Duck River Elec. Membership Corp. v. City of Manchester

• Citation: 529 S.W.2d 202
• Parties: DUCK RIVER ELECTRIC MEMBERSHIP CORPORATION, Appellant, v. CITY OF MANCHESTER, Tennessee, Appellee.
• Decision Date: 15 September 1975
• Court: Supreme Court of Tennessee

Page 202

529 S.W.2d 202

DUCK RIVER ELECTRIC MEMBERSHIP CORPORATION, Appellant, v. CITY OF MANCHESTER, Tennessee, Appellee.

Supreme Court of Tennessee.

Sept. 15, 1975.

Gilbert S. Merritt, Jr., Gullett, Steele, Sanford, Robinson & Merritt, Nashville, Edward F. Gordon, Bobo, Gordon & Grissom, Shelbyville, for appellant.

Charles E. Griffith, III, Griffith & Stockes, Nashville, H. Thomas Parsons, City Atty., Machester, for appellee.

OPINION

HENRY, Justice.

These two civil actions, consolidated for the purposes of appeal, raise two questions, viz:

1. Does the City of Manchester have the right to acquire, by eminent domain, so much of the electric system of Duck River Electric Membership Corporation as is within the boundaries of the city?

2. Assuming the existence of the right, what is the proper measure of damages?

I.

The first suit was instituted by the City of Manchester, seeking to acquire, by eminent domain, certain property owned by Duck River Electric Membership Corporation, located within the corporate limits of the city and used by Duck River as a part of its electric distribution system.

Duck River moved to dismiss, insisting that the city, a municipal corporation, 'is not authorized and has not been delegated the right to take property used to supply electric power under the Electric Cooperative Law and may not, therefore, take the property described in the petition, owned by defendant, a public non-profit electric membership corporation organized pursuant to the Electric Cooperative Law, T.C.A. § 65--2501, et seq.'

The trial judge overruled the motion to dismiss, holding that the city had authority to acquire so much of Duck River electric distribution system as is located within the city, under the Municipal Electric Plaint Law of 1935 (§ 6--1501 et seq., T.C.A.).

This appeal challenges this ruling by assignments which insist that (1) a Tennessee municipality may not condemn the property of an electrical cooperative without demonstrating a public purpose or need and absent a judicial finding that the taking serves such a need, and (2) that a Tennessee municipality is not authorized to condemn, under the general law, the property of an electric cooperative devoted to public use. We treat these assignments as being fairly summarized by the controlling issue as specified at the beginning of this opinion.

II.

The City of Manchester, the county seat of Coffee County, Tennessee is a municipal corporation organized and existing under the laws of the State of Tennessee.

Duck River Electric Membership Corporation is a public non-profit electric membership corporation organized and existing pursuant to the Electric Cooperative Law, as set forth in § 65--2501 et seq., T.C.A.

The city granted a franchise to Duck River, authorizing the operation of an electric system within the city for a fifteen year period beginning 8 January 1958 and expiring 8 January 1973. This franchise has not been renewed with the result that, as a practical prosition, Duck River continues to serve the city at its sufferance and the residents of the city are being supplied electricity at the sufferance of Duck River. While the orderly processes of the law would no doubt intervene to prevent the city being thrown into darkness, the fact remains that this arrangement is fragile and lacking in stability.

Under these circumstances the city, on 4 June 1974, after Duck River's franchise had expired, adopted its Ordinance Number 345, declaring that 'the prosperity of the City of Manchester will be materially retarded and that it would be detrimental to the welfare of the inhabitants and citizens of the City of Machester for (them) to continue to be served by the Duck River Electric Membership Corporation'; that they would 'be better served by a municipally owned electrical distribution system;' and directing that a condemnation suit be filed.

The determination by a condemning authority of the necessity for the taking is not a question for resolution by the judiciary and, absent a clear and palpable abuse of power, or fraudulent, arbitrary or capricious action, it is conclusive upon the courts. Harper v. Trenton Housing Authority, 38 Tenn.App. 396, 274 S.W.2d 635 (1954); City of Knoxville v. Heth, 186 Tenn. 321, 210 S.W.2d 326 (1948). But of course the courts have the right and duty to determine the existence of authority to take, the existence of a legitimate public use and related questions.

