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    MILWAUKEE ELECTRIC RY. CO. v. MILWAUKEE , 252 U.S. 100 (1920)

    U.S. Supreme Court

    MILWAUKEE ELECTRIC RY. CO. v. MILWAUKEE , 252 U.S. 100 (1920)

    252 U.S. 100

    MILWAUKEE ELECTRIC RY. & LIGHT CO.
    v.
    STATE OF WISCONSIN ex rel. CITY OF MILWAUKEE.
    No. 55.

    Argued Nov. 10, 1919.
    Decided March 1, 1920.

    [252 U.S. 100, 101]   Mr. Edward S. Mach, of Milwaukee, Wis., for plaintiff in error.

    Mr. Clifton Williams, of Milwaukee, Wis., for defendant in error.

    Mr. Justice BRANDEIS delivered the opinion of the Court.

    A petition for a writ of mandamus was brought by the city of Milwaukee in a lower court of the state of Wisconsin [252 U.S. 100, 102]   to compel the Milwaukee Electric Railway & Light Company to pave at its own expense with asphalt upon a concrete foundation that portion of Centre street, called the railway zone, which lies between the trakcs and for one foot outside of them. The paving had been specifically ordered on November 8, 1915, by a city ordinance after the city had laid such a pavement on all of the street except the railway zone. Theretofore the street had been paved from curb to curb with macadam. The company admitted that the railway zone was in need of repaving at that time; but it insisted that under an ordinance of January 2, 1900, which constituted its franchise to lay tracks on Centre street, it was entitled to repair with macadam and could not be compelled to repave with asphalt.

    The case was heard in the trial court on a demurrer o the amended return. The demurrer was sustained, and the decision was affirmed by the Supreme Court. 165 Wis. 230, 161 N. W. 745. The company having failed after remittitur to file an amended return or take further action, judgment was entered by the trial court awarding a peremptory writ of mandamus directing it to pave the railway zone as directed in the ordinance. This judgment also was affirmed by the Supreme Court. 166 Wis. 163, 164 N. W. 844. The case comes here on writ of error under section 237 of the Judicial Code (Comp. St. 1214). The single question presented is whether the ordinance of November 8, 1915, is void either under section 10 of article 1 of the federal Constitution, as impairing contract rights of the company, or under the Fourteenth Amendment, as depriving it of property without due process of law. The ordinance of January 2, 1900, which is the contract alleged to be impaired by the later ordinance, provides as follows:

      'Sec. 2. ... It shall be the duty of said railway company at all times to keep in good repair the roadway between the rails and for one foot on the outside of each rail [252 U.S. 100, 103]   as laid, and the space between the two inside rails of its double tracks with the same material as the city shall have last used to pave or repave these spaces and the street previous to such repairs, unless the railway company and the board of public works of said city shall agree upon some other material, and said company shall then use the material agreed upon. ...'

    The company contends that when this section is read in connection with section 9, it clearly appears that the obligation to repave cannot be imposed.

    First. The Supreme Court of the state held that the language of section 2 was not distinguishable from that involved in earlier cases in which it had held that a duty to keep 'in proper repair' without qualification was broad enough to require repaving and repairing with the same material with which the street was repaved. When this court is called upon to decide whether state legislation impairs the obligation of a contract, it must determine for itself whether there is a contract, and what its obligation is as well as whether the obligation has been impaired. Detroit United Railway v. Detroit, 242 U.S. 238, 249 , 37 S. Sup. Ct. 87. But, as stated in Southern Wisconsin Railway v. Madison, 240 U.S. 457, 461 , 36 S. Sup. Ct. 400, 401 (60 L. Ed. 739):

      'The mere fact that without the state decision we might have hesitated is not enough to lead us to overrule that decision upon a fairly doubtful point.'

    Among the cases relied upon by the state court is State ex rel. Milwaukee v. Milwaukee Electric Railway & Light Co., 151 Wis. 520, 139 N. W. 396, Ann. Cas. 1814B, 123, which was cited by this court in the Madison Case, 240 U.S. 461 , 36 Sup. Ct. 402 (60 L. Ed. 739), as a 'persuasive decision that the obligation to keep the space 'in proper repair' ... extends to' repaving the railway zone with asphalt when the rest of the street is being repaved with that material. But the company points to the clause in the ordinance of January 2, 1900, which provides for repair 'with the same material as the city shall have last used to pave or repair these spaces and the streets,' [252 U.S. 100, 104]   and insists that its obligation is, in any event, limited to repaving with such material as the city had last used between the rails. This would put upon the city the burden of paving the whole street in case of any innovation in paving save by agreement of the company and the city. It is not a reasonable construction of the provision.

