* CHAPTER V.

PREROGATIVE FRANCHISES.

1. Control of internal communication in a 2. Such a grant confers powers pertaining state a prerogative franchise. exclusively to sovereignty, as taking tolls, and the right of eminent domain.

§ 25. 1. RAILWAYS possess also many extraordinary powers or franchises which partake more or less of the quality of sovereignty, and which it is not competent for the legislature even to delegate to ordinary corporations. These are sometimes called the prerogative franchises of the corporation. They exist in banks, which practically supply the currency of the country, or its representative, and railways, which have already engrossed the chief business of internal communication in this country, and almost throughout the civilized world. And both currency and internal communication between different portions of a state are exclusively the prerogatives of sovereignty.

2. In saying that it is not competent for the legislature to confer prerogative franchises upon all corporations, nothing more is intended than that these prerogative franchises do not appertain to all the operations of business, and must therefore of necessity be limited to those persons, whether natural or artificial, which are occupied in matters of a sovereign or prerogative character, and which thus render an equivalent for the franchises conferred.1 This subject will be discussed more in detail under the titles of Tolls and Eminent Domain.

State v. Boston, Concord, & Montreal R. Co., 25 Vt. 433, 442, 443. The right to build and use a railway, and take tolls or fares, is a franchise of the prerogative character, which no person can legally exercise without some special grant of the legislature. But it is competent for the legislature to confer this franchise upon a foreign corporation, so as to enable it to take land for the purpose of constructing a public improvement in the state. Morris Canal & Banking Co. v. Townsend, 24 Barb. 658. And what title shall be acquired by such foreign corporation, and whether the proposed amendment will be likely to prove beneficial to the citizens of the state, is a question solely within the discretion of the legislature. Ib.

§ 26. 1. It is incident to all corporations to enact by-laws or statutes for the control of its officers and agents, and to regulate the conduct of its business generally. And in the case of railways this includes the regulation of the conduct of passengers and others who are in any way connected with them in business, although not their agents.

2. This power is subject to some necessary limitations. Such by-laws must not infringe the charter of the company or the laws of the state, must not be unreasonable, and must be within the range of the general powers of the corporation. And the question, whether reasonable or not, is to be determined by the jury under instructions from the court, being a mixed question of law and fact.2 But in a recent case in New Jersey3 it was decided 1 Elwood v. Bullock, 6 Q. B. 383; Calder Navigation Co. v. Pilling, 14 M. & W. 76; Child v. Hudson Bay Co., 2 Peere Wms. 207; Angell & Ames, c. 10; 2 Kent, Comm. 296; Davis v. Meeting H. in Lowell, 8 Met. 331. In a recent case in Kentucky it is said the power of a corporation to make by-laws is limited by the nature of the corporation and the laws of the country. It can make no rule contrary to law, good morals, or public policy. Sayre v. Louisville Union Benevolent Association, 1 Duvall, 143.

2 Day v. Owen, 5 Mich. 520.

3

Ayres v. Morris & Essex Railw. Co., 5 Dutcher, 393.

*that the question whether the regulation of a corporation affecting third persons is reasonable is a question of fact; but the validity of a by-law of a corporation, which affects only its members, is a question of law to be determined by the court.

The general powers of business corporations to enact by-laws was extensively and learnedly discussed in a somewhat recent case which passed through the Queen's Bench, the Exchequer Chamber, and was finally determined in the House of Lords.* The case turned mainly upon the reasonableness of the by-law, which excluded any person who had become bankrupt or notoriously insolvent from becoming one of the governing body of the company. The provision of the by-law was held entirely reasonable; but that having admitted the party to the office, he could not be removed without formal proceeding upon notice and hearing. And where one part of a by-law is reasonable it may stand, although connected with another part which is not reasonable.5

3. By-laws in violation of common rights are void. The power to make by-laws is usually given in express terms in the charter. And where such power to make by-laws is given in the charter upon certain subjects to a limited extent, this has been regarded as an implied prohibition beyond the limits expressed, upon the familiar maxim Expressum facit cessare tacitum.7

4. By-laws, unless by the express provisions of the charter or general statutes of the state, are not, in this country, required to be enacted or promulgated in any particular form, but only to be enacted at some legal meeting of the corporation. But in England it is generally considered requisite that by-laws be made under the common seal of the corporation, and that in regard to railways, by-laws affecting those who are not officers or servants * of the company should have the approval of the Board of Trade or Railway Commissioners.8

5. By many of the special railway charters in England, and by the Companies' Clauses Consolidation Act of 1845, it is provided

'Reg v. Saddlers' Company, 6 Jur. N. S. 1113; s. c. 7 id. 138; s. c. 9 id. 1081; s. c. 4 B. & S. 1059; s. c. 10 Ho. Lds. Cas. 404.

