State ex rel. Vilter Manufacturing Co. v. Milwaukee, Burlington & Lake Geneva Railroad

Winslow, J. By this action of quo warranto the relators have challenged the right of the defendant corporation to hold and exercise the privileges attempted to be conferred upon it by the common council of Milwaukee by the ordinance of which an abstract appears in the statement of facts. The relator’s claim, in brief, is this: The defendant is a commercial railroad corporation organized under sec. 1820, Stats. 1898, and is not authorized by law to operate a street railroad. The ordinance in question is in fact a street railway franchise, and can only be legally granted to a street railway — 149 — corporation organized under sec. 1862, Stats. 1898. Tbe defendant by accepting such franchise by formal written acceptance, and by insisting upon its right to' hold and use the privileges granted by the ordinance, is unlawfully “holding” and “exercising” a franchise within the state, within the meaning of subd. 1, sec. 3466, Stats. 1898. On the other hand, the defendant claims that, while the ordinance in question has been termed a “franchise,” and is framed in language appropriate for a franchise, it is in reality simply a code of regulations made by the city in the exercise of its police powers ; not conferring any rights or privileges upon the defendant, but merely regulating the use of its right to build a railroad across or along any street, which right it obtains directly from the state by the provisions of subd. 5, sec. 1828, Stats. 1898. The questions upon which the decision of the case depend may be stated as follows: (1) Is the ordinance in question an ordinance granting street railway franchises? (2) If so, can the defendant hold or exercise such franchises? (3) If not, can the relators invoke quo warranto as a remedy ? 1. As to the first question: The various provisions of the ordinance leave us no room to doubt that it is, in effect, an ordinance attempting to grant a franchise to operate an elevated street railroad in the city of Milwaukee. The fact that it is called a franchise, and that it is couched in terms frequently used in granting franchises, is not, of course, conclusive as to its character. Such terms might be used, and yet, if the provisions themselves were simply police regulations, they would not become franchises because they were so called. But, looking over the whole ordinance, it seems to us very clear that the term “franchise” was used advisedly. It bears nearly or quite all the marks usually borne by street railway franchise ordinances. The rights are granted to the defendant, its successors or assigns. It contemplates that almost the entire road within the city limits shall be con — 150 — structed over and along streets, many of which are much-used business streets, and some containing surface street railways. It also contemplates the construction of stations, stairways, and platforms in the streets for the accommodation of passengers. The provisions as to these stations, stairways, and platforms are elaborate, and seem to be framed with the idea that there will be numerous stations; and this is further made clear by the provision limiting the rate of fare between two points within the city of Milwaukee to five cents, and the provision that policemen, firemen, and members of the health department shall be carried free of charge within the city limits. Unless the supposed railway was expected to be to all practical intents and purposes a street railway with numerous stations, these clauses limiting fares within the city limits, and providing free carriage for city employees, would be absolutely nonsensical. Again, the ordinance provides that in return for the rights granted by the ordinance the company shall build bridges, which shall accommodate teams and foot passengers as well as its railroad, and perpetually furnish the power necessary for opening and closing the same. Here the city definitely proposes to exact from the company in return for its privileges an expensive service to be rendered to the city and its citizens. Whether these exactions could be legally made in the proper exercise of the police power it is not necessary to decide (State ex rel. Wis. Tel. Co., v. Sheboygan, 111 Wis. 23, 86 N. W. 657), but, in any event, they tend very strongly to- stamp the ordinance as an attempted franchise. We can come to no conclusion except that the ordinance is, and was intended to be, a grant of the right to build a street railway over streets and bridges in the city of Milwaukee, under the provisions of see. 1862, Stats. 1898. 2. The second question can be answered with little hesitation. It is very clear that the legislature did not intend that ordinary commercial railroads organized under sec. 1820, Stats. 1898, should be endowed with the power of accepting — 151 — street railway franchises under sec. 1862. The intention to keep the two classes of companies separate and distinct could scarcely be more clearly expressed than it has been by the statute. Street railway franchises can only be granted to street railway corporations formed under chapter 86, Stats. 1898, for the purpose of building and operating street railways. This is so plain, under the provisions of sec. 1862, sufra,, that we will spend no further time upon the question. Indeed, this proposition was not disputed by appellant’s counsel. 3. We thus come to the question whether the relators have chosen the proper remedy. Our statute provides (sec. 3466, Stats. 