1. Section 120 of the National Defense Act of 1916, which
empowered the President, in time of war, to place obligatory orders
with corporations for any product or material required, of the kind
usually produced by them, was sufficient authority for taking the
right held by a lessee to make use of part of the water in a power
canal, such taking being accomplished by requisitioning from the
power company owning the canal all the electrical power capable of
being produced by the use of all waters capable of being diverted
through its intake for its plants and machinery connected
therewith. P. 282 U. S.
2. A requisition by the government upon a power company for the
production of all the electrical power capable of being produced
through the full use of the waters of its intake canal, including
the use to which a lessee of the company was entitled under rights
which, by state law, were a corporeal hereditament and real estate,
a taking for public use of the water rights of such
lessee, and that the latter is entitled to compensation therefor
notwithstanding that, by an agreement made between the government
and the power company at the time of the requisition, the
Page 282 U. S. 400
waived delivery of the power on condition that it be distributed
to certain designated private companies (of which the lessee was
not one) for war uses, and the company waived all right to
compensation if permitted to carry on its business and to sell its
power consistently with the exigencies of the national security and
defense. Omnia Commercial Co. v. United States,
261 U. S. 502
distinguished. P. 282 U. S.
3. Secretary of War, in making war-time requisition of
electrical power generated by diversion of water from Niagara
not to have acted pursuant to powers in
respect of navigation or under treaty, but to have exercised power
of eminent domain. P. 282 U. S.
68 Ct.Cls. 414 reversed.
Certiorari, 281 U.S. 710, to review a judgment of the Court of
Claims in favor of the United States in a suit against it to
recover compensation for property rights in water alleged to have
been taken for war purposes.
Page 282 U. S. 404
MR. JUSTICE HOLMES delivered the opinion of the Court.
This is a proceeding by the petitioner to recover compensation
for property rights in water of the Niagara River alleged to have
been taken by the United States for war purposes. The Niagara Falls
Power Company, by private grant to it, Letters Patent from the New
York and acts of the legislature of that state, was the owner, so
far as the law of New York could make it owner, of land and water
rights on the American side of the River above the Falls. Included
in them was a power canal through which the Power Company was
Page 282 U. S. 405
to divert 10,000 cubic feet per second at the time of the
alleged taking. From this canal, the petitioner, the International
Paper Company, was entitled, by conveyance and lease, to draw and
was drawing 730 cubic feet per second -- a right that, by the law
of New York, was a corporeal hereditament, and real estate.
On December 28, 1917, the Secretary of War wrote to the Power
"The President of the United States, by virtue of and pursuant
to the authority vested in him and by reason of the exigencies of
the national security and defence, hereby places an order with you
for, and hereby requisitions, the total quantity and output of the
electrical power which is capable of being produced and/or
delivered by you through the use of all waters diverted or capable
of being diverted through your intake canal, and for your plants
and machinery connected therewith."
Immediate and continuous delivery of such power was directed,
and it was added: "You will be paid fair and just compensation for
power delivered hereunder." At the same time, an agreement was made
by the Secretary of War and the Power Company (reciting that the
President has requisitioned the power as above) to the effect that
the Secretary of War, "acting for and in behalf of the United
States," until further notice waives delivery of the power to the
United States on the express condition that the Power Company shall
distribute such power as provided in a schedule naming companies
and amounts, but not naming the petitioner, and, on the other side,
the Power Company waives all right of compensation by reason of
said requisition if permitted to carry on its business and to sell
consistently with the exigencies of the national security and
defence. On December 29, the representative of the Secretary of War
wrote to the secretary of the Power Company,
"Please note that the requisition order covers also all of the
water capable of being diverted through your intake canal. . . .
This is intended to cut
Page 282 U. S. 406
off the water being taken by the International Paper Company,
and thereby increase your productive capacity,"
and, on December 31 telegraphed to the counsel of the petitioner
"Power Company has been directed to take water hitherto used by
International Paper Co." The petitioner had been notified of what
was to happen, but was allowed time to run out its stock on hand.
