State v. Longyear Holding Co.
| Decision Date | 08 August 1947 |
| Docket Number | No. 34336.,34336. |
| Citation | 29 N.W.2d 657,224 Minn. 451 |
| Parties | STATE v. LONGYEAR HOLDING CO. et al. |
| Court | Minnesota Supreme Court |
Appeal from District Court, St. Louis County; Edwin J. Kenny, Judge.
Action by the State of Minnesota against Longyear Holding Company and others to determine adverse claims to the bed of Syracuse Lake situated in St. Louis County, involving that portion of the bed of the lake below low-water mark, in which there are valuable iron ore deposits. After findings for plaintiff, North Star Mining Company of West Virginia and others appeal.
Affirmed.
Holmes, Mayall, Reavill & Neimeyer, of Duluth, for appellants Longyear Holding Co. and others.
Arthur Roberts, of Duluth, for appellants Adams Corporation and C. M. Hill Lumber Co. Doherty, Rumble, Butler & Mitchell, of St. Paul, for appellant North Star Iron Co. J. A. A. Burnquist, Atty. Gen., Wm. C. Green, Asst. Atty. Gen. and Mandt Torrison, Sp. Asst. Atty. Gen., of St. Paul, for respondent.
Francis E. Murphy, of Crosby, amicus curiae on behalf of appellants.
Action by the state to determine adverse claims to the bed of Syracuse Lake, situated in sections 5 and 6, township 58 north, range 15 west, St. Louis county, Minnesota. The action involves only that portion of the bed of the lake below low-water mark, comprising approximately 33 acres, in which there are valuable iron ore deposits.
Defendants other than Lake Mining Company, which is operating under lease from the state, are the owners of all interests in the land bordering on said lake. For brevity, they are hereinafter referred to as the riparian owners.
Some 20 million tons of ore are involved, of which approximately 18 million tons lie under the lands bordering the lake to the low-water mark thereof and of which approximately two million tons lie under the lake bed below said low-water mark. It is the ownership of the latter which is involved in this action.
The state has entered into an agreement under statutory authority whereunder the lake has been drained, a temporary channel connecting the waters above and below it constructed, the overburden removed, and the mining of the ore deposits beneath the lake bed below its low-water mark commenced. Such operations have been undertaken and conducted under separate agreements with the riparian owners, so that the ore beneath their lands bordering said lake may be removed at the same time. All such operations are being conducted by Lake Mining Company under agreements with the riparian owners and with the state, whereunder specified royalties upon the ore removed from below said portion of the lake bed are to be paid to the lawful owners thereof as judicially determined, and whereunder, if required by the state, said lake is to be refilled and its channel restored when such operations are complete.
The trial court made findings and ordered judgment in favor of the state, in substance determining that Syracuse Lake at the time of Minnesota's admission to the Union was part of a navigable highway extending from the mouth of the St. Louis River to Lake of the Woods; hence that the state retained or reserved title to the bed thereof below low-water mark and now holds the same in its sovereign governmental capacity in trust for the people of the state, although not in absolute proprietorship with right of alienation; that the state is the owner of iron ores and other minerals on, in, or below said low-water mark of the lake, with the right to dispose of the same by lease, subject only to the prior lease and agreement held by Lake Mining Company, hereinbefore described; and that none of the riparian owners are entitled to receive or be paid any royalties or other compensation for the ore removed from said portion of the lake bed.
The only fact issue presented at the trial was whether Syracuse Lake was a navigable public lake within the federal tests of navigability at the time of Minnesota's admission to statehood, so that title to the bed thereof remained in the state upon such admission. The remaining issues were issues of law. The trial court found that Syracuse Lake was a navigable public lake within the federal tests of navigability at the time of Minnesota's admission to statehood, and, in our opinion, as will hereinafter be shown, the evidence amply sustained the trial court's findings in this respect.
In their written briefs and oral arguments, the riparian owners do not seriously question the sufficiency of the evidence to sustain this finding. It is their principal contention here, as it was at the trial, that even though at the time of Minnesota's admission Syracuse Lake was part of a navigable waterway, nevertheless, under the decisions of this court rendered subsequent thereto, the state's title therein was thereafter limited to that of sovereign and governmental rather than proprietary; while their interests in said lake bed, under our decisions, were held to be proprietary and beneficial, subject only to the state's sovereign or governmental right therein; and that, since the state has effected the diversion of the waters of said lake and provided a new channel in lieu thereof, its sovereign right to the lake bed no longer attaches thereto, and they alone, as holders of the proprietary interests therein, are now the lawful owners of the ore beneath the same.
