nity; 25 an exemption from a burden or duty to which others are subject; 26 an exemption or immunity from ordinary jurisdiction; a constitutional or statutory right or privilege; 27 a right reserved to the people by the constitution; 28 a right belonging to the government; a grant under authority of govern

29

25 State v. Morgan, 28 La. Ann. 482, 493, per Ludeling, C. J., in dissenting opinion, in case of exemption from taxation and right of transfer.

The term "franchises" in a "legal sense, contains the element of a grant or immunity, privilege or exemption" by public or quasi-public authority. Lawrence v. Times Printing Co., 22 Wash. 482, 490, 61 Pac. 166, per Reavis, J.

which the king alone can grant, exercised without a legislative grant, would be a franchise, with us, a are franchises, although they never privilege, or immunity of a public existed in the people, or could be nature, which cannot legally be exer- exercised by them in their political cised without legislative grant, would capacity. People v. Utica Ins. Co., be a franchise." People v. Utica Ins. 15 Johns. (N. Y.) 357, 8 Am. Dec. Co., 15 Johns. (N. Y.) 357, 387, 8 243. Am. Dec. 243 (a case of usurpation of franchise to carry on banking business as a corporation); State v. Real Estate Bank, 5 Pike (5 Ark.), 595, 599, 41 Am. Dec. 509, per Lacy, J.; Crum v. Bliss, 47 Conn. 592, 602, per Park, C. J.; Chicago & Western Indiana Rd. Co. v. Dunbar, 95 Ill. 571, 576; People ex rel. Koerner v. Ridgley, 21 Ill. 65, 69, per Breese, J. (a case of an information in the nature of quo warranto in a criminal proceeding; held, not to be allowed against persons for assuming a franchise of a merely private nature, and that persons appointed by statute to close up affairs of a bank are not officers, but mere trustees, and do not exercise or enjoy a franchise); Commonwealth v. City of Frankfort, 13 Bush (76 Ky.), 185, 189 (a lottery case); Cumberland River Lumber Co. v. Commonwealth, 6 Ky. L. Rep. 295 (in abstract only, no opinion); Maestri v. Board of Assessors, 110 La. 517, 526, 34 So. 658, per Blanchard, J.; State, Clapp, v. Minnesota Thresher Mfg. Co., 40 Minn. 213, 41 N. W. 1020, 3 L. R. A. 510; State v. Mayor, etc., of New York, 3 Duer (N. Y.), 119, 144.

Privileges and immunities of a public nature which cannot legally be

26 Central Rd. & Banking Co. v. State of Georgia, 54 Ga. 401, 409, per Warner, C. J. (a case of duration of charter and right of State to withdraw franchise).

27 Louisville Tobacco Warehouse Co. v. Commonwealth, 20 Ky. L. Rep. 1047, 1050, 48 S. W. 420, per Paynter, J. (citing Webster's Dict.), (a case of corporation failing to report for franchise tax).

28

People ex rel. Koerner v. Ridgeley, 21 Ill. 65, 69, per Breese, J. (as in case of the elective franchise).

29 "A franchise is a right belonging to the government, as a sovereign, yet committed in trust to some officer, corporation or individual." Knoup v. Piqua Bank, 1 Ohio St. 603, 613, per Corwin, J.

30

31

ment; a grant of sovereign power; a sovereign power;

32

a sovereign prerogative emanating from the sovereign authority of the State, either directly or through a delegated body.33

§ 4. "Franchise "-As a Contract-As an Exclusive Right. The definition given by Finch and substantially adopted and followed by Blackstone and other authorities,35 has been criticised as not being strictly correct under our government and laws, since franchises are based in this country upon contracts between the sovereign power and a private citizen, made upon a valuable consideration for purposes of public benefit as well as for individual advantage; and it is said by Chancellor Kent that franchises "contain an implied covenant on the part of the government not to invade the rights vested, and on the part of the grantees to execute the conditions and duties prescribed in the grant. Some of these franchises are presumed to be founded on a valuable consideration, and to involve public duties, and to be made for public accommodation, and to be affected with jus publicum, and they are necessarily exclusive in their nature. The government cannot resume them at pleasure, or do any act to impair the grant, without a breach of contract." 36 Again, "Franchise" is

30 "A franchise is a grant under Augusta v. Earle, 13 Pet. (38 U. S.) authority of government, conferring 519, 595, 10 L. ed. 274, per Taney, a special and usually a permanent C. J.; State v. Scougal, 3 S. Dak. 55, right to do an act, or a series of acts, 62, 44 Am. St. Rep. 756, 15 L. R. A. of public concern." Trustees of 477. Southampton v. Jessup, 162 N. Y. 122, 126, 56 N. E. 538, per Vann, J.; case reverses 10 App. Div. 456 (a case of a right "to make a roadway and erect a bridge").

