Stewart v. Sullivan County

• Decision Date: 11 December 1953
• Citation: 264 S.W.2d 217,196 Tenn. 49,32 Beeler 49
• Parties: STEWART et al. v. SULLIVAN COUNTY et al. 32 Beeler 49, 196 Tenn. 49, 264 S.W.2d 217
• Court: Tennessee Supreme Court

Page 217

264 S.W.2d 217

STEWART et al. v. SULLIVAN COUNTY et al.

32 Beeler 49, 196 Tenn. 49, 264 S.W.2d 217

Supreme Court of Tennessee.

Dec. 11, 1953.

Petition to Rehear Denied Feb. 11, 1954.

George L. McIntyre, Bristol, Joseph C. Swidler, Chas. J. McCarthy and Lee C. White, Knoxville, for appellants.

Caldwell & Brown, Bristol, for appellees.

GAILOR, Justice.

This appeal presents a bill filed by 44 citizens and property owners of Sullivan County, against that County and the Tennessee Valley Authority, on account of the abandonment and obstruction of a county highway and bridge as a result of the building of the T. V. A. South Holston Dam and Reservoir. The defendants filed separate demurrers to the bill, which were overruled by the Chancellor, who permitted this discretionary appeal.

After the filing of the bill, the Tennessee Valley Authority, with the concurrence of Sullivan County, filed petition for removal to the United States District Court for the Eastern District of Tennessee, which petition was disallowed and the cause remanded to the Chancery Court of Sullivan County, because the Federal Court lacked original jurisdiction under 28 U.S.C. Sec. 1349, and removal jurisdiction under 28 U.S.C. Sec. 1441. According to the order of removal, the learned Federal Judge found as follows:

'It further appearing that the suit arose between residents of Tennessee and Sullivan County, one of the 95 counties of Tennessee, because the county had undertaken to contract away its obligation, if any, under the Private Act (Ch. 201, Private Acts of 1929) by authorizing T. V. A., to close the aforesaid road; that no separate controversy exists between T. V. A., and respondents; that the suit is essentially against Sullivan County by a number of its citizens; that the suit in the Chancery Court was one in the nature of an appeal for the reason that the respondents had first petitioned the County Judge of Sullivan County to apply the aforesaid Private Act, had been refused that relief and had thereafter sought the same relief in the nature of a mandamus from the Chancery Court of Sullivan County.'

We are in full accord with this analysis of the nature and scope of this litigation by the Federal Judge, and the demurrers and briefs of the defendants would have been greatly clarified and simplified if the validity of the order had been recognized.

The real party defendant in this cause is Sullivan County, or as the Federal Judge put it, 'The suit is essentially against Sullivan County by a number of its citizens.' The cause of action arises from the abandonment and closing to public use of a county bridge and highway. The defendant County, itself, did not close the bridge and highway, but it permitted defendant T. V. A., by the construction of a dam, to flood the highway and so effectively close it to use by the public.

Then the County, instead of insisting that the obstruction be removed from its bridge and highway, entered into a contract of indemnity with T. V. A., which contract is made an exhibit to the original bill, whereby the County agreed to the closing of the bridge and highway, and on its part, T. V. A. undertook (1) to furnish substitute roads for those flooded, and (2) to indemnify the County against all claims for damages on account of the closing and abandonment of the bridge and highway. The liability of T. V. A. in this cause, therefore, is secondary to the liability of the County, and arises from the voluntary contract which T. V. A. made with the County on April 4, 1949. The part of the contract pertinent to this suit is paragraph 8, as follows:

