Property is held by the state, by virtue of its sovereignty, in trust for the public. The ownership of the navigable waters of the harbor and of the lands under them is a subject of public concern to the whole people of the state. The trust with which they are held, therefore, is governmental and cannot be alienated, except in those instances mentioned of parcels used in the improvement of the interest thus held, or when parcels can be disposed of without detriment to the public interest in the lands and waters remaining.
In 1869, there was an act passed by the Illinois legislature giving Central Railroad Company title to the submerged lands in the harbor of Chicago consisting of 1,000 acres used by the public for different purposes such as navigation, commercial and fishing. The State of Illinois sued the company and the state sought a decree that confirmed the state’s title to the submerged lands to confirm title and their right to develop improvements. The State alleged that the railroad company had encroached upon the domain of the State, and its original ownership and control of the waters of the harbor and of the lands thereunder, by claiming rights acquired under a grant from the State and ordinance of the city to enter the city and appropriate land and water two hundred feet wide in order to construct its facilities, and by claiming riparian rights acquired by virtue of ownership of lands originally bordering on the lake in front of the city. The State prayed for a decree establishing its title to the bed of Lake Michigan and exclusive rights to develop and improve the harbor of the city against the claim that the railroad company had an absolute title to the submerged lands by virtue of the State's legislative act. The appeal reached the United States Supreme Court to decide on the legislature’s authority to grant such title.
Can an act of Congress grant title to a party if it deprives the State of its ownership?
The Court held that the railroad company had, upon the land reclaimed, rights as riparian proprietor. As for the ownership of submerged lands in the harbor, and the right to construct, the court found that the State was the fee owner of the land in its sovereign capacity and that modification of that sovereignty was inoperative.