Franchises - Cornell University

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Cornell Law Library Scholarship@Cornell Law: A Digital Repository Historical eses and Dissertations Collection Historical Cornell Law School 1892 Franchises Arthur Grant Paerson Cornell Law School Follow this and additional works at: hp://scholarship.law.cornell.edu/historical_theses Part of the Law Commons is esis is brought to you for free and open access by the Historical Cornell Law School at Scholarship@Cornell Law: A Digital Repository. It has been accepted for inclusion in Historical eses and Dissertations Collection by an authorized administrator of Scholarship@Cornell Law: A Digital Repository. For more information, please contact [email protected]. Recommended Citation Paerson, Arthur Grant, "Franchises" (1892). Historical eses and Dissertations Collection. Paper 268.

Transcript of Franchises - Cornell University

Page 1: Franchises - Cornell University

Cornell Law LibraryScholarship@Cornell Law: A Digital Repository

Historical Theses and Dissertations Collection Historical Cornell Law School

1892

FranchisesArthur Grant PattersonCornell Law School

Follow this and additional works at: http://scholarship.law.cornell.edu/historical_thesesPart of the Law Commons

This Thesis is brought to you for free and open access by the Historical Cornell Law School at Scholarship@Cornell Law: A Digital Repository. It hasbeen accepted for inclusion in Historical Theses and Dissertations Collection by an authorized administrator of Scholarship@Cornell Law: A DigitalRepository. For more information, please contact [email protected].

Recommended CitationPatterson, Arthur Grant, "Franchises" (1892). Historical Theses and Dissertations Collection. Paper 268.

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Submitted as a Thesis by

Arthu r G raiat Patterson

Qandidata for the Deere of "Bachelor of Laws"

The Cornell Tlniversity,.8chool of La,0lasss of '92.

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In ,tLyt studyprpra)t )ry to fr7 tiL1f on t-i s subj ec -,

found the cases, ,d evail tile text books i. hoTel1_ss co.-

fict in re arr to it Tr 13 aCi ses on Real PropO, Ivspealk-

iT of til er a s onae tJiT, whi 1s tre, i se os 0 corporati o" s

an11 par ati arly iu.ni cip al corTorati o.s r eqardinjg tAet s

a very di ffere nt tiinl.

After so-ia, hesi t-.,ti on, cane to the conclu.i o... th t the

., ont cori__ic t in the c sios and .ext books being

largely due to tAhe diversifie .atri.e of franci ses,couid

be to a .re, ex.,en overcoP-D by a classification. And

~tjie i am <,;are tl-hat the cla;si fication adopted is very

cruO .!hink that ib is natura1 one,ai id I trust,,:!ay. surj-

nas-it a recorciliailion of nost of the casos.

in tr iat ~r of t-he subj ect i.stenL of fill-i i Te

paes Wi t, nTljwr ous Ci tati.)s1 of the facts of por ieular

casesI have atteipted to a23, conci C 'S.o S 5t ,,t o f tb ho

.Tenera rinci1les, aid the rea sons v~i c , suppe(rt te, lOp-

ilig by so doingj to cover the ios- imuortant parts of ie

subject in the briefest possible :an..or. A.G.P.

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TABLE 011

C.HAIP-'I ' .b I, J'RA i Ii t 1P U+] ;4f1-?AL.

I, 'iThe general nature of franchises Page 5

II, i'ranc! ihsos di stinpui shed L'ro'ri st-,tut ory or oon

ri ght. Page 7

IiI. i-nat which is w franchise in one country may be, a com-

mon right in another.. Page 8

I.,!,]-,at -may be the subject of a franchise. Page 9

V. Goeneral classifications of fr9nch-ises. Page 10

0rpA.PTR ° i I, PRoOPjRTY 1,M'B,'11- IS.

VTI.Definjition and nature of a property franchise. Page 12

VII.Value of property franchises. Pagfe 12

IlI.~The usual liabilities incid(ent to property ovirersihip

and business transactions. Pa qe 13

e courts have not consci E ousy and logical ly di s-

cussed a, d dfined I'ranch-i ses. Page 14

X. Tbe consituent elements of a corpora-ion engaged iii

the merce,rltile business. Paue 15

XI. T IPe rirfht to sue and be sued in the co', iorate na e is

a franchise. Page 17

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X-iI.1fIe ri llt to exercise a cont roi in the busin ssby

voting for directors,et'c. ,is not a franchise. Page 18

XIII.Peroetual succession of a corporsrion is not P,

frp, )cli se. Pagre 18

XI V. 9ihe d efi it ion of a corporation. Page 19

XV. Li~iitel right to exercise the porer of emi-nont domain

given. to soIe corpora1iois is a rran chise. Page 21

Y7I. f. epti on frov Lax- aion is a franchi se. Page 21

XTII.UThe rirfht to maintain a thoroughfare and charge tolls

is a franchise. PagTe 22

VII.T:e right to own n pass real propertty in the corpo-

rate nn-:e is sa franchise. Page 22

KI(.Tf Ye rigfL to run P public ferry is a franchise." 23

XXPatent rights are franchises. Page 24

=~I.Oopy rigfhts are franchi-es,also thu righlt o- baak-

i ng etc. Par e24

XXK!I.Pbh state has the right to tax prooerty fralcises

Page 27

XXIII.Francises being a, part of the sovearei gnty of' the

state,cannot be exerci sed rii thout its authorit. Pacre 28

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XXI. A state has the povIer iro proti. hi t til , exerci se ,vi th-

iLn its territory, of a, fratclu.ise nrantee by ,).Iy other state

or cou0nry. Page 30

XXV. co, ls ssification of p roperty fran chiseis. Page 31

]CI.( i object of classification Page 32

7XVII,,rancises incidenI, to the transaction of busi,.ess.

Page 32

MXVIII. 1'ranchises -rhich are property rights. Page 3

XKIX.Iphey are subject to the right of eminent domnain by

the state. Page 38

X.XTi.ten they ca..ii be sold or ;nortcTr'ned. Page 34

=CKI.The state by ta-ino, t:his class of franchi ses fro-,

thteir possessors tvi,thou"6 just co.ipensation,'wili be impair-

og thT oligation of contra;ct,unless V]a, right is reserve"

Page 34

Q±AIP.DriI I, POLITICAL iPA'--I S.;-,,.

.XtI.01hat is neant by political franchises. Page 3('

I.IlI.rTh11e rigir to vote is 11otir± 1j.is cou 1try,a fra, n-

cii se. Pa,~ 3;e

=KKIX. Political franchises are posessed by bodies politic,

such Ps T"unicipal c orpOrations. Page 88

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1 T.['i'e state has complet e coi.).trol! overla.d po ,,rer to

recall political franc-iss, Pagqe 39

x-=I. IPe exercise of most political franchises are des-

cretionary "vith the pofor possessincf theigand no liability

is incurred by toIe exercise of 1 e discretion. Page 39

XOXII.In certain cases,ir!perative mini61etrial duties are

iTposed on the possessors of political franchises. 40

=D'/IiI.The assumed exercise of a political fraicIhise 'vitLh-

out autiorit.y nakes the act void. Pa ge 40

. )K-_, Conclusi on. Pa, fe 41

Cases,rith references to er, ch section.Pars 48-,l

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Chapter I.

Il'he 'Aeneral ,Tature of' Franchises.

I . , -S,] 'R,-\L ) . Jt, I !'I ():: I f f\ I'P,,A! i LI SE

Ir order to cone at a feir un.dersWtndinr, of ;vhat

fr-rmchises areg.nd %;,ihat can be done *Jiith thenour first

inquiry is, rha t is a, fralichise.And a, suitable,an absolute-

l~: correct definition is probebil not to be found in any

text book or decision nor accessible to the studento Tho

may hcave occasion to institute the sea rch.fFevertheless,

some e inient jurists and text book ,iriters hav, e forial , ted

definitions which in the contingencr for wi-ich hey Tere

made,v''TerO sufficiently complete and , ccurate for the pnr-

poses for vrhicb they -rere intende(I.And we,b,,7 comparing tlIes

several definitions,vay like-Tise come to a conclusion suf-

ficiently accurate for present purposes.Je find in the flrst

placegthat a franchise is c,,n ,vn-a-fe,iven to a, ert in

person or perso!sSecon('ly,tht the advantarle is fiiven by

the state in the exercise of a, sovereign poIrer.ThirdlT,

that the benefite conferred_ do not belonr to the subject

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of common rights. .Te fi-ij.d f rgThr, by a very crude exemiina-

tiontha; the adverse ature of differn.t fraitc]i ses Flakes

anythinF but a verY coi~prehersive defiriUi on, defec ive as

a qeneral definition$ ,,,hil o on the o--rter h dri, e di f:ii lty

is encountered in f,)rAiLf.(f , feneral r.-finition that will

not incllcle too much.

