Richmond Fredericksburg and Potomac Railroad Company v. Louisa Railroad Company/Dissent Curtis

Mr. Justice CURTIS.

I have been unable to agree with the majority of the court in this case, and some of the principles on which a decision depends are of so much importance, as affecting legislation, that I think it proper to state my opinion and the reasons on which it rests.

That the 38th section of the complainants' charter contains a contract between the corporation and the State, the obligation of which the latter can not impair by any law, must, I think, be admitted. Whether 'An act for the extension of the Louisa Railroad to the dock in the city of Richmond,' does impair that obligation, depends upon the interpretation which the contract requires; and, inasmuch as it is the duty of this court to determine whether the obligation of the contract has been impaired, it is necessarily its duty to decide, what is the true interpretation of the contract.

The 38th section, with its preamble, are as follows:

'And whereas the railroad authorized by this act will form a part of the main northern and southern route between the city of Richmond and the city of Washington, and the privilege of transporting passengers on the same, and receiving the passage-money, will, it is believed, be a strong inducement to individuals to subscribe for stock in the company, and the General Assembly considers it just and reasonable that those who embark in the enterprise should not be hereafter deprived of that which forms a chief inducement to the undertaking,

'38. Be it therefore enacted and declared, and the General Assembly pledges itself to the said company, That in the event of the completion of the said railroad from the city of Richmond to the town of Fredericksburg, within the time limited by this act, the General Assembly will not, for the period of thirty years from the completion of the said railroad, allow any other railroad to be constructed between the city of Richmond and the city of Washington, or for any portion of the said distance, the probable effect of which would be to diminish the number of passengers travelling between the one city and the other, upon the railroad authorized by this act, or to compel the company, in order to retain such passengers, to reduce the passage-money: Provided, however, That nothing herein contained shall be so construed as to prevent the legislature, at any time hereafter, from authorizing the construction of a railroad between the city of Richmond and the towns of Tappahannock or Urbana, or to any intermediate points between the said city of Richmond and the said towns; And provided, also, That nothing herein contained shall be construed to prevent the General Assembly from chartering any other company or companies to construct a railroad from Fredericksburg to the city of Washington.'

The preamble in effect declares what general object the parties have in view, and the section makes known to what extent and by what means that subject is to be accomplished. That general object is to secure the corporation from being deprived of the passenger travel on its railroad; and the means of prevention are, to prohibit for thirty years the existence of any other road, the probable effect of which would be to diminish the number of passengers travelling between Washington and Richmond upon the railroad of the complainants.

The first question is, whether what is called the extension of the Louisa road, is a railroad, the probable effect of which would be to diminish those passengers; and this depends on what passengers are referred to in the contract.

It is maintained by the appellees that only passengers travelling the distance between Washington and Richmond are intended; but this is not consistent either with the substantial object of the parties, or with the language they have employed to make known their agreement. 'The privilege of transporting passengers on the same and receiving the passage-money,' and protection from being 'deprived of that which forms the chief inducement of the undertaking,' would be but imperfectly secured, if limited to one particular class of passengers only. Such a limitation inconsistent with the apparent object of the parties is not to be engrafted on the contract unless clearly expressed. It is said that the words 'passengers travelling between the one city and the other,' contain this limitation, their meaning being passengers travelling from one city to the other. The word 'between' in this clause admits of that interpretation, but does not require it. That word may also designate any part of the intermediate space, as well as the whole. It may be correctly said that the complainants' railroad is between Richmond and Washington, though it does not traverse the whole distance from one of those cities to the other, and the words which immediately follow, certainly tend strongly to show that it was in this last and more comprehensive sense the word 'between' was here used. The whole clause is, 'passengers travelling between one city and the other, upon the railroad authorized by this act.' But the railroad there referred to, upon the completion of which this contract was to take effect, was only to be from Richmond to Fredericksburg, so that, strictly speaking, passengers could not travel to or from the city of Washington upon the railroad authorized by the act; they could thus pass over only a part of the intermediate space between Washington and Richmond. This clause therefore does not control the evident general intent of the parties to protect the passenger travel, but rather tends to make that general intent more clear. The question being whether the travellers referred to are only those going the whole distance, and one part of the descriptive words, designating where they are travelling, being ambiguous, and the other part which points out how they are travelling, being clear, the result of the whole is to include all who travel in the intermediate space between the two cities, upon the complainants' railroad. And this construction is still further strengthened by the stipulation that the State will not authorize another road 'to be constructed between the city of Washington and the city of Richmond, or for any portion of the said distance;' for if the object of parties was merely to protect the enjoyment by the complainants of the tolls derivable from passengers going from one of those cities to the other, it is highly improbable that the State would have agreed to this broad restriction. Construing the preamble and the section together, I think it was the intention of the parties to secure to the complainants, for the period of thirty years, the exclusive enjoyment of all the railroad passenger travel over every part of the line between Washington and Richmond; and that the mode of security agreed on by the parties was, that the State should not authorize the construction of any such railroad as might probably interfere with that exclusive enjoyment.

