"Franchises and liberty are used as synonymous terms, and their definition is a royal privilege, or branch of the king's prerogative, subsisting in the hands of a subject. Being, therefore, derived from the crown, they must arise from the king's grant, or in some cases may be held by prescription, which, as has been frequently said, presupposes a grant. The kinds of them are various and almost infinite," and adds "that they may be vested in either natural persons or bodies politic, in one man or in many." And again on this subject he says: "To be a county palatine is a franchise, vested in a number of persons. It is likewise a franchise for a number of persons to be incorporated, and subsist as a body politic, with a power to maintain perpetual succession, and do other corporate acts; each individual member of such corporation is also said to have a franchise or freedom." (2 BI. Com. 37.)

Kent defines franchises as "privileges conferred by grant from government, and vested in individuals." (3 Kent's Com. 458.) He also says: "Corporations or bodies politic are the most usual franchises known in our law." (Id. 459.)

In Pierce v. Emery, 32 N. H. 507, Perley, C. J., speaking for the court, remarks: "A corporation is itself a franchise belonging to the members of the corporation; and a corporation, being itself a franchise, may hold other franchises as rights and franchises of the corporation." And further: "A corporation, being itself a franchise, consists and is made up of its rights and franchises."

In City of Bridgeport v. N. Y. & N. H. R. Co., 36 Conn. 266, Butler, J., speaking for the court, uses this language in regard to a railroad corporation: "The term 'franchise' has several significations, and there is some confusion in its use. The better opinion deduced from the authorities seems to be that it consists of the entire privileges embraced in and constituting the grant." (See title "Franchise" in Abbott's Law Dict., and cases there cited.)

It is true that the privileges so granted by the government do not pertain to the citizens of the state by common right. But what is the "common right" here referred to? Is it not a right which pertains to the citizens by the common law, the investiture of which is not to be looked for in any special law, whether established by a constitution or an act of the legislature? Coke says: "De commun droit-of common right-this is by the common law, because the common law is the best and most common birthright that the subject hath for the safeguard and defense not only of his goods, lands and revenues, but of his wife and children. This common law of England is sometimes called right, sometimes common right, and sometimes communis justitia." (Coke's Inst. 142a.) The definition of franchises as special privileges conferred by government upon individuals, and which do not belong to the citizens of the country generally of common right, had its origin in Bank of Augusta v. Earle, 13 Pet. 575. A very learned and accurate writer, Mr. Emory Washburn, in his work on Real Property (2d vol. 267), adopts this definition, and cites as authority the case above referred to from 13 Peters. The same

definition is quoted by Angell & Ames, in their work on Corporations, from the case referred to. (See Ang. & Ames on Corp., §4.)

In the case in 13 Peters it was contended that under the laws and constitution of Alabama the right of banking was a franchise. The court refused to so hold, on the ground that the right of banking, at common law, belonged to every citizen. (See, also, Curtis v. Leavitt, 15 N. Y. 170, opinion of Shanklin, J.) The discussion on the point in the opinion shows clearly that "common right" is used with the signification of common law,"

We are of opinion that the common right refers to the right of citizens, generally at common law. Such rights of citizens, though frequently spoken of as franchises, are not the franchises here meant; and it may be conceded that where such rights are granted to corporations, they are not franchises. But independent of the right to exist as a corporation, and to exercise powers in its corporate capacity, there are privileges granted to the water-works, which do not, by the common law, belong to citizens generally; such as the right to lay down pipes in the streets, ways and alleys of a city, and to collect rates for water furnished, which was held to be a franchise in San Francisco v. Spring Valley Water-Works, 48 Cal. 493, and in San Jose Gas Co. v. January, 57 Cal. 616. Conceding for the argument that the constitution, by section 19 of article xi, grants this right to every person, it does not follow that it is not a franchise. They are vested by a grant of the sovereign power, and not by the common law; and the generality of the grant does not deprive them of the character of franchises.

The right to collect rates for use of water supplied to the city and county of San Francisco, or the inhabitants thereof, which the appellant has possessed at least ever since the act of 1858 went into effect, is expressly declared to be a franchise by the constitution of the state in the second section of article xiv; thereof. As has been said above, the very existence of a corporation as such is a franchise, and it exercises its franchise in every act which it performs as a corporation. In the Bank of Augusta v. Earle, above cited, the supreme court of the United States, speaking through Taney, C. J., in relation to the making of contracts by corporations, which, by common right, individuals could make, said: "In making such contracts, a corporation, no doubt, exercises its corporate franchise. But it must do this whenever it acts as a corporation, for its existence is a franchise."

