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Timestamp: 2019-04-24 19:15:14+00:00

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Proceedings by the United States to acquire a lock and dam of the Monongahela Navigation Company, situated on the Monongahela river. From the judgment awarding compensation the navigation company appeals. Reversed.
'The secretary of war be, and is hereby, authorized and directed to negotiate for and purchase, at a cost not to exceed $161,733.13, lock and dam number seven, otherwise known as the 'upper lock and dam,' and its appurtenances, of the Monongahela Navigation Company, a corporation organized under the laws of Pennsylvania, which lock and dam number seven and its appurtenances constitute a part of the improvements in water communication in the Monongahela river, between Pittsburgh, in the state of Pennsylvania, and a point at or near Morgantown, in the state of West Virginia. And the sum of $161,733.13, or so much thereof as may be necessary, is hereby appropriated out of any moneys in the treasury not otherwise appropriated for consummating said purchase, the same [148 U.S. 312, 313] to be paid on the warrant of the secretary of war, upon full and absolute conveyance to the United States of the said lock and dam number seven, and its appurtenances, of the said Monongahela Navigation Company.
The effort at a voluntary purchase failing, on December 1, 1888, proceedings of condemnation were commenced in the circuit court of the United States for the western district of Pennsylvania. Viewers were appointed, who reported the value of the lock and dam number seven to be $ 209,393.52. Such valuation did not take into account the franchise of the company to collect tolls. An appeal was taken, as provided by the statutes of Pennsylvania, which appeal gave the right to a trial de novo, according to the course of the common law. A jury having been waived, the matter was tried before the court, the navigation company being the plaintiff, as to the question of amount of compensation. These facts appeared on the trial.
'The Monongahela river rises in the mountains of West Virginia, flows northwardly through Pennsylvania to Pittsburgh, where it forms a junction with the Allegheny and Ohio rivers.
'In pursuance of its charter, the navigation company, between 1841 and the present time, has constructed in said river seven locks and dams, which together now carry the slackwater navigation as far as the West Virginia state line.
'Prior to the construction of said company's works,-that is to say, prior to the year 1841,-the navigation of the Monongahela river was conducted altogether in small vessels, including small steamboats of not exceeding a tonnage of fifty [148 U.S. 312, 315] tons, which could not ascend the river at all seasons, but only during limited periods, depending on the rise of the river. The trade or commerce on said river, prior to its improvement by said company's works, was small, particularly in the article of coal, for which the river in its natural condition did not furnish sufficient harbors or places of shipment at all seasons of the year; but by the construction and maintenance of said company's works there has been created an existing navigation for large steamboats at all seasons of the year, and facilities for a large commerce, particularly in the article of coal, of which there is now transported in a single day as much as was before the construction of the company's works transported in an entire year.
'The construction of the lock and dam No. 7, the property attempted to be appropriated in this proceeding, by the Monongahela Navigation Company, was begun in the year 1882 and completed in 1884, being the last one built, and completing the company's improvements in the state of Pennsylvania.
'U. S. Engineer's Office, Customhouse, Cincinnati, O., March 24, 1881.
'Sir: I have just received official notice from the secretary of war, through the chief of engineers, that the resolution and documents relative to the construction of lock and dam No. 7, on the Monongahela river, forwarded to this- [148 U.S. 312, 318] office by your company in April last, (duplicate sent to the honorable secretary of war,) have been considered as fully meeting the requirements of the proviso in the last appropriation for the improvement of the above- named river, prohibiting the expenditure of the money appropriated 'until the Monongahela Navigation Company shall have undertaken in good faith the building of lock and dam No. 7 at Jacob's creek, and until said company shall, in a manner satisfactory to the secretary of war, give assurance of their ability and purpose to complete the same."
'That the paid-up capital stock of the Monongahela Navigation Company consists of thirty-two thousand six hundred and thirty-nine shares of fifty dollars; that dividends have been declared on the stock for a number of years at the rate of twelve per cent. per annum.
