No particular form of words or phrases in which a claim of
federal rights must be asserted in a state court has ever been
declared necessary by this Court, but it is sufficient if it
appears from the record that such rights were specially set up or
claimed there in such way as to bring the subject to the attention
of the state court.
Under the legislation and contracts set forth in the opinion of
the Court in this case, the water power incidentally created by the
erection and maintenance of the dam and canal for the purpose of
navigation in Fog River is subject to control and appropriation by
the United States, and the plaintiff in error is possessed of
whatever rights to the use of this incidental water power could be
granted by the United States.
At what points in the dams and canal the water for power may be
withdrawn, and the quantity which can be treated as surplus with
due regard to navigation, must be determined by the authority which
owns and controls that navigation.
This was a suit brought in 1886 in the Circuit Court of
Outagamie County, Wisconsin, by the Patten Paper Company and others
against the Kaukauna Water Power Company, the Green Bay and
Mississippi Canal Company, and others. The object
Page 172 U. S. 59
of the proceeding, as set forth in the complaint, was to have
determined what share or proportion of the flow of Fox River, where
the same passes Islands Nos. 3 and 4, in township No. 21 N., of
range No. 18 E., is appurtenant to, and of right should be
permitted to flow in, the south, middle, and north channels of said
river, respectively, and to have the defendants restrained from
drawing from said Fox River, above the head of Island No. 4, and so
that the same shall not come into the middle channel of said river
and into the mill pond of the plaintiffs, more water flow of said
river than the one-sixth part thereof, or more than the amount
which by nature was appurtenant to, and flowed in, the south
channel of said river.
The scope of the investigation was widened by reason of the
answer of the Green Bay and Mississippi Canal Company, which it was
agreed and stipulated should have the effect of a cross-bill in the
action, and which asserted that any decree to be entered in the
suit, determining or adjudicating what share or proportion of the
flow of the river should be permitted to flow in its several
channels, should be made subject to the right of the canal company,
by reason of the facts stated, to use all of the river power
created by the government dam and improvements on the river.
The principal facts disclosed in the case were the
following:
The Fox River is a navigable stream, and flows through township
21 N., of range 18 E., in the County of Outagamie, Wis., and in
said river, below Lake Winnebago, there are and always have been
rapids and abrupt falls. To permit navigation through or by said
rapids and falls necessarily requires the building of dams, locks,
and canals at great expense. By an Act approved August 8, 1846,
Congress granted to the State of Wisconsin, on its admission into
the Union, a large amount of public lands for the express purpose
of, and in trust for, improving the navigation of the Fox and
Wisconsin rivers. The state accepted said grant of land for said
purposes, and by an act of its legislature approved August 8, 1848,
undertook the improvement of said rivers and enacted, among other
things, that
"
whenever a water power shall be created by reason of any
dam erected
Page 172 U. S. 60
or other improvements made on any of said rivers, such water
power shall belong to the state, subject to the future action of
the legislature."
One of the rapids in Fox River, around which it was necessary to
secure slack-water navigation by means of dams, locks, and canals,
was commonly known as the "Kaukauna Rapids." The state adopted a
plan and system for the construction of a dam and canal at said
Kaukauna Rapids whereby there was to be built a low dam, beginning
on the south side, near the head of the rapids, extending
downstream, on or near the south bank of the river, across lots 8,
7, 6, and onto lot 5, of § 22, and thence extending at about a
right angle with the south bank across the river, leaving an
opening at the north end through which the water of the river could
pass, and be conducted by a conduit or canal to a certain point at
which should be placed a lock.
The sales of lands granted by Congress not proving sufficient to
carry on the work, the board of public works were authorized by the
legislature to issue certificates of indebtedness, which were
declared to be a charge upon the proceeds of the lands granted by
Congress, and upon the revenues to be derived from the works of
improvement.
In July, 1853, the state legislature created a corporation,
under the name of the Fox & Wisconsin Improvement Company, to
which, by the second section thereof, were granted and transferred
the uncompleted works of improvement, together with, all and
singular, the rights of way, dams, locks, canals, water power, and
other appurtenances of said works. The company agreed to pay the
outstanding certificates, and forthwith undertook the work.
Additional lands were granted by Congress in 1854 and 1855 to aid
the state in the improvement of the Fox and Wisconsin Rivers. The
company subsequently executed a deed of conveyance of the works of
improvement, the incidental water powers, and all of the lands, in
trust to apply all revenues derived from the improvement and the
proceeds of sales of the lands to the payment of the unpaid
certificates and of bonds issued by the company, and to the
completion of the works.
Page 172 U. S. 61
In 1864, the company failed, the deed of trust was foreclosed,
and in 1866 the property of the company, consisting of the works of
improvement, the water powers, and the lands, were sold, pursuant
to a decree of court entered February 4, 1864. The purchasers
became incorporated under the name of the Green Bay and Mississippi
Canal Company, and that company was authorized by the third section
of an act of the legislature approved April 12, 1866, to
"enlarge and increase the capacity of said works and of the said
rivers so as to make a uniform steamship navigation from the
Mississippi River to Green Bay, or to surrender the same to the
United States for such enlargement, on such terms as may be
approved by the governor for the time being of the state."
