Chenango Bridge Company v. . Binghamton Bridge Company

27 N.Y. 87, 26 How. Pr. 124

• Court: New York Court of Appeals
• Decided: June 5, 1863
• Status: Published

Opinions

Wright, J.

The Constitution of the United States declares that “ no State shall pass any law impairing the obligation of contracts.” (U. S. Const., art. 1, § 10.) The provision, interpreted by the light of history, has been supposed by many only to have been intended to apply to executory contracts; but a far more extended interpretation has been given to it by that court which possesses the ultimate right of passing upon the question, and whose decisions we are bound to respect and follow as the leaw of the land. Not only has it been settled that an executory contract, but, also, that a grant or executed contract, comes within the scope of the provision; ,and that a legislative grant of a franchise to a corporation to maintain a bridge or ferry,, or turnpike road, is a contract, if the grant be accepted, within the meaning of the.section, which no subsequent legislature can interfere with, even to promote the public good, if by such interference the private interests of the corporators are affected. (Fletcher v. Peck, 6 Cranch, 87; Dartmouth College v. Woodward, 4 Wheat., 518; Green v. Beddle, 8 id., 2; Gordon v. The Appeal Tax Court, 8 How., 133; State Bank of Ohio v. Kemp, 18 id., 369.) It may be doubted whether it was wise and legally sound to attribute to a legislative act, granting to a corporation an exclusive right to maintain a bridge or ferry, and exact compensation from the public for crossing a stream at a given point, the force of a contract, within the constitutional provision. But such is clearly the doctrine and effect of the series of adjudications referred to. It is no longer to be questioned that a private company, to whom a State legislature has in express terms granted the exclusive right of maintaining a bridge and exact-. ing tolls for crossing a stream at a designated locality, when the franchise has been accepted and acted under by the corporation, and no power is reserved to alter or repeal the law, is protected, even though the public interest may suffer, by the constitutional prohibition against any subsequent legislation which is, or permits, a direct interference with the enjoyment of the franchise or diminishes its value.. Any law of that character, it is lield, impairs the obligation of the contract between the State and the corporation, and is within the purview and prohibition of the Federal Constitution. Thé right, however, alleged to have been impaired or invaded, must have been given or granted expressly, and will not be implied. Public grants are to be construed strictly, and neither indivi duals nor corporations will be deemed to have original rights, as against the State, by implication. In the grant of privileges to a corporation, nothing passes - but what is granted in clear and explicit terms, and by words too plain to be mistaken. “ When a State,” says Judge Black, in the case of The Pennsylvania R. R. Co. v. The Canal Commissioners (21 Penn., 22)“ means to clothe a corporate body with a portion of her own sovereignty, and to disarm herself to that extent of the power that belongs to her, it is so easy to say so, that we will never believe it to be meant when it is not said. * * In the construction of a charter, to be in doubt- is to be resolved, and every resolution which springs from doubt is against the corporation. If the usefulness of the company would be increased by extending them [privileges], let the legislature see to it, but remember that nothing but plain English words will do it. The wisdom of such a rule of construction will not be questioned by any one who has at heart the safety and preservation of his' State government. (Richmond R. R. Co. v. Louisa R. R. Co., 13 How., 71.)

The plaintiffs were incorporated in 1808, by a single section of an act purporting to amend “The Neversink Turnpike Road and Susquehanna Bridge Companies,” incorporated by a previous act, in 1805. This last named act created five corporations, amongst which were two bridge companies, viz., “ The Delaware Bridge Company ” and “ The Susquehanna Bridge Company; ” the first to erect and maintain bridges across the east and west branches of the Delaware river, and the other to erect and maintain a bridge across the Susquehanna river, at Oquago, and another across the Chenango river at or near Chenango Point. The section referred to, as incorporating the plaintiffs, was without detail, except as to the amount of capital, simply providing “that, for the purpose of erecting and maintaining a toll bridge across the Chenango river at or near Chenango Point, the present stockholders of the Susquehanna Bridge Company, or such others as shall associate for that purpose before the first day of January next, shall be and hereby are created a body corporate, in fact and in name, by the name and style of The Chenango Bridge Company,’ and as such to have perpetual succession, under all the provisions, regulations, restrictions, clauses and provisions of the before mentioned Susquehanna Bridge Company, and their capital in stock shall consist of ten thousand dollars.” (Laws of 1808, ch. 119.) It will be observed, therefore, that there was no legislative grant, in terms, of the rights and privileges to be possessed and enjoyed by the corporation, but the intent is plain that they were to be the same as those granted to the Susquehanna Bridge Company, not only in its original charter, which. provided for the erection and maintenance of both bridges, but also by the amendment of such charter, in the act incorporating the plaintiffs.