In coming to this conclusion I have not overlooked the rule, that grants from States to corporations of such exclusive privileges, are to be construed most strongly against the grantees. But this rule, like its converse, fortius contr a proferentem, which applies to private grants, is the last to be resorted to, and never to be relied upon, but when all other rules of exposition fail. Bac. Max. reg. 3; 2 Bl. Com. 380; Love v. Pares, 13 East, 86. In Hindekoper's Lessee v. Douglass, 3 Cranch 70, Chief Justice Marshall says: 'This is a contract; and although a State is a party it ought to be construed according to those well established principles which regulate contracts generally.' A grant such as is now in question, in consideration of the grantees risking their capital in an untried enterprise, which, if successful will greatly promote the public good, in no proper sense confers a monopoly. It enables the grantees to enjoy, for a limited time, what they may justly be considered as creating. It is in substance and reality, as well as in legal effect, a contract, and in my judgment it is the duty of the court to give it such a construction as will carry it into full effect; imposing on the public no restriction, and no burden, not stipulated for, and depriving the company of no advantage, which the contract, fairly construed, gives. This is required by good faith; and to its demands all technical rules, designed to help the mind to correct conclusions, must yield. Having come to the conclusion that the intention of the parties to this contract was to secure to the complainants exclusive enjoyment of all railroad passenger travel over every part of the distance between Richmond and Washington for thirty years, and that the means adopted to effect this object was the promise of the State to authorize the construction of no railroad which might probably interfere with that exclusive enjoyment, the next inquiry is, whether the extension of the Louisa Railroad to the dock in the city of Richmond would probably have that effect. This act enables the Louisa Railroad Company to extend their road, from its junction with the complainants' road, as a point about twenty-four miles from Richmond, to that city, and thus to make another railroad between Richmond and that point on the complainants' road.

That this authority comes within that part of the restrictive stipulation, which describes the route over which another railroad is not to be built, is clear; for it does authorize 'another railroad,' 'for a portion of the distance' 'between the cities of Richmond and Washington.' But it is said that it does not come within the residue of the restrictive clause, because its probable effect will not be to diminish that passenger travel designed to be secured to the complainants. To this I cannot assent. The Louisa Company, by their original charter, are expressly authorized to carry passengers on their railroad, and when they are empowered by the act now in question to extend their road, it is a necessary implication that the extension is for the same uses, and subject to the same rights, and powers, and privileges as the original road, to which it is to be annexed. And accordingly we find, that by the 5th section of this act, the legislature has prescribed a limit of tolls, as well for passengers as for merchandise, coming from or going to another railroad and passing over the whole length of the Louisa road and each part of it, including the extension.

Passengers using the complainants' road between Richmond and the junction, may be divided into three classes. Those who travel the whole, or a part of the distance between Richmond and the junction, and do not go beyond the junction; those who do go to, or come from points beyond the junction on the complainants' road; and those who travel on the Louisa road, beyond the junction, going west, or coming east. The extension of the Louisa road is adapted to carry all these, and by the act complained of, the Louisa Company is authorized to construct a road to carry them. It may certainly be assumed, that a corporation, created to conduct a particular business for profit, will do all such business as it is its clear interest, and within its authority to do, and which it was created for the very purpose of doing. And if so, the effect of this extension must be, to transport thereon a part of all these classes of passengers, and thus to diminish the number of those same classes of passengers, who, at the time of the passage of the act in question, used the complainants' road.

As to those passengers who do not use the Louisa road beyond the junction, I am at a loss to perceive any reason why they are not within the description of passenger travel designed to be secured to the complainants; and if they are excluded therefrom, I know of none who would be included, unless upon the interpretation already considered and rejected, that the contract was designed to embrace only passengers travelling the entire distance between Richmond and Washington. It is not absolutely necessary to go any further to find that this extension act impairs the obligation of the contract, by authorizing another road to be built, the probable effect of which would be, to diminish the number of passengers travelling on the complainants' road between the junction and Richmond. But it is clear to my mind, that the third class of passengers using the Louisa road, are as much within this contract as any others. To explain my views on this point, it is necessary to refer to a few dates.

