Point Bridge Co. v. Pittsburgh Railways Co.

Lead Opinion

Opinion by

Mr. Justice Stewart,

The bridge which is the subject of this controversy is an essential part of a public street or highway in the City of Pittsburgh. It was none the less so before 1896 when it was the property of a private corporation. “A bridge erected for public travel and accommodation is a public highway whether built and maintained by the inhabitants of the district, or by a corporation authorized to demand toll for passage over it”: Pitts. & West End Pass. Ry. Co. v. Bridge Co., 165 Pa. 37. In June, 1896, the City of Pittsburgh, with a view to relieving its inhabitants from the burden of tolls for the use of the bridge, purchased the entire capital stock of the bridge company. While the effect of this purchase was not to vest the ownership of the bridge in the city, as we said in Monongahela Bridge Co. v. Traction Co., 196 Pa. 25, since the bridge company as a corporate entity was not by the purchase extinguished, nevertheless by the purchase the power of absolute control passed to the city, the only stockholder, as trustee for its inhabitants, as completely as though it had been the purchase of the physical structure of the bridge. Exercising this right of control, resulting from the acquisition of the capital stock, the city at once, June 26, 1896, declared the bridge free to public use. The action while brought in the name of the bridge company, is to enforce a demand of the city, and the latter is the real plaintiff. At the time the city acquired control the bridge was subjected to the use of appellant’s tracks in the same way and to the same extent as was any other part of the highway or street traversed, and this had been the situation for years before. The company, to whose rights the appellant has succeeded, in constructing its road upon the public streets, had exercised its chartered rights in so doing by and with the consent of the city authorities. To all these rights and privileges the defendant company has succeeded, and it is as rightfully upon the bridge with its tracks, so far as that right depends on the city’s consent, as upon any other part of its chartered route, and whatever conditions the city exacted for the consent given for the use of the streets applies as well to the use of the bridge. If there were any conditions applying specially to the use of the bridge, these became part of the contract as well between the city and the company, and except as changed by mutual agreement remain unaffected. But the right to exact conditions from the company, for the continued use of bridge or street by way of return for whatever benefit or advantage the company received, ended with the consent then given; the contract between the city and the company was then concluded, and the rights of the respective parties established. “The municipality acts by virtue of delegated authority from the legislature, and as the representative or agent of the State for that purpose. Hence, the ordinance of a city made pursuant to legislative authority, granting the right to use the streets of the city for a railroad____;. or for any other publicly recognized service, is, when accepted and acted upon by the grantee, a contract within the protection of the Federal Constitution, and new conditions cannot, in the absence of a reserve power, be imposed on the exercise of the right granted.” Dillon on Municipal Corporations, Section 1242. It is in the power of the municipality to exact whatever terms it choses as a condition of its consent. “It simply says (to the applying company) I have the sole and exclusive power to consent or refuse; on certain conditions I consent, otherwise I refuse. I don’t compel you to do anything, I merely give you a choice between alternatives; you have no power or right to demand my consent; you ask it, and I give it on my own terms, or not at all.” Mitchell, J., in Allegheny City v. Railway Co., 159 Pa. 411. Once given and accepted and acted upon by the other party, the bargain is concluded; and nothing in the nature of a condition other than what is expressed in the ordinance of consent can be required. There was still left however, in the city the right of regulation and control in the exercise of a police power of which it could not divest itself. Our inquiry here must be whether the city’s demand in the present case can be sustained as a proper exercise of such power. Except as it may be, it has nothing to rest upon. The city is conferring nothing upon appellant which the latter could not rightfully claim as incidental to and necessarily implied in the consent originally given it to occupy the bridge. True, the city has since given it over as a free bridge, but this it gave in like manner to every inhabitant, and having given it to the public at large, it could no more deny it, under reasonable regulations, to a corporation chartered to do business within the city limits, than it could deny 'its use to a particular individual under like conditions: Frankford & Philadelphia Pass. Ry. Co. v. Philadelphia, 58 Pa. 119. The situation then being the same as when the city rightfully gave its consent to the occupancy of the bridge, its present demand may not be asserted as an additional condition to those which it imposed at the outset, and can be maintained only as it can be brought within the police power of regulation. We turn to the statement of claim filed to ascertain just what the demand is. It is there thus stated: “The Point Bridge Company claims compensation from the Pittsburgh Railways Company for the use of said bridge by it and its predecessors in title, from the twelfth day of February, 1897, until the twelfth day of February, 1909, no compensation having been paid to it during said period, although demand has often been made for the same. The Point Bridge Company has fixed the rate of compensation which it is entitled to receive from the defendant for the use of its structure between said dates as follows:......The total claim of the plaintiff is, therefore, the sum of $40,000 from November 12th, 1897, to November 12th, 1902, with interest on monthly instalments of $666.66 falling due at the expiration of each month during said period. Also the sum of $50,000 for the period from November 12th, 1902, until November 12th, 1907, less the charge from May 28th, 1904, until December 7th, 1904, being six and one-third months, with interest upon the monthly instalments during said period of $833.33, also the sum of $15,000 from the twelfth day of February, 1909, with interest upon quarterly instalments of $3,000 from the expiration of each quarter during said period.” Then follows the averments, (1) that the use by defendant and its predecessors in title, whose obligations it assumed, has continually increased from the time the bridge was first entered upon, so that for some years cars to the number of 1,200, single trips, and upwards have been operated daily on the bridge, the said number having steadily increased from year to year, the size and weight of the cars having steadily increased from time to time, and the number of passengers carried thereon being steadily augmented; (2) that said bridge is an expensive structure, having cost in its original construction over $500,000 and large sums of money have been expended upon it for reconstruction and repair, and by reason of the increasing traffic over the bridge, particularly that occasioned by the operation of the cars of the defendant company, the life of the same will be shortened and entirely new structure will be required before many years; (3) that the bridge because of its height has required large and expensive approaches; (4) that the franchises of the bridge are very valuable on account of its strategic location: “Wherefore,” concludes the statement, “the sums herein charged for the use of said bridge by the defendant company and its predecessors are fair and reasonable charges,” and demand is accordingly made.

