Case ID: ohio-st_42/html/0607-01.html
Source: Caselaw Access Project
Author: {"author": "Johnson, C. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

State ex rel. Fanger v. Board of Public Works.
    1. Under the provisions of the act of March 23, 1840 (3 Rev. Stats 417, §§ 20 to 23 inclusive), relating to the canals of the state, it is the duty, as well as the right, of the hoard of public works, to resume the privilege or right to the use of surplus water, leased or sold for hydraulic purposes, or any portion thereof, whenever, at any time, it may he deemed necessary for the purposes of navigation, or whenever its use for hydraulic purposes shall be found in any manner to interfere with and injuriously afEect the navigation of the canal, feeder or stream from which such water is taken.
    2. The hoard of public works is not authorized by said statute to in any manner surrender, abridge, restrict or limit its power to resume, at any time, the surplus water leased ór sold for hydraulic purposes, whenever it may be deemed necessary for the purposes of navigation ; nor to create or impose any burden or obligation upon the state, by reason of the exercise of such right of resumption, other than is authorized by the 23d section of said act.
    3. Hence, a clause providing that on such resumption of surplus water and termination of the lease, the board of public works shall pay to the lessee the value of the lasting improvements erected for the use of such water, is a restriction on the performance of a public duty, and is unauthorized and void.
    MANDAMUS.
    
      The relator’s intestate was the assignee of a lease, dated June 27, 1853, made by the board of public works, to Riley and Le Blond, whereby certain water-power, out of the Mercer county reservoir, together with about one and three-quarter acres of land adjoining the same, was leased to' them for the term of thirty years, from November 1, 1853, with the privilege of a renewal, on the terms as hereinafter stated. The use of said water-power was to be subject to the restrictions, conditions and limitations stated in said lease.
    Among these were the following:
    “It is expressly understood and agreed by and between the parties that the party of the second part (the lessees), shall not be entitled to any deduction from the rent hereby made payable, unless said parties shall be deprived of the use of the water, for more than one month in any one year, and the party of the first part reserves the right to resume, at any time, the use of the water hereby leased, _ whenever, in the opinion of the acting commissioner in charge of tliis canal, the interests of .the party of the first part require it, the water hereby leased may be resumed, and then, and in that case, all the rights and privileges, derivable to said party of the second part from this agreement, shall cease and determine, provided the party of the first part shallfistpay or tender the party of the second part, the mine of all lasting improvements now made, or hereafter to he made, by said second party. Said value to be determined by three disinterested persons, chosen for that purpose. Each party choosing one, and the two thus chosen to choose the third.” Said lease also contains the following stipulations, touching the renewal of said lease for an additional term of thirty years, “ And it is further understood and agreed that at the expiration of this agreement, the party of the second part shall be entitled to a renewal of this lease for the like term of years, for such annual rent as may be offered by the highest bidder, who shall also agree to purchase of said party of the second part all permanent and valuable buildings necessarily erected by said party, for the convenient usé of the water-power hereby leased, at such price as such buildings shall be adjudged to be worth by three judicious, disinterested freeholders, to be chosen as hereinbefore specified, provided such buildings shall .be erected on land belonging to the state, or land which can be purchased by said •bidder at a reasonable price, to be determined by said appraisers. And if no such bids shall be made on the terms •aforesaid, at a higher rent than is herein specified, said party shall be entitled to such renewal on the terms of this lease.”
    The first term of thirty years expired on the first day of November, 1883. Prior to that date the board of public works notified the assignee of said lease that said board would not renew said lease for an additional term after the expiration of the first term, for the reason that said leased water was necessary for the purposes of navigation, and its use for hydraulic purposes interfered with the navigation of the canal, and said board proposed to resume the same. On the 6th day of May following, the board passed an order formally resuming the use of the said water.
    The petition avers that the said relator and. those under whom he claims have performed all the conditions of said lease on their part to be performed; that lasting and valuable improvements have been placed upon .the lands of the state, described in said lease; and that the board of public works has resumed the water-power so let, but has neglected and refused to renew said lease or to appoint an appraiser, of said improvements, though often requested so to do. The prayer of said petition is for a writ of mandamus commanding the defendant to select an appraiser so as to ascertain the value of said improvements, and for general relief.
    The parcel of land included in said lease, as is expressly stated therein, was leased for the purpose of enabling the party of the second part to use and enjoy the use of the water-power thereby leased. The land was a mere incident to the use of the water, and, independently of that, is of comparatively small value. The lease provided that upon resumption of the use of the water the entire lease should cease and determine.
    The main question in this case is the proper construction of the statute authorizing the lease of water-power by the board of public works — being sections 20 to 23, inclusive, of the act of March 23, 1840, found in volume 3 (Supplement), Revised Statutes, page 417. These sections are as follows :
    
