Holyoke Company v. Lyman

ERROR to the Supreme Judicial Court of Massachusetts; the case being this:

The 'General Laws' of the State just named, provide that every act of incorporation passed since the 11th of March, 1831,

'Shall at all times be subject to amendment, alteration, or repeal at the pleasure of the legislature.'

This general law being on the statute-book the legislature of the State in 1848 passed an act to incorporate the Hadley Falls Company, for the purpose of constructing and maintaining a dam across the Connecticut River, and of creating a water-power to be used by the corporation. The capital stock was fixed at $5,000,000, and it could hold $500,000 worth of real estate. The corporation was authorized and empowered 'to construct and maintain a dam across the river' at a point named, sufficient to raise the water to a height not exceeding one specified. The act in its fourth section read thus:

'The said corporation shall pay such damages to the owners of the present fishing rights existing above the dam which the said company is herein empowered to construct, as may be awarded by the county commissioners of the counties in which said rights exist.'

And a mode was provided by which either the company 'or any owners of the said fishing rights' might at any time proceed to determine the damages done to them. Nothing was said about damages done to fishing rights below the dam, nor about making or maintaining, or not making and maintaining any 'fishway.' No power was given to condemn the land of others for the site of the dam or for any other purpose.

The Hadley Falls Company built at great expense a dam, but without any fishway in it. Before this dam was built shad were accustomed to pass up the river beyond the dam, and were of value to the private owners of riparian fishing rights for sale as food, and a source of income to such proprietors both above and below the dam. The dam, however, by preventing the passage of the fish up the river, destroyed the fishing rights above. And compensation to a large amount was made to the owners of fisheries above the dam for the injuries done to their said rights.

After the dam was built, and owing to it, the number of shad in the river below decreased in a small but appreciable degree; the dam preventing them from passing to their former spawning-grounds above; and to some extent causing them not to return to the river after their annual passage to the sea. No owners of fishing rights below the dam had, however, ever claimed damages on this account.

On the 31st of January, 1859, the Hadley Company having failed, the same legislature passed an act incorporating the Holyoke Water-power Company, 'for the purpose of upholding and maintaining the dam across the Connecticut River, heretofore constructed by the Hadley Falls Company,' and gave to the new corporation full power 'to purchase, take, hold, receive, sell, lease, and dispose of all and any part of the estate, with all the water-power, water-courses, water-privileges, dams, rights, easements, and appurtenances thereto belonging, or therewith connected, which have at any time heretofore belonged to the Hadley Falls Company.'

The part of the Connecticut River where this dam was constructed runs through the State of Massachusetts, and is not navigable.

In this state of things the legislature passed in 1866 and subsequently, certain statutes, which authorized the commissioners of fisheries of the State to examine the several dams on the rivers of Massachusetts, and after notice to the owners thereof, to determine and define the mode and plan upon which suitable and sufficient fishways should be constructed. The statute regulated the plans, methods, &c., and provided that if any proprietor of any dam should refuse or neglect to agree with the commissioners to build the fishways for thirty days after a plan was duly furnished to him, the commissioners might build the same at his expense. Under and in pursuance of this legislation, the Holyoke Company was required to build a fishway in their dam. The fishway required was one that would cost about $30,000; and, as appeared, would not diminish the water-power of the company, except when they desired to add to it by what are known as 'flash boards.' The company refused to comply with the requirement, contending that the acts of incorporation to the two companies constituted contracts, that by the payment of damages to the owners of fishing rights above the dam the Holyoke Company had the right to maintain 'the dam,' theretofore constructed by the Hadley Company, and that the acts of 1866, &c., were laws impairing the obligations of contracts, and so in violation of the Federal Constitution. The court below, on a proceeding authorized by the statute to make them do so, adjudged otherwise, and its judgment was now here for review.

Mr. F. Chamberlin, for the plaintiff in error:

1. Where an absolute right to do an act is given, a contract is made that the State will do no act to impair that absolute right. Thus if an absolute grant of land is made, the State cannot thereafter annex a condition restricting its use; or if power is given to erect a bridge of a certain character, the State cannot cause the owner to make an alteration in it. The same rule will apply to a right given without any reservation to make a dam.