5 Reg. v. Lundie, 8 Jur. N. S. 640.

Hayden v. Noyes, 5 Conn. 391; Adley v. The Whitstable Co., 17 Vesey, 315; Clark's case, 5 Coke, 64. When the penalty of a by-law is imprisonment, it is void as against Magna Charta. But such power may be given by statute. 7 Child v. Hudson B. Co., 2 Peere Wms. 207.

Walford, 249; Hodges, 552, 553.

IN

that railway companies may make by-laws under their common seal" for the purpose of regulating the conduct of the officers and servants of the company, and for the due management of the affairs of the company in all respects whatever." And they have power to enforce such by-laws, by penalty, and by imprisonment for the collection of such penalty. But a by-law requiring a passenger, not producing or delivering up his ticket, to pay fare from the place of the departure of the train, was held not to be a by-law, imposing a penalty, and therefore not justifying the imprisonment of such passenger.9

6. The statute requires a copy of such by-laws to be furnished every officer and servant of the company, liable to be affected thereby. The code of by-laws framed by the Board of Trade in England for the regulation of travel by railway, and generally adopted there, is certainly very judicious; and if some similar one could be adopted and enforced here, it would accomplish very much towards security, sobriety, and comfort, in railway travelling, and tend to exempt the companies from much annoyance and very often from loss.10

9 Chilton v. London & Croydon R., 16 M. & W. 212; s. c. 5 Railw. C. 4. Parke, B. says: "This is not the case of a penalty, but the mere demand of a fare. Any passenger who does not, at the end of his journey, produce his ticket, may have broken his contract with the company, and be liable to pay his full fare from the most remote terminus. But this is not a penalty or forfeiture, under section 163, giving a right to arrest for non-payment of a penalty or forfeiture." See, also, the opinion of Rolfe, B., from which it appears that the by-law was considered valid.

10

Hodges, 453. "1. No passenger will be allowed to take his seat in or upon any of the company's carriages, or to travel therein upon the said railway, without having first booked his place and paid his fare. Each passenger booking his place will be furnished with a ticket, which he is to show when required by the guard in charge of the train, and to deliver up before leaving the company's premises, upon demand, to the guard or other servant of the company duly authorized to collect tickets. Each passenger not producing or delivering up his ticket will be required to pay the fare from the place whence the train originally started.

"2. Passengers at the road stations will only be booked conditionally, that is to say, in case there should be room in the train for which they are booked; in case there shall not be room for all the passengers booked, those booked for the longest distance shall have the preference; and those booked for the same distance shall have priority according to the order in which they are booked.

"3. Every person attempting to defraud the company, by riding in or upon any of the company's carriages, without having previously paid his fare, or by riding in or upon a carriage of a higher class than that for which he has booked

*7. In a recent case in Vermont, it was held, that railway companies have the power to make and enforce all reasonable regulations in regard to the conduct of passengers, and to discriminate between fares paid in the cars and at the stations, and to remove all persons from their cars who persist in disregarding such regulations, in a reasonable manner and proper place, although between stations.

8. But this may be controlled as to existing railways even, by general legislation of the state. And where a statute gave all railways the power to remove those who violated any of the by

laws or regulations of the company from their cars, at the regular stations, this was held to carry an implied prohibition from removing such persons at other points." And where one refuses to pay fare, and the train is stopped for the purpose of putting him off the train, at a dwelling-house, as by the statute of New York is

his place, or by continuing his journey in or upon any of the company's carriages beyond the destination for which he has paid his fare, or by attempting in any other manner whatever to evade the payment of his fare, is hereby subjected to a penalty not exceeding forty shillings.

"4. Smoking is strictly prohibited both in and upon the carriages, and in the company's stations. Every person smoking in a carriage is hereby subjected to a penalty not exceeding forty shillings; and every person persisting in smoking in a carriage or station, after being warned to desist, shall, in addition to incurring a penalty not exceeding forty shillings, be immediately, or, if travelling, at the first opportunity, removed from the company's premises, and forfeit his fare.

66

5. Any person found in the company's carriages or stations in a state of intoxication, or committing any nuisance, or otherwise wilfully interfering with the comfort of other passengers, and every person obstructing any of the company's officers in the discharge of their duty, is hereby subjected to a penalty not exceeding forty shillings, and shall immediately, or, if travelling, at the first opportunity, be removed from the company's premises and forfeit his fare.

"6. Any passenger cutting the linings, removing or defacing the numberplates, breaking the windows, or otherwise wilfully damaging or injuring any of the company's carriages, shall forfeit and pay a sum not exceeding £5 in addition to the amount of damage done."

"Note.-Persons wilfully obstructing the company's officers, in cases where personal safety is concerned, are liable, under the 3 & 4 Vict. c. 97, section 16, to be apprehended and fined £5, with two months' imprisonment in default of payment."

"Stilphin v. Smith, 29 Vt. 160; Chicago, Burlington & Quincy R. v. Parks, 18 Ill. 460. See late case in New Hampshire, in which it is held, railways may lawfully discriminate between fare paid in the cars and at the stations. Hilliard v. Goold, 34 N. H. 230, post, § 28, n. 17. Post, § 160.