Covington and Cincinnati Bridge Co. v. Kentucky - 154 U.S. 204 (1894)
U.S. Supreme Court
Covington and Cincinnati Bridge Co. v. Kentucky, 154 U.S. 204 (1894)
Covington and Cincinnati Bridge Company v. Kentucky
Argued April 25, 1894
Decided May 28, 1894
154 U.S. 204
This company was incorporated under an Act of the Legislature of Kentucky, approved February 17, 1846, with authority to construct a bridge across the Ohio at Cincinnati. The third section of the act required its confirmation by the Ohio, before the corporation should open its books for subscription, and the eighth section declared that
"The president and directors shall have the rights to fix the rates of toll for passing over said bridge, and to collect the same from all and every person or persons passing thereon, with their goods, carriages, or animals of every description or kind, provided, however, that the said company shall lay before the legislature of this state a correct statement of the costs of said bridge, and an annual statement of the tolls received for passing the same, and also the cost of keeping the said bridge in repair, and of the other expenses of the company, and the said president and directors shall, from time to time, reduce the rates of toll, so that the net profits of the said bridge shall not exceed fifteen percent per annum, after the proper deductions are made for repairs and charges of other descriptions."
By an act of the Legislature of Ohio, enacted March 9, 1849, this company was made a body corporate and politic of that state, "with the same franchises, rights, and privileges, and subject to the same duties and liabilities" as were specified in its original incorporation. Some subsequent legislation took place not affecting the matter in issue here. The bridge was completed in 1867 at a cost much in excess of what had been contemplated, and has never earned 15 percent on its cost. On the 31st of March, 1890, the Legislature of Kentucky enacted that it should be unlawful to charge, collect, demand, or receive for passage over the bridge spanning the Ohio River, constructed under such act of incorporation, any toll, fare, or compensation greater than or in excess of certain rates prescribed by the act, which were much less than the directors had fixed upon under the eighth section of the act of incorporation, and made it obligatory upon the company to maintain an office and sell tickets in Kentucky at those rates. The company refusing to comply with the requirements of this act, an indictment was found against it. This was demurred to, and such proceedings were had thereafter that the defendant was adjudged guilty and fined $1000, and the judgment was sustained as constitutional by the Court of Appeals of the state. The case being brought here by
writ of error, it is by the whole Court held that the Kentucky Act of March 3, 1890, in its effect upon the Bridge Company, violated the provisions of the Constitution of the United States.
The judges concurring in the opinion of the court, (BROWN, HARLAN, BREWER, SHIRAS and JACKS0N, JJ.), after reviewing in detail the course of the decisions, announce the following as their grounds for concurring in this result and in the judgment:
(1) That the traffic across the river was interstate commerce.
(2) That the bridge was an instrument of such commerce.
(3) That the statute was an attempted regulation of such commerce which the state had no constitutional power to make.
(4) That Congress alone possesses the requisite power to enact a uniform scale of charges in such a case, the authority of the state being limited to fixing tolls on such channels of commerce as are exclusively within its territory.
The minority of the Court (consisting of FULLER, C.J., and FIELD, GRAY, and WHITE, JJ.) gave the reasons for their concurrence in the result and the judgment as follows:
(1) The several states have the power to establish and regulate ferries and bridges, and the rates of toll thereon, whether within one state or between two adjoining states, subject to the paramount authority of Congress over interstate commerce.
(2) By the concurrent acts of the Legislature of Kentucky in 1846 and of the legislature of Ohio in 1849, this bridge company was made a corporation of each state, and authorized to fix rates of toll.
(3) Congress, by the Act of February 17, 1865, c. 39, declared this bridge "to be, when completed in accordance with the laws of the States of Ohio and Kentucky, a lawful structure," but made no provision as to tolls, and thereby manifested the intention of Congress that the rates of toll should be as established by the two states.
(4) The original acts of incorporation constituted a contract between the corporation and both states, which could not be altered by the one state without the consent of the other.
This was an indictment found by the grand jury of Kenton County, Kentucky, against the defendant bridge company for demanding and collecting illegal tolls, refusing to sell tickets at the rates required by law, and for failing to keep an office for the sale of tickets at its bridge in said county.
