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[5] Compensation of carrier a payment in the nature of a tax.

The fare charged for carriage on railroads is the consideration for the service performed, whether done by the state directly or by a corporation under a grant from the state; it is simply a substitute for the tax rendered necessary when the state builds and conducts railroads at the public expense; the corporation, upon the payment of the fare, is under the same obligation to render required service to the public that the state would be, if railroads were free and conducted by state authority.- Railroad Comrs. v. P. & O. C. R. Co., 63 Me. 269.

[6] What constitutes a regulation.

Regulation of the franchises of street railway corporations may be by enlarging, as well as restricting, their power.- Matter of Third Ave. R. Co., 121 N. Y. 536, 24 N. E. 951, 9 L. R. A. 124.

[7] Charter as a contract.

Reservation of power to alter or amend charters,- see post, notes [10]-[12].

Regulative acts not violative of charter rights,- see post, note [15]. Charter of gas corporation a contract,- see post, § 66, note [2].

A charter of incorporation granted by a state creates a contract between the state and the corporators, which the state cannot violate.— Wilmington R. Co. v. Reid, 13 Wall. (U. S.) 264, revg. s. c. 64 N. C.

226.

If the charter of a railroad in terms grants it power to charge a definite sum per mile, this express stipulation forms a part of the state's contract with the corporation, which succeeding legislatures may not impair without compensation.-Pingree v. Mich. Cent. R. Co., 118 Mich. 314, 76 N. W. 635, 53 L. R. A. 274. See Reagan v. Farmers' Loan & T. Co., 154 U. S. 362, 14 Sup. Ct. R. (U. S.) 1047; Chicago, B. & Q. Co. v. Iowa, 94 U. S. 155.

[8] Franchises as property.

Franchise grants construed favorably to the public right,—see post, note [30].

The legislature cannot take away the franchises or property of a public service corporation by a confiscatory reduction of its rates, under the reserved power to alter or amend its charter.- Rochester &C. T. Road v. Joel, 41 App. Div. (N. Y.) 43, 58 N. Y. Supp. 346.

A franchise is "property" of which the owner cannot be deprived by later legislation, except by exercise of the power of eminent domain. -Coney I. F. H. & B. R. Co. v. Kennedy, 15 App. Div. (N. Y.) 588, 44 N. Y. Supp. 825.

The essential franchise of a private corporation is private property which cannot be taken without compensation, even for public use.— Thorpe v. Rutland & B. R. Co., 27 Vt. 140.

[9] Rights of corporations incident to rights granted.

Authority in the charter of a corporation to carry persons and property implies authority to charge a reasonable sum for the carriage.— Stone v. Farmers' L. & T. Co., 116 U. S. 307, 6 Sup. Ct. R. (U. S.) 334, 388, 1191.

The power to make and vend gas, conferred upon a corporation by its charter, carries with it as an inevitable incident the right to fix the price of gas thus made and sold, so that by the terms thereof, its right to fix the price of its product is as much a part of its charter as if it were in terms set forth in the act of incorporation.-State ex rel. St. Louis v. La Clede Gas Co., 102 Mo. 472, 14 S. W. 974, 15 S. W. 383.

[10] Reservation of power to alter or amend charters.- Need not be expressed in charter.

Charters of gas corporations,- see post, § 66, note [2].

While in the case of a mere private corporation, the reservation of power to alter or amend the charter must be expressed in the charter itself; in case of public corporations, or those essentially public, the reservation is understood unless negatived in express words or by necessary implication.-Winchester Turnpike Co. v. Croxton, 98 Ky. 739, 17 Ky. L. R. 1299, 34 S. W. 518, 33 L. R. A. 177n.

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The power reserved to amend or alter the charter of a railroad corporation is continuous, and is not limited to a single occasion, or any number of occasions, of its exercise, then to become or be deemed to be exhausted.- People ex rel. McConville v. Hills, 46 Barb. (N. Y.)

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Effect on power to destroy franchise rights,- see ante, note [8].

A regulative measure not inconsistent with the general object of a grant of a franchise to a railroad company, even though in conflict with the provisions of the charter as to the subject, falls within the reserved power of the state to alter, amend or repeal the original charter, and if imposed in good faith and not in sheer oppression, it is not unconstitutional.- Fair Haven & W. R. Co. v. New Haven, 203 U. S. 379, 27 Sup. Ct. R. (U. S.) 74.

