Cleveland City Ry. Co. v. City of Cleveland

94 F. 385 | U.S. Circuit Court for the District of Northern Ohio | 1899

BIGKS, District Judge

(after stating the facts). The constitution of Ohio has empowered the legislature to confer upon the city of Cleveland the authority to operate lines of railway through its streets. Acting under this delegated power, as expressed in the Revised Statutes (section 2501 et seq., and section 3437 et seq.), the city council, from time to time, has made grants to the street railroads, conferring privileges upon them, and at the same time prescribing the terms and conditions under which such lines should be located and operated. Among the powers so vested in the city was the right to prescribo the rate of fare to be collected during the life of each grant. The city, acting under this general authority so conferred., passed ordinances at different times pertaining to the street railway's, which make a printed volume, and are in evidence before the court. These ordinances, granting sometimes original and some times additional authority, were accepted by the street-railway companies; and these acceptances, on the one side, and grants made with condi I ions, on the other, became a contract between the parties, which could not be annulled or amended without the consent of both parties. Railroad Co. v. Smith, 29 Ohio St. 292; Cincinnati & S. Ry. Co. v. Village of Carthage, 36 Ohio St. 634; City of Columbus v. Columbus St. R. Co., 45 Ohio St. 104, 12 N. E. 651; City R. Co. v. Citizens’ St. R. Co., 166 U. S. 557, 17 Sup. Ct. 653; Chicago v. Sheldon, 9 Wall. 50; Waterworks Co. v. Rivers, 115 U. S. 674, 6 Sup. Ct. 273. These ordinances, so molded into contracts under the legislative power hereinbefore referred to, are, in effect, laws of the state of Ohio, and therefore are within the inhibition of the fourteenth amendment to the constitution of the United States, which is directed quite as pointedly to the legislative power of the state or municipality as to the executive or judicial; so that the obligations of contracts made by legislation are protected by the federal constitution, which prohibits a state from passing any law impairing the obligations of contracts, or the taking of property without due process of law. City R. Co. v. Citizens’ St. R. Co., 166 U. S. 562, 17 Sup. Ct. 653. This court has jurisdiction to afford the relief prayed for in these bills, and has authority to declare invalid the ordinance's now sought to be enforced, if, as contended by the complainants, the ordinances involved do impair existing contract rights, or, in practical operation, deprive the complainants, respectively, of property, without due process of law. In City R. Co. v. Citizens’ St. R. Co., 166 U. S. 562, 17 Sup. Ct. 655, the court say:

“All that is necessary to establish the jurisdiction of the court is to show that the complainant had, or claimed in good faith to have, a contract with the city, which the latler had attempted to impair.” “Conceding that the legislature of the state alone had the right to make such a grant, it may, as was observed in Wright v. Nagle, 101 U. S. 792-794, exorcise authority by direct legislation, or by agency duly established, having power for that purpose. The grant, when made, binds the public, and is, directly or indirectly, the act of the state. The easement is a legislative grant, whether made directly by (he legislature itself or by any one of its properly constituted instrumentalities.”

See, a]so, Saginaw Gaslight Co. v. City of Saginaw, 28 Fed. 529; Weston v. City Council of Charleston, 2 Pet. 461; Waterworks Co. v. Rivers, 115 U. S. 674, 6 Sup. Ct. 273.

That a bill in equity seeking a judicial decree declaring an ordinance which impairs the contract rights of the complainant, or takes from him or it property without due process of law, Is a proper remedy, has been specifically determined by the supreme court. Chicago, M. & St. P. Ry. Co. v. Minnesota, 134 U. S. 460, 10 Sup. Ct. 462, 702; Smyth v. Ames, 169 U. S. 466, 18 Sup. Ct. 418. As the various ordinances in force when the council passed the so-called “Low Fare Ordinances,” in October, 1898, prescribed the rate of fare which the companies might charge during the life of each grant, the city possessed no power to modify such grant as respects the rate of fare, unless such power of modification was reserved in the ordinance making .the grant. The statutes of Ohio confer power upon municipalities to determine the conditions of the grant at the time it is made, including fixing the rates of fare to be charged, but no power to thereafter prescribe rates of fare. Where the grant itself fixes the rate of fare, a reserved right of regulation does not authorize a municipality, after the rate of fare has been so fixed, to modify or change it during the life of the grant. Old Colony Trust Co. v. City of Atlanta, 83 Fed. 39.

It is held by the superior court of Cincinnati in Smith v. Cincinnati:

“A general ordinance providing for the construction and operation of a street railway within the city limits, which provided that on the acceptance by the existing companies of the terms of the ordinance it shall thereupon he operative and binding as a contract between the city and the company so accepting the same, and that the street railroad shall be guided, governed, and regulated by the following conditions, and such lawful and reasonable restrictions as the council may thereafter pass, does not reserve to the council the right to abridge or destroy any of the contract rights of the company, but only to make and enforce proper and reasonable regulations as to the operation or construction of the routes.”