The complainants were incorporated in February, 1834, and their act of incorporation contained the compact now relied on. Their road was completed and opened for use in January, 1837. In February, 1836, an act was passed incorporating the stockholders of the Louisa Railroad Company. In December, 1838, the Louisa road was opened for use to the Louisa court-house, and from that time to March, 1848, the passengers using the Louisa road, going to or coming from Richmond, and points between that city and the junction, passed over the road of the complainants. In March, 1848, the complainants and the Louisa Company having differed concerning the tolls to be charged by the former on passengers and merchandise going to or coming from the Louisa road, the legislature passed the 'Act for the extension of the Louisa Railroad,' which contains the following section:-'Be it further enacted, that in case the Richmond, Fredericksburg, and Potomac Railroad Company shall, at the next annual meeting of the stockholders, stipulate and agree, from and after the expiration of the present contract with the Louisa Railroad Company, to carry all passengers and freight coming from the Louisa Railroad from the junction to the city of Richmond, at the same rate per mile as may at the same time be charged by the Louisa Railroad Company on the same passengers and freight; and shall also agree to carry all passengers and freight entered at the city of Richmond for any point on the Louisa Railroad, at the same rate per mile as is charged at the time for the same, by the Louisa Railroad Company; and shall also agree to submit to the umpirage of some third person or persons, to be chosen by the said companies, the compensation to the Richmond, Fredericksburg, and Potomac Railroad Company for collecting at the depots in Richmond the dues of the Louisa Railroad Company, and any other matters of controversy which may arise between the said companies owing to the connection between them, then this act to be void, or else to remain in full force.' It will thus be seen that the passenger travel, which it is the object of this act to take away from the complainants' road, had been de facto a part of its passenger travel between Richmond and the junction for about ten years. It is maintained that as the Louisa Railroad, from the junction westward, was the cause of the existence of this travel upon the complainant's road, between Richmond and the junction, the Louisa corporation might be empowered to construct another road between those points for the purpose of doing that business. In other words, that passenger travel actually existing on the complainant's road, may properly be diminished by the construction of another road for a part of the distance between Richmond and Washington, provided it be done by a party who at some prior time was instrumental in increasing the passenger travel; that we are to inquire whether by this new and competing road any more is to be taken away than was brought by the corporation which builds it, and if not, then the competing road does not diminish the number of passengers, travelling on the complainants' road, within the fair meaning of this contract. I can not give to this contract such a construction. It seems to me to be at variance with its express terms and with what must have been within the contemplation of the parties when it was entered into. The promise not to authorize any other railroad between Washington and Richmond, or for any part of that distance, the probable effect of which would be to diminish the number of passengers travelling on the complainants' railroad is absolute and unqualified. It contains no reservation in favor of parties who have been instrumental in bringing that travel to the complainants' road. It extends over the period of thirty years, and applies to the travel actually existing thereon during every part of that period, to whatever causes its existence there may be attributable. It must have been contemplated by the parties that the number of travellers on the complainants' road would increase during the long period of thirty years; it must have been known to them that this increase would be likely to arise, among other causes, from the increased number of passengers coming laterally to the line, in consequence of the construction of other railroads, as well as from increased facilities of access by other means. They enter into a contract which by its terms protects this increased travel during the whole period, and by whatever causes produced, just as much as it protects the travel existing during the first month after the opening of the road. How then can we engraft upon the contract an exception not found there, and say, that when it speaks generally of passengers travelling upon the road, it does not mean passengers which another railroad corporation has brought there? I am unable to see why not, as much as if a steamboat or stage company had brought them. In my opinion this class of passengers on the complainants' road, are as truly within the contract as any others; and a railroad, the object of which is to take away this class of passengers from the complainants' road, is one which the State has promised it would not authorize to be built.

Parties may agree, not only on the substantial rights to be protected, but on the particular mode of protecting them; and if they do agree on a particular mode, it becomes a part of their contract, which each party have a just right to have executed. In this compact the parties have agreed on the mode of protection. It is that the State will not authorize to be built any other railroad, which would probably have the effect to diminish the number of passengers on the complainants' road. It is the right to construct, and not the right to use which the contract restrains. To say that the State may properly authorize a road to be built, the purpose of which is to carry passengers, and thus diminish the number of passengers on the complainants' road, but that the road thus authorized must not be used to the injury of the complainants' rights, is to strike out of the contract the stipulation that such a road should not be authorized to be built. The power of the State to enable a corporation to build another road to carry merchandise only, seems to me to have nothing to do with this question. When the legislature shall adjudge that the public convenience requires another railroad there, to carry merchandise only, and that therefore the power of eminent domain may be exercised to build it, and when a company is found ready to accept such a charter, and risk their funds in its construction, then a case will arise under the power of the legislature to authorize a road for the transportion of merchandise only. But in the law now in question the legislature has not so adjudged; no such charter has been granted, or accepted, and no such road built; but one which the State is by its own promise restrained from authorizing. It seems quite aside from the true inquiry, therefore, to urge that the State might have empowered a company to make a railroad on which to transport merchandise only; for it has not done so.

