DECKER V.BALTIMORE &: N·.Y. R. CO.
723
the matters of fact upon which he relies, and, upon such a plea, the court can hear and determine the issues of fact thus tendered. Stone v. South Carolina, 117 U. S. 430, 6 Sup. Ct. Rep.799. As the matter is now presented, the motion. to remand must be overruled, an.d it is so ordered. LoVE, J., concurs.
DECKER ". BALTIMORE
& N. Y. R. Co. and others.
CJircuu Go'Urt. 8. D. NetD York. 1887.) CON8TJTUTIOIUL LAW-INTEBSTATE COMMERCE-NAVIGABLE WATEBS-OBSTRtJOTION.
Congress can lawfully confer upon a private corporation the capacity to ocwateR within a state, and appropriate the soil under them, cupy upon acqulriug the rights of the owners, in order to construct a bridge over such waters for the purposes of interstate commerCB, without the CODsent and notwithstanding the protest of the state.
P. B. McLennan, for complainant. W. W. MacFarland, for defendants. WALLACE, J. The complainant is a vessel owner whose business of transportation makes it necessary for him to use the narrow navigable water-way known aR Arthur kill, which constitutes one of the boundaries between the states of New York and New Jersey. He has brought this suit to restrain the defendants from constructing a railroad bridge across these navigable waters, which they propose to build and maintain under claim of authority conferred by the act of congress of June 16, 1886, entitled" An act to authorize the construction of a hridge across the Staten Island Sound, known as Arthur kill, and to establish the same as a post road." Thecase is now here upon the defendants' demurrer to the bill of com.platnt,and upon complainant's motion for an injunction pendente lite. It is not disputed that the complainant has a sufficient standing in a court of equity to challenge the right of the defendants to build the bridge; and the single question to be decided is whether they have a legal right to build the bridge. If they have, it is solely by the efficacy of the act of congress as a 'constitutional exercise of the power to regulate commerce between the several states. The legislature of New Jersey, by an act passed April 6, 1886, has forbidden the erection of anybridge or structure oV'e:r any part of the navigable waters where the tide ebbs and flows, separating the state from other states, without express permission given by the legislature by statute in that behalf. The act was passed after the bi!l,had been introduced in,congross authori:Ging the construction of
In Equity.
Bill for injunction.
, ',FEDERAL, REPORTER.
this bridge', arid before it became a law, and was preceded by the adoptiOli of concurrent resolutionsofthesenate and house of assembly of New Jersey protesting against any action on the part of congress intended to " legaHzetheerection of such a bridge. The case thus presents the constitutional question whether congress can lawfully confer upon a private corporation the capacity to occupy navigable waters within a state, and appropria te the soil under them, for the purposes of interstate commerce, without the consent of the state. Although the act of congress establishesthe bridge, when constructed, as a post road, this is wholly an incidental and an unnecessary feature of the legislation. The act does not purport to authorize the bridge in order to provide anadditiotial 'post road; and the provision establishing the bridge as a post road, when built, was unnecessary, because it would become such by force of pre-existing law. Section &964, Rev. St. U. S. Neither does it in terms purport to be an exercise of the power to regubut that this is: its essential character late commerce between the is apparent from the recitals which show that it was designed to aflord a connection between railtoads already constructed,or to be constructed, on opposite sides of the Obviously, congress intended to plant the rights conferred on the defendants upon the ,validity of the aetas a regulation of commerce. , Both the language and the history of the net preclude the doubt whether it can be construed as interrcl'ed, to grant a' privilege which is to become operative when concurrent authority to build the bridge is obtained from the states of New Jersey and New York. It is silent as to any such condition, and this silence is emphatic,iri view of theprovisions contemplating the assent of the state which have been inserted in all previous acts of a similar character when permission by the state had not been given in advance. As it wilS passed notwithstanding the protest of New Jersey, which was in effect a declaration that she would not consent, it must be assumed that congress did not regard the consent of the state necessary. The precise question to be decided has never been adjudicated, and the present act is the first attempt on the part of congress to grant such a right as is asserted by the defendants. In the language of the supreme court 'of the United States in Miller v. ¥nyCYr oj New York: , "The power vested in congress toregulate commerce with foreign nations, and among the several states, includes -the control of the naVigable 'waters of the United States so far as may be i1t'cessary to insure their free navigation; and by navigable waters of the United States are meant such as are navigable in"fact, and which, by themselves, or by their connection with other wa',ters, f'orJ.ll a continuous channel for commerce with foreign countries or among the states." 109 U. S. 395. , Whether the waters are wholly within the boundaries of a state, or, as here, lie between two states, is not material. They are navigable waters of the United States, if they form by themselves, or by uniting with others, a continuous highway for commerce with other states or
DECKER V. BALTIMORE & N. Y. R. CO.