      “ Seo. 20. Whenever, in the opinion of the board of public works, there shall be surplus water in either of the canals, or in the feeders, or at the dams erected for the purpose of supplying either of said canals with waterj or for the purpose of improving the navigation of any river, and constructed at the expense of the state, over and above the quantity of water which may be required for the purpose of navigation, the said commissioners may order such surplus water, and any lands granted to, or purchased by the state, for the purpose of using the same, or such part thereof as they may deem expedient, to.'be sold for hydraulic purposes, subject to such conditions and reservations as they may consider necessary and proper, either in perpetuity or for a limited number of years, for a certain annual rent, or otherwise, as they may deem most beneficial for the interests of the state.
    ' “ Sec. 21. The provisions of the foregoing section shall extend to and include the water passing round locks, from one level to another, on either of the canals of the state.
    “ Sec. 22. No hydraulic power, nor right to the use of any water, shall be sold, leased or conveyed, except such as shall accrue from the surplus water of the canal, feeders or dams, or from the water passing round any lock, after supplying the full quantity necessary for the purposes of navigation.
    “ Sec. 23. Every lease, grant, or conveyance of waterpower shall contain a reservation and condition that the state, or its authorized agents, may at any time resume the privilege or right to the use of water, or any portion thereof, whenever it may be deemed necessary for the purposes of navigation, or whenever its use for hydraulic purposes shall be found in any manner to interfere with and injuriously affect the navigation of either of the canals, feeders, or streams from which the water shall be taken for such hydraulic purposes ; and, whenever such privilege shall be resumed, in whole or in part, the sum paid therefor, or the rent reserved, or such reasonable portion thereof as shall be determined upon, agreeably to the conditions and stipulations of the lease or deed of conveyance aforesaid, shall be refunded or remitted to the purchaser or or. lessee, his heirs, or assigns.”
    
      T. J. Godfrey and Marsh & Loree, for plaintiff, filed no brief.
    
      Janies Lawrence, attorney general, for defendant:
    The agreement to pay for improvements was void. Section 12, art. 8, Const.; State v. Medbury, 7 Ohio St. 522; 37 Ohio St. 157; 5 Ohio, 184; Cooper v. Williams, 4 Ohio, 254 ; 5 Ohio, 391; Elevator Co. v. Cincinnati, 30 Ohio St. 629; Buckingham v. Smith, 10 Ohio, 288; Fox v. Cincinnati, 33 Ohio St. 492; Hubbard v. Toledo, 21 Ohio St. 379; Cooley’s Const. Lim. 128; 21 Ohio St. 14, 41; 12 Wis. 586 ; 24 Minn. 459; 31 Ind. 7; 16 Ohio St. 236. Hence, the writ asked for should be refused.
    If the act of March 23, 1840, authorized the board of public works to create an indebtedness or liability on the part of the state, for which the legislature is bound to appropriate money, said act is in conflict with article 2, section 2, and article 8, section 3, of the constitution.
   Johnson, C. J.

The twentieth section of the above recited statute, authorizes the board of public works to sell, for hydraulic purposes, the surplus water in the canals of the state, their feeders, dams and locks, “ subject to such conditions as they may consider necessary and proper, either in perpetuity or for a limited number of years for a certain annual rent, or otherwise, as they may deem most beneficial for the interest of the state.”

