Case Name: New Orleans City & Lake Railroad Company vs. Dr. W. H. Watkins
Court: Louisiana Supreme Court
Jurisdiction: Louisiana
Decision Date: 1896-06-22
Citations: 48 La. Ann. 1550
Docket Number: No. 12,183
Parties: New Orleans City & Lake Railroad Company vs. Dr. W. H. Watkins.
Judges: 
Reporter: Louisiana Annual Reports
Volume: 48
Pages: 1550–1561

Head Matter:
No. 12,183.
New Orleans City & Lake Railroad Company vs. Dr. W. H. Watkins.
The (general Assembly did not intend to use the words “ street railroad,” in Act 135 of 1888, in any narrow or technical sense; its evident purpose was to compel the city of New Orleans to make available for city purposes, and for the public benefit, in money, any local railroad franchise or privilege which was valuable, and the amount to be derived from the granting of which was likely to be increased by being put up at public auction.
In East Louisiana Railroad vs. City of New Orleans, 46 An. 526, this court held that the Act 135 of 1888 did not apply to railroads carrying the mails and transporting freight and passengers long distances beyond the limits of the city; and, besides, the East Louisiana Railroad Company was an existing corporation, having its domicile out of the city of New Orleans, with its legal character and its franchises as a railroad already-fixed. The ordinance of the city granted a simple “ right of way.” It originated in favor of the company no new source of revenue, no change in its business, nor effected and authorized no additional traffic arrangements.
APPEAL from the Civil District Court for the Parish of Orleans. Théard, J.
Denégre, Blair & Denégre and Farrar, Jonas & Kruttsehnitt for Plaintiff, Appellee.
Branch K. Miller and Percy Roberts for Defendants, Appellants.
Argued and submitted June 8, 1896.
Opinion handed down June 22, 1896.
Rehearing refused December 14, 1896.
Statement of the Case.
On the 5th of March, 1895, the Common Council of the city of New Orleans adopted Ordinance No. 10,392, Council Series, by which “it granted to W. H. Watkins and his associates, successors or assigns, the right to construct, maintaiu and operate a single or double track railroad upon the routes and lines therein described and to use steam locomotives or other appropriate motive power; Provided, that within sixty days from the promulgation of the ordinance the said W. EL Watkins and his associates would, under penalty of the nullity of the grant by the mere lapse of time, cause the same to be transferred to a corporation organized under the laws of this State with its domicile in the city of New Orleans, which corporation should provide in its charter for the assumption of the grant on such terms as may be agreed between it and the said W. H. Watkins and his associates.
The route designated by the ordinance was the following: “Beginning on Hagen avenue and Calliope street, connecting with the tracks of the Illinois Central Railroad Company; thence on Hagan avenue, connecting with the switch track of the Southern Chemical and Fertilizing Company, Limited; thence upon and along the extension of Hagan avenue and Hagan avenue to a point near Bienville street; thence along by the shortest practicable route to the intersection of Hospital or Barracks street and Metairie road; thence along Hospital street or Barracks to a point on or near Taylor avenue; thence to Bayou St. John, crossing Bayou St. John on an iron drawbridge with a clear opening of fifty feet on to the embankment of Marigny Canal or Pleasure street or avenue, and along said embankment or avenue to Marigny avenue; thence along and upon Marigny avenue to Elysian Fields street, with the right to there connect with the switch tracks of the Standard Guano and Chemical Manufacturing Company, and to cross and connect with the tracks of the Pontchartrain Railway and the Louisville & Nashville Railroad on Elysian Fields street; thence along Florida Walk to People’s avenue, with the right to there connect and cross the tracks of the New Orleans & Northeastern Railway to'Montegut street; thence down Montegut street to St. Claude avenue, and there to connect with the New Orleans & Southern Railroad, with the right to cross all intervening streets to the lower limits of the city, and with the right to make suitable connections with the slaughterhouses of the People’s Slaughterhouse Company and the Crescent City Slaughterhouse Company by spur tracks now existing, or such others as may be necessary.”
The right was further granted to cross all intervening railroads, street railroads, canals, streets, alleys and other unimproved city property along the entire route above described, with the right to make such local variations from the above described route as might be necessary in order to locate and construct proper and suitable • curves c nneeting with the various roads and parts of roads above described, and with the right to cross or extend along streets, alleys, canals and unimproved city property, with the right to construct such turnouts and switches as might be necessary to make a connection with all the railroads therein described and with the industries which are now, or may hereafter, be located along said route. The Oity Engineer should, upon request of the aforesaid grantee, furnish or approve the lines and levels upon which said railroads, tracks, or any part thereof are to be constructed upon such lines and levels as furnished or approved; provided, this grant should not interfere with grants made heretofore by the State of Louisiana, or the city of New Orleans, to other railroads, but should be subject thereto.
