Marshalltown Light, Power & Railway Co. v. City of Marshalltown

MoClain, J. In June, 1892, a franchise was granted by tbe city of Marshalltown to A. T. Birchard, bis successors and assigns, to construct an electric street railway in tbe streets of the city. Tbe proposition to grant such a franchise was submitted to and approved by tbe electors of tbe city, and tbe ordinance was duly accepted by said Birchard and his assignee, tbe plaintiff in this action. Tbe ordinance contained tbe following provisions: Section 8'. Whenever tbe said A. T. Birchard, bis successors and assigns shall make excavations upon tbe streets or alleys in tbe construction of said road, they shall put tbe street in as good repair as near as practicable as it was at tbe time of such excavation, but if said grantee, bis successors or assigns, shall desire to use cross ties and what is called a “ T ” rail, they may do so,- but where tbe said street is not paved they shall spike to the ties outside and inside tbe rails a strip of lumber four inches wide and of sufficient thickness to come within one-half inch from the top of tbe rail outside and inside; such strips to run tbe entire length of tbe railway and its switches where said streets are not paved and to be kept in good repair by said grantee, bis successors or assigns. But tbe said A. T. Birchard, his successor, assigns, — 639 — shall not in any case be required to pave, macadamize or make any improvement upon tbe streets, except as provided in this section. Afterwards street car tracks were constructed by tbe plaintiff on tbe streets wbicb are referred to in these actions, and subsequently proper steps were taken by tbe city council to have said streets paved and tbe cost thereof taxed, as provided by law, to tbe abutting property owners and to tbe plaintiff. At tbe time this paving was authorized and provided for, wbicb was in 1902, tbe following statutory provisions, found in section 834 of the- Code, were in force and applicable to tbe defendant city: All . . . street railway companies shall be required to make, reconstruct and repair all paving . . . between tbe rails of their tracks, and one foot outside thereof at their own expense, unless by ordinance of tbe city or by virtue of the provisions or conditions of any ordinance of tbe city, under wbicb said . . . ■ street railway may have been constructed or may be maintained, it may be bound to pave . . . other portions of said street, and in that case said . . . street railway shall make, reconstruct and repair tbe paving odf that part of tbe street specified by such' ordinance. At tbe time tbe franchise was granted to plaintiff’s assignor, there was no statutory provision applicable to cities of tbe second class, to wbicb class tbe defendant city belongs, requiring street car companies to pay any portion of tbe cost for paving streets on wbicb their lines were located, and tbe two questions presented by these appeals are: First, whether tbe provision in tbe franchise granted to plaintiff’s assignor exempting him and bis assigns from any requirement to pave except as provided in that franchise constituted a contract wbicb could not be affected by tbe subsequent legislation imposing such liability on all street car companies; and, second, whether tbe provision in tbe ordinance granting tbe franchise, that Birchard and bis assigns should spike strips of lumber four inches wide along each side of tbe rails of tbe — 640 — street ear tracks, constituted a provision as to paving other portions of the street than those required by the statute to be paved by street car companies, so as to bring the plaintiff company within the exception contained in the statute in that respect. There is no other ordinance of the city than that granting the franchise to plaintiff’s assignor which contains any provision as to the portions of the street which street car companies may be required to pave. 1. Constitutional law: impairment of contracts; street of railways. I. As to the provisions of the franchise ordinance exempting plaintiff from any requirement as to paving except as provided therein, the argument for appellant is that it constitutes a contract which cannot be impaired by subsequent legislation, and that therefore the statutory provision already quoted is unconstitutional so far as it purports to impose any liability on appellant with reference to paving other than that contained in the ordinance. But this is no longer a debatable question. At the time the franchise was granted there was in force a statutory provision (section 1090 of the Code of 1873) which has been retained in the Code of 1897, as follows : Section 1619. The articles of incorporaton, by-laws, rules and regulations of corporations hereafter organized under the provisions of this title, or whose organization may be adopted or amended hereunder, shall at all times be subject to legislative control, and may be at any time altered, abridged or set aside Ly law, and every franchise obtained, used or enjoyed, by such corporation may be regulated, withheld, or be subject to conditions imposed upon the enjoyment thereof, whenever the General Assembly shall deem necessary for the public good. The construction of this provision was involved in a case where the city ordinance provided for assessing to a street railway company the cost of pgving between the rails, and the State statute subsequently required that such companies pay the expense of paving between the rails and for the space of one foot outside of the rails. Referring to the — 641 — provision already referred to as Code, section 1619, tbe court beld that tbe statutory extension of tbe liability of tbe street car company for paving was not in violation of any contract right of tbe company, and tbe court says: “ If the city bad made no provision in tbe original grant on tbe subject, tbe power of tbe State to impose tbe condition would hardly .be doubted by any one; but if tbe power is reserved to tbe State, it would not be tbe subject of contract between plaintiff [tbe street car company] and tbe municipality. Tbe State has not by any legislation on tbe subject delegated to tbe municipal corporations it has created any of tbe rights or powers reserved by tbe statute above.” Sioux City R. Co. v. Sioux City, 78 Iowa, 742. See, also, the opinion in another case of tbe same title, and involving tbe same question, 78 Iowa, 367. On appeal to tbe Supreme Court of tbe United States, Sioux City R. Co. v. Sioux City, 138 U. S. 98 (11 Sup. Ct. 226, 34 L. Ed. 898.), it was urged that the imposition of an additional burden as to paving impaired tbe obligation of tbe contract embodied in tbe ordinance granting to tbe street car company its franchise ; but tbe conclusions reached by this court were approved of in tbe following language: Under section 1090 of