The Proprietors of the Charles River Bridge, Plaintiffs in Error v. The Proprietors of the Warren Bridge, and Others (1837)
Coram of Charles River Bridge v Warren Bridge
Chief Justice Roger B. Taney, Justice Joseph Story, Justice Smith Thompson, Justice John McLean, Justice Henry Baldwin, Justice James M. Wayne, and Justice Philip P. Barbour.
Facts of the case of Charles River Bridge v Warren Bridge
The dispute in question arose in 1785, when the Massachusetts legislature granted a charter to the Charles River Bridge Company, authorizing it to build and operate a bridge across the Charles River connecting Cambridge and Boston. In exchange for constructing the bridge, the charter gave the incorporators of the bridge, the right to collect tolls from the bridge for the duration of the charter.
The newly built bridge became a huge success for the investors who financed the construction of the bridge. However, public opinion over the bridge changed by the late 1820s, because the incorporators of the bridge kept the toll fees high. Due to public opinion, and due to the economic boom and population increase in the Boston area, there was a need for more bridges to be built.
Later in 1828, the State legislature once again issued another charter to construct a new bridge but this time to the Warren River Bridge Company. As per the new charter, the second bridge was supposed to become toll-free once it paid off its construction costs and made an agreed-upon profit. Anticipating a loss over revenue, the investors of the Charles River Bridge sued the Warren River Bridge Company in the state-court arguing that the new charter violated its property rights, namely, the right to collect tolls from the bridge. Furthermore, the counsels from the old bridge also stated that the State legislation which chartered the construction of the new bridge violated the Contract clause (Art 1, Section 10) of the United States Constitution, which prohibited State governments from enacting laws which impaired the obligation of contract(s). The Massachusetts Supreme Judicial Court (SJC) gave a divided opinion, because of which the Charles River Bridge Company, using a writ of error, made an appeal to the U.S. Supreme Court.
Decision of the Supreme Court of the United States in Charles River Bridge v Warren Bridge
On 14th February 1837, the U.S. Supreme Court gave a 5:2 judgment in favour of Warren Bridge. Chief Justice Taney, who wrote for the majority, stated that the case in question merely required a narrow interpretation of the contract, and was not a matter of constitutional deliberation. According to his interpretation of the contract, the 1785 charter did not grant the Charles River Bridge Company exclusive rights. He stated that even though the right over private property was well safeguarded, that right could not exceed the rights of the community. He explained that if the decision was to favour the plaintiff, economic progress would become stagnant as old transportation like canal companies would defeat new transportation technology like railroads by using the doctrine of implied contracts. Furthermore, the court held that “…ambiguity in the terms of the contract must operate against [the private party], and in favour of the public.” Moreover, the loss of the Charles River Bridge Company was irrelevant to its contractual rights. Hence, on this basis, the Supreme Court refused to imply monopoly rights into the 1785 charter that granted the toll-fee rights to the Charles River Bridge Company.
It should be noted, however, that Justice Story, with whom Justice Smith Thompson agreed, dissented with the majority. In their view, the majority ruling put forward a relationship of a ruler and subject, and not that of free equals, as between a legislator and a constituent. According to Justice Story, the majority, particularly, Chief Justice Taney, substituted expediency and pragmaticism for republican morality and the rule of law as the constitutional excess. This meant that private rights existed only at the pleasure of the rule of law as the majority in the legislature and undermined the security in property that was crucial to economic development. For these reasons, Justices Story and Thompson dissented.
A copy of the judgment can be found here.
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