tention. It was there held that it must be a very plain provision, indeed, in a contract which would justify the courts in holding that the power to regulate the paving and kind of paving to be used by a street railway in the portion of a street occupied by it; where doubt exists such contracts will be construed against the surrender of such power. In our case, however, the contract is plain, definite, and unequivocal, and the statutory power is equally positive. As was said in State ex rel. Webster v. Superior Court, 67 Wash. 37, 120 Pac. 861, L. R. A. 1915C, 287, Ann. Cas. 1913D, 78, quoting from Home Telephone Co. v. Los Angeles, 211 U. S. 265, 29 Sup. Ct. 50, 53 L. Ed. 176:

long prior thereto had, up to 1892, operated | 215, is cited by respondent to support its conunder a franchise requiring it to pave or macadamize any street upon which it should be located, between the rails and for one foot on each side of the rails on the outside of the rails, and to make and keep the track between and one foot on the outside of the rails as good as the street shall be outside of their tracks and to correspond in surface and improvements with the street outside the track. The franchise was in existence when the paving in question was done, unless repealed by a franchise granted the railway company in 1892 under which it was operating when the work was done. The new franchise was complete and so framed as to cover all features of street railway construction, maintenance, and operation. It was granted to authorize displacement of the old horse-car system by a general electric system, and contained a general repealing clause. The new franchise in general was worded the same as the old one with such changes as made it adaptable to electricity. The provision with reference to paving between the rails, from the old franchise before mentioned, was not, however, carried into the new franchise. The court accordingly held that a subsequent ordinance requiring the street between the rails to be paved with the same material as was the rest of the street was not an impairment of its franchise contract.

ulations •

*

*

"It has been settled by this court that the state may authorize one of its municipal corporations to establish by an inviolable contract the rates to be charged by a public service corporation (or natural person) for a definite term, not grossly unreasonable in point of time, and that the effect of such a contract is to suspend, during the life of the contract, the governmental power of fixing and regulating the rates. Detroit v. Detroit Citizens' St. Ry. Co., 184 U. S. 368, 382 [22 Sup. Ct. 410, 46 L. Ed. 592]; Vicksburg v. Vicksburg Waterworks Co., 206 U. S. 496, 508 [27 Sup. Ct. 762, 51 L. Ed. 1155]. But for the very reason that such a contract has the effect of extinguishing pro its existence and the authority to make it must tanto an undoubted power of government, both clearly and unmistakably appear, and all doubts must be resolved in favor of the continuance of the power."

In State ex rel. Milwaukee v. Milwaukee Elec., etc., Ry. Co., 157 Wis. 121, 147 N. W. If the rule above announced applies to the 232, it was held that, in case of doubt as to matter of fixing rates between a municipality the nature of a provision imposing a duty and a public service concern, it certainly upon a street railway company under a fran- would apply to the matter of constructing chise ordinance enacted pursuant to statute, and maintaining pavement by a public servit is to be construed as a regulation rather ice concern. A number of cases cited by rethan a contract. In that case it appears that spondent have to do with franchise ordinanc es where reservations were expressly made there was a statute already in force at the time the franchise was granted for the use by the grantor to enable it to amend, alter, or change the nature of the franchise or of the street for street railway purposes, pro- rights holden thereunder at any time durviding that "every such road shall ing the life of the franchise. There is no be subject to such reasonable rules and reg- such reservation in question here. It is true as the proper municipal that section 16 of the franchise ordinance exauthorities may by ordinance, from time to pressed a reservation, but only to the followtime, prescribe," and that such a statute af-ing effect: That the city of Olympia reserved fected the construction of an ordinance enacted pursuant thereto to the same extent as if it were expressly written into the ordinance. It was further held in that case that, in regulating the repair and improvement of its streets, a city exercises a legislative function, and it cannot, without express authority from the Legislature to do so, contract away its legislative power. It follows, we think, that, in the absence in this state at the time of the granting of the franchise to appellant of such a statute as was relied upon in the Wisconsin case last cited, that case is not in point. It may be noted that there was a vigorous dissenting opinion by three of the judges of the Supreme Court of Wisconsin to the holding in that case.

