In this case, Alger (Defendant) built a wharf in the Boston Harbor that extended beyond a line established by the Massachusetts legislature.
Alger's wharf was otherwise within the geographical limits of the colony ordinance of 1647 and it did not impede or obstruct the public's navigation.
The issue in Commonwealth v. Alger is "What are the just powers of the legislature to limit, control, or regulate the exercises and enjoyment of a property owner's rights."
[1] Justice Shaw held it is settled principle that, "every holder of property...holds it under the implied liability that his use of it may be so regulated, that it shall not be injurious to the equal enjoyment of others having an equal right to the enjoyment of their property, not injurious to the rights of the community."
[2] Shaw goes on to explain that, "It is much easier to perceive and realize the existence and sources of this power, then to mark its boundaries, or prescribe limits to its exercise."
In what is often referred to as the most important paragraph of the opinion, the court explains that police power, "is very different from the right of eminent domain, the right of a government to take and appropriate private property to public use, whenever the public exigency requires it; which can be done only on condition of providing a reasonable compensation therefore.
Professor Benjamin Barros states, "Shaw's attempt to make a principled distinction between eminent domain and the police power was understandable.
[2] Shaw provides obvious uses of police power, such as prohibiting the use of warehouses for the storage of gunpowder when the warehouses are located near homes or highways, placing restraints on the height of wooden buildings in crowded areas and requiring them to be covered with incombustible material, and prohibiting buildings from being used as hospitals for contagious diseases or carrying on of noxious or offensive trades.
[1] Shaw also thought the court's holding in this case would promote certainty, "Things done may or may not be wrong in themselves, or necessarily injurious and punishable as such at common law; but laws are passed declaring them offenses, and making them punishable, because they tend to injurious consequences; but more especially for the sake of having a definite, known and authoritative rule which all can understand and obey."
[2] Shaw gave an example of the certainty outcome he expected to obtain with this holding: "The trademan needs to know, before incurring expenses, how near he may build his works without violating the law or committing a nuisance; builders of houses to know, to what distance they must keep from the obnoxious works already erected, in order to be sure of the protection of the law for their habitations.
This requisite certainty and precision can only be obtained by a positive enactment...enforcing the rule thus fixed, by penalties."
[2] Commonwealth v. Alger helped signify a shift from community-based common-law regulation toward the modern regulatory state.
The decision in Commonwealth v. Alger also breaks "with a laissez-faire tradition and ushers in an era of positivist regulation."
[2] Finally, the court's decision in Commonwealth v. Alger demonstrated an expanded interpretation of the new term "police power" with Shaw holding, "that state authority to enact police regulations includes, but is not limited to, such doctrines as "use your own as not to injure another's property," and that the legislature has broad authority to exercise this power."