Public Interest in Private Property

In the 1876 case of Munn v. State of Illinois, 94 U.S. 113, (See Part I - section on "Franchise,") the Court ruled that a particular privately owned grain warehouse was in the nature of a monopoly. As the community had no choice but to use the service, the business had become akin to a "public franchise," clothed with a "public interest" and subject to "public duties," regulatable by the State.

The Court declared:

"Whenever any person pursues a public calling, and sustains such relations to the public that the people must of necessity deal with him, and are under a moral duress to submit to his terms if he is unrestrained by law, then, in order to prevent extortion and an abuse of his position, the price he may charge for his services may be regulated by law. Commonwealth v. Duane, 98 Mass. 1; State v. Perry, 5 Jones (N. C.) L. 252; State v. Nixon, id. 258; Bac. Abr. tit. 'Carriers,' D.; Murray's Lessee et al. v. Hoboken Land and Imp. Co., 18 How. 272; Kirkham v. Shawcrass, 6 T. R. 17; 2 Peake N. P. C. 185; 10 M. & W. 415; Ogden v. Saunders, 12 Wheat. 259; Mills v. County Commissioners, 4 Ill. 53; Trustees of Schools v. Tatman, 13 id. 37."

In a series of cases, the Court began to expand the application of the concept of "public interest" in commercial uses of private property. Using the justification of "public necessity" or "monopoly," new businesses became folded under the traditional group of licensed and public franchises, ("common" carriers, "public" houses and wharfs, etc.) Early regulation most commonly focused on rates and access.

The essential distinction between the state's right to regulate as a condition of the grant of the "privilege" of true monopoly created "in law," and the lack of such right over a monopoly existing only "in fact" (by circumstance) was argued. Jurists also pointed to the organic difference between regulatory scope as regards "public" and "private" franchise - "public" and "private" property. Although boundaries were established and are still recognized in the doctrine of "unconstitutional conditions," these lines have seemingly become increasingly blurred under a justification of overriding "public interest."