Kaukauna Water-Power Company v. Green Bay M. Canal Company

Suit is a Wisconsin court to enjoin the cutting of an embankment in order to use the water-power created thereby. The complaint was dismissed, but on appeal to the state supreme court the decision was reversed, with instructions to award an injunction. 35 N. W. Rep. 529. From the decree entered in pursuance thereof defendant brings error. Affirmed.

The facts of the case fully appear in the following statement by Mr. Justice BROWN: This was a complaint in the nature of a bill in equity filed in the circuit court of Outagamie county, Wis., by the Green Bay & Mississippi Canal Company against the Kaukauna Water-Power Company and a number of other defendants, lessees and tenants of the water-power company, for the purpose of enjoining them from interfering with the plaintiff and its employes while engaged in maintaining, repairing, and rebuilding a certain embankment and drain upon a certain lot of land upon the bank of the Fox river, in the state of Wisconsin, and from cutting, tearing away, or removing such embankment or drain. The case made by the complaint, pleadings, and evidence was substantially as follows:

By an act approved August 8, 1846, congress granted certain lands to the state of Wisconsin, upon its admission into the Union, for the purpose of improving the unvigation of the Fox and Wisconsin rivers, the former of which is one of the navigable rivers of the state, having an average flow of 150,000 cubic feet per minute, and affording a water-power of 300 horsepower per foot fall. By an act approved June 29, 1848, the legislature accepted the grant, and by a subsequent act, entitled 'An act to provide for the improvement of the Fox and Wisconsin rivers, and connecting the same by a canal,' approved August 8, 1848, created a board of public works to superintend the construction of the improvements contemplated by the act of congress. In this act (section 16) the legislature provided 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.' The board was limited, by the act in their contracts and expenditures, to the proceeds of the sale of the lands granted by congress. In 1851 the state made a contract with Morgan L. Martin for the improvement of the Fox river between Lake Winnebago and Green bay. At Kaukauna, in township 24 N., range 18 E., were rapids in the Fox river, and the navigation at this point had to be improved by the construction of a dam across the river to secure slack-water, and of a canal leading therefrom on the north side of the river to a point below the rapids.

In 1853, the state of Wisconsin, finding itself unable to complete the improvement from the grant made to it, incorporated the Fox & Wisconsin Improvement Company, for the purpose of carrying forward the improvements of these rivers, and relieving the state of its indebtedness on account of the work already done, and from its liability upon its contracts not then executed. The grant was made upon condition that the company should file with the secretary of state a bond for the vigorous prosecution of the improvement to completion, and for the completion of the same within three years. The bond was further conditioned to pay all the state's indebtedness, and to save the state harmless from all liability growing out of the improvement. Having complied with all of these conditions, all of the dams, locks, water-powers, and other appurtenances of said works, and all the said rights, powers, and franchises, were passed to and vested in the Fox & Wisconsin Improvement Company. Pursuant to the conditions of this grant, the improvement company went on to complete the works as then contemplated, and in its prosecution of the same, in order to secure slack-water navigation around the rapids, in 1853-'4 and '5 built a dam at the head of the rapids, so as to raise the water about 8 feet above the natural level, reaching from lot 5, section 22, south of the river, to section 24, north of the river; and also built a canal and locks on the north side of the river, reaching from the pond created by the dam to the slack-water of the river below the rapids and below the dam. The south end of the dam abutted upon lot 5, now owned by the canal company. This dam was built and maintained by virtue of the act of the state, approved August 8, 1848, providing for the completion of such improvement; and there was no other authority for building or maintaining the same. The dam so constructed was maintained by the improvement company and its successor, the Green Bay & Mississippi Canal Company, until 1876, when the United States, having taken title to the improvement, built the new dam now in question 40 feet below the old one, and extended the embankment down the river to meet it. In the belief that it also owned the hydraulic power mentioned in the sixteenth section of this act, the improvement company bought lands adjacent to the canal for the purpose of rendering such power available.

