Court Opinion

ID: 9418350
Source: CourtListenerOpinion
Date Created: 2023-08-02 22:22:20.745549+00
Date Added: 2024-06-11T17:17:19.379304
License: Public Domain

Mr. Justice McReynolds
delivered the opinion of the court.
The Northern Ohio Traction & Light Company through successive assignments from William A. Lynch acquired the interurban electric railroad between Canton and Massillon, Ohio, October, 1906; The Cleveland Trust Company is trustee under a mortgage on the road intended to *576secure an issue of bonds. The line was constructed under resolution by-the Board of County Commissioners, Stark County, passed February 22, 1892, which granted to William A. Lynch, and such railroad corporation as he might cause to be incorporated for that purpose, the right to locate, construct, maintain and operate an electric railroad along the state highway without specifying any limit of time. This resolution is copied in the margin.1
*577A disagreement concerning rates having arisen, by resolution of March 27, 1912, the Commissioners declared the original grant to Lynch not a perpetual franchise but subject to termination by either party and that the passenger rate was excessive, and should be reduced. It continued, “therefore, be it resolved, that unless said Northern Ohio Traction and Light Company comply with the above mentioned matters of reduction of amount of fare charged for transporting people between the cities of Canton and Massillon and from intermediate points, together with the transfer on the city lines of Canton and Massillon, on or before the twenty-seventh day of April, 1912, the said grant given to said William A. Lynch on February 22, 1892, to operate an electric railroad between the said cities of Canton and Massillon, is hereby declared terminated and the prosecuting attorney of this county is hereby instructed to take such legal proceedings as may be necessary to have said grant made null and void *578and the said electric railway removed from said public highway between the said cities' of Canton and Massillon.”
April 26,1912, the Commissioners returning to the matter resolved:
“In the event .that said demands are not met by said company on or before the time mentioned in the said resolution of March 27th, 1912, the prosecuting attorney of this county be and he is hereby instructed to immediately proceed to have injunction proceedings filed against said Northern Ohio Traction & Light Company, restraining said company from operating said electric railway on the public highway between the cities of Canton and Massillon or running cars thereon and to further compel said Northern Ohio Traction & Light Company to remove said railway from said public highway, and be it further resolved, that this resolution be contingent upon and in accordance with the conditions of the said resolution passed by this board on March 27th, 1912, . ..”
Accordingly, August 13, 1912, Charles Krichbaum, Prosecuting Attorney, instituted quo warranto proceedings in the Circuit Court asking that plaintiff in error Traction & Light Company be ousted from exercising the franchise to operate a railroad along the Canton-Massillon highway, and be compelled to remove its tracks and switches. A demurrer was sustained because (1) the petition did not state facts sufficient to constitute a cause of action; (2) it did not state facts sufficient to justify relief prayed; (5) plaintiff had no légal power to try or bring the action. No appeal was taken from a- final judgment entered June 3, 1913.
February 19, 1913, the Commissioners adopted another resolution which, after referring to the one of 1892 and the construction and operation of the railroad, stated that the grant continued from day to day so long as both parties consented and could be terminated at will, ahd then *579declared “that said term of said grant and conveyance-be terminated on this date.” It is in the margin.1
*580Obeying this last resolution, Hubert C. Pontius, Prosecuting Attorney, instituted the proceeding under review in the Supreme Court of Ohio. The petition alleged control of the railway by the Traction & Light Company; set up resolutions of 1892 and 1913 authorizing its construction and directing removal; and declared the company continued operations “which said conduct plaintiff avers is without warrant or authority of law.” It concluded, “wherefore, because of the premises and matters herein *581set forth, the plaintiff prays the advice of the court, and that the defendant, to wit, The Northern Ohio Traction and Light Company, be compelled to answer by what warrant it claims to have the use and to enjoy the rights, privileges and franchises aforesaid, in the operation of its said interurban electric railroad between the cities of Canton and Massillon, Ohio, in said county and state; and that it be ousted from exercising the same and be compelled to remove its tracks and switches from the said Canton-Massillon road between the corporate limits of the said cities of Canton and Massillon, and plaintiff further prays that such other and further relief be granted in the premises as to the court may seem just and proper.”
