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§ 34. Same Subject Continued.-It is apparent, therefore, from what is above stated, that a corporation in the exercise of its franchise may or may not obtain certain property rights according to the nature of the franchise or character of the grant. It also appears, as we have stated elsewhere, that the right to acquire property is declared to be a franchise.17 But the right and privilege, or what is termed the franchise of being a corporation, is of value to its members, and is considered as property separate and distinct from the property or franchises which the corporation may itself acquire subsequent to its incorporation by the use of its franchise.18 So the corpo

enjoyed are not private rights of Southern Ry. Co., 112 Ky. 424, 61 property, but are part of the public S. W. 31; Smith v. Mayor, etc., of rights which are shared in common." New York, 68 N. Y. 552, 555. Rails and other materials of a street railway company embedded in the surface of the public streets of a city remain personal property and may be disposed of as such. French v. Jones, 191 Mass. 522, 526, 78 N. E. 118.

17 See § 12, herein.

18 Central Pac. R. Co. v. California, 162 U. S. 91, 127, 16 Sup. Ct. 766, 40 L. ed. 903, per Fuller, C. J. (a case of taxation of franchise); Horn Silver Mining Co. v. New York, 143 U. S. 305, 312, 36 L. ed. 164, 12 Sup. Ct. 403, per Field, J. (a case of taxation of corporate franchises); Bank of California v. San Francisco, 142 Cal. 276, 280, 64 L. R. A. 918, 75 Pac. 832, per Angellotti, J.; Consolidated Gas Co. v. Baltimore City, 101 Md. 541, 545–548, per McSherry, C. J.; Lumberville Bridge Co. v. Assessors, 55 N. J. L. 529, 535, 26 Atl. 711, 25 L. R. A. 134, per Garrison, J. See Western Union Teleg. Co. v. Norman, 77 Fed. 13, 22; City of Bridgeport v. New York & New Haven Rd. Co., 36 Conn. 255, 266, 4 Am. Rep. 63; Bailey v.

"The powers and privileges which constitute the franchises of a corporation were in a just sense property, quite distinct and separate from the property which by the use of such franchises the corporation might acquire." Home Insurance Co. v. New York, 134 U. S. 594, 601, 33 L. ed. 1025, 10 Sup. Ct. 593, per Field, J. (taxability of franchises considered).

See $825-27, herein.

"Much confusion often happens from a failure to distinguish between those franchises that are corporate in a strict legal sense and not really property of the corporation, and franchises acquired by a corporation after corporate existence commenced, that it may part with if they be assignable, or deprived of without corporate existence being affected and which may survive the death of the corporation." State v. Portage City Water Co., 107 Wis. 441, 446, 83 N. W. 697, per Marshall, J. (a case of action to forfeit a waterworks franchise granted by a city to individuals and assigned to defendant).

rate property of a bank is separable from the franchise, and the banking capital attached to the franchise is another property owned in its parts by persons, corporate or natural, and the corporate property may be taxed in the absence of a special contract otherwise.19 And although the franchise or privilege of running a railroad and taking fares and freight is property which is valuable, still it is not the same sort of property as the rolling stock, roadbed, and depot grounds.20 The roadbed, acquired by purchase or condemnation, is altogether distinct from the pre-existing franchise to exist and to build the road, even though it is obtained as a result of the exercise of such franchise to be. That franchise consists in the incorporeal right, the property acquired is not the franchise; this distinction is clear between a franchise, as such, and the property acquired by the exercise or use thereof, even though the property so acquired may be largely augmented by the use to which the franchise enables that property or easement to be put and although it may have no particular value independent of the use made as incidental to the franchise to be.21 Again, the real estate of a corporation is a distinct thing from its franchises, even though the right to acquire and sell real estate is a franchise.22 And a structure, such as a pier, or bridge, is

1 Gordon v. Appeal Tax Court, 3 How. (44 U. S.) 133, 150, 11 L. ed. 529, per Wayne, J.

20 Wilmington Railroad v. Reid, 13 Wall. (80 U. S.) 264, 268, 20 L. ed. 568, per Davis, J. (a case of exemption from taxation, including franchise of railroad company).

21 Consolidated Gas Co. v. Baltimore City, 101 Md. 541, 545-548, 61 Atl. 532, per McSherry, C. J.

"A franchise', i. e., the right to exist and perform certain acts, is a thing distinct from the property rights which the corporation when created may acquire from individuals. * * * The 'franchise,' the charter granted by the State is one

thing; the property rights, including rights of way which the chartered body may acquire from private individuals, is quite another. These latter may be lost by acts of the corporation and the approval of the State is not necessary," although it may be true that a corporation cannot abandon its franchise without the consent of its creator, the State. Thompson v. Schenectady Ry. Co., 124 Fed. 274, 279, per Ray, Dist. J., see same case 131 Fed. 577.

22 Davis v. Gray, 16 Wall. (83 U. S.) 203, 228, 21 L. ed. 447, per Swayne, J. (a suit by receiver of railroad, grantee of lands from State,

not a franchise; it differs from the franchise right or privilege to construct and maintain the pier, etc., and take wharfage, tolls, rates or like charges for the use thereof.23 It is also declared that: "In every instance of a private easement-that is, an easement not enjoyed by the public-there exists the characteristic feature of two distinct tenements-one dominant and the other servient. On the other hand, a franchise is a special privilege conferred by government on individuals, which does not belong to the citizens of the country generally by common right.24 A franchise does not involve an interest in land-it is not real estate, but a privilege which may be owned without the acquisition of real property at all. The use of a franchise may require the occupancy, or even the ownership, of land, but that circumstance does not make the franchise itself an interest in land. To define the nature of a thing to enjoin forfeiture and grant of same lands to another; was as preventing fulfillment of conditions of grant).

