Lynchburg Traction & Light Co. v. City of Lynchburg

• Decision Date: 11 January 1927
• Docket Number: No. 2551.,2551.
• Citation: Lynchburg Traction & Light Co. v. City of Lynchburg, 16 F.2d 763 (4th Cir. 1927)
• Parties: LYNCHBURG TRACTION & LIGHT CO. v. CITY OF LYNCHBURG.
• Court: U.S. Court of Appeals — Fourth Circuit

16 F.2d 763 (1927)

LYNCHBURG TRACTION & LIGHT CO. v. CITY OF LYNCHBURG.

No. 2551.

Circuit Court of Appeals, Fourth Circuit.

January 11, 1927.

John L. Abbot, of Lynchburg, Va. (Barksdale & Abbot and A. D. Barksdale, all of Lynchburg, Va., on the brief), for appellant.

T. G. Hobbs, of Lynchburg, Va., for appellee.

Before ROSE and PARKER, Circuit Judges, and WATKINS, District Judge.

PARKER, Circuit Judge.

This is an appeal from an order dismissing a bill in equity filed by the Lynchburg Traction & Light Company, hereinafter called the company, to enjoin the city of Lynchburg from enforcing an ordinance fixing a street car fare of 5 cents on certain lines of the company. The basis of the suit is that the ordinance complained of impairs the obligations of contracts evidenced by franchises granted by the city to the company. The dismissal was based on lack of jurisdiction under the allegations of the bill of complaint.

The bill is voluminous, covering, with attached exhibits, 110 pages of the printed record. The facts averred, however, are simple, and may be briefly stated as follows:

The company is the owner of franchises granted by the city of Lynchburg prior to 1908, and subsequent thereto, authorizing the operation of a street railway system within the then limits of the city. These franchises, among other things, provided "that no passenger shall be required to pay a fare exceeding five cents for transportation. * * *" After 1908 the lines of the company were extended beyond the city limits, and in 1922 the Corporation Commission of Virginia authorized a fare of six cents between points outside of the city limits and other points on the lines. In 1925, the city, by proper proceedings, annexed to itself a large contiguous territory embracing the outside lines of the company, the annexation taking effect at midnight of December 31, 1925, and on December 14, 1925, in anticipation of the extension, the council of the city adopted the ordinance complained of, which is as follows:

"Be it resolved, by the council of the city of Lynchburg, that the five-cent street car fare now charged by the Lynchburg Traction & Light Company, on its lines within the city of Lynchburg, shall be, and the same is, made effective after December 31, 1925, at 12 o'clock midnight, on all lines of said company in that territory to be annexed to and become a part of the city of Lynchburg on December 31, 1925, at 12 o'clock midnight."

It is this ordinance which is attacked; and the sole ground of attack is that it violates the contract clause of the Constitution. There is no allegation that the rate fixed by the city is confiscatory, or that the company is in any manner denied due process of law or the equal protection of the laws, in violation of the Fourteenth Amendment to the Constitution. The company's sole contention, as we understand it, is that the ordinance impairs the obligation of its franchises or contracts with the city (1) in that it nullifies the order of the Corporation Commission of Virginia, which it claims modified and became a part of the original contracts; and (2) in that it increases the burden of the original contracts, by extending their provisions to outside territory.

We see no merit whatever in the company's first point. The bill does not allege that there was any contract by which the company was allowed to charge a 6-cent fare to or from points beyond the city limits. On the contrary, it is expressly set forth that this rate was fixed by the state Corporation Commission. It was fixed, therefore, not by contract, or by modification of contract, but by exercise of the police power of the state. Town of Victoria v. Victoria Ice, Light & Power Co., 134 Va. 134, 114 S. E. 92, 28 A. L. R. 562; City of Richmond v. Virginia Ry. & Power Co., 141 Va. 69, 126 S. E. 353.

As to the second point, that the ordinance increases the burden of the franchises or contracts by extending their provisions to the outside territory, the answer is that the ordinance makes no reference to the contracts or franchises, and it does not appear that the city, in enacting the ordinance, was proceeding under or relying upon the franchises or contracts embodied in them. The franchises themselves do not attempt to bind the parties as to rates in the territory beyond the old city limits, and the mere fixing of rates for this outside territory, although possibly void on other grounds, could not be said to impair the obligations of a contract which had no reference to the matter.

The company relies particularly upon Detroit United Railway Co. v. Michigan, 242 U. S. 238, 37 S. Ct. 87, 61 L. Ed. 268, Georgia Ry. & Power Co. v. Decatur, 262 U. S. 432, 43 S. Ct. 613, 67 L. Ed. 1065, and Georgia Ry. & Power Co. v. College Park, 262 U. S....