Village of Walthill, Neb. v. IOWA ELECTRIC LIGHT & P. CO.

• Decision Date: 16 February 1956
• Docket Number: No. 15400.,15400.
• Parties: VILLAGE OF WALTHILL, NEBRASKA, a Municipal Corporation, Appellant, v. IOWA ELECTRIC LIGHT AND POWER COMPANY, a Corporation; and First National Bank of Chicago (Trustee), a Corporation, Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

228 F.2d 647 (1956)

VILLAGE OF WALTHILL, NEBRASKA, a Municipal Corporation, Appellant, v. IOWA ELECTRIC LIGHT AND POWER COMPANY, a Corporation; and First National Bank of Chicago (Trustee), a Corporation, Appellees.

No. 15400.

United States Court of Appeals Eighth Circuit.

January 13, 1956.

Rehearing Denied February 16, 1956.

W. W. Nuernberger, Lincoln (Ernest B. Perry, Arthur E. Perry, and R. R. Perry, Lincoln, Neb., were with him on the brief), for appellant.

Lawrence J. Tierney, Omaha, Neb. (Ralph E. Svoboda, R. A. Skochdopole, and Kennedy, Holland, Delacy & Svoboda, Omaha, Neb., were with him on the brief), for appellees.

Before SANBORN, JOHNSEN, and VAN OOSTERHOUT, Circuit Judges.

VAN OOSTERHOUT, Circuit Judge.

This action involves a condemnation proceeding whereby the Village of Walthill in Nebraska, appellant, is seeking to condemn a gas distribution system located in said Village and owned by appellees, Iowa Electric Light and Power Company and First National Bank of Chicago (Trustee). Upon appellees' petition this case was removed to the Federal Court. A motion to remand upon the ground that the Federal Court was without jurisdiction for the reason that the cause of action had not reached the maturity of a civil action was overruled. The Federal District Court upheld its jurisdiction, fixed the value of the distribution system, and entered final judgment of dismissal of the action upon the basis that "the aforesaid gas distribution system is not a gas plant, within the purview of the Nebraska Statutes authorizing condemnation by the Plaintiff municipality and condemnation thereof by the Plaintiff is, hence, precluded." The District Court's memorandum opinion is published in 125 F. Supp. 859.

Appellant seeks reversal of the final judgment of the District Court on the following grounds:

1. The court erred in finding that the condemnation proceeding was a civil action subject to removal.

2. The court erred in its conclusion of law that the Village of Walthill, Nebraska, had no power to condemn the gas distribution system of the appellees under the Nebraska Statutes.

A third ground to the effect that the court committed error in fixing the valuation of appellees' property was withdrawn on oral argument.

The issue of whether the condemnation proceeding had reached the status of a civil suit subject to removal is thoroughly argued by all parties. Diversity of citizenship and the jurisdictional amount are both present. The parties agree that a State condemnation case if carried on through appeals would become removable at some stage. They disagree violently on whether that stage had been reached. The controlling issue is whether the proceeding here involved was a civil action at the time it was transferred to the Federal Court. If it was a civil action, the transfer was proper under 28 U.S.C. § 1441. A consideration of the facts is necessary to properly discuss this issue.

The appellant Village, pursuant to section 19-701, R.R.S.Nebraska 1943, at an election obtained authorization from its voters to acquire the gas plant¹ of the appellees. The appellant certified and transmitted the results of the election to the Supreme Court of Nebraska which in turn appointed a court of condemnation consisting of three district court judges as prescribed by section 19-702, R.R.S.Nebraska 1943.² The powers, duties, and procedure of the condemnation court are prescribed by sections 19-703, 19-704, and 19-705.³

The filing of the certified record of the election with the Supreme Court and the appointment by the Supreme Court of the condemnation court did not constitute the commencement of a civil action. The Nebraska court has held that the appointment of the members of the court of condemnation is a ministerial act only and does not lodge the condemnation proceeding in the Supreme Court or amount to such an institution of a proceeding as to give the Supreme Court any jurisdiction of the condemnation proceeding. In re Application of City of Sidney (Consumers Public Power District v. City of Sidney Power Dist.), 144 Neb. 6, 12 N.W.2d 104.

