128 N.E. 245 | NY | 1920
On October 29, 1912, the South Shore Traction Company obtained the consent of the city of New York to the construction and operation of a street railway along stated streets and avenues, chiefly in the borough of Queens. The consent was given upon the condition that five cents should be the maximum fare. In August, 1919, the receivers of the Manhattan and Queens Traction Corporation, which had succeeded to the franchise of the South Shore Traction Company, made *358 application to the public service commission for authority to charge a higher fare on the ground that the existing maximum was unjust and inadequate. A writ of prohibition directed to the commission was issued by the Supreme Court, and the order granting the writ affirmed by the Appellate Division.
At the date of this franchise, the public service commission was empowered by statute to increase "the maximum rates, fares, or charges chargeable by any * * * street railroad corporation" when found to be inadequate to yield a fair return (section 49, Public Service Commissions Law; Consol. Laws, chap. 48). That power came to the commission through the amendment of the Public Service Commissions Law in June, 1911 (L. 1911, chap. 546;People ex rel. Ulster Del. R.R. Co. v. Public ServiceCommission,
The question soon arose whether the new rule was retroactive, and annulled existing contracts in conflict with its terms. Indisputably it annulled such contracts between carriers and passengers, or carriers and shippers (Louisville NashvilleR.R. v. Mottley,
A different problem confronts us here. Here the statute was in existence when the municipal consent was given. Recognition in such circumstances of the power of the commission involves no interference with a grant already executed. No condition is annulled; no defeasance is abrogated; no obligation of contract is nullified or impaired. *361
The obligation of a contract is determined by the law in force when it is made (McCracken v. Hayward, 2 How. [U.S.] 608, 612). There are times when, in the exercise of the police power, an obligation, once attaching, may be modified or destroyed (Louisville Nash. R.R. Co. v. Mottley, supra; Union DryGoods Co. v. Georgia Pub. Serv. Corp., supra; Producers'Transp. Co. v. R.R. Comm., supra). That problem never arises when the power has been exerted before the contract has been made. Impairment is conceivable as the result of a statute passed thereafter. Impairment is inconceivable when, at the time of the contract, the statute is in force (Lehigh Water Co. v.Easton,
In thus holding, it may be prudent, even though unnecessary, to say that we decide the case before us, and no other. The conditions of other franchises may supply elements of distinction which cannot be foreseen. Contracts made after the passage of the statute (Consol. Laws, ch. 48) may conceivably be so related to earlier contracts either by words of reference or otherwise as to be subject to the same restrictions. We express no opinion upon these and like questions. They are mentioned only to exclude them from the scope of our decision. In deciding this case, we put our ruling upon the single ground that the franchise contract of October, 1912, was subject to the statute, and by the statute may now be changed.
The order of the Appellate Division and that of the Special Term should be reversed with costs in all courts, and the application denied with ten dollars costs.
HISCOCK, Ch. J., CHASE and ELKUS, JJ., concur; McLAUGHLIN and CRANE, JJ., concur in result; HOGAN, J., dissents.
Orders reversed, etc. *363