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Cedar Rapids Gas Light Co. v. Cedar Rapids, 223 U.S. 655 (1912)

Cedar Rapids Gas Light Co. v. City of Cedar Rapids

No. 163

Argued February 29, 1912

Decided March 11, 1912

223 U.S. 655


Where the general power reserved to regulate rates is only limited by the Fourteenth Amendment, no franchise contract will be presumed to imply that the municipality under its reserved right to regulate rates must only reduce them to such a point that there will be a margin to allow a discount for prompt payment.

A municipal ordinance drawn in form of a contract to be accepted by the franchisee, when accepted, becomes a contract, and is subject to the reserved powers of the municipality as limited by the laws of the state.

The practice and decisions of this Court are that § 709 Rev.Stat. does not give to a writ of error to the state court in a chancery case the effect of an appeal from a judgment in such a case in the federal courts and open the evidence for reexamination in this Court.

Findings of the state court in cases either at law or in equity may depend upon questions that are reexaminable in this Court, which, if properly saved, must be answered, and this Court may examine the evidence insofar as necessary to do so in respect to rulings within the appellate jurisdiction of this Court. Kansas City Southern Railway v. Albers Commission Co., ante, p. 223 U. S. 573.

Quaere whether a legislative rate, not in itself too low, is confiscatory

Page 223 U. S. 656

because it is too low to permit a further reduction in the way of discount for cash payment.

The state court having treated a public utility corporation fairly as to value of plant depreciation, and found that the net returns would exceed six percent, and given it leave to try the case again after the legislative rate had been in effect, this Court does not feel warranted in reversing on the ground that the rate is confiscatory because in some details this Court might have treated the corporation differently.

144 Ia. 426 affirmed.

The facts, which involve the validity, under the contract and due process provisions of the Constitution of the United States, of an ordinance of the City of Cedar Rapids, Iowa, fixing the price of gas at ninety cents per thousand cubic feet, are stated in the opinion.

Page 223 U. S. 666

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