Milwaukee Elec. Ry. & Light Co. v. R.R. Comm'n of Wis.

• Decision Date: 09 June 1913
• Citation: 142 N.W. 491,153 Wis. 592
• Court: Wisconsin Supreme Court
• Parties: MILWAUKEE ELECTRIC RY. & LIGHT CO. v. RAILROAD COMMISSION OF WISCONSIN.

153 Wis. 592

142 N.W. 491

MILWAUKEE ELECTRIC RY. & LIGHT CO.

v.RAILROAD COMMISSION OF WISCONSIN.

Supreme Court of Wisconsin.

May 31, 1913.

Dissenting Opinion June 9, 1913.

Marshall and Vinje, JJ., dissenting.

Appeal from Circuit Court, Dane County; E. Ray Stevens, Judge.

Action by the Milwaukee Electric Railway & Light Company against the Railroad Commission of Wisconsin to vacate and set aside an order of the Commission, and enjoin the enforcement thereof. From a judgment dismissing the complaint, plaintiff appeals. Affirmed.

This is an appeal from a judgment of the circuit court of Dane county dismissing the plaintiff's complaint after a demurrer thereto had been sustained and the plaintiff had declined to plead over within the time granted by the court. The action is an action brought under the provisions of section 1797m--64, Stats. Wis., to vacate and set aside, as unlawful and unreasonable, an order of the defendant commission purporting to fix certain rates at which street car tickets should be sold in packages by the plaintiff over its lines in Milwaukee, which rates were somewhat less than the rates fixed by certain ordinances of the city previously passed.

The essential facts are fairly stated in the appellant's brief substantially as follows:

The complaint shows that the Milwaukee Electric Railway & Light Company is incorporated, among other purposes, for the conduct of a street railway, and that it operates a street railway extending throughout the city of Milwaukee over a large number of streets. The company's present street railway system involves a consolidation of five previous systems; three of these originally were constructed as horse railways and by authority of the common council changed to electric railways, the fourth originally was planned as a cable railway, but afterwards was authorized to be constructed as an electric railway, and the fifth was constructed as a steam motor or “dummy” road, but subsequently, by due authority, was changed to an electric line.

The plaintiff's street railway is operated under franchises which may be divided into three classes: (1) Franchises granted to individuals in 1874, and passing by mesne conveyances to the plaintiff; (2) franchises granted to other street railway corporations and also passing by mesne conveyances to the plaintiff; and (3) a franchise embodied in an ordinance and resolution enacted by the city January 2, 1900, extending all existing franchises, which will be referred to as the “1900 Ordinance.” Of the franchises granted to individuals some were granted to Frank B. Van Valkenburg et al., and some to John H. Tesch et al. All were granted during the year 1874, and were to extend for a term of 50 years from the time of the grant. Under them the street railway was constructed and is now actually being operated on some of the most important streets and forms the key to the street railway situation in the city of Milwaukee. The franchises granted to other corporations were embodied in ordinances and resolutions of the city of Milwaukee and cover a number of other streets over which the plaintiff operates.