The Village filed a petition with the three-judge condemnation court and summons was served upon the appellees. Appellees responded to the summons by filing petition for removal to the Federal District Court. The transfer took place before the condemnation court heard any evidence or made any finding as to the valuation of the property sought to be condemned. Appellees insist and the trial court found that at this stage the proceeding was a civil action and hence subject to removal. All parties rely upon In re Appraisement of Omaha Gas Plant (Updike v. City of Omaha), 102 Neb. 782, 169 N.W. 725. In that case the constitutionality of the condemnation statutes involved in our present case was upheld, the court holding that the court of condemnation is not a court, and that under the Nebraska Constitution the legislature would have no right to create such a court. As we read the Omaha Gas Plant case, the court treated the three-judge condemnation court as a board of appraisers, the court stating 169 N.W. at pages 726-727:

"While the proceedings are judicial in their nature, it is unnecessary that they be conducted in their inception by a court, and in fact in every instance in which condemnation proceedings are carried on in this state, so far as to the writer known, they are not conducted in or by any regular judicial tribunal. While the appraisers required to be appointed by the statute under consideration are called a court of condemnation, the fact that this term is used is immaterial. Such bodies have been variously termed boards of assessment, of commissioners, of appraisers; but, whatever the nomenclature, they exercise practically the same functions, sometimes with, and sometimes without, the assistance of officers of regularly constituted courts.

* * * * *

"* * * As we have seen, the act of appraising the value of property involves the exercise of judicial functions — facts must be collated and compared in the mind of the appraiser, a standard of value must be reached, and the property measured by that standard. It is competent for the Legislature to select a class from which appraisers may be chosen, and men of judicial training and experience are no doubt well qualified for such duties."

There are statements in the Omaha Gas Plant case, supra, and in In re Application of City of Sidney, supra, to the effect that the proceedings of the court of condemnation are judicial in nature. The same thing has been said by the Nebraska court about the functions of lay appraisers appointed under other condemnation statutes. Webber v. City of Scottsbluff, 155 Neb. 48, 50 N.W.2d 533; Albin v. Consolidated School District, 106 Neb. 719, 184 N.W. 141. In the quotation from the Omaha Gas Plant case appearing above, it is apparent that the court, in speaking of appraisers performing judicial functions, was referring to appraisers generally. We do not believe that the fact that the appraisal board exercises some judicial functions raises the proceedings in which it is acting to the level of a civil action. Under the statutes we are here considering, the three-judge condemnation court's authority is limited to fixing the value of the property. Section 19-703, R.R.S.Nebraska 1943, provides in part:

"Such court shall have all the powers and perform all the duties of commissioners in the condemnation and ascertainment of the value and in making of an award of all property of any such works, plant or system."

The job assigned to the three-judge condemnation court is the same as that assigned to appraisers generally. It has no jurisdiction to determine issues other than those relating to value. Here the appellees have asserted many defenses to the condemnation, among them, that the proceedings were not within the purview of the statute, that the authorizing election was void, that there was no statutory authority to condemn a distribution system, and that the appellant is estopped. The applicable statutes do not give the condemnation court jurisdiction to determine such issues, and no one contends that the condemnation court is authorized to make such determinations. In a civil action a defendant has the right to assert all his defenses. Rule 12, Federal Rules of Civil Procedure, 28 U.S.C. This the appellees could not do in the condemnation court.

In Chicago, R. I. & P. R. Co. v. Stude, 8 Cir., 204 F.2d 116, rehearing denied, 8 Cir., 204 F.2d 954, affirmed 346 U.S. 574, 74 S.Ct. 290, 98 L.Ed. 317, the railroad had instituted condemnation proceedings pursuant to Iowa statutes, and valuation had been fixed by a commission appointed by the sheriff. Appeal was taken to the appropriate State District Court, and upon petition of the railroad the proceeding was removed to the Federal Court. The railroad also filed an original complaint in the Federal District Court alleging diversity jurisdiction, setting out the State proceedings, and contending that the damages fixed by the commissioners were excessive. Motion was made in the Federal District Court to dismiss the original complaint and remand the appeal proceedings from the commissioners' valuation. The original complaint was dismissed. This court also held that remand of the appeal proceedings should be made to the State court. This holding which was affirmed by the Supreme Court of the United States was based principally upon a finding that the railroad was not a defendant within the meaning of the Federal removal statute. The general principles applicable to removal are discussed, this court stating, 204 F.2d at page 119:

"There can be no doubt that when the requisite diversity of citizenship and the amount involved exist, proceedings for the acquisition of private property by eminent domain under state law may be removed from a state court to a federal court. But that right of removal exists only when the proceedings have ripened into

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