GRAND RAPIDS E. L. & "Po 00. 11.
RAPIDS B. Eo L. & F. G. 00.
659
GRAND J:tAPIDS E. L. & P.CO. 'V. GRAND RAPIDS E.E. L. & F. G. I Co. et ai. (Oircflit (Jourt, W; D. Michigan, S. D. January ll. 1888.) , MUNICIPAL CORPORATIONS-POWlms-EXCLUSIVE PRIVILEGES.
A city charter gave the council power to make. amend, and repeal any ordinances deemed desirable for lighting the streets. and taking charge of them. but did not confer, in express terms. exclusive power over them. Held. that it did not, by implication. give the city control of the streets to the exclusion of the sovereign power of the state, and that an ordinance granting exclusive use of the streets for wires and poles for electric lights for 15 years was ultJra "ires and void.
In Equity. Motion to dissolve preliminary injunction. The Grand Rapids Electric Light & Power Company filed a bill to perpetually enjoin the "Grand Rapids Edison Electric Light & Fuel Gas Company and -others from erecting poles and wires in the streets of Grand Rapids, and obtained a temporary injunction. The city of Grand Rapids had, ordinance in 1880, given complainant exclusive right to use the streets for that purpose for 15 years, and in 1887, by ordinance, had giveildefendant the same privileges, .but not exclusively. T. J. O;Brien and J. H. Campbell, for defendant, on motion to dissolve the injunction. Const. 4, § 38,llrovides that the legislature may confer on cities sucp powers of a local, legislative, and administrative power as they see fit. Art. 15, § 13, gives the legislature power to incorporate cities. Art. 15, 13, provides that corporations may be formed under a general law, and that laws purilUant to this section may he repealed, altered, and amended. Grand Hapids was incorporated under a special law. Complainant was incorporatpd undel' Public Acts 1875, (with amendments of 1881, 1882,) 1 How. St. c. 124, 4127-4161. The cllarter of Grand Hapids March 29, 1877, tit. 3, § 10, g'dve the council power to make, alter,a.nd,repeal ordinances for (25) regulating the lighting streets and alleys, also (35) gpneral care of the streets. (36,) lighting public lamps, and their erection, (title 6. § 1.) supervision of streets, highways,,'etc.,' and the clellning, and altering of the same. The city llad no power thereunder to "grant exclusive use of the streets for the purposes stated. It had only (1) the powers directly granted; (2) those necessarily ii:\lplit'd: (3)' those indispensable to the proper purposes of the corporation. 1 DiU. Mun.Corp. § 89, and caseS cited; Detroit v. Blackeby, 21 Mich. 84. The has paramount 8uthorityover the public ways. 2 Dill. Mun. Corp. §§656, ,680, and cases cited. ,The city could confer no greater power thanit'had, ahd to give mURt have exclusive control of the streets. East Ha,rifordv:BridgeCo.,10 How. 511; Mintum v. Larue. 23 How. 435: rison,v. Stilte,9 Mo. 530: McEwen v. Taylor, 4 G. Greene, 532: Wtight v. Nagle,lOI U.s. 796. The city had no express exclusive control of the streets. It wn:S'hOt implied. In Grand Rapids v. Whittlesey, 33 Mich. 109, theprovisions of the charter of 1871, relating to the matters in controversy, were substantially as now. The court held their control of streets was tlIat given usually to cIties. In Gale v· Kalamazoo, 23 Mich. 344, the trustees gave Gale a contract tlJ erect a market house, with an agreement that. there should be no other;'held'ihvalid.' Wright v. Nagle, 101 U. 8.791: Held that an inferior oourt,whiob-granted exclusive privileges for ferries and bridges over certain
660
FEDERAL REPORTER. .
rivers, had no power to do so. In Minturn v. Larue, 23 How. 435, the city of Oakland had under its cllarter power to make and regulate bridges, etc., but the court held that as the grant did not express the intent of the legislature to vest their exclusive power over the subject in Oakland, a grant of excluSIve right of ferry to complainant was ultm vires. See Railroad Co. v. Railway Co .· 24 Fed. Rep. 306, deciding an exclusive grant of streets for a horserailroad void; also, (las Co. v. City of Saginaw, 28 Fed. Rep. 529, holding the exclusive right to manufacture gas void; also, State v. (las Co., 18 Ohio St. 262, arid (las-light Co v. (las Co., 25 Conn. 19. To the same effect, See Chicago v. Rumpff, 45 Ill. 90, and Railway Co. v. Railway Co., 79 Ala. 465. In City of B1'enham v. Water Co., (Tex.) 4 S. W. Rep. 143, the city had the power to contract and to provide the city with water. A water company was organized under the general law, and the court held a grant of exclusive right to furnish water by an ordinance of the city was ultm vires, adopting 1 Dill. Mun. Corp. § 89. The following authorities sustain the doctrine that unless the exclusive power is exptel\sly given to the city. it cannot confer it: Logan v. Pyne,:,43 Iowa, 524; Harrison v. State, 9 Mo. 526; Davenport v. Kleinschmidt, (Mont.) 13 Pac. Rep. 24\:1; Railroad Co. v. Railroad 00., 12 Fed. Rep. 308. IIi Water Co. v. Hydraulic 00., 10 Atl. Rep. 170, the court sustained. an exclusive grant by a city because confirmed by the legislature. State v. May01', etc., 3 Duel'. 119, the court held that the city charter did not give; in express'terms, the power to grant the rightto build·a horse-railway on Broadway, and tl:1at its existence could not be implied. See Rail1'oad Co. v. Railroad Co.,. 10 Wall. 52; (las Co. v. Middletown, 59. N. Y. 228; Fe1'tilizing Qo. v. Hyde Pa1'k, 97 U. S; 659; Appeal of Gas 00.. 4 Atl. Rep. 783; 2 Dill. Mun. Corp, § 692, and cases cited; 1 Dill. Mun. Corp. § 362, and cases cited; Cooley, Canst. Lim. 207. Of the cases cited by complainant Dillon, (Vol. 2, § 695) says, of Gas.light Co. v. Gas Co., 25 Conn. 19, that however it may be as to the power of the legislature, to grant exclusive privileges, a municipal corporation cannot, unless expressly given to them or necessarily implied, citing People v. Bowen, 30 Barb. 24; State v. Gas 00., 18 Ohio st. 262; Slaughter-house Cases, 16 Wall. 36. The court. in Oityof QUincy v. Bull, 106 Ill. 337, did not pass on the point, and in Smith v. Oity of Newbem, 70. N. C. 14, held the city could build a market. In Grant v, Oity of Davenport, 3t? Iowa, 396, the legislature gave the city a right to make an exclusive contract. In Gas 00. v. Oity of Des Moine8, 44 Iowa. 505, the court did not pass on the question of exclusive priVileges. In Brown v. Duplessis, 14 La. Ann. 842, the city sold the right to use the streets for a horse-railroad for a certain number of years, and the court could not say it was an abuse of power. InOity of Louisville v. Weibee, 1 S. W. Rep. 605, the court held that, by an exclusive contract to remove dead animals for one year, with option of renewal, the city did not surrender her. right to control the pUblic health, and wust perfoqn her contract. 'l'hecase of Costar v. Brush. (1841,) 25 Wend. 628, sustaining an exclusive grant of ferry privileges is founded upon a doctrine rejected by.federal and state courts. In Water- Works (Jo. v, Atlantic City, 39N. J. Eq. 367, the court held that the exclusive power given was founded Qn the franchise held by the company from the legislature. In Railroad 00. v.Rai{wl,ly Co., HaN. W. Rep. 610, the council were to "authorize or forbid " horse-rail way companies, and the court held that an exclusive privilege for ao. years could be given if a larger and bette.r service could thereby be obtaine4.
