City of Belleville v. Citizens' Horse Railway Co. , 152 Ill. 171 ( 1894 )

Mr. Justice Baker

delivered the opinion of the court:

In our opinion the evidence establishes these facts: That for a period of more than one year prior to its going into the hands of a receiver, the Citizens’ Horse Railway Company, appellee, did not comply with the provisions of section 5 of ordinance No. 185, by keeping in repair so much of the streets as is between the rails of its tracks ; that during said year or more it frequently, if not continuously, failed to operate its railroad regularly for a period of thirty days, thereby violating one of the requirements of section 9 of the ordinance, and it is to be noted that what this provision denounces is not an entire failure to operate the road, in any way whatever, for a period of thirty days, but a failure “to operate the road regularly for a period of thirty days.” The word “regularly’ is defined as meaning, in a regular manner; in a way or method accordant to rule or established mode ; in uniform order; methodically; in due order; and such is the signification attached to the word in its common and ordinary use. That appellee had, in violation of another requirement of section 9, failed, for said period of more than a year, to run a car over its road, or any portion of it, so as to pass a given point at least every fifteen minutes at regular intervals in the daytime, and that such failure was not the result of an accident to its property or to its route ; that appellee, during said period, wholly failed to comply with the provisions of ordinance No. 275, which required it to run a car, starting from the terminus of its railroad in the west end at half-past nine o’clock every night, a car starting from the railroad’s eastern terminus at the Louisville and Nashville railroad depot at ten o’clock every night, and a car starting from said west end at half-past ten every night, and a car starting from said eastern terminus at eleven o’clock every night; that since appellee had been in charge of a receivership, neither of its receivers had complied with, or attempted to comply with, any of the provisions above referred to, of the ordinances of the city; that on June 18, 1891, the city of Belleville served a written' notice on appellee, and on divers and sundry occasions, both prior and subsequent to that date, notified it of its failures to conform to the provisions and requirements of the ordinances, and requesting it to comply therewith; that a written notice was served on appellee to appear before the city council of the city of Belleville at a designated time and place, and show cause why the city should not avail itself of its right to repeal ordinance 185, and ordinances 171, 275 and 446, and revoke the rights thereby granted, and that appellee, by its agents and attorneys, did appear before the city council, and failing to show any reasonable cause or excuse in the premises, ordinance No. 815, repealing ordinances numbered 171, 185, 201, 275 and 446, was passed, and appellee ordered to take up its tracks, switches, etc., within sixty days.

It appears from the findings and decree of the circuit court that it found the above stated facts substantially as we have found them. The Appellate Court reversed the decree, and counsel for appellee assumes that it found the facts otherwise, and the claim is made that the findings of the Appellate Court as to questions of fact, and mixed questions of law and fact, are final, and not subject to review in this court. Such is not the law. In chancery cases the finding of facts by the Appellate Court does not bind the Supreme Court, and in reviewing chancery cases the Supreme Court will determine controverted questions of fact from the evidence found in the record. Fanning v. Russell, 94 Ill. 386 ; Hayward v. Merrill, id. 349; Joliet and Chicago Railroad Co. v. Healy, id. 416 ; Stillman v. Stillman, 99 id. 196 ; Moore v. Tierney, 100 id. 207; French v. Gibbs, 105 id. 523.

Counsel for appellee also confounds, in his printed "brief, licenses and contract rights with franchises, and -.the result is, that he arrives at what we deem a wrong conclusion in respect to the present controversy. The contentions of appellee in this behalf are, that it derived from the ordinance of the city its franchises, or part of its franchises; that the city had no judicial authority to declare and enforce a forfeiture of its franchises; that a court of chancery had no jurisdiction so to do, and that a cause of forfeiture of a franchise cannot be taken advantage of or enforced against a corporation collaterally or incidentally, or in any other mode than by a direct proceeding for that purpose, at law, by quo warranto against the corporation.

