Monongahela Navigation Company v. United States

Proceedings by the United States to acquire a lock and dam of the Monongahela Navigation Company, situated on the Monongahela river. From the judgment awarding compensation the navigation company appeals. Reversed.

Statement by Mr. Justice BREWER:

By the act of August 11, 1888, (25 St. p. 411,) congress, among other things, enacted:

'The secretary of war be, and is hereby, authorized and directed to negotiate for and purchase, at a cost not to exceed $161,733.13, lock and dam number seven, otherwise known as the 'upper lock and dam,' and its appurtenances, of the Monongahela Navigation Company, a corporation organized under the laws of Pennsylvania, which lock and dam number seven and its appurtenances constitute a part of the improvements in water communication in the Monongahela river, between Pittsburgh, in the state of Pennsylvania, and a point at or near Morgantown, in the state of West Virginia. And the sum of $161,733.13, or so much thereof as may be necessary, is hereby appropriated out of any moneys in the treasury not otherwise appropriated for consummating said purchase, the same to be paid on the warrant of the secretary of war, upon full and absolute conveyance to the United States of the said lock and dam number seven, and its appurtenances, of the said Monongahela Navigation Company.

'In the event of the inability of the secretary of war to make voluntary purchase of said lock and dam number seven and its appurtenances for said sum of $161,733.13, or a less sum, then the secretary of war is hereby authorized and directed to institute and carry to completion proceedings for the condemnation of said lock and dam number seven and its appurtenances, said condemnation proceedings to be as prescribed and regulated by the provisions of the general railroad law of Pennsylvania, approved February 19, 1849, and its supplements, except that the United States shall not be required to give any bond, and except that jurisdiction of said proceedings is hereby given to the circuit court of the United States for the western district of Pennsylvania, with right of appeal by either party to the supreme court of the United States: provided, that in estimating the sum to be paid by the United States the franchise of said corporation to collect tolls shall not be considered or estimated; and the sum of five thousand dollars, or so much thereof as may be necessary, is hereby appropriated, out of any moneys in the treasury not otherwise appropriated, to pay the necessary costs of said condemnation proceedings; and upon final judgment being entered therein, the secretary of war is hereby authorized and directed to draw his warrant on the treasury for the amount of said judgment and costs, and said amount for the payment thereof is hereby appropriated out of any moneys in the treasury not otherwise appropriated. And when said lock and dam number seven and its appurtenances shall have been acquired by the United States, whether by purchase or condemnation, the secretary of war shall take charge thereof, and the same shall thereafter be subject to the provisions of section 4 of an act entitled 'An act making appropriations for the construction, repair, and preservation for certain public work on rivers and harbors, and for other purposes,' approved July 5, 1884.'

The effort at a voluntary purchase failing, on December 1, 1888, proceedings of condemnation were commenced in the circuit court of the United States for the western district of Pennsylvania. Viewers were appointed, who reported the value of the lock and dam number seven to be $209,393.52. Such valuation did not take into account the franchise of the company to collect tolls. An appeal was taken, as provided by the statutes of Pennsylvania, which appeal gave the right to a trial de novo, according to the course of the common law. A jury having been waived, the matter was tried before the court, the navigation company being the plaintiff, as to the question of amount of compensation. These facts appeared on the trial.

'In 1836, the state of Pennsylvania incorporated and by acts in that and subsequent years granted to the Monongahela Navigation Company the right 'to enter upon the said river Monongahela and upon the lands on either side, and to use the rocks, stone, gravel, or earth which may be found thereon in the constructions of their works, * * * and to form and make, erect and set up any dams, locks, or any other device whatsoever which they shall think most fit and convenient, to make a complete slack-water navigation between the points herein mentioned, to wit, the city of Pittsburgh and the Virginia state line.'

'The Monongahela river rises in the mountains of West Virginia, flows northwardly through Pennsylvania to Pittsburgh, where it forms a junction with the Allegheny and Ohio rivers.

