Green Bay & M. Canal Co. v. Kaukauna Water-Power Co.

• Decision Date: 13 December 1887
• Citation: 70 Wis. 635,35 N.W. 529
• Parties: GREEN BAY & M. CANAL CO. v. KAUKAUNA WATER-POWER CO. ET AL.
• Court: Wisconsin Supreme Court

70 Wis. 635

35 N.W. 529

GREEN BAY & M. CANAL CO.

v.KAUKAUNA WATER-POWER CO. ET AL.

Supreme Court of Wisconsin.

December 13, 1887.

Appeal from circuit court, Outagamie county.

The plaintiff corporation controls and uses a portion of a water-power at Kaukauna, in this state, created by a dam across the Fox river at that place, which was erected for the purpose of improving the navigation of that river, and claims to own all the surplus water-power created by such dam. The water is drawn by the plaintiff from the pond above the dam, into a canal on the north side of the river, and is there used by lessees of the plaintiff to propel machinery. The canal is a part of the improvement, and is navigated by boats and vessels. The defendant Kaukauna Water-Power Company is the owner of the land on the south side of the river, abutting such dam, and of land above and below the same, on the river, and has constructed a canal for the purpose of taking water through it from said pond to operate mills and machinery on its land below the dam. The other defendants are in the use of portions of the water so taken from the pond by the defendant corporation, under and by virtue of leases thereof, to them executed by the defendant the Kaukauna Water-Power Company. This action was brought to restrain the defendants from drawing water from said pond through the canal on the south side of the river, and also to compel the defendant the Kaukauna Water-Power Company to restore an embankment on lot 6, which it had removed, or to permit the plaintiff to do so.

By an act approved August 8, 1846, congress granted to the state of Wisconsin, when it should be admitted into the Union, a quantity of land to aid in the improvement of the Fox and Wisconsin rivers, and to connect the same by a canal. This act contains certain restrictions not material to this case. By an act of the legislature, approved June 29, 1848, the state of Wisconsin gave its assent to the act of congress of August 8, 1846, which operated as an acceptance by the state of the grant therein contained, upon the terms and conditions specified in the latter act. By an 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, the legislature created a board of public works to supervise and carry on such improvement. Sections 15, 16, and 17 (which are most material in this case) are as follows:

“Sec. 15. In the construction of such improvements, the said board shall have power to enter on, to take possession of, and use all lands, waters, and materials, the appropriation of which for the use of such works of improvement shall in their judgment be necessary.

Sec. 16. When any lands, waters, or materials appropriated by the board to the use of said improvements shall belong to the state, such lands, waters, or materials, and so much of the adjoining land as may be valuable for hydraulic or commercial purposes, shall be absolutely reserved to the state, and 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.

Sec. 17. When any lands, waters, or materials appropriated by the board to the use of the public in the construction of said improvements, shall not be freely given or granted to the state, or the said board cannot agree with the owner as to the terms on which the same shall be granted, the superintendent, under the directions of the board, shall select an appraiser, and the owner shall select another appraiser, who together, if they are unable to agree, shall select a third, neither of whom shall have any interest, directly or indirectly, in the subject-matter, nor be of kin to such owner, and said appraisers, or a majority of them, shall proceed to hear testimony and assess the benefits or damages, as the case may be, to the said owner from the appropriation of such land, water, or materials, and their award thall be conclusive,unless modified as herein provided. If the owner shall neglect or refuse to appoint an appraiser as herein directed, after ten days' notice of such appointment by the superintendent, then such superintendent shall make such appointment for him.”

From the award of the appraisers, made pursuant to section 17, an appeal to the circuit court is given to either party by section 18 of the act, and the procedure therein is prescribed in the following sections.

