CLEVELAND CITY RY. CO. V. CITY OF CLEVELAND.
385
CLEVELAND CITY RY. CO. v.
CITY
OF CLEVELAND.
CLEVELAND ELECTHIC RY. CO. v.
SAME.
(Circuit Court, N. D. Ohio, E. D.
May 16, 1899.)
Nos. 5,839 and 5,840.
1.
CONSTITUTIONAL LAW - IMPAIRMENT OF CONTRACTS STREET-RAILhOAD FRANCHISES.
OUDINANCES GRANTING
City ordinances making grants of franchises to street-railroad companies on specified conditions, when accepted by the companies, constitute contracts, which cannot be annulled or amended except by consent of both parties, and which are protected from impairment by the fourteenth constitutional amendment. RESTRAINING EIoiFORCg)IENT OF UNCO!'i:STITUTIONAI, ORDINANCE.
2. EQUITY JURISDICTION -
A federal court of equity may grant relief by Injunction against a city ordinance which impairs the contract rights of complainant, or deprives him of his without due process of law. 8. STREET RAILROADs-RIGHT OF MUNICIPALITY TO FIX RATES OF FARES.
The statutes of Ohio confer power upon municipalities to determine the conditions of the grant of a franchise to a street-railroad company, including the rates of fare to be charged, but no power to thereafter prescribe rates of litre; and where the grant itself fixes the rate of fare a reserved right of regulation does not authorize the municipality to thereafter change it during the life of the grant. ORDI-
4.
CON STITUTIONAI. LAW - IMPAIRMENT' OF OBLIGATION OF CONTRACTS NA!'i:CE CHANGING RATES OF FARE ON STREET BAILROADS.
A cit;r, in granting franchises to two certain street-railroad companies. fixed the rates of fare to be charged, resel'Ying the right to increase or diminish such rates, as it might deem justifiable and expedient. Afterwards, by different ordinances, it granted additional franchises to eaell company, expiring with the original franchise, to build extensions, lay additional tracks, or to change the motive power. It imposed conditions to each of such additional grants, which were accepted by the respective companies, in the way of requiring street paving and repairing, or the furnishing of incFeased car service, to which the companies were not before subject, Such ordinances also made changes in the rates of fare by providing that but a single fare, at the rate then charged. should be charged for passage between any two points on either the original lines or their extensions, and by requiring the companies to sell tickets at a- reduced rate. As to one of the companies, which, under the ordinance containing the reservation, had the right to, and did, charge two fares for passage over the entire length of its line, a subsequent ordinance granting it the right to lay a double track, and to maintain it dming the life of its original franchise. required the carriage of passengers over the entire line for a single fare at the rate then charged, and such company was sul)sequently granted the right to change its motive powm: from horses to electricity. whleh it did. at a large expense. J.oJach of said companies subsequently consolidated with a number of other companies, as to whom no power to change the rates of fare had been reserved by the city. tlwir original lines, to whleh the reservations in regard to changing rates of fare applied, thus becoming parts of two several consolidated systems, each containinlj( miles of. road, operated together. These consolidations were consented to by the .city, the consents containing, provisos, accepted the consolidated companies. requiring transfers to be given. 01' through cars run, so that a single rate of fare or ticket at the rate then charged should entitle a passenger to ride over the lines of any two of the constituent companies. whereas they were before entitled to charge separate fares oyer each line. None of such legislation of the city subsequent to that granting the two original franchises mentionp(} contained any reservation of the right to make future changes in rates of fare. Held, that such subsequent leg-isla941-'.-25
386
94 FEDERAL REPORTER.
tlon, and Its, by the compapies, operated as a ,repeal, of the provisions of the' grants reserving the right to change 'llie rates of fare on the original lines of the two COmpanies to which tp.e;y applied, or constituted new contracts with 'SUch companies and their successors, which the city could '!lot impair during ti\Ellife:,of their franchises;llUd that an ordinance passed by the city requiring the consolidated companies to reduce the rates of fare on such original lines, aside from being impracticable in each of such lines had become a part of a larger system, operated together as a whole, was unC'Cinstitutional and void ,as an impairment of the contracts lUade by SUCh, SU!;Jsl;lquent ordinances. 5. SAME"7'"MoDlFICATION OF ,GRANT ,BY CITy __ VAUDITY UNDEllOHIO STATUTE.
by a it spall not, during, the term of such grant or renewal, release the grantee from any obligation or liability imposed by the terms ,of such grant or renewal, a city making II grant of a franchise to a street-railroad company, in which it reserves the, right t.Q change tl:!e rates of fare to be charged, 'thereafter modi,fying pn'llutij,clent consideration. ' ,
}lev.
St. Ohio, § 2502, providing that, afite;r a grantor renewal of a grant
suits in equity by the CleiVeland Oity Railway Oompany and the, Cleveland Electric Railway"Company, respectively, against the city of Oleveland, to enjointhe enforcement 'of an ordinance reducing rates of fare ()n portions, of complainants' lines, On the ground opts unconstitutionality. IleaI'd on application for preliminary injunction. :The complainants have'lnstituted this 'suit to seek relief thri>ugh a decree' de· claring void certain ordinances passed by the city of Cleveland in October, 1898, knoWn as "L{)wIFare Otdinll'tJ.ces." By the proVisions of these two ordinances, the city undertak'es to of the two complainants to carry passengers over certain designated portions of the rdtitesoper;ated by them at a cash fare of 4 cents, and to sell tickets good for one 'passage at the rate of seven tickets for 25 cents.' Each of the compillinants, in its bill of complaint, contends that the ordinances so requiting"a'reduction of 'fare are'laws Of the state of Ohio, and in impairment of their contract rights, and that the rate of fare sought to be established lei so unreasonably low that, if put intO practical operation, it would amount to the taking of the complainants' property Without due process of law. Upon the filing of the bills; temporary restraining orders were issued. restraining the defendant from putting these ordinances into operation, and subsequently the cases were heard by the court upon an application, in each case, 'for a temporary injunction; and the cases have been 'fully and elaborately argued by the respective counsel, both orally and hy brief. As respects the Cleveland, City Railway Company, the' ordinance, the operation of which it is sought to enjoin, requires the company to operate What is known as the "Kinsman Street Line" at the rate of fare therein prescribed; and as to the Cleveland Electric Railway Company the ordinance in question is made applicable to that which is known' as the "Euclid Avenue Line," and all extensions thereof. Both of the companies, complainants herein, are operating under various ordinances passed in the common, council of the city of Cleveland, prescribing the terms and conditions upon Which the variouS railroad routes may be operated for stated periods of time. Both of the compiainant companies, at the date of the passage of the ordinance in question, were operating under such grants from the city, none of which had expired. A brief statement of the corporate' history of each of these complainants, and of the various ordinances under which' they were operating their lines of railway, is necessary to understand the precise question involved in this motion. The complainant the Cleveland City Railway Olmpany Is a corporation duly organized under the laws of the state of Ohio, having a capital stock of $8,000,000, of which $7,600,000 have heen issued, and a bonded indebtedness, secured mortgage upon a portion of its railroad line, of $2,026,000, payable in 11 years, with 5 per cent. interest, payable semianI1ually. This company was formed by the consolidation of two existing railway companies in the city of Cleveland,
CLEVELAND ClTY RY. CO. V. CITY OF CLEVELAND.
