Cuyahoga River Power Company v. Northern Ohio Traction & Light Company

The appeal is direct to this court, the laws and Constitution of the United States being asserted to be involved. Upon motion of defendants (appellees) the bill was dismissed for want of jurisdiction and equity. Its allegations, therefore, become necessary to consider.

Plaintiff (appellant) was incorporated as a hydroelectric power company on May 29, 1908, for the purposes specified in the act of the Legislature of Ohio, passed in 1904, and contained in sections 10128 and 10134 of the Ohio General Code of 1910.

The articles of incorporation filed May 29, 1908, with the Secretary of State, specified the streams across which the dams were to be built and maintained; that is, the streams in controversy, the Big Cuyahoga river and certain of its tributaries.

By said incorporation a contract was duly made and entered into between the state and plaintiff whereby the state granted to plaintiff a right of way over and along the Cuyahoga river between the designated terminia nd a vested right and franchise to construct, maintain, and operate, within the limits of the right of way, a hydroelectric plant for the development of electric current and energy from the waters of the river, together with a right or franchise to exercise the state's power of eminent domain in order to appropriate and acquire property necessary to carry out and perform the grant and make it effective. The grant has not been repealed.

The grants were accepted and are of great value, and upon the faith of that the capital stock of plaintiff was subscribed for, and large expenditures and investments made and obligations incurred, including bonds of the par value of $150,000, and stock to the value of $210,000, all in a large part prior to December, 1910.

On June 4, 1908, plaintiff by its board of directors adopted a specific and detailed plan for the development of the power and sale of the same to the public, and definitely located its proposed improvements for that purpose upon specifically described lands, which had previously been entered upon and surveyed by its engineers, and then and there declared and resolved that the parcels of land were necessary to carry out the purpose of the plaintiff's organization and that it thereby appropriated and demanded them for its corporate purposes. The parcels of land described in the resolution include all that were necessary for the purpose of the corporation, and the location of the improvement so fixed by the resolution was permanent and irrevocable, and conclusive upon plaintiff and all other persons, except as the same might be altered by further act of the state.

June 5, 1908, the plaintiff instituted a suit in the court of proper jurisdiction, to condemn or appropriate in accordance with the statutes of Ohio, the parcels of land mentioned in the resolution, and the persons owning the same were made parties. The suit was continuously pending until a date subsequent to July 18, 1911, but at the instance and request of one of the owners of the parcels and of the Northern Ohio Traction & Light Company, called the Traction Company, the suit was not pressed for trial against them until January, 1911, up to which date certain negotiations in regard to the improvement of the company were proposed, but finally terminated in the refusal of the owner of the land and the Traction Company to sell the land to plaintiff.

December 20, 1910, pending the suit and negotiations, the landowner executed a deed of the lands to the Northern Realty Company, conveying to it a fee-simple title.

January 20, 1911, after unsuccessful negotiations with the Realty Company, plaintiff instituted another suit for the condemnation of the land, which suit was prosecuted in the probate court (the court of jurisdiction) and is now pending in the Supreme Court of the United States, undetermined, to which court it was carried by a writ of error from the Court of Appeals of Ohio.

January 31, 1911, and while the suit above mentioned was pending, the Realty Company conveyed the land, that had been conveyed to it, to the Northern Ohio Power Company, and the latter company conveyed that and other land which it had acquired, and all of its properties, rights, and franchises, to the Traction Company, and the latter company entered upon the lands, and now holds possession of them and of the improvements erected thereon.

Prior to January 20, 1911, no location or improvement upon the lands above designated was made for the purpose of utilizing them in the development of power and they were actually employed for no use whatsoever, except a small wooden structure intended and occasionally used for dances and roller skating, a small portion of which structure was within all of the parcels.

Between January 31, 1911, and February 24, 1914, there was erected upon the lands designated a power house and other appliances for the generation of electric current and energy by means of steam power, also a dam, a powerhouse, and other appliac es for the generation of electric current and energy by the flow and fall of the waters of the river.

(There is an allegation of the capacity of the plants which may be omitted. Other allegations in regard to the various companies and the powers they possess and do not possess also may be omitted. It is only necessary to say that it is alleged that the Power Company had not, and the Traction Company has not, power to use the designated lands or the waters of the river to operate the steam power plant and the hydroelectric plant, or for the development of such powers, and therefore neither company had power to excrcise eminent domain for such purposes, though asserting its right and intention to do so, and, if it should do so, it would invade and injure rights of plaintiff, 'inflicting upon the plaintiff and the persons interested therein a continuing and irreparable injury, for which there is no adequate remedy at law.')

From and after the time of the adoption of the resolution of June 4, 1908, the designated parcels of land were subjected to plaintiff's public use and its rights and franchises, exclusive of all other persons and corporations; that such rights and franchises were granted to plaintiff by the state Ohio under and by authority of plaintiff's contract with the state, and for the protection of which plaintiff is entitled to, and claims, the protection of the Constitution of the United States and of the amendments thereof, as well as section 5 of article 13 of the Constitution of the state of Ohio.

The effect and result of the Traction Company's use of the designated parcels of land and of the waters of the river is an appropriation by it of the rights and franchises of plaintiff and the deprivation of its property for private use without compensation and without due process of law, contrary to the Fourteenth Amendment of the Constitution of the United States, and an impairment of the contract of plaintiff with the state of Ohio within the meaning of article 1 of the Constitution of the United States.

Plaintiff has at all times, and since its incorporation, actively and diligently and in good faith proceeded to carry out and accomplish its corporate purpose.

In April, 1909, the plaintiff amended its resolution of June 4, 1908, and enlarged its proposed plant and the output and product thereof and obtained a grant from the state over the additional portion or section of the Cuyahoga river, so as to carry out the amended plan, and it provides for the utilization of the designated parcels of land necessary to the plaintiff's rights and franchises. (The additional capacity is alleged.)

The prayer is that plaintiff's rights and franchises be established and adjudged; that the proceedings complained of be decreed a violation of the plaintiff's rights, and of the Constitution of Ohio and the Constitution of the United States, and a taking of its property without due process of law, and that an injunction be granted against their further exercise, that defendants be required to remove the structures and devices already erected upon the lands, or to convey them to the plaintiff, and that a receiver be appointed to take possession of the lands and structures. An accounting is also prayed, and general relief.

Mr. Carroll G. Walter, of New York City, for appellant.

Messrs. John E. Morley, of Cleveland, Ohio, J. S.C.lark, of Philadelphia, Pa., and S. H. Tolles and Thomas H. Hogsett, both of Cleveland, Ohio, for appellees.

Mr. Justice McKENNA after stating the case as above, delivered the opinion of the Court.