Court Opinion

ID: 5440099
Source: CourtListenerOpinion
Date Created: 2022-01-08 18:00:46.418837+00
Date Added: 2024-06-11T08:31:57.639754
License: Public Domain

McKinstry, J., concurring:
I concur. Section 31 of article iv of the former Constitution of the State reads : “ Corporations may be formed under general laws, but shall not be created by special act, except for municipal purposes. All general laws and special acts passed pursuant to this section may be altered from time to time, or repealed.” This section has been judicially constructed by the Supreme Court of the State in The City and County of San Francisco v. The Spring Valley Water Works, 48 Cal. 493, and Waterloo Turnpike Company v. Cole, 51 id. 381. By reason of the section of the Constitution above recited, the Legislature of California had no power by special act to confer upon a corporation formed or to be formed under the general laws corporate powers not acquired by all like corporations under the general laws. I do not propose to fortify the reasoning of Mr. Justice Crockett, in San Francisco v. Spring Valley Water Works. In itself, eminently satisfactory, it accords with established canons of constitutional and statutory construction. My purpose is simply to show that, to the extent above inti*171mated, the construction of the provision of the Constitution has been “ settled ” by the highest tribunal of the State.
It was claimed at the argument, that in California State Telegraph Company v. Alta Telegraph Company, 22 Cal. 398, it had been held that § 31 of article iv of the former Constitution did not prohibit the Legislature from conferring special corporate rights and powers, by special act, upon a corporation formed under the general laws. And, in connection with the alleged doctrine of that case, our attention has been strenuously called to the opinion of Mr. Justice Sawyer, of the Circuit Court of the United States (Dist. California), in Southern Pacific Railroad Company v. Orton, which contains a somewhat elaborate review of the two cases in the Supreme Court of the State. Surely, the opinion of the Circuit Judge is not appealed to by counsel as an authoritative reversal of the construction given by the Supreme Court of the State to a clause of our own Constitution. It is presumed that the learned judge, who presides with so much ability over the Circuit Court of the United States, would be the first to acknowledge, that upon such a question it would be his duty to follow the rule as settled by the highest State tribunal. The learned judge of the Circuit Court deemed himself at liberty to adopt his independent view in respect to the proper interpretation of the section of the State Constitution, in the absence, as he conceived it, of any settled construction by the Supreme Court of the State. He held that the provision of the State Constitution above quoted did not prohibit a special act conferring special corporate powers on a corporation already organized under the general laws—notwithstanding the Supreme Court of the State, in San Francisco v. S. V. Water Works, had decided that the prohibition operated to that extent. He believed the question not to be settled in the Supreme Court of the State, because two of the justices of the State Court, then composed of three justices, had expressed an opinion, in California State Telegraph Co. v. Alta Telegraph Co., that the constitutional prohibition did not attach; while in S. F. v. S. V. W. W., of a Court of five justices, one was disqualified and one dissented; by the simple process of transferring the dissenting judge from the Court oí five judges to the Court of three (a task rendered easier by the circumstance that both Courts had gone *172out of existence, although with an interval of some fifteen years between their extinction), the learned justice of the Circuit Court of the United States succeeded in arraying three State judges in favor of one construction of a provision of the State Constitution against three in favor of another construction of the same provision.
Adopting this arithmetical standard, there would be no difficulty, as is kindly suggested, for the present Court, composed of seven judges, to disregard the concurrent judgments of its predecessors, since seven or even six is a greater number than would constitute a majority of both the former Courts, could they be resuscitated and combined.
If the learned judge of the Circuit Court of the United States was correct in his understanding of the effect of the decisions in California State Telegraph Co. v. Alta Telegraph Co., and San Francisco v. S. V. W. Works, they would simply constitute an instance in which the Supreme Court of the State had decided a question one way upon one occasion, and another way upon another occasion—a discordance not without precedent even in the courts of the United States. But without commenting on the somewhat unusual, and perhaps in every respect not altogether satisfactory, mode of arriving at the weight to be accorded judicial decisions, which consists in an enumeration of the judges (for and against) of two courts differently organized, and a convenient transfer of judge from one to the other, the learned justice of the Circuit Court of the United States was mistaken in his facts.
