Lehigh Water Co. v. Easton, 121 U.S. 388 (1887)

For many years prior to June 21, 1880, the Lehigh Water Company, a corporation organized, under the laws of Pennsylvania, by the purchasers at judicial sale of the rights, powers, privileges, and franchises of the West Ward Company, also a Pennsylvania corporation, maintained a system of p. 389water works whereby the inhabitants of the borough of Easton, in that Commonwealth, were supplied with water for domestic and business purposes. On that day, it accepted the provisions of an act of the General Assembly of Pennsylvania, approved April 20, 1874, entitled “ An act to provide for the incorporation and regulation of certain corporations.” By such acceptance it acquired the privileges, immunities, franchises, and powers conferred by the act upon corporations created under it.

“ The third ground of objection is wholly without merit. By constructing water works of its own the borough will not destroy the franchises of the plaintiff company. It may impair their value, and probably will do so; but of this the p. 391company have no legal cause of complaint. The granting of a new charter to a new corporation may sometimes render valueless the franchises of an existing corporation; but unless the state by contract has precluded itself from such new grant the incidental injury can constitute nd obstacle. Charles River Bridge v. Warren Bridge, 11 Pet. 420; Turnpike Co. v. The State of Maryland, 3 Wall. 210; Piscatagua Bridge v. New Hampshire Bridge, 7 N. H. 35. No contract has been shown between the water company and the state by which the latter is precluded from granting to the borough of Easton the privilege of erecting works to supply its citizens with water.” Lehigh Water Co.’s Appeal, 102 Penn. St. 515, 528.

The only question presented by the record which this court can properly consider is, whether the judgment below denies to the plaintiff in error any right or privilege secured by that provision of the Constitution of the United States which declares that “ no state shall pass any law impairing the obligation of contracts.” Obviously, this clause cannot be invoked for the reversal of the judgment below. It is equally clear that the law of the state to which the Constitution refers in that clause must be one enacted after the making of the contract, the obligation of which is claimed to be impaired. Neither the Lehigh Water Company nor its predecessor had, under any statute enacted prior to 1874, an exclusive right to maintain water works in the borough of Easton for supplying its inhabitants with water. Nor did the grant to the borough, in the acts of 1867, of the power to construct and maintain a system of public water works, infringe any right or privilege which the plaintiff in error then had under its charter. But the claim is, that the exclusive privilege acquired by the company under the statute of 1874 was impaired in value by the acts passed in 1867. It cannot, however, with propriety, be said that the obligation of a contract made with the state m 1874 was impaired by statutes enacted in 1867. Whether the former repealed, by impheation, the acts of 1867, presents no question arising under the National Constitution. That is a question simply of statutory construction which the state p. 392court was competent to determine, and whose judgment in respect thereto is not subject to reexamination in this court. Had the borough of Easton been authorized by a statute enacted after the Lehigh Water Company had acquired the exclusive privilege given by the act of 1874, then this court would have been compelled to decide, upon its independent judgment, whether the latter applied only to private corporations; for, in such case, the determination of that question would be involved in the inquiry whether there was a contract between the state and the company, and, if there was a contract, whether its obligation was impaired by a law subsequently enacted. Louisville Gas Co. v. Citizens'1 Gas Co., 115 U. S. 683, 697.

This was an action to determine the rights of the parties to mining ground in Lawrence County, in the territory of Dakota. In April, 1878, one of the defendants below, and of the appellants here, John Noonan, asserted ownership to a tract of mineral land in that county, bearing the name of the Bobtail Lode. It was of great value, and he desired to obtain a p. 394patent of the United States for it. He therefore pursued the course prescribed in such cases by §§ 2325 and 2326 of the Revised Statutes; and, on the 20th of that month, filed the necessary application in the proper land office of the district.