See § 12, herein.

23 "The plaintiff has a franchise to construct and maintain this pier and take wharfage for its use. The pier itself is a structure built under his franchise. It is tangible, bulky property, and in no sense incorporeal. (2 Black. Comm. 191). It is not like a mere right or privilege which has no physical existence. A person may have a franchise to build and maintain a bridge and take toll for its use. The bridge as a structure is not a franchise. * * * A railroad company has a franchise to construct and maintain a railroad * * * its road and other structures may be taxed as real estate." Although under the laws of the State a mere franchise is not taxable except by special statute. Smith v. Mayor, etc., of New York, 68 N. Y. 552, 555, per Earl, J.

"The consideration for building

the bridge was the franchise to collect tolls for a designated number of years. The plaintiffs needed the bridge for the convenience of the public. The defendants agreed to build it for the franchise granted. The bridge as soon as completed became the property of the plaintiffs, and at the termination of this franchise they are compelled to deliver the bridge to plaintiffs. They asserted their duty in their charter, when in the fifth section they agreed to abandon the bridge to the plaintiffs. The defendants owned the franchise and not the bridge. They had the use of the bridge during the existence of their franchise, and held it in trust for the public. The defendant corporation, under their charter, stood in the same relation to the public as the plaintiffs would have done had they built the bridge." Police Jury v. Bridge Co., 44 La. Ann. 137, 141, 10 So. 677, per McEnery, J.

24 Citing 2 Wash. Real Prop. 303. See § 2, herein.

by the accidents which are employed in its use, is to confound the thing itself with the agencies applied in its adaptation. Because land may be required in putting a franchise into effective operation, it does not follow that the franchise is land, or an interest in land. But an easement is quite a different thing. It is essentially and inherently an interest in land. It is an estate-a dominant estate imposed upon a servient tenement. *** It will be found upon examining some of the cases that there is occasionally, in the arguments of counsel, a want of exactness in the use of terms, and now and then the right to do a particular thing is confused with the results achieved in the exercise of the right, and those results are inaccurately spoken of as the franchise. The right to occupy the streets with gas mains is a franchise-the actual occupation of them in that way pursuant to the franchises the acquisition of an easement. You must distinguish between the right to do the thing, and the interest acquired in the soil by the exercise of that right.” 25

Franchise "

Distin

§35. Same Subject-" Personal guished from Property Franchise.-A clear distinction is made between that franchise which creates a corporation that has the power to own property, and the franchise which authorizes the corporation thus organized to construct and operate a railroad. The first has been called the "personal franchise," so denominated, by virtue of which the corporation becomes a legal entity, and obtains the capacity to acquire property and other rights. The other franchise is declared to be purely and only a property franchise.26

§ 36. Franchise Differs from Grant of Land-Easement -Freehold.-The grant of franchises and privileges is unlike a grant of land, since, in the latter, the grantee is invested with

25 Consolidated Gas Co. v. Balti- 26 Sandham v. Nye, 30 N. Y. Supp. more City, 101 Md. 541, 61 Atl. 532, 552, 555, 62 N. Y. St. Rep. 198, 9 545-548, per McSherry, C. J. See Misc. 541, per Rumsey, J. See §§ 25§§ 26, 36, herein. 27, herein.

exclusive dominion. But there is, however, a certain resemblance to a grant to a telephone company of the use of a certain space on, above or beneath the earth's surface, since it cannot be excluded from the space which it is lawfully entitled to possess for its purposes, although this rule is subject to many qualifications dependent upon a lawful exercise of the public rights in, and public user of streets. Nor is the right existent in an electrical company to claim any exclusive right in the earth as an electrical field for the conduct of electricity.27 Again, it is declared that, "The exercise of the power of using streets for laying gas pipes is rather an easement than a franchise." 28 In an Illinois case where it was sought to set aside or redeem from conveyance of a patent it was held that a franchise was not involved so that a direct appeal to the Supreme Court would lie, the existence or validity of the patent not being questioned, and the court in its argument upon the point of analogy of title to a freehold declared that franchises differ in their nature from freeholds; that the very essence of a freehold lies in the title to the land; that no question can arise as to the existence of the land, but only as to the title to it; that a franchise is something incorporeal and artificial, created by the will of the sovereign authority and its very essence lies in its existence, in the right to exercise it.29

§ 37. General Creative Franchise and Special Franchise Distinguished.30-Under the constitution of California, franchises must be classed as property, subject to taxation. The 27 Hudson River Telephone Co. Jessup, 162 N. Y. 122, 56 N. E. 538, v. Watervliet Turnpike & Rd. Co., where franchise is distinguished from 56 Hun (N. Y.), 67, 3 Am. Elec. Cas. easement. Case reverses 42 N. Y. 387, 389, 9 N. Y. Supp. 177, per Lan- Supp. 4, 10 App. Div. 456. don, J. See §§ 25-27, 33, 34, herein.

28 People ex rel. Kunze v. Fort Wayne & Elmwood Ry. Co., 92 Mich. 522, 525, 52 N. W. 1010, per Montgomery, J.; People ex People ex rel. Maybury v. Mutual Gas Light Co., 38 Mich. 154, 155, per Campbell, C. J. See Trustees of Southampton v.

An indefeasible interest in land. See Ghee v. Northern Union Gas Co., 158 N. Y. 510, 513, 53 N. E. 692. Case reverses 56 N. Y. Supp. 450, 34 App. Div. 551.

20 Maginn v. Bassford, 196 Ill. 266, 63 N. E. 668, per Carter, J.

30 See §§ 6-8, herein.

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