47 U.S. 507 (1848)
In 1795 the Vermont legislature created the West River Bridge Company as a corporation.1 It granted the company the exclusive privilege of erecting a bridge over West River within four miles of its mouth together with the right to collect tolls for one hundred years.2 The company constructed the bridge, maintained it, and collected tolls until the proceedings that gave rise to this litigation.3
On November 19, 1839, Vermont enacted a general statute empowering county courts to lay out highways and assess damages to landholders.4 A companion statute declared that the Supreme and County Courts could take any real estate, easement, or franchise of any turnpike or other corporation when the public good required a public highway.5 The same compensation rules used for private property applied to such takings.6
Joseph Dix and others petitioned the Windham County Court.7 That court entered judgment establishing a public road that passed over the West River Bridge.8 The judgment converted the bridge into a free public highway and awarded compensation to the company for the appropriation and extinguishment of its franchise.9 The company removed the judgment by certiorari to the Supreme Court of Vermont, which affirmed the county court's decision.10
While the law proceeding was pending, the West River Bridge Company filed a bill in the chancery court of the first judicial circuit seeking an injunction against the highway proceedings.11 The chancellor sustained a demurrer and dismissed the bill.12 The Vermont Supreme Court affirmed that decree on appeal.13 The company prosecuted two writs of error to the United States Supreme Court from the Vermont Supreme Court's judgments, one arising from the law proceeding and one from the equity proceeding, both brought under section 25 of the Judiciary Act.14
Whether the Vermont statutes authorizing the taking of the West River Bridge Company's franchise for a public highway impair the obligation of the contract created by the 1795 charter?15
The Contracts Clause of Article I, Section 10 prohibits states from passing any law impairing the obligation of contracts.16 The power of eminent domain, however, is an inherent and paramount attribute of sovereignty that exists independently of the Contracts Clause.17 All contracts are made subject to the implied condition that the state may take private property, including corporate franchises, for public use upon payment of just compensation.18 Such a taking enforces rather than impairs the contract by recognizing its obligation while fulfilling an essential public necessity.19
No. The 1795 charter constituted a contract between the West River Bridge Company and the State of Vermont.20 The 1839 statutes authorized county and supreme courts to take any real estate, easement, or franchise of a corporation for a public highway when the public good required it.21 The statutes directed courts to award compensation under the same rules applied to private property.22 Joseph Dix and others petitioned the Windham County Court, which established a public road over the bridge, converted it to a free highway, and awarded compensation for the extinguishment of the franchise.23 The Vermont Supreme Court affirmed both the law judgment and the chancery dismissal.24
This exercise of eminent domain does not impair the contract because the power is an essential and inseparable condition of every contract.25 The taking fulfills that condition without interpolating any new term foreign to the original agreement.26
The Vermont statutes do not impair the obligation of the 1795 charter contract, and the judgments of the Vermont Supreme Court are affirmed.27
Related opinions on this issue
Justice McLean concurred that the power of eminent domain acts upon the property itself rather than on the contract.28 A franchise is property subject to the same public necessity as other property.29 He emphasized that the State cannot annul or modify the charter itself but may take the property for public use with compensation.30
The proceeding here was a bona fide sovereign act under a standing state law sanctioned by the Vermont Supreme Court.31 The distinction between acting on the contract and acting on the property is substantial.32 The power has been exercised by states since the founding without violating the Contracts Clause.33
Justice Woodbury concurred in the judgment but stressed limitations on the taking of a franchise.34 The franchise itself should be taken only when its further exercise is inconsistent with the highway and when the laws manifest a clear intent that one use yield to another under necessity.35 He agreed that the taking must be honest, bona fide, and required for public use.36
In this case the locality of the bridge on a line of travel and the substitution of a free public highway justified condemning the franchise along with the bridge.37 He would not uphold the taking of a franchise in all circumstances without these conditions of necessity and legislative intent.38
Justice Wayne delivered a dissenting opinion.39