CHAPTER V.

IMPAIRMENT OF RIGHTS SECURED BY CONTRACTS AND CHARTERS.

37. Impairment of private contracts.

38. Interference with rights secured by charters.

39. Charters not in terms exclusive.

40. Legislative contract not to condemn.

41. Condemnation of the property of a corporation.

42. Condemnation of a franchise.

43. Impairment of the enjoyment of a franchise, and regulation of the use of it.

44. Condemning a use of the property of a corporation.

45. Condemnation of property devoted to another public use.

46. Express legislative authority.

47. Condemnation under general laws of property devoted to another public use-Priority of location.

§ 37. Impairment of private contracts. The legislature may not destroy or impair the rights secured to individuals by virtue of their contracts. The rights of individuals in and to property contained in their contracts of transfer are protected by the constitution, but this does not interfere with the power of the state to condemn the property thus affected, on giving due compensation. The property and the contracts must yield to the demands of the sovereign. The contract is not thereby impaired, for full compensation is given. A state may not annul or modify a

2

1 Const. U. S., art. L., 10; Jones v. Walker, 2 Paine C. Ct. 688.

2 Brown v. Corey, 43 Pa. 495. Damages for the taking of property by eminent domain do not arise out of contract. The entry of the company is without consent of the owner, and needs no consent. Hence a statute allowing a stay of execution in actions for the recovery "of money due by contract, or of damages arising from breach of contract," does not apply to the case of recovery of damages for taking land by the power of eminent domain. Harrisburg R. R. v. Peffer, 84 Pa. 295.

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grant of land, or a lease, or a mortgage on it, but it may take the land for public use on making compensation. Such an appropriation does not impair the obligation of the contract contained in the grant or lease, or of the covenants of warranty, or for quiet enjoyment, or of the encumbrance upon the land." Land just granted by the state may be taken for a road. The owner is protected from arbitrary seizure, and not from an appropriation by public right for public use. All persons hold their property subject to requisitions for the public service. The conditions imposed upon a grant of land dedicated by an owner for a particular public purpose protect it from being applied to another and different use, unless compensation is paid.8

§ 38. Interference with rights secured by charters. Charters granted by the legislature to private corporations are in their nature contracts, and any curtailment of the franchises granted is considered an impairment of the obligation of a contract, and hence forbidden by the United States Constitution. If, however, the state has passed a

1 West River Bridge v. Dix, 6 How. 507; Fletcher v. Peck, 6 Cranch, 87; Johnson v. United States, 8 Ct. of Cl. 243; Young v. Mackenzie, 8 Ga. 31.

Frost v. Earnest, 4 Whart. 86; Alabama R. R. v. Kenney, 39 Ala. 307. The exercise of the right of eminent domain, in condemning the estate of a lessee, does not impair the obligation of the covenant to surrender, or any other covenant in the lease. The covenant to surrender is transferred to the person or corporation acquiring the title. Kip v. New York R. R., 67 N. Y. 227. The contract of a railroad company with one telegraph company to allow it the exclusive use of its right of way does not prevent a condemnation of a use of the right of way by another telegraph company. New Orleans Telegraph Co. v. Southern Telegraph Co., 53 Ala. 211.

Bailey v. Miltenberger, 31 Pa. 37; Dobbins v. Brown, 12 Pa. St. 75.
Frost v. Earnest, 4 Whart. 86.

Alabama R. R. v. Kenney, 39 Ala. 307.

• Enfield Bridge Co. v. Hartford R. R., 17 Conn. 40.

Bonaparte v. Camden R. R., Baldw. 205; Donnaher v. Mississippi, 8 Smed. & M. 649.

United States v. Illinois Central R. R., 2 Biss. 174. The English act admits of the condemnation of land inalienably settled upon a family by act of Parliament. In re Cuckfield Burial Board, 24 L. J. (Ch.) 585.

• Dartmouth College v. Woodward, 4 Wheat. 518; The State v. Noyes, 47

general law declaring that acts of incorporation shall be subject to alteration, amendment, and repeal, this reserves to the legislature the authority to make any alteration or amendment which will not defeat or substantially impair the object of the grant, or any rights under it, which the legislature may deem necessary. Manufacturing corporations, having erected dams, may be compelled to erect fish-ways for the passage of fish, notwithstanding they may have paid compensation for the destruction of private rights of fishery.1 The privileges granted to municipal corporations in their charters are not in the nature of property, and may be withdrawn by subsequent legislation.2 Licenses granted to corporations are revocable at the will of the legislature, without damages. The right of selecting a route secured by charter is impaired by a subsequent grant to another company of one of the routes, but where a choice of three routes is given, one not selected may be granted to another company."

§ 39. Charters not in terms exclusive. Charters granting privileges, and not in terms excluding other grants of a similar character, or with terms so general as to comprehend the entire privilege, are not considered as contracts that similar charters shall not be subsequently granted, even if the operation of the subsequent grant is injurious and fatal to the former grant. Charters are to be construed most

Me. 189; where the Legislature endeavored to compel one railroad company to hold its trains at a crossing with another road a certain time, for the arrival of trains. Crenshaw v. Slate River Co., 6 Rand. 245.

