Commonwealth v. Newton Township

Opinion by

Mr. Justice Kephart,

Section 5 of the Act of May 31, 1911, P. L. 468, applying to highways taken over by the State, transfers to the latter the benefit of all rights a township may have in any agreement! with a company using such highway, the terms of which require its maintenance. The agreement in this case, between the traction company and Newton Township, was based on “permission” to build and operate a railway on the township road. This privilege was granted on the following terms and conditions: first, the railway company to pay $1,000 on the execution of the agreement, and, second, in lieu of keeping the road in repair, to pay $300 annually, commencing as soon as the roadbed was occupied. Appellants, argue that the Act of 1911 is limited to situations wherein the railway company actually supplies the materials and does the physical labor for the maintenance and repair of the highway, and is not intended to include agreements which require the street railway company to maintain the roadway by the payment of a fixed sum of money to the township. Its further contention is, the $300 annual payment was a franchise charge, now a part of the township’s property created under a constitutional power, that could not be taken away by legislative enactment.

As to the latter, in construing the covenants of an agreement we must consider, apart from it, the legal relations that subsisted between'the parties at the time the agreement was entered into, and whether the effort made to supplant those legal relations, by a contract substituting other duties in their place, was successful. Under common law principles, a street railway company is required to maintain and repair the portion of the highway occupied by its facilities: Chambersburg Borough v. Chambersburg, etc., Co., 258 Pa. 57, 60. “When the State gives up a portion of one’ of its highways to particular use, without providing that what had been the duty of the municipality as to it shall continue, such duty devolves upon the party acquiring the right to use it, and a street railway company, given the right to use such portion of a street as is needed for its tracks, in taking charge of it, is charged with the duty of properly maintaining it”: Reading v. United Traction Co., 215 Pa. 250, 255. The agreement recognized a duty that needed no constitutional provision to assert it. Its intent and purpose was to keep in repair the highway thus occupied, by substituting for its legal duty another coequal with it. The consideration for the different undertaking was based on the primary duty to repair; this latter could not be departed from, and the performance of the substituted duty, even by the township, must ultimately result in the repair of the road. It makes little difference as to the substituted method, or to the ways and means employed to accomplish the purpose. The act reaches the purpose and includes the means necessary to accomplish it, whether the company must maintain by its own employees or by the payment of a fixed sum, or by any other means.

This compensation, “in lieu of” keeping the road “in repair,” was not given for the consent of the local authorities, as provided by section 9 of article XVII of the Constitution, which reads “No street passenger railway shall be constructed within the limits of any city, borough, or township without the consent of the local authorities.” The agreement1, by its terms, imposed conditions on the use of the highway ,and the privilege to construct the facilities of the railway thereon. “Consent” to enter the township, or “construct within the limits” as such, is not mentioned except as it may be inferred from the “permission” to use the roadway. The Constitution refers to and prohibits construction within a township without its consent. On the execution of the agreement, $1,000 was to be paid. Because no reason is there given for this payment, it may be treated as being for “consent to construct within the township.” But the covenant to pay $300 is predicated on a desire of the company to be relieved from the burden of actually doing the work necessary to keep it in repair. The money was to be used to repair and maintain, and was to continue as long as the road was occupied by the traction company. Without more definite language, the agreement should not, to say the least, be construed as placing this consideration under the constitutional provision, and the township cannot claim [for it] any special inviolability or right. The legislature, as owner, took the highway from the control of the township and placed it under the state highway commissioner. It was the state’s property to be used generally by all the people. The State had the power to take all the benefits to which its property was entitled, and which came into being from the nature and existence of such property; by the same act, it assumed the burdens incident thereto.

The statute operated when the notice provided therein was given to the township in 1912 that the State formally took over this part of Route 133. Thereafter the township had no status on which to found a right arising under the doctrine of payment to one of two conflicting claimants (Real Estate Saving Institution v. Linder, 74 Pa. 371, 373), or where money has been voluntarily paid in good faith and since used by the municipal authorities: 27 Cyc. 859, 863. When payment was made to the township, the money became state funds and should be treated as money received for state use. The township, in receiving, could not assert a claim as a creditor. Its position as a territorial subdivision of the State is very different from what it would have been if the transaction had been between individuals. Having received the money without right, on account of a matter due its principal, the fact that it was used for ordinary township expenses, and accounted for to its taxpayers on the mistaken idea of an agent to its principal, will not avail, notwithstanding the delay by the State for five years to make demand. The principle of Cox v. Prentice, 3 Maule & Selw. 344, 348, does not apply. The paramount principle here is the State dealing with one of its municipal subdivisions as agent. Change of taxpayers by new persons coming into a district do not affect municipal liability.

The State made no claim until after five payments had been received from the railway company. The money was accepted because of a mistaken belief in its ownership, and without notice that the State intended to exercise its right under section 5 of the Act of 1911.

There is nothing to show want of good faith, and, under any fair construction, interest should not be allowed until demand, here made when this suit was brought. The court was in error in allowing interest from the several dates of payment to the township: Grim’s Est., 147 Pa. 190, 193; Hunt v. Nevers, 15 Pick. (Mass.) 500, 505.

Interest is accordingly stricken from the judgment,' and, as thus modified, the judgment is affirmed.