US SUPREME COURT DECISIONS

By an act of Congress passed in 1828, a large quantity of land was granted to the State of Ohio for the construction of canals. The act provided that such canals, "when completed or used, shall be and forever remain public highways for the use of the government of the United States." The grant was accepted by the state, but in 1894, the state legislature authorized the abandonment of certain canals which had been constructed under the act of Congress and the leasing of the same to a railroad company.

Held that there was reason to claim that the act of 1894 impaired the obligation of the previous contract between the state and the federal government, and that a federal question was thereby raised.

Held further that, in accepting the Congressional land grant of 1828, there was no undertaking on the part of the state to maintain the canals as such in perpetuity, and that the government was only entitled to their free use as long as they were kept up as public highways, and that the act of the Legislature of Ohio authorizing their abandonment as canals and leasing them to a railway company did no violence to the contract clause of the Constitution.

Held further that a private property owner was no party to the contract between the state and the federal government, and stood in no position to take advantage of a default of the state in respect to its contract. His rights were entirely subsidiary to those of the government, and if the latter chose to acquiesce in the abandonment of the canals, he had no right to complain.

This was a petition filed in the Court of Common Pleas of Franklin County, Ohio, by the plaintiff Walsh to enjoin the defendant railroad company from entering upon the property of the Lancaster Lateral Canal Company and upon plaintiff's premises, and from constructing a railroad thereon, and for chanrobles.com-red

Page 176 U. S. 470

a decree ceclaring a certain act of the General Assembly of ohio giving it permission to do so to be null and void.

The case was determined upon demurrer to the petition, which set forth substantially the following facts: on February 4, 1825, the general assembly of the state passed "An Act to Provide for the Internal Improvement of the Ohio, by Navigable Canals," 23 Ohio Stat. 50, among which was the Ohio Canal, extending from the mouth of the Scioto River, through the State of Ohio to Lake Erie and passing through the Village of Carroll, in the County of Fairfield. On February 8, 1826, the Lancaster Lateral Canal Company was incorporated by act of the general assembly, 24 Ohio Laws, 71, and authorized to construct and operate a canal "from the Town of Lancaster to such point of the Ohio Canal as shall be found most eligible." The Village of Carroll was fixed upon as the terminus.

On May 24, 1828, Congress passed an act to aid the State of Ohio in the construction of its canals, 4 Stat. 305, by the fifth section of which act (printed in full in the margin), [Footnote 1] Congress granted to the state 500,000 acres of land in that state for this purpose with a proviso that

"the said canals, when completed or used, shall be and forever remain public highways

Page 176 U. S. 471

for the use of the government of the United States, free from any toll or charge whatever, for any property of the United States or persons in their service passing along the same."

The seventh section of the act declared that

"this act shall take effect provided the Legislature of Ohio, at the first session thereof hereafter to commence, shall express the assent of the state to the several provisions and conditions hereof, and unless such expression of assent shall be made, this act shall be wholly inoperative."

Pursuant to this act, the General Assembly of the State of Ohio, on December 22, 1828, passed an act expressly declaring the assent of the state, to the provisions and conditions of the act of Congress. Under these acts, the state received and took possession of the 500,000 acres of land provided by the grant, and from time to time sold and disposed of the same, and received from the proceeds of such sale somewhat more than $2,200,000.

The Lancaster Lateral Canal Company, incorporated as above stated, proceeded to construct and operate its canal under its charter until December 22, 1838, when it sold and conveyed the same to the State of Ohio, under an authority conferred upon the board of public works, by an act passed March 9, 1838, for the sum of $61,241, which was paid to the company out of the funds realized by the state from the sale of the congressional land grant. The canal was subsequently, under an act of the legislature, extended from its terminus in Lancaster to the Town of Athens, in Athens County, was opened as a continuous line of canal for navigation purposes prior to January 1, 1842, and this extension was also paid for by moneys realized from the sale of the land grant.

The complaint further averred that

"ever since the construction of said canal, which is and has been known as the Hocking Canal, the same has been and still is a public highway which has been used for the use of the State of Ohio and the government of the United States in pursuance of the several acts of Congress and of the General Assembly of the State of Ohio hereinbefore set forth."

On April 12, 1894, the Columbus, Hocking Valley & chanrobles.com-red

Page 176 U. S. 472

Athens Railroad Company, defendant herein, was organized and incorporated for the purpose of building a railroad from the City of Columbus through the counties of Franklin, Fairfield, Hocking, and Athens to the City of Athens, and on the 18th day of May, 1894, the General Assembly of the state passed an act for the abandonment of the Hocking Canal for canal purposes, and for leasing the same to this railroad company. (91 Ohio Stat. 327.) The act is printed in full in the margin. [Footnote 2] The fourth section of the act provided that the chanrobles.com-red

Page 176 U. S. 473

railroad company should have the exclusive right during the term of the lease (ninety-nine years)

"to use and occupy the property aforesaid, or so much thereof as may be necessary, for the purpose of constructing, maintaining, and operating a railroad thereon. Said company shall not disturb any vested rights or privileges of abutting property holders along said canal, and shall hold the state harmless from all loss or damage resulting to such property holders by reason of the construction and operation of said railroad."

The plaintiff further averred that the defendant was making preparations to build its road upon the line of the canal, and was threatening to take possession of his property without having acquired the rights and interests in the said lands and tenements belonging to the plaintiff, whose lands are located on both sides of the Hocking Canal, about five miles north of the City of Lancaster, in Fairfield County, and without having purchased or acquired by condemnation or otherwise the right to enter upon said lands and to construct said railroad. That such road will constitute a permanent trespass upon plaintiff's property, and will place large additional chanrobles.com-red

Page 176 U. S. 474

burdens upon his lands, which will render the same inconvenient and difficult of access, and great and irreparable injury will be done in the premises unless the defendant be restrained by an order of the court from taking possession of said canal and the said premises of plaintiff and constructing this railroad thereon.

The gist of the complaint lies in the allegation that the Act of May 18, 1894, authorizing the abandonment of the canal, conflicts with that clause of the Constitution which provides that "no state shall pass any law impairing the obligation of contracts," and also with several provisions of the Constitution of Ohio not necessary to be here enumerated.

A general demurrer was filed to this petition, which was sustained by the court, and the petition dismissed. Plaintiff appealed the case to the circuit court, which also sustained the demurrer, whereupon plaintiff appealed the case to the supreme court of the state, which reversed the judgment of the circuit court and ordered that the railroad company be enjoined from entering upon the lands of the plaintiff until it had condemned and paid for the additional burden of constructing and operating the railroad on the land, according to law. 58 Ohio St. 123.

Upon motion of the plaintiff, the court certified that, in the rendition of this judgment, it became material to determine whether the Act of May 18, 1894, was repugnant to the contract clause of the Constitution, and ordered it to be further certified that the court adjudged that it was not in violation of or repugnant to such clause, and that such act was valid and binding upon the plaintiff. Whereupon plaintiff sued out a writ of error from this Court.