The Judicial Interpretation of Public Utility Franchises

Abstract

The United States Supreme Court has recently added one more decision to the long list of cases on the contractual aspects of public utility franchises. The specific question before the court was the review of a permanent injunction granted by a federal district court of three judges to restrain the railroad commission of California from enforcing against the Los Angeles Railway Corporation the provisions for rates of fare embodied in a series of franchises under which the company operated. The franchises had been granted successively from 1886 to 1928 and had provided generally that the rate of fare should not exceed five cents, although in some of the later ordinances it was also stated that an increase might be permitted by proper showing before "a competent authority having jurisdiction over rates of fare..."