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As we understand the later briefs filed in behalf of the plaintiff in error, the vain attempt to justify the grant under the Recopilacion de Leyes de las Indias, Book 4, Title 12, Law 1, is given up, and therefore we shall spend no time upon that. There is, however, an effort to support it under a decree of January 4, 1813. 1 Reynolds, Spanish & Mexican Land Laws, 83. This was a scheme of the Cortes to reduce public and crown lands to private ownership, after reserving one-half for the public debt. When certain preliminaries had been accomplished, as to which we have no information, the other half was to be allotted in the first place to retired officers and soldiers who had served in the present war, &c., as a patriotic reward. Of the remaining land there was to be given, gratuitously and by lot, to every resident of the respective towns who applied, a tract, under certain limitations. The proceedings on these grants were to be had by the constitutional common councils, and the provincial deputations were to approve them. Although this decree purported to apply to crown lands 'in the provinces beyond the sea' as well as to those in the peninsula, it would seem, on the face of it, to have been intended for Spaniards, and to have had but doubtful reference to the natives of conquered territory.

But there are other answers to the suggestion that are free from doubt. The decree has been said to have been repealed in the following year. United States v. Clarke, 8 Peters, 436, 455. Hall, Mexican Law, 48. But compare United States v. Vallejo, 1 Black, 541. Hayes v. United States, 170 U. S. 637, 653, 654. But even if it be assumed, as it is by the argument for the plaintiff in error, that either that or later legislation to similar effect instituted a working system in the Philippines, a large assumption, it is admitted that the conditions of the supposed gratuity were not fulfilled. Our attention has not been called to any law giving authority to the ill-defined body that attempted to make the grant. The land was not distributed by lot, and the essential requirement of approval

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by a higher authority was wholly neglected. In view of the admission to which we have referred we find it unnecessary to follow the learned and able argument of the SolicitorGeneral. There is a hint, to be sure, that the grant may be presumed to have satisfied native custom and may be sustained upon that ground. But such a notion would be a mongrel offspring of Spanish law and ignorance, and no reason is given for making the presumption other than a guess. Unauthorized grants of public lands by subordinate officials seem to have been a noticeable feature in other Spanish colonies. Whitney v. United States, 181 U. S. 104, 114, 115. The real object of the reference to the decree of 1813 is to found a claim of prescription by showing a just title for the possession which is proved to have been maintained for ten years.

Lacson, the original grantee, held the land until 1881, when he conveyed it to Pedro Carrillo and his wife. Possession was abandoned in 1885 without further change of title. Therefore the only 'just title' to which the possession can be referred is the original grant. The phrase justo titulo is explained to mean a title such as to transfer the property, Schmidt, Civil Law of Spain and Mexico, 289, 290; see Partidas, 1. 18, T. 29, P. 3; or as it is defined in the Civil Code of a few years later than the decree of 1880, "that which legally suffices to transfer the ownership or property right, the prescription of which is in question." § 1952. Of course this does not mean that the titulo must have been effective in the particular case, for then prescription would be unnecessary. We assume, for instance, that if a private person in possession of crown lands, seeming to be the owner, executed a formally valid conveyance under which his grantee held, supposing his title good, possession for ten years might create an indisputable right. But if the public facts known by the grantee showed that the conveyance to him was void, we understand that it would not constitute a starting point for the running of time, and that the grantee's actual belief

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would not help his case. Indeed, in such a case he would not be regarded as holding in good faith, within the requirement of the decree, because a man is not allowed to take advantage of his ignorance of law. The subject is fully expounded in Hayes v. United States, 170 U. S. 637, 650 et seq.

All that was done to give Lacson a lawful title was insufficient on its face. Therefore, on the facts known to him he was chargeable with knowledge that he had acquired no legal rights, and it was impossible that the period of prescription should begin to run from the date of the instrument under which he claimed. The possession of Carrillo and his successors, after the conveyance to him in 1881, was not maintained for ten years, and therefore the claim of the plaintiff in error must fail.

Judgment affirmed.

CITY OF MINNEAPOLIS v. MINNEAPOLIS STREET RAILWAY COMPANY.

APPEAL FROM THE CIRCUIT COURT OF THE UNITED STATES FOR THE DISTRICT OF MINNESOTA.

No. 46. Argued December 2, 3, 1909.—Decided January 3, 1910.

This court will consider the nature of a corporation organized under a state law only so far as may be necessary to determine Federal rights.

