United States v. 27.7 ACRES OF LAND, ETC.

• Decision Date: 08 March 1963
• Docket Number: Civ. A. No. 448.
• Citation: 214 F. Supp. 707
• Parties: UNITED STATES of America, Plaintiff, v. 27.7 ACRES OF LAND, MORE OR LESS, IN CARROLL COUNTY, ARKANSAS, and Arkansas & Ozarks Railway Corporation, et al., and Unknown Owners, Defendants.
• Court: U.S. District Court — Western District of Arkansas

214 F. Supp. 707

UNITED STATES of America, Plaintiff, v. 27.7 ACRES OF LAND, MORE OR LESS, IN CARROLL COUNTY, ARKANSAS, and Arkansas & Ozarks Railway Corporation, et al., and Unknown Owners, Defendants.

Civ. A. No. 448.

United States District Court W. D. Arkansas, Harrison Division.

March 8, 1963.

Charles M. Conway, U. S. Atty., Robert E. Johnson, Asst. U. S. Atty., Ft. Smith, Ark., for plaintiff.

Warren & Bullion, Little Rock, Ark., for defendants.

Virgil Willis, Harrison, Ark., for Mr. and Mrs. Neis.

JOHN E. MILLER, Chief Judge.

The United States of America, as plaintiff, acquired a portion of the right of way of the defendant, Arkansas & Ozarks Railway Corporation, hereinafter designated as railway, for use in connection with the Table Rock Dam and Reservoir Project. The complaint contains a description of the specific property, but may be summarized as a right of way 10,900 feet in length and of varying widths, containing 27.7 acres, more or less, situated in Carroll County, Arkansas. The complaint was filed January 19, 1959, and three days later the court, upon motion of the plaintiff, entered an "Order for Delivery of Possession," in which the court directed that all defendants in the action and all persons in possession or control of the property described in the complaint "shall surrender possession of the said property to the plaintiff within five days after service of a copy of this order; provided, that the defendant, Arkansas & Ozarks Railway Corporation, may continue to use the said property at its own risk and to the extent and for such time as its use does not interfere with the possession and use of the plaintiff."

On April 10, 1959, the railway filed its answer, in which it referred to the order of possession, and stated "that such order imposes an undue burden of hardship upon the defendant, causing it to operate said properties at its own risk subject to any use the plaintiff might desire to make of said property including inundation thereof; the defendant asserts that the operation of a railroad under such conditions is extremely hazardous and unusually costly to it.

"Defendant asserts that the action of the plaintiff in seeking to permit the defendant to continue to use said properties at its own risk and subject to any immediate possession of the plaintiff, is an attempt by the plaintiff to relieve itself of its responsibility not to overflow said railroad and to interfere with the operation thereof; that said proviso imposes a responsibility upon the defendant for the acts of the plaintiff regardless of how or when taken.

"Defendant further asserts that in view of the order of possession and the hazardous conditions under which defendant is allowed to continue said operthis cause should be set for an immediate trial at which time defendant will introduce evidence as to the value of the property and just compensation to it for the taking thereof."

On June 26, 1959, the plaintiff filed an amendment to its complaint and thereby made as parties defendants a great many individuals named in said amendment. Of the individual defendants, William L. Neis and wife filed an answer and alleged that they were the owners in reversion of a portion of the land taken by the plaintiff, and that when the railway ceases to use that portion of the right of way owned by them, the fee simple title will revert to them.

The railway and Mr. and Mrs. Neis asked that just compensation be awarded them in accordance with the provisions of Amendment 5 to the Constitution of the United States.

In United States v. Petty Motor Co., (1946) 327 U.S. 372, 66 S.Ct. 596, 90 L.Ed. 729, the court at page 377 of 327 U.S., at page 599 of 66 S.Ct., in discussing the meaning of "just compensation" said:

"The Constitution and the statutes do not define the meaning of just compensation. But it has come to be recognized that just compensation is the value of the interest taken. This is not the value to the owner for his particular purposes or to the condemnor for some special use but a so-called `market value.' It is recognized that an owner often receives less than the value of the property to him but experience has shown that the rule is reasonably satisfactory. Since `market value' does not fluctuate with the needs of the condemnor or condemnee but with general demand for the property, evidence of loss of profits, damage to good will, the expense of relocation and other such consequential losses are refused in federal condemnation proceedings."

