Court Opinion

ID: 7166469
Source: CourtListenerOpinion
Date Created: 2022-07-24 16:21:40.283792+00
Date Added: 2024-06-11T16:15:34.026791
License: Public Domain

*13On Rehearing.
The whole contention of the defendants is predicated on the proposition that the city of Shreveport has no power to fix rates hy contract so as to preclude the subsequent regulation of such rates by the city council.
The power to fix rates by contract and the power to regulate rates may coexist in the same council or other legislative body. Thus the. Legislature has the undoubted power to regulate rates, but at the same time may grant to a railroad company the right to charge rates within certain limitations. Such a grant is a contract, and the rights thereby vested cannot be divested or impaired by subsequent legislation. Gulf S. I. R. Co. v. Adams (Miss.) 45 South. 91.
There is no express legislation in this state authorizing municipalities to establish rates for street railroads by contract or agreement. But such power necessarily flows from the statutory prohibition that no railroad shall be constructed through ■ the streets of any incorporated city without the consent of the municipal council thereof, and from the general power of regulating the use of the streets. Rev. St. 1870, § 689; Act No. 131, p. 184, of 1855, § 7; Brown v. Duplessis, 14 La. Ann. 854; Forman v. Railroad Company, 40 La. Ann. 448, 4 South. 246. In the latter case, the ordinance fixing the rates of fare was held by the court to constitute a contract which the city had the undisputed right to make under its powers as expounded in the jurisprudence of the state. The city of New Orleans had the charter power “to authorize the use of the streets for horse and steam railroads and to regulate same.” The city of Shreveport has the same power under its charter and section 689 of the Revised Statutes of 1870. If a municipality has the power to grant a franchise on conditions, it necessarily must have the power to enter into an agreement binding on both parties. If the railroad be bound by the tariff agreed upon, the municipality must also be bound. Under defendants’ contention neither party is bound or one is bound and the other is free to .repudiate the agreement. In Cleveland v. Cleveland City Railroad Company, 194 U. S. 534, 536, 24 Sup. Ct. 756, 48 L. Ed. 1102, an ordinance granting a street franchise, with the right to charge certain rates of fare, duly accepted by the grantee, was held to constitute a binding contract, the obligation of which could not be impaired by subsequent legislation.
The city of Shreveport had the power to grant the street franchise and to fix the rates of fare by agreement with the railroad company, and this contract precluded the municipality from lowering the rates during the life of the franchise. The contrary theory would leave the street car company at the mercy of every successive council, and would render the construction of street car lines impracticable as a business investment.
Rehearing refused.