(62 Colo. 229, P.U.R.1916E, 134, 161 Pac. 151.) the cars of the Denver Tramway ver Tramway Company for the Company to be transported upon the transfer of passengers taking pascars of said grantees to the inter- sage upon its lines between the section of any street between Hamp- points set out in the complaint, and den and Quincy avenues, the latter that the only provision it has been avenue inclusive, without additional able to make is that the Denver fare, upon presentation of said Tramway Company shall receive 5 coupon ticket. It was further al

cents from all passengers so transleged: “That at the time of the ferred and transported. It is then passage of said ordinance, and the alleged that the defendant is a pubgranting of said franchise to the lic utility and subject to the prograntors of the said defendant, visions of the Public Utility Law, the Denver City Tramway Company and further that, “pursuant to the was engaged in operating a street provisions of law in such case made railway as a common carrier be- and provided, it did file with the tween the city of Denver and the Public Utilities Commission of the said Hampden avenue, at the inter- state of Colorado its schedule of section of said Hampden avenue and rates, and that its schedule of rates Broadway, in the said city of Engle- so filed was not suspended by the wood, and that thereafter the de- said Public Utilities Commission fendant company did until on or herein upon its own motion or upon about the 28th day of October, A. D. the complaint of others for a period 1914, substantially comply with the of thirty days, and that thirty days terms and conditions of said § 6 of expired from the time of the filing said ordinance, and for some years the same and from the 28th day of thereafter did in fact provide for September, A. D. 1914, and until the those seeking passage upon the cars 28th day of October, A. D. 1914, and of the said the Denver City Tram- thereupon and pursuant to law the way Company, without extra charge, said rates did on the 28th day of as provided in 6 of said ordi- October, A. D. 1914, go in effect and nance."

become and are now established efIt is then alleged that since the fective fares and charges, practices, said 28th day of October, 1914, the rules, and regulations of this dedefendant has refused to comply fendant company." with that provision of the ordinance It is then said, in substance, that in the matter of providing the sale to comply with the ordinance in the of coupon tickets entitling passen- matter complained of it must violate gers to transportation to and from the Public Utility Law as relates to the city of Denver on the line of the the prohibition of free service or Denver Tramway Company, as pro- free transportation; further, that vided by the terms of the ordinance. the plaintiff and all others who may The prayer was for injunction to claim to be injured by reason of the compel the enforcement of the terms premises have a plain, speedy, and of the ordinance in the particular adequate remedy at law under the respect.

Public Utilities Law of the state. The answer of the defendant com- To this answer the plaintiff filed pany admits the ordinance and the a demurrer upon the ground that terms thereof, and alleges that from the same does not constitute a suffithe date of the passage of the ordi- cient defense to the complaint. The nance up to October 28, 1914, the court sustained the demurrer, and, defendant had given and tendered the defendant electing to stand upon to all persons seeking passage on its its answer, judgment was rendered cars between the point complained in accordance with the prayer of the of free service and transfers enti- complaint. This judgment is before tling passengers to passage between us for review. such points. The answer further al- It will be seen that the defendleges that the defendant has sought ant company contends that its presto make arrangements with the Den- ent rates of service are those fixed by the State Public Service Commis. Utility Law. (Laws 1913, chap. sion in due compliance with the stat- 127.) This act is very broad, and ute creating such Commission and seems to confer the absolute power prescribing its powers and duties, to regulate, both as to rates and and the first question, therefore, pre- otherwise, all public utilities within sented in this particular, is: May the state; at least all such as are the Commission alter a rate or regu- specified in the act, and among lation fixed by a franchise ordinance which are street railways. Section prior to the enactment of the Public 13 of the act provides: “Sec. 13. Utilities Law ?