A corporation, whose existence is a franchise, may possess powers and privileges, which, in themselves, are not franchises (such as the right to bank, discussed in Bank of Augusta v. Earle, above cited, or the right to buy and sell property, real and personal), but it usually owns, along with such privileges, some that are franchises; but whether the powers be entirely of the kind which are franchises or not, its existence and right to employ its corporate powers is a franchise. This we think abundantly established by the cases above cited. We have no doubt that it was the intention of those who framed and ratified the constitution to place such franchises in the category of

property to be taxed. The word "franchises," as used in the first section of article 13, is used generally without any qualifying words, and is intended to embrace all franchises of the character above referred to, whether vested in individuals or bodies politic. A franchise conferred on an individual to lay down pipes in the streets of a city and to collect rates for water furnished a city or its inhabitants is to be taxed in the same way as when vested in corporations. The law in this respect is the same in regard to all persons, whether natural or artificial.

It is contended that the clause, "and all other matters and things real, personal and mixed, capable of private ownership," in section I of article 13, qualifies the word "franchises" which precedes it. We do not think so. The structure of the sentence forbids any such construction. What is said before the employment of these words is complete of itself, and needs nothing to show what was signified. The words used show clearly that they were intended to add something to what preceded them, to refer to kinds of property not previously mentioned, nct to qualify anything. They were doubtless inserted out of abundant caution to show that all kinds of property, whether specifically enumerated or not, were intended to be included in the property to be taxed, though not embraced in the specific classes previously mentioned. They constitute a declaration that in enumerating the property to be taxed it was not intended to confine the enumeration to "moneys, credits, bonds, stocks, dues, franchises," but to include all other kinds of property, and that by no construction of the word property, as used in the section, were any kinds of property to be left out.

But it is immaterial whether these words qualified "franchises" or not, for the reason that the franchises so referred to are capable of private ownership. To hold that a private corporation does not own its franchise right, power and privileges would be both novel and untenable. Admitting that under the law of the state there may be legislation which might impair their value, it does not follow that it is not owned as property, with all the rights which attach thereto. All these rights exist until the legislative authority has acted so as to impair them or take them away; and until such legislation is enacted the rights of property remain unimpaired. There has been no legislation yet of the character as regards the appellant that has been called to our attention, or that we have been able to discover.

This franchise of a corporation is sometimes classed as real estateof that kind styled incorporeal hereditaments. (Enfield Toll Bridge Co. v. Hartford and New Haven R. Co., 17 Conn. 40; s. c., 17 Conn. 462; Price v. Price's Heirs, 6 Dana 107; 1 Blackstone's Com., 2022, 37, 38.) In the case cited from 17 Conn. 40, this was said of a bridge corporation. The shares of stock of the water-works are by statute made personal estate. (See act of 1853.) But whether real or personal estate, they are property. Such franchises, as long as they exist, are protected as property by the guarantee universal in the states of the Union, which forbids their being taken except for public

purposes and on compensation being made. (1 Cooley's Con. Lim., 4th ed., 655, and cases cited in note 4.) During their existence they are as fully protected by law as any other species of property. On this subject see Wilmington R. Co. v. Reid, 13 Wall. 268; 3 Kent's Com. 458; Hamilton County v. Massachusetts, 6 Wall. 633; People v. Selfridge, 52 Cal. 331; Ť. & T. R. Co. v. Campbell, 44 Cal. 89; O. R. Co. v. O. B. & F. V. R. Co., 45 Cal. 365. (See cases just above cited from 17 Connecticut, and Norwich Gas-light Co. v. Norwich City Gas Co., 25 Conn. 36.)