It will be observed that there is no suggestion in the statement of any express contract on part of the defendant company to pay anything. Stating it most favorably . to the plaintiff, the action rested on an implied assumption on the part of the defendant to pay to the city what the city could under its police power by ordinance have required it to pay. It is manifest that under this power it could not have exacted rent for use and occupation. For convenience in speech, but at the expense of accuracy, what is properly exacted under general police power from companies of this character when they use municipal structures in some of our own and other cases is characterized as rent; but the term when so employed ought not to mislead. It is correct enough when applied to the privilege of using a municipal bridge by telegraph and telephone companies, for, as said in St. Louis v. Western Union Tel. Co., 148 U. S. 92, where the sum exacted was held to be rent: “It is in the nature of a charge for the úse of property belonging to the city, ......that which may be properly called rental. The use made by tbe company is in respect to so much of its space as is occupied by its telegraph poles, permanent and exclusive.......Whatever benefit the public may , receive in the way of transportation of thessages, that space is, so far as respects its actual use for the purpose of highway and personal travel, wholly lost to the public. To that extent it is a use different in kind and extent to that enjoyed by the general public.” Street car companies stand upon very different footing; their business is solely and exclusively that of transportation in travel, and for this purpose the service of a car company over a bridge such as this is absolutely indispensable to the public; the company’s occupancy of the bridge is in no sense exclusive but is shared in with the general public, for the bridge and the whole of it is open to public travel of all sorts. Making all allowance for the space occupied by its poles which are mere instrumentalities in aid of public travel — in this respect differing from telegraph poles — by enabling the railway to operate, they largely increase the accommodation of the bridge for the only purpose it was intended to serve. The city would have no more right to exact rental from this company for the use of the bridge than for any other part of its highways except as it had been made a condition of the grant of the franchise.