387
each of which owned and was operating lines of street railway under ordinances passed by the municipality; and by the terms of such consolidation, and by the statutes of Ohio, became possessed of the rights, franchises, and privileges theretofore possessed by each of the constituent companies. The Woodland Avenue & West Side Street.Railroad Company and the Cleveland City Cable-Rallway Company were the constituent companies entering into such consolidation. The said the Woodland Avenue & West Side Street-Rallroad Company, one of the constituent companies forming such complainant, was organized in 1885, and was a consolidated company formed by the consolidation of the West Side Street-Railroad Company and the Woodlano Avenue Railway Company; and the said the Woodland Avenue Railway Company, which was consolidated, was the successor, by purchase, of the Kinsman Street Railroad Company, having become such about the year 1880. By the terms of the consolidation, in 1885, of the said the Woodland Avenue Railway Company and the West Side Street-Railroad Company, said consolidated company, known as the Woodland Avenue & West Side Street-Railroad Company, became vested with all the rights and privileges of each of said constituent companies. The Cleveland City Cable-Railway Company was the successor and owner, by purchase, of all of the property and franchises of the St. Clair Street Railroad Company and the Superior Street Railroad Company, each of which companies was a corporation under the laws of the state of Ohio, owning and operating lines of street railway in the city of Cleveland under grants from the city. By virtue of the consolidation of the Woodland Avenue & West Side Street-Railroad Company and the said the Cleveland City Cable-Railway Company, In 1893, the complainant company the Cleveland City Railway Company became vested with all of the rights, privileges, and franchises of the said constituent companies above mentioned. In 1885, when the Woodland Avenue & West Side Street-Railroad Company was organized, the constituent companies before such consolidation were independent lines of railway, one operating chiefly upon the west side of the Cuyahoga river, and the other upon the east SIde. running to the northeasterly portion of the city. Each was acting under independent franchises and contracts with the city of Cleveland. There was no exchange of traffic by way of transfer, and each company was charging a fare of five cents over its line. At the time of this consolidation, the West Side StreetRailroad Company had the right, by ordinance, to continue the operation of its road for 25 years from February, 1883, and to charge a cash fare of five cents for each passenger carried. The 'Voodland Avenue Railway Company was operating its lines of road under several grants from the city; among others, a grant made in 1879, relating to the operation of cars from Water street, through Superior and Ontario streets and Woodland avenue, to "Iadison avenue. This grant provided, among other things, that the company shouid not charge more than five cents cash fare, and in said ordinance was reserved the right to the municipal council to thereafter increase or diminish the rate of fare as it might deem wise and expedient;· this being the ordinance known as the "Kinsman Street Ordinance," and under which the defendant claims the right to put into operation the ordinance reducing the fare, set up in the complainant's bill. In 1883, another ordinance was passed, granting the Woodland Avenue Railway Company the right to extend and construct its line of railway upon 'Woodland avenue from the crossing of the CleYeland & Pittsburgh Railroad Company's tracks to Corwin street; and in this ordinance provision was made for the operation of cars over the entire line, including the line referred to in the ordinance of 1879; and the company agreed that during the continuance of said grant it would charge but one fare of five cents over its entire line. inclUding said extension. In 1885, upon the consolidation the Woodland Avenue & West Side Street-Hailroad Company, the city council passed an ordinance entitled "An ordinance to fix the terms and conditions upon which the railway tracks of the West Side Street-Hailroad Company and the tracks of the Woodland Avenue Railway Company and said companies may be consolidated," and in and by the said ordinance it is provided that: "The said consolidated company to carry passengers through without of cars, by the running of cars through from the workhouse, on the line of the Woodland Avenue Railway Company, to the point on the 'Vest Side Street-Railroad where Gordon avenue crosses Lorain street, and, when practicable, in th') judgment of the
388
i.! "
connell, :to do likewise on branches Of the consolldated lines, and that for a single fare from any point to any point on the lines or branches of the consolidated road no -greater charge than five cents shall be collected; and that tickets at the rate of eleven for fifty cents, or twenty-two for otledollar, shall at all times be kept for sale on the cars by the conductors." This ordinance was duly accepted' by the Woodland Avenue & West Side Street-Railroad 'Company, and Its SUccEl$sor, -the complainant, has complied with the terms of said ordinance, which has not yet expired; and It also appears that the prOVision so fixIng the rate of fare to be chlirged at five cents llad reference to and included the operation of cars upon that portion of Woodland avenue referred to In the 01'dlnancesougbt to be enjoined In the bill of complaint. In April, lSS7, the Woodland Avenue & 'Vest Side Street-Railroad Company accepted an ordinance by the city of Cleveland relating to the construction of an additional track, upon Franklin avenue, and In this ordinance It Is provided that the grant made shall continue and terminate with the grant of the main line of said company on the 10th of February, 1908, and that It Is made upon the express condition that no increase of fare shall be charged by said railway company upon any part of Its main line, or on said extension, so that but one fare of not to exceed 5 cents shall be charged between an.y, points on said company's main line or extensions, and that said, company shall sell tickets at the rate of 11 for 50 cents, or 22 for $1. This ordinance of 1887 is still In force. The part of the main lin'e referred to, upon which -it ,was so provided that a fare of not to exceed five cents should be charged, Is,tneline of railway formerly known as Kinsman Street. and referred to in the ordinance the operation of which Is sought to be enjoined herein. In August, 1887, the city council passed an ordinance. which was duly accepted by' the Woodland Avenue & West Side Street-Hallroad Company. relating to an extension of its tracks upon 'Vaverly avenue, and' this ordinance provided that no Increase of 'fare should be charg'ed by said company on any part of its maiBi Une 01' on said extension, and that but one fare of not to exeeed 5 cents should: be charged between any points on said company's lines 01' extensions, and that"said company should sell tickets on its cars as follows: 11 tickets for ·50 cents, or 22 tickets for $1. This grant Is still In force. and the main line upon' which the rate of fare Is so prescribed Includes the line of railway upon 'Woodland avenue. referred to in the ordinance of October 17, 1898. set forth In complainants' bill, In 1892 the council passed an ordinance. duly accepted by the Woodland Avenue & 'Vest Side Street-Railroad Company. relating to -an .additional track upon Kinsman street, which ordihance required large expenditures of money by way of pa\Tl:ng and repairs of pavements. and In said ordinance it was provided that the grant Is made upon tl1econdltions that the company shall charge but one fare between any points on said company's main line and extensions, and sell tickets at the rate of 11 for 50 cents, or 22 for $1; all rights under the grant to terminate on the 10th of 11'ebruary, 1908. The main line referred to In this ordinance inclUdes the 'Woodla nd Avenue I,ine, In respect to which the council, by the ordinance of October 17, 1898. seeks to prescribe a lower rate of fare. It appears from an inspection of the various ordinances that In each instance where ne'w rights were granted to the company the city received as well new and valuable considerations by way of Increased obligations In respect to paving, or the opel'atian of through cars for the accommodation of the public, or the selling of tickets upon the cars. Prior to May 13, 1893, the Cleveland City Cable-Railway Company owned and operated lines of street raihvay upon Superior street by cable power, and lines upon St. Cllilr street by horse power; and the ordinance under which It was so operating authorized it. for a period of years, which has not yet expired, to operate Its lines, and upon each of them to charge aeash fare of not to exceed five cents. In May, 1893, at the time of the consolidation forming the Cleveland City Hailway Company, the two companies entering into such consolidation addressed a communication to the city council notifying it of their agreement In that respect, and that on .lune 1, 1893, It was proposed to operate the lines as an entire system, to Issue proper transfers,ilo that a passenger on any line-of the Woodland Avenue & West Side Street-Hallroad Company could be transferred to and have a continuous passage upon any line Of the Cleveland City Cable-Railway Company, Ilnd viee versa; that only one fare- should be charged; and that it waS proposed to also estab-
,
I
CLEVELAND CITY RY.
co.
