Wis. Traction, Light, Heat & Power Co. v. Green Bay & Miss. Canal Co.

• Decision Date: 20 October 1925
• Citation: 188 Wis. 54,205 N.W. 551
• Court: Wisconsin Supreme Court
• Parties: WISCONSIN TRACTION, LIGHT, HEAT & POWER CO. v. GREEN BAY & MISSISSIPPI CANAL CO. ET AL.

188 Wis. 54

205 N.W. 551

WISCONSIN TRACTION, LIGHT, HEAT & POWER CO.

v.GREEN BAY & MISSISSIPPI CANAL CO. ET AL.

Supreme Court of Wisconsin.

Oct. 20, 1925.

Appeal from Circuit Court, Outagamie County; Edgar V. Werner, Judge.

In the matter of the application of the Wisconsin Traction, Light, Heat & Power Company for condemnation of property belonging to the Green Bay & Mississippi Canal Company and others. From an order granting the relief prayed for, and from an order denying defendant's motion to set such order aside, defendant appeals. Reversed and cause remanded, with directions.

The petitioner, respondent here, Wisconsin Traction, Light, Heat & Power Company, hereinafter called the Traction Company, instituted condemnation proceedings under the eminent domain statute, seeking condemnation of certain lands and water powers appurtenant thereto, and certain easements, estates, or interests therein, for its purposes in the operation by it as a public utility of a street and interurban railway, and furnishing electric light and power to the public. The petition in said matter was verified July 14, 1924, and notice of hearing on the same was served on the appellant herein August 9, 1924, and hearing had in September, 1924. The real estate involved was a narrow strip about 1,600 feet long in the city of Appleton bordering on the Fox river, the United States dam in said river, and the United States canal.

The dam here in question is one of several on the Fox river which are kept up and maintained by the United States government for the declared purpose of aiding the navigation of said river, in which dams the Green Bay & Mississippi Canal Company, hereafter called the Canal Company, has an interest, such interests being based upon the reservations contained in a certain deed of September 18, 1872, by the Canal Company to the United States government. A history of the transactions relating to the situation of the Canal Company and its predecessor in title with the United States government, the state of Wisconsin and others, may be found in Kaukauna Water Power Co. v. Green Bay & M. Canal Co., 142 U. S. 254, 12 S. Ct. 173, 35 L. Ed. 1004;Green Bay & M. Canal Co., v. Patten Paper Co., 172 U. S. 58, 19 S. Ct. 97, 43 L. Ed. 364;Id., 173 U. S. 179, 19 S. Ct. 316, 43 L. Ed. 658;Green Bay & M. Canal Co. v. Kaukauna Water Power Co., 70 Wis. 635, 35 N. W. 529, 36 N. W. 828;Green Bay & M. Canal Co. v. Kaukauna Water Power Co., 90 Wis. 370, 61 N. W. 1121, 63 N. W. 1019, 28 L. R. A. 443, 48 Am. St. Rep. 937;Patten Paper Co. v. Green Bay & M. Canal Co., 104 Wis. 24, 83 N. W. 1119.

The conveyance with its reservations by the Canal Company to the United States government in 1872, so far as here material, is as follows:

“In consideration of the sum of one hundred and forty-five thousand dollars paid by the United States of America, the said party of the second part the receipt whereof is hereby acknowledged, the Green Bay & Mississippi Canal Company, the said party of the first part, hath granted, bargained and sold and by these presents doth grant, bargain and sell unto the said United States of America, the party of the second part, the following described property rights, franchises, etc., situate in the state of Wisconsin, and described as follows, to wit: All and singular its property and rights of property in and to the line of water communication between the Wisconsin River aforesaid and the mouth of the Fox River, including its locks, dams, canals and franchises saving and excepting therefrom and reserving to the said party of the first part the following described property rights and portion of franchises, which in the opinion of the secretary of war and of Congress are not needed for public use, to wit: First, all of the personal property of said company, and particularly all of such property described in the list or schedule attached to the report of said arbitrators and now on file in the office of the secretary of war to which reference is here made whether or not such property be appurtenant to said line of water communication. Second, also all that part of the franchises of said company, viz., the water powers created by the dams, and by the use of the surplus waters not required for the purpose of navigation with the rights of protection and preservation appurtenant thereto and the lots pieces or parcels of land necessary to the enjoyment of the same and those acquired with reference to the same all subject to the right to use the water for all purposes of navigation as the same is reserved in leases heretofore made by said company.”