Blackstone says (book 2, chap. 3, *37,) that a franchise is a royal privilege or branch of the king’s prerogative, subsisting in the hands of a subject; that being derived from the crown it must arise from the king’s grant, or held by prescription, which presupposes a grant. In Chicago City Railway Co. v. People ex rel. 73 Ill. 541, this court said that corporate franchises in the American States emanate from the government or the sovereign power, owe their existence to a grant, or, as at common law, to prescription, which presupposes a grant, and are invested in individuals or a body politic.

The proposition which is the foundation of appellee’s, claim was expressly decided, and decided adversely to such claim, in the case last cited. It was there held, that where a street railway company is incorporated under an act of the legislature, with power to construct, maintain and operate a railroad in a city, upon the consent of the city, and in such manner and upon such conditions as the city may impose, and the city, by ordinance, grants the privilege of constructing and operating the same upon a certain street, the grant by the city is a mere license, and not a franchise. To the same effect are the subsequent cases of Board of Trade v. People ex rel. 91 Ill. 80, Chicago and Western Indiana Railroad Co. v. Dunbar, 95 id. 571, City of Quincy v. Bull, 106 id. 337, and Chicago Municipal Gas Light Co. v. Town of Lake, 130 id. 42. And in this latter case it was also held, that the privilege of the use of the streets of a city or town, when granted by ordinance, is not always a mere license, and revocable at pleasure; that if the grant is for an adequate consideration, and is accepted by the grantee, then the ordinance ceases to be a mere license and becomes a valid and binding contract, and that the same result is reached where, prior to its revocation, the license is acted upon in some substantial manner, so that to revoke it would be inequitable and unjust.

Appellee places much reliance upon the decision of the Supreme Court of Wisconsin in State ex rel. v. Madison Street Railway Co. 72 Wis. 612, where it was held that a municipal ordinance granting to a street railway corporation a franchise to occupy and use public streets for the purposes of its railway, has the force and effect of a statute of the State, and that for a violation of the provisions of such ordinances an action could be maintained to vacate the charter or annul the existence of such corporation. The decision was based upon a statute of that State, and can not be regarded as authority here ; but had it been decided on common law grounds, there is nothing in the case that would justify us in overturning the settled law of this State, as announced in a long line of decisions.

Ordinance No. 185, passed December 21, 1885, was a contract, and one under which appellee had vested rights. • But it contained conditions subsequent, which made it determinable under certain circumstances. It was provided in section 8 of the contract, that “upon the failure of said company to comply with any condition herein named, the said council shall have the power, which it hereby expressly reserves, to repeal the ordinance and revoke the consent hereby givenand in section 9, that in certain specified contingencies “the rights and privileges hereby granted shall at once cease and determine." It was in plain violation of these conditions subsequent that appellee did not keep the streets in repair between the rails of its tracks, that it failed to operate the horse railroad regularly for numerous periods of at least thirty days each, and that it failed, for more than a year prior to the appointment of a receiver, to run a car over its road, or any portion of it, so as to pass a given point at least every fifteen minutes at regular intervals in the daytime, when such failures were not the results of accidents to its property or its route. These matters were all expressly named in the contract as conditions, and appellee agreed that if it failed to comply with them, or any or either of them, then that the rights and privileges granted it by the ordinance should at once cease and determine, and that the city should have the power to repeal the ordinance, and revoke the license and consent given for occupation and use of the streets for the purposes of the railway.

