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REGULATION OF TELEGRAPH, GAS, STORAGE AND WHARF

AGE RATES. Sec. 33, Art. IV. The legislature shall pass laws for the reg. ulation and limitation of the charges for services performed and commodities furnished by telegraph and gas corporations, and the charges by corporations or individuals for storage and wharfage, in which there is a public use; and where laws shall provide for the selection of any person or officer to regulate and limit such rates, no such person or officer shall be selected by any corporation or individual interested in the business to be regulated, and no person shall be selected who is an officer or stockholder in any such corporation.

As to water and gas rates, see note to section 1, article XIV, and section 19, article XI. As to railroad rates, see section 22, article XII, post.

Legislative History.

There has been no legislation under the provision and no citation of it by the courts.

ARTICLE XI.

19. Use of streets by water and lighting companies.

USE OF STREETS BY WATER AND LIGHTING COMPANIES.

Sec. 19, Art. XI. In any city where there are no public works owned and controlled by the municipality for supplying the same with water or artificial light, any individual, or any company duly incorporated for such purpose, under and by authority of the laws of this state, shall, under the direction of the superintendent of streets, or other officer in control thereof, and under such general regulations as the municipality may prescribe, for damages and indemnity for damages, have the privilege of using the public streets and thoroughfares thereof, and of laying down pipes and conduits therein, and connections therewith, so far as may be necessary for introducing into and supplying such city and its inhabitants either with gaslight, or other illuminating light, or with fresh water for domestic and all other purposes, upon the condition that the municipal government shall have the right to regulate the charges thereof. [Ratification declared February 12, 1885.] .

For water rates, see section 1, article XIV, post.

Legislative History.

The original section contains in addition to the above provision the following: "No public work or improvement of any description whatsoever shall be done or made in any city in, upon or about the streets thereof, or otherwise, the cost and expense of which is made chargeable or may be assessed upon private property by special assessment, unless an estimate of such cost anal expense shall be made, and an assessment, in proportion to benefits, on the property to be affected or benefited, shall be levied, collected, and paid into the city treasury before such work or improvement shall be commenced, or any contract for · letting or doing the same authorized or performed." There is no parallel provision in the Constitution of 1849. Prior to the present Constitution the right of laying pipes in streets of cities or towns lay only in grant from the legislature.

Section Cited.

The section is cited as to the use of streets by gas and water companies in the following cases: San Jose Gas Co. v. January, 57 Cal. 616; S. V. W. W. v. S. F., 61 Cal. 24; S. V. W. W. v. Schottler, 62 Cal. 108; People v. Stephens, 62 Cal. 238; In re Madera Irr. Dis. trict, 92 Cal. 342, 27 Am. St. Rep. 106, 28 Pac. 272, 675; Mutual Electric Co. v. Ashworth, 118 Cal. 5, 50 Pac. 10; San Diego Water Co. v. San Diego, 118 Cal. 584, 62 Am. St. Rep. 261, 50 Pac. 633: Pereria v. Wallace, 129 Cal. 402, 62 Pac. 61; In re Johnston, 137 ('al. 118, 69 Pac. 973.

Annotation.

Use of Streets.—The word "city,” used in this section, includes "town." (Pereria v. Wallace, 129 Cal. 397, 62 Pac. 61; People v. Stephens, 62 Cal. 209.)

The right to use the streets as provided in the section is a franchise subject to be taxed. (S. V. W. W. v. Schottler, 62 Cal. 108; San Jose Gas Co. v. January, 57 Cal. 614.) The provisions of this section are mandatory and prohibitory, and exclude the right of a municipality to award the privileges therein granted to the highest bidder, and the act of 1897 (Stats. 1897, p. 135), for the sale of such franchise is unconstitutional. (Pereria v. Wallace, 129 Cal. 397, 62 Pac. 61.)

An ordinance requiring a special permission to be obtained from the board of supervisors, before streets can be obstructed, is reasonable. (Mutual Electric etc. Co. v. Ashworth, 118 Cal. 1, 50 Pac. 10.)

This section is a direct grant, the only conditions or limitations of which are those contained therein, and the regulations of the municipality must be uniform in their application to all who may desire to exercise the privilege. The municipality has no other power of regulation over the subject than that expressly conferred and cannot impose additional burdens or terms as a condition to the exercise of the right so granted. (In re Johnston, 137 Cal. 115, 69 Pac. 973.)

An ordinance requiring a verified application for a permit from the superintendent of streets, and making it a misdemeanor to lay down pipes without such permit is void. A person proceeding under the constitutional grant of power after permit was refused and arrested for not having first obtained the permit, will be released on habeas corpus. (In re Johnston, 137 Cal. 115, 69 Pac. 973.)

Water Companies.—The privilege of distributing water for pay is a franchise which might have been withheld altogether. (Temple, J., San Diego Water Co. v. San Diego, 118 Cal. 585, 62 Am. St. Rep. 261, 50 Pac. 633.)

