United States v. Twin City Power Company

• Decision Date: 30 August 1954
• Docket Number: No. 6805-6807.,6805-6807.
• Parties: UNITED STATES of America, v. TWIN CITY POWER COMPANY and William P. Dauchy, its Mortgagee, Appellees. UNITED STATES of America, Appellant, v. TWIN CITY POWER COMPANY and William P. Dauchy, its Mortgagee, Appellees. UNITED STATES of America, Appellant, v. TWIN CITY POWER COMPANY and William P. Dauchy, its Mortgagee, Appellees.
• Court: U.S. Court of Appeals — Fourth Circuit

215 F.2d 592 (1954)

UNITED STATES of America, v. TWIN CITY POWER COMPANY and William P. Dauchy, its Mortgagee, Appellees.

UNITED STATES of America, Appellant, v. TWIN CITY POWER COMPANY and William P. Dauchy, its Mortgagee, Appellees.

UNITED STATES of America, Appellant, v. TWIN CITY POWER COMPANY and William P. Dauchy, its Mortgagee, Appellees.

Nos. 6805-6807.

United States Court of Appeals Fourth Circuit.

Argued June 15, 1954.

Decided August 30, 1954.

COPYRIGHT MATERIAL OMITTED

John F. Cotter, Atty., Dept. of Justice, Washington, D. C. (Perry W. Morton, Asst. Atty. Gen., John C. Williams, U. S. Atty., Greenville, S. C., and Edmund B. Clark, Atty., Dept. of Justice, Washington, D. C., on brief), for appellant.

David W. Robinson, Columbia, S. C. (Robinson, Robinson & Dreher, Columbia, S. C., on brief), for appellees.

Before PARKER, Chief Judge, and SOPER and DOBIE, Circuit Judges.

PARKER, Chief Judge.

These are appeals by the United States in three condemnation cases from awards of compensation for the taking of lands in connection with the Clark Hill water power and flood control development on the Savannah River. The lands taken had been acquired in South Carolina and Georgia by the Twin City Power Company for the development of a power project at Price's Island in the Savannah River and condemnation cases for their taking were instituted by the United States in the court below and in the United States District Court for the Southern District of Georgia. Motions by the United States to strike portions of the answers which asserted the right of the owner of the lands to have their availability for the development of water power considered in connection with market value raised before the judge below the only question presented by this appeal; and his opinion in entering the order denying the motions deals with the question ably and conclusively. See United States v. 1532.63 Acres of Land, 86 F.Supp. 467.

Commissioners to value the lands were appointed by the court below acting in conjunction with the United States District Court for the Southern District of Georgia. United States v. 3928.09 Acres of Land, 12 F.R.D. 127. The commissioners heard evidence on the question of compensation and filed a comprehensive report showing that the lands taken, when considered in connection with their availability for water power purposes, had a value of $267.02 per acre, and valued them accordingly. The commissioners further found that for agricultural purposes or as wild forest land, without reference to availability for development of water power, the lands would have had a value of around $37 per acre. The court below entered judgment for the landowner and its mortgagee in accordance with the valuation of the commissioners, United States v. 3928.09 Acres of Land, D.C., 114 F.Supp. 719; and the United States has appealed.¹ No question is raised on the appeal except with respect to considering the availability of the lands for water power purposes on the question of valuation, the contention of the United States being that "the value of land as a potential power site on a navigable stream is not an element of just compensation under the Fifth Amendment". We agree with the judge below that this contention cannot be sustained.

There is practically no dispute as to the facts. They are thus stated by the District Judge in his order denying a petition for rehearing:

"The properties of the two Twin City corporations taken by the United States in these actions and in those pending in the Southern District of Georgia, extend some eleven miles along both sides of the Savannah River from Price\'s Island to Chamberlain\'s Ferry embracing some forty-seven hundred acres. Along this distance the Savannah River has a sixty-foot fall and a stream flow exceeding that at most of the hydro developments in Georgia and the Carolinas. At Price\'s Island on the Twin City properties there was an excellent dam site between spurs with sound foundation rock and ideal clay available for construction purposes.

"Twin City\'s ownership of a strip of land for a railroad siding to the C. & W. C. Railroad some two miles away, the proximity of nearby transmission facilities, the ownership of a reservoir area free of houses, bridges, railroads and highways were factors materially minimizing construction costs. At the time of taking, conditions were favorable for the marketing of power.

