Seaboard Air Line Railway v. City of Raleigh

Background

In this case a railroad company and a city fought over a spur track that ran onto a sidewalk in front of a cotton compress and later a warehouse. In 1881 the city’s Board of Aldermen recorded permission for the railroad to occupy that sidewalk and run a track there. The spur was used for many years. The city later passed an ordinance directing removal of the spur. The railroad sued, saying the recorded permission created a contract protected by the Constitution, and asked a court to block the removal. The trial court refused the injunction and dismissed the bill; the railroad appealed.

Reasoning

The central question was whether the city’s written permission was a contract or only a revocable license. The Court assumed the city had power to make contracts but examined the written record and the nature of the permission. The minutes showed only a grant to occupy the sidewalk with no fixed time, so the Court held it was a license that the city could revoke. The Court rejected the railroad’s arguments that long use or related corporate powers turned the permission into a permanent contract. The Court also refused to apply an implied-contract exception tied to general municipal powers and duties because the permission was a later, discretionary allowance, not essential or time-bound.

Real world impact

The ruling means that where a city’s record shows only a permission to occupy public space without a time-bound contract, that permission can be revoked and removal ordered. Railroads and other businesses cannot automatically convert long-standing licenses into permanent, enforceable contracts. The Court affirmed the lower court’s dismissal, so the removal order stands in this case.