•103

minus on the bank of the Mississippi river | property of others by fire from its locomoto an elevator company; and it was agreed tive engines, in the absence of any contract. between them that the elevator company between the parties, the course of legisla should maintain an elevator building there- tion and decision in Iowa was as follows: on, and should receive and discharge for the Before any statute upon the subject, the corrailroad company, at certain rates, all grain poration was held not to be liable without brought over the railroad, shipped primarily proof of negligence on its part, or if the to points beyond or other than Dubuque, and plaintiff's own negligence contributed to the should have the handling of all such grain; loss. Kesee v. Chicago & N. W. R. Co. (1870) and that the railroad company, during the 30 Iowa, 78, 6 Am. Rep. 643; Gandy v. Chilease, would not itself erect, or lease or grant cago & N. W. R. Co. (1870) 30 Iowa, 420, 6 to any other party the right to erect, a simi- Am. Rep. 682; McCummons v. Chicago & N. lar building in Dubuque. The railroad W. R. Co. (1871) 33 Iowa, 187; Garrett v. company, being sued on the agreement, con- Chicago & N. W. R. Co. (1872) 36 Iowa, 121. tended that it was in contravention of sound Thereupon the legislature amended the secpublic policy, as giving to the elevator com- tion above cited by adding a provision that pany a monopoly of all the through grain "any corporation operating a railway shall brought over the railroad. But the supreme be liable for all damages by fire that is set court of Iowa held the agreement to be out or caused by operating of any such railvalid, and, in the course of its opinion, said: way; and such damage may be recovered by "The elevator is mainly a means or instru- the party damaged, in the same manner as mentality for loading and unloading grain set forth in this section in regard to stock, into and out of cars, boats, barges, or other except to double damages." Code 1873, § vehicles, and, incidentally, for storing the 1289. This amendment was at first assame; it is in no just sense a connecting line sumed to impose an absolute liability upon of transit or connecting common carrier to the corporation, independently of its negli the defendants' lines." 26 Iowa, 197. gence, and was held to be constitutional. "The power of courts to declare a contract Rodemacher v. Milwaukee & St. P. R. Co. void for being in contravention of sound pub. (1875) 41 Iowa, 297, 20 Am. Rep. 592. But lic policy is a very delicate and undefined it was afterwards settled, upon a considerapower, and, like the power to declare a stat- tion of the whole section, that the effect of ute unconstitutional, should be exercised the amendment was only to change the buronly in cases free from doubt." 26 Iowa, den of proof in actions for damages by fire; *

202.

that the fact that the fire was set out or

cited.

The statute of Iowa of 1862, chap. 169, caused by operating the railway was only 6 (substantially re-enacted in the Code of 1873, § 1289), provided that "any railroad prima facie evidence of negligence on the company hereafter running or operating its part of the company; and that such negli road in this state, and failing to fence such R. I. & P. R. Co. (1879) 50 Iowa, 338; Babcock Small v. Chicago, gence need not be alleged. road on either or both sides thereof, against v. Chicago & N. W. R. Co. (1883) 62 Iowa, live stock running at large, at all points 593, 13 N. W. 740, 17 N. W. 999; Seska v. where said roads have the right to fence, Chicago, M. & St. P. R. Co. (1889) 77 Iowa, shall be absolutely liable to the owner of any 137, 41 N. W. 596; Engle v. Chicago, M. & live stock injured, killed, or destroyed by St. P. R. Co. (1889) 77 Iowa, 661, 37 N. W. reason of the want of such fence or fences as 6, 42 N. W. 512. It was also held that, by aforesaid, for the value of the property so virtue of the statute, contributory negli injured, killed, or destroyed, unless the injury complained of is occasioned by the wil-gence on the part of the plaintiff was no defense to such an action. West v. Chicago ful act of the owner or his agent;" that, "in & N. W. R. Co. (1889) 77 Iowa, 654, 35 N. order to recover, it shall only be necessary W. 479, 42 N. W. 512; Engle's Case, just for the owner of the property to prove the injury or destruction complained of;" and The Code of Iowa of 1873, in § 1308, rethat, if the company should neglect to pay enacting the statute of Iowa of 1867, chap. for thirty days after notice and affidavit, 113, provided that "no contract, receipt, rule, the owner might recover double damages. or regulation shall exempt any corporation Under that statute it was held to be no de- engaged in transporting persons or property fense that the stock was unlawfully running by railway from liability of a common carat large, if not by the wilful act of the owner rier, or carrier of passengers, which would or his agent. Spence v. Chicago & N. W. R. exist had no contract, receipt, rule, or regu Co. (1868) 25 Iowa, 139. But where the owner of land had agreed to maintain a fence belation been made or entered into." That tween it and the railroad, the court, while statute was rigidly enforced by the supreme holding that persons not in privity of estate court of Iowa in suits against railroad corwith him might still recover, said that it could not be doubted that he and his privies were estopped by his agreement to maintain an action against the company under that statute. Warren v. Keokuk & D. M. R. Co. (1875) 41 Iowa, 484, 486.