EugeneH.Lwia, for defendant. The power given the. city to grant a privilege to use tbestreets for wires and poles did not necessarily imply exclusive privilege, and does not come der the rule of;rones v. Richmond, 18 Grat. 517, where tha charter of the city
GRAND RAPIDS E. L. & P. CO. V. GRAND RAPIDS
E. L. & F. G. CO.
661
of Richmond gave power to pass by-laws "for peace, comfort, and safety," and the city counsel, at the time of evacuation, fearing disorder, destroyed all liquors. The city had the power to "regulate the lighting" of the streets; the ordinance deprives them of that power. "rhe legislature of Maryland, in 1797, gave the corporation of Gorgetown power to grade and level the streets. In Goszler v. f]orp0l'ation. 6 Wheat. 593, the plaintiff owned certain lots upon a street, which had been graded under an ordinance establishing the grll-de forever. G"iaf Justice MARSHALL held that a later ordinance changing the grade was valid, and that the c'orporation could not abridge its own legislative powers. 2 Dill. Mun. Corp. § 685. The charter of Grand Rapids confers the power to repeal its ordinances. 'rhe act granting the privileges to the defend· ant repealed the exclusive privilege given complainant. The ordinance of a municipal corporation must conform to the statute giving the corporation power to pass the ordinance. 1 Dill. Mun. Corp. § 91; Petersburg v.Metzker, 211I1. 205; Thompson v. Schermerhorn, 6 N. Y. 92. The right to repeal bears close analogy to' the provision in the constitution of Michigan, that all laws creating cOl'porations may be amended, altered, or repealed. In Wate1'· Works v. Schottlel', U. S. 347, 4 Sup. Ct. Rep. 48, the court held that the provision in the constitution ""that all special or general acts passed pursuant to this section may"be altered, from time to time, or repealed," should be considered in connection with the charter granted. See, to the same effect, Na,zro v. Insumnce Co.· 14 Wis. 319; Railroad Co. v. Ma1'sh. 17 Wis. 13; Chapin v. Crusen, 31 Wis. 209; Railwag Co. v. Board lSup'rs, 35 Wis. 257; Miller v. State. 15 Wall. 4;7!:l. In none of these cases was the language in the constitution in favor of the reservation of the right to repeal stronger than the language in the charter.
no
Blair, Kingsley Kl.einhaus, for complainant. The case involves a federal question. MUl'my v. Chm'leston, 96 U. S. 440; Yick Wo v. Hopkins, 118 U. S. 356, 6 Sup. Ct. Rep. 1064; Wright v. Nagle, 101 U. S. 791; Gas-Light Co. v. City, 28 Fed. 529; Transportation Co. v. ParkM'sbu1'g, 107 U. S. 691, 2 Sup. ct. Hep. 732. If the ordinance is valid, it IS the duty of the court to issue an injunction. Railway Case, 23 Cent. Law J. 467; Gas Co. v. Dwight, 29 N. J. Eq. 242; Water Co. v. Rivers, 115 U. S. 674, 6 Sup. Ct. Rep. 273. The granting exclusive rights to ferries, ra.Hroads, water, or gas companies is not a monopoly. Cooley, Torts, 277; People v. Marx, 2. N. E. Rep. 34, note; Landing Co. v. Slaughte1'-House Co., 111 U. S. 746,4 Sup. Ct. Rep. 652; Water- Works Co. v. Water- Works Co., 7 Sup. Ct. Rep. 405. The legislature had the right to give the power claimed, and could do so by the agency of a municipal corporation, (State v. Gas-Light Co., 18 Ohio St. 293; Maybury v. Gas-Light Co., 38 Mich. 154; Murmyv. Charleston, 96 U. S. 440;) either by express terms, or by direct and necessary implication, (State v. Gas-Light Co., 18 Ohio St. 293.) A corporation for municipalpllrposes is not a mere privilege, but an absolute right. People v. Hurlhut, 24 Mich. 108; Cooley, Vonst. Lim. 188, 189; Ex parte Mi,'ande, 14 Pac. Rep. 888; People v. Common Council. 28 Mich. 237. In exercising the portion of the pure legislative authority which properly belongs to the state, the municipality is confined to the powers clearly granted. Leonard v. City ,af Canton, 35 Miss. 189; 1 Dill. Mun. Corp. § 91. note 3; People v. Hurlbut, 24 Mich. 81. But in local and private matters it alone is concerned, and not the state. Fund Soc. v. Philadelphia, 31 Pa. St. 183; 1 Dill. Mun. Corp. 27; Gale v. Kalamazoo, 23 Mich. 351; People v. HU1'lbut, 24 Mich. 103; v. Boston, 122 Mass. 359; Bailey v. Mayor, 3 Hill, 539; Detroit v. Corey, 9 Mich. 184; People v. Common Council, 28 Mich. 228. The courts very liberally find power in'municipalitiesto issue bonds, (City of Galena v. Corwith, 48 Ill. 423;) erect water-works, (Daviesv. Flewellen, 29 Ga. 50;) construct a break--
x
em
662
,,',
FEDERAL REPORTEIh
water, (Nal1'o v.Insurance 00.· 14,Wis. 319;) to provide for electric lights. (Attorne1J'f/ert. v. Detroit. 55 Mich. 181',20 N. W. Rep. 894;) and many other purposes. St'Wl'te'Dants v. Oity of Alton, 3 McLean, 393j French v. Quincy. 3 Allen, 9: People v.Harris. 4 ,Cal. ,9: Torrent v. Muskegon, 47 Mich. U5.11} N. W. Rep. 132; Willard v. Newbwryport, 12 Pick. 227: PuUy v. Spangenberg. 5 La. 410j Oity of WlIa1idottev. Zeitz. 21 Kan. 649: Oity Oouncil v. Ohurch,4 Strob. 806j Town Oouncil v. Pippin. 31 Ala. 542; Smith v. New bern, 70 N; 0.14; Oommissioners v. Oommon Oouncil. 28 Mich. 250. The granting of the use of the streets toa gas company in no ",ay concerns the state. People v.Walker. 38 Mich. 156: Attorney (Jen.v. Detroit. 55 Mich. 181, 20 N. W. Rep. 894· .All municipal corporations have all powers necessary to carry out an expressly granted power, (Oity of (Jalena v. 001·with. 48Iil. 425;) and a thing within the intent ot the grant is as much a part of it as if expressed, (Thomas v. Railroad 00., 101 U. S.82j Railroad 00. v. Railroad 00.,13 How.71j D01.lJning v. 00.· 40 N. H. 232; U. S. v. F'reeman, 3 How. 563j Oity of Quincy v.Bull, 106 Ill. 350; 1 Dill. Mun. Corp. § 89, 2 Dill. ¥un. Corp. § 61:15.) See, for a complete exposition of the doctrine of implied p'owers. the Newbern Oase. 70 N. C. 18. It is very clearly by Chief Justice SHAW to be such as, in the minds of reasonable men. is necessary to accomplish the object for Which the grant was made. Springjleld v. Railroad 00., 4 Cush. 63 j cited and approved, R"ilroad 00. v. Hall. 91 U.S. 343. ' The right to provi{}e electric lights was established in Putnam v. (J"and Rapid,y, Mich. 416, 25 N. W. Rep. 330j Hobart v. Oityof Detroit, 17 Mich. 257. No one could have bel'll' induced in 1880 to put up electric lights except on obtaining an exclusive privilege. The grant was reaso:'lable therefor, and much different from one in perpetuity. Railway 00. v. Railway 00.,33 N. W. Rep. 610; Birmingham m. Ry. Oase, 23 Cent. Law J. 467j LouiS'VilZe v. Weible. 1 S. W.Hep. 60t); l).a'l)enport v. Kleinschmidt, 13 Pac..Rep. 249. An existing necessity often confers powers which do not necessarily exist. Jones v. Richmond.18 Grat. 517; Ooldwaterv. Tucker. 36 Mich. 474j Olason v. Milwaukee, 30 Wis. 316j Meat-Shop Oase, 44 MO. 547. It has been held lately that the granting ot exclusive privileges wQu,ld be sustained when such grant was necessary .to cacry,out special powers granted. althoughtbere was. no express power to grant exclusive privileges.. Des Moines st. Ry. Case. 33 N. W. Rep. 610; St. RlI. Oase/, 23 Cent. Law J. 467j Water-Works v. Atlantic Oitydl9'N. J. Eq. 36.7. It is. objected that the council,granted away legislative powers held in trust. The legislat1JrQ can, except as barred by the constitution by an irrepealable act, grant exclusive rights to build bridges, ferries. etc.· and it is no answer that one 'legislature could not preclude its successors of the performance of such a trust. Langdon v. Mayor. 93 N. Y. 157.j Brenham Oase. 4 S. W. nep. 143. It the power to grant the ordinanceexistsin the charter it is valid. Union 00. v. Orescent Oitl! 00., 111 U. S. 746.4 Sup, Ct. Hep. 652j WaterWorks v. Ri'Ders.1l5 U. S. 674, 6 Sup. Ct. Rep. 273: Wate1'- W01'ksv. WaterWorks. 120 U. S. 64. 7 Sup. Ct. Rep. 405. It is ol>jectell that it ties the hands of the council from providing for the chang'ing nec.eSsities of the city. Such an objection applies to contr<wts, but not to fmnchises, and contracts .of such a business character as for water. gas, or the u8eofa building are as binding as private contracts, (Valparaiso v. Gardner.'97,iInd.4j Fund Soc.v. Philadelphia, 31 Pa.St. 189; (Jale v. KalamazoQ,,23·Mich. 351,) and without a restraining clause in the.charter a city C<Ln m.ake SUch a contract for a rf'liSOnable term of years. (Valparaiso v. (Jurdnel', .97 Ind. '1, Indianapolis v. (JasUo., 66 Ind. 396.jF,ttnd Soc. v. Philadelphia. 31 Pa. St. 180: Mosea;v. Risdon. 46 Iowa. 251; (Jale v. Kalamazoo, 23 Mich. 351.) III Water Oo.,v. Bridgepo1't 00., 10 AU. Rep. 170, the court,
