Lehigh Valley Railroad v. McFarlan , 31 N.J. Eq. 706 ( 1879 )

The opinion of the court was delivered by

Depue, J.

The Morris Canal and Banking Company was incorporated by an act of the legislature, passec^ on the 1st of December, 1824, and was authorized to construct a canal to unite the river Delaware, near Easton, with the tide-waters of the Passaic (P. L. 1824- p. 158). By the act of January 26th, 1828, the company was empowered to extend its canal to the waters of the Hudson, at or near'Jersey City (P.'L. 1828 p. 34)• In 1845, the canal was enlarged to provide for its navigation with boats of greater capacity. In 1871, the canal, its property, works and franchises were granted by a perpetual lease to the Lehigh Valley Railroad Company, under the authority of the legislature of this state (P. L. 1871 p. 444).

The canal was .constructed from the Delaware to the Passaic, in 1828, and extended to Jersey City in 1830. The summit level of the canal is in the county of Morris, near Lake Hopatcong, and from that source, water for the supply of the eastern division of the canal is mainly obtained. East ■of the summit level, the canal enters the valley of the Rockavvay, and, at Dover, in the county of Morris, it crosses the Rockaway river. The crossing of the river is effected by means of a lift-lock, which discharges the waters from ’the upper level of the canal into the river, and a guard-lock on the opposite side of the river, through which the water flows into the lower level of the canal; and, also, a dam across the river, which holds the water at the place of crossing, where the waters of the canal and those of the river are commingled, to a height suitable for the purpose of carrying boats across the river and supplying a head of wrater upon the lower level, called, in the pleadings, “ the four-mile level.” The original dam is a substantial, permanent structure, and was erected about the year 1828. In 1845, when the canal was enlarged, the company placed on the top of the dam, planks or flash-hoards, attached by means of iron pins, so as to be capable of being put on or taken off, at pleasure, that they might be used or dispensed with, as occasion might require.

McFarlan is the owner of a rolling-mill and iron-works, situate on the Rockaway river, a short distance above the place where the canal crosses the river. His works are driven by the waters of the Rockaway, taken from the river a few hundred feet above the intersection of the canal with the river, and discharged again into the river above that point. •

The defendants do not deny the complainants’ right to maintain that part of the dam which is permanent. The controversy relates solely to the maintenance of flash-boards on the permanent structure during the boating season, for the purpose of keeping the water to the requisite height in the level eastward of the guard-lock, and it is undisputed that when the flash-hoards are on, and the dam full, the water is thrown back on the wheel of the rolling-mill in such a manner as greatly to interfere with its use.

In June, 1875, McFarlan leased the rolling-mill to Wynkorp & O’Conner, for the term of two years. The tenants, finding the use of the water-wheel of the mill impeded by the back-water, on the 26th of July, by the direction of McFarlan, removed the flash-hoards from the company’s dam. The flash-boards having been immediately replaced, the defendant, on the next day, again removed them. Thereupon, this bill was filed for an injunction to restrain the defendants from interfering with the complainants in rebuilding and maintaining the said dam, with the flash-boards thereon. A temporary injunction was granted, and, on final hearing, on the advisory opinion of the vice-chancellor, the injunction was dissolved, and the bill dismissed, from which decree this appeal was taken.

The complainants rest their prayer for relief on a claim of a right to increase the height of their dam during the navigation season, by the addition of flash-boards eight inches in width. On the argument, it was sought to deduce this right from several considerations.

The complainants invoke the doctrine of equitable estoppel from the long acquiescence by McFarlan in the use of the flash-boards, and the fact that he was a director of the canal company when its lease was made to the other complainant.

The complainants also set up a right in themselves to hold the water at the height at which it will be held by flash-boards, and’ to flood the lands of McFarlan to that extent, by prescription arising from a use of more than twenty years.

I do not deem it necessary to examine either of these grounds for relief, inasmuch as, in the judgment of this court, the decision of this case should be placed on another and a distinct ground, founded on the rights of the canal company under its charter.

The charter of the company was granted in 1824. By the constitution of this state, in existence at that time, it was competent for the legislature to authorize the taking of the property of private individuals for public uses without compensation first made. Den v. Morris Canal Co., 4 Zab. 587. This charter is irrepealable, and created a contract which is incapable of alteration or repeal by the legislature, ■except by mutual consent. In fact, no effort has ever been made to effect any change in it in the -respects which are material to the present case. It is unaffected by the provision of the constitution of 1844, which interdicts the taking of property by private corporations for public use without compensation first made. Const. 1844, Art. IV, § VII, ¶ 9. A state constitution is a law within the meaning of that clause of the constitution of the United States which ordains that “ no state shall pass any law impairing the obligation of contracts.” Dodge v. Woolsey, 18 How. 331; R. R. Co. v. McClure, 10 Wall. 511. The company’s charter, and the powers and privileges therein granted, continue, notwithstanding the change of policy adopted by the constitution of 1844, and possess equal vitality with respect to acts done by the company under it after the constitution of 1844 became the fundamental law, as if done before the .adoption of that instrument.

