Sec. 10.-Powers Denied to States Cl. 1.-Contracts-Charters of creditors, and can not, as such, be impaired in any essential particular by State legislation. It runs directly from the stockholder to the creditor, and the obligation becomes a part of every contract, debt, and engagement of the corporation as much as if severally made with the stockholder himself. Knickerbocker Trust Co. v. Myers, 133 Fed. 766. See also Sherman v. Smith, 1 Black 590. Ochiltree v. Iowa R., etc., Co., 21 Wall. 251. Pinney v. Nelson, 183 U. S. 144. Hill v. Merchants' Mut. Ins. Co., 134 U. S. 515. Pittsburgh Steel Co. v. Baltimore, etc., Soc., 226 U. S. 455. A statute repealing the charter provision as to the liability of the stockholders impairs the obligation of contracts as respects creditors of the corporation existing at the time of the repeal; the obligation is impaired whether considered as an agreement by the stockholder on subscribing for stock to become security for the creditors for the payment of the debts of the company which had been contracted upon the faith of his liability, or as abolishing the remedy which the corporation had, and as impairing the obligation of the contract of the corporation. Hawthorne v. Calef, 2 Wall. 10. See also Bernheimer v. Converse, 206 U. S. 516; Selig v. Hamilton, 234 U. S. 652; and Henley v. Myers, 215 U. S. 373, as to change of remedy. No injustice shall be done to stockholders.-When a constitutional provision authorizing the amendment or repeal of a charter contains a condition: "Provided, however, That no injustice shall be done to the stockholders," a contract with a waterworks company excluding competition by the city in furnishing a water supply for a stated period can not be impaired by the establishment of a municipal plant, as it would be a palpable injustice to the stockholders to permit the competition. Vicksburg v. Vicksburg Waterworks Co., 202 U. S. 453. Contracts of Railroad Corporation' In general. A charter granted to a railroad corporation is a contract, and a franchise granted to one railroad can not be revoked or granted to another. A franchise to operate a strect railroad, if valid when granted, can not be impaired either by legislative act or judicial decision. An ordinance which merely amounts to a proposition to grant a franchise in consideration of the construction and operation of a street railroad, when accepted by performance, becomes a contract unimpairable by the State. Wilmington R. R. v. Reid, 13 Wall. 266. New Orleans, etc., R. Co. v. Delamore, 114 U. S. 510. City R. Co. v. Citizens R. Co., 166 U. S. 567. 'See Art. I, sec. 8, cl. 3, p. 83, as to regulations of commerce by Congress. 12703°-S. Doc. 157, 68-1—26 Sec. 10.-Powers Denied to States Cl. 1.-Contracts-Of Railroads See also Pacific R. Co. v. Maguire, 20 Wall. 43. Chicago, etc., R. Co. v. Iowa, 94 U. S. 161. New York, etc., R. Co. v. Pennsylvania, 153 U. S. 628. Houston, etc., R. Co. v. Texas, 170 U. S. 261. Blair v. Chicago, 201 U. S. 400. Grand Trunk, etc., R. Co. v. South Bend, 227 U. S. 544. Statute providing for the operation of a street railway company by trustees does not impair the obligation of any contract. Boston v. Jackson, 260 U. S. 309. Upon the consolidation of two or more railroad corporations, the franchise granted to the consolidated corporation is subject to the laws in force at the time of the consolidation; the consolidation works their individual dissolution. Railroad Co. v. Maine, 96 U. S. 510. Shields v. Ohio, 95 U. S. 323. See also Pullman Co. v. Missouri, etc., R. Co., 115 U. S. 594. Wabash, etc., R. Co. v. Ham, 114 U. S. 595. Keokuk, etc., R. Co. v. Missouri, 152 U. S. 310. Exclusive privileges.-As to the strict construction of the language of a charter granting exclusive privileges in the case of a railroad between Washington, D. C., and Richmond, Va., seeRichmond, etc., R. Co. v. Louisa R. Co., 13 How. 80. When, by a State statute, a railway company has become vested with exclusive rights to operate a street railway in a city, the municipal corporation can not by ordinance grant to another company the privilege of laying and operating a railway upon the same streets before the expiration of the charter granted to the first company. City R. Co. v. Citizens' St. R. Co., 166 U. S. 557. The grant by a county board of a right to locate, construct, maintain, and operate an interurban electric railway along a State highway, without specifying any limit of time, must be held-unless there are controlling provisions in the State constitution or statutes, or a prior adjudication by its courts to the contrary to constitute, when accepted, a perpetual franchise, protected by this clause, against revocation by subsequent resolution of such board. Northern Ohio Traction, etc., Co. v. Ohio, 245 U. S. 574. See also United R. Rs., etc., v. San Francisco, 249 U. S. 517. Subject to operation of general laws.