When a claim of contractual rights under a state statute is
denied by a state court purely upon the ground that the attempted
grant was in conflict with the state constitution and therefore
void
ab initio, the "contract clause" of the federal
Constitution is not violated and this Court may not review the
decision.
In determining whether such decision was influenced by
legislation subsequent to the alleged contract, this Court will
give considerate attention to the state court's decision, presuming
an intention on the part of such court to obey the Constitution and
laws of tho United States; it will not, however, confine itself to
the language of the opinion, but will examine the decision in its
scope and substance, and decide for itself whether subsequent
legislation was given effect in arriving at the result.
The decision of the court below, holding void an act of the
Legislature of New York (Laws of 1907, c. 355) which purported to
grant rights in the Saint Lawrence River, was arrived at
independently of the later repealing act and accompanying
legislation found in Laws of 1913, chaps. 452 and 453.
Writ of error to review 212 N.Y. 1 dismissed.
The case is stated in the opinion.
Page 242 U. S. 273
MR. JUSTICE CLARKE delivered the opinion of the Court.
This proceeding was commenced in the Supreme Court of New York
by the Long Sault Development Company, hereinafter called the
plaintiff, for the purpose of testing the constitutionality of an
act of the legislature of that state, passed in 1907, to
incorporate the plaintiff and to grant to it important rights in
the bed of, and with respect to the use of the waters of, the St.
Lawrence River. Laws of 1907, c. 355.
The case is now in this Court on the claim that this Act of 1907
is a valid law, and that the property rights springing from the
grants therein and the acceptance of them by the plaintiff were
impaired by a later act, passed in 1913, purporting to repeal the
Act of 1907, and by the effect given to this later act by the
decision of the Court of Appeals, rendered in June, 1914.
The title of the Act of 1907 indicates the comprehensive
character of the grants which the legislature attempted to make by
it. It reads as follows:
"An Act to Incorporate the Long Sault Development Company, and
to Authorize Said Company to Construct and Maintain Dams, Canals,
Powerhouses, and Locks at or near Long Sault Island, for the
Purpose of Improving the Navigation of the St. Lawrence River and
Developing Power from the Waters Thereof, and to Construct and
Maintain a Bridge, and Carry on the Manufacture of
Commodities."
The act proceeds, first, to incorporate the Long Sault
Development Company, giving it perpetual corporate
Page 242 U. S. 274
existence, and then in terms to authorize it to construct,
maintain, and operate dams, canals, reservoirs, and the
appurtenances necessary or useful for the purpose of developing
water power and electrical energy at such point or points adjacent
to the south shore of the St. Lawrence River, and in and upon the
river bed near Long Sault Island or Barnhart's Island, as may be
selected by the company; to erect and maintain power houses and
electrical transmission appliances, and to construct a bridge or
bridges across the river in connection with the dam authorized, and
to charge tolls for passage thereon.
These important rights are declared to be granted upon various
specified conditions, the most important of which is
"that the rights hereby granted shall never be so used as to
impair or obstruct the navigation of the Saint Lawrence River, but,
on the contrary, that such navigation shall be preserved
in as
good condition as, if not better than, the same is at present,
regard being always had to the amount of the natural flow of water
in said river as affecting its navigability from time to time."
The act further provides that, after the Congress of the United
States shall authorize the construction of the proposed dams,
locks, and canals, and after the payment of certain sums of money
into the state treasury, then the Commissioners of the Land Office
shall, upon application of said corporation,
"
grant unto it the title and interest of the people of the
state in and to lands under the waters of the Saint Lawrence River
to be covered or occupied by said works and locks and power
houses."
The payments to be made, after the year 1911, shall be not less
than $25,000 for each year. The petition alleges that the river at
Long Sault rapids is now practically unnavigable, being navigated
only by light draft passenger vessels downstream during the summer
tourist season, and that all other traffic up and down the river
passes around the rapids by way of the Cornwall Canal, on the
Canadian side of the river.
Page 242 U. S. 275
The plaintiff was duly organized as a corporation, and expended
a large sum of money in preparing to utilize the grants of the
act.
By an act which became a law on the 8th day of May, 1913, the
legislature of the state in terms repealed this Act of 1907, under
which the plaintiff in error is claiming.
Almost three months before this repealing act was passed, this
suit was commenced by the filing of a petition in the supreme court
of New York, praying for a writ of mandamus, to be directed to the
treasurer of that state, requiring him to receive as a payment into
the treasury of the state the sum of $25,000, as a sum due and
payable on February 1st, 1913, for the year 1912, under the
provisions of the Act of 1907, which sum had theretofore been
tendered to the treasurer and had been by him refused for the
reason, it is alleged, that he had been advised by the attorney
general of the state that said act was unconstitutional and void.
