Charles River Bridge v. Warren Bridge, 11 Pet. (13 U.S.) 420 (1837)

[The Charles River separates the cities of Boston and Charlestown in Massachusetts. The Charles River bridge was built in 1785 after the legislature chartered the Charles River Bridge Company, a private corporation which earned income by exacting a toll to cross the bridge. That toll could be charged for 40 years, after which crossing was to be free and the bridge to be owned by the commonwealth. The company was also required to pay Harvard College, which had operated a ferry system across the Charles before the bridge was build, ^200. In 1792, the charter was extended to seventy years from the opening of the bridge, at which time title would transfer to the commonwealth. The corporation performed all of the duties imposed on them by the terms of its charter. Later, other bridges were built, including one from Boston to Cambridge, some of which were toll bridges, and some of which were not. The stock of the Charles River Bridge company rose from $333 in 1792 to $1650 in 1805 to $2080 in 1814. As this occurred, the public began to view the bridge as a sign of monopoly. The company didn’t help matters by refusing either to reduce the toll or to make repairs on the bridge. As the Democratic-Republicans began to gain power in Massachusetts, the bridge became a symbol of the changes the Democrats would wield if elected to power. In 1828, the Democrats swamped the Whigs (successors to the Federalists) in the Bay State. That year, the Massachusetts legislature chartered a company to build a second bridge, called the Warren Bridge, between Boston and Charlestown. Unfortunately for it, the Charles River Bridge Company’s charter contained no express provision covering its exclusivity. The Warren Bridge was located 262 feet from the Charles River bridge on the Charlestown side, and 825 feet apart on the Boston side. Under the terms of the Warren bridge charter, it was to be a toll bridge until it was paid for, but for no longer than six years, at which point the title to the bridge would be deeded to the commonwealth. This meant that the value of the Charles River Bridge company would soon be useless. The proprietors of the Charles River Bridge sued, claiming that the law violated the Contract Clause of the Constitution. In the Massachusetts Supreme Judicial Court, the vote was split 2-2, and the judges wrote seriatim opinions. To comply with § 25 of the Judiciary Act, the Court decided to sustain the act, which permitted appeal to the Supreme Court. The Charles River Bridge was argued by Daniel Webster (the Senator from Massachusetts), Warren Dutton and Lemuel Shaw (soon to become the Chief Justice of the Massachusetts Supreme Judicial Court), and the Warren Bridge was represented by Simon Greenleaf, a good friend of Justice Joseph Story, and John Davis. The case was first argued in the Supreme Court in 1831, when John Marshall was Chief Justice. However, it was not decided by the divided Court until 1837, after Marshall’s death and after Roger Brooke Taney was confirmed as Chief Justice to replace Marshall.]

TANEY, Ch. J., delivered the opinion of the court.

The questions involved in this case are of the gravest character, and the court have given to them the most anxious and deliberate consideration. The value of the right claimed by the plaintiffs is large in amount; and many persons may, no doubt, be seriously affected in their pecuniary interests, by any decision which the court may pronounce; and the questions which have been raised as to the power of the several states, in relation to the corporations they have chartered, are pregnant with important consequences; not only to the individuals who are concerned in the corporate franchises, but to the communities in which they exist. The court are fully sensible, that it is their duty, in exercising the high powers conferred on them by the constitution of the United States, to deal with these great and extensive interests, with the utmost caution; guarding, so far as they have the power to do so, the rights of property, and at the same time, carefully abstaining from any encroachment on the rights reserved to the states.

[Plaintiffs] must show, that the state had entered into a contract with them, or those under whom they claim, not to establish a free bridge at the place where the Warren bridge is erected. Such, and such only, are the principles upon which the plaintiffs in error can claim relief in this case.

[By an] act of the legislature of Massachusetts, of 1785, ... plaintiffs were incorporated by the name of "The Proprietors of the Charles River Bridge;" and it is here, and in the law of 1792, prolonging their charter, that we must look for the extent and nature of the franchise conferred upon the plaintiffs. [This act] is the grant of certain franchises, by the public, to a private corporation, and in a matter where the public interest is concerned. The rule of construction in such cases is ... "now fully established to be this--that any ambiguity in the terms of the contract, must operate against the adventurers, and in favor of the public, and the plaintiffs can claim nothing that is not clearly given them by the act."

[I]s there anything in our local situation, or in the nature of our political institutions, which should lead us to depart from the principle, where corporations are concerned? We think not; and it would present a singular spectacle, if, while the courts in England are restraining, within the strictest limits, the spirit of monopoly, and exclusive privileges in nature of monopolies, and confining corporations to the privileges plainly given to them in their charter; the courts of this country should be found enlarging these privileges by implication; and construing a statute more unfavorably to the public, and to the rights of community, than would be done in a like case in an English court of justice.