*582The. answer relied upon final judgment in proceedings instituted by Krichbaum as an adjudication of the grant’s validity; also a resolution by the county commissioners May 3, 1909, providing for double tracking as recognition and continuation of original franchise. And further, “this defendant says that said resolution of February 22, 1892, and said amending resolution of May 3, 1909, by the acceptance thereof by this defendant and its predecessors in title, constitute a contract between the board of county commissioners of Stark county, Ohio, and this defendant, and that any ouster of this defendant from its use and operation of said electric railroad between Canton and Massillon would be an impairment of the obligation of this defendant’s contract, and a taking of this defendant’s property without due process of law, and would also be a denial to this defendant of the equal protection of the law, all in violation of the Constitutions of Ohio and of the United States.”
Without opinion or other explanation the Supreme Court pronounced the following decree October 19, 1915: “This cause came on to be heard on the pleadings and the evidence and was argued by counsel. On consideration whereof, the court finds upon the issues joined in favor of the plaintiff on the authority of Gas Company v. The City of Akron, 81 Ohio St. 33. It is, therefore, ordered and adjudged that the said defendant be ousted from the exercise and use of the rights, privileges and franchise described in the petition of the plaintiff in the operation of the interurban electric railroad therein described, and it is hereby ordered to remove its tracks and switches from the said Canton and Massillon road between the corporate limits of the said Cities of Canton and Massillon within ninety days from this date. It is further ordered and adjudged that the plaintiff recover of the defendant its costs herein, taxed at $-.”
Dissenting, three members declared: “The sole ques*583tion in this case as presented is whether the board of county commissioners can revoke and annul a franchise granted by the state without having the power so to do delegated to it by the sovereign authority.” 93 Ohio St. 466.
Plaintiffs in error maintain that the Commissioners’ resolution dated February 19, 1913, was an exercise of state authority repugnant to the Federal Constitution, because it impaired their contract, took their property without due process of law, and denied them equal protection of the laws.
In East Ohio Gas Co. v. Akron, (decided October, 1909) 81 Ohio St. 33, relied upon to support the judgment below, a city ordinance, without specifying anything as to duration, provided “that the East Ohio Gas Company, its successors and assigns, are hereby granted the right to enter upon the streets, alleys and public grounds of the city of Akron, Ohio, ... to maintain, operate, repair and remove mains and pipes . . . together with the right to construct and maintain, repair and remove all necessary regulators,” etc. And the court said (pp. 52, 53): “It is true that the ordinance grants the right to énter and occupy the streets, but in respect to the time when it shall terminate its occupancy and withdraw, the ordinance is silent. May we infer from this silence that the, gas company has a perpetual franchise in the streets? We are not now prepared to hold that the company has thus acquired such a perpetual franchise;' ... It comes then to this, that in the absence of limitations as to time, the termination of the franchise is indefinite and, to preserve mutuality in the contract, the franchise can continue only so long as both parties are consenting thereto.”
The Supreme Court determined, in effect, that a valid franchise to construct and maintain the railroad granted to Lynch and his successors in 1892 was terminated by resolution of 1913. Accepting this ruling, is the latter resolution inoperative and void because in conflict with *584Art. I, § 10, of the Federal Constitution? Manifestly it amounted to action by the State. St. Paul Gas Light Co. v. St. Paul, 181 U. S. 142, 148; Ross v. Oregon, 227 U. S. 150, 163.
It is suggested that in 1892 Ohio statutes only empowered county commissioners to grant franchises not exceeding twenty-five years in duration, and the present one accordingly expired in February, 1917. But by its final judgment (1915) the Supreme Court recognized a valid franchise existing in 1913 and declared it ended by the resolution of that year without discussing the subject of limitation. Consideration of the point is therefore unnecessary — our concern is with rights struck by the resolution. We express no opinion as to whether those have now expired. Neither are we concerned with the General Assembly’s reserved power to revoke or repeal privileges; it has taken no action. Ohio Constitution (1851), Art. I, § 2, and Art. XIII, § 2.
Beyond serious doubt, under constitution and statutes of Ohio in 1892 county commissioners had power to grant franchises over public roads valid for twenty-five years, if not perpetually. Nothing said by the state courts prior to East Ohio Gas Co. v. Akron (1909) is cited which intimates that grants, without specified limit of time, were revocable at will. Evidently this was not the settled view in 1903 when the Circuit Court distinctly adjudged that accepted ordinances by a city between 1861 and 1873, authorizing construction and operation of street railways, silent as to time, created perpetual rights, subject however to revocation by the General Assembly. State ex rel. Taylor v. Columbus Ry. Co. (1903), 1 Ohio C. C. (N. S.), 145. This judgment was affirmed in 1905, 73 Ohio St. 363, “on the sole ground that the defendant had present right to occupy the streets at the time of the commencement of this action” — a result hardly intelligible upon the theory that the grants were revocable at will. Appar*585ently the doctrine announced in East Ohio Gas Co. v. Akron, was not suggested in either court.