This section does not deprive the right to collect rates for water of its character of a franchise. (Spring Valley W. W. v. Schottler, 62 Cal. 69.)

The provision of the act of 1858, requiring water companies to furnish water free of charge to cities and counties, was abrogated by this section. (Spring Valley W. W. v. San Francisco, 61 Cal. 18.) For regulation of water rates, see Const., art. XIV, post.

Lighting Companies.—Under this section the city may require spe. cial permission from the city before poles can be erected in the streets by an electric light company; and the mere fact that the permission is granted to one company and unjustly refused to another will not entitle the latter to enjoin the city authorities from interfering with the erection of such poles—the proper remedy being to compel the granting of the permit by mandamus. (Mutual Electric etc. Co. v. Ashworth, 118 Cal. 1, 50 Pac. 10.)

Although a contract fixing the price of gas may be void, still if the gas is actually furnished to and used by the municipality, the board may allow for its payment such sum as it is reasonably worth. (San Francisco Gas Co. v. Dunn, 62 Cal. 580.)

In the absence of an express limitation, a contract by the board as to rates for the term of five years will not be held unreasonable. (San Francisco Gas Co. v. Dunn, 62 Cal. 580.)

The board of supervisors has no power to delegate to a commission the power to fix the rates to be paid by the county for gas. But where the board afterward ratifies the rates fixed by the commission, the final determination with respect to the rates is exercised by the board, and is valid. (San Francisco Gas Co. v. Dunn, 62 Cal. 580.)

ARTICLE XII. $ 1. Corporations to be formed under general laws. § 2. Dues to be secured by individual liability, etc. § 8. Stockholders to be individually liable. § 4. Term “corporations” construed. § 5. Banking prohibited. § 6. Existing charters, when invalid. § 7. Charters not to be extended, nor forfeiture remitted. $ 8. All franchises subject to the right of emrinent domain. $ 9. Restrictions on powers of corporations. § 10. Liabilities of franchise under lease or grant. § 11. Corporation stock, restriction on issue of. $ 12. Election of directors-Cumulative or distributive votes. $ 13. State not to loan its credit nor subscribe to stock of care

porations. § 14. Corporations to have office for transaction of business in

stocks. $ 15. Foreign corporations, conditions. § 16. Corporations, where to be sued. § 17. Transportation companies, rights and liabilities of. $ 18. Officers of corporations, restriction as to interests. $ 19. Free passes on railroads prohibited to state officials. $ 20. Fares and freights to be regulated by government. § 21. Discrimination in charges by carriers forbidden. $ 22. Railroad districts, organization of. § 23. Temporary railroad districts. § 24. Legislature to pass laws to enforce this article.

CORPORATIONS TO BE FORMED UNDER GENERAL LAWS.

Sec. 1, Art. XII. Corporations may be formed under general laws, but shall not be created by special act. All laws now in force in this state concerning corporations, and all laws that may be hereinafter passed pursuant to this section, may be altered from time to time or repealed.

See subdivision 19, section 25, article IV, ante.

Legislative History.

The parallel provision in the Constitution of 1849 is section 31 of article IV, as follows: “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.”'

Concerning these provisions, it is said by Justice Crockett in San Francisco v. S. V. W. W., 48 Cal. 512, that it was the special purpose of the framers of the Constitution to guard against the abuse of conferring extraordinary privileges, oppressive powers and onerous monopolies upon some and denying them to others engaged in the same business, and so interfering with the enterprise and industry of the individual citizen. Nor were they content to leave it doubtful whether the legislature would have power to modify or abrogate these general laws so far as to affect the rights of existing corporations. Hence, the Constitution contains the further provision that all general laws and special acts may be altered from time to time or repealed. It was intended by this provision to keep corporations within the wholesome legislative control and to repel the assumption that their rights were held under a contract which the legislature was powerless to modify. The true construction of this constitutional provision is that all private corporations shal! derive their powers from general laws and not from special statutes. The general laws under which they were formed and such others as shall afterward be enacted shall alone define their rights

and powers.

On this theory all private corporations formed for similar purposes will stand upon the same footing, enjoy the same rights and be subject to the same burdens which cannot be increased or diminished except by general laws applicable to all. In harmony with this theory and accepting it as a true construction of the Constitution, the legislaturo at its first session enacted general laws under which private corporations might be formed, and defined minutely their pow. ers and duties. These laws constituted the charters under which corporations, when organized pursuant to them, acted. The laws conferred and measured their powers and prescribed the mode of their exercise. These laws have been modified from time to time, and have never omitted to prescribe the powers to be exercised, and the duties to be performed by the corporation. Nothing short of some imperative rule of constitutional construction will justify us in holding at this late day, that, though corporations must be formed under general laws, it is nevertheless competent for the legislature, by special grant, to confer upon a corporation once organized any powers, however extraordinary. I think, on the contrary, that no corporate rights or powers can be conferred by special grant, but must all be derived under general laws.

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