THE OPINION
op
MB,. TÄKBY,
attorney general of the united states,
On the validity of the law of New-Jersey, under which the
Camden & Amboy Rail-Roadj
and
The Delaware and Raritan Companles*
CLAIM A
MONOPOLY.
WASHINGTON, Sept. 5th, 1833.
Sir,
I proceed to state my opinion on the questions you have
proposed to me at the instance of the Trenton and New
Brunswick Turnpike Company.
It is now too well settled to be disputed, that a charter
granted by a state to a company incorporated to make a road
or canal, where the funds for the work-are pritcided hy individ¬
uáis, is a contract on the part of the state, and the public can¬
not by subsequent legislation without the consent of the corpo¬
ration alter the terms of the charter.
The second section of the act of March 2d, 1832, passed by
2
the legislature of New-Jersey, contains a stipulation that the
state shall not for a specified time incorporate any company,
(except such as are therein mentioned) for the purpose of mak¬
ing a rail road to be used for the transportation of passengers or
merchandize between the cities of Philadelphia and New-
York, or to compete in business with the Camden and Amboy
road, without the consent of the united Canal and Rail Uoad
Companies.
This pledge on behalf of the state, is not given in express
and direct terms, but it may be finally implied from the words
of the law. And assuming this to be the interpretation of the
act of March 2d, 1832, the question arises whether the legis¬
lature had the power to enter into such a contract with the
Canal and Road Companies, and thereby to bind the state and
all future legislative bodies of the state to adhere to its condi¬
tions.
As the legislature exercises only a delegated power, it is quite
clear that they cannot bind the state by contract or otherwise,
beyond the scope of the authority granted to them by their
constituents. The Legislative body is not the depository of
the entire sovereignty of the state and capable of binding the
peo[)le by its acts in all cases whatsoever. It is the agent of
the sovereign power, appointed for the purpose of executing
certain trusts, and when it steps beyond the limits of its author¬
ity, its acts are void and do not bind the people by whom it
was chosen. Like all other cases of delegated power, the
constituent is not bound further than the agent is authorized
to act for him.
Nor will the act derive any additional obligatory force from
the form in nhlvli the aooMmc«! po%vf.r is exocutcd, and if it is
not authorized, it is equally a nullity, whether it takes the shape
of an ordinary act of legislation, or that of a contract with
individuals. In order to render a contract made by the legis¬
lature obligatory on the people of the state, it is necessary to
shew that they had authorized the legislature to make such an
engagement on their behalf—And those who maintain the va¬
lidity of the agreement in question, must take upon themselves
the burthen of proving that the power to make it had been
delegated by the people of New-Jersey to the legislative body.
It will I presume be admitted on all hands, that the legisla¬
ture of New-Jersey exercises a limited authority, and that it
does not represent the entire power of the people of the state.
Their constitution provides for the election of the members of
the legislature every year, and does not specifically enumerate
the powers which the legislative department sbnil exerelsa, but
the authority ofthat branch of government, is in some respects
expressly restrained by the constitution, and there are obvious¬
ly other limitations necessarily to be implied from the nature
of our institutions and the principles of free representative go¬
vernment. Frequent elections, which have been considered
one of the great safe guards of the people, would lose much of
their value, if a single legislature might disarm their suc¬
cessors of the most important legislative powers, and bind the
people of the state and their descendants forever.
The power claimed for the legislature of New-Jersey in this
instance, is that of restricting the power of succeeding legisla¬
tures in the exercise of ceitain legislative functions ; and they
have by a contract with individuals or corporations, engaged
that the representatives of the people of New-Jersey shall not
for a specified time, exercise the power of incorporating a
company for the purpose of making a rail road in a certain
part of the state. The question is, have the people of New-
Jersey delegated to the legislative body the power to make
such contract, and to deprive them for the time specified of tue
power of prosecuting such works of internal improvement as
they may deem necessary to advance their interests and pro¬
mote the prosperity of the state
There is no clause in the constitution of New Jersey, which
gives the power specifically to the legislature ; and if it exists,
it must be on the ground that is an incident to representative
legislative power generally, and may always be exercised by
the legislative body, when there is no express prohibition in the
constitution.
It must be acknowledged that there woii'd appear to be
high authority for regarding this power as an incident to the
power of legislation—In the act of Congress incorporating
the Bank of the United States, there is an agreement on the
part of the United States, not to authorize any other Bank out
of the JLtisirici of Ouiambia, daring the exietííncp. of that char¬
ter ; and similar pledges may be found in similar cases, in the
legislation of different States, where the Constitution has not
expressly conferred on the legislature the power to make
them.
