it is the contract of the legal entity, of the artificial being created by the charter-and not the contract of the individual South Carolina: State v. Hood, 15 Rich. L. (S. C.) 177, 188 (corporation is wholly distinct from natural persons composing it, per Inglis, J.). Tennessee: City of Nashville v. Ward, 16 Lea (84 Tenn.), 27, 30 (is not distinct, per Deaderick, C. J.). Corporation is an entity irrespective of, and entirely distinct from, the persons who own its stock, and it is well settled that all the shares in a corporation may be held by a single person and yet the corporation continue to exist; nor does the fact that one person owns all of the stock, make him and the corporation one and the same person. The corporation does not lose its legally distinct and separate personality by reason of the ownership of the bulk or whole of its stock by another; nor does the fact that all the shares of a corporation pass into the ownership of one person, operate to dissolve the corporation. It is also immaterial whether the sole owner of stock is a man or another corporation, and the corporation owning such stock is as distinct from the corporation whose stock is owned as the man is from the corporation of which he is the sole member. Commonwealth v. Monongahela Bridge Co., 216 Pa. 108, 114, 115, 64 Atl. 909, per Potter, J., citing or quoting Exchange Bank of Macon v. Macon Construction Co., 97 Ga. 1, 6, 25 S. E. 326; Kendall v. Klapperthal Co., 202 Pa. 596, 607, 52 Atl. 92; Rhawn v. Edge Hill Furnace Co., 201 Pa. 637, 644, 51 Atl. 360; Monongahela Bridge Co. v. Pittsburg Birmingham Traction Co., 196 Pa. 25, 46 Atl. 99; 10 Cyc. 1277. "Franchises are usually conferred upon corporations for the purpose of enabling them to do certain things. The franchises are vested in the corporate entity rather than in the officers." Londoner v. People, 15 Colo. 246, 247, 25 Pac. 183, per Hayt, J. "The doctrine of corporate entity is not so sacred that a court of equity, looking through forms to the substance of things, may not, in a proper case, ignore it to preserve the rights of innocent parties or to circumvent fraud." Rieger, Kapner & Altmark, In re, 157 Fed. 609, 19 Am. B. Rep. 622, 628. The court, per Sater, Dist. J. (p. 629), cites First National Bank of Chicago v. Trebein Co., 59 Ohio St. 316, 52 N. E. 834, and the following is a part of the quotation in the said case, given by the court: "In contemplation of law, a corporation is a legal entity, an ideal person, separate from the real persons who compose it. This fiction, however, is limited to the uses and purposes for which it was adopted-convenience in the transaction of business, and in suing and being sued in its corporate name, and the continuance of its rights and liabilities, unaffected by changes in its corporate members. But the fiction cannot be abused. A corporation cannot be formed for the purpose of accomplishing a fraud or other illegal act under the disguise of the fiction." The court in the principal case cites also the following authorities: Cincinnati, Volksblatt Co. v. Hoffmeister, 62 Ohio St. 189, 200, 56 N. E. 1033, 48 L. R. A. 732, 78 Am. St. Rep. 707; State v. Standard Oil Co., 49 Ohio St. 137, 177-179, 30 N. E. 279, 15 L. R. A. 145, 34 Am. St. Rep. 541; Brundred v. Rice, 49 members; the only rights it can claim are given to it in that character, and not the rights which belong to its members as citizens of a State.11 Even though the word "franchise" is sometimes used as synonymous with privileges and immunities of a personal character, it is nevertheless something which cannot be enjoyed by a citizen without a legislative grant; so that a membership in a religious, benevolent, literary and scientific corporation or association, incorporated under general or special laws, is not a franchise, and a member of a corporation or association without legislative grant, organized to transact commercial business, has not a franchise but a mere privilege. Therefore, the right of membership in a private corporation, such as a Board of Trade, is not a franchise.12 So, in New York, a distinction is made between membership in a municipal, eleemosynary, or private corporation, where the member is declared to be in the enjoyment of a franchise, the right to which is not derived from the body, but is created by statute or exists by prescription, and membership in an unincorporated voluntary association, such as an association or exchange called an "Open Board of Brokers," where the privilege of membership is not given by statute or derived through prescription, as in a corporation, but is created and conferred by the organization itself and may be conferred or withheld at pleasure and therefore is not a franchise arising from a grant from a sovereign or government. 