Source: https://supreme.justia.com/cases/federal/us/262/432/
Timestamp: 2019-04-19 21:04:34+00:00

Document:
1. A judgment of a state supreme court which does not terminate the litigation between the parties in such manner that, should there be an affirmance here, the court below would have nothing to do but to execute the judgment it had rendered, is not a final judgment for the purpose of review in this Court, even though it be regarded by the state court as settling the law of the case. P. 262 U. S. 436.
2. Upon review of a judgment of a state supreme court, its decision upholding the power of a municipality of the state, under the local constitution and laws, to enter into a rate contract with a street railway company is controlling upon this Court. P. 262 U. S. 437.
3. But, in deciding constitutional questions presented, this Court will determine for itself whether there is in fact a contract and, if so, the extent of its binding obligations, but will lean to an agreement with the state court. P. 262 U. S. 438.
4. A street railway company cannot avoid the obligation to abide by maximum rates fixed by a valid contract with a town by showing that they have become confiscatory. P. 262 U. S. 438.
5. A state statute extending the corporate limits of a town and construed by the state supreme court as having the effect of rendering applicable to the added territory maximum street railway rates fixed by an earlier contract between the town and the street railway company impairs the obligation of the contract by adding to its burdens. P. 262 U. S. 439.
6. In the absence of any showing that the classification is in fact unreasonable and arbitrary, a statute which empowers a commission to revise the rates of street railway companies as they may be fixed by future contracts with municipalities, but not those fixed by contracts existing when the statute passed, cannot be said to violate the Equal Protection Clause of the Fourteenth Amendment as applied to a company whose contract is thus excepted and prescribes a maximum rate which the company claims to be inadequate. P. 262 U. S. 439.
seating capacity and trailer cars upheld against constitutional objection in view of obligations imposed by a contract between the company and a municipality and the powers of the commission. P. 262 U. S. 439.
153 Ga. 329 reversed; certiorari denied.
Error to a judgment of the Supreme Court of Georgia affirming a decree for the Town of Decatur in its suit to enjoin the plaintiffs in error from increasing the fare on a street car line in violation of a contract.
"to never charge more than five cents for one fare upon its main Decatur line . . . for one passenger and one trip upon its regular cars from the terminus of said line in the City of Atlanta to the terminus of the same in the Town of Decatur, or from the terminus of said line in the Town of Decatur to the terminus of the same in the City of Atlanta, . . ."
"to grant one transfer ticket upon the payment of one full fare for the purpose of giving one continuous ride from any point within the Town of Decatur . . . to any point within the City of Atlanta on any of its lines in said city, and vice versa."
In pursuance of this agreement, the company tore up, removed, and abandoned the northerly line, and has never since restored it.
was beyond the powers of the town; that permission to remove and abandon the northerly line furnished no consideration for it; that it constituted an attempt to fix fares outside the corporate limits of the town; that, since it was entered into, these limits had been twice extended so as to include a portion of the main line outside the corporate limits when the contract was entered into, and that the contract could not be applied to this additional territory without impairing its obligation in violation of the Constitution of the United States. They further contended that, in any event, the five-cent fare should be limited to passengers entering cars at the termini of the line in Atlanta and Decatur, and not to those entering at intermediate points, and that, because of changed conditions since the contract was made, the five-cent fare was confiscatory. Upon an application made by the defendants after the disposition of the mandamus proceeding, the Railroad Commission had fixed a seven-cent fare on lines not covered by the contract, and required the defendants to furnish, during rush hour periods, additional seating capacity, and, on the main Decatur and College Park routes, to operate trailers during such rush hours. The commission had also ordered that no change should be made in the existing rules and practices of the company as to transfers.
writ of error became the law of the case and was res judicata. and therefore precluded a further review, and the decree of the trial court was affirmed. 153 Ga. 329. Deprivation of rights under the federal Constitution was duly and properly asserted. The case is here on writ of error. From motives of caution, defendants also filed a petition praying the issuance of a writ of certiorari, consideration of which was postponed to await the hearing on the writ of error.
"must terminate the litigation between the parties on the merits of the case, so that, if there should be an affirmance here, the court below would have nothing to do but to execute the judgment or decree it had . . . rendered."
Bostwick v. Brinkerhoff, 106 U. S. 3, and cases cited.
We hold, therefore, that the writ of error was properly brought, and come to a consideration of the substantive matters presented.
to fix rates devolved by the state constitution upon the General Assembly, and therefore that the Town of Decatur was without power to enter into a contract on that subject. When the contract was made, the General Assembly had never exercised this authority, and the state supreme court held that there was nothing in the Constitution of the state which precluded the municipality from contracting as to fares, and that, while the matter was one falling within the police power, whose exercise could not be abridged by contract, it was competent for the municipality to enter into such a contract where the state had not exercised and was not seeking to exercise its police power over the subject, and that this contract would remain effective until there should be conflicting legislative action. See Milwaukee Elec. Ry. v. Wisconsin R. Co. Comm'n, 238 U. S. 174, 238 U. S. 183. This conclusion, involving as it does a construction of the state constitution and laws and powers of state municipalities, is controlling upon this Court, as it has decided many times. See for example, Old Colony Trust Co. v. Omaha, 230 U. S. 100, 230 U. S. 116; Claiborne County v. Brooks, 111 U. S. 400, 111 U. S. 410; City of Richmond v. Smith, 15 Wall. 429, 82 U. S. 438.
Iowa Co. v. Chariton, 255 U. S. 539, 255 U. S. 542; Paducah v. Paducah R. Co., 261 U. S. 267.
2. Treating the contract as valid, it is insisted that its obligation is impaired by the statutory extension of the limits of the town and the action of the court in holding the five-cent fare applicable in the added territory. While the statute does not refer to the contract or in terms make the rates applicable in the annexed territory, the necessary result of the decision of the state courts is to give it that effect, and in that way the statute, in the respect complained of, does substantially impair the obligation of the contract by adding to its burdens. Detroit United Railway v. Michigan, 242 U. S. 238, 242 U. S. 247-248; Columbia Railway, Gas & Electric Co. v. South Carolina, 261 U. S. 236.
3. The state statute of August 23, 1907, Civil Code, § 2662, extends the power of the Railroad Commission to street railroad companies, but contains a proviso to the effect that it shall not be construed "to impair any valid, subsisting contract now in existence between any municipality and any such company." It is insisted that this proviso brings about an arbitrary classification, in violation of the equal protection clause of the Fourteenth Amendment, because it subjects future contracts to the power of the Commission while exempting existing contracts therefrom. But it is not shown that the classification in fact is unreasonable and arbitrary, and, under the decisions of this Court, we cannot say that it is obnoxious to the constitutional provision. Arkansas Natural Gas Co. v. Arkansas Railroad Commission, 261 U. S. 379, and cases cited.
went no further than to direct a continuance of a practice which, so far as the record discloses, was not beyond the terms of the contract providing specifically for such transfers.
Neither are we able to say that the order of the commission directing the defendants to provide additional seating capacity on some of its lines and trailers upon the line covered by the contract was beyond its ordinary power to require adequate service. There is nothing in the contract with which the order conflicts, and such service naturally would seem to be implied, in the absence of a provision to the contrary.
It results from the foregoing that the judgment below, insofar as it makes applicable the contract rates within the annexed territory, cannot be sustained. The contract rates apply only to the Town of Decatur, as it existed when the contract was made. To apply them to additional territory is to impose a burden upon defendants outside the contract. We find no other error, but, upon the ground stated under paragraph 2, the decree of the state supreme court is reversed and the cause remanded for further proceedings not inconsistent with this opinion.

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