When it is claimed that the obligation of a contract is impaired
by a state law, this Court inclines to accept the construction
placed upon the contract by the supreme court of the state if the
matter is fairly in doubt. P. 252 U. S.
A street railway franchise declared it the duty of the grantee
"at all times to keep in good repair the roadway between the
rails and for one foot on the outside of each rail as laid, and the
space between the two inside rails of its double tracks with the
same material as the city shall have last used to pave or repave
these spaces and the street previous to such repairs,"
unless the company and the city agreed on some other material.
In the absence of such an agreement, held
company's obligation extended to the use of materials
Page 252 U. S. 101
adopted by the city in repaving the rest of the street which
were not the same as the city had last used in repaving between and
near the rails. P. 252 U. S.
Where a street railway company, by franchise contract with a
city, undertakes to repave between and next its rails with such
material as the city used in repaving the rest of the street, and
the city's regulatory power in respect of paving has not been
precluded by contract, it is for the city to determine in the first
instance what kind of pavement the public necessity and convenience
in such a case that the court could not say
that it was inherently arbitrary and unreasonable to require the
company to install asphalt on a concrete foundation which the city
had adopted to replace macadam and which was more expensive. P.
252 U. S.
A street railway company cannot escape a contractual duty to
repave between and next its tracks upon the ground that the expense
will reduce its income below six percent, claimed to be not a
reasonable return upon property used and useful in its business.
The Fourteenth Amendment, in guaranteeing equal protection of
the laws, does not assure uniformity of judicial decisions, and
there is clearly no ground for the contention that such protection
is denied because the state court, after a judgment complained of,
rendered another, claimed to be irreconcilable with it on a matter
of law, in a suit between strangers. P. 252 U. S. 105
1 Wall. 175, and Muhlker v. New York
& Harlem R. Co., 197 U. S. 544
166 Wis. 163 affirmed.
The case is stated in the opinion.
MR. JUSTICE BRANDEIS delivered the opinion of the Court.
A petition for a writ of mandamus was brought by the City of
Milwaukee in a lower court of the State of Wisconsin
Page 252 U. S. 102
to compel the Milwaukee Electric Railway & Light Company to
pave at its own expense with asphalt upon a concrete foundation
that portion of Centre Street, called the railway zone, which lies
between the tracks and for one foot outside of them. The paving had
been specifically ordered on November 8, 1915, by a city ordinance
after the city had laid such a pavement on all of the street except
the railway zone. Theretofore, the street had been paved from curb
to curb with macadam. The company admitted that the railway zone
was in need of repaving at that time, but it insisted that, under
an ordinance of January 2, 1900, which constituted its franchise to
lay tracks on Centre street, it was entitled to repair with
macadam, and could not be compelled to repave with asphalt.
The case was heard in the trial court on a demurrer to the
amended return. The demurrer was sustained, and the decision was
affirmed by the Supreme Court. 165 Wis. 230. The company having
failed after remittitur to file an amended return or take further
action, judgment was entered by the trial court awarding a
peremptory writ of mandamus directing it to pave the railway zone
as directed in the ordinance. This judgment also was affirmed by
the Supreme Court. 166 Wis. 163. The case comes here on writ of
error under § 237 of the Judicial Code. The single question
presented is whether the ordinance of November 8, 1915, is void
either under § 10 of Article I of the federal Constitution, as
impairing contract rights of the company, or under the Fourteenth
Amendment as depriving it of property without due process of law.
The ordinance of January 2, 1900, which is the contract alleged to
be impaired by the later ordinance, provides as follows:
"Sec. 2. . . . It shall be the duty of said railway company at
all times to keep in good repair the roadway between the rails and
for one foot on the outside of each rail
Page 252 U. S. 103
as laid, and the space between the two inside rails of its
double tracks with the same material as the city shall have last
used to pave or repave these spaces and the street previous to such
repairs, unless the railway company and the board of public works
of said city shall agree upon some other material, and said company
shall then use the material agreed upon. . . ."
The company contends that, when this section is read in
connection with § 9, it clearly appears that the obligation to
repave cannot be imposed.
The supreme court of the state held that the
language of § 2 was not distinguishable from that involved in
earlier cases in which it had held that a duty to keep "in proper
repair" without qualification was broad enough to require repaving
and repairing with the same material with which the street was
repaved. When this Court is called upon to decide whether state
legislation impairs the obligation of a contract, it must determine
for itself whether there is a contract, and what its obligation is,
as well as whether the obligation has been impaired. Detroit
United Railway v. Detroit, 242 U. S. 238
242 U. S. 249
But, as stated in Southern Wisconsin Railway v. Madison,
240 U. S. 457
240 U. S.
"the mere fact that, without the state decision, we might have
hesitated is not enough to lead us to overrule that decision upon a
fairly doubtful point."
Among the cases relied upon by the state court is State ex
rel. Milwaukee v. Milwaukee Electric Railway & Light Co.,
151 Wis. 520, which was cited by this Court in the Madison
case (p. 240 U. S.