In 1901 a lease was executed by the Canal Company to the Traction Company of a certain portion of the real estate in question with a grant of the right to use for hydraulic power one-half of the flow of Fox river not required for navigation at the upper or Grand Chute dam in Appleton (the United States government dam hereinbefore mentioned), less and excepting therefrom a flow of 9,500 cubic feet of water per minute previously deeded to Appleton Edison Light Company, Limited, and other small quantities theretofore leased. The maximum period in said lease was 100 years, and requiring notices of option on the part of the lessee at 10-year intervals, one of which was given in 1921. The questions raised and discussed as to the meaning and effect of certain of the clauses therein contained we do not set out because not passed upon or decided here.

The upper portion of the real estate here involved, that is, the portion abutting on the United States government dam, is, under the terms of the lease, subject to be withdrawn from the same upon the Canal Company acquiring the right to use or lease more than one-half of the flow of said river at such dam; such other one-half being controlled by the Kimberly Clark Company since 1845.

Beyond the property covered by the terms of the lease, but within the area proposed to be taken by the condemnation proceedings, is a strip belonging to the Canal Company, but which has been and is now occupied and used by the Traction Company as tenant at will, and beyond that again, and at the extreme end of the strip, is a piece of land theretofore leased by the Canal Company to another corporation whose rights thereto however have been acquired by the Traction Company, but which lease expires by its terms May 26, 1927.

After entering into possession the Traction Company invested between $900,000 and $1,000,000 in flumes, tail races, electrical equipment, boiler house, generators, switchboards, substations, handling equipment, railroad tracks, coal yards, etc., and used a combined steam and water power with the usual kind of machinery and equipment in a modern public utility, and is now serving the cities of Neenah and Menasha with street railway service and 21 neighboring municipalities with electric light and power, and is planning large and extensive additions to its plant in order to extend and enlarge its service.

It appears from the testimony that by virtue of the transaction with the United States government in 1872 the Canal Company had an interest in 11 power sites along the Fox river, all subject to the paramount right and control of the United States government as above indicated. Two of such sites were as yet undeveloped, and on the remainder the Canal Company has 11 customers, including the Traction Company; the arrangement between such several customers and the Canal Company being all by private contract or lease, some of which have still long periods of time to run. It owns some water wheels at the lower site in Appleton in the plant of the Interlake Pulp & Paper Company, one of its lessees. Since about 1907 on one of the sites in the city of Kaukauna it has owned buildings, generators, and wheels, all of which were on February 1, 1923, leased by the Canal Company to the city of Kaukauna, a municipal corporation and public utility, for public utility purposes, specifying certain real estate on the side of the river at Kaukauna, together with the hydraulic canal leading from the pond created by the United States government dam across the Fox river at said city, together with the buildings on said real estate, “including the hydroelectric power plant on said lots known as the ‘Badger Plant,’ ” together with machinery and personal property, including the water wheels, gates, flumes, bulkheads, etc., used or useful in the operation of said plant and belonging to the lessor, together with the “right to take and use through the said canal and Badger plant for hydraulic, hydroelectric, or other powers, so much of the flow of the Fox river at all stages as it comes to the dam as may be in excess of that taken under the dominant rights of the United States, etc.

The agreed rent was based upon designated amounts per kilowatt hour for all energy generated and used by the lessee from the two generators, or any additional water turbines and electrical generators as may be installed. It also provided that upon the city obtaining an increase in rates for electric service it will increase the rent in said lease specified by 50 per cent. of the net profit derived from such increase, and the city bound itself to furnish the lessor with annual reports of increases in rates. It also provided that in the event of the development, during the term of said lease, of any of the presently undeveloped water powers of the Canal Company “for the purpose of generating hydroelectric power, and selling the same as a public utility,” then the city was, upon two years' notice to surrender the lease, etc., with certain rights reserved to the city.

A further provision gave to the Canal Company a voice as to the person or persons employed in the active management and operation of the premises, and required the dismissal by the lessees of persons found to be so unsatisfactory to the lessor.

In June, 1924, and prior to the...