Southern Pacific Co. v. City of Portland

Where, as in this case, a municipal ordinance, granting a franchise to use streets as authorized by the state-law, expressly reserves to the city the power to make or alter regulations and to prohibit the use of a specified motive power, the grantee cannot accept it and after-' wards claim that, as the state law only authorized the designation of streets, the municipality cannot exert the power reserved to prohibit the specified motive power without impairing the contract. Although a municipality cannot defeat a grant- made under authority of the State, it may under the police power reasonably regulate the method in which it shall be used; such regulations do not defeat the grant, if it is still practicable to operate under the new regulations. Railroad Co. v. Richmond, 96 U. S. 521. The grantee of a franchise to use the streets coupled with conditions cannot avail of the benefits and deny the validity of the conditions, or claim that the exercise of the expressly reserved power is a violation of the contract clause of the Constitution. Where under its reserved powers the municipality attempts to regulate a franchise to use the streets both as to nature of motive power and cars operated, the provisions are separable and do not stand or fall together. Laclede Gas Co. v. Murphy, 170 U. S. 99. A franchise given by a municipality under state authority to. a railroad to lay and operate tracks in a street includes the right to haul both passenger and freight cars, and a reserved power to regulate cannot be availed of to prohibit the hauling of freight cars and defeat the franchise given by the State and to that extent impair the contract under which the railroad was constructed. While the power to regulate a franchise does not authorize a prohibition that destroys it, the municipality may legislate in the light of facts and conditions. Whether subsequent regulations impair the obligation of a contract should only be determined on a complete record; and where, as in this case, all the conditions were not considered by the court of original jurisdiction the bill will be dismissed without prejudice. The ordinance of Portland prohibiting the using of locomotives and hauling of freight cars on one of its streets occupied by a railroad under a franchise, held not to' be an impairment of the contract as to the locomotives; but not decided on this record, whether it is an impairment as to the hauling of freight cars.

APPEAL FROM THE CIRCUIT COURT OF THE UNITED STATES FOR THE DISTRICT OF OREGON. Appeal from a decree refusing to enjoin the City of Portland from enforcing an ordinance prohibiting the Southern Pacific Company from running steam locomotives or freight cars along Fourth Street. It .appeared that the Oregon Central R. R. was chartered to build a road from Portland to the California line. The company thereupon purchased a block of land in the city on which to locate its terminals. and applied to the Council to designate the street on which the track should be laid. The general statute of the Staté then of force provided (Bellinger & Cotton’s Code of Oregon, §§ 5077, 5078) that whenever a private corporation was authorized to appropriate any part of any public street within the limits of any town, such corporation should locate their road upon such particular street as the local authorities might designate. But if such local authorities refused to make such designation within a reasonable time when requested, such corporation might make such appropriation without reference thereto. The bill alleges that on January 6,1869, “under and by •virtue of the laws of the State and its charter then in effect,” the City of Portland duly passed Ordinance 599, which provided that— “Sec. 1. The Oregon Central Railroad Company, of Portland, Oregon, is hereby authorized and permitted to lay a railway track and run cars over the same along the center of Fourth Street, from the south boundary line of the City of Portland, to the. north side of G Street, and as much further north as said Fourth Street may extend or be extended, upon the terms and conditions as hereinafter provided.” ******** “Section 3. The Common Council reserve the right to make or to alter regulations at any time as they deem proper for the conduct of the said road within the limits of tbLe city, and the speed of railway cars and locomotives within said limits, and may restrict or prohibit the running of locomotives at such time and in such manner as they may deem necessary.” “Section 