Appellant
The proprietors of the Charles River Bridge
Appellee
The proprietors of the Warren Bridge
Appellant's Claim
That it held an exclusive charter to operate a toll bridge, and the state ofMassachusetts violated the Contract Clause of the Constitution by granting acharter to another bridge company.
Chief Lawyers for Appellant
Warren Dutton, Daniel Webster
Chief Lawyers for Appellee
Simon Greenleaf, John Davis
Justices for the Court
Henry Baldwin, Philip Pendleton Barbour, Roger Brooke Taney (writing for theCourt), James Moore Wayne
Justices Dissenting
John McLean, Joseph Story, Smith Thomson (John Catron and John McKinley not yet appointed)
Place
Washington, D.C.
Date of Decision
12 February 1837
Decision
Denied appellant's claim.
Significance
In the past, the Court had usually defined the Contract Clause broadly, defending the interests of corporations. In Charles River Bridge, however,the Court ruled that a state charter did not grant a company any implicit rights; the exact terms of the contract had to be stated. In a larger sense, theCourt also recognized that at times a state's power to promote the public welfare outweighed the rights of a corporation.
Article I, section 10 of the Constitution says, in part, that no state shallpass any law "impairing the obligations of contracts." Although perhaps not one of the best-known constitutional passages among most Americans, the Contract Clause entered into more Supreme Court decisions during the nineteenth century than any other part of the Constitution.
Economic arrangements bound by contract and then altered or revoked by the states frequently found their way to the High Court. During the tenure of ChiefJustice Marshall, the Court tended to side with the interest of corporationsover the states. Marshall defined the Contract Clause broadly, and he wrotea series of important decisions reflecting that interpretation. In Fletcher v. Peck (1810), Marshall ruled a state could not revoke a land grant--even if there was fraud involved. Later, Marshall said a charter given to a corporation was the same as a contract and received protection under the Contract Clause, so the state of New Hampshire could not alter a charter granted toDartmouth College (Dartmouth College v. Woodward [1819]).
By 1837, however, Chief Justice Marshall had passed away, and a new man heldhis position. Roger Taney had been appointed by Andrew Jackson in 1835, and he shared some of Jackson's Democratic politics, including an affinity for states' rights. In one of the first decisions written by Taney, he showed the Court would now take a different approach to the Contract Clause and the economic assumptions that guided Marshall's interpretation of it.
Two Bridges in Boston
The case of Proprietors of the Charles River Bridge v. the Proprietors ofthe Warren Bridge pitted two Boston companies in a clash over tolls. Eachfirm owned a bridge spanning Boston's Charles River into Charlestown. The Charles River Bridge Company had received a charter in 1785 to operate its tollbridge. Over the years, the bridge had proved lucrative for its owners, which included, at different times, John Hancock and Harvard University. But by the 1820s, many Bostonians resented paying the toll, and they convinced the state to erect a free bridge over the Charles River. In 1828, Massachusetts granted a charter for this bridge, the Warren Bridge. Its operators would collect a toll for six years, to pay off building expenses, then open the bridge for free crossings.
The proprietors of the Charles River Bridge were understandably upset. Without its bridge monopoly, the company would lose revenue from the tolls. The company sued the proprietors of the Warren Bridge, seeking an injunction to stopconstruction of the new bridge. The Charles River Bridge Company argued thatthe state had violated the charter and thus the Contract Clause of the Constitution. The Massachusetts courts denied the injunction, and in 1831, the Supreme Court took up the case.
At that time, Chief Justice Marshall, with his sympathy toward the Contract Clause, was still on the bench. The Charles River Bridge Company hired DanielWebster, who had successfully argued and won the Dartmouth case beforeMarshall a dozen years earlier. Now a U.S. senator from Massachusetts, Webster was one of the most prominent lawyers in the country. Fate, however, tookaway any advantage the appellants might have had entering their appeal. As various justices--including Marshall--fell ill or died, the case was continually postponed. It took six years before Charles River was finally decided.
Taney's Defense of "Happiness and Well Being"
Charles River was reargued 19-26 January 1837, with just seven justices seated. By then, the Warren Bridge was open for free, and the Charles RiverBridge was out of business. But the issues raised by the case were still important. Webster argued that the original charter had implied an exclusive right for his client to control the bridge traffic between Boston and Charlestown. The Court voted 4-3 to reject this claim.
Chief Justice Taney dismissed Webster's argument of any implied powers granted by the 1785 charter, and wrote that the government had a legitimate interest in guaranteeing the public had convenient means of transportation. The people, through its elected officials, granted the charter, and "in grants by thepublic, nothing passes by implication." The state was obliged to uphold theterms outlined in the charter, but the company could not infer any privilegesnot specifically granted. The charter said nothing about competing bridges.
Taney's decision reflected his belief in states' rights and the need, at times, to limit property rights or business interests. He wrote:
The three dissenting justices--McLean, Story, and Thompson--each wrote separate opinions. Story's is the most often cited. He did see in the grant an exclusive right for the Charles River Company to collect tolls over the river. Healso thought courts should, in general, broadly interpret a company's rightsas granted by a public contract. Story said the majority's decision would send a frightening signal to the grantee of a public charter; once the companywas successful, the state could "overthrow its rights and . . . take away itsprofits."
Today, most legal scholars accept Taney's decision, and many of his later opinions supporting property and business interests. But in Charles River, says legal historian James Ely, Taney saw that "existing property rights could sometimes be destroyed to make room for innovations and improvements."
Related Cases
The proprietors of the Charles River Bridge
Appellee
The proprietors of the Warren Bridge
Appellant's Claim
That it held an exclusive charter to operate a toll bridge, and the state ofMassachusetts violated the Contract Clause of the Constitution by granting acharter to another bridge company.