Franchises to public service corporations will not be extended by implication, but whatever is plainly and legally granted is protected by the contract clause of the Constitution. Where the corporate existence has been recognized after the expiration of the shorter period and the State has not moved in quo warranto, a franchise legally granted by municipal ordinance and legislative enactment for the life of the charter of a public service corporation cannot be impaired during the term specified in the charter filed before the grant was made, although such term be longer than that allowed by the act under which the corporation was organized. A franchise contract may extend beyond the life of the corporation to which it is granted; at the end of the corporate life it is a divisible asset.

VOL. CCXV-27

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of 1907 related to an electric road it does not impair the contract, if any, with the company operating a horse railroad.

The right to make such ordinance was under the general reserved power of the city and State, and all such grants are to be construed liberally for the public under the reserved powers. Water Co. v. Freeport, 180 U. S. 587. Corporations accept such grants subject to all reservations. Telephone Co. v. Richmond, 98 Fed. Rep. 671; S. C., 103 Fed. Rep. 31; Detroit v. Railway Co., 185 U. S. 388; Fath v. Tower Grove Ry., 16 S. W. Rep. 913; General Ry. Co. v. Chicago, 52 N. E. Rep. 880; Blair v. Chicago, 201 U. S. 487; Jackson Ry. Co. v. Interstate Ry. Co., 24 Fed. Rep. 306; Commonwealth v. Railway, 27 Pa. St. 339. And see 21 Pa. St. 22; Farrell v. Railway Co., 61 Connecticut, 127; Endlich on Interpretation, § 354.

Public policy does not permit unnecessary inference of authority to make a contract which affects the continuance of the sovereign power and duty to make such laws as public welfare may require. Long v. Duluth, 49 Minnesota, 281; Georgia Banking Co. v. Smith, 128 U. S. 174; Stone v. Trust Co., 116 U. S. 307, 326. See also Fanning v. Gregoire, 16 How. 530; Gaslight Co. v. Middletown, 59 N. Y. 229; Minturn v. Larue, 23 How. 435; Hoffmann v. Quincy, 4 Wall. 435; Alcott v. Supervisors, 16 Wall. 678; Water Co. v. Syracuse, 116 N. Y. 167; Indianapolis Ry. Co. v. Street Railway Co., 127 Indiana, 369; Elliott on Roads and Streets, 2d ed., § 736; Electric Ry. Co. v. Cleveland, 204 U. S. 116.

The burden is on appellee to show the existence of the contract.

Mr. M. B. Koon, with whom Mr. N. M. Thygeson and Mr. M. D. Munn were on the brief, for appellee.

MR. JUSTICE DAY delivered the opinion of the court.

This is an appeal from a decree of the Circuit Court of the United States for the District of Minnesota, enjoining the city

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of Minneapolis from enforcing, as against the Minneapolis Street Railway Company, appellee, a certain ordinance of the city of Minneapolis, passed February 9, 1907, prescribing the rate of fare for the transportation of passengers over any street railway line, or lines, of the company in the city of Minneapolis.

The case was tried upon amended bill and answer. The ground alleged for injunction in the amended bill was in substance that the ordinance of February 9, 1907, violated the terms of a previous and subsisting contract, prescribing the rates of fare to be charged by the company in the city of Minneapolis. It appears in the record that the railway company was organized on July 1, 1873, and that its alleged contract arises from an ordinance of the city of Minneapolis passed July 9, 1875, ratified by an act of the legislature of the State of Minnesota passed March 4, 1879. We shall have occasion later on to deal more specifically with this ordinance and ratifying act.

It is sufficient for the present purpose to say that it is the contention of the company that by the ordinance of July 9, 1875, and the ratifying act, it became the owner of an irrepealable contract for the term of fifty years from the date of its organization, by the terms of which it had the right to charge a fare not exceeding five cents for each person carried on any continuous line which might be designated by the city council of the city, such continuous line, however, not to exceed three miles in length. The contract, it is alleged, is violated by the ordinance of February 9, 1907, requiring the sale of six tickets for twenty-five cents.

The existence of the alleged contract is denied by the city upon several grounds. It is urged that the complainant company was so organized that its charter, and consequently its corporate life, expired thirty years after the date of its incorporation, that is, on July 1, 1903, and, therefore, its contract rights, ceased and terminated at that time. This contention is based upon the incorporation of the company, which,

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