Case ID: la_145/html/0179-01.html
Source: Caselaw Access Project
Author: {"author": "O’NIELL, J. MONROE, C. J. SOMMERVILLE, J. \n      O’NIELL, J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

(82 South. 81)
    No. 23343.
    BLACK et al. v. NEW ORLEANS RY. & LIGHT CO. et al.
    (Feb. 3, 1919.
    On Motion to Vacate Order Making Receiver Party to Appeal, March 14, 1919. On the Merits, May 5, 1919.)
    On Motion to Dismiss Appeal.
    
      (Syllabus by Editorial Staff.)
    
    1. Courts <&wkey;224(ll) — Louisiana Supreme Court — Appellate Jurisdiction — Amount.
    An appeal by plaintiffs, four resident taxpayers of city of New Orleans, from rejection of their suit against city and a street railway company to enjoin collection of an increased fare authorized by ordinance, involving less than $2,000 so far as plaintiffs were personally concerned, but more than that amount so far as defendant company was concerned, involved over $2,000, and was properly taken to Supreme Court.
    2. Appeal and Error <&wkey;71(3) — Appealable Orders and Judgments — Denial op Injunction.
    In a suit by four resident taxpayers of city of New Orleans against the city and a street railway company, to enjoin collection of increased fares authorized by ordinance on ground of unconstitutionality or illegality of the ordinance, wherein defendants, without denying facts alleged in petition, disputed plaintiffs’ conclusion of law, a judgment which, if affirmed, would put an end to the suit, entitled plaintiffs to an appeal.
    3. Injunction &wkey;>146 — Plea of No Cause of Action.
    A defendant, in a suit for no other relief than an injunction, may plead, in answer to a rule to show cause why a preliminary injunction should not issue, that petition does not disclose a cause of action for an injunction, and thus put an end to suit, if it is not founded on law.
    On Motion to Vacate Order Making Receiver Party to Appeal.
    
      (Syllabus by the Court.)
    
    4. Receivers <&wkey;174(5) — Order of United States District Court — Jurisdiction of State Court — Receiver as Party.
    When, by an order of the District Court of the United States appointing a receiver to a local corporation, the receiver is, in express terms, authorized to defend all pending suits against such corporation, and, in a suit of that character, pending, on appeal, this court orders that he be made a party defendant, and the order is duly served, with citation to the receiver to appear and defend, within the delay fixed by law, the jurisdiction, thus acquired by this court, will not thereafter be ousted by reason of a motion, filed by the receiver, to rescind the order last mentioned, and based upon the averment that he cannot legally be made party to such suit without the consent of the court by which he was appointed; nor will an order of that court (made long after the filing of the motion to rescind and after the expiration of the delay allowed by the order of this court) authorizing him to except to the jurisdiction, when sought to be made a party defendant in such suits, be construed as intended to apply to the particular suit in question, in which he had already been impleaded, as a necessary party at a time when he possessed the authority of the appointing court to appear and defend it.
    On the Merits.
    
      (Additional Syllabus by Editorial Staff.)
    
    5. Appeal and Error &wkey;>878(3) — Exception by Party Not Appealing — Review.
    In a taxpayers’ suit against a city and a street railway company to enjoin the collection of increased fares authorized by ordinance, the railway’s exception to the sufficiency of plaintiffs’ petition, after a judgment rejecting plaintiffs’ demand, was final as to the railway, where it did not answer plaintiffs’ appeal, and the ruling of the court below will not be reviewed.
    6. Municipal Corporations <&wkey;1000(5) — Remedies of Taxpayers — Injunction— Ordinance Raising Street Railroad Fares.
    Contracts between a city and a street railway permitting an increase in fares as a war measure for a limited time, at the suggestion of national authorities, to avoid receivership, etc., were made for the public good, so that city taxpayers, not alleging any vested right or interest in the contracts, and not alleging that ordinance was unreasonable or in bad faith, or that their taxes would be thereby increased, and not referring to any law forbidding city to modify contract, had no interest to sue to enjoin collection of increased fares, and suit against city would be dismissed, in view of Code Prac. art. 15.
    7. Municipal Corporations <&wkey;987 — Remedies of Taxpayers — Ordinance Raising Fares — Injunction.
    The putting into effect of a modification of contract between city of New Orleans and a street railway, permitting a temporary increase of fares, before 10 days after adoption of ordinance, was permitted by city charter (Act No. 159 of 1912, § 35), and, where 10 days had passed since ordinance was adopted, the property rights of resident taxpayers were not affected by such action, even if irregular.
    8. Municipal Corporations <&wkey;870 — Ordinance — Increase of Street Railway Fares — Constitutionality.
    The action of the city of New Orleans in authorizing by ordinance a temporary increase of street railway fares, not releasing or extinguishing an indebtedness, liability, or obligation of a street railway company to the municipality, but having the effect of increasing the amounts to become due the city by increasing company’s revenues, of which city receives a certain percentage, did' not violate Const, art. 59, as to release of debts to municipalities.
    9. Constitutional Law <&wkey;135 — Impairment of Obligation of Contracts — Privilege.
    Contracts granting privileges, such as contracts between a city and a street railway company under express legislative authority and under police power of state and city, are always within control of state to change, modify, or revoke, so that increase in street railway’s fares, authorized by ordinance, does not impair the obligation of contracts, in violation of Const. La. art. 166, or Const. U. S. art. 1, § 10.
    
