We make correction of the finding as to a part of paragraph twenty-three and strike out a part of paragraph twenty-nine. These changes in the finding appear in the statement of facts preceding the opinion. Other corrections asked for are denied.
The defendant street railway's predecessor was operating upward of nine miles of horse railway and nearly two of overhead trolley, in the city of Hartford, when it petitioned the city for permission to operate upward of eleven miles of additional overhead trolley over other of the streets of the city. Permission was given by the so-called Tucker grant upon defined terms, one of which provided that the railway should pay annually to the city two per cent of its gross annual receipts. The Tucker grant was accepted by the railway by its vote and agreement of March 27th, 1894; in pursuance of which the railway has since paid to the city the two per cent provided for in the Tucker grant and agreement continuously through the year 1922 and in the intervening period many times obtained other grants upon the same condition, which in effect was each time a renewal of this agreement, but on and after January 14th, 1924, it has refused to make payment of the two per cent upon the claim that the agreement in this respect was illegal. *Page 321 The city's right to maintain its action depends upon whether it had the right under its charter to make the agreement it did, or if it did not have this right whether the railway by its long course of conduct in making payment of the two per cent, is now estopped to challenge the validity of its agreement in this particular. The action taken by the city in making the Tucker grant, coupled with its acceptance by the vote and agreement of the railway, constituted an executed contract and created vested property interests. Chicago v. Chicago O. P. Elevated R. Co., 250 Ill. 486,95 N.E. 456; McQuillin on Municipal Corporations (1st Ed.) §§ 121, 1672. The franchise under which the railway operates in the streets of Hartford came from the State. It might in the grant of its charter, without consulting the city, have designated the streets over which the railway should operate its lines, fixed their location and the conditions under which the tracks should be laid and the railway operated (CentralRailway Electric Co.'s Appeal, 67 Conn. 197,209, 35 A. 32), or it might have delegated the duty of designating the streets, fixing the location of the tracks and the conditions attached to their location and operation to its agent, the city of Hartford. In either case the franchise of the railway would have come from the State. By the first method the State would have granted the right without committing the determination of these conditions to the municipality. Thus, in Central Railway Electric Co.'s Appeal,67 Conn. 197, 35 A. 32, the route was designated in the charter; in Fair Haven Westville R. Co. v. NewHaven, 74 Conn. 102, 49 A. 863, the railroad sought to double its existing single track lines; in Waterbury v. Connecticut Ry. Ltg. Co., 86 Conn. 180,84 A. 723, the routes were all specified in the charter and the application asked for the adoption of electricity *Page 322 as a motive power over existing lines. In the second of these methods the State would have conferred upon the municipality, as its agent, the right to represent it. Whatever the municipality should do in its grant to the railway would be the act of the State, so far as made within the power committed to it. Ghee v.Northern Union Gas Co., 158 N.Y. 510,53 N.E. 692; Cleveland v. Cleveland City Ry. Co., 194 U.S. 517,24 Sup. Ct. 756. The defendant railway's predecessor was, in 1859, granted by its charter the right to lay a single or double railway over and along a specified highway in Hartford and to such point in that highway as its directors should designate. By amendment in 1862, it was empowered to construct and operate over any of the other highways in Hartford such other railways as "public convenience may require; provided, however, that no such railways . . . shall in any case be constructed, built or operated without the consent of the common council . . . first had and obtained," etc. This amendment brought the defendant within the second of these methods. Since the amendment has remained to the date of this action unrepealed and unmodified, it is unquestioned that the railway could not have constructed or operated its lines in any of the streets of Hartford, except on the designated part of Main Street, without the consent of the common council of Hartford. The legislative intention is manifest. It has never abrogated the power thus vested in the city of Hartford. As a general rule street railway routes have been designated in the charters granted by our General Assembly; in the instant case the power of designation was committed to the common council. Within the exercise of its power of consent what were the limitations or conditions which the city of Hartford could attach to the grant of its consent? Obviously none *Page 323 which conflicted with law, or with the charter granted to the railway by the General Assembly. In re KingsCounty Elevated R. Co., 105 N.Y. 97, 13 N.E. 18. Beyond these limitations upon its power of consent the city might attach any other conditions or limitations which it chose. It represented in its every grant the State, and within the limitations imposed by law or by the State itself, its power was supreme, for it possessed, for the time, the sovereign