On the 30th of April, 1895, M. J. Hart, E. Greenbaum, Oharles Mendelson, T. A-. Clayton and Samuel J. Hart, the latter appearing individually and as acting for Sturgis S. Adams and R. T. McDonald, appeared before Hunter O. Leake, notary public, in the city of New Orleans, and proceeded to form a corporation known as the “ Watkins Railroad Company.” The declared object of the corporation was for the construction, maintenance, owning and operating by steam or other appropriate motive power, of a belt railroad, in the parish of Orleans, with connections and extensions into and in the parishes of Jefferson and St. Bernard, together with the necessary and proper locomotives, cars, railway tracks, warehouses, depots, yards, wharves, docks, switches, sidings, turnouts, turntables, inclines, transfer boats, elevators, bridges and terminal approaches thereto, and for the purpose of transporting for hire freight cars, passenger cars, loaded and empty, and merchandise, live stock and freight of every kind, to and from the several railroads, steamboat and steamship landings, depots, manufactories, breweries, wharves, docks, warehouses, slaughterhouses and other manufacturing industries and commercial establishments in the parishes of Orleans, Jefferson and St. Bernard along the line or adjacent to the line of said railroad, and for the purpose of acquiring the right and franchise granted by the city of New Orleans to W. H. Watkins and associates, successors and assigns, by Ordinance No. 10,392, Council Series, adopted by the city of New Orleans on the fifth day of March, 1895, and for the purpose of constructing,maintaining and operating the belt railroad provided for in said ordinance, along the route and upon the streets, ways, alleys and places in said ordinance mentioned and described, upon the conditions and within the limitations and provisions in said ordinance expressed, and for the purpose of acquiring any other or further or additional grant or fran chise from the State of Louisiana, city of New Orleans, or the parishes of St. Bernard or Jefferson, that might be necessary to effectuate and carry out the purposes of this charter, and also to lease or acquire by original grant, or by purchase from grantees, other rights and franchises to construct, maintain and operate another line or other lines of belt railroad within «the limits of the parishes of Orleans, Jefferson and St. Bernard, with the power to make any lease of its property and franchises, or any traffic arrangements, or to consolidate with other corporations operating lines of railway into and out of said parish, or with the corporate powers, rights, franchises and privileges specified in the act of incorporation. The act declared that the corporation was to have and enjoy corporate succession by its corporate name for ninety-nine years. The capital stock of the corporation was declared to be one hundred thousand dollars, divided into one thousand shares of one hundred dollars each, payable at the time of subscription in cash, or in franchises, or property, real and personal, conveyed to the corporation. The corporation was declared to be authorized to commence business whenever ten per cent, of the capital stock should have been subscribed and paid in.
On April 29, 1895, by act before Wenck, notary, in the city of New Orleans, W. H. Watkins transferred to the Watkins Railroad Company, represented by A. T. Moss, its vice president, all his title, interest of every kind and nature in and to the right and franchise to him granted under the said Ordinance No. 10,392.
On the 3d of November, 1895, Watkins executed his bond in favor of the mayor of the city of New Orleans for the sum of twenty-five thousand dollars under the requirements of Ordinance No. 10,392. The bond was approved by the mayor on the 5th of the same month, and on the 10th of December the Council appjoved of the major’s action in so doing.
