6'JFit^CF RAlLV*Av ~£Qfe^!v2,
washiwctoh. D, G.
OPINION
OF
GOV. WILLIAMSON AND GEN. WALL,
ON THE
RIGHTS VESTED
IN THE
to
DELAWARE AND RARITAN CANAL AND CAMDEN
AND AMBOY RAILROAD COMPANIES,
BY THE ACTS OF THE STATE OF NEW JERSEY PASSED IN
RELATION TO THEM.
TRENTON:
PRINTED BY SHERMAN AND HARRON.
1849.
LIBRARY
BUREAU OF RAILWAY ESONOMiCfc,
WASHINGTON, B>.«
3 sCrti
v\ I
W * \
X I \ t
r\ \ * t
.OPINION.
After a deliberate consideration of the act of the
legislature of New Jersey, of the 2d of March, 1832,
entitled "An act relating to the Delaware and Raritan
Canal and the Camden and Amboy Railroad and Trans¬
portation Companies," I am clearly of the opinion, that
the act is constitutional, and a valid exercise of legisla¬
tive power; and that the legislature is legally restrained
from passing any law impairing the privilege thereby
granted.
The act is in substance and in its very nature, a con¬
tract between the state of -New Jersey, of the one part,
and the Delaware and Raritan Canal and the Camden
and Amboy Railroad and Transportation Companies, of
the other part, and has been made and entered into for
a fair and valuable consideration, paid and agreed to be
paid by the companies, for the exclusive privilege thereby
granted. If the companies in that arrangement, have
obtained an important privilege, they have secured to the
state which granted it, great and corresponding benefits.
It has heretofore been the policy of the New Jersey
legislature to promote internal improvements, by in¬
corporating private companies for the purpose of accom¬
plishing particular objects of that character; and thus to
obtain for the state the benefit and advantage of works of
public utility and convenience, and thereby at the same
time to augment the revenues of the state, without the
risk of contracting a burdensome load of debt, in untried
experiments and hazardous speculations. And there¬
fore, as an inducement to private companies, to undertake
such works, and in consideration of the risk and heavy
expenditures which are to be encountered, the legisla¬
ture, as applications have been made to them for acts of
incorporation, for the erecting or constructing of bridges,
4
turnpike and railroads, canal, and other important works,
which promised to be of great public convenience and
benefit, has granted liberal charters, with such privileges
and powers as were deemed necessary to insure success
to the undertakings. And as far as respects these two
companies, for the privileges which they have obtained,
the legislature has not only secured to the state the
important benefits and advantages resulting from the use¬
ful and expensive works which have been constructed by
the companies, but has actually obtained for the state
an annual revenue sufficient to defray all the expenses of
the state government; the companies having transferred
to the state one thousand shares of their joint capital
stock, and guaranteed that the dividends on the stock
transferred, and the transit duties secured by the acts
incorporating the companies, shall amount annually to
thirty thousand dollars; and also allowed the state the
right of appointing one director to represent the stock of
the state.
The act is, therefore, a solemn contract, made between
the parties to it, and the grant of the exclusive privilege
of transporting passengers and merchandize between the
cities of New York and Philadelphia, without competition
from any other railroad, has been made for a valuable
consideration, paid and secured to be paid for it to the
state. And this contract has not only been faithfully
observed and carried into execution on the part of the
companies, but it has been ratified and confirmed on the
part of the state by subsequent legislative proceedings;
as the annual amount guaranteed by the companies has
been received by the state, and the moneys appropriated
by acts of the legislature to the use of the state, and also
a director appointed to represent its stock.
And this contract is as binding upon the state as upon
the companies, for it is of the very essence of a contract
that it be mutual and equally obligatory upon the parties.
