itation of duration, such licenses were in perpetuity and conveyed rights of property within the protection of the contract clause of the Constitution of the United States.

Such grants are subject to reasonable police power of the State and forfeitable for acts of abuse or non-user; but they cannot be taken away or impaired arbitrarily.

Decisions of the highest court of the State relating to such matters of local law as the construction of the constitution and statutes of the State and the powers of its municipalities, are controlling upon this court, so long as their application involves no infraction of rights secured by the Constitution of the United States.

In the absence of any controlling statute, this court will not give any greater effect to the syllabus of a case decided by the highest court of a State and reported in the official reports of that court than is given thereto in the courts of the State.

A provision in an ordinance that the grantee of a franchise to use the streets of a municipality may be required to remove therefrom what it has placed therein under the franchise when necessity demands, held, in this case, not to be an intention to limit the franchise to the corporate existence of the grantee

An ordinance, not based upon necessities of the municipality, requiring an electric light company to remove its poles and wires held, in this case, to be an arbitrary impairment of the contract of the original ordinance granting the right in perpetuity and therefore void because unconstitutional under the contract clause of the Constitution of the United States.

Quare what is the exact meaning of the phrase "general electric light business" as used in an ordinance granting a franchise to a corporation for that purpose, and whether it includes distribution of electricity for power and heat.

The practical interpretation of a contract by the parties thereto for a considerable period before a controversy arises is of great, if not controlling, influence; and this rule is applicable in Nebraska as in the nature of estoppel.

Acquiescence by the municipality in the extension of a franchise for electric light to distribution of electricity for power and heat evidenced, as in this case, by collection of taxes imposed on receipts therefrom and the purchase by the city of current for power, held, to entitle those who had advanced money on the security of the franchise to insist upon the recognition and continuation of the right of the corporation to supply electricity for power and heat as well as light; and an ordinance requiring the corporation to discontinue

such distribution of heat and power is void under the contract clause of the Constitution of the United States.

A judgment against a corporation construing its franchise is not res judicata as against a mortgagee who was not a party to the suit and whose rights were acquired prior to the commencement of the suit in which the judgment was entered.

THE facts, which involve the construction of ordinances of the city of Omaha, Nebraska, granting franchises for distribution of electric current, the extent of the rights thereunder and the effect of subsequent ordinances thereon and the constitutionality of the latter under the contract clause of the Constitution of the United States, are stated in the opinion.

Mr. William D. McHugh for appellant:

The ordinance in question granted to the New Omaha Thomson-Houston Electric Light Co. or assigns, a right of way over the streets of the city of Omaha for the purposes named "in perpetuity." For views as to the nature of the right "in perpetuity," see Am. Water Works Co. v. State, 46 Nebraska, 194; Potwin Place v. Topeka Ry. Co., 51 Kansas, 609; Fellows v. Los Angeles, 151 California, 52; Nebraska Tel. Co. v. City of Fremont, 72 Nebraska, 25; New Orleans Gas Co. v. Louisiana Light Co., 115 U. S. 650; State v. Neb. Tel. Co., 17 Nebraska, 126; State v. S. C. & P. R. R. Co., 7 Nebraska, 374.

The circumstances attending the passage of the ordinance in question negative the idea that the grant of the right of way was for a limited term.

The provision in the ordinance in question to the effect that whenever the city council shall, by ordinance, declare the necessity of removing from the public streets of the city of Omaha, the telegraph, telephone or electric poles, the grantee company shall, within sixty days from the passage of the ordinance, remove its poles from such streets and alleys, was not a reservation of a power to

terminate at will the grant of the right of way. New Orleans v. Great So. Tel. Co., 40 La. Ann. 41; Louisville v. Cumberland Tel. Co., 224 U. S. 649; Northwestern Tel. Co. v. Minneapolis, 81 Minnesota, 140.

A public service corporation may accept a grant of a right of way for a period longer than its corporate existence. Detroit v. Citizens' St. Ry. Co., 184 U. S. 368.

As the ordinance in question granted a right of way in terms which expressly recognize the right of assignment, and without limitation as to time and with no reservation of power in the city to alter or revoke the same, under general principles of law the grant of the right of way to the company or assigns was in perpetuity. Blair v. Chicago, 201 U. S. 400; Morristown v. East Tenn. Tel. Co., 115 Fed. Rep. 304; Citizens' Ry. Co. v. Detroit Ry. Co., 171 U. S. 48; Detroit v. Citizens' St. Ry. Co., 184 U. S. 368; People v. O'Brien, 111 N. Y. 1; Turnpike Co. v. Illinois, 96 U. S. 63; Louisville v. Cumberland Tel. Co., 224 U. S. 649.

