## Facts

- Massachusetts chartered the Charles River Bridge Company (1785) to build and operate a toll bridge between Boston and Charlestown for a limited term, after which the bridge would revert to the Commonwealth.
- The charter arrangement included an annual payment to Harvard College, which had previously held a ferry franchise for the crossing.
- In 1828, Massachusetts chartered the Warren Bridge Company to build a nearby bridge between substantially the same endpoints; it later became free to the public after a short toll period.
- The new bridge diverted most traffic from the Charles River Bridge, materially reducing or eliminating toll revenues and effectively destroying the economic value of the earlier franchise.
- The Charles River Bridge proprietors claimed the later charter unlawfully impaired the contract created by their earlier charter.

## Issues

1. Whether the 1785 bridge charter, though not expressly exclusive, implied a contractual right to be free from state-authorized competition at the same crossing.
2. Whether the 1828 charter authorizing a competing bridge impaired the obligation of contract in violation of the U.S. Constitution’s Contract Clause.

## Decision

- The Supreme Court affirmed the judgment for the Warren Bridge proprietors (5–2).
- The Court held that the Charles River Bridge charter conveyed only the privileges expressly stated and did not impliedly grant an exclusive right to the route or a monopoly over crossings.
- Because no contractual right against competition was clearly granted, the later charter did not impair any contract protected by the Contract Clause.
- Justice McLean concurred, emphasizing strict construction of corporate franchises and that ambiguity operates against the corporation.
- Justice Story, joined by Justice Thompson, dissented, arguing the earlier charter implied a promise not to authorize a directly competing crossing that would render the franchise valueless.

## Legal Principles

- Public grants and corporate franchises are construed strictly; nothing passes by implication, and ambiguity is resolved in favor of the public.
- Exclusive privileges and monopolies are disfavored and will not be inferred from general charter language; they must be clearly and expressly granted.
- The Contract Clause protects actual contractual obligations created by the state, not a grantee’s expectations of profit or assumptions of immunity from competition absent explicit terms.
- A state’s later authorization of competing infrastructure does not impair a prior charter unless the prior charter unmistakably surrendered the state’s authority to permit such competition.

## Conclusion

The Court ruled that a legislative charter to operate a toll bridge does not, without explicit language, confer an exclusive right to the crossing; therefore, chartering a competing bridge—even one that destroys the older franchise’s profitability—does not violate the Contract Clause.


Proprietors of Charles River Bridge v. Proprietors of Warren Bridge, 36 U.S. (11 Pet.) 420 (1837)