Fertilizing Company v. Hyde Park

Supreme Court of the United States · Property

PropertyPolice powerNuisanceCorporate chartersContracts Clausepolice powernuisancecorporate charter

Facts

The company was incorporated by Illinois in 1867 for fifty years and was authorized to establish chemical works in Cook County south of a specified township line and to maintain depots in Chicago for receiving and carrying off dead animals, offal, and other animal matter. It operated a depot near Chicago and chemical works at a location that later fell within Hyde Park, and it transported putrid animal matter to the works through the village on the only available railroad. The evidence, accepted by the court, showed the factory was an extreme nuisance, with intolerable stench that caused nausea and discomfort and greatly annoyed nearby inhabitants, while the transportation of the matter through the village was also highly offensive. In 1869 the village charter was revised to give Hyde Park broad authority to define and abate nuisances and regulate or prohibit offensive businesses, with a two-year proviso delaying use of those powers against this company; after that period expired, Hyde Park enacted and sought to enforce an ordinance forbidding transport of offensive matter through the village and operation of offensive or unwholesome establishments within or near the village.

Issue

Did the company's 1867 charter create a contract protecting it from Hyde Park's later ordinance under the Contracts Clause, so that the village could not prohibit transportation of offal through the village or the maintenance of the company's offensive works there? More specifically, did the charter unmistakably grant immunity from the state's police power to regulate and abate nuisances?

Rule

In construing corporate charters, every reasonable doubt is resolved against the corporation. Nothing is taken as granted except what is given in unmistakable terms or by an equally clear implication; silence is negation and doubt is fatal. Therefore, unless a charter clearly provides otherwise, a corporation remains subject to the state's police power, including the power to regulate and abate nuisances affecting public health.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In 2008, Ohio chartered Riverbend Rendering Works for 40 years, authorizing it to collect animal byproducts in Cleveland and operate processing facilities anywhere in northeastern Ohio. The charter says nothing about health regulations or nuisance law. In 2022, Akron adopted an ordinance barring any plant within city limits that emits putrid odors shown to cause nausea and severe discomfort to nearby residents.

If Riverbend argues that the ordinance unconstitutionally impairs its charter, which is the strongest answer?

Explanation. The majority held that corporate charters are construed most strongly against the corporation. Nothing is taken as granted except what is given in unmistakable terms or by equally clear implication; silence is negation and doubt is fatal. So a charter authorizing a business for a term does not by itself create contractual immunity from later exercises of the police power to regulate or abate a nuisance affecting public health. (Derived from Fertilizing Company v. Hyde Park (n.d.).)