Both must be bound or both left free to renounce it; as
there can be no mutuality if the one party is left free to
recede from it, and not the other. If the state is not
bound by the contract, the companies are not; and if it
5
is competent for the state to repent and to renounce it, it
is equally so for the companies to do it. If then it
would be a breach of contract and of good faith on the
part of the companies to refuse to pay to the state the
dividends upon the stock transferred and the transit
duties, or to redeem their pledge by paying the full
annual sum of thirty thousand dollars ; so it would he a
breach of contract and a flagrant violation of the plighted
faith of the state for the legislature to pass any law
impairing the privilege granted.
But the question arises whether the legislature had the
power to enter into such a contract with the canal and
railroad companies, and thereby to bind the state to
adhere to its conditions.
That the legislature of New Jersey, unless restrained
by the state constitution or the constitution of the
United States, possesses the power of exercising all
legislative authority, in such manner as it shall deem
prudent and best for the public good, is a proposition too
clear to be controverted. And if the legislature had not
the power to pass the law in question, it must be because
it was restrained by some express constitutional provi¬
sion ; or that the power of passing such an act, is not an
incident to the power of legislation, under our forms of
government.
It will not be pretended that the act violates any pro¬
vision either of the constitution of the state or of the
United States, or that it interferes with the exercise of
any power granted to Congress ; and therefore the objec¬
tion of the want of power to enter into such a contract
can have no foundation to rest on, unless it can be
shown that a power to grant exclusive privileges requires
to be expressly delegated by the people to their represen¬
tatives, and that it is not incident to general powers of
legislation to grant such privileges to individuals or
corporations.
It certainly cannot be necessary, in order to sustain the
validity of the act, that there should be some clause in
the constitution of the state, giving the power spe¬
cifically to the legislature to grant such privileges. The
6
framers of that instrument have omitted, and wisely-
omitted, to enumerate and define all the powers intended
to be given to the legislature in the exercise of its legis¬
lative functions ; and if that body could exercise no other
powers than such as are specifically granted, its powers
would be totally inadequate to all the purposes of govern¬
ment. And it might, with equal plausibility be denied
that the legislature has authority to pass laws, to levy
taxes, or to borrow money upon the credit of the state, or
to grant charters of incorporation, or to take the lands of
individuals without their consent, for the construction of
turnpikes, railroads or canals, or to pass laws upon any
other given subject, because the power is not specifically
given to them by the people, as that the legislature is not,
for the want of an express delegation of power for,the
purpose, competent to grant to individuals or private
companies, as an inducement to engage in great works of
internal improvement of a hazardous and expensive
nature, an exclusive privilege for a reasonable term of
years, subject to such limitations and restrictions as the
legislature, in its discretion, when making the grant,
thinks proper to impose.
The people of New Jersey having declared in the state
constitution, that the government of the state " shall be
vested in a governor, legislative council and general
assembly"—that, of itself, is a delegation to them of all
the sovereign power which a government can rightfully
exercise, except so far as they are restrained by some
express limitation or exception in that instrument; and
subject to that restriction, and to such as are imposed by
the constitution of the Federal Government, its treaties,
or some act of Congress made in pursuance thereof, the
legislature of this state has all the powers which any
legislative body may exercise. In the case of McLaren
against Pennington, (1 Paige's Ch. Rep., 107,) Chancel¬
lor Walworth considers the state legislatures as having
all the powers of the British Parliament, where they are
not restrained by the United States or state constitution.
And Chancellor Kent, in his valuable and learned Com¬
mentaries on American Law, (1 vol. 448,) observes:
7
" the principle in the English Government, that the
Parliament is omnipotent, does not prevail in the United
States; though, if there be no constitutional objection to
a statute, it is with us as absolute and uncontrollable as
laws flowing from the sovereign power under any other
form of government." These eminent and distinguished
jurists evidently consider the state legislatures as invested
with all sovereign power, except so far as they are
restrained by some express constitutional provision, and
that their power is as absolute and without control as
that of any legislative body under any other form of gov¬
ernment.
The authority to grant exclusive privileges is an attri¬
bute of sovereignty, and inherent in every government,
and has always been exercised as an incident to the
power of legislation, and without any express delegation
of it—and may be most beneficially exercised for the
people, and in some instances, is a necessary and indis¬
pensable inducement to be held out to capitalists to
engage in expensive and hazardous public works, when
it may be doubtful whether they will succeed or not.
