Daily capital journal. (Salem, Oregon) 1903-1919, 1918-07-23
SIX CENT FARE is
UPHELD BY COURT
IN DECISION .TODAY \
Supreme Court Affirms Legal
ity Of Action of Public
Service Commission

down by the supreme court. The opin-
ion was written by Justice Burnett.
The court held that the power once
possessed by the city of Portland to
fix rates in franchises was given the
city by the state, and since then it has
been withdrawn by the safe and placed
in the public service commission. As a
consequence the commission has author
| ity to change the rates in franchise
and the question of impairment of a
contract is not involved.
The decision affects every town or
| city in the state which may he at
tempting to hold public service utih-
ties to the rates fixed in their franeh-
ises.
In synopsis of the court s decision,
Justice Burnett says:
"The contention of the city in the
main is that the franchise granted by
its ordinance to the Portland Railway,
Light & Power company constituted a
contract between it and the company,
the obligation of which coud not be i'm.
paired by the action of the public ser
vice commission. The court holds in
substance that the city could not hay @
granted such franchise unless the pow
er to do so had been delegated to it by
the right to maintain the railway in the
city the municipality acted as a gov
ernmental agency of the state and real
ly entered into the arrangement ON be-
half of the state; that the latter hav-
ing delegated authority to the city and
and made an agent Of the city for the
purpose in question, could rightfulIy re-
woke that agency and establish another;
that by the enactment of the public SER
vice law it had created such a new
agency in the form of the public SER
vie commission, giving it plenary pow
er in all such matters.
So far as it affects the Portland
charter, it is true that the constitution
denies to the legislative assembly the
power to enact or amend any particular
charter by special law, but, as held
in the case of Rose against the Port of
Portland, it is competent for that body
to pass a general law which is para.
mount in authority over all city char.
ers, and this is what happened when it
passed the general public service law
which was approved by the people on
the referendum.
"Thc case of the city is not aided
by the fast that it sought to amend its
Fcharter by the initiative process after
the passage of the public service legis-
lation so as to assume for itself within
the territory substantially all the pow
ers of the public service commission.
The reason for this is that the right
to fix fares and and freights is branch
of the state S legislative prerogative
and is not merely local issue affecting
any particular city or town and that
the initiative and referendum powers
are reserved to legal voters of cities and
towns only as to local, special and mu
nicipal legislation. The entire question
of regulating public service corporations
in their charges for their services to
the public is referable to the authority
Of the state on such subjects The
whole public, and not any local munich
pality, is affected by this power and no
city or town can so amend its charter
as to arrogate to itself powers primari-
ly resident i'll the state, without the
consent of the latter. Whatever nav
be said of the franchise of the com
pany, whether it be an agreement be-
tween contracting parties or a piece of
legislation, it exists subject to the ever
present police power of the state SO to
regulate it that in its relation to the pub
nc the company shall render reasonable
services and be entitled to a reasonable
remuneration therefor.
The conclusion is that by the gen.er-
al law relating to public service cor
porations the state had right to, and
did, in effect, withdraw from the city
of Portland the agency authorizing il to
grant franchise to, or enter into a con
tract with the company for five-cent
fare, and appointed another agency, the
public service commission, with full DOW
er to act for the state, and that to this
new agency the company had applied
for change in the agreement, with TIE
result that the parties to the contract
the company on one side and the state.
represented by its public service COM
mission, on the other, mutually agreed
to change thefranchise or contract So
as to allow the company to charge six
cents instead Of five. Without regard
to what might be said if either party
to the contract or franchise, without
the consent of the other, should attempt
to change it, either by legislation or
otherwise, the impairment of the obliga-
tion of the agreement is not involved.
1t is a case where those who made the
contract had mutually agreed to its
amendment
Other Opinions.
Other opinions were handed down as
follows:
W. W. Green VS.. Harold Smith ct al,
APPELLANTS; appealed from Linn; suit for
foreclosure of mortgage; opinion by
Justice Benson; Circuit Judge Galloway
affirmed.
c. W. Horst VS.. Columbia Contract
company, appellant; appealed from
Multnomah; suit for damages resulting
from collision of steamboat with fish
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