United States v. Indian Creek Marble Co., 3219.

• Decision Date: 26 July 1941
• Docket Number: No. 3219.,3219.
• Parties: UNITED STATES ex rel. TENNESSEE VALLEY AUTHORITY v. INDIAN CREEK MARBLE CO. et al.
• Court: U.S. District Court — Eastern District of Tennessee

40 F. Supp. 811

UNITED STATES ex rel. TENNESSEE VALLEY AUTHORITY v. INDIAN CREEK MARBLE CO. et al.

No. 3219.

District Court, E. D. Tennessee.

July 26, 1941.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

H. James Hitching, Asst. Gen. Counsel for T. V. A., and Alvin Ziegler, Atty. for T. V. A., both of Chattanooga, Tenn., and Frank Montgomery, Atty. for T. V. A., of Knoxville, Tenn., for plaintiff.

James B. Wright, of Knoxville, Tenn., and D. S. Beeler, of Rutledge, Tenn., for defendant.

TAYLOR, District Judge.

This memorandum relates to a request by the respondents to instruct the Commission, appointed by the court to fix just compensation, in certain respects deemed by respondents essential to a discharge of the Commission's duty. The just compensation to be fixed by the Commission is for certain lands taken in fee and for the imposition of easements on the premises owned in fee by the Indian Creek Marble Co., which premises have a certain incumbrance in the form of a lease executed by Indian Creek Marble Co. to two individuals purporting to give the lessees the exclusive right over a period of years and for a consideration to remove therefrom marble, stone and other mineral. It is stipulated in the record that the just compensation for the fee taken and for the imposition of the easements on the fee is to be divided equally between the lessor Indian Creek Marble Co. and the lessees. In view of this stipulation it is not the duty of the Commission to apportion the just compensation between the lessor and lessees.

The briefs and argument of the parties are concerned more with the questions of law involved in the requests than with the necessity, propriety or duty of the court to give instructions at all.

Since the same question of just compensation would be tried de novo by a three judge court, if exceptions are filed to the Commission's finding by either party, it is believed that there could be no valid objection to the instructions, and that instructions might be helpful to the Commission in fixing just compensation. I shall comment on certain of the principles involved by the requests, and rule specifically on certain others.

The Commission, by consent of the parties, requested the court to express an opinion as to the admissibility of a certain unauthenticated letter written purportedly by an officer of the condemnor, in which the officer expressed an opinion as to the quality or character of certain marble or stone on the property involved, and again as to the admissibility of a report of a committee of Congress which investigated certain matters in connection with T. V.A., in which report the same letter appears. It is my opinion that the letter offered is inadmissible as such, and I think as to that counsel for respondents are in at least implied accord. As to the expressions of opinion of the committee with respect to certain other purported leases, or the good faith involved in their execution or subsequent handling, this could not be competent evidence or material in establishing the similar contention or negativing such contention with respect to the execution and handling of other purported similar leases of other mineral on or under different land. This is not to be taken as an implied holding that the report would be admissible if it related to the same leases, for it is clear from the authorities examined that such report is inadmissible. 22 Corpus Juris 516; 20 Amer.Juris. 1027. In the absence of authority, the general principles involved would exclude the report as a public record or document, because the matters urged by respondents as material and admissible are expressions of opinion as distinguished from recorded facts made pursuant to the discharge of a statutory or other legal duty.

I do not deem it necessary or even proper for the court to undertake to deal with each specific request made by either the respondents or the petitioner. General principles will be discussed, and what is hereinafter said will, I think, enable the Commission to arrive at a correct conclusion as to the amount of money which will represent the just compensation provided by the Constitution of the United States, no more, no less.

The Commission is entitled under the statute, Tit. 16 U.S.C.A., § 831x, to view the property. From such view the Commission will draw proper inferences as to conditions as they existed before any taking occurred. They will consider and give due weight to the testimony of witnesses who were sworn and testified, having in mind the knowledge of each witness as to the matter covered by the testimony given. They will consider all observable matters and all facts established by the evidence tending to show any interest on the part of the witness which might or would tend to influence or color the testimony or furnish a motive for the concealment of facts known to the witness. The Commission will enter into a determination of the actual facts bearing upon the amount of compensation without prejudice. They will decide the facts entering into a determination of value with utter disregard of any and all considerations which do not affect the actual market value of the property. They will neither consider nor receive any ex parte unsworn statement of fact or expression of opinion in making their ultimate conclusion as to just compensation. They will approach their consideration of just compensation by determining the value of the whole property before any part was taken. They will do that assuming the attitude of one willing to sell, but not under pressure to sell, at its fair market price for cash. They will consider all the elements of value inherent in the property, including the uses to which it was being put as well as the uses it was reasonably susceptible to, which would add to its market value. They will have in mind, in other words, what an intelligent owner would know of the property in so far as the evidence before them and their inspection of the property shows it. If they have before them evidence of the sale of similar property similarly situated on a free market, they may consider the price at which such similar property was sold, if within a time not too remote from the date of the taking of this property. Having thus determined the fair cash market value, they will consider the evidence before them, including facts ascertained by inspection, the effect of the taking by T.V.A., the part actually taken wholly and the part partially taken, including the reasonable probabilities as to the effect of the easements and the effect of the water impounded by Norris Dam upon the market value as of the date of the taking, considering that the depreciation in value for all the takings was fully accomplished on the day of the actual taking, that is, the date as of which they have previously fixed the unimpaired value of the property; the condition and value of the property immediately before being touched by T.V.A.; the condition and value of the property as of the same date, but assuming that as of that date all of the taking and all of the damage that would affect market value had already become an accomplished fact. Having determined these two values, the difference will represent the amount of cash due the owners, assuming it was paid on the day of the taking. If any part of the just compensation was not paid to the owners or paid into court for them when the property was taken, they will consider the question of how much additional should be paid to compensate the owners for the delay in payment. The usual rate of interest in the locality is ordinarily considered a fair measure of that amount.

Certain of the requests have to do with evaluation of just compensation on the assumption that one of the elements of value entering into it is that there is not only valuable marble on the premises, but that there was actually in operation when the taking occurred a marble quarry, and that the nature of the taking by T.V.A. damaged or wholly destroyed valuable marble, and necessitated either removal at great expense of marble shattered by the T.V.A. operations, or a re-location of the established quarry at a place on the premises where operation would be more difficult and expensive, and that just compensation would necessarily include the expense to the lessees incident to this situation. All of the damage done by T.V.A. in this particular would constitute an element requiring just compensation, if by reason of the damage the cash market value of the whole premises was reduced, the question being, would the fair cash market value of the property as a whole, taking into account its elements of value, be reduced by reason of the claimed damages, or would a buyer of the property after the damage complained of pay as much for it as he would have paid prior to the damage? If the effect of the operation of T.V. A. resulting in the shattering of certain marble deposits made no difference as to the market value of the whole, then the damage done by the operation, if any is shown to have occurred, is not to enter into the question of just compensation. A determination of this question goes, of course, to the value of the marble deposits, and whether as a marble quarry the property was valuable or was merely a mass of commercially valueless material which would not enhance the market value of the property, and if of value whether the quantities involved left room for an equal market value of the whole premises, in so far as a matter of operation is concerned, so that any marble shattered by the operations of the T.V.A. did not decrease its market value as such. The contention of T.V. A. is that the value as a marble quarry is fanciful and not real, and that on the free open market the marble deposits would not enter into the consideration price at all. The respondents contend that a buyer would pay more for the premises because of the marble deposits,...