the right to adopt and enforce all necessary ordinances "to control the performance of the conditions of the charter, and also of amending, or in any manner altering this charter, having due regard for the vested rights of said Olympia Light & Power Company, and its successors and assigns." It also reserved to itself the power to revoke the franchise if any of the conditions thereof were not complied with. Now, the appellant accepted the franchise and complied therewith by constructing the kind of pavement where the street was paved that the city then required. It is bound by its franchise so to do. It is not bound by its franchise, and in fact the city contracted with it that it should not be bound, to do anything further. The very early and leading case in point upon the mat

19 L. Ed. 594. In that case it appeared that | Rep. 462; State ex rel. Corrigan St. Ry. Co., in May, 1859, the city of Chicago conferred upon a street railway company the right to construct a railway, which franchise was accepted and acted upon, which provided, among other things, that the company

"as respects the grading, paving, macadamizing, filling, or planking of the streets, or parts of the streets, upon which they shall construct their said railways, or any of them, shall keep 8 feet in width along the line of said railway ou all the streets wherever one track is constructed, and 16 feet in width upon the line of said railway where two tracks are constructed, in good repair and condition during all the time to which the privileges hereby granted to said company shall extend, in accordance with whatever order or regulation respecting the ordinary repairs thereof may be adopted by the common council of said city."

It was held by the Supreme Court of the United States that a contract having been entered into between the parties valid at the time by the laws of the state, no decision of the courts of the state subsequently made can impair its obligation, and that the provisions above quoted did not make the company liable for curbing, grading, and paving the streets with an entirely new pavement. The obligation of the company extended to pairs only.

85 Mo. 263, 55 Am. Rep. 361; State v. Mayor, 67 N. J. Law, 199, 50 Atl. 620; Village of Madison v. Traction Co., 235 Ill. 346, 85 N. E. 596; City of Anna v. Northern, 261 Ill. 538, 104 N. E. 171; City of Moline v. Tri-City Ry. Co., 262 Ill. 122, 104 N. E. 271; Enid City Ry. Co. v. City of Enid, 43 Okl. 778, 144 Pac. 617; Harris v. City of Macomb, 213 Ill. 47, 72 N. E. 762; Chicago, etc., Ry. Co. v. Chicago (Ill.) 27 N. E. 926.

[2] There can be no doubt that a municipality in this state can require a street railway company to keep its tracks in a reasonably safe condition for the public safety and welfare under the police power, but that is very different from requiring a street railway company occupying its streets under a franchise contract definite and unambiguous in its terms to pave with certain material and in a certain manner, and afterwards without its consent to pave with other material and at its own expense.

[3] There is no statute in this state giving to cities of the third class the power to require railway companies, that have conre-structed their tracks and are operating their cars thereon, to pave or improve any portion of the street. Without such delegated power the city of Olympia has none. The statute of 1911 (page 441) provides the manner in which such cities shall proceed to improve the streets, and to provide for the payment thereof from the general fund or by special assessment against the property specially benefited.