V. CITY OF CLEVELAND.
389
lish a cross-town line, and charge but one fare for a continuous ride upon any additional lines within the city of Cleveland. Upon the receipt of como, munication, the common council, on :\fay 10, 1893, passed a resolution approving, the proposed consolidation upon the terms and conditions stated in such communication; and it appears that since the 1st of June, 1893, the Cleveland City Railway Company, the complainant herein, has operated said various lines of street railway, charging a cash fare of five cents for each passenger, and selling tickets good for passage as required by said several ordinances, and with the system of transfers contemplated in said council resolution, and in all respects complied with the conditions of the various ordinances under which it is operating its railway system. Such heing the relations established hy ordinance between the city of Cleveland and the complainant, on the 17th of October, 1898, the city council passed an ordinance entitled "An ordinance to provide for a diminution of fare under an ordinance granting a renewal of franchises to the Kinsman Street Company, and to reconstruct, maintain, alHl operate its street railroad in and through certain streets of the city of Cleveland." This ordinance, after reciting the reservation contained in said ordinunep of 1879, providing, "The council, however, reserves to itself the right to hereafter increase or diminish the rate of fare as it may deem justifiable and expl'dient," further recites that "the council now deems a diminution of fare fiahle," and by section 1 of the ordinance provides "that the rate of fare for a single continuous passage over the lines and all extensions thereof operated nnder the aforesaid grant to the Kinsman Street Railway Company be, and thl' same is hereby, fixed at four cents, cash fare, over the whole or any part therl'of"; and by section 2 the ordinance requires the company operating said lim' to keep on sale in its cars, when, in operation, tickets good for a single continuous passage at the rate of 7 tickets for 25 cents. The contention of the Clpveland City Hai!way and upon whiC'h it asks an injunction, is that the s.'lid ordinance of Octoher 17. 1898. which so requires it to carry upon a portion of its line at a cash fare of 4 cents. and to sell tickets at the rate of 7 for 25 cellts. is in violation and contravention of till' contract obligation existing between the said company and tlte city of Clewland, and impairs its contract rig-hts in this: that whereas. it is entitled. by virtue of the several ordinances hereinbefore set forth. to eharge upon all of its said lines a cash fare of 5 cents, the provision of said ordinance reqUires it. to accept a cash fare of 4 cpnts; and whereas, it is entitled. as respects ticket fare, to sell ticl_ets at the rate of 11 for 50 cents or :!2 for lFl. this ordi1llll1CP requires it to sell tickets at the rate of 7 for 25 cents; and this. the eomplainant claims, would be an impairment, by law of the state of Ohio. of its contract rights growing out of said ordinance and its acceptante thereof. It is also contended that the practical effect of the ordinance would be to reduc'e the rate of fare to 4 cents for a cash fare, and 3 4 17 eents for a ticket fare; tltat experience in the operation of street railwllYs has shown tltat where there is such a difference in amount between tiekets and cash fare, as a matter of ('onvenience and eeonomy at least 70 pel' cent. of passengers use tiekets. so that. if said ordinance be put into operation. the complainant contpnds it wonW he obliged to earry about 70 per cent.. of its passengers at the rate of 3 4 h cen Is. and that about 30 per eent. would pay the cash fare of 4 eents. whereby it e1aims thllt its gross reeeipts would be redncPd more than one-fifth. while its operating expenses wouW remain the same, and that the praetical olwration of the ordinance would hp to diminish its net receipts more than 50 pel' eent.; and in its bill the compl:illant gives a eompnl'lltive statement of gross and npt receipts for the year 18!)'i, the number of passengcrs carri(,d. the ratl' per passenger reeeived under existing ordinancps. and what its reeeipts would have been had the ordinance of October 17, 18!J8. been put in force upon its entire line; and from this statement it appears that its receipts would have been reduced $221,ii05.38, 01' something more than 20 per eent., amI that the average rate of fare per passenger cart'ied would have heen 3.87 eents. and that. in order to have made the gross equal to 'those under existingordinances. it would have been olJliged to ('art'y. in 1897, ii.7:iG.5BO more pas· sengers than it did in fact carry. It is further eontended amI set forth in tlw bill that, had'the ordinance in question heen in operation in 18!J7 over the eutin line, the company would have suffered a loss in income of
390
,0 '/
94 .FEDERAL REPORTER. -.
than 52.5, Pl;lJ: cent., of ,its net Income; and for the Period of time, and assumingthltt r 7tQjer cent. CatTled ,vould ha';Ve i used 'tickets, the loss to the'c6mp!itiY'woUld than' '61 pet cenLof its net Income',:'Arid .the complainant contends that the Which it alleges WQUId result'l;lPe'reached in the statements given without anything fot Interest depreciatIon; nothing fot dividends or Interest on capital aUd'nothlhg'by way of sinld'Og tund, whlcb I,t Is alleged ShOtlld be allowed by reason of the 'stlortness of the franchises' of, the 'cclInpan'Y;' and the complainant cbllte,Iids":thlitsltid l'edrictlon ,Of fare wou,ld deprive it of the reasonable profits which 'it is entitled to 'derive frorh its property, and' constitutes a' taidng of due process of law, in contravention of the constitution of We tJnited Eltl/.tes. " , ' , ' ,', " , . The cOIIiplainlliJ.t' the Cleveland Electric Ranway Company is a corporation duly organized' 'under the laws of the state of Ohio, having a capital stock of $12!000,OOO, sUbllt,antlally all of which is issued, lln!I a bonded indebtedlH'ss, secured by mortgage upon its property, aggregatllig about $3.750,000. and a floating of about $250,000. This company 'was formed by the consolidation railwaY companies in the city of Cleveland. each of which owrled' and was operat1nglines of stre'et railway under oJldinnnccfl passed by the muhiclpality; and, by the terms of such consolidation. and lly the statutes of Obiai became possessed of the rights, franchises, and privilegeK theretoforepossessM by each of the constituent companies. The constituent companies mitering Into such consolidation were the East Cleveland Railroad Company, the Broadway & NewbUrgh 'Compan;r. the Brooklyu Street Railroad Company, and tli'e South Side Sti'eeVRaili'oad Company. Tlw said the East, Cleveland Railroatl Company ,,;a8 a corporation whieh had beeu in existence, anlfoperated lines, of street railway 'in the city ,of Cleveland, sil1('p about the year 1859, and at the time of said consolidatiOn ,owned and was operathig several line!3 of street 'railway In said, city, namely, its Euclid Avenue Line, extend.ing from the business pottlon ot the citY,on Bank street, throul1;h Superior street; Euclid avenue,Erlestreet; Prospect sUeet, avenue, and Euclid avenue td the city limits; 'its Ga:tden Street Line, i'ts Cedar Avenue Lim'. and its Wade Plitk Avem:letll1e:That the aggregate mileage of the lines oPerated lIy said', company was about 40 miles, and each of said lines trail heen constructed, and was in under grants from the'city of Cleveland, and upon the fnitb'of which the said coirrpany had so its lines of railway, and in and by which said' grahts the city and said company, as authorized by the statutes ot Ohio, had 'agreed as to the terms and conditions and the period of time for the operation by said company of its sllid lines of street railway: That prior 'to Septemj)er'15, 1879, the East Cleveland Railroad Company wasoperafing its main li l1e"of railway from the intersection of Superior and Waterstre'ets to the easterly limits of the city on Euclid avenue, under various separate grants, some fr,om the city council, some granted