## Facts

- Pennsylvania chartered Monongahela Navigation Company to improve navigation on the Monongahela River through locks and dams and granted it a franchise to collect tolls from river traffic using those improvements.
- The company expended substantial funds to construct and operate the navigation works, making the river navigable for larger vessels and year-round commerce.
- Lock and Dam No. 7 (the “upper lock and dam”) was built under state authority and with federal encouragement.
- Congress enacted the Act of Aug. 11, 1888, authorizing the Secretary of War to purchase Lock and Dam No. 7 and its appurtenances, and if necessary to condemn them in federal court using Pennsylvania condemnation procedures.
- The statute directed that, in valuing the taking, the company’s franchise to collect tolls “shall not be considered or estimated.”
- In the condemnation proceeding, compensation was limited to the value of the tangible property and excluded any value attributed to the toll-taking franchise.

## Issues

1. Whether the Fifth Amendment requires the United States to pay just compensation for the value of the company’s toll-collection franchise when condemning the lock and dam.
2. Whether Congress may constitutionally mandate that the franchise’s value “shall not be considered or estimated” in determining compensation.

## Decision

- The Supreme Court reversed the judgment to the extent it excluded the value of the toll-taking franchise.
- The Court held that the United States could condemn the lock and dam, but it must pay just compensation for all property interests taken, including the franchise to collect tolls.
- The statutory directive excluding franchise value was invalid as applied because it conflicted with the Fifth Amendment’s just-compensation requirement.
- The Court rejected the argument that Congress’s decision to acquire the works eliminated the state-granted franchise without compensation; the franchise remained property taken by the condemnation.

## Legal Principles

- The Takings Clause requires “just compensation” when private property is taken for public use, and “compensation” means the full and perfect monetary equivalent of what is taken.
- Just compensation must place the owner in as good a pecuniary position as if the property had not been taken.
- Compensable property includes not only tangible assets but also intangible property rights associated with the taken enterprise, including a legally conferred franchise to collect tolls when that franchise is appropriated or destroyed by the taking.
- Congress may prescribe condemnation procedures, but it cannot redefine constitutionally required compensation by excluding substantial elements of value inherent in the property interest taken.

## Conclusion

When the United States condemned Monongahela’s lock and dam, the Fifth Amendment required payment for both the physical works and the valuable toll-collection franchise tied to them; Congress could not constitutionally command that the franchise be ignored in valuing just compensation.


Monongahela Navigation Co. v. United States, 148 U.S. 312 (1893)