And I can discover no reason, growing out of the nature
and principles of our republican forms of government, for
denying this power to the state legislatures. It must
exist some where. It does not remain with the people
at large; they have not expressly reserved it—and if
they had, they could not exercise it. It is not given to
Congress. It must, therefore, exist in the state legisla¬
tures. And no where could it he more safely trusted
than in the hands of the immediate representatives of the
people, who are responsible to the people for the manner
in which they exercise it. That the legislature may
authorize public improvements, is a power which cannot
be denied to them ; and it is to the exercise of this
power that the people of New Jersey are indebted for all
the great works of internal improvement by which the
state is so much benefitted and enriched. And if they
may authorize such works, they must have the power to
grant all the rights and privileges necessary to effect the
object; and the exercise of this power, like all other
8
political power, must be confided to their sound discre¬
tion. And it is for those who deny this power to the
legislature, to sustain their objection ; for the presump¬
tion is in favor of every legislative act; and the whole
burden of proof is on those who deny its constitutionality.
(12 Wheaton R. 440.)
The argument that the legislature may abuse this
power, does not prove that it is not a portion of the
sovereign power which the people have delegated to the
legislature. All power may be abused—and if the fear
of abuse is to constitute a sound argument against its
existence, you must deny to the legislature all power not
expressly given to them. The power of raising money
by tax, or of borrowing money, or disposing of the pub¬
lic property, may be abused by a corrupt or indiscreet
legislature; but no man in his senses would think of
denying that the legislature, without an express delegation
of power for these purposes, has an unquestionable right
to exercise it. To deny that the government of the
state has sovereign power to grant exclusive privileges,
because the power is not specifically given, or because
the power may be abused, would necessarily lead to a
denial of all authority in the legislature to exercise any
powers not expressly given to them in the constitution.
That the power to grant exclusive privileges does
exist in every government, and that it appertains to
sovereign power, is fully proved by its having been, at all
times and in all countries, exercised by the government;
it has always been exercised by the British Parliament
and by Congress, and by the legislature of every state in
the Union. The Parliament of Great Britain has passed
laws granting exclusive privileges in almost innumerable
instances—the validity of which no one thinks of deny¬
ing. So the Congress of the United States has repeated¬
ly done the same thing; as by the act of February 25,
1791, establishing the first Bank of the United States, in
which there is a clause that no other bank shall be estab¬
lished by any future law of the United States during the con¬
tinuance of the corporation thereby created. And in the
act establishing the present bank there is a similar clause.
9
This, it must be admitted, is high authority for the exer¬
cise of the power by the state legislatures; for what is
Congress but a legislative body, holding a limited
authority under a written constitution; and the exercise
of this power by Congress without any express grant of
it, has received the sanction of the Judiciary of the
United States. The objection that there is no express
grant of the power to Congress, applies equally strong
against the exercise of it by that body as against the
exercise of it by the legislature of this state. So, in the
state of New York, there are numerous instances of the
exercise of this power by the legislature. When the
legislature of that state granted to Livingston and Fulton
the sole and exclusive right of using and navigating
boats propelled by steam in the waters of that state, for
a term of years, no one thought of denying the power of
the legislature to grant a monopoly or exclusive privilege;
but the exclusive privilege granted to them was finally
broken down upon the ground that the privilege intended
to be secured to them, conflicted with the laws of Con¬
gress regulating trade and commerce among the several
states, and came in collision with the powers of the
General Government; and not for the want of original
power in a state legislature to grant an exclusive privi¬
lege ; and there the exclusive privilege granted extended
over all the waters of the state. So, in that state, exclu¬
sive privileges as to driving public stages along certain
roads, have been granted by the legislature. And, in the
state of Connecticut, a grant has been made of an exclu¬
sive right to run stage wagons upon a particular road.
