
    CONDITIONS WHICH MUNICIPALITY MAY IMPOSE ON STREET RAILWAY COMPANY.
    Common Pleas Court of Lorain County.
    Elyria v. Cleveland, S. W. & Col. Railway.
    Decided, 1908.
    
      Municipal Corporations — Franchises—Conditions Which may he Imposed on a Street Railway Company — May he Required to Either Widen Bridge or Pay a Stipulated Amount into the City Treasury — Sections 1536-183, 1536-184, 1536-185 and 3437.
    1. In Ohio a municipal corporation in granting a street railroad com-, pany permission to construct a street railroad in the streets of the city, may at least prescribe such terms and conditions as are; jn furtherance of the duty which the municipal corporation owes to the public and are essential to the preservation of the streets for public use, provided such terms and conditions are not inconsistent with the restrictions placed upon, nor inconsistent with the rights granted to such street railroad company by the Legislature.
    2. When an extension of an existing franchise is granted, the city has authority to prescribe that the street railroad company shall widen a bridge occupied by it or in lieu thereof pay a stipulated amount to the city, at the city’s option, and such provision, when the ordinance containing the same has been duly accepted by the street railroad company, becomes an agreement binding the street railroad company to the performance of the same.
    
      E. A. Pounds, City Solicitor, and M. B. & E. E. Johnson, for plaintiff.
    
      G. 17. Gollister, E. G., E. G. <& T. G. Johnson and Thompson, Glitsoh & Ginniger, contra.
   Washbukn, J.

Heard on demurrer.

The petition in this case discloses that the plaintiff is a municipal corporation and the defendant is a private corporation, owning and operating an electric railroad which, on October 22, 1907, extended through the city of Elyria and over and across a certain bridge in the city of Elyria,

On October 22, 1907, tbe plaintiff passed an ordinance granting to tbe defendant “a renewal of previous grants and granting a right to lay certain street railroad tracks in the city of Elyria and tbe right to extend certain street railroad tracks and to lay additional tracks in streets of said city and tbe right to construct, maintain and operate a street railway in, upon and over certain streets in said city, together with tiie right to construct, maintain and-operate all the neessary poles, wires, fixtures and appliances requisite for the 'Construction, maintenance and operation of the said street railway; that said rights were granted in consideration of certain agreements and contained certain conditions named in said ordinance, among which was:

“The railway company, by the acceptance of this ordinance, agrees as .■follows:
“ ‘To pave the roadway of the bridge on East Bridge street on which its' tracks -are now located, with the same material and in the. same manner as East Bridge street at the place adjoining Said bridge is now* paved, and to widen said bridge to the full width of roadway, or in lieu of widening said bridge, to pay to the city of Elyria the sum of $15,000, .at the city’s option, which widening shall be fully completed on or before October 1, 1908, or in case the city exercises its option of accepting the money in lieu of said widening,_ that said money shall be paid into the city treasury on or before March 1, 1908.’ ”

Said ordinance was approved by the mayor on October 28, 1907, and thereafter duly published, and said ordinance was duly accepted in writing by the defendant on October 28, 1907, “by the terms of which written acceptance said defendant agreed to be bound by the obligations and conditions which said ordinance imposed upon said defendant.” Said city “on November 26, 1907, by resolution duly passed, elected to -accept said $15,000 in lieu of the widening of said bridge and on November 29, 1907, duly notified said defendant in writing that plaintiff had so elected.”

The defendant -failed to pay said $15,000 on or before March 1,1908, and the plaintiff on March 5, 1908,. made written demand for the same, but the defendant has wholly failed to make any payment whatever. The prayer of the petition is for judgment for $15,000 and interest.

Copies of said ordinance and written acceptance thereof are attached to the petition, but not made part thereof.

A demurrer has been filed to this petition, the claim being that the city had no right or authority in law by a condition in said ordinance to make a contract with the defendant for the payment of said $15,000.

Certain sections of the Revised Statutes of Ohio will be considered in determining this question, and it may be proper to read them now.

