146 U.S. 387, 452-53, 13 S.Ct. 110, 118, 36 L.Ed. 1018 (1892)
In 1851 the Illinois legislature incorporated the Illinois Central Railroad Company by statute.1 The statute granted the company a right of way across the state together with alternate sections of public land to aid construction of the line.2
On April 16, 1869, the legislature enacted a statute granting the company all right, title, and interest of the State in the submerged lands constituting the bed of Lake Michigan lying east of the company's existing breakwater between the north line of Randolph Street extended and the south line of Monroe Street extended.3 The grant also conveyed adjacent lands lying between the east line designated and the center line of Michigan Avenue, from the south line of Park Row to the north line of Randolph Street extended, for the erection of wharves, piers, docks, warehouses, and other structures in aid of commerce.4 The grant imposed annual payments of ten percent (later reduced to five percent) of gross receipts from the premises to the canal fund until the total reached $2.5 million, required verified semi-annual statements, and provided for forfeiture of all rights upon default.5
The company accepted the 1869 grant and made the required percentage payments.6 It thereafter expended substantial sums erecting a pier, docks, warehouses, a breakwater, and filling portions of the submerged land.7 The State of Illinois, through its Attorney General, filed an information in equity in the Illinois Supreme Court asserting that the State held fee title to the bed of Lake Michigan as navigable waters and that the 1869 act was void as beyond legislative power.8 The railroad answered claiming fee ownership under the grant.9
The Illinois Supreme Court held that the State owned the bed of Lake Michigan within its borders and that the 1869 act conveyed no title to the company.10 The court entered a decree declaring the company had no right or interest in the premises and enjoining it from asserting any claim.11 The company appealed to the United States Supreme Court, which took the case on the pleadings and a stipulation of facts.12
Whether the State of Illinois owns the submerged lands constituting the bed of Lake Michigan within its borders?13
Upon admission to the Union, each state acquired title to the beds of its navigable waters in trust for the public, a title that cannot be alienated in a manner that substantially impairs the public interest in navigation and commerce.14
Yes. Lake Michigan is a navigable body of water.15 The State of Illinois entered the Union on equal footing with the original states and therefore received fee title to the beds of its navigable waters, held in public trust.16 The 1851 charter granted the railroad a right of way and alternate land sections but did not disturb the state's underlying title to the lake bed.17
Subsequent expenditures by the company on improvements did not create any adverse claim against the state's sovereign title.18
The State of Illinois owns the submerged lands constituting the bed of Lake Michigan within its borders.19
Whether the Act of April 16, 1869, is operative to convey any title to the Illinois Central Railroad Company in the submerged lands?20
A state legislature lacks power to convey submerged lands beneath navigable waters when the grant would substantially impair the public trust by allowing private control over navigation, commerce, or harbor development.21
No. The 1869 statute purported to grant fee title to extensive submerged lands east of the company's breakwater for wharves and warehouses.22 This transfer would have permitted the railroad to obstruct or monopolize a major commercial harbor, directly impairing the public rights in navigation that the state holds in trust.23 Although the company accepted the grant and paid the required percentage of gross receipts, the legislature exceeded its authority by attempting to alienate core trust property.24 The lower court's decree correctly declared the grant inoperative as to the lake bed.25
The Act of April 16, 1869, is not operative to convey any title to the Illinois Central Railroad Company in the submerged lands.26