Section 6--1505 T.C.A., a part of the Municipal Electric Plant Law of 1935, reads in pertinent part, as follows:

Any municipality proceeding under the provisions of §§ 6--1501--6--1534 is authorized and empowered to condemn any land, easement or rights-of-way, either on, under or above the ground, for any and all purposes necessary in connection with the construction, operation and maintenance of an electric plant or improvements thereto.

It is self-evident that this statute applies only to real estate. We assume that the trial judge, in holding that the Municipal Electric Plant Law of 1935 authorized the taking, along with the Revenue Bond Law, had in mind that the former law and the above quoted statute authorized the condemnation of land only, and, on that basis we affirm his holding, as to the availability of this statute; however, in view of § 6--1304, its actual utility is questionable.

Section 6--1304, T.C.A., a part of the Revenue Bond Law reads, in pertinent part:

In addition to powers which it may now have, any municipality shall have power under this chapter:

(1) To construct, acquire by gift, purchase, or the exercise of the right of eminent domain, reconstruct, improve, better or extend any public works, within or without the municipality, or partially within or partially without the municipality, and to acquire by gift, purchase, or the exercise of the right of eminent domain, lands or rights in land or water rights in connection therewith.

In the clearest of language this statute empowers the city to acquire by condemnation, any public works, and land or rights in land, in connection therewith. This is a clear and complete remedy. It is not necessary to rely upon any other statute. It does not provide for the application of the general eminent domain statutes (§ 23--1401 et seq.) as does § 6--1501; however, § 23--1402 makes the general eminent domain statutes 'a part of every section, or legislative act, present or future, which grants the power of such condemnation', unless expressly stated to the contrary. Therefore, in this regard, the acts are of identical import.

We hold that this condemnation action must be sustained under the provisions of § 6--1304, Tennessee Code Annotated, and we affirm the action of the trial judge in so holding.

Counsel for Duck River earnestly and ably urge upon the Court the proposition that a corporation may not condemn property already devoted to public use by another corporation, and cites, in support of this general rule of law, numerous cases from this and other jurisdictions. We do not fault this as a correct generalized statement of the law.

Railroad Co. v. Cemetery Co., 116 Tenn. 400, 94 S.W. 69 (1906) holds, in substance, that property devoted to one public use cannot lawfully be taken for another and inconsistent use without express or applied legislative authority. The inconsistent public use was a railroad right-of-way Vis-a-vis, a cemetery. This case has no particularized application since the contemplated use in the instant case is not inconsistent and for the further reason that § 6--1304 is a specific grant of authority to municipalities authorizing, as it does, the condemnation of public works (defined by § 6--1302 to include electric plants and systems). Electric systems are seldom privately owned and are always devoted to the public use in the practical sense that they exist to serve substantial segments of the public. The Legislature, therefore, knew that it was authorizing the condemnation by Tennessee municipalities of public service type utility operations engaged in supplying electric current to the public.

Southern Railway v. Memphis, 126 Tenn. 267, 148 S.W. 662 (1912) reaffirms Railroad v. Cemetery Co. There the suit involved a taking of switch and terminal yards for public park purposes, a wholly inconsistent use.

Railroad v. Mayor and Aldermen of Union City, 137 Tenn. 491, 194 S.W. 572 (1917) recognizes that property devoted to a public use may be appropriated to an inconsistent use upon legislative authorization.

Williamson Co. v. Turnpike Co., 143 Tenn. 628, 228 S.W. 714 (1920) recognized the general rule but permitted the county to condemn a turnpike company pursuant to legislative sanction.

Cases from other jurisdictions and textbook authority follow the same general pattern.

There are compelling reasons for holding that a Tennessee municipality has the power to condemn the property of an electrical cooperative within its boundaries.

We look first to the character of the two entities.

In Memphis v. Laski, 56 Tenn. 511 (1872) the Court characterized Tennessee municipalities thusly:

A municipal corporation is created by the government for political purposes, and is vested with subordinate and local powers of legislation. It is an Imperium in imperio, and can no more be embarrassed in the exercise of the governmental powers with which it is invested for the public good, than can the power creating it.

They exist for the purpose of general government. They are arms or agencies of the state and they exercise, by delegation, a portion of sovereign power for the public good. Thornton v. Carrier, 43 Tenn.App. 615, 311 S.W.2d 208 (1957).

Electric membership cooperatives, under Tennessee law, are general welfare corporations. (§ 65--2503 T.C.A.). They are organized to distribute electricity to their members, governmental agencies and political subdivisions with non-members restricted to ten percent (10%) of the number of members. (§ 65--2508). By...