Since a contract arising out of conditions of the grant can alone give to the municipality the power to exact rent from a street car company, what may it exact in the absence of such contract? We have not far to seek for the answer. Our own decisions show clearly what may and what may not be done in such case. The municipality may not prohibit the railway company from exercising and enjoying the franchise with which it has been invested: Frankford & Philadelphia Pass. Ry. Co. v. Philadelphia, supra; it may not tax its business for the purpose of raising revenue, since that would be an invasion of its corporate franchise derived by grant from the Commonwealth, and therefore unlawful and void: Johnson v. Philadelphia, 60 Pa. 445. On the other hand it may in the exercise of its police power regulate the use of the company’s franchise, and to this end it may exact from the company a license fee: Frankford & Philadelphia Pass. Ry. Co. v. Philadelphia, supra. Such license fee, however, can. have no other purpose than to enable the municipality, without cost to itself, to meet and supply conditions created solely by the railway company, but for which the municipality is legally responsible. The use to which the railway company subjects the bridge over which it passes is distinguishable in several particulars from that which it is subjected to by ordinary travel. Quite manifestly it imposes on the municipality special burdens against which the municipality has a right to be relieved. For the proper maintenance of the bridge so as to secure safety the municipality is responsible. The extraordinary use made of its tracks by the railway company, in the continued and constant transportation of cars, unusual in weight in comparison with thé ordinary vehicles in use, must in the nature of things entail upon the municipality additional cost for supervision and repair. A license fee sufficiently indemnifying the municipality against such additional cost may very properly be exacted because of the special use which has occasioned the necessity. It may be, and it is the contention of the appellee, that the special use made of the bridge by the railway company will materially shorten the life of the structure. We do not know how this is, but if it be a fact, no reason can be advanced why that circumstance should not be considered as a proper subject of indemnity. So too with respect to everything resulting in increased cost to the city which has been occasioned because of the extraordinary use made by the railway company of the bridge. “Mere charges (the reference being to license fees charged to telegraph companies) by municipalities under délegated authority may be imposed upon public service corporations occupying the streets of a city, but not by way of rental, but in tbe exercise of the police power and to enable the municipality without cost to itself to discharge the duty it owes to the public.” Dillon on Municipal Corporations, Section 1274. . We have repeated decisions of our own in which the doctrine here asserted has been applied to telegraph companies which have entered upon the streets under franchise of the State and with the consent of the municipality. These cases, or many of them, are cited in the opinion in the recent case of Del. & Atl. Tel. & Tel. Co.’s Petition, 224 Pa. 55, where the same rule is recognized. The like principle must be applied to railway companies under similar conditions. In the case of telegraph companies the license fee is sustained on the ground that the municipality has a right to so save itself from the cost of inspection and supervision made necessary for public safety in consequence of the erection of poles, etc. This rule must govern equally with respect to railways, and whatever burden outside of that, resulting from extraordinary use of the bridge, in the way of maintenance of the structure, may properly be considered as an element entering into the determination of the amount of a license fee to be charged.

What we have said in discussing the general subject under consideration may at first glance seem to conflict with what we have said in several of our cases, but any question as to this will be removed upon a careful study of these cases. The two cases supposed to be most at variance are Beaver County v. Telegraph Company, 219 Pa. 340, and Beaver County v. Traction Co., 229 Pa. 565. It is only necessary to say with respect to these cases that both distinctly recognize as proper elements to be considered in determining the compensation, or whatever it may be called, which the municipality may claim from the railway, under conditions such as we have here, those matters to which we have specially referred, and such other matters as occasion expenditure by the municipality in consequence of the extraordinary use of the bridge by the railway company. If in either the final recovery embraced more than these matters, it was because no assignment of error directed the attention of this court to such excess. In Point Bridge Co. v. P. & W. E. Ry. Co., 230 Pa. 289, the action was upon an express agreement made by the railway company with the bridge company for the use of the bridge for a period of five years at a yearly compensation to be fixed as to amount by the. court. Before the expiration of the term the contract for the use of the bridge had passed from the bridge company to the city, and upon the refusal of the company to pay the compensation for the period of the term unexpired when the city purchased, the city brought its action. We held that the action was a proper and adequate remedy for the recovery of any sum that might be due for the use of the bridge for the five year period, only however because the claim rested in a contract to which the city had succeeded. That case decides nothing that is involved in this. In Beaver County v. Telegraph Co., supra, the action was against a telegraph company for the use of a bridge for other purposes than those of public travel. If the line of distinction be observed between telephone and telegraph companies and street railways as to their respective rights, and the further distinction where the action has rested on contract and where it was for penalty and license fee, no substantial conflict will be found to exist.

