veston, 90 Tex. 398, 36 L.R.A. 33, 29 S. W. 96; Pacific R. Co. v. Leavenworth, supra, 1 Dill. 393, Fed. Cas. No. 10,649; Atchison Street R. Co. v. Nave, 38 Kan. 744, 5 Am. St. Rep. 800, 17 Pac. 587; Northern C. R. Co. v. Baltimore, supra, 21 Md. 93; Indianapolis & C. R. Co. v. Lawrenceburg, 34 Ind. 304; Indianola v. Gulf W. T. & P. R. Co. 56 Tex. 594; Monroe v. Detroit, M. & T. Short Line R. Co. 143 Mich. 315, 106 N. W. 704; People ex rel. West Side Street R. Co. v. Barnard, 110 N. Y. 548, 18 N. E. 354; Clinton v. Worcester Consol. Street R. Co. 199 Mass. 279, 85 N. E. 507; Omaha Water Co. v. Omaha, supra, 12 L.R.A. (N.S.) 736, 77 C. C. A. 267, 147 Fed. 1, 8 Ann. Cas. 614; Walla Walla v. Walla Walla Water Co. supra, 172 U. S. 1, 43 L. ed. 341, 19 Sup. Ct. Rep. 77; Vicksburg v. Vicksburg Waterworks Co. 202 U. S. 453, 50 L. ed. 1102, 26 Sup. Ct. Rep. 660, 6 Ann. Cas. 253. That this was the intended effect of § 124 of our Constitution is placed beyond all question by a reading of the debates on such section in the constitutional convention prior to its adoption. 2 Debates Const. Convention 1901-02, pp. 1960-1985. And such section of the Constitution is self-executory and needed no subsequent legislation to put it into effect. Moreover, it constitutes a limitation upon the legislative power, and no subsequent legislation could take away or impair the absolute power aforesaid thus vested in municipalities. But such a power is not necessarily to be regarded as a power of contract. It is a power to impose conditions upon a consent of municipalities which they have the absolute right to withhold altogether or to grant subject to such conditions as they may arbitrarily impose, but it is not, strictly speaking, a power to contract. And, in view of the fundamental considerations aforesaid, involved whenever the police power of the state is being surrendered, on principle, and in accordance with the greater weight of authority (Pond, Public Utilities, §§ 510 to 523, citing Manitowoc v.

Manitowoc & N. Traction Co. supra, 145 Wis. 13, 140 Am. St. Rep. 1056, 129 N. W. 925), it does not follow that, because the power aforesaid has been thus conferred upon municipalities to make a stipulation as to what the rate charges aforesaid shall be as a condition upon which its consent aforesaid is given, such stipulation shall be regarded as a contract which shall

as such control the of amount such charges for the fu

power of municipality to contract for

rates.

ture after the consent aforesaid is given and the public service is being performed. The contrary seems to be the prevailing view taken by the best-considered authorities, and that we think is the true view, unless a municipal power to contract is plainly expressed as conferred by some other constitutional ordinance or legislative enactment on the subject. And, in the absence of such other plain expression, the continuing power of the state to supervise and regulate such rate charges for the future, to the end that they may be kept reasonable and just under changing conditions, will not be held to have been surrendered. Such continuing power, in such case, will be held to be reserved by the state; whether dormant or already conferred for its exercise upon some governmental agency of the state is immaterial. If dormant, it may nevertheless be infused with life by appropriate legislation and put into operation at any time in the future.

And in such case the initial rates

fixed by the franchise as a condition upon the municipal consent aforesaid will be taken to have been fixed subject to the reserved power of the state to regulate the rates in the future as the public welfare may demand, and that status will be taken to have been so understood by the grantee as well as the grantor of the franchise. Therefore, upon the question before us of whether the state irrevocably surrendered its power of future regulation of the rates named in the particular franchises involved, we must look to con

stitutional and, legislative expressions on the subject other than those above considered.

