Green Bay Canal Company v. Patten Paper Company (172 U.S. 58)

This was a suit brought in 1886 in the circuit court of Outagamie county, Wis., by the Patten Paper Company and others, against the Kaukauna Water-Power Company, the Green Bay & Mississippi Canal Company, and others. The object of the proceeding, as set forth in the complaint, was to have determined what share or proportion of the flow of Fox river, where the same passes Islands Nos. 3 and 4, in township No. 21 N., of range No. 18 E., is appurtenant to, and of right should be permitted to flow in, the south, middle, and north channels of said river, respectively, and to have the defendants restrained from drawing from said Fox river, above the head of Island No. 4, and so that the same shall not come into the middle channel of said river and into the mill pond of the plaintiffs, more water flow of said river than the one-sixth part thereof, or more than the amount which by nature was appurtenant to, and flowed in, the south channel of said river.

The scope of the investigation was widened by reason of the answer of the Green Bay & Mississippi Canal Company, which it was agreed and stipulated should have the effect of a cross bill in the action, and which asserted that any decree to be entered in the suit, determining or adjudicating what share or proportion of the flow of the river should be permitted to flow in its several channels, should be made subject to the right of the canal company, by reason of the facts stated, to use all of the river power created by the government dam and improvements on the river.

The principal facts disclosed in the case were the following:

The Fox river is a navigable stream, and flows through township 21 N., of range 18 E., in the county of Outagamie, Wis.; and in said river, below Lake Winnebago, there are, and always have been, rapids and abrupt falls. To permit navigation through or by said rapids and falls necessarily requires the building of dams, locks, and canals, at great expense. By an act approved August 8, 1846, congress granted to the state of Wisconsin, on its admission into the Union, a large amount of public lands, for the express purpose of, and in trust for, improving the navigation of the Fox and Wisconsin rivers. The state accepted said grant of land for said purposes, and by an act of its legislature approved August 8, 1848, undertook the improvement of said rivers, and enacted, among other things, that 'whenever a water power shall be created by reason of any dam erected or other improvements made on any of said rivers, such water power shall belong to the state, subject to the future action of the legislature.'

One of the rapids in Fox river, around which it was necessary to secure slack-water navigation by means of dams, locks, and canals, was commonly known as the 'Kaukauna Rapids.' The state adopted a plan and system for the construction of a dam and canal at said Kaukauna rapids, whereby there was to be built a low dam, beginning on the south side, near the head of the rapids, extending downstream, on or near the south bank of the river, across lots 8, 7, 6, and onto lot 5, of section 22, and thence extending at about a right angle with the south bank across the river; leaving an opening at the north end through which the water of the river could pass, and be conducted by a conduit or canal to a certain point, at which should be placed a lock.

The sales of lands granted by congress not proving sufficient to carry on the work, the board of public works were authorized by the legislature to issue certificates of indebtedness, which were declared to be a charge upon the proceeds of the lands granted by congress, and upon the revenues to be derived from the works of improvement.

In July, 1853, the state legislature created a corporation, under the name of the Fox & Wisconsin Improvement Company, to which, by the second section thereof, were granted and transferred the uncompleted works of improvement, together with, all and singular, the rights of way, dams, locks, canals, water power, and other appurtenances of said works. The company agreed to pay the outstanding certificates, and forthwith undertook the work. Additional lands were granted by congress in 1854 and 1855 to aid the state in the improvement of the Fox and Wisconsin rivers. The company subsequently executed a deed of conveyance of the works of improvement, the incidental water powers, and all of the lands, in trust to apply all revenues derived from the improvement and the proceeds of sales of the lands to the payment of the unpaid certificates and of bonds issued by the company, and to the completion of the works.

In 1864 the company failed, the deed of trust was foreclosed; and in 1866 the property of the company, consisting of the works of improvement, the water powers, and the lands, were sold, pursuant to a decree of court entered February 4, 1864. The purchasers became incorporated under the name of the Green Bay & Mississippi Canal Company, and that company was authorized by the third section of an act of the legislature approved April 12, 1866, to 'enlarge and increase the capacity of said works and of the said rivers so as to make a uniform steamship navigation from the Mississippi river to Green Bay, or to surrender the same to the United States for such enlargement, on such terms as may be approved by the governor for the time being of the state.'