5. It is hereby expressly provided that any refusal or neglect of the said Oregon Central Railroad Company to comply with the provisions and requirements of this ordinance, or any other ordinance passed in pursuance hereof, shall.be deemed a forfeiture of the rights and privileges herein granted; and it shall be lawful for the Common Council to declare by ordinance, the forfeiture of the same, and to cause the said rails to be removed from said street.” The ordinance was accepted and the road was built from the terminals along Fourth tó Sheridan Street, thence south over its private property and. the right of way granted by Congress (May 5, 1870, 16 Stat. 94, c. 69) to McMinnville. From its completion in 1871 to the present time freight and passenger cars drawn by steam locomotives have been constantly operated along Fourth Street. In 1903 the charter of the city of Portland was amended so as to authorize the granting of street franchises, and it is alleged that the city desired the railroad to take an electric franchise, paying therefor an annual sum. It is further charged that on May 1, 1907, over the protest of the Railroad Company, the Council passed Ordinance 16491, to go into effect eighteen, months after date, by which it was made unlawful for the Oregon Central, its assigns, their lessees, or any other person to run or operate steam locomotives or freight cars along Fourth Street . . . between Glisan and the southerly limits of the city, excepting freight cars for the repair or maintenance of the railway lawfully and rightfully on said street. Violations were to be punished by fine Or imprisonment and deemed a forfeiture of all rights claimed by the Oregon Central with respect to the operation of the railway on the street. On November 16, 1908, after the expiration of the eighteen months, a proceeding was instituted in the Municipal Court against the company and. one of its agents, charging that he and it “did wilfully and unlawfully run and operate steam railway locomotives along Fourth Street” contrary to the provisions of Ordinance 16491. The Southern Pacific, a Kentucky corporation, thereupon filed a bill in the United States Circuit Court, alleging that the Oregon Central’s property had been transferred to the Oregon & California R. R. and that in 1887 the property and this street right had been leased to the Southern Pacific, which had since continuously operated freight and passenger cars with steam power over Fourth Street. It averred that the railroad owned no other terminal property than that purchased in 1869 and reached by the tracks on Fourth Street; that it was impossible to obtain any other ^terminal within the city accessible to the railroad from the intersection of Fourth and Sheridan Streets to the south boundary; that cars from Corvallis on its line running south could not be brought into the city and its business as a common carrier conducted if the ordinance was. enforced, except by constructing, at an estimated cost of §911,000, about 10 miles of road from Beaverton to Willsburg, thence across a bridge owned by the Oregon R. It. & N. Co., and thence by the southern terminus of said railroad constructed by the Oregon Central. The bill charged that the ordinance imposed excessive penalties and illegal forfeitures; that it was arbitrary, unreasonable and oppressive; deprived the company of property without due process of law; interfered with interstate commerce, and impaired the obligation of the contract under which the track had been laid in Fourth' Street. The city answered denying that the Southern Pacific owned the property and franchises of the Oregon Central, on the ground that the latter company had no charter-right to sell and also offered evidence to show that when in 1869 the tracks were first laid on Fourth Street, there were very few buildings thereon, while it was now one of the principal thoroughfares upon which many stores, hotels and public structures have been erected; it proved that the locomotives and cars were much heavier than those in use when Ordinance 599 was passed and the grade being steep, the puffing, blowing, exhaust, noise and jar caused by steam -locomotives was more disturbing and injurious than where the line is more nearly level. It also proved that the Southern Pacific Was then building a Cut-off or Belt Line, by which freight could be carried around the city instead of being hauled over Fourth Street. The court held that under the police power, as well as that reserved in Ordinance 599, the city