Turnpike Company v. The State - 70 U.S. 210 (1865)
U.S. Supreme Court
Turnpike Company v. The State, 70 U.S. 3 Wall. 210 210 (1865)
Turnpike Company v. The State
70 U.S. (3 Wall.) 210
1. If a state grant no exclusive privileges to one company which it has incorporated, it impairs no contract by incorporating a second one which itself largely manages and profits by to the injury of the first.
2. In such a case, it is no defense to a scire facias against the first for nonuser or abuser of its franchises that the state had incorporated the second, was in part managing it and largely profiting by it, and in consequence of all this that the revenues of the first company were so far lessened that it could observe its charter no better than it did.
3. If a state injure one incorporated company by the unlawful grant of a charter to another and rival one, the remedy of the first company is by proper proceedings to restrain the second from getting into operation, and not by neglecting its own duties.
In 1812, the State of Maryland incorporated a company to
build a turnpike road between Baltimore and Washington. The company by its charter had power to take tolls and was bound to erect bridges and keep them and the road in good repair. In regard to its privileges generally, there was nothing special about it.
In 1831, the same state granted a charter to a railroad company to make a railroad between the same cities, the line of which ran near to and parallel with the track of the turnpike.
The turnpike company not having kept its road and bridges in repair, while it yet demanded tolls, the legislature of the state, in 1860, directed their attorney general to issue a scire facias against it to forfeit its charter; which writ was issued accordingly.
It was set up as a defense to the sci. fa. that the state had, in disregard of the Constitution of the United States, passed laws "impairing the obligation of contracts" in that, with the grant of a charter to the turnpike company in force, it had incorporated a company to make a railroad right alongside of it, which second road had every year been transporting great numbers of persons and large amounts of property that, but for it, would have been carried on the turnpike, and had now by statute directed the sci. fa.; that the turnpike company being by the charter to the railroad corporation deprived of much of the income which but for this they would have received, it had become
"impracticable for them, with all the income that they received from such persons and property as pass upon the turnpike road, to maintain and keep it in any better order and repair than it was kept in."
The turnpike company further set up that the railroad had been made not only under the authority of the state, but to a considerable extent with the state's own money, the state in addition managing it largely and getting from it one-fifth of the whole amount received for the transportation of passengers.
The Court of Appeals of Maryland, where the case finally got, considered the defense insufficient, and gave judgment
of ouster of the franchise. The charter of the turnpike company was thus annulled. The case was now here on error. *