Upon the question of the liability of a railroad corporation for damage done to the

porations as carriers. Brush v. Sabula, A. & D. R. Co. (1876) 43 Iowa, 554; McCoy v. Keokuk & D. M. R. Co. (1876) 44 Iowa, 424. But no intimation that it applied to them in any other relation was ever made by that court before the execution or the agree ment in question in the case at bar.

To recapitulate: Before February 1,

100

*105

for those covenants, no equivalent for which is to be found in the lease now before us.

But that court granted a rehearing, and on February 3, 1894, after further arguments, and, by a majority of the judges, reversed its former opinion, affirmed the judgment of the district court, and held the stipulation in question to be valid. 90 Iowa, 265, 24 L. R. A. 647, 57 N. W. 843. Its course of reasoning may be shown by quoting some passages of the opinion.

1890, the date of this agreement, the supreme court of Iowa had declared that an elevator erected by another party by agreement with a railroad company upon the land of the latter was in no just sense a connecting line of transit, or a connecting common carrier, with the line of the railroad; and that the power of the courts to declare a contract void for being in contravention of public policy should be exercised only in cases free from doubt. That court, in 1875, when construing § 1289 of the Code of 1873, In the first place, it was said: "Public had declared that an action under the first policy is variable; the very reverse of that part of that section, which makes a railroad which is the policy of the public at one time corporation failing to fence its road wher- may become public policy at another; hence ever it had a right to do so absolutely liable no fixed rule can be given by which to deto an action by the owner of any live stock termine what is public policy. The authorkilled or injured by the want of such fenc-ities all agree that a contract is not void as ing, could not be maintained by an owner of against public policy, unless it is injurious adjoining land who had agreed with the rail- to the interests of the public, or contravenes road company to maintain the fence at the some established interest of society." So far, place in question. And that court had never the opinion is in precise accord with the expressed any opinion upon the effect of opinion of this court in Pope Mfg. Co. v. such an agreement as is now pleaded upon Gormully, 144 U. S. 224, 233, 36 L. ed. 414, an action against a railroad company, under 418, 12 Sup. Ct. Rep. 632. The Iowa court the latter part of that section, for damages then quoted with approval the saying of Sir by fire caused by the negligence of its serv- George Jessel, M. R., in Printing & N. Regants in operating its railway. istering Co. v. Sampson, L. R. 19 Eq. 462, 465: "It must not be forgotten that you are not to extend arbitrarily those rules which say that a given contract is void as being against public policy, because, if there is one thing more than another which public policy requires, it is that men of full age and competent understanding shall have the utmost liberty of contracting, anu that their contracts, when entered into fairly and voluntarily, shall be held sacred, and shall be enforced by courts of justice. Therefore you have this paramount public policy to consider, that you are not lightly to interfere with this freedom of contract."

