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authority is given. Of the former class are corporations for the government of a town ;. of the latter, are guilds or fraternities within the town.
The franchise of building a bridge, or of erecting locks, and taking tolls for the use of the same, is exclusive — insurance companies, banks, and many other pecuniary associations are not exclusive, and their number may be increased to any extent. The government cannot create more than one municipal corporation for the government of a city, because a second charter would be a grant of the very duties and powers before vested, a new grant of the subject once conveyed; but the creation of new banking companies does not, except by consequences, infringe upon the rights of a precedent company. Notwithstanding the new grants, the old charter subsists, and those who claim under it are undisturbed in the enjoyment of its privileges. It is idle, therefore, to reason from franchises of this class, to others which are in their nature exclusive. In the latter case, the individuals incorporated receive privileges which, in their nature, trench upon the public common right. In the former case, the corporations exercise a common right as a new person, i. e. the corporation created by government, with such powers as are incident to their new character.
Exclusive franchises are founded or presumed to be founded upon adequate consideration received by the government granting them. Franchises concurrently exercisable are not founded upon a consideration received by the government, because they were a part of the common right, and are exercised under a new authority. The consideration of a bridge-charter, is the implied covenant on the part of the grantees to fulfil the object of the grant. Very different is the case of a banking company or an insurance company. They do not bind themselves to assure property, or to discount money. A bridge company may be required to build a bridge under penalty of amercement or forfeiture of their franchise.
Government have no right to resume a franchise which they have granted, or to do any thing directly or indirectly in derogation of their grant. A subsequent grant of the same franchise is therefore inoperative and void.
A grant of this character came under consideration in the case of Rex v. Amery, in B. R. and afterwards on appeal in the
House of Lords.' Henry VII. made a grant to certain citizens of Chester, incorporating them by the name of the Mayor, &c. of Chester. In the reign of Charles II. the attorney-general filed an information, in the nature of a quo warranto, against the corporation, and judgment was rendered thereupon, that the liberties, &c. should be seized until the further order of the court. And no further order was afterwards taken. Charles II., after the seizure, granted a new charter to certain inhabitants of Chester. James II. afterwards granted a charter of restoration of the former liberties to the old corporation. It was decided that the original charter was only suspended, as it regarded the enjoyment of the same, and that the charter of James II. set up the old charter, notwithstanding the intervening grant. But this case is the more important, because, as appears from the note of Brown, the reporter, the charter of Charles was decided to be void ab initio. In this country, the power of the general state governments is the same as the prerogative of the king in Great Britain. The above decision, therefore, is applicable to legislative enactments in the United States.
In the case of Dartmouth College v. Woodward, it was decided, in the Supreme Court of the United States, that the legislature of New Hampshire had no power to control or newmodel a subsisting charter of the college, created before the revolution; that such an interference was an attempt, in contravention of the constitution of the United States, to impair the obligation of a contract. This was the case of a franchise, but the court, in their decision, referred to the case of Fletcher v. Peck, and Terret v. Tailor,* in both of which cases state legislatures had attempted to impair grants of lands. The court considered an estate in a franchise, and an estate in land, as resting upon the same principle. Grants of franchises, therefore, convey vested rights, and the same rules are applicable to them as to conveyances of lands. The government cannot create a new estate in a franchise or in land; in both cases there must be an entry for breach of condition to revest the franchise or the land. If a condition is waived in part, it is wholly lost. The government is estopped by covenants, whether express or
12 Term Rep. 565; 2 Brown Parl. Rep. 336, Toml. ed.
24 Wheat. 518.
36 Cranch, 87.
49 Cranch, 43.
implied, and a conveyance of a franchise made by the government whilst out of possession, like a conveyance of land under some circumstances, is void ab initio, and not capable of being confirmed like a voidable estate.
In the case controverted in Massachusetts, the Charles River Bridge Company had been incorporated and clothed with authority to erect a toll-bridge connecting the towns of Boston and Charlestown. Subsequently, in the year 1826, the Warren Bridge Company were incorporated, and authorized to erect a toll-bridge between the towns of Boston and Charlestown. This subsequent grant did not purport directly to resume any part of the privileges before granted in the elder. The new bridge to be erected was not, perhaps, on the same line of travel, but it in fact withdrew a very large portion of the travel which otherwise would have taken the direction of the old bridge, which was distant only a few rods.