by tbe county commissioners' before tbe terl'it\lry affected tberebybecame a part of the city of Cleveland, artd still other grants from the authorities' of the former village of East Cleveland; and the cOntract rigbts of the· company fOr tbe operation of its road easterly of Willson avenue, contained few restrictions,and none respf\cting the of fare to be charged, anq extended for a period of nearly 20 years; and at' that time, east of Willson avenue, upon Euclid avenue, there was but a sing.Ie track, and under contracts and agreements then in force between the cOlIlpan) and the pubilC 'authorities it had the right to charge passengel'S one fare from Water street to Willson avenue, another fare from Willson a to Faitlhount street,and still another fare fr0ll! Fairmount street to the city limits; 'alld it was, iIi fact, at that time charl1;ing pasmlgers two fares between Water aM Superior streHs and the city lilhits. That. in this situation, the said the' East Clevelandlril'ilroad C'omplmy and the city entered into a new contract, Droviding for the renewal of the grant to the said the gast Cleveland Rallroad'CoIiipany fdr the construction, maintenance. and operation of a portion of the line then operated by said double-track 'street railway 'over company from Superior and Water streets, through Superior street, around the Public Sqn:ll'e to Euclid avenue; through said avenue to grie street; thence to Prospect street; thence to Case avenue; thence to guclid avenue, and along said Eucl\(. avenue to Willsonllvenue; and said ordinance imposed new con-
CLEVELAND CITY HY. CO, V, CITY OF CLl';VEI,AND.
ditions as respects paving to be done by said compau3'. i'emoval of snow and ice. from the tracks, and other similar provisions; and in and b3' section 6 of said ordinance it was provided that said company SllOUlcl not charge more than five cents each way for a passenger over tM whole or apy part of the line therein renewed. Tb,at said company might charge a reasonable compensation for carrying packages, and that the council reserved to itself the right to thereafter increase or diminish the rate of fare, as it might deem justitiableor expedient; and under and by the terms of said ordinance. which was to remain in fOl'ce for the period of 25 years from the 20th' day of September, 1S7\). the said company reconstructed its tracks between Superior and Water streets and ·Willson avenue. as aforesaid,. and thereafter. up to April, 18S3, charged, as it was permitted to do by said ordinance, one fare of five cents between Superior and -Water streets and Willson avenue, and an additional fare of five cents from Willson avenue eastwardly to the end of its line. That about April 4, 1883, said company entered into a new contract with said city, by ordinance duly passed and accepted by the company. by which,upon certain terms and cond]tions, it was granted the right to extend and to build a,u additiona,l tmck, a,nd operate a double-track line upon Euclid avenue from Willson a"enue to FairItlount stl'eet; a,nd in said ordinance a,nd grant said company a,greed tha,t it would cha,rge but one fare of not more tha,n five cents between the westerly terminus. of the company's road ,upon Superior street a,nd the easterly terminus of its line, and that the rights gra.nted. expire on the 20th day of September, 1904; and in and by said contract it was provided that the council reserved to itself the right to thereafter increase or diminish. the rate of fa,re between the westerly end of said company's line on Superior street and the city limits, a,s it might deem justifiable and expedient. That npon the making of the last-mentioned contract the relations between the city and the East Cleve· land Company were so far chi:mged that the company had agreed to carry passengers over its lines as far easterly as the city limits for five cents for each passenger, but it 113,d not agreed, and was under no obligation, to run all its cars tbrough, and ,,'as, in fact, operating only portion of its cars as through cars, a,nd \vas under no o)J!igation to and was not transferring passengers who desired to go east of WillsOn avenue who had taken passage upon a car which did not go beyond that point. That such arrangement and operation were unsatisfactory, both to the city and to the company, and in March, 1886, a new contract was entered into between the city and the railroad compa,ny by ordinance duly passed, and accepteq by the ra,ilroad company, whereby it beca,me obliga,ted to construct and operate a double-track railroad in Euclid avenue between the easterly line of Fairmount street and the easterly limits of the city, such territory having theretofOre been occupied by a single track; thereby maldng its entire guclid Avenue Line a double-track street railroad, AmI in said ordinance it also agreed to pave between the mils of each trac1" together with the spaces between the mils, and to keep I'ertain portions of the pavement in good repair; each and all of which obligations were in addition to existing under former contracts between the railroad compa,ny and the city. And the complain'ant claims that in and by said ordinanee an entirely new contract and agreement, SUPerseding all contracts prior thereto, was made with the city by the said railroad company with respect to the rates of fare which it should clmrge over its said line so to be made into a double-track through line from Superior and "Yater streets to the easterly limits of the city upon Euclid aveuue, the agreement between the city and the railroad company with respeet to the fare thereafter to be eharged being as follows: 'rhat said eompany should operate the whole of said tmcl, a,s a through line, with through ears, and should eharge and collect but one fare of not more than five cents for each passenger one way in either direction, between the easterly limits of the city on Euelid avenue and the westerly terminus of said compa,ny's tmc-ks at the intersection of Superior and \Vater streets; and that the company SiIOUld run through cars over said line between the points last named in either cIirection, as the public convenience, in the opinion of the common council, by resolution expressed, should require; and that the· contract so made should be in force until the 20th day of September, Ul04,-which contract, ha\'ing been so (]uly expressed by ordinance, and accepted by said the East Cleveland Hailroad Compan3', the complainant the Cleveland Electric Railway Company claims
a
l)ecame ll... valid contract between the said the East Cleveland Railroad C0111Il.nl1' thl) city .of Cleveland, by .w1J.icl1 compauy agreed, in consideration of thegrants.tllerein made to it, to make the necessary expenditures contemPlate.d in. saId. ordinance with' .r espect. to the reco.nStructiott of its trael;:s, . and assumed ahdagreed to perfornutddltional obligatlot:!s in. to paving, and agreed thM It would operate saldi-oad in accordance with the terms of said ordinance untn .the 20th day of September, 1004: and that dl1r1ng such till10 it .would carry passengers Il.t flle rate of fare so fixed In said ordinance, to wit. five CeiItS for each passenger one way, in either direction, over said 'entire line; and ill pursuance of .said contract, and in reliance thereon,' the said company proceeqed to in all respects comply with the conditions of said ordinance, and began the operation of a through line. of cars in accordance with the terms thereof,and said company, and said complainant, its successor,llave ever since said fully complied with the terms ,and conditions of said last-mentioned and are nowcqmplying tl:\erewith, jIlthollgh said company 'thereafter vljlluntadly began the sale of tickets good for passage at a less rate than it authori7;ed to charge in said ordinance, to wit, at the rate of 11 tickets for ;-}(t cent!