), as a "persuasive decision that the obligation to
keep the space in proper repair' . . . extends to" repaving the
railway zone with asphalt when the rest of the street is being
repaved with that material. But the company points to the clause in
the ordinance of January 2, 1900, which provides for repair "with
the same material as the city shall have last used to pave or
repair these spaces and the streets,"
Page 252 U. S.
and insists that its obligation is, in any event, limited to
repaving with such material as the city had last used between the
rails. This would put upon the city the burden of paving the whole
street in case of any innovation in paving save by agreement of the
company and the city. It is not a reasonable construction of the
Granted the duty to repave, and to repave with
material other than that last used in the space between the tracks,
was it reasonable for the city to require that the pavement be of
asphalt upon a concrete foundation -- a pavement which involved
larger expense? The city alleged in its petition that the use of
macadam by the railway was unreasonable, and that it is physically
impossible to make a water-tight bond between the water-bound
macadam and the asphalt so as to prevent water from seeping through
under the asphalt, causing it to deteriorate in warm weather and to
be lifted by freezing in cold weather. The allegation was not
expressly admitted by the return, and must be deemed to have been
covered by its general denial of all allegations not expressly
admitted, but neither party took steps to have this formal issue
disposed of. The case differs, therefore, in this respect from the
case, where there was an express finding that
repavement of the railway zone with stone would have been
unsuitable when the rest of the street was of asphalt (p.
240 U. S. 462
The difference is not material. As the ordinance did not, as a
matter of contract, preclude regulation in respect to paving, it
was for the city to determine, in the first instance, what the
public necessity and convenience demanded. Compare Fair Haven
& Westville Railroad Co. v. New Haven, 203 U.
. We cannot say that its requirement that the
railway zone be paved like the rest of the street with asphalt upon
a concrete foundation was inherently arbitrary or unreasonable.
The company insists that the ordinance of
Page 252 U. S. 105
November 8, 1915, is unreasonable and void also for an entirely
different reason. It alleges in its return that, for a long time
prior to that date, the earnings from its street railway system in
Milwaukee were considerably under six percent of the value of the
property used and useful in the business, and were less than a
reasonable return. It contends that this allegation was admitted by
the demurrer, and that to impose upon the company the additional
burden of paving with asphalt will reduce its income below a
reasonable return on the investment, and thus deprive it of its
property in violation of the Fourteenth Amendment. The supreme
court of the state answered the contention by saying: "The company
can at any time apply to the Railroad Commission and have the rate
made reasonable." The financial condition of a public service
corporation is a fact properly to be considered when determining
the reasonableness of an order directing an unremunerative
extension of facilities or forbidding their abandonment.
Mississippi Railroad Commission v. Mobile & Ohio R.
Co., 244 U. S. 388
New York & Queen's Gas Co. v. McCall, 245 U.
, 245 U. S. 350
But there is no warrant in law for the contention that merely
because its business fails to earn full six percent upon the value
of the property used, the company can escape either obligations
voluntarily assumed or burdens imposed in the ordinary exercise of
the police power. Compare Missouri Pacific Railway Co. v.
Kansas, 216 U. S. 262
216 U. S. 279
Chicago, Rock Island & Pacific Railway v. Arkansas,
219 U. S. 453
Missouri Pacific Railway v. Omaha, 235 U.
The company also insists that the ordinance is
void because it denies equal protection of the laws. The contention
rests upon the fact that, since entry of the judgment below, the
supreme court of the state has decided Superior v. Duluth
Street Railway Co.,
166 Wis. 487, which the company alleges is
not reconcilable with
Page 252 U. S. 106
its decision in this case. The similarity of the ordinances and
conditions in the two cases does not seem to us as clear as is
asserted. But, however that may be, the Fourteenth Amendment does
not, in guaranteeing equal protection of the laws, assure
uniformity of judicial decisions, Backus v. Fort Street Union
Depot Co., 169 U. S. 557
169 U. S. 569
any more than in guaranteeing due process it assures immunity from
judicial error, Central Land Co. v. Laidley, 159 U.
; Tracy v. Ginsberg, 205 U.
. Unlike Gelpcke v.
1 Wall. 175, and Muhlker v. New
York, 197 U. S. 544
where protection was afforded to rights acquired on the faith of
decisions later overruled, the company seeks here to base rights on
a later decision between strangers which, it alleges, is
irreconcilable on a matter of law with a decision theretofore
rendered against it. The contention is clearly unsound.
As we conclude that there was a contractual duty to repave
arising from the acceptance of the franchise, we have no occasion
to consider whether there was, as contended, also a statutory duty
to do so arising under § 1862, Wisconsin Statutes, which provides
that street railways shall "be subject to such reasonable rules and
regulations . . . as the proper municipal authorities may by
ordinance, from time to time prescribe."
MR. JUSTICE PITNEY and MR. JUSTICE McREYNOLDS dissent.