After this agreement was made, and before this action was begun, a similar agree ment was brought before the courts of the state of Iowa, in the case of Griswold v. Illinois C. R. Co., which arose under a contract substantially similar to that now before us, except in containing covenants by the lessee to put in immediate use and to maintain a good and substantial elevator, coal sheds, and lumber yard on the premises; to ship all grain, coal, and lumber that he can control by the lessor's railroad; and to "transact the business for which said buildings are erected and designed at fair and reasonable rates, and in a prompt and careful manner, That court went on to say: "The defendso that neither the company nor the public ant owed no duty to the public to exercise will be prejudiced by reason of the said lessee care with respect to its own buildings situate dealing unfairly or negligently in their be- on its right of way, and incurred no liability half, or in the transaction of the business for their negligent burning, unless the fire connected with the grain, coal, and lumber spread beyond its own premises. The operbuildings so erected as aforesaid." A dis- ation of a railway increases the danger from trict court of the state having upheld the fire to property situated on the premises of validity of the contract, and rendered judg. its owner, where he has the right to have it, ment for the defendant, the plaintiff ap- and hence the provision of § 1289 making the pealed to the supreme court of the state. corporation operating the railway* absoluteThat court, at the first hearing, expressedly liable for all damages by fire that is neglian opinion that the stipulation in the contract, exempting the railroad company from liability to the lessee for damages by fire negligently set by its locomotive engines to such buildings, was void as against public policy; and among the grounds on which that opinion was placed was that the covenants just quoted, and the prospect for busi-terests, and against public policy. The plaintiff Griswold's buildings were not upon ness which the existence and use of those his own premises, nor where he had a right buildings held out to the railroad company, to have them, independent of the defendant; "were no doubt the controlling considera- they were upon the right of way, where they tion which induced it to execute the lease," could only be by its permission. In granting and that "the lease itself fully recognizes an the permission, and in placing the buildings interest of the public in its subject-matter." there, both parties knew of the increased 53 N. W. 295, 297. It does not clearly ap-hazard of the location from fire communicat pear what that opinion would have been but led either through accident or negligence in

gently set out or caused by the operation of the railway. As to such property, the railway company owes to the public the duty of care, and the public has an interest in the performance of that duty. Therefore a contract that exempts from that duty to the public would be injurious to the public in

107

The judgment of the Circuit Court of Appeals, affirming the judgment of the Circuit Court, is therefore affirmed.

BIENVILLE

(175 U. S. 109) WATER SUPPLY COMPANY, Appt.,

บ.

CITY OF MOBILE.

the operation of the road. They knew that | Sup. Ct. Rep. 617; Sioux City Terminal R. the .defendant corporation could only act & Warehouse Co. v. Trust Co. of N. A. 173 U. through its officers, agents, and employees, S. 99, 43 L. ed. 628, 19 Sup. Ct. Rep. 341; and that these might be negligent in the per- Wade v. Travis County, 174 U. S. 499, 43 formance of their duties." "This is not a L. ed. 1060, 19 Sup. Ct. Rep. 765. question whether, under § 1289, the defendant would be liable to Griswold for negligently communicating fire to this property in the absence of a contract to the contrary; but it is whether the public has any interest that this contract contravenes. It seems to us now quite clear that, as these buildings could only be placed upon the defendant's right of way by its consent, and were so placed upon the premises, and on the conditions expressed in the lease, the public had no interest therein, under said § 1289 or otherwise, that would be injured by giving effect to the agreement in question. Much as the public may have been interested in the convenience of such a place of business, it had no interest as to who should carry the hazard incident to that property being located as it was." "Upon further consideration we are of the opinion that this contract was not made by the defendant in its capacity as a common carrier, and that the provision of § 1308 is not applicable." "After a careful review of the case, we reach the conclusion that the public had no interest in the clause of the contract in question, that its enforcement works no injury to any interest of the public, and that the judgment of the district court should be affirmed."

A second petition for rehearing was then filed, and that case had not been finally de

cided by the supreme court of Iowa when the present case came before the circuit court of the United States at April term, 1894. The circuit court thereupon suspended judgment in this case; and at September term, 1894, the state court having meanwhile denied the second petition for a rehearing, and thereby finally affirmed the validity of the stipulation, followed the final decision of that court, and gave judgment for the defendant. 62 Fed. Rep. 904.