    Second. Granted the duty to repave, and to repave with material other than that last used in the space between the tracks, was it reasonable for the city to require that the pavement be of asphalt upon a concrete foundation-a pavement which involved larger expense? The city alleged in its petition that the use of macadam by the railway was unreasonable, and that it is physically impossible to make a water-tigt bond between the water-bound macadam and the asphalt, so as to prevent water from seeping through under the asphalt, causing it to deteriorate in warm weather and to be lifted by freezing in cold weather. The allegation was not expressly admitted by the return and must be deemed to have been covered by its general denial of all allegations not expressly admitted; but neither party took steps to have this formal issue disposed of. The case differs, therefore, in this respect from the Madison Case, where there was an express finding that repavement of the railway zone with stone would have been unsuitable when the rest of the street was of asphalt. 240 U.S. 462 , 36 Sup. Ct. 400 (60 L. Ed. 739). The difference is not material. As the ordinance did not, as a matter of contract, preclude regulation in respect to paving, it was for the city to determine, in the first instance, what the public necessity and convenience demanded. Compare Fair Haven & Westville Railroad Co. v. New Haven, 203 U.S. 379 , 27 Sup. Ct. 74. We cannot say that its requirement that the railway zone be paved like the rest of the street with asphalt upon a concrete foundation was inherently arbitrary or unreasonable.

    Third. The company insists that the ordinance of [252 U.S. 100, 105]   November 8, 1915, is unreasonable and void, also, for an entirely different reason. It alleges in its return that for a long time prior to that date the earnings from its street railway system in Milwaukee were considerably under 6 per cent. of the value of the property used and useful in the business and were less than a reasonable return. It contends that this allegation was admitted by the demurrer; and that to impose upon the company the additional burden of paving with asphalt will reduce its income below a reasonable return on the investment and thus deprive it of its property in violation of the Fourteenth Amendment. The Supreme Court of the state answered the contention by saying:

      'The company can at any time apply to the Railroad Commission and have the rate made reasonable.'

    The financial condition of a public service corporation is a fact properly to be considered when determining the reasonableness of an order directing an unremunerative extension of facilities or forbidding their abandonment. Mississippi Railroad Commission v. Mobile & Ohio R. R. Co., 244 U.S. 388 , 37 Sup. Ct. 602; New York & Queen's Gas Co. v. McCall ( 245 U.S. 345, 350 , 38 S. Sup. Ct. 122. But there is no warrant in law for the contention that merely because its business fails to earn full 6 per cent. upon the value of the property used, the company can escape either obligations voluntarily assumed or burdens imposed in the ordinary exercise of the police power. Compare Missouri Pacific Railway Co. v. Kansas, 216 U.S. 262, 279 , 30 S. Sup. Ct. 330; Chicago, Rock Island & Pacific Railway v. Arkansas, 219 U.S. 453 , 31 Sup. Ct. 275; Missouri Pacific Railway v. Omaha, 235 U.S. 121 , 35 Sup. Ct. 82.

    Fourth. The company also insists that the ordinance is void because it denies equal protection of the laws. The contention rests upon the fact that since entry of the judgment below the Supreme Court of the state has decided Superior v. Duluth Street Railway Co., 166 Wis. 487, 165 N. W. 1081, which the company alleges is not reconcilable with [252 U.S. 100, 106]   its decision in this case. The similarity of the ordinances and conditions in the two cases does not seem to us as clear as is asserted. But, however that may be, the Fourteenth Amendment does not, in guaranteeing equal protection of the laws, assure uniformity of judicial decisions (Backus v. Fort Street Union Depot Co., 169 U.S. 557, 569 , 18 S. Sup. Ct. 445), any more than in guaranteeing due process it assures immunity from judicial error (Central Land Co. v. Laidley, 159 U.S. 103 , 16 Sup. Ct. 80; Tracy v. Ginsberg, 205 U.S. 170 , 27 Sup. Ct. 461). Unlike Gelpcke v. Duu que, 1 Wall. 175, and Muhlker v. New York, 197 U.S. 544 , 25 Sup. Ct. 522, 49 L Ed 872, where protection was afforded to rights acquired on the faith of decisions later overruled, the company seeks here to base rights on a later decision between strangers which, it alleges, is irreconcilable on a matter of law with a decision theretofore rendered against it. The contention is clearly unsound.

    As we conclude that there was a contractual duty to repave arising from the acceptance of the franchise, we have no occasion to consider whether there was, as contended, also a statutory duty to do so arising under section 1862, Wisconsin Statutes, which provides that street railways shall 'be subject to such reasonable rules and regulations ... as the proper municipal authorities may by ordinance, from time to time prescribe.'

    AFFIRMED.

    Mr. Justice PITNEY and Mr. Justice McREYNOLDS dissent.

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