Plaintiff alleged that it is a corporation organized for the purpose of building, maintaining and operating street railroads in the city of New Orleans, and had been so engaged for many years since the time of its organization; that in such capacity it owned and controlled various lines of street railroads and a line of steam railroad; that among the lines of street railroad so owned and operated was a double track electric street railroad on the neutral ground of Oanal street, from the intersection of Oarondelst street and Oanal street to the Metairie cemetery and return, and a double track horse railroad on the Metairie road running from the cemetery to Bayou St. John; that the line of steam railroad ran from West End, on Lake Pontchartrain, to the Metairie cemetery, and from Metairie cemetery to the intersection of Canal and Carondelet streets over the same rails on which it operated its electric street railroad. That the line of street electric road on Canal street was the principal thoroughfare to the cemeteries in the city of New Orleans, to which large numbers of people resorted, especially on Sundays and holidays, and was used by thousands of people every day. That the said fine of steam railroad connected the city of New Orleans with West End, the principal pleasure resort in summer time of the people of the city, and from the 1st of May to the 1st of September petitioner carried thousands of people from the city through the said Canal street to West End and return. That on said electric street line they ran an average of a car from each terminus as often as every minute, each of said cars having a capacity to carry about forty people. That in summer time, from 1st of May to the 1st day of September, petitioner ran a steam train at intervals of fifteen minutes from each terminus, each train having a capacity to about six hundred people. That the line of double track railroad running from Metairie cemetery to the Bayou St. John would soon be converted into an electric line, and that said road was the only avenue from the old City Park to the lines of street railroad owned and operated by your petitioner on the other side of the Bayou St. John, thereby making connection for the people of the Third District with the Metairie cemeteries and with the old City Park, said line being much frequented by visitors to the cemeteries and park.
That for the franchises owned and operated by petitioner in the city of New Orleans (all of which was bought and paid for after competition at public auction to icself as the then highest bidder), petitioner had paid very large sums of money to the city of New Orleans, exceeding one million of dollars, and that petitioner, on said franchises and the property which it owned in the city of New Orleans, paid to said city annually taxes in excess of the sum of fifteen thousand dollars per annum. Petitioner averred that the City Council of .the city of New Orleans did by Ordinance No. 10,382, Council Series, which said ordinance was adopted by said Council on the 5th day of March, 1895, and was approved by the Mayor on the 7th March, 1895, grant to W. H. Watkins and his associates, successors or assigns, the right to construct, maintain and operate a single or double track railroad upon the route and lines described, and to use steam locomotive or other appropriate motive power on the said railroad; that the route on which said road was to be constructed begins at the intersection of Calliope street and Hagan avenue, in the city of New Orleans, runs through Hagan avenue to Bienville street, thence by an undeseribed route to Barracks or Hospital street, thence to Taylor avenue, through Taylor avenue to Marigny avenue to Florida Walk, through Florida Walk to Montegut street, through Montegut street to St. Claude avenue to the lower limits of the city; that as would be perceived by the terms of said ordinance the said line of railroad to be operated by steam or other motive power crosses the lines and track of petitioner on Canal street at Hagan avenue, and on Metairie road at either Hospital or Barracks street, and petitioner was informed and believed, and so charged that it was the intention of said Watkins and his associates to enter upon the tracks of petitioner, and to intersect the same with the said lines of double track through Canal street and through Metairie Road, and to operate the said road with steam or other motive power, or with both, at their option, under the said grant; that the construction and operation of said line of railroad across the tracks of petitioner would damage petitioner in a sum exceeding one hundred thousand dollars; that petitioner would be compelled to stop each and every one of its electric cai’S and its steam train before crossing the said tracks going in both directions, each of which stoppages of said trains and cars was a loss and damage to petitioner, and that it would be further delayed by having to wait until the trains of the said Watkins pass; that the crossing of lines such as petitioner’s were by a steam line such as the Watkins line might be under said grant would be a source of extreme peril to the property of petitioner and to the lives of its passengers, and that thousands of timid and careful people would be prevented, hindered and restrained through fear of collision at said crossing from traveling on petitioner’s trains and cars to its further loss and credit. That it was informed and believed and so charged that the said Watkins and his associates proposed to enter upon the tracks of petitioner and to cross the same without previous compensation to petitioner under the Constitution of the State of Louisiana for the damage that would be occasioned thereby to petitioner, and petitioner averred it has the right to contest the validity of the grant made by Ordinance 10,392, Council Series, not only because of the damage and injury that the same would occasion petitioner, but because of the •fact that petitioner was a taxpayer of the city of New Orleans as averred in a sum exceeding fifteen thousand dollars per year, and it had the right as such taxpayer to annul void corporate acts of the city of New Orleans in detriment of the interests of the taxpayers. Petitioner, therefore, averred that said ordinance was absolutely null, void and of no effect.
First. Because the same was not advertised and sold at public auction to the highest bidder, as provided by Sec. 4 of Act No. 135 of 1888.