'125
countries. The Daniel BaU, 10 Will. 557jEscanaba 00. v. Chicago, 107 U. S. 682, 2 Sup. Ct. Rep. 185. The power of control over such wa,ters necessarily includes the power of deciding what structures are impediments to commerce; and, by an unbroken line of decisions, it is settled that the paramount authority regbridges that affect' the navigation of the navigable waters of the United States is in congress. So long as this authority lies dormant, the states may authorize the erection of bridges over navigable waters within their limits, which may to some extent obstruct navip;ation, or, by concurrent action, may bridge the waters lying between theJP; but, so soon as congress intervenes and exercises its 'power of what has been done .by state authority must give 'fay to the paramount authority of congress. The power of the state:ends where that of the nation begins; WiUson v. Black Bird Creek Ma'i'sh(Jo., 2 'Pet. 250j Wheeling Bridge Case, 18 How. 421j Gilman v. (Jityoj Philadelphia, 3 Wall. 728; COunty oj Mobile v. KimbaU, 102 U. S. 891j Pound v. Turck, 95 U. 8.459. however, tall short of adjudicating the present case, because they do not decidein terms that the power of regulation extends further than is required to preserve the free and unobstructed navigation of the. public waters. If the power ends there, the present act is nugatory. That it does end there never has been authoritatively determined. The lands under the water on the New Jersey side of Arthur kill belong to the state ofNew Jersey, or to those who have derived title from the state. The shores of navigable waters, and the soil under them, were not granted by the constitution to the United States, but- were re,served to the states respectively. Pollard v. Hagan, 3 How. 212. The right of eminent domain over such lands, for all n1unicipal purposes,' resides in the state within the boundaries of whiCh they lie, and within the legitimate limitations of this right the power of the state to appropriate the shores of navigable waters, and the lands under them, is absolute. Ormerod v. New York, W. S. &: B. R. Co., 21 Blatchf. 106, 13 ' Fed. Rep. 370. Expressions of opinions by learned jurists are found in several adjudged cases to the effect that congress cannot, under the power of regulating commerce, authorize the erection of bridges over navigable waters without the consent of the state, or sanction an obtruction ofcommerce. In People v. Ren88elaer &: S. R. Co., 15 Wend.113,Chlef Justice SAVAGE, after asserting that the power to erect bridges over such waters existed in the state legislature before the adoption of the federal constitution, says: as is conveyed under the power to regulate commerce and navigation. It remains, then, in the state legislature, or it exists nowhere. It does exist because it has not been surrepdered any further than such surren.der may be. qualifiedly implied; that is, the power to erect bridges over navigable streams must be considered so far surrendered as may be r.ecessary for a free naVigation upon those streams." "It is not pretended that sueh power has been delegated to the general gov-
REPORTER. In Peaplev, Keny, 76 El\RL, J., states: "The East river is a public navigable \YItter, and tobriQ,ge It requires t,be authority of the state pf New York and of the United States; of the former by reason of its rights in the lands on' the shore, and under'the water, and of its qualified sovereignty over the water; and of the latter. by reason of tbe exclusive power of congress ,to regulate commerce, and to determine in its regulation thereof to what extent navigation upon the water IQ.ay be obstructed or interfered with." In the' Wheeling Bridge (lz8e Mr. Justice McLEAN, in considering whether congress could legalize a bridge over navigable water within the jurisdiction ohny state or states,uses this language: "Bqt this does not necessarily include to construct bridges which may obstruct commerce, but can never increase its facilities on a navigable water. Any power wbich congress may have in regard to such a structurejs'iJjdirect, and results from '3 commercial regulation. It may, under this povver, declare that no bridgl;l shall be built which -shall be an obstruc. tion to the use of a navigable water. .And this, it would seem, is as. far as the commercial power by congress can be exercised. ... ... ... If, un<Ier the commercial power, congress may make bridges over navigable waters, it would be difficult to find any limitation of sucb a pOwer. ... ... .... So extravagant and absorbing a federal power as this has rarely, if ever, been claimed by anyone.... , In the more recent case of Bridge 00. v. U. S., 105 U. S. 496, Mr. Justice FIEtD.nses this language: "From·the u,se of the word' assent' to the erection of a bridge over a navigable 'river, or' the declaring of one already erected a lawful structure, the trallBitlonihas been easy and natural to the assumption of an affirmative power in congres/!!. .authorize, independ,ently of the action of the states, the constructiou of sqch bridges, and