The provision of the charter of the town of Lexington quoted in the statement preceding this opinion goes no farther than § 124 of the Constitution and § 1033d of the statute law aforesaid.

Section 156 (b) of the Constitution, referred to and in part quoted from in the statement preceding this opinion, does not ex proprio vigore have the effect of conferring on municipalities the authority to fix rates by contract. And the saving provision therein to the effect that nothing in such section shall impair the right which may theretofore have been or might thereafter be "conferred by law upon the authorities of any city, town or county to prescribe rules, regulations or rates of charge to be observed by any public service corporation in connection with any services performed by it under a municipal or county franchise,

Municipal corporationauthority to fix rates.

." has reference, we think, to the authority to regulate rates, etc., and not to the fixing of rates

irrevocably by contract.

The general power of regulating rates of public utility companies

was dormant in this state (Com. ex rel. State Corp. Commission v. Virginia Pass. & Power Co. 11 Va. L. Reg. 744, State Corp. Com. Rep. for 1905, p. 152) until the Act of 1914 (Acts 1914, p. 673) above mentioned. There may be some charters of municipalities in the state granting such supervisory power or restricting the municipal power to contract aforesaid. If so, the charters of the defendants in error are not among them. There has been no general statute enacted conferring such supervisory power upon municipalities, or restricting the municipal power to contract aforesaid.

So we see that neither under § 156 (b) nor under any statute enacted in pursuance thereof was the contract power conferred upon the

municipalities (the defendants in error) of which we are in search.

We come next to consider § 156 (c) of the Constitution, which is quoted in the statement preceding this opinion. That section merely authorizes the legislature to confer upon the State Corporation Commission the jurisdiction to regulate such rates as aforesaid (along with other powers of regulation not material to be mentioned) "which the state has the right to prescribe;" i. e., to regulate such rates.

It was under this section of the Constitution that said Statute of 1914 was enacted. When the state first undertook to put into active effect its dormant power of regulation of rates aforesaid, it imposed the duty of its exercise upon the State Corporation Commission. And the Commission has undoubted jurisdiction and authority under such constitutional and statutory provisions to exercise such supervisory power of regulation as to all such rates as have not been irrevocably fixed by franchise contracts such as aforesaid. But we do not find that such section of the Constitution or statute law confers the municipal power of contract of which we are in quest.

sider § 125 of the Constitution quoted in the statement preceding this opinion. We see that that section of the Constitution expressly provides that, while nothing therein "contained shall be construed as preventing the general assembly from prescribing additional restrictions on the powers of cities and towns in granting franchises ." (italics supplied), every franchise, such as those involved in the cases before us, "shall make provision to secure efficiency of public service at reasonable rates; and we see that that is a power to contract as to the rates during the whole franchise period. And no limitation whatever is placed on such power to contract, except that the franchise period is limited so that it may not exceed

We have now, however, to con

thirty years, and that the franchise shall be offered for sale after due advertisement; bids therefor to be received publicly in a manner to be provided for by law. There is no question raised in the cases before us but that such requirements were all fulfilled in the granting of the franchises in question. And we see from the reading of the whole of this section that it plainly expresses the intention that, in the absence of such "other restrictions (on their powers) as may be imposed by law," municipalities are intended by this section to be clothed by the legislature with the unlimited power to contract by the franchise with the grantee thereof on the subject of fixing the rates which may be charged for services rendered the public thereunder during the whole franchise period.

-constitutional power to contract for rates.

