Wilson v. E. Jersey Water Co.

• Citation: 79 A. 440,78 N.J.E. 329
• Parties: WILSON, Atty. Gen. v. EAST JERSEY WATER CO.
• Decision Date: 17 February 1911
• Court: New Jersey Court of Chancery

79 A. 440

78 N.J.E. 329

WILSON, Atty. Gen.

v. EAST JERSEY WATER CO.

Court of Chancery of New Jersey.

Feb. 17, 1911.

Information by Edmund Wilson, Attorney General, against the East Jersey Water Company for an injunction restraining the diverting of water from a river. Leave to amend information granted, with leave to defendant to move to dismiss on failure so to do.

Edmund Wilson, Atty. Gen., pro se.

William H. Corbin and Charles L. Corbin, for defendant.

STEVENS, V. C. This is an information filed by the Attorney General praying for an injunction against the East Jersey Water Company restraining it from diverting any water from the Passaic river at Little Falls. The information states that the company was incorporated under the general corporation act in August, 1889, for the purpose, among other things, of storing, selling, and delivering water and of constructing and maintaining the necessary reservoirs, pipe lines, and other works therefor; that it has established extensive works at Little Falls on the Passaic river, and has there constructed a large filter plant and pumping station, and daily diverts from the Passaic river several millions of gallons of water in order to supply the inhabitants of Bayonne, Harrison, East Newark, Kearney, Nutley, and Little Falls with water for domestic and public use; and that it is doing this without any warrant of law. The answer of the company admits its incorporation under the general corporation act and the establishment of its works at Little Falls. It denies that it is diverting water without authority of law, and avers that the municipalities mentioned in the information have lawful authority, under chapter 250 of the Laws of 1888 and by the legislative acts under which they are created, and under the general laws of the state, to enter into contracts with any water company or other company or contractor to obtain a supply of water for the purpose of extinguishing fires, and for such other lawful purposes as may be deemed necessary and convenient. The answer then sets up the various contracts entered into with the municipalities named, and avers that, in order to satisfy those contracts, it became necessary for the East Jersey Water Company to acquire the Little Falls water power and land at Little Falls on both sides of the river and in the bed of the stream, to construct appliances thereon, including a filter plant, to purchase rights of way for its pipe lines, to build a reservoir and to install water gates and meters; that it did all this at great cost and with full knowledge of the public authorities; that it has been pumping water for many years; and that the state and public authorities have, with full knowledge, acquiesced therein, and are now estopped by acquiescence and barred by delay. The municipalities supplied are not parties to the bill and the effect of granting the injunction would be to cut off their water supply without giving them an opportunity to be heard.

The issue between the company and the state has been very much narrowed by recent decisions made in the cases of McCarter v. Hudson County Water Co., 70 N. J. Eq. 525, 61 Atl. 710, Id., 209 U. S. 355. 28 Sup. Ct. 529, 52 L. Ed. 828, and of Paterson v. East Jersey Water Company, 74 N. J. Eq. 49, 70 Atl. 472, affirmed at the present term of the Court of Errors. In the Hudson County Case it was declared by the Supreme Court of the United States that the state has the constitutional power to insist that its natural advantages shall remain unimpaired by its citizens, and that it is not dependent upon any reason for its will so to do. Mr. Justice Holmes says: "It appears to us that few public interests are more obvious, undisputable, and independent of particular theory than the interest of the public of a state to maintain the rivers that are wholly within it, substantially undiminished, except by such drafts upon them as the guardian of the public welfare may permit for the purpose of turning them to a more perfect use." In that case, in the exercise of its police power, the Legislature had passed an act making it unlawful to transport into any other state by pipes or conduits the waters of brooks, streams, or ponds, and the act was held to be valid. There is no statute restraining the transportation or distribution of water within the state, except the act of 1907 (P. L. 633), section 2 of which, however, provides that nothing therein contained shall be construed to take from any municipality the right to use and take all the water which it has the right to use or appropriate by purchase or condemnation. The Attorney General does not contend that the state has by express legislation forbidden the East Jersey Water Company to supply municipalities with water. He rests his case upon the company's lack of power; his position being that, having been incorporated under the general corporation act, it is not by that act authorized to engage in the business of selling water.