July 7, 1870, Congress passed an act entitled "An act for the
improvement of water communication between the Mississippi River
and Lake Michigan by the Wisconsin and Fox Rivers." By this act,
Congress authorized the Secretary of War to ascertain the sum
"which in justice ought to be paid to the Green Bay and
Mississippi Canal Company as an equivalent for the transfer of, all
and singular, its property and rights of property in and to the
line of water communication between the Wisconsin River and the
mouth of Fox River, including its locks, dams, canals, and
franchises, or so much of the same as shall, in the judgment of
said secretary, be needed,"
and to that end he was authorized to "join with said company in
appointing a board of disinterested and impartial arbitrators" --
one to be selected by the secretary, one by the company, and the
third by the two arbitrators so selected. The act provided that in
making their award, the arbitrators should take into consideration
the amount of money realized from the sale of lands granted by
Congress to aid in the construction of said water communication,
which amount should be deducted from the actual value thereof as
found by the arbitrators. It was further enacted that no money
should be expended on the improvement of the Fox and Wisconsin
Rivers until the Green Bay and Mississippi Canal Company should
make and file with the Secretary of War an agreement, in writing,
whereby it shall agree to grant
Page 172 U. S. 62
and convey to the United States its property and franchises upon
the terms awarded by the arbitrators.
By an act approved March 23, 1871, by the Legislature of
Wisconsin, the directors of the Green Bay and Mississippi Canal
Company were authorized to sell and dispose of the rights and
property of said company to the United States, and to cause to be
made and executed all papers and writings necessary thereto as
contemplated in the act of Congress.
Subsequently, in November, 1871, the arbitrators fixed the then
value of all the property of the company at $1,048,070, and the
amount realized from land sales, to be deducted therefrom at
$723,070, leaving a balance of $325,000 to be paid to the company.
And, in anticipation that the secretary might decide that the
personal property and "the water powers created by the dams and by
the use of the surplus waters not required for purposes of
navigation" were not needed, these water powers and the water lots
necessary to the enjoyment of the same, subject to all uses for
navigation, were valued at the sum of $140,000; personal property,
$40,000, and the improvements, $145,000.
The Secretary of War recommended to Congress that it should take
the works of improvement, and not the water powers and personal
property. Congress accordingly, by act approved June 10, 1872, made
the necessary appropriation, and the company, by its deed of
September, 1872, conveyed and granted to the United States
"all and singular its property and rights of property in and to
the line of water communication between the Wisconsin River and the
mouth of Fox River, including its locks, dams, canals and
franchises, saving and excepting therefrom, and reserving to the
said company, the following described property, rights and portions
of franchises which, in the opinion of the Secretary of War and of
Congress, are not needed for public use, to-wit: First. All of the
personal property of the said company, and particularly of all such
property described in the list or schedule attached to the report
of said arbitrators, and now on file in the office of the Secretary
of War, to which reference is hereto made, whether or not such
property be appurtenant to
Page 172 U. S. 63
said line of water communication. Second. Also all that part of
the franchise of said company,
viz., the water powers
created by the dams and by the use of the surplus waters not
required for the purpose of navigation, with the rights of
protection and preservation appurtenant thereto, and the lots,
pieces or parcels of land necessary to the enjoyment of the same,
and those acquired with reference to the same, all subject to the
right to use the water for all purposes of navigation, as the same
is reserved in leases heretofore made by said company, a blank form
of which attached to the said report of said arbitrators is now on
file in the office of the Secretary of War, and to which reference
is here made, and subject also to all leases, grants and
assignments made by said company, the said leases,"
etc., "being also reserved therefrom."
The leases referred to, and reserved from the grant, were those
granted by the company to third parties in consideration of the
payment of annual rents. The use of the surplus water began as
early as 1861, and has extended until now, from one-quarter to
one-half of the flow of the river is utilized at points near the
first lock. The company has caused to be erected at this point
large and costly mills, and it was found by the trial court that
the Green Bay and Mississippi Canal Company has leased all of the
water power created by the dam and canal, or arm of the dam, to be
used over the water lots abutting on the canal.
The cause having been submitted to the Superior Court of
Milwaukee County upon the pleadings and proofs, that court
sustained the allegations contained in the cross-complaint of the
Green Bay and Mississippi Canal Company, and adjudged, among other
things, that
"the Green Bay and Mississippi Canal Company is the owner of,
and entitled, as against all the parties to this action, and their
successors, heirs, and assigns, to, the full flow of the river, not
necessary to navigation, and that, all and singular, the other
parties to this action are hereby forever enjoined from interfering
with the said Green Bay and Mississippi Canal Company in so
withdrawing and using such water, and it is further considered and
adjudged and decreed, as in favor of the Patten Paper Company
against all other
Page 172 U. S. 64
defendants, that all of the water of the river which is
permitted by the Green Bay and Mississippi Canal Company to flow
over the upper dam, or into the river above Island No. 4, so as to
pass down the river, should be, and it is hereby, divided and
apportioned between the plaintiffs and their successors and
assigns, the Kaukauna Water Power Company, and its successors and
assigns, and the Green Bay and Mississippi Canal Company, and its
successors and assigns, between and to the south, middle, and north
channels of the river, in the following proportions,"
etc.