The court believes it will be helpful to recite some of the historical facts relative to the attempts to operate a railroad through the territory traversed by the defendant railway.

In 1900-03 the Missouri & North Arkansas Railway Company constructed a line of railroad from the City of Helena, Arkansas, on the Mississippi River west and north to Neosho, Missouri, and from Neosho, Missouri, to Joplin it operated over leased tracks. The total distance between Helena, Arkansas, and Joplin, Missouri, was 330.4 miles. The original company encountered financial difficulties and after it had gone through a receivership, the railroad was transferred to another corporation, Missouri & Arkansas Railway Company, which undertook to operate the railroad as originally operated by the Missouri & North Arkansas Railway Company.

On September 6, 1946, the Missouri & Arkansas Railway Company ceased to operate the railroad, and on February 14, 1947, certain stockholders filed a petition in this court for the appointment of a receiver "to take charge and possession of the property of the defendant corporation and to hold the same intact and to continue the prosecution and defense of any and all actions pending by or against the corporation in any courts, and any proceedings pending before the Interstate Commerce Commission of the United States or any other governmental bodies." In accordance with the petition this court on the same date, February 14, 1947, appointed two receivers in accordance with the prayer of the petition.

On May 14, 1947, the State of Arkansas was permitted to file an intervention in which it alleged the lack of good faith on the part of the stockholders to operate the railroad. A hearing was held on that intervention on June 6, 1947, and an additional receiver was appointed. In the meantime, the Missouri & Arkansas Railway Company had filed a petition with the Interstate Commerce Commission to obtain a certificate of convenience and necessity to abandon the railroad. That petition of the railway company was pending when this court appointed the additional receiver on June 6, 1947, and the court instructed the receivers (1) to request the Interstate Commerce Commission to refrain for a period of 90 days from rendering a decision on the petition for a certificate of convenience and necessity to abandon the railroad; (2) to receive and consider plans for resumption of operation; and (3) to consider any offer to purchase or lease the whole or any part of said railroad.

In accordance with the instructions, the receivers filed a report in which they recommended that operation of the railroad be resumed, and many suggestions and numerous plans were submitted by third parties for the resumption of the operation of the railroad. It became apparent, however, that a resumption of operation would require a large capital outlay and an enormous amount of work and planning. It was necessary if operation was to be resumed to completely rehabilitate the entire line, but notwithstanding those difficulties every effort was made without success to resume operations.

On October 15, 1947, the Cities of Eureka Springs and Berryville filed a motion for leave to intervene, which motion was denied. On October 31, 1947, Richard Thompson and other erstwhile patrons of the railroad filed a motion to intervene which motion was denied. See, Gross v. Missouri & Ark. R. Co., (W.D. Ark.1947) 74 F.Supp. 242.

In due time the Interstate Commerce Commission issued its certificate of convenience and necessity permitting the abandonment of the line of railroad extending from Helena, Arkansas, to Neosho, Missouri. Every effort was made to sell portions of the railroad and, in fact, that part extending from Helena, Arkansas, to Cotton Plant, Arkansas, was sold but the purchasers were unable to operate it, and after a short time that portion was abandoned and salvaged. The corporation then salvaged the line from Cotton Plant, Arkansas, to Harrison, Arkansas, but retained for operation the portion extending from Harrison, Arkansas, to Seligman, Missouri, which was transferred to the present defendant, Arkansas & Ozarks Railway Corporation.

On November 25, 1959, the plaintiff filed "Motion for Pretrial Order." Prior to the filing of this motion, the court and the attorneys for the plaintiff and for the defendant railway had many conferences in an effort to narrow the issues and to determine the elements that should be considered by the court in arriving at just compensation. The record discloses that on August 25, 1959, the court, on its own motion, ordered the railway to file a brief in support of its claim to just compensation and "particularly the measure thereof." In the same order the court required the plaintiff to file its brief on said question after receipt by counsel of the brief of the railway. The briefs were duly filed and considered by not only the court but by the attorneys representing the parties. In the motion for the pretrial order the plaintiff alleged that "before the parties can adequately prepare for trial, they are entitled to know what is the measure of just compensation to be followed in this case." Again the court conferred with counsel on both sides, and, because of the physical condition of the railroad, the court undertook to announce the rules which it believed should be followed by counsel in the trial of the case on the question of just compensation. The court filed its...