State ex rel. Attorney Gen. v. Portage City Water Co.

• Decision Date: 25 September 1900
• Citation: 83 N.W. 697,107 Wis. 441
• Parties: STATE EX REL. ATTORNEY GENERAL v. PORTAGE CITY WATER CO.
• Court: Wisconsin Supreme Court

107 Wis. 441

83 N.W. 697

STATE EX REL. ATTORNEY GENERAL

v.PORTAGE CITY WATER CO.

Supreme Court of Wisconsin.

Sept. 25, 1900.

Syllabus by the Judge.

1. A special privilege granted by sovereign authority, either to an individual or a corporation, is a franchise.

2. It is not essential to a franchise that the grant be made direct; it is sufficient if it be made through a legitimate legislative agency.

3. A grant made by the common council of a city, by authority of its charter, to construct, maintain and operate a system of waterworks in such city and to use the streets and alleys thereof for that purpose, is a legislative grant through the medium of an authorized legislative agency, and is a franchise.

4. The grant of a franchise to an organized corporation, or to an individual or individuals, and thereafter transferred to a corporation, is not a corporate franchise strictly so called, or in any sense, except that of being property of the corporation.

5. Section 3241, Rev. St., covers only the subject of the forfeiture of charters of domestic corporations for the reasons therein mentioned.

6. The enactment of section 3466, Rev. St., into statute law was not an adoption of 9 Anne, c. 20, § 4, with the English construction thereof, but of section 28, art. 2, c. 9, 2 Rev. St. N. Y. 1829, and the construction thereof by the New York courts.

7. Unlike the statute of Anne, section 3466, Rev. St., contains no word or words of limitation as regards the meaning of the word “franchise,” but it is used in its general sense, so as to include franchises regardless of whether they are corporate or not.

8. The constitutional jurisdiction of the circuit courts of this state, subject to exceptions mentioned in the constitution, extends to all civil matters, including those covered by section 3466, Rev. St., and such jurisdiction under such section may be exercised under section 3463, the statutory substitute for quo warranto proceedings and the remedy by writ of scire facias at the common law.

9. The word “person” in a legislative enactment includes a corporation if that appears to have been the legislative intent, and that is governed by the rule of statutory construction in section 4971, Rev. St., and elementary principles as well. Such word in section 3466 is so governed.

10. Proceedings by quo warranto at the common law were proper to reclaim a franchise, whether corporate or not, for abuse of it or nonperformance of a condition of the grant, and jurisdiction in that regard is complete regardless of section 3466, the remedy being under section 3463, the statutory substitute for the common-law remedy.

11. A proceeding to forfeit a franchise owned by a corporation, which franchise is not dependent upon corporate existence, may be maintained against the corporation entirely independent of whether it be a domestic or foreign body.

12. If the owner of a franchise fail to perform the conditions of the grant, the franchise is thereby ended, and an action may be brought by the attorney general in the name of the state to obtain a judicial declaration of the forfeiture, either under section 3466, Rev. St., or by the rules of the common law.

Appeal from circuit court, Columbia county; Robert G. Siebecker, Judge.

Application by the state, on the relation of the attorney general, to forfeit a franchise of the Portage City Water Company. From an order overruling a demurrer to the complaint, defendant appeals. Affirmed.

Action in the name of the attorney general to forfeit a waterworks franchise, so called, granted by the city of Portage, Wis., to individuals, and subsequently assigned by them to the defendant. The complaint states, in substance, that the defendant is a foreign corporation; that April 15, 1887, the common council of the city of Portage, a municipal corporation of this state, granted to Moffett, Hodgkins & Clarke, their heirs and assigns, the right to maintain a system of waterworks in said city, said grant being made by ordinance, a copy of which was made a part of the complaint; that such ordinance was duly accepted, and that, pursuant thereto, since 1897, the defendant has maintained the authorized system of waterworks, to furnish water for public and private use in said city; that said ordinance, among other things, required the maintenance of fire hydrants, and provided that such hydrants should be kept, night and day, unavoidable accident excepted, supplied with water for fire services, and protected from freezing, and that if the grantees of the franchise, their successors or assigns, should at any time fail to supply an adequate amount of water for fire and other public and private purposes as provided therein, for a period of two weeks continuously for any cause other than fire, floods, acts of God or the public enemies, the contract made by the ordinance and the acceptance thereof should be null and void, and all rights, privileges and franchises granted by such ordinance should be forfeited and cease; that defendant failed to keep the fire hydrants supplied with water and failed to keep them protected from freezing, and further failed to supply water for fire and other public and private purposes, from the 1st day of February, 1898, to the 1st day of July, 1899, solely through its negligence and carelessness. Several other violations of material provisions of the ordinance referred to were alleged. Judgment forfeiting and annulling the franchise was prayed for. Defendant demurred to the complaint upon the grounds, among others, of want of jurisdiction of the court over the subject of the action, and insufficiency of facts to constitute a cause of action.