to control them. From the authorities cited. and the reasons assigned, it is evident that congress possesses no such power. ... . * ... If weight is to be given totbese authorities, and to the reasons on which they rest; it must follow that the sovereignty and juriSdiction of the state over their navigable waters, wbich were as absolute upon the adoption of the constitutiQn as ov.er their roads, still continue; except that they are to be so exercised as not to obstruct the free navigation of the waters, so far as such navigation may be required in the prosecution of interstate and foreign commerce... ' , It is to be 'remarked, however, observations, that what was said by Mr.. Chief Justice SAVAGE in the first case,imd by Mr .. Justice EARL in the second, was obikl', and that the views expressed by Mr. Justice McJ;.£AN and by Mr. Justice FIELD were by wl;ly of argument in dissenting from the opinion of the court. It was not necessary in either of those. Cases to pass upon the pointsl,lggest{Jd. The case of South Carolina v. Georgia, 93 U. S. 4, is an authority the other way. The supreme court there considered a case in which a bill was filed by the state of South Carolina against the secretary of war and other officers of the United States, to restrain them from obstructing or interrupting'the navigation Of the Savannah river under authorj.ty of an s.ppropriatibri act of congress for the imprbvElment Of the harbor at Savan- . nah. The court wereofthe opinion that the acts sought to be restrained did not tend 'to the destruction of the the river, although,
DECKER V. BALTIMORE
&;
N. Y. B. CO.
727
by obstructing the water-way of one of its channels, navigation would be restricted to the other channel, and therefore were not in any just or legal sense a destruction or impediment of navigation. The court held that the appropriation act conferred upon the secretary of war the discretion to determine the mode ofimprovement, and authorized,the diversion of the water from one channel into another, if" in his judgment, such was the best mode. Mr. Justice STRONG, speaking for the court, uaedthis language: "It is not. however. to be conceded that congress has no power to. order obstructions to be placed in the navigable waters of the United States. either to assist navigation. or to change its direction by forcing it into one channel of a river rather than the other. It may build light-houses in the bed of the stream. It may construct jetties. It ma,y require all naVigators to pass along a prescribed channel. and may close any other channel for their passage. If. aa we have said, the United States have succeeded to the power and rights of the several states. so fat as cOIltrol over interstate and foreign commerce is concerned. this is not to be doubted." And the Wheeling Bridge CU<w was cited as ruling that the power of congress to regulate comm.erce includes the power to determine what shall or shall not be deemed, in the judgment of law,an obstruction of navigation. This decision controls the present case. The state of South Carolina had not consented to the closing of one of the channels oCher river 'by. the authorities of the United States, and insisting that this could not be done against her consent,had asserted her rights to prevent it by a bill equity. Thequestion was necessarily involved whether, under the power to regulate commerl1e, congress can close the channel of Ii. river within a state against the consent of the state. The decision puts that question at rest, and is an unqualified affirmation that eongress can do so. If congress can close a river, it can certainly bridge one. Applying theprinciple of that decision here, where, instead of a jetty or a; lighthouse,a bridge is the structure authorized, it follows that what congress has sanctioned by the present act is not an obstruction of navigation, 'that the judgm of congressconclndes controversy as to the fact; and lnt .that concurrent action on the part of New Jersey is not only not indispenSable, bl1t that her opposition is futile.' The argument that thEnights of the state of New Jersey are 'ignored or .p,ermitting such.a bridge to be built without her conSent is purely a; sentlmelltalone. She has no control of the water-way for the purposes of navigation which is not subordinate to the will of congress. She can make no use of it against the will of congress. The act of congress does not attempt to appropriate any of the property of her citizens, or to interfere with her power of eminent domain. If the constitutional power of congress over the navigable waters of the United States is confined to a mere negation of state authority over them, if congress can only ratify and prohibit what the state proposes, if it has no faculty of independent action, and no vigor to originate, then, instead of being paramount, the power is practically subordinate to the power of the state. Yet it has never been doubted that, within the scope of its powers, the government of the United States is supreme, or that its
in
728
FEDERAL REPORTER.
