Court: Arizona Supreme Court; October 30, 1963; Arizona; State Supreme Court
Southern Pacific Company initiated a lawsuit against Pima County for breach of contract, resulting in a summary judgment favoring the Railroad for $6,935.65. The contract, established on April 2, 1957, allowed the County to utilize a right-of-way for a new highway crossing, with the Railroad agreeing to prepare the tracks and install two flashing signals. In return, the County committed to reimburse the Railroad for all construction costs. After the County petitioned, the Corporation Commission established the crossing but denied the County's authority to allocate public funds for the flashing signals. The Railroad fulfilled its contractual obligations but faced non-payment from the County based on the Commission's order.
The central legal question is whether the County could validly agree to reimburse the Railroad for safety installations at the crossing. The County argues that the contract is ultra vires and unenforceable despite the Railroad’s full performance. Conversely, the Railroad asserts that the County possesses the statutory authority to enter into such agreements. The County’s contractual powers are broad but limited by statutory provisions, particularly those granting exclusive authority to the Corporation Commission over crossings. Citing A.R.S. 40-337, the text emphasizes that public funds cannot be used for signal installations without Commission permission. Previous case law, specifically Maricopa County v. Corporation Commission of Arizona, reinforces the principle that the financial responsibility for signal installations rests solely with the railroad company, thus indicating that the County lacked authority to contractually obligate itself to reimburse the Railroad for those costs.
The railroad company has an implied duty to cover all expenses related to its operations, as established by relevant statutes. Legislative intent clearly places this financial burden on the railroad. Historical case law, such as Chicago, B. Q. R. Co. v. Chicago (1896), supports that expenses incurred for public safety measures at crossings, including gates and flagmen, are considered part of the railroad's responsibilities. Arizona law mandates the provision of safe highways, affirming that railroads, as public highways, are subject to public control and legislative oversight despite being private property. The Corporation Commission has the authority to mandate safety measures, and the costs associated with these measures must be borne by the railroad, not the public. An agreement by the County to fund flashing signals at a crossing is invalid, as they lack the power to use public funds for this purpose. The court's ruling is reversed, with concurring opinions from several justices. Additionally, a 1959 legislative amendment allowing cost-sharing for safety installations does not apply retroactively to this case.