. It is apparent that whether thé ordinances of October 17, 1898, are valid and enforceable against the respective complainants depends, in the first instance, upon the solution of the question whether the reservations in the ordinances of 1879 authorized the action taken by the council in passing these “Low Fare Ordinances'’ in October, 1898. -If, subsequent to the passage of these ordinances of 1879, no other grants had been made prescribing rates of fare upon the lines referred to in the ordinances of 1879, the only question presented would be whether the reserved right is now being exercised in a reasonable manner. It appears, however, that numerous other ordinances have been passed, and accepted by each of the complainant companies, relating to the same subject-matter, viz. the rate of fare to be charged upon the same lines of railway referred to in the ordinance of 1879. ■ It therefore becomes necessary to. inquire how far, if at all, the contract rights-of the parties have been changed by these subsequent ordinances. The general principles to be followed in such an examination are well settled. In U. ¡3. v. Tynen, 11 Wall..92, the rule is stated as follows:

“When there are two acts on the same subject, the rule is to give effect to both, if possible, but, if the two are repugnant in any of their provisions, the latter act. without any repealing clause, operates, to the extent of the repug-nancy, as a repeal of the first; and, even where two acts are not, in express terms, repugnant, yet if the latter act covers the whole subject of the first, and embraces new provisions, plainly showing that it was intended as a substitute for the first act, it will operate as a repeal of that act.”

See, also District of Columbia v. Hutton, 143 U. S. 18, 12 Sup. Ct. 369; U. S. v. Claflin, 97 U. S. 546.

And again, where parties, having entered into a written contract, thereafter makes a second contract relating to the same subject, to the extent that the provisions of the second contract are incon-sisteut with these of the .first the last contract, and not the first, measures ¡he obligations of the parlies. In 5 Lawson, Rights, Item. & True. s§ 25Ü9, 2570, the rule is staled as follows:

“One written contract, complete in itself, will be conclusively presumed to supersede ¡mother one made prior thereto in relation to the same subject-matter. The rescission may be implied in some cases. Thus, if an agreement be made between the same parties containing the same matter, in which the terms of the latter are inconsistent with those of the former, so that they cannot subsist together, the latter will be construed to discharge the former.”

See, also, Chrisman v. Hodges, 75 Mo. 413; Hargrave v. Conroy, 19 N. J. Eq. 281; McDonough v. Kane, 75 Ind. 181; Howard v. Railroad Co., 1 Gill, 311.

With these principles in mind, we proceed to inquire, as respects the Cleveland City Railway Company, whether the common council of Cleveland, in October, ÍS98, was authorized, under then existing contracts between it and the said company, to- take action under the reservation in the ordinance to the Kinsman Htract Railroad Company of 1879, and reduce fares, as was attempted to be done by the ordinance of which complaint is made in the biil. The ordinance by virtue of which this reserved right to reduce fares is claimed was passed August 25, 1879, and entitled “An ordinance granting a renewal of franchise to the Kinsman Htrcet Railroad Company to reconstruct, maintain and operate its street railroad in and through certain streets of the city of Cleveland,” and it authorized the Kinsman Htreet Railroad Company to- construct, maintain, and operate a double-track street railroad from Water street to Madison avenue upon Kinsman street, (now' Woodland avenue), and by section 7 of this ordinance it was provided as follows:

“8aHI company shall not charge more than five cents fare each way for one passenger over the whole or any part of its line, Imt said company may charge a reasonable compensation for carrying packages; the council, however, reserves to itself (lie right to hereafter increese or diminish the rate of fare, as it may deem justifiable and expedient.”

This ordinance, then, was a grant to the Kinsman Street Railroad Company, and related to the operation by such company and its successors from Water street to Madison avenue on Kinsman street, the name of the latter street having been subsequently changed to Woodland avenue. It appears in evidence that the successor of the Kinsman Htreet Railroad Company was the Woodland Avenue Railway Company, and that from about 1880 to 1885 the Woodland Avenue Railway Company owned and operated this so-called “Kinsman Street Line.” After the Woodland Avenue Railway Company acquired such line, to wif, in 1883, an ordinance was passed by the council, and duly accepted by the company, by which the company was authorized to extend its tracks noon Woodland avenue upon ceriain terms and conditions expressed in the ordinance; and in said ordinance it was provided that its existing railway and this extension should thereafter be operated as an entire line, and that but one fare of five cents over its entire line, including said extension, should be charged. This ordinance of 1888 relates to the operation of (he company’s street railroad as well over the line referred to in the Kinsman Company ordinance of 1879, and contains no reservation of the right to thereafter increase or diminish the rate of fare. In 1885 the Woodland Avenue Railway Company and the West Side Street-Railroad Company consolidated. At the time of such consolidation the West Side Street-Railroad Company was operating a line of railroad chiefly upon the west side of the river, under a grant from the city of Cleveland expiring 25 years from July, 1883, and under the terms of the grant was authorized to charge a cash fare of five cents; the city having reserved no right to change such rate of fare during the period of the grant. The effect of the consolidation was to establish a new main line extending from the southeasterly to the westerly portion of the city, and with reference to such consolidation the common council, on February 16, 1885., passed an ordinance entitled:

“An ordinance to fix the terms and conditions upon which the railway tracks-of the West Side Street-Railroad Company and the tracks of the Woodland Avenue Railway Company, and said companies may be consolidated.