1 Holyoke Co. v. Lyman, 15 Wall. 500; Commissioners of Fisheries v. Holyoke Water-Power Co., 104 Mass. 446.

East Hartford v. Hartford Br. Co., 10 How. 511 (reversing s. c., 17 Conn. 79). Susquehanna Canal Co. v. Wright, 9 Watts & S. 9; Richmond Turnpike v. Rogers, 1 Duv. 135; Rundle v. Delaware Canal Co., 14 How. 80; New York R. R. v. Young, 33 Pa. 175; Monongahela Nav. Co. v. Coons, 6 Watts & S. 101. Chesapeake Canal Co. v. Baltimore R. R., 4 Gill & J. 1. Louisville R. R. v. Louisville City R. W., 2 Duv. 175.

Turnpike Co. v. The State, 3 Wall. 210; The State v. Noyes, 47 Me. 189; Piscataqua Bridge v. N. H. Bridge, 7 N. H. 35; White River Turnpike Co. v.

strongly against the company and in favor of the public.1 Street-car lines are permitted on the same, or parallel, streets with lines previously authorized by charters not exclusive.' A striking instance of construction of a charter in favor of the public is found in the case of Richmond Railroad v. Louisa Railroad. The charter granted to the first railroad was to a railroad to run between two points, with a stipulation that no other railroad be chartered for the period of thirty years, the probable effect of which would be to diminish the number of passengers on the railroad. Another railroad was chartered to run between the same points, but the granting of the charter was not considered an impairment of the obligation of the contract, for the reason that it did not appear but that the second road would be used exclusively for merchandise, and not for passengers. An exclusive charter for a horse-railroad does not exclude the construction of a steam-railroad, and vice versa.

§ 40. Legislative contract not to condemn.-The power of eminent domain is one of the essential incidents of sovereignty, and one legislature cannot contract with a corporation that its property shall not be taken by the exercise of eminent domain. Such provision has no binding force upon a subsequent legislature. There is no such thing as an

Vermont Central R. R., 21 Vt. 590; Sixth Avenue R. R. v. Kerr, 45 Barb. 138; Hamilton Avenue, 14 Barb. 405; Mohawk Bridge v. Utica R. R., 6 Paige, 554; New York R. R. v. Young, 33 Pa. 175; Tuckahoe Canal Co. v. Tuckahoe R. R., 11 Leigh, 42; Richmond Turnpike v. Rodgers, 1 Duv. 135; Illinois Canal v. Chicago R. R., 14 Ill. 314; Dyer v. Tuskaloosa Bridge Co., 2 Port. 296; Fuller v. Edings, 11 Rich. L. 239.

1 Charles River Bridge v. Warren Bridge, 11 Pet. 420; Mohawk Bridge v. Utica R. R., 6 Paige, 554.

2 Sixth Avenue R. R. v. Kerr, 45 Barb. 138; New York R. R. v. Fortysecond Street R. R., 50 Barb. 285; Brooklyn City R. R. v. Coney Island R. R., 35 Barb. 364.

3 13 How. 71.

♦ Louisville R. R. v. Louisville City R. W., 2 Duv. 175.

5 Denver R. W. v. Denver City R. W., 2 Col. 673.

• Backus v. Lebanon, 11 N. H. 19; Proprietors of Locks v. Lowell, 7 Gray,

extinction of the right of eminent domain. The use may be changed, notwithstanding the original condemnation devoted the land to a specific purpose forever. The word "forever" would mean until the legislature otherwise directed. A provision in a charter by which the legislature reserved a right to repurchase, does not bind the legislature to purchase rather than to condemn. Lands reserved from sale by constitution or by legislation would be subject to condemnation for public improvements. The contracts or conveyances of a municipal corporation do not prevent a subsequent condemnation of the property. The action of railroad commissioners, approving the abandonment of a railroad depot, is not a contract between the state and the railroad, and the legislature may subsequently reverse the action of the commissioners. The action of the commissioners in approving the proposed change is not such a judgment as to prevent the legislature from nullifying and reversing the approval by taking a different course. Their duties are quasi legislative. The discretion which is sometimes exercised by the legislature itself is delegated to the board of commissioners, and the power may be resumed by the legislature, and the course modified, without impairing the obligation of a contract."

§ 41. Condemnation of the property of a corporation. While the legislature may not repeal or materially modify the charter of a corporation, unless the power is

223; Charles River Bridge v. Warren Bridge, 7 Pick. 344; The State v. Hudson Tunnel Co., 38 N. J. L. 548; Newcastle R. R. v. Peru R. R., 3 Ind. 464; Illinois Canal v. Chicago R. R., 14 Ill. 314.

1 New York R. R. v. Boston R. R., 36 Conn. 196; Beekman v. Saratoga R. R., 3 Paige, 45.

2 Wellington, petitioner, 16 Pick. 87.

3 Backus v. Lebanon, 11 N. H. 19.

4 Parmelee v. Oswego R. R., 7 Barb. 599; The State v. Hudson Tunnel Co.,

38 N. J. L. 548.

5 Brimmer v. Boston, 102 Mass. 19.

6 Connecticut v. New Haven Co., 43 Conn. 351.