(See Perren ag't, 1 Days Ca. in Eq. 19.) And the
Supreme Court of Massachusetts has fully recognized the
power of the legislature of that state to grant an exclusive
privilege, as that of banking within any town or county,
or throughout the commonwealth; and to stipulate that
no rival institution shall he authorized within a certain
distance. (7 Pickering, 645. Charleston River Bridge
v. Warren Bridge.)
But it cannot he deemed necessary to-refer to instances
in other states, of the exercise of this power, when the
2
10
statute book of our own state furnishes us with so many-
instances of the exercise of this power, the validity of
whicli has never been questioned. As in the act of
1758, passed by the colonial legislature of New Jersey,
exempting lands from taxes when purchased for the
Delaware Indians. In the acts authorizing the erection
of bridges over the Passaic and Hackensack rivers, and
over the Raritan and Delaware rivers. In the charter
incorporating the Society for establishing useful Manufac¬
tures at Paterson. In the charters granted in 1824, for
constructing the Morris Canal, and for incorporating the
Delaware and Raritan Canal Company. And subse¬
quently in the original acts incorporating these two
companies, and in several of the supplements thereto.
And there have been many other instances of the
exercise of this power by the legislature of New Jersey,
which might be referred to.
After so many instances of the exercise of this power
by the legislature, and for such a number of years, and
by so many successive legislative bodies, it appears to me
to be impossible at this time to consider this question
open for discussion, unless the constitutional power and
authority of the legislature of New Jersey is forever to
remain unsettled, varying with every annual change of
that body, and subject to all the fluctuations and changes
which the circumstances of the day may produce.
The grant of this privilege to the companies took
away no vested rights. It interfered with no man's
property, but left every citizen in the full possession of
all the rights he before enjoyed. There was then no
injustice, no violation of first principles in making it.
The grant only secured to the companies for a limited
time, the benefits of their own hazardous and expensive
experiment. And I cannot, for a moment, doubt the
constitutional power and authority of the legislature of
New Jersey to make that contract.
But it has been suggested as a fatal objection to this
contract, that it proposes to restrain " the power of
succeeding legislatures in the exercise of certain legisla¬
tive functionsand that the legislature " have, by a
11
contract with individuals or corporations, engaged that
the representatives of the people of New Jersey shall not,
for a specified time, exercise the power of incorporating
a company for the purpose of making a railroad in a cer¬
tain part of the state."
This objection is more specious than sound, and can¬
not stand the test of a careful examination. It is noth¬
ing more nor less than a denial of the power of the legis¬
lature to grant an exclusive privilege, as every grant of
such a privilege may be considered as restricting the
legislative power of their successors on the same subject
to the extent of the privilege granted; and if the argu¬
ment is sound, the legislature cannot, in a charter of
incorporation for erecting a bridge, or constructing a
railroad or canal, engage that it shall not be lawful, at any
time during the continuance of the charter, to erect or con¬
struct another work of the same kind within two, five, or
ten miles of the one thereby authorized to be made; for
such an engagement restricts the power of all future
legislatures ; as it is a contract " that the representatives
of the people of New Jersey shall not, for a specified
time, exercise the power of incorporating a company for
the purpose of making" another work of the same kind,
within the prescribed limits. The principle is the same,
whether the restriction is limited to two miles or exten¬
ded to twenty. It is a grant of an exclusive privilege for
the distance mentioned; and if there is anything in the
objection, the legislature of New Jersey has been for
years, either from ignorance, or from some worse cause,
abusing their powers and granting privileges which they
had riot power to grant. And Congress has done the
same thing. And the legislatures of the other states
have fallen into the same fatal error, and have been
granting exclusive privileges when they had no constitu¬
tional power or authority to grant them.
There might be some weight in this objection, if New
Jersey was a separate, sovereign, and independent state ;
or if there was no restriction upon state legislation in the
constitution of the Federal Government. And the fallacy
of the argument consists in the keeping out of view that
12
constitution which is the supreme law of the land, and
controls all state legislation which is repugnant to it.