The riparian owners acquired their original rights in the premises adjoining said lake by virtue of patents from the United States issued to them or their assignors or predecessors in interest. It is well established that if Syracuse Lake was part of a navigable watercourse at the time of Minnesota's admission to statehood title to the bed thereof, as well as to the bed of other navigable lakes and streams within the state, remained in the state and did not pass to the federal government, and that in consequence patents from the United States covering lands riparian thereto conveyed to the grantees therein no interest in the beds of such waters.
It would follow therefrom that any rights of riparian owners therein must arise by virtue of some action or proceeding taken subsequent to Minnesota's admission to statehood which divested or limited the state's beneficial interest in such lands and vested the same in the riparian owners. As stated above, the riparian owners assert that such transfer of beneficial ownership was effected by the decisions of this court subsequent to statehood. These, they assert, established a rule of property which divested the state of any beneficial or proprietary ownership in the beds under navigable waters and vested the same in them, effective when the state's sovereign interest therein terminated as the result of accretions and relictions, or by the complete drainage and diversion of such waters to a new channel, as in the instant case.
It is the contention of such riparian owners that the rule of property thus asserted is established in Union Depot, Street Railway & Transfer Co. v. Brunswick, 31 Minn. 297, 17 N.W. 626, 47 Am.Rep. 789; Hanford v. St. Paul & Duluth R. Co. 43 Minn. 104, 42 N.W. 596, 44 N.W. 1144, 7 L.R.A. 722; Shell v. Matteson, 81 Minn. 38, 83 N.W. 491; and State v. Korrer, 127 Minn. 60, 148 N.W. 617, 1095, L.R.A. 1916C, 139.
The state, on the other hand, contends that Syracuse Lake was part of a navigable waterway at the time of Minnesota's admission to the Union, and hence that title to the bed of the lake below the low-water mark was reserved to the state at such time and subsequent thereto; that such title so reserved, while designated at times as governmental or sovereign, nevertheless gave the state the full beneficial right, title, and interest in and to the bed of the lake below low-water mark; that decisions defining the state's rights in the beds of navigable waters as governmental or sovereign rather than proprietary mean only that the state cannot parcel and sell or otherwise alienate such water beds so as to interfere with commerce or the navigability thereof, but that it holds the same in trust for all the people for public navigation; that no decision of this court and no legislative enactment ever vested the beneficial title or ownership of said water bed in the riparian owners; that legislation alone, rather than judicial decisions, could effect such a transfer of state lands; and that the legislature, by repeated enactments, has expressly declared that the state is the beneficial owner thereof.
The state further asserts that its actions in authorizing the temporary drainage of Syracuse Lake and the removal of ore beneath it under the leases described, taken pursuant to statutory authority, did not constitute the parceling and sale or alienation of said lands in violation of its sovereign or governmental title; or in violation of the trust in which it held such lands for the people, since (a) such actions did not interfere with the public right of navigation, and (b) they were in conformity with the state's duty, as trustee, to put such lands to their greatest productive and beneficial use for the benefit of all the people.
As previously stated, the trial court's findings and conclusions upheld the position of the state as above set forth.
1. It is well settled that the test of navigability to fix ownership of lake beds must be determined as of the date of a state's admission to the Union and under the federal decisions with reference thereto. United States v. State of Utah, 283 U. S. 64, 75, 51 S.Ct. 438, 75 L.Ed. 844; United States v. Appalachian Elec. Power Co., 311 U.S. 377, 408, 61 S.Ct. 291, 300, 85 L.Ed. 243, 253; Union Depot, Street Railway & Transfer Co. v. Brunswick, 31 Minn. 297, 17 N.W. 626, 47 Am.Rep. 789; United States v. Holt State Bank, 270 U.S. 49, 46 S.Ct. 197, 70 L.Ed. 465.
2. The federal test of navigability, as laid down by the United States Supreme Court, is stated in United States v....
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