power of the State. Ashland v. Wheeler, 88 Wis. 607,60 N.W. 818; Beekman v. Third Avenue R. Co., 153 N.Y. 144,47 N.E. 277. McQuillin on Municipal Corporations (1st Ed.) §§ 121, 1644. "The right to consent to the use of the streets for street-railway purposes embraces necessarily the right to consent conditionally, — to consent with limitations, restrictions, and reservations. The city, of course, could withhold its consent entirely. There can be no doubt, therefore, of its right to withhold partially or to limit the grant." Mercantile Trust Deposit Co. v. Collins Park B.R. Co., 101 F. 347, 351; St. Louis M. River R. Co. v. Kirkwood,159 Mo. 239, 60 S.W. 110; Southern Pacific Co. v.Portland, 227 U.S. 559, 33 Sup. Ct. 308; Traverse CityGas Co. v. Traverse City, 130 Mich. 17, 89 N.W. 574;Minersville Borough v. Schuylkill Electric Ry. Co.,205 Pa. 394, 54 A. 1050; Portsmouth v. VirginiaRy. Power Co., 141 Va. 54, 126 S.E. 362. Provision for compensation as a condition of its grant of consent by the municipality was not repugnant to any provision of the charter granted the railway unless it were, in law, a tax. Defendant's charter made it subject to the statutes relating to railroads existing in 1848 with their amendments. These required of defendant, in 1893, the payment of a certain tax to the State which was stated to "be in lieu of all other taxes on its franchises, funded and floating debt, and railroad property *Page 324 in this State." If the two per cent payment provided for in the Tucker grant was a tax it was repugnant to this law of 1893. We will take up this specific point at a later stage of this opinion.
So far as we can ascertain there is no other provision of the defendant railway's charter which conflicts with, or is inconsistent with, the two per cent provision. We have held a similar provision for the payment of a percentage of the gross receipts germane to the location of a railway upon a new street. "In deciding," we say, "whether to approve a railway location, all the natural consequences of the construction and operation of the road upon it must be taken into account. An electric railway in a city street must throw the main course of ordinary travel upon those parts of the highway which are not covered by its tracks. Such parts, being thus subjected to greater wear, . . . must often be improved or reconstructed, in order to be adequate to support the increase of burden, and this increase will be largely determined by the amount of business for which the tracks are used, and so, to a great degree proportioned to the gross receipts which such business yields." Central Railway ElectricCo.'s Appeal, 67 Conn. 197, 213, 35 A. 32. In Providence v. Union R. Co., 12 R. I. 473, an action was brought to recover moneys due for the use of streets by a railway under an ordinance providing for compensation for such use which was conditioned upon the assent of the city and upon such terms and conditions as the city council might impose. In sustaining the action the court held: "But the power here conferred is not a mere police power. Evidently it was conferred, not only for the general good, but also to enable the city to protect itself as the body charged with the maintenance and repair of the streets, and it is to be construed fairly in view of its purposes. Rails *Page 325 in streets are a serious annoyance; they divert travel to other streets, and so necessitate an increase of care and expense, not only where they are laid, but also in such other streets. It is therefore not unreasonable to require the companies to pay something for their privilege. The city, in giving its assent, has required it; and the companies, in accepting the assent, have agreed to comply with the requirement. We think the agreement binds them." In Allegheny v. Millville, E. S. Street Ry. Co., 159 Pa. 411, 28 A. 202, at page 416, the Supreme Court states: "A valuable franchise to use public property, the streets, for corporate profit, is about to be granted. It is not illegal or unreasonable that the public or the city which represents it should have a consideration for the privilege it confers." See also Clinton v. Worcester Consolidated Street Ry.Co., 199 Mass. 279, 287, 85 N.E. 507; Mitchell v.Dakota Central Telephone Co., 25 S.D. 409, 416,127 N.W. 582; Asbury Park S. G. Ry. Co. v. NeptuneTownship, 73 N.J. Eq. 323, 336, 67 A. 790;Postal Tel. Cable Co. v. Newport, 160 Ky. 244, 248,169 S.W. 700; St. Louis v. Western Union Tel. Co.,148 U.S. 92, 13 Sup. Ct. 485; Western Union Tel. Co. v. Richmond, 224 U.S. 160, 32 Sup. Ct. 449; Peopleex rel. Jackson v. Suburban R. Co., 178 Ill. 594, 606,53 N.E. 349; Kinsman Street Ry. Co. v. Broadway N. Street R. Co., 36 Ohio St. 239; 4 McQuillin on Municipal Corporations (1st Ed.) § 1645. The use of these streets by the railway was nearly one third of their entire surface. The electrification of its railways added largely to the speed with which its cars were operated. The increase of its receipts within the period of these payments was eight-fold, indicating largely increased number of cars in operation and passengers carried. The use of the surface of these streets by the railway had thus largely increased within *Page 326 this period. Its poles, twenty-seven hundred, stood at intervals of one hundred and twenty-five feet near the curb lines of these streets. It was therefore a reasonable provision that the city should receive a return for the use of its streets by the railway, quite apart from a return