GRAND RAPIDS E. L. &P. CO. V. GRAND RAPIDS E. E. L. &; F. G. CO.
663
in sustaining an exclusive right of laying water pipes said: "Communities may endure monopolies, but they cannot endure the violation of contracts." JACKSON.J. 'fhe leading and material facts in relation to the matter in controversy, and on which rest the proper determination of the questiOI) involved in the present motion, are, briefly, these: By the eharter of the city of Grand Rapids the common council thereof were invested with the following powers and duties relating to the matters under consideration:' "Tit. 3., Sec. 10. The common council '" '" '" .shall have power within establish, mod/fy,amend and repealaueh said city to enact, make, ordinances, by-laws, and regulations as they deem desirable, within said city, for the folIoWing purposes:" "TweT4tY-flfth. To regulate the lighting of the streets and alleys, and the prote!ltion and safety of the public lamps, and to employ a suitable person to superitlterid the .same. to prescribe his duties. and fix the compensation therefor." . ·,Thirty-j1flh. To provide for the cleaning of the bigQways, streets, avenues. lanes, alleys, publiegrounds and squares, crosswalks and sidewalks in said city, and to require the owners or occupants of property on any paved street or streets of said city to clean the said streets in front of, or adjacent to, the premises occupied by them to the center of said streets; to prohIbit and prevent the incumbering thereof in any manner whatsoever, and to ramove any obstructions therefrom, and to prevent the exhibition of sigos on (l8,Ilvass or otherwise in and upon any vehicle standing. or traveling upon the of.said city; to control, prescribe, and regulate the IIlwe of constructing and suspending awnings, and the exhibition llnd suspension of signs thereon; to, control. prescribe, and regulate the manner in which the highways, streets, avenues, lanes, alleys, public grounds and spaces within said city shall. be used, and to provide for the preservation of and the prevention of willful injury to the gutters in said highways, streets, lanes, and alleys; to direct and regulate the p:anting, and provide for the preservation of ornamental trees therein. .. To provide for and regulate the lighting of public lamps, and the erection of lamps and lamp-posts and suitable hitching-posts; to prohibit all practicEll!, amusements. anddQings in said streets haVing a tendency to frighten team I! and horses, or dangerous to life or property; to remove or cause ,to be removed therefrom all walls and structures that may be liable to fall therein, so as to endanger life or property." "Tit. 6. sec.!. '.rhe common council shall have the care and of the bridges, lanes., alleys, parks, and public grounds in said city, and it shall be their duty to give directions for the repairing. preserving, improving, cleansing, and securing of such highways, bridges, lanes, alleys, grounds, and to cause the same to be repaired, cleansed, parks. improved, and secured, from time to time, as may be necessary; to regulate, the high ways, lanes, and alleys, already laid out or which may bereafter be laid out, and to alter such of them as they shall deem Inconvensubject to the restrictions contained in this title." The complainant is a corporation, organized March 31, 1880, under the laws of the state of Michigan, and its powers and franchises are defined by thestatu'te underwbich it was created and organized. It was invested py the law of its creation with no exclUBive rights, franchises, or privileges. . 'On the nineteenth day of April, 1880, the common council of Grand Rapids, deeming it expedient and for the welfare andadvan.
664
FEDERAL REPORTER.
tage of the city that a system of lighting by electricity should be established therein, for the purpose of inducing the complainant to undertake the work of supplying the city with electric light, or lights, passed the following ordinance: "An ordinance authorizing the 'Grand Rapids Electric Light & Power Company,' to erect the necessary lines for the transmission of power and light by of electricity in the city of Grand Rapids. Passed April 19, 1880. First published April 22, 1880. Amended April 27, 1880. "".rhecommon council of the city of Grand Rapids do ordain as follows: "Section 1. '.rhat the' Grand Rapids Electric Light &; Power Company, I as a body corporate under that or such other name as the sll>id corporation may hereafter adopt, be and they are hereby authorized to use exclusively, for the term ofji/teen years from the passage of ordinance, any and all the streets, lanes, alleys, bridges, and Pllblic grounds of said city, including any territory that may be hereafter added to the same, forthe purpose down or suspending' on suitable poles or supports in said streets, lanes, alleys, bridges, and public grounds from time to time, as said company may desire, wires, cables, or other conductors of electricity for distributing and supplying said city and th e inh,abitants thereof with for light and po wer: provided, that the common council of said city sh!,ll have the control and direction of the places, times and circumstances in which said lines, wires, cables, poled, or supports may be erected or laid down, and that said company shall not unnecessarily obstruct the passage of any such lane. alley, bridge, or public ground, and shall; within a reasonable tilne after making any opening or excavation for the purposes aforesaid, repair and leave said street, lane,alley, bridge, or ,public ground itt as good condition as before said opening or excavation was made'aI\d under t,he direction and ,be approved of by the city surveyor. "Sec. 2. The privileges hereby granted are lIpon the express condition that said compa.ny shall; on or before th6firstday of January next,commence the work of manufai:ltQring electricity for lighting said city, and ahall supply the same to said C'ity and the inhabitatitS thereof at a reasonable price along the lines WhICh are or shall thereafter be constructed by said company, and that they shall extend their saidlines of conductors, and increase their facilititls for the produCing the electricity, as the demand for its use, at such reasonable price, 'may warrant. "8ec.3. Any temporary failure on the part of said corporation to perform any of the conditions of this ordinance when such failure is occasioned by any unavoidable accident, it shall not be construed as a forfeiture of the privileges hereby granted: prOVided the same shall be repaired within a reasonable time. , "Sec. 4. That if said company shall make any opening or excavation in the streets, lanes, walks, or public grounds of said city, the same shall be done after notice to and under the direction of the common council or city surveyor, and said company, in case of any such excavation or other interfer, ence with any street, alley, or public ground, shall forthwith, under direction of the citysurvejor, restore the street, alley, or ground, to its original condition, and all such places shall be, left by said company in as good condition as before disturbed by the company, and in ca.se of failure to do sO Within what the common council or city surveyor shall deem a reasonable time, the 'said coinOlQn<!ouncil or city surveyor may cause it to be done, and the comrany shaltbe liable to pay the thereof ondemand, and in casf' the ,erection of cables or ,other cond,\lctors of electricity by said company shall be necessary oyer the streets, alleys,:and public grounds of said city, then the said compariy shall' place the same at such places, and secure the same in such manner. as shall be approved by the common council, and this is not to grant permission to erect such conductors over any such streets,alleys, or grounds,
GRA1'lD RAPIDS E. L. & P. CO. V. GRAND RAPIDS E. E. L. & F. G. CO.