In pursuance of this act the plaintiff’s corporation was organized, and proceeded to erect a bridge across the Chenango river, at the point designated, at about eighty rods from the southerly termination of such river. For more than half a century they have maintained the bridge, and have reaped therefrom, for the last thirty years, in the way of dividends on their capital stock, nearly seventeen per cent per annum. In the meantime, Chenango Point, now called Binghamton, the locality of the bridge, has, from an inconsiderable settlement, become a large and prosperous village, located on the east and west sides of the Chenango river, and having, in 1857, nearly ten thousand inhabitants. Up to 1855, there was no way for that portion of the population residing on the west side of the Chenango to cross it except by the plaintiffs’ bridge. In 1855, to promote the public convenience, the legislature incorporated the defendants, “ with power to construct another bridge, at a point not less than eighty rods above the plaintiffs’ bridge. (Laws of 1855, ch. 164.) The construction and use of the defendants’ bridge has, to some extent, diminished the profits of the plaintiffs’ franchise; and it is therefore claimed by the latter, that the law incorporating the defendants and empowering them to erect and maintain their bridge is unconstitutional and void. It is not pretended, of course, that the plaintiffs’ right to maintain their bridge, and exact tolls, from the public for crossing it, has been interfered with, but the ground taken is, that their grant gives them a monopoly of the waters of the Chenango for the distance of two miles above and below their bridge; that their charter contains, in effect, a stipulation on the part of the State, when perpetually surrendering into their hands a portion of its sovereignty, neither to sanction competition nor to maintain, or authorize to be maintained, any other similar improvement within two miles each way from their bridge, that might diminish the amount of their income. Undoubtedly, if the charter of the plaintiffs gave them an exclusive privilege over the waters of the Chenango river to the extent of four miles, up and down the stream, for bridge or ferry purposes, and the legislature, in the contract with them, deliberately and intentionally surrendered, for all time, the power of the State to make improvemements_ for the public accommodation within those limits, any subsequent law, establishing or authorizing the establishment of another bridge or ferry, would be within the constitutional prohibition. On the contrary, if such exclusive privilege is not given in clear and explicit terms, and a reasonable construction of their charter, or of the act incorporating them, renders it doubtful whether the State meant -or intended to disarm herself, to the extent claimed, of her sovereign authority, the exercise of such authority, in 1855, when the public necessity required it, would bo unobjectionable and valid, even though its tendency might be to lessen the value of the plaintiffs’ franchise. It is, therefore, a principal question in this case, whether the privilege asserted by the plaintiffs be or be not secured to them by the acts of 1805 and 1808.

The plaintiffs, as has been mentioned, were endowed with the corporate rights and functions of the Susquehanna Bridge Company. This latter corporation had been originally created ror the purpose of erecting and maintaining a bridge across the Susquehanna river, on the line of one of the branches of the Never sink Turnpike Company, and also a bridge across the Chenango river, at the starting point of such branch road. The act of 1808 limited its functions to the erection and maintenance of the first-named bridge, and created the plaintiffs an independent corporate body, to erect and maintain a bridge across the Chenango, at or near Chenango Point. For' the terms of the plaintiffs’ charter, we are to look to that of the Susquehanna Bridge Companj'; and, looking into the act of 1805, it is seen that the rights and privileges of the latter company are not defined, but it is provided, in a single section, that it is to have perpetual succession, and be “ invested with all and singular the powers, rights, privileges, immunities and advantages, and be subject to all the duties, regulations, restraints and penalties which are contained in the foregoing incorporation of the Delaware Bridge Company,” and “all and singular the provisions, sections and clauses thereof,” not inconsistent with the particular provisions contained in the section incorporating the Susquehanna Bridge Company were fully extended to such corporation. For the terms, therefore, of the charter of the Susquehanna Bridge Company, resort must be. had to the prior sections of the act of 1805, incorporating the Delaware Bridge Company. Of course, the intention, by the general language, was not to import into the Susquehanna Bridge Company charter the provisions in heze verba of (the sections of the act creating the Delaware Bridge Company; but I think the intention is plain to invest the former company with all the powers, rights and privileges pertaining to a bridge corporation, as such, and similar to those which had just been given and accorded to the latter, subjecting it to like duties, regulations and restraints. All the. provisions of the act in respect to the Delaware Bridge Company, which related to its corporate powers, the manner of organization, kind of bridge to be erected, and when to be completed, the right to erect gates and demand and receive tolls at either end of the bridges, the neglect to repair or rebuild which was to work a forfeiture of the charter, the duties enjoined in respect to the care and superintendence of the bridges, and the penalties imposed and to be enforced, were made applicable to the Susquehanna Bridge Company, and the section incorporating it should read as though similar provisions were literally embodied in it. But more is insisted on; for if this was all, there could be no pretext that the alleged bargain between the State and the plaintiffs embraced any engagement from the State that competing bridges or ferries should not be erected or allowed for the distance of two miles above and below their bridges. Hence it is sought to further import into the charter of the Susquehanna Bridge Company a provision of the act limited in words to the bridges to be erected by the Delaware Bridge Company across the east and west branches of the Delaware river. The 81st section of the act provides that “ it shall not be lawful for any person or persons to erect any bridge or establish any ferry across the said west and east branches of the Delaware river, within two miles above or below the bridges to be erected and maintained in pursuance of this act,” &c. It is assumed that this provision, although not in express terms, was tantamount to an engagement on the part of the State, which entered into and formed a part of the contract with the Delaware Bridge Company, that no competing bridge or ferry should be erected or allowed, during the continuance of the corporation, for two miles above and below these bridges; that the exclusive privilege thus given was carried, by force of the general words employed, into the Susquehanna Bridge Company charter, and as the plaintiffs were endowed with the rights, privileges and capacities of the latter company, not the identical monopoly, but a similar one, over the waters of the Chenango river, was secured to them.