'That the tolls received by the said company for the use of its works, including lock and dam No. 7, have averaged for several years past not less than $240,000; that the market value of the stock was at the time of the inception of these proceedings about $100 per share; that the money value of their entire works and franchise is not less than $4,000,000; that the actual toll receipts of lock and dam No. 7 for several years past have exceeded $2,800 per annum, and that a very large increase of such toll receipts at lock and dam No. 7 will certainly take place in a short time by the development of coal mines naturally tributary to said lock and dam.
'That by the construction and maintenance of the company's works a permanent and reliable public highway has been created on which a large and increasing carriage of coal and general merchandise takes place, and that permanent navigation for the largest vessel and steamboat now exists from the city of Pittsburgh, Pa., to or near the line between the states of Pennsylvania and West Virginia.
'That, in view of the present and prospective tolls receivable [148 U.S. 312, 319] at lock and dam No. 7, the present value of said lock and dam No. 7 is not less than $450,000, said value being predicated upon said present and prospective tolls; that said lock and dam No. 7 are a protion of said company's works which consist of seven dams, each furnished with a lock or locks.
'That the navigation which is sought by these proceedings to be made free was mainly created and made possible at all seasons by the construction and maintenance of the company's works.
'That a large portion of the tolls received by the company is charged upon merchandise and articles carried between points of shipment and delivery entirely within the state of Pennsylvania, and constituting internal commerce of said state, and that a portion of the tolls collectible at lock and dam No. 7, for the use of said lock and dam, is chargeable for merchandise, goods, and passengers carried between points of shipment and delivery in the state of Pennsylvania, the transportation being wholly within the state as to said portion.
The result of the trial was a finding by the court that the value of the lock and dam No. 7 was $209,000, 'not considering or estimating in this decree the franchise of this company to collect tolls.' Such amount was the sum adjudged and decreed to be paid by the United States to the navigation company for the property condemned. The company has brought the case to this court by both writ of error and appeal.
Johns McCleave and Wayne MacVeagh, for appellant. [148 U.S. 312, 320] Atty. Gen. Miller, Sol. Gen. Aldrich, and D. T. Watson, for the United States.
It appears from the foregoing statement that the Monongahela Company had, under express authority from the state of Pennsylvania, expended large sums of money in improving the Monongahela river by means of locks and dams, and that the particular lock and dam in controversy here were built not only by virtue of this authority from the state of Pennsylvania, but also at the instance and suggestion of the United States. By means of these improvements, the Monongahela river, which theretofore was only navigable for boats of small tonnage, and at certain seasons of the year, now carries large steamboats at all seasons, and an extensive commerce by means thereof. The question presented is not whether the United States has the power to condemn and appropriate this property of the Monongahela Company, for that is conceded, but how much it must pay as compensation therefor. Obviously this question, as all others which run along the line of the extent of the protection the individual has under the constitution against the demands of the government, is of importance, for in any society the fullness and sufficiency of the securities which surround the individual in the use and enjoyment of his property constitute one of the most certain tests of the character and value of the government. The first 10 amendments to the constitution, adopted as they were soon after the adoption of the constitution, are in the nature of a bill of rights, and were adopted in order to quiet the apprehension of many that without some such declaration of rights the government would assume, and might be held to possess, the power to trespass upon those rights of persons and property which by the Declaration of Independence were affirmed to be unalienable rights.
In the case of Sinnickson v. Johnson, 17 N. J. Law, 129, 145, cited in the case of Pumpelly v. Green Bay Co., 13 Wall. 166, 178, it was said that 'this power to take private property reaches back of all constitutional provisions; and it seems to have been considered a settled principle of universal [148 U.S. 312, 325] law that the right to compensation is an incident to the exercise of that power; that the one is so inseparably connected with the other that they may be said to exist, not as separate and distinct principles, but as parts of one and the same principle.' And in Gardner v. Newburgh, 2 Johns. Ch. 162, Chancellor Kent affirmed substantially the same doctrine. And in this there is a natural equity which commends it to every one. It in no wise detracts from the power of the public to take whatever may be necessary for its uses; while, on the other hand, it prevents the public from loading upon one individual more than his just share of the burdens of government, and says that when he surrenders to the public something more and different from that which is exacted from other members of the public, a full and just equivalent shall be returned to him.
