Source: https://supreme.justia.com/cases/federal/us/279/797/
Timestamp: 2019-04-25 17:51:38+00:00

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Justia › US Law › US Case Law › US Supreme Court › Volume 279 › Kirk v. Maumee Valley Elec. Co.
The State of Ohio constructed and owned a canal for the primary purpose of navigation and for the incidental and subordinate purpose of permitting use of its surplus water for hydraulic power. An Act of March 23, 1840, authorized the leasing of such surplus water for hydraulic purposes when not required for navigation, and subject to resumption of use by the state whenever its use for hydraulic purposes should injuriously affect navigation. Having acquired leases under the Act and improved the canal at large expense under a contract with the state, the plaintiff employed the water leased in the business of generating and selling electricity. Later, an Act of May 11, 1927, directed that a section of the canal above the plaintiff's intake and upon which plaintiff was dependent for its water, should be abandoned for both canal and hydraulic purposes and be held by the state for the purpose of constructing a highway upon the lands occupied by the canal.
1. That such abandonment did not impair the obligation of the contracts in the leases or deprive the lessee of property without due process, the leases being only incidental to the use and maintenance of the canal for purposes of navigation and imposing no obligation on the state to maintain the canal for any purpose. P. 279 U. S. 802.
for navigation, but before the passage of the Act providing for its abandonment, did not constitute an abandonment of the navigation purpose by the state and a devotion of the canal by the State to the sale of water rights free from reserved power to abandon the canal and devote it to other uses. P. 279 U. S. 804.
Appeal from a final decree of a district court of three judges enjoining the appellants from interfering with the flow of water in part of a canal in such manner as to infringe certain water rights claimed by the appellee.
This is a direct appeal, under § 266 of the Judicial Code, from a final decree, following an interlocutory decree, of a district court of three judges for Southern Ohio, 33 F.2d 318. The decree enjoined appellants, the superintendent of public works of Ohio, a state officer, the City of Toledo, certain villages in Ohio, and the Board of Bounty Commissioners of Lucas County, Ohio, from draining or otherwise interfering with the flow of water in a section of the Miami & Erie Canal in such manner as to interfere with rights of appellee to take surplus water from the canal under certain leases and a grant acquired by it or its assignors from the state. Appellee contends that the Act of the Ohio Legislature of May 11, 1927, under which appellants purport to act, is in violation of the federal Constitution.
to Toledo and thence to Lake Erie. The water from the river enters this section of the canal at its western end and flows past the Providence Mills involved in No. 675, Kirk v. Providence Mill Co., post, p. 279 U. S. 807. Some 16 miles from the inlet is a side cut through which water may be discharged into the river, and so diverted from the rest of the canal. The section from the inlet to this side cut is described as "Lineal Part 2." Appellee's plant is located on Lineal Part 1, which extends from the side cut northeasterly to the outlet at Toledo, and is thus dependent for its supply of water on a continuous flow through Lineal Part 2.
The several leases were granted by the state, acting through its Board of Public Works, in 1895, 1901, two in 1903, and 1906. Each, for a specified consideration or a stipulated rental, purported to grant for a period of 30 years, with privilege of renewal, the right to take from the canal specified amounts of water for hydraulic purposes. In 1910, the lease of 1895 was supplemented and amended to provide for an increased amount of water. For present purposes, we may assume that all rights under these leases and any extension or renewal of them are vested in appellee, and that each has been from time to time properly renewed at the expiration of its term.
"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 purpose of navigation, or whenever its use for hydraulic purposes shall be found in any manner to interfere with and injuriously affect the navigation. . . ."
Following the acquisition of its first lease in 1900, appellee constructed a small hydraulic electric plant on land adjacent to Lineal part 1. In 1910, appellee, having secured three of the other leases, reconstructed its plant, and, pursuant to an agreement with the state, improved the canal at large expense, and is now using the water from it in the business of generating and selling electric light and power.
By Act of May 11, 1927, 112 O.L., pp. 360-363; §§ 14178 to 14178-12 of General Code of Ohio, it was directed that that portion of the Miami & Erie Canal known here as "Lineal Part 2" be abandoned for both canal and hydraulic purposes and held by the state for the purpose of constructing a highway upon lands occupied by the canal. It transferred the abandoned part to the supervision and control of the state highway director and directed him, within 60 days after the act should take effect, to drain the water from the abandoned part of the canal and to prevent water from flowing into or through that part. Section 4, provided that all leases previously granted for canal or hydraulic purposes on the part of the canal referred to "shall become and be null and void on and after sixty days from the taking effect of this Act." Since Lineal Part 1, from which appellee withdraws water from the canal under its several leases, is fed only by the water flowing from Lineal Part 2, compliance with the statute will also result in draining the water from Lineal Part 1 of the canal, and will deprive appellee of the use of the water which it has been withdrawing under its leases.
Appellee asserts, as the district court held, that the effect of the Act of 1927 is to impair the obligation of the contracts embodied in its leases in violation of § 10, Art. I, and to deprive it of property without due process of law in violation of the Fourteenth Amendment of the Federal Constitution.
decree in the suit in the Northern District, but that decree is not before us for review. It does not appear that the city threatens to violate the decree, or that there are any circumstances entitling appellee to any further relief against it upon the contract for its benefit, or that the state, through its legislation and conveyance of Lineal Part 1 to the City of Toledo, intended to surrender or has surrendered any of its rights in or powers over Lineal Part 2, or has subjected itself to any new or additional obligation to maintain the canal or continue the flow of water through it.