      10. Municipal Corporations <&wkey;688 — Privileges in Streets — Grant — Modification of Privilege.
    The charter of the city of New Orleans (Act No. 159 of 1912, §§ 12, 28, 29) authorizes the city to modify privilege granted by it for use of street by street railroads, etc., especially with the consent of the other party.
    11. Municipal Corporations <&wkey;688 —Contract with Street Railway — Power to Modify — Charter.
    Charter of City of New Orleans (Act No. 159 of 1912, § 1), giving the city all powers and functions which under Constitution have been or could be granted to any city, authorized the city to modify its contracts, granting privileges to street railway companies, with the consent of the other parties to such contracts.
    12. Carriers <&wkey;12(9) — Rates — Increase-Contracts — Public Necessity.
    A city’s contract with a street railway, to whom it has granted privilege of operating in its streets, etc., is subject to modification by an ordinance authorizing an increase in car fare, when required by public welfare, -such as war conditions increasing the cost of service and necessitating higher rates.
    O’Niell, J., dissenting in part.
    Appeal from Civil District Court, Parish of Orleans; Hugh C. Cage, Judge.
    Suit for injunction by Wilbert Black and three others, resident taxpayers of New Orleans, against New Orleans Railway & Light Company and the city of New Orleans. Preliminary injunction denied, and plaintiffs’ demand rejected, and they appeal.
    Motion of defendant company to dismiss appeal denied, motion of company’s federal receiver to vacate order making him a party to the appeal denied, and judgment affirmed as to the New Orleans Railway & Light Company, and reversed as to the city of New Orleans, and judgment rendered in its favor dismissing the suit at plaintiffs’ cost.
    L. E. Hall and Paul A. Sompayrac, both of New Orleans, for appellants.
    Farrar, Goldberg & Dufour, of New Orleans, for respondent J. D. O’Keefe, Receiver New Orleans Ry. & Light Co.
    I. D. Moore, City Atty., John F. C. Waldo, and John J. Reilley, Asst. City Attys., all of New Orleans, for appellee City' of New Orleans.
   On Motion to Dismiss Appeal.

O’NIELL, J.

This suit was brought by four resident taxpayers of New Orleans against the city and the street railway company to prevent by injunction the collection of an increase in ear fare from five to six cents.

The allegations on which the injunction was demanded, stated broadly, were that the railway company was bound by stipulations in its franchise contract with the city not to charge more than five cents fare, and that a recent municipal ordinance purporting to authorize the increased fare was, for reasons stated in plaintiffs’ petition, unconstitutional, illegal, null, and without effect. Plaintiffs alleged that the amount in dispute or at issue in the case largely exceeded $20,000. The allegation was not disputed, nor was any proof offered to support it, beyond the affidavit of one of the plaintiffs attesting to the truth of all of the allegations of the petition.

The prayer of the petition was that a preliminary injunction should issue to prevent the collection of the excess fare, and, after due proceedings, that the municipal ordinance purporting to authorize the collection should be adjudged unconstitutional, illegal and null, and that the injunction should be made perpetual.

The judge issued a rule ordering the defendants to show cause why the preliminary injunction should not issue.