“Section 1. Be it ordained by the city council of the city of Cleveland that the consent of the city is hereby given to the consolidation of the West Side Street-Railroad Company and the Woodland Avenue Railway Company, upon the following conditions: The said consolidated company to carry xjassengers throhgh,. without change of cars, by running of the cars through from the workhouse, on the line of the Woodland Avenue Railway Company, to a point on the West Side Street-Railroad Company where Gordon avenue crosses ¿orain street, and, when practicable in the judgment of the council, to do likewise on the branches of the consolidated lines; and that, for a single fare from any point to any point on the lines or branches of the consolidated road, no greater charge than five cents shall be collected, and that tickets, at the rate of eleven for fifty cents, or twenty-two for one dollar, shall at all times be kept for sale on cars by conductors.”

This ordinance, as appears in evidence, was duly accepted by the-consolidated company, the Woodland Avenue & West íáide Street-Railroad Company, and it is to be observed that it had reference to and included the operation of cars as part of a through line upon that portion of Woodland avenue which is referred to in the grant to. the Kinsman Street Railroad Company of 1879, and amounts to an agreement on the part of the Woodland Avenue & West Side Street-Railroad Company that it will thereafter carry passengers over such entire route at a cash fare of 5 cents, and ticket fare by tickets sold at the rate of 11 for 50 cents, or 22 for $1. It further appears that in April, 1887, the Woodland Avenue & West Side Street-Railroad Company accepted an ordinance passed-by the city council relating-to an additional track upon Franklin avenue, and that in such ordinance it is provided that the grant therein made should continue and terminate with the grant on the main line of said company, on the 10th day of February, 1908, and that the grant was made upon the express condition that no increase of fare should be charged by said-railway company on any part of its main line, or on such extension; so that but one fare, not to exceed 5 cents, should be charged' between any points on said company’s main line or extension, and that said company should sell tickets at the rate of 11 for 50 cents or 22 for $1. This grant, by its terms, does not expire until the 10th day of February, 1908, and it requires the company to carry passengers at a cash fare of five cents during that period, over its entire main line, as well as its extension; and it also appears that part of the main line over which it was so required and agreed to carry at the rale of five cents cash fare was the line of railway operated on Wood! aud avenue (formerly Kinsman street) under the grant made to the Kinsman Street Railroad Company in 1879. Again, in August, 1887, an ordinance was passed, and accepted by the Woodland Avenue & 'West Side Street-Railroad Company, relating to the further extension of its tracks on Kentucky street, and in this ordinance it is provided that the grant shall expire with the grant of the main line on February 10, 1908, and that it is made upon the condition, agreed to by the company, that no increase of fare shall he charged by said company on any part of its main line or extensions, and that but one fare, not to exceed 5 cents, should be charged between any point and any other point, on said company’s main line or extensions, and that tickets should be sold at 11 for 50 cents or 22 for fl. This grant has not yet expired, and the main line, in respect to which the company so agrees to operate at a cash fare of five cents, includes, the line of railway operated under the grant to the Kinsman Btroet Railroad Company in 1879. On June 20, 1892, the Woodland Avenue & West Side Street-Railroad Company accepted a further ordinance passed by the council, relating to an additional track upon Kinsman street, which ordinance imposed various additional obligations with respect to paving and repairing, and involved the expenditure of a considerable sum of money on the part of the company; and in this ordinance it is provided that it is granted upon the condition that (he company shalt charge but one fare between any points on said company’s main line and extensions, and sell tickets at the rate of 11 for 50 cents or 22 for §1; a d that the grant shall terminate wiih the grant of the company’s main line on Feb-ruaiy 10, 1908. This ordinance is in full force, and is an agreement upon the part of the company to carry at the rate of fare stated, good for passage over its entire main line and extensions, including, as part of ils main line, the line upoá Woodland avenue (formerly Kinsman street), operated under the original grant to the Kinsman Btreet Railroad Company, in 1879. It also- appears from an inspection of the ordinances that in each instance in which new grants were made to these companies, new and valuable considerations passed to the city for the making of the same by way of increased requirements for paving, and additional accommodations in the operation of cars. It appears in the bill and evidence that the complainant the Cleveland City Railway Company was formed on May 13, 1893, by a consolidation of the Woodland Avenue & West Bide Street-Railroad Company and the Cleveland City Cable-Railway Company. The last-named company at that time owned and operated lines of street railway upon Superior street by cable power, and upon St. Clair street by horse power, and was operating under grants of the city of Cleve-' land for a period of years which has not yet expired; and the grants under which said cable company was operating authorized it and its successors, throughout the entire period of said grants, to charge a cash fare of five cents, there being in none of such grants any reservation of any right on the part of the city council to increase or diminish the rate of fare to he charged; and the company, at the time of the consolidation, was operating its road and charging a cash fare of five cents, as authorized in the ordinances of the city. Under the consolidation it was proposed to operate all the lines of the two constituent companies as an entire system, to operate through cars thereon, and permit passengers, for one fare of five cents, to ride from one end of said line so consolidated to the other; and, such being the purpose of the consolidation, on May 13, 1893, a communication was addressed to the common council of the city of Cleveland, as follows:

