franchise was granted and accepted. This declared that the "mode" of use of the streets "shall be such as shall be agreed upon between the municipal authorities of the . . . village and the company, but if they cannot agree, the probate court of the county shall direct what the mode of use shall be." In 1896 the state law was amended so that it forbade the construction or maintenance of wires, fixtures and appliances for conducting electricity without the consent of the municipality. In 1913 the company took down certain poles and wires used for lighting the streets. The Supreme Court held that it could not restore these or erect new additional ones without obtaining the consent of the city; but it interpreted the injunction granted below as not applying to the repair and replacing of poles and wires which had been continuously used for commercial lighting and affirmed the judgment of the state court with the qualification, "restrained to the scope of its opinion, as we have interpreted it." The case thus rests on the abandonment by the company of its rights under the ordinance of 1889 in its poles and wires used for street lighting. The statute of 1896, requiring the consent of the city, is sustained as a reasonable exercise of the police power; such modification of the company's rights as it may suffer from the decree of the state court is said "not to constitute an impairing of the obligation of its contract with the state or village." In Pacific Gas & Electric Co. v. Police Court the only contract right adduced against a municipal command to sprinkle the streets was the general authority conferred by the franchise to operate a road in the streets; but the ordinance was found to be within the police power, and the police power was said to dominate the right of the company under its franchise to use the streets. In two cases the contracts unsuccessfully relied on were with private persons rather than with some public authority. Munday v. Wisconsin Trust Co. sustained the state court in holding a deed invalid because the grantee was a foreign corporation which had failed to file the requisite papers with the state in which the land lay. As the obstructing statute was in force before the transaction. in question, the court reminded the aggrieved litigant that "the settled doctrine is that the contract clause applies only to legislation 251 U. S. 22, 40 Sup. Ct. 79 (1919), 19 MICH. L. REV. 139. subsequent in time to the contract alleged to have been impaired." Before the suit began the grantee had obtained a license to do business and hold property within the state, but the state court had held that this did not validate prior invalid transactions. This was said by the Supreme Court to be wholly a matter of state law and to involve no right under the Constitution or laws of the United States. In Producers' Transportation Co. v. Railroad Commission the plaintiff had previously fixed its rates by private contract and now insisted that it was not a common carrier; but the court disagreed with it and allowed the state railroad commission to take it in hand. Mr. Justice Van Devanter reiterated the well-settled rule that “a common carrier cannot, by making contracts for future transportation or by mortgaging its property or pledging its income, prevent or postpone the exertion by the state of the power to regulate the carrier's rates and practices." To make the matter certain, he added: "Nor does the contract clause of the Constitution impose any obstacle to the assertion of that power." In three cases the contract clause was grasped not as a mere make weight but as the only hope against legislation concededly within the general police power. In Bank of Oxford v. Love' it was recognized that the charter of a bank was a contract, but the provision that the business shall be controlled by the stockholders under such rules and regulations as the company may see fit to adopt was held not to confer any immunity from a statute requiring periodic examination by the state banking department and the imposition of moderate fees for the maintenance of the scrutinizing agency. In Piedmont Power & Light Co. v. Graham the plaintiff attempted unsuccessfully to spell out an exclusive franchise from a provision in its charter that the town "warrants that it will, by its proper authorities, provide for the full and free use of its streets, lanes," etc. Mr. Justice Clarke called the contention "fatuous and futile," and declared that "grants of rights and privileges by a state or municipality are strictly construed and whatever is not unequivɔ 251 U. S. 228, 40 Sup. Ct. 131 (1920), 19 MICH. L. Rev. 137. 250 U. S. 603, 40 Sup. Ct. 22 (1919). 