In order to raise funds for the completion of the work and the payment of the state indebtedness, it mortgaged the property to the amount of $500,000; and also, under an act of the legislature of October, 1856, made a deed of trust to three trustees of all the unsold lands granted to the state in aid of the improvement, and of all the works of improvement constructed on the river, including the dams, locks, canals, water-powers, and other appurtenances. This trust-deed was subsequently forclosed for the purpose of paying the state indebtedness and the bonds issued under the mortgage, as well as those secured by the trust-deed, and the property upon such foreclosure was sold to a committee, which subsequently became incorporated under the name of the Green Bay & Mississippi Canal Company, plaintiff in this suit, which in this manner became seised in fee of all the improvements, and all the rights, powers, and privileges connected with the improvement company, including the dam and canal and all the hydraulic power thereby furnished and the mill lots connected therewith. Plaintiff entered into possession of this property, and spent considerable sums in improving, repairing, and operating such works of improvement. Finding its expenses largely exceeded the revenue derived from it, an act of congress was procured in 1870, authorizing the secretary of war to ascertain the amount which ought to be paid to the plaintiff for its property and rights in the canal, which amount being subsequently settled by a board of arbitration, a deed was made to the United States of the entire property, with a reservation of the water-power created by the dam, and by the use of the surplus water not required for the purposes of navigation, with the rights of protection and reservation appurtenant thereto, and the land necessary to the enjoyment of the same, and acquired with reference to such use.

The dam which furnishes such hydraulic power rests upon the south side of the river on lot 5 of the government survey, which lot in its natural condition was low, and scarcely raised above the surface of the water in the river at its natural stage. In order to maintain a head of water in the pond for the purpose of navigation or hydraulic power, it was necessary to build an embankment about 10 feet high, and of a thickness and strength sufficient to hold the water in the pond. Such embankment was built and extended across the fronts of lots 5, 6, and 7, shortly before the construction of the dam. This lot No. 5 was entered by one Denniston in 1835. He afterwards assigned his duplicate therefor to one Hathaway, who received a patent from the United States, August 10, 1837. His title, through several mesne conveyances, became vested in the water-power company May 14, 1880, but no authority was ever obtained from the owner of this lot to erect or abut the dam upon it, or to build an embankment upon it, and no condemnation proceedings under the act of 1848 to obtain an appraisal of damages to such lot were proved at the trial. Lots 6 and 7, also originally entered by Denniston, lie immediately above lot 5, and in their natural state were also low and flat. In 1854, one John Hunt, then the owner in fee of these lots, granted to the improvement company, its successors and assigns, the right to erect and forever maintain an embankment of the dimensions as surveyed by the engineer of said company, reserving the right to 'myself to use said embankment when completed, but not so that the same shall be injured through lots 6 and 7; * * * also the privilege of excavating a ditch along the south or east side of said embankment, not exceeding three feet in width.' Under and by virtue of such grant the improvement company built the embankment, and dug the ditch, and the same have ever been maintained under and by virtue of such grant and the legislative act of 1848.

The defendant the Kaukauna Water-Power Company, claiming to own that part of lots 5, 6, and 7, adjacent to Fox river, by purchase of lot 5 from one Beardsley and of lots 6 and 7 from Hunt in 1880, began to excavate and build a canal upon these lands, in order to draw water from the pond on the south side, and use the same for hydraulic purposes, when plaintiff gave notice in writing of its claim to such hydraulic power, stating that it would resist the breaking of such embankment and the drawing of water from the pond, thereby depriving plaintiff of the use thereof, and of the control of and dominion over the same. The other defendants claimed the right to use the water from the canal of the water-power company under, and as tenants of, such company. The complaint was dismissed by the circuit court, and an appeal taken to the supreme court of the state, by which the decree of the circuit court was reversed, and the case remanded to that court with instructions to enter judgment for the plaintiff, and for an injunction against the defendants restraining them from drawing any water from the pond maintained by the dam for hydraulic purposes. From the decree so entered by the Circuit Court

The following is a map of the improvements:

the Kaukauna Water-Power Company and the other defendants sued out this writ of error, claiming that there was drawn in question the validity of a statute of the state, and of an authority exercised under the state, upon the ground of their repugnance to the constitution of the United States. A motion to dismiss the writ of error upon the ground that no federal question was involved was postponed to a consideration of the case upon the merits.

HARLAN, J., dissenting. Affirming 35 N. W. Rep. 529.

Alfred L. Cary and D. S. Ordway, for plaintiffs in error.

[Argument of Counsel from pages 262-268 intentionally omitted]

Moses Hooper, for defendant in error.

Mr. Justice BROWN, after stating the facts as above, delivered the opinion of the court.