Court Opinion

ID: 3445884
Source: CourtListenerOpinion
Date Created: 2016-07-05 20:17:56.390929+00
Date Added: 2024-06-11T12:45:13.440785
License: Public Domain

I fully concur in the dissenting opinion of Chief Justice Clay, and in addition to the cogent reasons urged by him, respectfully suggest that section 163 of the Constitution has no reference to franchises, but relates alone to easements. It forbids certain public service companies from obtaining an easement in the streets or public grounds of a municipality without obtaining its consent. Its provisions may be construed to embrace companies of like character, other than those named, who seek such easements, but it cannot apply to a motorbus transportation company, which neither seeks nor obtains an easement, and which uses the streets in the customary manner even though the use be extraordinary. Section 164 alone relates to franchises. It limits such grants to 20 years, and forbids a municipality from granting a franchise or aprivilege for a term of years, except by public sale. Consistent therewith and aside from the maximum limit, it imposes no restrictions upon the power of a municipality to exercise its own discretion in fixing *Page 744 
the term of either a franchise or of a privilege, and in this respect makes no distinction between such rights; hence it is immaterial whether the right of the motorbus transportation company to use the streets is denominated a franchise or aprivilege. Neither of these sections by its terms refers in any way to the other. However, the public service companies mentioned in section 163 usually expend large sums of money in the development of easements acquired by them, embracing improvements of a permanent character. Naturally they desire long-term franchises, and as a rule request such from the municipality; hence it has been assumed that it is essential for such corporations to procure a franchise for a term of years in order to operate. Indeed in Hilliard v. Fetter, cited in the majority opinion, the court reached the conclusion that a utility company did not apply for a yearly license in good faith; it appearing that the applicant had constructed expensive conduits in the street, which it would be difficult and expensive to remove. The court concluded that it was attempting to acquire a permanent easement, and refused to permit it to do this without purchasing a franchise for a term of years; the gist of the opinion being that the meaning of the words "term of years" is "that no grant for a permanent use for less than such time would be applied for."
Assuming the soundness of that opinion, it can have no application to the facts of this case. Here the bus company has no physical easement of any kind in the street. It has nothing in the way of physical improvements that will be difficult to remove, or that will become valueless at the end of the license period, and cannot acquire a permanent use of the streets by the grant of* such license. True, it is a common carrier, and enjoys special privileges in the use of the streets. For this it may be regulated by the municipality, and required to pay a license or to purchase a franchise for a term of years, or altogether be prohibited from the use of the streets, if necessary for the public interest, in the discretion of the municipality. In this respect no distinction can be drawn between it and a taxicab company or transfer company, which are also common carriers and continuously use the streets, and which this court has held not to be subject to a franchise tax. See Commonwealth v. Louisville Transfer Co., 181 Ky. 305,204 S.W. 92. It is said, however, that it is performing the same duty as a street *Page 745 
railway company; that it operates between fixed termini and is a common carrier, using the streets in the same manner and for the same purpose as does a street railway company, and if one is required to purchase a franchise the same principles should apply to the other.
It may be conceded that the rival companies are organized for the same purpose and are to some extent analogous; the distinction being that the railway company has acquired a physical easement in the public streets, upon which it has expended large sums of money, and has by its own initiative procured a long-term franchise, and the court has held that such easements cannot be acquired for a single year, and this determining factor does not exist as to a bus company. The railway company required a long tenure for its own protection, and the constitutional provision guarded the public's rights by providing that the city authorities could grant such tenures only upon competitive bidding. In selling it such franchise, the city did not agree that it would not grant to others engaged in similar business along different lines aprivilege to conduct such business, and to do this in any of the ways permitted by the Constitution, although this might create competition with the first grantee. Of course, if the grant is for a term of years, it must be sold; otherwise, not.
But it is said that the bus company has invested large sums in the purchase of equipment showing an intention of permanent operation, and it is the intention to permanently engage inbusiness that should control. I do not think this tenable. No doubt the taxicab companies have also invested large sums in rolling stock, but, should either of these companies cease to do business in Louisville, the rolling stock could be transferred elsewhere; hence the amount of such investment is not a factor in a determination of the case. Also, if the tenure of the privilege to be granted is to be determined by the intention of the parties to continue longer in business, it would apply alike to all occupations, professions, and businesses in which a special right or privilege is conferred or a license tax imposed, because the public sale provision of section 164 includes all privileges. Most professional and business men contemplate remaining in the city of their location for a longer period than one year, and it would be farcical to say that a yearly license could not be granted to such persons. It may be that the city would derive more *Page 746 
revenue from a sale of a 20-year franchise to a bus transportation company than it would to charge annual license fees. On the other hand, an ordinance regulating motor-busses and fixing license fees may be changed from year to year as the business develops, so as to produce far more revenue than would be derived from the sale of a franchise. But who is to determine this?
As we have seen, the Constitution has wisely left the determination of this question to the municipality itself, and it is authorized to do so by the Legislature. To my mind the construction adopted in the majority opinion has the effect of nullifying the discretion thus vested in the municipality, and denies to cities an opportunity to cautiously try out grants sought of them, and renders them unable to learn the value of the proposed grant for a period of years before it is given. It may result in their selling, often for a song, grants for years, the full value of which cannot be foreseen, and thus by irrevocable contract fix upon their streets servitudes covering long periods, and confer rights of immense value for an inadequate consideration, because, when applied for and sold, the proposed use is by reason of its experimental stage of unknown value.
The achievements of science and the effects of those achievements on our lives cannot be foreseen. When new uses of our streets and ways are proposed, and this is a new one, no one can with any degree of accuracy foretell just how extensive or how valuable such use will be, or how much burden and inconvenience will result from it. And thus to deny cities an opportunity to proceed with caution, and learn in advance some of the privileges they are bestowing, may result in great financial loss, not only to Louisville, but to the other municipalities of the state. I do not think the language or the spirit of the Constitution admits of a construction preventing them from so doing, and therefore respectfully dissent.