case of taxation of a special franchise decided in New York the court, per Kenefick, J., says: "The plaintiff insists that the authority to cross highways sprang into being with the creation of the corporation, that it is a part of the franchise to be a corporation, and that, to constitute a special franchise, some particular railroad must be grantee of the right, or some particular highway or highways must be the subject of the grant. As I view it, this claim argues a misconception of the term 'special franchise.' As applied to railroads, this species of property is defined as the 'franchise' right or permission to construct, maintain or operate the same in, under, above, on or through, streets, highways, or public places.47 A special franchise thus derives its character from the nature of the grant, to wit, the right to occupy the public ways. This right does not lose its character as a special franchise because it emanates directly from the State, rather than indirectly through its political subdivisions, nor because it comes into being with the creation of a corporation, rather than by subsequent action of the legislature or its duly authorized municipal agents. The tax on its franchise to be a corporation is imposed irrespective of whether it crosses any highways, or of the number of highways crossed. Authority to run 'upon and along' highways is conferred by the same section of the general railroad law which confers the right to 'cross highways.' If the plaintiff's argument is sound, then a railroad might, under its general powers, run for some distance along a highway, without possessing a special franchise therein subject to taxation." 48

Ry. Co. v. Tax Commissioners, 174
N. Y. 417, 435, 67 N. E. 69, per
Vann, J., reargument denied, 175
N. Y. 482 (Mem.), case affirmed, 199
U. S. 1, 50 L. ed 65, 25 Sup. Ct. 705.
47 Laws 1899, c. 712, § 1.

48 New York, Lackawanna & Western Ry. Co. v. Roll, 66 N. Y. Supp. 748, 749, 750, 32 Misc. 321. See chapter herein on taxation.

Definition of special franchise and what the term includes, under tax laws of New York, see 3 Cumming & Gilbert's Annot. Genl. Laws & Statutes of N. Y. (ed. 1901), 3876, 3877, Laws 1896, ch. 908, § 2, subds. 3, 4, as amended by Laws 1899, ch. 712 and Laws 1901, ch. 490. See chap. IV, herein.

§ 8. Primary Franchise, and Secondary Franchises of Corporation. The right of an incorporated company to be a corporation, or the right conferred upon it by the State, to be an artificial body, has been called its primary franchise, and this has been distinguished from what is termed its secondary franchises, which include the right to carry on or transact a particular kind of business, as in case of the privileges granted to a water company with the right to take tolls, etc.; or the right of a railroad company to collect fares; or of a toll road company to exact toll for services performed. This distinction has been considered as important in connection with the power of alienation, since in certain corporations other than those subject to public service duties and obligations, secondary franchises may be said, generally, to be those which may be alicnated, and even in connection with public utility corporations there are some decisions in which the same distinction is made apparent. So in certain tax cases the distinction between the franchise to be a corporation and other rights, privileges and franchises of the corporation, has been the subject of much discussion and many adjudications.49

"Virginia Cañon Toll Road Co. v. People, 22 Colo. 429, 432, 45 Pac. 398, 37 L. R. A. 711, per Campbell, J. See two last preceding sections, and next following section herein.

See also the following cases:

United States: Adams Express Co. v. Ohio State Auditor, 166 U. S. 185, 224, 41 L. ed. 965, 17 Sup. Ct. 604, per Brewer, J., rehearing denied, 165 U. S. 194, 255, 41 L. ed. 683, 707, 17 Sup. Ct. 305; Mercantile Bank v. Tennessee, 161 U. S. 160, 171, 40 L. ed. 656, 16 Sup. Ct. 466, per Peckham, J.; Home Ins. Co. v. New York, 134 U. S. 594, 599, 33 L. ed. 1025, 10 Sup. Ct. 593, per Field, J., case affirms People v. Home Ins. Co., 92 N. Y. 328, also aff'd by divided court 119 U. S. 129, 30 L. ed.

350, 8 Sup. Ct. 1385, restored to calendar, 122 U. S. 636 (Mem.). (The principal case is cited in People v. Miller, 83 N. Y. Supp. 184, 187, 85 App. Div. 211, which case is reversed 177 N. Y. 51, 69 N. E. 124, which is cited in People v. Miller, 86 N. Y. Supp. 420, 422, 90 App. Div. 588. This last case is reversed 179 N. Y. 49, 71 N. E. 463); Memphis & Little Rock Rd. Co. v. Commissioners, 112 U. S. 609, 619, 28 L. ed. 837, 5 Sup. Ct. 299; Gordon v. Appeal Tax Court, 3 How. (44 U. S.) 133; Western Union Teleg. Co. v. Norman, 77 Fed. 13, 22.

California: San Joaquin & King's River Canal & Irrig. Co. v. Merced County, 2 Cal. App. 593, 595, 597, 599, 84 Pac. 285.

Connecticut: Bridgeport, City of,

In a Kansas case, a corporation was organized under state laws for the purpose of supplying a municipality with water,

v. New York & New Haven Rd. Co., 36 Conn. 255, 266, 4 Am. Rep. 63. Iowa: Cedar Rapids Water Co. v. Cedar Rapids, 118 Iowa, 234, 239, 91 N. W. 1081, per Weaver, J., citing Grand Rapids Bridge Co. v. Prange, 35 Mich. 400, 24 Am. Rep. 585.

Kentucky: Bailey v. Southern Ry. Co., 112 Ky. 424, 430, 61 S. W. 31, per O'Rear, J.; Board of Councilmen of City of Frankfort v. Stone, 108 Ky. 400, 22 Ky. L. Rep. 25, 56 S. W. 679.