It has been suggested by one of the defendants' counsel, that though the power of the legislature to enter into a compact for some exclusive privileges is not denied, yet that the legislature had not power to grant such privileges as are here claimed by the complainants, and therefore the State is not bound thereby. This is rested not upon any express restriction on the powers of the legislature, contained in the Constitution of Virginia, but upon limitations resulting by necessary implication from the nature of the delegated power confided by the people of that State to their government. But if, as must be, and is admitted, it is one of the powers incident to a sovereign State to make grants of rights, corporeal and incorporeal, for the promotion of the public good, it necessarily follows that the legislature must judge how extensive the public good requires those rights to be. Whether the State shall grant one acre of land, or one thousand acres; whether it shall stipulate for the enjoyment of an incorporeal right, in fee, for life or years; whether that incorporeal right shall extend to one, or more subjects; and what shall be deemed a fit consideration for the grant in either case, is intrusted to the discretion of the legislative power, when that discretion is not re-restrained by the constitution under which it acts. This has been the interpretation by all courts, and the practice under all constitutions in the country so far as I know, and it seems to me to be correct. See Piscataqua Bridge, v. New Hamp. Bridge, 7 N. H. Rep. 35, and cases there cited; Enfield Bridge, v. The Hart. & N. H. R. R. Co., 17 Conn. R. 40; Washington Bridge v. State, 18 Conn. R. 53.

It remains to consider whether this court has jurisdiction to reverse the decision of the State court.

The Court of Appeals having refused to entertain an appeal, the superior Court of Chancery of the Richmond Circuit, was the highest court of the State, to which the complainants could carry the case; and it is to the decision of that court we must look. The questions are whether that court erroneously decided against a right claimed by the complainants under the Constitution of the United States, and whether the bill was dismissed by reason of that erroneous decision. The points decided are set out with great clearness upon the face of the decree. Their substance is, that the construction of this extension road is lawful, the legislature having power to authorize it; that it may lawfully be used for the transportation of passengers, who, but for the existence of the Louisa road would never have come on to the line of the Fredericksburg road; that whether the Louisa Company will use the extension for the transportation of any other passengers, and thus infringe complainants' rights, does not appear; when the supposed case shall occur, it may be proper to interfere by injunction, if, upon the facts of that case as they shall appear, there is not a plain, adequate, and complete remedy at law.

It is clear, then, that the Chancellor decided, against the right claimed by the complainants, under the Constitution, that this extension should not be constructed. In my opinion, this decision was erroneous. It is clear, also, that he decided against their right, under the Constitution, to be protected in the enjoyment of the passenger travel coming upon their road, in consequence of the existence of the Louisa road. I think this was also erroneous. By reason of these decisions the bill was dismissed. They left nothing but a case of contingent damage, which would not happen at all, if the Louisa Company should carry only the passengers coming upon the line of the complainants' railroad by reason of the existence of the Louisa road; there was no certainty to what extent, or under which circumstances, or whether at all, the complainants' rights would be infringed.

Upon these views of the contract of the State, and the rights of the complainants, it necessarily followed that the bill was to be dismissed; for equity would not interfere in a case where the defendants had valuable rights and powers, which they might not exceed, and which they ought not to be restrained from exercising. But on the other hand if the defendants had no such rights, or powers; if they were claiming them and about to exercise them, in a manner certain to inflict great and continuing injury on the complainants, the extent of which injury a court of law could not fully ascertain, and could redress, even partially, only by a great multiplicity of suits, then no court of chancery would hesitate to grant relief. It is certain therefore that this bill was dismissed, by reason of, what I consider, the erroneous views taken by the chancellor, of the rights claimed by the complainant under the Constitution of the United States.

It has been argued that by the local law of Virginia, contained in the general railroad act of that State, the chancellor had not jurisdiction to grant an injunction to restrain the construction of the extension road. If the chancellor had so decided and dismissed the bill, for that reason this court could not reverse that decision. But he did not so decide; and I cannot infer that he would so decide if this case were to be remanded, because I am of opinion that the statute relied on has no application to this case.

My opinion is that the decree of the Superior Court of Chancery should be reversed and the case remanded, with such directions as would secure to the complainants the remedy to which they are entitled, to prevent the violation of rights, secured to them by the Constitution of the United States.