UNITED STATES v. TWIN CITY POWER CO. ET AL.
No. 21
Supreme Court of the United States
Argued October 18, 1955. - Decided January 23, 1956.
350 U.S. 222
David W. Robinson argued the cause for respondents. With him on the brief were James F. Dreher and R. Hoke Robinson.
This is a suit for condemnation of land instituted by the United States against respondent power company. A single question of valuation is presented. It is whether the just compensation which the United States must pay by force of the
The condemnation proceedings are part of the procedure for completion of the Clark Hill project on the Savannah River, a navigable stream in southeastern United States. The Clark Hill project is the first in a series of steps recommended by the Chief of Army Engineers for the improvement of the basin of that river. H. R. Doc. No. 657, 78th Cong., 2d Sess. That Report conceives of the Clark Hill project as serving multiple purposes-hydroelectric, flood control, and navigation. It states that the Clark Hill project, “if suitably constructed and operated primarily for hydroelectric-power development, would incidentally reduce downstream flood damages and improve low-water flows for navigation.” Id.,
The Court of Appeals concluded that the improvement of navigation was not the purpose of the taking but that the Clark Hill project was designed to serve flood control and water-power development. 215 F. 2d, at 597. It is not for courts, however, to substitute their judgments for congressional decisions on what is or is not necessary for the improvement or protection of navigation. See Arizona v. California, 283 U. S. 423, 455-457. The role of the judiciary in reviewing the legislative judgment is a narrow one in any case. See Berman v. Parker, 348 U. S. 26, 32; United States ex rel. TVA v. Welch, 327 U. S. 546, 552. The decision of Congress that this project will serve the interests of navigation involves engineering and policy considerations for Congress and Congress alone to evaluate. Courts should respect that decision until and unless it is shown “to involve an impossibility,” as Mr. Justice Holmes expressed it in Old Dominion Co. v. United States, 269 U. S. 55, 66. If the interests of navigation are served, it is constitutionally irrelevant that other purposes may also be advanced. United States v. Appalachian Power Co., 311 U. S. 377, 426; Oklahoma ex rel. Phillips v. Atkinson Co., 313 U. S. 508, 525, 533-534. As we said in the Appalachian Power Co. case, “Flood protection, watershed development, recovery of the cost of improvements through utilization of power are likewise parts of commerce control.” 311 U. S., at 426.
The interest of the United States in the flow of a navigable stream originates in the Commerce Clause. That Clause speaks in terms of power, not of property. But the power is a dominant one which can be asserted to the
We can also put aside such cases as United States v. Kansas City Life Ins. Co., 339 U. S. 799, where assertion of the dominant servitude in the navigable river injured property beyond the bed of the stream. Here we are dealing with the stream itself, for it is in the water power that respondents have been granted a compensable interest.
It is argued, however, that the special water-rights value should be awarded the owners of this land since it lies not in the bed of the river nor below high water but above and beyond the ordinary high-water mark. An effort is made by this argument to establish that this private land is not burdened with the Government‘s servitude. The flaw in that reasoning is that the landowner here seeks a value in the flow of the stream, a value that inheres in the Government‘s servitude and one that under our decisions the Government can grant or withhold as it chooses. It is no answer to say that payment is
That is illustrated by United States v. Chandler-Dunbar Co., 229 U. S. 53, the case that controls this one. In that case a private company installed a power project in St. Mary‘s River under a permit from the Government, revocable at will. The permit was revoked, Congress appropriating the entire flow of the stream for navigation purposes. The Court unanimously held that the riparian owner had no compensable interest in the water power of which it had been deprived. Mr. Justice Lurton, speaking for the Court, said, “Ownership of a private stream wholly upon the lands of an individual is conceivable; but that the running water in a great navigable stream is capable of private ownership is inconceivable.” Id., at 69. The Court accordingly reversed a judgment that awarded the riparian owner what respondents have obtained in this case, viz., “the present money value of the rapids and falls to the Chandler-Dunbar Company as riparian owners of the shore and appurtenant submerged land.” Id., at 74. The Court said, “The Government had dominion over the water power of the rapids and falls and cannot be required to pay any hypothetical additional value to a riparian owner who had no right to appropriate the current to his own commercial use.”* Id., at 76. Some of the land owned by the pri-
The power company in the present case is certainly in no stronger position than the owner of the hydroelectric site in the Chandler-Dunbar case. While the latter was deprived of a going private power project by the Government, the present private owners never had a power project on the Savannah and as a result of the Government‘s pre-emption never can have one.