The circumstances surrounding the grant of 1892 show no intention either to give or accept a mere revocable right. It would be against common experience to conclude that rational men wittingly invested large sums of money in building a railroad subject to destruction at any moment by mere resolution of county commissioners. Detroit v. Detroit Citizens’ Street Ry. Co., 184 U. S. 368, 384.
Where there are no controlling provisions in state constitution or statutes and no prior adjudication by its courts to the contrary, we have distinctly held that franchises like the one under consideration are contracts not subject to annulment as here undertaken. Louisville v. Cumberland Telephone Co., 224 U. S. 649, 664; Grand Trunk Western Ry. Co. v. South Bend, 227 U. S. 544, 556; Owensboro v. Cumberland Telephone Co., 230 U. S. 58, 73; Old Colony Trust Co. v. Omaha, 230 U. S. 100, 117.
As construed by the Supreme Court of Ohio the resolution of 1913 impaired a valid contract, upon which plaintiffs in error properly relied. It was accordingly invalid and without effect.
The judgment below is reversed and the cause remanded for further proceedings not inconsistent with this opinion.

Reversed and remanded.

Mr. Justice Day took no part in the consideration or decision of this’ cause.

 Resolution for Right of Way for Electric Railway.
Resolved, that the right is hereby granted to William A. Lynch and to such railroad corporation as he may cause to be incorporated for that purpose to locate, construct, maintain and operate an electric railroad along either side of the state road running between Canton and Massillon, between the line of the Canton Street Railway and the corporate limits of the city of Massillon, said road to be constructed of ties and rails in the customary manner with the necessary poles and wires for an electric railroad. The ties shall not be laid nearer to the center line of said road than nine feet, except where switches are constructed, at which places the present traveled driveway may be slightly changed from its location to allow for the construction of such switches. Wherever cutting or filling may be neéessary in order to establish a suitable grade for said railroad, and such cutting or filling encroaches upon the traveled portion of said road, or nearer than nine feet from the center of the road or wherever the cut or fill would interfere with the usefulness or safety of the road, at all such places the grade of the road shall be changed and its bed shall be re-graveled so as to restore it to its present state of usefulness, instead of locating said railroad on one side of the center line as above provided, the same may be located, along the center line of said road, along the whole or any portion thereof provided that in such case wherever so located said railroad company, or the property owners along the road shall cause a good and sufficient roadway to be graded on each side of said railroad, each of said roadways to be not less than sixteen feet wide in cuts and not less than eighteen feet wide'on fills, and each roadway shall be graveled to a width of ten feet and eight inches in thickness and put in condition for public travel without unreasonable delay. In case the railroad is built upon the side of the road, crossings shall be constructed of plank or other suitable materials, at all public highway crossings or intersections and in front of all private driveways on the side of the road on which said railroad may be located. If the railroad be constructed in *577the center of the road, the track shall be laid so that the ties shall not be above the level of the highway on either side at the ends of the ties, materially, or so as to prevent the crossing of teams and vehicles over said railroad with reasonable convenience. All work that may be done under this resolution upon and along said state road shall be done under the supervision and subject to the control and to the approval and acceptance of the commissioners, they reserving the right to make such minor changes in location and the plans and methods of grading the highway as the public interests may require.. It being understood and agreed that said Wm. A. Lynch or the railroad company, before commencing any part of said work shall enter into a bond in the sum of ten thousand dollars for the faithful performance of the conditions enjoined upon them by this resolution. This resolution to be of no binding effect until such bond is duly executed and accepted. It being further understood and agreed that said Wm. A. Lynch or the railroad company before commencing any part of said work shall enter into a bond in the sum of ($5,000) five thousand dollars conditional that said Wm. A. Lynch or said railroad company shall keep said county and said board perfectly harmless from any and all liability to abutting property owners growing out of the construction of said road.

 Resolution of the County Commissioners of Stark County, Ohio.