could prohibit the use of steam and the hauling of freight cars, the ordinance not being arbitrary in view of the results of hauling locomotives and cars along Fourth Street, which he found was “quite steep, and the noise,"vibration, smoke, cinders and soot from the moving steam locomotive and train seriously interfere with the transaction of public and private business, and are a. constant source of danger and inconvenience to the public.” He made no finding as to whether the company had other' convenient and accessible means of reaching the terminal, for handling through and local freight. But having held that the city had power to pass Ordinance 16491, he dismissed the bill, and the carrier appealed. The franchise or right granted the Oregon Central Railroad Company to appropriate and use the portion of Fourth Street designated in Ordinance No. 599, for the purpose of constructing and operating its railroad thereon, is a grant direct from the State and not from the city. Dillon on Municipal Corporations, 5th ed., §§ 1228, 1230, 1242, 1265-9. This franchise was granted by the State of Oregon under the terms and provisions of §§ 24 and 25 of the act of the Legislative Assembly of. the'. State of Oregon, passed October 14, 1862, which are now §§ 6841 and 6842 (Lord’s Oregon Laws). The grant by the State of this franchise or right to appropriate and use the part of Fourth street so designated by Ordinance No. 599 when it was accepted and acted upon by the railroad company and valuable improvements made and money expended on the faith thereof, became a CQntract between the State and the company which cannot be impaired either by law of the State or by an ordinance of the city. Mayor of Knoxville v. Africa, 77 Fed. Rep. 501; Dillon on Municipal Corporations, 5th ed., § 1242. The franchise granted by the State of Oregon to the Oregon Central Railroad Company was one in perpetuity. Louisville Trust Co. v. Cincinnati, 76 Fed. Rep. 296; Louisville v. Cumberland Tel. Co., 224 U. S. 649, 662; Blair v. Chicago, 201 U. S. 400; Detroit Citizens’ Street Ry. v. Detroit Ry., 171 U. S. 48; St. Clair Turnpike County v. Illinois, 96 U. S. 63; Vilas v. Manila, 220 U, S. 345; 3 Dillon Mun.- Corp., §§ 1265-1269. This franchise being a vested property right can be assigned, mortgaged or leased as other property. Oregon Ry. & Navig. Co. v. Oregonian Ry. Co., Ltd., 130 U. S. 1. Ordinance No. 16491 is not within any power reserved to the city by Ordinance.No. 599; nor is it a reasonable or necessary exercise of any police power of the State or city regulating the use of the railroad on Fourth street with a view to the public welfare. Railroad Co. v. Richmond, 07 Virginia, 83; S. C., 96 U. S. 521. Ordinance No. ,16491 is unreasonable and oppressive and as such operates to defeat the purposes of the .grant, from the State, and it is void in that— It impairs.the obligation of the contract under which the street was appropriated by the company and under which it located and operated its road thereon. It deprives the company of its property — said franchise — without due process of law and denies it the equal protection of the laws. Its enforcement will interfere with, restrain, and prevent the movement by the company of interstate commerce. Even if it be conceded that the city could, under the police power, prohibit the use of steam locomotives on Fourth street, it could not, as it attempted to do under Ordinance No. 16491, deprive the company of its right, under reasonable-regulations, to move its freight trains at some time during the twenty-four hours. Such a prohibition is a taking of the property of complainant, under the guise of the exercise of the police power; it is not regulation, it is confiscation. Wisconsin Tel. Co. v. She-boygan, 111 Wisconsin, 23, 36; Wisconsin Tel. Co. v. Oshkosh, 62 Wisconsin, 32, 40; Am. Un. Tel. Co. v. Harrison, 31 N. J. Eq. 627; Summit v. N. Y. & N. J. Tel. Co., 57 N. J. Eq. 123, 127; New Hope Tel. Co. v. Concordia, 106 Pac. Rep. 35; Missouri Tel. Co. v. Mitchell, 22 So. Dak. 191; Michigan Tel. Co. v. Benton Harbor, 121 Michigan, 512;' Telephone Co. v. St. Joseph, 121 Michigan, 502, 506; Jonesville v. Southern Michigan Tel. Co., 155 Michigan, 86; Carthage v. Cent. N. Y. Tel. Co., 185 N. Y. 448; Northwestern Tel. Exchange v. Minneapolis, 81 Minnesota, 140; 3 Dillon on Mun. Corp., 5th ed., §§ 1230, 1269; Street Ry. Co. -v. Asheville, 109 No. Car. 688; Traction Co. v. Shreveport, 122 Louisiana, 1. If Ordinance No. 16491 be invalid in respect to the prohibition