These failures on the part of - appellee did not, of themselves, avoid the contract, but they put it in the power of the city to rescind it. It is entirely competent for parties to a contract to introduce into it a provision that if one of them fails to fulfill certain specified terms, the other ghall be entitled to treat the agreement as at an end. There is a difference between this mode of discharging a contract and that by breach. When the parties have agreed that one of them shall have an option to dissolve the contract if certain of its terms are not observed, upon the non-fulfillment of the specified terms the party may exercise his option, and if he' elects to treat the contract as at an end it will be discharged. But when a term of the contract is broken, and there is no agreement that the breach of that term shall operate as a discharge, it is always a question for the courts to determine whether or not the default is in a matter which is vital to the contract, for if it is not, the contract will not be discharged. (3 Am. & Eng. Ency. of Law, p. 893, and note 5; Head v. Tattersall, L. R. 7 Exch. 7) The contract at bar was of the kind first mentioned above. It contained provisions which made it determinable under certain circumstances, at the election of the city. And how was the city to indicate its election to avoid the contract? Manifestly by passing an ordinance repealing the ordinance that constituted the contract, and revoking all the rights and privileges granted thereby, and by notifying appellee to remove its tracks, switches and turn-outs from the streets of the city. All this was done. The contract between appellee and appellant was thereupon at an end. Of course, section 3 of the repealing ordinance was void. The citjr had no authority, without the judg-„ ment of a court, to forfeit to its own use the tracks, switches and turn-outs of the railway company. (Baldwin v. Smith, 82 Ill. 162.) But there was no attempt to enforce it. The remaining sections are complete in themselves, and so distinct and separately enforceable that they may be enforced without regard to section 3. They, therefore, are not invalid. Nelson v. People, 33 Ill. 390; Donnersberger v. Prendergast, 128 id. 229.

The case of Railroad Co. v. Leavenworth City, 1 Dill. 393, is very like this. There an ordinance and contract, special in their terms, were construed to give the city a right to re-enter and take possession of the street and remove the railroad track, on the failure of the company to comply with the conditions of the ordinance granting to it the right of way. Dillon, J., in'disposing of .the case, said : “I refuse the injunction on the ground that the company is in default, and the city is only pursuing a remedy which is given to it by the contract of the parties.”

The city, in the petition which it filed in the foreclosure suit, did not ask the court to forfeit the franchises of appellee, or even the license or contract for the right of way on its streets. This latter had already been abrogated by its own act. It merely stated the facts in regard to the ordinance, the defaults of the company in respect to the conditions therein, and the passage of the repealing- ordinance, and asked leave of the court to remove the tracks, turn-outs, switches, etc., from the streets of the city. Since the property in question was under the jurisdiction and in the care and custody of the court of chancery, the petition was entirely proper and absolutely necessary. Nor did the court assume to decree a forfeiture of either the franchises of the railway company or of the license from or contract with the city. It merely found the facts, and granted the relief that the city was justly and equitably entitled to receive.

It is objected that the city did not, in its petition, make either appellee of any other person or persons party defendant. Whether or not this was essential, it is unnecessary now to decide. At all events, appellee filed an answer to the petition, and there was a replication to the answer, and the matter was heard upon the pleadings and proofs, and appellee cross-examined the witnesses of appellant, and introduced witnesses and other evidence in its own behalf. So the formal defect in the petition, if it was a defect, was waived, and appellee enjoyed all the rights and privileges of a defendant, and was not injured by the omission.

It is objected that the city attorney did not have any power or authority from the city council to file the petition on which a forfeiture was declared. No forfeiture was declared, and in the absence of anything to show the contrary it will be presumed that the city attorney was authorized to appear on behalf of the city.

It is objected that the court denied the motion to refer the original bill and the intervening petition to the master in chancery, to take and report evidence. There was no account to state, other than making a computation of the amount due on the bonds and mortgage, and it is not perceived that it was not within the judicial discretion of the chancellor to hear 'the witnesses himself, instead of having their testimony taken by the master.

It is urged that the court improperly denied the motion to empanel a jury to hear and determine all the questions of fact raised on the petition filed by the city. It does not appear that any issue was formed that gave appellee the right to demand a jury. Besides this, the motion was not made in apt time, but on the same day and immediately before the cause was heard by the chancellor, and while the numerous witnesses were in attendance for examination.

We find no error in the record made in the circuit court.

The judgment of the Appellate Court is reversed, and the order and decree of the circuit court are affirmed.

Judgment reversed and decree affirmed.

Mr. Justice Phillips took no part in the decision of this case in this court.