“To the Honorable Council of the City of Cleveland, Ohio: The Woodland Avenue & West Side Street-Railroad Company and the Cleveland City Cable-Railway Company have agreed to consolidate their two lines into the Cleveland City Railway Company; the consolidation to take effect June 1st, 1893. It is proposed, on .Tune 1st, 1893, to immediately issue proper transfers, without extra charge, so that passengers on any line of the Woodland Avenue & West Side Street-Railroad Company may be transferred to and have a continuous passage upon any line of the Cleveland City Cable-Railway Company within the limits of the city of Cleveland, and also so that passengers upon any line of the Cleveland City Cable:Railway Company may be transferred to and have a continuous ride upon any line of the Woodland Avenue & West Side Street-Railroad Company within the city of Cleveland; only one fare to be charged for such ride. And, as soon as the necessary improvements can be made, additional cross-town lines will be run, and only one fare charged for a continuous ride upon any additional lines within the city of Cleveland.”

On May 15,1893, the common council of the city passed a resolution approving and consenting to the consolidation of the companies and the operation of cars upon the terms stated in said communication. It appears in evidence that since the consolidation forming the said complainant company the Cleveland City Railway Company it has continued the operation of its various lines of street railway, as proposed in said communication; has continued to charge the same cash fare of 5 cents f.or each passenger; has put in force the system of transfers contemplated in the council resolution; and has kept on sale tickets at the rate of 11 for 50 cents or 22 for $1. It also appears that no one of the grants under which the constituent companies which formed said complainant were authorized to operate their cars on their various lines of railway at a cash fare of 5 cents, and to sell tickets at the rate of 11 for 50 cents, has expired, but that each and all of said ordinances are in full force, and that none of said grants expire prior to the year 1908. This being the situation, can the city successfully contend that the reservation in the ordinance of 1879 relating to the Kinsman Street Railroad Company is now operative as respects the complainant the Cleveland City Railway Company? Prior to 1885, the West Side Street-Railroad Company was operating upon the west side of the Cuyahoga river. There was no interchange of traffic by transfer between it and the Woodland Avenue Railway Company, and passengers were obliged to pay a cash fare upon each road. The West Side Company was .operating under a grant running for 25 years from February, 1883, entitling it to charge a cash fare of five cents. The consolidation of the Woodland Avenue and West Side Companies was made upon the condition that a new through line of street railroad should be established, so that for a single fare passengers should be carried from any point to any point on the lines or branches of the consolidated company. Upon the taking effect of this consolidation, the relations of the two companies to the city were so far changed that, whereas the companies before had operated independent lines of railroad, and charged separate fares, a new through line was established, and a rate of fare fixed upon the entire line of five cents. The right to ¡•o charge five cents, and to carry at ticket fare at the rate specified, of course involved the right to charge such fare for the whole or any portion of the distance traveled on the line. It was competent for the companies and the city to at that time agree with respect to the terms and conditions, including the rate of fare, upon which this through line should be operated. The parties did make such contract, and one of the terms of the contract related to the rate of fare to be charged over the entire line; and part of the line with respect to which the rate of fare was so fixed in 1885 was the same line referred to in the Kinsman Street-Railroad Company ordinance of 1879; that is to say, the city and the railway companies, in 1885, contracted with respect to the same subject-matter referred to in the ordinance to the Kinsman Street-Railroad Company in 1879. This ordinance of 1879 at the time related solely.to the rate of fare upon Kinsman street, operated as am independent line. The ordinance of 1885 is a contract with respect to the same subject-matter, but establishes a rate of fare which should apply to the Kinsman Street Line, not as an independent line, but as part and parcel of a direct through line from the southeasterly to the westerly part of the city. It is to be observed that no reservation is contained in this ordinance of any right to increase or diminish the rate of fare therein fixed, and the right to operate under this ordinance of 1885 was in full force in October, 1898. It must follow that no power existed in the council, in 1898, to change the rate of fare which had been so established by agreement between the parties. Again, it is apparent that the existence of any such reservation is inconsistent with the right which is expressly granted by the ordinance of 1885. The consolidated company certainly acquired the right to carry to the end of the term at five cents over the entire line or any portion Uiereof. This right could not co-exist with a right in the council to reduce the rate of fare during the period, as respects a portion of the line. By the contention of the city the right to reduce could now only be made applicable to the Kinsman Street Line and its extension. The city, however, contracted in 1885 that the company might carry over the Kinsman Street Line, as part of the through line, at a cash fare of five cents; from which contract it necessarily follows that the entire contract relations of the company and the city, as respects the rate of fare to be charged on the Kinsman Street Line, were merged in the contract of 1885, and the subsequent ordinances by which the Kinsman Street Line ceased to be independent, and became part and parcel of a through line, upon which a rate of fare for the full period of the grant was established. By the subsequent ordinances of 1887 and 1892, running to the Woodland Avenue and West Side Companies, it is, as respects each of them, as before pointed out, expressly provided that their conditions, as respects fare, shall be applicable to the entire main line of the company, that the rate of fare shall continue to be five cents until the expiration of the several grants, and that the grants do not expire until the 10th day of February, 1908. Again, in determining the contract rights of the complainant company, regard must also be had to its rights under the grants to the Cleveland City Cable-Railway Company, which the present company acquired by the consolidation of 1898. The cable company had the right to operate, at a cash fare of five cents, its independent lines of railway. By virtue of the consolidation, its various lines became part of a great through system, operated by the consolidated company, whereby the public acquired the right of a continuous passage over the entire line for one fare of 5 cents, or ticket fare at the rate of 11 tickets for 50 cents or 22 for $1. The consolidated company, by virtue of such consolidation, acquired all the rights which had before pertained to the constituent companies with respect to the rates of fare which it was lawful to charge, except so far as it had voluntarily modified the same by entering into the consolidation; and it then became the duty of the company, and in the performance of such duty it acquired a corresponding right to carry over its entire line, or any portion thereof, at a cash fare of five cents. A portion of the entire system which this company is now operating under these several grants from the city was formerly the line of the Kinsman Street Railroad Company, and the reservations under which the city now claims the right to reduce rates of fare upon the portion of the line which was formerly the Kinsman Street Line was made with reference to, and can only have reference to, the operation of the Kinsman Street Line as an independent line. Row the situation has so far changed that, by operation of law, and by express contract with the city of Cleveland, this original Kinsman Street Line has become part and parcel of a through line, and, as respects the rates of fare which may be charged upon such through line, the city and the railway company have entered into various contracts expressly fixing the rates of fare to be charged over the through line, or any part thereof.