Seeond. Because the said grant was a valuable franchise, which if put up and sold at public auction would have realized a large sum of money for the treasury of the city of New Orleans, and it was an unreasonable and reckless exercise of corporate authority to donate such a grant without consideration to a private individual. Petitioner prayed for judgment in favor of petitioner, adjudging and decreeing that the said Ordinance No. 10,392, Oouncil Series, and the rights and privileges therein contained and thereunder granted unto the said W. H. Watkins were absolutely null, void and of no effect, and perpetually enjoining the said Watkins from undertaking to construct or operate the railroad provided for in the said Ordinance No. 10,392, Oouncil Series, and, in the event that the court should hold that the said ordinance was valid and that said ordinance authorized the said Watkins to construct and operate the said railroad, enjoining, prohibiting and restraining the said Watkins from entering upon the railroad of petitioner on Oanal street and on Metairie Road, and from building the said railroad across the same until the said Watkins had previously made to petitioner compensation satisfactory for the damage and injury to be occasioned to the petitioner by the construction of said road, said damages to be settled either by agreement or by the verdict of a special jury, as provided by law in matters of expropriation.
The District Oourt rendered judgment in favor of the plaintiff and against the defendant, W. H. Watkins, and its transferee or assign, the “Watkins Railroad Company,” decreeing the nullity of Ordinance No. 10,392, Council Series, adopted by the Council of the city of New Orleans on March 5, 1895, and perpetually enjoining the said W. H. Watkins and the Watkins Railroad Company from constructing or operating the railroad provided for by said ordinance.
W. H. Watkins and the Watkins Railroad Company appealed.
The date of the approval of Ordinance No. 10,892 was on the 5th day of March, 1895, but the date of its promulgation did not appear.

Opinion:
The opinion of the court was delivered by
Nicholls, C. J.
The conclusions we have reached in this case make unnecessary any examination of the question whether plaintiff, would be entitled to damages for the crossing of its tracks (laid upon the streets of the city of New Orleans), by another road, when such crossing was made under authority of the city authorities so to do, and if so, what the character of such damages would be, and whether plaintiff, if entitled to such damages, would be entitled to enjoin the second road from making the crossing until it should have previously made compensation to it for such damages.
We will confine ourselves to the single proposition whether under the law the Common Council of New Orleans had the power and authority to make the grant embodied in Ordinance No. 10,392. Plaintiff as a taxpayer maintains that it has not, and relies in support of that position upon the fourth section of Act 135 of 1888, which declares that the Common Council " shall not have power to grant, renew or to sell or dispose of any street railroad franchise, except after at least three months' publication of the terms and specifications of said franchise, and after the same has been adjudicated to the highest bidder by the Comptroller, as provided in Sec. 21 of the city charter."
In discussing this question in East Louisiana Railroad Company vs. City of New Orleans, 46 An. 526, we said that the " section of the act manifestly applied to street railway franchises, granted for the purpose of operating a road exclusively within the city limits. It did not apply to railroads carrying the mails, and transporting freight and passengers long distances beyond the limits of the city. The Legislature never intended, and in the nature of things such intention would be impracticable in execution, to cause railroads coming into the city from a distance to have the franchise of a right of way. No latitude of construction could make the provisions of Sec. 4 extend to other than roads which are operated exclusively within the corporate limits. The fact that plaintiff's road reached the city over another road did not change its character into a street railway. Its attempt to reach the road over which in part it ran its trains was a matter of convenience. Its destination was still beyond the city limits, and practically it was a continuous line of road from the city to its objective point, Covington. If it ran its trains only from its intersection with the Northwestern Railroad within city limits and carried passengers and freight between those points it would be classed as a street railway and come within the purview of Sec. 4. But that was nob a fact. The object of the plaintiff company was to carry freight on its own cars beyond the city limits to Pearl River Station, where they would reach their own roadbed. As the road of plaintiff was not a street railway the City Council had the power to grant the franchise without requiring a compliance with Act 135 of 1888. Art. 243 of the Constitution. Consent only was necessary bo grant the privilege of a right of way to a railroad running beyond the city limits. Sec. 689, R. S. The city could, as a matter of right, refuse to grant the authority for a passage through its streets of a railroad. It could also demand a price for the privilege. But it could also, as a matter of right, if it deemed the exercise of the power reasonable and proper, grant the right of way to a railroad extending its lines into other territory without a compensation in money but for other considerations."
