City of Louisville v. Cumberland Telephone & Telegraph Co.

Citations

• 224 U.S. 649
• 32 S. Ct. 572
• 56 L. Ed. 934
• 1912 U.S. LEXIS 2333

Syllabus

<p>Under the then constitution of Kentucky, in 1886, the legislature had the sole right to create corporations and grant franchises to use the streets of municipalities; a charter granted by the State, subject to conditions to be imposed by the municipality, became, after the acceptance of the conditions, a grant, not of the municipality but of the State, arid one which cannot be impaired by an ordinance made by the municipality.</p> <p>The new constitution of 1891, conferring upon municipalities the right to grant street franchises, and the later statute repealing special corporate'privileges, did not and could not, repeal rights vested in corporations nor relieve them of the burdens imposed by prior charter contract.</p> <p>The constitution of Kentucky of 1891, while limiting the power to sell franchises in the future, distinctly protected previously granted charter rights under which work had in good faith been begun.</p> <p>While franchises to be are not transferable without express authority, franchises to have and to hold and to use are contractual and proprietary and can be transferred; and, held in this case, that the franchise granted to a telephone company was property, taxable and.alienable Under the conditions on which it was granted, and, under the contract clause of the Constitution, could not be abrogated as against a transferee whose rights had been recognized by the municipality.</p> <p>Permitting the transferee of a franchise to act thereunder and expend large sums of money and exacting from it a bond to comply with the conditions of the franchise will operate to estop a municipality from denying that the franchise was transferable and the transferee had succeeded.to all the rights of the transferring corporation.</p> <p>Where the State, and not a municipality, has granted an assignable right in perpetuity to use the streets of that municipality, the grant is not affected by the status of the city being changed so to give it the greater rights than