. If the ordinances, as respects rates of fare, which we have been examining, passed since 1879, are to be construed as statutes, it follows that, having been passed subsequent to the ordinance of 1879 relating to the Kinsman Street Railroad Company and relating to the same subject-matter, they are so far inconsistent with the ordinance of 1879 as to operate as a repeal thereof. If we treat these subsequent ordinances simply as contracts, it is apparent that, having entered into a contract in 1879, the city has subsequently entered into various other contracts relating to the same subject, and that these later contracts are so far inconsistent with the provisions of the original ordinance as that the rights of the parties must now be measured by their latest contract, and not by the original agreement. Again, the inconvenience, if not the absolute impracticability, of enforcing the obligations of both the original ordinance of 1879 and the subsequent ordinances, in and of itself must well-nigh force the conclusion that the rights of the parties must be gathered from these later, rather than from the original, ordinance. The complainant company confessedly has the right by contract to carry over its entire line, or any portion thereof, at a cash fare of five cents, and this it may do until its present grants expire in the year 1908; and what the city proposes, by the ordinances of 1898, is to compel the company, as resx>ects a portion of this line, to carry at a cash fare of four cents. The right to carry at five cents over the whole line, or any portion thereof, is inconsistent with the obligation to carry for less than five cents over some portion of the through line. It is apparent that the relations between the city of Cleveland and the complainant, as the successor of the various companies out of which it has been formed, have been so far changed by subsequent ordinances and contracts and consolidation, that the reservation contained in the ordinance of 1879 relating to the Kinsman Street Railroad Company, and authorizing the council to thereafter increase or diminish the rate of fare upon such line, is not and cannot now be made operative, legally, as against the complainant company, the Cleveland City Railway Company. By reason of the various ordinances and contracts which the complainant company and its predecessors have entered into with the city of Cleveland since,the ordinance of 1879, the various railroad companies assumed different and much larger obligations in the carrying of passengers than were imposed upon the Kinsman Street Railroad Company by the ordinance of 1879. In almost every instance, the company agreed to carry passengers further; and at the time of the consolidation of the Woodland Avenue and West Side Companies the service which the railway company agreed to give to the citizens desiring to ride as passengers, it may fairly be said, was doubled, and the city and its citizens received from the railway company large and valuable concessions, which concessions formed a part of the consideration for the passage of the ordinances and the making of the contracts. Ko other conclusion can be reached than that the relations between the city of Cleveland and the complainant, as the successor of the various companies out of which it is formed, have been so far changed by the various contracts entered into since 1879 that the city is estopped from claiming that the reservation contained in the ordinance of 1879 can now be used to either increase or diminish the rate of fare upon a small portion of the line of the Cleveland City Railway Company.

