
    DALLAS RY. CO. v. GELLER.
    (No. 3912.)
    (Supreme Court of Texas.
    April 27, 1925.)
    1. Carriers <§¿312(9) — Constitutional law <&wkey; 135 — Rate schedule subject to legislative control by municipality, though maximum fare is fixed by franchise.
    Under Const, art. 1, § 17, street railway rates are subject to legislative control by municipality, which may authorize higher rate than maximum fixed by franchise without impairing obligation of contract, of which reservation of such control is part, subject to proviso that rates fixed must not be so unreasonable as to practically destroy value of company’s property, in violation of due process and equal protection clauses of federal Constitution.
    2. Municipal corporations <&wkey;108 — Regulation of rates' of public service company not for .voters to pass on.
    Changing, fixing, or regulation of charges, fares, or rates of public service company are legislative and judicial questions, not for voters of city to pass on.
    3. Municipal corporations &wkey;>108 — Regulation of street railway rates held not within referendum provision of city charter.
    Fixing and regulation of street railway rates held not subject to referenum provided for by Dallas charter, in view of article 2, § 8, par. 7, delegating such matter to board of commissioners.
    &wkey;jFor other cases see same topic ana KEY-NUMBER in all Key-Numbered Digests and Indexes
    Error to Court of Civil Appeals of Fifth. Supreme Judicial District.
    Suit by F. J. Geller against the Dallas Railway Company. Judgment of dismissal was reversed by the Court of Civil Appeals (245 S. W. 254), and defendant brings error.
    Reversed, and judgment of district court affirmed.
    Templeton, Beall, Williams & Worsham, of Dallas, and Templeton, Brooks, Napier & Brown, of San Antonio, for plaintiff in. error.
    Jas. J. Collins and Nelson Phillips, both of Dallas, ap'd Baker, Botts, Parker & Gar-wood, Edwin B. Parker, H. M. Garwood, and C. R. Wharton, all of Houston, amici curiae.
    W. S. Bramlette, of Dallas, for defendant in error. ’
   PIERSON, J.

Defendant in error, F. J. Geller, alleging himself to be an elector, voter, and citizen of the city of Dallas, Tex:, and a patron of the Dallas Railway Company, brought this suit in the district court of the Forty-Fourth judicial district of Texas at Dallas, seeking to enjoin plaintiff in error, Dallas Railway Company, from raising the charge or fare for carrying its passengers over its lines of street railway from the 5-cent rate to a 6-cent rate, as was provided and authorized in an- ordinance passed by the board of commissioners of the city of Dallas on June 24, 1922.

In 1917 the plaintiff in error had received a franchise from the city of Dallas to operate its lines of street railway upon and over the streets of the city of Dallas. The ordinance by which said franchise was granted in 1917 was submitted to and approved by the electors of the city of Dallas under the referendum provisions of the .city charter. The franchise so • granted prescribed a schedule of rates for the carriage of passengers, and designated 5 cents as the maximum fare to be charged.

It is the contention of defendant in error, Geller, that the said franchise of 1917 was and is a contract, such as cannot be altered or changed by the. city under its powers to fix, change, or regulate the schedule of rates for public service corporations, but binds plaintiff in error during the life of the franchise to a 5-cent rate, and that the ordinance of 1922, granting plaintiff in error permission to charge a 6-cent fare, is invalid on account thereof. He further contends that, before said ordinance changing, regulating, and increasing the rate should take effect, it must be approved by vote of the electors under the referendum provisions of the city charter, in accordance with the petition filed by the requisite number of electors as prescribed by said charter.

On hearing, the trial court sustained plaintiff in error’s general demurrer and special exceptions, and dismissed the case.

The honorable Court of Civil Appeals for the Fifth Supreme judicial district held that the ordinance involved in this case was one regulating the rate schedule, that the schedule of rates was subject to constant" regulation by the governing body of the municipality granting it, and that the ordinance changing the rate schedule was not void, but held it inoperative until approved by the electors of the city of Dallas under the referendum provision of the city’s charter. The court, speaking through Chief Justice Sargea’nt, held that the franchise ordinance of 1917 was not a fixed contract binding for the life of the franchise, but one regulating a rate schedule which is subject to revision from time to time by the legislative branch of the municipality, and cites section 17, art. 1, of the Constitution of Texas; San Antonio Tr. Co. v. Altgelt (Tex. Civ. App.) 81 S. W. 106 (writ of error denied); the same case in 200 U. S. 304, 26 S. Ct. 261, 50 L. Ed. 491; San Antonio v. San Antonio Public Service Co., 255 U. S. 547, 41 S. Ct. 428, 65 L. Ed. 777; S. W. Tel. & Tel. Co. v. City of Dallas (Tex. Civ. App.) 174 S. W. 636.

Perhaps the city attorneys, amicus curiae, are unduly or unnecessarily alarmed, construing, as they do, the opinion of' the honorable Court of Civil Appeals to hold that a municipality cannot make contracts that are binding upon public service corporations.

In the first case cited the Court of Civil Appeals for the Fourth Supreme judicial district said:

“The Legislature has the power to regulate the rates of fare of a street railway company in the absence of-any provision in its charter relinquishing that right (Wood on Railroads [Miner’s Ed.] 1658; Nellis, St. Railroads, 40), provided, however, the rates established are not so unreasonable as to practically destroy the value of the property of the corporation, and thereby depriving it of its property without due process of law, and denying it equal protection of the law. * * * This right, under the present Constitution, cannot, as we have seen, be relinquished by a provision in the company’s charter.”