665
except at such places as shall be agreed to by said common council; but it is expressly provided that in no case shall lines used as conductors of electricity be placed over and above the li'nes and wires used by the city in its fire-alarm telegraph apparatus, and that the location at which conductors shall be maintailled shall at all times be subject to the control of the common council. "Sec. 5. The said company shall be liable to compensate the city of Grand Rapids and all cor{'':'Iations and persons for all damage!! that may grow out of the use of the public ways and grounds of said city for their said business, and for having opened or incumbered any street, alley, sidewalk, or public space. or from any other cause whatever, connected with the franchise hereby conferred. and said corporation shall at all times be sUbject to all ordinances now in existence, or which may hereafter be passed. relative to the streets, alleys, and public grounds in said city, and the manner of making improvements therein, and all ordinances relating to the means of public protection while excavations are being made in said streets, alleys. and public grounds; .and said corporation shall be liable for any loss the city of Grand Rapids may suffer in case,the city shall be liable for damages on account of anything that shall grow out of the operation or business of said corporation, or those acting under its authority. or under its agents. "Sec. 6. (As amended April 27,1880.) The city of Grand Rapids expressly reserves the right to alter and amend this ordinance in any manner necessary for the safety or welfare of the public, and, in case it is necessary to do so. to protect the public interest; but the exclusive rights and privileges hereby granted shall Dot be impaired or abridged by such alteration or amendment. "Sec. 7. Said company shall, within thirty days after the acceptance of this ordinance. execute to the city of Grand Rapids a bond in the penal sum of twenty thousand dollars. with sufficient sureties, to be approved by the common conncil and filed in the office of the city clerk, conditioned to compensate the city for all damages. costs, expenses. and outlays which may come to said city by reason of the actions of the said company. or its agents, servants or employes, or persons doing service upon the works of said company, and from all loss and damage the city shall suffer from any cause that shall grow, rectlyor indirectly, out of the granting this franchise,or out of anything that shall be done under the name or for the company operating under the same, and, said bonll shall also be conditioned to perform each and every requirment of tbis ordinance by said company to be by them performed, and to obey all ordinances of said city passed or that may be passed. Said bond shall be renewed once in every two years, and as much oftener as the said counsel shall require by resolution. "Sec. 8. That the common counsel may, by resolution, at any time direct the said company to erect upon any streets or places in said city. the necessary apparatus for furnishing the residents light and power by electricity. as contemplated by this ordinance, and in case of the passage of such resolution, the said company shall signify its acceptance of the resolution and willingness to forthwith proceed to erect such apparatus in Buch streets and places, and to furnish light and power to such as may desire; and in case said company shall, for thirty days after notice of such resolution, neglect to accept the same, and proceed to such erection of such apparatus, then the exclusive right of said company to the use of such streets and places shall cease, and the said council may grant the use of said streets and places to some other person or company. "Sec. 9. T1)is ordinance shall take effect from and after its acceptance by the president and directors of the Baid · Grand Rapids Electric Light and Power Company,' which acceptance shall be filed with the city clerk within thirty daJ's from and after the passage of ordinance."
666
FEDERAL RE:PORTER.
was duly by the complainant,\vho thereafter proceeded at considerable expense to erect works,and extend its wires, in. order the city with electric light. These works were still being maintained, and the ordinance substantially complied with by the complainant, when, on May 20; 1887, the common council of Graud Rapidspaslledari ordinance granting to the defendant, the Grand Rapids Edison Electric Light & Fuel Company, a corporation organized March 30, 1887, under the General Laws of Michigan, for the purpose of supplying electricity forlight and power, the right to use the streets of said city for the purpose of erecting supports, running wires or cables, etc., in the disnibution ofelectrio lights throughout the city. The defendant ltccepted said ordinance,'which contained the same general provisions as the ordinance of Aptil 19, 1880, except that it conferred no exclusive rights or privileges,and was proceeding with the erection of its works, and the running of its 'wires and. cables, when the complainant filed in this court its present bill, claiming that its acceptance of the ordinance ofApril 19, 1880, constituted a contract with the city of Grand Rapids, which: conferred upon it the exclumve right to the use of the streets, lanes, alleys, ,brl,dges, and pUblic grounds of said city for the purpose of supplying the same and the inhabitants thereof with electric lightj that the ordinance of May 20, 1887"granting to the defendant, the Grand Rapids Edison Electric Light & Fuel Gas Company, the right to use said streets, etc., forthe purpose of distributing its electric light and power throughout said city, was an impairment of the complainant's contract rights under the prior ordinance of1880j and praying that said defendant company,its, officers and agllnts, who are made co-defendants, beenjoined from usingJthe streetS of Grand Rapids for the purpose aforesaid. A preliminary injunction was granted, and the defendant corporation, having since filed its answer, now moves to dissolve that injunction. Several grounds .have been presented and urged in support of this motion, hut, in the view which the court takes of the legal principles involved in the case, there is only one controlling question to be settled and determined in order to a proper dispol:!ition of the present application, and that is, were the common council of Grand Rapids, under the city's charter powers, invested with the requisite authority to confer upon the complainant the exClUBive right to Use the streets of that city for the purpose of running its electric wires,cables, and supports under or over the same? In other wQrds, had the common council the power, under the city's charter, to grant to complainant the exclusive right and privilege of using the city's streets for said purpose? It may be considered as settled by the authorities that the complainant's acceptance of the ordinance of 1880 constituted a contract between it and the cit,y'of Grand Rapidsjbut the exclUBive right to the use of the streets whicp this ordinance undertakes to confer upon, the complainant for the periodof15 years, and which it is claimed·formed an essential. and material part of the contract, and which it is insisted the ordinance of May 20, 1887, impairs,.e-.opresents the only federal question on which
GRAND RAPIDS E. L. & P. CO.
v. GRAND
RAPIDS E. E. L. &: F. G. CO.