The plan of making the improvements, under the supervision of the board of public works, proved a failure, and was abandoned in 1853, by the enactment of chapter 98, Gen. Laws of that year, entitled “An act to incorporate an association for the completion of the improvement of the Fox and Wisconsin rivers,” approved July 6, 1853. This act incorporated the “Fox & Wisconsin Improvement Co.,” and granted to it all the lands then unsold which had theretofore been granted by congress to the state in aid of such improvement, subject to certain conditions specified in the act. It also granted such company “the works of improvement contemplated by the act of August 8, 1848, and by several acts supplemental thereto and amendatory thereof, and known as the ‘Fox & Wisconsin Rivers Improvement,’ together with all and singular the rights of way, dams, locks, canals, water-power, and other appurtenances of said works, also all the rights possessed by the state of demanding and receiving tolls and rents for the same, so far as the state possesses or is authorized to grant the same, and all privileges of constructing said works and repairing the same, and all other rights and privileges belonging to the improvement, to the same extent and in the same manner that the state now holds or may exercise such rights by virtue of the acts above referredto in this section, [section 2.]”

Chapter 112, Laws 1856, renewed and confirmed the grant to the improvement company; but upon the condition, among others, that such company should, within 90 days after the passage of the act, make a deed of trust to three trustees to be appointed by the governor, with the assent of the company, conveying to such trustees the lands thus granted to the company by the act, and all the other property, rights, and franchises belonging to the company, in trust for certain uses and purposes therein expressed. Such conveyance was duly made by the company, as required by the act, to the trustees duly selected for that purpose. By chapter 179, Laws of 1851, the legislature authorized the governor to enter into a contract with Morgan L. Martin for the completion of the improvement of Fox river between Green bay and Lake Winnebago, and a contract to that effect was duly entered into, pursuant to that act, May 14, 1851. This was while the improvement was under the supervision of the board of public works. Under this contract Martin built the dam in question at Kaukauna in 1854 and 1855.

The Fox river, at the point where such dam is erected, runs nearly east. At its north end the dam abutted upon land of the improvement company, and at its south end on a lot designated as lot 5. West of lot 5, abutting on the river, are lots 6 and 7. A canal on the north side of the river is supplied with water from the pond. It is constructed with locks, and is used for purposes of navigation. The south bank of the river was but little higher than the waters of the river in its natural state, and required an embankment to keep the same within the channel of the river. The company thereupon procured from one John Hunt, who was then the owner of lots 6 and 7, an instrument in writing, dated October 6, 1854, executed and recorded as a deed, in and by which Hunt released to the Fox & Wisconsin Improvement Company, and its legal representatives, “the right to erect and forever maintain an embankment of the dimensions as surveyed by the engineer of said company, reserving to myself the right to use said embankment when completed, but not so that the same shall be injured, through lots 6 and 7. Section 22. * * * Also the privilege of excavating a ditch along the south or east side of said embankment, not exceeding three feet in width, and upon the south or east side of said survey and stakes set by said engineer.” The company erected such embankment, and extended the same upon lot 5 to the dam. No authority from the owner of lot 5 to erect or abut the dam upon that lot, or to build such embankment in front of it, and no condemnation proceedings under the act of 1848 to obtain an appraisal of damages to such lot, were proved on the trial.

The Fox & Wisconsin Improvement Company, having made default in the performance of the conditions of the act of 1853, and of the trust deed above mentioned, and of a certain mortgage in trust executed by said company upon all the property, rights, and franchises granted to it by the state as aforesaid, such trust deed and trust mortgage were duly foreclosed in the circuit court, and judgment for the sale of said property, rights, and franchises was entered February 4, 1864. Pursuant to that judgment, such property, franchises, etc., were sold to the plaintiff, which was a duly organized corporation, authorized by law to make such purchase. Out of the proceeds of such sale a debt of over $200,000 against the improvement, sometimes called (but erroneously) a state debt, was paid, and the improvement completed, at an expense of over $43,000. Thus the trust conferred upon the state by the act of congress of 1846 was fully performed. Such sale was confirmed by the court, and the trustees in the trust deed before mentioned, who had previously been appointed by the court as referees to sell the mortgaged and trust property, duly conveyed the same to the plaintiff the Green Bay & Mississippi Canal Company. The only surviving mortgagee in trust joined as a grantor in such conveyance....