By Finch it has been defined' to e",Lroyal privileg e,

or a, branch of the kingys prero,,l:,ivesubsistin T i Ja tlhe

hands of his subjects"and he Toe on to s_-, tthat it may

be vested in a natural person~or a bo,.i.> politic.Blackstone

and nert ,,l1 of' the inglish a ubhori, ties,ad opted. Finches

definit, ion.-TowT if in JLngiland,,, privileie 1],. the hands of a

subject, 'hich the kinf. alone could grant ioul( be a fran-

chise; vi tbh us a Drivi Ie re or immuni vhici., can.iot be Te-

gally exercisetl -i thout leTisla-_ive grantmust be a fran-

c,..se.The re fore a, .rs be deLi s. 'f

3-BI,,J -BY L-i4 STPATh ,IF TI. ., T &I, S. ; Cn ij.iS SO. -j:_- ,:

A P,-RSOT OR MJ¢ UIR O1i' POF-,S.-JS; i \Y .A - T 'AN.ib- j -4. F .T

Ti'T, F Pi-,, g'I .,+ 1,, OT A PO bfbR, Th Fl (JI .'Y LJS TO' ±% B I f2 O

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'k} S3U]J'O'L (UL CO, I J PlY J N!. fAn~i vs i s Cshi by Chief Justice

i arshal,"ouht not to he exercised b,' private in~liviruals

at their mere nrill and plinasurebut should be preserved

for public contro~l. "

IIH. FPA40i{I SLS DI )I STr-TORI i-1) 1i'PfA SV2AYU'pTY PP .

A fraichise must be the deleg ,Aon of-ohe ri~f-ft to ex-

orcise some po'.rer or privilege which is in fact contrary

to the law of the ]i.nc. And it must of course be sone poT:er

or privilere which the sovereigjn power of the staT, has a

rigTht to deleqfate or create.Franchises are to be distin-

f ished from statutory rigfhts in that the latter is given

to ,.11 thie subjects,t.and thus becomes e, common rightor in

other w.,,ordstbecornes the li-- of the land..To one having an ad-

vantagre,w.',hich by h.e definitionis one of the distillcuish-

inr fer.tures of a, franchi seIPor the ar.s rsason~a rigft or

privileoe 'Tiven by the constitution.,cannot be a franchise.

Vhether the privileg-e of voting in the United Staies,(in

view,- of the provision in the United States Constitution,

guarenteeing to te people of e: c!i stee a republican for

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of governiment)will be di scussed herepfter ,under the head of

political franchises.

Of course !ranchises must in this country be granted

by special s[atute or b, so.i-e statut or process,if blr the

latter.the riTh, to becone a corioration -ay be . con-rion

right;but the riqht to enjoy the franchises is only acquird

il the man-i-er prescribed i prseori--e i by the le

gislature~subjert to the condlitions express or implied,

wvhich the a7 imiposes.The priniary differences between the

statutory or conLon rightand a franlchise are-first in the

case of a co-mron or statutory right properthere is no dis-

crimination in its enjoyrientbet_..ieen persons of the same

classs s hile such a dlscrliiiiation is one of tho 'iscri.i-

nating features of a francli se. Secondly,the part, ies -.ho are

to receive lhe framchise -.re at-as ascerlained before it

is grantedq -,hile , s atu-,or or co,!mon rirfht -ay exist, even

though there is no one to clai-i and tate advantri-e of it.

rIII. Ar"iAl IS \ ( -h JLT,, RI ,T PT, , A Y A\'y B.T A P J'T-

(jJ-ij3; > f Y--- hR

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i should be noted that a privilere vay be a co-rion

riocht in one country or state,..nd c franchise in anotheras

for instance the ri rrht of bankinggin e'ew Yorkuncder MaLe re-

straining act,passeO in 1804,tvhich provi(led tihat"no per-

son unauthorized by lpvJ.,ar becore a. melber of an associ-

ation ---------- or proprietor of any bank1 or fund for issu-

ing notesreceivinf deposits, ahinq discountsor transact-

in other usiness b 'Ihuing business. "it 7was held 'that this

cook auz.y the corTnon lavi right of ba, nkingain 1. made bakinp

possible only in the exercise of a franchise to be obtained

by legislative .rant.At the same time in iLgland,and i an,

of the American stctes~it vas n com-mon rit!ht,given by the

comm)on ]j or stcatuteto all who mivht see fit to enqa(fe

in the business.As has been seena statute a:. conferr a

co-on righ, o, a -r"i epeni on the scope of its

apptica,-ion,and its ascertained or its inde.iiLi~e benefic-

iari es.

IIT. tiA !O OAXT BE 'U_,Ei.1 LfIwtJ1 ( A iP 4-f1 i

Any posmer privilege or exemption can be given as p,

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franchi seexcept those that fall unier t>~ i.inrf clr8ss

First ,those conferred by the federal or state constitutio s

or by statute or common law. 8econcIly,tboC prohibited by

the -Vederal or state constitutions.Thirdlv,those incidents

and powers os sovere(ifnty wihich are absolutely inalienalle.

f'he first class are not subjects of fraechise becai1,se they

already belon(,, to the citizen of common rir-ht.T' e other

classes are not because the poer to grant them does not it

in any branch or organ of governnent.

IT. }f, 'rPL GLASSIIPiO ATIO 7 OF T'?AfOfSl

As to the classification of franchisebuz fe' have at-

tempted it,and those u.,,ith reg-rd to special features only.

Rut it seeins that if the general nature and purpose of the

franchise ":.re taken as a basis of classification;thev may

be classified for convenience of me'orizincj and reference,

at least,as POLtTIOA~I . ,_FAO'iISJ'3S-those that jre fiven to

such bodies politic as citiesand incorporated villagesfor

the purpose of establishiag a 1imited local aovernmqent.

T ie oter lass "Ire may call POP2T ii k O ±. -ES. -such as

givento -,n oredinory business corporationand have to (o -Jijj

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an or dina,rv tr,ns,cti on of businessand the pcoqufsi ution ' ,I i .d

man g7rneT, of prope h;,.

ihe IA;,e' class i-~ai~ 1)e sub divi(1ed ,vii h reference to

their o,, bstr c, or reIvive va, lue as-first,'r a1ehi ss inci -

dent Lo tbe trpnsr, ction of businiessSecond-fIrnchi ses vYarich

create propertyT Pifhts.

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Ohapter II.

Propertyf Fra: c1it seg.

TTI * D ,JjI D i I L11I !- T D :C ATJ-1' O)F A PROP-, TV F l, ) ,.

Property franchises are thOse -Ihich give their po-

s3ssors certl-ain advantaues over their fellow.vs i Li tile use

of their ova propartyyor in the transac iom of busiT, ess;

or Kth rig ilh to ,ngafe in a business in vIfiich thej other-

,,,isb could not -as the rigiht to 2aimtain a ferT;T ,nd charge

tolls for the use of iG.8o0na of Uhe most couilion franchi s

of this class arelilnite4 liability ol contracta !ilited

riqIt to exercise he poe r of eqinentd q a inThe Ir ivi-

3jle of , corporati 9: to sue oml. be su'd in its corporate

ar t ie riht t o use a corpra.e s:;a,etc.

VII. AITUJEh OF PROP rR .IY / ,-IXJ 8IIS.

This cla, ss of proprtr franc.ises is usuall- con-

sidlered, by the courts as incorpora,1 heredit;.ents.Thei?

valu hebai ahe po t fr,privie:gj or adva a, ate -ey conaertr

in ait i on to hose 1--icls belonri to the individuals by coi-

mon right,in re[Tard ,o the o.,nership of property and bisi-

ness transactions c3eera!!, . onthe value of" !, frac.1i se

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15 ' rela,i ve oia,.a t i --s d p en.-I on .. l vlue of the

proper-Ky to ;1.rhich it rela,tes.B t bhsr; ia, he insrt" 'nC.s

..r ere 1 f-,,'rAlc.nL se, is of value 9,asidO froT. aidi1depe cl.i_, of

other property.An exa ople of 'this kind ,.,Irould bo th-i ri fht

to maiLain a, ferr,wicl, ,ight bo of value io i e pOSesssDY

h oufTh no f'erry 7.TP a iain iel at the tiniN.

V III. "t-11 J8JL'LSUAL LIA 3 1 LI I i -:, I [ 1 ,q,- pR op ,, 7- r, Tr 7 -

S-IP /h:T TJS " <-TSS TRA.J SAC T I f.

