San Francisco-Oakland Terminal Rys. v. City of Alameda

This is a motion to dismiss the bill as to the first count, which seeks to have annulled an ordinance of the defendant municipality, wherein plaintiff operates street railroads, fixing rates of fare for such railroads to be charged school children at a ligure less than those charged the general public, upon the ground (1) hint its effect is to impair the obligation of contracts existing between plaintiff and the city under ordinances previously in force; and (2) that it is unlawfully discriminating.

[1] In my opinion the case as to the first point is ruled by the prin *890 ciples announced in Home Telephone Co. v. Los Angeles, 211 U. S. 265 , 29 Sup. Ct. 50, 53 L. Ed. 176 ., and the cases there cited. It is there held and reiterated from previous decisions that, while the state may authorize a municipal corporation to bind itself and “establish by an inviolable contract the rates to be charged by a public service corporation” within certain limitations, as such a contract “has the effect of extinguishing pro tanto an undoubted power of government, both its existence and the authority to make it must clearly and unmistakably appear, and. all doubt must be resolved in favor of the…