A legislative grant of privileges to a corporation may be a contract; but where one of the conditions of the grant is that the legislature may alter or revoke it, a law revoking the exclusive character of such privileges is not an impairment of contract.-Hamilton Gas L. & C. Co. v. Hamilton City, 146 U. S. 258, 13 Sup. Ct. R. 90.

The power to amend, when reserved in the charter of a railroad corporation, gives full and complete power to make such alterations, etc.,

as come within the just scope of legislative power, which includes power to regulate as to rates.- Raworth v. No. Pac. R. Co., 2 Inters. Com. R. 614, 3 Inters. Com. R. 857, 5 I. C. C. R. 234.

Under the power reserved in the N. Y. Constitution to alter or amend the charters of corporations, the legislature may impose upon railroads such additional restrictions and burdens as the public good requires. People ex rel. Kimball v. Boston & A. R. Co., 70 N. Y. 569.

By the reserved power to alter, suspend or repeal the charter of a corporation (1 N. Y. Rev. Stat. 600, § 8; N. Y. Const. Art. VIII, § 1) the franchise of a street railroad corporation is subject to legislative regulation.-Geneva & W. R. Co. v. N. Y. C. & H. R. R. Co., 90 Hun (N. Y.), 9, 35 N. Y. Supp. 339.

1 Rev. Stat., title 3, ch. 18, § 8, providing that the charter of every corporation thereafter granted should be subject to alteration, suspension and repeal by the legislature, authorizes a regulative act which modifies the charter of a railroad organized while such section was in effect. Suydam v. Moore, 8 Barb. (N. Y.) 358.

The power reserved to alter, modify or repeal the charter of a gas corporation authorizes legislative action fixing the maximum prices to be charged for gas by such corporation.-State ex rel. Atty.-Gen. v. Cincinnati Gas L. & C. Co., 18 Oh. St. 262.

The reservation by the state of the right to alter, amend or repeal a corporate charter affects the entire relation between the state and the corporation, and places under legislative control all rights, privileges and immunities derived by its charter directly from the state, including its very existence; but rights and interests acquired by the corporation, not constituting a part of the contract of incorporation, and so not derived directly from the state, stand on a different footing and are not thereby subjected to legislative control.- Lawrence v. Rutland R. Co., Vt. —, 67 Atl. 1091.

[13], [14] Power to regulate not dependent on reservation of power to alter or amend charters.

Railroad corporations hold their property and exercise their functions for the public benefit, and they are therefore subject to legislative control. The legislature which has created them, may regulate the mode in which they shall transact their business, the price which they shall charge for the transportation of freight and passengers, the speed at which they may run their trains, and the way in which they may cross or run upon highways and turnpikes used for public travel. It may make all such regulations as are appropriate to protect the lives of persons carried upon railroads or passing upon highways crossed by railroads. All this is within the domain of legislative power, although the power to alter and amend the charters of such corporations has not been reserved.- People ex rel. Kimball v. Boston & A. R. Co., 70 N. Y. 569.

A state may regulate foreign and domestic corporations, regardless of whether the right to amend their charters has been reserved.— McGuire v. C. B. & Q. R. Co., 131 Iowa, 340, 198 N. W. 902.

A railway charter from the state authorized the corporation to "fix, regulate and receive charges."— Held, that there is annexed to this grant an implied reservation of the right of the state, through a commission or otherwise, to see to it that such rates shall conform to the standards of reasonableness fixed by the state.- Stone v. N. J. & C. R. Co., 62 Miss. 646; Stone v. Yazoo & M. V. R. Co., 62 Miss. 607.

[15] Regulative acts not violative of charter or contract rights. One whose rights, such as they are, are subject to state restriction, cannot remove them from the power of the state by making a contract concerning them.-Hudson Water Co. v. McCarter, 209 U. S. 349, 28 Sup. Ct. R. (U. S.) 529, affg. s. c. 70 N. J. Eq. 695, 65 Atl. 489.

It is not within the power of a city council to reduce the rates of fare on street railways whose franchises have been extended in duration on conditions involving large expense to the corporation and substantial benefits to the public.- Cleveland v. Cleveland Elect. R. Co., 201 U. S. 529, 26 Sup. Ct. R. (U. S.) 513; Cleveland v. Cleveland City R. Co., 194 U. S. 517, 24 Sup. Ct. R. (U. S.) 756.

