Dallas Ry. Co. v. Geller

• Decision Date: 27 April 1925
• Docket Number: (No. 3912.)
• Citation: 271 S.W. 1106
• Parties: DALLAS RY. CO. v. GELLER.
• Court: Texas Supreme Court

Page 1106

271 S.W. 1106

DALLAS RY. CO. v. GELLER.

(No. 3912.)

Supreme Court of Texas.

April 27, 1925.

Error to Court of Civil Appeals of Fifth Supreme Judicial District.

Suit by F. J. Geller against the Dallas Railway Company. Judgment of dismissal was reversed by the Court of Civil Appeals (245 S. W. 254), and defendant brings error. Reversed, and judgment of district court affirmed.

Templeton, Beall, Williams & Worsham, of Dallas, and Templeton, Brooks, Napier & Brown, of San Antonio, for plaintiff in error.

Jas. J. Collins and Nelson Phillips, both of Dallas, and Baker, Botts, Parker & Garwood, Edwin B. Parker, H. M. Garwood, and C. R. Wharton, all of Houston, amici curiæ.

W. S. Bramlette, of Dallas, for defendant in error.

PIERSON, J.

Defendant in error, F. J. Geller, alleging himself to be an elector, voter, and citizen of the city of Dallas, Tex., and a patron of the Dallas Railway Company, brought this suit in the district court of the Forty-Fourth judicial district of Texas at Dallas, seeking to enjoin plaintiff in error, Dallas Railway Company, from raising the charge or fare for carrying its passengers over its lines of street railway from the 5-cent rate to a 6-cent rate, as was provided and authorized in an ordinance passed by the board of commissioners of the city of Dallas on June 24, 1922.

In 1917 the plaintiff in error had received a franchise from the city of Dallas to operate its lines of street railway upon and over the streets of the city of Dallas. The ordinance by which said franchise was granted in 1917 was submitted to and approved by the electors of the city of Dallas under the referendum provisions of the city charter. The franchise so granted prescribed a schedule of rates for the carriage of passengers, and designated 5 cents as the maximum fare to be charged.

It is the contention of defendant in error, Geller, that the said franchise of 1917 was and is a contract, such as cannot be altered or changed by the city under its powers to fix, change, or regulate the schedule of rates for public service corporations, but binds plaintiff in error during the life of the franchise to a 5-cent rate, and that the ordinance of 1922, granting plaintiff in error permission to charge a 6-cent fare, is invalid on account thereof. He further contends that, before said ordinance changing, regulating, and increasing the rate should take effect, it must be approved by vote of the electors under the referendum provisions of the city charter, in accordance with the petition filed by the requisite number of electors as prescribed by said charter.

On hearing, the trial court sustained plaintiff in error's general demurrer and special exceptions, and dismissed the case.

The honorable Court of Civil Appeals for the Fifth Supreme judicial district held that the ordinance involved in this case was one regulating the rate schedule, that the schedule of rates was subject to constant regulation by the governing body of the municipality granting it, and that the ordinance changing the rate schedule was not void, but held it inoperative until approved by the electors of the city of Dallas under the referendum provision of the city's charter. The court, speaking through Chief Justice Sargeant, held that the franchise ordinance of 1917 was not a fixed contract binding for the life of the franchise, but one regulating a rate schedule which is subject to revision from time to time by the legislative branch of the municipality, and cites section 17, art. 1, of the Constitution of Texas; San Antonio Tr. Co. v. Altgelt (Tex. Civ. App.) 81 S. W. 106 (writ of error denied); the same case in 200 U. S. 304, 26 S. Ct. 261, 50 L. Ed. 491; San Antonio v. San Antonio Public Service Co., 255 U. S. 547, 41 S. Ct. 428, 65 L. Ed. 777; S. W. Tel. & Tel. Co. v. City of Dallas (Tex. Civ. App.) 174 S. W. 636.

Perhaps the city attorneys, amicus curiæ, are unduly or unnecessarily alarmed, construing, as they do, the opinion of the honorable Court of Civil Appeals to hold that a municipality cannot make contracts that are binding upon public service corporations.

In the first case cited the Court of Civil Appeals for the Fourth Supreme judicial district said:

"The Legislature has the power to regulate the rates of fare of a street railway company in the absence of any provision in its charter relinquishing that right (Wood on Railroads [Miner's Ed.] 1658; Nellis, St. Railroads, 40), provided, however, the rates established are not so unreasonable as to practically destroy the value of the property of the corporation, and thereby depriving it of its property without due process of law, and denying it equal protection of the law. * * * This right, under the present Constitution, cannot, as we have seen, be relinquished by a provision in the company's charter."

The Supreme Court of the United States, in 200 U. S. 304, 26 S. Ct. 261, 50 L. Ed. 491, said:

"Assuming, but not deciding, that the ordinance of March 16, 1899, extending the franchise of the San Antonio Street Railway, and imposing certain limitations, constituted a contract pro tanto, the question still remains whether the provision `that said street railway companies shall charge 5 cents fare for one...