US SUPREME COURT DECISIONS

An ordinance of a city, imposing, pursuant to a statute of the state, a license tax, for the business of running any horse or steam railroad for the transportation of passengers, does not impair the obligation of a contract, made before the passage of the statute, by which the city sold to a railroad company for a large price the right of way and franchise for twenty-five years to run a railroad over certain streets and according to certain regulations, and the company agreed to pay to the city annually a real estate tax, and the city bound itself not to grant, during the same period, a right of way to any other railroad company over the same streets.

This was a summary proceeding by the City of New Orleans against the New Orleans City and Lake Railroad Company in a civil district court of the Parish of Orleans, to collect a license tax of $2,500 for the year 1887, imposed by an ordinance of the city, pursuant to the statute of Louisiana of 1886, c. 101, § 8, which provided

"That for the business of carrying on, operating or running any horse or steam railroad, or both, for the transportation of passengers within the limits of any city or town in this state, the annual license shall be based on the annual gross receipts, as follows, viz., first class -- when the said annual gross receipts are five hundred thousand dollars, or in excess of that amount, the license shall be twenty-five hundred dollars."

Acts of Louisiana of 1886, pp. 165, 175.

The defendant admitted that its annual gross receipts were more than $500,000, but contended that the statute and ordinance, chanrobles.com-red

Page 143 U. S. 193

so far as they affected the defendant, were unconstitutional and void as impairing the obligation of the following contracts:

On October 2, 1879, the City of New Orleans sold to the New Orleans City Railroad Company, for the price of $63,000, the right of way and franchises for running certain lines of street railroad for carrying passengers within the city until January 1, 1906,

"to have and to hold the said right of way and franchises of the said railroad lines unto the said New Orleans City Railroad Company, its successors and assigns, transferees and vendees, for the full term and period hereinabove fixed,"

and the company agreed to construct its railroad, to keep the streets in repair, and to comply with regulations as to the style and running of cars, the motive power, and the rates of fare, as therein provided, and to

"annually pay into the city treasury, upon the assessed value of said road and fixtures, the annual tax levied upon real estate, the value of said road and fixtures to be assessed by the usual mode of assessment,"

and the city bound itself

"not to grant, during the period for which said franchises are sold, a right of way to any other railroad company upon the streets through which said right of way is hereby sold unless by mutual agreement between the city and the purchaser or purchasers of these franchises."

On June 9, 1883, the liquidating commissioners of the New Orleans City Railroad Company, whose charter had expired, sold and transferred all that company's real and personal property, movable and immovable, right of way, and franchises for the privilege of running streetcars, to the defendant by a contract by which, among other things,

"said New Orleans City Railroad Company, having, according to law, paid its state and city licenses for 1883, amounting to twenty-five hundred dollars each, hereby transfers the unexposed term thereof, extending to December 31, 1883, to the present purchaser, the New Orleans City and Lake Railroad Company."

Judgment was given in favor of the city, and was affirmed on appeal by the Supreme Court of Louisiana. 40 La.Ann. 587. The defendant sued out this writ of error. chanrobles.com-red

Page 143 U. S. 194