On February 7, 1918, its use of the water ceased, and was not
resumed until midnight November 30, 1918, when the order of
December 28 was abrogated. The Court of Claims found that the
shutting off of the water from the petitioner's mill cost it
$304,685.36, direct overhead expense, but gave judgment that the
petition be dismissed.
The government has urged different defences with varying energy
at different stages of the case. The latest to be pressed is that
it does not appear that the action of the Secretary was authorized
by Congress. We shall give scant consideration to such a
repudiation of responsibility. The Secretary of War, in the name of
the President, with the power of the country behind him, in
critical time of war, requisitioned what was needed and got it.
Nobody doubts, we presume, that if any technical defect of
authority had been pointed out, it would have been remedied at
once. The government exercised its power in the interest of the
country in an important matter, without difficulty, so far as
appears, until the time comes to pay for what it has had. The doubt
is rather late. We shall accept as sufficient answer the reference
of the petitioner to the National Defence Act of June 3, 1916, c.
134, § 120, 39 Stat. 166, 213; U.S.Code, Title 50, § 80, giving the
President in time of war power to place an obligatory order with
any corporation for such product as may be required, which is of
the kind usually produced by such corporation.
Page 282 U. S. 407
Then it is said that there was no taking, but merely a making of
arrangements by contract. But all the agreements were on the
footing that the government had made a requisition that the other
party was bound to obey. Liggett & Myers Tobacco Co. v.
United States, 274 U. S. 215
274 U. S. 220
is said that the Power Company and the petitioner could withdraw
water from the River only by license from the United States, under
the Act of June 29, 1906, c. 3621, 34 Stat. 626, and that the
license was revoked by what was done. But the Secretary of War did
not attempt to pervert the powers given to him in the interest of
navigation and international duties to such an end . He proceeded
on the footing of a full recognition of the Power Company's rights
and of the government's duty to pay for the taking that he
purported to accomplish. There is no room for quibbling
distinctions between the taking of power and the taking of water
rights. The petitioner's right was to the use of the water, and,
when all the water that it used was withdrawn from the petitioner's
mill and turned elsewhere by government requisition for the
production of power, it is hard to see what more the government
could do to take the use. It is true that the petitioner did not
come within the scope of the government's written promise to pay.
But the government purported to be using its power of eminent
domain to acquire rights that did not belong to it, and for which
it was bound by the Constitution to pay. It promised to pay for all
the power that the canal could generate. If it failed to realize
that the petitioner had a right to a part of the power, its clear
general purpose and undertaking was to pay for the rights that it
took when it took the power. Phelps v. United States,
274 U. S. 341
274 U. S. 343
Campbell v. United States, 266 U.
, 266 U. S.
-371; United States v.
Page 282 U. S. 408
Falls Manufacturing Co., 112 U.
, 112 U. S. 656
Of course, it does not matter that, by a subordinate arrangement,
it directed the use of the power to companies that would fulfill
its purposes, rather than to machinery of its own. That arrangement
it was able to make only because it took the power.
We perceive no difficulty arising from the case of Omnia
Commercial Co. v. United States, 261 U.
. There, the taking of the whole product of a
company went no further than to make it practically impossible for
that company to keep a collateral contract to deliver a certain
amount of steel to the appellant. But here, the government took the
property that the petitioner owned as fully as the Power Company
owned the residue of the water power in the canal. Our conclusion
upon the whole matter is that the government intended to take, and
did take, the use of all the water power in the canal; that it
relied upon and exercised its power of eminent domain to that end;
that, purporting to act under that power and no other, it promised
to pay the owners of that power, and that it did not make the
taking any less a taking for public use by its logically subsequent
direction that the power should be delivered to private companies
for work deemed more useful than the manufacture of paper for the
exigencies of the national security and defence. See Mt.
Vernon-Woodberry Cotton Duck Co. v. Alabama Interstate Power
Co., 240 U. S. 30
MR. JUSTICE McREYNOLDS, MR. JUSTICE STONE, and MR. JUSTICE
ROBERTS are of opinion that the judgment of the Court of Claims
should be affirmed.