"Dams at the Price\'s Island site were economically feasible for use in connection with a sixty, seventy, eighty, ninety or one hundred foot head. Twin City owned practically all of the land needed for the sixty-foot development and therefore an integrated site for such a project. These properties embraced one of the best undeveloped hydro sites in the eastern part of the United States. This land was also useful for hydroelectric purposes in conjunction with up-stream and down-stream properties owned by others. The value of the Twin City lands would have been increased by up-stream developments at Calhoun Falls and at Hartwell which were under consideration at the time of taking.

"These properties were under constant study for hydro-electric development from the time of the first acquisition for this purpose by Twin City in 1901. It was authorized to build dams in the Savannah River under six Acts of Congress enacted between 1901 and 1919. The Secretary of War and the Chief of Engineers approved its plans, the Federal Power Commission tendered Twin City a preliminary permit in 1926, for a development at Price\'s Island. From 1928 to 1932, the Savannah River Electric Company held a Federal Power license to build at Clark Hill and to incorporate the Twin City properties into its development. From time to time other private interests were interested in acquiring these properties for river development. During the twenty-year period immediately preceding these condemnation proceedings the Army Engineers had this stretch of the Savannah under constant study in connection with both private and public hydro-electric development. Finally in 1944, Congress decided that the project should be built by the United States and the Federal Power Commission therefore refused to issue a license for its construction to the private applicant, the Savannah River Electric Company. Savannah River Electric Co. v. Federal Power Comm., 4 Cir., 164 F.2d 408.

"These facts are largely undisputed. The great weight of the evidence supports the finding that this use for power purposes was so probable at the time of taking as to affect the market value of the property. The Government, having been attracted to the acquisition of this property because of its suitability for water power development, can hardly deny that the water power potential actually did affect its value in the market.

"The amount of the award is supported by the preponderance of the evidence. Three competent and well qualified hydraulic engineers with large experience in this field, after fully considering all of the pertinent factors, testified that in their respective opinions a prudent, competent and well-informed buyer, willing but not compelled to buy, trading with an equally well-informed, competent and willing seller would have paid substantially more than the award for these properties. The commissioners, evaluating all of the evidence, found that a figure, less than these given in these opinions, was just compensation and the two courts confirmed the aggregate of the awards in the companion decrees of August 26, 1953. On reconsideration I am convinced of the correctness of the findings in the decree."

It is provided by the Fifth Amendment to the Constitution of the United States that private property shall not be taken for public use "without just compensation"; and in arriving at just compensation all elements entering into the value of the property taken must be given consideration. The most profitable use of the land here being taken is use in the development of water power; and there is no basis in law or in reason why this element of value should be ignored. The land was acquired by the owner for that purpose; and it is now being acquired by the United States for that purpose. As was well said by the District Judge in his opinion, 114 F.Supp. at page 723:

"All of the properties of Twin City and the entire eleven mile stretch of the Savannah River along which this land lay have been incorporated by the United States in its Clark Hill hydro development for water power purposes as its best and most valuable use. The testimony from both sides shows that during the entire period from 1901 to the date of taking Congress and all of the interested Federal agencies, without exception or dissent, considered that these properties of Twin City should be developed for water power, either by private interests or by the United States and either separately or in conjunction with other property."

The rule applicable in such a situation is that stated in Olson v. United States, 292 U.S. 246, 255, 256, 54 S.Ct. 704, 708, 709, 78 L.Ed. 1236, as follows:

"The highest and most profitable use for which the property is adaptable and needed or likely to be needed in the reasonably near future is to be considered, not necessarily as the measure of value, but to the full extent that the prospect of demand for such use affects the market value while the property is privately held. Mississippi & R. R. Boom Co. v. Patterson 8 Otto 403, 98 U.S. 403, 408, 25 L.Ed. 206; Clark\'s Ferry Bridge Co. v. Public Service Comm., 291 U.S. 227, 54 S.Ct. 427, 78 L.Ed. 767; 2 Lewis, Eminent Domain, 3d Ed. § 707, p. 1233; 1 Nichols, Eminent Domain, 2d Ed. § 220, p. 671. The fact that the most profitable use of a parcel can be made only in combination with other lands does not necessarily exclude that use from consideration if the possibility of combination is reasonably sufficient to affect market value. Nor does the fact that it may be or is being acquired

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