The franchise of a corporation is and can be well defined to be the right of the corporation to exist and exercise the powers and privileges vested in it by its charter. (Burt. on Tax., § 83.) The franchise is the faculty of the corporation. As said by Redfield in his work on railways: "The faculty of a corporation is its organic life; its corporate existence by which it is enabled to carry on business; that which it derives from its charter of incorporation its corporate franchise." (2 Redf. on Railways, 3d ed., 452.) In this state, the charter is the statute or statutes granting and defining the powers of the corporation, under which it is constituted and exists, together with the instruments required to be executed by the provisions of such statute or statutes. These are sometimes called the constating instruments. (Field on Corp., § 34, n. 3.) Such franchises are legal estates, not mere naked powers, and are powers coupled with an interest, which vest in the corporation by virtue of its charter or constating instruments. (Society for Savings v. Coite, 6 Wall. 606; Provident Institution v. Massachusetts, 6 Wall. 622; Hamilton Co. v. Massachusetts, 6 Wall. 638; Porter v. R. R. I. & St. L. R. Co., 76 Ill. 561.) That the state has full power to tax them, see same cases, and State R. R. Tax Cases, 92 U. S. 603. In the case from 76 Illinois, above cited, it is said: "It is clear upon authority that the franchise of a corporation is property, and as such it may be a proper object of taxation." (P. 573.) In Veazie Bank v. Fenno, 8 Wall. 547, Chase, C. J., used this language: "Franchises are property, often very valuable and productive property, and seem to be as properly objects of taxation as any other property." Daniel, J., delivering the opinion of the court in West River Bridge Co. v. Ďix et al., 6 How. 529, said: "We are aware of nothing peculiar to a franchise which can class it higher, or render it more sacred than other property. A franchise is property, and nothing more." (See also Wilmington R. Co. v. Reid, 13 Wall. 264, and Monroe Savings Bank v. The City of Rochester, 37 N. Y. 367.) In this last case Fullerton, J., delivering the opinion of the court, said, in regard to a statute declaring the privileges and franchises granted by the legislature to savings banks or institutions for savings, personal property, and liable to taxation as such: "In declaring the privileges and franchises of a bank to be personal property, the legislature has adopted no novel principle of taxation. The powers and privileges which constitute the franchise of a corporation are in a just sense property, and quite distinct and separate from the property, which,

by the use of such franchise, the corporation may acquire. They are so regarded by the law, and so regarded by common acceptation.'

That such franchises can be taxed according to the valuation arrived at through an assessment is recognized in the case of the Freight Tax, 15 Wall. 282, and in the case of the State Tax on Railway Gross Receipts, 15 Wall. 296. In the case of the State Railroad Tax Cases, above cited from 92 U. S. Reports, a tax on the assessed value of franchise and capital stock by the state of Illinois was sustained, approving the decision to that effect in Porter v. R. R. I. & St. L. R. R. Co., above cited from 76 Illinois. (See also Gordon v. Appeal Tax Court, 3 How. (U. S.) 133, and Judge Redfield's comment on this case in 2 Redf. on Railways, 453.) As to the extent of the power of the state to tax, see Providence Bank v. Billings, 4 Pet. 562, and Hamilton Co. v. Massachusetts, 6 Wall. 639. In the case in 4 Peters, Marshall, C. J., said: "All powers

over which the sovereign power of a state extends are subjects of taxation. The sovereignty of a state extends to everything which exists by its authority, or is introduced by its permission. (4 Pet. 563.) The same doctrine was declared in Osborne v. Bank of the United States, 9 Wheat. 738. From the foregoing cases, it would seem that there can be no doubt of the power of a state to tax the franchise at its assessed value. There may be more difficulty in arriving at its value than that of a parcel of land or personal chattels, but still its value may be estimated. When it is condemned for public use, the compensation to be paid can be fixed. As is justly said in Porter v. R. R. I. & St. L. R. R. Co., 76 Ill. 578: "We have never known it to be asserted that the value of a franchise is so indefinite and uncertain that it can not be made the measure of a recovery when it is wrongfully invaded; or that when it is taken and condemned for pubic use, it can not be ascertained what compensation shall be made to its owner. It is recognized in those respects as being capable of a definite valuation. If its value may be ascertained for those purposes, it may as readily be ascertained for the purposes of taxation." As to value of franchises, and that they possess a value beyond that belonging to the tangible property of the corporation, see cases just above cited. (Commonwealth v. Hamilton Mfg. Co., 12 Allen 298, and Commonwealth v. Cary Improvement Co., 98 Mass. 23.)

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In this state, the constitution having declared that franchises are property, and that all property in the state not exempt from taxation shall be assessed in proportion to its value, to be ascertained as provided by law (Const., art. xiii, § 1), it would seem to follow that the tax must be according to the valuation made by the officer appointed for that purpose. If the state can impose a tax on the franchise of a corporation in the nature of an excise or duty, it does not exclude the taxation by a valuation made by an assessor.

That such a franchise as that held by the appellant was taxable in this state, we think has been held by this court in two cases: Burke v. Badlam, 57 Cal. 594; and San Jose Gas Company v. January, 57 Cal. 614.