US SUPREME COURT DECISIONS

Where the district court, in denying a preliminary injunction, of its own motion dismisses the bill, its action is equivalent to sustaining a demurrer, and, upon appeal, the allegations of the bill must be taken as true. P. 248 U. S. 431.

A city, instead of exercising its power to compel the removal of tracks operated by a street car company without franchise, passed an ordinance looking to their continued operation by the company and prescribing fares and transfer privileges and penalties for violations. Held equivalent to a grant of a right to operate during the life of the ordinance, entitling the company to a fair return on its investment. Denver v. Denver Union Water Company, 246 U. S. 178. P. 248 U. S. 435.

A company operated a system of city street car lines, for some of which it had franchises entitling it to charge a certain fare and for others no franchises. An ordinance, regulating the entire system, purported explicitly to fix the fares for trips over two or more lines, whether franchise or not, and forbade extra charge for transfers, defining a continuous trip as a journey from one point to another in the city, whether made on one car or line or by transferring from car to car or from line to line, declaring, however, that it should not be construed as an attempt to impair the obligation of any valid contract, but should apply to and govern all such street railway passenger traffic in the city except where governed by the provisions of such contract.

Held: (1) that the latter declaration must be construed as referring only to trips wholly on the franchise lines (p. 248 U. S. 435); (2) that, if its enforcement would result in a deficit to the company, as alleged, the ordinance violated the due process clause. P. 248 U. S. 436.

An ordinance compelling a street car company to carry passengers on continuous trips over franchise lines to and over non-franchise lines, and vice versa, for a fare no greater than its franchises entitle it to charge upon the former alone, impairs the obligation of the franchise contracts. Detroit United Railway v. Michigan, 242 U. S. 238. P. 248 U. S. 437.

Reversed. chanrobles.com-red

Page 248 U. S. 430

The case is stated in the opinion.