Charles River Bridge Case (1837)

1. Between 1630 and 1701, Harvard College operated a ferry between Charlestown (where Harvard was located) and Boston; in 1701, the ferry became privately operated.

2. In 1785, responding to complaints from citizens who lived north of Boston that ferry service was inadequate, the Massachusetts state legislature incorporated the Charles River Bridge Company for a period of 40 years.

3. The Bridge Company was given the power to erect a bridge over the Charles River between Boston and Charleston and to collect tolls.

4. In 1792 the charter to the Bridge Company was extended for 70 years.

5. Before the charter expired, the Massachusetts state legislature authorized the Warren Bridge Company to build a bridge from Charlestown to Cambridge.

6. The charter specified that as soon as tolls from the new bridge covered expenses and a specified profit, the Warren Bridge Company was to turn the bridge over to the state.

7. The state intended to make the new bridge toll free.

8. In 1829, the Charles River Bridge Company sought an injunction to stop the construction of the new bridge.

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Joseph Story dissenting (edited and shortened):

Is the charter to receive a strict or liberal construction? Are any implications to be made beyond the express terms? .....

It is a well-known rule in the construction of private grants, if meaning of the words are doubtful, to construe them most strongly against the grantor..... Why is this rule adopted? Plainly, because a 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 contract.....

....It has been argued, and the argument has been pressed in every form which ingenuity could suggest, that if grants of this nature are to be construed liberally, as conferring any exclusive rights on the grantees, it will interpose an effectual barrier against all general improvement of the country.

....For my own part, I can conceive of no surer plan to arrest all public improvements, founded on private capital and enterprise, than to make the outlay of 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, her has not the slightest 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 enjoyments 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 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 be detrimental of the public.

In the next place, the grant is a contract for valuable consideration, and a full and adequate consideration. The proprietors are to lay out a large sum of money (and in those times it was a very large outlay of capital) in erecting a bridge; they are to keep it in repair during the whole period of forty years; they are to surrender it in good repair at the end of that period to the State, as its own property; they are to pay, during the whole period, an annuity of two hundred pounds to Harvard College; and they are to incur other heavy expenses and burdens, for public accomodation. In return for these charges, they are entitled to no more than the receipt of the tolls during the forty years....With all this they are to take upon themselves the chances of success; and if the enterprise fails, the loss is exclusively their own. Nor let any man imagine that there was not, at the time when this charter was granted, much solid ground for doubting success. In order to entertain as just view of this subject, we must go back to that period of general bankruptcy, and distress and difficulty. The Constitution of the United States was not only not then in existence, but it was not even dreamed of. The Union of the States was crumbling into ruins, under the old confederation. Agriculture, manufacturing and commerce were at their lowest ebb. There was infinite danger to all the States from local interests and jealousies.....These are historical facts which required no coloring to give them effect, and admitted of no concealment to seduce men into schemes of future aggrandizement. I would even now put it to the common sense of every man, whether if the Constitution of the United States had not been adopted, the charter would have been worth a forty years' purchase of tolls.

This is not all. It is well known, historically, that this was the very first bridge ever constructed in New England, over navigable tide water so near the sea. The rigors of our climate, the dangers from sudden thaws and freezing, and the obstructions from ice in a rapid current, were deemed by many persons to be insuperable obstacles to the success of such a project.....I state these things which are of public notoriety to repel the notion that the Legislature was surprised into an incautious grant, or that the reward was more than adequate to the peril....

The argument of the defendants is that the plaintiffs are to take nothing by implication. Either (say they) the exclusive grants extends only to the local limits of the bridge, or it extends the whole length of the river, or at least to old Cambridge Bridge.....Now I utterly dent the alternatives 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 close 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 an 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 reach of the exclusive right. The question would not be so much as to the fact of distance, as it would to the fact of nuisance.

Now, I put it to the common sense of every man whether if, at the moment of granting the charter, the legislature had said to the proprietors, "You shall build the bridge, you shall bear the burdens; you shall be bound by the changes; and your sole reimbursement shall be from the tolls of forty years; and yet we will not guarantee you even any certainty of receiving any tolls; on the contrary, we reserve to ourselves the full power and authority to erect other bridges, toll or free bridges, according to our own free will and pleasure, contiguous to yours, and having the same termini with yours; and if you are successful, we may thus supplant you, divide, destroy your profits, and annihilate your tolls, without annihilating your burdens." If, I say, such had been the language of the legislature, is there a man living, of ordinary discretion or prudence, who would have accepted the charter upon such terms?..... And I put the question further, whether any legislature, meaning to promote a project of permanent, public utility would ever have dreamed of such a qualification of its own grant, when it sought to enlist private capital and private patronage....?

Although the legislature have an unlimited power to grant franchises by the constitution of Massachusetts, they are not intrusted with any general sovereign power to recall or resume them. On the contrary, there is an express prohibition in the bill of rights in that constitution restraining the legislature from taking any private property, except on two conditions: first, that it is wanted for public use; and, secondly, that due compensation be made.