The present suit therefore must turn upon the nature and extent of the right to withdraw water from the canal which appellee acquired under the grant and its several leases. To establish that its constitutional rights are infringed, it must show that compliance with the Act of 1927 is inconsistent with and infringes the rights conferred upon it by them. They are public grants by the state, to be construed in the light of the statute of 1840 authorizing them and the other laws of the state. What the state has granted, it may not take away, but the exercise of powers reserved to it under the grant cannot infringe either the contract or due process clauses of the Constitution.
canal for hydraulic power by Act of February 18, 1830, 28 O.L., p. 58, which was superseded by the Act of March 23, 1840, 38 O.L., p. 87, under which the present leases were granted.
built, to-wit, navigation. The large expenditures of the state were to furnish not water power, but a navigable highway for the transportation of persons and property. The authority of the board of public works to contract in respect to power was expressly confined to such water as remained after the wants of navigation had been supplied, and it never could have been intended in this way to impose on the state an obligation to keep up the canal, no matter what the cost, for the sole purpose of meeting the requirements of its water leases. There was certainly no duty resting on the state to maintain the canal for navigation any longer than the public necessities seem to require. When it was no longer needed, it might be abandoned, and, if abandoned, the water might be withdrawn altogether."
The court below, recognizing that such had been the established construction of surplus water leases, thought nevertheless that, as at the time of appellee's first lease, 1895, navigation on the canal had very much diminished, and, at the time of the later leases, had ceased, the state, by continuing to grant leases of surplus water under the Act of 1840, must be taken to have abandoned the use of the canal for navigation, and to have made use of it only as a source of water for sale for hydraulic purposes. Hence, it concluded that the leases could no longer be construed as were the earlier leases by this and the state court, but that they must be taken as grants of the right to use the water without any power reserved in the state to abandon the canal or to devote it to other uses.
it to other purposes, other than the making of leases or grants which, as before, purported to deal only with surplus waters not required for navigation. Instead, reliance is placed on the fact that there had been a gradual abandonment of the use of the canal for navigation by the public.
If, under the local law, the state might abandon the canal, while still used for navigation, by appropriate legislative action, and by such abandonment terminate the rights of lessees under the Act of 1840, which appellee does not deny, it is difficult to see how the failure of the public to use the canal and the continued practice of granting leases of surplus waters by administrative officials under the Act of 1840, which the courts of Ohio had repeatedly held were subject to the power of the state to abandon the canal, evidenced a change of state policy or forfeited the right which had resided in it from the the beginning to abandon the canal and devote it to other purposes.
Miami & Erie Canal as a public canal and providing that boats built for use upon it for freight transportation should be purchased by the state at their fair value if, in the future, the policy of the state should be changed by abandonment of the canal so as to make the boats useless for transportation.
These statutes exhibit a continuing purpose of the legislature to stimulate and encourage the use of the canal for purposes of navigation for which it was established. The fact that such stimulation was found necessary or desirable, and that it ultimately failed of its object does not indicate, in event of failure, a purpose on the part of the state to relinquish its power to abandon the canal and devote it to other purposes unhindered by the leases of surplus waters.
We find in this case no circumstances differentiating it from the earlier decisions in this and the Ohio courts. In each, as in the present case, the failure of the public to make sufficient use of a particular sector for transportation led to its abandonment and appropriation to other purposes and to the necessary termination of all rights under grants of surplus water which, being but incidents to the maintenance of the canal for navigation, ceased when that purpose was abandoned. The fact that some of the earlier cases involved other state canals on which there was still some navigation at the time of the granting of the leases there involved, and the additional fact that the present appellee, under its supplemental agreement with the state, bears the expense of maintaining and patroling the canal, we do not regard as sufficient to differentiate this case from those so long acquiesced in. Nor can the case of State ex rel. Crabbe v. Middletown Hydraulic Co., 114 Ohio St. 437, be taken to have overruled, sub silentio, the rule announced in the former cases which was not involved in its decision.
The grant was of water to be taken from the river near the entrance to the canal. Appellee admits that, of itself, the grant imposed no obligation on the state to continue the canal in use. The only claim made by appellee under this grant is of the right to have the specified amount of water come to it through the canal so long as it is maintained as such. Consequently, appellee has no right under this grant, apart from the right claimed under its leases, to have the state maintain the canal, which latter we find to be nonexistent, and we need not decide what effect in other respects, if any, the Act of 1927 had upon the grant.
The decree below will be reversed, but the decree to be entered will be without prejudice to the rights of appellee against the City of Toledo under the Ohio statute of January 22, 1920, and under the conveyance to the city of Toledo made pursuant to it, and without prejudice to the rights of appellee under the final decree of the District Court for Northern Ohio, entered on the mandate of the Circuit Court of Appeals for the Sixth Circuit in the suit entitled Maumee Valley Electric Co. v. City of Toledo et al.
Similar legislation authorizing the purchase of Lineal Part 2 by the County Commissioners of Lucas county was enacted March 27, 1925. 111 O.L., p. 367. The option to purchase has not been exercised.
Act of March 24, 1863, 60 O.L., p. 44 (involved in Fox v. Cincinnati, supra); Act of March 26, 1864, 61 O.L., p. 74; Act of April 12, 1888, 85 O.L., p. 207; Act of March 3, 1891, 88 O.L., p. 72; Act of January 22, 1920, 108 O.L., pt. 2, p. 1138; Act of March 25, 1925, 111 O.L. p.208; Act of March 27, 1925, 111 O.L., p. 367; Act of April 21, 1927, 112 O.L., p. 388; Act of May 11, 1927, 112 O.L., p. 360.

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