As respects the complainant the Cleveland Electric Railway Company, a very similar question is presented by the ordinances before the court. The city contends for the validity of the “Low Fare Ordinance,” passed, as respects this last-named complainant, by virtue of an ordinance passed in 1879, granting a renewal of franchise to the East Cleveland Railroad Company. By this ordinance, set forth in the bill, the East Cleveland Railroad Company and its successors were authorized to reconstruct, maintain, and operate a doable-track street railroad from Superior street easterly through designated streets, including Euclid avenue, to Willson avenue; and by section 6 of said ordinance it was provided:

“Said company shall not charge more than five cents fare each way for one passenger over the whole or any part of the line herein renewed, hut said company may charge a reasonable compensation for carrying packages. The council, however, reserves the right to hereafter increase or diminish the rate of fare, as it may deem justifiable and expedient.”

It appears by the allegations of the bill and in proof that prior to the' 15th day of September, 1871), the East Cleveland Railroad Company was operating a line of railway from the intersection of Superior and Water streets to the easterly limits of the city, on Euclid avenue, under various grants, some of which emanated from the city council, others from the county commissioners, and others from the authorities of the village of East Cleveland prior to its annexation to the city. At that time there was but a single track east of Willson avenue upon Euclid avenue, and the company, under its grants, had the right to charge passengers one fare from Water street to Willson avenue, another from Willson avenue to Fair-mount street, and still another from Fairmount street east; and was, in fact, charging two fares of five cents each, each way between Water street and the city limits. This was the situation when the council passed the ordinance of September 15, 1879, containing the reservation with respect to fare, under which the .city claims the right to pass and enforce the ordinance of October 17, 1898. After the passage of this ordinance, the company continued the operation of its line thereunder up to April 4, 1883, and, as it was permitted to do, charged one fare between Water street and Willson avenue, and an additional fare of five cents from Willson avenue easterly to the end of its line. On April 4, 1883, the council passed an ordinance, which was accepted by the company, granting it the right to build and operate an additional track on Euclid avenue, between Willson avenue and the easterly line of Fairmount street, making a double-track line. This ordinance contained a provision and reservation, as respects fare, in similar terms to that of the ordinance of 1879. Under this ordinance of 1883 the company agreed to carry passengers over its line as far east as the city limits for five cents. It did not make any agreement to run through cars, and for the next three years it did in fact only run a portion of its cars through. It was under no obligation to give transfers at Willson avenue, and was in fact not giving such transfers. It is alleged in the bill, and in proof by affidavit, that this arrangement and operation of the cars was unsatisfactory, both to the company and to its patrons, and in March, 188C (see Rev. Ord. p. 826), the council passed an ordinance entitled “An ordinance granting to the East Cleveland Railroad Company the right to extend and operate its double-track street railroad on Euclid avenue between the easterly line of Fairmount street and the easterly limits of the city.” By section-3 of this ordinance the company was required to pave 14 feet, — an obligation which did not pertain to its then existing contract with the city; and, by section 4 of the ordinance, the following provision is made, as respects the rate of fare to be charged by the Fast Cleveland Company over its entire line, which included the line referred to in the ordinances of 1879 and 1889:

“The rights as herein granted and conferred are upon the express condition, however, that said company shall charge and collect hut one fare of not more Hum five ecnis for each passenger one way in either direction, between the easterly limits of the said city on Euclid avenue and the westerly terminus of said company’s tracks at the interseciion of Superior and Water streets; and upon the further condition that the said company shall run through car's over said line between said points last named in each direction, os the public convenience and the opinion of the common council, by resolution expressed, may mpiire.”

¡Section 5 of this same ordinance provides:

“The rights herein granted to lay and operate a double-track street railroad on Euclid avenue between Katrmount street and the easterly limits of the city shall cease and determine on the ViOth day of September, A. I). '1ÍXM, as provided for said company’s tracks on Euclid avenue west of Jfairmounf. street.”