253 U. S. 193, 40 Sup. Ct. 453 (1920). cally granted is withheld; nothing passes by implication." The alleged federal question was found so frivolous that the appeal from the court below was dismissed for want of jurisdiction. A similar summary disposition was given to the appeal in Cuyahoga River Power Co. v. Northern Ohio T. & L. Co. A waterpower company which had been granted the right of eminent domain was told that it acquired no exclusive right to any particular lands by filing with its articles of incorporation a plan specifying the places where it planned to erect dams. "The contention of plaintiff," observes Mr. Justice McKenna, "is certainly a bold one, and seemingly erects into a legal principle that unexecuted intention, or partly executed intention, has the same effect as executed intention, and that the declaration of an enterprise gives the same right as its consummation." The acts of a competing company of which the frustrated plaintiff complained were held not acts that might be attributed to the state as an impairment of plaintiff's contract. No wrong was done the plaintiff by incorporating other power companies under the same general law or by sanctioning the transfer of the rights and franchises of a corporation older than itself to one younger. The contract clause was one of the supports picked out by the successful lighting company in Los Angeles v. Los Angeles Gas & Electric Corporation,10 and figured at least indirectly in the decision. The case held that the city could not compel the company to remove poles and wires to make room for a competing municipal system. Since the attempt was not a valid police measure and was unaccompanied by any proffer of compensation, it was held to be inhibited. by the Fourteenth Amendment. But the property rights thus wrongfully threatened seem to be regarded as not confined to property acquired for the purpose of exercising the powers conferred by the franchise, but to embrace also property rights in the franchise itself. To quote Mr. Justice McKenna: "A franchise conveys rights, and if their exercise could be prevented or destroyed by a simple declaration of a municipal council, they would be infirm indeed in tenure and 252 U. S. 388, 40 Sup. Ct. 404 (1920). 10251 U. S. 32, 40 Sup. Ct. 76 (1919), 19 MICH. L. REV. 139. Justices of substance. It is to be remembered that they came into existence by compact, having, therefore, its sanction, urged by reciprocal benefits, and are attended and can only be exercised by expenditure of money, making them a matter of investments and property, and entitled as such against being taken without the proper process of law-the payment of compensation." The distinction between a breach of contract and an impairment its obligation finds illustration in Hays v. Port of Seattle,11 already considered in the section on eminent domain. Back in 1896 the plaintiff made a contract with the state for excavating part of Seattle harbor, the state engaging "to hold the lands subject to the operation of the contract pending its execution, and subject to the ultimate lien of the contractor thereon." After long delay and disagreement as to plans, the state in 1913 turned the property over to the Port of Seattle, which proceeded to go ahead with the excavation on its own account. This was held to be nothing but a possible breach by the state of its contract with the plaintiff, Mr. Justice Pitney observing: "Supposing the contract had not been abandoned by complainant himself or terminated by his long delay, its obligation remained as before, and formed the measure of his right to recover from the state for the damages sustained." As the state by general law provided ample opportunity to sue and to collect a judgment against it, and the infliction on the plaintiff, if any, was for a recognized public purpose, an injunction was denied and the plaintiff left to his action for damages. Two of the tax cases already treated dealt also with objections to retroactive legislation. The plaintiff in Oklahoma Ry. Co. v. Severns Paving Co.12 was told that its charter obligation to pave a Portion of its right of way implied no agreement on the part of the city that prevented a special assessment on the railroad right of way to defray part of the expense of paving the main portion of 11 12 251 U. S. 233, 40 Sup. Ct. 125 (1920), 19 MICH. L. REV. 149. 251 U. S. 104, 40 Sup. Ct. 73 (1919), 19 MICH. L. REV. 129. intoxicating beer is within the war power, this can be legally effected, only provided compensation is made." Mr. Justice Brandeis called attention to the fact that in one of the earliest cases one of the judgments affirmed was "for violation of the act by selling beer acquired before its enactment....and that it was assumed without discussion that the same rule applied to the brewery and its product.” He then continued: "But we are not required to determine here the limits in This is plainly a stretch of the Kentucky Distilleries case, since the Volstead Act became effective on its passage. There is nothing in the dissenting opinion in the Ruppert case indicating specifically that the objectors would have been mollified if the Volstead Act had provided compensation, though Mr. Justice McReynolds refers to the Fifth Amendment and the "well settled rights of individuals in harmless property." In Board of Public Utility Commissioners v. Ynchausti & Co.TM which sustained a requirement of free carriage of the mails from vessels engaged in the Philippine coasting trade, the Chief Justice said that "it is impossible to conceive how either the guaranty by the Bill of Rights of due process or its prohibition against the taking of private property for public use without compensation can have the slightest application to the case if the Philippine government possess |