In the suit which arose between the two companies, it became a question, 1. Whether the franchise of the old company had been invaded by the subsequent grant: 2. Whether the legislature had a right, by any proceedings of theirs, to infringe the rights vested in the old company, with a view to public advantage. The exclusive limits of a bridge company may be defined in the grant itself, or they may be left to be determined by implication, as was the case with the Charles River Bridge Company. When the grant was made to this company, there was an implied covenant on the part of the government, that no subsequent grant should be made giving authority to build a bridge. so near as to operate injurious damage to the first charter. The operation of this implied covenant was not intended to protect the first bridge company against remote and consequential injuries, but it was the very basis of the contract between the parties, and was intended to guaranty to the company the beneficial enjoyment of their charter, the hazardous duties of which they had been encouraged to assume.
The parties might have expressly provided that another bridge should not be erected within certain ascertained limits, but as the matter was left undetermined, the effect of the agreement was that no grant should be made at any future period, which at that time should work injury to the grant, regard being had to changes and the circumstances of the country at the time when
the new grant might be made. These changes might be such as to have a very important effect upon the rights of the grantees of the franchise. If the grant had been made when the country was first settled, it might have been a fraud upon the contract to have authorized another bridge over any part of Charles River. Now such are the changes produced by the increase of population and commerce, many bridges may be undoubtedly erected upon the river, which cannot be considered as interfering in any degree with the rights of the Charles River Bridge Company. If Boston and its vicinity should increase to the size of London, perhaps it would be absolutely impossible for all the passengers between Boston and Charlestown to cross the bridge of the old company. The necessity of the public might then require that another bridge should be erected, and a grant authorizing such a bridge would not at all interfere with or operate as a fraud upon the first grant. It might even be just, in a case which might be supposed of the insufficiency of the old bridge, to allow the erection of a new bridge, even by the side of the old bridge, on its very line of travel; so that passengers would cross, who would otherwise be compelled to resort to the old. When the exclusive limits of a franchise are therefore undefined, as in the case of the Charles River Bridge, and are left to be implied, the extent of the franchise must vary with the varying circumstances of the case. The limits of the franchise may be more narrow than when originally created, and are not to be ascertained, it is evident, by reference to the charter itself. And if this view of the subject is correct, the extent of the franchise is not to be determined by usage at any period of time. What may have been destructive, a century since, may now be without any injurious consequences to the rights of the grantees of the franchises. When the limits are defined, the covenant implied on the part of the government, is, that the grantee shall forever, in all circumstances of the country, exclusively enjoy the franchise within those limits; when they are undefined, that the franchise shall be exclusively enjoyed within limits which are to vary with the circumstances of the country. It becomes, then, an important inquiry, by what means these circumstances and their relation to the subject shall be ascertained. Can the legislature determine this question? It is apprehended that their decision upon the question cannot be conclusive.
They are one of the contracting parties, and it is inconsistent with established principles of justice and common sense, that as a party to a contract, government should adjudicate upon its construction, its efficacy, or its extent. But independent of this consideration, the legislature is not the proper tribunal for the adjudication of the question. The powers which spring from the people for their own protection and government, are divided by the constitutions of the states into three departments, the judicial, the executive, and the legislative. To each is assigned its peculiar duties, and neither can transcend its limits. The judiciary are to determine all conflicting interests in the enjoyment of property, and to decide upon the construction of contracts. If the legislature then had not placed themselves in the situation of parties to the grant, still they are not constitutionally authorized to determine upon its force. It is a matter exclusively for courts of law. It is not to be presumed that the Massachusetts legislature intended fraudulently to grant a new charter in violation of the rights of the old company. It was extremely proper for them, when called upon to make a new grant, to inquire into and, pro hac vice, determine the extent and sufficiency of the franchise already existing. There was an analogy between this inquiry, no doubt, and the judicial inquest on the writ of ad quod damnum, which is itself ex parte, and is not conclusive of the rights of parties. But this legislative inquiry did not operate, as that is supposed to do in the argument of counsel, as a judgment in rem; and its only object was to inform the legislature of the facts, which might prima facie render a new grant justifiable. The effect of the inquiry, and of the subsequent grant, was to preserve the parties acting under it, from personal penalties attending the erection of a nuisance.
There can be no doubt that the parties to a grant, are entitled to have the facts, in a case like this, passed upon by a jury. They are the proper tribunal to determine what degree of interference is sufficient to make a new grant fraudulent in its operation upon an existing franchise. They are the proper judges of the circumstances of the case, and of their bearing on the subject, and of all matters in pais not ascertainable by the record itself. They may take into consideration the necessities of the population, the amount of custom withdrawn, &c. In this case it is apparent that the injury done to the old bridge by the