I think this position not tenable, for reasons that will be stated:

1. The privilege, whatever may be its character, is not given in terms to the Chenango Bridge Company, nor does the provision relate to a monopoly of the waters of the Chenango river, but, on the contrary, the words of the act limit the prohibition to the west and east branches of the Delaware riven But it is claimed that the legislative intent is manifest that the plaintiffs were to possess and enjoy the “ rights, privileges and advantages ” of the Delaware Bridge Company, and as one of those “ advantages ” consisted in a monopoly of the streams over which their bridges were to be erected, for two miles each way from the bridges, a like monopoly, of the Chenango river was intended to be given to them. The acts of 1805 and 1808, however, afford no satisfactory evidence that the legislature intended to grant such a monopoly to the plaintiffs.. The leading purpose of the act of 1805 was to establish a corporation for making a road from Oxford, in the county of Chenango, to intersect the Newburgh and Cochecton turnpike road, at a point easterly of the east branch of the Delaware river, and, as subsidiary thereto, another corporation to open a communication, by a turnpike road, from Chenango Point to Kingston. The bridge incorporations were but secondary, and, as was afterwards expressed, were created to sufficiently carry into effect the road incorporation. The Chenango road was to cross the west and east branches of the Delaware river, and the west branch of the Kingston orNever.sink road, starting from Chenango Point, the Susquehanna river, and, it might be, the Chenango river. The act first provided for the incorporation of the Newburgh and Chenango Turnpike Company, reserving the power to dissolve the corporation and vest its property in the State when the income arising from the tolls had paid for making the road, together with an interest on the moneys expended of ten per cent per annum. The Neversink Turnpike Road Company was next, created, with the same provision as to a dissolution of the corporation, and vesting its property in the people of the State. The act then set forth, in the form of á preamble, the necessity, with the view of sufficiently carrying into effect the foregoing road incorporation, and fully promoting the public convenience, of erecting and maintaining durable and permanent bridges across the Susquehanna and Chenango rivers, and the east and west branches of the Delaware river, at the several places of intersection of the said roads; that, from the size and rapidity of the streams, great expense would be necessarily incurred in maintaining and erecting such bridges; and, from the extraordinary freshets and frequent obstructions happening in those rivers, which would endanger the permanency and durability of the bridges, a frequent renewal of the whole capital might be required for rebuilding them, and, therefore, require a power (not contained in the foregoing incorporation) for calling from the stockholders, from time to time, such sums as should be required for upholding such bridges; that these circumstances forbade the policy incorporated in the foregoing road incorporations, that said property should revert to the State; and that it would be most expedient, for the purposes aforesaid, to make two separate and distinct bridge incorporations, with powers adequate to the accomplishment thereof, in the best possible manner. The act then proceeds to create a corporation by the name of “ The president and directors of the Delaware Bridge Company,” for the purpose, as expressed, of erecting bridges across the west and east branches of the Delaware river, when the turnpike road to be laid out by virtue of the act should cross the same. Provisions for subscription to stock and for formally organizing the company, describing the kind of bridges to be built, and when to be completed, the power to demand and receive certain rates of toll at each of the bridges, and other regulations and restraints followed. Amongst the provisions was one before stated, declaring “it unlawful for any person or persons to erect any bridge or establish any ferry across the said west and east branches of Delaware river, within two miles above and below the bridges to be erected and maintained in pursuance of this act.” The corporation was to have continual succession for the full term of thirty years from the passage of the act, and at the expiration of such term the bridges, with their appurtenances, were to become the property of the State. The next provision in order was the incorporation of “The Susquehanna Bridge Company." For the purpose of erecting and maintaining a toll bridge over and across the Susquehanna river, at or near Oquago, in the county of Tioga (a point of intersection of the turnpike roads), and also for the erecting and maintaining of a toll bridge over the Chenango river, at or near Chenango Point (the starting point of the Neversink road), all such persons as should .associate for that purpose, and their successors and assigns, were created a body corporate, by the name of “ The Susquehanna Bridge Company,” to have perpetual succession and be invested with the powers, rights, privileges, immunities and advantages, and be subject to all the duties, regulations, restraints and penalties which were contained in the foregoing incorporation of the Delaware Bridge Company; and all the provisions, sections and clauses thereof, not inconsistent with the particular provisions contained in the section creating the Susquehanna Bridge Company, were fully extended to the latter incorporation. As it was thus provided that this corporation was to have perpetual succession, it could hardly be inferred that it was the original intention that the provision limiting the existence of the Delaware Bridge Company to thirty years, and a reversion of its property to the State, should apply to it; but the act of 1808 settles any doubt that might have been entertained as to the effect of the general words of the section, by a repeal of the thirty years limitation, and making the existence of the Susquehanna Bridge Company perpetual, whilst it divided it into two companies.