The Supreme Court of the United States, in 200 U. S. 304, 26 S. Ct. 261, 50 L. Ed. 491, said:

“Assuming, but not deciding, that the ordinance of March 16, 1899, extending the franchise of the San Antonio Street Railway, and imposing certain limitations, constituted a contract pro tanto, the question still remains whether the provision ‘that said street railway companies shall charge 5 cents, fare for one continuous ride over any one of their lines, with one transfer to or from either line to the other,’ constituted a contract with respect to which no further legislation upon that subject could be enacted without impairing its obligation. Even if construed as a contract, it was still subject to the provisions of the Constitution of 1876, which, in section 17 of the Bill of Rights, declared that no irrevocable or uncontrollable grant of special privileges. or immunities should be made; but that all privileges granted by the Legislature or created under its authority shall be subject to the control thereof. * * * Under the Bill of Rights of that Constitution the Legislature could not reduce the fares to a confiscatory amount or to an amount which would render it unprofitable to operate the road.”

With this construction as limited and defined in the cases last cited we are in Record. We incline to the view that the honorable Court of Civil Appeals intended to go no further than to hold in accord with the above-mentioned case of San Antonio Tr. Co. v. Altgelt (Tex. Civ. App.) 81 S. W. 106, in which this court refused a writ of error, and with the Supreme Court of the United States in the same case (200 U. S. 304, 26 S. Ct. 261, 50 L. Ed. 491), and the other eases cited above, wherein it was held that a rate schedule as in this case is subject to legislative control within the limitations of the Constitution and the laws which control the rights of property. This holding in this case in po wise contradicts the holding in the case of Mayor et al. v. Houston Railway, 83 Tex. 548, 19 S. W. 127, 29 Am. St. Rep. 679.

The right or power to further control or regulate the grant in regard to the rate schedule is a reservation to the municipality, and not an inhibition to contract; and, where a franchise is accepted by a grantee, this reservation provided in the law becomes a part of the contract.

The matter of changing, fixing, or regulating the charges, fares, or rates of a public service company or corporation, and of determining what tíre compensation for such service should be and its reasonableness, is both legislative.and judicial in character, and in its nature one which is at least impracticable, if not impossible, for the public at large, the voters, to pass on. They cannot have or digest the information, data, and facts necessarily incident and essential to the forming of a correct, accurate, and fair judgment upon the subject. S. W. Tel. & Tel. Co. v. City of Dallas, 104 Tex. 114, 134 S. W. 321; City of Dallas v. Dallas Con. El. St. Ry. Co. (Tex. Civ. App.) 159 S. W. 76.

Further, we think it clear that the charter provisions themselves reserve from referendum the fixing and regulating of the schedule of rates. That the fixing and regulating of the schedule of rates was not to be subject to a referendum is clearly shown in that paragraph of the city charter relating to that subject. Paragraph 7 of section 8 of article 2 declares;

“The right is hereby delegated to the city of Dallas, acting through its hoard of commissioners, to determine, fix and regulate the charges, faros or rates of any person, firm or corporation enjoying or that may enjoy a franchise or exercising any other public privilege in said city and to prescribe the kind of service to be furnished by such person, firm or corporation, and the manner in which it shall be rendered, and from time to time alter. or change such rules, regulations and compensation'. The hoard shall make rules and regulations granting a fair hearing to persons or corporations to be affected by said regulations, and no change in regulations shall be adopted except after notice to the persons affected and after a fair hearing shall be granted them; provided, that in adopting such regulations and in fixing or changing such compensation, or determining the reasonableness thereof, no stocks or bonds authorized .or issued by any porporation enjoying a franchise shall be considered unless upon proof that the same have been actually issued by the corporation for money paid and used for the development of the corporate property, labor done or property actually received in accordance with the laws and Constitution of the state applicable thereto; and in order to ascertain all facts necessary for a proper understanding of what is or should he a reasonable rate or regulation, the hoard of commissioners shall have full power to inspect hooks and compel attendance of witnesses as provided in subsection 6 hereof and may prescribe all penalties named in subsection 6 fotf a failure or refusal to attend and testify or produce books. * * * ” (Italics ours.)

Under proper construction of the charter, the city of Dallas does not provide for referendum on rate schedules. True, the referendum provision is broad, and provides generally for referendum of ordinances, but that provision must be construed in connection with the plain and specific provision relating to the fixing and regulating of rate schedules so as to give effect to its plain and specific requirements.

It is hardly necessary to repeat, analyze, or emphasize the provisions of the above paragraph. It is clearly provided that the city shall act through the board of commissioners in determining, fixing, and regulating the charges, fares, and rates, and in prescribing the kind of service to be furnished; that the board shall make rules, and grant a fair hearing; that the board of commissioners shall be empowered to inspect books, hear testimony (and for that purpose have power to compel attendance of witnesses), and to ascertain all the necessary facts about the properties and the conditions of the service for a proper understanding of what is or should be a reasonable rate. It would be to abrogate this provision of the charter to require that these matters be referred to a vote of the electors of the city.

In construing and applying both the provisions of the charter — the one providing for the' referendum, and this provision relating to rate schedules, effect should be given to both, especially where to do so does no violence to either but gives effect to the clear intendment of the charter and avoids an absurdity. See the opinion of this court in the case of S. W. Tel. & Tel. Co. v. City of Dallas, 104 Tex. 114, 134 S. W. 321. Further discussion is unnecessary.

The judgment of the Court of Civil Appeals is reversed, and that of the district court is affirmed.  