>. TIlatpribr to July, 1888, the line of railway of the said the East Cleveland Railroad Company had been operated by horse power. That at that date such progress had been made In perfecting the system of propelling cars by electric motors thll.t the company was willing to incur the necessary expense of equipping certain of its lines with electricity, and thereupon the said company and said city entered into a still further contract, by ordinance dUly passed and accepted, providing for the equipment and operation of said company's Euclid Avenue l;lnd Cedar Avenue Lines by electriCity, and In said ordinance and contract it was, provided that the privilege of constructing the electric system and the operllctlon of said lines thereby tbsaid company in consideration .of the Improved facilities contempla,ted, and the large expense necessary to .!'lecure the same, and that the right' to operate said line after the expenditure, of sll.idlarge sum of money so necessary for Its equipment should be aUlI remai,n in force for the period of 25 years from and after the passage of said ordinan.ce both upon the mllin line llild what is known as the Cedar Avenue Line of said. company, and provided that nothing in the ordinance should be constrj1ed to authorize any increase, of present fare for transportation over any part :of said company's .lines. And your orator shows and alleges that at t1,letime o+the passage of saId ordinance and its acceptance by said company the' rate of fare ,therein referred to whl"h was not to be Increased was, as inbefore set forth, five cents for each and every passenger carried 'In either direction over said lines, and it was In terms provided in said ordinance that its acceptance should be deemed an agreement with the said company by which it agreed to perform all and singular the matters and things therein agreed by it to be performed. The council were' a.lso given permission in and by said contract to require the company thereafter to equip the ep.tire length of its main line and Cedar Avenue Line with electricity; and thereafter, in reliance upon its said contract, and the performance thereof by the city, said company proceeded, at the expense of many hundreds of. thousands of dollars, to equip its said lines with electricity iJ;l pursuance of the terms of said ordinance. That thereafter .tl:\e said. the East Clevelan4 'Rll.ilroad Company entered into another cqntract wi,th the city of Cleveland, by ordinance pl;lssed and accepted, by which it·was ,given authority to construct a,nd operate the line known as the "Wade Park the Company agr'eeing, in consideration thereof, to do certa,in additional paving, and to submit fo various other reg,ulrements as in said ,ordinance expressed, .and wlt1,l respect to, the rate of fare to be charged by said company,.saip. ordinailce anq contract provided. that no increase of fare should be chargeQ. by said company on anypar't of its main line or said extension, amI that to exceed five cents, OJ' one 'of said company's tickets, should a passenger to transportation m:!)l! the main line and. extension from the Intersectio!l of Lake and Water stfeetsto the easterly limits of the city. That. In with the terll).!10f said ordinance and contract, said East Cleyel!1nd Company constructed ,and placed in opera.tion the said Wade Avenue Line at great expense, since sait;! time said IIne has been operated at the rates of fare therein fixed, and in all respects the conditions of said ordinance with. 'l'hatIiriorto May, lS93,:fhe said the East Cleveland Railroad
393
Company, the Broadway & Newburgh Street Railroad Company. the Brooklyn· Street Railroad Company and ·the South Side Street-Railroad Company were engaged in the operation of their respective lines of road in various and difterent parts of the city, and, as authorized in various contract grants under which they had constructed their said lines of railway and were operating the same, each and all of said constituent companies were charging a cash fare of live cents, and that their right so to do was fixed by the terms of their respeetive eontracts and agreements with the city; and eomplainant alleges that there was not, at any time, as respeets anyone of said constituent companies, power in the common eouncil of the city to in any manner compel said eompanies, or any ane of them. during the existenee of their respeetive grants, to reduee tllP eash fare to be ebarged by the said eompanies. or eithei' one oj' thPllI, below a eash fare of five cents, That cadI of saill eonstituent compauips ollPrated its· liue as an indelwudeut line, That no systPlU of transferR (excppt between tht' South Side and Brooklyn lines) frolll the liue of one of Raid rOlHls to the lillt'S of others was in force. so that a passenger, having occasion to usp more than one of said lines, ,,'as obliged to pay two fares of five cents eaeh; and that each and all of the grants under whith said ('(Jmllanies ,vere so oppratiug'U1H[P]' the rights aforesaid prior to the 29th day of :'IIay. ISH::!. are still in force and eftect, That about April 11, IS\)3. the said constituent companies ent2l'ed into an agreement of eonwlidation, ill conformity with the statutes of Ohio, au,1 formed and organized the eomplainant the Cleveland Electrie Hailway Company as a consolidated company, lly virtm' of which conRolillation the complainant the Cleveland Electric Uailway Company at once heeame of and vested with all and singular the property, rights. franchiRps. and of each and all of said constittwnt compani\'s; aud such heing' effeeted, and complainants intending to operate said lineR as one pntire and to give to the llublic in the city the privilpge of riding ov\'r saiLl system hy a continuous passage for onp fare. the complainant applied to the ponlIllon eouncil of the city of Cleveland· for its consent and approval of the tprms of said consolidation so far as 1'hpy related to the maintenance and operation or said various lines and rates of whieh should be charged hy said complainant, and upon 2ll, 18\13, said eity couneil duly adopted a resolution consenting to said consolidation, and providing. among other thingR, as follows: "That only one fare shall he charged for a continuous ride on or over any line of railway formerly owned by any of said constituent companies and any line of any other of said constituent companies within the limits of the cit)- of Cleveland; and passengers on any such lines paying one fare shall be entitled. without additional or extra charge, to be transferred to any other of said lines, alHl having one continuous ride thereon for said single fare," resolution furthet' provided that the Cleveland Electric Hailway Company should file with the city derk a written acceptance of the terms of said resolution within 10 da)'s from the time of its adoption. which written acceptance was duly filed, as required by the terms of said resolution, on the date of its passage, 29. lS!clil: and the eomplainant has, ever since the adoption of 8aid eontinued to operate said various lines of railway. and to charge only the same eash fare of five cents for eaeh passenger. in'strict compliance with each of the different contracts whith each of said constituent eompanieR had with the eity. and which are still in full force. And the eomplainant the Cleypland Eleetrie Railway Company adopted and put in foree the system of transfers contemplated in said couneil resolutions, and has. although not required RO to do hy the grants and contracts of the East Cleveland Hailroad Company. kept on saIP. and accepted for passage, tickets sold at the rate of 11 for 50 cent;: or 22 for $1. That no one of the grants or contraets aforesaid under which said eonstituent companies which formed the complainant were authorized to oppratp their various lines of street railway and to charge a cash fare of five CPI1tS for each passenger carried therpon, has expired, hut all of said grants are in full force and effect, That, in DecemllPr, 1893, the complainant dUly aecepted alt ordinance of the eity authoriZing it to extend its douhle-traek railway on pect street from Erie street to Ontario street in which ordinanee it was provided that the eomplainant, with respect to all lines of railwa;v ,vhidl it was operating, should comply with the terms and conditions of said resolntion of tIle city council passed 29, 1893, approving said terms of consolidation.