The Supreme Court of Wisconsin reversed the judgment so rendered
by the superior court, and remanded the case to the superior court
with directions to enter judgment in accordance with its opinion.
That court, in obedience to the mandate of the supreme court,
entered a final judgment in the case as follows, omitting
recitals:
"Upon motion of Hooper and Hooper, plaintiffs' attorneys, it is
considered, adjudged, and decreed, as in favor of the Patten Paper
Company, Union Pulp Company, and Fox River Pulp & Paper
Company, against all defendants, that all the water of the river,
except that required for purposes of navigation, shall be, and is
hereby, divided and apportioned between and to the south, middle,
and north channels of the river, in the following proportions --
that is to say, 43/200 thereof of right should flow down the south
channel; 157/200 thereof should of right flow down the main channel
of the river, north of Island No. 4, and that of the water so of
right flowing down the main channel of the river, north of Island
No. 4, and above the middle channel, 62/157 thereof should of right
flow down the middle channel, and south of Island No. 3, and that
of the water flowing down the north channel north of Island No. 4,
and above Island No. 3, 95/157 part should of right flow down the
north channel, and north of Island No. 3, and each of the parties
to this action, their heirs, successors, and assigns, are forever
enjoined from interfering with the waters of said river so as to
prevent their flowing into said channels in the proportions
aforesaid."
"And it is further adjudged by the court that said Green
Page 172 U. S. 65
Bay and Mississippi Canal Company, its successors and assigns,
shall so use the water, if at all, created by said dam as that all
the water used for water power or hydraulic purposes shall be
returned to the stream in such a manner and at such a place as not
to deprive the appellants, or those claiming under or through them,
of its use as it had been accustomed to flow past the lands of the
said appellants on said river, and in the several channels of said
river below said dam, as it was accustomed to flow, and that said
appellants shall have the right to use the water of said river,
except such as is or may be necessary for navigation, as it was
wont to run in a state of nature, without material alteration or
diminution."
From this judgment the Green Bay and Mississippi Canal Company,
plaintiff in the cross-bill, appealed to the supreme court of the
state, and on January 10, 1896, the respondents, the present
defendants in error, moved to dismiss said appeal for the reason
that the judgment was in exact accord with the mandate, and was in
effect the judgment, of the supreme court. Upon this motion, the
supreme court dismissed the appeal, expressing itself as
follows:
"After careful consideration, we are constrained to hold that
the judgment entered is a substantial compliance with the mandate
of this court. Certainly it would have been improper to allow any
amendment to pleadings or new litigation. The mandate was not for a
new trial, nor for further proceedings according to law, but with
direction to enter judgment in accordance with the opinion, and the
opinion left nothing undetermined. This left nothing for the trial
court to do in the case except to enter judgment therein as
directed."
By that appeal and its decision, the jurisdiction of the state
courts in the case was exhausted, and the judgment entered in the
superior court became the final judgment of the highest court in
the state in which a decision in the suit could be had. And on May
18, 1896, a writ of error to said judgment by the Green Bay and
Mississippi Canal Company was taken to this Court, and allowed by
the chief justice of the Supreme Court of Wisconsin.
Page 172 U. S. 66
MR. JUSTICE SHIRAS, after stating the facts in the foregoing
language, delivered the opinion of the Court.
First for our consideration is the motion made by the defendants
in error to dismiss the writ of error because the record does not
disclose that any federal question was involved in the controversy,
and because no title, right, privilege, or immunity claimed under
the Constitution of the United States, or any treaty or statute of,
or commission held, or authority exercised under the United States,
was specifically set up or claimed in the trial court or in the
Supreme Court of the State of Wisconsin by the plaintiff in error,
nor was there any decision in either of said state courts against
any such title, right, privilege, or immunity specially set up or
claimed by the plaintiff in error.
The contention that no federal question is disclosed in the
record is sufficiently disposed of, we think by an inspection of
the cross-complaint filed by the Green Bay and Mississippi Canal
Company. It was therein claimed that the water power in question
was created by a dam, canal, and other improvements owned and
operated by the United States, and that the right and title of the
said canal company to the use of the water power so created arose
under and by virtue of certain alleged and recited acts of Congress
and acts of the legislature of the State of Wisconsin relating to
the improvement of Fox River as a public highway, and especially by
virtue of an alleged contract between the United States and the
canal company whereby the use of the surplus water created by said
dam and canal was granted and reserved to the canal company.
Assuming the truth of such allegations, it is plain that the
Page 172 U. S. 67
plaintiff in error asserted a right and title and authority
exercised under the United States.
It is, however, urged that, whatever may have been the right,
title, privilege, or authority possessed by the canal company and
derived from the United States, such right, title, privilege, or
authority was not specially set up and claimed in the state courts
at a time and in a manner to give this Court jurisdiction.
This contention is based on the words in section 709 of the
Revised Statutes, carried forward from the twenty-fifth section of
the Judiciary Act of 1789, "specially set up or claimed," and the
effect to be given to those words has been frequently considered by
this Court.