The language used in the fifth amendment in respect to this matter is happily chosen. The entire amendment is a series of negations, denials of right or power in the government; the last (the one in point here) beling: 'Nor shall private [148 U.S. 312, 326] property be taken for public use without just compensation.' The noun 'compensation,' standing by itself, carries the idea of an equivalent. Thus we speak of damages by was of compensation, or compensatory damages, as distinguished from punitive or exemplary damages; the former being the equivalent for the injury done, and the latter imposed by way of punishment. So that, if the adjuective 'just' had been omitted, and the provision was simply that property should not be taken without compensation, the natural import of the languale would be that the compensation should be the equivalent of the property. And this is made emphatic by the adjective 'just.' There can, in view of the combination of those two words, be no doubt that the compensation must be a full and perfect equivalent for the property taken; and this just compensation, it will be noticed, is for the property, and not to the owner. Every other clause in this fifth amendment is personal. 'No person shall be held to answer for a capital or otherwise infamous crime,' etc. Instead of continuing that form of statement, and saying that no person shall be deprived of his property without just compensation, the personal element is left out, and the 'just compensation' is to be a full equivalent for the property taken. This excludes the taking into account as an element in the compensation any supposed benefit that the owner may recieve in common with all from the public uses to which his private property is appropriated, and leaves it to stand as a declaration that no private property shall be appropriated to public uses unless a full and exact equivalent for it be returned to the owner.
We do not in this refer to the case where only a portion of a tract is taken, or express any opinion on the vexed question as to the extent to which the benefits or injuries to the portion not taken may be brought into consideration. This is a question which may arise possibly in this case, if the seven locks and dams belonging to the navigation company are so situated as to be fairly considered one property,-a matter in respect to which the record before us furnishes no positive evidence. It seems to be assumed that each lock and dam by themselves constitute a separate structure and separate property, [148 U.S. 312, 327] and the thoughts we have suggested are pertinent to such a case.
By this legislation congress seems to have assumed the right to determine what shall be the measure of compensation. But this is a judicial, and not a legislative, question. The legislature may determine what private property is needed for public purposes; that is a question of a political and legislative character. But when the taking has been ordered, then the question of compensation is judicial. It does not rest with the public, taking the property, through congress or the legislature, its representative, to say what compensation shall be paid, or even what shall be the rule of compensation. The constitution has declared that just compensation shall be paid, and the ascertainment of that is a judicial inquiry. In Charles River Bridge v. Warren Bridge, 11 Pet. 420, 571, Mr. Justice McLean in his opinion, referring to a provision for compensation found in the charter of the Warren bridge, uses this language: 'They [the legislature] provide that the new company shall pay annually to the college, in behalf of the old one, a hundred pounds. By this provision it appears that the legislature has undertaken to do what a jury of the country only could constitutionally do,-assess the amount of compensation to which the complainants are entitled.' See, also, the following authorities: Com. v. Pittsburg & C. R. Co., 58 Pa. St. 26, 50; Pennsylvania R. Co. v. Baltimore & O. R. Co., 60 Md. 263; Isom v. Mississippi Cent. R. Co., 36 Miss. 300.
We are not, therefore, concluded by the declaration in the act that the franchise to collect tolls is not to be considered in estimating the sum to be paid for the property.
