1. Under the power reserved by the Arkansas Constitution to
alter any corporate charter, the legislature may require a street
railway which has surrendered its franchise for an indeterminate
permit to pave the streets between its rails. P.
274 U. S.
389.
2. Such exercise of a reserved power to amend corporate charters
by a requirement which might have been in the original charter and
has some reasonable relation to the object of the grant and the
duty of the state to maintain the highways is consistent with the
Due Process Clause of the Fourteenth Amendment. P.
274 U. S.
390.
3. The imposition of burdens, otherwise legitimate, upon a
public service company cannot be held invalid as confiscatory
because it is operating at rates which do not allow an adequate
return. P.
274 U. S.
390.
Page 274 U. S. 388
4. A state law requiring the street railway in a particular
municipality to do paving not required of other street railway
elsewhere in the state not shown to be similar to it with respect
to the location, use, and physical character of the street occupied
by them is not a denial of the equal protection of the laws. P.
274 U.S. 391.
5. The Fourteenth Amendment does not require the uniform
application of legislation to objects that are different where
those differences may be made the rational basis of legislative
discrimination. P.
274 U.S.
391.
169 Ark. 690 affirmed.
Error to a judgment of the Supreme Court of Arkansas which
affirmed a judgment recovered by the Improvement Paving District in
its action against the Traction Company. The judgment was for the
amount expended by the plaintiff for street paving which defendant
had declined to perform though required by statute.
MR. JUSTICE STONE delivered the opinion of the Court.
Defendant in error, a board of improvement incorporated by the
State of Arkansas, brought suit in the Circuit Court of Sebastian
County to recover the cost of paving a part of certain streets in
Ft. Smith, Arkansas, occupied by the street railway of plaintiff in
error. Plaintiff in error originally operated its railway under a
franchise requiring it to do similar paving and limiting it to a
maximum fare of 5 cents per passenger. Availing of the permission
granted by No. 571 of the Acts of Arkansas 1919, amended by No. 124
of 1921, the company had surrendered in that year its franchise for
an indeterminate permit to operate its road. The permit did not fix
a maximum fare or require the railway to pave
Page 274 U. S. 389
parts of the streets occupied by its tracks, but subjected it to
the regulatory powers of a utilities commission.
In 1923, the legislature passed a statute, Acts of Arkansas
1923, No. 680, requiring plaintiff in error, under certain
conditions which have occurred, to pave the streets between its
rails to the end of the ties. In the event of its failure to do so,
the improvement district was authorized to do the paving at the
expense of the railway. The act is in form a general statute, but,
by reason of provisions making it applicable to street railways
operating under indeterminate permits in cities of the first class
other than in Miller County, it in fact applied to plaintiff in
error alone.
Plaintiff in error having failed to do the required paving, the
board completed the improvement and brought the present suit. The
company by answer set up that the statutory requirements of paving
impaired the obligation of its contract with the state in violation
of article I, § 10 of the federal Constitution, and deprived it of
property without of the laws guaranteed by the Fourteenth of the
laws guaranteed by the Fourteenth Amendment. The judgment of the
circuit court for defendant in error was affirmed by the supreme
court of the state. 169 Ark. 690. The case is here on writ of
error. Judicial Code, § 237, as amended.
It is urged that the acceptance of the indeterminate permit
under the act of 1919 constituted a contract between the railway
and the state by which the state bound itself not to impose any
added burdens except in the exercise of its police power; that the
requirement for street paving was not an exercise of the police
power, and was therefore a forbidden impairment of the contract.
This contention assumes that the permit exempted the railway from
paving costs. But no such exemption appears in the permit.
Provisions of this character are not lightly to be read into a
contract between a state and a
Page 274 U. S. 390
public utility.
Durham Public Service Co. v. Durham,
261 U. S. 149,
261 U. S. 152.
Even granting the assumption, the case of
Fair Haven R. Co. v.
New Haven, 203 U. S. 379, is
a complete answer. There, this Court held that a general law
imposing on a street railway the duty to repair so much of the
streets as was occupied by its tracks was an exercise of the power
reserved to the state to alter, amend, or repeal the original
charter, and was not an impairment of the obligation of contract.
That case controls here, since § 6, Art. XII, of the Constitution
of Arkansas, in force at the time when plaintiff relinquished its
franchise and accepted the permit, reserved to the legislature the
power to alter any corporate charter.
See also Sioux City
Street Ry. v. Sioux City, 138 U. S. 98.