Section 3437. ‘ ‘ Street railways, with single ,or double tracks, side-tracks, and .turn-outs, may be constructed or extended within or without, or partly within and partly without, any municipal corporation or unincorporated village; and offices, depots, and other necessary buildings for such railways may also be constructed.”
Section 29 of’ the muncipal code of 1902 (153^-183, Revised, Statutes). • “The right so to construct or extend such railway, as provided in Section 3437, Revised Statutes of Ohio, within o,r beyond the limits of a municipal corporation can' -be granted only by council thereof, by ordinance, * * * and -that no extension of any street railroad located wholly without any such city, or of any street railroad wherever located, which has been or shall be built in pursuance of a right obtained from any source or authority other than a municipal corporation, shall be made within the limits of such city, except as a new route, and subject to the provision of Section 2501 of the Revised Statutes of Ohio and Section 30 of this act. ’ ’
Section 2501 (1536-184, Revised Statutes). “No corporation, individual or individuals, shall perform any work in the construction of a street railroad, until application for leave is made to the council in writing, and the council by ordinance shall have granted permission, and prescribed the terms and conditions upon, and the manner in which the road shall be constructed and operated, and the streets and alleys which shall be used and occupied therefor, but the council may renew any such grant at its expiration upon such conditions as may be considered conducive to the public interest. ”
Section 30,municipal code of 1902 (1536-185,Revised Statutes). “Nothing mentioned in Section 2501 of the Revised Statutes of Ohio shall be done; no ordinance .or resolution to establish or define a street railroad route shall be passed, and no action inviting proposals to construct and operate such railroad shall be taken by the council; and no ordinance for the purpose specified in Section 2501 of the Revised Statutes of Ohio shall be passed until public notice of the application therefor has been given by the clerk, of the corporation once a week, for .the period of at least three consecutive weeks in one or more of the daily papers, if there be such, and if not, then in one or more weekly papers published in the corporation; and no such grant as mentioned in Section 2501 of the Revised Statutes of Ohio shall be made, except to the corporation, individual or individuals, that will agree to carry passengers upon said proposed railroad at the lowest rates of fare, and shall have previously obtained the written consent of a majority of the property holders upon each street or part thereof, on the line of the proposed street railroad, represented by the feet front of the property abutting on the several streets along which such road is proposed to be constructed.
. “Provided, that no grant nor renewal of any grant for the construction or operation of any street railroad, shall be valid for a greater period than twenty-five years from the date of such grant or renewal; and after such grant or renéwal of the grant is made, whether by special or general ordinance, the municipal corporation shall not, during the term of such grant or renewal, release the grantee from any obligation or liability imposed by the terms of such grant or renewal of a grant.”

From a consideration of these and other statutes and an examination of the authorities, I am of the opinion that the streets a.nd highways belong to the state and are under its control, but the state has placed the streets of a city under the control of the cits'- authorities, subject to such regulations and restrictions as the state has or may hereafter see fit to impose. The statutes of Ohio confer upon municipal corporations plenary power of control over their streets and has vested in them the fee thereof, in trust for and to the use of the public for said purposes, subject to the right of the state to direct the mode of administering , that- trust, or even to administer it for itself. So far as the state has undertaken to do this, its action is, of course, binding upon the municipal corporations of the state.

. , The view most favorable to the defendant- in the case at bar is- that the state has conferred upon a corporation organized for street railway purposes the right to construct and operate a ■street railroad in municipal corporations, by Section 3437, Revised Statutes — conditioned upon the city’s yielding its permission under the regulations prescribed by law. And granting that the defendant derived its power to construct its railway in the streets of Elyria from the state, which I am inclined to think is the, correct view, the question is? what terms and conditions under the laws of Ohio had the city a right to prescribe before it yielded its permission to the use of its streets by the defendant company!

Under the view of the law here taken, it could prescribe only such terms and conditions as the state had granted i-t authority to prescribe. Under Section 2501, Revised Statutes, heretofore quoted, the city in granting permission to use its streets for a street railway is given authority to “prescribe the terms and conditions upon and the manner in which the road shall be constructed and operated.'”

What “terms and conditions” are authorized to be made by the cities under this authority ? Yhry ..few terms and conditions are prescribed by the Legislature itself and such as there are I will refer to later, and the policy of the law seems to be to leave to the local authorities the right'to prescribe the many and varied terms and conditions appropriate to the different localities, and which must always be agreed to by the companies receiving the permission to construct and operate a street railroad in the streets of the cities. This policy is convenient and affords protection to local interest. Whether or not a certain route is practical or desirable, what motive power should be adopted,' whether the road should be single or double tracked, the kind of rails to be used, what the gauge of the track should be, how frequently cars should be run and between what hours, regulations as to street paving and repairs, joint use of tracks by different companies and regulations as to the removal of snow and the sweeping and sprinkling of tracks, are a few of the questions which may arise, and for imperative local reasons, governed by time, place and circumstances, they may be decided differently for various cities and villages, yet wisely for all. Hence, the Legislature of this state has adopted the policy of permitting the local authorities and the corporations to settle these matters by agreement made at the time permission is granted.