July 7, 1870, congress passed an act entitled 'An act for the improvement of water communication between the Mississippi river and Lake Michigan by the Wisconsin and Fox rivers.' By this act congress authorized the secretary of war to ascertain the sum 'which in justice ought to be paid to the Green Bay and Mississippi Canal Company as an equivalent for the transfer of, all and singular, its property and rights of property in and to the line of water communication between the Wisconsin river and the mouth of Fox river, including its locks, dams, canals, and franchises, or so much of the same as shall, in the judgment of said secretary, be needed'; and to that end he was authorized to 'join with said company in appointing a board of disinterested and impartial arbitrators,'-one to be selected by the secretary, one by the company, and the third by the two arbitrators so selected. The act provided that in making their award the arbitrators should take into consideration the amount of money realized from the sale of lands granted by congress to aid in the construction of said water communication, which amount should be deducted from the actual value thereof as found by the arbitrators. It was further enacted that no money should be expended on the improvement of the Fox and Wisconsin rivers until the Green Bay & Mississippi Canal Company should make and file with the secretary of war an agreement, in writing, whereby it shall agree to grant and convey to the United States its property and franchises upon the terms awarded by the arbitrators.

By an act, approved March 23, 1871, by the legislature of Wisconsin, the directors of the Green Bay & Mississippi Canal Company were authorized to sell and dispose of the rights and property of said company to the United States, and to cause to be made and executed all papers and writings necessary thereto as contemplated in the act of congress.

Subsequently, in November, 1871, the arbitrators fixed the then value of all the property of the company at $1,048,070, and the amount realized from land sales, to be deducted therefrom, at $723,070, leaving a balance of $325,000 to be paid to the company. And, in anticipation that the secretary might decide that the personal property and 'the water powers created by the dams and by the use of the surplus waters not required for purposes of navigation' were not needed, these water powers and the water lots necessary to the enjoyment of the same, subject to all uses for navigation, were valued at the sum of $140,000; personal property, $40,000; and the improvements, $145,000.

The secretary of war recommended to congress that it should take the works of improvement, and not the water powers and personal property. Congress accordingly, by act approved June 10, 1872, made the necessary appropriation; and the company, by its deed of September, 1872, conveyed and granted to the United States 'all and singular its property and rights of property in and to the line of water communication between the Wisconsin river and the mouth of Fox river, including its locks, dams, canals and franchises, saving and excepting therefrom, and reserving to the said company, the following described property, rights and portions of franchises which, in the opinion of the secretary of war and of congress, are not needed for public use, to wit: First. All of the personal property of the said company, and particularly of all such property described in the list or schedule attached to the report of said arbitrators, and now on file in the office of the secretary of war, to which reference is hereto made, whether or not such property be appurtenant to said line of water communication. Second. Also all that part of the franchise of said company, viz., the water powers created by the dams and by the use of the surplus waters not required for the purpose of navigation, with the rights of protection and preservation appurtenant thereto, and the lots, pieces or parcels of land necessary to the enjoyment of the same, and those acquired with reference to the same, all subject to the right to use the water for all purposes of navigation, as the same is reserved in leases heretofore made by said company, a blank form of which attached to the said report of said arbitrators is now on file in the office of the secretary of war, and to which reference is here made, and subject also to all leases, grants and assignments made by said company, the said leases,' etc., 'being also reserved therefrom.'

The leases referred to, and reserved from the grant, were those granted by the company to third parties in consideration of the payment of annual rents. The use of the surplus water began as early as 1861, and has extended until now from one-quarter to one-half of the flow of the river is utilized at points near the first lock. The company has caused to be erected at this point large and costly mills; and it was found by the trial court that the Green Bay & Mississippi Canal Company has leased all of the water power created by the dam and canal, or arm of the dam, to be used over the water lots abutting on the canal.

