Florida Blue Ridge Corp. v. Tennessee Electric P. Co.

• Citation: 106 F.2d 913
• Decision Date: 13 December 1939
• Docket Number: No. 9258.,9258.
• Parties: FLORIDA BLUE RIDGE CORPORATION v. TENNESSEE ELECTRIC POWER CO.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

106 F.2d 913 (1939)

FLORIDA BLUE RIDGE CORPORATION v. TENNESSEE ELECTRIC POWER CO.

No. 9258.

Circuit Court of Appeals, Fifth Circuit.

October 17, 1939.

Rehearing Denied December 13, 1939.

J. Howell Green, of Decatur, Ga., and Augustine Sams, of Atlanta, Ga., for appellant.

Dan MacDougald, of Atlanta, Ga., and William Butt, of Blue Ridge, Ga., for appellee.

Before SIBLEY, HUTCHESON, and McCORD, Circuit Judges.

On Rehearing: Before SIBLEY, HUTCHESON, and HOLMES, Circuit Judges.

SIBLEY, Circuit Judge.

The plaintiff-appellant, Florida Blue Ridge Corporation, a corporation of Delaware, sued Tennessee Electric Power Company, a corporation of Maryland but domesticated in Georgia, to remove a cloud upon its title to lands in Georgia caused by a deed held by the Tennessee Company from Toccoa Electric Power Company purporting to convey easements over the lands, to declare the easements abandoned, to enjoin the Tennessee Company from trespassing on the lands, and for damages. The suit was dismissed on motion as setting forth no cause for suit, and appeal taken.

The principal facts alleged are, in order of time, these: The Tennessee Company, operating hydro-electric generating and distribution plants in Tennessee, desired to establish one higher on the same stream in Georgia. As a foreign corporation it could not under Georgia law condemn the necessary property. It organized a Georgia corporation, called Toccoa Power Company, subscribing for all the stock, with qualifying shares issued to five of its officers and employes. The charter was held invalid. Rogers et al. v. Toccoa Power Co., 161 Ga. 524, 131 S.E. 517, 44 A.L.R. 534. Then the Toccoa Electric Power Company was chartered, the stock being similarly held. On a suit by the same persons this charter was sustained. Rogers v. Toccoa Electric Power Co., 163 Ga. 919, 137 S.E. 272, and the Company in 1927 condemned easements over the lands of Rogers and others, paid for them, and established a power dam and a generating and transmission plant, and began operating it. The plaintiff corporation acquired these lands expressly "subject to such rights, if any, as Toccoa Electric Power Company had by reason of condemnation proceedings in Fannin County, Georgia." On January 6, 1936, Toccoa Electric Power Company deeded to Tennessee Electric Power Company all its property, real, personal and mixed, including easements, rights and franchises, in Georgia and Polk County, Tennessee, the deed being attested and acknowledged in Tennessee. The deed recites that the Tennessee Company is duly authorized to carry on business in the States of Tennessee and Georgia. On June 8, 1936, the Tennessee Company applied to the Georgia Secretary of State for domestication which was granted July 3, 1936. November 30, 1936, the Toccoa Company filed petition to surrender its charter, which was granted December 29, 1936, and that corporation was dissolved. The Tennessee Corporation has since maintained the dam in Georgia, withdrawing water from the lake at will not only to generate power there but to feed its plants below, causing harmful variations in the Lake level and yielding profits to the Tennessee Company, for which compensation is sought as for a trespass.

It is not claimed in the petition or brief that what the Tennessee Company is doing is in excess of the easement condemned and therefore a trespass, but only that the easement is at an end and plaintiff's land is free of it, or at least that the Tennessee Company cannot enjoy it.

On the last contention a point is made that the attempted transfer of the easement was made in Tennessee and is therefore void. There is no allegation as to where and how the President and Secretary under the corporate seal were authorized thus to sell all the property and franchises of the corporation. Since their authority is not denied we are bound to presume that it was given regularly in stockholders' meeting held at a proper time and place. So presuming, the deed is as valid as if it had been the individual deed of the persons executing it to their own property in Tennessee and Georgia. Land in Georgia may be freely conveyed by deed executed elsewhere if the deed in form and substance complies with the Georgia law of deeds. The propriety of deeds to Georgia lands executed in another State is expressly recognized by statutes prescribing how they shall be attested for record in Georgia. Code Sec. 29-409. This deed was thus attested. It is not invalid as to the Georgia land conveyed.

It is also urged that the State of Georgia had not consented to the transfer of the easement and franchises by its corporation, and the State of Maryland had not consented for its corporation to accept them. The charter of the grantee, the Maryland Corporation, is not exhibited nor its scope pleaded. We have no reason to suppose that it did not authorize the exercise of franchises and easements in Georgia of the same sort it was exercising in Tennessee. The record is also silent as to what the Georgia corporation's charter contained, but we may assume it gave the usual power to sell any or all of its property. See Biggs v. McBrayer, 174 Ga. 244, 162 S.E. 787. It could sell an easement of flowage as mere property. But it is said that what was really sold was the franchise of making and selling electricity to the public, a public utility business regulable by the Georgia Public Service Commission, which was no more transferable than the franchise to run a public railroad. It is true that a railroad sold or leased without legislative provision otherwise leaves the original grantee of the franchise responsible to the public for its right use. Singleton v. Southwestern R. R., 70 Ga. 464, 48 Am.Rep....