The application of the petitioner for a writ of mandamus was denied
by the supreme court, and this decision was affirmed by the
appellate division and by the Court of Appeals, which ordered the
record in the case remitted to the supreme court, to be proceeded
upon according to law.
Up to this time, there is nothing in the record before us to
indicate that any question was presented to the state courts
excepting the single one as to whether or not the Act of 1907 was
valid under the Constitution of the State of New York.
More than a month later, on the 14th day of July, 1914, the
Court of Appeals, on motion of the plaintiff, requested the supreme
court to return the remittitur to the Court of Appeals, which court
then amended the same by incorporating therein the statement that
"upon the argument of the appeal in this cause before the Court of
Appeals" there was submitted a brief, containing five
Page 242 U. S. 276
specified points. Of these in "Point III" alone, counsel for the
plaintiff for the first time, and then only by way of argument,
attempt to present a federal question by claiming that, if the
repealing act is to be regarded as an attempted condemnation of the
special franchises claimed by the plaintiff, it "would be
unconstitutional in that such franchises were not taken by the
state for public use," in violation of the Fourteenth Amendment to
the Constitution of the United States.
It is significant to note that the Court of Appeals, in its
decision, rendered before the remittitur was thus amended, did not
treat or regard the repealing act as "an attempted condemnation of
the special franchises claimed by the plaintiff," nor did it
afterwards so treat it.
Upon the record thus described, the plaintiff in error comes
into this Court, claiming that the act of the Legislature of the
State of New York of 1907 is a valid, constitutional law, and that,
it having been accepted and acted upon by the plaintiff, contract
and other property rights resulted which, under the decision of the
Court of Appeals, have been impaired or taken away by the repealing
Act of 1913, in violation of the Constitution of the United States
and of the Fourteenth Amendment thereto, and it therefore prays for
a reversal of the judgment of the supreme court, entered pursuant
to the decision of the Court of Appeals.
The defendant in error meets this claim of the plaintiff by a
denial of the jurisdiction of this Court, for the claimed reason
that the Court of Appeals reached the conclusion that the Act of
1907 was unconstitutional and void without reference to, and
without giving any effect to, the subsequent repealing statute.
The grants of the Act of 1907 are such that, if it was a valid
law, upon their being accepted, they constituted property or
contract rights of which the plaintiff could not be deprived, and
which could not be impaired, by
Page 242 U. S. 277
subsequent legislation, and therefore the denial by the
defendant in error of the jurisdiction of this Court renders it
necessary for us to determine whether the Court of Appeals, in its
decision, gave any effect to the repealing act. If it did not give
effect to that act, either expressly or by implication, this Court
is without jurisdiction to review its decision, for the reason that
the provisions of the Constitution of the United States for the
protection of contract rights are directed only against the
impairment of them by constitutions or laws adopted or passed
subsequent to the date of the contract from which such rights
spring, and do not reach decisions of courts construing
constitutions or laws which were in effect when the contract was
entered into, as has been held by a long line of decisions
extending from
Knox v. Exchange
Bank, 12 Wall. 379, to
Cross Lake Shooting
& Fishing Club v. Louisiana, 224 U.
S. 632.
In deciding this question, this Court is not limited to the mere
consideration of the language of the opinion of the state court,
but will consider the substance and effect of the decision, and
will for itself determine what effect, if any, was given by it to
the repealing act.
Fisher v. New Orleans, 218 U.
S. 438;
Cross Lake Shooting & Fishing Club v.
Louisiana, 224 U. S. 632, and
Louisiana Railway & Navigation Co. v. Behrman,
235 U. S. 164.
While this Court will exercise independent judgment as to the scope
of the decision of the state court, it will give to that decision
that respectful and sympathetic attention which is always due to
the highest court of a state (
Fisher v. New Orleans,
supra), with the presumption always in mind that the state
courts will do what the Constitution and laws of the United States
require.
Neal v. Delaware, 103 U.
S. 370,
103 U. S. 389;
Chicago &c. R. Co. v. Wiggins Ferry Co., 108 U. S.
18;
New Orleans v. Benjamin, 153 U.