-The power given to the directors of a railroad company in the charter to make by-laws, rules, and regulations for the management of the affairs of the company, with the express provision that such by-laws, rules, and regulations shall not be contrary to the laws of the State, does not imply a contract on the part of the State to exempt the company from the operation of laws enacted within the scope Sec. 10.-Powers Denied to States Cl. 1.-Contracts-Of Railroads of legislative power for the regulation of business in which it has authority to engage. Railroad Commission Cases, 116 U. S. 329. Pennsylvania R. Co. v. Miller, 132 U. S. 82. Liability for tort of lessee railroad.-A railroad company which has leased its road under an amendment to its charter which contains no other provision as to leasing than that the leasing may be upon such terms as are mutually agreeable to the parties has no contract the obligation of which is impaired by applying to it a general statute which renders any railroad company of that State leasing its road to a company of another State liable jointly with the lessee for any actionable tort of the latter committed in the operation of the road. Chicago, etc., R. Co. v. McWhirt, 243 U. S. 422. Municipal control-In general.-Even in the absence of positive legislation giving a municipal corporation the power to regulate the use of the streets by railroad companies, any contract entered into by the city with a railroad company would be subject to the exercise of such a power by the city, so long as it did not materially modify or impair the rights granted by the contract. Baltimore v. Baltimore Trust Co., 166 U. S. 681. Right to lay double track.-Where under statutory authority a municipal corporation has granted to a railway company the right to lay double tracks on certain streets, such is a contract right which can not be impaired by a subsequent ordinance, passed after one track has been laid and in use, prohibiting the laying of a second track, when the statute, while it authorized the city to grant the franchise, reserved to it no such power to repeal. Grand Trunk, etc., R. Co. v. South Bend, 227 U. S. 544. See also Baltimore v. Baltimore Trust, etc., Co., supra, holding that though a city has made a grant to a railroad company to lay double tracks through many miles of streets, it may, in the exercise of the police power, subsequently repeal the grant as far as it relates to a short distance in a crowded part of a narrow street. Louisiana v. Morgans Co., 264 U. S. 392, as to construction of viaduct. License not contract.-A license to use a sidewalk as a spur track, granted by a city to a railroad long after the creation of the railroad corporation, is not a contract right protected by the Constitution, and the city may direct its removal by legislation. Seaboard Air Line R. Co. v. Raleigh, 242 U. S. 15. See also Southern Pac. Co. v. Portland, 227 U. S. 559, as to prohibiting the running of locomotives along a street. Wabash R. Co. v. Defiance, 167 U. S. 93, as to the erection and maintenance of bridges. Chicago, etc., R. Co. v. Nebraska, 170 U. S. 71, as to construction of viaduct over tracks. Sec. 10.-Powers Denied to States Cl. 1.-Contracts-Of Railroads Atlantic Coast Line v. Goldsboro, 232 U. S. 548, as to conforming to grade and shifting of cars. Richmond, etc., R. Co. v. Richmond, 96 U. S. 537, as to use of steam in propelling cars. Worcester v. Worcester, etc., R. Co., 196 U. S. 548; Oklahoma R. Co. v. Severns Pav. Co., 251 U. S. 104; Pacific Gas Co. v. Police Ct., 251 U. S. 22, and Denver, etc., R. Co. v. Denver, 250 U. S. 241, as to general regulations affecting railroad track laid in public street. East Tennessee, etc., R. Co. v. Frazier, 139 U. S. 288, as to power to create a mortgage. Batlimore, etc., R. Co. v. Nesbit, 10 How. 395, and Minneapolis, etc., R. Co. v. Emmons, 149 U. S. 364, as to right to hold and method of acquiring land. Offield v. New York, etc., R. Co., 203 U. S. 372, as to condemnation of stock owned by a person who refuses to agree on the terms of purchase. Southern Wisconsin R. Co. v. Madison, 240 U. S. 457, and New Orleans, etc., R. Co. v. Louisiana, 157 U. S. 219, as to paving and repairing streets. Power to require abolition of railroad grade crossings regarded as authority impliedly reserved when State granted right to occupy land. Erie R. Co. v. New Jersey, 254 U. S. 394. Regulation of rates.1-In general.