The defendants pleaded that the plaintiff^ had no right of action, that the petition disclosed no cause of action, and, in substance, that the municipal ordinanée modifying the railway franchise contract so as to permit the increase of fare was not violative of any provision of the Constitution or laws referred to in plaintiffs’ petition, and was entirely valid and authorized by the municipal charter. The rule was tried and submitted on the pleadings, and the documents annexed thereto and made part thereof, consisting mainly of attested copies of the franchise contracts and pertinent municipal ordinances.

It appears from the reasons for judgment that the judge considered separately each and every attack made upon the constitutionality or legality of the ordinance in eoiitest. Concluding that the ordinance was valid, he gave judgment decreeing that the rule nisi should be recalled, that the preliminary injunction prayed for should be denied, “and that the plaintiffs’ demand be refected at their cost.” Plaintiffs prosecute this appeal from the judgment. Defendants move to dismiss the appeal on the grounds (1) that the court has not jurisdiction ratione materiae, and (2) that the judgment appealed from is only an interlocutory decree, and cannot cause irreparable injury to the plaintiffs.

Appellees’ contention that the amount or value in contest does not exceed $2,000 is founded upon the idea that appellants are not interested to that extent; that is, that the extra one cent car fare would not cost them $2,000 in a lifetime. It is not disputed that, as far as the defendant railway company is concerned, the value of the right in contest largely exceeds $2,000. Therefore,' if the railway company were appealing from an adverse judgment, this court would have jurisdiction of the case. Eor that reason, we think the appeal taken by the plaintiffs belongs in this court. As was said in Marx v. Meyer Bros., 50 La. Ann. 1236, 23 South. 923, inasmuch as the defendants would have had the right to appeal to this court if they had lost the suit, the plaintiffs must have the same right. Defendants’ interest in the suit is as well in contest now as if they were appellants.

We are also of the opinion that the judgment rendered is one from which the plaintiffs were entitled to an appeal. The only relief sought, or object of the suit, was to prevent by injunction the act complained of. The only cause stated for demanding the relief was the alleged unconstitutionality or illegality of the ordinance purporting to authorize the increase of fare. The defendants did not, in their answer to the rule, deny any allegation of fact in the petition. Admitting the facts, they disputed plaintiffs’ conclusion of law, that a cause was shown for issuing a writ of injunction. The judge, having considered each and every attack made,upon the constitutionality or legality of the ordinance in question, and having found no force in any of the propositions of law advanced by the plaintiffs, rendered a judgment which, in effect, if affirmed, will put an end to the suit. That is the way an exception of no cause of action ought to be dealt with. See Oglesby v. Turner, 124 La. 1084, 50 South. 859. We see no reason why a defendant in a suit for no other relief than an injunction should not, in answer to a rule to show cause why a preliminary injunction should not issue, be permitted to plead that 'the petition does not disclose a cause of action for an injunction at all — preliminary or perpetual — and thus put an end to the suit if it is not founded on law.

In the decree rendered- in this case, “that the plaintiffs’ demand be rejected at their cost,” possibly the word “demand” refers only to the demand for a preliminary injunction. But the effect of the judgment, if affirmed, will be to dispose of the suit finally; because the reason for rejecting the demand for a preliminary injunction was not merely that plaintiffs were not entitled to a preliminary injunction, but that they were not entitled to any relief, even on proof of their allegations of fact. The reasons for the judgment thus rendered will, if affirmed, be the settled law of the case. It would be unreasonable. under these circumstances, to require that the suit be put at issue, and that judgment be rendered on the merits — or on a want of merit in the case — before allowing the plaintiffs to appeal.

The motion to dismiss the appeal is overruled.

On Motion to Vacate Order Making Receiver Party to Appeal.

MONROE, C. J.