394
94
REPORTER.
and that it should, upon eachofllal;d ,lines, comply, with the conditions Of, 'lai(l s.omade has not yet expinill.;and that last"menthmeQ: ordInance; no one of the g/:ants under which complainant is operating its Un.es of street railway expire the year 1910. . ' Such being,therelations by ord,ina,nce between the city of Cleveland and the compla.lnant the Oleveland Electric Railway Company, on the 17th day of Q<,tober",1898, the city councll passed a1). ordinance entitled "An ol'lHnancetoProvi(ie for diminution of .the rate of fare under section 6 of an orclinance pal!liled. September 15, entitled, 'A,n ordinance granting a renewal of franchise .tothe East Company to maintain, and operate its street railroad in and through certain streets of the city of Cleveland.''' This ordinance, after reciting the reservatlon contained in said ordinance of 1879, providing, "The council, however, to itself the right to hereafter increase or diminish the rate of fare as it may deem justifiaille and expedient," further recites that the "council does now, deem it justifiable and expedient to diminish t):le rate of fare," aBd by section 1 of the ordinance provides: "That the rate of,fare;for a single continuous passage over thc lines andaJl extensions thereof -operated under the aforesaid grant to the said East ClevelaQd' Railroad Compail.y be, al\d is hereby, fixed at four cents cash fare over the whole or any Part thereof;" and by section 2 the ordinance requires the" company operating' such line to keep on sale on its cars, when in operation, tlC1l:ets good for a single continuous passage at the rate of 7 tickets for 25 cents. ' . The complainant the Clev:elaI\d Electric Railway Company makes substantially the same contention wit):l: respect to said. ordinance last mentioned lJeing in contravention of its contract obligations with the city of Cleveland with respect to cash, fares ,and ·as provided therein, and imJ;Jairment of contract rights, and, also, with rllspect to 'tbe, ,practical llffect of the ordinance If put in operation, as to diminisQ.ing,rej::eipts, etc" as clain)ed by complainant the Cleveland City R3.Uway OOp1pany:, bereintefore referred to, except as to the comparative .sta.tement of gross given .in the blllof ,tbe Oleveland Electric Company foJ; t,be ,years 1896 and 1897, from, .which it appears that its grOBSJI'eQE\ipts wouldhaye, been red,uced, in 1897, $334,890.67, or something more than 20 per cent" theave,age ,rate of. fare per' passenger would have ,been 3.80 cents, anli that, in .or!ler ,to have made t,he gross 'receipts, equal to those unller existi.ng,orqinances, it ,Would to carrr. in 1897, 3,812,912 morepassengeJ,'1l it did in fact .It further cone tends fortb in its .blll that,. bad tM ordinance in question been in oPllration in 1897 oyer the entir!lline, tne would have suffered a loss of income tlll1-P. 64 per, j:lent. or i,ts netincome,-;lJ;l,d .the t:llat.tlle it alleges w?J;Il(i.result reached in the statemen,t&!,glv:en without for interestcbarges, deprp· clation, nothhl.g 'dividends _ iJ;I.terest OI/. the capital stock, arid Or by way of sinking fulld, which it alleges should allowed by of sb,ortnells of thefraQ.chises of thecoUlPIl,UYi and the complainant contends, that said reduction,of fare.would profits it is entitled to derive from its ,property, and ,constitute a takJng of its property without due of the United States. process of law, in' contravention Of the
Squire"ElaIld.ers & DempSey, Miner G. Norton and Ford,
"',' ,Crowl, for riespondents.
RICKS, I>istrictJudge (3Jfter stating the facts). The constitution of Qhio hlUl empowered the legislature to confer upon the, city of Cleveland ,to linesof'ri!,ilway through its streets. Acting under this delegat/tdpower,: iuthe Revised Statutes (section 2501 et seq., and section 3437 et seq.)', the city council, from to,the street railroad,s, conferring and,at ,same time prescribing the terms and con.(litions under which snch iines should be located and operated. Among pOwers so vested. in the city was the right
CLEVELA:"D CITY HY. CO. V. CITY OF CLEVELA:"D.
395
to prescribe the rate offare to be collected (luring the life of each grant. The city, acting under tb,is general autl1orityso conferreQ, passed ordi:nances at difFerent times pertaining to the street railways, which make a priQted volume, and are in evidence before the court. These ordinances, granting sometimes original and sometimes additional authoritY,were accepted by the street-railway eompanies; and these acceptances, on the one side, and grants made with conditions, on the other, became a contract between the parties, which could not be annulled or amended"without thecQnsent of both parties. Railroad Co. v. Smith, 29 Ohio St. 292; Cincinnati & S. Ry. Co. v. Village of Carthage, 36 Ohio St. 634; City of Columbus v. Columbus St. R. Co., 45 Ohio St. 104, 12 N. E. 651; City R. Co. v. Citizens' Sf. R. Co., 166 U. S. 557, 17 Sup. Ct. 653; Chicago v. Hheldon,9 Wall. 50; 'Waterworks Co. v. Rivers, 115 U. S. 674, 6 Sup. Ct. 273. These ordinances, so molded into contracts under the legislative power hereinbefore referred to, are, in efFect, laws of the Htute of Ohio, and therefore are within the inhibition of the fonrteenth amendment to the constitution of the United States, which is directed quite as pointedly to the legislative power of the state or municipality as to the executive or judicial; so that the obligations of contracts made by legislation are protected by the federal (:onsfitution, which prohibits a state feom passing any law impairing the obligations of contracts, or the taking of property without due process of law. City R Co. v. Citizens' St. R. Co., 166 U. S. 5(i2, 17 Sup. Ct. (i53. This court has jnrisdiction to afford the relief prayed for in these bills, and has authority to declare invalid the ordinances now sought to be enforced, if, as contended by the complainants, the ordinances involved do impair. existing contract rights, or, in practical .operation, deprive the complainants, reHpectively, of property, without due process of law. In City R. Co. v.. Citizens' St. R. Co., 166 U. S. 562, 17 Sup. Ct. 655, the court say: "All that is necessary to establish the jurisdictlon of the court is to show that the complainant had, or tlaimed in good faith to have, a contract' with the city, which the latter had attempted to impair." "Conceding that the legof the state alone had the right to make such a grant, it may, as was observed in 'Wright v. Kagle, 101 U. S. 7[j2-7\f.4, exercise authority by direct legislation, or by agency duly having power for that purpose. The grant, when made, binds the public, and is, directly or indirectly, the act of the state. The easement is a legislative grant, whether made directly by the legislature itself or by anyone of its properly constituted
See, also, Saginaw Gaslight Co. v. City of Saginaw, 28 Fed. 529; \Veston v. City Council of Charleston, 2 Pet. 461; Waterworks Co. v. Rivers, 115 U. S. 674, 6 Sup. Ct. 273. That a bill in equity seeking a judicial decree declaring an ordinance which impairs the contract rights of the complainant, or takes from him or it property without due process law, is a proper remedy, has been specifically determined by the supreme court. Chicago, M. & St. P. Ry. Co. v. }Iinnesota, 134 U. S. 460, 10 Sup. Ct. 4(i2, 702; Smyth v. Ames, 169 U. S. 466, 18 Sup. Ct. 418. As the various ordinances in force when the council passed the 130called "Low Fare Ordinances," in October, 1898, prescribed the rate
396 '.:,
'
of fare which the companies might charge during the life of each grant, the City possessed no p(jwer to modify such grant as retate, of, fare, sueh power of modification was r.eserved III the oJ;'qinance maklIig the grant. The statutes of Oh1.O confer power upon muniCipalities, to 'determine the conditions of the grant at the time it is made, including fixing the rates of fare to be charged, but no powel'to thereafter prescdbe rates of fare. Where-the grant itself fixes the I'ate of fare, It 'reserved right of regulation does not authorize a municipality, after the rate of fare has been so fixed, to modify or change it during the life of the grant. Old Colony Trust Co. v. Cit, of Atlanta; 83 Fed. 39. It is held by the superior court of Cincinnati in Smith v. Cincinnati : ," "A ordinance providing for the and operation of a street railway within the city limits, which provided that on the acceptance by the existing companies of the terms of the ordinance it shall thereupon be operative and, binding as Ii contract between the city and the company so accepting the same, and that the street railroad shall be guided, governed, and, regulated by the'following conditions, and such lawful and reasonable restrictions as the council" may thereafter pass. does not reserve to the council the right to a bridge or destroy any of the contract ,rights of the company, but only to make and enfofGe, proper and reasonable regulations as to the operation or construction of the routes." ,