That the charter of this company authorizes the taking .and appropriation of property of private individuals for its use, at the will of the company, and without compensation therefor first made, seems to me to be too clear for successful denial.

The fifth section of the act authorizes the company to ■construct a canal or artificial navigation, to connect the waters of the Delaware river, near Easton, with the tidewaters of the Passaic river, with all the locks and works necessary for the use of said canal. It further provides that it should be lawful for the said company to enter, from time to time, and upon all times, upon all lands, whether •covered with water or not, for the purpose of exploring or ■surveying the route or routes of said canal, and locating the several works, as above specified, doing thereunto no unnecessary damage; and when the said route or routes shall have been fixed upon, and its several works located by its president or directors, or a majority of them, and a survey thereof deposited in the office of the secretary of .state, it should be lawful for them, and for any agent, superintendent, engineer, contractor, or any person or persons employed in • the service of said corporation, at any time, to enter upon, take possession of, and use all and singular such lands, waters and streams, subject to such compensation to be made therefor as is thereinafter directed.

By the sixth section it was enacted that, where lands, waters and streams, that may be useful for such canal, shall not be made a free gift by their, owner or owners, to the said company, then the company shall pay to the owner or owners such compensation as shall be mutually agreed upon; and, in case of disagreement in relation to the value of such lands, waters and streams, it should be lawful to and for the aforesaid president and directors, from time to time, and at all times, to cause a survey or surveys, and-map or maps, to be made of any of the lands, waters and streams in their estimation requisite, and not given as aforesaid, and which they are authorized by this act to take for the uses aforesaid, and to exhibit the same to one of the justices of the supreme court of this state, who is required to appoint appraisers, whose duty it was made, if requested so to-do, by the owner or owners or by the company, to make a just and equitable estimate and appraisal of the value of the lands and damages to the several owners, proprietors or parties interested in the premises so required for the purposes aforesaid; and it was provided that the company shall pay or tender the damages so assessed, to the person or persons entitled thereto, and immediately thereupon the estate, right, property and interest in and to the premises so appropriated, described and appraised, should be vested in the company, to be by them held so long as they shall be used for the purposes of said canal.

The twentieth section provides that nothing in the act should be taken to impair the light of any person to an action against the said company, for damages to his or her water rights, lands, tenements or hereditaments, by the erection of said canal, where such person hath not been agreed with bv the said company, or his or her damages, right and estate satisfied and vested in the said company, under the previous provisions of the act; and the twenty-seventh section enacts that the twentieth section should be so construed as to extend to the damages sustained by the subsequent operations of the company, from time to time, as the same may arise.

By force of these charter powers, the entry upon, occupation of and use of lands, and the appropriation of waters necessary for the use of the canal, as from time to time may be determined upon by the company, is made lawful. The title to lands so taken, and the right to the waters so appropriated, do not finally vest in the company, until compensation be made; but, nevertheless, the occupation and use thereof are lawful, leaving the damages sustained by the injured parties to be recovered in the manner pointed out by the act, by actions at law, if the amount of compensation to be paid has not been ascertained by the appraisement of commissioners appointed as prescribed by the act.

This construction was placed on the company’s charter by Chief-Justice Ewing, as early as 1830 (Kough v. Darcey, 6 Hal. 237), and was emphatically endorsed in the judgment of the supreme court in Den v. Morris Canal, 4 Zab. 587. The case last cited is a precedent directly in point. It was an action of ejectment to recover lands occupied by the company for its canal, where no agreement for the use of the lands, and no legal assessment, payment or tender of tbe damages by the company had been made. The court held that upon the true construction of its charter, the company had authority to take and use the land, and construct their canal upon it, without any agreement with the owner therefor, or assessment and payment, or tender of damages, and that ejectment would not lie; that the company was not a wrong-doer in taking possession under such circumstances, and that the plaintiff’s remedy was by action for compensation under the twentieth section of the charter, and not by ejecting the company from the premises.

