State Ex Rel. Missouri Cities Water Co. v. HodgeState Ex Rel. Missouri Cities Water Co. v. Hodge
The City of Mexico initiated this proceeding seeking to condemn a waterworks system owned and operated by Missouri Cities Water Company (“Missouri Cities”). Missouri
I.
Missouri Cities is a privately owned corporation which in turn owns a waterworks system in the City of Mexico, and surrounding Audrain County, Missouri. It serves Mexico and the county under a certificate of convenience and necessity from the Missouri Public Service Commission. The wаterworks system consists of a treatment plant, wells, pumps, and a distribution system. Through the exercise of eminent domain, the third class city of Mexico seeks to acquire Missouri Cities’ waterworks system and to operate the waterworks itself.
Apparently, this controversy arises from the City of Mexico’s displeasure over a 61% increase in rates for water service to Missouri Cities’ Mexico customers from 1984 to 1991. According to the statements of counsel during orаl arguments, Mexico appeared before the Public Service Commission to challenge the rate increases but did not appeal the Commission’s adverse decision.
In 1992 the City of Mexico performed an analysis of Missouri Cities waterworks operation and determined that a municipally owned and operated waterworks could save money for its residents. Mexico made an offer of $3,952,903 to purchase Missouri Cities’ Mexico opеration. This offer was rejected. Mexico made a second offer of $5,200,-000, which was also rejected.
On December 2, 1992, the Mexico City Council approved an ordinance declaring the acquisition of Missouri Cities’ Mexico Division by condemnation to be a public necessity. The City of Mexico filed its petition on December 7, 1992, seeking to condemn all of Missouri Cities’ interest in the real and personal property, fixtures, equipment, and easеments used in operating the waterworks system.
After conducting a hearing on the matter, the Circuit Court of Audrain County entered an order of condemnation on April 14, 1993, but stayed enforcement to allow Missouri Cities to file its petition for writ of prohibition. This is the proper procedure by which to challenge a proposed order of condemnation. Pursuant to article V, sections 4 and 10 of the Missouri Constitution, we have jurisdiction to decide this cause the sаme as an original proceeding.
II.
The power of eminent domain, or condemnation, has long been recognized in Missouri. In
St. Louis, H. & K.C. Ry. Co. v. Hannibal Union Depot Co.,
The power of the state to appropriate private property to a public use is an inherent element of sovereignty.
The Missouri Constitution recognizes this right by implication when it states:
That private property shall not be taken or damaged for public use without just compensation.
Mo. Const. art. I, § 26.
It is generally accepted that the power of condemnation is limited to takings for the “public use”, although there appears to be no general agreement upon the precise definition of that term. 26 Am.Jur.2d
Eminent Domain
§ 25 at 669. In
Kohl v. United States,
The proper view of the right of eminent domain seems to be, that it is a right belonging to a sovereignty to take private property for its own public uses, and not for those of another. Beyond that, there exists no necessity which alone is the foundation of thе right.
In Missouri, the right of eminent domain rests with the state and does not naturally inhere in counties, municipalities or public service corporations. The right to condemn can be exercised only upon delegation from the state.
State ex rel. Schwab v.
[T]he exercise of eminent domain is in derogation of the right of the citizen; that a statute delegating that power must be strictly construed, and the person or body clаiming the right to exercise such delegated power must be able to point to the statute which either expressly or by necessary implication confers that right.
(Footnote omitted.)
III.
The City of Mexico primarily bases its claim to the power of condemnation over the Missouri Cities waterworks facilities upon § 91.450, RSMo 1986, which states in relevant part:
Any city of the third or fourth class ... shall have the power, to erect or to acquire, by purchase or otherwise, maintain and оperate, waterworks ...
Mexico concedes that § 91.450 does not expressly confer upon it the power “to condemn” or “to acquire by the exercise of eminent domain”, but argues instead that this power is necessarily implied by the words “or otherwise”. In support of this argument, Mexico cites State ex rel. Schwab v. Riley.
In Riley, the court held that the words “or otherwise” when used in § 71.680, RSMo 1959, contained the power of condemnation by necessary implication. That statute provided that cities could:
... acquire by purchase, construction, lease, gift or otherwise, within or without the corporate limits, ... sewage disposal plants.
