New Orleans, S. F. & L. R. v. City of New Orleans

33 So. 192, 109 La. 194, 1902 La. LEXIS 135
CourtSupreme Court of Louisiana
DecidedDecember 15, 1902
DocketNo. 13,965
StatusPublished
Cited by1 cases

This text of 33 So. 192 (New Orleans, S. F. & L. R. v. City of New Orleans) is published on Counsel Stack Legal Research, covering Supreme Court of Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
New Orleans, S. F. & L. R. v. City of New Orleans, 33 So. 192, 109 La. 194, 1902 La. LEXIS 135 (La. 1902).

Opinion

BLANCHARD, J.

This cause was heretofore before the court on the appeal of the plaintiff from the decision of the district judge refusing a preliminary injunction asked by it, and dismissing the case.

This court, while affirming the judgment refusing the preliminary injunction, did so for reasons which touched only a question of practice, and, on the rehearing, amended the judgment below so as to reserve the rights [195]*195of plaintiff on the issue raised in the pleadings, viz.: — did its franchises expire August 8th, 1898, or do they run until May 22, 1903?

See 52 La. Ann. 1831-1843, 28 South. 311.

Plaintiff’s cause of action and the defenses of the city are fully set forth in the opinion of the court on the former appeal. It is not deemed necessary to restate the same here, further than to say that following the action of this court on the former appeal the city filed an amended answer in which it represented that the franchise granted to the plaintiff on August 5, 1873, by Oity Ordinance No. 2264, had expired by limitation and is no longer in existence; that the question of the expiration of this franchise is at issue in the case; and that it is of great importance to the city there should be an affirmative decision upon it.

The prayer of this answer was for judgment in favor of the city, in reconvention, decreeing that the only franchise ever acquired by the plaintiff company is that derived from Ordinance 2264 aforesaid, and that the same has expired and is now without force or effect.

The trial judge sustained the contentions of the plaintiff, holding its franchise operative until May 22, 1903.

The city appeals.

In 1873 a corporation styled the Canal Street, Oity Park & Lake Railroad Company was organized, with the object expressed in its charter of constructing and operating a railroad from Canal street, in the city of New Orleans, to Lake Pontchartrain.

In August of that year, the city, by Ordinance No. 2264, granted to this company the privilege to build and operate a double-track railway from the corner of Canal and Basin streets, over the route therein mentioned, to the Spanish Fort on Lake Pontchartrain.

This privilege was to have a duration of 25 years from the date of the adoption of the ordinance.

Subsequently, several amendments to this ordinance were adopted, which it is immaterial to notice, since they have no bearing on the present controversy.

The company, to which the grant embodied in Ordinance 2264 and its amendments were made, never completed the road. It became bankrupt and its property and assets were administered in bankruptcy in the federal court, with the result that in July, 1877, all of its property, rights and franchises were sold at bankrupt sale and purchased by Thos. H. Handy.

Handy paid part of the purchase price in cash and for the remainder gave two notes, which were secured by mortgage on all the property sold.

In January following Handy, and certain parties associated with him,- organized a new company, bearing the same name as the one whose rights he had purchased.

The object of this new company, as declared in its charter, was the construction and operation of “a railroad from Canal street to Lake Pontchartrain, thence along the Lake shore as provided in an ordinance of the city of New Orleans No. 2264, administrative series, and the amendments which have been made thereto, or may hereafter be made, granting the right to construct and operate said road.”

From the recitals of this charter it appears that Handy and his co-subscribers thereto were, at the time of the formation of the new company, the owners of the property and franchises of the former City Park Company, which Handy had purchased at bankrupt sale and for which he had obtained a deed five days before.

It further appears that the company so organized was organized merely for the purpose of taking over that property, those franchises and such other franchise rights, amendatory thereof, as might be thereafter granted, and the new company expressly assumed payment of the two mortgage notes representing the unpaid portion of the purchase price for which the property, rights and franchises of the old company had been adjudicated to Handy at the bankrupt sale.

On May 22, 1878, some four months after the organization of the new company, the city of New Orleans, by Ordinance No. 4523, administrative series, made to it (the new company), for 25 years from that date, the identical grant that had been made to the first City Park Company by Ordinance 2264 and the ordinances amendatory thereof, to wit:— Nos. 2548, 2679 and 3146.

The only difference between the grant as set forth in Ordinance 2264 and those amendatory thereof, and that set forth in Ordinance No. 4523, besides that relating to the time [197]*197when the franchise was to expire, are the following:—

Article 8 of Ordinance 2264 recites that the grantee shall keep such portions of the streets and public places as may be occupied by .its tracks, turntables, etc., in good order and condition from curb to curb, while the same numbered article in Ordinance No. 4523 recites that the grantee shall keep the streets and public places occupied by its tracks, turntables, etc., in good order and condition from curb to curb.

Article 12 of Ordinance 2264 announces the repeal of two prior ordinances, to wit: — Nos. 1G83 and 1843, granting certain rights to construct a railroad to George F. Brott and associates, and requires the grantee of Ordinance 2264 to file an acceptance of its provisions within ten days, etc., while the same article in Ordinance 4523 omits this and in lieu thereof recites that the city reserves the right to use the railroad as a main track for other railroads, on making compensation therefor.

Handy made a formal transfer of the property and franchises of the old company, which he had acquired at the bankrupt sale, to the new company, and in this act of sale the assumption by the newly organized company of the mortgage notes outstanding against him, was again recited.

The new company, thus possessed of the property and franchises of the old company and confirmed in its franchise rights by Ordinance 4523 of the city council, constructed, completed and put in operation the railroad as contemplated by the city ordinance.

But it defaulted on the mortgage notes given by Handy for the credit portion of the purchase price of the property bought at bankrupt sale, which it had assumed, and the holders of the notes, taking out executory process {the act of mortgage containing the pact de non alienando), caused all the property, rights and franchises of the company to be sold and the same were bought by M. Schwartz & Bro. This was in January, 1879.

The sheriff's deed conveys specifically:—

First. The right of way and powers, privileges and immunities and franchises conferred and granted by the city to the Canal Street, City Park & Lake Railroad Company under Ordinance 2264 as amended by Ordinance 2548.

Second. The right of way, franchise and privileges conferred by the city through the following streets or avenues (naming them).

Following their purchase, the Schwartzes organized the New Orleans, Spanish Fort & Lake Railroad Company, plaintiff herein.

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Bluebook (online)
33 So. 192, 109 La. 194, 1902 La. LEXIS 135, Counsel Stack Legal Research, https://law.counselstack.com/opinion/new-orleans-s-f-l-r-v-city-of-new-orleans-la-1902.