Court Opinion

ID: 7811441
Source: CourtListenerOpinion
Date Created: 2022-09-07 17:13:18.264655+00
Date Added: 2024-06-11T16:30:28.986107
License: Public Domain

Hart, J., (on rehearing.) Counsel for appellee in their motion for a rehearing have called our attention to the case of Home Telephone & Telegraph Company v. Los Angeles, 211 U. S. 265, and base their right to a rehearing on the principles decided in that case. We do not think that case lends any support to their right for a rehearing. The Supreme Court of the United States expressly recognizes the right of the State to authorize its municipal corporations to establish by a contract the rates to be charged by a public service corporation for a definite term which is reasonable in point of time. In that case the franchise was granted by an ordinance for a term of fifty years which was to be enjoyed in accordance with the terms and conditions named. The council was given the power “by ordinance * * * to regulate telephone service and the use of telephones within the city * * * and to fix and determine the charges for telephones and telephone service and connections.” The court held that this gave ample authority to exercise the governmental power of regulating charges, but that it gave no authority to enter into a contract to abandon the governmental power itself. The court expressly recognized in that case that an agreement as to rates might be autliorized by a State Legislature to be made by ordinance, and simply lield tliat the ordinance authorized was not an ordinance to agree upon rates for the life of the franchise, but that it was simply an ordinance to fix and determine rates. On the other hand, in Vicksburg v. Vicksburg Waterworks Co., 206 U. S. 495, the Legislature had authorized the city “to provide for the erection and maintaining of a system, of waterworks to supply said city with water, and to that end to contract with a party or parties who shall build and operate waterworks”; and the court held that it was within the right of the-city council, in the exercise of the power conferred, to make a binding contract fixing a maximum rate at which water should be supplied to the inhabitants of 'the city for a limited term of years. In determining- the matter of contracts in cases like this, the Supremo Court of the United States has given the State decisions much weight and ordinarily followed them. The reason that the Supreme Court of the United States generally follows the decisions of State courts in construing their own statutes and constitutions is that the ordinary administration of the law is carried on by the State courts, and by the course of their decisions property rights become vested which it would be wrong to disturb. In Taliaferro v. Barnett, 47 Ark. 359, the court held that a decision of this court when overruled stands as though it had never been, and that the court in reversing-a judgment declares what the rule of law was in fact when the erroneous decision was made. Again, in Apel v. Kelsey, 52 Ark. 342, the court said that former interpretations of the law have become rules of property and should not be overturned. See also Townsend v. Martin, 55 Ark. 192, and Washington Fire Ins. Co. v. Hogan, 139 Ark. 130. Our statutes granting-municipal corporations power to provide for or construct waterworks or works for lighting the streets and furnishing such power to consumers have already been before this court for construction in varying forms, and it has always been held that municipal corporations may by ordinance accepted by a public service corporation fix rates for the life of the franchise within a certain designated minimum and maximum, and that the rates so fixed are matters of contract. The right of the public service corporation to take the rates so fixed and to rest securely thereon has been regarded as guaranteed by the Constitution of the 'State and of the United States. Lackey v. Fayetteville Water Co., 80 Ark. 108; Arkadelphia Elec. Light Co. v. Arkadelphia, 99 Ark. 178; Mena v. Tomlinson Brothers, 118 Ark. 167; Arkansas Light & Power Co. v. Cooley, 138 Ark. 390, and Lonoke v. Bransford, 141 Ark. 18. It is a rule of construction that existing statutes become a part of such contracts. Hence in Arkadelphia Elec. Light Co. v. Arkadelphia, 99 Ark. 178, and Lonoke v. Bransford, 141 Ark. 18, it was held that the municipal corporations had the power to lower rates. The fixing of minimum and maximum rates in such ordinances is evidently made to meet the rise and fall of prices in labor and commodities. It is worthy of note that the public service corporations have heretofore contended that contracts fixing maximum and minimum rates are binding. Doubtless, therefore, many such franchises have been granted on the faith of our previous construction of the statute, and the overruling of these decisions might result seriously to those who have relied on them in the conduct of their affairs. It is also suggested that our decision is in conflict with Southern Iowa Electric Co. v. Chariton, 255 U. S. 539, and San Antonio v. San Antonio Public Service Company, 255 U. S. 547. We do not think so. In the first-mentioned case, the statute provided in express terms that the power of municipal corporations to regulate rates shall not be abridged by ordinance or contract; and the Supreme Court of the United States properly followed the decision of the Supreme Court of Iowa that the limitation or restriction provided by the statute could not be bartered away by the city council. In the last-mentioned case the Constitution of Texas provided that “no irrevocable or uncontrollable grant of special privileges or immunities shall be made, but all proceedings and franchises granted by the Legislature or created under its authority shall be subject to the control thereof”; and it was properly held by the Supreme Court of Texas and of the United States that this prevented the ordinance in question from becoming a binding rate contract. The court held further that, even if the city had been granted power to make such contracts by a later amendment to the State Constitution, the existing ordinance was not thereby converted, for the future, into a contract. Therefore the motion for a rehearing will be denied.