HAMLET and others v. FLETCHER and others.'

(Circuit Court, E. D. Lousiana. June 4, 1885.)

REMOVAL OF CAUSES-SEPARATE CONTROVERSY-SERVICE OF PROCESS.

In a suit in a state court against a commercial firm, which is brought into court by service of process upon one of its members, who appears and defends for it and himself to a point beyond the time allowed for the legal removal of the cause to the federal court, service at that late day of process upon another member of the firm would not affect the removability of the cause, and make it a removable one, unless there is in the suit a controversy which is wholly between citizens of different states, which can be fully determined as between them, and which could not have been tried before the term at which the removal was applied for.

On Motion for Rehearing on order to remand to the state court. B. R. Forman, for plaintiffs.

E. H. Farrar and E. B. Kruttschnitt, for defendants.

PARDEE, J. The petition of Hamlet, Bliss, and Elliott, citizens of Alabama, against Fletcher, Weissenberg & Co., alleged to be a commercial firm, residing and doing business in New Orleans, and composed of John F. Fletcher, Thomas O'Connor, William Weissenberg, and George M. Fletcher, was filed in the civil district court of the parish of Orleans, March 17, 1883. Service of citation was made, as appears by the sheriff's return, on the same day on the firm, and on William Weissenberg through William Weissenberg in person. April 6, 1883, William Weissenberg individually, and on behalf of the firm, appeared and filed exceptions on his own behalf, and on behalf of the firm, which exceptions went to the merits of the whole case. The exceptions were tried on April 13, 1883, and sustained on the seventeenth of the same month. An appeal was taken to the supreme court of the state, and at the November term of that court the judgment below was reversed, and the case was remanded for further proceedings.

In the lower court, May 22, 1884, the said William Weissenberg answered for himself and the firm. June 4, 1884, citation and the original petition were served on John F. Fletcher individually, and as a member of the firm of Fletcher, Weissenberg & Co. June 17th of the same year Fletcher filed exceptions individually and on behalf of the firm. These exceptions, it appears, were cumulated with the merits, and on November 28, 1884, Fletcher filed his answer. The case was set down for trial on December 4, 1884, but not being reached was ordered to be continued to the next jury term. February 5, 1885, William Weissenberg and John F. Fletcher joined in a petition for the removal of the case to this court, on the ground that they were citizens of Tennessee, and the plaintiffs were citizens of Alabama, and that the suit involves a controversy wholly between citizens of

1 Reported by Joseph P. Hornor, Esq., of the New Orleans bar.

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different states. Bond was filed, and the case removed to this court.

It is clear that the case was not removable at the time service of citation was made on Fletcher. This is conceded. If Fletcher was a party before the service by reason of the commercial character of the partnership of Fletcher, Weissenberg & Co., and his membership thereof, then service of citation at a late day in the suit would not affect the removability of the case.

If he was not a party until served with citation, and at the time of such service the suit was not removable, then bringing him in would not make the case a removable one, unless there is in the suit a controversy which is wholly between citizens of different states, which can be fully determined as between them, and which could not have been tried before the term at which the removal was applied for.

No such controversy is alleged, and the record, as recited, shows that Fletcher's appearance brought no new controversy into the cause; that after his appearance it was the same as before; and that such controversy not only could have been tried at a previous term, but actually was tried. How the case would stand, as to right to remove, had Fletcher made such defense that there could be said to be in the suit a controversy wholly between him and citizens of a different state, and which could be fully determined as between them, and had removed the case by himself on such ground, it is not necessary to determine. As the cause stands here now it is clear that it should be remanded, and therefore the rehearing on the order heretofore granted remanding the cause is refused.

JACKSON COUNTY HORSE R. Co. v. INTERSTATE RAPID TRANSIT RY. Co.1

Creuit Court, D. Kansas. March 3, 1885.)