for the expense which may have been caused to it by the construction and operation of the railway over its streets. Where an ordinance of a city provided for the payment by a telephone company of $5 for each pole set in the streets of a city, the Supreme Court of the United States held: "It is more in the nature of a charge for the use of property belonging to the city — that which may properly be called rental." St. Louis v. Western Union Tel. Co.,148 U.S. 92, 97, 13 Sup. Ct. 485. This construction of such a charge has since been approved by numerous authorities. No injustice was done the defendant railway by conditioning the grant to it upon the payment to the municipality of a consideration for the privilege. The terms of the municipal consent were not forced upon the railway. It could not compel the consent, but it could refuse to accept the terms offered.
The defendant is insistent in its claim that this case is governed by our decision in Central Railway Electric Co,'s Appeal, 67 Conn. 197, 35 A. 32. Public Acts of 1893, Chapter 169, pp. 308, 312, provided that when a street railway is given a right to construct a railway, it shall present to local authorities a plan, which they may accept and adopt or modify, subject to the right of appeal to the Superior Court or a judge thereof, and it or he shall make such orders on appeal as may be deemed to be equitable and the decision of the court or judge shall be final. The street railway law of 1893 did not operate upon the defendant railway, or any other, until it had obtained from the local authorities the right to construct and operate *Page 327 the line or lines it asked for. The Central Railway and Electric Company had constructed, under legislative authority, a railway in the principal streets of New Britain; thereafter it was given power to lay tracks in thirty other streets and presented its plan for the construction and operation of the railway in three of these streets to the mayor and common council who approved the plan subject to certain conditions. Upon appeal to a judge of the Superior Court he held the condition providing for the payment to the city of a percentage of the gross receipts "so long as it should use . . . the streets . . . for railway purposes" to be valid. On appeal from his decision, we held that the reason of appeal, that the judge ruled that the railway's right to construct and operate its railways was dependent upon the consent of the city authorities, was not well taken for the reason that the judge had not so ruled, and further that the franchise of the railway to construct and operate its railway in these thirty streets had been granted to it by the express terms of its charter.
In the case before us, the right of the defendant to construct and operate its railway in any except one designated street could only be granted by the consent of the authorities of the city of Hartford. This is a vital distinction between that case and this. We have already quoted from that opinion our holding that a condition requiring the payment by a railway to a municipality of a percentage of the gross receipts for the privilege of constructing and operating its railway over the streets of the city in which the defendant had not theretofore granted its consent to operate was a legitimate condition to attach to the granting of such a privilege. In the New Britain case we held the condition requiring such a percentage illegal because it appeared that the payments were required *Page 328 as a compensation for the expenses chargeable to the city in consequence of the operation of the entire railway system, the greater part of which was in use when the privilege was granted, and which the city had no right to make the subject of a new condition requiring the payment for the expense caused by the railway in the streets which it already possessed the right to operate in. We were careful to point out that the city authorities might have based the payments for the location of the railway upon the new streets upon a percentage of the gross receipts which would be a fair equivalent of the expense the city would be put to by reason of the construction and operation of the railway in the new streets. The computation measured by a percentage of the total gross receipts of the entire system would be merely a convenient method of determining the fair expense to the city. "It is not impossible," the opinion states on page 215, "that the city authorities acted upon the view that the mileage of the tracks that it was planned to lay in Chestnut, East and Jubilee streets, would bear such a proportion to the total mileage of the company's system, that the specified percentages of the entire gross receipts from the operation of that system (measuring as they must, to a large extent, the business done upon it, from time to time), would be only a fair equivalent for the new expenses to which the city would be annually subjected, in the maintenance and reparation of these three streets, when the railway should be in use upon them. If it were clear that the order meant this, or if a fixed sum had been assessed as such an equivalent, we should think there was no error." The New Britain case is thus plainly distinguishable in its facts from this case, but its holding that the municipality could charge a percentage of the gross receipts of a railway as equitable *Page 329 consideration for the privilege granted by it to a public utility supports the plaintiff's position.
