1863 N.Y. Gen. Term. LEXIS 104

A state legislature can grant a franchise that impairs or destroys the value of a previously granted franchise, absent an express prohibition in the original grant.

Summary

Fort Plain Bridge Co. sued Smith for building a competing bridge near its own, alleging it infringed on their franchise. The court held that the state legislature’s repeal of a section in Fort Plain Bridge Co.’s charter that prohibited competing bridges meant the company had no exclusive right. Absent an express prohibition in the original grant, the legislature could authorize a competing bridge even if it diminished the value of the original franchise. Furthermore, to claim nuisance, the plaintiff needed to prove special damages distinct from the general public.

Facts

Fort Plain Bridge Co. was incorporated with the right to build a bridge and collect tolls. Initially, their charter prohibited any other bridge within a mile. Smith constructed a competing bridge near Fort Plain’s bridge after the legislature repealed the exclusive provision in Fort Plain’s charter. Fort Plain Bridge Co. claimed Smith’s bridge infringed upon their franchise and was a nuisance.

Procedural History

The case originated in a lower court, which ruled in favor of Smith. Fort Plain Bridge Co. appealed to the General Term of the Supreme Court of New York, arguing that Smith’s bridge unlawfully interfered with their franchise. The General Term affirmed the lower court’s decision.

Issue(s)

1. Whether the state legislature’s repeal of the exclusivity clause in Fort Plain Bridge Co.’s charter allows the legislature to authorize a competing bridge.
2. Whether the construction of a bridge without legislative authority constitutes a nuisance that can be challenged by a party who does not suffer specific damages different from the general public.

Holding

1. Yes, because after granting a franchise, the legislature can grant a similar franchise to another party, even if it impairs the first franchise’s value, unless expressly prohibited in the original grant.
2. No, because to maintain an action against a public nuisance, the plaintiff must demonstrate special damages distinct from those suffered by the general public.

Court’s Reasoning

The court relied on The Charles River Bridge v. The Warren Bridge to establish the principle that a state legislature can grant a franchise that diminishes the value of a prior franchise unless explicitly prohibited. The repeal of the exclusivity clause in Fort Plain’s charter removed any such prohibition. The court stated, “Since the case of The Charles River Bridge v. The Warren Bridge (11 Peters, 420), it has been understood to be the law, that it is competent for the legislature, after granting a franchise to one person, or corporation…to grant a similar franchise to another…the use of which shall impair or even destroy the value of the first franchise, although the right so to do may not be reserved in the first grant; unless the right so to do is expressly prohibited by the first grant.” Regarding the nuisance claim, the court reasoned that even if Smith’s bridge obstructed navigation, only those who suffered unique damages could bring a cause of action. The court cited precedent that “no one has the right to abate it, or sustain an action for damages occasioned by the erection, unless he has himself sustained some damages not sustained by the rest of the community.” The court acknowledged the possibly unfair outcome, stating, “I am free to say that I would be glad to see the old common law restored, which denied to the legislature the power to take away or impair a franchise granted by it; but the law is settled the other way, and we must conform to it.”