinances of May 23, 1859. And neither before nor after the passage of the act of 1865 was the ninety-nine year term recognized or acted upon in ordinances granting the use of the streets.
Under the ordinance of 1858 the council undertook to authorize the persons named to lay and operate a horse railway in certain streets of the city. This right, by the terms of the ordinance, was granted for the period of twenty-five years, and until the common council, in the manner designated, should elect to purchase and pay for the property of the railway companies. If this ordinance had been without legislative authority previous to the act of February 14, 1859, that act constituted the persons named in the ordinance of 1858, with one other, and their successors, a body politic and corporate under the name of the Chicago City Railway Company, for the term of twenty-five years, with all the powers incident to such corporations. The corporation was authorized to construct, maintain, and operate a single or double track railway in the city of Chicago, within the present or future limits of the south or west divisions of the city. But the grant did not stop there. It was immediately qualified and limited by the authority given to the common council of the city, for it provided that this right to maintain and operate street railways was upon streets, etc., 'as the common council of said city have authorized said corporators, or any of them, or shall authorize said corporation so to do in such manner and upon such terms and condition, and with such rights and privileges, as the common council has or may, by contract with said parties, or any or either of them, prescribe.' The corporation was given the right of eminent domain. Then, as to the action of the city, already taken under the ordinance of 1858, by § 7, all of the rights and privileges granted or intended so to be to the incorporators and their associates by the ordinances and amendments thereto passed by the council were approved and vested in the corporation. By § 10 of the act the North Chicago City Railway Company was incorporated. Is this act consistent with the theory that the full franchise of occupying and using the streets, without regard to authority from the city, except in designating streets, was vested by the state in the companies incorporated? This act conferred upon the railway companies, it is true, the right to use and occupy the streets of the city, but this right was upon the terms prescribed in the law. Conceding the plenary power of the legislature over the subject at that time, and that franchises, broadly speaking, are rights and privileges conferred by the state, and are derived from a grant of the sovereign power, nevertheless the state, while exercising its authority, might give to the city such measure of right and control in the manner as it saw fit. Dill. Mun. Corp. 3d ed. § 705; Richmond, F. & P. R. Co. v. Richmond, 96 U. S. 521, 24 L. ed. 734. The city is the corporate body directly interested in the use and control of the streets. By the charter of 1851 exclusive control over the streets was given to the council. That it was the intention of the legislature to give effect to the right of municipal control in the act under consideration is shown in its confirmation of terms already fixed by contract between the city and the companies. As to the future, companies were to have no right to the use and occupancy of the streets until they should obtain from the city council authority to that end, under contracts to be agreed upon as to terms and conditions. A more comprehensive plan of securing the city in the control of the use of the streets for railway purposes could hardly be devised. The company must be 'authorized' by the city council before it can lay tracts or operate railways in the streets. This is more than to designate that for which authority has already been given. To authorize is to 'cloth with authority' (Webster's dict.); 'to give legal power to' (Century dict.). It is an additional grant of right and power which the legislature requires the corporation to obtain as a condition precedent to its use and occupation of the streets. This power of the city, in the absence of language in the statute excluding the authority and reserving its exercise to the state, necessarily includes the right to fix the time for which the streets may be used. This doctrine was, we think, correctly stated by Judge Lurton, in delivering the opinion of the court of appeals in Louisville Trust Co. v. Cincinnati, 22 C. C. A. 334, 346, 47 U. S. App. 36, 59, 76 Fed. 296, 308. 'The right of the local authority thority to impose terms and conditions is clearly conferred, and no such corporation can impose itself upon the public streets or highways unless it enter into an agreement touching the occupancy of such streets, or resorts to the right of condemnation, in default of an agreement. This right to impose terms and conditions most obviously implies the right to agree upon the duration of such occupancy. The right to exclude altogether, unless resort be had to condemnation, involves the right to limit the period of the grant.' Coverdale v. Edwards, 115 Ind. 374, 381, 58 N. E. 495; Elliott, Railroads, § 1081.
