Detroit Citizens’ Street Ry Co. v. Detroit Ry., 171 U.S. 48 (1898)

Detroit Citizens’ Street Railway Company v. Detroit Railway

No. 286

Argued April 26-27, 1898
Decided May 23, 1898
171 U.S. 48

ERROR TO THE SUPREME COURT

OF THE STATE OF MICHIGAN

Syllabus

At the time when the plaintiff in error received from the City of Detroit exclusive authority to construct and operate its railways in that city, the Common Council of Detroit had no power, either inherent or derived from the legislature to confer an exclusive privilege thereto.

The plaintiff in error is a Street railway company of the State of Michigan, organized for the purpose of owning and operating lines in the City of Detroit, and is the successor in interest of a similar corporation named the Detroit City Railway. The rights asserted by it arise from an ordinance of the Common Council of that city passed on November 24, 1862. This provided that the Detroit City Railway was

exclusively authorized to construct and operate railways as herein provided on and through [certain specified Streets], and through such other Streets and Avenues in said city as may from time to time be fixed and determined by vote of the Common Council of the said City of Detroit and assented to in writing by said corporation. . . . And provided the corporation does not assent in writing, within thirty days after the passage of said resolution of the council ordering the formation of new routes, then the Common Council may give the privilege to any other company to build such route.

The ordinance provided also that "the powers and privileges conferred by the provision of this ordinance shall be limited to thirty years from and after the date of its passage."

Section 2 of the ordinance is only necessary to be quoted, and it is inserted in the margin.{1}

There is also inserted in the margin sections 33 and 34 of the Tram-Railway Act.{2}

By an ordinance passed November 14, 1879, it was provided further that

the powers and privileges conferred and obligations imposed on the Detroit City Railway Company by the ordinance passed November 24, 1862, and the amendments thereto, are hereby extended and limited to thirty years from this date.

On November 20, 1894, the Common Council passed an ordinance granting to several third parties the right to construct street railways upon portions of certain streets upon which the plaintiff in error was maintaining and operating street railways, and also the right to construct, maintain, and operate railways on certain other streets, alleys, and public places in the City of Detroit without giving to plaintiff in error the opportunity to decide whether it would construct the same. The present suit was brought in the Circuit Court for the County of Wayne and State of Michigan, to enjoin the grantees named in the latter ordinance, and also the city, from acting thereunder, upon the ground that it impaired the contract between the city and the plaintiff in error arising from the ordinances first aforesaid. The bill was dismissed, and, on appeal to the supreme court of the state, the decree of dismissal was affirmed. From that decree the present writ of error has been duly prosecuted to this Court.

There are five assignments of error. They present the contention that the grant to the plaintiff in error was a contract within the protection of the provision of the Constitution of the United States which prohibits any state from passing any law impairing the obligation of a contract, and that the subsequent grant to the defendant in error, the Detroit Railway, was a violation and an impairment of the obligation of that contract.