667
the jurisdiction of this court to hear and determine the controversy between the parties can be rested. So far, therefore, as this court is concerned, its action in sustaining or overruling the present motion, or in dissolving or continuing in force the injunction restraining the defendant corporation from using the streets of Grand Rapids under the,ordinance of May 20, 1887, depends upon the question above stated, i. e., whether the COmmoh council, under the city's charter, had the power to grant the complainant the exclusiv.e right of using the streets of the city for the purposes aforesaid. It is conceded that in the charter of Grand Rapids, in force when said ordinance of 1880 was passed, there is no express power or authority conferred upon the common council to make such a grant of exclusive rights and in, to, or over the streets of the city. The authority for the making of this exclusive grant must, therefore, as combe found and sustained, if at all, upon plainant's counsel properly what are called the implied powers of the common council. It is too well settled to need the citation of authorities in its support that municipal corporations, which are mere political agencies of the government, forming but parts of the machinery employed in carrying on the affairs of the state,possess and can exercise cmly such powers as are "granted in express words, or those necessarily or fairly implied in or incident to the powers expressly conferred, or those essential to the declared objects and purposes of the corporation, not simply convenient, but Implied powers, says Judge Cooley, (Const. Lim. margo p. 194,) "are such as are necesSa1'Y in order to carry into effect those expressly granted, and which must therefore be presumed to have been within the intention of the legislative grant." The courts of the country, state and federal, have not been disposed to extend or enlarge the power of municipalities by implicationj on the contrary, they have, in the main, applied to their charter powers substantially the same rule of strict construction that is applied to charters of private incorporation, on the ground, as stated in Cooley's Constitutional Limitations, (marg. p. 195,) that "the rel\SOnable presumption is that the state has granted, in clear and unmistakable terms, all that it has designed to grant at all." In Minturn v. Larue, 23 How. 436, NEJ..BON, J., speaking for the court, says: "It is a well-settled rule of construction of grants by the legislature to corporations, whether public or private, that only such powers and rights can be exercised under them as are clearly comprehended within the words of the act, or derived therefrom by necessary implication, regard being had to the objects of the grant. Any ambiguity or doubt arising out of the terms used by the legislature must be resolved in favor of the public."
In Ra.u'l:oad do. v. Canal Com'r, 21 Pa. St. 22, the rule is thus stated by the supreme court of Pennsylvania: "When a state means to clothe a corporate body with a portion of her own sovereignty and to disarm herself .to that extent of the power that belongs to her, it is so eaay to say so, that we will never believe it to be meant when it is not said; In the construction of a charter to be in doubt is to be resolved; and everyresolutioD which springs from doubt is against the corporation." ,
668
To the same effect is the language of the supreme court in the case of Fertilizing Co. v. Hyde Park, 97 U. S. 666; and Bridge v. Bridge, 11 Pet. 420. Judge DiJIon, in his'note to section 91 of Municipal Corporations, (3d Ed.) pp. 118, 119, after citing nUlperous authorities announcing the same general rule, says: ,"The pdnciple of strict construction should not be pressed in any case to sllch an unre,:\sonable extent as to defeat the legislative purpose fairly appearing, upon.the entire charter or enactment. Perhaps the rule as it is briefly expressed' in the text,best embodies the result of the adjudications upon this point, namely, if, upon the whole; the1'e be fair, reasonable and substantial doubt Whether the legislature intended to confer the authority in question, particularly Hit relates to a matter extra-municipal or unusual in its nature, and the 'of which will be attended with taxes, tolls, assessments, or burdens ripon the inhabitants. or oppress them. or abridge natural or common rights, or divest them oitheir property, the doubt should be resolved in favor of the citizen aDd against the municipality."
When it is considered that corporations, whether public or private, are the creatures of the legislative department of government, existing solely and alone by virtue of the sovereign will, and exercising only delegated authority of the state, the strict rule of construction applied to their powers is manifestly the correct one. This principle necessarily follows from the relation corporations occupy to the state. A municipal corporation is not a "regnu,min regno," but an instrumentality, established by legislative enactment, to which certain powers of action are given for defined public purposes. The corporation may, through its proper officers,perfotm all acts or make all such contracts and incur all such liabilities as come legitimately within the powers conferred upon it; but all acts and contraQts beyond the scope of the powers granted are void. These fundamental principles lie at the foundation of the law relating to all corporations. Before applying these general principles and rules for the construction of the delegated powers granted te corporations, whether public or private, it is proper to call attention to the fact that municipalities do not ordinarily or usually posses exclU8ive control over their streets; on the contrary, it is well settled by authority that the streets of a city are public highways, which it is the proyince of the government, by appropriate means, to render safe and convenient for the use of the public. "Public streets, squareS, and commons, unless there be some special restriction when dedidated or acquired, are for the public me, and the use is none the less for the public at large, as distinguished from the municipality, because they are situated within the limits of the latter, and because the legislature' may have given the supervision and control of them to the local authorities. The legislature of the state represents the public at large, and 'has ,full and paramount authority over all public ways and public pillces:" "To the commo.nwealth here," says Chief Justice GIBSON, "as to the king of England, belongs the franchise of any highway as a trustee oithe public; and streets regulated and rp,paired by the authority of a municipal corporation are as much highways as are rivers t
GRAND RAPIDS E. L. & P. CO. V. GRAND RAPIDS E. E. L. & F. G. CO.
669
railroads, canals, or public roads laid out by the authority ofthe quarter sessions." 2 Dill. Mun. Corp. (3d Ed.) § 656. "As the highways of a state, including streets in cities, are under the paramount and primary control of the legistature, and as all municipal powers are derived from tile legislature, it follows that the authority of municipalities over streets, and the uses to which they may be put, depends entirely upon their charters or legislative enactments applicable to them." 2 Dill. Mun. Corp. (3d Ed.) § 680. It is also well settled that the right to use the streets and other public thoroughfares of a city for the purpose of placing therein or thereon pipes, mains, wires, and poles for the distribution of gas, water, or electric lights for public and private use, is not an ordinary business in which anyone may engage; but is afranchwe belonging to the government, the privilege of exercising which can only be granted by the state or by the mooicipal government of the city, acting under legwlative authority. The present case involves no consideration of the power of the legwlature to have conferred upon the complainant the exclusive right which it claims to the use of the streets of Grand Rapids for the purpose oflaying down electric wires. It is conceded that the legislature of Michigan, subject to the constitutional reservation of the right to amend, alter, or repeal its charter; could have directly conferred upon the complainant the exclusive privilege of occupyihg the streets of the city for the distribution of electric light for public and private use. It is also conceded that the legislature, subject to the same constitutional reservation, had the authority to confer upon the common council of Grand Rapids the power to grant the same exclusive right; and the question is, has it delegated such authority to the city or its common council in the powers with which it has invested it otthem? It is manifest that this question is not controlled by such cases as Gas Co. v. Light Co., 115 U. S. 650,6 Sup. Ct. , Rep. 252; Water-Works v. Rivers, 115 U. S. 674, 6 Sup. Ct. Rep. 273; Gas Co. v. Gas Co., 115 U. S. 683, 6 Sup. Ct. Rep. 265; Water-Works v. Water-Works, 120 U. S. 64,7 Sup. Ct. Rep. 405; Sla,ughter-House Cases, 16 Wall. M, and similar' cases, relating to legisldtive grants of exclusive privileges, to be exercised within the limits of municipal corporations. Thesecf.Lses, however, establish one important principle, which has a direct bearing, and throws light upon, the question here involved, and that is, that a municipality, under the usual powers conferred of providing a supply of light and water for the city and its inhabitants, and of establishing and regulating its streets, does not possess the exclusive authority over those subjects; that notwithstanding the grant of such powers to a municipal corporation, the state, in whom rests the paramount rights to, and control over, all franchises and all public highways, may exercise its sovereign authority over all such subjects and confer rights and privileges, exclusive or not, as it may deem proper, within the limits of the municipality. These legislative grants of special franchises, whether exclusive or not, to be exercised in cities, are not sustained nor do they rest upon any implied repeal of powers previously delegated to the municipal corporation; but they are supported upon the ground of
:.670 .'