The cause having been submitted to the superior court of Milwaukee county upon the pleadings and proofs, that court sustained the allegations contained in the cross complaint of the Green Bay & Mississippi Canal Company, and adjudged, among other things, that 'the Green Bay & Mississippi Canal Company is the owner of, and entitled, as against all the parties to this action, and their successors, heirs, and assigns, to, the full flow of the river, not necessary to navigation, and that, all and singular, the other parties to this action are hereby forever enjoined from interfering with the said Green Bay & Mississippi Canal Company in so withdrawing and using such water; and it is further considered and adjudged and decreed, as in favor of the Patten Paper Company against all other defendants, that all of the water of the river which is permitted by the Green Bay & Mississippi Canal Company to flow over the upper dam, or into the river above Island No. 4, so as to pass down the river, should be, and it is hereby, divided and apportioned between the plaintiffs and their successors and assigns, the Kaukauna Water-Power Company, and its successors and assigns, and the Green Bay & Mississippi Canal Company, and its successors and assigns, between and to the south, middle, and north channels of the river, in the following proportions,' etc.

The supreme court of Wisconsin reversed the judgment so rendered by the superior court, and remanded the case to the superior court, with directions to enter judgment in accordance with its opinion. 61 N. W. 1121. That court, in obedience to the mandate of the supreme court, entered a final judgment in the case as follows (omitting recitals):

'Upon motion of Hooper and Hooper, plaintiffs' attorneys, it is considered, adjudged, and decreed, as in favor of the Patten Paper Company, Union Pulp Company, and Fox River Pulp & Paper Company, against all defendants, that all the water of the river, except that required for purposes of navigation, shall be, and is hereby, divided and apportioned between and to the south, middle, and north channels of the river, in the following proportions; that is to say: 43/200 thereof of right should flow down the south channel; 157/200 thereof should of right flow down the main channel of the river, north of Island No. 4; and that of the water so of right flowing down the main channel of the river, north of Island No. 4, and above the middle channel, 62/157 thereof should of right flow down the middle channel, and south of Island No. 3; and that of the water flowing down the north channel north of Island No. 4, and above Island No. 3, 95/157 part should of right flow down the north channel, and north of Island No. 3; and each of the parties to this action, their heirs, successors, and assigns, are forever enjoined from interfering with the waters of said river so as to prevent their flowing into said channels in the proportions aforesaid.

'And it is further adjudged by the court that said Green Bay & Mississippi Canal Company, its successors and assigns, shall so use the water, if at all, created by said dam, as that all the water used for water-power or hydraulic purposes shall be returned to the stream in such a manner and at such a place as not to deprive the appellants, or those claiming under or through them, of its use as it had been accustomed to flow past the lands of the said appellants on said river, and in the several channels of said river below said dam, as it was accustomed to flow, and that said appellants shall have the right to use the water of said river, except such as is or may be necessary for navigation, as it was wont to run in a state of nature, without material alteration or diminution.'

From this judgment the Green Bay & Mississippi Canal Company, plaintiff in the cross bill, appealed to the supreme court of the state; and on January 10, 1896, the respondents, the present defendants in error, moved to dismiss said appeal for the reason that the judgment was in exact accord with the mandate, and was in effect the judgment, of the supreme court. Upon this motion the supreme court dismissed the appeal, expressing itself as follows:

'After careful consideration, we are constrained to hold that the judgment entered is a substantial compliance with the mandate of this court. Certainly it would have been improper to allow any amendment to pleadings or new litigation. The mandate was not for a new trial, nor for further proceedings according to law, but with direction to enter judgment in accordance with the opinion; and the opinion left nothing undetermined. This left nothing for the trial court to do in the case, except to enter judgment therein as directed.' 66 N. W. 601.

By that appeal and its decision the jurisdiction of the state courts in the case was exhausted, and the judgment entered in the superior court became the final judgment of the highest court in the state in which a decision in the suit could be had. And on May 18, 1896, a writ of error to said judgment by the Green Bay & Mississippi Canal Company was taken to this court, and allowed by the chief justice of the supreme court of Wisconsin.

B. J. Stevens and Wm. F. Vilas, for plaintiff in error.

Alfred L. Cary, George G. Greene, and Moses Hooper, for defendants in error.

Mr. Justice SHIRAS, after stating the facts in the foregoing language, delivered the opinion of the court.