The case now before the court is ... a charter from a state; the act of incorporation is silent in relation to the contested power. The argument in favor of the proprietors of the Charles River bridge, is ... that the power claimed by the state, if it exists, may be so used as to destroy the value of the franchise they have granted to the corporation. The argument must receive the same answer; and the fact that the power has been already exercised, so as to destroy the value of the franchise, cannot in any degree affect the principle. The existence of the power does not, and cannot, depend upon the circumstance of its having been exercised or not.

[T]he object and end of all government is to promote the happiness and prosperity of the community by which it is established; and it can never be assumed, that the government intended to diminish its power of accomplishing the end for which it was created. And in a country like ours, free, active and enterprising, continually advancing in numbers and wealth, new channels of communication are daily found necessary, both for travel and trade, and are essential to the comfort, convenience and prosperity of the people. A state ought never to be presumed to surrender this power, because, like the taxing power, the whole community have an interest in preserving it undiminished. And when a corporation alleges, that a state has surrendered, for seventy years, its power of improvement and public accommodation, in a great and important line of travel, along which a vast number of its citizens must daily pass, the community have a right to insist, in the language of this court, above quoted, "that its abandonment ought not to be presumed, in a case, in which the deliberate purpose of the state to abandon it does not appear." The continued existence of a government would be of no great value, if, by implications and presumptions, it was disarmed of the powers necessary to accomplish the ends of its creation, and the functions it was designed to perform, transferred to the hands of privileged corporations. While the rights of private property are sacredly guarded, we must not forget, that the community also have rights, and that the happiness and well-being of every citizen depends on their faithful preservation.

This [1785] act of incorporation is in the usual form, and the privileges such as are commonly given to corporations of that kind. It confers on them the ordinary faculties of a corporation, for the purpose of building the bridge; and establishes certain rates of toll, which the company are authorized to take: this is the whole grant. There is no exclusive privilege given to them over the waters of Charles river, above or below their bridge; no right to erect another bridge themselves, nor to prevent other persons from erecting one, no engagement from the state, that another shall not be erected; and no undertaking not to sanction competition, nor to make improvements that may diminish the amount of its income. Upon all these subject, the charter is silent; and nothing is said in it about a line of travel, so much insisted on in the argument, in which they are to have exclusive privileges. No words are used, from which an intention to grant any of these rights can be inferred; if the plaintiff is entitled to them, it must be implied, simply, from the nature of the grant; and cannot be inferred, from the words by which the grant is made.

The relative position of the Warren bridge has already been described. It does not interrupt the passage over the Charles River bridge, nor make the way to it, or from it, less convenient. None of the faculties or franchises granted to that corporation, have been revoked by the legislature; and its right to take the tolls granted by the charter remains unaltered. In short, all the franchises and rights of property, enumerated in the charter, and there mentioned to have been granted to it, remain unimpaired. But its income is destroyed by the Warren bridge; which, being free, draws off the passengers and property which would have gone over it, and renders their franchise of no value. This is the gist of the complainant; for it is not pretended, that the erection of the Warren bridge would have done them any injury, or in any degree affected their right of property, if it had not diminished the amount of their tolls. In order, then, to entitle themselves to relief, it is necessary to show, that the legislature contracted not to do the act of which they complain; and that they impaired, or in other words, violated, that contract, by the erection of the Warren bridge.

The inquiry, then, is, does the charter contain such a contract on the part of the state? Is there any such stipulation to be found in that instrument? It must be admitted on all hands, that there is none; no words that even relate to another bridge, or to the diminution of their tolls, or to the line of travel. If a contract on that subject can be gathered from the charter, it must be by implication; and cannot be found in the words used. Can such an agreement be implied? The rule of construction before stated is an answer to the question: in charters of this description, no rights are taken from the public, or given to the corporation, beyond those which the words of the charter, by their natural and proper construction, purport to convey. The whole community are interested in this inquiry, and they have a right to require that the power of promoting their comfort and convenience, and of advancing the public prosperity, by providing safe, convenient and cheap ways for the transportation of produce, and the purposes of travel, shall not be construed to have been surrendered or diminished by the state; unless it shall appear by plain words, that it was intended to be done.

The Charles River bridge was completed in 1786; the time limited for the duration of the corporation, by their original charter, expired in 1826. When, therefore, the law passed authorizing the erection of the Warren bridge, the proprietors of Charles River bridge held their corporate existence under the law of 1792, which extended their charter for thirty years; and the rights, privileges and franchises of the company, must depend upon the construction of the last-mentioned law, taken in connection with the act of 1785.