It is no answer to say that these private owners had interests in the water that were recognized by state law. We deal here with the federal domain, an area which Congress can completely pre-empt, leaving no vested private claims that constitute “private property” within the meaning of the
The holding of the Chandler-Dunbar case that water power in a navigable stream is not by force of the
“Since the owner is to receive no more than indemnity for his loss, his award cannot be enhanced by any gain to the taker. Thus, although the market value of the property is to be fixed with due consideration of all its available uses, its special value to the condemnor as distinguished from others who may or may not possess the power to condemn, must be excluded as an element of market value.”
The Court in the Chandler-Dunbar case emphasized that it was only loss to the owner, not gain to the taker, that is compensable. 229 U. S., at 76. If the owner of the fast lands can demand water-power value as part of his compensation, he gets the value of a right that the Government in the exercise of its dominant servitude can grant or withhold as it chooses. The right has value or is an empty one dependent solely on the Government. What the Government can grant or withhold and exploit for its own benefit has a value that is peculiar to it and that no other user enjoys. Cf. U. S. ex rel. T. V. A. v. Powelson, 319 U. S. 266, 273 et seq. To require the United States to pay for this water-power value would be to create private claims in the public domain.
Reversed.
The issue here is the determination of the compensation which, under the
This issue has confronted the United States ever since it proposed to construct a multipurpose dam across the Savannah River, and found it necessary to acquire privately owned land on which to locate its Clark Hill dam, plant and reservoir. Part of the needed land lay in South Carolina on the north bank of the river and the remainder on its south bank in Georgia. Of the 70,000 or more acres thus required, about 4,700, at the heart of the project, are the ones before us. Those in South Carolina are owned by the Twin City Power Company, a South Carolina corporation. Those in Georgia are owned by the Twin City Power Company of Georgia, a Georgia corporation. The latter is a wholly owned subsidiary of the former and the two will be referred to as Twin City.
In 1947, the United States, in seven proceedings, but under a single program, took possession of the 4,700 acres. It filed four actions in the United States District Court for the Western District of South Carolina, and three in the corresponding court for the Southern District of Georgia. Each sought to condemn the title to some of the property taken and to fix the compensation to be paid for it.
Because of the necessity for proceeding in two jurisdictions, the compensation issue has been passed upon by
For over 50 years, the land in question has been the subject of frequent consideration and negotiation in connection with the proposed construction of some dam to raise the level of the Savannah River from 60 to 100 feet in that vicinity. Twin City was organized for the development of a hydroelectric plant in this area and began acquiring this property for that purpose in 1901. By 1911, it owned practically all of the land necessary for an integrated site for a hydroelectric power project with a
In 1925, the Federal Power Commission granted Twin City a preliminary permit for a development at Price‘s Island involving a dam with a 60-foot head of water. In 1926, the Southeastern Power & Light Company negotiated with Twin City for the purchase of its land. Shortly thereafter, the Savannah River Electric Company intervened and obtained a license from the Commission to construct a 90-foot dam for a hydroelectric development which would have absorbed the land now before us. The Savannah River Electric Company also instituted, but later abandoned, proceedings to condemn the Twin City
Included in the 4,707.65 acres to be evaluated are 4,519.15 acres owned in fee, and 188.50 over which Twin City merely has flowage rights.4 The latter are significant because a market for flowage rights is a recognition of a special value of the land for that use.