Sioux City Ry. Co. v. Sioux City, 138 U. S. 98, 11 Sup. Ct. 226, 34 L. Ed. 898, a case cited and relied on very largely by respondent in its brief and in argument, as authority for the proposition that the contract represented by the franchise is not binding, we do not consider as in any way decisive in this case for the reason that there, as in the Wisconsin cases heretofore discussed, there was a provision of the Iowa Code that the charter of the street railway company should at all times be subject to legislative control and might at any time be altered, abridged, or set aside by law, and that the franchise might be regulated, withheld, or subject to restrictions upon the enjoyment thereof. This provision was in force at the time of the granting of the franchise by ordinance of Sioux City which required the railway company to pave the street between the rails. The Legislature, subsequent to the ordinance, passed a law requiring railway companies in such cities to pave one foot outside of the rails, and the city thereupon enacted the ordinance considered in the case cited. It was there held that the reservation of power by the Code that the franchise might be regulated, withheld, or subject to restrictions was a condition of the original grant, and that no contract was impaired where the company accepted its corporate power subject to such reservation. Other cases analogous and supporting the text as quoted from Joyce on Franchises, supra, which have been examined, are: Coast Line R. Co. v. City of Savannah (C. C.) 30 Fed. 646; Parmelee v. City of Chicago, 60 Ill. 267; Billings v. Chicago, 167 Ill. 337, 47 N. E. 731; Western Paving Co. v. Railway Co., 128 Ind. 525, 26 N. E. 188, 28 N. E. 88, 10 L. R. A. 770, 25 Am. St.

We have repeatedly held that street railways cannot be assessed for special improvements under statutes which provide that lots, tracts, and parcels of land and other property within such improvement district which shall be specially benefited by the improvement shall be especially assessed therefor, for the reason that the occupancy of such streets by such railways under franchise is not property, but merely an easement. Seattle v. Seattle Electric Co., 48 Wash. 599, 94 Pac. 194, 15 L. R. A. (N. S.) 486; In re Third, Fourth and Fifth Avenues, 49 Wash. 109, 94 Pac. 1075, 95 Pac. 862; In re Third Avenue, 54 Wash. 460, 103 Pac. 807.

[4] Under the franchise here in question we are agreed the respondent has no such power or right as it seeks to assert.

[5] As to pavement of the railway between Puget street and Central street, which respondent contends can be required by reason of the ordinance of May 2, 1904, No. 816, heretofore mentioned, we do not think that the requirement therein to maintain such pavement as shall be constructed by the city is equivalent to a requirement to construct such pavement. There are cases cited by respondent as tending to support its view that "maintain" includes "construct," as Hoar v. Hennessy, 29 Mont. 253, 74 Pac. 452, where a statute provided that:

"Coterminous owners are mutually bound equally to maintain: (1) The boundaries and

(2) The fences be- | operation of the railway. A reasonable construction, therefore, of the word "maintain," as contained in section 3 of Ordinance No. 816, is that it does not mean construct and maintain, but simply maintain after construction.

was in no wise a party to the misappropriation. This is true, even though the misappropriation consisted of advancements to Eggers. No such advancements could be made without the consent of Olson, or without the consent of the agent who was acting for him. In either event the loss caused thereby is Olson's, in the absence of a showing that Schulz also consented, of which there is nothing in the record.

the market for sale, and when sold that the
proceeds should be applied, first to the pay-
ment of the amount due Olson, and next to
the payment of the amount due Schulz-
Olson agreeing to release the lots as they
were sold "upon payment of pro rata share
total indebtedness" to him. On November 14,
1907, pursuant to the agreement, Eggers
deeded the property to Schulz, Schulz and
Eggers gave a note to Olson, and Schulz ex-
ecuted a mortgage to Olson to secure the
same. Later the property was platted into
lots and placed on the market for sale. On
January 22, 1908, Olson, to facilitate the
giving of releases, executed a power of at-
torney to R. H. Lund, authorizing and em-
powering Lund, as his true and lawful at-
torney in fact, to receive and receipt for all | WICK, JJ., concur.
moneys due and payable upon the note
executed to him by Schulz and Eggers, and to
execute releases and satisfactions covering
the property described in the mortgage or
any part thereof.

The judgment against Schulz is reversed, and the cause remanded, with instructions to enter a judgment to the effect that the plaintiff take nothing by his action against him.

MORRIS, C. J., and MOUNT, and CHAD

(91 Wash. 504)

POST v. TAMM. (No. 12922.) (Supreme Court of Washington. June 16, 1916.)

1. EVIDENCE 441(11)-PAROL EVIDENCE

BILLS AND NOTES.