The policy indicated, therefore, by the legislative action, was not the same in respect to the two, and ultimately the three, bridge incorporations. The duration of one of them (the Delaware Bridge Company), was limited to thirty years, when its bridges were to revert to the State; and it might well have happened that those across the "east and west branches of the Delaware river would become State property and free bridges, before the turnpike road, of which road they were a part, would revert. The others were to exist forever, as private corporations, notwithstanding the turnpike road on "which they were situated might become public property. It was evidently the purpose of the legislature to offer similar inducements to adventurers, and to place the several road and bridge companies on an equal footing as to advantages. There is nothing to indicate that in the view of the legislature one .of the contemplated bridge enterprises was of more public importance than the other, or that it was necessary to hold out greater inducements in the one case than in the other. Certainly a perpetual bridge franchise, in that part of the State, at that time, was to be regarded as more valuable, without an engagement from the State not to sanction competition, than one to endure only for thirty years with such engagement written in it; and it ought not to be assumed, without the strongest evidence, that a legislative act which cautiously refrained, as to one bridge incorporation, to bargain away the power of the State, for all time, to make improvements in a particular section for the public accommodation, intentionally bargained away such power to another corporation, in no sense more meritorious. Can it be said, then, that it 'was intended to confer larger privileges and advantages on one of the corporations than on the other? I think not. It may have been meant that the Delaware Bridge Company, which was to endure but for thirty years, should enjoy a monopoly of the waters of the two branches of the Delaware river; but it is not a reasonable inference that such a right was designed ■to be conferred on a corporation created for similar purposes, and in the same legislative scheme, to which perpetual existence was given. A provision forbidding competition by individuals was doubtless of importance at that early period, and it is at all times, to either bridge or ferry proprietors; but it was of especial importance to a corporation that could only look thirty years ahead for a reimbursement of its outlays, or for a realization of profits from its franchise. There would be no equality in advantages, proffered to bridge companies of equal merit, in a scheme which designedly gave a like monopoly to one whose existence was made perpetual. Ho satisfactory reason can be assigned for the distinction as to the durability of the charters, unless it be that the legislature only contemplated conferring on the companies to whom perpetual existence was given, the right to erect and maintain toll bridges, at the points named, without any monopoly of the streams.

Again, the provision in the Delaware Bridge Company incorporation, declaring it to-be unlawful for any one to set up'competing bridges or ferries, cannot, by any just interpretation of the act or of legislative intention, be carried into the Susquehanna Bridge Company charter. Nothing is to be .deemed carried into it, by the general words used, that is inconsistent with the particular provisions of the section creating the. last named corporation. A purpose of its creation was to construct a bridge across the Chenango river, at or near Chenango Point. It was as well known then as now, both by the legislature and the applicants for the charter, that the designated locality of this bridge was at the confluence of two-rivers, and at a point where the Chenango terminated by emptying itself into the Susquehanna. It would have been . an absurd provisión to introduce into their charter that no one should establish a competing bridge or ferry on the Chenango river for the distance of two miles below their bridge. It was a physical impossibility to give the same monopoly of the waters of the Chenango as was given, as is alleged, to the Delaware Bridge Company over the waters of the Delaware. river. It is not to be assumed that the legislature, or the parties interested in the application, contemplated any such absurdity.

