Public Utility Dist. No. 1 of Pend Oreille County v. Inland Power & Light Co.

• Citation: 390 P.2d 690,64 Wn.2d 122
• Decision Date: 02 April 1964
• Docket Number: No. 36990,36990
• Court: Washington Supreme Court
• Parties: PUBLIC UTILITY DISTRICT NO. 1 OF PEND OREILLE COUNTY, a municipal corporation, Respondent, v. INLAND POWER & LIGHT COMPANY, a corporation, Relator, The Superior Court of the State of Washington for Pend Oreille County, Felix Rea, Judge, Respondent.

Page 122

64 Wn.2d 122

390 P.2d 690

PUBLIC UTILITY DISTRICT NO. 1 OF PEND OREILLE COUNTY, a municipal corporation, Respondent, v. INLAND POWER & LIGHT COMPANY, a corporation, Relator The Superior Court of the State of Washington for Pend Oreille County, Felix Rea, Judge, Respondent.

No. 36990.

Supreme Court of Washington, En Banc.

April 2, 1964.

Davis, Trezona, Chastek & Lorenz, Will Lorenz, Spokane, for relator.

Roger Marquis, Chief, Appellate Section, Lands Division, Washington, D. C., amicus curiae.

Clarence C. Dill, William G. Ennis, Spokane, for respondents.

WEAVER, Judge.

This is a review by certiorari of a decree of public use and necessity.

The decree provides that: (1) the contemplated acquisition by Public Utility District No. 1 of Pend Oreille County, Washington (herein called the District) of all the electrical works, lines, plants, facilities, and electrical properties now owned and operated in Pend Oreille County by the Inland Power & Light Company (herein called Inland) that are useful for generation, transmission, and distribution of electricity is a public necessity; and (2) the contemplated use of the property sought to be taken is a public use. The record contains evidence sufficient to support the trial court's conclusion that acquisition by the District of Inland's electrical properties within the boundaries of Pend Oreille County would be for a public use, required by public interest, and necessary for a public purpose under the statutes and decisions of this state.

The prime purpose of this review, however, is to challenge the jurisdiction of a state court to entertain an action of eminent domain against properties in which the United States has an interest.

Since its inception, Inland (and its predecessor), a nonprofit membership corporation organized under the laws of this state, has been financed in its operations in ten Washington counties and two counties in Idaho by the Rural Electrification Administration, an agency of the United States Department of Agriculture. 7 U.S.C. (1958 Ed.) § 901 et seq. Inland's purpose is to implement the rural electrification program, i. e., to bring the benefits of electrification and telephone service to sparsely populated and remote areas that were not served by existing public utility companies. This was made possible through long-term, low interest rate loans from the United States, secured by mortgages upon Inland's properties. The loan contracts and various mortgages are between Inland and the federal government. They contain numerous restraints and controls not found in a usual security transaction. For example, Inland cannot employ a manager or superintendent without first securing consent. By statute, Inland cannot sell or dispose of its properties without approval of the administrator of the Rural Electrification Administration. 7 U.S.C. (1958 Ed.) § 907.

A survey of the loan contracts, mortgages and the Rural Electrification Act leads to only one conclusion: the United States has a substantial interest in the properties in Pend Oreille County which the District seeks to condemn.

The District recognized this interest when it made the Rural Electrification Administration (hereinafter called REA), Department of Agriculture, United States of America, a respondent in its first condemnation petition.

The REA, by the United States Attorney for the Eastern District of Washington, moved to be dismissed from the action

'* * * for the reason that said respondent, as a sovereign, has not consented to be sued in the above entitled court, and therefore this court has no jurisdiction over said respondent.'

The motion of dismissal was granted. Subsequently, the entire action was dismissed because

'* * * under the pleadings of petitioner now on file the United States is a necessary party, Respondent, and that without the United States as a party under these pleadings, this court does not have jurisdiction over the subject matter of this action in eminent domain. * * *'

The District's amended petition of eminent domain drops the United States as a party, but identifies the REA as Inland's mortgagee; it is substantially the same as the original petition.