It is apparent that whether the ordinances of October 17, 18!l8, are ,valid and enforceable against the respective complainants depends, in the first instance, u:tJon the solution of the question whether the reservations in the ordinances of 1879 authorized th(, action taken by the council in passing these "Low Fare Ordinances" in October"1898. If, subsequent to the passage of these ordinances of 1879, no other grants had been made prescribing rates of fare upon: the lines referred to in the ordinances of 1879, the .only question presented would be whether the reserved right is now being e,xercised in a reasonable manner. It appears, however, that numerous other ordinances have been passed, and accepted by each of the complainant companies, relating to the same subject-matter. ,;iz. the rate of fare to be charged upon the same lines of railway referred to in the ordinance of 1879. It therefore becomes necessary to inquire how far, if at all, the contract rights of the parties li,ave been changed by these subsequent ordinanees. The general principles to be followed in such an examination are well settled. In U. S. v. Tynen, 11 Wall. 92; the rule is stated as follows: "vVhen there are two acts on the same subject, the rule is to give effect to both, if possible, but, if the two ;ire repugnant in any of their prOVisions, latter act, without any repealing dause, operates, to the extent of the repugnancy, as a repeal of the first; and, even wJlere two acts are not, in express terms, repugnant, yet if the latter act covers the whole subject of the first. and embraces new provisions,' plainly Showing that it was icltended as a substitute for the first act, it will operate as a repeal of that act."
',See,also District of Columbia v. Hutton, 148 U. S. 18, 12 Sup. Ct. 369; U. S. v. Claflin, 97 U.S. 546. 'And again, where parties, having entered into a written contract, thereafter make a second contract relating to the Same subj ect, to the extent that the provisions of the second contract are incon-
397
sistent with those of the first the last contract, and not the first, measures the obligations of the parties. In 5 Lawson, Rights, Rem. & Prac. §§ 2569, 2570, the rule is stated as follows: "One written contract, complete in itself, will be conclusively presumed to supersede another one made prior thereto in relation to the same subject matter. The rescission may be implied in some cases. Thus, if an agreement be made between the same parties containing the same matter, in which the terms of the latter are inconsistent with those of the former, so that they cannot subsist together, the latter will be construed to discharge the former."
See,also, Chrisman v. Hodges, 75 Mo. 4:13; Hargrave v. Conroy, 19 N. J. Eq. 281; McDonough v. Kane, 75 Ind. 181; Howard v. Railroad Co., 1 Gill, 311. With these principles in mind, we proceed to inquire, as respects the Cleveland City Railway 0.Jmpany, whether the common council of Cleveland, in October, 1898, was authorized, under then existing contracts between it and the said company, to take action under the reservation in the ordinance to the Kinsman Street Railroad 0.Jmpany of 1879, and reduce fares, as was attempted to be done by the ordinance of which complaint is made in the bill. The ordinance by virtue of which this reserved right to reduce fares is claimed was passed August 25, 1879, and entitled "An ordinance granting a renewal of franchise to the Kinsman Street Railroad Company to reconstruct, maintain and operate its street railroad in and through certain streets of the city of Cleveland," and it authorized the Kinsman Street Railroad Company to construct, maintain, and operate a double-track street railroad from 'Water street to Madison avenue upon Kinsman street (now 'Woodland avenue), and by section 7 of this ordinance it was provided as follows: "Said-company shall not charge more than five cents fare each way for one passenger over the whole or any part of its line, but said company may charge a reasonable compensation for carrying packages; the council, however, reserves to itself the right to hereafter increase 0'1' diminish the rate of fare, as it may deem justifiable and expedient."
This ordinance, then, was a grant to the Kinsman Street Railroad Company, and related to the operation by such company and its successors from 'Vater street to avenue on Kinsman street, the name of the latter street having been subsequently changed to 'Woodland avenue. It appears in evidence that the successor of the Kin,,man Street Railroad Company was the 'Voodland Avenne Railway Company, and that from about 1880 to 1885 the 'Voodland Avenue Railway Company owned and operated this so-called "Kinsman Street Line." After the Woodland Avenue Railway Company aeqllired such line, to wit, in 1883, an ordinance was passed by the call neil, and duly accepted by the company, by which the company was authorized to extend its tracks upon \Voodland avenue upon certaill terms and eonditions expre8sed in the ordinance; and in said ordinum'p it was provided that its existing railwa;y and this extension should thereafter be operated as an entire line, and that but one fare of five cents over its entire line, including said extension, should be charged. This ordinanee of 188B relates to the operation of the company's street railroad as well over the line referred to in the Kinsman Company.
',' 94' FEDERAl'!: REPOltTER.'
ordinance of 1879; and contains no reservation of the right ,to there' after increase or dhn:ihish the rate of fare. In 1885,theWoodland' Avenue Railway Gompany arid 'the West Side Street-Railroad pany consolidated. At the time ofsuchconsoHdation the West Side 8treet(Railroad Company was operating R line of raHroadchiefly upon of th'r river, under a from thecity of Cleveland expiring 25 years from July, 1883; and under theJerms of the grant was authorized to charge a cash fare of nve cents; the city having reserved no right to change such rate of fare during the period of grant;, ,The of,the cOJ;lsolidation was to establish a new main'l'in'e extending from' thes6utheasterly to,the westerly portion of the city, and with reference to such consolidation the common council," on fFebruary paSsM'lin 'ordinance entitled: "An to fix the tetms and conflitions upon which the railway tracks' of the West Side Compally'and the tracks of the Woodland Avenile Railway Company, and said conipanies may be consolidated. "Section 1. 'Be it ordained.by the city council of the city of Cleveland that the consent of,thecity' is hereby. given to the consoHdation of the We,sfSide StreetRaUr.qad «()1ppany and Woodland ,Avenue Company, upon the following conditions: The said consolidated compilny to carry passengers throhgh, wIthout'change of cars, by"run'nlng 'Of the catll through from the workhouse, OD tbl:'! i line of the Woodland Avenue Railway Company, to a point on the West SIde Street-Railroad Company where Gordon avenue crosses Lorain street, and. wlJep practicltble, in the judgment of the council, to do 1lI,ewise on the branches of tlle. coi.:lfio¥dated lines; and that, for a single fare froll). any point to point 'on 'the l'ines or branches of the consolidated road, no gre/lter charge than five cents shall be collected, and that tickets, at the rate ofele'venfor fifty cents; or twenty-two for one dollar, shall at· an times be kept for sale on .cars by con-
':L'his ordinance, as appears in was' duly accepted by the consolidated c0mpany,' the Woodland AvenlIe & West Side StreetRailroad Company, and it is to be observed that it had reference to and included theoperatj,oJ;l of cars as part of a through line upon that portion of Woodland avenue which is referred to in the grant to the Kinsman Street Railroad Oompany of 1879, and amounts to an agreement on the part of the Woodland Avenue & West Side StreHRailroad Oompany that it will thereafter carry passengers over such entire route at a cash fare of 5 cents, and ticket fare by tickets sold at the rate of 11 for 50 cents, or 22 for $1. It further appears that in April, 1887; the Woodland Avenue & West Side Street-Railroad Company accepted an ordinance passed by the city council relating to an additional track upon Franklin avenue, and that in such ordi- . nance it is' provided that the grant therein made should continue and terminate With the grant on the main line of said company, on the 10th day of February, 1908, and that the grant was made upon the express condition. that no increase of fare should be charged by said railway company on any part of its main line, or on such extensiOJi; so that but one fare, not to exceed 5 cents, should be charged betweenanYl?oints on said company's main line or extension, and that said company should sell tickets at the rate of 11 for 50 cents or 22 for $1. ' This grant, by its terms, does nat expire nntil the 10th day of Febrnary, 1908, and it requires the company to carry passengers at a cash fare of five cents during that period, over its entire
CLEVELAND CITY RY. CO. V. Crry OF CLEVELAND.