All charges made, demanded or reIt must be conceded that the ordi- ceived by any public utility, or by nance and the acceptance thereof any two or more public utilities, for constituted a contract which the any rate, fare, product or comcity and the company were at the modity furnished or to be furnished time empowered to make. If the con- or any service rendered or to be tract is now an enforceable one, rendered shall be just and reasonthe present action in equity was able. Every unjust or unreasonable proper.

charge made, demanded or received The city of Englewood was, at

for such rate, fare, product or comthe date of the ordinance, a town modity or service is hereby prooperating under the general law of hibited and declared unlawful." the state, as appears from the plead- By $ 14 the Public Utilities Comings. Its sole power to enact such mission was given the power, and it an ordinance was in § 6676, Rev. was made its duty, to adopt all Stat. 1908, as follows: "No fran- necessary rates and regulations of chise or license giving or granting all public utilities, as follows: "Sec. to any person or persons, corpora- 14. The power and authority is heretion or corporations, the right or by vested in the Public Utilities privilege to erect, construct, operate Commission of the state of Colorado, or maintain a street railway, electric and it is hereby made its duty to

a light plant or system, telegraph or adopt all necessary rates, charges, telephone system within any city or and regulations to govern and regutown, or to use the streets or alleys late all rates, charges, and tariffs of of a town or city for such purposes, every public utility within this state shall be granted or given by any

as herein defined, the power to corcity of the first or second class or rect abuses, and prevent unjust disby any incorporated town in this criminations and extortions in the state in any other manner or form rates, charges and tariffs of such than by :

ordinance passed public utilities of this state and to and published in the manner herein- generally supervise and regulate after set forth.”

every public utility in this state and It will thus appear that the legis- to do all things, whether herein spelature had conferred no specific cifically designated, or in addition power upon the town of Englewood thereto, which are necessary or conto enact a rate-making ordinance. venient in the exercise of such powThe only specific power conferred er, and to enforce the same by upon the municipality by this sec- the penalties provided in this act. tion is to grant a franchise in the through proper courts having jurisform of an ordinance. There does diction.” not appear a suggestion as to a rate- Section 21 fixed the maximum making power, and no such power rate to be charged passengers by a can be inferred. It may be con- street railway and provides for ceded that, as between the parties, transfers as follows: "Sec. 21. No such ordinance constituted a valid street or interurban railroad corcontract.

poration shall charge, demand or The question to be determined is collect or receive more than 5 cents as to the effect upon such a contract for one continuous ride in the same by the enactment of the Public general direction within the cor(62 Colo. 229, P.U.R.1916 E, 134, 161 Pac. 151.) porate limits of any county, city or charges, classifications, rules, regutown; except upon a showing before lations, contracts or practices, or

; the Commission that such greater schedule or schedules, in lieu therecharge is justified. Every street or of." interurban railroad corporation shall From the sections quoted, and upon such terms as the Commission from other provisions of the act, it shall find to be just and reasonable fully appears that the legislature infurnish to its passengers transfers tended to delegate to the Public entitling them to one continuous trip Utilities Commission the adminisin the same general direction over tration, supervision, and regulation and upon the portions of its lines of all service rendered to the public within the same city and county, or throughout the state, including mucity or town, not reached by the nicipalities. Rates and regulations originating car.”

fixed by contract are specifically inFurther powers were conferred cluded within the powers of the upon the Commission by $ 23 as Commission. follows: “Sec. 23. (a) Whenever From what has been said it will the Commission, after a hearing had be seen that the town of Englewood upon its own motion or upon com- had no express . authority to fix a plaint, shall find that the rates, tolls, rate of fare, so as to limit or profares, rentals, charges or classifica- hibit the assumption of such power tions, or any of them demanded, ob- by the legislature. The uniform served, charged or collected by any rule in this respect was stated in public utility for any service, or Home Teleph. & Teleg. Co. v. Los product or commodity, or in con- Angeles, 211 U. S. 265, 53 L. ed. nection therewith, including the 176, 29 Sup. Ct. Rep. 50, to be: rates or fares for excursion or com- "It has been settled by this court mutation tickets, or that the rules, that the state may authorize one of regulations, practices, or contracts, its municipal corporations to estabor any of them, affecting such rates, lish by an inviolable contract the fares, tolls, rentals, charges, or class- rates to be charged by a public seryifications, or any of them, are un- ice corporation (or natural person) just, unreasonable, discriminatory, for a definite term, not grossly unor preferential, or in any wise in reasonable in point of time, and that violation of any provision of law, or the effect of such a contract is to that such rates, fares, tolls, rentals, suspend during the life of the con

, charges, or classifications, are in- tract the governmental power of fixsufficient, the Commission shall de- ing and regulating the rates. Determine the just, reasonable or suffi- troit v. Detroit Citizens' Street R. cient rates, fares, tolls, rentals, Co. 184 U. S. 368, 382, 46 L. ed. charges, rules, regulations, prac- 592, 605, 22 Sup. Ct. Rep. 410; tices, or contracts to be thereafter Vicksburg v. Vicksburg Waterworks observed and in force, and shall fix Co. 206 U.S. 496, 508, 51 L. ed. the same by order as hereinafter 1155, 1160, 27 Sup. Ct. Rep. 762. provided.

