Fifth Avenue Coach Co. v. City of New York

Background

A New York transportation company, successor to the old Fifth Avenue Transportation Company, operates double-deck automobile stages on Fifth Avenue and other streets. It long sold advertising space inside its vehicles and, after switching to motor coaches in 1905–1907, began leasing exterior space to an advertising firm for substantial revenue. The city passed an ordinance forbidding advertising trucks, vans, or wagons in Manhattan streets, with a limited exception for ordinary business notices on regular work wagons. The company sued for an injunction; lower courts dismissed its complaint and the State Court of Appeals affirmed.

Reasoning

The key question was whether the company’s charter or franchise included a right to sell advertising on the outside of its stages and whether the city could lawfully ban such displays. The Supreme Court agreed with the lower courts that the franchise did not expressly allow exterior advertising and that such ads were not a necessary incident to carrying passengers. The Court held the ordinance a proper exercise of the city’s power to regulate streets to prevent congestion and offensive displays, rejecting the company’s claims of unfair treatment, loss of property without due process, and impaired contracts.

Real world impact

The decision lets cities stop transportation companies from turning vehicle exteriors into paid advertising panels and preserves local control over street use. Transit firms that rely on ad income may lose that revenue stream on regulated streets. The ruling also confirms that contracts and corporate charters are subject to existing local ordinances and police powers when those laws existed at the time of contracting.