The so-called “1900 Ordinance” was passed January 2, 1900, and granted to the plaintiff the right to operate over certain portions of streets for which it theretofore had no franchises. It provided also that all franchises expiring prior to December 31, 1934, should be extended from the date of such previous expiration to December 31, 1934, and all franchises which otherwise would expire subsequently to December 31, 1934, were made to terminate on that date. The franchise entailed on the company the obligation to give a universal transfer and also to furnish power to swing drawbridges, make certain expenditures for strengthening bridges and transport on its cars free of charge certain policemen, firemen, and health officers, and contained the following provisions as to rates of fare: “Sec. 6. After the passage, publication and acceptance of this ordinance by said railway company, the rate of fare for one continuous passage upon the lines of railway within said city limits of said city owned and operated by said railway company constructed under any franchise herein, heretofore or hereafter granted to said railway company or its predecessors, successors or assigns, as the case may be, shall be not to exceed five cents for a single fare, except for children under ten years of age the rate of fare shall be three cents for one child and five cents for two children, and infants under three years of age free. Except where cars or carriages shall be chartered at a special price, which fare shall entitle each passenger, upon demand made at the time of payment of fare, to one transfer at established points of transfer to any connecting or cross line of said railway company for passage within said city, and convenient points of transfer shall be maintained and such additional points of transfer established as will carry out the full intent and purpose of this ordinance to maintain and extend the transfer system now in force upon the lines of said railway company at the present standard of convenience for the people of said city. Each transfer ticket shall be good only for the passenger to whom it is issued, and for a continuous trip in the direction specified upon the transfer so given, and upon the first car leaving the transfer intersection after the time designated on such transfer. Provided, however, that after the acceptance of the terms of this ordinance the railway company shall, on demand made at its office in said city, or to the conductors on its cars operated on its lines within the corporate limits of said city, sell tickets in packages of twenty-five for one dollar or six for twenty-five cents, each of which tickets shall entitle the holder thereof to use the same upon the cars of said railway company only between the hours of 5:30 o'clock and 8:00 o'clock in the morning and between the hours of 5:00 o'clock and 7:00 o'clock, central standard time, in the afternoon of each day until Jan. 1, 1905, and shall also entitle the holder to the same privileges as are or may be accorded to passengers paying a cash fare of five cents; and the said railway company shall, from and after Jan. 1, 1905, continue the sale of tickets in packages at the price aforesaid until Dec. 31, 1934, each to be good at all hours of the day, with same privileges as are or may be accorded to passengers paying a single cash fare of five cents.” Of the various ordinances granting franchises, one that of March 26, 1866, granted to the Milwaukee City Railway Company, one of the plaintiff's predecessors, provided that the rate of fare should not exceed six cents, including the government tax. All other franchises, including those granted to Van Valkenburg et al. and Tesch et al. included a provision that the rate of fare “shall not exceed five cents,” except for chartered cars, etc. The various street railway companies were all acquired by the Milwaukee Street Railway Company, and on foreclosure of its mortgage passed to the plaintiff in January, 1896. From that time on all these companies were operated by the plaintiff, and the complaint alleges that prior to 1900 the plaintiff was entitled to charge, and did charge, a cash fare of five cents to each passenger, and was not obliged to furnish any transfers whatever. The plaintiff or its predecessors accepted the various franchises granted to them respectively, and fulfilled the terms thereof, and in compliance with the terms of the 1900 Ordinance the plaintiff, instead of charging merely a cash fare of five cents as it theretofore had done, sold tickets at the rates prescribed in the ordinance, and granted universal transfer privileges. In November, 1906, the city of Milwaukee filed a complaint with the defendant Railroad Commission for a reduction of the rates of fare and filed a second similar complaint on May 13, 1908. In proceedings held on these complaints the Railroad Commission on August 23, 1912, entered the order involved in this case. This order did not interfere with the cash fare, but provided that the company should discontinue its ticket rate of 25 for $1 (the rate prescribed by the 1900 Ordinance), and should sell tickets in packages of 13 for 50 cents, which tickets were ordered to be accepted in payment of fare.

Thereupon the plaintiff instituted this action to vacate and set aside this order and enjoin the execution, performance and enforcement thereof, and also prayed for a temporary injunction.

Miller, Mack & Fairchild, of Milwaukee (Sullivan & Cromwell, William J. Curtis and Henry H. Pierce, all of New York City, of counsel), for appellant.

Walter C. Owen, Atty. Gen., Walter Drew, Deputy Atty. Gen., and Daniel W. Hoan, City Atty., of Milwaukee (Max Schoetz, Jr., of Milwaukee, of counsel), for respondent.

WINSLOW, C. J. (after stating the facts as above).

We are much indebted to counsel for the illuminating briefs and able oral arguments with which we have been favored by both sides in this case. It is but just to say that our labors have been much lightened thereby. The case, however, is not in itself complicated or difficult of statement. There is in fact but a single question, and that is whether the ordinances referred to in the statement of facts, so far as they specify the rates of fare which may be charged, constitute contracts which are protected by the state and federal Constitutions from impairment.

On the part of the appellant the familiar principle is relied on that where municipal authorities, acting under clear and unmistakable legislative authority so to do, have granted the use of streets to a public utility corporation for the purpose of serving the people, and the grant has been accepted by the utility and performance entered upon, a contract has been created between the public and the corporation which cannot be impaired by subsequent legislation. Walla Walla...