against the movement of freight traffic, then the entire ordinance is void. It is a. fundamental rule that if part of an ordinance is void, another essential and connected part of the same is also void. State v. Hoboken, 38 N. J. L. 110; United States v. Ju Toy, 198 U. S. 253, 262; Illinois Cent. R. Co. v. McKendree, 203 U. S. 514, 529. The original ordinance, reserves to the city the right to make such rules and regulations, even to the extent of prohibiting the use of steam locomotives'or freight cars on. Fourth Street. Railroad Co. v. Richmond, 96 U. S. 521; Buffalo &c. Ry. Co. v. Buffalo,.5 Hill (N. Y.), -209; McQuillan on Ordinances, 2d ed., § 763; Nellis on St. Railways, § 46; Pacific Railroad Co. v .• Leavenworth, Fed. Cás. No. 10649; Pac. &c. Ry. v. Hood, 94 Fed. Rep. 618; Railroad v. Bingham, 87 Tennessee, 522; Louisville T. Co. v. City, 76 Fed. Rep. 296; S. C., 78 Fed. Rep. 307; 3 Dillon on Municipal Corporations, 5th ed., § 1229, p. 1952; Clinton v. Worcester, 199 Massachusetts, 279; Rutherford y. Hudson R. T. Co., 73 N. J. L. 227; McQuaid v. Portland Ry. Co., 18 Oregon, 248; Art.. II, § 4, Const. Oregon. The original ordinance was necessarily made and accepted subject to the city’s right to the exercise of its police power. The power to make .such regulations concerning the operation of the plaintiff’s road as public safety and welfare might, from time to time, require cannot be contracted away. Northern Pacific Railway v. Duluth, 208 TJ. S.'583; Joyce on Franchises, § 138; Ex ;parte Koehler, 23 Fed. Rep. 529; P. Ry. L. & P. Co. v. Railroad Commission, 105 Pac. Rep. 713; Constitution Oregon, Art. II, § 2; Fertilizing Co. v. Hyde Park, 97 U. S. 663; North Chicago &c. v. Lakeview, 105 Illinois, 207; Buffalo &c. Ry. Co. v. City of Buffalo, 5 Hill (N. Y.), 209; Brown v. City,. 47 Pa. St. 329; 2 Elliott on Roads, 3d ed., §839; Municipal Paving Co. v. Donovan, 142 S. W. Rep. >644; Macomb y. Jones, 158 Ill. App. 271; Hennington v. Georgia, 163 TJ. S. 299; Baltimore v. Baltimore T. Co., 166 TJ. S. 673; Portland Ry. L. & P. Co. v. Portland, Fed. Rep. (decided Nov. 1912, not reported); Beer v-. Massachusetts, 97 TJ. S. 25; Mugler v. Kansas, 123 TJ..S. 623; N. Y. & N. E.. R. R. v. Bristol, 151 TJ. S. 567; New Orleans Gas Co. v. Louisiana Light Co., 115 TJ. S. 60; Budd v. New York, 143 TJ. S. 517; C., B. & Q. R. R. v, Chicaga, 166 TJ. S. 226; Detroit Railroad Co. v. Osborne, 189 TJ. S. 383; New Orleans Gas Light Co. v. Drainage Commissioners, 197 TJ. S. 453; C., B. & Q. R. R. Co, v. Illinois, 200 TJ. S. 561; Union Bridge Co. v. United States, 204 TJ. 3.’364; Cooley on Const. Lim., 7th ed., p. 400; 9 Enc. of TJ. S. Sup. Ct. Reports, 494; Stone v. Mississippi, 101 TJ. S. 814, 817; Butchers’ Union v. Crescent City Co., Ill IT. S. 748; Slaughter House Cases, 16 Wall. 36, 62; Boyd v. Alabama, 94 U. S. 646; Douglas v. Kentucky, 168 U. S. 488; Railway Co. v. People, 201 U. S. 506; Portland v. Cook, 48 Oregon, 550, 555; Portland v. Meyer, 32 Oregon, 368, 371; State v. Muller, 48 Oregon,.,252, 255; affirmed Muller v. Oregon, 208 U. S. 412; St. Louis & S. F. Ry. Co. v. Mathews, 165 U. S. 1; Providence Bañkv. Billings, 4 Pet. 514; Railroad Comm. Cases, 116 U. S. 307, 325; Vicksburg S. & P. R. Co. v. Dennis, 116 U. S. 665; Water Co. v. Freeport, 180 U. S. 587, 611; Stanislaus Co. v. San Joaquin Canal Co., 192 U. S. 201; Metropolitan Street Ry. Co. v. New York, 199 U. S. 1; Water, Light & Gas Co. v. Hutchinson, 207 U. S. 385; Home Tel. & Tel. Co. v. Los Angeles, 211 U. S. 273. The ordinance prohibiting the use of steam locomotives on Fourth Street does not deny the plaintiff in error the equal protection of the laws, although it alone is named in the ordinance, where no'.other person or corporation has the right to run engines in'that street, as is the case at bar. Richmond F. & P. R. Co. v. Richmond, 96 U. S. 521. . The appropriate regulation of the use of property is not “taking it,” within the meaning of the constitutional prohibition against the deprivation of property without due process of law. Richmond F. & P. R. Co. v. Richmond, 96 U. S. 521; Pittsburg, C. & St. L. R. Co. v. Hood, 36 C. C. A. 428; 94 Fed. Rep. 624. • The ordinance complained of, prohibiting the use of steam locomotives on Fourth Street, does not impair any vested rights of the plaintiff in error under its charter. Richmond F. & P. R. Co.v. Richmond, 96 U. S. 521. The charter, of the City of Portland in force when the ordinance was passed contains a provision giving the council power to exercise all the police powers to the same extent as the State could exercise said power within said limits. Under this power the council has authority to regulate the running of railroad cars within the city limits and to prohibit their propulsion by steam. Richmond F. & P. R. Co. v. Richmond, 96 U. S. 621; Buffalo & N. F. R. Co. v. Buffalo, 5 Hill (N.’ Y.), 209; Dillon on Mun. Corp. (5th ed.), §.65'. Municipal corporations are prima facie the sole judges respecting the necessity and reasonableness of their ordinances. McQuillin on Mun. Ord., 2d ed., § 731, p. 1586; Greensboro v. Ehrenreich, 80 Alabama, 579; Van Hook v. Selma, 70 Alabama, 361; Ex parte Delaney, 43 California, 478; Louisville y. Roupe, 6 B. Mon. (Ky.) 591; Spriggs v. Garrett Park, 89 Maryland, 406; Commonwealth v,. Patch, 97 Massachusetts, 221; Lamar v. Weidman, 57 Mo. App. 507; Hannibalv. M. & K. Tel. Co., 31 Mo. App. 23; Budd v. Camden, 69 N. J. L. 193; Union Oil Co. v. Portland, 198 Fed. Rep. 441; Dobbins:v. Los Angeles, 195 U. S. 223. The legal presumption is in their favor, unless the contrary appears on their face or is established by proper evidence. McQuillan on Mun. Ord., 2d ed., § 731, p. 1587; Union Oil Co. v. Portland, 198 Fed. Rep. 441. When a privilege or a franchise is granted containing the reserved power to alter, amend or repeal, whenever the public interest may require, no question as to the impairment of the obligation of the contract can arise when additional burdens are imposed. Northern Pacific v. Duluth, 208 U. S. 583; Sioux City Street Ry. Co. v. Sioux City, 138 U. S. 98; 1 Nellis on Street Railways, § 46. A municipal corporation has no power to grant a franchise in perpetuity without express statutory authority from the legislature. Joseph v. Water Co., 57 Oregon/586; Artesian Water Co. v. Boise City, 123 Fed. Rep. 232; 186 Fed. Rep. 705; Logansport Railway Co. v. City, 114 Fed. Rep. 688; Citizens’ St. Ry. v. Detroit, 171U. S. 48; Nellis on Street Railways, §46; 2 Elliott on Roads, ,§ 1048; Lake Rowland v. Baltimore, 77 Maryland, 352; Belleville v. Citizens' R. R. Co., 152 Illinois, 171; McQuaid v. Portland Ry. Co., 18 Oregon, 237; Water Co. v. Cedar Rapids, 118 Iowa, 234; 28 Cyc. 655, 875; Cooley’s Const. Lim., 6th ed., 251; Brenham v. Water Co., 67 Texas, 542; Illinois Trust Co. v. Arkansas City Water Go., 76 Fed. Rép. 196; Birmingham, St. Ry. Co. v. Birmingham, 79 Alabama, 472; Water Works Co. v. Huron (S.. D.), 12 Am. R. R. & Corp. Rep. 398; Water Company v. Westminster, 98 Maryland, 551. A contract beyond the power of the city is void ab initio. State v. Minnesota Ry. Co., 80 Minnesota, 108; Flynn v. Little Falls Elec. Co., 74 Minnesota, 180. The city was vested with the right and power at the time ordinance 599 was passed to designate the street upon which the railroad could locate its road, and this right carried with it the power to impose reasonable conditions to such grant or permission which, when accepted by the grantee, became binding on it. Pittsburg &c. Ry. Co. v. Hood, 94 Fed. Rep. 618; Southern Bell Tel. Co. v. Mobile, 162 Fed. Rep. 523; Mercantile Trust Co. v. Collins Park & B. R. Co., 101 Fed. Rep. 347; Pacific Ry¿ Co. v. Leavenworth, Fed. Cas. No. 10649; Michigan Tel. Có. v. City, 93 Fed. Rep. 11; Pittsburg, C. & St. L. Ry. Co. v. Hood, 94 Fed. Rep. 618. Prohibition of steam power, under Ordinance No. 16491, does not prevent employment of electricity as a motive power. Booth on St. Railways, § 68, 2d ed. The ordinance does not in any manner constitute an interference with interstate commerce. Smith v. Alabama, 121 U. S. 465. Municipal corporations are prima facie the sole judges inspecting the necessity and reasonableness of their ordinances, subject to the supervision of the courts. 2 McQuillan on Ordinances, 2d. ed, §§ 731, 732; Union Oil Co. v. Portland, 198 Fed. Rep. 441; Holden v. Hardy, 169 XJ. S. 366; Dobbins v. Los Angeles, 195 U. S. 223. Any doubt or ambiguity in the ordinances must be resolved against appellant. 19 Cyc. 1459; O. R. efe N. Co. v. Ore. Ry. Co., 130 U. S. 1, 26; Mayor v. Farmers’ L. & T. Co., 143 Fed. Rep. 67, 71; City v. Helena W. Wks., 122 Fed. Rep. 1, 14; Oregon v. Pac. Gen. Elec. Co., 52 Oregon, 343; Joseph v. Water Co., 57 Oregon, 586; Water Co. v. Freeport, 180 U. S. 587; Bums v. Multnomah Ry. Co., 15 Fed. Rep. 177. A right granted in the nature of,a franchise, to be exercised for a public purpose, cannot be assigned or leased without legislative authority. Oregon v. P. G. E. Co., 52 Oregon, 521; Oregon Ry. Co. v. Oregonian Ry. Co., 130 U. S. 1.