Ft Smith Light Traction Co v. Board of Improvement of Paving Dist No 16 of City of Ft Smith, Ark

• Citation: 274 U.S. 387,71 L.Ed. 1112,47 S.Ct. 595
• Decision Date: 16 May 1927
• Docket Number: No. 269,269
• Parties: FT. SMITH LIGHT & TRACTION CO. v. BOARD OF IMPROVEMENT OF PAVING DIST. NO. 16 OF CITY OF FT. SMITH, ARK
• Court: United States Supreme Court

274 U.S. 387

47 S.Ct. 595

71 L.Ed. 1112

FT. SMITH LIGHT & TRACTION CO.

v BOARD OF IMPROVEMENT OF PAVING DIST. NO. 16 OF CITY OF FT. SMITH, ARK.

No. 269.

Submitted March 17, 1927.

Decided May 16, 1927.

Messrs. Joseph M. Hill and Henry L. Fitzhugh, both of Ft. Smith, Ark., and R. M. Campbell, of Chicago, Ill., for plaintiff in error.

Mr. John P. Woods, of Ft. Smith, Ark., for defendant in error.

Mr. Justice STONE delivered the opinion of the Court.

Defendant in error, a board of improvement incorporated by the state of Arkansas, brought suit in the circuit court of Sebastian county, to recover the cost of paving a part of certain streets in Ft. Smith, Ark., occupied by the street railway of plaintiff in error. Plaintiff in error originally operated its railway under a franchise requiring it to do similar paving and limiting it to a maximum fare of 5 cents per passenger. Availing of the permission granted by No. 571 of the Acts of Arkansas 1919, amended by No. 124 of 1921, the company had surrendered in that year its franchise for an indeterminate permit to operate its road. The permit did not fix a maximum fare or require the railway to pave parts of the streets occupied by its tracks, but subjected it to the regulatory powers of a utilities commission.

In 1923 the Legislature passed a statute, Acts of Arkansas 1923, No. 680, requiring plaintiff in error under certain conditions which have occurred to pave the streets between its rails to the end of the ties. In the event of its failure to do so, the improvement district was authorized to do the paving at the expense of the railway. The act is in form a general statute, but by reason of provisions making it applicable to street railways operating under indeterminate permits in cities of the first class other than in Miller county, it in fact applied to plaintiff in error alone.

Plaintiff in error having failed to do the required paving, the board completed the improvement and brought the present suit. The company by answer set up that the statutory requirements of paving impaired the obligation of its contract with the state, in violation of article 1, § 10, of the federal Constitution, and deprived it of property without of the laws guaranteed by the Fourteenth of the laws guaranteed by the Fourt Amendment. The judgment of the circuit court for defendant in error was affirmed by the Supreme Court of the state. 169 Ark. 690, 276 S. W. 1012. The case is here on writ of error. Judicial Code, § 237, as amended (Comp. St. § 1214).

It is urged that the acceptance of the indeterminate permit under the act of 1919 constituted a contract between the railway and the state by which the state bound itself not to impose any added burdens except in the exercise of its police power; that the requirement for street paving was not an exercise of the police power and was therefore a forbidden impairment of the contract. This contention assumes that the permit exempted the railway from paving costs. But no such exemption appears in the permit. Provisions of this character are not lightly to be read into a contract between a state and a public utility. Durham Public Service Co. v. Durham, 261 U. S. 149, 152, 43 S. Ct. 290, 67 L. Ed. 580. Even granting the assumption, the case of Fair Haven R. R. v. New Haven, 203 U. S. 379, 27 S. Ct. 74, 51 L. Ed. 237, is a complete answer. There this court held that a general law imposing on a street railway the duty to repair so much of the streets as was occupied by its tracks was an exercise of the power reserved to the state to alter, amend or repeal the original charter and was not an impairment of the obligation of contract. That case controls here since section 6, art. 12, of the Constitution of Arkansas, in force at the time when plaintiff relinquished its franchise and accepted the permit, reserved to the legislature the power to alter any corporate charter. See, also, Sioux City Street Ry. v. Sioux City, 138 U. S. 98, 11 S. Ct. 226, 34 L. Ed. 898.

Assuming the exercise of the power of amendment is subject to the limitation of the due process clause of the Fourteenth Amendment (Shields v. Ohio, 95 U. S. 319, 324, 24 L. Ed. 357; Stanislaus County v. San Joaquin Co., 192 U. S. 201, 213, 24 S. Ct. 241, 48 L. Ed. 406), that limitation, as was held in Fair Haven R. R. v. New Haven, supra, is not transcended by a requirement which might have been included in the original charter and which has some reasonable relation to the object of the grant and to the duty of the state to maintain its highways. Cf. Southern Wisconsin Ry. v. Madison, 240 U. S. 457, 36 S. Ct. 400, 60 L. Ed. 739; Great Northern Ry. v. State ex rel. Clara City, 246 U. S. 434, 38 S. Ct. 346, 62 L. Ed. 817.

It is said that the act in its application is confiscatory because plaintiff in error must bear this expense, although it is losing money in the operation of its road at the rates for service now prevailing. But the imposition of burdens, otherwise legitimate, upon a public service company, cannot be held invalid as confiscatory because the permitted rate does not allow an adequate return. People ex rel. Woodhaven Gaslight Co. v. Public Service Commission, 269 U. S. 244, 46 S. Ct. 83, 70 L. Ed. 255; Milwaukee Elec. Ry. v. State ex rel. Milwaukee, 252 U. S 100, 105, 40 S. Ct. 306, 64 L. Ed. 476, 10 A. L. R. 892. Whether the rate is confiscatory is not before us.

It is also contended that as there are other street railways in the state, some operating under franchises and one under an indeterminate permit, which are not required to do street paving, the challenged act denies the equal protection of the laws. The Fourteenth Amendment does not prohibit legislation merely because it is special, or limited in its application to a particular geographical or political subdivision of the state. See Missouri v. Lewis, 101 U. S. 22, 31, 25 L. Ed. 989; Missouri Ry. V. Mackey, 127 U. S. 205, 209, 8 S. Ct. 1161, 32 L. Ed. 107; Mason v. Missouri...