While the decisions of the supreme court of the state are not binding upon us in determining whether a contract was made which is entitled to protection under the Federal Constitution, we may notice the case of Chicago City R. Co. v. People, 73 Ill. 541. That was a proceeding in quo warranto against the Chicago City Railway Company, asking to declare a forfeiture of its franchise consent of two thirds of the owners of the avenue. The grounds relied upon were that the railway company had not obtained the consent of two third of the owners of the property fronting on the avenue within fifteen months from the passage of the ordinance of August 22, 1864, the time limited for construction in the ordinance of that date. The respondent, the Chicago City Railway Company, relied upon an ordinance passed November 13, 1871, amendatory of the ordinance of August 22, 1864, extending the time to complete its railway for a period of two years from the date of the last-named ordinance. The court found that two thirds of the property owners had consented, as provided in the ordinance of August 22, 1864, but found that the company had neglected to construct its road to the city limits within fifteen months from the passage of the ordinance, as therein provided. The question turned upon the validity of the extending ordinance of November 13, 1871, passed after the Constitution of 1870 went into effect. The majority of the court—Chief Justice Walker and Justices Breese and Sheldon dissenting—held that the common council had authority, under the act of 1865, to extend the time for the building of the roads on Indiana avenue, as the time limitation was a provision in favor of the city, which it might waive, as the charter of the company was silent upon the time within which the railway might be constructed, and in this connection held that the right granted by the city to construct the railway was a license as distinguished from a franchise derivable from the state, and, therefore, not within the constitutional prohibition against the passage of local or special laws granting to any corporation, association, or individual the right to lay down railroad tracks, or amending existing charters for that purpose, or granting to any corporation, association, or individual any special or exclusive privilege, immunity, or franchise whatever. The minority of the court were of opinion that the Constitution of 1870 made the extending ordinance invalid. In neither the majority nor the dissenting opinions is there any intimation that the railway company could occupy or use a street of the city of Chicago without the permission of the city. In discussing how far the charter authorized the company to act without the consent of the city, Mr. Justice Sheldon, in the course of an able dissenting opinion, concurred in by the Chief Justice and Mr. Justice Breese, is careful to point out that the right to occupy the streets is not complete in the grant of the charter from the state, and is only capable of being exercised when supplemented by the authorization of the city. And see People's Pass. R. Co. v. Memphis City R. Co. 10 Wall. 38, 55, 19 L. ed. 844, 850. In that case this court held that a charter authorizing a street railroad company to operate street railroads in all the streets of the city 'with the consent of the city' was unavailing until the consent of the city was first had, which consent was a condition precedent to the use of the streets.
What, then, was conferred in the franchise granted by the state? It was the right to be a corporation for the period named, and to acquire from the city the right to use the streets upon contract terms and conditions to be agreed upon. The franchise conferred by the state is of no practical value until supplemented by the consent and authority of the council of the city. After the passage of the act of 1859 the common council of the city, on May 23, 1859, passed an ordinance authorizing the extension and operation of certain horse railways in the streets of the south and west divisions of the city, and granting the use thereof to the Chicago City Railway Company. The city purported to act under authority of the act of 1859, and by virtue of the powers and authority otherwise vested in the common council by law. By this ordinance the term of use and occupation was fixed at 'during all the term in the said act of the 14th of February, A. D. 1859, specified and prescribed.' On the same day the council passed an ordinance granting rights in certain streets to the North Chicago City Railway Company. This ordinance contained this language: 'The rights and privileges granted to the said company by this ordinance, or intended to be, shall continue and be in force for the benefit of said company for the full term of twenty-five years from the passage of this ordinance, and no longer.' On February 21, 1861, the legislature passed an act incorporating the Chicago West Division Railway Company for the term of twenty-five years, the corporation to possess the powers enumerated in t