An act transferring from one set of public functionaries to another the expressly reserved power of the state or city to regulate the use of the streets and highways in such manner as not to injuriously affect the public interests, does not impair the obligation of franchise contracts. People ex rel. N. Y. Elect. L. Co. v. Squire, 145 U. S. 175, 12 Sup. Ct. R. (U. S.) 880, affg. s. c. 107 N. Y. 593, 14 N. E. 820.

The New York Mileage Book Act (L. 1895, ch. 1027, as amd. L. 1896, ch. 835) is not unconstitutional as to a railroad corporation reorganized after the passage of such Act.- Minor v. Erie R. Co., 171 N. Y. 566, 64 N. E. 454, affg. s. c. 73 App. Div. (N. Y.) 621, 76 N. Y. Supp. 513.

An act requiring railroads to issue mileage books under penalty for refusal, is unconstitutional as to existing railroad corporations, under the decision of the U. S. Supreme Court in Lake Shore & M. S. R. Co. v. Smith, 173 U. S. 684.- Beardsley v. N. Y. L. E. & W. R. Co., 162 N. Y. 230, 56 N. E. 488, revg. s. c. 15 App. Div. (N. Y.) 251, 44 N. Y. Supp. 175, and 17 Misc. (N. Y.) 256, 40 N. Y. Supp. 1077.

A mileage book act, though declared by the Supreme Court of the United States to be unconstitutional as to railroad corporations formed prior to its passage, is constitutional as to a corporation thereafter incorporated.-Purdy v. Erie R. Co., 162 N. Y. 42, 56 N. E. 508, 48 L. R. A. 669.

Where a franchise to furnish water supply in a town is not exclusive, it does not prevent the town from contracting for a further or other supply, even though the competition may impair the value of the first franchise.- Matter of City of Brooklyn, 143 N. Y. 596, 38 N. E. 983, 26 L. R. A. 270.

The constitutional prohibition against the impairment of contracts by legislation does not prevent the granting of franchises similar to existing ones, which impair the value of the latter.- Matter of City of Brooklyn, 143 N. Y. 596, 38 N. E. 983, 26 L. R. A. 270.

As the legislature may take away a franchise to be a corporation and may regulate the exercise of its corporate powers, it may prescribe the conditions and terms upon which it may live and exercise such franchise.- Mayor v. Twenty-third St. R. Co., 113 N. Y. 311, 21 N. E. 60.

Upon railroad corporations created by it, the legislature may impose such additional restrictions and burdens as the public good requires.— People ex rel. Kimball v. Boston & A. R. Co., 70 N. Y. 569.

Every public regulation may, and does, in some sense, limit and restrict the absolute right that existed previously. But this is not to be considered an injury. So far from it, the individual, as well as others, is supposed to be benefited.- Vanderbilt v. Adams, 7 Cow. (N. Y.) 349.

[16] Exemption from public control

Power of legislature.

The right of a state to exercise the police power is a continuing one and cannot be contracted away.- Northern Pac. R. Co. v. Duluth, 208 T. S. 583, 28 Sup. Ct. R. (U. S.) 341, affg. s. c. 98 Minn. 429, 108 N. W. 269.

A state may, in matters of proprietary rights, exclude itself from the right to regulate the price at which water shall be furnished its citizens by private companies, when the power has been clearly conferred.Vicksburg v. Vicksburg Waterworks Co., 206 U. S. 496, 27 Sup. Ct. R. (U. S.) 762.

A state legislature, unless prohibited by constitutional provisions, may authorize a municipal corporation to contract with a street railway company as to rates of fare, and so to bind during the specified period any future common council from altering or in any way interfering with such a contract.- Detroit v. Detroit Citizens' St. R. Co., 184 U. S. 368, 22 Sup. Ct. R. (U. S.) 410.

The governmental power of self-protection can not be contracted away, nor can the exercise of rights granted, nor the use of property, be withdrawn from the implied liability to governmental regulation. in particulars essential to the preservation of the community from injury.- New York & N. E. R. Co. v. Bristol, 151 U. S. 556, 14 Sup. Ct. R. (U. S.) 437.

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