1898) that an action may be brought by the attorney general in the name of the state “when any person shall usurp, intrude into or unlawfully hold or exercise any public office, civil or military, or any franchise within the state,” and that such action may be brought by a private person on his own complaint when the attorney general refuses to act. It is alleged in the complaint in the present case that the attorney general, on due application to- him, has refused to act, and this is expressly admitted in the answer; hence it is clear that, if it appear by the answer that the defendant is a person usurping or unlawfully “holding or exercising a franchise within this state,” no defense to the action is shown. It was held in State ex rel. Att’y Gen. v. Portage City W. Co. 107 Wis. 441, 83 N. W. 697, that a private corporation is a “person,” within the meaning of this statute, and that a franchise to operate a system of public waterworks in a city, using the streets and alleys for that purpose, while not a corporate franchise in the sense that it is necessary to corporate existence, is still a franchise within the meaning of the section quoted, and may be annulled for cause by quo war-ranto proceedings. A street railway franchise is of the same nature as the franchise considered in the case just cited. While not a corporate franchise, it is a special privilege — 152 — granted by sovereign authority, and the state may always inquire into the title by which it is held, and render judgment of ouster if the party assuming' to exercise it has no title thereto. High, Extr. Rem. (3d ed.) § 648. It is well understood that there must be something more than a mere claim of the franchise or privilege in order to justify an action of quo warranto. There must be a usurpation or an unlawful holding or exercising of the franchise, as the statute indicates. Indeed, the very form of the ancient writ demonstrates this. It commanded the defendant to show by what right (quo warranto) he exercised the franchise, having no lawful grant thereof. The principle is well illustrated in Att'y Gen. v. S. & St. C. R. Co. 93 Wis. 604, 67 N. W. 1138, where it was said, quoting from People v. Thompson, 16 Wend. 657: “There must be a user or possession of the office or franchise to authorize the information, and a mere claim is insufficient.” That was a case where the legislature had passed an act amending the charter of a railroad corporation and granting it additional privileges. The claim on the part of the attorney general was that the corporation, by long nonuser, had surrendered its charter, and ceased to exist, and hence could not exercise the rights attempted to be granted to it by the amending act. There was no allegation in the proposed information that the corporation had accepted the provisions of the amending act, nor that it had used or attempted to use the rights and privileges in terms conferred by the amending act; and it was held that the vague and uncertain allegation in an unverified statement byway of showing cause (signed only by the attorneys of the company, and in no sense an answer to the information) that it “is exercising and intends to exercise the rights, privileges, and franchises conferred” by the act, did not aid the information, and hence the motion for leave to file the information and bring the action was denied, because it was not shown that there was anything more153 ¡than a mere claim on the part of the defendant. In the present ease, however, the situation is essentially different. The «ordinance required the defendant to accept it in writing •within a specified time, and the defendant within that time 'filed a formal written acceptance thereof with the city clerk. Had the defendant been a- street railway corporation, and able to accept such a grant, it is well settled that by such accept-.-anee it would have assumed a public trust- It would have thereby become its duty to serve the public by building and ‘operating its road; not simply because of the contract it had made, but because of the public duty involved by the acceptance of a legislative grant. It might be compelled to carry -out that duty, or action could be brought by the state to forfeit its franchises and vacate its charter for failure to perform it. Wright v. Mil. E. R. & L. Co. 95 Wis. 29, 69 N. W. 791. In Stedman, v. Berlin, 97 Wis. 505, 73 Ñ. W. 57, where a franchise of a public waterworks company was in question, and no work had been done, and there was no holding or possession of the franchise save that resulting from an acceptance thereof, and the filing of a bond to perform its terms, It was held that in that case the remedy was- not by action in equity at the suit of a private party, but by quo warranto or scire facias at the suit of the state, because the party was in the exercise of the privileges conferred. The simple principle is that the defendant in quo warranto must be unlawfully holding or exercising the franchise, or else the action will not lie. In the case of Att’y Gen. v. S. & St. C. R. Co. 93 Wis. 604, 67 N. W. 1138, there was no holding or exercising of the franchises attacked. The company had not formally accepted the act in writing, nor had it accepted it by acting under any of its provisions. The most that could be said was that it had made a mere claim. But in the present case the defendant had accepted the franchise granted Iby a formal acceptance under seal, as the ordinance required. It has thus not only made a contract with the public to carry — 154 — out its provisions, but bas become charged -with a duty so to do (providing it bad legal power to accept sucb a franchise). Under these circumstances we can see no escape from the legal conclusion that it is holding and exercising the franchise as fully as if it had started to build its structure, and removed a few wagon loads of earth, or planted a few foundation stones. It may be remarked in the present case that the answer alleges that the company has already spent large sums in surveying the route in the city of Milwaukee, and in procuring plans for its bridges, so- that it appears by the answer itself that there has been an actual acceptance of the ordinance by commencing work under it. However, we prefer to base our conclusions upon the formal written acceptance. This opinion has perhaps been carried to greater length than necessary. The trial judge decided the case in a brief opinion, which very pithily disposes of most of the material questions involved, and which we cannot forbear quoting in full, as follows: “The defendant is a commercial railroad, not a corporation formed for street railway purposes. The authority of the city of Milwaukee in the premises is confined to such reasonable police regulations as may be proper. The ordinance in question is, by its express terms, a franchise. Authority for such grant from the city is found only in sec. 1862, Stats. 1898, and extends merely to> street railway corporations. The franchise granted by the common council is therefore without warrant in law. The action is properly brought, and it is the determination of the court that the defendant holds such franchise unlawfully.” By the Court. — Order affirmed.