A grant of public franchises may be in such form that when duly accepted it constitutes a contract within the protection of this clause of the constitution.1 Thus a grant of franchises, such as a right of way, to a railroad by a municipal corporation,2 or by the state,3 or a grant by a municipal corporation to a street railway company of a right of way in the streets,* each upon acceptance by the grantee and the incurring of expense in reliance thereon amount to a contract, the obligation of which is protected by this clause of the Constitution. Thus a city ordinance reducing the rate of fare on a street railway has been held to be an impairment of the obligation of a contract.13 If a statute grants an exclusive franchise and such statute is valid, a subsequent act of a municipality interfering with such franchise impairs the obligation of the original contract.1* Thus the construction of waterworks by a city impairs an exclusive grant of such franchise.15

1 City Ry. Co. v. Ry., 166 U. S. 557; New Orleans Water Works Co. v. Rivers, 115 U. S. 674; Chicago v. Sheldon, 9 Wall. (U. S.) 50; Terre Haute, etc., R. R. v. State, 159 Ind. 438; 65 N. E. 401; Burlington v. Burlington Street Ry. Co., 49 la. 144; 31 Am. Rep. 145; New Orleans v. Telegraph Co., 40 La. Ann. 41; 8 Am. St. Rep. 502; 3 So. 533; Commonwealth v. Boston, 97 Mass. 555; St. Paul v. Ry., 63 Minn. 330; 34 L. R. A. 184; 63 N. W. 267; 65 N. W. 649; 68 N. W. 458; Cape May. etc., Ry. v. Cape May, 35 N. J. Eq. 419; Cincinnati, etc., Ry. Co. v. Carthage, 36 O. S. 631; Cincinnati Street Ry. Co. v. Smith, 29 O. S. 291; Ashland v. Wheeler, 88 Wis. 607; 60 N. W. 818.

2 Iron Mountain Ry. v. Memphis, 96 Fed. 113; 37 C. C. A. 410; Port of Mobile v. Ry. Co., 84 Ala. 115; 5 Am. St. Rep. 342; 4 So. 106; Workman v. Ry. Co., 129 Cal. 536; 62 Pac. 185, 316; Areata v. Ry. Co., 92 Cal. 639; 28 Pac. 676; Snell v. Chicago, 133 111. 413; 8 L. R. A. 858; 24 N. E. 532; East Louisiana R. Co. v. New Orleans, 46 La. Ann. 526; 15 So. 157; Cincinnati, etc., Ry. Co. v. Carthage, 36 O. S. 631; Houston, etc., R. R. Co. v. Ry. Co., 70 Tex. 649; 8 S. W. 498; Rio Grande R. Co. v. Brownsville, 45 Tex. 88.

3 New York, etc., Ry. v. Pennsylvania, 153 U. S. 628; Commonwealth v. Ry., - Ky. - ; 54 L. R. A. 916; 64 S. W. 451.

4 City Ry. Co. v. Ry., 166 U. S. 557; 64 Fed. 647, and affirming 56 Fed. 746; Chicago v. Sheldon, 9 Wall. (U. S.) 50; Louisville Trust Co. v. Cincinnati, 76 Fed. 296; 22 C. C. A. 334; Baltimore, etc., Guarantee Co. v. Baltimore, 64 Fed. Rep. 153; Africa v. Knoxville, 70 Fed. Rep. 729; Detroit, etc., Ry. v. Detroit, 64 Fed. 628; 26 L. R. A. 667; 12 C. C. A. 365; Coast Line Ry. Co. v. Savannah, 30 Fed. Rep. 646; Citizens' Street Ry. Co. v. Memphis, 53 Fed. Rep. 715; Citizens' Street Ry. Co. v. Ry., 56 Fed. 746; Birmingham, etc.. Ry. v. Ry., 79 Ala. 465; 58 Am. Rep. 615; The People v. Ry. Co., 118 111. 113; 7 N. E. 116; Parmelee v. Chicago, 60 111. 267; City Ry. Co. v. Ry. Co., - Ind. - ; 52 N. E. 157; Williams v. Ry. Co., 130 Ind. 71; 30 Am. St. Rep. 201; 15 L. R. A. 64; 29 N. E. 408; Western Paving & Supply Co., v. Citizens' Street Ry. Co.. 128 Ind. 525; 25 Am. St. Rep. 462; 10 L. R. A. 770; 26 N. E. 188; 28 N. E. 88; Sioux City Street Ry. Co. v. Sioux City, 78 la. 367; 43 N. W. 224; Kansas City v. Corrigan, 86 Mo. 67; Hovelman v. Ry. Co., 79 Mo. 632; People v. O'Brien, 111 N. Y. 1: 7 Am. St. Rep. 684; 2 L. R. A. 255; 18 N. E. 692; reversing 45 Hun 519; Mayor, etc.. of New York v. Ry. Co., 32 N. Y. 261; Wright v. Light Co., or a grant to a railroad of the right of erecting a freight house upon a levee,5 or a grant of a right to construct telegraph6 or telephone lines in public streets,7 or electric lights and power,8 or to construct and maintain electric conductors,9 or to lay water pipes,10 or gas pipes,11 or permission to an individual to build a vault under an alley,12 in the public streets, may