The appeal herein was lodged in this court on December 19, 1918. On December ’28 the defendant company (appellee) moved to dismiss the appeal. On January 18, 1919, plaintiffs (appellants), alleging that since the lodging of the appeal and the filing of the motion to dismiss the United States District Court for this district had appointed J. D. O’Keefe receiver of the defendant, and that he had qualified under the appointment, moved that as receiver he “be made a party hereto”; and, it having been so ordered, copies of the motion and order, together with a citation to appear herein, were served upon the receiver in person, on January 20, 1919; and on February 3 following this court handed down a judgment overruling the motion to dismiss. Thereafter (on February 12) the receiver appeared by motion, and reciting the facts above stated, and suggesting that according to the comity observed between courts, and the law, this court is without authority “to prosecute, or authorize the prosecution of, this appeal, as against mover, in his capacity as receiver,” and that the court wherein mover was appointed “is the sole court which has jurisdiction over him and the property under his administration,” prayed that appellants be required to show cause why the order making the receiver a party to this suit should not be rescinded; and, the rule to show cause having been granted, the appellants, by way of return thereto, also recite the facts above stated, and allege that in view thereof the order making the receiver a party was competent and proper; that his appointment did not destroy the corporate existence or capacity of the appellee, or devest this court of its previously acquired jurisdiction; that the consent of the United States court was not necessary to enable this court to make the order here complained of, but that, if necessary, it was given before the order was made, having been included in the powers originally conferred upon the receiver by the decree appointing him; that, should it be held that said order should be vacated, this court is nevertheless authorized to proceed to judgment as between plaintiffs and the original defendant,” etc.

The decree (of date January 9, 1919), appointing the receiver is annexed to, and made part of, the return, and reads, in part, as follows:

“It is ordered that J. D. O’Keefe be, and he is, appointed receiver of the New Orleans Railway & Light Company, and of all its property; * * • and he is hereby authorized, forthwith, to take possession of all of said property. * * * He is authorized and directed to collect all moneys, claims, and accounts; * * * to institute and prosecute such suits * * * as he may be advised by counsel; to defend all such suits as may be brought against said receiver, as well as all suits now pending or hereafter brought ag'ainst said railroad company which affect * * ■ * or involve the property of said company,” etc.

We are informed (through the brief of the counsel for the receiver) that on February 24 his honor the judge of the District Court of the United States made an order (of which a certified copy is said to have been, but has not been, filed herein) authorizing the receiver—

“to appear in the several courts of the state of Louisiana, in proceedings there pending against the New Orleans Railway & Light Company, in which it has been sought to make said receiver a party, and except to the jurisdiction of said courts in the premises.”

It therefore appears that this suit had been instituted against the defendant company, decided by the trial court, and appealed to this court, when the receiver was appointed, with authority, conferred in express terms, to defend all such suits as might be brought against him, “as well as all suits now [then] pending,” or thereafter brought against said railroad company, which affected, or might affect or involve, its property; that the receiver was served with a copy of the order of this court directing that he be made a party hereto, with a citation to appear and conform to that direction within 25 days; that with no authority from the court by which he was appointed, with respect to this suit, to do otherwise than defend it, he moved this court to rescind its order last above mentioned, on the ground that it was without authority to make such order, and that the court by which he was appointed was alone vested with jurisdiction over him (meaning, with jurisdiction to determine whether he should be called, as a necessary party, to defend a suit which was pending when he was appointed, and which, as a pending suit, it had expressly authorized him to defend); and that 12 days after his said appearance, and 10 days after the expiration of the delay allowed by this court within which, under its order, he was to become a party hereto, the appointing court made an order authorizing him to do that which he had already done, without such order, to wit, make the objection that he could not be made a party to this pending suit against the railway company without being authorized to that effect by the court which appointed him.

But he possessed the authority from the appointing court, and, so possessing, it would seem to have been his duty to appear and defend this suit when this court made its order that he be made a party for that purpose. He was cited to appear, and was allowed 25 days within which to do so, and during the whole of that time and after-wards he possessed the same authority. The question here presented, therefore, is not whether he can be made a party hereto, without the consent of the appointing court, but whether, having the consent of that court and having been made a party defendant herein by an order of this court, made at a time when neither the lack of such consent nor any other obstacle stood in the way, the consent can now be withdrawn. We think not; and we doubt whether the order made by the learned judge of the United States District Court on February 24 is to be construed as so intended. Our statute (Act 159 of 1898, § 5, p. 312) provides that—

“In the order appointing such receiver such court may, in its discretion, confer on the receiver such powers of administration as it may deem best for the interest of all parties, and may from time to time restrict or enlarge such powers,” etc.

But where an agent is vested with authority to-defend a suit, and, while so authorized, is cited to defend it, the court in which the suit is pending thereby becomes vested with jurisdiction to proceed and determine the issues involved with reference to the fact that he has been impleaded, and we know of no rule under which that jurisdiction can be defeated by a subsequent withdrawal of his authority.