So, before this property can be taken away from its owners, the whole value must be paid; and that value depends largely upon the productiveness of the property,-the franchise to take tolls. That, in the absence of congressional action, the state of Pennsylvania had the power, either acting itself or through a corporation which it chartered, to improve the navigation of the river by means of locks and dams, and also to authorize [148 U.S. 312, 330] the exaction of tolls for the use of such improvements, are matters upon which there can be no dispute, in view of the many decisions of this court. Those very closely in point are Willson v. Marsh Co., 2 Pet. 245; Pound v. Truck, 95 U.S. 459 ; Huse v. Glover, 119 U.S. 543 , 7 Sup. Ct. Rep. 313; Sands v. Improvement Co., 123 U.S. 288 , 8 Sup. Ct. Rep. 113.
Kindred to these are the cases of Gilman v. Philadelphia, 3 Wall. 713; Transportation Co. v. Chicago, 99 U.S. 635 ; Escanaba & L. M. Transp. Co. v. City of Chicago, 107 U.S. 678 , 2 Sup. Ct. Rep. 185; Cardwell v. Bridge Co., 113 U.S. 205 , 5 Sup. Ct. Rep. 423; and Bridge Co. v. Hatch, 125 U.S. 12 , 8 Sup. Ct. Rep. 811,-in which the power of a state, in the absence of congressional action, to obstruct navigation by the construction of bridges across navigable streams, was sustained. And also the cases of Packet Co. v. Keokuk, 95 U.S. 80 , and Transportation Co. v. City of Parkersburg, 107 U.S. 691 , 2 Sup. Ct. Rep. 732, in which the power of a state, under like circumstances, to improve the border of streams by wharves and exact wharfage therefor was affirmed.
'These acts, improving rivers, constructing roads, etc., will never be complained of as interfering with the rights and powers of congress. The tolls alone are the subject of complaint. [148 U.S. 312, 334] But these are only the fair equivalent for privileges which the state had a right to create, and without which these privileges could never have existed. Commerce, therefore, has not been crippled by the tolls, as the defendant claims, but has been extended by them. The legislature of the state creating this corporation, with its duties and its privileges, has come in aid of the powers of congress.
But in this case there was not only the full authority of the state of Pennsylvania, but also, so far as respects this particular lock and dam, they were constructed at the instance and implied invitation of congress. The act of March 3, 1881, making an appropriation for the improvement of the river in terms provided that no such improvement should be made until the navigation company had in good faith started upon the building of this lock and dam. This lock and dam connected the lower improvements already made by the navigation [148 U.S. 312, 335] company with the upper improvements proposed to be made by congress, and the appropriation by the latter was conditioned on the company's undertaking their construction. This is something more than the mere recognition of an existing fact; it is an invitation to the company to do the work; and when, in pursuance of that invitation, and under authority given by the state of Pennsylvania, the company has constructed the lock and dam, it does not lie in the power of the state or the United States to say that such lock and dam are an obstructon, and wrongfully there, or that the right to compensation for the use of this improvement by the public does not belong to its owner, the navigation company.
And in Bridge Co. v. Hatch, 125 U.S. 12 , 8 Sup. Ct. Rep. 817, the proposition was thus stated: 'And although, until congress acts, the states have the plenary power supposed, yet, when congress chooses to act, it is not concluded by any thing that the states, or that individuals by its authority or acquiescence, have done, from assuming entire control of the matter, and abating any erections that may have been made, and preventing any others from being made, except in conformity with such regulations as it may impose.' It cannot be doubted, in view of the long list of authorities,-for many more might be cited,-that congress has the power, in its discretion, to compel the removal of this lock and dam as obstructions to the navigation of the river, or to condemn and take them for the purpose of promoting its navigability. In other words it is within the competency of congress to make such provision respecting the improvement of the Monongahela river as in its judgment the public interests demand. Its dominion is supreme.
