Telluride Power Co. v. Rio Grande Western Ry. Co., 187 U.S. 569 (1903)

Telluride Power Transmission Company v.

Rio Grande Western Railway Company
No. 72

Argued November 10, 1902
Decided January 5, 1903
187 U.S. 569

ERROR TO THE SUPREME COURT

OF THE STATE OF UTAH

Syllabus

It is sufficient answer to a claim that a statute of Utah amounts to a deprivation of the rights under the Fourteenth Amendment that it appears for the first time in the petition for a writ of error from this Court and that the claim of invalidity was not raised in the district court, nor assigned as a ground of error on the appeal to the supreme court of the state, and that that court did not pass upon the action of the district court in view of the unconstitutionality of the statute.

Where the Supreme Court of Utah has construed the statutes and Constitution of Utah to the effect that a foreign corporation had no existence as a corporation in the state, and could acquire therefore no rights as such, and that an individual connected with the corporation had no independent rights in the premises, these conclusions do not involve the decision of federal questions, but only the meaning and effect of local statutes and a finding of fact, neither of which is reviewable by this Court.

Whatever rights the plaintiff in error in this action may have had under § 2339, Revised Statutes of the United States, depended upon questions of fact and of local law, which are not reviewable by this Court.

Where the state court refuses to remove a cause to the circuit court, and afterwards, on filing the record in the circuit court, that court remands the cause to the state court, if there was any error in the ruling of the state court, it becomes wholly immaterial. Missouri Pacific Railway v. Fitzgerald, 160 U.S. 556.

This is a suit to condemn land in the exercise of the right of eminent domain, under the laws of Utah, and was brought in the District Court of the Fourth Judicial District of that state. The complainant in the suit, defendant in error here, was a corporation of Utah. The plaintiff in error was a Colorado corporation. Ferguson and Holbrook were citizens of Utah, Nunn was a citizen of Colorado. The bill alleged the corporate character of the complainant and the necessity of the land for the use of the railroad. The route of the road was set out, and that it would pass over a tract of unsurveyed lands of the United States which could not be accurately described, but which, when surveyed, would proximately be parts of the S.W. 1/4 of section 27, W. 1/2 of S.W. 1/4 of 26. N.E. 1/4 of the S.W. 1/4 section 26, and N.W. 1/4 of the S.E. 1/4 of section 26, T. 5, S.R. 3, east Salt Lake meridian, and lying in Provo canyon, and along and near Provo River. That, prior to plaintiff’s survey, Ferguson had or claimed some possessory right by occupation of said land or some part thereof, but, on account of the land’s being unsurveyed, the number of acres claimed by Ferguson could not be given, but the lands he claimed to occupy, it was alleged on information and belief, commenced at a fence between them and lands below and southeasterly, occupied by A. L. Murphy, and extends northeasterly up the canyon and river, a distance of about 4,800 feet, to a point which by estimation would be the northeast corner of the northwest quarter of the southeast quarter of section twenty-six when the land should be surveyed. It was alleged that the line of the railroad was on and over said lands, and that plaintiff had appropriated for railroad purposes a strip of land two hundred feet wide, containing twenty-two acres, more or less; that such strip was necessary for the construction and operation of the road. A map of the line of road was attached to the bill.

The following were the allegations of the bill as to the other defendants:

And, on information and belief, the plaintiff alleges that the defendants the Telluride Power Transmission Company, L. L. Nunn, and L. Holbrook assert and claim some interest in or to said land appropriated by the plaintiff, or in the possessory right to the same or to some easement therein.

That the defendants are the only persons and parties in possession of said land or any part thereof or claiming any right or title therein or thereto so far as is known to the plaintiff.

And the plaintiff alleges that it cannot contract for the purchase of said tract of land required for its railroad as aforesaid. That the defendant W. W. Ferguson refuses to sell, alleging that he has contracted to sell to the other defendants or some of them; that the other defendants refuse to sell the same or any easement therein or possessory right thereto on the pretense that they want said land and propose to flow the same for power purposes. And, on information and belief, the plaintiff alleges that the claimed interest of the defendant Holbrook, if any, is held by him as trustee for the defendants, the Telluride Power Transmission Company and L. L. Nunn.