Chief Lawyers for Appellant
Warren Dutton, Daniel Webster
Chief Lawyers for Appellee
Simon Greenleaf, John Davis
Justices for the Court
Henry Baldwin, Philip Pendleton Barbour, Roger Brooke Taney (writing for theCourt), James Moore Wayne
Justices Dissenting
John McLean, Joseph Story, Smith Thomson (John Catron and John McKinley not yet appointed)
Place
Washington, D.C.
Date of Decision
12 February 1837
Decision
Denied appellant's claim.
Significance
In the past, the Court had usually defined the Contract Clause broadly, defending the interests of corporations. In Charles River Bridge, however,the Court ruled that a state charter did not grant a company any implicit rights; the exact terms of the contract had to be stated. In a larger sense, theCourt also recognized that at times a state's power to promote the public welfare outweighed the rights of a corporation.
Article I, section 10 of the Constitution says, in part, that no state shallpass any law "impairing the obligations of contracts." Although perhaps not one of the best-known constitutional passages among most Americans, the Contract Clause entered into more Supreme Court decisions during the nineteenth century than any other part of the Constitution.
Economic arrangements bound by contract and then altered or revoked by the states frequently found their way to the High Court. During the tenure of ChiefJustice Marshall, the Court tended to side with the interest of corporationsover the states. Marshall defined the Contract Clause broadly, and he wrotea series of important decisions reflecting that interpretation. In Fletcher v. Peck (1810), Marshall ruled a state could not revoke a land grant--even if there was fraud involved. Later, Marshall said a charter given to a corporation was the same as a contract and received protection under the Contract Clause, so the state of New Hampshire could not alter a charter granted toDartmouth College (Dartmouth College v. Woodward [1819]).
By 1837, however, Chief Justice Marshall had passed away, and a new man heldhis position. Roger Taney had been appointed by Andrew Jackson in 1835, and he shared some of Jackson's Democratic politics, including an affinity for states' rights. In one of the first decisions written by Taney, he showed the Court would now take a different approach to the Contract Clause and the economic assumptions that guided Marshall's interpretation of it.
Two Bridges in Boston
The case of Proprietors of the Charles River Bridge v. the Proprietors ofthe Warren Bridge pitted two Boston companies in a clash over tolls. Eachfirm owned a bridge spanning Boston's Charles River into Charlestown. The Charles River Bridge Company had received a charter in 1785 to operate its tollbridge. Over the years, the bridge had proved lucrative for its owners, which included, at different times, John Hancock and Harvard University. But by the 1820s, many Bostonians resented paying the toll, and they convinced the state to erect a free bridge over the Charles River. In 1828, Massachusetts granted a charter for this bridge, the Warren Bridge. Its operators would collect a toll for six years, to pay off building expenses, then open the bridge for free crossings.
The proprietors of the Charles River Bridge were understandably upset. Without its bridge monopoly, the company would lose revenue from the tolls. The company sued the proprietors of the Warren Bridge, seeking an injunction to stopconstruction of the new bridge. The Charles River Bridge Company argued thatthe state had violated the charter and thus the Contract Clause of the Constitution. The Massachusetts courts denied the injunction, and in 1831, the Supreme Court took up the case.
At that time, Chief Justice Marshall, with his sympathy toward the Contract Clause, was still on the bench. The Charles River Bridge Company hired DanielWebster, who had successfully argued and won the Dartmouth case beforeMarshall a dozen years earlier. Now a U.S. senator from Massachusetts, Webster was one of the most prominent lawyers in the country. Fate, however, tookaway any advantage the appellants might have had entering their appeal. As various justices--including Marshall--fell ill or died, the case was continually postponed. It took six years before Charles River was finally decided.
Taney's Defense of "Happiness and Well Being"
Charles River was reargued 19-26 January 1837, with just seven justices seated. By then, the Warren Bridge was open for free, and the Charles RiverBridge was out of business. But the issues raised by the case were still important. Webster argued that the original charter had implied an exclusive right for his client to control the bridge traffic between Boston and Charlestown. The Court voted 4-3 to reject this claim.
Chief Justice Taney dismissed Webster's argument of any implied powers granted by the 1785 charter, and wrote that the government had a legitimate interest in guaranteeing the public had convenient means of transportation. The people, through its elected officials, granted the charter, and "in grants by thepublic, nothing passes by implication." The state was obliged to uphold theterms outlined in the charter, but the company could not infer any privilegesnot specifically granted. The charter said nothing about competing bridges.
Taney's decision reflected his belief in states' rights and the need, at times, to limit property rights or business interests. He wrote:
. .. the 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 assumedthat the government intended to diminish its power of accomplishing the endfor which it was created . . . While the rights of private property are sacredly guarded, we must not forget the that the community also have rights, andthat the happiness and well being of every citizen depends on their faithfulpreservation.
The three dissenting justices--McLean, Story, and Thompson--each wrote separate opinions. Story's is the most often cited. He did see in the grant an exclusive right for the Charles River Company to collect tolls over the river. Healso thought courts should, in general, broadly interpret a company's rightsas granted by a public contract. Story said the majority's decision would send a frightening signal to the grantee of a public charter; once the companywas successful, the state could "overthrow its rights and . . . take away itsprofits."
Today, most legal scholars accept Taney's decision, and many of his later opinions supporting property and business interests. But in Charles River, says legal historian James Ely, Taney saw that "existing property rights could sometimes be destroyed to make room for innovations and improvements."
Related Cases
- Fletcher v. Peck, 10 U.S. 87 (1810).
- Dartmouth College v. Woodward, 17 U.S. 518 (1819).
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