FEDE:RAL REPORTER.
" , :J
T,) confer and privileges, either in the streets ofa city 9rin the ,public highways, necessarily involves the.assertion and exercise of · powers and control over the ,same. . Nothing short of the whole soo.'ere4rJn power o,f, the state can confer exclusive rights and privileges in pubdediGated or acquired for public use, and which are held in trust for the public at large. This' brings us directly up to the inquiry whether the legislature of Michigan has delegat!,!d to the city of Grand ,Rapids the state's sovereign power. and control over the streets of ,that If the charter powers of the city have investeli it or its · common council with the whole FJO'I?ereign power and exclusive control over the streets within its limits, it might lawfully confer upon the complain· ant the exclusive right of user, which the ordinanqe of 1880 undertook to grant. If, however, the city or its common (louncil possessed no such exclusive power and control, then the grant which it attempted to make ,to complwnant was vires," and therefore void, so far as it purports to conferexclusivl:lprivileges in or over the streets of the city. It is not daimed that the city or common council was invested with such exclusive. conttoland authority by virtue of the powers exprellsly granted in respect to the streets and public highways of the oity. These express powers were "to provide for the cleaning 'of the streets, * * * to pro4ibit and prevent the incumbering thereof in any manner whatever. and to remove any obstructions therefrom; * * * to control, prescribe an<J regulate the manner in which the highways, streets, lanes, alleys, etc., within said city shall be ui;led," with the further provision that "the common council shall have the care and supervision of the highways, streets, bridges, alleys, parks, and public ground$ in said city, and it shall be their duty to give direction for the repairing, preserving, improving, cleansing, and securing of such high highways, etc., and to cause the same to be. repaired,. cleansed and improved, from tilne to time, as may be necessary; to regulate the roads, streets,etc., already laid out, or which may hereafter be laid out; and to alter such of them as they shall deem inconvenient, snbject to the restrictions contained in this title." It is perfectly clear that these provisions of the charter confer no exclu,sive or sovereign power and control over the streets of the. city. In respect to the subject of light, the common council are invested with power "to regulate the lighting of the streets and alleys, and the protection and safety of the public lamps, and to employ a suitable person to superintend the same, to prescribe his duties and fix the compensationthereforj * * '" to provide for and regulate the lighting of public lamps and the erection of lamps and lamp-posts." It is urged on behalf of complainant, that to enable the city toexe(lute and carry into effect this authority conferred and duty imposed.upQn it, of providing for and regulating the lighting of the streets and public lamps, ther;e,should be implied the power and right of so using the streets as to secure that important object, and that if the grant of the exclusive privilege of using the streets is neeessary to obtain the benefit, convenience, and advantage of an improved !
','
right and authority which has never
.
..'
parted with by the
GRAND RAPIDS E. L. &:P. CO. '11. GRAND RAPIDS E. E. L. & F. G. CO.
671
system of lighting, such as electric .lights afford, the common council could lawfully confer such exclusive right; or, to state the proposition in another form, it is this, that, under itS powers upon the subject of lights, the city or common council could adopt a system of electric lights for the streets and public lamps, and having so determined, if it became necessary, in order to secure 'slich improved light, to grant the exclusiveprivilege of using the public streets to the party who 'is to supply the same, the common council would have the implied power of conferring such exclusive right. This presents a new and rather novel way of enlarging the power of municipal corporations, and of securing for them the prerogatives of sovereignty. First, imply from the powers granted the right to adopt a new system of lighting the city's streets, (which may be a proper and legitimate. implication,) then, when the common councilhasdetermined to procure such improved system, if difficulties arise, such as a demand for exclusive rights and privileges on the part of the company controlling the system, make another implication, from what is called the necemty of the case, and assume the right to confer sovereign franchises. The proposition is not only unsound, but dangerous in the extreme, and wholly unsupportE)d authority. Obstacles and difficulties, in the way of exercising powers fairly and reasonably implied from those expressly granted, can never operate to en1arge the original grant ofauthority. A private corporation is chartered by the state without exclusive rights; it demands exclusive privileges and sovereign franchises in and over a city's streets as a condition of supplying it with eleetric light; that demand,it is said, creates a 'MC688'ity in the common council t6 grant or concede such exclusive privilege, and that necessity warrants an enlargement, by implication, of the city's charter powers, and confers upon it authority which clearly did not exist prior to such necessity. But, without dwelling on this position, which is utterly untenable,' if we apply the rules of construction above mentioned, even adopting the more liberal one quoted from the note to section 91, Dill. Mun. Corp., to the powers which the city of Grand Rapids possesses over ,its streets and public lights, whether viewed separately or in connection with each· other, it cannot be maintained that any power can be thence implied which would authorize the common council to make the exclusive grant contained in the ordinance of 1880. Is there not a "fair, reasonable, and substantial doubt" whether the legislature intended, under the powers granted,-" to regulate the lighting of the streets and the protection oithe public lamps," "to provide for and regulate the lighting of the public lamps," "to care for and supervise the streets, and to prescribe, control, and regulate the manner in which the highways, streets, etc., shall be used,"-to confer upon the COmmon council of Grand Rapids the exclusive so\rereign authority and control over the streets of the city? Is such exclusive control necessarily implied, in or incident to, the powers expressly granted, or essential to the declared objects and purposes intrusted to the city government? Is not the granting of sovereign franchises in the public highways of the state a "matter extra-municipal or unusual· in its nature?" In confining the inhabitants of the city for the
672
,FEDER&L REPORTER.
period of 15 years to one 90mpany for their supply of the improved light, are they not deprived of the benefit of all competition during that period, and is thereoot thus imposed upon them the burden of a quasi n1Onop01y, while they are at the same time prevented from availing themselves of any aud all improvements which may be made in the systems of lighting? 'l'here can be but one answer to these questions, unless we disregard well-established principles, and ignore the authority of judicial decisions on the subject. The rights and beneficial. user which the public or the inhabitants of cities have and are entitled to .enjoy in th" streets of a populous place are much more enlarged and various than with respect to ordinary highways, and there is a corresponding presumptioll against the intention to restrict or curtail such rights by conferringexclusive privileges therein. Looking at the question of legislative intent from another stand-point, we find that it is not the policy of the state of Michigan to grant irrepealable franchises and privileges to private corporations. Article 15, § 1, of state constitution, provides that "corporations may be formed under general laws, but shall not be created by special act except for municipal purpqses. AU laws passed pursuant to this section may be amended, altered, or repealed." Now by the ordinance .of 1880, if valid,the complainant, a corporation organized under the laws of the state, has secured not only au exclpsive franchise belonging to the state, but an irrepealable pri'/;ilege, such as the.1egislature could not have conferred. Is it to be presumed that the under its constitutional authority "to confer upon incor,porated cities such powers of a local legislative and administrative character as tJ"eymay deem proper," intended to invest the common council of Grand Rapids with the power to grant irrepealable franchises in or over the streets of that city, and thereby confer upon the grantees privileges or franchises. not subject to alteration,amendment, or which, the legislature could not itself have directly conferred. If such a presumption is proper, the conclusion is reached that the agencies or creatures of the state may, in the exercise of derivative and delegated powers, do what the legislature itself could not. This would violate the well-settled rule that the legislature cannot do indirectly, through the local' government,wQat the people have by their constitution restricted it in d,oil1g directly. Dill. Mun. Corp. (2d Ed.) § 263. Again, by title 3, § 10, of the city's charterit is provided that "the common council * * * shall have power within said city to enact, make, continue, establiBh, modify, amend, and repeal such ordinances,by-Iaws, and regulations as they deem desirable within said city, for the following purposes," including the regulation of the streets, and lighting the same as above set out. It may well be doubted whether, under this grant of power, the common council can make or enact any ordinance which they may not afterwards modify, amend, or repeal as they deem proper or desirable. But without undertakiIlg to definitely settle this, it is very clear, from the power thus conferred to modify, amend, and repeal all ordinances they might pass, that the legislature did not intend to bestow upon the common council liLuthOl:,ity to make exclusive grants of sovereign franchises and
GRAND RAPIDS E. L. & P. CO. V. GRAND. RAPIDS E. E. L. &F. G. CO.