MUNICIPAL CORPORATIONS-GRANT OF EXCLUSIVE PRIVILEGE TO STREET RAILWAYS- - POWER OF KANSAS CITY, KANSAS - ELEVATED RAILROAD — INJUNC

TION.

In 1872 the city of Kansas, in Kansas, passed an ordinance granting to the Kansas City & Wyandotte Street Railway Company "the sole right, for the space of 21 years, to construct, maintain, and operate their railway over and along all the streets in said city," subject to restrictions as to grade and condition of road. In 1881 the company leased to the Jackson County Horse Railroad Company a part of its road running through a certain street, and in 1883 the city passed another ordinance granting to the Interstate Rapid Transit Railway Company the right to construct and operate an elevated railroad through certain streets, including the street occupied by the Jackson County Horse Railroad Company, which filed a bill to enjoin the building of the elevated road. Held, that so much of the ordinance of 1872 as purported to give exclusive privileges to the lessor or to complainant was beyond the powers vested

1 Reported by Robertson Howard, Esq., of the St. Paul bar.

in the city of Kansas and void, and that complainant had no right to challenge the validity of the ordinance of 1883, or to restrain defendant from building its road.

In Equity.

John C. Tarsney and B. F. Stringfellow, for complainant.

J. P. Usher, W. C. Stewart, and W. Freeman, for defendant. BREWER, J. In this case I shall notice but a single question, and that because such question, vital to this controversy, was recently made by me the subject of a careful examination; and the opinion then formed has not been changed by the able and exhaustive arguments of the learned counsel for complainant.

In the case of the Atchison Street Ry. Co. v. Missouri Pac. Ry. Co., decided by the supreme court of Kansas last spring, and reported in 31 Kan. 660, S. C. 3 Pac. Rep. 284, in which case I was charged with the duty of preparing the opinion of the court, the right of a street railway to occupy the streets of the city was challenged. There, as here, the city had passed an ordinance giving to the street railway company the exclusive right to occupy the streets with its railway for a term of years. There, as here, the city was given by its charter general supervision and control of the streets, but was not given, in express terms, power to authorize street railroads. In other words, the power vested in the city and the extent to which that power had been exercised by the city are alike. The court did not decide the precise question here presented, but expressly declined to give any opinion thereon, holding that, under the grant of general supervision and control of the streets, the city had power to permit the occupation of its streets by a street railroad. But obviously there was opened. for inquiry the broad question of the powers of a city under such a general grant, and that question was made, as I have stated heretofore, the subject of full and careful investigation. To guard against any possible misapprehension, let me here state that in what I shall hereafter say I am in no manner speaking for that court, or expressing the conclusions reached by my associates, but am only giving my own views formed then, and strengthened by the arguments presented

now.

The precise question is, had the city of Kansas the power to grant for a term of years the exclusive right to occupy its streets with street railroads? That question must be answered in the negative. Let me in the outset formulate two or three unquestioned propositions: (1) The legislature has, as the general representative of the public, the power, subject to specific constitutional limitations, to grant special privileges; (2) it may, with similar limitations, grant the like power to municipal corporations as to all matters of a purely municipal nature; but, (3) as the possession by one individual of a privilege not open to acquisition by others apparently conflicts with that equality of rights which is the underlying principle of social organization and popular government, he who claims such exclusive privilege

must show clear warrant of title, if not also probable corresponding benefit to the public. Hence the familiar rule that charters, grants of franchises, privileges, etc., are to be construed in favor of the government. Doubts as to what is granted are resolved in favor of the grantor, or, as often epigrammatically said, a doubt destroys a grant. Now, coming closely to the question, the legislature has not in terms given to the city the power of granting an exclusive privilege of occupying the streets with railroads; it has not in terms given to it the right to contract away its continuous control of the streets, and its future judgment of the needs of the public in those streets, by a surrender of their occupation, for railroad purposes, to individuals for a series of years. Indeed, it has not in terms made any specific grant in respect to the occupation of streets by railroads, and their operation thereon.