But it is said -that the Legislature having specifically' provided-for certain terms and conditions which municipal corporations may require, has indicated a legislative intent or policy to restrict the .power of the council in prescribing terms and conditions to those things which are specifically provided for.

It is true that at the time the original section which is now Section 2501 was passed, the Legislature as a part of the same act gave authority to municipal corporations to “require any part or all of the track between the rails of any street railroad constructed within the corporate limits, to be paved with stone,” etc., and at the same time required the council, when the street was less than sixty feet in width, to prescribe certain conditions as to the crown, curb and gutter of the street (Sections 2503, 2504).

If I understand the contention of counsel, it is that municipal corporations in Ohio are restricted to "these terms and conditions for which specific provision has been made by the Legislature and to such regulations as can be made under their general 'police powers. In my judgment such a construction of the acts of the Legislature is not warranted.

In the first place, whatever regulations municipal corporations have a right to make under their police powers, can be made without making them the subject of an agreement in an ordinance granting permission to use the streets, and therefore there is no necessity for including them in such ordinance (Townsend v. Circleville, 78 Ohio St., 122). And in the second place if the power of municipal corporations be limited merely to the matters of pavement, curb and gutter provided for in Sections 2503 and 2504, Revised Statutes, then no force or effect or meaning whatever is given to Section 2501 where municipal corporations are given the general authority to “prescribe the terms .and conditions upon and the manner in which the road shall be constructed and operated.”

The better rule seems to be that while these matters for which specific authority is granted may be considered in arriving at the general policy of the Legislature, the powers of municipal corporations are not limited to them, and while municipal corporations have authority to make terms and regulations such as are specifically provided for in these statutes, they also have general authority to provide terms .and conditions as provided for in Section 2501, Revised Statutes. But, of course, they can not legally insist upon such terms and conditions as are inconsistent ivith the rights granted to the company by the Legislature (State v. Traction Co., 18 C. C., 490), nor inconsistent with the restrictions already placed upon the company by the Legislature, nor such as contravene the policy of the law as shown by all the legislation on the subject.

An act of the Legislature which may be considered together with these other laws in determining the general policy of the Legislature of this state is contained in the municipal code' of 1902, wherein the Legislature authorized the public authorities in certain cities where street railways were being operated under grants exacting car license fees, to agree with the companies for the payment of a percentage of their gross receipts as a substitute for such car license fee,- thus recognizing the right of municipal corporations to exact -such car license fees under 'its general authority to prescribe the terms and conditions upon which the street railroad should be constructed and operated (Section 30, municipal code of 1902).

It is the common practice to insert many terms and conditions in franchises of this kind; and strange to say'very few of these have ever been tested in the courts of'this state, and in none of the eases where tests have been made has the question raised by demurrer in this case been determined.

The power given to municipal corporations to prescribe terms and conditions is general, but of course it is not unlimited. Terms and conditions which would contravene the policy of the law as shown by all the legislation on .this subject, are not warranted. Accordingly, it has been held that the city has no right to determine the method in which differences between the company and its employes should be settled-, nor reserve in an ordinance a right to purchase at a future date, for those matters are contrary to the spirit of the law (Raynolds v. Cleveland, 2 C. C.—N. S., 139). This holding is based upon the fact that such terms and conditions tend to keep persons from bidding and to increase the rate of fare, and it is said in argument that the terms and conditions prescribed by the ordinance in the case at bar are likewise contrary to the spirit of the law, because they too tend to keep persons from bidding and to increase the rate of fare.

But a complete answer to this contention is found in the allegations of the petition which show that the case at bar was an extension, and that no bids were asked for or received. This ease is not one where a new route was established and an original grant made to the lowest bidder, and whether or not in such a ease the terms and conditions complained of in this case could, be enforced, is not before the court. Here we have an extension of a former grant, and the terms and conditions complained of refer to the repair and widening of a bridge then occupied by the defendant’s tracks.

