Fertilizing Company v. Hyde Park/Dissent Strong

by William Strong

United States Supreme Court

97 U.S. 659

Fertilizing Company  v.  Hyde Park

MR. JUSTICE STRONG.

I cannot concur in the judgment directed by the court in this case. That the charter granted by the legislature, March 8, 1867, and accepted by the company, is a contract protected by the Constitution of the United States, cannot be denied, in the face of Dartmouth College v. Woodward (4 Wheat. 518), and the long line of decisions that have followed in its wake and reasserted its doctrines. And if the company holds its rights under and by force of the contract, those rights cannot be taken away or impaired, either directly or indirectly, by any subsequent legislation. This I believe to be incontrovertible, though the opinion just delivered may seem to express a doubt of it.

What, then, was the contract created by the charter and its acceptance? The first, second, and third sections constituted certain persons named, and their successors, associates, and assigns, a body politic and corporate, to have continued succession and existence for the term of fifty years, and declared that its capital stock should be $50,000, but gave the company power to increase the same to any sum not exceeding $250,000.

The fourth and fifth sections are as follows:--

'SECT. 4. Said corporation is hereby authorized and empowered to establish and maintain chemical and other works at the place designated herein, for the purpose of manufacturing and converting dead animals and other animal matter into an agricultural fertilizer and into other chemical products, by means of chemical, mechanical, and other processes.

'SECT. 5. Said chemical works shall be established in Cook County, Illinois, at any point south of the dividing line between townships 37 and 38. Said corporation may establish and maintain depots in the city of Chicago, in said county, for the purpose of receiving and carrying off from and out of the said city any and all offal, dead animals, and other animal matter which they may buy or own, or which may be delivered to them by the city authorities and other persons.'

In order to have a clear apprehension of the rights and privileges which this charter was intended to secure to the company, and of the purposes which the legislature that granted it had in view, it is both admissible and important to take notice of the circumstances that existed at the time of its grant, so far as they are shown by the record. Chicago was then a populous city, built upon a level plain, where drainage and sewerage are exceedingly difficult, if not impossible. The slaughtering of animals and packing the flesh for markets in other places were conducted there upon a stupendous scale. The business had been growing in magnitude for years, and bid fair to be what it has become,-larger than that of any city in the United States, if not in the world. Of necessity, the amount of blood and offal produced was correspondingly large. It could not be disposed of or allowed to accumulate there without manifestly endangering the health and injuriously affecting the comfort of the hundreds of thousands of inhabitants of the city. It was, therefore, a matter of public importance to provide for its removal elsewhere. Such would have been the case had the business of slaughtering extended no further than to supply the domestic market. At that time there was in the county of Cook, about thirteen miles south of the city, a marshy region in the midst of swamps, and much of it at all seasons covered with shallow ponds and bayous. It was very thinly inhabited, and it held out few, if any, invitations for additional settlement. Obviously it was a thing of public interest to relieve the city from accumulations of the blood and offal, and have them transported to a place where they would cause no injury, or so much less than they would cause if remaining in the midst of a dense population. It cannot be supposed that the legislature was unmindful of these considerations. The charter itself furnishes evidence that its motive and purpose were to furnish relief to the city, doing the least possible harm to residents in other localities. It offered to the grantees certain privileges as the consideration for large expenditures by them for removing from the city the matter so injurious to its inhabitants. It expressly authorized the establishment and maintenance by the corporation of chemical and other works for the purpose of manufacturing and converting dead animals and other animal matter into an agricultural fertilizer and into other chemical products. It designated the place where the works might be located as 'in Cook County, at any point south of the dividing line between townships 37 and 38.' It also granted to the corporation the right to establish and maintain depots in the city 'for the purpose of receiving and carrying off from and out of the city any and all offal, dead animals, and other animal matter which they (the company) may buy or own, or which may be delivered to them by the city authorities or other persons.'

When accepted, it was, therefore, a contract by which the State authorized the company to establish works and carry on a business which, without the authority, would be a nuisance to a few persons, in order to relieve a very large community from a greater nuisance. It was, therefore, a grant of a right to maintain a local nuisance.