399
main line, as well as its extension; and it also appears that part of the main line over which it was so required and agreed to carry at the rate of five cents cash fare was the 'line of railway operated OIl Woodland avenue (formerly Kinsman street) under the grant made to the Kinsman Street Railroad Company in 1879. Again, in August, 1887, an ordinance was passed, and accepted by the Woodland Avenue & West Side Street-Railroad Company, relating to the further extension of its tracks on Kentucky street, and in this ordinance it is provided that the grant shall expire with the grant of the main line on February 10, 1908, and that it is made upon the condition, agreed to by the company, that no increase of fare shall be charged by said company on any part of its main line or extensions, and that but one fare, not to exceed 5 cents, should be charged between any: point and any other point on said company's main line or extensions, and that tickets should be sold at 11 for 50 cents or 22 for $1. This grant has not yet expired, and the main line, in respect to which the company so agrees to operate at a cash fare of five cents, includes the line of railway operated under the grant to the Kinsman Street Railroad Company in 1879. On June 20, 1892, the Woodland Avenue & West Side Street-Railroad Company accepted a further ordinance passed by the council, relating to an additional track upon Kinsman street, which ordinance imposed various additional obligations with respect to paving and repairing, and involved the expenditure of a considerable sum of money on the part of the company; and in this ordinance it is provided that it is granted upon the condition that the company shall charge but one fare between any points on said company's main line and extensions, and sell tickets at the rate of 11 for 50 cents or 22 for $1; n- r1 that the grant shall terminate with the grant of the company's main line on February 10, 1908. This ordinance is in full force, and is an agreement upon the part of the company to carry at the rate of fare stated, good for passage over its entire main line and extensions, including, as part of its main line, the line upon Woodland avenue (formerly Kinsman street), operated under the original grant to the Kinsman Street Railroad Company, in 1879. It also appears from an inspection of . the ordinances that in each instance in which new grants were made to these companies, new and valuable considerations passed to the city for the making of the same by way of increased requirements for paving, and additional accommodations in the operation of ears. It appears in the bill lLnd evidence that the complainant the Cleveland City Railway Company was formed on May 13, 1893, by a consolidation of the Woodland Avenue & West' Side Street-Railroad Company and the Cleveland City Cable-Railway Company. The last-named company at that time owned' and operated lines of street railway upon Superior street by cable power, and upon St. Clair street by horse power, and was operating under grants of the city of Cleveland fora period of years which has not yet expired; and the grants under which said cable company was operating authorized it and its successors, throughout the entire period of said grants, to charge a cash fare of five cents, there being in none of such grants any reservatibn of any right on the part of the city council to increase
400
or qiminish the rate of fare. to Qecharged; and the company, at the time ioi the consolidation, was,qperating its.r.oad apdcharging a casbvfare of five cents, as in the ordinances of the city. Under the consolidation it was proposed to operate all the lines of tlle' two. constitueut companies. as an entire flystem, to operate through ears thereon, l;llld pernijt .passengers, for one fare of five cents, to ride from one end of said line so consolidated to the other; and, sucbbeing the purpose of ,the consolidation, on May 13, 18H3, a communication was addressed to the common council of the city of Cleveland, as follows: 'Tofhe Honorable Council of the City of Cleveland, Ohio: The Woodland AvenUe .8f,West Side Street-Raill'Qad Company and the Cleveland City CableRailway COmpany have agreed to consolidate their two lines into the Cleveland City Railway Company; the consolidation to Lire effect June 1st, lSlJa. It is proposed; 'on June 1st, 1893, to immediately issue proper transfers, without extra chal'ge, so that passengers on any line of the Woodland Avenue & West Side Street-Railroad Company may be transferred to and have a continuous passage upon any line of the Cleveland, City Cable-Railway (jompany within the limits of the city of Cleveland, and also so that passengers upon any line of the Cleveland City Cable-Railway Compilny may be transferred to and have a continuous ride upon any line of the Woodland Avenue & West Side StreetHailroadQoll}pany within the city of Cleveland; . only one fare to be charged for such ride. And, as soon as the necessary improvements can be made, additional crpss-town lines will be run, and only one fare charged for a continuous additional lines within the city of Cleveland." ride upon
On May 15, 1893, the common council 'of the city passed a resolution approving and consenting to the consolidation of the companies and the operation of cars upon the terms statep. in said communicati.on. It appears in evidence that since the consolidation forming the said complaillant company the Cleveland City Railway Company it has continued the operation of its various, lines of street railway,as proposed in said communication; has' continued to charge. the .same cash fare of 5 cents for each passenger; has put in force the system of transfers contemplated in the council resolution; and has kept on .sale tickets at the rate, of 11 for 50 cents or 22 for $1. It also appears that no one otthe grants under which the cOllstitue;nt companies which formed ,said complainant were authorized to operate their cars on their various lines of rail- . way at a cash fare of 5 cents, and to sell tickets at the rate of 11 for 50 cents, has expired, but and all of said ordinances are in fug force,. and that none of !'laid gJ,'Rnts ex,pire prior to the 1908.. This being the situatiou,. f:an the city successfully contend that reservation in the ordinance of 1879 rel'ating to the Kinsman Strf3et Railroad Company is now operativ;eas respects the complainant the City Railway Company? Prior to 1885, the West Side Street-Railro.ad Company w,as operating upon the west side pf the Cuyahoga There was no interchange Of traffic by transfer between it and the WQpdland Railway Company, and passengers were obliged to ,pay a .cash fare upon each road. ,The West Side Company was operating under a grant running for 25 years from February, 1883,entitling it to charge a cash fare of.fiye cents. The consolidation of the Woodla:nd Avenue and West Side Companies was made upon the condition tbat a