Whereas, the county commissioners of Stark County, Ohio, on the 22nd day of February, 1892, passed a resolution appearing on pages 17, 18, and 19 of Volume 8, Commissioners’ Journal, Stark county, Ohio, and said resolution is as follows: [Here follows a copy of the resolution granting a right of way to Lynch above set out] and,
Whereas, an electric interurban railway, some time after the passage of said resolution, was built and constructed from Canton, Ohio, to Massillon, Ohio, upon the state road between said cities, the course described in the aforesaid resolution, and
Whereas, cars are now being operated upon said interurban electric railway and have been so operated for some years, by persons or companies, claiming to derive their rights and title from the said William A. Lynch, and claiming that their said title, right and interest emanate from the aforesaid resolution, and
Whereas, The Northern Ohio Traction and Light Company, a corporation, -is now and has been, for several years last past, operating the interurban electric cars over said railway and carrying passengers over said interurban electric railway between the cities of Canton and Massillon, Ohio, and
Whereas, the said The Northern Ohio Traction and Light Company claims its rights, interests and privileges for the conducting of said business as assignee, transferee and successors of the said William A. Lynch, and his assigns or successors, based and founded upon the aforesaid resolution passed by the county commissioners of Stark county, Ohio, on the 22nd day of February, 1892, and recorded on pages 17, 18 and 19 of Volume 8, Commissioners' Journal, Stark county, Ohio, and
Whereas, the commissioners of the county of Stark-and state of Ohio contend,
First. That the said William A. Lynch, at the time of the enactment of said resolution of the commissioners of Stark county, was not an incorporated company and was not entitled to the privileges of which a company incorporated in Ohio for the purpose of owning and operating an interurban electric line, was not such an entity that he could accept the interests, rights andddtles granted by the county commissioners of Stark county in the aforesaid resolution.
Second. That whatever right, title, interest and privilege, if any, were conveyed by the aforesaid resolution to the said William A. Lynch *580were conveyed and granted to the said William A. Lynch and to him alone, said grant and conveyance being a personal one.
Third. That the term of the grant included in the aforesaid resolution of the county commissioners, passed by the county commissioners on the 22nd day of February, 1892, as aforesaid is an indeterminate one, continuing from day to day and that said term extends and continues only so long as both parties to said grant and conveyance, to wit: Stark county, Ohio, through its board of county commissioners, the grantor, and William A. Lynch, or any company he might organize and incorporate, or any successor of the said William A. Lynch or the said company he might organize, the grantee, agree and consent, and that said grant and conveyance can be terminated at any time by either party to said grant and conveyance, or those -claiming to hold or holding under said grant.
Now, therefore, be it resolved by the board of commissioners of Stark county, Ohio, assembled in session, that sai,d term of said grant and conveyance be terminated on this date, to take effect on this date, and that the board of commissioners of Stark county, Ohio, refuse to extend to The Northern Ohio Traction and Light Company, which company claims to hold, title, right and interest as the successor, assignee and transferee of the aforesaid William A. Lynch and his successors and assignees, or either of them, the term for the operation of the aforesaid interurban electric railroad beyond this date.
Be it resolved that The Northern Ohio Traction and Light Company be notified that the commissioners of Stark county, Ohio, have on this date terminated the term of said grant and conveyance, under which said grant The Northern Ohio Traction and Light Company claim the right and privilege of operating said interurban electric railroad between Canton and Massillon, Ohio, and that the county of Stark and state of Ohio and the board of commissioners of Stark county, Ohio, will regard and do regard the operation of an interurban electric rail*581road between Canton and Massillon, Ohio, on said state road running between. Canton and Massillon, Ohio, from this date forward a usurpation and infringement upon the rights of said Stark county, Ohio, and said board of commissioners of said Stark county, Ohio.
Be it resolved that the prosecuting attorney of Stark county, Ohio, be directed and is hereby directed to take whatever steps he may deem .necessary and advisable to prohibit and prevent The Northern Ohio Traction and Light Company or any other person, individual, corporation or company from continuing to operate an interurban electric, ■railroad between the cities of Massillon and Canton, Ohio, on the state road, running between said cities by virtue of any rights, title or interest the said The Northern Ohio Traction and Light Company or any other person, individual, corporation or company may claim as resulting from the aforesaid resolution, enacted by the county commissioners of Stark county, Ohio, on February 22,1892.
Be it resolved that the said The Northern Ohio Traction and Light Company be directed and is hereby directed to remove all its property, equipment and belongings from the right of-way described by the aforesaid resolution, herein referred to as having been passed by the county commissioners of Stark county, Ohio, on February 22, 1892, and now occupied by the said The Northern Ohio Traction and Light Company, at once. ■
Be it resolved that a copy of this resolution be sent or delivered, and the auditor of Stark county, Ohio, is hereby directed to send or deliver to The Northern Ohio Traction and Light Company a copy of this resolution.