In California State Telegraph Company v. Alta Telegraph Company two important questions were presented. The first was the validity of the Act of May 3rd, 1852, which purported to grant to Messrs. Allen and Burnham the exclusive right and privilege of building and operating a telegraph line between San Francisco and Marysville. The second question was, whether the plaintiff, a corporation formed under the general laws, could take by assignment the rights and privileges granted to Allen and'Burnham by the special act. Of the three judges then composing the Supreme Court of the State, one (Mr. Justice Norton) took no part in the decision. The other two (Cope, C. J., and Crocker, J.) concurred in the opinion, that *173the provision of the Constitution above quoted (which, by its terms, applies only to corporations) did not prohibit the Legislature from granting by special act franchises to individuals. But as to the question whether the Legislature under the former Constitution had power to grant exclusive privileges to a corporation, California State Telegraph Company v. Alta Telegraph Company cannot properly be cited as authority. True, Mr. Justice Crocker, in support of his argument that the assignment of the franchise from the individuals to the corporation was valid, did say that there was nothing in the language of the Constitution which prohibited the Legislature from directly granting to a corporation already in existence, and created under general laws, special privileges in the nature of a franchise, by special act. But to this proposition, Chief Justice Cope did not assent; but, on the contrary, declined to express any opinion in respect to it. He said: “ As to the power of the Legislature to grant the franchise in question, I have no doubt; and as to the capacity of the corporation to purchase, the defendant is not the party to object. If the corporation in making the purchase has acquired property which, under the law of its incorporation, it had no power to acquire, all that can be said is, that it has exceeded its powers, and may be deprived of the property by a judgment of forfeiture. The question is one which the State alone can raise.” It is plainly a mistake, therefore, to assume that the Court decided in California State Telegraph Company v. Alta Telegraph Company that the Legislature had power, by special act, to confer upon a corporation formed under the general laws corporate powers and privileges not acquired by other corporations formed under the same general laws.
It is equally a mistake to say, that all the judges who took part in San Francisco v. Spring Valley Water Works, 48 Cal. 493, did not Agree that the Legislature had no such power. There is no dispute that three of the justices reached that conclusion. Mr. Justice Ehodes dissented from the judgment, upon the ground that a grant of the right to lay down water-pipes, etc., in the streets was not a grant of corporate power. But on the question as to the legislative power to grant, specially, peculiar corporate powers to a corporation already formed *174or to be formed under the general laws, Mr. Justice Ehodes said: “ The proposition, that § 31 of article iv of the Constitution prohibits the passage of special acts granting corporate powers to- corporations, other than those created for municipal purposes; that this inhibition extends as well to a special act conferring a particular corporate power as to an act providing for the entire organization of a particular corporation—is, in my judgment, fully sustained by the opinion of Mr. Justice Crockett.”
Thus we see, that, in California State Telegraph Company v. Alta Telegraph Company, the Court did not decide that the Legislature had power under the Constitution, by special act, to grant special corporate powers and privileges to a corporation formed under the general laws, and that in San Francisco v. Spring Valley Water Works, the Court did decide to the contrary. It further appears (adopting for the nonce the method by enumeration), that, of six judges of the Supreme Court who took part in the decisions referred to, one only (Mr. Justice Crocker) expressed the opinion that such a special act was not prohibited by the Constitution.
It has been doubted whether the judgment in San Francisco v. Spring Valley Water Works determined that a grant of "authority to lay down pipes, etc., in the streets was grant of corporate power. If such was the effect of that judgment, it would seem that it is decisive of the question here presented in respect to the validity of the seventeenth section of the Act of April 1st, 1872. (Stats. 1871-72, p. 922.) Even assuming that San Francisco v. Spring Valley Water Works did not necessarily determine that a grant “ to lay down pipes in the street ” was a corporate power, I am of opinion that an attempt to make such grant to a corporation, by special act, would come within the inhibition of the Constitution. A special use of a public street, either by a water or street-railroad corporation, is inseparably connected with corporate powers, since the admitted powers of the corporation can be employed only through and by means of such special use.
A special act of the Legislature which should confer on a particular corporation, formed under a general law which gives to municipalities the power to permit railroad corporations to *175lay down rails in the streets, the exclusive right to lay down rails within a municipality would, if valid, give to the particular corporation (to the exclusion of all others) the means of employing corporate powers which the general law attempts to confer upon all railroad corporations, at the option of the municipalities. It would he difficult to show that corporations possess any power which they are prohibited from bringing into action. In the case supposed, the special law would wholly deprive all corporations, except the one for whose benefit it was passed, of the right which the general law in terms confers upon them.
The same result, in a degree, must follow a special law, which, by granting the privilege of laying down railway tracks to a particular corporation, interferes with the acquisition of a similar privilege hy other like corporations; as when, by the general law, the granting of the privilege is conferred upon the municipalities. That such must be the effect of the special provision of the law of 1872, is sufficiently apparent, from the consideration that the number of tracks which may be laid down in a street by railroad corporations is necessarily limited, since they cannot be so multiplied as to obstruct the use of the street by the public at large.
