Cuyahoga River Power Company v. Northern Ohio Traction & Light Company/Opinion of the Court

As we have said, a motion was made to dismiss the bill. The grounds of the motion were that there was no jurisdiction in the court, the controversy not arising under the Constitution and laws of the United States, and that the bill did not state facts sufficient to constitute a cause of action against defendants or either of them.

There is an assertion, in words, of rights under the Constitution of the United State, and the only question now presented is whether the assertion is justified by the allegations of the bill. Putting the question concretely, or rather the contention which constitutes its foundation, the District Court said:

'The contention of the plaintiff is that by virtue of its     charter, it has appropriated the potentialities of the river      and its tributaries within the boundaries by it designated in      its resolution of improvement, and that it is entitled,      because of its incorporation under the general laws of the      state, to exclude any use of the water power of these streams      of the nature of the use which it anticipates enjoying in the      future while it proceeds, however dilatorily, to make its      improvements in detail and to complete its ambitious scheme. In brief, its proposition is that its charter is equivalent     to a contract with the state of Ohio giving it the exclusive      right to the employment of the benefits which nature has      conferred upon the public through the forces of these streams      to the end that, until it finds itself able to completely      occupy all the territory which it has privately designated to      be necessary for its use, the public shall not have the      advantage of any portion not immediately occupied by it      through the employment of the resources thereof by another      public utility company.'

The court rejected the contention holding that it was not tenable under the law and Constitution of Ohio. To sustain this view the court cited prior Ohio cases, and certain cases on the docket of the court, and, as an inference from them, declared that it was-

'not true in Ohio that the character of complainant gave to     it 'a vested right seemingly unlimited in time to exclude the      rest of the world from the water sheds it chose' simply by      declaring by resolution just what territory it hoped in the      future to occupy to carry out its purposes.'

'The terms of section 19, article 1, of the Ohio Constitution     militate against the plaintiff's claim. Until appropriation     is completed as provided by the condemnation laws of the      state, the Traction Company's right to dominion over its      holdings is inviolate. Wagner v. Railway Co., 38 Ohio St.     32.'

The court also cited Sears v. City of Akron, 246 U.S. 242, 38 Sup. Ct. 245, 62 L. Ed. 688 (then just delivered), expressing the view that, if the case had been brought to the court's attention sooner, a less extended discussion of the motion to dismiss could have been made.

We concur with the District Court, both in its reasoning and its deductions from the cited cases. The contention of plaintiff is certainly a bold one, and seemingly erects into a legal principle that unexecuted intention, or partly executed intention, has the same effect as executed intention, and that the declaration of an enterprise gives the same right as its consummation. Of course, there must be a first step in every project as well as a last step, and in enterprises like those we are considering there may be attainment under the local law of a right invulnerable to opposing assertion. And this plaintiff contends. To be explicit it contends that as against the Power Company and the Traction Company, they being its competitors in the same field of enterprise, its resolution of June 4, 1908, constituted an appropriation of the waters of the river, and a definite location of 'its proposed improvement for that purpose upon specifically described parcels of land previously entered upon and surveyed by its engineers.' Whether the resolution had that effect under the Ohio laws we are not called upon to say. Indeed, we are not so much concerned with the contention as the ground of it. Plaintiff alleges as a ground of it, a contract with the state of Ohio, by its incorporation, 'wherein and whereby said state duly granted to the plaintiff a right of way over and along said Cuyahoga river' between the designated termini, with the rights and franchises which we have mentioned, together 'with the right or franchise to exercise the state's power of eminn t domain in order to appropriate and acquire all property necessary to carry out and perform said grant and make the same effective' and that the acts of defendants, having legislative sanction of the state, impair plaintiff's contract.

It is manifest, therefore, that the determining and effective element of the contention is the charter of the state, and plaintiff has proceeded in confidence in it against adverse adjudications. One of the adjudications is Sears v. City of Akron, supra. The elemental principle urged here was urged there; that is, there was urged there, as here, that the charter of the company constituted a contract with the state, and that the contract was to a conclusive effect executed by the resolution of the board of directors of plaintiff on June 4, 1908, such resolution constituting an appropriation of the lands described therein, they being necessary to be acquired in order to construct and maintain the improvement specified in the plaintiff's charter and resolution. The principle was rejected, and it was decided that the incorporation of plaintiff was not a contract by the state with reference to the riparian rights, and that if plaintiff acquired riparian rights, or specific rights in the use and flow of the water, that 'would be property acquired under the charter, not contract rights expressed or implied in the grant of the charter.'