But for the very reason that such a “ (b) The Commission shall have contract has the effect of extinguishthe power, upon a hearing, had upon ing pro tanto an undoubted power its own motion or upon complaint, of government, both its existence to investigate a single rate, fare, and the authority to make it must toll, rental, charge, classification, clearly and unmistakably appear, rule, regulation, contract, or prac- and all doubts must be resolved in tice, or any number thereof, or the favor of the continuance of the powentire schedule or schedules of rates, Providence Bank v. Billings, 4 fares, tolls, rentals, charges, classi- Pet. 514, 561, 7 L. ed. 939, 955; fications, rules, regulations, con- Railroad Commission Cases, 116 U. tracts, and practices, or any thereof, S. 307, 325, 29 L. ed. 636, 642, 6 of any public utility, and to estab- Sup. Ct. Rep. 334, 388, 1191; Vicks. lish new rates, fares, tolls, rentals, burg, S. & P. R. Co. v. Dennis, 116 U. S. 665, 29 L. ed. 770, 6 Sup. Ct. as between the water company and Rep. 625; Freeport Water Co. v. the city as long as the legislature Freeport, 180 U. S. 587, 599, 611, did not exercise its superior and 45 L. ed. 679, 688, 693, 21 Sup. Ct. supreme power over the subject of Rep. 493; Stanislaus County v. San the rates. From the general powers Joaquin & K. River Canal & Irrig. to establish waterworks and to conCo. 192 U. S. 201, 211, 48 L. ed. tract and be contracted with, im406, 412, 24 Sup. Ct. Rep. 241; New pliedly the city had the power to York ex rel. Metropolitan Street R. contract in the matter of rates for Co. v. New York State Tax Comrs. water furnished the public as long 199 U. S. 1, 50 L. ed. 65, 25 Sup. Ct. as the legislature did not exercise Rep. 705. And see Water, Light, & its reserved power in that particuGas Co. v. Hutchinson, 207 U. S. lar. But that implied power was 385, 52 L. ed. 257, 28 Sup. Ct. Rep. inferior to the reserved power. It 135.”

was subject to the right of the legisIn Freeport Water Co. v. Free- lature to prescribe different rates at port, 180 U. S. 587, 599, 611, 45 L. any time. The legislature, not haved. 679, 688, 693, 21 Sup. Ct. Rep. ing expressly delegated to the city 493, it is said: “This power of regu- power by which it could inviolably lation is a power of government, agree as to the rates, could exercise continuing in its nature; and if it power in that particular regardless can be bargained away at all, it can of the franchise provisions. It had only be by words of positive grant, withheld supreme power unto itself. or something which is in law equiva. Neither by the charter nor by subselent. If there is reasonable doubt, quent legislation did it delegate to it must be resolved in favor of the the city of Benwood authority to existence of the power. In the words agree unalterably as to the rates for of Chief Justice Marshall in Provi- a stipulated period. The water comdence Bank v. Billings, 4 Pet. 514, pany and the city in the making of 561, 7 L. ed. 939, 955: 'Its abandon- the so-called franchise contract were ment ought not to be presumed in bound by cognizance of the fact that a case in which the deliberate pur- their dealings were subject to future pose of the state to abandon it does exercise of the legislature's power not appear.'

over rates for water furnished the In the well-considered case of general public in the locality. Hence Benwood v. Public Service Com- the franchise was made subject to mission, 75 W. Va. 127, 83 S. E. what the legislature might there295, and reported in L.R.A.1915C, after do as to the rates dealt with 261, it was said: “But the city of by the franchise. It was subject to Benwood says it had the right given the legislature's making use of the it by the legislative charter to 'con- inherent power reserved, and not tract and be contracted with.' True, exclusively delegated to the city of this general provision usually found Benwood, to supervise all public in municipal charters is in the char- service charges. And when the ter of the city of Benwood. But legislature in its wisdom saw fit to that provision cannot be construed exercise its reserved power of superas delegating beyond legislative con- vision over the matter of public trol the power to fix public service service rates by the creation of the rates. For, as we have seen, the Public Service Commission and the presumption is against such delega- delegation of the power to the Comtion of the power. The delegation mission in that behalf, the rates 'must clearly and unmistakably ap- mentioned in the franchise became pear.' It does not so appear in the subject to supervision and regulageneral provision merely to contract tion by the Public Service Commisand be contracted with."