BeafI"ore discussi g the e ffc, , of and -at te of t e

most promi1en1t franc]ises,it ,Iay be -ell o tur'n, our at; en-

-i on for?, n io nft to the co Tion and inevi tal.e I nci cents an

effec -s,o-f busijiess tr" scin- &Id in thie firs t place e

shou 1 oCiceat the 1 ifposas .-_n aver y one a pe rsoa al

lia bii t- f r I-its oi.Tj debts,and also for all tor-s coimmi ittecl

byf hi ,or , 3r done by his property, and lie is ,.1 so liable

for the cts of is ,,t- s on t o act within the scope of Ii s

appari: .uI,'.ority i a everr c a. se ,,here th liabi-,itr :.roulnd

at och o th.a princi pa! if ae a ere the one ,, i-ad.Thris

personal liabi Ii tj is s6e 7i, .1 " taht invariably attches to

property orLers, md to the partiefs to a business transc,-o

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Bi io-n; Md .ideed it is nccossv .ry to prOtect, creiitors &nd

proniote -, ir dealinq betve.T .n1a aP,,:d i.And t 1s d ubt-

1"Iss because comnon- justice deman ! ,( it that The a: de-

clres~public policy s,,ctiuosqandj. ,very brancxie of our ju-

risprudence enforces it.

Againgone individual has no contro'l over or pox,-

er to la-vfully appropriate rIho prop3r7y of anotherno na-

ter ho.T necessary or advantag(eous it roay be Cio his business

interests.Such a pom.Ter hov ever does belong to -,hIe sovereigR

tv of the state,and rnay be exercised as einent rooai.

Indeed suc prirqary facts a s the le al !iabiltil here snen-

tioned,and the povver of e mileni;, r".m,,nare such co_ ion max-

in-s of la e thiat to entio_ thei seem a!-ost u rtecessaey.

But their conioc'ion j-ith the subject in hand i s so iriti-

nate tlat they caniot %..rith propri . ty be ' itdfn they

such fundi ental and undertyiliu c principalesq, ha c, they -)ust

ever be foremost in the inds of those .ihe -ould accurate-

Iv rIetect and defi---itely outline :,ii.e property francnises of

a busiaess corporation.

IX. -Lr[ GO)URIS }/-t C )i OfSS33ID I- 0 ) WI IA R01 iA;4UOL[.)iS j.

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15.

These franichi~ses beilgj iost coln"oTaly ,iet vitb in

co rOhctio'n ,!ith tlia other irntaiibiehis ivisiblo bei iq calle

a cor-oorai,, o and .th courts beinrg confusod vi ,Ih one exis-

t(-,Jic,3 ,hich the natural se e s coul 11ot co mpr eh ad h eA n oi,

hlvo ppeared blanded -orot1er,2eoed to consider life too

short and tic too precious to loqicatl, discuss and df'-

Li tby defi. athe inost obscae of th e o i3 j.vi sibles ,;;ich

is the fran.chise.But theyf have neverthelass spelled out a

1o ieca soTutio:l for the iosc i ort,ant questions ;rhiich

arise Tith revi,rd to fraruchises th. Lugh iT fa, ct they I'ave

very often re, ched! teir con.clusions br sle !ie of, rea-

soni cf other than tha of considering -he purposes s,id the

facts of the franchise itselr,Yu the prachlicai result. has

made excusabl a the ill oi cal and or,9tI,-C alDpar "tay con-

flictii decisi us of the courts.

. I 0-. 8T0I.r TJ ITT tL.;I I[]TS OI!, A OORP ,)RkA oI r _ I.T'CTA... I I(

fi~b-LAKR _[4 L i0 13TU1 4 ,r S. i 'I SRY, hi >;u iif) Li 'kW hi TfiY.

het us consi(Ter t% ,o sit lP]a corporal , + " on c

ceivable,7Ljhich ,.,iou-l perhaps be a corporationa en. Od in

r-ercantiie business.,TlTia.t are the fraachises possessed by

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sucil R, eorporation?'J3 rna.! Lirs; qertion tie limited liabil-

ity :riicl. is ,e ost conspCicous arid possibly .e chi ef

franchise possessed by such -! corporation.

.Te iind that, tho corporation is co nposed of a nurl-

bor of persons ;iic. have each contributed certF~ifri afaouit

of capi'althe su) of wlhich constitutes the ,rhole capital

on xvhic_4 the business or the corm biuation is to be carried

oln.These iembers to all appearatices do business cs ot er

persollseacii -Gransaction beinrg brouglht about either by those

personally iiaterested~or their duli authorized agents.Yet

1, . find that if the assets of the cobination becoTne less

than its liabilities,t-e, cre~litors -,ust suffer as loss,the

difference 4 because tje state in the exercise of its s)ver-

eign po-,wer has e povered those persons so engagjed in. busi-

ness~to con-iracl.- debts that they noeed not pay if 61ie aMou-it

of capital per:i].nentiy required to be invested by thei

proves insufficient under their :1na)-.ent to aeet t'eir

liabilitlies and although the debts contracted wer. y tle

parties for -- heir own- nersonal dva!t.Ie,a.nd aIthouh the

inrividuol 1 eb er sof I-n1 corporation ad aPle ;3,ns fro

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hich to .pDay their debts.This rflption frim liability

wvhich the sta ,e grants and the law enforces ,is a franchise

of the corporation,and illustrate well he principle in-

gre .iants .)f all franc-.ises w-hich is the advan-age given

to their possa;sors over those of the same statts ho

do not have th, -h. It is aw exe-aption rhat does not belong to

the citizen of common rifht, <his exe~iptio:aI uillht add, is

riot based on equitable principlesbut is ji.,stified byh a ,

sound practical political econoly for the pirpose of facil-

itating ].aIe Onterprises.

XI. RID RI PT 1 SiJkJ PiD A E SIJ V 1,T A OOAPOPATE TFAAE I S A

RAITO-I SE.

The right to sue and be sued in the name chosen by

te rlembers as Sh e name under .Tli2 ch th1ey ,TitI transact tle

business of the concern is iD this country a franchisebe-

cauee it is a principIle of procedure ever inforced that

suits must be brougiht b-: and against the litigants in their

own names,ancl as that is the node of bringing parties into

court.YLNd is "he only one that ,vou!h be ordiliarily- rec-

ognized;*,, hen the sate in a diff'erent case,pr scribes A rif

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'erent rfay~tha t rant is a frauchise. T right to sue and

be sued in the corporate name in .giand,ca arly 1o, -

ever be terl.ed a franichise,because any concerni doing bus-

ness-as for example a partnershipor a joi.it stock assoc±-

ai;ion,-maV sue or be sued in the niarne thiefy have adopted

under .ihicli 1o ('o business. Tteref're tltis privi le[fr in

.ingland is 1, co_-i) on rirr.t and no-5 a franchise.

XII, '7._ [] RP-I ti T) Qf 5fI SE A CO,.'R.C)L OJ" Y-, BUASIh.SS BY

V0,IT 1, Fjrpo Di Ri'JOX5(RS _'C. , i S T-I ,A , rIC 1 .L

The right of a stockholder to vote and have a con-

troll in the business is either a ma',ter of contractor a

c0 l:m o1 ri Tht incide,nt to the 1te rest -v fed 'y the stock-

holder.It certainly can be obtained by other :seans Lhan leg

islative jrantso it is no- a franchise.

Xii . ,P FiVk' !J/_AJL SU'jQbSI 0DrT O- A1 COPPOPAL[ (3i IS .IYO A IRA.l-

Perpetual successionl,hich it is o often hinted

is a, francliserests solely on contract,and is the neces-

sary result of permitting one -imuber of ,- concer. b tr ans-

ferrin2 his irltarest to . .utsider,to constitute >e tra s

Page 24: Franchises - Cornell University

19

ferree in hi sstead a. meber. Perfact perpetual 3;cc,-sio n is

enjo r",:i by joint stoCk ssooia! ons,'v],ich are crea;ires of

contractu Idor authori y of the comlmon lawandl posss no

franchises. Tone of lhe le neus of' a franc;iso ,rS pres orlL

in the poL73r of perpetual succession. So to argue that it

is not c. fr'_niclii se seems unnec ,ss Cr .

IXT. rij .D". Tr I T( (Q. A CORPOI(OT.

