San Antonio v. San Antonio Pub. Svc. Co. - 255 U.S. 547 (1921)
U.S. Supreme Court
San Antonio v. San Antonio Pub. Svc. Co., 255 U.S. 547 (1921)
City of San Antonio v. San Antonio Public Service Company
Argued March 23, 1921
Decided April 11, 1921
255 U.S. 547
1. The district court has jurisdiction of a suit by a street railway company to enjoin a city from requiring it to accept an unremunerative rate of fare, and has power to determine whether the right to enforce the rate in question is secured to the city by contract. P. 255 U. S. 555.
2. In view of a provision of the Texas Constitution (Art. I, 17) that
"no irrevocable or uncontrollable grant of special privileges or immunities shall be made, but all privileges and franchises granted by the legislature, or created under its authority shall be subject to the control thereof,"
held that an ordinance of the City of San Antonio which extended the rights, privileges, and franchises of certain street railway companies and fixed the rate of fare should not be construed and could not operate as a contract between them and the city binding them to that rate after it became unremunerative and in effect confiscatory. P. 255 U. S. 555.
3. Held also that, even if the city gained power to make such contracts through a later amendment of the state constitution, the existing ordinance was not thereby converted, for the future, into a contract. P. 255 U. S. 555.
4. A maximum fare limitation in a street railway franchise, granted by a city which was vested with the rate regulating power and forbidden to restrict it by contract, should be taken as in exercise of the regulating power, and not as imposing a unilateral contract or condition upon the grantee to observe the limitation even though it become confiscatory, and especially so where the case exhibits no actual intention of the parties to bind the grantee and not the city. P. 255 U. S. 556.
5. Where a city consented to a consolidation of a gas and electric with a street railway corporation upon condition that their existing obligations should be preserved, and where the obligation of the street railway to collect no more than a fare fixed by ordinance arose under and had long been attributed in practice to the city's regulating
power, and that power was expressly reserved as to gas and electricity in the ordinance permitting the consolidation, held that a contract binding the consolidated company to the fare limitation after it became confiscatory could not be implied. P. 255 U. S. 556.
This was a suit by the appellee to enjoin the appellants from enforcing an ordinance limiting the fare chargeable on its streetcar lines to an amount which had ceased to yield adequate returns and had become confiscatory. The court below overruled a motion to dismiss the bill (257 F. 467) and, on final hearing, granted the relief prayed. The facts are given in the opinion.