But with every respect for the distinguished men who have
sanctioned such legislation in the General Government, or in
the States, I cannot think that a legislative body, holding a
limited authority under a written Constitution, can by contract
or otherwise, limit the legislative power of their successors.—
The power which the Constitution gives to the legislative body,
must always exist in that body until it is altered by the People,
and cannot be restricted by a mere legislative act. If they
can deprive their successors of the power of chartering Com¬
panies of a particular description or in particular places, it is
obvious that upon the same principle, they might deprive them
of the power of chartering any Corporations, for any purpose
whatever; and, if they might by contract, or otherwise, de¬
prive their successors of this legislative power, they could sur¬
render any other legislative power whatever in the same man¬
ner, and bind the state forever to submit to it. The existence
of such a power in a representative body has no foundation in
reason, or in public convenience, and is inconsistent with the
principles upon which all our political institutions are founded,
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For if a legislative body may thus restrict the power of its suc¬
cessors, a single improvident act of legislation, may entail last¬
ing and incurable evil on the people of a state. It may com¬
pel them to forego the advantages which their local situation
affords, and prevent them from using the means necessary to
promote the prosperity and happiness of the community. It
is unnecessary to state cases in which evils of the most serious
character might arise from such a power in the Legislature.—
They will readily suggest themselves to any one who reflects
on the subject.
There are cases no doubt in which the acts of the legislature
irrevocably bind the state. This happens in all cases of dele¬
gated power where the agent is acting within the scope of his
authority ; Thus for example, if the Legislature of a state bor¬
rows money, or grants the public lands in fee simple, or estab¬
lishes a Corporation to accomplish some public object, and
endues it, for that purpose with certain particular faculties,
capacities and privileges, in all these instances the people of
the state are bound by the acts of their representatives, be¬
cause such acts are within, the admitted scope of legislative
authority ; and being contracts made by the authorized agents
of the People, they are necessarily binding on their constitu¬
ents ; and cannot be altered without the consent of the other
party to the contract. But it does not follow, because the
legislature has the power to establish a Corporation, and
clothe it with such privileges and franchises as it may deem
proper, that it may also deprive future legislature of the right
to exercise similar power. For it is not at all essential to the
exercise of the power to create corporations, that an agree¬
ment should be made not to charter other corporations, which
may rival it in trade—and if a legislative body of the United
States, or of any one of the states, were in consideration of a
loan to money, to stipulate that whatever might be the exigen¬
cies of the public, no future legislature should borrow money
6
without the consent of the first lender, it would hardly I think be
supposed that such an engagement was within the scope of le¬
gislative authority or bound their successors, and rendered
them incapable of contracting for an additional loan, if it was
found to be necessary for the public interest or safety. The
power of surrendering attributes of sovereignty, which are so
essential to the well being of a state, cannot be presumed to
reside in the representative, unless expressly granted by the
constituent..
The charter for a Rail Road from Trenton to New Bruns¬
wick, would not be inconsistent with the capacities and fran¬
chises granted to the present united Canal and Rail Compa¬
nies. They would still exercise and enjoy them, though they
would prove less profitable. And if the state cannot, now
authorize the Turnpike Company or any other Company to
make a Rail Road from Trenton to New Brunswick, it is not
because it would be inconsistent with the capacities, franchises
or privileges with which the present Companies have been
clothed ; but because the Legislature of 1832 have not only ex¬
ercised the power of creating Corporations, but have restricted
the legislative power of their successoi-s on the same subject.—
If they may restrict it in this particular, where is the power of
restriction to end ? It is not given in express terms by the
Constitution of New Jersey, and its existence appears to me
to be inconsistent with the spirit of our Institutions, and dan¬
gerous to the best interests of the community. It cannot be
regarded as an ordinary legislative power in a representative
Government, when the power of the agent is not unlimited
over the rights of the constituents.
Ill my opinion, therefore, the agreement contained in the act of
March 2d, 1832, is not binding on the state of New Jersey, so far
as it proposes to restrain future legislative bodies of that state from
authorizing the construction of a rail road within the limits men¬
tioned in the act of assembly. And that the legislature may now
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lawfully grant the power to make such a road to any company al¬
ready incorporated or hereafter to he incorporated. And such a
grant would he a valid one, and the execution of it could not he
prevented hy the united Rail Road and Canal Companies herein
before mentioned.
The remainining question is what would be the rights of the
Company who relied on such a pledge ? May a subsequent
Legislature entirely disregard it? This question assumes
that the Legislature had no right to make such a contract, and
that the state is not bound by it. ■
As a matter of law tbe answer would be obvious. Every
one is so far presumed to know the law, that in ordinary cases,
civil and criminal, he is bound as if he did not know it. The
corporations therefore ought not to have relied on a pledge
which they were bound to know the legislature had not the
Constitutional power to give : If they have done so they must
abide the consequences.
But the principles of moral justice would undoubtedly, in
many cases require that the state should indemnify a party
who had confided in the public agents and had mistaken their
power. And if the Legislature of New-Jersey should deter¬
mine to disregard the restrictions imposed in these charters
on Legislative power,' it would be for them to decide what
amount of compensation, if any, was due to the united compa¬
nies; and whether any ought to be given, and how much, are
questions upon which it would hardly be proper for me to ex¬
press an opinion.
I have the honor to be very respectfully,
Your obedient Servant
R. B. TANEY.
Suowden, Printer, 58 Wall-itreet, New-York.