T]ien to the conbinatio- under consi(r.ra, I.ionthere a.u

but t, ro fra.nchises rrPA~, oThne one cert'. in exemtions from

!iabilitythe other the ri rFJt to sue Oil be sueri in t-e

contr, aame.TP!i s 00:bnal on i s, call e, a cor-oraui on,

and a corpolation is diefined '-, ,. the (freatp, jurist,as being

an i nvisibIe.iLtaqibl nersne:i stinf-" only n the conter-

pIa"I;,in Of thk l th is refin-tionv.re ,pa invited to i-

a,, ine th.ae there exists somethinvT invisibleinaui, iblein-

ban0,Ciblate _ e eas odor!ess anr tbout f'eeli.-a.,, re,

.,is sonei.. ii. , C i s s blin, s . to 0 !E,; s deaf as

a Cog horn a, s d ub as F va uu -1is c pFbl e of contract-

ing an( doin- all Ninds of business.T-lut t'ii . al! Ics bus-

inCss capac tyits profits it can iot hold.VotTr I 6o not vi sh

Page 25: Franchises - Cornell University

to be undl'rstbod as ridiculinf th" ides of callifnC5 a cor-

porc,-, op an invisible person.Tha6 fictiortlih-e Ell other

le al fictions ias for a purposoamd that purpose va s to

produce brevity in. describing< ud. durlinr uvil u a peCul-

ar po ers nd liabilities of the person.s ,ho eij oy - the

corpor re franchi ses hi e th ey *,re ay ctili( t2-i hi -h e scope

to *hici the franchises &Dply.'Then the leagal fictioL was

carric - .qc ,er,and sought to be vnade ., te,- i; by ',hici' to 6,3

terni1be the status of the corporation under the fourteenth

FJ',.nenCIenat to the constitutionetc. in that capacityt ,as

beymond the scope of its usefulness.

A corporati on axi~sts in realiti as vel -.,s in the

conterplaiio of la'.,a".nd t;hre is ,o reason y its actual

exist 0.ca should not be defined.7W,.ye have examined the fran-

c ises of e, comon business corporaiaionsd sside from its

fra chisos -e find it is ilpiy - , combination of inrivid-

uals doinr-r business.''Phen <. ,-at is s corponation?It is a cor-

bination o' individuals for a cer L',in pur-pose;to aii i-i the

acc opli i. u le of thich tbe. t.re V'iven1 b the s-ate Certaifi.

advaLitages called franchises.

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21

Xi . m ijE IRI -LtL[] 4'() ELJ4R&)J. .-: I bT K .) vt. - I S A EM.RJGX fU-:l .')

0nle of t,,e peclr sovereifin powers WmicE sor@ cor-

porations a,,re perhitted to exercisegis the powoer Of emi-

nent domain.TbAs power is to a limitad extent,deleg-ated by

the sta,,e, to corporations en(a,!ed in a business of ,such a

public nature tha; th, exercise of this powjer .:roul: be

justified on the theory ol' the reatest c ood to the, (Treatesi

number.And this power in the hands of a corporation is of

course - franchise.

XVI . P".1iPYI (): I GP '~~I( \~ j;t S,,,

All prop ert is oidinaril1 suhj oct to taxation br

the st ate, and an im-aunity fro- taxation of certain prop rt.u

by the state it seems must ba I- franchise.In the, cese of

iMlorgfan v Louisiana,it was hold that eerption from taxa-

tion was not such 2 franchise Cs could be mortuae,qad an d

soldand in the same ce-se it was strongly intimate; that il;

muni-ty fron taxation. was not a franchise at sl l.Bu b elI of

the elements -frnc..... se :ero present,anol there is good

authority in declari , it to be suc h ic! seems to bthe

natural and logical conclusion.

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2

x-- I . , R I C + L T T N0 1 1 T, , A-m / _ _. ! £ L : , a . . , F',i ! , o L f - T

I S k -F .- .

I, -as been held in ny casesq uill iv is no long-

er. cuestionedt.t1,t the rifht t,. 2intai, a hj(Vn.JPT or pub-

lie thiorouqh rare of a.,ny ,i and charre tolls for t be use

of it,can only be ad P-I a .rant fro t-,le sa te,rnd sucb

Tr 0t,1 is r franchise be reas , - fo+ th s-- aiA ng

and T-eenin., controlI of the thorourbf!}fres in that tiiP,.r i s

!)-,cause of the quasi-public n.ture of the business, anie . -hle

advant ::e to be u led by th e public in ;aviI1qy the regu-

lation of tolls controlled ':y the sovereicn o17 er rather

than avnut it so.lely in the bands of those enaed in

the minta i aPca of the ro J.

1~i . RI0-W tJ4 bT PS RrLPr J ' i4jn

(Jorporati one ore usualy a!lo-.ecI to holrI _an!d to

teenort _ full njomen of uheir other

franchises.But it is a fui'liiental principal tha,, nothin'f

buu natural persons in esse can hold and dispose of real

estale of co-m. on ricrlit;and os a, corDort, ion is consirered

Page 28: Franchises - Cornell University

an artificial person,it cannot ,,:itout autb]:ority fro. the

stateeither express or implied,1old lan.This porer is

usu,!lF expressly (fivei_ s-d whether expressedly or impli-

edly is a, franchise.'_j-e right to interfere fi-i4 . the tile

of the corporation is hovzever solely .,.ith the stateanld as

in the case of an aliencamot be attackec collateral.ly.

X-1IX. T-; Ri(LT T( RU"T A PUBLIC _P,,Y j S A FPAf(Ii S3

It seems to be well settled at common lat, that the

rigi~t to establisJ4 and keep a public ferry cannot be exer-

cised w',ith out a grant from the sovereign pover.And the

statutes of many if not a1! the states have declared ',.hot

the co ion laI ,,as,a.nd provided means by :1ich the rir ht

may be had.The same reasons wihich justify the government

for contro ling thoroughfares 9enerally,-nanmely,the pub-

li nature of the busiaess-apply to ferrys.The question

whether or not the sovereign power may grant rights to ferry

bet-,weei ci sahe points,to different partiesis a much moot

ed one.But it seemsifrom the weiffht of authori U, that -th ev

-- ay if the first grant was not by its terms an exclusive

r i t-.

Page 29: Franchises - Cornell University

T7C. P]TTYK' P}.1GS ARE IRAi'.T(D I S,,.

Patent riqhtsri,,I.I are gral .ted to invetorscofisist in

moLopolYnhich the letters-patent allow, the in.venLor io en-

joyf'or a limited tij e,as a recompense for his invention.

These monopolies have alwa been obtp-inable only froi telC

sovereiqn pocier;(the Inited States Govern ent qrantilof

them in this country)and as free competition in businesc; is

an elementary rifrbt of every citizen,it is plaiL thbat to

create a monopoly that Wll be recognized and protecterd by

the courts; sovereign poier must be employead.And this grant

is a very typical exaimple of franchise.A ±T=X X The rFrai

iag of these monopolies for a lii ted period are justified

by the advantag qe to be obtain, ,d b-, tie Country in general,

frori the encouragement thus held out to inventors to im-

prove useful machines :,nd articles of cotnmierce.

XJ JTAPgJIDOrS O .P i'P I'SS.

Copy rights-A copir right is an exclusive right given

to an aul;Ior to publish ans sell his ow-L± uwork for his o zn

benefit during Ca. certain liti time.It is , monopoly

and whil- the common Iar recognises the ri(Thit of the authov

Page 30: Franchises - Cornell University

to first publish his rorkit gives no such protection as

is cquIre(. ul.er ti 0 copy ri0-hi T, rs.In the [United Sta tes,

copy rignhts are granted by the !general niovernlrianlu.1ld are

franchi ses of the same nature as patent ri ghts.TheC reason f

for grantin !! patent rights,,pply .vith equal force to copy-

ri ghts.

Trade Zi,,Iarks-These are also franchises.Tlhei are mo-

nopolies of a certain mark or name user in business.5' the

M.onlopoly of their use.their owners 9,r enabled to protect

themselves from the public agairAt counterfeits,anJ aainst

fraudulent practiecs by competing dealers. The value of

trade marks depends on the reputetion of the party using

t1hem,or the popularity of the article .Tith whichl they , ,,re

used.They mc;,in some cases~ba practically acquired by

prescription,or longT usa.ge,bu.t under the la ws of th-e United

Statesthey are clearly francliises.

The right to be a, corporation is said in some of the

cases to be a froanchisebut a thoughtful study of the facts

would tend to persuade one to think this viewv of the case t

to be erroneous.Because a corporation is simply an associ-

Page 31: Franchises - Cornell University

ato l of iiiJivi dUa1s posS ssed s ith fra'chi s; SSO to s'y thI

tiiaG tie riTht to , , - corpora, i!a is a .[rac'chrrosS!qTOu1 Oe

iil e fect "ayi.-Ig tYi ai; Ki e re ,.ppor ti', ity to be mndo,.Toc

-itha P, rra achiso is , francfis, J' ici surely canaot be iog-

The right of bankl Jag i s a fr aicU soaAt c"o "o'1 av

te riTht of barlkinT 1)eI oa- g s U') ev ry citizen at com flon

ri!Tht~a id .so Uiht be 3 ercisea bj hii at pie'sure.lut in

Pany of ta s 1tat13 0 Snera ta, tuttas restral i ;IT th e righit

oLP bankianj~hav2 beck! passed.kL A._1 5 e thiose rastrabiinl acts

io fW bfect, ta 1 s a'y bcia cos son la rirrt,a~i rsra bi qikiaj

g g! possible in the exercis T' r frr)7t fro L the state,

.e p i e .v I I a a fr...ciS Tbe ri Tht to i nsure

st-nds on auch the sa 0 foot'nj as MI? r8rigat of bankini.