It. is apparent from an inspection of this ordinance of 1880, in connection with admitted circumstances surrounding its passage, that die council was then luting and agreeing upon a rate of fare to be charged upon Ihe entire line of the East Cleveland .Railroad Company, and during the entire life of the franchise, which did not expire until 1904; and nowhere in this ordinance is contained any reservation in the city council to thereafter change the rate of fare therein prescribed. It also appears in the malting of this contract that, the city received additional consideration, namely, the obligation of the company to pave an additional space upon the street., and the requirement for the operation of through cars. In 1889 the reservation contained in tin: ordinance of 1879 liad been repeated, in substance, in the ordinance; of that date, but in 1886, the council, for the íirst time, legislates or contracts upon the subject of fares to be (‘barged in connection with Ihe operation of through cars and a double-track street railroad, and it entirely omits the reservation contained in the former ordinances. This ordinance of 1886 was a contract, still in full force and effect. It in express terms prescribed the rate of fare which the company shall charge In the operation of. its line upon Euclid avenue, and in express terms provides that the conditions and. obligations of such ordinance shall remain in force until the year 1.904; and it makes ibis obligation to so operate through cars and maintain a double-track road, and to charge but live cents fart; over the entire line, continue as Jong as, and terminate; with, the ordinance of 1879; and this ordinance of 1879, so referred to, is the ordinance in which is contained the reservation upon which the city buses its contention as to the validity of the reduction of fare attempted to be made in October, 1898. It is perfectly apparent that it could noi have been in the minds of the; parties contracting that the reservation of the right to regulate fare in the ordinance of 1879 could he operative after the express contract in relation1 to fare for the entire period of the grant, as made by the ordinance of 1886.

Again, Ihe council having, in the ordinance of 1879, reserved the right to thereafter increase or diminish the rate of fare, did, in 1886, in the making of this contract, fix the rate of fare at five cents, to extend from the passage of the ordinance up to the expiration of the grant made in 1879; so- that it may perhaps be fairly said that the ordinance of 1886 was an exercise of the reserved right of regulation contained in the ordinance of 1879. But, whether it be treated as an exercise of such right, or as the entering into of a new contract, it is plain that, after the passage and acceptance of the ordinance of 1886, there no longer remains in the city council a right to increase or diminish the rate of fare to be charged upon that line until the expiration of the grant of 1886, to wit, the year 1904. Again, in 1888, an ordinance was passed granting the East Cleveland Railroad Company the right to construct and operate its road by electricity on Euclid and Cedar avenues. In this ordinance, it is recited:

“Whereas, there is a desire on the part of the people residing in the easterly portion of the city for a more convenient and rapid mode of transit, and that an electric system be substituted for animal power for the movement of cars: therefore, the East Cleveland Railroad Company is hereby granted permission,” etc.

And in section 6 of the ordinance it is provided:

“Nothing herein shall be so construed as to authorize any increase of present fare for transportation over any portion of said company’s line.”

It appears in- evidence that the company, having accepted this ordinance, at the expense of a very large amount of money, changed its construction. as contemplated, and continued, after electricity was put in, to operate without any increase of fare. It is apparent that the “present fare” referred to in the ordinance of 1888 must have had reference to the fare which the company was then charging, and as fixed in the ordinance of 1886, namely, a cash fare of five cents. In consideration of the company’s so equipping its line with electricity, and so agreeing to carry at “present fare,” this same ordinance granted an extension of franchise for 25 years from July 13, 1888. By virtue of this ordinance, read in connection with the ordinance of 1886, the company acquired thereby the right to operate its line for a period of 25 years from that date, at the then present rate of fare referred to in the ordinance, namely, a cash fare of five cents. In 1889, an ordinance was passed, granting the East Cleveland Railroad Company the right to construct what is known as the “Wade Park Avenue line,” and, by section 4 of this ordinance, it is provided':

“Permission is granted upon the express condition that no increase of fare shall be charged by said company on any part of its main line or said extension, and but one fare, not exceeding five cents, or one of said company’s tickets, shall entitle a passenger to transportation over the main line and extension from the intersection of Lake and Water streets to the easterly limits of the city, or from the easterly limits of the city to the intersection of Lake and Water streets.”

This provision as to fare covers a portion of the Euclid Avenue Line, with respect to which it is claimed by the city that a reserved right exists to regulate fares under the ordinance of 1879; but the council, as in the ordinance of 1886, specifies the fare to be five cents, and, upon this Wade Park Avenue Line, from Superior and Water streets to Case avenue, there could be no longer any right to reduce fare, as the extension is made upon the condition that the company will thereafter carry over the entire Wade Park Avenue Line at a cash fare of ñve cents or a railroad company’s ticket.

Prior to June 1, 1893, the Broadway & Newburgh Street Kailroad Company, the Brooklyn Street Railroad Company and the South Side Street-Railroad Company were corporations operating independent lines of railway in the city of Cleveland, each of them operating under contracts or grants from the city, and charging, as authorized in the ordinances permitting their operation, a cash fare of five cents. As to no one of these companies was there any right remaining in the city council to increase or diminish the rate of fare during the period of the several grants. These companies, about June 1, 1893, consolidated with the East Cleveland Railroad Company, forming the complainant the Cleveland Electric Railway Company. The city council consented to the terms of such consolidation under the following terms and conditions:

‘•‘Only one fare shall be charged for a continuous ride on or over any line of railway formerly owned by said constituent companies, and any line of any other of (he said constituent companies within the limits of the city of Cleveland; and passengers on any of such lines paying one fare shall be entitled, without additional or extra charge, to be transferred to any other of said lines, and li;ive a eontinnous ride thereon, for said single fare.”