In the absence of fraud or mistake, a contemporaneous oral agreement limiting or exempting the maker of a note from liability cannot be shown as a defense to an action upon the note.

[Ed. Note. For other cases, see Evidence, Cent. Dig. §§ 1799-1812, 2043, 2044; Dec. Dig. 441(11).]

2. EVIDENCE 441(11)-PAROL EVIDENCEBILLS AND NOTES CONDITIONS SUBSEQUENT.

A contemporaneous oral agreement providing for the surrender of the note upon a condition subsequent cannot be shown as a defense to action upon the note.

[Ed. Note.-For other cases, see Evidence, Cent. Dig. §§ 1799-1812, 2043, 2044; Dec. Dig. 441(11).]

3. APPEAL AND ERROR 843(4)-REVIEW AMENDMENT-IMMATERIAL MATTERS.

Subsequently all of the lots, with the exception of two, were sold at prices ranging from $350 to $500; the total amount realized therefrom being about $8,000. The sales were made by a real estate agent, and were closed through the offices of Lund & Lund, who collected the money received from the sales, and procured the execution of the releases for the property sold. None of the money paid for the property was received by Schulz, nor did he have anything to do with the sales. His only part in the transaction was to execute deeds and contracts of sale to the property when he was called upon so to do from time to time; all of such instruments being signed and left by him at the offices of Lund & Lund. Of the moneys received from the sales of the property, but $2,820 was paid on the note of Olson. What became of the balance the record does not disclose. Some of it was paid to Eggers, but how much is not shown. Some was paid in costs and commissions, but neither is this amount shown. It is reasonably clear, however, that Lund received much more than enough to satisfy the note of Olson. The last two lots mentioned were applied in satisfaction of a debt due from Eggers to the Scandinavian-American Bank of Tacoma. The transfers necessary to accomplish this purpose were made by Schulz in the usual manner at the office of the Lunds, but his testimony is to the effect that he did not know the purposes to which they were ap-ley, Judge. plied.

Where evidence is not excluded because not

within the pleadings, whether appellant was al-
lowed to amend his pleadings is immaterial.
[Ed. Note.-For other cases, see Appeal and
Error, Cent. Dig. § 3336; Dec. Dig. 843
(4).]

4. BILLS AND NOTES 487

PLEADING

AMENDMENT CONDITION OF CAUse. In suit on a promissory note, refusal of the trial court, after case had been tried and defendant had rested and the court had anpleading new facts showing failure of considernounced its ruling, to allow amended answer ation was not error.

487.]

[Ed. Note.-For other cases, see Bills and Notes, Cent. Dig. § 1582; Dec. Dig. Department 2. Appeal from Superior Court, Snohomish County; Augustus Braw

Action by Frances Post against Frederick Tamm. From a judgment for plaintiff, defendant appeals. Affirmed.

E. C. Dailey and Clifford Newton, both of Everett, for appellant. Sherwood & Mansfield, of Everett, for respondent.

On this record we cannot conclude that there is any existing liability against Schulz. R. H. Lund was the agent of Olson, not the agent of Schulz, and as between Olson and Schulz payments to Lund were payments to Olson. If, therefore, Lund misappropriated the funds, the loss must fall upon Olson, MAIN, J. This action was brought upon whose agent Lund was, not upon Schulz, who a promissory note. The issues were framed

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

by the complaint and seventh amended an- [to the rulings of the trial court in settling swer, and the reply thereto. The complaint the pleadings. Whether the rulings upon prayed for judgment upon the note. The answer prayed for a rescission. By order of the court the cause was tried to a jury acting in an advisory capacity. At the conclusion of the defendant's evidence the plaintiff moved for a directed verdict. This motion was sustained, and a verdict was returned under the direction of the court. From the judgment entered the defendant appeals.

PARKER, J. The plaintiff, First National Bank of Monroe, seeks a reduction of taxes assessed and levied upon its capital stock for the year 1913 by the taxing officers of [3] Some reference is made in the briefs Snohomish county. Having tendered to the