Court Opinion

ID: 7905303
Source: CourtListenerOpinion
Date Created: 2022-09-08 21:59:48.291766+00
Date Added: 2024-06-11T16:32:23.946351
License: Public Domain

OPINION ON REHEARING.
(Filed February 12, 1921.)
The opinion of the court was delivered by
Marshall, J.:
This is an appeal from a judgment directing the specific performance of a contract for the transfer of a. part of an electric street railway. An opinion was filed June 5, 1920. {Ante, 285.) On the application of the defendant, a rehearing was granted, and the case has been again briefed and argued. The correctness of the statement of fact in the former opinion has not been challenged, and no additional *294statement of facts is made except such as may be necessary to understand the conclusions reached by the court on the several propositions argued.
1. One of the propositions argued is that “the contract was void for want of consideration because entered into under assumed conditions which did not in fact exist.” The argument to support this proposition is based on the contention that the franchise giving to the Lawrence Railway & Light Company the right to build a street railway on Massachusetts street from Seventh (Winthrop) street to the south end of the Kansas river bridge, had expired at the time the contract between, that company and the defendant (an interurban railroad company) was entered into. The ordinance giving the franchise to the Lawrence Railway & Light Company became effective April 13, 1909, and in section 1 provided:
“That consent, permission and authority be and are hereby given unto The Lawrence Railway and Light Company of Lawrence, Kansas, its successors and assigns ... to locate, construct, maintain and operate, a single or double track, standard gauge electric railroad ... . from the south end of 'the Kansas river bridge south on Massachusetts street to the city limits.”
In section 14, the ordinance provided that—
“'The grantee shall within fifteen days after the passage, approval and publication of this ordinance, file with the city clerk of said city, a written acceptance of the grant and franchise herein, and shall within one year after the filing of such acceptance, have ready for at least five (5) miles of its track on part of its route herein defined, and the remainder of said route within twenty (20) months from the granting of this franchise, unless delayed by strike, litigation or other unavoidable casualty or causes beyond its control.”
That ordinance in section 19, further provided that—
“If at any time a bridge is constructed across the Kansas river, the grantee is given permission, so far as the city can legally grant such permission, to construct and operate its street railway over and across said bridge and on and along Locust street to Delaware street in North Lawrence.”
On July 11, 1910, ordinance No. 585 was passed by the mayor and councilmen of the city of Lawrence. That ordinance contained the following:
“Section 2. That all parts or portions of Ordinance Number 413 of the said City of Lawrence, Kansas, imposing upon the said grantee any duty, liability or obligation to build, maintain or operate a line of street *295railway in, upon, over and along Massachusetts Street, between Winthrop Street and the south end of the Kansas River bridge in said City, prior to the 12th day of December, 1912, be, and the same are hereby repealed.”
The latter ordinance was passed when all parts of the franchise given by ordinance No. 413 were in force and effect, and left the Lawrence Railway & Light Company with the franchise to build a street railway on that part of Massachusetts street at any time that a bridge might be constructed across the Kansas river, if within the life of the franchise.
In the brief of the defendant on the rehearing is found this language, “each party assumed separate obligations beneficial to both.” There were many provisions in the contract between the Lawrence Railway & Light Company and the defendant, by which each promised certain things for the benefit-of the other. These covenants were at least a part of the consideration from each to the other for the contract in controversy. The right which the Lawrence Railway & Light Company gave to the defendant to construct a railroad on Massachusetts street from Seventh street to the south end of the Kansas river bridge, was then valid and subsisting and was a part of the consideration for the contract. There was no failure of any part of the consideration.
2. Another contention is that “the power given to a city by statute to grant rights, privileges and franchises cannot be delegated.” The legal principle stated is correct, but the fault in the contention is that there ivas no delegation of any power to grant franchises, and no such power was attempted to be exercised by the Lawrence Railway & Light Company in making the contract with the defendant. The Lawrence Railway & Light Company had a franchise to build and operate a street railway in Lawrence, and did not deprive itself of the right to operate that street-railway system by the contract. The contract provided for the construction of a part of the railway by the defendant and for its operation by the Lawrence Company, and provided means by which the Lawrence Company might do the things that the franchise gave it the right to do. Part of the contract reads as follows:
“It is further agreed that in the event The Lawrence Company shall at any time desire to use any of such tracks so constructed by The Interurban Company without purchasing the same, The Lawrence Company *296shall have the option and privilege of using any of such tracks for its local traffic during the full term of this agreement or any renewals thereof, and also of using the overhead of The Interurban Company for the purpose of attaching its trolley and feed wires upon the following terms and conditions.”
Under this provision of the contract, the Lawrence Railway & Light Company retained the right to run its cars over any track that might be built by the defendant. This would fulfill its franchise obligation.
3. It is argued that-“the tracks in the 500 and 600 blocks in Massachusetts street [from Seventh street north to the south end of the Kansas river bridge] are expressly excluded from the operation of the contract sued on.” This argument is based on the following language contained in the contract:
“The said Lawrence Company does not guarantee the right to The Interurban Company to operate its cars over the tracks of The Lawrence Company in the City of Lawrence, but grants to the Interurban Company only such rights as The Lawrence Company may have, and no more.”