The Covington and Cincinnati Bridge Company was incorporated under an act of the Legislature of Kentucky approved February 17, 1846, the third section of which required the confirmation of the act by the State of Ohio before the corporation should open its books for subscription,
and the eighth section of which declared that
"The president and directors shall have the right to fix the rates of toll for passing over said bridge, and to collect the same from all and every person or persons passing thereon, with their goods, carriages, or animals of every description or kind, provided however that the said company shall lay before the legislature of this state a correct statement of the cost of said bridge, and an annual statement of the tolls received for passing the same, and also the cost of keeping the said bridge in repair, and of the other expenses of the company, and the said president and directors shall, from time to time, reduce the rates of toll so that the net profits of the said bridge shall not exceed fifteen percent per annum after the proper deductions are made for repairs and charges of other descriptions."
By an act of the Legislature of Ohio enacted March 9, 1849, this company was made a body corporate and politic of that state, "with the same franchises, rights, and privileges, and subject to the same duties and liabilities" as were specified in its original incorporation and with a further proviso that
"nothing herein contained shall be construed to take away the jurisdiction of this state to the center of the said bridge nor in anywise to acknowledge the jurisdiction of the Commonwealth of Kentucky this side of the said center."
On March 20, 1850, this act of confirmation was amended by the Legislature of Ohio by granting the company
"power to enter upon any lands in the City of Cincinnati, from low water mark in the Ohio River northwardly, not exceeding one hundred feet in width, to Front Street, and appropriate the same"
for passageways and abutments, etc.
The original act of incorporation was amended by the Legislature of Kentucky by the following among other subsequent acts:
1. By Act of February 23, 1856, authority was given to increase the capital stock from $300,000 to $700,000, with power in the City of Covington to subscribe for and purchase $100,000.
2. By Act of February 6, 1858, the company was authorized
to issue preferred stock under certain restrictions, such stockholders to receive dividends of 6 percent
3. By Act of February 5, 1861, the capital stock was increased to $1,000,000, one-half of such amount in preferred stock, and to pledge the revenues of the company for the payment of dividends upon such preferred stock to the extent of 15 percent per annum.
4. By Act of January 21, 1865, the capital stock was increased to $1,250,000, the additional $250,000 being preferred stock, the holders of which should enjoy all the benefits, privileges, and immunities to which the holders of the existing stock were entitled.
By the sixth section of this act, the legislature reserved the right to change, alter, or amend the original charter, "but not so as to abridge or injure legal or equitable rights acquired thereunder."
5. By Act of February 25, 1865, the above sixth section was repealed.
6, By Act of Congress of February 17, 1865, the bridge was declared to be a lawful structure and post road for the conveyance of the mails of the United States. 13 Stat. 431.
The bridge was completed and opened for travel January 1, 1867.
On April 9, 1890, the Legislature of Kentucky passed another act amendatory of the act of incorporation, and out of which this prosecution arose, providing that it should be unlawful for any person or corporation to charge, collect, demand, or receive for passage over the bridge spanning the Ohio River, constructed under such act of incorporation, any toll, fare, or compensation greater than, or in excess of, certain rates prescribed by the act, which were much less than the directors had fixed upon under the eighth section of the act of incorporation. The second section provided that the company should sell passage tickets over their bridge at these rates, entitling the holder to passage either way over said bridge, and by the third section the company was required to keep an office within the County of Kenton constantly open
for the sale of such tickets, and keep conspicuously posted a schedule of the tolls fixed in pursuance of the act.
The company failing to conform to this last-mentioned act, this indictment was filed May 9, 1890. Defendant demurred thereto, and the case was submitted upon this demurrer and a statement of facts showing the cost of the bridge structure and offices to have been $1,855,462.36; the percent of net earnings on cost for first 23 years, 4.82; the percent of net earnings on cost for the year 1889, 6.14; the estimated percent of net earnings on cost for 1890, 4.09, under the charges fixed by the directors; the estimated percentage of net earnings on cost for the year 1890, under the act of which complaint was made, 1.06. The court sustained the demurrer and dismissed the indictments upon the ground that the act of 1890 impaired the obligation of the contract contained in the eighth section of the original act. The commonwealth appealed to the Court of Appeals, by which the judgment of the court below was reversed and the case remanded with directions to overrule the demurrer, and for further proceedings. The case was thereupon remanded to the lower court and submitted without a jury. The court adjudged the defendant guilty, and imposed a fine of $1,000, from which judgment the defendant again appealed to the Court of Appeals, which affirmed the judgment of the court below, and certified at the request of the appellant, the following questions as arising under the Constitution and laws of the United States:
1. Whether the act of 1890 was within the constitutional inhibition of laws impairing the obligation of contracts.
2. Whether such acts were in violation of the exclusive power of Congress to regulate commerce among the states.
3. Whether said act was in violation of the Fourteenth Amendment, prohibiting the taking of private property without due process of law.
Defendant thereupon sued out a writ of error from this Court.