Motions to dismiss or affirm-color for mo tion to dismiss-affirmance.

1.

2.

A bill invoking the jurisdiction of the clrcuit court of the United States on the ground that the case arises under the Constitution of the United States by reason of the violation and impairment of a contract will be dismissed when it does not aver facts to show such violation.

On motions to dismiss or affirm a decree by which a bill was dismissed for lack of jurisdiction, which was not error, there being color for the motion to dismiss, the motion to affirm will be sustained.

[No. 368.]

Submitted October 10, 1899. Decided November 6, 1899.

APPEAL from a decree of the Circuit

Court of the United States for the

Southern District of Alabama dismissing a bill for lack of jurisdiction. On motion to dismiss or affirm. Affirmed.

See same case below, 95 Fed. Rep. 539. The facts are stated in the opinion. Messrs. D. P. Bestor and R. H. Clarke for appellant.

Messrs. B. B. Boone and E. L. Russell for appellee.

Mr. Chief Justice Fuller delivered the opinion of the court:

sys

The first opinion of the supreme court of the state of Iowa in the case of Griswold v. Illinois C. R. Co. was delivered after the agreement now in question was made. The This was a bill in equity filed in the cirfinal decision in that case, reversing the for-cuit court of the United States for the southmer opinion, was made after repeated argu-ern district of Alabama, by the Bienville ments and full consideration; was nowise in- Water Supply Company against the city of consistent, to say the least, with the decision Mobile and its mayor, to enjoin defendants or the opinion of that court in any other case; from making or carrying out any contract and was rendered before the case at bar was for supplying water to the inhabitants decided in the circuit court of the United of the city or for constructing a States. Under such circumstances, that de- tem of waterworks for that purpose durcision, being upon a question of statutory ing the continuance of certain contracts and local law, was rightly followed by the between complainant and the city, made circuit court. Rowan v. Runnels, 5 How. parts of the bill, and from building or 134, 139, 12 L. ed. 85, 87; Morgan v. Curte-acquiring a system of waterworks to bring nius, 20 How. 1, 15 L. ed. 823; Fairfield v. Gallatin County, 100 U. S. 47, 52, 25 L. ed. 544, 546; Burgess v. Seligman, 107 U. S. 20, 35, 27 L. ed. 359, 365, 2 Sup. Ct. Rep. 10; Bauserman v. Blunt, 147 U. S. 647, 653-656, 37 L. ed. 316, 318, 319, 13 Sup. Ct. Rep. 466, and cases there cited; Williams v. Eggleston, 170 U. S. 304, 311, 42 L. ed. 1047, 1049, 18

water into the city during such continuance.

The parties were all citizens of Alabama, but complainant invoked the jurisdiction of the circuit court on the ground that the case was one arising under the Constitution of the United States, in that the contracts between it and the city were violated and impaired in the premises.

$112

Defendants demurred, assigning special causes, among which were the following:

"(1) Because said bill, taken in connection with Exhibits 'A' and 'B,' made a part thereof, shows that no contract was made between the city of Mobile and the Bienville Water Supply Company as to the rates to be charged the inhabitants of said city for water, but that said contract merely fixed a maximum rate that said water company was to charge the inhabitants of said city of Mobile.

"(2) Because said bill of complaint shows that said city of Mobile was specially authorized and empowered by its charter and by the act of the general assembly of Alabama approved November 30, 1898 (and of which said act this court will take judicial notice), to buy or to build, erect and main-plugs therein, and built a reservoir and tain, and to operate waterworks for the supply of its inhabitants with water, and for the extinguishment of fires, and for sanitary, domestic, and other purposes.