In the exercise of the rights thus granted, the company established their works at a place in Cook County, south of the dividing line between townships 37 and 38, in what is now the village of Hyde Park, but quite remote from the thickly inhabited part of the village. The point at which they are located is within the limits designated by the legislature. The selection of the place within those limits was confided by the charter to the company, and when the selection was made and the works were erected, the charter conferred the right to maintain them and carry on the business where they were located. I concede that the company could not exercise their discretion wantonly or in negligent disregard of the rights of others. But there is nothing in the case tending to show such disregard or wantonness. There is nothing to show, and it is not claimed, that the works are not at a place where they were authorized to be erected. On the contrary, there is every thing to show that the neighborhood where they were located was swampy and nearly uninhabited, giving, as I have said, little promise of further improvement.

The company also, at large expense, erected receiving depots, as authorized by the charter, for the purpose of receiving and carrying from the city matter consisting of dead animals and offal, and engaged in having it transported to the only railroad upon which it could be transported to the chemical works located within the limits of the municipal division known as Hyde Park Village. That by the charter they were authorized to transport it thither, I regard as beyond any reasonable doubt. I admit to the fullest extent the rule that all charters of private corporations are to be construed most strongly against the corporations. Nothing is granted that is not expressly or clearly implied. But this rule is quite consistent with another, equally settled, that charters are to receive a reasonable interpretation in view of the purposes for which they were made. An express grant of power must include whatever is indispensably necessary to its enjoyment. No man can reasonably deny that a grant of power to establish works at a certain place to convert animal matter into an agricultural fertilizer, coupled with power to establish depots for receiving and carrying it from the city, does authorize its transportation to the converting works. It is not denied in the present case. One of the rights, then, which the company obtained by their charter was to carry the offal, dead animals, and other animal matter into and through the village of Hyde Park to the works authorized for its conversion.

To recapitulate: The company obtained by their contract with the State, among others, three rights: One, a right to establish and maintain at a place in Cook County, south of the dividing line between townships 37 and 38, works for converting animal matter. The works have been established there at a cost of more than $200,000; second, they obtained the right to establish receiving depots for receiving and carrying such matter from Chicago; and, third, they obtained the right to carry such matter from their receiving depots to their converting works in Hyde Park. I do not understand any of these propositions to be questioned, either by the defendants in error or by the majority of this court.

The only serious question, therefore, is whether by any law of the State this contract has been impaired, and the rights assured by it have been taken away. On the 26th of March, 1869, nearly two years after the charter had been granted and accepted, the legislature of the State passed an act, entitled 'An Act to revise the charter of the town of Hyde Park, in Cook County,' giving therein full sanitary and police powers to the municipal authorities, but containing the following proviso: 'The sanitary powers conferred by this act shall not be exercised by said board of trustees as against the Northwestern Fertilizing Company or the Union Rendering Company, located at or near the Calumet River, in said town, until the full expiration of two years after the passage of this act.' Under this act the board of trustees, on the 14th of February, 1870, adopted an ordinances declaring all establishments for rendering offal, &c., nuisances, and imposing penalties upon any person who shall own, keep, or use them. The ordinance also prohibited the deposit of any dead animals or other filthy, nauseous, or offensive substance on any lot, street, alley, or other place in the town, and imposed penalties for any violation of the ordinance. On the 10th of April, 1872, the village of Hyde Park was incorporated, and succeeded to the rights and duties of the town of the same name; and on twenty-ninth day of November, of that year, another ordinance of the village was made, reiterating in substance the provisions of the ordinance of Feb. 14, 1870. It went further, and its provisions make it impossible for the company to enjoy the rights accorded to them by their charter. It declared to be nuisances all places within the village kept, occupied, or used for the purpose of rendering offal or animal substances, when the same is or may be kept in such a manner as to occasion any offensive smell, and all places where any nauseous, unwholesome, or offensive business may be carried on, and it imposes penalties upon offenders. It prohibited the establishment, maintenance, or carrying on of any offensive or unwholesome business or establishment without the limits of the village, or within one mile of the limits thereof, and it ordained that 'no person shall transfer, carry, haul, or convey any offal, dead animals, or other offensive matter or material into or through the village of Hyde Park.' All these provisions are sanctioned by prescribed penalties, and the village authorities are enforcing them against the company. If they are enforced, it cannot carry on the business which its charter authorized. The offal from Chicago or elsewhere cannot be brought to the works; and if it could, the company could not render it into a fertilizer. The ordinance is in direct conflict with the legislative grant, a grant which was for a consideration returned, and which, therefore, has the force of a contract. It is, in my judgment, a palpable violation of the constitution provision that no State shall pass a law impairing the obligation of a contract.

