In 1969, IL legislature passed the Lake Front Act, which gave the IL Cent. R.R. Co. the right to more than 1000 acres of submerged lands extending out from Chicago under Lake Michigan.
R.R. agreed to pay 7% of its earnings from use of the submerged lands in perpetuity.
In 1873, IL repealed the act and revoked the R.R.'s title.
R.R. continued to build piers and assert ownership over the lands.
Finally, State Attorney General filed suit, seeking a declaration of its title to the disputed lands.
Procedural History
SCOTUS held for IL, grant was revocable.
Issues
Does the state have the authority to dispose of land under navigable water?
Holding/Rule
The trust in which the navigable waters of the harbor and lands under them are held is governmental and cannot be alienated, except in the improvement of the interest, and any grant is necessarily revocable.
There can be no irrepealable contract in a conveyance of property by a grantor in disregard of a public trust, under which he was bound to hold and manage it.
Reasoning
State holds title to soils under tide water by common law. That title necessarily carries with it control over the waters above them.
However, this is a different kind of title than that which the state holds in lands intended for sale and which are open to pre-emption and sale.
This is title held in trust for the people of the state, so that they can enjoy navigation of the waters and fishing free from the obstruction or interference of private parties.
The interests of the people can be improved by the state granting parcels of the land to erect wharves, docks, and piers.
However, these must not substantially impair public interests in the lands and waters remaining.
This is a very different doctrine from one that would sanction the abdication of the general control of the state over lands under the navigable waters of an entire lake.
The public has an interest in the land and so it can only be discharged in a way that maintains or promotes the public's interest.
The property cannot be relinquished through transfer because this would substantially impair the public's interest in the lands and waters.
A state can no more abdicate its trust over property in which the public has an interest than it can abdicate its police power.
It always remains within the state's rights to revoke any powers it gives regarding control over public trust lands.
Public property in trust cannot be placed entirely beyond the direction and control of the state.
Harbor of Chicago is immensely valuable to the people of IL, and so the grant of large portions of it to the R.R. Co. is necessarily revocable.
The trust in which the navigable waters of the harbor and lands under them are held is governmental and cannot be alienated, except in the improvement of the interest.
