45

tion, this is usually effected through the process of the courts, which are the modern agencies employed by the state to exercise its power of visitation; ** and, if sufficient ground be disclosed therefor, if the corporation is acting unlawfully, the court may pronounce judgment of dissolution against it as against any other private corporation. But the courts do not possess the power of determining when or how such corporations shall be regulated and controlled. This is an exclusive function of the legislature; and it must determine not only when the public necessity exists for regulation, but the method to be employed, and the extent of the regulation. When the law of regulation has been duly enacted, then the court may be called upon to exercise its functions. It may not only employ its process, legal, equitable, and criminal, to enforce the law, but it may also, when the validity of the law is challenged, determine whether the regulation is reasonable. If it is made to appear plainly to the court that the regulating statute is unreasonable, the court may declare it void.*

40

44 Angell & A. Priv. Corp. § 684; 2 Kent, Comm. 300; Wisconsin Keeley Institute Co. v. Milwaukee, 95 Wis. 153, 70 N. W. 68, 36 L. R. A. 55, 60 Am. St. Rep. 105; Swift v. Richardson, 7 Houst. (Del.) 338, 32 Atl. 143, 40 Am. St. Rep. 127; Commonwealth v. Iron Co., 105 Pa. 111, 51 Am. Rep. 184; Cincinnati Volksblatt Co. v. Hoffmeister, 62 Ohio St. 189, 56 N. E. 1033, 48 L. R. A. 732, 78 Am. St. Rep. 707.

45 Clark, Priv. Corp. pp. 237-239.

46 THORPE v. RAILROAD CO., 27 Vt. 141, 62 Am. Dec. 625; Bank of Republic v. Hamilton Co., 21 Ill. 53; Pearsall v. Railway Co., 161 U. S. 646, 16 Sup. Ct. 705, 40 L. Ed. 838; Commonwealth v. Railroad Co., 103 Mass. 254, 4 Am. Rep. 555; Blake v. Railroad Co.. 19 Minn. 418 (Gil. 362), 18 Am. Rep. 345; State v. Johnson, 61 Kan. 808, 60 Pac. 1068, 49 L. R. A. 662.

47 SAN DIEGO LAND & TOWN CO. v. NATIONAL CITY, 174 U. S. 754, 19 Sup. Ct. 804, 43 L. Ed. 1154; Cotting v. Yards Co.. 183 U. S. 90, 22 Sup. Ct. 30, 46 L. Ed. 92; CHICAGO, M. & ST. P. R. CO. v. MINNESOTA, 134 U. S. 418, 10 Sup. Ct. 462, 33 L. Ed. 970; Spring Valley Waterworks v. San Francisco (C. C.) 124 Fed. 598; Hockett v. State, 105 Ind. 250, 5 N. E. 178, 55 Am. Rep. 201: Steenerson v. Railway Co., 69 Minn. 353, 72 N. W. 713.

The courts, when the question is properly presented, may deter

OBJECTS AND LIMITS OF REGULATION.

189. The objects of regulation of quasi public corporations are the protection of the public safety in life and property and the prevention of public extortion and imposition; and laws and ordinances obviously tending to effect such results are valid. But those statutes are invalid in which public regulation is a manifest pretext for meddlesome interference with corporate business, or which result in the confiscation of corporate property.

49

48

Statutes and ordinances have been upheld which require. railway companies to fence their roads, and to bridge highway crossings; and also those requiring a conductor upon every street car; 50 also those which fix the prices to be charged for hauling freight and passengers, 51 and for supplying water and gas to consumers."

52

mine whether or not the rates which have been established by statute or municipal ordinance are reasonable, but they have no power to fix such rates. People's Gaslight & Coke Co. v. Hale, 94 Ill. App. 406.

The reasonableness of the rates fixed by law as maximum rates for gas companies is a matter for judicial determination. Capital City Gas Co. v. Des Moines (C. C.) 72 Fed. 818.

48 Missouri Pac. Ry. Co. v. Humes, 115 U. S. 512, 6 Sup. Ct. 110, 29 L. Ed. 463; THORPE v. RAILROAD CO., 27 Vt. 141, 62 Am. Dec. 625.