It has been suggested that the charter did not precisely designate the place where the rendering works might be established, and to which the city offal might be carried; and hence it is argued that, notwithstanding the contract, it is within the power of the legislature to order the removal of the works to another locality, and that this may be done mediately by a municipal corporation empowered by the State. The inference I emphatically deny. It is true the charter empowered the company to select a location within certain geographical limits, and did not itself define the exact point; but when under this power a location was made by the company, and hundreds of thousands of dollars were expended upon it, it was beyond the power of the other contracting party to change it. The location was lawful when made, and, if lawful then, it cannot be made unlawful afterwards. If it could be, it would be in the power of the legislature to change it a second, a third, a fiftieth time, and fix it at last at a place where none of the rights of the company could be enjoyed. No one has ever doubted that when a railroad company has been authorized, as is often the case, to construct a railroad beginning at some point within a township or a county, and has constructed its road from some point in that township or county, its right to maintain it from that terminus is indefeasible. That which was left uncertain has become certain. So, if a warrant be granted for a tract of land in a specified district without describing it, when the warrantee has selected a tract, the contract is closed, and his right to that tract is absolute. It must be, therefore, that the location of the company's works at the places where they were located, recognized as a proper location in the act of the legislature of 1869, is one which cannot be changed without the consent of both parties to the contract, or without compensation made.

But it is said the ordinance complained of is only an exercise of the police power of the State, and that the charter must be assumed to have been granted and accepted subject to that police power. I admit that the police power of a State extends generally to the prevention and removal of things injurious to the comfort of the public. I admit also that the works of the company may have been and probably were offensive, and were a nuisance, unless their character was changed by the law. So, also, carrying offal, or animal matter, into or through the village may have been and probably was more or less offensive. But the question now is, were the works or the transportation things illegal? In view of the contract contained in the charter, was it a legitimate exercise of the State's police power to declare them illegal, abate them, and inflict penalties for doing what the State had declared that the company might do? I am confident it was not. Had the charter been a mere license, instead of a contract, the case would be different. But the legislature may legalize acts which, without such legislation, would be obnoxious to criminal law. It may legalize that which, without such action, would be a nuisance. It may do this either by law or by contract. It may limit the extent to which its police power shall be exerted. And it often does. The charter of a railroad company is a familiar illustration. Crossing highways and running locomotives, were they not authorized by law, would be nuisances. Who will contend that, when a charter has been granted for building a railway and running locomotives thereon, the company or its agents can be punished criminally for maintaining a nuisance? Why not? Because there is no nuisance in the eye of the law, and the State has contracted away a portion of its police power. So, also, an illustration may be found in the case of gas companies. If a legislature charter a gas company, and locate its works at a designated place, authorizing the manufacture of gas there, it would be marvellous indeed if the agents of the company could be indicted for a nuisance, or if the legislature could without compensation deny the exercise of the powers granted, because manufacturing gas is offensive. The police power of a State is no more sacred than its taxing power. We have held again and again that a State may by contract with one of its corporations bind itself not to tax the property of that corporation. If so, why may it not bind itself not to exercise its police power over certain employments. It would be a monstrous stretch of credulity to conclude that the legislature of Illinois did not intend such a relinquishment of police power when it granted the charter to the plaintiff in error. Its members must be assumed to have had common knowledge. They knew the offensiveness of animal offal. The plain object of the charter was to relieve the citizens of Chicago from it. The legislature knew that the transportation of the offal to a point south of the designated line, and its deposit there, would inevitably be offensive to the much less numerous inhabitants of the vicinity. With this knowledge they authorized what the plaintiff in error has been doing. They invited the investment of $250,000 to enable it to be done, and they entered into a contract that the company should have a right to do it for fifty years. To say now, as the judgment in this case does, there was a tacit reservation, that under the pretence of exercising the police power of the State the rights of the company may all be taken away, and their investments destroyed without compensation, is, in my opinion, not only unjust, but unwarranted by any judicial decision heretofore made. While saying this, I freely admit that the police power of the State may remain to regulate the conduct of the company's business, provided the regulation does not extend to the destruction of the chartered rights. It may prescribe that the offal shall be transported to the appellants' works in closed cars or wagons. It may impose reasonable regulations upon the disposition of the offal when received at the rendering works, but under the cover of regulation it cannot destroy.