-"L (in. nest localities also a fra,chise

To enu0ra' 1 JI the franchises that ha-l bean or

May be ni vqvlrou! b i ipossib!,3 as Tia be rea 1!: seen

froa-! thtia very nat~ure of the caso,but mnoulolh bave be, ien-

tio-leri to ri ve a rncat i le. of their nature.

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77iI, i 8,kAY£.il i-S / R 3-RIT 'I) Wt-VC PROP T? _'Y .iP-A 1,Ii

(ertaia classes of franc_;iises -r3 unifora, ly .ld

(>) b prip, rty,rI a such iirblo y-,:ca{i f!. il o os -:e

carl i mposeD t,ax 3 on. p-rsoras or propCrr .r ic4 ar, lot vi --

in its JuI s iwi,,vsrv orie 4'thi - The stage 0153 al a,!-

ID~ianee to 1tflTad every fraichis or privi 1 ige by the'il,

is subj ec t to be -axd by _ie state in ratur!_ for tlia bene-

fit and prot tiot -.... r c aI vd fro the ,nta_ covr 6e it

P" 1s-i s of ascerjal 111(1 value of the fralch a or the

-ode of taxasionvarias frrmtly i, different statssbut tnc

rightS to tax is unifor1iy lield,subjact /o1T-vart. Me 335

in- !jqitato,*u Thils iiitatio n a."7 b suTDaiza : about

hhus: ;ro porer but the s ver i-ty I ratSimi z rt fraceisa,

or an absoluta! y deparl.t 2 3ov, i- ty ca tax Q-. fren-

ciiss.' 1 erefwa a statse of ti a United States das o a v

t- tax a franchise gra,,a by tia UJ-ited Sbatas. Tsithir

1as , cit yr o jtler iullicipal fover ii 8-t porxar to tax a

fraacj'_isa trsart by the s-ate ii avhic i I is situated.

['his imitation is based on reason,because if the sub. rdi-

nSa po~vr~ T5as pl~traei tD tax; the por.Tr t. tl.x b' i-!, the

Page 33: Franchises - Cornell University

28

p.o r ,o destroy; such a- axerel s, 3y the ubordfnat3 ov-

or"1 iO:Lt," oul( prev{±!t the sovertiji po1r fro I prot .cti 1j

i ts aa I s vrat :3 r i iq ntTcr,. ric ieJs o1 f courss c ontar y

,\7i .11 -!* fIQk2 : J Z: ; I r{ I P/k?.i' O-_' I' .:[ SftiT KfT-V i,-><T'Y ( I I 'K'] i2

.V !I, L .,is F / _ ' ,O i I I -1 'P ' y T : ' A i ! i C , i- I'll

then it is att i p I to userp Ln3 5ovirei ao S.1r-

or br iihe i xrcise of a frTioiis, not gra-at 3d,a quo -Tarrant

,vii]. lie aaiist tb3 offeadi party.anyd that party cannot

cl i- any advantage under th franc.:. se he Dr sua to ex-

orcise.FI'here secis to be an appar :>t exc~pbion to tlihis ru1c

i-i the case of a de facto corporatio1.I3uat ii thas3 cases,

as all parl ies ,oJiestly believe Lhat a cor-oratio, existed,

te equi table re1if is to mrsu-cefor tLihe prose as inl

3andi th-1 it ijo 1xist.But i 1 th cas-3 -f a i er userDat ion

of corporpte po'rars,'o equities il be allo5ed the pretend

inr partieCs as"he wi-o CO~nes ito equit71 vas2 co*e ..it~

cte3, i hands."'_Co p-23asu e that thir)T shoulid , entiti3d to,

t l a L vanP-g es :0 b3 _eriv3_ fro 'icorporati lion accout

of innoce1t par ies,su1pposi-T tgera to be such,and contrac-

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29

iT1T fith the - as suc C 1., 6 s co tr "ary -O erery :C1undi ''e'ta

priT) e1 p! of la and of reiasri .T ake f a TII.. f Ti I.

0 li i- (I liability for dbt.r T t fra! c. S!iS.'-, is a !e (fal

d fens just as i1- ic ,o tIe statutP of i it i. o-,s ar3

d Pal Tfeaces and like? al! !eal efanCes,are I TI0o sCnse

matters of c-)tract.Let us take an exaip1e. Sup os - A.. ,ho

is 22 yOars (-) ,coe s to B. ,and repra:,ats hif esel as 20

years o1d. B. ,bs~v y_ (T 1i- i to be 20 years old,enters into

, cotra, t rit hi._B. attepts to enforce hi ri[.ht fro

,- e o, tract. an A., plIad In_' Icy as a deence?Of course

iiot!fo more ca i an associatioa of individuals,i!o iiave

pretendae to act as a corporation,but U. ithout authority,

plead tJe corporate franacis of exac iptioa fr 'I perso'rial

!iabilitF in an action for a debt.The case ofqidechanics

T[atio a! Bar!I- v Pendleto n 55 Hun ,579 i s easiiu i stinlTui sh-

edor in f-cU oes not ilitade alainst this Joctriebe-

cause in that caseathe parties could] not be he, l as part-

nt ras there P7as not enoufgh allvred to con.ect the '1 ,i ith

any busi-iss tran saction of the asociatio,.O£ courset e

use of so ,e framchi se vri tout -,n autihori ti can ofll: be

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so

r e li s'va ( aq Pils S~ * by- 1 a T 0rardi iiT eaa -,I fb1 i' P stra crb-ri fig par-

tieS fro:-4 fart'. er usurpftion.But it is cCrt,..1l7 s ,

fro>- t(1, a uthor i -f to say t-ha, t the cour ts I11! Jever awa, rd

fl'vanqarTe to ,U pary Y:D acFou9 .t -f a, ,ron11fTI usurpatYi of

fr ri - e ss.

3K.X. 0L -'f~ ; IfA3 ' i -r)j - +'v p ..n %I l i" i -I./ _.:_'.,'I Li,

.... V "ROU BI ill

F1 r1i-_t I r' -* TiP.I '.!.O Y, 01 A } r "I .+ 1 ,... -, . ) RY AI\ , ) H S, T ',4 ,

As fralcVlises are < sby the sovereigi1 purer

Of-0he state to i.dividu,. and as the g_ jaj)tirj of bxem is

enlire1j di scretionary ,.ri th the state,it fotlovs t.111at :o

potrr c,.0a c ,pell tahe raTn I4T of a franc0i se, eit'er can.

One e ir thbout author t',act for a-jnuYr i. .. r ant-

-inj b'e'. -Zence i- is -ha- , sta-c , ar cr rc a _,ore .r cor

pora ti - ro eXJ" .rc < S ri f T 0 ,c1,i '. ih i its territ ry.

I f it <T aer 1 iot SO nO stat could be SOVer 5111_ i a".y pjow-

6r t]h.at could ]b 31'+3 ? by -1t -t .

its poli tical nianag .- i And 2,S ay ri it p prigvi Ita or in-

+lnu&]i ty, 'ii c_ absoiutely belongs -O the 70V5 r Ient of +e

stats,,ay be grant> as a ,.anc.i e if the eta- could t

Page 36: Franchises - Cornell University

ders, ts sover aiq--t7 iould b 3 (I no-inal,nd 1a3!i r i r .e d.

TaxiJl corpora-i.o1,, ,roe iTt3rD ---,rc

.... ..u..a o- i f c.oq er c beca1s t ih-. _::arcisa 4c' ,, frano.i8pe

is no; 'l3c3sS.r' r ;z I nter -Stab - co2 .1,3ro,3.IA1d t ,3 'r, "C'i 3PS' a e s a...

. . ........1 7- fi, ij 15 aTr jV--r, 'IiC iAs , P to 811

d 0 IT -- ,- P - y0- ~ l .. S t.. .

joy ali ty 0 o , f r et s do :oy.A fra ehis. cc

i ja- a (ei a8 a, ad scvPreT i -,r if ny y de v _, c " tJ- gr. - co u,

be extra- w3Trit ri ,;!,the result oul be tit - v ffoVe r -

~ort~ Dal eexeroi ni. its s- veT. jity )v8 tir :1Jrly

.over,-_.e i,- an: tat ajainst the la .; rs po, raer

to verta ql c-.rio ar u co l c ii, h

-n3 D1 [ ~t 1 i &'1- v 3'~ -r,~ Y. :

f r af 1 f c s.s .. . d i Cl d into -;o cl r; s .