Section 4 of the act having made use of the word " street railroad" in connection with the prohibition contained therein, defendant's effort is to give such a definition to that term as would exclude the tracks authorized to be constructed and the road to be operated under Ordinance 10,392 from falling under the bar of the fourth section. The carrying of passengers within the limits of the city in contradistinction to the carrying of freight and passengers would seem to be, according to the defendant, the distinctive mark or characteristic of a street railroad. Our decision just cited is supposed to be decisive on that point, bub in this there is a mistake. It is true we allude to the fact that the East Louisiana Company carried "freight," but that word has not the importance which defendant attributes to it — the next words "beyond the limits of the city," and the words " in their own cars," have more signifi canee, and the use of these words must be read in connection with the subject matter the court was dealing with. The court was dealing with a special case, and held, that in that case and under the conditions and circurpstances shown, the Common Council had the power and authority to grant to the East Louisiana Railroad, without a money consideration (and that fixed as to amount by a bid at public auction), the privilege which it had accorded. The case was one of a simple "right of way" to an existing corporation having its domicile out of the city of New Orleans, with its legal character and its franchises as a railroad corporation already fixed, to continue or extend its line through the streets further into the city. The privilege originated in favor of the company no new resource of revenue, no change in its business was effected, and no additional traffic arrangements were authorized to be entered into. The ordinance took matters up just as they were and simply permitted the moving forward of the terminus of the road — nothing more; freight and passengers were not transferred to cars of another line for a consideration, or moved upon another line for a consideration, but were carried straight on upon the company's own line, upon its own cars. We were called upon in the case cited to ascertain what the intention of the Legislature was in enacting the act of 1888, and reached the conclusion that its dominant idea was to deal with franchises or privileges having a money value, and franchises of such a character as would be the subject of competition if the way were left open for the public at large to obtain them at public auction. We reached the conclusion in that case that the privilege granted to the Eastern Louisiana, though it might have a value to the company, and though that value to it might induce it to make liberal offers to the city in one way or another for the purpose of receiving it (thus making it valuable also to the city) was none the less not a priviiege for which third persons would be likely to compete, and that therefore it was not within the contemplation of the act of 1888, which looked to an " advertisement" and to " competition " as special factors in determining its prohibitory clauses. We did not decide that an existing railroad corporation carrying freight and passengers, having its domicile beyond the city and coming into it, could simply, by reason of those conditions, be authorized under ordinances of the city to construct a track or tracks from some point inside of its own line and circling the city, originate a new character of business inside its limits, and obtain, in and through the ordinance, new, separate and distinct sources of revenue. Under such circumstances, and to that extent, the foreign road would substantially be acting under a new franchise, not its old one.
Our decision substantially so declared. The view of this matter which we teok was similar to that taken by the Supreme Court of California in People vs. San Francisco & S. J. Railway Co., 44 Pac. 463.
Referring to a privilege such as was granted to the East Louisiana Company and a contention that, in order to make it valid it should have been put up at public auction, the court said " that under the law ' they (the Common Council) can not grant the privilege to any but the highest bidder,' and the highest bidder may be one who merely desires to prevent the road from passing through, and who can not make use of the franchise except for that purpose.
" In fact the franchise sought is not the subject of competition. A particular railway company desires permission to construct its road through the town, or, in other words, to make a connection through the town of those portions of its road extending upon either side of the town to its opposite terminus. In the nature of things there can be no competition for this privilege. The builder of the road must build and operate the whole line. The right to do so is part of its corporate franchise, and how is it possible that any other person or corporation can acquire the right to construct or own and operate as a distinct and independent road and franchise that part of the road necessary to connect its two ends? This law was not intended to apply to such a case, but only to those cases. — of street railroads— in which bona fide competition is possible."
If we compare the conditions existing at the time of the grant to the Eastern Louisiana road and the precise thing which it was authorized to do under its grant, with the conditions and circumstances existing when Ordinance No. 10,392 was passed, and with the objects and purposes to be accomplished under this last mentioned ordinance, it will be found they are essentially different. The very origin of the business which the new corporation is to transact is found in the ordinance itself — it is a local franchise, new, separate and distinct from any outside franchise, clearly valuable and for which the public would compete in money, if opportunity so to do were permitted. The city was not authorized to grant a privilege extending beyond its own limits. It had nothing to do with extensions beyond its own territory.
We do not think the General Assembly intended to use the words " street railroad " in any narrow technical sense, but that its evident purpose was to compel the city to make available for city purposes, and for the public benefit, in money, any local railroad franchise or privilege, which was valuable, and the amount to be derived from the granting of which was likely to be increased by being put up at public auction. So understanding to be the object of the lawmaker, it is our duty to give the statute a liberal construction in aid of its purposes, and this duty on our part carries with it an affirmance of the judgment appealed from, without the necessity of passing upon other questions raised in the controversy.
For the reasons herein assigned the judgment appealed from is affirmed.