673
privileges, such as would restrict the local government in meeting the the future wants and convenience of a growing city; or, if such legislative intent is to be inferred or implied from the powers expressly granted, there is reserved to the common council, not by implication, butin express terms, the sovereign right and power of amending, modifying, or repealing the ordinance which grants such exclusive rights. Reading that reserved authority into the ordinance of 1880 would leave the common council at liberty to pass the further ordinance of 1887, which is claimed to be so in conflict with the former as to impair its obligation. But aside from these general considerations, the decided weight of judicial authority is against the right of the common council of Grand Rapids to confer upon complainant the exclU8ive franchise which the ordinance of 1880 attempts to grant. Thus, in Dillon on Municipal Corporations,(2d Ed.)§ 547, His said: " A. generalgi'ant of power in the charter of a city to cause it to be lighted with gas, While it carries with it, by implication, all such powers as are clearly necessarjfor the exercise of the authority expressly conferred, does not authorize the city council to grant to any person or corporation an exclusive right to use the streets of the city for the purpose of laying down gas-pipes fOt· a term of years" and thereafter until the works shall be purchased from the grantee by the city. The court admitted that the power to light the city would autnorize the council to contract for gas, and to grant the contracting party the Use of the streets, but deni'ed its authority to make such use exclusive for a determiriate future period."
-Ci'tingthe well-considered case of the State v. Coke Q)., 18 Ohio St. 262, which has not only been followed in Ohio, (see Railroad Co. v. Smith, 29 Ohio St. 291,) but recognized with approval by the supreme court of the United States, (see GasQ). v. Light Co., (115 U. S. 659, 6 Sup. Ct. Rep. 252.)- '.fa the same effect, see Dill. Mun. Corp. (2d Ed.) §§ 61, 548, 549; Cooley, Const.Lim. Marg. pp. 38, 207, 208; GaB-light Co. v. Gas Co., 25 Conn. 19 (this case has been qualified in so far as it denied to the legislature itself the power to grant an exclusive franchise, but ill respect to the city's power to do so it has not been questioned;) Gas-Light Q). v. Sa.ginaw, 28 Fed. Rep. 529; Gas Co. v. Middletown, 59 N. Y. 228. In harmony with these decisions, and resting upon the same general principles which they announce, are the cases which deny to municipalities, under the grant of power to establish and regulate ferries within their limits, the authority to confer exclusive ferry franchises upon others. See Dill. Mun. Corp. (2d Ed.) §78; East Hartford v. Bridge Q)., 10 How. 511; Minturn v. Larue, 23 How. 435; Harrison v. State, 9 Mo. 530j McEwen v. Taylor,4 G. Greene, 532; Wright v. Nagle, 101 U. S. 796. So, in reference to street-railways, i.t is well settled by the authorities that, under general powers, such as the city of Grand Rapids possesses over its streets and highways, its common council could llot confer upon individuals or a private corporation the exclU8ive right to use the city's highways for street-railway purposes. See Cooley, Canst. Lim. 207,.208; .Davis v. Mayor of New York, 14 N. Y. 506 i Milhau v. Sharp, 2.7 N. Y. 611; Railroad Co. v. Smith, 29 Ohio St. 291; Railroad Co. v. Rail,.. v.33F.no.12-43
G74
'FEDERAL REPORTER.
:1
road 00.,10 Wall. 52; Rtililroad 00. v. Railway Co., 12 Fed. Rep. 308; Railroad 00. v; Railwd.y 00., 24 Fed. Rep. 306; Railway Co,,'v. Railway 00., 79 Ala. 465; Dill. Muti: Corp. (2tl Ed;) § 558, and oases cited. The sa:me,principleis'applied in reference to market-houses with:which v. a municipality may be· authorized to' provide itself. Thus in Kalamawo,23 Mich. 344, a contract was made between Gale and the municipal corpOration, \lnder and by the terms of which the former agreed to ereotasuitable market-house building for the town, and place the same under the control of the president and trustees of the village for 1(} years, at'a'stipulatedrent. The president and trustees agreed that, durtng the conmnuance ·ofthe contract, there should beno other public m'arket.' It washald, Judge COOLEY delivering the opinion of the court, that this contract was that the governing authority could not abdicate any of its legislative powers, nor precludeitself from meeting, proper ",ay, emergencies ttS they might arise; and ,that the contract or vested a monopoly. In v. 524, under ,POW13r to license. and regulate hackney carriages, and other v.elliclea, an ordinance was Passed granting the exclush1'6 privilege and thltlchise ofI1l;nning hiTe omnibuses',' for the purpose Of carrying per'granting of such was not sons, etc.. n;was held that witbfnthe power.. .' ".. ' It', the of the SUpreme court of Michigan' were in conflict with ithe forgoing authorities, we should respect them, and conform our own to their construction of the powers of their municipalities, under the general rule laid down by the supreme court of the United States that "wheh the settled decisions of the highest court of a state have determined the extent and character of the powers which its political and municipalorganizatious shall possess, the decisions are authoritative upon the courts of the United States. " But after a careful review of the igan casea cited by counsel, lam unable to discover in them any want of harmony with the general principles laid down in theauthoritiea which have been referred to. : Gale v. Kalamazoo, 23' Mich. 344, is strictly in linewith these nor can 1 find that it has been either questioned,qualified, or overruled. Again;in Grand Rapida v. Whittlesey, 33 Mich.l09,'itwRsheld, in conformity with the views herein expressed, that chartElrpowers which conferred upon the municipality supervision and control of the ",treetsof the corporation were nothing more than the pOwers possessed by township officers over country highways; that the powerwas"the'usual authority given cities over their streets, and nothin the case of Grand Rapida v. Hydraulic 00., decided ing July, 1887, and reported in 33 N. W.Rep. 749, the supreme court of and: maintain the state's sovereign control and authority over the streets' of Grand Rapids. The Michigan cases cited by complainant's counsel in no way conflict with the foregbiIlg positions and decisions, nor have they any direct bearingupon tbequestion under consideration. They certainly do not establishthat. the supreme court of Michigan has given any broader or more liberal construction to the ordinary charler powers of the state's
GRAND RAPIDS E. L. &'·:P. CO.
RAPIDS E. E. L.