S. 411, and
Defiance Water Co. v. Defiance,
191 U. S. 184.
Page 242 U. S. 278
An examination of the opinion of the Court of Appeals shows that
the court, in its consideration of the repealing Act of 1913, not
only did not give to it an effect which would impair any contract
relation springing from the Act of 1907, but that, on the contrary,
it concluded that the repeal
"could not operate to confiscate any valid franchise or property
right which the Long Sault Development Company had previously
acquired under the act repealed,"
and that this conclusion made it necessary for the court to
"consider and determine whether the legislature possessed the
constitutional power to convey away the state control over the
navigation of the St. Lawrence River to the extent attempted by the
Act of 1907."
And then, addressing itself to the constitutional problem thus
stated, the court proceeds, upon principle and authority, to decide
that, under the Constitution of the State of New York, the power of
the legislature of that state to grant lands under navigable waters
to private persons or corporations is limited to purposes which may
be useful, convenient, or necessary to the public; that it has no
power to so part with the title to such lands that the state may
not in the future improve navigation over them, if the public
interest shall so require, and that they are held by the state on
such a trust for the public use that the legislature has no power
to authorize the conveyance of them to a private corporation to
maintain navigation thereover "in as good condition as . . . at
present," thereby parting for all time with its power to improve
such navigation.
The court finds its principal authority for these legal
positions in the decision of this Court in
Illinois Central
Railroad Company v. Illinois, 146 U.
S. 387, in which it was decided that the title which a
state holds to land under navigable waters is different in
character from that which it holds in land intended for sale and
occupation, in the former case, it being held in trust for the
people of the
Page 242 U. S. 279
state, in order that they may enjoy the navigation of the waters
and carry on commerce over them free from obstruction or
interference by private parties; that this trust devolving upon the
state in the public interest is one which cannot be relinquished by
a transfer of the property; that a state can no more abdicate its
trust over such property, in which the whole people are interested,
so as to leave it under the control of private parties than it can
abdicate its police powers in the administration of government and
the preservation of the peace, and that the trust under which such
lands are held is governmental, so that they cannot be alienated
except to be used for the improvement of the public use in
them.
This was a pioneer decision upon the subject at the time it was
rendered by a divided Court, but the principles upon which it
proceeds have been frequently approved by this Court.
Morris v.
United States, 174 U. S. 196;
United States v. Mission Rock Co., 189 U.
S. 391,
189 U. S. 406;
Kean v. Calumet Canal Co., 190 U.
S. 452,
190 U. S. 481,
and they have been very widely approved by many of the highest
courts of the states of the Union. Rose's Notes on U.S. Reports,
Vol. 12, p. 270; Supp. 3, p. 291; Supp. 5, p. 369.
Having arrived at these conclusions of law, the Court of Appeals
proceeds to make application of them to the Act of 1907, and
concludes that that act, in terms, virtually turns over to the
corporation the entire control of the navigation of the Long Sault
Rapids (provided that the consent of Congress to the grant could be
obtained), requiring only that the company shall pay certain
stipulated sums of money, and that it shall preserve the navigation
of the river "in as good condition as . . . the same is at
present," and says that, no matter how much the interest of the
public might demand the improvement of the river in the future, the
state would be powerless to act, either directly or by constraint
upon the corporation, and for this reason it concludes that the act
is, in substance, an abdication
Page 242 U. S. 280
of the trust upon which the state holds control over the St.
Lawrence River as navigable water, and that therefore it is
unconstitutional and void. Whether this construction placed upon
the act is the one which this Court would place upon it if coming
to an original interpretation of it we need not inquire, for, under
the authorities hereinbefore cited, the prohibition of the
Constitution against the impairing of contracts by state
legislation does not reach errors committed by state courts when
passing upon the validity and effect of a contract under a
constitution or laws existing when it is made.
This discussion of the decision by the Court of Appeals makes it
very clear that that decision does not give any effect whatever to
the repealing Act of 1913, but that, wholly independent of that
act, and proceeding upon sound principle and abundant authority,
the court arrived at the conclusion that the Act of 1907 was
unconstitutional and void, and therefore it results that this case
does not present any question for decision under the federal
Constitution, and that, for want of jurisdiction, the writ of error
must be
Dismissed.
MR. JUSTICE McKENNA and MR. JUSTICE PITNEY dissent upon the
ground that Chapter 355 of the Laws of 1907 of the State of New
York, creating the Long Sault Development Company and conferring
upon it certain rights and franchises, when accepted, as it was, by
the company, constituted a contract between the state and the
company; that the repealing act and accompanying legislation passed
in 1913 (Chaps. 452 and 453) had the effect of impairing the
obligation of that contract, in contravention of § 10 of Article I
of the federal Constitution, and that effect was given to the
latter legislation by the decision under review.