33y section 22, the board is expressly limited to a sale of such surplus water as may remain, “ after supplying the full quantity necessary for the purposes of navigation.”

And to make this limitation effective, section 23- requires that every lease grant or conveyance of water-power shall contain a reservation and condition that the state or its authorized agents may at any time resume the privilege or right to the use of water or any portion thereof whenever it may be deemed necessary for the purposes of navigation, or when its use for hydraulic purposes shall be found in any manner to interfere with, and injuriously affect the navigation of either of the canals, feeders or streams from which the water shall be taken for such hydraulic purposes.”

The admitted facts of this case show, that the lease before us contains' such reservation and' condition, and- that the .authorities of the state have properly resumed the right to the use of the water granted by this lease. The sole question involved is, as to the validity of a proviso annexed to said reservation and condition, which reads as follows:

■“ Provided the party of the first part shall first pay or tender to the party of the second part, the value of all lasting improvements now made or hereafter to be made by said second party, said value to be determined by three disinterested persons chosen for that purpose, each party choosing one and the two thus chosen to choose the third.”

If the clause thus quoted is valid, the relator is entitled to the relief sought, otherwise not. Piad the board of public works the power to bind the state to purchase' the improvements, should it be deemed necessary to resume the use of the surplus water for the purposes of navigation or when its use by the lessees will be found injuriously to affect navigation ? We think not; The latter clause of section 23 provides what shall be the right of the lessees in case of such resumption. Whenever such privilege shall be resumed in whole or in part, the sum paid therefor, or the rent reserved, or such portion thereof as shall be determined upon agreeably to the conditions and stipulations of the lease or deed of conveyance aforesaid, shall be refunded or remitted to the purchaser or lessee, his heirs or assigns.”

This clause, which section 23 requires shall be inserted in the lease, and which seems to embrace the only right reserved to the lessee in case of the resumption of the surplus water, is, strange to say, omitted from this lease, and in lieu thereof is the proviso above quoted, which requires of the state, as the condition precedent to the resumption of such water-power, that the state shall first pay, or tender, to the lessee, the value Of all lasting improvements, and which further requires that the state shall pay sucli amount as shall be fixed by arbitrators mutually chosen by the parties.. Whether we regard the obligation to purchase as a condition precedent or subsequent, the result is the same, as in neither case is the power conferred to make such purchase. .

It may well be doubted whether the board of public works, as the agent of the state, has power to enter into arbitration that will bind the state in any matter committed to their charge, in the absence of express legislative authority. However this may be, it is quite clear that no authority is delegated to them to contract away or restrict the right to resume this surplus water, whenever its use for navigation is required. The power to grant or lease water privileges is incidental and subordinate to the public use. The duty of those having charge of the canals to employ all the water, if needed for public use, is imperative. The public right is paramount; so important was this principle deemed by the legislature, that this right to resume the surplus water was required to be inserted in every lease, grant or conveyance. The board possesses no power to surrender this right or hamper themselves in its exercise.' By this so-called proviso, they cannot resume this surplus water, however much it may be needed for the public use, or however injuriously its use by the lessee may affect the navigation of the canals, without purchasing the improvements. Such a restriction upon' the performance by them of an important public trust, is clearly unauthorized, and.is contrary to that public policy under which the canals have been constructed and operated... They were constructed-at great expense for'the public convenience and welfare. They are public navigable highways. The statutes in force from time to time, show how careful the state has been to preserve these great highways, free from all encroachments that might interfere with their usefulness.

The board of public works have power to perfect, render useful, maintain, keep in repair and protect the same. Revised Statutes, 7691. This is a power of superintendence .for the protection and maintenance of the canals, including every thing that pertains to them. They possess no powers, except such as are expressly conferred by law or that are necessarily implied, the purpose .of which is, the maintenance of the canals as public highways.