There is a class of cases wherein it has been held and laid down
as settled doctrine that
"the revisory power of this Court does not extend to rights
denied by the final judgment of the highest court of a state unless
the party claiming such rights plainly and distinctly indicated,
before the state court disposed of the case, that they were claimed
under the Constitution, treaties, or statutes of the United States;
that if a party intends to invoke for the protection of his rights
the Constitution of the United States, or some treaty, statute,
commission, or authority of the United States, he must so declare,
and, unless he does so declare 'specially,' that is, unmistakably,
this Court is without authority to reexamine the final judgment of
the state court; that this statutory requirement is not met if such
declaration is so general in its character that the purpose of the
party to assert a federal right is left to mere inference."
The last elaborate discussion of this phase of the subject is
found in the opinion of the Court in
Oxley Stave Company v.
Butler Company, 166 U. S. 648,
delivered by MR. JUSTICE HARLAN, in which many of the cases are
reviewed, and from which the preceding quotation is taken.
But no particular form of words or phrases has ever been
declared necessary in which the claim of federal rights must be
asserted. It is sufficient if it appears from the record that such
rights were specially set up or claimed in the state
Page 172 U. S. 68
court in such manner as to bring it to the attention of that
court.
"The true and rational rule," this Court said in
Bridge Proprietors v. Hoboken
Co., 1 Wall. 143,
"is that the court must be able to see clearly, from the whole
record, that a certain provision of the Constitution or act of
Congress was relied on by the party who brings the writ of error,
and that the right thus claimed by him was denied."
In
Roby v. Colehour, 146 U. S. 159,
it was said that
"our jurisdiction being invoked upon the ground that a right or
immunity specially set up and claimed under the Constitution or
authority of the United States has been denied by the judgment
sought to be reviewed, it must appear from the record of the case
either that the right so set up and claimed was expressly denied or
that such was the necessary effect in law of the judgment. . . . If
it appear from the record by clear and necessary intendment that
the federal question must have been directly involved, so that the
state court could not have given judgment without deciding it, that
will be sufficient."
Powell v. Brunswick County, 150
U. S. 440;
Sayward v. Denny, 158 U.
S. 180;
Chicago, Burlington &c. Railroad v.
Chicago, 166 U. S. 226.
As, then, in its cross-complaint, the canal company explicitly
set up and claimed, as the foundation of its alleged rights, the
acts of Congress and the transactions between the United States and
the canal company under which the United States became the owner of
the dam, canal, and other improvements on the Fox River, and the
canal company became vested with its rights in the surplus water
power incidental to said works, and as in the final judgment the
Supreme Court of Wisconsin necessarily held adversely to these
claims of federal right, we hold that the motion to dismiss for
want of jurisdiction must be overruled, and that it is our duty to
inspect the record in order to see whether there was error in the
rulings of the court below.
Whether the water power incidentally created by the erection and
maintenance of the dam and canal for the purposes of navigation in
Fox River is subject to control and appropriation
Page 172 U. S. 69
by the United States, owning and operating those public works,
or by the State of Wisconsin, within whose limits Fox River lies,
is the decisive question in this case.
Upon the undisputed facts contained in the record, we think it
clear that the canal company is possessed of whatever rights to the
use of this incidental water power could be validly granted by the
United States.
That Fox River is one of the navigable waters of the United
States has been already decided by this Court in the case of
The Montello,
20 Wall. 430, upon the same facts, historical and legislative, that
are now before us. That was the case of a libel filed by the
government in the Circuit Court of the United States for the
District of Wisconsin against the steamer
Montello, in
admiralty, for noncompliance with acts of Congress making
enrollment and license and certain provisions as to steam valves
necessary for vessels like the
Montello, navigating the
navigable waters of the United States. The court below dismissed
the libel, resting its decision on the ground that, before the
navigation of the river was artificially improved, there had been
numerous obstructions to a continuous navigation, by reason of
falls and rapids, and that therefore Fox River was not a navigable
water of the United States. But this Court reversed the judgment,
and held that Fox River is a stream of a national character, and
that steamboats navigating its waters are subject to governmental
regulations.
To aid in the improvement of the Fox and Wisconsin Rivers, and
to connect the same by a canal, the United States, by the Act of
August 8, 1846, c. 170, 9 Stat. 83, granted a quantity of land on
each side of Fox River, and the lakes through which it passes, from
its mouth to the point where the portage canal should enter the
same, and provided that as soon as the Territory of Wisconsin
should be admitted as a state, all the lands granted by the act
should become the property of said state "for the purpose
contemplated by the act, and no other." It further enacted that the
legislature should agree to accept said grant upon the terms
specified in the act, and should have power to fix the price at
which said lands should be sold, not less than one dollar and
twenty-five cents
Page 172 U. S. 70
the acre, and to adopt such kind and plan of improvement on said
route as the said legislature shall from time to time determine for
the best interest of said state, and provided also that the lands
granted should not be conveyed or disposed of by said state, except
as said improvements should progress -- that is, the said state
might sell so much of said lands as should produce the sum of
twenty thousand dollars, and then the sales should cease until the
governor of the state should certify the fact to the President of
the United States that one-half of said sum had been expended upon
said improvements, when the said state might sell and dispose of a
quantity of said lands sufficient to reimburse the amount expended,
and that thus the sales should progress as the proceeds thereof
should be expended, and the fact of such expenditure certified in
the manner in the act mentioned. It further enacted that the said
improvements should be commenced within three years after the said
state should be admitted into the Union, and completed within
twenty years, or the United States should be entitled to receive
the amount for which any of said lands might have been sold by the
state.