sion. The legislature had withheld And further: "We do not say the exercise of its power over those that the contract as to rates con- rates until that time. It could use tained in the franchise was not good the power when it pleased. No (62 Colo. 229, P.U.R.1916 B, 136, 161 Pao. 151.) length of nonuser affected the state's Kansas, 231 U. S. 622, 58 L. ed. 404, right thereto. Chicago, B. & Q. R. 34 Sup. Ct. Rep. 226; Dawson v. Co. v. Iowa (Chicago, B. & Q. R. Dawson Teleph. Co. 137 Ga. 62, 72 Co. v. Cutts) 94 U. S. 155, 24 L. ed. S. E. 508." 94."

The doctrine announced in that It was further held in that case: case is a fair statement of the over"It is most earnestly insisted on be whelming weight of judicial opinhalf of the city that the contract is ion. inviolable, and that to uphold the The case of State ex rel. Webster powers of the Public Service Com- v. Superior Ct. 67 Wash. 37, 120 mission to the extent of allowing the Pac. 861, Ann. Cas. 1913D, 78, and Commission to change the rates also reported in L.R.A.19150, p. would in effect abrogate the con- 287, contains an exhaustive review tract, contrary to constitutional in- of the authorities on this subject. hibitions against the enactment of See also Milwaukee Electric R. & any law impairing the obligation of Light Co. v. Railroad Commission, a contract. In the light of what 238 U. S. 174, 59 L. ed. 1254, P.U.R. we have said, this position cannot 1915D, 591, 35 Sup. Ct. Rep. 820. be sustained. Nothing that was This doctrine has been recognized binding in the contract will be im- by this court in the case of Wolverpaired. By it the state was not ton v. Mountain States Teleph. & bound. The contract related to a Teleg. Co. 58 Colo. 58, 142 Pac. 165, subject-matter belonging to

to the

Ann. Cas. 1916C, 776, wherein it state. The state had not given the was said: “And it is now held that, city the power or agency to contract

even in case of such contracts with away its right thereto for a given public utilities for specific rates and time. The contract, having been entered into without express legis

for definite periods of time, these lative authority, was permissive

are subject to legislative acts of only. It was conditioned upon the

regulation. Louisville & N. R. Co. exercise of the sovereign power over

v. Mottley, 219 U. S. 467, 55 L. ed. the subject-matter. All this the par

297, 34 L.R.A.(N.S.) 671, 31 Sup. ties to the contract were bound to

Ct. Rep. 265; Southern Wire Co. v. know when they entered into it.

St. Louis Bridge & Tunnel Co. 38 There can be no impairment of the

Mo. App. 191." contract by the act of the state in

We must hold, therefore, that at claiming its own, when it is not

the time of the adoption of the ordibound by the contract. The super

nance in question, the town of Envision and regulation of the rates glewood was without express legisby the state, through the Public lative power to fix rates or regulaService Commission, do not take tions for public utilities, and that from either of the parties to the its contract

contract with contract any right which they had

the defendant com- power of

Carrier-ratesthereunder. Such supervision and pany was subject municipality regulation does not therefore im- to the legislative pair the obligation of a contract. power afterward asserted by the Home Teleph. & Teleg. Co. v. Los

enactment of the Public Utilities Angeles, supra; State ex rel. Web- Statute. ster v. Superior Ct. 67 Wash. 37, It follows, therefore, that the L.R.A.1915C, 287, 120 Pac. 861, power to regulate the rates of the Ann. Cas. 1913D, 78; Knoxville public utility in question is vested Water Co. v. Knoxville, 189 U. S. by the act exclusively in the Public 434, 47 L. ed. 887, 23 Sup. Ct. Rep. Utilities Commission. The law fully 531; Louisville & N. R. Co. v. Mott provides that every order or deley, 219 U. S. 467, 55 L. ed. 297, 34 cision made by the Commission may L.R.A.(N.S.) 671, 31 Sup. Ct. Rep. be reviewed by the supreme court 265; Wyandotte County Gas Co. v. upon the application of either party,

to fix,