To support this argument, the defendant contends that the franchise to build that part of a street railway had expired, and that therefore the language quoted excludes that part of Massachusetts street from the operation of the contract. It has been seen that the franchise had not expired as to that part of Massachusetts street, and this argument must fail.
' 4. Another contention is that “the contract sued on is ultra vires and void.” To support this contention, defendant argues that the Lawrence Railway & Light Company was not authorized by ordinance No. 413 to enter into such a contract; that it was in violation of the law of this state; and that it was in excess of the corporate powers of the Lawrence company. An examination of the argument shows that the proposition contended for is that the Lawrence Company by the contract undertook to split its franchise and assign to the defendant a part of it and retain the remainder. By the contract, the Lawrence Company did not attempt to transfer or abandon any part of its franchise or to split it, but did provide means by which áll of the franchise rights could be carried into execution. Such statute as we have on this subj ect authorizes railroads to lease the property of other railroads. (Gen. Stat. 1915, § 8594.) Of course, if both railroads are under the con*297trol of the public utilities commission, the lease must be approved by that commission. (Gen. Stat. 1915, § 8364.) Also, if one railroad under the control of the commission gives rights to another in a road then owned or operated by the former, the contract must be so approved.
5. The defendant insists that “the occupation of a public street by a railway company, in any other manner than that prescribed by statute is a nuisance per se.” No fault can be found with the legal principle stated, but the principle does not apply for the reason that the street is occupied under ordinances authorized by statute and passed by the proper authorities of the city of Lawrence. The basis of this argument is principally the contention that the franchise rights on Massachusetts street had expired.
6. Another contention is that “the contract sued on was not assignable without appellant’s consent, and cannot be enforced by appellee.” The contract was made by the Lawrence Railway & Light Company and the defendant. The Lawrence company assigned its franchise rights including its-rights under this contract to the plaintiff. The defendant argues that “it appears from the terms of the instrument itself that it calls for the performance of an obligation personal in its nature, such as carrying with its performance the element of credit.” The rule of law contended for by the defendant is well established and cannot be refuted, but the court is unable to see where there is any obligation of a personal nature going from either of these contracting parties to the other. Each is a corporation; each operates through officers and employees that are constantly changing; each gives rights to and in the other’s property; and in certain instances, there are promises for the payment of money.
The franchise granted to the Lawrence Railway A, Company was granted to that company, “its successors and assigns.” The ordinance granting that franchise, and its terms, were known to and understood by both parties to the contract. With that ordinance before them, the parties stipulated that—
“It is understood and agreed that the terms, agreements and conditions of this contract shall be binding upon and shall be construed in favor of the successors and assigns of each of the parties hereto; pro*298vided, nothing herein contained shall authorize the Interurban Company to run or operate over the tracks of the Lawrence Company, any cars other than those run or operated by itself, its successors and assigns, for the transaction of its or their own business.”
It was intended that the rights and obligations conferred by that contract might be transferred to other persons or corporations ; else,- why say that the contract should be binding on their successors and assigns. The defendant gave its consent to the assignment of the rights conferred by the contract when it was signed. The franchise subsequently granted by the city of Lawrence to the defendant was to “its successors and assigns.” It must be held that the rights and obligations under the contract were assignable.
7. It is argued that the contract between the Lawrence Railway & Light Company and the defendant was never approved by the public utilities commission and is therefore invalid and nonenforcible. The contract was not approved by the public utilities commission. The order of the commission approving the purchase of the Lawrence Railway & Light Company franchise and properties by the plaintiff, did not apply to the contract between the Lawrence Railway & Light Company and the defendant. The defendant was under the control of the public utilities commission. The Lawrence Railway & Light Company was not.
Section 8364 of the General Statutes of 1915, reads:
“No franchise granted to a common carrier or public utility governed by the provisions of this act shall be assigned, transferred .or leased, nor shall any contract or agreement with reference to or affecting such franchise or right thereunder be valid or of any force or effect whatsoever, unless the assignment, transfer, lease, contract or agreement shall have been approved by the commission.”
The contract did not transfer or lease any part of the franchise of the defendant, and did not refer to nor affect that franchise, nor any right thereunder within the meaning of the statute. One of the franchise rights of the interurban company was evidently to build a line of railroad into Lawrence; it had power to purchase property to carry into effect that franchise and to make contracts therefor without the approval of the public utilities commission. The property that might be thus contracted for included rails, ties, cars, right of way, and might well include rights in tracks already laid. The de*299fendant could contract to pay for these things. The statute does not prohibit the defendant from leasing other railroad tracks, other railroads, nor from purchasing any other company’s franchise, without the consent of the commission, if the other railroad or company is not under the control of the commission. This contract carries into effect the defendant’s franchise and does not assign, transfer, or lease it, nor any part of it, nor refer to or affect it, nor modify, restrict, or defeat its operation. By the contract the defendant acquired rights it did not have prior thereto and did not give any it then had.
The conclusion reached in the former opinion is adhered to, and the judgment is again affirmed.