But, like the other powers granted to congress by the constitution, the power to regulate commerce is subject to all the limitations imposed by such instrument, and among them is that of the fifth amendment, we have heretofore quoted. Congress has supreme control over the regulation of commerce, but if, in exercising that supreme control, it deems it necessary to take private property, then it must proceed subject to the limitations imposed by this fifth amendment, and can take only on payment of just compensation. The power to regulate commerce is not given in any broader terms than that to establish post offices and post roads; but, if congress wishes to take private property upon which to build a post office, it must either agree upon the price with the owner, or in condemnation pay just compensation therefor. And if that property be improved under authority of a charter granted by the state, with a franchise to take tolls for the use of the [148 U.S. 312, 337] improvement, in order to determine the just compensation such franchise must be taken into account. Because congress has power to take the property it does not follow that it may destroy the franchise without compensation. Whatever be the true value of that which it takes from the individual owner must be paid to him before it can be said that just compensation for the property has been made. And that which is true in respect to a condemnation of property for a post office is equally true when condemnation is sought for the purpose of improving a natural highway. Suppose, in the improvement of a navigable stream, it was deemed essential to construct a canal with locks, in order to pass around rapids or falls. Of the power of congress to condemn whatever land may be necessary for such canal there can be no question, and of the equal necessity of paying full compensation for all private property taken there can be as little doubt. If a man's house must be taken, that must be paid for; and, if the property is held and improved under a franchise from the state, with power to take tolls, that franchise must be paid for, because it is a substantial element in the value of the property taken. So, coming to the case before us, while the power of congress to take this property is unquestionable, yet the power to take is subject to the constitutional limitation of just compensation. It should be noticed that here there is unquestionably a taking of the property, and not a mere destruction. It is not a case in which the government requires the removal of an obstruction. What differences would exist between the two cases, if any, it is unnecessary here to inquire. All that we need consider is the measure of compensation when the government, in the exercise of its sovereign power, takes the property.
And here it may be noticed that, after taking this property, the government will have the right to exact the same tolls the navigation company has been receiving. It would seem strange that if, by asserting its right to take the property, the government could strip it largely of its value, destroying all that value which comes from the receipt of tolls, and having taken the property at this reduced valuation, immediately possess and enjoy all the profits from the collection of the same tolls. [148 U.S. 312, 338] In other words, by the contention this element of value exists before and after the taking, and disappears only during the very moment and process of taking. Surely, reasoning which leads to such a result must have some vice, at least the vice of injustice.
'It is next insisted that if, in the judgment of congress, the public good required the bridge to be removed, or alterations to be made in its structure, just compensation must be made the company for the loss incurred by what was directed. It is true that one cannot be deprived of his property without due process of law, and that private property cannot be taken for public use without just compensation.
It is evident, therefore, that the point decided was that congress had reserved the right to withdraw its assent to the construction of a bridge on the plan proposed, whenever, in its judgment, such bridge should become an obstruction to the navigation; that the bridge company entered upon the construction of the bridge in the light of this express reservation, and with the knowledge that congress might at any time declare that the bridge constructed as proposed was an [148 U.S. 312, 341] obstruction to navigation; and that congress, exercising this reserved power, did not thereby subject the government to any liability for damages. There was no taking of private property for public uses; and while the company may have been deprived of property, it was deprived by due process of law, because deprived under authority of an express reservation of power. Even this conclusion was reached with strong dissent, Mr. Justice Miller, Mr. Justice Field, and Mr. Justice Bradley dissenting, and each writing a separate opinion. And these opinions only make more clear the fact that the case was rested in the judgment of the majority on the effect of the reservation.
In the case at bar there is no such reservation; there is no attempt to destroy property; there is simply a case of the taking by the government, for public uses, of the private property of the navigation company. Such an appropriation cannot be had without just compensation; and that, as we have seen, demands payment of the value of the property as it stands at the time of taking.