Assuming the exercise of the power of amendment is subject to
the limitation of the due process clause of the Fourteenth
Amendment,
Shields v. Ohio, 95 U. S.
319,
95 U. S. 324;
Stanislaus County v. San Joaquin Co., 192 U.
S. 201,
192 U. S. 213,
that limitation, as was held in
Fair Haven R. Co. v. New Haven,
supra, is not transcended by a requirement which might have
been included in the original charter and which has some reasonable
relation to the object of the grant and to the duty of the state to
maintain its highways.
Cf. Southern Wisconsin Ry. v.
Madison, 240 U. S. 457;
Great Northern Ry. v. State ex rel. Clara City,
246 U. S. 434.
It is said that the act, in its application, is confiscatory
because plaintiff in error must bear this expense although it is
losing money in the operation of its road at the rates for service
now prevailing. But the imposition of burdens, otherwise
legitimate, upon a public service company cannot be held invalid as
confiscatory because the permitted rate does not allow an adequate
return.
People ex rel. Woodhaven Gaslight Co. v. Public Service
Commission, 269 U. S. 244;
Milwaukee Elec. Ry. v. State
ex rel. Milwaukee, 252 U.S.
Page 274 U. S. 391
100,
252 U. S. 105.
Whether the rate is confiscatory is not before us.
It is also contended that, as there are other street railways in
the state, some operating under franchises and one under an
indeterminate permit, which are not required to do street paving,
the challenged act denies the equal protection of the laws. The
Fourteenth Amendment does not prohibit legislation merely because
it is special or limited in its application to a particular
geographical or political subdivision of the state.
See
Missouri v. Lewis, 101 U. S. 22,
101 U. S. 31;
Missouri Ry. v. Mackey, 127 U. S. 205,
127 U. S. 209;
Mason v. Missouri, 179 U. S. 328;
Mallett v. North Carolina, 181 U.
S. 589;
Hayes v. Missouri, 120 U. S.
68.
Cf. Walston v. Nevin, 128 U.
S. 578;
Williams v. Eggleston, 170 U.
S. 304;
Condon v. Maloney, 108 Tenn. 82;
Owen v. Sioux City, 91 Iowa 190;
Strange v.
Board, 173 Ind. 640;
Tenement House Dept. v.
Moeschen, 179 N.Y. 325;
People ex rel. Armstrong v.
Warden, 183 N.Y. 223;
State ex rel. Wixon v.
Cleveland, 164 Wis. 189;
Davis v. State, 68 Ala. 58.
But cf. state ex rel. Johnson v. Chicago, Burlington &
Quincy R. Co., 195 Mo. 228. If a state may delegate to a
municipality power to require paving by a street railway located
within its limits,
Durham Public Service Co. v. Durham,
supra, we perceive no reason why it may not, by a legislative
act, make a like requirement limited to a single municipality.
Nor need we cite authority for the proposition that the
Fourteenth Amendment does not require the uniform application of
legislation to objects that are different, where those differences
may be made the rational basis of legislative discrimination. There
is nothing in the record now before us to show that there is any
similarity of plaintiff's road to others in the state with respect
to many considerations which might reasonably determine which roads
should be required to do street paving. Differences
Page 274 U. S. 392
in location, use, and physical character of the streets, the
extent to which paving has been completed and local methods of
assessing benefits for street paving, are some of the
considerations which might reasonably move the legislature to
require street paving of one road or several and not of others.
Cf. New York ex rel. Metropolitan Street Ry. v. State Board of
Tax Comm'rs, 199 U. S. 1,
199 U. S. 46-47;
N.Y. N.H. & H.R. Co. v. New York, 165 U.
S. 628;
Erb v. Morasch, 177 U.
S. 584,
177 U. S. 586;
Savannah, Thunderbolt Ry. v. Savannah, 198 U.
S. 392. We may not assume in the absence of proof that
such differences do not exist.
Erb v. Morasch, supra; Middleton
v. Texas Power & Light Co., 249 U.
S. 152,
249 U. S. 158;
Swiss Oil Corp. v. Shanks, 273 U.
S. 407.
There are no facts disclosed by the record which would enable us
to say that the legislative action with which we are here concerned
was necessarily arbitrary or unreasonable, or justify us in
overruling the judgment of the state court that it was reasonable.
Durham Public Service Co. v. Durham, supra, 261 U. S.
154.
Judgment affirmed.