The defendant sets up in its second defense that its contract with the plaintiff was ultra vires because the provision for the payment of two per cent of the gross receipts was not based upon any equitable compensation for injuries arising from the location and operation of its railway, and included earnings from lines already in operation. The burden of proving this defense was on the defendant. A reading of the finding indicates that it has not met this burden. Paragraphs thirty and thirty-four of the finding show that the trial court was of the opinion that it was necessary for the plaintiff to prove that it had been put to additional expense by reason of the construction and operation of the railway in the streets in which its lines were then operating and that computation made at the time of the Tucker grant fixed the computation of two per cent of the gross receipts as just and equitable compensation. There was no such obligation upon the plaintiff. It could stand upon its contract until the defendant established some or all of the grounds of the second defense. It is true the court finds that there were no expenses incurred by the city through the construction and operation of this railway. If this finding was made as a result of misplacing the burden of proof upon the plaintiff it cannot stand. It finds questionable support in the evidence. And it appears to conflict with the findings that there had not been shown any additional expense. Failure to prove a fact cannot be made the basis of a positive finding regarding that fact. There is no finding that the two per cent of the gross receipts was imposed to provide compensation to the city for expenses caused it thereafter by the operation of the railway over the streets in which it was operating its lines prior to the *Page 330 Tucker grant. We cannot assume this to be the fact. The locations sought were about equal in mileage to those already granted, while the contract as to each grant recited that it was made upon a valuable consideration. In the New Britain case, the court held that the city had no right to require an annual percentage of the gross receipts from the lines already in operation and that "the most natural construction of the finding, however, would seem to be that which makes it uphold the imposition of this condition on the ground that it would provide a just compensation for such expenses as the city might thereafter incur for the maintenance of all the streets through which cars are run."
In the absence of a similar finding, we cannot hold, upon the record in the instant case, that the parties to the contract intended to include in the payments of two per cent of the gross receipts provided for, compensation on account of expenses caused by the lines already in operation. The fact that many similar grants of consent have been made to defendant to operate its lines in other streets since the decision inCentral Railway Electric Co.'s Appeal, supra, in 1896, and at no time has defendant protested these payments, is strong confirmation of the existence in the minds of defendant's advisers of the distinction between the grant made in the New Britain case and those made to the defendant which we have pointed out. The court could hold upon the record in theNew Britain case that the percentage of the gross receipts provided for included compensation for expenses caused the city by the railway from its lines already in operation, and for which it had no legal right to condition its consent. In the instant case, we cannot hold that the percentage agreed upon did in fact include compensation for expenses caused by the lines *Page 331 already in operation. We may not assume that the parties to the Tucker grant intended such illegal compensation. It seems the more probable interpretation that the percentage agreed upon was the estimate which the city deemed a fair equivalent for the new expenses to which it would be annually subjected by the operation of the new lines, together with a fair equivalent for the uses the railway made of all of plaintiff's streets over which it operated in the city of Hartford in the conduct of its private business, in which estimate the defendant acquiesced. The defendant assumes that unless plaintiff shows that it has incurred expense as a consequence of the construction and operation of the railway this provision of the contract must fall. That is a misconception. The parties to the contract, we must assume, thought as they expressed, that there was a valuable consideration for the contract, either in the expense to be incurred by the plaintiff, or in compensation for use of these streets, or in both. The fact that either of these considerations which they assumed and estimated, later failed to measure to their then judgment does not subsequently furnish either party ground for avoiding the obligation of the agreement entered into. The parties had the right to make their own estimate of the consideration for the plaintiff's grant of consent. Their estimate may have been good or bad; if voluntarily made it is beyond the control of a court.