The act of 1792, which extends the charter of this bridge, incorporates another company, to build a bridge over Charles river; furnishing another communication with Boston, and distant only between one and two miles from the old bridge. [B]y the same act that extended this charter, the legislature established another bridge, which they knew would lessen its profits; and this, too, before the expiration of the first charter, and only seven years after it was granted; thereby showing, that the state did not suppose, that, by the terms it had used in the first law, it had deprived itself of the power of making such public improvements as might impair the profits of the Charles River bridge; and from the language used in the clauses of the law by which the charter is extended, it would seem, that the legislature were especially careful to exclude any inference that the extension was made upon the ground of compromise with the bridge company, or as a compensation for rights impaired.

Indeed, the practice and usage of almost every state in the Union, old enough to have commenced the work of internal improvement, is opposed to the doctrine contended for on the part of the plaintiffs in error. Turnpike roads have been made in succession, on the same line of travel; the later ones interfering materially with the profits of the first. These corporations have, in some instances, been utterly ruined by the introduction of newer and better modes of transportation and travelling. In some cases, railroads have rendered the turnpike roads on the same line of travel so entirely useless, that the franchise of the turnpike corporation is not worth preserving. Yet in none of these cases have the corporation supposed that their privileges were invaded, or any contract violated on the part of the state.

The millions of property which have been invested in railroads and canals, upon lines of travel which had been before occupied by turnpike corporations, will be put in jeopardy. We shall be thrown back to the improvements of the last century, and obliged to stand still, until the claims of the old turnpike corporations shall be satisfied; and they shall consent to permit these states to avail themselves of the lights of modern science, and to partake of the benefit of those improvements which are now adding to the wealth and prosperity, and the convenience and comfort, of every other part of the civilized world. Nor is this all. This court will find itself compelled to fix, by some arbitrary rule, the width of this new kind of property in a line of travel; for if such a right of property exists, we have no lights to guide us in marking out its extent, unless, indeed, we resort to the old feudal grants, and to the exclusive rights of ferries, by prescription, between towns; and are prepared to decide that when a turnpike road from one town to another, had been made, no railroad or canal, between these two points, could afterwards be established. This court are not prepared to sanction principles which must lead to such results.

The judgment of the supreme judicial court of the commonwealth of Massachusetts, dismissing the plaintiffs’ bill, must, therefore, be affirmed, with costs.

McLEAN, Justice.

Where the legislature, with a view of advancing the public interest by the construction of a bridge, a turnpike-road, or any other work of public utility, grants a charter, no reason is perceived, why such a charter should not be construed by the same rule that governs contracts between individuals. The public, through their agent, enter into the contract with the company; and a valuable consideration is received in the construction of the contemplated improvement. This consideration is paid by the company, and sound policy requires, that its rights should be ascertained and protected, by the same rules as are applied to private contracts.

The complainants’ charter has been called a monopoly; but in no just sense can it be so considered. A monopoly is that which has been granted without consideration; as a monopoly of trade; or of the manufacture of any particular article, to the exclusion of all competition. It is withdrawing that which is a common right, from the community, and vesting it in one or more individuals, to the exclusion of all others. Such monopolies are justly odious, as they operate not only injuriously to trade, but against the general prosperity of society. But the accommodation afforded to the public by the Charles River bridge, and the annuity paid to the college, constitute a valuable consideration for the privilege granted by the charter. The odious features of a monopoly do not, therefore, attach to the charter of the plaintiffs.

[W]as the complainants’ property appropriated, under the charter granted to the respondents, for particular purposes? If the new bridge were deemed necessary, by the legislature, to promote the general convenience, and the defendants were consequently authorized to construct it, and a part of the plaintiffs’ franchise were granted to the defendants; it was an appropriation of private property for public use. It was as much an appropriation of private property for public use, as would have been an appropriation of the ground of an individual, for a turnpike or a railroad, authorized by law.

Believing that this court has no jurisdiction in this case; although I am clear that the merits are on the side of the complainants; I am in favor of dismissing the bill, for want of jurisdiction.

BALDWIN, Justice.

I entirely concur in the judgment of the court.

STORY, Justice. (Dissenting.)

I have examined the case with the most anxious care and deliberation, and with all the lights which the researches of the year, intervening between the first and last argument, have enabled me to obtain; and I am free to confess, that the opinion which I originally formed, after the first argument, is that which now has my most firm and unhesitating conviction.

It is a well-known rule in the construction of private grants, if the meaning of the words be doubtful, to construe them most strongly against the grantor. But it is said, that an opposite rule prevails in cases of grants by the king; for, where there is any doubt, the construction is made most favorably for the king, and against the grantee. The rule is not disputed; but it is a rule of very limited application.