It is the settled law of Nebraska, evidenced by a series of decisions by the Supreme Court of that State, that an ordinance such as the one in question grants to the company named, on acceptance, a right of way in perpetuity, and that cities in Nebraska have power to make such grants in perpetuity. Plattsmouth v. Nebraska Tel. Co., 80 Nebraska, 460; Nebraska Tel. Co. v. Fremont, 72 Nebraska, 25; Sharp v. South Omaha, 53 Nebraska, 700; State v. Citizens' St. Ry. Co., 80 Nebraska, 357; State v. Lincoln Street Ry. Co., 80 Nebraska, 333.

All departments of the State have accepted this rule of law.

The charter powers of the city of Omaha, in 1884, were as broad as were the charter powers of those cities which the Supreme Court of Nebraska held were authorized to grant such a right of way in perpetuity.

The bondholders represented by complainant, purchased

Argument for Appellant.

230 U.S.

their bonds with knowledge of and in reliance upon the law of Nebraska as announced by its Supreme Court, to the effect that the city of Omaha had, under its charter, authority to grant the right of way in perpetuity, and that by such ordinance there was granted such a right of way in perpetuity.

The law of the State of Nebraska as declared by its Supreme Court construing the powers of cities under the statutes of that State and construing the effect of ordinances passed by such cities pursuant to such charter authority, entered into and became part of the contract evidenced by the ordinance in question and its acceptance. Brine v. Ins. Co., 96 U. S. 634; Edwards v. Kearzey, 96 U. S. 595; Gulf and Ship Island R'd Co. v. Hewes, 183 U. S.

71.

Where, upon the faith of a state decision affirming the validity of contracts made or bonds issued under a statute, other contracts have been made or bonds issued under similar statutes, neither the legislature nor the judiciary of a State can modify the law so as to impair the obligation of the contract previously made. Loeb v. Columbia Township, 179 U. S. 472; Taylor v. Ypsilanti, 105 U. S. 71; Wade v. Travis Co., 174 U. S. 499; Wilkes County v. Coler, 180 U. S. 506.

The distribution and sale of electric energy to be utilized for power and heat purposes, is included within the expression "general electric light business" for the transaction of which the right of way was granted.

This is evidenced by the literature, scientific and popular, showing the state of the art of electric lighting in 1884.

The city of Omaha and the company operating the plant under the ordinance in question have, for more than twenty years, in carrying out the provisions of the ordinance, uniformly placed a practical construction upon the said ordinance, interpreting the same to mean that the company had the right thereunder to distribute elec

Atty. Gen. v.

tric energy for power and heat purposes. Drummond, 1 Dru. & Wall. 353; Brown v. United States, 113 U. S. 570; Chicago v. Sheldon, 9 Wall. 50; Clark's Turnpike Co. v. Commonwealth, 96 Kentucky, 525; Columbia v. Gallagher, 124 U. S. 510; Insurance Co. v. Dutcher, 95 U. S. 269; New York v. Starin, 106 N. Y. 1; Mobile v. Louisville & N. R. R. Co., 84 Alabama, 115; Gas Light Co. v. St. Louis, 46 Missouri, 121; School District v. Estes, 13 Nebraska, 53; State v. Cass Co., 60 Nebraska, 566; United States v. Hill, 120 U. S. 180; United States v. Moore, 95 U. S. 763; United States v. Burlington R. R. Co., 98 U. S. 341.

The city of Omaha, by its legislation and acts during twenty years, has become and is estopped to deny the right of the company operating the plant, to distribute through its system, electric current for power and heat purposes as and to the extent it was doing when the resolution complained of was passed. Omaha St. Ry. Co. v. Omaha, 90 Nebraska, 6; State v. Citizens' St. Ry. Co., 80 Nebraska, 357; State v. Lincoln Street Ry. Co., 80 Nebraska, 333.

The decision in the case brought by the Omaha Electric Light and Power Company cannot affect the decision in this cause, since neither the bondholders nor their trustee. were parties to that litigation. Keokuk & Western Rd. v. Missouri, 152 U. S. 301; Louisville Trust Co. v. Cincinnati, 76 Fed. Rep. 296.

Mr. Benjamin S. Baker, with whom Mr. William C. Lambert, Mr. John A. Rine and Mr. L. J. TePoel, were on the brief, for appellee:

Appellant has not pleaded or proved sufficient to entitle it to maintain the action.

Ordinance 826 was not a perpetual grant to the grantee. Omaha Electric Light Co. v. Omaha, 179 Fed. Rep. 455. No necessity existed for a perpetual grant. Blair v. Chi