In theory, the British Parliament is omnipotent and
without control, and it is therefore a maxim there, that a
law which one Parliament is competent to pass, another
is competent to repeal; and that no restrictive words in
a statute shall prevent a future Parliament from repealing
or altering such statute; but it is to the honor of the
British nation, however, that this power, from a scrupu¬
lous regard to the honor and faith of the nation, is never
exercised in modern days, in repealing of charters of
incorporation, or any law in the nature of a contract
under which private rights are vested. But that maxim
does not prevail here in its full extent, and only applies
to ordinary acts of legislation. In the tenth section of
the first article of the constitution of the United States,
it is declared, that no state shall "pass any bill of
attainder, ex post facto law, or law impairing the obliga¬
tion of contracts." This clause is an express limitation
upon the power of state legislation, and cannot be
disregarded. Every state law which is contrary to the
letter or spirit of this constitutional prohibition, is of
course void, as the constitution is the paramount law.
This prohibitory clause applies to all contracts whether
executory or executed, express or implied, or whether
made between individuals or between a state and indivi¬
duals or corporations, or in the form of a legislative
enactment, or in any other form.
A grant by a legislative act of rights, powers, or privi¬
leges, to individuals or corporations, is a contract within
the meaning of the constitution, is equally binding on
the state, as a grant or conveyance of money or lands of
the state; and the legislature can no more revoke a grant
of the one than it can a grant of the other. A state legisla¬
ture has still the power of passing an act in the nature of a
contract, to bind the state ; but cannot constitute itself a
judge in its own case, and pronounce its own contract
invalid.
It is by reason of that prohibitory clause, that charters
granted by the state legislatures, incorporating private
13
companies with powers, rights, and privileges, and which
are in their nature contracts between the government
and the incorporators, cannot be repealed, altered or im¬
paired, unless the power to do so is expressly reserved
in the charter, as is sometimes done. And it is now
finally settled by many decisions, as a great principle of
constitutional law, that a statute passed by a state legisla¬
ture, which is in its nature a contract, cannot be repealed
or its obligation impaired.
I will only refer to two or three of them. In the case
of Fletcher against Peck, (6 Cranch, 87,) this subject first
came under the consideration of the Supreme Court of
the United States. The state of Georgia authorized a
sale of its public lands; and sales were accordingly made,
and conveyances executed; and it was held that these
sales could not be revoked or annulled by the state.
That the prohibitory clause in the constitution extends
to contracts with a state, as a party, as well as to con¬
tracts between individuals ; and that when a law is, in its
nature, a contract—when absolute rights have vested
under that contract, a repeal of the law cannot divest
those rights; and that a party to a contract cannot pro¬
nounce its own deed invalid, although that party be a
sovereign state. And Mr. Chief Justice Marshall, in
delivering the opinion of the court, says, that the princi¬
ple " that one legislature is competent to repeal any act
which a former legislature was competent to pass, and
that one legislature cannot abridge the powers of a
succeeding legislature," is correct so far only as respects
general legislation.
In the case of the state of New Jersey against Wilson,
(7 Cranch, 164,) the remnant of the Delaware Indians
had claims to a considerable portion of lands in New
Jersey; to extinguish which, the state agreed to purchase
for them certain other lands; and the legislature, on the
12th of August, 1758, passed an act by which it was en¬
acted " that the lands to be purchased for the Indians
aforesaid, shall not hereafter be subject to any tax, any
law, usage or custom to the contrary thereof, in any wise
notwithstanding." The Indians having continued in pos-
14
session until the year 1801, they then applied to the le¬
gislature, and obtained an act authorizing a sale of their
lands, which had been so purchased for them; and under
which act the lands were sold and purchased by certain
individuals. In October, 1804, the legislature passed an
act repealing the section of the act of August, 1758,
which exempted the lands from taxes. The court held
that the act declaring the lands should not thereafter be
subject to any tax, constituted a contract which could not
be rescinded by a subsequent legislature, and that the re¬
pealing act was a breach of that contract, and void by
reason of the prohibitory clause in the constitution of
the United States. As the lands were exempted from
taxes by a legislative act, no doubt the legislature consid¬
ered that an act passed by one legislature another legisla¬
ture was competent to repeal. But that was one of the
cases where the acts of the legislature irrevocably bind
the state, it being the case of a contract, and not a gene¬
ral act of legislation.