The prayer was for the ascertainment of the extent of occupation by defendants and their damages and the condemnation of a right of way of one hundred feet wide on each side of the center line of plaintiff’s survey, on and over the land occupied by defendants, or any of them, and for general relief.

The Telluride Power Transmission Company and the defendant Nunn petitioned for the removal of the cause to the Circuit Court of the United States for the District of Utah on the ground of separable controversy. The petition alleged that they were citizens and residents of Colorado and the plaintiff was a resident and citizen of Utah, that Holbrook had no interest in the controversy, and that Ferguson had contracted to sell to them the lands involved. The petition was denied. Subsequently said corporation and Nunn filed a certified transcript of the proceedings in the Circuit Court of the United States for the District of Utah, but, on motion of plaintiff’s attorney, the cause was remanded to the district court of the state. The order remanding was made on the 29th of March, 1897, and a copy thereof filed in the district court, April 29, 1898, the day the trial commenced.

In that court, the defendants answered -- Ferguson separately, the other defendants uniting. The answers need not be quoted. It is enough to say that they put in issue the allegations of the bill as to the organization and existence of the plaintiff corporation, its authority to build a railroad up Provo Canyon, the survey of its line in March, 1896, and its location. It was alleged

that certain persons claiming to be the agents of said alleged plaintiff had, during the summer and fall of 1896, run uncertain and irregular lines up said Provo Canyon, cut brush and made slight and unimportant excavations, which, from their character, gave no evidence of any purpose or design upon the part of any person to survey or construct any line of railroad,

and that such line "passed over and into certain tracts of unsurveyed land." Ferguson’s location upon certain unsurveyed lands was alleged with the view of obtaining title thereto as soon as the lands could be entered, and that he had erected improvements thereon and had contracted to sell the same to the power company and Nunn for the purpose of enabling them to "use the same for a reservoir upon which to store water for electrical power, manufacture and agricultural purposes."

It was alleged that the power company was a Colorado corporation and its stockholders citizens of the United States, and that it was organized, among other things,

for the purpose of acquiring by purchase, or otherwise, water rights, ways, and power, and to work, develop, and utilize water rights, power, ways, mills, etc., for such business and enterprises as appertain to the same.

The adaptability of Provo Canyon for supplying and storing water was alleged, and the utility of furnishing light and electrical power and heat to neighboring industries. That said defendants have been engaged for years in acquiring water rights, and in the year 1894 entered Provo Canyon, and had extensive surveys made, and prosecuted the same with diligence; that the greater part of the lands in the canyon were unoccupied and unsurveyed, and of little or no value except for the purposes designed by the defendants;

that defendants began the construction of a flume and made the necessary excavations therefor in order to obtain power with which to aid in the construction of a large dam by which to reservoir and hold back the waters of said river for power and irrigation purposes; that said defendants made the necessary surveys for canals for the purposes aforesaid and surveyed a reservoir, and showed upon the surveys the contour of the line thereof, and prosecuted with due diligence the work necessary for the consummation of the enterprise entered upon; that, in the winter and early spring of 1896, the said defendants vigorously prosecuted said work and expended large sums of money in the execution of said design and purpose; that, long prior to 1896, in good faith, they entered upon said public unsurveyed lands of the United States with the design and specific purpose of constructing in said canyon at a point at or near what will be when surveyed, as nearly as defendants can determine, the southwest quarter of the southeast quarter of section 27, township 5 south, range 3 east, a dam by which to reservoir and store said surplus waters of Provo River; that they surveyed said reservoir, extending the lines of survey up said river from said point to a point at or near the northeast corner of the northeast quarter of the southwest quarter of section 7, township 5 south, range 4 east, in Wasatch County, Utah, and said defendants have further located and surveyed the necessary canals connected with said reservoir for the purpose of carrying into effect the enterprise and business entered upon by them; that, since the year 1894, as aforesaid, the said defendants have been in the actual possession and occupation of the land in said canyon between said points, and which is intended by them as a reservoir, and also other portions of the public domain lying west of said reservoir and in said canyon, except that the claim of defendant Ferguson, lying within said reservoir, has been occupied by said Ferguson as a residence, but defendants allege having paid said Ferguson a large sum of money, and have obtained a contract from him by which he covenants and agrees to convey all his interest in the premises so occupied by him to the said defendants.

