United States v. Powelson
| Decision Date | 10 March 1941 |
| Docket Number | No. 4679.,4679. |
| Parties | UNITED STATES ex rel. and for Use of TENNESSEE VALLEY AUTHORITY v. POWELSON et al. |
| Court | U.S. Court of Appeals — Fourth Circuit |
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William C. Fitts, Jr., of Knoxville, Tenn., Gen. Counsel, Tennessee Valley Authority (Joseph C. Swidler, S. Frank Fowler, and Charles J. McCarthy, all of Knoxville, Tenn., Attys., Tennessee Valley Authority; L. B. Bolt, Philander P. Claxton, and Robert H. Marquis, all of Washington, D. C., on the brief), for appellant and cross-appellee.
Isidor J. Kresel, of New York City (G. L. Jones, of Asheville, N. C., on the brief), for appellee and cross-appellant.
Before PARKER, SOPER, and DOBIE, Circuit Judges.
This is an appeal and a cross-appeal from a judgment awarding damages in a condemnation suit instituted, under Sec. 25 of the Tennessee Valley Authority Act of May 18, 1933, 48 Stat. 58, 70, 16 U.S.C.A. § 831x, by petition of the United States on the relation of the Tennessee Valley Authority. The purpose of the suit was to condemn lands required for the construction of the Hiawassee Dam and Reservoir on the Hiawassee River in Western North Carolina and a number of landowners affected by the dam and reservoir were made parties. Among these was the Southern States Power Company, which has since assigned to W. V. N. Powelson, its sole stockholder, all of its interest in the lands affected and any awards of damages that have been made or may be made with respect thereto.
The case was duly referred to three commissioners, as provided by the act, for the assessment of compensation for the property sought to be condemned; and the award of these commissioners was accepted as to all property involved, except that of the power company. As to that, the commissioners fixed the value of the land taken at $1,437,000, with severance damages of $253,000 to the remainder and $110,000 as damages for the taking of the small Murphy hydro-electric plant, or a total award of $1,800,000. The parties agreed on the award of $110,000 for the Murphy plant but excepted to the other findings of the commissioners, and the case was heard before a specially constituted court of three District Judges, as provided by the act. The court reduced the valuation of the land taken to $976,289.40 and the severance damages to the remaining lands to $111,791.23. It approved the valuation of $110,000 for the Murphy plant upon which the parties had agreed, but awarded $100,000 as severance damages to the connected property resulting from the taking of that plant. The total amount awarded by the judgment of the court below, therefore, was $1,298,080.63, of which the item of $110,000 is not disputed. From the judgment both parties have appealed.
Question is raised at the outset as to the character of review provided by the statute. It is said that, because of the provision that we shall dispose of the case upon the record "without regard to the awards or findings theretofore made by the commissioners or the district judges", the case is to be heard by us de novo and not as an appeal. We do not so interpret the statute. We are not authorized to take testimony, as are the judges of the District Court, but are to hear the case just as we hear other appeals upon the record made in the District Court. The judges and commissioners who took the testimony had the advantage of seeing and hearing the witnesses; and their findings, under well-settled rules, are entitled to special weight on that account. The commissioners visited the premises and they, as well as the judges, gave literally weeks and months to hearing a case which was heard before us in a single day. The trial court was thus in a better position than an appellate court could possibly be to determine questions of fact; and it is hardly reasonable to suppose that it was the intention of Congress that we should pay no attention whatever to the findings of that court. The reasonable construction of the statute, we think, is merely that we are not to be bound by the findings of the trial court, but are to consider them in the light of the record, just as we consider similar findings in other appeals in which we have power to review the facts. The commissioners appointed by the court below were men of high character and sound judgment, the chairman being an outstanding lawyer now Speaker of the House of Representatives of the state, and the three judges composing the court were among the ablest of our Circuit, men of wide experience and of long service on the bench. It could hardly have been intended that the findings of such men made in the course of official duty should be absolutely disregarded by the appellate court.