In short, wherever the intent from the words is clear, or possesses a reasonable certainty, the same construction prevails in crown grants, as in private grants; especially, where the grant is presumed to be from the voluntary bounty of the crown, and not from the representation of the subject.

Whenever the grant is upon a valuable consideration, the rule of construction ceases; and the grant is expounded exactly as it would be in the case of a private grant—favorably to the grantee. Why is this rule adopted? Plainly, because the grant is a contract, and is to be interpreted according to its fair meaning. It would be to the dishonor of the government, that it should pocket a fair consideration, and then quibble as to the obscurities and implications of its own contract. Such was the doctrine of my Lord COKE, and of the venerable sages of the law, in other times, when a resistance to prerogative was equivalent to a removal from office. If we are to have the grants of the legislature construed by the rules applicable to royal grants, it is but common justice, to follow them throughout, for the honor of this republic. The justice of the commonwealth will not, I trust, be deemed less extensive than that of the crown.

The present, however, is not the case of a royal grant, but of a legislative grant, by a public statute. The rules of the common law in relation to royal grants have, therefore, in reality, nothing to do with the case. We are to give this act of incorporation a rational and fair construction, according to the general rules which govern in all cases of the exposition of public statutes. We are to ascertain the legislative intent; and that once ascertained, it is our duty to give it a full and liberal operation.

I can conceive of no surer plan to arrest all public improvements, founded on private capital and enterprise, that to make the outlay of that capital uncertain and questionable, both as to security and as to productiveness. No man will hazard his capital in any enterprise, in which, if there be a loss, it must be borne exclusively by himself; and if there be success, he has not the slighest security of enjoying the rewards of that success, for a single moment. If the government means to invite its citizens to enlarge the public comforts and conveniences, to establish bridges, or turnpikes, or canals, or railroads, there must be some pledge, that the property will be safe; that the enjoyment will be co-extensive with the grant; and that success will not be the signal of a general combination to overthrow its rights and to take away its profits. The very agitation of a question of this sort is sufficient to alarm every stockholder in every public enterprise of this sort, throughout the whole country. Already, in my native state, the legislature has found it necessary expressly to concede the exclusive privilege here contended against; in order to insure the accomplishment of a railroad for the benefit of the public. And yet, we are told, that all such exclusive grants are to the detriment of the public.

According to my views of the terms of the charter, the grant, then, is of the franchise of erecting a bridge over Charles river, between Charlestown and Boston, and of taking tolls or pontage from passengers. It is, therefore, limited to those towns; and does not exclude the legislature from any right to grant a bridge over the same river, between any other towns and Boston; as, for example, between Chelsea and Boston, or Cambridge and Boston, or Roxbury and Boston.

[D]oes it, by implication, include an exclusive franchise on each side, to an extent which shall shut out any injurious competition? In other words, does the grant still leave the legislature at liberty to erect other bridges on either side, free or with tolls, even in juxta-position with the timbers and planks of this bridge? or is there an implied obligation on the part of the legislature, to abstain from all acts of this sort, which shall impair or destroy the value of the grant?

The argument of the defendants is, that the plaintiffs are to take nothing by implication. Either (say they) the exclusive grant extends only to the local limits of the bridge; or it extends the whole length of the river, or, at least, up to old Cambridge bridge. The latter construction would be absurd and monstrous; and therefore, the former must be the true one. Now, I utterly deny the alternative involved in the dilemma. The right to build a bridge over a river, and to take toll, may well include an exclusive franchise, beyond the local limits of the bridge; and yet not extend through the whole course of the river, or even to any considerable distance on the river. There is no difficulty, in common sense, or in law, in maintaining such a doctrine. But then, it is asked, what limits can be assigned to such a franchise? The answer is obvious; the grant carries with it an exclusive franchise, to a reasonable distance on the river; so that the ordinary travel to the bridge shall not be diverted by any new bridge, to the injury or ruin of the franchise. A new bridge, which would be a nuisance to the old bridge, would be within the reach of its exclusive right. The question would not be so much as to the fact of distance, as it would be as to the fact of nuisance. There is nothing new in such expositions of incorporeal rights; and nothing new in thus administering, upon this foundation, remedies in regard thereto.