Upon what, then, can it be claimed that the city has the power to give to an individual the right to occupy the streets with railroads, secure him that right for a term of years, and also the right of debarring, during such term, every other citizen from a like use of the streets? It was held in the Atchison Case, supra, that the city might permit a street railroad, and this because the legislature had granted to it a general control and supervision of the streets. In this the current of opinion and authority was followed. Under such power the city may permit any ordinary use of a street as a street. A street railroad comes within the ordinary scope of such use. But power to permit one citizen to use the streets in a given way is a very different thing from power to give such citizen the right to keep every other citizen from a like use of the streets. The one is a mere street regulation-a license; the other rises into the dignity of a contract-a franchise. The one may rest upon the ordinary powers of street management and control, the other requires the support of a special grant.

Doubtless the city may practically secure exclusive occupation to one railway company; i. e., by giving permission to one, and withholding permission from all others, the occupation of that one becomes, for the time being, exclusive. But that is an altogether different matter. In the one case the exclusiveness depends on the continuous will of the city; in the other upon that of the individual company. In the one the full and constant control of the streets is retained; in the other it is partially transferred to the company.

Again, exclusiveness of occupation is not necessary to the full performance of a street railroad company of all its functions. The running of a street railroad on one street is in no manner interfered with by the running of a similar road on a parallel street. Doubtless the profits of the one will be increased if the other is stopped. Monopoly implies increase of profits. But the question of profits is very different from that of the unimpeded facilities for transacting business. The latter may be granted without any exclusiveness. And power to grant all facilities for transacting busi

ness does not imply power to forbid all others from transacting like business. Even where a charter is granted by the legislature directly, it grants no exclusive right, unless the exclusiveness is expressly named, As said by Judge DILLON, 2 Mun. Corp. § 727:

"But a legislative grant of authority to construct a street railway is not exclusive, unless so declared in terms, and therefore the legislature may at will, and without compensation to the first company, authorize a second railway on the same streets or line, unless it has disabled itself by making the first grant irreparable and exclusive."

And if a direct grant from a legislature carries no implication of exclusiveness, why should it be presumed that the legislature intended to vest in a city the power to give exclusive privileges, when it has in terms granted no such power? Will the power to create monopolies be presumed unless it is expressly withheld? That would reverse the settled rule of construction, which is that nothing in the way of exclusiveness or monopoly passes, unless expressly named. It will not do to say that the grant of general supervision and control of the streets carries with it, by implication, the power to give exclusive privileges; for that grant implies a vesting in the city of continuous control. It is no authority for surrendering its constant supervision and management to any other corporation or individual. It implies that the city to-day, to-morrow, and so long as the grant remains, shall exercise its constant judgment as to the needs of the public in the streets, and not that it may to-day surrender to an individual or a private corporation the right of determining a score of years hence what the public may then need. The city may to-day determine that one street railroad will answer all the wants of the public, and so give the privilege of occupying the streets to but a single company. Ten years hence its judgment may be that two railroads are needed. Where is the language in the charter which restricts it from carrying such judgment into effect by giving a like privilege to a second company? It is doubtless true, as counsel say, that capital is timid, and will not undertake such enterprises without abundant guaranties and undoubted security. But this suggests matters of policy, and presents considerations for the legislature. It does not aid in determining what powers have been granted, or in the construction of charters or ordinances. When the legislature deems that the public interests require that cities should be invested with power to grant exclusive privileges, it will say so in unmistakable terms, as it already has in some instances. Till then courts must deny the possession of such power.

Decided cases on this question are few in number, yet these all speak one voice. In Davis v. The Mayor, etc., 14 N. Y. 506, it appeared that the city council had passed a resolution granting to a company the privilege of constructing and maintaining for a term of years a street railroad in Broadway, in the city of New York. The city had simply the general supervision and control of streets, as in