The Court reasoned that because the statute listed almost every other conceivable method of acquiring title, the words “or otherwise” must have been intended to grant the power of condemnation to cities.
Missouri Cities counters by arguing that unlike § 71.680, § 91.450 does not exhaust all methods of acquiring prоperty short of condemnation. Specifically, § 91.450 does not contain the terms “lease” or “gift”. Thus, it argues that the power of condemnation is not necessarily implied and that the term “or otherwise” might merely imply the omitted terms.
While the arguments of both parties are reasonable, neither hits the mark. Riley dealt with a situation where a city was attempting to condemn private property for a public use, the creation of a sewage lagoon. This rather оrdinary exercise of the power of eminent domain simply did not demand an overly “strained or narrow interpretation”. Were the issue now before us one involving property held for a private use, Riley might well be persuasive, but it is not. Here we are called upon to address a different and a much more difficult question. May a waterworks system already dedicated to a public use be condemned by a municipality for the very same use?
IV.
The difficulty with the exercise of eminent domain over property already committed to a public use is apparent. If the condemnation is for a different use, what of the necessity of the original public use? If the condemnation is for the same use, why is it necessary at ah?
A significant body of Missouri law has addressed the issue of when condemnation of public property may occur for a new and different public use. In
State ex rel. State Highway Commission v. Hoester,
As a general rule, property already devoted to a public use cannot be taken for another public use which will totally destroy or materially impair or interfere with the former use, unless the intention of the legislature that it should be so taken has been manifested in express terms or by necessary implication, mere general authority to exercise the power of eminent domain being in each case insufficient; ...
In
Kansas City v. Ashley,
On the other hand, condemnation was allowed under a general grant of authority in
State ex rel. Maryland Heights v. Campbell,
The consistent thread оf law running through these cases is that if an existing public use will not be harmed by a new and different public use, condemnation will be allowed under a general form of authority, both uses being “necessary” and not necessarily inconsistent or destructive. However, before allowing a municipality or a public service entity to take other public property that would destroy the previous “necessary” use, specific legislative delegation is required. The rаtionale being that the legislature, not the subsequent condemning authority, is the proper entity to decide between mutually conflicting or destructive uses of public property.
Mexico has attempted to argue that because its proposed use of the waterworks is not inconsistent with the existing public use of the property and will continue and not destroy that use, the above line of cases would allow its attempt to condemn the waterwоrks under mere general authority. As is apparent, however, this line of eases is directed at situations where there is a new use that might require a choice between two necessary public uses. These cases do not directly apply to a situation where a prior public use is being condemned so that a new owner may continue the same use.
Only a passing reference to this issue exists in Missouri case law. In
St. Louis, H. & K.C. Ry. Co. v. Hannibal Union Depot Co.,
It may be conceded, as a general rule of law, that lands once appropriated to one public use cannot be taken under proceedings in invitum and applied to the same or an inconsistent use, unless the intention of the legislature that it should be so taken is manifested in express terms or by necessary implication.
(Emphasis added.)
Fortunately, the case law of a number of other jurisdictions has addressed this issue in detail and provides significant guidance, especially in the context of the condemnation of entire public utilities.
V.
A few cases have held that property already devoted to a public use cannot be condemned for that same use. In
Cary Library v. Bliss,
We are of the opinion that the proceeding authorized by the statute was, in its nature, merely the transfer of property from one party to another, and not an appropriation of property to public use, nor a taking which was, or which could be found by the legislature to be a matter of public necessity.
Id. at 96.
This same idea was stated in
State ex rel. Harbor Boom Co. v. Superior Court, Pacific County,
And even property actually devoted to public use is still subject to the power of eminent domain, except that ‘it cannot be taken to be used for the same purpose in the same manner,’ as that would amount simply to a taking of property from one and giving it to another without any benefit or advantage whatever to the public ...
It has been suggested that these eases are limited to public service corporations and do not apply to municipalities.
Vermont Hydro-Electric Corporation v. Dunn,
VI.
The majority of decisions have allowed the condemnation of public utilities by municipalities, even though they had already been devoted to a public use. These cases implicitly or explicitly recognize a shift in the analysis of the necessity requirement for condemnation. 1 The focus changes from the actual use of the property, as normally is the case in either the condemnation of private property or condemnation of public property for an inconsistent use, to the additional benefits of public ownership of property already committed to the same public use.