It is true that this section of the Constitution is not self-executory. It needs subsequent legislation to put into effect the power conferred upon municipalities of making the franchise contract. Such legislation might, prior to the action of the municipalities, which are the defendants in error, in granting the franchises in question before us, have prescribed some limitations on the aforesaid power to contract, consisting of restrictions upon their power to make the franchise contracts binding during the whole franchise period, as is in effect provided in the section of the Constitution under consideration might be done; but we see, when we examine the statutes, that they did not impose any such limitation. On the contrary, §§ 1033e and 1033f in their provisions, quoted in the statement preceding this opinion, make it plain that the unlimited power to make such binding contracts during the whole franchise period is thereby expressly conferred upon the municipalities. So expressly are they authorized to make unlimited contracts, and so binding are the contracts as such, that the courts mentioned in § 1033f are given jurisdic

tion by mandamus "to enforce compliance by said cities or towns and by all grantees of franchises . . with all the terms and contracts and obligations of either party, as contained in franchises." (Italics supplied.) The latter section of the statute further recognizes the binding nature of the franchise contract aforesaid, especially as to rates, during the whole of the franchise period, unless, of course, it is modified by the consent of both parties thereto, of the municipality as well as of the grantee or holder of the franchise, but puts a restriction even upon the exercise on the part of the municipality of its consent to a modification of the terms of the contract by making the provision quoted in the statement preceding this opinion, to the effect that no such consent as may result in allowing "an increase in the charge to be made for the use by the public of the benefits of such franchise" shall be given until after certain public advertisement is made.

The case of Com. ex rel. Dowden v. Richmond & R. River R. Co. 115 Va. 756, 80 S. E. 796, involved such a modification of the original franchise provisions, and this court regarded the franchise as a contract with respect to the street railway rates. It is true that the question we have under consideration was not directly involved in that case, but it is mentioned because much discussed in argument before us in the instant cases. Further: As the Constitution and statute law stood at the time the franchise contracts in question were entered into, the provisions of such contract and the bond required, as set forth in the statement preceding this opinion, were alone relied upon to fix during the life of the franchises the rates aforesaid. No provision was made by law restricting the power of the municipalities to an initial fixing of such rates subject to future regulation thereof. And no such provision even yet exists in our statute law, although it might be enacted as aforesaid. The power is still left vested

in municipalities to irrevocably fix such rates by franchise contract during the life of the contract.

We conclude, therefore, that the statute law in existence when and under which the franchises involved in the cases before us were granted expressly delegated to the municipalities the unlimited authority to contract with the grantee of such franchises on the subject of fixing the rates of charges aforesaid thereunder during the whole of the franchise periods.

This conclusion is controlling of our decision of the cases before us for the reasons which are expressed by the Supreme Court in the case of Columbus R. Power & Light Co. v. Columbus, 249 U. S. 412, 63 L. ed. 677, 6 A.L.R. 1648, P.U.R.1919D, 239, 39 Sup. Ct. Rep. 349, as follows: "If a party charge himself with an obligation possible to be performed, he must abide by it unless performance is rendered impossible by the act of God, the law, or the other party. Unforeseen difficulties will not excuse performance. Where the parties have made no provision for a dispensation, the terms of the contract must prevail," -citing numerous cases.

In the cases before us inadequacy of the rates to enable appellant to render efficient service, due to unforeseen change in economic condi

Public Service

Commission

rates-change

of economie conditions.

power to change tions, is urged in argument as the gravamen of the appellant's complaint upon the facts. Such precisely was the case last cited; and the court in that case said: "It may be, and, taking the allegations of the bill to be true, it undoubtedly is, a case of a hard bargain. But equity does not relieve from hard bargains simply because they are such."

That statement is equally true of the jurisdiction of the State Corporation Commission in the cases before us. The franchises involved in the cases before us being contracts duly authorized as aforesaid, their provisions fixing the rates are

binding during the franchise periods, unless and until they are modified by consent of both parties, the municipalities and the holder of the franchises; the former acting in that behalf in accordance with the permissive provisions of the statute on the subject aforesaid.

