and the law ought to recognise them. But in its general administration it applies to the case of the prosperous as well as the unfortunate debtor, and the welfare of society cannot be promoted by any provisions calculated to discourage the punctual discharge of obligations and equal justice to all.

Chancellor Kent has attempted a laboured apology for the English rule on the subject of compound interest. "It appears to me," he says, "that this provision in the law is not destitute of reason and sound policy. Interest upon interest, promptly and incessantly accruing, would, as a general rule, become harsh and oppressive. Debt would accumulate with a rapidity beyond all ordinary calculation and endurance. Common business cannot sustain such overwhelming accumulation. It would tend also to inflame the avarice and harden the heart of the creditor. Some allowance must be made for the indolence of mankind, and the casualties and delays incident to the best regulated industry; and the law is reasonable and humane which gives to the debtor's infirmity or want of precise punctuality some relief in the same infirmity of the creditor. If the one does not pay his interest to the uttermost farthing, at the very moment it falls due, the other will equally fail to demand it with punctuality. He can, however, demand it, and turn it into principal when he pleases; and we may safely leave this benefit to rest upon his own vigilance or his own indulgence."

If the effect of a simple demand or even of a suit at law, were to give a right to compound interest, there would be some plausibility in this statement of the case. No authority, however, can be found for that position in England. The plaintiff invariably recovers in a suit at law, his principal and simple interest up to the day of judgment—not compounded from the day of suit brought, much less from any previous demand in pais. In England, interest subsequent to the judgment even cannot be recovered on it. A fresh action must

'Connecticut v. Jackson, 1 Johns. Ch. Rep. 17.

be brought for the interest afterwards accruing. The law is different in most of the United States, by force generally of express legislative enactment.1 Apart then, from this idea, there is nothing in this apology but an eloquent appeal for indulgence to the indolence of mankind—an appeal which we must be permitted to think, would have equal force were it directed against even simple interest, or against all laws which rigidly enforce the obligation of contracts. It is best to leave the consideration of indulgence to the faults or the casualties of men, to be pleaded before the only forum where such themes are appropriate the forum of the conscienceenlightened and influenced by the precepts of that religion which inculcates the prayer, "forgive our debts, as we also forgive our debtors."

ART. IV.-CASES OF CONFLICTING FRANCHISES.

In the famous case of the Charles River Bridge v. the Warren Bridge, the only question was the extent of territory covered by the franchise. The majority of the court were of opinion, that the right was confined to the local limits of the bridge. If a contract could have been implied, binding the legislature not to authorize the erection of another bridge near to the Charles river bridge, the effect of such a contract would be to exclude injurious competition within the exclusive limits.

The court in this case undoubtedly departed from the law as it had been previously understood for centuries. The legislature cannot consistently with the principles of equity, do anything which impairs a previous grant. There may be great practical difficulties in determining the exclusive

'4 Yates 226; 2 Ves. jr. 162.

11 Pet. R. 420.

limits of a franchise, in a case like that of the Charles river bridge, but the naked proposition laid down by the court, that the exclusive limits of a franchise for the erection of a bridge do not extend beyond the local limits of the bridge itself, unless the extent of the franchise is expressly defined by the legislative grant, cannot be sustained on principle. If the Charles river bridge had been erected by the state, and transferred to individuals for a consideration equivalent to the whole amount of tolls, it would have been a fraud upon the grant, if the state had erected another bridge so near as to withdraw the tolls of the first bridge.

On the true principles of equity, a court of chancery would never in favour of the state enforce an executory contract, the terms of which had thus been violated. The grant of a free

bridge, which withdrew all the toll from the Charles River Bridge Corporation, was discreditable to the state of Massachusetts, and the transaction to which she was a party would between private individuals never have been endured by a court of chancery. The decision of the supreme court of the United States was founded upon the doctrine, that public grants are to be construed strictly, and that nothing passes by implication. The court, however, did not decide that those principles of construction shall not be applied to public grants, which are necessary to sustain and give them effect. The evil against which the Charles River Bridge Company sought protection, was injurious competition. The limits within which such competition would be injurious could not be implied. They must, such was the opinion of the court, be ascertained by express covenant; but in all other respects the contract between the state and its grantees is to be determined by the same principles which prevailed before the decision of this case. What in the view of the law is injurious competition does not necessarily depend upon express stipulation. If there is a covenant fixing the exclusive limits of the franchise within those limits, competition is injurious, and the legislature cannot authorize a bridge of any character by

which tolls shall be diverted. The effect of such a covenant, whether it is express or may be implied, is, not that another bridge of the same character shall not be constructed, but to exclude a diversion of tolls by any bridge within the entire extent of the franchise.

The rule of the common law was, that if a rival bridge is erected so near an existing one as to draw away its custom, essentially to impair its value, or materially to diminish its income, it must be deemed a nuisance. This doctrine was discarded in the above case, and a diversion of tolls is not now considered injurious by the supreme court of the United States, unless it is effected by a bridge erected within limits ascertained by the express provision of the previous grant. In all other respects the rule adopted by the court corres ponds with the rule of the common law. In determining whether a rival structure is a nuisance, the question does not so much concern the character of the bridge as the results which attend its use. If by the diversion of tolls it materially impairs the existing bridge, it is unauthorized. The restriction is to be construed liberally in reference to the mis. chief to be guarded against. The legislature could not on any pretence of public necessity grant to another company the privilege of building a bridge within the limits actually occupied by the Charles river bridge. All the judges agreed that the franchise was inviolable so far as its limits extended. The difference of opinion related to the implied terms of the contract. If the court had been of opinion that the limits of the franchise might have been extended by implication, there would have been no question in regard to the effect of that contract. If the limits of the franchise had been expressly designated by the terms of the charter, the right would have been exclusive, and it is evident that the court would have regarded the grant of the Warren bridge as absolutely void, notwithstanding there might have been in the grant a full provision for compensation.

One of the counsel for the Warren bridge (Mr. Greenleaf),

contended with great force of argument, that if the legislature had covenanted expressly that another bridge should not be erected within a certain distance of the Charles river bridge, the right to build another bridge might nevertheless be granted to others. He seemed to suppose that the faith of the state was pledged to indemnify the parties, by making full compensation for whatever property the state might take, and for all the injury which should be done to private rights, but that for the breach of the covenant no actual provision of compensation was necessary, to give validity to the grant by which the injury was effected. This doctrine was not sanctioned by the court. It cannot be supported on principle. The state is capable of contracting, is affected by the same legal and equitable principles as private individuals, and notwithstanding its legislative character and powers, it must fully sustain the obligations of its contract.

Undoubtedly the state may in the exercise of the eminent domain provide for the public necessities by destroying existing rights and privileges acquired by legislative grants. If it is necessary for the preservation of the health of the public, to destroy dams which have been constructed under the authority of the legislature, or if the public convenience and the interests of navigation require that the bridges which have been authorized by the legislature on a navigable river should be removed; if for the creation or improvement of a harbour, it is necessary to reclaim the shore which has been granted-all these acts are within the constitutional power of the legislature. By such an exercise of the right of sovereignty the validity of contracts is not impaired, nor their obligation destroyed or suspended, although the property which is held under legislative rights is subjected to the same liabilities and burdens as property held in other rights.

But the rightful exercise of the eminent domain does not extend to the direct abrogation of a contract. What the legislature have once granted, the state cannot reclaim and