Los Angeles Ry. Co. v. Los Angeles

This is an appeal by the plaintiff — a street-railway corporation — from a judgment of the superior court denying its prayer for an injunction restraining the defendant from interfering with the exercise of an alleged franchise. The record consists of the pleadings, certain stipulated facts, and the decree, from which it appears that, by an ordinance of the city of Los Angeles, duly adopted May 11, 1897, the predecessors of plaintiff were granted a franchise to construct and operate a street-railway over and along certain streets of that city — the work of construction to be commenced within six months, and completed within eighteen months from the passage of the ordinance. By a subsequent ordinance the time of completion was extended six months, but at the end of this extended time — May 11, 1899 — only one and three-quarter miles out of four and three-quarter miles of the projected road had been built, leaving one mile at one end and two miles at the other end of the route covered by the franchise entirely vacant and unoccupied, in which condition it remained until May 1, 1903, a period of four years. One of the express conditions contained in the ordinance granting the franchise was the following: "If said road is not fully completed and in operation within said time, then this franchise shall be forfeited as to the portion thereof uncompleted." The grantees of the franchise paid the city therefor the sum of five thousand dollars. No ordinance declaring the franchise forfeited was ever passed or adopted, but on May 15, 1903, while the plaintiff was engaged in the work of extending its tracks over a portion of the route described in the ordinance which had been left unoccupied from May 11, 1899 to May 1, 1903, the defendant, by its police officers and superintendent of streets, entered Upon this new construction, compelled plaintiff to suspend work and threatened to tear up and remove the newly laid tracks.

To enjoin this proceeding the present action was commenced May 15, 1903. It appears from the decree that an injunction pendentelite was issued restraining defendant, its officers, agents, etc., from tearing up, removing, destroying, or in any wise interfering with the new portion of the track then in process of construction, and this temporary injunction remained in force until October 12, 1905, when it was dissolved by the final decree from which this appeal is prosecuted. *Page 244

The question whether the superior court erred in dissolving the temporary injunction and denying a permanent injunction depends mainly upon the further question whether the franchise of plaintiff was forfeited ipso facto by its failure to complete the road within the time limited by the grant. The respondent claims that it was so forfeited under the provisions of section 502 of the Civil Code, while the appellant contends that without a decree declaring a forfeiture in an action by the attorney-general in behalf of the state, the franchise remained unimpaired. It is argued in support of this view that nothing is involved in this controversy beyond the respective rights of the plaintiff and defendant growing out of and dependent upon the ordinance granting the franchise, which, it is contended, embraces all the terms of the contract, and which upon the received construction of grants providing for forfeitures upon breach of conditions subsequent, means no more than that their breach entitles the grantor to maintain an action to enforce the forfeiture. The respondent, on the other hand, contends that section 502 of the Civil Code in force at the date of the grant is a part of the contract, and that it is self-executing in working a forfeiture for failure to complete the construction of the road within the time specified in the ordinance.