the Iowa Oode (section 1619 of the present Code), tbe Legislature bad the power not only to repeal and amend the articles of incorporation of tbe company, but to impose any conditions upon tbe enjoyment of its franchise which tbe General Assembly might deem necessary for tbe public good. The reservation of this power was a condition of the grant. The city council could make no arrangement with the company which would not be subject, under that section, to tbe superior power of tbe General Assembly. . . . Moreover, the city derived from tbe State alone its power to grant a license to the company. The right to operate the railway in the streets is a franchise obtained through power given to the city by the State, but tbe State reserved the power to regulate such franchise and impose conditions upon it. It reserved the power to determine the question of the exemption of tbe company from — 642 — taxation, and to prescribe wbat burdens should be imposed upon it for the public good in the enjoyment of its franchise. Manifestly, such power of the State would exist if the right to occupy the streets with tracts was granted to the company directly by an act of the Legislature of the State; and the case is not changed by the fact that the franchise was granted by the city. There is nothing in the ordinance of the city council which takes away the power of the State and the city to impose additional taxes on the property of the company, or which indicates an intent that no further or different tax should be subsequently imposed on its property, -x- -x- * ]sy0 question can arise as to the impairment of the obligation of a contract, when the company accepted all of its corporate powers subject to the reserved power of the State to modify its charter and to impose additional burdens upon the enjoyment of its franchise.' TJnder the Act of March 15, 1884 (Laws 1884, page 18, chapter 20), it was made a condition of the enjoyment of its franchise by the company that, when the city should determine that the streets should be paved, the companjy should bear a certain portion of the cost thereof, and any prior contract between the company and the city in regard to paving was subject to the provisions of section 1090 of the Code. There was nothing in the ordinance of December 12, 1883, which bound or could bind the city not to exercise its statutory authority to impose other conditions upon the exercise of the rights of the company. The only distinction which counsel attempt to draw between these cases and the case before us is that in the S'ioux City ordinance there was no express exemption; but the language of the opinions clearly indicates that the line of reasoning relied upon would have been equally satisfactory in those cases had there been an express exemption. The very point of the decision in those cases was that the city could not make a contract which would preclude legislation on the part of the State imposing additional burdens. The same principle is announced in Storrie v. Houston City Street R. Co., 92 Tex. 129 (46 S. W. Rep. 796, 44 L. R. A. 716). Tn that case the court adopts the views expressed in the Sioux City cases above cited. There is nothing in the case of Lacey v. Marshalltown, 99 Iowa, 367, inconsistent with the — 643 — doctrine of the Sioux City cases, for the only point decided is that under the statutory provisions involved in that decision it was left optional with the city to determine whether or not it should compel a street railway company to pay for a part of the paving, and, if it did not see fit to do so, .an abutting property owner could not complain that a part of the cost was not taxed to a street railway company occupying the street. There seems to have been no intention in the case of Ft. Dodge Electric Light & Power Co. v. Ft. Dodge, 115 Iowa, 568, to treat the question here involved as in doub^ for it is expressly said in that case that no such question is raised. 2. Street Railway Frank-chise paving statutes. . II. The contention that the provision of the franchise ordinance already quoted brings the case within the exception of Code, section 834, may be disposed of very briefly. The exception in that section is of cases where ^7 ordinance the street railway is bound to pave other portions of the street than the portions referred to in the statute. But under the provisions of the franchise ordinance already quoted, there is no requirement whatever as to paving. The provision is that the street ear company may use cross-ties and what ;s called a T-rail, but “where the said street is not paved they shall spike to the ties outside and inside the rails a strip of lumber four inches wide; . . . such strips to run the entire length of the railway and its switches, where said streets are not paved,” etc. How this provision can be tortured into the semblance of a requirement for the paving by the street car company of a portion of the street we are entirely unable to see, nor do we think it at all pertinent to follow counsel in a discussion of the meaning of “ paving ” and the substances or materials which may be used in paving. It seems to us plain that there was no intention on the part of the city to require the paving by the street railway company of a space .four inches wide on each side of each rail of its track, where constructed through streets not otherwise paved. — 644 — It is only on unpaved streets that this form of construction is required, evidently as a convenience to tbe public in tbe use of sucb streets for driving, in tbe event that tbe street car company should use on sucb unpaved streets cross-ties and a T-rail. If there was no provision in tbe ordinance for -taxing any portion of tbe paving to tbe street car company, it is within tbe direct provision of Code, section 834, and .not within the exception. 3. Special assessments: irregularities; appeal. III. Complaint is made that tbe council, in estimating tbe number of square feet of paving for which tbe plaintiff should pay, included not only tbe space between tbe rails and sPace °f one foot in width outside tbe rails, but also tbe space occupied by tbe rails themselves. No complaint on this account was made before tbe city council, and therefore tbe question could not be properly raised in tbe district court nor on appeal to this court. Sucb objection could very easily have been made specific, and tbe general complaint presented to tbe council, that its proceedings in attempting to levy and assess these paving taxes against tbe plaintiff are “ in many other respects irregularly invalid and without authority of law,” was wholly insufficient to raise any such question. We have no occasion, therefore, to pass upon tbe question as now presented. Finding no errors in the conclusion reached by the distinct court, its judgment in each case is affirmed.