The property of the power company affected by the condemnation consisted of three power sites on the Hiawassee River and one on the Nottely River, a tributary of the Hiawassee. These power sites constituted the basis of an integrated power development which had been planned by the power company, with a 110-foot dam on the Hiawassee River at Appalachia near the North Carolina-Tennessee line, a 245-foot dam, designated as its Powelson dam, 12 miles up the river at the site of the present T. V. A. dam, a 200-foot dam farther up the Hiawassee near the town of Murphy, and a 200-foot dam on the Nottely across the North Carolina-Georgia line. The Murphy and Nottely developments were to be primarily for storage, and it was estimated that they would greatly increase the capacity of the Powelson development, where the storage capacity of the reservoir was limited due to the narrowness of the valley between the mountains. Likewise it was estimated that the capacity of the Appalachia plant would be greatly increased as a result of the storage resulting from the other three developments. The integrated development, with the large storage thereby made available, would enable the power company, according to its testimony, to develop 512,500,000 K.W. hours of electric energy, which it would be able to sell under contract calling for power of 35% annual load factor, i. e. under a contract providing that a very large part of the deliveries might be required during the dry months of the year. There was evidence that for power of such load factor a higher rate could be obtained than for power of a higher load factor.
The power company and its predecessors began acquiring property as a basis for this integrated development as early as 1913 and continued to do so up until 1936, when the petition herein was filed. It had successfully conducted litigation with a rival company and had established priority of right with respect to the development. Hiawassee River Power Co. v. Carolina-Tennessee Power Co., 252 U.S. 341, 40 S. Ct. 330, 64 L.Ed. 601; Carolina-Tennessee Power Co. v. Hiawassee River Power Co., 175 N.C. 668, 96 S.E. 99; Id., 171 N.C. 248, 88 S.E. 349. It had acquired the four dam sites necessary to the contemplated development, had purchased a large part of the land for the reservoirs and had done a large part of the necessary surveying and engineering. In these activities and in the acquisition of property for the development it had expended a total of $1,199,603.27, of which $420,874.40 had been expended as the purchase price of land, $45,219 represented the expense of acquiring the land, $84,632.74 surveying expense, and $58,168.91 engineering expense. Included also was the cost of the acquisition and development of the Murphy plant, which amounted to $295,998.73. The company had received income amounting to $137,660.74 on its investment; but, after giving credit for this, the investment in the property was $1,061,942.53. As we have seen, the total amount awarded respondent by the court below was $1,298,080.63, and the value of the property remaining to respondent after the taking was shown to be $165,000, which makes a total of $1,363,083.63. This means that the judgment below merely gives to respondent what it has invested in the property with approximately 4% simple interest on the investment, or approximately 3% when the $100,000 for severance damages to the Murphy plant is eliminated, as for reasons hereafter stated we think it should be.
At the time of the taking, as heretofore stated, respondent owned the dam sites for the integrated four dam development which it contemplated and had been adjudged to have priority of right with respect to making the development. For this purpose it had acquired approximately 22,000 acres of land of which 3,300 acres were above the Appalachia dam site, 12,500 above the Powelson dam site, 1,000 acres above the Murphy dam site and 4,500 acres above the Nottely dam site. The property taken by the condemnation embraced the Powelson and Murphy dam sites with 315.9 acres in the Appalachia basin, 12,679.94 acres in the Powelson basin and 200 acres in the Murphy basin. This taking destroyed the feasibility of the four dam development contemplated by respondent and left it with 2,094.84 acres of land in the Appalachia basin, 316 acres in the Powelson basin, 619 acres in the Murphy basin, and 4,297 acres in the Nottely basin. As stated above, the court fixed the value of the property taken, other than the Murphy hydro-electric development, at $976,289.40, and the value of that development at $110,000. Consequential damages to the other lands and property, resulting from the taking, were fixed as follows:
Appalachia dam and basin ....... $ 83,562.51
Powelson remnant ............... 1,584.20
Murphy remnant ................. 7,737.50
Nottely ........................ 18,907.02
Murphy transmission lines ...... 100,000.00
Except with respect to the consequential damages of $100,000 to transmission lines resulting from the taking of the Murphy plant, as to which we shall have more to say hereafter, the court arrived at these figures by finding that the lands which lay within the basin of the...
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