The right of taxation by the state, extends to all sub¬
jects over which its sovereign power extends; but it was
held, in the last case referred to, that the legislature of
New Jersey was competent to enter into a contract, in its
form a law, by which this power should not be exercised
by any future legislature over a portion of the lands of the
state.
It is impossible, in any case, to produce a decision more
in point or more controlling than this; and it places the
authority and power of the legislature to grant exclusive
privileges, and thereby to bind the state and all future le¬
gislative bodies of -the state to adhere to its conditions,
beyond all doubt. The power of taxation is of vital im¬
portance to every government, and if the legislature may,
by a contract with individuals, engage " that the repre¬
sentatives of the people of New Jersey shall not, for a spe¬
cified time, exercise the power" of taxing their lands, and
thereby release those lands from the common burden to
which all the other lands in the state are subject, can there
be a shadow of doubt that it is competent for the legisla¬
ture, by a contract with individuals or corporations, " to
15
engage that the representatives of the people of New
Jersey shall not, for a specified time, exercise the power
of incorporating a company for the purposes of making a
railroad in a certain part of the state," to compete in busi¬
ness with the railroad of those with whom the contract
is made ? I think not: and that the cases referred to fur¬
nish a conclusive answer to the objection- that the law in
question is void, because it is restrictive of the power of
succeeding legislatures in the exercise of their legislative
functions.
In the celebrated case of Dartmouth College against
Woodward, (4 Wheaton, 518,) it was decided that a charter
granted in 1769, by the British crown, was a contract
within the meaning of the constitution, and protected by
it, and that an act of the legislature of the state of New
Hampshire, altering the charter without the consent of
the corporation, was an act impairing the obligation of
the contract, and consequently void. And the same court
had also previously decided, in the case of Terrett and others
against Taylor and others, (9 Cranch, 43,) that a legisla¬
tive grant is not revocable; and had denied the power of
a state legislature to repeal statutes creating private cor¬
porations, or confirming to them property already acquired
under the faith of previous laws.
Mr. Justice Story, in his excellent commentaries on the
constitution of the United States, and which deserves to
be read and studied by every American, gives us a most
able and full exposition of this prohibitory clause. He
observes (3 vol. 256,) "that a grant is a contract within
the meaning of the constitution, as much as an unexecuted
agreement. The prohibition, therefore, equally reaches
all interferences with private grants and private convey¬
ances, of whatever nature they may be. But it has been
made a question whether it applies in the same extent to
contracts and grants of a state created directly by a law,
or made by some authorized agent in pursuance of a law.
It has been suggested, that in such cases, it is to be
deemed an act of the legislative power; and that all laws
are repealable by the same authority which enacted them.
But it has been decided upon solemn argument, that con-
16
tracts and grants made by a state are not less within the
reach of the prohibition than contracts and grants of pri¬
vate persons; that the question is not whether such con¬
tracts or grants are made directly by law, in the form of
legislation, or in any other form, but whether they exist
at all. The legislature may, by a law, directly make a
grant; and such grant when once made, becomes irrevo¬
cable, and cannot be constitutionally impaired. So the
legislature may make a contract with individuals directly
by a law, pledging the state to a performance of it; and
then, when it is accepted, it is equally under the protec¬
tion of the constitution." And, (page 258,) "that it may
be laid down as a general principle that, wherever a law
is in its own nature a contract, and absolute rights vested
under it, a repeal of that law cannot divest those rights
or annihilate or impair the title so acquired." And he
observes (page 262,) " the doctrine is held to be equally
applicable to grants of additional rights and privileges to
an existing corporation, as to the original charter, by
which a corporation is first brought into existence and
established."
