Cleveland v. Cleveland Electric Railway Company (194 U.S. 538)/Opinion of the Court

This case is analogous in the facts shown by the record to the one just decided (Cleveland v. Cleveland City R. Co. 194 U.S. --, ante, p. 756, 24 Sup. Ct. Rep. 756), and presents identical questions of law.

We shall briefly advert to some only of the material facts.

An ordinance was passed by the city council of Cleveland in 1879, granting a renewal of franchise to the East Cleveland Railroad Company, and in § 6 of the ordinance it was provided as follows:

'Said company shall not charge more than 5 cents fare each way for one passenger over the whole or any part of the line herein renewed, but said company may charge a reasonable compensation for carrying packages. The council, however, reserves the right to hereafter increase or diminish the rate of fare, as it may deem justifiable and expedient.'

By ordinances duly accepted, passed in 1886, 1888, and 1889, extensions were authorized, thorized, the right was given to doubletrack portions of the line, the franchise was extended, and additional obligations were assumed by the railroad company in respect to paving, etc. It was expressly stipulated in the ordinances of 1886 and 1887 that the company should charge and collect for passage over its lines in either direction but one fare, of not more than 5 cents; there was no reservation of the future right to alter rates of fare; and it was agreed that the rights conferred should continue during the life of the franchise.

In 1893 the East Cleveland Railroad Company was consolidated with three other corporations, independent lines of railway, in the city of Cleveland, each of them operating under contracts or grants from the city, and charging, as authorized in the ordinance permitting their operation, a cash fare of 5 cents. As to no one of these companies was there any right remaining in the city council to increase or diminish the rate of fare during the period of the several grants. The fare then being charged by all the constituent companies was 5 cents. Since the consolidation the system has been operated in its entirety, and but a single fare of 5 cents has been charged.

On October 17, 1898, the city council of Cleveland passed an ordinance reducing the cash fare to be charged by the complainant on the portion of its line affected by the ordinance of 1879 to 4 cents, and required seven tickets to be sold for 25 cents. The validity of this ordinance was assailed by the bill filed in this cause, and similar contentions were urged against its constitutionality as are contained in the bill filed in the suit brought by the Cleveland Railway Company. Like jurisdictional objections were also interposed in this case by the city of Cleveland as were raised in the other case.

The circuit court granted a motion for judgment upon the pleadings, and decreed that the ordinance of 1898 was void because it impaired the obligations of prior contracts. 94 Fed. 385. The principles applied in the case of the Cleveland City Railway Company, just decided, govern this case, and, as a result, the decree of the Circuit Court must be, and it is, affirmed.

Mr. Justice Harlan took no part in the decision of this cause.