Hume, Oellerich & Jackson, for appellant.

E. R. Hicks, Atty. Gen., C. A. Fowler, and Burr W. Jones, for respondent.

MARSHALL, J. (after stating the facts).

In the decision of this appeal, the order in which the case is presented in the briefs of counsel will not be followed. Neither will time and space be taken to review the interesting history of quo warranto proceedings with which the court is favored. The law as regards the general scope of such proceedings at common law is too well settled to require going back to its origin and tracing it down to the present time in order to make a proper application thereof to the facts alleged in the complaint, under our statutory substitute for the common-law proceeding.

It is conceded that unless the privileges granted by the city of Portage to construct, maintain, and operate a system of waterworks within its corporate limits, and use the streets and alleys of the city for that purpose, constitute a franchise emanating from sovereign authority, this action will not lie either under the statutes or independent of them.

Counsel for appellant say the grant contained in the waterworks ordinance is not a franchise within the meaning of that designation of a legislative grant. There is authority for that contention, and much authority against it. This court has several times spoken on that subject in no uncertain language. The law in that regard is so firmly settled here that it is useless to go elsewhere for guidance, as what follows amply shows.

In City of Ashland v. Wheeler, 88 Wis. 607, 60 N. W. 818, the court held that the common council of a city, when acting by legislative authority, may make such a grant as the one in question, and if the grant be owned by a corporation it is as much a “franchise of the corporation” as if granted to such corporation by act of the legislature, for the common council exercises a delegated authority and what it does within that power is done by the legislature through its agency.

In State v. Madison St. Ry. Co., 72 Wis. 612, 40 N. W. 487, it was said that the rights, immunities and privileges granted by an ordinance of similar character as the one in question but on a different subject, when possessed by a corporation, are “as much the franchises of the corporation as if they had been directly granted by the state under which it was organized. The common council is authorized to grant them by statute and such power is a delegated one. What the common council does within that power is done by the legislature through its agency.”

In Wright v. Light Co., 95 Wis. 29, 69 N. W. 791, the right to construct and maintain a street railway, granted by the common council of Milwaukee to individuals and subsequently acquired by the defendant corporation, was spoken of thus: “The right is something more than an easement, and more than a mere contract right. It is also a franchise granted by the state, acting through the common council of the city, to the railroad company. It becomes, when owned by a corporation, one of its corporate franchises, for failure to exercise which an action may be brought by the attorney general, in the name of the state, to vacate its charter, under section 3241, Rev. St.”

In Stedman v. City of Berlin, 97 Wis. 505, 73 N. W. 57, an action in equity to annul a waterworks franchise, it was held that such an action cannot be brought by the city or the taxpayers thereof in its right on the ground of fraud; that the granting of such a franchise is an affair between the city and the grantee, and that it can only be reclaimed by quo warranto or scire facias at the suit of the state.

The cases cited where common-law terms are used, as that the franchise can be forfeited only by quo warranto or scire facias, must be read in connection with section 3463, Rev. St., which provides that all remedies heretofore obtainable by writs of scire facias and quo warranto, and by proceedings by information in the nature of quo warranto, may be obtained by civil action, and that it shall not be necessary to sue out such writs in form

We may properly remark in passing, that it is not supposed that the terms “franchise of the corporation” and “corporate franchise,” when used in the cases referred to, were intended to refer to corporate franchises, strictly so...