The amended complaint further alleged, that, from its original location in June, 1876, the plaintiff or its grantors had been in the actual and continuous possession of the Caledonia p. 395claim, and. every part of it, and in accordance with the laws of the United States and of the territory of Dakota, and the local rules and regulations of miners in the district; and had expended, in labor and money, more than five thousand dollars in its development and improvement; that the defendant Noonan claimed an interest in a portion of its mining ground, to the extent of three acres and forty-seven hundredths of an acre, by virtue of an alleged location of a quartz mining claim, called the Bobtail lode, made by his predecessors in interest, in February, 1876, which was invalid and a cloud upon its title to the Caledonia lode. It prayed that the defendant might answer and set out particularly his claim to that portion of the Caledonia lode which conflicted with the Bobtail lode, and the nature of it; and that it might be adjudged that he had no estate or interest therein, and that he be enjoined from asserting any right or title to it.

“Now, on this 15th day of July, a .d. 1880, the trial of the cause is resumed. By consent of all parties, Thomas F. p. 396Mahan is made a party defendant in this action. Counsel for defendant appear and answer instanter for him, any amendments to pleadings required to be prepared and served during the pendency of this action, or at its conclusion.”

“ 10. And plaintiff further avers that the defendant, Thomas F. Mahan, has, or claims to have, some right, title, or interest adverse to plaintiff in or to that portion of the said Caledonia lode claim above described by survey ; that said claim of said defendant Mahan is without foundation or right as against plaintiff, but said Mahan persists in the same and makes said claim, as plaintiff is informed and believes, under the said alleged and pretended location of the said alleged Bobtail lode claim above described as coowner with, and claiming under the same right as, defendant Noonan, as above mentioned, and that said claim of said Mahan casts a cloud upon plaintiff s p. 397title to its said portion of said Caledonia lode above described, and plaintiff, therefore, makes said Mahan a defendant in this action, and asks the same judgment, decree, and relief against him as hereinafter prayed against said defendant Noonan.

The trial continued after the amendment, the defendant Mahan participating in all its proceedings as if his name had been inserted in the complaint in the most formal manner, and he had answered it specifically. The agreement provided that the amendment might be made during the pendency of the action, or on its conclusion, and in accordance with it the p. 400amendment to the complaint filed with the judgment roll may properly be read and treated as part of the pleadings. If the defendant Mahan had desired to file a formal answer to the allegations of the complaint, he should have insisted upon it at the time. He was probably satisfied with the answer of his codefendant on file, which put in issue the plaintiff’s title and set up all that he could have pleaded for himself. He had on the trial all the benefits of the most formal answer, and his connection with the case as a party sufficiently appears from the amendment filed.

While it is true that, before the new agreement, the prohibition against settlement upon the country constituting the reservation of the Indians remained in full force, yet it was evident to all that it would soon be withdrawn by some arrangement; that immediately afterwards the mineral lands would be open to occupation and development; and that from that time mining claims taken up in the territory would be respected and protected. With the new agreement the results anticipated followed. The presence of the miners on the reservation up to that time was illegal, but from that time it was legal. Those then in possession of mining claims, which had been taken up and developed in accordance with the rules of miners in mining districts of the country, were entitled to protection in their possessory claims as against the intrusion of others. The effect of the withdrawal of the district from the reservation, and the consequent end of the prohibition, was to leave the predecessors of the plaintiff exempt from liability to be disturbed for their unlawful entry on the land, and free to take measures under the mining laws for the perfection of their claims. Evidence of what had been done by them, the p. 403location of their claim, its extent, the amount of work done in its development, was competent, not as creating any absolute right to the property, but as showing the existence and condition of the property when their possession became lawful under the new agreement. Whether they should be protected in holding the property afterwards depended upon their future compliance with the laws, statutory and mining, governing the possession and use of mineral lands in. Dakota. The rule laid down by the Supreme Court of the territory is, in our judgment, the correct one, which should govern cases of this kind, and that is substantially this : that where a party was in possession of a mining claim on the 28th of February, 1877, with the requisite discovery, with the surface boundaries sufficiently marked, with the notice of location posted, and with a disclosed vein of ore, he could, by adopting what had been done, causing a proper record to be made, and performing the amount of labor or making the improvements necessary to hold the claim, date his rights from that day; and that such location and labor and improvements would give him the right of possession. By this rule substantial justice is done to-all parties who were entitled to protection in their mining claims when the new agreement took effect.