In February, 1848, the State of Wisconsin was created by the
adoption of a constitution, and the legislature of the new state,
by an act passed August 8, 1848, accepted the grant from Congress
made by the Act of August 8, 1846, and organized a board of public
works, and authorized the board, in the construction of such
improvements, to
"enter on, to take possession of and use all lands, waters and
materials the appropriation of which for the use of such works of
improvement should in their judgment be necessary."
The act contained the following section:
"SEC. 16. When any lands, waters or materials appropriated by
the board to the use of said improvements shall belong to the
state, such lands, waters or materials, and so much of the
adjoining land as may be valuable for hydraulic or commercial
purposes, shall be absolutely reserved to the state, and whenever a
water power shall be created by reason of any dam erected or other
improvements made on any of
Page 172 U. S. 71
said rivers, such water power shall belong to the state subject
to future action of the legislature."
Sections 17-22 provide for condemnation by the board of such
lands, waters, and materials belonging to individuals, with whom
the board could not agree, and for payment of damages out of the
fund.
By an Act approved February 9, 1850, the Legislature of
Wisconsin enacted as follows:
"The board of public works are hereby authorized and empowered
in any future lettings of contracts for the improvement of the Fox
and Wisconsin Rivers to consider bids made by any person or persons
for improvements which will create a water power, and when such
person or persons offer to perform, or perform and maintain, the
work in consideration of the granting by the state to him or them,
his or their assigns, forever, the whole or a part of such water
power,
provided that before such bid is accepted and the
contracts entered into, it shall receive the approval of the
governor."
"When lettings have been made for the improvement of said rivers
whereby a water power is created, the board of public works may
relinquish to the person or persons who have performed the same all
or a part of such power as a consideration in full or in part for
such performance or maintenance of such improvement, or for
both."
The eighth article of the Constitution of Wisconsin contained
the following:
"SEC. 10. The state shall never contract any debt for works of
internal improvement or be a party carrying on such works, but
whenever grants of land or other property shall have been made to
the state especially dedicated by the grant to particular works of
internal improvement, the state may carry on such particular works,
and shall devote thereto the avails of such grants, and may pledge
or appropriate the revenues derived from such works in aid of their
completion."
By the Act approved July 6, 1853, the Legislature of Wisconsin
created a corporation to supersede the board of public works in the
construction and maintenance of the improvements on the Fox and
Wisconsin Rivers, under the name of
Page 172 U. S. 72
the Fox & Wisconsin Improvement Company, and granted and
surrendered to the said company
"the works of improvement contemplated by the act entitled 'An
act to provide for the improvement of the Fox and Wisconsin Rivers
and connecting the same by a canal,' approved August 8, 1848, and
by several acts supplemental thereto and amendatory thereof, and
known as the 'Fox and Wisconsin Rivers Improvement,' together with
all and singular the rights of way, dams, locks, canals, water
power and other appurtenances of said works; also all the right
possessed by the state of demanding and receiving tolls and rents
for the same so far as the state possesses or is authorized to
grant the same, and all privileges of constructing said works and
repairing the same, and all other rights and privileges belonging
to the improvement to the same extent and in the same manner that
the state now holds or may exercise such rights by virtue of the
acts above referred to in this section."
The Fox & Wisconsin Improvement Company, thus created and
empowered, agreed to fully execute the trust, and forthwith
undertook the work.
By an Act approved October 3, 1856, entitled "An act to secure
the enlargement and immediate completion of the improvement of the
navigation of the Fox and Wisconsin Rivers," etc., it was enacted
by its second section as follows:
"SEC. 2. To enable said company to make all the dams, locks,
canals, feeders and other structures, and to do all the dredging
and other work, and furnish all materials necessary to complete the
improvement of the navigation of the Fox and Wisconsin Rivers and
the canal connecting the same, all the lands now unsold, granted by
Congress in aid of said improvement, as explained by the same body
(which grants are hereby accepted) are hereby granted to the Fox
and Wisconsin Improvement Company, subject, however, to the terms
and conditions of said grants by Congress and to the further terms
and conditions following -- that is to say that within ninety days
after the passage of this act, the said company shall make a deed
of trust to three trustees, to be appointed
Page 172 U. S. 73
as hereinafter provided, including and conveying to said
trustees and their successors all the unsold lands granted to the
State of Wisconsin by the several acts and resolutions of Congress
to aid in the improvement of the Fox and Wisconsin Rivers, and all
the works of improvements constructed or to be constructed on said
rivers, and all and singular the rights of way, dams, locks,
canals, water powers and other appurtenances of said works, and all
rights, privileges and franchises belonging to said improvement,
and all property of said company, of whatever name and
description."