But it is said, that there is no prohibitory covenant in the charter, and no implications are to be made of any such prohibition. [Y]et it is conceded, that the legislature cannot revoke or resume this grant. Why not, I pray to know? There is no negative covenant in the charter; there is no express prohibition to be found there. The reason is plain. The prohibition arises by natural, if not by necessary, implication. It would be against the first principles of justice, to presume that the legislature reserved a right to destroy its own grant. That was the doctrine in Fletcher v. Peck, 6 Cranch 87, in this court; and in other cases turning upon the same great principle of political and constitutional duty and right. Can the legislature have power to do that indirectly, which it cannot do directly? If it cannot take away, or resume, the franchise itself, can it take away its whole substance and value? If the law will create an implication, that the legislature shall not resume its own grant, is it not equally as natural and as necessary an implication, that the legislature shall not do any act directly to prejudice its own grant, or to destroy its value? If there were no authority in favor of so reasonable a doctrine, I would say, in the language of the late lamented Mr. Chief Justice PARKER, in this very case: "I ground it on the principles of our government and constitution, and on the immutable principles of justice, which ought to bind governments, as well as people."

The rule of law is clear. The application of it must depend upon the particular circumstances of each case. Wherever any other bridge or ferry is so near, that it injures the franchise, or diminishes the toll, in a positive and essential decree, there it is a nuisance, and is actionable. It invades the franchise, and ought to be abated. But whether there be such an injury or not, is a matter, not of law, but of fact. Distance is no otherwise important than as it bears on the question of fact. All that is required, is, that there should be a sensible, positive injury. In the present case, there is no room to doubt upon this point, for the bridges are contiguous; and Warren bridge, after it was opened, took away three-fourths of the profits of the travel from Charles River bridge; and when it became free (as it now is), it necessarily took away all the tolls, or all except an unimportant and trivial amount.

But then again, it is said, that all this rests upon implication, and not upon the words of the charter. I admit, that it does; but I again say, that the implication is natural and necessary. It is indispensable to the proper effect of the grant. The franchise cannot subsist without it, at least, for any valuable or practical purpose. What objection can there be to implications, if they arise from the very nature and objects of the grant? If it be indispensable to the full enjoyment of the right to take toll, that it should be exclusive within certain limits, is it not just and reasonable, that it should be so construed? If the legislative power to errect a new bridge would annihilate a franchise already granted, is it not, unless expressly reserved, necessarily excluded, by intendment of law?

To the answer already given to the objection, that, unless such a reservation of power exists, there will be a stop put to the progress of all public improvements; I wish, in this connection, to add, that there never can any such consequence follow upon the opposite doctrine. If the public exigencies and interests require that the franchise of Charles River bridge should be taken away, or impaired, it may be lawfully done, upon making due compensation to the proprietors.

To sum up, then, the whole argument on this head: I maintain, that, upon the principles of common reason and legal interpretation, the present grant carries with it a necessary implication, that the legislature shall do no act to destroy or essentially to impair the franchise; that (as one of the learned judges of the state court expressed it) there is an implied agreement that the state will not grant another bridge between Boston and Charlestown, so near as to draw away the custom from the old one; and, as another learned judge expressed it) that there is an implied agreement of the state to grant the undisturbed use of the bridge and its tolls, so far as respects any acts of its own, or of any persons acting under its authority. In other words, the state impliedly contracts not to resume its grant, or to do any act to the prejudice or destruction of its grant. I maintain, that there is no authority or principle established in relation to the construction of crown grants, or legislative grants, which does not concede and justify this doctrine. I maintain, that a different doctrine is utterly repugnant to all the principles of the common law, applicable to all franchises of a like nature; and that we must overturn some of the best securities of the rights of property, before it can be established. I maintain, that the common law is the birthright of every citizen of Massachusetts, and that he holds the title deeds of his property, corporeal and incorporeal, under it. I maintain, that under the principles of the common law, there exists no more right in the legislature of Massachusetts, to erect the Warren bridge, to the ruin of the franchise of the Charles River bridge, than exists to transfer the latter to the former, or to authorize the former to demolish the latter. If the legislature does not mean in its grant to give any exclusive rights, let it say so, expressly, directly, and in terms admitting of no misconstruction. The grantees will then take at their peril, and must abide the results of their overweening confidence, indiscretion and zeal.

My judgment is formed upon the terms of the grant, its nature and objects, its designs and duties; and, in its interpretation, I seek for no new principles, but I apply such as are as old as the very rudiments of the common law.

Upon the whole, my judgment is, that the act of the legislature of Massachusetts granting the charter of Warren Bridge, is an act impairing the obligation of the prior contract and grant to the proprietors of Charles River bridge; and, by the constitution of the United States, it is, therefore, utterly void. I am for reversing the decree to the state court (dismissing the bill); and for remanding the cause to the state court for further proceedings, as to law and justice shall appertain.

THOMPSON, Justice.

[Opinion omitted.]