=_,rs:,' fr ,-Ichll jS3 0il 3:lt .. o tiA transactio , of usi r;-,.... , r"r t] 0_ c o , m e

sucht as lie ritht t' sue ..... be ui a the coporate mamq.

privierT of § ailt, i f._ a. farm[. T-:, ayi a 1-,:o opo y re

Page 37: Franchises - Cornell University

eRKtp].eTh e dis tinctionl betren ao these ttvo classes seems to

be tha the for rner is un. i aciden; of a certain btsiaiess or

trad , a uere immi auity Jr privilege ,Jhioi may be -takenl ad-

vftfltPfie of,0hile, the latt- r is a special rightthioL , en

exercised i inci"ent, to the enjo ,,ent )f propevt7,or rath-

er creates in its possessora peculiar property righit.Thiat

isonl is an advantage in the omriership Dr ase of property,

ii1ie the other relates sblIy to the transaction of busi-

XIT~Ii. Y-.%.{ O.BJ JO'i' Oi,' 011I S 'I C.ATI O4.

The i oportlane of thi s classi fication zillbeco o-s

apparent,anfl the necessity of keeping it in oind nore ully

realized ,,h deter. ,ing ,,hat fraicluise may be mnor-Ugaffed

aid soldand 71rIat franchise cease to exist o.ihen the busines

of the party jfho possesses th-v is vound ip.

TIIt. 0-\ IO {IS" ,S I o 1) iT? 0", T, TRAPTS!AO'TP 0) 1 P±' BFJSI .IFJSS.

it is eviden, that the privileges or ii',mnities

,Thich ve tear_ frtnohisesincidsnt t the iransaction tf

business,carnot be proper- cyoand as they are not property,

they- cannot be sold or mortqTvedbut beia[q i l'ci. "ntI s L'..ic

Page 38: Franchises - Cornell University

33

adhTere to a certain. busine-<osthey majT change hands by new

pa rties sc, to te buiess t e ' rbors 01' a coro-

rai Ao1 >in,yV nantir ly changeb, nae ,, e,nbe rs ti k1i:ia the ol] one

placesgand fhe franlc ises ..:,hijl Coal'inLle to att;C 1 to t ,,

business.

It vwoulJ se , that .tis class Oif fralcrIhAss be-

inag based v-hlolly on -,:Le policy of the Tover' n nentamid being

of such a, , nature that property rights ii then cannot be ac-

quiredthe state -iay vithdra, tile at pleasure ,iithout hav-

ing reserved -t]i.at rig'ht.W!hile a different doctrine rill ap-

ply to the other class of property franchi ses.

X V-'SI! I rRA_{:TO :T ,,.o I(C, A _u P 7OP 2.. B.RI7 .-. y

Franchises mvvtic]. conStitute property rigfhtsas has

been saidare those ,hich are inciden-t, to -the ovnership of

pro-nr ty.Theiy create i"i their possessors special property

ri,T]1ts. Ther are spolcen of in the books as incorporeal

her:iditimesats, :nd are al'zays consiired as propertY in tie

hands of their posessors.

XsI ,'1 . 'N IL- , LMLJtJ '-. .' ' -"i cI, )j ," 14 R Ti N M " T .... Y... .. Y Azv! J.. , 7 [r ... t ll,-L ';

Page 39: Franchises - Cornell University

34.

1t is-.ll settled that this class of property franchi seS

are subject to the exercisO of' eminent (tofla. the sa'.1o as

a±'y other private property.Public policyor public ndt to

justi fy the actt anid proper compesation to reimburse Ior

the loss,vill alzays per il t the state to recall a franchise

*,T.ether they cari be sold or iortqajed depiods on the

permission griven by the sovereign po,,lcrror at ].east the

int: nt of that oover 1rilbh rej ard 'o tkheir exarcise.The

courts ff-'r the iost part holi that the franchi ses are per-

sonal trasts-confided by the state to the grauteeand that

the la-tar cannot nortjgage,lease,or transfer the- except

onpermission by the state.This iiermissiou,:ozever;-ay be

either express or imliod,ad ien it dIoes not conflict

'w-ith public policy,criay usually be implied from rather in-

direct authori ty.

XXI. Q I J SYAT 5,BY TA(1 T 'I S 'LASS () _HA.JGO-.I- S 8 hrPJY

rKJR P(OSS >SC1RS hf'ij0 IUS 0J~i~hir,:Vt ~ n~_ . _, ± ,, ., ,,., 0 8 ?A.1-'11 j-8 JS_[ :[ ,T --... . . .. :,i'lLL _ , I odiPAI .

1±;'1- {' Ilji ().BLiaAq I(Oj (), CI 0.Ell CO Ti'RAOT, 2LjJSS T-V 1 Roic. I S . _ 1J-n

Aside from the o; ercise of e'lnent do,ai.i,thjis

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8.5

class of franchises cannot be takeni by tste5tac3 U1fliss

the riujht to recall them at aviy tine 1vas resorved to the

state when they -viere qranted~because the ifrantii f by the

state and accepting by the granteeforis a contract which

cannot be iinpaired by the passaj~e of any lavT..As such an act

would be in conflict w-jith the Jnited States 'osti tution,

restrairiic, the state from passi-g any law , i npairiag -iih

oblicratio of contract.But unlcss the grant expressly cre-

ates a ronopolya similar rjra,%t may be made to anot'h.er par-

ty -iihout coflicti.-aI with the constitutioi,thoug1 in ef-

fect t Le second gral.t T,]at r nder the first valueless.

Page 41: Franchises - Cornell University

Chapter IlI.

Political 2'ranchi ses.

XI , C <i . vvrJ-' IS S BY POLITIOCAL FRAT'{i 8J2.

Br poli tical fr.esee re to unl0erstral id os e

local no f e1s hich- have to d, ,-iith the govern-ient 0 tiLa

people.Tiey are del.Tat-ed soverei gftysfi the saxme as propBr-

ty franch1i s s, re 9but .iaviag no el e-Ints ' Ii0c 0 ou Ol con-

stitute property rigihtsfthey are ever subject to the -Jill 0

of tha state to racall.Any :overniental acti on by tlie state

that 1-.iay be delaated to local bodiesare proper subjects

of political franchises.It is alrays necessary that the fr

:itees of thes, franchises should bo bodies politicand that

their ,ioda of exerci sing 1h3 should b, iin aceord,of the

principles of a republican fora of joverra.ient.A co Ton il-

Usr1,,ion of this class of franchises is the liriltedi po-

lice po ir possessed by cities uatd incorporated villafres.

i . TJ4 ] RI }TIT OTI 7OT. IS JOT, iU I 'CUTi S OJ PULTTY, .A iRqALT-

a U S..

The right to vote. or the pr: vilIe(e of, exercisiyg

the elective frandhise,as it is colfMion1 y called.,i not in

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87

any !e(al sense a franchise.The reasons are obvious. irIrst,

this belrt( a republican fore of jovr:' &o.t,TJi o h ieans

qfoverni isnt by represeilttives chlosen by thl people,and as

that can only be obtined by iecans of a popular voee,thi. -

Vote is not, ny per(issio)1l of te soverein,but is of itself

the -.iost sover-icTn act ]mao k n to our government. Sacondly,

thn P rec-ilatione reqardi LU votin{yjhici are basedL o-a public

policy,are general st ,utesgrmlatimn to the ihole people,

and tliough in effect they designate -i'j-o ar3 and :11he are not

qualified to exercise Lbis sovereign act,the fact tha; part

of a ,people are deemied incompetent.cdoes aot create in the

o- ,hers a franchi se any nore tian the lall which -.xxtx

prevents resident aliens fro ld7i real-estate creates

il the citizens a frPrnchise.I oropositioIi,:hich of course

no one vould contend for.

The elective frachise,populirly so-callad,1,as led

to much confusion of the conception of franchises,but

vie minq it from a leTal standpointtlere is no such thinq

as the elective franc;iise: that isgit is noz a fran;i se.

The stuatute3s re-ardliamr votingr beingr reyuP;tiois of th!

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38

privil 3J3 to votaanrl not J7:ants of tiat privilOs'm.In fact,

oy a, anal-si s of te caseit ./iil scl- J , at no- 1t of the

o13 ..i5 co ion, to franchi ss r pr3s. tit in t.'e voti r

':R-;1 -o 0 B g -@ ,jj P!-Li -

XXXIIV. POtITICAL -. i, " 7 PQSLP) I - YA" ( -I

iD, ,-I _ ! ,s fT UGIAkL OoRPth pl.- i.8.