So an ordinance requiring electric street cars to come to a full stop before crossing intersecting streets was held valid. Cape May & D. B. & S. P. R. Co. v. Cape May, 59 N. J. Law, 404, 36 Atl. 678, 36 L. R. A. 657.

49 New York & N. E. R. Co.'s Appeal from Railroad Com'rs, 62 Conn. 527, 26 Atl. 122; New York & N. E. R. Co. v. Bristol, 151 U. S. 556, 14 Sup. Ct. 437, 38 L. Ed. 269.

50 State v. Trenton, 53 N. J. Law, 132, 20 Atl. 1076, 11 L. R. A. 410; SOUTH COVINGTON & C. ST. RY. CO. v. BERRY, 93 Kỵ. 43, 18 S. W. 1026, 15 L. R. A. 604, 40 Am. St. Rep. 161.

51 Georgia R. & Banking Co. v. Smith, 128 U. S. 177, 9 Sup. Ct.

52 See note 52 on following page.

Police Power.

But the courts have also held that an ordinance requiring gates to be erected or guards stationed at every street crossing in a town is invalid; 53 and that a statute fixing a maximum price for freight or passengers at less than the actual cost of carriage, is, in effect, a statute of confiscation, and therefore unconstitutional and void.54 Instances of the regulation of corporate conduct by legislation in the strict exercise of the police power for the preservation of public health and comfort and the protection of private property are too numerous for specification and consideration here. Many of them apply to strictly private corporations and to individuals as well

47, 32 L. Ed. 377; Peik v. Railroad Co., 94 U. S. 178, 24 L. Ed. 97: People v. Railroad Co., 178 Ill. 594, 53 N. E. 349, 49 L. R. A. 650; City of Indianapolis v. Navin, 151 Ind. 139, 47 N. E. 525, 41 L. R. A. 337.

52 CITY OF KNOXVILLE v. WATER CO., 107 Tenn. 647, 64 S. W. 1075, 61 L. R. A. 888; Id., 189 U. S. 434, 23 Sup. Ct. 531, 47 L. Ed. 887; Spring Valley Waterworks v. Schottler, 110 U. S. 347, 4 Sup. Ct. 48, 28 L. Ed. 173; State v. Light Co., 34 Ohio St. 572, 32 Am. Rep. 390.

It is the province of a legislative body to fix the rates to be charged for service rendered by a quasi public corporation, where its business is impressed with a public interest. People's Gaslight & Coke Co. v. Hale, 94 Ill. App. 406; Baily v. Gas-Fuel Co., 193 Pa. 175, 44 Atl. 251.

But a city council has no power to compel a gas company, without its assent to the ordinance, to furnish gas in a manner and at rates entirely at the option of the consumer. Logan Natural Gas & Fuel Co. v. Chillicothe, 65 Ohio St. 186, 62 N. E. 122.

53 Toledo, W. & W. Ry. Co. v. Jacksonville, 67 Ill. 37, 16 A. Rep. 611.

54 Reagan v. Trust Co., 154 U. S. 362, 14 Sup. Ct. 1047, 38 L. Ed. 1014; Smyth v. Ames, 169 U. S. 466, 18 Sup. Ct. 418, 42 L. Ed. 819; New Memphis Gas & Light Co. v. Memphis (C. C.) 72 Fed. 952; Indianapolis Gas Co. v. Indianapolis (C. C.) 82 Fed. 245.

See, also, as to confiscation of the property of a water company by regulation of rates, San Diego Water Co. v. San Diego, 118 Cal. 556, 50 Pac. 633, 38 L. R. A. 460, 62 Am. St. Rep. 261.

as to quasi public corporations.55 Some of the class last mentioned will be referred to under appropriate heads hereafter. But the regulation of quasi public corporations in respect of their rates and charges, while sometimes referred to as an exercise of the police power, can only be so regarded when that phrase is used in its broadest and most comprehensive signification, under which the state may regulate all persons and property for the public welfare.56

Sovereign Power.

But limitation of the rates and charges of quasi public corporations by legislation, though sometimes referred to by the courts as an exercise of the police power, is more properly referable to the sovereign power of the state to regulate and control all public affairs. The state may not say to any citizen with whom he shall deal, or at what price he shall sell; for this would interfere with his inherent liberty of action. 57 So, too, of a strictly private corporation, which in this particular enjoys the same freedom of trade.58 But the quasi public corporation has assumed public functions and duties such as the state itself, if it chose, might exercise and perform, and therefore has voluntarily subjected itself to public regulation."