31 Pennsylvania Rd. Co. v. Philadelphia Belt Line Rd. Co., 10 Pa. Co. Ct. Rep. 625, 629.

32 "It must needs be a sovereign power or something which no subject or citizen can of right use." Knoup v. Piqua Bank, 1 Ohio St. 603, 613, per Corwin, J. See Bank of

33 Truckee & Tahoe Turnpike Road Co. v. Campbell, 44 Cal. 89, 91, per Rhodes, J.

34 See §§ 22, 23 herein.

35 See § 1 herein.

36 Kent's Comm. (14 ed.), bottom p. 723, *p. 458; Horst, Mayor, etc., v. Moses, 48 Ala. 146, per Peters, J., dissenting in part; Maestri v. Board of Assessors, 110 La. 517, 526, 34 So. 658, per Blanchard, J.; State v. Real Estate Bank, 5 Pike (5 Ark.), 595, 599, 41 Am. Dec. 509, per Lacy, J.

sometimes used to mean an exclusive right held by grant from the sovereign power, such in its nature that the same right or privilege cannot be subsequently granted to another without the grant operating as an invasion of the franchise of the first grantee and of his property rights. The strictly legal signification of the term is not, however, always confined to exclusive right and the word is used in law to designate powers and privileges which are not exclusive in their nature.37 It is also declared that every grant of a franchise is, so far as that grant extends, necessarily exclusive, and cannot be resumed or interferred with; it is a contract whose obligation cannot be constitutionally impaired.38 In a recent case in the United States Supreme Court it is held that there are privileges which may exist in their full entirety in more than one person, and the privilege or franchise or right to supply the inhabitants of a city with light or water is of this kind; and that a grant of power conferring such a privilege is not necessarily a grant making that privilege exclusive.39 So a franchise may consist solely in being a corporation and carrying on business solely in a corporate capacity and still be also a right which any person or persons may exercise without any grant from the State, and, therefore, such a right would not be an exclusive one, and the corporation would be a private one as distin

" Chicago & Western Indiana Rd. Co. v. Dunbar, 95 Ill. 571, 576, per Dickey, J.

Co., 54 N. Y. Supp. 598, 34 App. Div. 181.

North Dakota: Patterson v. Wollman, 5 N. Dak. 608, 33 L. R. A. 536, 67 N. W. 1040.

Ohio: Bank of Toledo v. City of Toledo (Toledo Bank v. Bond), 1 Ohio St. 622, 635, 636, per Bart

36 Charles River Bridge v. Warren Bridge, 11 Pet. (36 U. S.) 420, 604, 618, 637, 638, 643, 645, 9 L. ed. 773, per Story, J., in dissenting opinion. Examine the following cases: Illinois: Mills v. County of St. ley, C. J. Clair, 7 Ill. 197.

New Jersey: Millville Gas Light Co. v. Vineland Light & Power Co. (N. J.), 65 Atl. 504; State v. Freeholders of Hudson, 23 N. J. L. 206, 209, per Carpenter, J.

New York: Staten Island Midland R. Co. v. Staten Island Electric R.

Pennsylvania: Rayburn Water Co. v. Armstrong Water Co., 9 Pa. Dist. R. 24, 30 Pittsb. Leg. J. (N. S.) 239.

39 Water, Light and Gas Co. of Hutchinson v. City of Hutchinson, 207 U. S. 385, 28 Sup. Ct. 135, case affirms 144 Fed. 256.

guished from a public one with no public functions which it would be under obligation to perform.40 We shall, however, consider this entire matter exhaustively under other sections in this work.