66

"(3) Because there is nothing shown or alleged in said bill of complaint and in said Exhibits 'A' and 'B,' made a part thereof, which precludes or estops the city of Mobile from buying, building, erecting, maintaining, and operating a system of waterworks. (4) Because said Exhibits 'A' and 'B' made a part of said bill of complaint, show that the only obligation resting upon and binding upon said city of Mobile is that it shall pay to said Bienville Water Supply Company the sum of fifty dollars ($50) each per annum, payments to be made monthly, for 260 fire hydrants placed on the streets of said city by said water supply company until the expiration of said contract on July 1st, A. D. 1900, and it is not alleged or charged in said bill of complaint that the city of Mobile has or intends to repudiate its obligation to pay for said 260 fire hydrants at the rate of $50 each per annum, payments to be made monthly."

The opinion of the circuit court, Toulmin, J., is reported 95 Fed. Rep. 539, and states the facts appearing from the bill, and pertinent legislation, in substance, correctly, as follows: Complainant was a corporation chartered by the legislature of Alabama for the purpose, among other things, of supply. ing water to the city of Mobile, a municipal corporation of the state, and its inhabitants, and was authorized to construct the needed canals, ditches, pipes, aqueducts, etc., best suited for the purpose, and was "charged with the duty of introducing into the port of Mobile (city) such supply of pure water as the domestic, sanitary, and municipal wants thereof may require." Accordingly, complainant laid mains and pipes in the streets of the city, and established hydrants and fire erected pumps connecting with such mains and pipes, at large expense to itself, and used the property to supply the city and its inhabitants with water. August 15, 1888, complainant entered into a contract with the city to furnish for its use 260 fire hydrants, and to furnish water for fire service of a certain number of streams and pressure, and further agreed that the city should have the unrestricted use of the hydrants for such fire purposes and the free use of water for all municipal buildings, and that the company would not charge a greater or higher rate for water for domestic use than that specified in the contract. In consideration of complainant's stipulations, the city agreed to pay complainant for the use of the hydrants, monthly, at the rate of $50 a hydrant per annum, during the continuance of the contract, which was for a term of six years. April 14, 1891, the contract was changed in some particulars and the term extended to twelve years. These two contracts were annexed to the bill and marked Exhibits "A" and "B."

The bill averred that complainant had "(8) Because said bill of complaint fails complied and was complying with all the obto allege any facts which show that the city ligations and requirements of the contract of Mobile has or intends to do or commit any on its part, and that the city had violated act which will impair the said contract be- and was violating the contract in that it had tween the city of Mobile and the Bienville bought and taken possession of a waterWater Supply Company, and which said con- works plant, and was now operating the tract is made a part of the bill of complaint. same, selling water to customers, and cutting "(9) Because it is shown upon the face rates below those fixed in the contract, and of said bill of complaint that the city of Mo- actually competing in the business of selling bile did not grant the complainant the fran- and furnishing water to its inhabitants, and chise to lay its said water mains and pipes that it had taken away some of complainin the city of Mobile, but that it was done ant's customers, thereby decreasing its inby the general assembly of Alabama, and come; and, further, that the city was buildfrom which it appears that said city of Mo-ing another system of waterworks to supply bile had no lawful authority to grant or to itself and its inhabitants with water, and enter into a contract with complainant, con- that it claimed the right so to do under the ferring thereby the exclusive right or priv-provisions of its charter and an act of the ilege of supplying water to the inhabitants legislature of Alabama of November 30, of said city of Mobile."

The court sustained the demurrer on the foregoing grounds, and gave complainant fifteen days in which to amend, and, no amendment having been made, dismissed the bill. From that decree an appeal to this court was allowed and perfected, and motions to dismiss or affirm submitted.

1898.

The charter provided that the city might contract for, build, purchase, or otherwise acquire public works subject to the approval of a majority vote of the citizens of Mobile at a special election called therefor; and in July, 1897, such an election was held, and a majority of the votes cast were in fa

pany, Ex parte.

(175 U. S. 114)

Mandamus to correct mistake in execution of mandate to state court.

Writ of error, and not mandamus, is the proper remedy to correct the action of a state court in failing to give full effect to a pandate from the Supreme Court of the United States by mistaking or misconstruing its judgment. [No. Original.]

vember 13, 1899.

Court of Tennessee to compel it to correctly execute a mandamus which it had received from the United States Supreme Court. Denied.