The defendant cannot escape the obligations arising from the contract it voluntarily entered into with the city of Hartford unless the contract was ultra vires. It makes this contention upon the authority of CentralRailway Electric Co.'s Appeal, supra, which we have discussed, and upon the contention that the provision of the contract for the payment of the two per cent of the gross receipts is a tax. The city of Hartford *Page 332 concedes that if this provision were a tax within the meaning of § 3920 of the Revision of 1888, it would be an illegal requirement, but it contends that if illegal when made, the defendant's twenty-seven annual payments made under the contract which it accepted and carried out for twenty-eight years estopped it from then repudiating the obligation of continuing these payments. We do not stop to consider whether, if the provision were not ultra vires, but was confiscatory or unreasonable in character, the defendant could avoid making these payments, as some authorities seem to hold, for these claims are not made in the record, or in the argument or brief of the defendant.
The trial court has found as a fact that this payment is a tax, and also found as a conclusion from the subordinate facts that the payment is a tax. Whether the provision in question in this contract was a tax or not must be determined upon the proper construction to be given to the language of this provision of the contract construed in the light of the circumstances surrounding its making. A question of that character is one of law and not of fact. Fuller v. MetropolitanLife Ins. Co., 70 Conn. 647, 663, 41 A. 4. "It was, after all, the legal reading and interpretation of what was written." Jordan, Marsh Co. v. Patterson,67 Conn. 473, 479, 35 A. 521. The conclusion drawn from the subordinate facts, if erroneous, "is an error of law, and reviewable by us." Neff v. Neff, 96 Conn. 273,275, 114 A. 126. A tax is a burden or charge levied upon persons or property by governmental authority for governmental or public purposes. LoanAssociation v. Topeka, 87 U.S. (20 Wall.) 655, 664. "A tax is not a debt in the ordinary sense of that term. It does not rest upon contract, either expressed or implied. It does not carry interest, and is not subject to set-off unless expressly so made by statute. *Page 333 Neither its existence, nor its continuance, depends upon individual will." Cromwell v. Savage, 85 Conn. 376,377, 82 A. 972. The defendant railway sought from the plaintiff the privilege of constructing and operating additional tracks over its streets, and the right under the law of 1893 to change its motive power to electricity on all of its lines. The law of 1893 did not affect the right of the city of Hartford to grant or withhold its consent to construct and operate the additional lines. The city voted to grant defendant's application upon its agreeing to the specified conditions in the grant, one of which was the payment of the two per cent of the gross receipts annually. The court finds that "the plaintiff would not have approved of the plan submitted by the defendant's predecessor in title without the acceptance of the condition in the Tucker grant relative to the payment to the plaintiff of a percentage of the receipts of defendant and its predecessor from its operations under said plan." The defendant's application had been pending a long time, its present counsel now say that it may be that defendant was then advised that the two per cent payment was legal, and we may safely assume that they are correct in their surmise. The contract was one which defendant undoubtedly felt was of advantage to it, and one which it had long considered. It could not secure the consent of the plaintiff unless it acceded to the proposed terms. It weighed the offer and deemed it of value to it; its directors unanimously accepted the grant and instructed its secretary to give the notice of acceptance as required by the terms of the grant, which he did. There was thus a valuable consideration to each of the parties to the contract. The city received the specified payment; the railway obtained the primary right to use a part of these streets for the purposes of its business. It was entirely optional *Page 334 with the defendant whether to accept the grant upon these terms, or refuse it. We repeat, upon its acceptance the agreement became complete and the contract executed. The payment provided for was not a charge levied by government upon defendant's property for governmental purposes but the payment of an obligation created by its voluntary action. The provision for payment of a percentage of the gross receipts does not fall within any known definition of a tax; it is neither proportional nor compulsory in character, but voluntary and individual, and its every attribute is antagonistic to the normal attributes of a tax. Payments such as these are sometimes spoken of as taxes both in current speech, in statutes, and in judicial decisions; it is neither surprising nor significant to find that the payments in controversy, in current speech, have been designated as taxes. We must look, not for the current but the legal meaning of tax, that is, for the restricted or exact use of this word, and we cannot find it in the nature or characteristics of these payments. That is the true test. Heerwagen v. Crosstown StreetRy. Co., 179 N.Y. 99, 103, 71 N.E. 729; Memphis v.Postal Tel. Cable Co., 145 F. 602, 606; 37 Cyc. 707, 708. The authorities are in practical