§ 5. "Corporate Franchise" — Corporate Franchises.Whenever a corporation is legally formed, the right to be and exist as such and as a corporation to do the business specified and authorized in the articles, constitutes a valuable right which has been called the "corporate franchise," as it is a grant from the sovereign power. And this applies, whether a banking or a grocery business, or the operation of a railroad, or in fact any other business, in which individuals may engage without a grant from the State, is specified and in which the right to engage in a corporate capacity is granted.41 But it is decided that a franchise granted to an organized corporation, or to an individual or individuals, and thereafter transferred to a corporation, is not a corporate franchise strictly so called, or in any sense, except that of being the property of the corporation.42 As to the term corporate franchises, it is declared that it covers all rights granted to a corporation.43 The above statements, however, involve certain questions which have been

40 Twelfth St. Market Co. v. Philadelphia & Reading Term. R. Co., 142 Pa. 580, 590, 21 Atl. 989.

41 Bank of California v. San Francisco, 142 Cal. 276, 279, 64 L. R. A. 918, 75 Pac. 832, per Angellotti, J. (citing Central Pacific R. Co. v. California, 162 U. S. 91, 17 Sup. Ct. 35, 41 L. ed. 362; Horn Silver Mining Co. v. New York, 143 U. S. 305, 36 L. ed. 164, 12 Sup. Ct. 403; Home Ins. Co. v. New York, 134 U. S. 594, 599, 33 L. ed. 1025, 10 Sup. Ct. 593; State Rd. Tax Cases, 92 U. S. 575, 23 L. ed. 663, Spring Valley Water Works v. Schottler, 62 Cal. 69, 106; Southern Gun Co. v. Laylin, 66 Ohio St. 578, 64 N. E. 564, 566; State v. Anderson,

90 Wis. 550, 63 N. W. 746; 2 Morawetz on Corp. § 922); Jersey City Gas-Light Co. v. Gas Improvement Co., 46 Fed. 264, 265, per Greene, J., case aff'd 58 Fed. 323.

See State v. Western Irrig. Canal Co., 40 Kan. 96, 99, 19 Pac. 349, per Horton, C. J.

Compare Meyer v. Johnson, 53 Ala. 237, 324, per Manning, J.; Young v. Webster City & So. West. Ry. Co., 75 Iowa, 140, 143, 39 N. W. 234, per Rothrock, J.; Knoup v. Piqua Bank, 1 Ohio St. 603, 613, per Corwin, J.

42 State v. Portage City Water Co., 107 Wis. 441, 83 N. W. 697.

43 Atlantic & Gulf R. Co. v. Georgia, 98 U. S. 359, 365, per Strong, J.

the subject of considerable discussion by the courts, and which relate principally to the power of alienation, taxation and the nature of franchises, based upon such distinctions as exist between the franchise to be a corporation and other franchises or rights and privileges; but these questions will be fully considered elsewhere herein under their proper headings.44

§ 6. General Franchise of Corporation. The general franchise of a corporation is its right to live and do business by the exercise of the corporate powers granted by the State. Such a franchise, however, gives the corporation no right to do anything in the public highways without special authority from the State, or from some municipal officer or body acting under its authority. Thus the general franchise of a street railroad is the special privilege conferred by the State upon a certain number of persons known as the corporators to become a street railroad corporation and to construct and operate a street railroad upon certain conditions, but its privileges are within the above rule as to occupation of streets.45

§ 7. Special Franchise of Corporation.-A right granted to a corporation to construct, maintain or operate in a public highway some structure intended for public use, which except for the grant would be a trespass, is a special franchise, and when a right of way over a public street is granted to a corporation with leave to construct and operate a street railway thereon, the privilege is known as a special franchise.46 In a

44 See three last preceding sections herein, also sections as to transfer or alienation; taxation; nature of franchise; and distinctions.

45 People ex rel. Metropolitan St. Ry. Co. v. Tax Commissioners, 174 N. Y. 417, 435, 67 N. E. 69 (a case of taxation, etc. In this case the court, per Vann, J., says: "The general franchise of a street railroad company

✦✦ is the special privilege conferred by the State upon a certain

number of persons known as the corporators to become a street railroad corporation and to construct and operate a street railroad upon certain conditions," but this differs from a special franchise); reargument denied, 175 U. S. 482 (Mem.), case affirmed, Metropolitan St. Ry. Co. v. New York, 199 U. S. 1, 50 L. ed. 65, 25 Sup. Ct. 705. See Chap. IV herein.

46

People ex rel. Metropolitan St.