&,
F. G. CO.
675
m:unicipal'corporaHonsthatHhose herein expressed. and indicated by the authorities cited. I carnnot discover in these decisions of the Michigan supremeoourt any general policy of the state in respect to municipalities and their powers, which\Di&Y be legitimately invoked in suppon of the validity of the 'ordinance' of 1880,S() far as it attempts to grant the excluSive use of the city's streets to complainant for the purposes aforesaid. . I ' , There are several decisions of state courts which sustain the complainant's claim. The'most direct and best reasoned is that of 'Oity of Newport v. Light Co., 8 Ky. Law' Rep. 22, in which it was held that "when a municipal corporation has the power, express or implied, to contract with others to furnish its inhabitants with the DieanS of obtaining gas, at their own expense, it has the power to make a contract granting to a corporation the exClusive right to the use of its streets for that purpose for a term of years." The'chttrter of the city contained no power, in express terms, authorizing the cQunsel to grant an exclusive privilege. The court rested ita opinion on the grounds'-First, that the power given the municipality to provide for lighting the city included the power to grant the exclusive right to the use of the streets for that purpose; and, secandly, that the Newport Light Company was iU\'ested, "in express terms, byaprovision contained in itS charter, with the right to furnish any city, town. district, corporation, or locality, or any public institution, manufacturing establishment, or private premises, with gas or other light, for Buch time and on such'wrmsas may be agreed on by the parties." The first of these grounds is in conflict with the decided weight ofauthority, and the seeond presents the doubtful question whether the right to contract, as cOnferred upon the private corporation, can operate to enlarge by implication the powars of the municipality, so as to authorize it to grant excl'lt8ive privileges; If this decision, which is subject to the criticism made upon it by Judge BRowN,in Ga8-Light Co. v. City of Saginaw,28 Fed. Rep. 537, C.aD be sustained, it must stand upon the second,and not upon the first, ground upon which it was placed. In Des 'Moines St. Ry. Case, (Iowa,)M N. W. Rep. 610, the city was authorized to gmnt or prohibit the laying down of street-car tracks within its limits. The court held that, although there was no grant of power in express terms authorizing the council to confer an exclusive privilege in the use of the streets, that under the circumstances of the case, and to procure a better public service, the council could grant a valid, exclusive right for the limited .peri.od of 25 years, such contract being necessary to secure the service which it might riot otherwise be able to obtain. We cannot assent to the correctness. of this decision, nor to the proposition which the complainant's counsel urges in connection therewith, that the reasonableness of the period for which the exclusive right is conferred constitutes an element in determining the city's authority to make the grant. It is assumed that the authority to grant exclusive privileges, under implied powers, is COt:lltensifvewith municipality's power to contract; that when the contract is reasonable as to the peri0d ofits dumtion, the authority to grant franchises during the same period must follow as a neces!'ary implication.
676
read his opinion, takes this view of the subject, when he. says: is not intended to declare that the common council might grant an exclU$i'lJe franchise in perpetuity; ()r for ·an um'easonabl,e time, any more than it,could. contract tor an unlimited ,period of supply, QJ.I for an unreasonable ;time, for. that might be regarded as abuse of its powers and, for that rea· son, void; but short of that it would' seem that the power in the one case is that in,the other.". I cannot understand the principle on which this position is to be susof a municipal corporation to make contracts in tained. The respept to objects intrusted to its administrative care and supervision, as a local agency of the state, is one thing, while the power to grant exdu&ve ,franchises, which belongs to the sovereign, is anotherr and essentially different matter. There is no necessa.r:y connection between them. To therefore, that the latter is coextensive the former, is simply the very proposition which isbeing discussed and controverted. and adjudged cases, that We have endeavored to show, upon the authority of a municipality to grant excluwive privileges in its 8treets involves the exercise of the whole sovereign power over such highways; that UI)thing short of exclu&ve power and control will sustain the grant rights. In the light of the authorities, which fully establish thil:! proposition, how can it be successfully maintained that the judgme,nt of the common council, or even of the courts, as to what is a reaQO'I1{lble period for the duration of a city's contract, is the.measure or limit of its power in granting exclusive franchises in or over .its streets? If the power rests in the city council to grant an exclusive privilege for 15 1 ,cannot understand why the grant may not under the same authority. be conferred for any longer period that may be: determined on. The power requisite to confer an excluwive 80vereignfranchise for 15 years involves the exercise aud operation of the same sovereign power which the grant for 100, or 1,000, years, or in perpetuity. If the authority does not exist to make the grant for the longer period, it does iUor shorter; for it requires the possession of the not whole excl-uaivepower and control togi'ant either the one or the other. 'l'henext authority on the subject of exclusive privileges, cited and reHed OIl-QY complainant's counsel,vi,z., Water-Works v. Atlantic City,'39 N. J. E/q., 367,did not turn upon the city's authority, but was rested mainly npoJ;l the legislative grant of ,the privilege. The chancellor said: .. Of tlie power of the ci ty to make the contract, (apart from the covenant that it wouIt;J. not grant to any othElf person or corporatipn the right to lay waterpipes iIi the public streets) there can be no qilestion. The City had the power, by its ch(ltter, to provide for a supply of water, and in this power is implied the powertofurnish the supply by contract. * * * The right of the com. pan'Y to protection.in this case does not depend upon the covenant. * * * The franchise.granted by the legislat'!-tre to the company is, by necessary implication, ewcZttsive." .....Thisis 'not, there/orei in conflict with the positions taken in this opinioU'. But if these, and:other authorities cited by complainant's counsel tlot'so directly in point, had decided what is claimed for them, they are
'rna learned district judge for the Western district of Michigan, as I
BAMFORD 'V. LlilHIGH Z!NC & IRON CO.
677
not in harmony with sound principles, nor with the great weight of ad· judged cases on the question here involved, and they cannot, therefore, be recognized and followed. This case has merited and has received at our hands the most careful investigation and consideration, and has been discussed more at large than is usual with the court, because of its importance, not only to the parties directly interested, but also to the public. As the result of that investigation, and the principles herein announced, my conclusion is that so much of the ordinance of 1880 as undertook to confer upon complainant the exclusive use of the streets of Grand Rapids for the period of 15 years, for the purpose oflaying down its wires therein or its poles thereon, etc., was beyond the power and authority of the common council, and therefore void; that complainant cannot, therefore, question the validity of tbeordinance of May 20, 1887, giving to the defendant corporation permission to use the streets of the city for a similar purpose, :Qor has complainant any valid or legal grounds on which to restrain the its works, laying its wires and cables, or placing defendant from its poles and supports for wires and lamps in, upon, and over the streets of said city. I am of the opinion that the preliminary injunction which restrained the defendant temporarily from so doing was improvidently granted, and be dissolved. It is accordingly so ordered, at the costs of the complainant.
BAMFORD ef,
al.
'V. LEHIGH ZINC
&
IRON
Co.
(OVrcuit Court, 8. D. New York. September 80, 1887.) 1. MINES AND MINING-LEASE-CONSTRUOTION-ANNUAL RENT.
A lease of a mine and concentrating works was upon a specified royalty per ton for ore mined, and a specified royalty per ton for ore concentrated, payable annually, bilt in case the royalty in anyone year fell below $1,000, then such asum:wa$ to be paid aeto make the annual rent of that year amount to $1,000·. !lela, that the lease intended that payment of the minimum rent 01 $1,000 sh\}uld be made annually, and should not be postponed to the end ot the term. Defendant took a lease of disused concentrating works, and of a disused mine, the history of which was well known to the metallurgists of the vicinity, and to defendant. Defendant was to search for, dig, mine, and carry away ores, and was to pay a royalty per ton for ores mined upon the premises, and a royalty per ton for concentrating the same, and a different royalty for concentrating ores mined elsewhere; but in case the royalty fell below $1,000 in any year, such a sum was to be paid liS to make the rent for that year $1,000. Held, that the case showed that defendant was to pay for the specified term at least $1,000 per annum for the privilege of taking the property and experimenting with it, and that, in an action for rent, a refusal to charge that from the almost entire absence of ore in the mine the consideration of the agreement failed, and plaintiff could not recover, was not error. FOR OF CONSIDERATION,
8.
SAME-F*LBEREPRESENTATIONS-SILENCE OF COMPLAINING PARTY-PRESUMPTioN.
. In an action for rent upon a lease of a mine, in which defendant set up false representations as to the value of the mine, and of the exi ltence of ore