The Civil Code took effect January 1st, 1873. Section 497 of that Code, as it stood when the law of 1872, which purports to give the right to plaintiff to lay down its tracks in Montgomery avenue, was passed, provided:
“ Authority to lay railroad tracks through the streets and public highways of any incorporated city or town may be obtained, for a term of years not exceeding fifty, from the trustees, council, or other body to whom is intrusted the government of the city or town, under such restrictions and limitations, and upon such terms and payment of license tax, as the city or town authority may provide. In no case must permission be granted to propel cars upon such tracks otherwise than by horses, mules, or by wire ropes running under the streets, and moved by stationary steam-engines, unless for special reasons, as hereinafter provided.”
Section 17 of the Act of April 1st, 1872, purports to grant to plaintiff, and also to the “North Beach and Mission Eailroad *176Company,” the right to lay down in Montgomery avenue an Iron railway, with single or double track, with the conditions only, that the railroads be built simultaneously with the paving of the avenue, the “ tracks ” paved with like material, and that only one double track, to be paid for by both corporations, shall be laid between Stockton and Kearny streets. It will be seen, that the conditions accompanying the attempted grant are, in fact, different from those accompanying the grants from the city to the plaintiff and defendants. If the power exists in the Legislature, the special law may provide that the corporation grantee shall take the privilege to lay down tracks in a street unconditionally, free from any of the restrictions and limitations, and without being subjected to any of the terms, which, under the general law, may be imposed upon corporations asking the same privilege from the municipality.
Under § 497, the permission may be granted to individuals as well as to corporations; but so far as the section relates to corporations, it entered into and constitutes a part of the general law concerning the formation of street-railroad corporations. It follows, that § 17 of the Act of 1872 is repugnant to § 81, article iv, of the Constitution. It attempts to confer upon a particular corporation a means of employing its corporate powers in such manner as interferes with the rights of other like corporations formed under the general law.
If valid, .such a law, in effect, “ creates ” a new corporation. The corporation, from the date of the passage of the special act conferring special privilege, is not, in respect of its privileges, the corporation formed under the general law.
And here it may properly be remarked, that the whole of the section of the Constitution is to be read together.
The first clause of the first sentence of the section—“ Corporations may be formed under general laws ”—is as important as the last clause of the same sentence—“ but shall not be created by special act,” etc. Corporations may be formed only under the general laws, but they are not formed nor created directly by the general laws. They are formed by individuals, under the general law ; and when, in a particular instance, the corporate character is assumed, it is assumed with the same powers, privileges, and liabilities as are possessed by and imposed *177upon all other like corporations formed by other individuals under the same general law. Corporations formed under the general laws do not exist anterior to the acquisition of the power to hold property, or any other corporate power. They come into existence panoplied. There can be no instance of the formation of a corporation under a general law which differs as to its corporate powers, or its liberty to employ them, from other corporations formed under the same general law; and there can be no creation, by special act, of a corporation which might or might not have been formed under the general laws.
I am also convinced, that the special enactment purporting to grant to plaintiff and another corporation the privilege of laying tracts in Montgomery avenue is invalid within the doctrine of People v. Lynch, 51 Cal. 15. It was there said: “ The ' cities and villages ’ required to be created by our Constitution are cities and incorporated villages, with franchises. * * * From the very nature of such corporations, and from what has already been said as to the intent of the Constitution, that the legislative body of a city shall exercise choice and judgment with reference to expediency of action in matters appropriately confided to their care, it would seem to follow that the Legislature had no reserved power to set aside such choice or judgment, or to supersede the employment thereof in a particular instance.”
I further believe, with Mr. Justice Sharpstein, that the section of the Act of 1872 conflicts with the provision of the former Constitution—“ All laws of a general nature shall have a uniform operation.”
I agree that § 499 of the Civil Code contains a limitation upon the authority conferred upon incorporated cities by § 497. It provides: “ Two corporations may be permitted to use the same street, each paying an equal portion for the construction of the t?'acJc'; but in no case must two railroad corporations occupy and use the same street or track for a distance of more than five blocks.” This either means that two corporations may use the same track (single or double) for a distance of five blocks, or that two may use the same street for that distance, using the same track, on the condition that each pay half *178the expense of its construction—in case there is not room for laying the tracks by both.
I am satisfied it means the first of these two things, and that, when the privilege has been granted by the supervisors to one corporation, a second corporation can only ask (at the utmost) the privilege of using the tracks laid down by the corporation which has first acquired the right—on paying one-half the cost of construction. Neither corporation has any right in the street, except such is acquired under and in accordance with the law of the land.