§ 213. Legislative right to alter, § 214. Insolvency and receivership annul or revoke fran

chises continued.

decisions.

§ 180.

Incorporation Franchise

Generally

General and special laws. In nearly all the States there are constitutional provisions requiring corporations to be formed under general, and not special laws, and in a few States certain provisions are made by the Constitution as to the formation of certain kinds or classes of corporations.1 So, in a Pennsylvania case, it is said, "Our system of street passenger railways had its origin in the days of special legislation. Each company then had its own act of incorporation, in which its route was described and powers defined. These companies were confined to the cities and large towns of the State. * After the adoption of the new Constitution the practice of separate legislation for each company became impracticable, and in 1878 a general law was passed providing for the organization of street railway companies. The New York constitutional provision against private and local laws does not affect previously existing legislation. In a late case in the same State it is held that the Laws of 1896, validating defective proceedings to obtain authority to maintain street railroads, are not within the inhibition of the Constitution as to passing private or local laws altering highways, since said laws are not directed to any particular railroad or locality, and are, therefore, general in their scope and operation. One principle, however, obtains with relation to the control by the State of public service corporations, and that is, such control is limited by constitutional provisions as to protection of property, which provisions prohibit its owners being deprived there

1 See 3 Cook on Corp. (4th ed.), pp. 2363-2660, for compilation of constitutional and statutory provisions. (The work was published in 1898.)

2 Pennsylvania R. Co. v. Montgomery Co. Pass. Ry. Co., 167 Penn. St. 62, Am. St. Rep. 659, 5 Am. Elec. Cas. 166, 167, 31 Atl. 468, per Williams, J.

3 Ingersoll v. Nassau Elec. R. Co.,

3

157 N. Y. 453, 52 N. E. 545, 43 L. R. A. 236, affg. 89 Hun (N. Y.), 213, 6 N. Y. St. Rep. 16, 34 N. Y. Supp. 1044, 28 Chic. L. News, 34; N. Y. Const., art. 3, § 18, as amended in 1874, and in revision, 1894.

4 Kittinger v. Buffalo Tract. Co., 160 N. Y. 377, 54 N. E. 1081, affg. 49 N. Y. St. R. 713, 25 N. Y. App. Div. 329; N. Y. Const., art. 3, § 18.

of by oppressive action on the part of the State without due process of law or just compensation.5

§ 181.

Incorporation Franchise - Generally General and special laws continued. In determining the construction of a constitutional provision against creating corporations by special acts, it is an important factor that the legislature has for a long period of time, with the acquiescence of the people, exercised the power to regulate corporations by special acts. And the legislative control of the rates of fare of a street railway corporation in cities of over 100,000 population is not in conflict with a constitutional provision against the creation of corporations by special act. In Maryland the Amendatory Act of 1884 was supposed to have been passed in order to remove all possible doubt as to the authority under the General Incorporation Law for incorporating telephone companies, but it was held that "telegraph" included " telpehone." The fact that an electric corporation has a general State charter gives it no right to use the city streets for its poles and wires 10 A franchise by legislative grant has the legal character of an estate in property.11 Where a Constitution provides that " The State shall not be a party to or interested in any work of internal improvement, nor engaged in carrying on such work," 12 it is held that the State cannot authorize the purchase and operation of any street railway or railways wholly or partly within a certain city, since it cannot do, by means of agencies of its own creation, what it cannot do itself. 13 In a case decided

5 Western Union Teleg. Co. v. Myatt, 98 Fed. 335.

6 Indianapolis v. Navin, 151 Ind. 139, 47 N. E. 525, 41 L. R. A. 337, 14 Nat. Corp. Rep. 774; rehearing denied, 151 Ind. 156, 61 N. E. 80, 41 L. R. A. 344, 30 Chic. L. News, 414; Ind. Const., art 11, § 13. See § 161, herein.

7 Chap. 360.

8 Act of 1868, chap. 471, §133, covering telegraphs.

Chesapeake & Potomac Teleph. Co. of Baltimore v. The Baltimore & O. Teleg. Co. of Baltimore, 66 Md.

399, 7 Atl. 809, 59 Am. Rep. 167, 16 Am. & Eng. Corp. Cas. 219, 2 Am. Elec. Cas. 416.

10 Chicago Gen. St. R. Co. v. Ellicott (U. S. C. C., N. D. Ill.), 83 Fed. 941.

11 Oakland R. Co. v. Oakland, Brooklyn & F. R. Co., 45 Cal. 365. 12 Mich. Const., art. 14, § 9. For other like constitutional provisions, see 3 Cook on Corp. (4th ed.), pp. 2362-2660.

13 Attorney-General V. Pingree. 120 Mich., 550, 79 N. W. 814; Mich. Act, March 24, 1899.

in 1894 it was held that the Lieutenant-Governor, in council, had authority to create companies, under letters-patent, to carry on any business with the Province of Quebec, concerning which the legislature itself would have a right to make laws, and to give such company all the powers necessary for carrying on their business. It was also determined that where the powers granted to a company incorporated by letters-patent included the erection of poles in the streets of a city, a resolution of the city council, granting its assent to such erection of poles, was not ultra vires.14

§ 181a.

Designation of through telephone line - Mandamus - Delegation of power. In a New Jersey case an application for mandamus for the designation of a route for a telephone line through the borough was allowed where the part applied for connected other parts of a through line. Such application being held to be within the acts of the legislature of 1880, 1887 and 1888 relating to telegraph companies since the purpose of these acts was to impose upon local authorities the duty of designating streets for the erection of poles, etc., only in order that a through line could be constructed, and the applicant telephone company's line had been in existence as a through line, but was built in the borough, in part upon private property by permission, which might be withdrawn at any time and the through line interrupted. The application was for the designation of streets which would fill up this interval and connect the parts of an existing through route built under lawful authority. The company had been duly incorporated under the telegraph act of 1875, but subsequently changed its name as it had a right to do under the general corporation Act. It was also held that the Act of 1900,15 amendatory of the telegraph act of 1875, did not affect the applicant's rights.16

§ 182. franchise.

Franchise differs from grant of land - Ownership of
The grant of franchises and privileges is unlike a

14 Bird v. Merchants' Teleph. Co., 5 Rapport's Judic. Office de Queb. (Cour Super., 1894), 445.

15 Approved March 19, 1900, Pub. L. p. 74.

16 State, New York & New Jersey Teleph. Co. v. Mayor, etc., of Borough of Bound Brook, 66 N. J. L. 168. 48 Atl. 1022, 7 Am. Elec. Cas. 6.5. See §§ 362, 363 herein.