95 Wis. 29; 60 Am. St. Rep. 74; 36 L. R. A. 47; 69 N. W. 791; State v. Hilbert, 72 Wis. 184; 39 N. W. 326; State v. Ry., 72 Wis. 612; 1 L. R. A. 771; 40 N. W. 487.

5 St. Paul v. Ry., 63 Minn. 330; 34 L. R. A. 184; 63 N. W. 267; 65 N. W. 649; 68 N. W. 458.

6 New Orleans v. Telegraph Co., 40 La. Ann. 41; 8 Am. St. Rep. 502; 3 So. 533; Michigan Telegraph Co. v. St. Joseph, 121 Mich. 502; 80 Am. St. Rep. 520; 47 L. R. A. 87; 80 N. W. 383; Hudson Telephone Co. v. Jersey City, 49 N. J. L. 303; 60 Am. Rep. 619; 8 Atl. 123.

7 Michigan Telephone Co. v. Charlotte, 93 Fed. 11; Chesapeake, etc., Co. v. Baltimore, 89 Md. 689; 43 Atl. 784; 44 Atl. 1033; Northwestern Telephone Exchange Co. v. Minneapolis, 81 Minn. 140; 53 L. R. A. 175; 83 N. W. 527; 86 N. W. 69; Commonwealth v. Warwick, 185 Pa. St. 623; 40 Atl. 93.

8 Southwest Missouri Light Co. v. Joplin, 101 Fed. 23; Levis v. Newton, 75 Fed. 884; Capital City, etc., Co. v. Tallahassee, 42 Fla. 462; 28 So. 810; Rutland, etc., Co. v. Light Co., 65 Vt. 377; 36 Am. St. Rep. 868; 20 L. R. A. 821; 26 Atl. 635; Commercial, etc., Co. v. Tacoma, 17 Wash. 661; 50 Pac. 592; Clarksburg, etc., Co. v. Clarksburg. 47 W. Va. 739; 50 L. R. A. 142; 35 S. E. 994.

9 People v. Squire. 145 U. S. 175; affirming People v. Squire. 107 N. Y. 593; 1 Am. St. Rep. 893; 14 N.

E. 820; State v. St. Louis, 145 Mo. 551; 42 L. R. A. 113; 46 S. W. 981.

10 Los Angeles v. Water Co., 177 U. S. 558; W7alla Walla v. Water Co., 172 U. S. 1; St. Tammany Water-Works Co. v. Waterworks Co., 120 U. S. 64; New Orleans Waterworks Co. v. Rivers, 115 U. S. 674; Little Falls, etc., Co. v. Little Falls, 102 Fed. 663; Stein v. Mobile, 49 Ala. 362; 20 Am. Rep. 283; Citizens' Water Co. v. Hydraulic Co., 55 Conn. 1; 10 Atl. 170; Quincy v. Bull, 106 111. 337; Warsaw Waterworks Co. v. Warsaw, 161 N. Y. 176; 55 N. E. 486; Skaneateles Waterworks Co. v. Skaneateles, 161 N. Y. 154; 46 L. R. A. 687; 55 N. E. 562; Ashland v. Wheeler, 88 Wis. 607; 60 N. W. 818.