Nothing, I admit, is more indefinite than the extent or limits of what is called police power. I will not undertake to define them. Certainly it has limits. I refer to what Judge Cooley has said in reference to the exercise of the power over private corporations. Cooley, Const. Lim. 577. He says, 'The exercise of the police power in these cases must be this: the regulations must have reference to the comfort, safety, or welfare of society; they must not be in conflict with any of the provisions of the charter, and they must not, under the pretence of regulations, take from the corporation any of the essential rights and privileges which the charter confers. In short, they must be police regulations in fact, and not amendments of the charter in curtailment of the corporate franchise.' This I understand to be entirely correct. In support of it he refers to numerous decisions, which I will not cite, but to which I also refer. There are many others fully sustaining the text as I have quoted it.

There is no authority to the contrary. The cases relied upon to uphold the exercise of the power which the defendants in error assert are all clearly distinguishable. They are not cases where the police power was exerted for the destruction of a chartered right distinctly granted by a contract.

The only decision referred to which has been made by this court is Beer Company v. Massachusetts, supra, p. 25. In my judgment, it furnishes no support for the present ruling. The case was this: In 1828, the legislature granted a charter to the Boston Beer Company, by which they were made a corporation, 'for the purpose of manufacturing malt liquors in all their varieties,' and made the corporation subject to all the duties and requirements of an act passed on the 3d of March, 1809, entitled 'An Act defining the general powers and duties of manufacturing companies,' and the several acts in addition thereto. The general manufacturing act of 1809 contained a provision that the legislature might from time to time, upon due notice to any corporation, make further provisions and regulations for the management of the business of the corporation and for the government thereof, or wholly to repeal any act or part thereof establishing any corporation, as should be deemed expedient. In 1829, the act of 1809 was repealed, with the following qualification, however: 'But this repeal shall not affect the existing rights of any person or the existing or future liabilities of any corporation, or any members of any corporation now established, until such corporation shall have adopted this act and complied with the provisions herein contained.' The legislature of the State, in 1869, passed an act restricting the sale within the Commonwealth of any malt liquors, and prohibiting it except in certain specified cases.

The Supreme Court Judicial Court of the State adjudged: first, that the act of 1869 did not impair the obligation of the contract contained in the charter of the beer company, so far as it related to the sale of malt liquors, but was binding upon the company to the same extent as on individuals. The sale was not expressly authorized, nor authorized by necessary implication. And, secondly, the court held that the act was in the nature of a police regulation in regard to the sale of a certain article of property, and is applicable to the sale of such property by individuals and corporations, even when the charter of the corporation cannot be altered or repealed by the legislature.

We affirmed the decision of the State court. But there was nothing in the charter that authorized, either expressly or by necessary intendment, the company to sell their product within the Commonwealth. It was not a contract to authorize what was a nuisance when it was granted, or what might thereafter become one. It was not a contract respecting any thing that was illegal when the contract was made. The contract under consideration in the present case was. It was made with reference to the exercise of the State's police power, and in restraint of it. It is obvious, therefore, the beer company's case has no applicability to the one we have now in hand.

I have said enough to indicate the reasons for my dissent. To me they appear very grave. In my judgment, the decision of the court denies the power of a State legislature to legalize, during a limited period, that which without its action would be a nuisance. It enables a subsequent legislature to take away, without compensation, rights which a former one has accorded, in the most positive terms, and for which a valuable consideration has been paid. And, in its application to the present case, it renders it impossible to remove from Chicago the vast bodies of animal offal there accumulated; for if the ordinance of Hyde Park can stand, every other municipality around the city can enforce similar ordinances.