The San Francisco call., 1896-04-22
Continuation of His Exhaustive
Argument Before Judge
McKenna.
SCOPE OF THE FRANCHISE
The Corporation Must Enjoy It's Priv
ilegeS According to Contract and
the Constitution.

me more than / can express" remarked
Attorney Hayne to friend Yesterday.
"but when I'm fighting for principle I'll
fight in spite of everything, and il die in
the fight I'll die game"
The spirited pleader was still arguing in
the great railroad case, and all day kept
the United States Circuit Court room reso-
nant with the music of his eloquence. The
main point upon which he insisted during
the morning session was as to the reserved
power of the State over the corporations
created by it. He read a large number of
cases in which this reserved power was
recognized, contending that the only limi-
tation of this power was that it could not
60 beyond what the State had the right to
give. namely, franchises and corporate
rights. The State could and did grant
these two privileges, and could take them
away.
This" he continued, sis what the State
means by its constitutional prevision-a
provision which 1t does not extend to the
property acquired through the exercise of
a franchise, nor apply to the fruits of a
corporations past industry, but by which
the State can limit, or for that matter
altogether destroy, the future corporate
rights or acts of any society created by it
by merely repeating its charter. This
absolute power, since it includes the lesser
power of modification, may adopt the
milder course of amending rather than
the heroic measure of destroying, but both
are in its hands. This is plainly stated by
Judge Field in the San Mateo Railway tax
case in the thirteenth Federal Reporter,
as we'll as in the sinking fund cases and in
the Greenhood cases, found in volume 105
of the Federal Supreme Court reports"
Mr.. Hayne proceeded to read from Sec
tion 465 of the Civil Code of California to
show that the code, which he contended
was the charter of the corporations organ
lied under it, granted to the company the
right to take tolls within the limits pre-
scr1bed by law, and subject to alteration,
change or amendment by the Legislature
at any time" That, he strongly con-
tended, made the company q tenant at
will of the State. Hence, to oblige the
company to keep its contract could not
be considered .antamount to deprivation
of Its property by the State. If the cor
poration did not like it it could disincor-
porate, and the persons who had been
members OF the corporation would still
have every bit OF property which they had
had before. Nothing would be taken from
them.
But, if the corporation wished to enioy
its corporate privileges it must enjoy them
according to contract, in the manner agreed
TO. All the Southern Pacific corporations
were formed under the Civil Code of Cali
fornia, and the law for all is practically
the same. The Market-street bond case
made the code the measure OF the powers
of all corporations formed under the gen.
eral laws.
In addition Mr.. Hayne cited section
of the constitution of the United States
| which provided that the constitution and
| the amendments thereto shall be a part of
the law of the land.
ba L
found to be unconstitutional it is ipso facto
illegal. In the case of Neal against the
State OF Delaware we find an interesting
instance of the constitutional setting
aside of State law. The constitution OF
Delaware provided and still provides that
| Jurors shall be white male citizens
Neal, who was colored man, made a test
case OF his having been debarred from
acting on jury. The Supreme Court Of
| the United States declared that the Fed
eral constitution must operate to deprive
OF all torce and effect any and all State
laws inconsistent with it. When State
| laws are at variance with the constitution,
! the constitution simply wipes them out.
NOW, II the Federal constitution can
enter into the body of State legislative
| enactments in order to remedy any de-
tects which may be found therein, all we
have to do in order to prove an act illegal
| is to make manifest that it is contrary to
IL.
| spective of any State laws whatsoever
Not that in case of a conflict between a
| State law and the constitution the State
law is to be set aside, but the sections of it
which are opposed to the constitution
must be simply disregarded, the remain
der OF the statute preserving all its former
| force and effect"
| To sustain his contention on this point
Mr.. Hayne read long list of citations.
giving brief extracts from some of the de-
cisions most of which had been rendered
by judges of National reputation for acute
| ness and ability.
1--WE have urged" he went on, "that the
power to fix'transportation rates is in its
nature legislation. The other side don't
seem to be sure what its nature is, though
they seem to regard it in some measure as
Judicial. Well, granting that it be
Judicial, it the Railway Commission be a
judicial tribunal, clothed with judicial
authority, then what right has any court
to intervene to fix rates, particularly
when it does not. appear that the rates
fixed by the commission are not unreason-
able? Nor should any court intervene
when it is plainly shown that the matter
OF the fixing of rates is actually or has
been under consideration by the body to
which the matter was confided by positive
legislative enactment.
sin this case it appears that the matter
of fixing rates for the Southern Pacific
Company was fully and thoroughly ad-
judicated before the commission. This
fact is proved by the affidavits of partici-