The weight of authority, perhaps, sustains the view that a receiver cannot, in his own name, go into a court, other than that of his appointment, merely by virtue of .his appointment and of the general powers thereby conferred upon him, but a contrary doctrine is strongly maintained in some of the states.

“Thus,” says Mr. High, “in Tennessee it is held that the necessary effect of the delivery of a demand or chose in action to a receiver, duly appointed by a court of equity, is to invest him, in his capacity as receiver, with such an interest in the debt to be recovered that he alone is entitled to sue therefor. * * * So, in Louisiana, it is held that a receiver of partnership assets, appointed during litigation for a settlement of the firm business, is authorized by virtue of this appointment to institute an action in his own name for the recovery of money due to the firm, and that a judgment in his favor is a sufficient protection to the defendant therein.” Citing Helme v. Littlejohn, 12 La. Ann. 298.

And similar cases are cited from Maine, Pennsylvania, New York, and Georgia. High on Receivers (3d Ed.) p. 188 et seq.

From the same author we take the following:

“When the receiver’s authority is derived, not merely from the order appointing him, but from a statute under which his appointment is made, his functions as regards the bringing of suits, in matters concerning his receivership, .must be determined with reference to the extent of the powers conferred by the statute.” Id. p. 190.

In the instant case, whether the authority to defend all pending suits against the railway company was conferred by the judge of the United States court with reference to the state statute or to the rules governing the practice in equity in the courts of the United States is immaterial, as we have no doubt that it was competent for the learned judge to confer that power; and, as we find nothing in the order of February 24 purporting to withdraw it (if that were possible, as matters now stand), we are of opinion that the rule predicated upon the theory that it has been withdrawn, or was never conferred, should be dismissed; and it is so ordered.

On the Merits.

SOMMERVILLE, J.

Plaintiffs, four in number, allege that they “are citizens, inhabitants, taxpayers, and qualified electors of the city of New Orleans”; that the city entered into contracts with several street railway companies, which companies have been merged into and consolidated under one head, known as the New Orleans Railway & Light Company; that it was stipulated in the contracts between the city and the several railroad companies that said companies would operate street railroads and furnish service for a fare not to exceed five cents for each passenger; that they are the patrons of the said street railway system, and that they are vitally interested as citizens and taxpayers in the material growth, welfare, and progress of the city; that the stipulation fixing the maximum car fare at five cents for each passenger transported was and is for the benefit of said city of New Orleans, its citizens, inhabitants, and people, and “especially petitioners”; that the city, by ordinance, has consented to a modification of the several contracts between it and the railway companies whereby a fare of six cents for each passenger transported is allowed to be charged by the companies, for a limited time, which modification has been accepted and acted upon by the said companies; that the modification of the contracts is unauthorized, illegal, and in violation of the contract obligations between the city, its citizens, inhabitants, people, and especially petitioners, and the railway companies, on various grounds set forth in the petition; that the fixing of the maximum street car fare of five cents for each passenger is for the benefit of all the people, citizens, and inhabitants of the city of New Orleans, including petitioners, and that the same cannot, in any event, be legally increased; • and plaintiffs asked that a preliminary injunction issue, restraining the city and the New Orleans Railway & Light Company from carrying out the modified contract just mentioned, and that the New Orleans Railway & Light Company be restrained from collecting six-cent fares from passengers on the street railroads; and that defendant company be permanently enjoined from making such charge.

A rule nisi was issued by the court, directing the defendants to show cause why a preliminary injunction should not issue as prayed for. Both defendants appeared and filed the following exception: “That the plaintiffs, individually and collectively, are absolutely without interest or right of action to prosecute this suit and stand in judgment therein.”

The exception was overruled; and defendants, in written answers, filed reasons showing why a preliminary injunction should not issue, and the trial court refused to issue the injunction asked for.

Plaintiffs appealed. The city answered the appeal, and asked that the judgment appealed from be set aside, and that its exception to plaintiffs’ petition be maintained, and that the suit be dismissed. The railway company did not answer the appeal, and the ruling on its exception is final as to it. That ruling will not be reviewed here.