-A State may regulate the rates to be charged by a railroad for the transportation of freight and passengers, unless restrained by some positive provision in the charter; and its power in this regard is not affected by the fact that the corporation's income has been pledged to meet obligations incurred on the faith of the charter. It is competent for the State to empower a corporation absolutely to fix its own rates, and where this is done expressly any attempt to change the rates by the State impairs a contract obligation. Chicago, etc., R. Co. v. Iowa, 94 U. S. 155. Winona, etc., R. Co. v. Blake, 94 U. S. 180. Ruggles v. Illinois, 108 U. S. 526. Ex parte Koehler, 23 Fed. 529. See also Peik v. Chicago, etc., R. Co., 94 U. S. 164. San Antonio Traction Co. v. Altgelt, 200 U. S. 304. Terre Haute, etc., R. Co. v. Indiana, 194 U. S. 579. A carrier can not assert, as against the operation of a ratemaking order of the State railroad commission, the constitutional protection of a contract right under its charter to charge certain rates where its charter became, by the carrier's own voluntary act, subject to legislative alteration, since the commission's order fixing rates is a legislative act under delegated power. Louisville, etc., R. Co. v. Garrett, 231 U. S. 298. An ordinance granting a right to charge 5 cents fare for one continuous ride on a street railway, passed after the adoption See Art. I, sec. 8, cl. 3, p. 83, as to regulation by Congress. Sec. 10.-Powers Denied to States Cl. 1.-Contracts-Of Railroads of a constitutional provision declaring that "no irrevocable or uncontrollable grant of special privileges" shall be made, does not constitute a contract with respect to which no further legislation upon that subject can be enacted without impairing its obligation, and a statute requiring the company to sell tickets to school children for half the regular fare is valid. San Antonio Traction Co. v. Altgelt, 200 U. S. 304. As to acceptance by corporation of subsequent constitutional provision see Louisville, etc., R. Co. v. Garrett, 231 U. S. 298. Order of Public Service Commission of Washington requiring street railway passengers to be carried beyond limits of particular franchise held not to impair obligation of contract contained in municipal ordinance granting street railway franchise. Puget Sound Traction, etc., Co. v. Reynolds, 244 U. S. 574. Railroad can not repudiate rates contracted for.—A railroad corporation may contract with a municipality or with a State to operate a railway at agreed rates of fare. And where the provisions of an accepted statute respecting rates to be charged for transportation are plain and unambiguous, and do not contravene public policy or positive rules of law, a railroad company can not avail itself of privileges which have been procured upon stipulated conditions and repudiate performance of the latter at will. Grand Rapids, etc., Co. v. Osborn, 193 U. S. 29. A decision of a State supreme court denying an interstate carrier an immunity based upon a stipulation on an interstate passenger ticket held reviewable by certiorari and not by writ of error. A ticket for interstate passage over several railroads bore a printed stipulation limiting the selling carrier's liability to its own lines. Held, that by accepting and using the ticket, though without reading it, a passenger must be presumed to have agreed to the stipulation, thereby establishing a contract, prima facie valid, and binding in a State court. Missouri Pac. R. R. v. Prude, 265 U. S. 99. Construction of language granting right.--In providing for a rate of fare to be charged by a street railway company, it may very well be that language used by a legislature in merely conferring authority upon a company to fix certain charges for fare might not be regarded as amounting to a contract, when the same language used by parties in fixing rates under a legislative authority and direction to agree upon them would be regarded as forming a contract, because the statute provided specially for that mode of determining them. Detroit v. Detroit, etc., R. Co., 184 U. S. 388. |