59

55 West River Bridge Co. v. Dix, 6 How. (U. S.) 507, 12 L. Ed. 535; Ward v. Farwell, 97 Ill. 593; BOSTON BEER CO. v. MASSACHUSETTS, 97 U. S. 26, 24 L. Ed. 989; Mugler v. Kansas, 123 U. S. 623, 8 Sup. Ct. 273, 31 L. Ed. 205.

56 Cooley, Const. Lim. (6th Ed.) 705, 706. But where the conditions, regulations, and restrictions imposed are such as to evince a desire to oppress and control, and perhaps defeat, the company's existence, they cannot be supported as a lawful exercise of the police power. City of Richmond v. Telegraph Co., 85 Fed. 19, 28 C. C. A. 659.

57 Baker v. Portland, 5 Sawy. (U. S.) 566, Fed. Cas. No. 777; Hamilton v. County Ct., 15 Mo. 13; People v. Morris, 13 Wend. (N. Y.) 325; Cooley, Const. Lim. (6th Ed.) 744, 745.

38 Joy v. Plank Road Co., 11 Mich. 164; Treadwell v. Manufacturing Co., 7 Gray (Mass.) 393, 66 Am. Dec. 490.

59 Chicago G. W. Ry. Co. v. People, 79 Ill. App. 529; People v.

60

It must serve every one applying, unless excused therefrom by the law, and at such reasonable rates as the state may prescribe. 61

Reasonable Regulation.

The justices of the Supreme Court of the United States, in the course of their frequent consideration of the regulation of rates of quasi public corporations, have given utterance to the following rules for determining what is reasonable regulation: "What the company is entitled to ask is a fair return upon the value of that which it employs for public conven

Budd, 117 N. Y. 1, 22 N. E. 670, 5 L. R. A. 559, 15 Am. St. Rep. 460; Munn v. People, 69 Ill. 80; MUNN v. ILLINOIS, 94 U. S. 113, 24 L. Ed. 77.

60 COY v. GAS CO., 146 Ind. 655, 46 N. E. 17, 36 L. R. A. 535; CRUMLEY v. WATER CO., 99 Tenn. 420, 41 S. W. 1058; American Water Works Co. v. State, 46 Neb. 194, 64 N. W. 711, 30 L. R. A. 447, 50 Am. St. Rep. 610; State v. Water Co., 18 Mont. 199, 44 Pac. 966, 32 L. R. A. 697, 56 Am. St. Rep. 574.

Where persons or corporations carry on a business which is public in its nature, and on which is impressed a public interest, they must serve all who apply on the same terms and at reasonable rates. People's Gaslight & Coke Co. v. Hale, 94 Ill. App. 406; Griffin v. Water Co., 122 N. C. 206, 30 S. E. 319, 41 L. R. A. 240; Owensboro Gaslight Co. v. Hildebrand, 19 Ky. Law Rep. 983, 42 S. W. 351.

61 Cincinnati, H. & D. R. Co. v. Bowling Green, 57 Ohio St. 336, 49 N. E. 121, 41 L. R. A. 422; People's Gaslight & Coke Co. v. Hale, supra; Cleveland City R. Co. v. Cleveland (C. C.) 94 Fed. 385; Donnell v. State, 48 Miss. 661, 12 Am. Rep. 375; Dow v. Beidelman, 125 U. S. 680, 8 Sup. Ct. 1028, 31 L. Ed. 841; Railroad Commission Cases, 116 U. S. 307, 6 Sup. Ct. 334, 29 L. Ed. 636; Chicago, B. & Q. R. Co. v. Iowa, 94 U. S. 155, 24 L. Ed. 94.

A private corporation engaged in the business of operating a telephone plant, being a common carrier of news and intelligence, is charged with the public duty to furnish for a reasonable compensation to any citizen a telephone and telephonic service, and to charge each patron for the service rendered the same price it charges every other patron for the same service under similar conditions. Nebraska Tel. Co. v. State, 55 Neb. 627, 76 N. W. 171, 45

L. R. A. 113.