Plaintiffs do not allege that they are parties to the contracts between the city and the several railway companies; and they are not. They do not implead the several railway companies as parties defendants in this cause; they simply implead the New Orleans Railway & Light Company as the representative of the subsidiary companies operating under their charters. They do not allege that the city and the various railway companies were without authority to enter into the several contracts between them; on the contrary, they sue to enforce one provision of those contracts. They do not allege that taxation on their property will be increased in any way by the action of the parties in modifying the contracts in the manner complained of. They do not allege that the public fisc will be impaired in any way; on the contrary, the gross receipts of the railways companies will presumably be increased by the raise in car fare, and the city’s proportion of such receipts will be larger because of such increase.

The contracts between the city and the several railways companies operating in the city were undoubtedly entered into for the benefit of the public, and the provisions of those several contracts were for the common good of all the people and for the general welfare and convenience of the city and the inhabitants thereof. The provisions therein contained were not made “specially for petitioners,” and no one provision was made specially for them or any other individuals, or class or set of people. The contracts are with and for the city. They do not contain stipulations pour autrui. State ex rel. City v. R. R. Co., 37 La. Ann. 589; Loeber v. R. R. Co., 41 La. Ann. 1151, 5 South. 60; Oliff v. City of Shreveport, 52 La. Ann. 1203, 27 South. 688.

The Code Prac. art. 15, says that “an action can only be brought by one having a real and actual interest, which he pursues, but as soon as that interest arises he may bring his action.”

Plaintiffs are not parties to the contracts, and they have no real and actual interest in enforcing any one of the provisions thereof, and they have no vested rights therein.

The modification of one of the clauses of the contracts, with the consent of the parties thereto, does not in any way increase the burden of taxation upon plaintiffs’ property.

It is apparently for the public good. It is a war measure; the modification it is agreed, shall exist for a limited time; and, as declared in the ordinance attached to the petition, the contracts were modified because of the exigencies of the prevailing war and at the suggestion of national authorities, so as to avoid receiverships for and possible destruction of public utility corporations throughout the United States on account of the existing war. The increase in car fares was agreed upon to continue for a limited time so as to provide sufficient revenue to meet the increased cost of operation due to the enhanced price of labor, materials, and the imposition of taxes to help meet the cost of our war with Germany.

Plaintiffs do not point to any provision of the city charter which the city has violated, except in putting the modification into effect before the expiration of 10 days after the adoption of the ordinance. Such putting into effect in less than 10 days is permitted under section 35 of the city charter. Act 159, 1912, p. 253. Besides, 10 days have now passed since the ordinance was adopted. Plaintiffs’ property rights were not affected by such action if it was irregular.

This case is not like the Handy Case, 39 La. Ann. 107, 1 South. 593, where certain taxpayers obtained an injunction to prevent the city from awarding a wharf lease where it was alleged that the award was to be made in direct violation of the law directing how such awards should be made by the city; that the city would be acting in bad faith in awarding the lease to a certain contractor ; that the proposed wharf rates fixed in the ordinance would be an increased burden upon commerce; that plaintiffs were prepared to bid many thousand dollars more for the lease than the favored contractor would pay; and that the burden of taxation on their property would be materially increased by the failure of the city treasury to receive the excess amount which they were willing to pay for the lease.

In commenting upon the Handy Case it is said in Morris v. Mu. Gas Co., 121 La. 1016, 46 South. 1001:

“The case of Handy et al. v. City, 39 La. Ann. 107, 1 South. 593, and others of like import, cited by plaintiff, do not support his contention that a taxpayer can contest the validity of a municipal ordinance for any cause. The doctrine of those cases is that property holders or taxable inhabitants have the right to resort to judicial authority to restrain municipal corporations, and their officers from transcending their lawful powers, or violating their legal duties in any unauthorized mode which will increase the burden of taxation, or otherwise injuriously affect taxpayers or their property; such as unwarranted appropriation and squandering of corporate funds, and unjustifiable disposition of corporate property, and illegal levying and collecting of taxes not due or exigible, etc. * * * Appellants’ interest as property owners to contest the ordinance will only accrue if damage to property rights become actual and real. O. P. art. 15.”

Plaintiffs having failed to allege any vested right or interest in the ordinances and contracts involved in this ease, and having failed to allege that the ordinance of the city was unreasonable and partial to the railway companies, or that the commission council acted in bad faith, or that their taxes would be increased by the adoption of the ordinance, or that the public fisc would be diminished thereby, and, not having referred to any law which forbade the state or city to modify a-contract with the consent of the other contractor, they are without interest or right of action to prosecute this suit and stand in judgment herein and their suit against the city of New Orleans will be dismissed.-

As the defendant railway company did not answer the appeal and ask for a reversal of the ruling on the exception filed by it to the right of plaintiffs to prosecute this suit and to stand in judgment herein, it is bound by that ruling; and the action of the trial court in refusing, in its discretion, to issue a preliminary injunction on the petition of the plaintiffs will be considered.