13 Again, it Ohio St. 640, 32 N. E. 169, 34 Am. St. Rep. 589; Thompson on Corp. § 1077; Cook on Corp. (4th ed.), 23; 7 Ency. Am. & Eng. Law, 633, 634. See also United States v. Milwaukee Refrigerator Co., 142 Fed. 247 (holding corporation a legal entity as a general rule, but will be regarded in law as an association of persons under certain circumstances. "Bank of Augusta v. Earle, 13 Pet. (38 U. S.) 519, 10 L. ed. 274. 12 Board of Trade of Chicago v. People ex rel. Sturgis, 91 Ill. 80, 83 (the question here was one of the right of a member of a board of trade to be restored to membership and whether such membership was a franchise within the meaning of a law giving the right to prosecute appeals and writs of error to the Supreme Court). See Chicago & Western Indiana Ry. Co. v. Dunbar, 95 Ill. 571, 575, per Dickey, J. Disfranchisement of member of corporation, what is. See Richards v. Clarksburg, 30 W. Va. 491, 4 S. E. 774; White v. Brownell, 4 Abb. Pr. (N. S.) (N. Y.) 162, 192. 13 White v. Brownell, 4 Abb. Pr. is declared that the right to be a corporation by a particular name is a franchise, but that this is an entirely distinct and different right from the right to use a franchise in transacting business which can only exist by specific grant or prescription.14 And it is further decided that where, under the law, a corporation may acquire a right to the exclusive use of another than its corporate name as a trade name, but not as a corporate name, and the object of the statute is not to prevent the fraudulent use of trade names but to prevent the identity of corporate names, the commissioner of corporations may properly approve a name as that of a corporation, notwithstanding that name is then in use as a trade name by a corporation with a different corporate name; and the corporate name inserted in the certificate of incorporation from the Secretary of State under authority of the statute is conclusive of the right to the corporate name and gives a franchise to bear the name which can no more be impeached by private persons than can the franchise to be a corporation, and in bearing such a name a franchise conferred by law is exercised precluding any right of the older corporation to have a petition granted for leave to file an information in the nature of a quo warranto to restrain the exercise of a franchise and the use of the corporate name.15 As to municipal corporations, special franchises may be conferred upon a city in respect to its waterworks, sewers and public parks, to enable it to accomplish the purpose for which it was created. So the right of a city to take possession of, and improve as a public park, lands lying outside its limits, is derived only from a sovereign N. S. (N. Y. Ct. Com. Pleas) 162, 191-193, 2 Daly (N. Y.), 329, 358, per Daly, F. J. 14 Hazelton Boiler Co. v. Tripod Boiler Co., 137 Ill. 231, 233, 28 N. E. 248, per Schofield, C. J. See Union Water Co. v. Kean, 52 N. J. Eq. 111, 129–132, 27 Atl. 1015, citing numerous cases. 15 Boston Rubber Shoe Co. v. Boston Rubber Co., 149 Mass. 436, 21 N. E. 875, cited in American Order Scottish Clans v. Merrill, 151 Mass. 558, 561, 8 L. R. A. 320, 24 N. E. 918. Compare Hazleton Boiler Co. v. That equitable relief may be had to prevent use of corporate name, given by special charter, and exercise of a franchise and that complain- Hazleton Tripod Boiler Co., 137 Ill. ant not restricted to quo warranto. 231, 28 N. E. 248. grant, and so far as concerns the city is a "public franchise." 16 And, by way of further illustration, the franchise right to erect and maintain electric light and power plants may be conferred upon cities of a certain class.17 And, generally, municipalities may, within constitutional limitations, be empowered, or granted the franchise, to own and operate electric lighting plants not only for use of the city but also for private use.18 Again, where a city acts in the capacity of a private corporation, in exercising its powers or franchise, it is placed by the law upon the same plane, in the matter of its liability for damages, as would any person or collection of persons which is the grantee of a like special franchise.19 10 Mayor of Detroit v. Park Commissioners, 44 Mich. 602, 7 N. W. 180. An information in nature of quo warranto to inquire by what authority the city usurped certain franchises. See People v. Spring Valley, 129 Ill. 169, 21 N. E. 843, where the information charged a city with exercising a franchise not authorized by its charter, and it was held proper to make the city a defendant by its corporate name, but the question of franchise as such was not discussed, being evidently conceded to exist. "A municipal corporation, for instance, may have the franchise of a market, or of a local court." Pierce v. Emery, 32 N. H. 484, 507, per Perley, C. J. Municipality may be authorized to erect and maintain a system of waterworks. See Keen v. Waycross, 101 Ga. 588, 29 S. E. 42. City may be authorized to construct sewers. See Kennedy v. Bollmar, 61 N. J. L. 20, 38 Atl. 756. 