But it is evident that the one fare here mentioned must have reference to the present fare then charged by the constituent companies, namely, a fare of ñve cents. It thus appears that, by virtue of the ordinance of 1886 the East Cleveland Railroad Company was authorized to operate its line and cars to the end of its term at a cash fare of five cents; that each of the constituent companies which formed the present complainant the Cleveland Electric Railway Company was also authorized, for a period of time which has not yet expired, to charge a cash fare of five cents; that these different lines have been merged by consolidation; and that, under the consolidation, the system is being operated as an entirety. The portion of the Euclid Avenue Line to which the reservation of the ordinance of 1879 had reference, as an independent line, has long since ceased to be such, and the relations of the consolidated company (the complainant) and the city under these various grants are so fixed as that to admit the reserved power of regulation in the ordinance of 1879 to be uotv operative w’ould be to impair the obligations of the several subsequent contracts in which the rate of fare is definitely fixed without reservation. Also, as poiuted out in the discussion of the question as to the other complainant, as a matter of practical railroad operation, it is difficult to see how the conferred rights of the parties could be worked out if effect is given to the alleged reserved power in the ordinance of 1879.

It is contended by counsel for the city that certain of the provisions as to rates of fare, claimed to constitute a new contract since the passage of the ordinance of 1879, are invalid, because in violation of section 2502 of the Revised Statutes, providing that, after a grant or renewal of a grant is made, 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. It is questionable whether the right reserved to the city council to thereafter increase or diminish fare can fairly be said to be either an obligation or a liability of the railroad company within the meaning of this prohibition of the statutes; but, expressing no opinion on that subject, it is not true that the provisions of the section prohibit the city, after making an agreement or grant or renewal of a grant containing sundry provisions as to the rates of fare, from thereafter, upon sufficient consideration, modifying such contract. This has been expressly held in the case of Clement v. City of Cincinnati, 16 Wkly. Law Bul. 355, and affirmed by the supreme court of the state in 19 Wkly. Law Bul. 74. The court there held:

“The modification of a contract between tlie city and the owner of a street-railroad route, made in good faith for the better accommodation of the public, is not void by virtue of section 2502 of the’Revised Statutes, and the release of the grantee of such route from an obligation, although in consideration of more rapid transit, involving greater expense and higher rate of fare, is permitted.”

See, also, Woodson v. Murdock, 22 Wall. 351; City of Cincinnati v. Cincinnati St. Ry. Co., 31 Wkly. Law Bul. 308; Id., 2 Ohio N. P. 298; also State v. East Cleveland R. Co., 6 Ohio Cir. Ct. R. 318, affirmed by supreme court in 27 Wkly. Law Bul. 64. For nearly 20 years, as the result of municipal legislation, sometimes hostile,‘Sometimes friendly, the rights and privileges of the public and the different street-railroad companies of this city have been gradually molded into a well-defined code of street-railway laws, every step of which has been stubbornly contended for by the respective parties to these suits. Conceding to each party all the rights and privileges won by this agitation, the court is convinced, after a thorough and painstaking investigation of all the ordinances, grants,'and evidence, that the complainants are entitled to the relief for which they pray in their bills' of complaint, granting them a temporary injunction. The court thinks it must be clear to every fair-minded person, from the findings of fact filed with this opinion, that to permit the ordinances of October, 1898, to be put into operation by the municipal authorities would clearly impair the present contract rights of the complainants, for which no adequate remedy exists at law.

The second contention of the complainants is that the ordinances in question prescribe a rate of fare so unreasonably low as to deprive the complainants of their property without due process of law. In support of this contention, a large volume of testimony in the shape of affidavits has been filed by the defendant and the complainants. On the part of the complainants these affidavits are offered to establish their contention that, taking into consideration the value of their railway systems, cost of construction, maintenance, and operation, they could not carry passengers at the. reduced rate proposed without loss, and that this loss would be so great as that, in time, it would deprive them of their property without due process of law. The court has examined these affidavits sufficiently to see that it would involve a laborious and expert accounting to decide this contention; and, having reached a conclusion on the first contention of the complainants, that the ordinances are invalid for the reasons hereinbefore stated, it: is not necessary, for the purposes of this motion, to make any further examination of that claim.

It is, however, due the complainants to say that their testimony makes out a prima facie case, within the ruling announced in Smyth v. Ames, where the supreme court held:

“A state enactment or regulation made under the authority of a state enactment, establishing a rate for the transportation of persons or property by a railroad, that will not admit of the canter earning such compensation as, under all the circumstances, is just to it and to the public, would deprive such carrier of its properly without due process of law, and deny to it the equal protection of the laws, and would therefore be repugnant to the fourteenth amendment to the constitution of the United States.”

A preliminary injunction will issue, to remain in force until the final hearing of ihe cause, or until .the further order of the court. Counsel will proceed to take their testimony for the final hearing, and the 90 days allowed by equity rule 69 will he apportioned between the parties.