'8. Anything in section 7 or elsewhere in this agreement to the contrary notwithstanding, the County does not release or waive or agree not to enforce any claim, demand, or 'action over' which it may now or hereafter have against the Authority or the United States, and which is based upon an obligation or liability which the County may have or incur to any member of the traveling public or to any landowner deprived of access to land owned by him in the County, where such obligation or liability on the part of the County arises out of the inundation, flooding, closing, or other impairment, as the result of the construction, maintenance, and operation of South Holston Dam or South Holston Reservoir, of any of the public and/or county highways, roads, or bridges within the County, the replacement, relocation, reconstruction, or protection of which is not provided for by this agreement; and the Authority hereby expressly covenants and agrees to indemnify the County against and save it harmless from any such obligation or liability; provided however, that whenever any such obligation or liability exists or is alleged to exist on the part of the County in favor of any landowner or member of the traveling public, the County shall not, except pursuant to a judicial judgment or decree, pay, compromise, settle, or otherwise dispose of such obligation or liability, or any claim, demand, suit, or action based thereon, without the written consent of the Authority, and provided further, that the Authority shall at all times have and exercise full control over the defense, settlement, and disposition of all claims, demands, suit, and actions filed with or against the county in respect of any such obligation or liability, and may compromise, settle, or otherwise dispose of the same either by constructing the road or roads necessary to extinguish or abate any such claim, demand, action, or suit, which road or roads shall then be regarded as constructed under section 3 hereof, or by any other method or procedure the Authority may see fit to adopt in its sole discretion.'

The County could not, of course, by contract with T. V. A. escape its liability to the complainants, but the foregoing excerpt from the contract makes clear why it was necessary that T. V. A. should be a party defendant in this cause, and it is elementary law in Tennessee that the beneficiary of a contract made by third parties, may sue in his own right for its breach. Christian v. John, 111 Tenn. 92, 103, 76 S.W. 906; Associated Ind. Corp. v. McAlexander, 168 Tenn. 424, 79 S.W.2d 556; Fulmer v. Goldfarb, 171 Tenn. 218, 101 S.W.2d 1108.

In his decree overruling the demurrers and permitting the appeal, the learned Chancellor held and found as follows:

'It is therefore ordered, adjudged, decreed and declared by the Court that by the contract of April 4, 1949, between the defendants Sullivan County, Tennessee, and the Tennessee Valley Authority, the defendant Tennessee Valley Authority agreed to assume full liability for and to indemnify the defendant Sullivan County against and save it harmless from any obligation or liability to any member of the traveling public or to any landowner deprived of access to land owned by him in the county where such obligation or liability on the part of the county arises out of the inundation, flooding, closing or other impairment as a result of the construction, maintenance, and operation of South Holston Dam and Reservoir of any of the public and/or county highways, roads, or bridges within the county, the replacement, relocation, reconstruction or protection of which was not provided for by the agreement and that by entering into the aforesaid contract, the defendant Tennessee Valley Authority waived any defense against such claims which it might have had in the absence of said contract.'

As to their special damage, the complainants make these allegations in their original bill, that prior to November 1, 1950, and the construction of the dam by T. V. A., complainants had free access to and from U. S. Highway No. 421 over a County highway leading from their properties to said Federal Highway. That this County highway had originally been constructed by the complainants or their predecessors in title, and after its construction by the private property owners, maintenance and upkeep of the highway had been taken over by the county and the road made a part of the County highway system, the bill alleges:

'A number of your complainants and their predecessors in title furnished material and labor in the construction of the road and were vitally interested in same as it afforded them an outlet into Holston Valley and from there leading into Bristol. Their children were educated in the schools of Holston Valley and a great number of complainants were employed in the industries at Bristol and used this road daily to and from their work. The road was satisfactory and afforded adequate access to and from their homes. * * *'

Then the bill alleges that the T. V. A. undertook to furnish an alternate substitute route for use by the complainants and others in similar situations, and as to this alternate route the bill alleges that this road was not satisfactory and not useable during the winter months of the year and by it their journeys from home to Bristol were 6 miles longer than by the old road. T. V. A. was informed of this and an effort was made to get some relief from T. V. A., but complainants were advised by T. V. A. that there was nothing more that could be done and T. V. A. admitted that they could never provide complainants with an access comparable to the one they had had.

The bill then...