On the trial of the rule nisi evidence was offered and received, and the case was virtually tried on its merits. The reasons of the court for refusing to issue a preliminary injunction would be the same for denying the injunction after trial on the merits.

In considering the petition for a preliminary injunction, we find that plaintiffs allege that the action of the city violates article 59 of the Constitution; but the ordinance attached to the petition does not release or extinguish, in whole or in part, an indebtedness, liability, or obligation of the defendant corporation to the municipality. On the contrary, it assumes to have the effect of increasing the amounts to become due the city under the contracts with the railway companies by increasing the revenues of defendant, of which the city gets a given per cent.

The burden of plaintiffs’ complaint is that the raise in car fares—

“impairs the obligation of the contract between the said city of New Orleans, its citizens, inhabitants, and people, and especially petitioners, on the one part, and the said New Orleans Railway & Light Company and underlying companies on the other part, which is a contravention of article 166 of the Constitution of the state of Louisiana, and of section 10, art. 1, of the Constitution of the United States.”

The only contracts referred to in the petition are those entered into between the city and various railways companies to which plaintiffs were not parties, and which were made under express legislative authority, and under the police power of the state and city; and contracts granting privileges are always within and under the' control of the state to change, modify, or revoke. These contracts are essentially not made with individual citizens.

Section 12 of the city charter (page 266, Acts of 1912) empowers the commission council “to authorize the use of the streets for railroads operated by horse, electricity, steam or motive power, and to regulate the same.” Section 28 empowers the commission council to grant privileges for 'the use of streets “for such periods of time as the commission council may determine. The commission council shall have power and authority to revoke all existing privileges, such as are referred to in this section, which may be revocable.” The power to revoke certainly carries with it the right to modify a privilege granted by the city, particularly with the consent of the other party. Section 29 provides in part: “No right to construct and operate any street railway shall be sold except to the person, corporation, firm, or association offering the highest percentage of gross annual receipts to be derived therefrom during the term thereof, and said percentage shall be estimated on -the gross annual income derived from the said franchise,” etc.

If this power to contract, given to the city for the general welfare and convenience of the city and its citizens, should be held to be insufficient to authorize the city to modify the contract granting privileges by the city, with the consent of the other parties to those contracts, then the Legislature has given such right specially in section 1 of the charter of the city (Act 159, 1912) which says: “The city, shall also have all powers, privileges, and functions which, by or pursuant to the Constitution of this state, have been, or could be, granted to or exercised by any city.”

It thiis appears that the city of New Orleans, under its police power, was authorized to make the contracts involved, and to modify them, and particularly with the consent of the railway companies, and no part of this police power could be contracted away for the benefit of plaintiffs or any one else.

If plaintiffs had alleged that the increase in car fare consented to and fixed by the city temporarily was unreasonable and done in bad faith, and therefore in excess of the powers of the city to adopt the ordinance, the contradiction thereof would, have been found in the ordinance attached to the petition. That point was disposed of by the New Jersey Court of Errors and Appeals in the following language:

“The concise question presented is: Has the board of public utility commissioners, a state agent, the power to increase the rate to be charged for transportation service in order to produce a sufficient additional income to meet increased expense of operation growing out of the great advance in the cost of labor and material, principally due to conditions incident to our war with Germany; and, if so, was such power lawfully exercised? Assuming that the rate of five cents existing prior to the new conditions was a reasonable one, then the application of ordinary common sense will unhesitatingly lead every fair-minded person to the conelusion that it would not continue to remain reasonable if the cost of production so advances as to destroy the basis upon which it was rested. The solution of such a proposition does not require the aid of legal learning; it is a question of economics, which any one of ordinary intelligence can apply.” O’Brien v. Public Utilities and City of Trenton v. Board, decided November term, 1918 (N. J.) 106 Atl. 414.