From these authorities, which must be deemed conclu¬
sive upon the subject, it is clearly stated, that the consti¬
tutional prohibition extends to all contracts, whether made
by individuals or by a state, and whether made directly
by an act of the legislature or in any other form, and that
a state legislature may, by the grant of rights, powers,
and privileges to individuals or existing corporations, bind
the state and all future legislative bodies to adhere to its
conditions; and that it is not competent for a subsequent
legislature, because the contract is in the form of a law,
to impair the obligation of it. And that not only the
original charter but all grants of additional rights and pri¬
vileges made to an existing corporation, are equally pro¬
tected from the power of subsequent legislatures, as the
original charter itself.
It is, therefore, the constitution of the United States
which abridges and restricts the power of a subsequent
legislature, and prohibits the repeal or violation of a law,
passed by a former legislature, under which private rights
17
are acquired. The constitution does not prohibit the
state legislatures from making such contracts and granting
such rights and privileges as they may deem expedient
for the public interest. It leaves them in the full exer¬
cise of all the power they ever possessed for such pur¬
poses; but when a contract is made, or rights and privi¬
leges granted, the constitution prohibits and restrains the
state legislatures from doing any act impairing the obliga¬
tion of wrhat has beeh so done. And the proposition is
not correct, that a legislative body cannot enter into a
contract with individuals or corporations, by which their
successors will be bound and restrained from exercising
their legislative functions, contrary thereto. There is a
plain distinction between an act of general legislation and
an act in the nature of a contract; and it is true, so far as
respects general legislation, a law which one legislature
has authority to pass, a subsequent legislature has power
to repeal; and that a legislative body cannot by an act of
general legislation, restrain the power of a subsequent one;
as if the legislature should pass a law declaring that no
corporation should hereafter be enacted, or any turnpike,
railroad or canal constructed in the state, or in any par¬
ticular part of the state; a subsequent legislature might
repeal or totally disregard such a statute, for no private
rights could vest under it; and it would be no violation
of private property to repeal it; and the restriction ends
where the prohibition ends.
If there was no constitutional prohibition, all laws
which a state legislature might pass, a subsequent legisla¬
ture might repeal, and therefore a subsequent legislature
might, if not restrained by the principles of moral justice
and a just regard to the honor of the state, repeal a law,
in the nature of a contract, as well as any other law. But
it is considered a happy feature in the constitution of the
general government, that in all cases where rights of pro¬
perty are concerned, in order to render sacred those rights,
the state legislatures are prohibited from interfering with
all contracts, however or by whomsoever made. But, says
Mr. Justice Story, " if a charter be a mere grant of politi¬
cal power, if it create a civil institution to he employed
in the administration of the government, or if the funds
3
18
be public property alone, and the government alone be
interested in the management of them, the legislative
power over such charter is not restrained by the consti¬
tution, but remains unlimited. (3 Story's Com. 261.)
All corporations, therefore, created for public purposes
only, such as cities, towns, and other public bodies, re¬
main subject to the legislative will, "so always that pri¬
vate rights are not violated or interfered with." It is the
rights of personal liberty and private property which are
protected and made sacred by the constitution. And if the
legislature had the power to make the contract in question,
a subsequent legislature is not at liberty to disregard it;
but the state is as irrevocably bound by it as the Canal and
Railroad Companies.
The question now is, not whether the act of 1832 was
a wise or imprudent act of legislation. The act has been
passed, and the contract made, and rights acquired under
it; and it is not now to be revoked or interfered with,
because the state can make a more advantageous bargain
with new applicants for legislative favor.
The original charters and all the supplements thereto,
together, constitute the contract between the state and
the companies. The additional rights and privileges
which have been subsequently granted are equally within
the scope and meaning of the constitution as the origi¬
nal charters; and vested rights are now held under the
laws granting these rights and privileges, as well as under
the original charters. These new rights and privileges
were calculated to increase public confidence in the faith
and honor of the state, and to enhance the value of the
stock of the companies, and to give to the companies ad¬
ditional credit, and upon the faith of these laws, individu¬
als have been induced to invest their money in the stocks
of the companies, and the companies have been enabled
to effect loans to a very great amount, in a foreign coun¬
try, and which, probably, they could not have obtained
without this legislative faith.
