Public Franchise

Although franchises were most often evidenced by a written charter, license or letters patent, long-standing rights established by prescription were also assumed to suppose a grant. In general, franchises could be granted by Sovereign prerogative to a municipality, a corporation or an individual. A franchise granted an exclusive privilege or license to act in a certain manner prohibited to the general community. Thus, a franchise to govern could be granted under Sovereign prerogative to a municipality, corporation or individual "proprietor"; a franchise of incorporation to a group of individuals; a franchise to trade to a joint stock corporation; and a license to build a public access bridge over navigable waters to a person or corporation..

Although both are exclusive, a distinction is made between a "monopoly" and a franchise. As explained in Proprietors of Charles River Bridge v. Proprietors of, 36 U.S. 420 (1837) 36 U.S. 420 (Pet.):

"A monopoly is that which has been granted without consideration; as a monopoly of trade; or of the manufacture of any particular article, to the exclusion of all competition. It is withdrawing that which is a common right, from the community, and vesting it in one or more individuals, to the exclusion of all others."

A distinction is also made in the law between private rights of commercial/non-commercial property ("juris privati") and rights of property acquired under a grant of "public" franchise. A "public" franchise is one affecting common or public rights, (e.g. rights held in public trust, such as "commons," common fishery, and free and common navigation on navigable streams.) It is exclusively granted as a "license" to a corporation or individual to provide a public service or utility in order to promote the general comfort and convenience; advance the public prosperity; or to facilitate the purposes of safe, convenient and cheap ways for transportation and travel. The rights of public franchises are established only in charter or license and the services provided are subject to regulation under the public law ("publici juris" or jus publicum)

When a franchise or license was granted that abridged a "public right," (such as fisheries in arms of the sea, or ferries and bridges obstructing common right-of-way over navigable rivers or arms of the sea,) an equivalent "consideration" was required in exchange for the privilege. The consideration could be in the form of some burden such as the expenditure of money in establishing and maintaining facilities for the convenience and safety of the public.

As explained by Justice Story in Proprietors of Charles River Bridge v. Proprietors of, 36 U.S. 420 (1837) 36 U.S. 420 (Pet.):

"...Another is, that wherever a grant is made for a valuable consideration, which involves public duties and charges, the grant shall be construed so as to make the indemnity co-extensive with the burden. Qui sentit onus, sentire debet et commodum. In the case of a ferry, there is a public charge and duty. The owner must keep the ferry in good repair, upon the peril of an indictment. He must keep sufficient accommodations for all travellers, at all reasonable times. He must content himself with a reasonable toll. Such is the jus publicum. In return, the law will exclude all injurious competition, and deem every new ferry a nuisance, which subtracts from him the ordinary custom and toll. See Com. Dig. Piscary, B.; Ibid. Ferry. So strong is the duty of the ferry-owner to the public, that it was held, in Paine v. Patrick, 3 Mod. 289, 294, that the ferry-owner could not excuse himself from not keeping proper boats, even by showing that he had erected a bridge more convenient for passengers. It would be a fraud upon such a grant of a ferry, to divert the travel, and yet to impose the burden...."

In exchange for public use of the public franchise facility or service, the owner also had a right to demand a toll. The right to demand toll under the license was considered property that could be "demised, leased or mortgaged" or taken in payment of a debt. (Poph. 79; Moore 474; Webb's Case, 8 Co. 92; Gunning on Tolls 106, 110; 6 Barn. & Cres. 703; 5 Ibid. 875; 3 Maule & Selw. 247; 1 Crompt. & Jerv. 57; in the Exchequer, p. 400.)

As explained by Justice Baldwin in Proprietors of Charles River Bridge v. Proprietors of, 36 U.S. 420 (1837) 36 U.S. 420 (Pet.):

"...So it is, where a toll is demandable by an express grant, by custom or prescription, on a public highway, in a public port, or for the use of public property, which is termed toll thorough, because the party claiming it is presumed to have had no original right to the place where he demands toll. He must, therefore, show not only his right to toll, by custom, prescription or grant, but must show some consideration for it, some burden on himself some benefit to the public, or that he, or those under whom he claims, had once a right to the locus in quo, which had been commuted for the toll, and this consideration must be applied to the precise spot were toll is claimed. Cro. Eliz. 711; 2 Wils. 299; 3 Burr. 1406; 1 T. R. 660; 4 Taunt. 137; 6 East 458-9; 4 T. R. 667. A claim of toll at a place where no toll has been granted, or where no consideration for it exists, is void by magna charta and the statute of Westminster, which prohibit all evil tolls; such as are exacted where none are due, exacting unreasonable toll where reasonable only is due, or claiming toll thorough, without fair consideration or reasonable recompense to the public. 2 Inst. 219.

"Toll traverse, or a toll demanded for passing on or over the private property of the claimant, or using it in any other way, is of a different description; being founded on the right which every man has to the exclusive enjoyment of what is exclusively his private property, its use by others is a sufficient consideration for the exaction of toll. Mo. 575; 2 Wils. 299; Cowp. 47-8. But whenever toll is exacted for the passage over a public water, the nature of it changes; its foundation not being property, it rests on a grant or prescription, and if the toll is unreasonable, the grant is void. 2 Inst. 221-2. The grantee must have the ownership or usufruct of the locus in quo (1 Yeates 167; 9 S. & R. 32), and within reasonable bounds; a prescription for a quay half a mile in length is not good, unless the vessels unlade at the wharf; the court say, 'he may as well prescribe to the confines of France.' 1 T. R. 223; 1 Mod. 104. "

Private property granted by patent or franchise from national domain to which no "common public right" of "commons," common fishery or navigation has attached is subject to "juris privati." Use can be prohibited only in accordance with the municipal or police powers to prevent public nuisance to human health, peace, safety or morals. Public franchises (licenses) are subject to "publici juris," or public law. When the franchise affects one of the traditional public rights and is granted for the purposes of public benefit, such as a ferry, bridge or toll-road, the government has the right to regulate the franchise for public convenience, safety and prosperity. In the case of ferries, regulation extended to the number and place of the ferry-ways, the number and kind of boats, the times of putting off from each side and to all details concerning the convenience and safety of passage and transportation; in the case of bridges -the place where the bridge was to be built; its dimensions, materials, lighting, draws and other details. Under a public franchise, owners have certain obligations and liabilities in cases of negligence or injury that can be enforced against them by individuals, or the public. They also have certain rights strictly defined by the terms of the charter, the expansion of which may not be inferred.