2. Conceding that the section of the act of 1805, making it illegal for any person or persons to erect any bridge or establish any ferry across the west and east branches of the Delaware river, within two miles above or below the bridges to be erected and maintained in pursuance of the act, was, in substance, a stipulation on the part of the State to the extent expressed, entering into the contracts with both bridge companies, that competition should be prevented, I cannot well see how it can be construed as a restriction upon the sovereign authority. In terms, it is a restriction, if at all, upon persons, and as such was offered and accepted by the bridge companies. There was no guaranty written in the -contract, that, if the public exigencies or interest required, (the State would not exercise its sovereign power in the premises. Such a stipulation in a contract with the adventurers, it is urged, would have been, worthless add illusory. Not at all; but on the contrary it would have been indiscreet, not to say profligate legislation, to have bargained away forever State authority over the subject. As a restriction upon individuals and public officers and local authorities, it was of great importance to the adventurers. The riparian proprietors of the streams might have bridged them or crossed with ferries, except as forbidden by act of the legislature. There were then statutes providing for the opening and construction of highways and bridges by superintendents and commissioners of highways, and also for authorizing and regulating ferries within the State. The establishment and use of a ferry for profit was forbidden, unless duly authorized, and authority was conferred upon the Court of Common Pleas in each county of the State to grant licenses for keeping ferries, to such persons as the courts should think proper.. It was certainly of consequence to the corporators that- they should be protected against the otherwise lawful acts of these superintendents and commissioners of highways, Courts of Common Pleas and private persons. But it is' said that if it was not a restriction upon the sovereign power, the legislature might have rendered the franchises comparatively valueless immediately upon the completion of the bridges, and before the corporators could be reimbursed, by the State establishing free or other bridges within the prescribed limits. This argument supposes that a State will act in bad faith; which supposition is not to be entertained. All experience attests the fact that the failure to realize any just expectations of remuneration from franchises of this character has never been attributable to broken public faith, and this applicants for the franchises know, and act accordingly. The object in introducing the provision, and the purpose it was intended to serve, seem to me plain. Without it, the riparian owners might have established a free bridge or ferry, the superintendents and commissioners of highways have laid out highways and constructed bridges across the rivers, and the Courts of Common Pleas have allowed ferries to be established across them, so as to have impaired, if not wholly destroyed, the franchises. There were sufficient parties and officers and' public authorities for the provision to apply to, and so that it might have full effect, without extending its operation to the State or the legislative authority. It is quite unnecessary-to hold that it is or was intended as a restraint upon the legislative power, to give full force and effect to the language employed. Certainly the intention to surrender the sovereign authority to private corporations ought never to be implied, nor should the language of a statute be so construed as to deprive the State of her power to provide for the best interests of the people by appropriate and needful legislation, if it be susceptible of a different and reasonable construction. There is great force in the remark.of Chief Justice Taney, in the case of the Charles River Bridge v. The Warren Bridge (11 Pet,; 420), that “ a State ought never to be presumed to surrender this power, because the whole community have an interest in preserving it undiminished; and when a corporation alleges that a State has surrendered its power of improvement and public accommodation,, the community have a right to insist 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.”

Upon the whole, I do-not think the plaintiffs were entitled • to sustain the action. The grant to them was the right to maintain a bridge across the- Chenango river, at or near Chenango Point,- and take certain rates of toll for crossing it. And this was the whole grant. There was no monopoly over the waters of the Chenango river above and below these bridges given to them; nor any undertaking by the State, in the act of incorporating them, not to sanction competition, nor to make improvements that might diminish their income. In this respect they have no rights to be impaired, and consequently none which the courts are called upon to protect.

The judgment of the Supreme Court should be affirmed.

Davies and Rosekrans, Js., concurred on both the grounds stated by Wright, J. Selden and Marvin, Js., not conced ing that the plaintiff was not entitled to the same protection from competing bridges or ferries as that granted to the Delaware Bridge Company, were for affirmance, on the ground that the provision in favor of the latter did not import any restriction of the legislative power, but was satisfied by limiting the power of local authorities to authorize bridges or ferries under the existing laws.