What then would be the effect of an attempt on the
part of the legislature to interfere with this grant of an
exclusive privilege ? Would it not lessen the value of
the stock of the companies, and prejudice the securities
19
for the money borrowed to complete the works ? Would
it not destroy all confidence, at home and abroad, in all
our legislative acts? And would not such an interference
be justly pronounced a flagrant violation of private pro¬
perty, and fix upon us and our posterity the character of a
faithless people ? It would have been infinitely better
that no canal or railroad should ever have been made in
New Jersey, than that such a foul blot should be fixed on
the fair character of the state. The mischief of such an ex¬
ercise of power cannot be calculated. Every stockholder
in every bridge, canal or railroad in New Jersey, would
tremble at such a precedent, and withdraw his investments
from the state as speedily as possible. If the legislature
may revoke or impair the exclusive privilege granted to
these companies, why may not future legislatures interfere
with the privileges granted to other companies ? And
what security will the stockholders in other companies
have, after the violation of this solemn pledge, that it will
not be done ?
If the legislature had the constitutional power and au¬
thority to enter into such a contract, and thereby to bind
the state to adhere to it, there can be no question, in my
opinion, that the legislature cannot, either directly or in¬
directly interfere, with the privileges granted; and that
any such interference, to the prejudice of the companies,
would be a violation of the pledged faith of the state. In
Green against Biddle, (4 Wheaton's Rep. 122,) it was held
by the court, " that the objection to a law on the ground
of its impairing the obligation of contracts, could never
depend upon the extent of the change which the law ef¬
fects in it." And Mr. Justice Story observes, (3 Story's
Com. 250,) that " it is perfectly clear, that any law which
enlarges, abridges, or in any manner changes the inten¬
tions of the parties, resulting from the stipulations in the
contract, necessarily impairs it. The manner or degree
in which this change is effected, can in no respect influ¬
ence the conclusion; for whether the law affect the validi¬
ty, the construction, the duration, the discharge, or the evi¬
dence of the contract, it impairs its obligation." Good faith
requires that not only the letter, but the spirit of the con¬
tract should be inviolably observed; and any law granting
20
to individuals or a corporation, rights or privileges which
they had not when the act of 1832 was passed, or any
other assistance, without which their present powers and
privileges would be inadequate to enable them to trans¬
port passengers or merchandize between the cities of Phi¬
ladelphia and New York, or to compete in business with
the Camden and Amboy Railroad, without the consent of
the united Canal and Railroad Companies, would be equi¬
valent to passing a law to make it lawful to construct
another railroad. The intention of the legislature in pass¬
ing the law of 1832, cannot he mistaken. When the le¬
gislature declare that it shall not be lawful to construct
another railroad, they bind the state to protect the united
companies from all opposition, as far as they have the
constitutional power to do so; and, therefore, a grant of
powers or privileges of any kind, to a company, to ena¬
ble them to compete in business with the Camden and
Amboy Railroad, and when it could not be done without
a grant of such additional powers or privileges, would be
a palpable violation of the pledge, and impair the obliga¬
tion of the contract between the state and the united com¬
panies. And, in my opinion, the grant of any powers,
rights or privileges, to a corporation, or any contract made
with a corporation, which can fairly be construed into a
legislative sanction, for converting an existing turnpike
into a railroad, would be such a breach, on the part of the
state, of the contract with the united companies; that the
state would not only forfeit all claims against the compa¬
nies for a fulfillment of their part of the contract, but the
companies would have a fair and just claim against the
state for full indemnity for any loss or injury which they
may hereby sustain.
I. H. WILLIAMSON.
Elizabethtown, Dec. 8th, 1834.
I have carefully investigated and considered the ques¬
tions involved in the above opinion, and entirely concur
in that opinion.
GARRET D. WALL.
Burlington, Dec. 19th, 1834.