agreement in holding that a provision in statute, ordinance or contract affecting a municipality and public utility similar to the two per cent payment in the contract before us, is not a tax. It is designated as rental and not a tax in St. Louis v. Western Union Tel. Co., 148 U.S. 92,13 Sup. Ct. 485. Later, where franchises were granted to a street railway subject to the payment of a percentage of gross receipts, or of a lump sum, it was held that payments of this character are not to be construed as an equivalent or substitute for taxes. MetropolitanStreet Ry. Co. v. New York, 199 U.S. 1,25 Sup. Ct. 705. In Denver v. Stenger, 295 F. 809, *Page 335 812, the Circuit Court of Appeals had occasion to construe a provision in the grant of a franchise providing for the payment, in further consideration for the franchise, of $5,000 per month during the twenty-year term of the franchise, in the light of the claim by the utility that the payment was a tax or in the nature of a tax. "It seems unchallenged," says the court, "that, at all times here material, the appellant possessed the power to deny the privilege of special use of its streets or to grant such under terms and compensations agreeable to it; also, that it possessed the further power to tax the exercise of such privilege. The former is a police power and compensation therefor is in the nature of rental. . . . The latter is a revenue power and exactions thereunder are taxes. . . . The obligation to make these payments is purely contractual. The voluntary nature thereof is not affected by the fact that one of the advantages inducing assumption of it was freedom from car license taxes. Being voluntary in origin it cannot be a tax. . . . The contention that the payments are operating charges in the nature of rental seems sound. That this character of charge is in the nature of rental has been determined by the Supreme Court. St. Louis v. Western UnionTel. Co., 148 U.S. 92 [13 Sup. St. 485]." A county imposed payment of a percentage of gross receipts upon a light and power company for the use of highways. The court held: "The percentage payment is not a tax upon the property of the corporation, nor a license charge for the privilege of operating its business. It is a compensation for the use of the portions of the highway covered by the franchise easement, and it is limited to such percentage of the total gross receipts as can be shown to have arisen from the use of the franchise." Tulare v. Dinuba, 188 Cal. 664, 674, *Page 336 206 P. 983; Hanford Gas Power Co. v. Hanford,163 Cal. 108, 111, 124 P. 727.
The defendant interprets the provision in the Tucker grant for the payment of the two per cent, "until such time as the State law shall be so changed as to provide that taxes of street railway companies shall be paid locally instead of to the State; and in the case of such change in the law, the company shall pay annually to the city any deficiency in the amount of said taxes from the amount of said two per cent on the receipts as aforesaid," as supporting its claim that this payment is a tax. The plaintiff interprets this provision as intended to point out the difference between the two per cent payment and a tax, and also to furnish the defendant protection against a larger payment of the privilege granted it in the event that the taxation of defendant by the State should be changed. The plaintiff's interpretation is the more apparent one and the more reasonable. The Tucker grant protected the rights of the defendant as well as those of the plaintiff against the impairment of the contract rights each obtained. We have instanced a few of the cases where the rights of the municipality were given constitutional protection. We cite similarly a few cases where the rights of the public utility have been accorded a like protection. Detroit v. Detroit Citizens Street Ry.Co., 184 U.S. 368, 22 Sup. Ct. 410; Cleveland v. ClevelandElectric Ry. Co., 201 U.S. 529, 26 Sup. Ct. 513;Knoxville Water Co. v. Knoxville, 189 U.S. 434,23 Sup. Ct. 531; Amesbury v. Citizens Electric Street Ry.Co., 199 Mass. 394, 85 N.E. 419. Central Railway Electric Co.'s Appeal, supra, at page 221, is in harmony with the law of our country and conclusively determines that the two per cent payment provision is not a tax but a contractual obligation voluntarily assumed which became effective when the railway was constructed *Page 337 and in operation. "To ask for equitable compensation," we say, at page 222, "for injuries occasioned by the location is something very different from laying a tax, or charging a license fee. There can be no obligation to pay, unless the tracks are laid; and it will then be merely a contractual obligation, voluntarily assumed, to make good a loss that would otherwise ensue to the municipality from their location." The contract of these parties must be held valid until the contrary appears. In its second defense defendant pleads the invalidity of this provision of the contract upon these two grounds; both of which were sustained by the trial court. We are unable under the law, as we find it, to sustain the judgment upon either of these grounds, or upon any other ground apparent in the record. The conclusions reached would perhaps justify our failure to pass upon the issue of the estoppel of defendant raised by the plaintiff's reply. Its conclusiveness in supporting plaintiff's appeal and the large consideration counsel have given it, lead us to state with some brevity our view of it.