The theory of the government seems to be that the right of the navigation company to have its property in the river, and the franchises given by the state to take tolls for the use thereof, are conditional only, and that whenever the government, in the exercise of its supreme power, assumes control of the river, it destroys both the right of the company to have its property there and the franchise to take tolls. But this is a misconception. The franchise is a vested right. The state has power to grant it. It may retake it, as it may take other private property, for public uses, upon the payment of just compensation. A like, though a superior, power exists in the national government. It may take it for public purposes, and take it even against the will of the state; but it can no more take the franchise which the state has given than it can any private property belonging to an individual.
It is also suggested that the government does not take this franchise; that it does not need any authority from the state for the exaction of tolls, if it desires to exact them; that it only appropriates the tangible property, and then either makes the use of it free to all, or exacts such tolls as it sees fit, or transfers the property to a new corporation of its own creation, with such a franchise of take tolls as it chooses to give. But this franchise goes with the property; and the navigation company, which owned it, is deprived of it. The government takes it away from the company, whatever use it may make of it; and the question of just compensation is not determined by the value to the government which takes, but the value to the individual from whom the property is taken; and when by the taking of the tangible property the owner is actually deprived of the franchise to collect tolls, just compensation requires payment, not merely of the value of the tangible property itself, but also of that of the franchise of which he is deprived.
Another contention is this: First, that the grant of right to the navigation company was a mere revocable license; secondly, that if it was not there was a right in the state to alter, amend, or annul the charter; and, thirdly, that there was by the eighteenth section thereof reserved the right at any time after 25 years from the completion of the improvement to purchase the entire improvement and franchise by paying the original cost, together with 6 per cent. interest thereon, deducting dividends theretofore declared and paid,-- [148 U.S. 312, 344] a provision changed by section 8 of the act of June 24, 1839, so as to require a payment of the expenses incurred in constructing and making repairs, with 8 per cent. per annum interest. But little need be said in reference to this line of argument. We do not understand that the supreme court of Pennsylvania has ever ruled that a grant lkie this is a mere revocable license. The cases referred to by counsel are those in which there was simply a permit; but here there was a chartered right created,- the right not merely to improve the river, but to exact tolls for the use of the improvement; and such right, created by an act of incorporation, as long ago settled in this court in Dartmouth College Trustees v. Woodward, 4 Wheat. 518, is a contract which cannot be set aside by either party to it.
Again, the state has never assumed to exercise any rights reserved in the charter, or by any supplements thereto. So far as the state is concerned, all its grants and franchises remain unchalleged and undisturbed in the possession of the navigation company. The state has never transferred, even if it were possible for it to do so, its reserved rights to the United States government, and the latter is proceeding not as the assignee, successor in interest, or otherwise, of the state, but by virtue of its own inherent supreme power. What the state might or might not do is not there a matter of question, though doubtless the existence of this reserved right to take the property upon certain specified terms may often, and perhaps in the present case, materially affect the question of value. And, finally, there is no suggestion on the part of congress, and no proffer in these proceedings, of payment under the terms of the charter and supplementary act of 1839, and no attempt to ascertain the amount which would be due to the company in accordance therewith.
These are all the questions presented in this case. Our conclusions are, that the navigation company rightfully placed this lock and dam in the Monongahela river; that with the ownership of the tangible property, legally held in that place, it has a vested franchise to receive tolls for its use; that such franchise was as much a vested right of property as the ownership [148 U.S. 312, 345] of the tangible property; that the right of the national government, under its grant of power to regulate commerce, to condemn and appropriate this lock and dam belonging to the navigation company, is subject to the limitations imposed by the fifth amendment, that private property shall not be taken for public uses without just compensation; that just compensation requires payment for the franchise to take tolls, as well as for the value of the tangible property; and that the assertion by congress of its purpose to take the property does not destroy the state franchise.
The judgment, therefore, will be reversed, and the case remanded, with instructions to grant a new trial.
Mr. Justice SHIRAS having been of counsel, and Mr. Justice JACKSON not having been a member of this court at the time of the argument, took no part in the consideration and decision of this case.

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