2. It is urged, however, for the plaintiff in error, that any police power delegated to municipal corporations may be revoked at pleasure by the legislature, although the power be no longer executory, and that acts done thereunder by the municipality may be set aside or confirmed at will; and the cases of Richmond v. Richmond & D. R. Co. 21 Gratt. 604, 617, and Stafford County v. Luck, 80 Va. 223, are cited in support of such position. In the former case the power in question was the power to tax, which was delegated to the city in its charter, and such power, as involved in that case, was revoked before it was exercised. In the latter case the power in question was that of bridge commissioners and a board of supervisors to continue to exercise powers conferred by a statute after it was amended and virtually repealed by a subsequent statute. The only question involved was the authority for future action. This authority was held to have been revoked by the later statute. This also is a case, therefore, where the power or authority in question was revoked before it was exercised. The validity of no contract made under the prior existing authority was involved.

There is, of course, no question but that powers which are conferred upon municipalities by the legislature may be by the legislature revoked at any time; but such revocation can affect only the valid- public serviceity of future ity of future ac- police powertion of the municipalities under the revoked authority.

Contract-for

right to annul.

On principle, contracts made by municipalities under delegated authority cannot differ from contracts

made by any other agent upon the question of the effect of the revocation of the authority of the agent. The revocation of the authority comes too late to affect contracts previously made in accordance with the authority. The revocation can affect only the authority of the agent to make contracts thereafter as binding on the principal. And so we find the authorities hold. Pond, on Public Utilities, § 512.

3. In the case of People ex rel. West Side Street R. Co. v. Barnard (1888) 110 N. Y. 548, 18 N. E. 354, the conclusion was reached that the general statute law of the state on the subject of the granting and sale of franchises by municipalities to street railway companies conferred on the municipalities the power of making contracts in the granting of such franchises. That conclusion was there reached by a consideration of the general statute law in the light of the constitutional provision on the subject. However, the constitutional provision involved, in that case was confined to a prohibition of the legislature from granting the right to lay down railroad tracks without the consent of the local authorities and certain landowners; and the general statute law involved, while similar in some respects to the Virginia statute law on the subject, nowhere contained any express mention of rates of charges, except in the provision that "the legislature expressly reserves the right to regulate and reduce the rate of fare on such railroad or railway." Laws 1886, chap. 642, § 1.

N. Y.

The case does not involve the question of whether the rate contract was irrevocable during the life of the franchise. Therefore we do not consider that case as an authority to support the conclusion we have reached above, but, we mention it as it has been much discussed in the briefs before us. Indeed, if the statute law of Virginia were no more specific on the subject in the direction of an express grant of the power of irrevocable contract

by the municipality than is the statute law of New York involved in the case mentioned, we would have come to a different conclusion from that which we have reached. See also Quinby v. Public Service Commission (1918) 223 N. Y. 244, 3 A.L.R. 685, P.U.R.1918D, 30, 119 N. E. 433, and People ex rel. South Glens Falls v. Public Service Commission (1919) 225 N. Y. 216, P.U.R.1919C, 374, 121 N. E. 777.

4. We should perhaps especially mention the case of Freeport Water Co. v. Freeport, 180 U. S. 587, 45 L. ed. 679, 21 Sup. Ct. Rep. 493, which is not cited or relied on by counsel for the plaintiff in error, but which is frequently referred to in the authorities which are above cited as relied on by the plaintiff in error company. As that case is sometimes quoted from, it would seem as if it were in conflict with the other Supreme Court cases cited above and with our conclusion on the subject of when a municipality is authorized to make by the grant of a franchise an irrevocable contract during the life of the franchise. In that case the charter of the city authorized it "to contract for a supply of water for public use for a period not exceeding thirty years," and it was held that such language did not in that case confer the unlimited power to make an irrevocable contract during such period; but such holding was reached by the majority opinion on the ground that the city was incorporated under the general incorporation act of Illinois, of which § 9 Hurd's Rev. Stat. (Ill.) 1917, chap. 32, provided that "the general assembly shall, at all times. have power to prescribe such regulations and provisions as it may deem advisable, which regulations and provisions shall be binding on any and all corporations formed under the provisions of this act.