The good faith of the defendants was alleged, and that their possession was open and notorious, and that they with like faith prosecuted their enterprise, and expended therein $50,000, and by reason of their dam, they would be able to obtain more than 8,000 horsepower, which would be sufficient to supply said Utah County and the towns and cities therein with power for heating, lighting, and manufacturing purposes, and would also be able to supply water for irrigation purposes.

The acts of the plaintiff were averred as follows:

Defendants further aver that said plaintiff, sometime in the summer of 1896, wrongfully, and for the purpose of annoying the said defendants and interfering with their project and enterprise, came into Provo Canyon and ran irregular, indefinite, and devious lines through a portion of said canyon, pretending that it was the purpose to establish a railroad therein, and defendants allege that said lines so run were so irregular and uncertain, so shifting and changing, as to indicate no such purpose; that, in two or three points in said canyon, various persons claiming to represent plaintiff made slight excavations, but the character of the same was such as to indicate no purpose to construct a railroad or to perform intelligently and with a fixed or settled purpose any work or enterprise.

Defendants allege upon information and belief that said plaintiff has no purpose or design to construct any railroad, but that what has been done has been with a view to annoy defendants and to prevent said defendants from constructing their reservoir and canals and obtaining electrical power for the purpose aforesaid, and for the purpose of preventing any legitimate railroad undertaking from being consummated if the operation of a line through said canyon was essential.

Defendants allege that the construction of a railroad along the bottom of said canyon would be destructive of their enterprise and reservoir and power, and would prevent them from carrying out the work in which they have been engaged long prior to the spasmodic, uncertain, and mala fides entry of said plaintiff into said canyon, and in which they are still engaged.

It was alleged that plaintiff knew of the intention and character of defendants’ work, and to permit it to condemn the land and to deprive defendants of its possession would be a "grievous wrong and fraud upon their rights."

It was averred that Holbrook had no interest in the controversy.

The allegations of defendants were not only set up in their answers, but were also made the subject of cross-bills.

A jury was empaneled, and under the instructions of the court, they were confined to the consideration of compensation and damages. They returned a verdict assessing the value of the strip of land taken by the railroad at $575; damages to the remaining land, $500; cost of fencing, $525.30, and cost of cattle guards, $42.53. Benefits were assessed at nothing.

There were many instructions asked by defendants which the court refused. They also objected to the instructions which the court gave. Subsequently the court rendered its judgment, in which it found and adjudged as follows:

This action having come on for hearing before the court, and a jury impaneled to assess compensation and damages, on the 18th day of April, 1898, and having been heard on that and the succeeding day, it is now found and determined that the plaintiff is a railroad corporation as alleged in the complaint and with a franchise to construct and operate lines of railway and telegraph as alleged, including a franchise to construct a line of railroad and telegraph on and over lands described in the complaint and sought to be condemned.

That the plaintiff filed a copy of its articles of incorporation and due proof of its organization with the Secretary of the Interior, and the same were duly approved by the Secretary on the 27th day of May, 1890, under the Act of Congress of March 3, 1875, granting the right of way to railroad companies.

That the lands sought to be condemned and the adjoining lands are unsurveyed public lands of the United States, and at the time of the beginning of the suit, were occupied by William W. Ferguson, who has since died.

That the plaintiff, on the 8th day of July, 1896, completed the survey and location of its line of railroad on and over the lands sought to be condemned and hereinafter described.

That the said defendant L. Holbrook has disclaimed any interest in the lands.

That neither on or before or since the 8th day of July, 1896, has the defendants the Telluride Power Transmission Company and L. L. Nunn, or either of them, had any possession of the lands sought to be condemned, or by appropriation or otherwise any right to raise the waters of Provo River so as to flow the same or any part thereof, or any right to the said lands or possession thereof as part of a reservoir site, and to raise the waters of said river so as to flow the same would be an unreasonable use of said waters and the public lands and easements in the canyon adjacent to said river.

And it is now adjudged by the court:

That the use to which the land sought to be acquired by plaintiff is to be applied in the construction and operation of a line of railroad and telegraph for which the lands are to be used for a right of way, and that it is a public use authorized by law, and that the taking and condemnation thereof is necessary to such use. That said lands have not already been appropriated to any other public use.