11 Franchise granted by the city council. St. Paul Gaslight Co. v. St. Paul, 181 U. S. 142; Missouri v. Murphy, 170 U. S. 78; (affirming 130 Mo. 10; 31 L. R. A. 798; 31 S. W. 594) ; Chicago, etc., Co. v. Lake, 130 111. 42; 22 N. E. 616; Indianapolis v. Trust Co., 140 Ind. 107; 49 Am. St. Rep. 183; 27 L. R. A. 514; 39 N. E. 433; Toledo v. Gas Co., 5 Ohio C. C. 557; Providence Gas Co. v. Thurber, 2 R. I. 15; 55 Am. Dec. 621. Franchise granted by the state legislature. Louisville Gas Co. v. Gas Co., 115 U. S. 683; New Orleans Gas Co. v. Light Co., 115 U. S. 650.

12 Gregsten v. Chicago, 145 111. 451 ; 36 Am. St. Rep. 496; 34 N. E. 426.

Since an invalid contract is not protected by this clause, an unauthorized grant of an exclusive franchise is not protected thereby.16 The mere grant of a franchise is not presumed to be the grant of an exclusive franchise.17 Thus a grant of a franchise to operate a waterworks is not a contract preventing the municipality from constructing a competing plant.18 So a general statute prohibiting a ferry from being established within half a mile of one already established is not a contract that no competing ferry at a less distance will ever be permitted.19

13 (City of) Cleveland v. Ry., 194 U. S. 517.

14 Louisville Gas Co. v. Gas Co., 115 U. S. 683; New Orleans Gas Co. v. Light Co., 115 U. S. 650; In re Brooklyn, 143 N. Y. 596; 26 L. R. A. 270; 38 N. E. 983; Philadelphia, etc., Ry.'s Appeal. 102 Pa. St. 123; Potter County Water Co. V. Austin, 206 Pa. St. 297; 55 Atl. 991; Providence Gas Co. v. Thurber, S R. I. 15; 55 Am. Dec. 621.

15 Walla Walla v. Water Co., 172 U. S. 1; Westerly Waterworks v. Westerly, 80 Fed. 611; Bellevue Water Co. v. Bellevue, 3 Ida. 739; 35 Pac. 693; White v. Meadville, 177 Pa. St. 643; 34 L. R. A. 567; 35 Atl. 695; Memphis v. Water Co., 5 Heisk. (Tenn.) 495.

16 Hamilton Gas Light Co. v. Hamilton. 146 U. S. 258; Norwich Gaslight Co. v. Gas Co.. 25 Conn. 19; In re Brooklyn. 143 N. Y. 596; 26 L. R. A. 270; 38 N. E. 983;

Syracuse Water Co. v. Syracuse, 116 N. Y. 167; 5 L. R. A. 546; 22 N. E. 381; Lehigh Water Co.'s Appeal, 102 Pa. St. 515; North Springs Water Co. v. Tacoma, 21 Wash. 517; 47 L. R. A. 214; 58 Pac. 773; Clarksburg Electric Light Co. v. Clarksburg, 47 W. Va. 739; 50 L. R. A. 142; 35 S. E. 994; Gas Co. v. Parkersburg, 30 W. Va. 435; 4 S. E. 650.

17 Williams v. Wing, 177 U. S. 601; Belmont Bridge v. Wheeling Bridge, 138 U. S. 287; Fanning v. Gregoire, 16 How. 524. " A contract binding the state is only created by clear language and is not to be extended by implication beyond the terms of the statute." Williams v. Wingo, 177 U. S. 601, 603.

18 North Springs Water Co. v. Tacoma. 21 Wash. 517; 47 L. R. A. 214; 58 Pac. 773.

Even if a franchise is non-exclusive, conduct of a municipality interfering with such franchise other than by fair competition impairs the obligation of the original contract. Thus a non-exclusive grant of a franchise to construct waterworks cannot be impaired by subsequently establishing a municipal waterworks to be supported in part by compulsory taxation upon realty near hydrants.20