See same case below, 52 S. W. 1001.

*115

vor of the city contracting for or otherwise lation to that end. Such being the state of acquiring waterworks to be owned and the case, the circuit court did not err in disoperated by the city, and the issuing of missing the bill, and, as there was color for bonds to pay for the same. The act of No- the motion to dismiss, the motion to affirm vember 30, 1898, authorized the issuing of will be sustained. Decree affirmed. bonds for that purpose. It was further averred that acting under and by virtue of the power granted by the charter and the act of November 30, the city had entered into a|Re C. G. BLAKE, and Rogers, Brown, & Comcontract to have a system of waterworks built, and that the building of the same was now going on, and that it had made a contract with certain persons to take said bonds, who had already taken and paid for a part of them. Complainant contended that the city had no legal right to impair the value of its plant and to destroy or diminish its income therefrom, which would be the effect of the city's action in building waterworks and furnishing water to its inhabitants, and it was averred that defendant was insolvent, and that the only way complain- Submitted October 30, 1899. Decided Noant could protect itself was through the interposition of a court of equity. It was not asserted by complainant that it had been PPLICATION for leave to file a petition granted an exclusive franchise to furnish for a writ of mandamus to the Supreme water to the city and its inhabitants, but that under the contracts the city had no right to furnish water to other persons, or to build or acquire a system of waterworks to supply water to itself and its inhabitants, and that to do this was a violation thereof. The circuit court observed that the city of Statement by Mr. Chief Justice Fuller: Mobile granted complainant no rights or *The Embreeville Freehold, Land, Iron, privileges whatever, but that the legislature Railway Company, Limited, was a corpora of the state granted it the right to build tion organized under the laws of Great Brit waterworks and to use the streets of the city ain and Ireland for mining and manufacturfor water purposes, and authorized com- ing purposes, carrying on business in the plainant and the city to contract together state of Tennessee, as authorized by a law of for the purpose of supplying the city with that state of March 19, 1877. The 5th secwater. The contract was made, but there tion of the act gave priority in the distribuwas no express provision in it for furnishing tion of assets to resident creditors of the the inhabitants with water, and no stipula- state. The company having become insoltion by complainant that it would do so, vent McClung and others filed an original though it was clear that the parties contem- creditors' bill in the proper court, asking the plated that complainant would contract appointment of a receiver and the adminiswith the inhabitants to supply them with tration of the affairs of the company as an water for domestic purposes, since it was insolvent corporation. The case resulted in stipulated that complainant should not a final decree by the supreme court of Tencharge for water so supplied higher rates nessee adjudging that the Tennessee creditthan those specified therein. On the other ors were entitled, under said section, to prihand, the city was authorized and empow- ority in the distribution of the assets over ered by its charter and the act of the legis-simple-contract creditors of other states and lature of Nevember 30, 1898, to build or oth- countries. Among the creditors affected erwise acquire waterworks of its own to sup- were C. G. Blake and Rogers, Brown, & Comply water to itself and its inhabitants for pany, citizens of the state of Ohio, and the the extinguishment of fires and for sanitary Hull Coal & Coke Company, a corporation of and domestic purposes, and the city in its Virginia, who, being dissatisfied, sued out a contracts with complainant did not agree writ of error from this court. And it was not to do so. It did agree to pay complain- held, reversing the decree of the state su ant for a certain number of hydrants erected preme court, that the 5th section of the act and supplied by it, and to make the pay of 1877, in so far as it gave priority to Tenments monthly, but there was no averment nessee creditors over creditors of the same that the city had by act or word repudiated class of other states of the Union, was in its obligation, or failed or refused to make violation of the 2d section of the 4th article the payments stipulated for, or that it in- of the Constitution, providing that "the citi tended to do so. zens of each state shall be entitled to all priv. In short, there were no facts averred show-ileges and immunities of citizens in the severing that the city had violated, was violat- al states;" but it was also ruled that a coring, or intended to violate, its contracts poration created under the laws of another with complainant, and there was no legis- state was not a "citizen" within the meaning