By the third section, it was enacted that for raising funds from
time to time for the construction, enlargement, and completion of
said works of improvement, and for the purchase of materials to be
used therein, etc., said company might issue its bonds, to be
countersigned by said trustees, in sums of not less than five
hundred nor more than one thousand dollars each at rates of
interest not exceeding ten percentum per annum, payable
semiannually, the principal of said bonds payable at a period to be
therein named, not exceeding twenty years from their date, etc.,
and that the payment of said bonds should be secured by the deed of
trust aforesaid of said lands, works, water powers, property, and
franchises. It was further provided that in case the company should
fail to comply with any of the requirements of the act or to pay
the principal or interest of its bonds to be issued as therein
provided, the said trustees should sell the said lands, in tracts
not exceeding six hundred forty acres, and should apply the
proceeds thereof to the purposes expressed in the act, and that if
the proceeds of said sales should be insufficient to pay all the
evidences of state indebtedness and interest thereon and redeem all
the bonds and other obligations of said company, then the said
trustees should sell the water powers created by said improvements,
and thereafter all the corporate rights, privileges, franchises,
and property of said company in said improvement, and all
appurtenances thereto, to pay the same, and that the purchasers
thereof should take, hold, and use the same as fully as they were
held, used, and enjoyed by said company, etc.
Page 172 U. S. 74
By the fourth section, it was enacted that the trustees might,
on the requisition of said company, proceed to sell the lands
granted by Congress in aid of said improvement, and might sell or
lease the water powers created by said improvement in such manner
and upon such terms as to price and time and place of payment as
the company might direct, but that no sales of said lands or sales
or leases of said water powers should be made until after the
execution and delivery of said deed of trust, etc.
In 1864, the company failed, the deed of trust was foreclosed,
and the property of the company, consisting of the works of
improvement, lands, and water powers, was sold, in February, 1866,
to purchasers, who became incorporated, under authority of law, as
the Green Bay and Mississippi Canal Company. In the Act of April
12, 1866, authorizing the purchasers at said sale to form
"a corporation for the purpose of holding, selling, operating or
managing the lands, water powers, works of improvement, franchises
and other property purchased at said sale, or any part
thereof,"
it was enacted that said corporation should have power to
enlarge and increase the capacity of said works and of the said
rivers so as to make a uniform steamship navigation from the
Mississippi River to Green Bay, or to surrender the same to the
United States for such enlargement on such terms as should be
approved by the governor of the state.
The amount realized at the sale was just sufficient to pay the
state indebtedness outstanding on account of certificates issued to
aid in the work of improvement, and the sum estimated by a
commission duly appointed, to be necessary to complete the
improvement.
The Green Bay and Mississippi Canal Company, thus organized,
continued to hold the works of improvements and manage the same
until, in 1870, Congress passed an act providing for the purchase
from the company of
"all and singular its property and rights of property in and to
the line of water communication between the Wisconsin River and the
mouth of the Fox River, including its locks, dams, canals and
franchises, or so much of the same as should in the judgment of the
Secretary
Page 172 U. S. 75
of War be needed,"
and authorizing the appointment of a board of arbitrators, to be
mutually chosen, who should appraise the properties to be taken.
This act provided that, in making their award, the arbitrators
should take into consideration the amount of money realized from
the sale of the lands granted to the State of Wisconsin to aid in
the construction of said water communication, which amount was to
be deducted from the actual value thereof as found by the
arbitrators.
In pursuance of this legislation, the arbitrators were appointed
and acted. They fixed the value of the company's property at
$1,048,070; the amount of the land sales at $723,070; leaving a
balance of $325,000 to be paid the company. They valued the water
power and the water lots necessary to the enjoyment of the same at
the sum of $140,000, the personal property at $40,000, and the
improvement at $145,000.
Subsequently, Congress, by Act of June 10, 1872, appropriated
the amount of $145,000, and on September 18, 1872, the canal
company, by its deed of that date, transferred and conveyed the
works of improvement to the United States, reserving to itself the
personal property and the water powers, in the language
following:
"All that part of the franchises of said company,
viz.:
the water powers created by the dams and by the use of the surplus
waters not required for purposes of navigation, with the rights of
protection and reservation appurtenant thereto, and the lots,
pieces or parcels of land necessary to the enjoyment of the same,
and those acquired with reference to the same, all subject to the
right to use the water for all purposes of navigation, as the same
is reserved in leases heretofore made by said company; . . . and
subject, also to all leases, grants and assignments made by said
company, the said leases,"
etc., "being also reserved herefrom."
Since that time, the United States have assumed possession and
exclusive control of the rivers, and have expended several millions
of dollars in their improvement, in pursuance of yearly
appropriations, and the canal company has continued,
Page 172 U. S. 76
until the decree complained of in the present case, in the
possession and enjoyment of the water powers and water lots
mentioned in the report of the arbitrators and reserved in the deed
to the United States.
It is apparent from the conceded facts that the water power in
question did not exist while the stream was in its natural
condition. Nor was it created by the erection of a dam by private
persons for that sole purpose.
We of course, must accept the doctrine of the Supreme Court of
Wisconsin that it would not be competent even for the legislature
to legalize such structures for private purposes. Such a question
is for the state tribunals.
But we have here the case of a water power incidental to the
construction and maintenance of a public work, and, from the nature
of the case, subject to the control of the public authorities -- in
this instance, the United States.
It also appears that through the entire history of this
improvement, these incidental water powers were recognized by the
legislature of the state as a source of revenue for the promotion
and success of the public enterprise, and in aid of its completion.