.. e sovereirTntir ) f -be sate Is a liiited sover ij i-

tUY.T-a hicyest sovereignty residi. iq _e peopl.Tie li-q-

itations in tha, sit,,-'.e sovereignfILty a tr3 se; iiin the stat

and federal consitutio_;s.As has bafr , aid, _ ao-

-r ...ant ri c, Cs .....se handi bt the

at-'_e oer, by '.osa alaTiants --,i thout ",flich

FjAte s v reim t CouI rOt -x..-st.Bet"I. On thoes3 lj,'mo i " lta-

'o, . .... l pa mr vy be A1eleriatped to an, local

bod- anr 3>r so a,.-t edositu -,s Y tat ,.ie Call Paro

litical ira-nchhise.The -)ost oon are -those del

1 -cal goverii-e-ntssuch - as iicipal copporati ons,and co-

si st - r) rivileges Df self Tov Ir1. i t> - I- ,sucI - as -,hn right to

lv to b-nfi.t I public, exercise

a y - ted e e i ' iaill, - I L l. -ooo en-,-t

0 l i-,e -a,, s e t do , a t -, -!,JI p i -, :i t - p)o lI I c e Do o ,e r .A i ! t h e

Page 44: Franchises - Cornell University

39.

Do,.,rors i-ienti one b i,, d irived b'- crra(r n directly Ifro 1 t1a

sto 0 a,ar.- proparly fra, c.)isas.

CX7,_KitT. '1.': SL A. i- 8 OWS C IAPly i ' 0)! i(R.I ,I) OV.i -,, A'TI) P 'Ji,'R .

.. ,:! \,- jL, POLI 'i (AL .'R,' F 0 i S_,S.

It is avid , I -1h IIa-., :n 'i) ] aI obtai t propar iT ri rftts

frou' a purely political franchise and therePfore th restric

tion oi tle state tMing prOpelty fr, ichisa 3S Oi ace ount of

incurring the obligatiums of contract,does not app1,w. isice

the state lay deprive a n.unicipai corpora.,;ion of its polit-

ical framchises at pleasure.

Kx X Ti. TV -.0 ?',(3 8:, ' :0ST P O'I OAL t t S.LS -d OI S -

0C .t.iI OJVRY ,.!Vii 'il. P0:,"T~ R P()SSISS ..81. VJG I ,I,, ..i'TD £f( LI IYBt I 'IT

I B .:TOEJRPZ<) 1Y O_?,FS,'_.i 0. I'.l .. p(iI f1 O, Di S A. Ti'I O

Aks ?, f-eneral propositiort.3te political franc'iises

of a municipal corporation are discretionary po' rs ii

thieir hands .Waka for ins .. ica the liimitart Police po.rer.The

po-er that_ is conferred by 0h stgte beini.-,he same ",s that

rhici. the state possesses, the rrantees 7iave, the s-ne dis-

cretion in its exrciso jacts has the stateand no ,ore !ih,-

bility attacii ; ill tVe one case t1ali ill the other for the

Page 45: Franchises - Cornell University

40

eIrcise of tie non-exercise of the power.it is also held

that ,.-here the municipality forbids certai:a acts unjder its

police IoIrer 2 md then ne(lects to enforce its ordiiatances,aa

cia arT 0o i 1 s results,tbe city or v211a,,- is not

1i able,arrd this see'-s to be in harmony ;iti the theory

of cDnsi erinrir tha Pct -.s under a fully r!. scretionary pow-

or.

7XXIJii . I.f OERTAI'- OA -S.8 IMP.;P,: iLivI TI SIJ> , DU:.i_'I.

_VR"- IrLPCOBL 07- ,T K PO S:-S0_RS OF POli'iI"JAL -P, l -i S- S.

fThoer e 1' certain ooiiticP,1 rpanoc ise; ,, iC impos,

on their possessors the duty of properiTy exercising them.

Such is the case ,;ith po.trer to construct and keep streets

in a safe co'ditio for trave !.A fai].ure on the part of the,

municipality to execute te require !ents vsould ake it !ia-

in damages to be recov-red by the injure1 part- ,,,rhoever

he ma-y be.

[J i ijy Ijy [ fjy_', AFjry rjjD . f> ;}_© _I~ O ' Ai PI:I hPI '_7i CR .,R.j r,

_C "GHit-L VOI D.

As a!l political frPrdchl ses are rant, s (I t, P Tn

Page 46: Franchises - Cornell University

Ili C, pality has 1io povu, r to ta-ko public 0i awi t!]Iout a

franchise conanerriw it,b,] ,rra.i.!s -rc in fac-t, U consti-

i,~~~~~~~~~~~, ct o onvi f e , o.,e r: i,:,, t , : ons (.'I ih te 9 er

cOnlstitution grants ite United States Oovern.menIt power,

An.d in the srle v,; , rb en. Mie r- u n-a. ,overn uent passes

an orliucJ tra- I ias no au;.orit y t to pass 4te ordi sauca

is wholly void.and can neiT, ier give pourers nor rights nor

in curr Ii abili ties. Such aOri iace stands oa nhe s5- s

foo ing as an uconstitutiona i lan,,boing void and of no

effeet,ab iumtio

XXKI X. (()TIiS h

A "or e minute i scussion of this c 1..... ss of franchi ss

mi ghit I pro 2i -able eut havi upg touch n (P the 11or e i'npor-

taut poit s, suffi ci en 1ly, s i think~ to idi cate tha, Ihe

term J0, ra.cIiSu m e a,., ver y (i iferen rights and poters

in dii e re nt-,n e aions and n gin , r,. to di fferenRt subj ect s

1 i ].L le,,e the su-j ect trustin t h t I have i ndicated

the constituent eles s;ets of the nost co: on franchises,

and by F, crude ctasci ficationsugestd som e a of the causes

for so 'rihi confasion9s is found in thba booksc con.ceriang

th r

Page 47: Franchises - Cornell University

~~Pja lib 1(

B , of' Auqu ' - -v ofJ~a~c :U ug~ s,, v *, a l e,t Psters,595i Opilioll or Tparifley,( ,J

T -ent,voi-i f ie..

0alif:o±riia v.PaciJ'ic Ly.Co.9127 U.S. 5140.

P,,pt v .T[,ica Insurance Co.;15 Johvn. 1SP 387,

Broo. - arnd L~edleC!-,To! °I.,4 8@

Bouvers institutesVoI.II 114.

Vood v. Larence C0o.,1 B1ack.G8 ,P 409.

0iFy ol ,ridgeport v.?T.Y., :. .P,. o. 3 Conn. ,25P 266

p_11e g e, I r1 .f es j n Oorporaions Sec. 3 ,

"-4" i1iaii v. S'arp927 '.Y, tll 't P ;19.

Pierce v.imnery,2 q .2 . ,484,P 507.

.cao Ral -ay C0.v.Peop1e,73 1I1s,9541,P 547.

Board o)1 Tra, - of C ica'jc0 v.Peopleggl i1ls.,809P 82.

II

-AttorIeY (enera, v.Utica Ins-Co. 4i Jobh.C h. 71,P 877

Art Ii iScc.18,KY.Cons'itutlon.

BlPck. , Vol.Ii 37.Oia, ses jdt, ionP 284.

Page 48: Franchises - Cornell University

III.

t 'i s t ~ d i i o ~ T . Y P ,, -1 0Pr l . 8, a 2 0 " Y J- l e P .0 , S e e 1

Peo,O V.TKtic e p i , . 1 J9q.B

Ourgis v.ILsr.vi-,t,15 'I.Y. ItP 170.

I V.

8t',%e v. City of Tope,,,30 lan. 653,P 657.

State of Ohio v. aty of Oincina%,i,20,Obio State,18.

Q,!ifdrnia State ;-lPa o ., v.Alta , Tel.(io 9. ai 98.

0'Donnell v.Baidey.24 L"Lliss. .880.

VT.

Dillon on Munlic pal OorporaTionsqSeo.C,,.

Hill v.9021rt4n,92) :ass.,344p 3:9.

SpmIldin. v. Andover,54 T.f, 38 9 P. 154.

VI.

See cases of Section I.

-VI I i.

]~-,dwl. , tc.v._arersto~i ;r ank,8C Pa,Stste,4_91.

Y¢a madv v. Eierhouse 18 ird.,270,

:Y. L fe I s.Oo v.0 oJo a8 ai}. ,300.

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44

i,fass.Life Ins.Oo v.Esiieman,30 0, Btate,647.