The power of eminent domain is an attribute of sovereignty. It is an inherent power of the state, not derived from, but limited by the fundamental principles of the constitution. Miller v. City of Tacoma, 61 Wash.2d 374, 382, 378 P.2d 464 (1963); King County v. Theilman, 59 Wash.2d 586, 592, 369 P.2d 503 (1962). Of course, by statute, the state may delegate the power of eminent domain to one of its subdivisions, but such statutes are strictly construed. State ex rel. Tacoma School District No. 10 v. Stojack, 53 Wash.2d 55, 330 P.2d 567, 71 A.L.R.2d 1064 (1958). Relator argues in its brief:

'RCW 8.12.060, the statute from which the PUD acquires its right of condemnation, requires that the defendants include '* * * names of the owners and occupants thereof and of persons having any interest therein * * *." (Italics ours.)

Under this statute the United States is a necessary and indispensable party to the eminent domain proceeding. This distinguishes the instant case from United States v. Cless, 254 F.2d 590 (C.A. 3rd, 1958), for the United states was not entitled, under local law, to be a party in an action to foreclose a prior mortgage.

Eliminating the REA as a party to the amended petition may be sufficient to propect the petition from pretrial attack, but trial on the merits clearly established the interest of the United States in the property.

Counsel have cited us no case directly in point. In Carr v. United States, 98 U.S. 433, 438, 25 L.Ed. 209 (1878), the court said:

'In some cases (perhaps it was so in the present case), it might not be apparent until after suit brought that the possession attempted to be assailed was that of the government; but when this is made apparent by the pleadings, or the proofs, the jurisdiction of the court ought to cease. Otherwise, the government could always be compelled to come into court and litigate with private parties in defence of its property.'

It is elemental that an action against property in which the United States has an interest is a suit against the United States. In United States v. Brosnan, 363 U.S. 237, 250, 80 S.Ct. 1108, 4 L.Ed.2d 1192 (1960), the court said:

'* * * Under the decisions of this Court, a judicial proceeding against property in which the Government has an interest is a suit against the United States which cannot be maintained without its consent. The Siren, 7 Wall. 152, 19 L.Ed. 129; State of Minnesota v. United States, 305 U.S. 382, 59 S.Ct. 292, 83 L.Ed. 235; United States v. State of Alabama, 313 U.S. 274, 61 S.Ct. 1011, 85 L.Ed. 1327. It has been suggested that this principle applies only where the Government holds a fee interest or such other interest in the property as to render it an indispensable party under state law. See United States v. Cless, 3 Cir., 254 F.2d 590, 592. That, however, seems a dubious distinction since whether or not the United States is an indispensable party to a judicial proceeding cannot depend on state law. See State of Minnesota v. United States, supra, 305 U.S. at page 386, 59 S.Ct. at page 294 .'

It is urged that the United States (being fully aware of what is happening, it having appeared as amicus curiae in this court) may make an appearance in the condemnation proceeding at any stage it wishes.

The rule of law is to the contrary.

'* * * Where jurisdiction has not been conferred by Congress, no officer of the United States has power to give to any court jurisdiction of a suit against the United States. Compare Case v. Terrell, 11 Wall. 199, 202, 20 L.Ed. 134; Carr v. United States, 98 U.S. 433, 435-439, 25 L.Ed. 209; Finn v. United States, 123 U.S. 227; 232-233, 8 S.Ct. 82, 85, 31 L.Ed. 128; Stanley v. Schwalby, 162 U.S. 255, 270, 16 S.Ct. 754, 760, 40 L.Ed. 960; United States v. Garbutt Oil Co., 302 U.S. 528, 533-535, 58 S.Ct. 320, 323, 82 L.Ed. 405.' Minnesota v. United States, 305 U.S. 382, 388, 59 S.Ct. 292, 83 L.Ed. 235.

This is not a new or novel doctrine. In United States v. Clarke, 8 Pet. 436, 33 U.S. 276, 281, 8 L.Ed. 1001 (1834), Chief Justice Marshall said:

'As the United States are not suable of common...