Considering then the limitations upon the police power of the municipality as we have above indicated in connection with license fees — and, as we have seen, it can exact nothing beyond from the railway — it is apparent that the inquiry in the present case was allowed to embrace much that should have been excluded. Evidence was admitted under objection with respect to the number of fares received by the defendant company from 1902 to 1908 inclusive; likewise, evidence of the gross receipts of defendant for the same period. A license fee based on such considerations would be taxation pure and simple. The same objection would apply to the evidence admitted to show a commercial practice entitling the owners of a bridge to receive a certain annual return upon the money invested, and to the evidence of what other railway companies would require to pay for privileges, on other bridges like those enjoyed by the defendant on this. In the first twelve specifications of error the admission of such evidence as we have referred to is complained against,, and these assignments are sustained. The thirteenth, fourteenth, fifteenth and sixteenth may be considered together. They alike relate to instructions given by the trial judge in answer to points submitted by counsel for appellee. These instructions all proceed on the theory that it was an action for rent that was being tried. The points were affirmed and in consequence the jury were instructed, according to the thirteenth, that they were to “allow the plaintiff a fair and reasonable compensation for the use the defendant makes of the plaintiff’s bridge and approaches, by way of a rental,......not to be increased or decreased by reason of. the fact that no charge is made by the bridge company to the general public.” In view of what, we have said in the general discussion, this was manifest error. The point involved in the fourteenth instructed the jury to consider “the location and character of the bridge, its length, its height, the space of the bridge and approaches, which is used by the defendant, the value of the bridge during the years in question, the cost of maintaining and the amount spent for repairs and reconstruction of said bridge, the probable life of the bridge with the use to which it is subjected especially by the defendant company, and in this connection you. will consider the question of the amount of the annual sinking fund necessary to be set aside to replace this bridge at the end of its life.” Many of the specific matters here included were proper for consideration in view of the issue, but only however as they were of help in: determining what additional cost by way of repair and maintenance resulted from the extraordinary use to which the bridge was put by the defendant company. If there was evidence in the case showing that in consequence of such extraordinary use the life of the bridge would be shortened, such evidence called for consideration, but certainly not as forming a basis for a charge against the defendant company sufficient to replace the bridge at the end of its life. To whatever extent such extraordinary use of the bridge contributed in shortening its life, for such contribution the company might well be charged; but to charge it with the whole cost of a new structure would be beyond all reason. By the point involved in the fifteenth the jury was instructed to consider “the territory which is served by the defendant’s cars operated across this bridge, and all the circumstances surrounding the use made of this bridge, in so far as it is of value ánd a source of revenue and profit to the defendant company.” With the profits of the defendant company the jury had nothing whatever to do; nor was it a matter of concern to the city; all the city could require was indemnity against the. extraordinary expense it was put to by the company’s occupancy of the bridge, and its right to require this depended in no degree upon the financial success of the defendant company. The instruction complained of in the sixteenth assignment was, that, “In considering what is a fair and reasonable compensation for the use of this bridge and approaches by the defendant company, you will consider the rates paid for a similar use on other bridges in the City of Pittsburgh, and in Allegheny County.” The evidence the jury was here directed to consider was wholly incompetent and should have been excluded. The several assignments above commented upon are sustained.

The seventeenth, eighteenth and nineteenth assignments complain of the refusal of the court to instruct as requested by defendant’s counsel in certain points submitted. The first two points were to the effect that there could be no recovery in the action inasmuch as the city having in 1896 acquired all the stock of the bridge company and thrown the bridge open to free public travel, itself bearing all the cost of repairs and maintenance; the second, that there could be no recovery because the bridge is part of the highway of the city, and the defendant company is rightfully thereon by reason of the ordinance granting the consent of the city. The action here is not based on any ordinance of the city. Whether in the absence of an ordinance establishing a license fee the city may recover from the defendant what it has paid for repair and maintenance of the bridge during all these years, and which it might have protected itself against by an ordinance requiring a-license fee, is not before us, nor has it received discussion at the hands of court or counsel. The language of the first of the above points merely suggests it. As the record stands we are not called upon to consider it, or the further question as to the effect of the repeated demands upon the defendant company in this connection alleged in the plaintiff’s statement. Aside from these questions which at present are not involved, there was no error in refusing the instructions. The nineteenth assignment is the converse of one of the plaintiff’s points which we have already passed on, and is sustained. The twentieth calls for no consideration in view of the disposition we are about to make of the case.

The judgment is reversed and a venire facias de novo awarded.

Moschzisker, J., writes dissenting opinion.

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Dissenting Opinion

Dissenting Opinion by

Mr. Justice Moschzisker:

Before the taking over of the stock of the bridge company by the City of Pittsburgh, the defendant railway and its predecessors had always paid a considerable rental for the use of the bridge,— more, I believe, than the amount assessed in the verdict in this case. Under Beaver County v. Beaver Valley Traction Co., 229 Pa. 565, the City of Pittsburgh, through the plaintiff company, is still entitled to the rental. The majority opinion will in effect deprive the municipality of that income, and this upon a theory which rejects and repudiates the whole doctrine of the . case just cited. The Beaver County case was heard by the entire present membership of this court; it was decided after mature deliberation, and the opinion was unanimously adopted; the underlying principles expressed therein and essential to the decision in that case, rule the present one, and I cannot concur in a departure therefrom. For this reason I dissent.

Case Details

Case Name: Point Bridge Co. v. Pittsburgh Railways Co.

Court Name: Supreme Court of Pennsylvania

Date Published: Mar 31, 1913

Citation: 87 A. 614

Docket Number: Appeal, No. 71

Court Abbreviation: Pa.