'PaPMr v. Tenn., Tti onal IBank, 9 -. *Lsk. 9479.

Planters IIr s.v. Sorrelts,57 Ter:a. 935"?.

!lTob].e v.Ounning") 9 .74 1lls. :l.

P a v.].'- %,V,. R.Y. Co. 942 .11J s v ,654,

£ K.

,ic'. v.L.ousiana,93 f.S. 217 P 2 2P,

xi.

Coe v. .... Colum.bus P. a'nd ind, P..',.. 0o. 10 0. State,872,8 -

rli omas v. DD1'in, 22 'ifendal lsP 70.

At]insclOn v.P. 0. . .'.Oo. 4l f)5 St,

Bee -ia_ v. S.rat~oga and Scien", ecly PR.R.Oo. s Paige,z45.

_T-. Y. ;. [.R. C o. 9 v.Ki p 4e, i Y. 9 4 ,

Kraie v, CLoir el t d P. RP 0o. 5 ,0. ' te 146.

'4iss. ,?.... o, c. 3) cLon aId 12 jriesk 9 4.

State v.-iaine Oen rt 66 e. ,488,P. 112.

Si:,,e f "el Jersey C.11-r7 r a, i

Gordon A-ppead Tax-. 0ourt,,8 Ror S.

Page 50: Franchises - Cornell University

45

Je<P'.e, Srtm Branch IanIk v. SJke Ie y, 1 1] ac]. 9436.

Railropd Co. v.-a. 993 .. 3. ,:,9.

iirSt Divlsionl,S.P. ,, Py h.R.0o. v.Palcher,14 i'in. 22'!.

0onl,.iorgll v. .Lao 08 Otbo. g21 7 P 222 ,

XT I I.

Si',XOkfin U'al1Oy R,.R. Co...v. Liverr ore,47 Pa.,465.

]3acInail v. Sara-,oa, a, d ScS!elaectcdR P. . o. 9 3 PaiTe,45

,oI(f~nv. La. ,2 0%%o,2117o

XVI.,

Leaure v.i-{1!eis 9 7,Ser, and PSY.

Groundie v.,/ater Go.,7 Pa.,State,23-.

P.ny1 v.Lessee of Coster.14 Pet.122.,

1jansh.,; , v .i-c':nshar . 99, 2'- -;' .r'. Rep .(iIIs 11 :

Lla11,et v. Si 1ison,84 sf.Q.,37.1S } Am.Tep. 594•

iPussel v. aes -.IR. o.,8 Tex. 643.

4i-VuTh v.Cool Go 0 a icl Go. 9 7 IIls,2.

XIX.

id iIlton v.a.adden92 Ata. ,80, also 70 Av.Dec. -52

-pmoer V. jTqO1 ].vo Co.,18 ia. 8327 P 333.

Star]: v. c0o>rdn,! <'ott and y.(;tS.0, ) 87'7,also 9 Am Dec.712.

Page 51: Franchises - Cornell University

McRoberts v.,ashburie,10 >,inn ,D- .

Dandy v•Ohs~lmars,2, Ills. 9,212.

Benson v•qorrr&.n,et c .o f•Y. , 10 Barb. ,2 2 P 245.

Ake vestern RR. Oorporation,20 IT.Y. 8170#

Ii RPev.Stat.of' - . P - ,Sec.l-lO,

Robinsor on PvtentsVol.ISec.I.

aiter s v. vlan h ., ttan BE,-,.k,20 0. ,288

UTTica Ins.Co.,v. Scot 6.,19 John.,l.

I-e ss -v.Ter- z .4 ISerg. and R. 9 37- .

Up- i t y I iis .O0 o . Or -vm 9 4,Q, 3:T e" < 6

vr]be.ton v. Peters,8 Pet.,7i9l.

St ,we v.Tbornas 92 VTall. 507.

Ssr Jost (an-s Oo.v.Jzucr.:,57 Gal. 7614.

Spring Talley Go.v.Scbhottlee,2 Gal,71,

Lane Co. v.Oreqon,7 Wal.,71,

Portland Bank v.Apthpop,12 brass.,252.

Ooite v.0onn.Lubuei Life Ins.0o., 86 Qorm ,!i

Page 52: Franchises - Cornell University

Ottmya Class Co. ,v.iveCaler,81 illso .:5(

LLc(o!!ouqjj ii.; :d. 94 S1,eat.,316,

Osborne v. Bank of U. S. 99 T ji e at. 7,0

'XXI I I.

Pettis V.Atjin'sqC0 Ills.94,54.

Fuller v. oe. .57 !T.Y. ,2,n.

] .dUnour v.Layo4.9 0. state,

!4ational Bank v. Ldodon ,45 Y.y. I

Oha ffeev. LudeIinfr.7 3,a. gtnn.607.

Lanfer tr v.sVh eeler,11 Abb.'9_f., 0.-0.

ventz v.Love,8 .Atl.Rep. (PE,.,)878,

YXI T.

L]and. OTiar, P, R,. am_ 0'1.Oo. ,voToffeY,6 Ka11,9240,

People v.I'5ie .ol' Phila, , 9 2 JT.Y,tl.

\rt.LT. Tel o. v.Mazsr], 28 OState,5'91.

Paul v.Virgilnia,8 .,al-,lG

Ducat v.Ohicago,10 Vial.,410.

Fire Dept.v.,Toble,8 :.Dq83it,440.

Doyle, v.Oontinent 1 Life Ir s.Co.994 C.S., F5,

Maine v.G.T.,.V. Oo.142 U. S.,21i ,

Page 53: Franchises - Cornell University

xxXT2 I I.

Blck.,Boo: II,P 87.0ha-,'fees Ed.,P 284.,Sc 29.

:-Br (ivev Jriidg, CO.v.Dick,6 j io,.Q,07,at P 583.

a-rles .... . erridf e Go. v,,'arreBridre,l Pet. ,420.

iBotp t".ater Pr -r Co.v.B. . R.l.o. ,28 PiC_.,8 0.

Oantra] Brid,'re. _ o v. Lo:e, ll,-; 9 , a.Tr ,

,,I..,t.,P :,.Jer irnpike Co. .V.U.z.T.0o21I.,90.

'T.Yetc.,,..Oo.v.Bostol etc ,..Oo. , " Oou . 19c.

a.i-tteT of Yerr,42 Barb. 9 119.

Gue v.Tide etc Canal Co.,24 'T-ov..257,,

_~a~ ~,~~ ;p_ v. Lar, i 927 ,f. J. iq, $57.

Oorm~on;oa3 o_.tSi*,et, al .,tARlO Allen,448.B 445.

Co v.Oolunibus etc. 00.9,1Oo.,40 Ei 0io s-,ta,872,

OarTenter v.BIa ckhk ±i Ig u o., .5 T.Y.,4.5,P 50.

"ae f i.fild Toll ridg C o. --. J. TP . Co. 17 Oonn. ,40

(~e, Jor~ich fa,s lighlt Co.v. or Ci ity '-,s Co. 2,. Co-. ,19

GhineleclI-ouch e Lun:r an i-_oo Co. 1v.O-.0alth. ,!00 Pa. st,

488.

Dartmouth Col 1 v. Toor i-arC,4 Ve. t. ,518.

Page 54: Franchises - Cornell University

Oo.of Rirccl;ond v.00. of i, I'6uren 11 I!l:. q1.

P.oberts~ v.C ity of Rockford,21 Ii.,451.

Tbe peo-ple v.Porer,25 I]!s.,169.

City of St Louis,v.R.ussel,9 Mo. 507,

Patterson v. Society of i ianufacT 're. 9 .J.Lvr,8.

xx i.

Davis v.ivontgomery,51 A! .9129. 23 Amr.Rep.9545.

-_.eeteir v.Oineinat-ri. 119 O. Stateq19,,

Joliet v. Verley,85 IIIs. 558.

Bric]evr v .,v......svi11e,29 Ind. 187.

Fisher v.Bost, .,104 Mass. 987.

O-rant v. Hrie,69 Pa.State,420.

Conrad v.Trustees of Ithaca,16 :T.Y. 158.

0larich v.1 ,,ayor et c o, Xra shinton,! ;ieao,. 40.

~IM i 1.

.ve, V.City of RoIoDster,35 Barb. ,177.

0av anau gh v.Boston,189 id ass.,426.P 485.

,'7ak e fi Id V. Te6 _po~t,60 _,_ [ 4 F 8274,

Page 55: Franchises - Cornell University

0

Steele v.Beerio,91O At. ep. )4ie,)1:5.

.On v I t1o,1 1 ,4 ss.,47 6,P 479.

"1ov ,. of Idaio Sprinqs v.FilliaenlM Pac.Rep.(Oolo.)48.