It is not pretended that the company has under its charter any more right to take water than any other riparian owner has. What that right is, is thus stated by Pitney, J., in the Hudson County Water Company's Case. He says: "In a sense the landowner owns the water while it is upon the land, but his ownership is limited to a usufructuary interest, without right to divert any from its natural course saving for the limited uses that naturally and of necessity pertain to a riparian owner, such as the supply of his domestic needs, the watering of his cattle, the irrigation of his fields, the supplying of power to his mill, and the like. This right of user is limited to so much as shall be reasonably necessary, and is qualified by the obligation to leave the stream otherwise undiminished in quantity and unimpaired in quality. The common law recognizes no right in the riparian owner as such to divert water from the stream in order to make merchandise of it, nor any right to transport any portion of the water from a stream to a distance for the use of others." The East Jersey Company is a riparian owner of lands at Little Falls. As such it has the rights above mentioned, and no more. If it has the right to take water from streams for the use of municipalities, such right exists independently of, and outside of, the powers conferred by its charter. As has already been said, the Supreme Court of the United States rests its decision in the above-cited case upon the state's right to exercise its police power. But the Court of Errors puts its decision of the same case upon other grounds. I shall state what these grounds are in the language of Vice Chancellor Emery, in the case of Paterson v. East Jersey Water Co., supra. He says: "The permanent diversion of water for sale was, as I understand (the opinion in the Hudson Water Co.'s Case), held to be an unlawful and unreasonable use of the waters by a riparian owner, and the validity of the act (prohibiting the transportation of water out of the state) was sustained upon the ground, first, that the state as the trustee for the public had a residuum of common and public ownership in the running stream subject to the exercise of all rights of private riparian owners, which rights, however, include only lawful uses in connection with the riparian land itself and exclude diversion for sale, and that this public ownership of the residuum of interest entitled the state in the common interest to forbid by statute the transportation out of the state of water drawn from its fresh water streams. The second ground upon which the act was sustained was placed upon the right of the state, as itself a riparian owner, by reason of ownership of the bed of the stream below the tidal flow." This statement is authoritative for it was approved by the Court of Errors on appeal.

Such being the state's right, it seems very plain that the state may, by its Attorney General, restrain all unlawful diversions of water by riparian proprietors. If the East Jersey Company had no other title to divert such waters than its riparian proprietorship, it would be the duty of this court to enjoin it; for it would be, without right, diverting water to which the state has a double title—its title to the residuum of ownership in the flow of streams, and its title as lowest riparian owner. The mere fact that the state can point to no tangible injury is, as was expressly decided in the Paterson Case, of no consequence. Whether the company is taking more or less, it is taking property of the state which does not belong to it. If, then, it can justify its taking, it must, as I have said, do so, not because of any right conferred by its certificate of incorporation under the general corporation act, but because of some statutory right outside of its charter conferred either upon it or upon those with whom it has contracted. It has been able to point to no such right conferred upon itself, and consequently it must rest its power to divert upon a right conferred on others. Two questions arise: First, have the municipalities named in the information the right, as against the state, to obtain a water supply; second, if they have, does the East Jersey Company stand in the position of acting as their lawful agent in obtaining it?

In the discussion of the question, it is to be borne in mind that the possession or nonpossession of the power of eminent domain by the contractor or the municipality is not here a matter of much consequence. This power is given, not to enable the company or the individual to condemn the land of the state, but the land of individual proprietors. Vested with this power, conferred in the ordinary way, the conferee has no right to condemn the property of the state. The state's rights can only be obtained by grant from the state itself. Such grant may he express or by necessary implication. Thus, if a railroad, telegraph, or telephone company be authorized to construct its line between New York and...