San Antonio Traction Co. v. Altgelt

Background

A private street railway originally organized under an 1874 charter and later sold after foreclosure became part of a new Traction Company that accepted the city’s grants and limits. The city had passed an 1899 ordinance fixing a five‑cent fare as part of an extension of the franchise. In 1903, the Texas legislature passed a law requiring street railways to sell twenty‑ride student tickets at half the regular adult fare to eligible students who presented a school principal’s certificate. The railway company sued, claiming the new law unlawfully interfered with previously granted rights and contracts about fares.

Reasoning

The Court addressed whether municipal promises about fares could be protected forever against later state laws. It read the Texas Constitution of 1876 to mean that privileges and franchises granted or accepted after that constitution took effect remain subject to state control. Because the Traction Company’s franchise and the absorbed companies’ rights were tied to actions taken after 1876, the legislature retained power to regulate fares. The Court also said the legislature could not set fares so low as to be confiscatory, but here there was no evidence the student‑ticket rule would make operation unprofitable. The lower court’s findings that the 1903 law did not seriously impair revenues were accepted.

Real world impact

The decision lets the State require discounted student tickets and otherwise regulate municipal street‑railway franchises granted or accepted after 1876. Railway companies can still challenge regulations that prove confiscatory, but routine fare limits and student discounts are permissible. The Court affirmed the judgment of the Court of Civil Appeals.