That none of the defendants, by pleadings or otherwise, is seeking condemnation of said lands for a reservoir or other public use, and the lands cannot be used for both as a reservoir site as claimed and a railroad, and there is no common use, either public or private, to be adjusted.

The judgment then recited the findings of the jury, and directed the money to be paid into court for subsequent distribution among those who should be entitled thereto. This judgment was afterwards set aside at the request of defendants, to enable them to present findings, which they subsequently did. The court, however, refused to find as requested, and reinstated its former judgment and findings. The findings requested presented the allegations of the answers as established by the evidence, and also presented, as established, the feasibility of building the railroad upon lines which would not interfere with the projected works of the defendants.

The plaintiff paid into court the award of the jury, and a final order of condemnation was made. The case was taken to the supreme court of the state, and the judgment of condemnation was there affirmed. 23 Utah 22. The chief justice of the state allowed this writ of error.

On appeal to the supreme court of the state, there were eighty-three assignments of error, two of which were based on rulings in regard to the jury and forty-five of which were based upon instructions to the jury or refusals to instruct the jury. The rest of the assignments except three were based on the findings, and refusals to find, as requested by defendants. The last three assignments were as follows:

81. The court erred in denying defendants’ petition to remove said cause to the federal court.

82. The court erred in assuming to retain jurisdiction over said cause and proceeding to try the same after the filing of the petition on the part of the defendants to remove said cause to the Circuit Court of the United States for the District of Utah.

83. The court erred in holding and deciding that it had jurisdiction to hear, try, and determine said cause.

In the petition for writ of error, it was alleged that errors were committed by the Supreme Court of Utah in that

the final judgment and decision of the Supreme Court of the State of Utah the said court erred in holding and deciding and determining that these defendants, both citizens of the State of Colorado, one a corporation existing under the laws of the said State of Colorado and the other a natural person, did not have the authority or the right to locate and appropriate public lands of the United States upon the Provo River flowing through said public lands of the United States for the purpose of maintaining a dam with which to generate power to create electricity, and such decision was contrary to the protection afforded these defendants by the Fourteenth Amendment of the Constitution of the United States. The decision likewise violated the rights of the said defendants under Section 2, Article IV, of the Constitution of the United States: "The citizens of each state shall be entitled to all privileges and immunities of citizens in the several states."

And the petitioners further say that, in the final judgment and decree of the said Supreme Court of the State of Utah and of the District Court of the Fourth Judicial District in and for the County of Utah, State of Utah, a decision was had against a right and privilege of these defendants claimed under a statute of the United States, which right and privilege was specially set up and claimed by these said defendants in said cause. That, by the answer in said cause, the defendants allege that they had the right and authority from the United States, and were exercising it, to erect a dam in Provo Canyon for the purpose of creating power to transmit electricity. That said right and authority existed under the mining laws of the United States originally enacted in 1868 and amended in 1872, Revised Statutes, section 2339, and the said right was denied by the said plaintiff and the said District Court of the Fourth Judicial District, and the said Supreme Court of Utah, on appeal, held that these defendants had no right to erect such dam on the public unsurveyed lands of the United States.

And the petitioners further say that the said Fourth Judicial District Court in and for the County of Utah, State of Utah, and the said Supreme Court of the State of Utah, in affirming the said decision on appeal, have decided against the right of these defendants existing under the statute of the United States to remove the said cause from the said state court above named to the United States court, which claim was exercised duly by the petition and bond filed in due time by these defendants in the Fourth Judicial District Court before the time expired for these said defendants to appear and answer to the suit brought against them by the said plaintiff in this cause.

In the assignments of error, those grounds are repeated, and errors are assigned upon the rulings on instructions by the district court and the action of the supreme court in sustaining those rulings.

Section 2339, referred to in the assignments of error, is as follows:

Whenever, by priority of possession, rights to the use of water for mining, agricultural, manufacturing, or other purposes, have vested and accrued, and the same are recognized and acknowledged by the local customs, laws, and decisions of courts, the possessors and owners of such vested rights shall be maintained and protected in the same, and the right of way for construction of ditches and canals for the purposes herein specified is acknowledged and confirmed; but whenever any person, in the construction of any ditch or canal, injures or damages the possession of any settler on the public domain, the party committing such injury or damage shall be liable to the party injured for such injury or damage.