authority, when asserted, is, to the extent asserted, of necessity exclusive.. The constitution delegates to congress the power to prE1scribe the conditions upon which commerce in an its forms shall be conducted between the citizens ofthe several states, and to adopt measures to promote its development and prosperity. Bridges over navigable waLers are necessaryto facilitate.transportation and commercial intercourse. They are well-recognized instrumentalities of commerce. The power to build them, or authorize them to. be. built, is an incident of the general power to;regulate interstate commerce. If the national 'Rndstate authorities as to the expediency of bridging a river,.and if, as is asserted, the p'<Hyel' to act is partitioned between them, and can only be exercised (;oncu,rrently, interstate conimercemay be crippled. If congress deems a railro!td, bridge necp-ssary.or usefu,l as an instrumentality of interstate commerce, there is no sound reason, aside fromcQnsiderations .of expediency,. why it should not build one, ,orauthorize·a; private corporation 'to It Seems idle ,that its ,power only to prob},bitingthestiates from building. such bridges, and that it can direct 'bridges shall llot. be built,qut not what shall be built. This would make the constitutional prerogative obstructive merely. Thus circnmscribed, it would be shorn of most of its value. , It is not.intended to inti.matethat congress can authorize the appropriation ilfprivate property for the purposes of such a bridge. It was at onetime QQUbtful whether the government ofthe Ul}ited States, in order to obtain p:r;9pert:y required for its own purposes, could exercise the right of eminent domain within the states.. That question was settled in Kohl v. U. S., 91 U. S. 367, where it was held that the govemment, if such property cannot be obtained by purchase, may appropriate it upon making just compensation to the owner. It is not necessary to consider whether congress could enable the defendants to condemn property in New Jersey for the purposes of their bridge. This has not been attempted by the act under consideration. All thatis now necessary to decide is that, if the defen.dants acquire the right of the Owners of the land under the waters and on the shores, the act of congress gives them lawful authority to build and maintain their bridge without the consent of the state of New Jersey. . The demurrer is sustained, and the motion for an injunction is denied.
CURTISS '0. HURD.
729
CtmTISS '0. HURD.
(Oircuit Oourt, 8. D. New York. May 9,1887.) 1. SALE-RESCISSION-MISREPRESENTATION.
Equity will rescind a purchase, upon the application of the purchaser, where the purchase was indu(:ed. by a material misrepresentation of the vendor, although the misrepresentation were innocently made by the vendor.
2.
SAME-MATERIALITY.
Such relief will not be granted. however, if the misrepresentation was of a trifling or immaterial thing,. or if it was vague and inconclusive in its nature, or if the complainant did not trust to it, ·or was not misled by it, or if it was upon matter of opinion, or was of a fact equally open to the knowledge of botbparties, and in regard to which neither could be presumed to trust the other,. . . UpOl1 apilrchase of shares of stock in an association, which was in legal effect merely a partnership, the vendor represented that the association was an incorporated company. Held, that such a representation, although un' true in fact, was not a misrepresentation of matters of substance, in the abo senceof any inquiries on the part of the purchaser concerning the character of the corporation, and was not a sufficient ground for decreeing a rescission of .. .' .
3.
SAME-CORPORATE EXISTENCE.
In Equity. . G. fubriskie, for complainapt. L. B. Bunnell, for defendant. WALLACE, J. Complainant sues to obtain a rescission ofa purchase of 100 shares of stock in the Housatonic Rolling-Stock Company, bought by him in August, 1882, and for which he paid the sum of $4,250, leging that he was induced to make the purchase by the tions of the defendant, who was the president ofthe company. The bill alleges that various· misrepresentations were made to the complainant by' the defendant which were the inducing cause of the purchase of the stock. The proofs, however, are such that it is only necessary to sider whether there waS such a misrepresentation respecting the corporate organization of the Housatonic Rolling-Stock Company as entitles him to the relief sought. The Housatonic Company was not an incorporated company. It waS an association which was in legal effect a partnership, formed by the defendant and several others in October, 1881, for the purpose of buying, building, leasing, and running railroad cars under the name and style of the Housatonic Rolling-Stock Company. By the articles of association the legal title to the property was vested in a board of trustees (who were named) and their successors, who were to have the sole custody and management of the business and property of the association, with power to appoint its officers. The amount of capital to be contributed was not fixed by the articles of a..ClSociation, although the capital stock was divided into shares, and each
(Ill.) 7 N; E. Rep. 92.
1
Respecting the fraud for which equity will give relief, see Dillman v. Nadlehotfer,