It is said, however, in argument, that the 20th section in the act of 1840 authorizes the board to grant this surplus water, “subject to such conditions and reservations, as they may consider necessary and proper,” and that this proviso, which makes it a condition precedent that the state shall first pay or tender the value of the permanent improvements upon the resumption of the surplus water, is a condition within the meaning of that clause, which the board could agree to, if they deemed it necessary and proper. It is further said that at that day, it was to, the interest of the state to encourage the development of manufacturing interests along the line of the canals by offering favorable terms to lessees or grantees, so that their products would be transported over the canals, and thus increase the revenue of the state. In reply to this it may be said : 1st. As already shown, the board possessed no power to surrender the duty of performing the public trust committed to their charge, and the limitation, self-imposed, to pay for these improvements before resuming the water, though it may be necessary for the purpose of navigation, was against the public policy of the state, which made it the duty of the board to resume this water at any time when needed for the public use, untrammeled by any condition or any right of the lessee to prevent it.

2nd. The phrase “ subject to such conditions and reservations,” has the same meaning as it has in section 23, where it is . provided, that every lease, grant or conveyance of water power, shall contain “ a reservation and condition that the state or its authorized agents, may at any time resume the use of water or any portion thereof.”

What we mean to say is, that these terms, “ conditions and reservations,” are such as are imposed upon the lessees or grantees of water-power, and not upon the state.

3d. But if we are in error in this construction of the statute, and these words embrace conditions and reservations imposed ■ upon the state, they must bo such as relate to the use of the water for hydraulic purposes, which are in the nature of the quantity used, the manner of its use, &c. It is quite clear they are not broad enough to embrace conditions to be imposed upon the state after the right to use the water ■ has expired, or after the state has abandoned the canal as a public highway. By such resumption or abandonment, which are identical in their results, so far as lessees are concerned (Hubbard v. Toledo, 21 Ohio St. 379), the state is not liable to respond in damages to the lessee. If it were otherwise, the state would be compelled to maintain her canalssat any sacrifice for the exclusive benefit of the lessees of surplus water, or become the purchaser of the property of the lessee, thus making the incidental purpose, paramount to the public use.

If this obligation to purchase is valid in this instance, it is within the power of the board of public works to bind the state to become the purchaser of all the permanent improvements in the state, erected for the use of surplus water leased or granted. They cannot do this, although they might deem it necessary and proper, as a means of developing manufacturing interests along the line of the canals, and thereby increasing transportation over them and thus enhancing the revenues from the canals.

4th. This obligation to purchase, when the surplus water is resumed, is in legal effect, a covenant to purchase, and not a condition annexed to the use of the water.

A condition in its legal signification is something annexed to the grant, while this is in the nature of a stipulation binding the state to purchase, when the lease is terminated. The state covenants that upon the resumption of the surplus water it will purchase the improvements at a price to be fixed by arbitrators. If it be called a condition instead of a covenant, it can only apply to the right of the state to resume water.

. In this sense, it is a condition precedent to such resumption. As such it would be clearly illegal, for as we have shown, there can be no restriction on the right and duty to resume the use of this surplus water whenever it becomes necessary for the public use.

5th. The statute provides what shall be the relief to which the purchaser or lessee is entitled on such resumption. The last clause of section 23 reads thus: Whenever such privilege shall be resumed in whole or in part,' the sum paid therefor, or the rent reserved, or such reasonable portion as shall be determined upon agreeable to the conditions and stipulations of the lease or deed of conveyance aforesaid, shall be refunded or remitted to the purchaser or lessee, his heirs or assigns.”

As was said in Hubbard v. Toledo, supra, this clause of the statute expressly negatives the liability of the state for the destruction of the privilege, By resuming the grant, beyond what is therein provided; namely, in case of resumption of such surplus water the sum paid therefor, or the rent reserved, or a reasonable portion thereof shall be refunded or remitted. Hubbard v. Toledo, 21 Ohio St. 379; Elevator Co. v. Cincinnati, 30 Ohio St. 629; Fox v. Cincinnati, 33 Ohio St. 492; Same case, 104 U. S.; State v. Railway, 37 Ohio St. 157. Writ refused.