The case is determinative of the plaintiff's contention here, and it is manifest, if plaintiffs have any rights, they are against defendants as rival companies, or against them as landowners, rights under the charter, not by the charter, considered as a contract express or implied. The District Court recognized the distinction and confined its decree accordingly. The court refused to speculate as to what plaintiff might be able to do hereafter in the assertion of rights against the Traction Company, but declared that it was against public policy to accede to the contention of plaintiff that, in the absence of specific acquirement, it (plaintiff) could prevent an owner of property within its territory from occupying or using the same without condemnation proceedings being had, and compensation paid or secured for such property.

The court, therefore, was considerate of the elements of the case and of plaintiff's rights, both against defendants as rival companies or as landowners, and necessarily, as we have said, if either or both of them be regarded as involved in the case, its or their assertion cannot be made in a federal court unless there be involved a federal question, and a federal question, not in mere form, but in substance, and not in mere assertion, but in essence and effect. The federal questions urged in this case do not satisfy the requirement. The charter as a contract is the plaintiff's reliance primarily and ultimately. Independent of that, it has no rights or property to be taken; that is, independently of the resolution of June 4, 1908, there was no appropriation or condemnation of the land. Wagner v. Railway Co., 38 Ohio St. 32.

Having nothing independently of its charter and the resolution of June 4, 1908, it could be divested of nothing, and it must rely upon the assertion of a contract and the impairment of it by the state, or some agency of the state, exercising the state's legislative power. That there is such agency is the contention, but what it is exactly it is not easy to say. We, however, pick out of the confusion of the bill, with the assistance of plaintiff's brief, that the rights it acquired, and by what they are impaired, are as follows: By the resolution of June 4, 1908, the lands described in the bill (Exhibit A) became, and ever since have been, subjected to plaintiff's public use, and subject to its rights of way and franchises, exclusive of all other persons or corporations, that the Traction Company asserts and claims that by reason of purchases of the rights and franchises of the Northern Ohio Power Company sanctioned by the orders of the Pul ic Unilities Commission as set forth in the bill, and the construction by it (the Traction Company) of power plants upon the designated tracts of land, they, the tracts of land, have become subject to a public use and cannot be appropriated by plaintiff. And it is said (in the brief) that the Traction Company bases its claim upon the state laws; that is, the incorporation of the defendant Power Company and the Public Utilities Commission's orders.

It is manifest that there was no state legislative or other action against any charter rights which plaintiff possessed. What the Traction Company may or does claim cannot be attributed to the state (its incorporation antedated that of plaintiff), and it would be a waste of words to do more than say that the incorporation of plaintiff under the general laws of the state did not preclude the incorporation of the Power Company under the same general laws. What rights, if any, the Power Company thereby acquired against plaintiff, is another question. There remains then, only the order of the Public Utilities Commission, authorizing the conveyance by the Power Company of the latter's rights and franchises to the Traction Company, to complain of as an impairment of plaintiff's asserted contract. But here again we are not disposed to engage in much discussion. The commission's order may or may not have been the necessary condition to a conveyance by the Power Company of whatever rights it had to the Traction Company. Section 614-60, Page & Adams Ohio General Code. The order conferred no new rights upon the Power Company, which that company could or did convey to the Traction Company, nor give them a sanction that they did not have, nor did it affect any rights of the plaintiff.

From every federal constitutional standpoint, therefore, the contentions of plaintiff are so obviously without merit as to be colorless, and whatever controversies or causes of action it had were against the defendant companies as rivals in eminent domain, or as owners of the lands, and diversity of citienship not existing, the District Court of the United States had no jurisdiction.

Decree affirmed.

Mr. Justice DAY and Mr. Justice CLARKE took no part in the consideration or decision of this case.