And the Supreme Court of the United States, in a recent opinion, reviewed the law on the subject of contracts between public service corporations and private individuals, where higher rates were established by the state railroad commission than those contracted for by the parties to a contract, and they said in part:

“Except for the seriousness with which this claim has been asserted and is now pursued into this court, the law with respect to it would be regarded as so settled as not to merit further discussion.
“That private contract rights must yield to the public welfare, where the latter is appropriately declared and defined and the two conflict, has been often decided by this court. Thus in Manigault v. Springs, 199 U. S. 478, 480, 26 Sup. Ct. 127, 130, 50 L. Ed. 274, it was declared that:
“ ‘It is the settled law of this court that the interdiction of statutes impairing the obligation of contracts does not prevent the state from properly exercising such powers as are vested in it for the promotion of the common weal, or are necessary for the general good of the public, though contracts previously entered into between individuals may thereby be < fleeted.’
“This on authority of many cases ■ jvhich are cited.
“In Hudson County Water Co. v. McCarter, 209 U. S. 349, 357, 28 Sup. Ct. 529, 531, 52 L. Ed. 828, 14 Ann. Cas. 560, it is said that:
“ ‘One whose rights, such as they are, are subject to state restriction, cannot remove them from the power of the state by making a contract about them. The contract will carry with it the infirmity of the subject-matter.’
“In Louisville & Nashville R. R. Co. v. Mottley, 219 U. S. 467, 482, 31 Sup. Ct. 265, 270, 55 L. Ed. 297, 34 L. R. A. (N. S.) 671, this is quoted with approval from Knox v. Lee, 12 Wall. 457, 550, 551, 20 L. Ed. 287, viz.:
“ ‘Contracts must be understood as made in reference to the possible exercise of the rightful authority of the government, and' no obligation of a contract can extend to defeat the legitimate government authority.’
“In the same report, in Chicago, Burlington & Quincy R. R. Co. v. McGuire, 219 U. S. 549, at page 567, 31 Sup. Ct. 259, 262, 55 L. Ed. 328, it is said:
“ ‘There is no absolute freedom to do as one wills or to contract as one chooses. The guaranty of liberty does not withdraw from legislative supervision that wide department of activity which consists of the making of contracts, or deny to government the power to provide restrictive safeguards. Liberty implies the absence of arbitrary restraint, not immunity from reasonable regulations and prohibitions imposed in the interest of the community.’
“In Atlantic Coast Line R. R. Co. v. Goldsboro, 232 U. S. 548, 558, 34 Sup. Ct. 364, 368, 58 L. Ed. 721, the court said:
“ ‘It is settled that neither the “contract” clause nor the “due process” clause has the effect of oven-iding the power of the state to establish all regulations that are reasonably necessary to secure the health, safety, good order, comfort, or general welfare of the community; that this power can neither be abdicated nor bargained away, and is inalienable even by express grant; and that all contract and property rights are held subject to its fair exercise.’
“And in Rail & River Coal Co. v. Ohio Industrial Commission, 236 U. S. 338, 349, 35 Sup. Ct. 359, 362, 59 L. Ed. 607, the state of the law upon the subject is thus aptly described:
“ ‘This court has so often affirmed the right of the state, in the exercise of its police power, to place reasonable restraints, like that here involved, upon the freedom of contract, that we need only refer to some of the cases in passing.’
“These decisions, a few from many to like effect, should suffice to satisfy the most skeptical or belated investigator that the right of private contract must yield to the exigencies of the public welfare when determined in an appropriate manner by the authority of the state, and the judgment of the Supreme Court of Georgia must be affirmed.” Union Drygoods Co. v. Georgia Pub. Service" Corporation, 248 U. S. 372, 39 Sup. Ct. 117, 63 L. Ed. 309.

It is therefore ordered, adjudged, and decreed that the judgment appealed from be affirmed as to the New Orleans Railway & Light Company, and that it be annulled, avoided, and reversed as to the city, and that there now be judgment in favor of the city of New Orleans against plaintiffs, dismissing this suit at plaintiffs’ cost in both courts.

O’NIELL, J.,

being of tbe opinion that tbe judgment appealed from should be affirmed as to both defendants, concurs only in the decree affirming the judgment in favor of the New Orleans Railway & Light Company; his opinion being that plaintiffs had a right of action against the railway* and light company, and that, if the city of New Orleans was not a necessary party defendant in the action, it would suffice for the court to say so.

MONROE, C. J., not having heard the argument takes no part.