The Legislature has placed the control of streets in the municipal corporations and has placed upon;those corporations the duty of keeping said streets open, in repair and free from nuisance. It has also provided that the right given-to street railways by Section 3437, Revised Statutes, to construct or extend their railways within the limits of a municipal corporation “can be granted only by the council thereof by ordinance.” The Legislature has also provided that in granting such permission municipal corporations shall have authority to “prescribe the terms and conditions upon and the manner in which the road shall be constructed and operated. ’ ’

Now, from the consideration of these statutes and the other statutes to which reference has been made, and considering the fact that the terms and conditions insisted upon by municipal corporations must be agreed to by the street railroads before they are of any force and effect, and considering that local reasons governed by time, place and circumstances may call for varied and different terms and conditions appropriate to the different localities,' I am of the opinion that the Legislature of this state has adopted the policy of permitting the local authorities and the street railway corporations to settle by agreement made at the time the permission is granted, all such matters as are in furtherance of the duty which a municipal corporation owes to the public and are essential to the preservation of the streets for public use.

How is this policy contravened by an agreement such as was made in the case at barf The defendant company had its tracks upon tbe roadway oí -the bridge on East Bridge street. It de-' sired to have its right to use said bridge extended beyond the time covered by the original permission. Accordingly the city and the company agreed to the provisions of which complaint is made, the company agreeing to pave the space between its rails on said bridge and to widen said bridge to the full width of the roadway, or in lieu thereof to pay $15;000, so that the city itself might widen said bridge, said widening being made desirable if not necessary, in part at least, by the defendant’s occupancy of the same, and the city on its part, in consideration of the promise of the defendant to- pay said sum, agreed to such extension.

Assuming that the Legislature granted the defendant company the right to build its line over said bridge, it did not thereby place a burden upon the municipal corporation by requiring it to build or repair the bridge for the benefit of the defendant. The Legislature placed the duty of keeping that bridge in repair upon the plaintiff. It also gave to the plaintiff the absolute right to decline to extend the right of the defendant to use said bridge. How ean the spirit of the law be violated by permitting the plaintiff to refuse to extend the defendant’s right to use that bridge, unless it bears the burden of widening it, so that the general public shall not be deprived in whole or in part of its right to use said bridge? Considering all the authority that is vested in the municipal corporation in reference to this matter, surely it had a right to protect itself against' such burden.

The city council having control over its streets and being charged with the duty of beeping them open and in repair for public use, and having the right to grant or withhold permission for the use of the same by a street railway, and having the general right to prescribe terms and conditions if such permission is granted, when called upon to give consent may prescribe terms which embrace the doing of all those things necessary to the preservation of the street for public use.

If the agreement had been simply for the widening of the bridge, I can not conceive how anyone could consistently claim that that was contrary to the spirit of the law, and the fact that the agreement provided for the payment of money in lieu of said, widening, being manifestly for the purpose of accomplishing the same object, does not, in my judgment, make the provision contrary to the spirit of the law.

The council had a right to insist at least upon such terms and conditions as were not inconsistent with the rights granted to the company by the Legislature, .and which were not inconsistent with the restrictions already placed upon the company by the Legislature and which did not contravene the policy of the law as shown by all the legislation on the subject.

The provision in question is not prohibited by any of these considerations, and' I therefore hold that the city had a right to enter into the .agreement, and that the defendant, having agreed thereto, is bound thereby so far as this demurrer is concerned.

My attention has been called to the legislation and decisions in this state in reference to telephone companies, but the legislation as to street railroads is so different from the legislation as to telephones that I do not regard the latter as of .any special significance.

The right of telephone companies to use the city streets has been conferred by direct grant to the telephone companies themselves, with power in the municipal authorities to agree upon the mode of use only, but without authority to demand or receive any compensation for the use of the street beyond what may be necessary to restore the pavement to its former state of usefulness. And under such restricted powers the municipal authorities can not enforce an agreement made by ordinance, accepted by the telephone company, granting permission to use the streets of the city upon condition that the company charge its subscribers not to exceed a certain price for its telephone service. Farmer v. Telephone Co., 72 Ohio St., 526.

It will be noticed, however, that the grant to street railway companies in Section 3437, Revised Statutes, is not as clear as the grant to telephone companies in Section 3454, Revised Statutes, and also,.that the powers of municipal corporations as to street railways are much greater in Section 2501 (Bates, 1536-183, 1536-184), Revised Statutes, than the powers of municipal corporations as to telephone companies in Section 3461, Revised Statutes.

Demurrer overruled.  