In
In re City of Brooklyn,
While the purpose of the waterworks company was public in its nature, it cannot be said to be strictly identical with the municipal purpose. A municipal corporation is a public and governmental agency. It holds property for the general benefit, with a larger scope of use.
On appeal, the United States Supreme Court noted:
It matters not to whom the water supply system belongs, individual or corporation, оr what franchises are connected with it; all may be taken for public uses upon payment of just compensation.
Long Island Water-Supply Co. v. Brooklyn,
The Supreme Court of Washington similarly stated:
A municipal corporation may be given the right by the legislature to condemn and take property of a privately owned utility corporation already devoted to the same public use, for the reason that the use of the public utility by a municipal corporation is larger in scope and of more general benefit to the public.
State ex rel. Washington Power Co. v. Superior Court,
Another justification set forth for the public taking of private property already devoted to a public use is the temporal reality that the property may be withdrawn from public use by its owners. Thus a public ownership grants a broader and more permanent protection to the public.
Vermont Hydro-Electric Corporation v. Dunn,
With the exception of two decisions that will be discussed later, all of the cases holding that a municipality can condemn a publiс utility for its same use have required specific and express authorization from the legislature. This is to assure that there is a recognized need for the condemnation of property
Perhaps the most illustrative cases of the type of statutory specificity required for this purpose are
C.P. National Corp. v. Public Service Commission,
Most other cases appear to require this same degree of specificity. In
City of Pryor Creek v. Public Service Company of Oklahoma,
VII.
Only two cases have been found allowing the condemnаtion of public utilities under a more general statute. In
City of Shakopee v. Minnesota Valley Electric Cooperative,
We are not persuaded by this case for two reasons. First, the authority cited is 1 P. Nichols,
Nichols on Eminent Domain,
§ 2.2[9] (1979);
Duck River Electric v. City of Manchester,
In
City of Palm Bay v. General Development Utilities, Inc.,
... public will should not be thwarted by the defendant merely because it got there first, or because it thinks that it possesses some preference whereby a special law or delegation must be enacted according to its will, while for all other people and classes of property a general delegation of power is sufficient.
To the extent that this decision merely focuses on the need of the public use, rather than the need in the shift in ownership we find that it is lacking in persuasive value. It is also interesting to note that the case was decided upon a motion to dismiss. The decision further states that upon remand the city will not be allowed to exercise its power to condemn “unless and until the necessity for the taking is established”. Id. at 916. Thus, the ease may merely stand for the proposition that the power to determine necessity, normally reserved for the legislature, may be assumed by the courts.
VIII.
A municipality’s condemnation of an entire public utility, already operating under a certificate of convenience and necessity, for the same use, 2 is an extraordinary exercise of the power of eminent domain. We hold that it may only be exercised, if at all (see, supra point V.), upon the express and specific authorization of the legislature. For this purpose the words “condemnation” or “power of eminent domain”, or their equivalents, must be used in connection with the public use property sought to be acquired, such as “waterworks”, “electrical utilities”, etc. We understand this tо be the majority rule (see, supra point VI.). While the words “or otherwise” were sufficient in the Riley situation to acquire private property not held for public use, they are not sufficient here.
Although we sympathize with the City of Mexico’s frustration over the rate increases suffered by its citizens, the city’s present remedy is before the Public Service Commission (PSC) in a rate proceeding. Dissatisfaction with the PSC is not in and of itself justification for condemnation of a public utility, without, at the very least, a specific and express statute so providing.
The trial court being without jurisdiction to enter an order of condemnation in this
Notes
. Interestingly, Black's Law Dictionary 1181 (4th rev. ed. 1968) includes in its definition of the term “necessary" the following distinction:
In eminent domain proceedings, it means land reasonably requisite and proper for accomplishment of end in view, not absolute necessity of pаrticular locations. State v. Whitcomb,94 Mont. 415 ,22 P.2d 823 .
. Mexico argues that it has not renewed Missouri Cities' franchise. A franchise, however, is not a prerequisite to public use. Public use is determined by the PSC’s issuance of a certificate of convenience and necessity.
City of Blue Springs
v.
Central Development,
. While this case has been pending, the legislature has passed Senate Bill No. 709, which would appear to prohibit the type of condemnation considered here. Because of the result reached, we need not address the effect of this bill, if it should be signed into law by the Governor.