Michigan: Grand Rapids Bridge Co. v. Prange, 35 Mich. 400, 405, 24 Am. Rep. 585; Joy v. Jackson & Michigan Plank Road Co., 11 Mich. 155, 164, 165, per Christiancy, J.

New Jersey: Lumberville Bridge Co. v. Assessors, 55 N. J. L. 529, 535, 537, 25 L. R. A. 134, 26 Atl. 711, per Garrison, J.; State Board of Assessors v. Central Rd. Co., 48 N. J. L. 146, 314, per Dixon, J.

New York: People v. Knight, 174 N. Y. 475, 67 N. E. 65 (case reverses 73 N. Y. Supp. 745, 67 App. Div. 333); Smith v. New York, 68 N. Y. 552, 555; Sandham v. Nye, 30 N. Y. Supp. 552, 555, 62 N. Y. St. Rep. 198, 9 Misc. 541, per Rumsey, J.

western Rd. Co., 94 Tex. 530, 532, 62 S. W. 1050, per Gaines, C. J.

Vermont: Miller v. Rutland & Washington Rd. Co., 36 Vt. 452, 494, per Barrett, J., quoting from Bank of Middlebury v. Edgerton, 30 Vt. 182, 190.

Virginia: Tuckahoe Canal Co. v. Tuckahoe Ry. Co., 11 Leigh (Va.), 42.

Wisconsin: Linden Land Co. v. Milwaukee Elect. Ry. & Light Co., 107 Wis. 493, 513, 83 N. W. 858; Attorney General v. Chicago & Northwestern Rd. Co., 35 Wis. 425, 560, per Ryan, C. J., quoted in Brady v. Moulton, 61 Minn. 185, 186, per Mitchell, J.

Examine Baldwin's Amer. Rd. Law (ed. 1904), 26.

See Thompson's Comm. on Corp. § 257 (where the franchise to be a corporation is designated a primary franchise, and that of the right to carry on a certain business, as the right to maintain and operate a railway, a secondary franchise); Id. § 694 (where it is said that the primary franchise may be exercised only in State where created, while the secondary franchise may by comity, or unless by prohibited, be exercised in any State. See also Id. § 7884); Id. §§ 5336, 5341-5352, (where he says: "The secondary franchises of a corporation, that is, those peculiar and exclusive privileges which do not consist in the right of being a corporation, are property, and hence are alienable”); Id. § 5353 (where under the section heading "Franchise to be a corporation not alienable," the author makes the distinction "between what may be regarded as primary, Texas: State v. Austin & North- and what as secondary franchises.

Ohio: Coe v. Columbus, Piqua & Indiana Rd. Co., 10 Ohio St. 372, 385, 75 Am. Dec. 518, per Gholson, J. [citing Thomas v. Dakin, 22 Wend. (N. Y.) 71]; Pierce v. Emery, 32 N. H. 484-507.

Pennsylvania: Monongahela Bridge Co. v. Pittsburg & Birmingham Traction Co., 196 Pa. 25, 46 Atl. 99; Shamokin Valley Rd. Co. v. Livermore, 47 Pa. 465, 468, 86 Am. Dec. 552, Agnew, J.

and a municipality granted to it, by ordinance, the right to erect, construct and maintain waterworks in the city and to occupy its streets for the laying of pipes, erecting hydrants, and other privileges usually accorded to water companies, including the right to take tolls, etc., for a certain period, and it was declared by the court, and the decision was based thereon, that such rights to occupy the streets, erect hydrants, supply water, etc., were secondary franchises, differing and distinct from the franchise to be a corporation, received from the State which was essential to the creation and continued existence of the corporation, to its right to live, to exist as an artificial being. The court, per Smith, J., said: "The rule is that the primary franchise of being a corporation vests in the individuals who compose it and not in the corporation itself, while the secondary franchises, such as the right of a railway to construct and operate its road, or the right to operate a water plant and collect water-rents are vested in the corporation." 50

§ 9. "Franchise" under Constitutions and Statutes.-As appears elsewhere, herein, the word "franchise" has various meanings, and it is difficult to define the term as used under constitutions and statutes, since, as a rule, it is a question of construction in each particular case precluding any definition applicable to all cases. Thus, although a state constitution declares that the right to collect rates or compensation for the use of water is a "franchise," still such word is an affirmative one denoting a grant, instead of a negative term signifying prohibition, and does not take away the right to collect water

The franchise of being a corporation of dissolution," as the peculiar priv-of having a corporate existence- ileges or rights" of a corporation is a franchise of the former character; "which it may have received from and the franchise of carrying on a the legislature under its charter or particular business or holding par- incorporating act, or from a municiticular property is of the latter char- pal corporation under an ordinance acter"); Id. §§ 5356, 6140, 6747 by way of a license"). (where secondary franchises, as considered in connection with the "effect

50 State v. Topeka Water Co., 61 Kan. 547, 558-560, 60 Pac. 337.

rates or compensation, fixed by contract between the parties for the irrigation of lands, where no special statute regulates such rates. So the words "privileges, immunities or franchises," used in a constitution may be intended to refer to things of the same or similar general nature.52 But it is declared that where the term "franchise" is used in a statute or elsewhere in the law, it is generally, if it is not always, understood as a special privilege conferred by grant from the State or sovereign power, as being something not belonging to the citizen of common right.53 Again, "franchise"