Assuming defendant is right in its claim that plaintiff was without power to impose as a condition of its grant to the defendant the payment of the percentage of its gross receipts which defendant agreed to make, the plaintiff maintains that the defendant is estopped after this long exercise of the privileges of the grant to it, to avoid the making of these payments which it had made, without protest, for twenty-eight years, while it continues to exercise under claim of right the privilege of franchises granted in 1894, and in many other grants of like character and upon like terms. Defendant's claim of ultra vires ignores the true legal construction of that term as applied to a contract. The contract of a municipality which is not within the powers conferred upon it is ultra vires, that is, void *Page 338 ab initio, and the act of one or both parties to the contract cannot give it life either by way of ratification or estoppel. 4 Dillon on Municipal Corporations (5th Ed.) §§ 1610, 1611; Central Transportation Co. v. Pullman'sPalace Car Co., 139 U.S. 24, 48, 49,11 Sup. Ct. 478; 3 McQuillin on Municipal Corporations (1st Ed.) § 1172. "An act is ultra vires of a corporation," we say in Byrne v. Schuyler Electric Mfg. Co.,65 Conn. 336, 346, 31 A. 833, "when it is not within the power of the corporation to perform it." The Tucker grant contract was not made in express violation of law. Defendant does not and could not claim that. Its entire subject-matter was within the power of the municipality, unless the single provision of the contract is void; the rest of the contract it does not attack but admits to be valid. It has not offered to abandon the rights it acquired under the contract; it desires and purposes to continue in the exercise of all the rights accorded it under the contract. The benefits to it arising out of this franchise, which we must assume was of prospective value to it when granted, and has since become and is now of real value to it, it retains but refuses to longer pay the primary pecuniary benefit to the plaintiff which it agreed to give in consideration of its consenting to the grant. Private individuals or corporations would not be permitted to retain all the benefit of their contracts with each other yet refuse to perform the most substantial of their obligations. The defendant received a franchise which was of pecuniary benefit to it; it has expended large amounts in developing the railway lines for which the franchise was given. It is manifest defendant cannot place the plaintiff in statu quo except at disastrous sacrifice to itself. In such a situation it is too late for it to claim that this condition of the grant is ultra vires or to attack this contract upon other grounds. It will *Page 339 not be allowed to hold the contract valid except as to the single provision but invalid as to that. That situation does not present a case of ultra vires in its true legal sense. The public utility will be bound by the condition that the municipality had no power to impose, provided the municipality had the power to consent or refuse to grant the franchise, and the utility accepted the grant with the conditions imposed and thereby executed the contract, and in pursuance of the grant has constructed and long operated under its contract, and purposes so continuing. Southern PacificCo. v. Portland, 227 U.S. 559, 33 Sup. Ct. 808; Rutherford v. Hudson River Traction Co., 73 N.J.L. 227,63 A. 84; Jersey City v. North Jersey Street Ry. Co.,72 N.J.L. 383, 61 A. 95; Mitchell v. Dakota CentralTelephone Co., 25 S.D. 409, 416, 127 N.W. 582;Hanford Gas Power Co. v. Hanford, 163 Cal. 108,111, 124 P. 727; Valdez v. Valdez Dock Co.,5 Alaska, 399; People ex rel. FitzHenry v. Union Gas ElectricCo., 260 Ill. 392, 103 N.E. 245; Pensacola v. SouthernBell Tel. Co., 49 Fla. 161, 37 So. 820; St. Louis M.River R. Co. v. Kirkwood, 159 Mo. 239, 253,60 S.W. 110; People ex rel. Jackson v. Suburban R. Co.,178 Ill. 594, 606, 53 N.E. 349; Simons Sons Co. v. MarylandTel. Tel. Co., 99 Md. 141, 175, 176, 57 A. 193;Mercantile Trust Deposit Co. v. Collins Park B.R. Co., 101 F. 347, 351; Potter v. Calumet ElectricStreet Ry. Co., 158 F. 521; Allegheny v. Millville,E. S. Street Ry. Co., 159 Pa. 411,28 A. 202; 4 McQuillin on Municipal Corporations (1st Ed.) § 1688.