17 State v. City of Hiawatha & General Elec. Co., 53 Kan. 477; State v. Taylor, 36 Wash. 607, 79 Pac. 286. 18 United States: ThompsonHouston Elec. Light Co. v. City of Newton, 42 Fed. 723, 3 Am. Elec. Florida: Jacksonville Elec. Light Indiana: Crawfordsville v. Braden, 130 Ind. 149, 28 N. E. 849. Michigan: Mitchell v. Negaumee, 113 Mich. 359, 4 Det. L. N. 318, 38 L. R. A. 157, 71 N. W. 646. New York: Potsdam Elec. Light & Power Co. v. Village of Potsdam, 97 N. Y. Supp. 199, 49 Misc. 18. See Tuttle v. Brush Elec. Illum. Co., 50 N. Y. Super. Ct. 464, 1 Am. Elec. Cas. 508, 514, 515. Pennsylvania: Linn v. Chambersburgh Borough, 160 Pa. 511, 4 Am. Elec. Cas. 647, 28 Atl. 842. See also Black v. Chester, 175 Pa. 101, 34 Atl. 354. Tennessee: Smith v. Nashville, 88 Tenn. (4 Pick.) 464, 12 S. W. 924. See Opinion of Justices, 150 Mass. 593, 24 N. E. 1084. 19 Chicago, City of, v. Selz. Schwab & Co., 104 Ill. App. 376, aff'd 202 Ill. 545, 67 N. E. 386; Dickinson v. City of Boston, 188 Mass. 595, 1 L. R. A. § 12. Corporations Continued-What Franchises are Embraced Generally.—A corporation is not only itself a franchise, but it consists and is made up of its rights and franchises and it may hold other franchises as rights and franchises of the corporation.20 So it is said, by the court, in a Connecticut (N. S.) 664, 75 N. E. 68; Bullmaster York, 3 Duer (N. Y.), 119, 144, per v. St. Joseph, 70 Mo. App. 60. Bosworth, J. 20 United States: See Memphis & Little Rock Rd. Co. v. Commissioners, 112 U. S. 609, 610, 619, 28 L. ed. 837, 5 Sup. Ct. 299; Buchanan v. Knoxville & Ohio Rd. Co., 71 Fed. 324, 334, 18 C. C. A. 122, per Severens, Dist. J. California: Spring Water Works v. Schottler, 62 Cal. 69, 106, per Thornton, J., quoting from Pierce v. Emery, 32 N. H. 484, 507, per Perley, J. Connecticut: Driscoll v. Norwich & Worcester Rd. Co., 65 Conn. 230, 256, 32 Atl. 354, per Torrance, J., in dissenting opinion. Florida: Sullivan v. Lear, 23 Fla. 463, 2 So. 846, 11 Am. St. Rep. 388. See quotation from this case in note to § 39, herein, as to distinction between franchise to be and to do. Illinois: Chicago & Western Indiana Rd. Co. v. Dunbar, 95 Ill. 571, 576. Iowa: Cedar Rapids Water Co. v. Cedar Rapids, 118 Iowa, 234, 239, 91 N. W. 1081, per Weaver, J. Kentucky: Louisville Tobacco Warehouse Co. v. Commonwealth, 20 Ky. L. Rep. 1047, 1051, 48 S. W. 420, quoting from Pierce v. Emery, 32 N. H. 484, 507, per Perley, J. New Jersey: State Board of Assessors v. Central Rd. Co., 48 N. J. L. 146, 271, per Scudder, J. New York: People ex rel. Metropolitan Street Ry. Co. v. Tax Commissioners, 174 N. Y. 417, 67 N. E. 69; State v. Mayor, etc., of New Vermont: State v. Boston, Concord & Montreal Rd. Co., 25 Vt. 433, 442, per Redfield, Ch. J. Examine the following cases: United States: Mercantile Bank v. Tennessee, 161 U. S. 171, 40 L. ed. 656, 16 Sup. Ct. 466, per Peckham, J.; Home Ins. Co. v. New York, 134 U. S. 594, 599, 33 L. ed. 1025, 10 Sup. Ct. 593, per Field, J. [case affirms People v. Home Ins. Co., 92 N. Y. 328, also aff'd by divided court, 119 U. S. 129, 30 L. ed. 350, 8 Sup. Ct. 1385, restored to calendar 122 U. S. 636 (Mem.). The principal case is cited in People v. Miller, 83 N. Y. Supp. 184, 187, 85 App. Div. 211, which case is reversed 177 N. Y. 51, 69 N. E. 124, which is cited in People v. Miller, 86 N. Y. Supp. 420, 422, 90 App. Div. 588, this last case is reversed 179 N. Y. 49, 71 N. E. 463. The principal case is also quoted from in Cobb v. Commissioners of Durham County, 122 N. Car. 307, 309, 30 S. E. 338, per Montgomery, J.]; Davis v. Gray, 16 Wall. (83 U. S.) 203, 228, 21 L. ed. 447, per Swayne, J.; Thompson v. Schenectady Ry. Co., 124 Fed. 274, 279, per Ray, Dist. J., see same case 131 Fed. 577; Central Trust Co. of New York v. Western North Carolina Rd. Co., 89 Fed. 24, 31, per Simonton, Cir. J.; Southern Pacific Rd. Co. v. Orton, 32 Fed. 457, 474, per Sawyer, J. California: San Joaquin & King's River Canal Irrig. Co. v. Merced |