'In pursuance of its charter, the navigation company, between 1841 and the present time, has constructed in said river seven locks and dams, which together now carry the slackwater navigation as far as the West Virginia state line.

'Prior to the construction of said company's works,-that is to say, prior to the year 1841,-the navigation of the Monongahela river was conducted altogether in small vessels, including small steamboats of not exceeding a tonnage of fifty tons, which could not ascend the river at all seasons, but only during limited periods, depending on the rise of the river. The trade or commerce on said river, prior to its improvement by said company's works, was small, particularly in the article of coal, for which the river in its natural condition did not furnish sufficient harbors or places of shipment at all seasons of the year; but by the construction and maintenance of said company's works there has been created an existing navigation for large steamboats at all seasons of the year, and facilities for a large commerce, particularly in the article of coal, of which there is now transported in a single day as much as was before the construction of the company's works transported in an entire year.

'The construction of the lock and dam No. 7, the property attempted to be appropriated in this proceeding, by the Monongahela Navigation Company, was begun in the year 1882 and completed in 1884, being the last one built, and completing the company's improvements in the state of Pennsylvania.

'The work was commenced under the following circumstances:

'It was provided by an act of the legislature of Pennsylvania, constituting a supplement to the company's charter, approved April 8, 1857, that whenever the construction of sufficient locks and dams to extend the slack water on the Monongahela river from the Pennsylvania state line to Morgantown, in Virginia, shall have been commenced, it shall be the duty of the Monongahela Navigation Company to commence the construction of lock and dam No. 7 in such manner and on such plan as will extend the navigation from its present terminus to the Virginia state line, and complete the same simultaneously with the completion of the work extending to Morgantown.'

On March 3, 1881, congress passed an act, (21 St. p. 471,) among other things appropriating $25,000 for improving the Monongahela river in West Virginia and Pennsylvania, with this proviso:

'But this sum shall not be expended until the Monongahela Navigation Company shall have undertaken in good faith the building of lock and dan number seven at Jacob's creek, and until said company shall, in manner satisfactory to the secretary of war, give assurance of their ability and purpose to complete the same.'

After the passage of this act, and on March 24, 1881, Col. William E. Merrill, the engineer and officer in charge of the public works of the United States on the river Monongahela, addressed this letter to the navigation company:

'U.S. Engineer's Office, Customhouse, Cincinnati, O., March 24, 1881.

'Hon. J. K. Moorhead, President Mon. Nav. Co., Pittsburgh, Pa.-Sir: The last river and harbor bill contains the following appropriation: 'Improving Monongahela river, West Virginia and Pennsylvania, $25,000, but this sum shall not be expended until the Monongahela Navigation Company shall have undertaken in good faith the building of lock and dam number seven, at Jacob's creek, and until said company shall, in manner satisfactory to the secretary of war, give assurance of their ability and purpose to complete the same.' You will, therefore, see that my work on number eight is wholly dependent on your work on number seven. I have, therefore, to urge on your company that you will, at the earliest date possible, undertake in good faith the building of lock and dam number seven,' and that you will give the secretary of war satisfactory assurance of your ability and purpose to complete it. I would therefore suggest that it might be useful for your secretary to communicate at once to the secretary of war such facts as to the financial resources of the company and its intentions about number seven as will satisfy him on the points specially left to his discretion and unlock the appropriation so that it may be used this summer. Respectfully, your obedient servant, Wm. E. Merrill, Maj. Eng'rs & B'v't Col.' Whereupon, and on April 6, 1881, the following resolutions were passed by the navigation company, notice of which was given to the secretary of war:

'Whereas, congress has made an appropriation for the commencement of the building of lock and dam number eight in the Monongahela river, the payment of which appropriation is made to depend upon the secretary of war being satisfied of the bona fide intention of this company to construct lock and dam number seven, and of their financial ability to complete the same; and whereas, Col. Merrill, of the United States engineers, in charge of the government improvement of the Monongahela river, has requested this company to furnish the secretary of war with satisfactory assurances in relation thereto: Therefore, resolved, that it is the bona fide purpose and intention of this company to construct lock and dam number seven in the Monongahela river in the manner and at the time required of them by the acts of assembly of the state of Pennsylvania; that is to say, so to complete said lock and dam number seven that the same shall be ready for use as soon as the requisite locks and dams above lock and dam number seven, constructed or about to be constructed by the federal government, shall also be finished and ready for use, so as to complete the slack water of said river from Pittsburgh, Pennsylvania, to Morgantown, Virginia. Resolved, that the secretary of this company be directed to forward a copy of the foregoing resolution, together with copies of the company's annual report, showing the intention of the company and their ability to complete this work, to Col., Merrill, and also to the secretary of war.'

And on May 4, 1881, Col. Merrill addressed the following letter to the president of the navigation company:

'Sir: I have just received official notice from the secretary of war, through the chief of engineers, that the resolution and documents relative to the construction of lock and dam No. 7, on the Monongahela river, forwarded to thisoffice by your company in April last, (duplicate sent to the honorable secretary of war,) have been considered as fully meeting the requirements of the proviso in the last appropriation for the improvement of the above-named river, prohibiting the expenditure of the money appropriated 'until the Monongahela Navigation Company shall have undertaken in good faith the building of lock and dam No. 7 at Jacob's creek, and until said company shall, in a manner satisfactory to the secretary of war, give assurance of their ability and purpose to complete the same."

Thereafter, and in 1882, lock and dam No. 7 were commenced, and completed in 1884. In the course of the trial the company called a witness, and offered to prove by him and other witnesses

'That the paid-up capital stock of the Monongahela Navigation Company consists of thirty-two thousand six hundred and thirty-nine shares of fifty dollars; that dividends have been declared on the stock for a number of years at the rate of twelve per cent. per annum.

'That the tolls received by the said company for the use of its works, including lock and dam No. 7, have averaged for several years past not less than $240,000; that the market value of the stock was at the time of the inception of these proceedings about $100 per share; that the money value of their entire works and franchise is not less than $4,000,000; that the actual toll receipts of lock and dam No. 7 for several years past have exceeded $2,800 per annum, and that a very large increase of such toll receipts at lock and dam No. 7 will certainly take place in a short time by the development of coal mines naturally tributary to said lock and dam.

'That by the construction and maintenance of the company's works a permanent and reliable public highway has been created on which a large and increasing carriage of coal and general merchandise takes place, and that permanent navigation for the largest vessel and steamboat now exists from the city of Pittsburgh, Pa., to or near the line between the states of Pennsylvania and West Virginia.

'That, in view of the present and prospective tolls receivable at lock and dam No. 7, the present value of said lock and dam No. 7 is not less than $450,000, said value being predicated upon said present and prospective tolls; that said lock and dam No. 7 are a protion of said company's works which consist of seven dams, each furnished with a lock or locks.

'That the navigation which is sought by these proceedings to be made free was mainly created and made possible at all seasons by the construction and maintenance of the company's works.

'That a large portion of the tolls received by the company is charged upon merchandise and articles carried between points of shipment and delivery entirely within the state of Pennsylvania, and constituting internal commerce of said state, and that a portion of the tolls collectible at lock and dam No. 7, for the use of said lock and dam, is chargeable for merchandise, goods, and passengers carried between points of shipment and delivery in the state of Pennsylvania, the transportation being wholly within the state as to said portion.

'To which offer of testimony counsel for the United States objected, for the reason that the same was incompetent and irrelevant; whereupon the court sustained the objection and rejected the evidence.'

The result of the trial was a finding by the court that the value of the lock and dam No. 7 was $209,000, 'not considering or estimating in this decree the franchise of this company to collect tolls.' Such amount was the sum adjudged and decreed to be paid by the United States to the navigation company for the property condemned. The company has brought the case to this court by both writ of error and appeal.

Johns McCleave and Wayne MacVeagh, for appellant.

Atty. Gen. Miller, Sol. Gen. Aldrich, and D. T. Watson, for the United States.

[Argument of Counsel from pages 320-323 intentionally omitted]

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