Opinion ID: 1354613
Heading Depth: 1
Heading Rank: 6

Heading: Franchise agreements

Text: To assist in the interpretation of these specific franchises, we first examine the basis for the control of public streets by the municipality. Historically, roads were built in newly established settlements when adjoining landowners dedicated land for public thoroughfares as a convenient means of transportation and communication. 2 Pond, A Treatise on the Law of Public Utilities 869-70, § 498 (4th ed. 1932). In some cases dedication vested fee ownership in the municipality, but in trust for the public use. See Savage v. Salem, 23 Or. 381, 383, 31 P. 832 (1893); Selvin, The Public Trust Doctrine in American Law and Economic Policy, 1789-1920, 1980 Wis.L.Rev. 1403, 1403 n. 4. Once land was dedicated, the municipality had the right and responsibility to act in the interest of the public health and the general welfare. 2 Pond at 453, § 395. However, in Portland, as elsewhere, fee ownership remained in the original landowner. Sharkey v. City of Portland, 58 Or. 353, 362, 106 P. 331, 114 P. 933 (1911). The public was granted an easement for the use of the streets, Huddleston v. City of Eugene, 34 Or. 343, 351, 55 P. 868 (1899); Lankin v. Terwilliger, 22 Or. 97, 99, 29 P. 268 (1892), and the municipality retained the power to improve, grade, pave and regulate those streets, 3 Dillon, Commentaries on the Law of Municipal Corporations 1766, § 1120 (5th ed. 1911). In some cases the government undertook street construction on those lands and the landowner remained uncompensated. Sears v. Crocker, 184 Mass. 586, 69 N.E. 327 (1904) (the public's easement included the land both above and below the surface, as well as the surface, and the construction of a subway line was a proper street use which did not entitle the private landowner to compensation); see also Callender v. Marsh, 18 Mass. 418 (1823); Radcliff's Executors v. Mayor of Brooklyn, 4 N.Y. 195 (1850). The state or municipality also granted franchises to corporations to use these public streets and highways for providing public services. 3 Dillon, supra, at 1905-07, § 1210. A franchise is a special privilege granted by the government to a person or corporation, which privilege does not belong to the citizens of a county generally, of common right. Whitbeck v. Funk, 140 Or. 70, 73-74, 12 P.2d 1019 (1932). A franchise allows the grantee to exercise powers which, without the franchise, the grantee could not exercise. Whitbeck, 140 Or. at 74, 12 P.2d 1019. In interpreting these franchises, if the terms of the franchise are doubtful, they are to be construed strictly against the grantee and liberally in favor of the public. City of Joseph v. Joseph Water Works Co., 57 Or. 586, 591, 111 P. 864, 112 P. 1083 (1911). We now turn to the specific franchises governing the rights of the City of Portland and of the utilities.