By the Act of July 6, 1853, the water powers were granted, with the
rest of the public works, to the Fox & Wisconsin Improvement
Company upon a public trust to continue and complete the partially
constructed highway, and the company was thereby authorized to
mortgage such water powers, as part of the plant, to secure bonds
issued to raise money for that purpose, and subsequently, upon a
foreclosure, the entire property became vested in the Green Bay and
Mississippi Canal Company.
The case of
Kaukauna Co. v. Green Bay and Mississippi Canal
Co., 142 U. S. 254,
involved some of the questions presented in the present case.
There, a private riparian owner sought to withdraw water from this
very dam to furnish power to its works. The canal company filed a
bill against such owner, the Kaukauna Water Power Company, to
enjoin it from interfering with the canal company in building and
maintaining the dam and from cutting said dam in order to permit a
flow of water out of the pool into the works of the defendant.
Page 172 U. S. 77
The decree asked for was granted by the Circuit Court of
Outagamie County, and that judgment was affirmed by the Supreme
Court of Wisconsin. 70 Wis. 645. The case was brought to this
Court, where it was contended on behalf of the Kaukauna Water Power
Company that said company, by reason of ownership of the bank and
of the bed of the stream, was the owner of the use, while passing,
of all the water which might flow over the bed of the stream (in
other words, was the owner of all the water power which could be
utilized upon its land), and that therefore the act of the State of
Wisconsin of August 8, 1848, was void as an impairment of such
property rights. The judgment of the court below was affirmed in an
opinion by MR. JUSTICE BROWN, some of the observations of which are
so pertinent to our present purpose that we quote them at some
length:
"The case of the plaintiff canal company depends primarily upon
the legality of the legislative act of 1848, whereby the state
assumed to reserve to itself any water power which should be
created by the erection of the dam across the river at this point.
No question is made of the power of the state to construct or
authorize the construction of this improvement and to devote to it
the proceeds of the land grant of the United States. The
improvement of the navigation of a river is a public purpose, and
the sequestration or appropriation of land or other property,
therefore, for such purpose is doubtless a proper exercise of the
authority of the state under its power of eminent domain. Upon the
other hand, it is probably true that it is beyond the competency of
the state to appropriate to itself the property of individuals for
the sole purpose of creating a water power to be leased for
manufacturing purposes. This would be a case of taking the property
of one man for the benefit of another, which is not a
constitutional exercise of the right of eminent domain. But if, in
the erection of a public dam for a recognized public purpose, there
is necessarily produced a surplus of water which may properly be
used for manufacturing purposes, there is no sound reason why the
state may not retain to itself the power of controlling or
disposing of such water as an incident of its right to
Page 172 U. S. 78
make such improvement. Indeed it might become very necessary to
retain the disposition of it in its own hands in order to preserve
at all times a sufficient supply for the purposes of navigation. If
the riparian owners were allowed to tap the pond at different
places and draw off the water for their own use, serious
consequences might arise not only in connection with the public
demand for the purposes of navigation, but between the riparian
owners themselves as to the proper proportion each was entitled to
withdraw -- controversies which could only be avoided by the
state's reserving to itself the immediate supervision of the entire
supply. As there is no need of the surplus running to waste, there
was nothing objectionable in permitting the state to let out the
use of it to private parties, and thus reimburse itself for the
expenses of the improvement."
"The value of this water power created by the dam was much
greater than that of the river in its unimproved state, in the
hands of the riparian proprietors, who had not the means to make it
available. Those proprietors lost nothing that was useful to them
except the technical right to have the water flow as it had been
accustomed, and the possibility of their being able sometime to
improve it. If the state could condemn this use of the water, with
the other property of the riparian owner, it might raise a revenue
from it sufficient to complete the work, which might otherwise
fail. There was every reason why a water power thus created should
belong to the public, rather than to the riparian owners. Indeed,
it seems to have been the practice not only in New York, but in
Ohio, in Wisconsin and perhaps in other states, in authorizing the
erection of dams for the purpose of navigation, or rather, public
improvement, to reserve the surplus or water thereby treated, to be
leased to private parties under the authority of the state, and
where the surplus thus created was a mere incident to securing an
adequate amount of water for the public improvement, such
legislation has, it is believed, been uniformly sustained."
The learned judge then proceeds to cite decisions to that effect
rendered in several of the state supreme courts.
Page 172 U. S. 79
As respected the right of the riparian owners in that case to
recover compensation for their property thus taken, this Court held
that the Act of Congress of 1875, c. 166, 18 Stat. 506, to aid in
the improvement of the Fox and Wisconsin Rivers, made a proper
provision for such compensation, and that, although the act of 1875
may have been repealed in 1888, c. 4, 25 Stat. 4, 21, yet that the
lapse of thirteen years had afforded a reasonable opportunity for
the Kaukauna Water Power Company to have obtained compensation for
the damages sustained by the construction of the improvements.
As previously stated, the State of Wisconsin, by its Act of
October 3, 1856, granted and conveyed to the Fox & Wisconsin
Improvement Company all the rights and interest of the state in the
improvement, including the water powers created thereby, and in
case the sales of the granted lands should fail to realize a sum
sufficient to complete the intended works of improvement, and to
pay the outstanding indebtedness of the state, and redeem the bonds
issued by the company, the state authorized the sale of the water
powers created by the said improvements. And subsequently, by Act
of March 23, 1871, the state authorized the Green Bay and
Mississippi Canal Company, which had become the owner of the entire
improvement works, lands, and water powers, by purchase at the
foreclosure sale, to sell and dispose of the same to the United
States.