The defense of ultra vires was advanced in NewHaven v. Fair Haven Westville R. Co., 38 Conn. 422, in resisting the payment of an assessment levied upon the property of the defendant for lack of authority of the city to levy it, although the defendant had *Page 340 suffered the city to make the improvements for which the assessment was levied with knowledge of the proceedings taken and without objection to them. We held: "The presumption therefore is, in the absence of any finding to the contrary, not only that the defendant consented to the making of the improvement by the city, but that there was an implied understanding that the defendant was to bear its fair proportion of the expense. We think, therefore, that the defendant should be estopped from setting up this claim." Our court in this decision has applied the principle of estoppel as the many authorities we have cited applied it. In this jurisdiction a corporation or an individual contracting with a municipality is estopped to defend against the enforcement of a single provision of the contract which has been accepted and its benefits long and continuously enjoyed and still retained, upon the ground that the single provision is beyond the power of the municipality to have made. Defendant appeals to equity as the origin of estoppel. It can find no succor in equitable principles. The contract it made was of its own volition, made upon a valuable consideration which was incapable of accurate estimate when made; the city of Hartford consented to the grant of the franchise to defendant; its business since that grant has been largely based upon the consent so given; it cannot keep all that it received and refuse to do what it agreed to do in consideration of the grant, — that would not be equitable, indeed it might be characterized by a harsher term.
Two rulings on evidence should be noted. The defendant offered in evidence certain records of the board of street commissioners of Hartford covering certain hearings and discussions held by that board in reference to a petition presented to the common council and upon which no action was taken by the council. *Page 341 This was prior to the petition which culminated in the Tucker grant. The evidence was offered for the purpose of showing that at these hearings the percentage of the gross receipts, which it was suggested and discussed that defendant should be required to pay, was consistently referred to as a tax, and this testimony was claimed by defendant's counsel to be relevant for the purpose of determining whether or not the percentage of the gross receipts which defendant was required to pay in the Tucker grant was in fact a tax. The evidence was clearly irrelevant and immaterial. It comprised no part of the action which finally culminated in the Tucker grant. The communication of the railway dated January 8th, 1894, was referred to a special joint committee and not to the board of street commissioners. That board never had before it the communication leading to the passage of the Tucker grant. The petition before the street commissioners never resulted in action by the common council.
The offer also was not admissible for the purpose of proving as a fact the meaning of the payment of the two per cent of gross receipts found in the Tucker grant. Finally, discussions and statements made before a committee of a legislative body, or in debate before that body, are not admissible in proof of a legislative intention in an Act passed by the body, for the reason that it is impossible to determine what effect the individual discussion had upon the action taken. Litchfield v. Bridgeport, 103 Conn. 565, 573,131 A. 560; Duplex Printing Press Co. v. Deering,254 U.S. 443, 474, 41 Sup. Ct. 172; Banco Mexicano v.Deutsche Bank, 263 U.S. 591, 44 Sup. Ct. 209;Plunkett v. Old Colony Trust Co., 233 Mass. 471, 474,124 N.E. 265. The testimony of Mr. Goodrich upon the same point was even more objectionable, for it *Page 342 included idle street talk. As the court found that the two per cent as a matter of fact was a tax, we cannot hold the admission of this evidence to have been harmless.
There is error, the judgment is set aside, and the cause remanded to the Superior Court with direction for an accounting by defendant in accordance with plaintiff's Exhibits A and B, and this opinion, for all payments accruing thereunder on and after January 1st, 1924, together with interest upon each payment from the time it became due, and for the rendition of a judgment in favor of the plaintiff for the amount found due upon such accounting.
In this opinion the other judges concurred.