In The People v. Platt, the State of New York had granted lands on both sides of the Saranac River, without any reservation of the river, or any restriction on the use of it expressed in the grant. By a statute subsequently passed, owners of all dams were required to make fishways, and it was held that such a requirement was unconstitutional as to the defendants, because the unrestricted use of the land and river was given, and it could not be afterwards restricted.

In Commonwealth v. New Bedford Bridge, a charter was granted to erect a bridge, with draws of a certain width, and it was held that a statute ordering draws of an increased width to be built was void. The court say:

'Nor can the legislature, without the assent of the defendants, in any way impair the original terms of the charter by annexing new conditions or imposing additional burdens, onerous in their nature or inconsistent with a reasonable construction of the compact.'

In West River Bridge Company v. Dix, this court gives the same construction of the clause of the Constitution about contracts on which we rely, and say:

'The language and meaning of the inhibition were designed to embrace proceedings attempting the interpolation of some new term or condition foreign to the original agreement, and therefore inconsistent with and violative thereof.'

Now in our case, we find an unreserved and unconditional right to erect and maintain a dam across the Connecticut River. Does not a statute that we shall erect a fishway at any cost which the State sees fit to require, interfere with our 'perfect use and enjoyment of the thing granted?'

It is evident, also, that in granting these charters the legislature had this principle in mind; for it made a provision which was intended to reach the very matter of fishways. It provided that damages should be paid to certain persons supposed to be affected.

Will it be said that although there is no express reservation at all in the grant, yet that in Massachusetts, in all charters authorizing the erection of dams, there is an implied reservation, of a right to require the grantees to make any fishways in those dams which the legislature may think desirable? The position is not tenable; for the courts of that State have laid down no such general principle. They have only declared that owners of lands or privileges on streams, if they erect dams on them, do so subject to the usual rule that they must so manage them as not to interfere with the right of persons above or below, either to have the water flow, or to have fish pass. But it follows not that when no reservation of power to cause fishways to be built has been made in the original contract, the State has power to 'interpolate such term or condition foreign to the original agreement.'

2. Even if in the State of Massachusetts there were an implied condition annexed to grants of power to build dams, the State, in the case at bar, has, by providing in our charter for this very right of fish passage, made another contract, which, upon our accepting it and paying damages, as we have done, exempts us from any further requirement. This right to have fish pass up and down rivers is a public right solely. No owner of land above or below a dam can maintain any action against the builder of a dam which injures his fishery, nor proceed against the dam as a nuisance, nor is the owner liable to indictment. If, however, a provision for damages is inserted in a charter, it is clear that this additional consideration is paid for the relinquishment by the State of the right to thereafter demand fishways, or payment of other or further damages than those required; and a contract to that effect arises by necessary implication, as clearly as if it was expressed in terms. For how unjust it would be, where only an implied condition of building a fishway existed, to put in an express condition that all damages should be paid, and then force the plaintiff, by building fishways, to give back to the owners what he had already paid them for the loss of. Our view does not leave the State withour remedy. It may in the exercise of its right of eminent domain take back this right, by paying for it, as in all other similar cases.

3. Then will it be said that there is a general statute of Massachusetts, existing when this charter was made, which reserves the right to alter, modify, or repeal any charter theretofore granted, and that the State has the power under this statute to take back any right it has given even for a valuable consideration? If this construction can be maintained all that a State has to do, in order to avoid the provision of the Constitution against the passage of laws impairing the obligation of contracts, is to pass a law saying in substance: 'In all contracts I may hereafter make I reserve the right to break them if I see fit.' The constitutional provision cannot be evaded in such a manner. But no such construction can be given to this statute. The distinction is this: The legislature may, under certain circumstances, alter the charter, but they cannot do anything to affect or destroy any rights of property acquired under the charter; and if under such reservation they attempt to violate any contract they have made, they are met by a higher power than their own, which forbids it.

Mr. C. R. Train, Attorney-General of Massachusetts, contra.

Mr. Justice CLIFFORD delivered the opinion of the court.