The legal effect and import of the sale and conveyance by the
canal company were to vest absolute ownership in the improvement
and appurtenances in the United States, which proprietary rights
thereby became added to the jurisdiction and control that the
United States possessed over the Fox River as a navigable water. By
the findings of the arbitrators, the sum of $325,000 was payable to
the canal company, but by agreement, and under the Act of Congress
of June 10, 1872, the United States consented to the retention by
the canal company of certain personal property and of the water
powers, with the lots appurtenant thereto, in part payment of the
sum at which
Page 172 U. S. 80
the entire plant had been appraised, and accordingly in its deed
of conveyance the company reserved to itself such personal property
and the water powers and appurtenances, and the United States paid
the remaining sum of $145,000.
The substantial meaning of the transaction was that the United
States granted to the canal company the right to continue in the
possession and enjoyment of the water powers and the lots
appurtenant thereto, subject to the rights and control of the
United States as owning and operating the public works, and that
the United States were credited with the appraised value of the
water powers and appurtenances and the articles of personal
property. The method by which this arrangement was effected --
namely, by a reservation in the deed, was an apt one, and quite as
efficacious as if the entire property had been conveyed to the
United States by one deed and the reserved properties had been
reconveyed to the canal company by another.
So far, therefore, as the water powers and appurtenant lots are
regarded as property, it is plain that the title of the canal
company thereto cannot be controverted, and we think it is equally
plain that the mode and extent of the use and enjoyment of such
property by the canal company fall within the sole control of the
United States. At what points in the dam and canal the water for
power may be withdrawn, and the quantity which can be treated as
surplus with due regard to navigation, must be determined by the
authority which owns and controls that navigation. In such matters,
there can be no divided empire.
This aspect of the subject was before us in
Wisconsin v.
Duluth, 96 U. S. 379, where
the State of Wisconsin sought, by an original bill in this Court,
to restrain the City of Duluth from changing the current of the St.
Louis River, and making other improvements in the city harbor, to
the detriment, as was claimed, of the harbor of Superior City,
within the jurisdiction of Wisconsin. It, however, was disclosed
that Congress had made large appropriations for the work complained
of, and that the executive department had taken
Page 172 U. S. 81
exclusive charge and control of it. The court dismissed the
bill, and in its opinion, per Mr. Justice Miller, said:
"Nor can there be any doubt that such action is within the
constitutional power of Congress. It is a power which has been
exercised ever since the government was organized. The only
question ever raised has been how far and under what circumstances
the exercise of the power is exclusive of its exercise by the
states. And while this Court has maintained in many cases the right
of the states to authorize structures in and over the navigable
waters of the states, which may either impede or improve their
navigation, in the absence of any action of the general government
in the same manner, the doctrine has been laid down with unvarying
uniformity that when Congress has, by any expression of its will,
occupied the field, that action was conclusive of any right to the
contrary asserted under state authority."
To the same effect is
South Carolina v. Georgia,
93 U. S. 4.
Several cases are cited in the briefs for the defendants in
error wherein it has been decided by state supreme courts of high
authority that whatever remains of the stream, beyond what is
wanted for the public improvement and which continues to flow over
the dam and down the original channel of the river, belongs to
riparian owners upon the stream in the same manner as if the state
dam had not been erected.
Our examination of the cases so cited has not enabled us to
perceive that they are applicable to the present subject. In none
of them have we found that by the state legislation was there a
fund created out of the use of the surplus water, to be expended in
the completion and maintenance of the public improvement. As we
have seen, the entire legislation -- state and federal -- in the
present instance has had in view the dedication of the water powers
incidentally created by the dams and canal to raising a fund to aid
in the erection, completion, and maintenance of the public works,
and, as we have further seen, provision was made in the federal act
of 1875 for the ascertainment and payment of damages, in respect to
which this Court said in
Kaukauna Co. v. Green Bay &
Mississippi Canal Co., 142 U. S. 279,
that
"the terms of
Page 172 U. S. 82
this act are broad enough to cover not only lands taken for
flowage purposes, but all injury done to lands or other property by
means of any part of the works of said improvement, which would
include damages caused by the diversion of the waters."
Moreover, in the state cases cited by the defendants in error,
the question of federal jurisdiction and control did not arise, and
was not considered.
Other propositions, based on the alleged departure by the
supreme court of the state from the case made by the pleadings,
were discussed by the counsel for the plaintiff in error, but, as
the views heretofore stated dispose of the case, it is not
necessary for us to consider them.
Our conclusion, then, is that as by the judgment of the Supreme
Court of Wisconsin there was drawn into question the validity of an
authority exercised under the United States, to-wit, the granting
of the said water powers and easement, and the decision was against
the validity of such authority, thereby depriving the plaintiff in
error of property without due process of law, the judgment of that
court must be, and is hereby,
Reversed, and the case is remanded to the Supreme Court of
Wisconsin for further proceedings not inconsistent with this
opinion.