The injury which McFarlan sustained by back-water, is one which the company was authorized by its charter to do, if it resulted from the construction of its canal, and for which the injured party’s only redress is by action for damages. The depreciation or diminution in value of adjacent property, not actually occupied, caused by back-water, is a taking, within the meaning of an act of the legislature, of this character. Glover v. Powell, 2 Stock. 211; Trenton Water Power Co. v. Raff, 7 Vr. 335. The language of the charter leaves no doubt on this subject. The fifth section gives the company power to enter upon, take possession of, and use all and singular such lands, waters and streams, as may be necessary for the construction and use of its canal, subject to the compensation in the act directed. The twentieth section, which provides for the means of obtaining compensation, impliedly gives a right of action to the person injured, for damages to his or her water rights, as well as to his lands, tenements and hereditaments, arising from the construction of the canal; and the twenty-seventh section extends that remedy to damages sustained by the subsequent operations of the company, from time to time, .as the same may arise. In construing the twentieth section, Chief-Justice Ewing, in Kough v. Darcey, remarks that “ In the first place, this section embraces all persons who may sustain injury or suffer damage in lands, tenements, hereditaments and water rights, by the erection of the canal, in whatsoever mode such injury or damage may accrue, whether direct or indirect, immediate or consequential, whether by actual occupation, or by remote deterioration ; in the second place it covers the same extent of damages, right and estate, which are provided for and which may be satisfied by or vested in the company, in virtue of the previous sections.” The same views with regard to the company’s rights under its charter, are expressed by Mr. Justice Elmer, in Den v. Morris Canal, ubi supra. Referring to the observation of Chief-Justice Ewing, above quoted, and speaking of the twentieth section of tlie charter, he says : “ It is, therefore, one of the modes ■of compensation directed by the act, authority being thus given to the company to take possession and use the requisite land, subject to being sued by the proprietor for such ■damages as he thereby sustained, including the taking from .him his estate therein, unless he thought proper to agree ■upon the proper compensation, or to await an assessment, it follows as a necessary construction, that the taking and using was meant to be absolute, and not subject to be .afterwards disturbed. The taking and using subjected the company to be called upon for compensation, at the option ■of the proprietor, to the whole extent of the injury done to his possession and estate, by means of a suit at law.” The .same learned judge, speaking on the subject of the rights of the company under its charter, in lands appropriated to its use in constructing its canal, says: “ It being established that the preliminary survey was sufficient, and that, by the true construction of the charter, the company have authority to take and use the land, that is, to construct their canal upon it, before any agreement was made with the owner, or •any assessment or tender of the damages, subject to the liability of being sued for the damages thus occasioned, I think it follows, as a necessary implication, that the owner cannot recover the possession by action of ejectment. Such .an action is not an action for the recovery of damages, within the meaning of the twentieth section. It would be .absurd to suppose that the legislature meant to give the ■company a right to take the land, and construct the canal upon it, and, upon failure to obtain a valid assessment of the damages, subject the whole work to be destroyed by permitting a part of it to be taken from their possession, .and filled up or otherwise obstructed.”

In the first of the cases cited, it was held that, in taking property for the construction of its canal, the company could not he regarded as a trespasser for the purposes of an action by the injured party, for compensation. In the other case, it was considered that an entry on lands, without the consent of the owner, or payment or tender of damages, did not make the company a trespasser for the purposes of an action of ejectment. In both cases, the taking and possession were regarded as lawful, and the only remedy for the injuries consequent thereupon, arising either from the actual occupation of lands, or from the injurious effects upon water rights, and whether the damages were direct or consequential, was by action.

Following these precedents, and guided by the true construction of the company’s charter, it is manifest that these defendants cannot resort to the means of redress they sought to adopt. They claim a right to abate a private nuisance, by removing a portion of the company’s dam. The foundation of the right to abate is, the unlawfulness of the structure complained of. That foundation does not exist. The charter of the company authorizes and legalizes the erection of works of the character complained of, and provides another mode of redress for private injuries, as the only means of relief. And it was competent for the legislature, at the time this charter was granted, to confer upon a corporation the powers and privileges granted to this company.

In the pleadings, the right of the complainants under their charter to erect this dam as it was constructed, is distinctly put in issue. The complainants, in their bill, set out the charter of the company, and the supplements thereto, and aver that “ the said Morris Canal and Banking Company, under and by virtue of the power and authority conferred upon it by the said act of incorporation, and the several supplements thereto, was fully authorized and empowered to erect and maintain said dam for the purposes aforesaid.”

The defendants, in their answers, insist that “ the said Morris Canal and Banking Company never acquired any right, either by its said act of incorporation, or by any of the supplements, or amendments thereto, or in any other way, to dam said river at said point of intersection, for any other purpose than simply that of floating the boats through said river; and that neither said complainant, the Morris Canal and Banking Company, nor the Lehigh Valley Railroad Company, ever acquired, in any manner whatever, as against any riparian proprietors, either above or below the said canal dam, the right to use said dam for the purpose of creating or maintaining a reservoir or feeder for the ‘ four-mile level5 of said canal, and have never acquired any right, for any purpose, to back or dam the waters of said river upon the said tract of land of the defendant, Henry MeFarlan, or to impede the natural flow of the waters in said river along said tract of land, or in said tail-race, and have no right whatever to dam said water, or to raise said canal dam higher than the top of the wooden sill or string-piece of said canal dam.”

The evidence taken for the final hearing, shows that the dam, with the addition of flash-boards above the substantial structure, is necessary to an adequate supply of water to the lower level, and indispensable to the operations of the canal. The proof shows that, without the flash-boards, the navigation of the canal by boats of the draught to which the canal, after its enlargement, was adapted, would be permanently stopped over that level, and that no less than seventy-three loaded Ijoats were grounded on that level while this supply of water was cut off by the act of the defendants.

Considering the character of the complainants’ rights, and the nature and extent of the injury, public and private, that will result from the proposed interference with a great public work, this is plainly a case requiring the interposition of chancery.

The decree appealed from should be reversed, and a perpetual injunction decreed in accordance with the prayer of the bill.

Decree unanimously reversed.