There is no need to discuss here the question whether the Clark Hill project, as authorized by Congress, is primarily in the interest of navigation, rather than of flood control or power development, for, in any event, the United States has the power of eminent domain. By
There also is no need to discuss the traditional servitude, generally referred to as the navigation servitude, which the United States enjoys within the banks and bed of the Savannah River. All of the Twin City land and flowage rights involved are located above and beyond the ordinary high-water mark of the river. It is conceded that the United States has a right to exercise its navigation servitude without payment of compensation within the limits of the servitude. There is no claim made here for payment for any value in the flow of the stream, for any part of the bed of the river or for any land below the ordinary high-water mark of the river.5
“It is not the broad constitutional power to regulate commerce, but rather the servitude derived from that power and narrower in scope, that frees the Government from liability in these cases [United States v. Chicago, M., St. P. & P. R. Co., 312 U. S. 592, and United States v. Willow River Power Co., 324 U. S. 499]. When the Government exercises this servitude, it is exercising its paramount power
in the interest of navigation, rather than taking the private property of anyone. The owner‘s use of property riparian to a navigable stream long has been limited by the right of the public to use the stream in the interest of navigation. See Gould on Waters, c. IV, §§ 86-90 (1883); I Farnham, Waters and Water Rights, c. III, § 29 (1904). This has applied to the stream and to the land submerged by the stream. There thus has been ample notice over the years that such property is subject to a dominant public interest. This right of the public has crystallized in terms of a servitude over the bed of the stream. The relevance of the high-water level of the navigable stream is that it marks its bed. Accordingly, it is consistent with the history and reason of the rule to deny compensation where the claimant‘s private title is burdened with this servitude but to award compensation where his title is not so burdened.” United States v. Kansas City Ins. Co., 339 U. S. 799, 808.6
Similarly, there is no controversy here between the United States, any State, or private landowner as to the paramount right of the United States to take possession of the land in question for the purposes stated. Unlike the situation in Federal Power Commission v. Niagara Mohawk Corp., 347 U. S. 239, there are no vested water rights claimed here under state law. Twin City does not contest the right of the United States to develop the
“... The statement in that opinion (p. 326) [Monongahela Navigation Co. v. United States, 148 U. S. 312] that ‘no private property shall be appropriated to public uses unless a full and exact equivalent for it be returned to the owner’ aptly expresses the scope of the constitutional safeguard against the uncompensated taking or use of private property for public purposes. Reagan v. Farmers’ Loan & Trust Co., 154 U. S. 362, 399.
“That equivalent is the market value of the property at the time of the taking contemporaneously paid in money....
“Just compensation includes all elements of value that inhere in the property, but it does not exceed market value fairly determined. The sum required to be paid the owner does not depend upon the uses to which he has devoted his land but is to be arrived at upon just consideration of all the uses for which it is suitable. 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. Boom Co. v. Patterson, 98 U. S. 403, 408. Clark‘s Ferry Bridge Co. v. Public Service Comm‘n, 291 U. S. 227. 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.”7 Olson v. United States, 292 U. S. 246, 254-256.
In the instant case, the Commissioners, the District Courts and the Court of Appeals have applied the above rule. The Commissioners considered all elements of value which they could ascertain with reasonable accuracy, provided those elements were sufficiently assured to be reflected in the fair market value of the premises.8
“Since the award to Twin City of $1,257,033.20 is not the value of its property for any particular purpose but represents its fair market value after considering all of the reasonable uses of the property which were not too remote or speculative, this amount is the ‘just compensation’ required by the
Fifth Amendment and the applicable statutes. . . . This is the amount that in all probability would have been arrived at by fair negotiations between an owner willing to sell and a purchaser desiring to buy.” 114 F. Supp., at 725.
The potential use of this land for dam, plant and reservoir purposes is far from speculative in the light of the 50 years of recognition of its availability and suitability for those purposes. The land was accumulated by Twin City for this very purpose and it is now flooded as part of the Clark Hill project. The steam-plant comparison computations made by the Commissioners are substantially uncontroverted. If a purchase price had been sought by negotiation in 1947, it is inevitable that a primary consideration would have been the value of the flowage rights and of the dam and plant locations in relation to water-power development. We cannot realistically imagine that such a negotiation would have been limited to a consideration of the land‘s timber and its minor value for agricultural uses.9
Before passage of the
After the Federal Government announced that it would, itself, develop and use the water power, it still had to acquire fast land for its dam and plant site and for its reservoir basin. Although its taking of the property cut off further competitive bids for the land, the Government had the same constitutional obligation to
A classic comment upon a comparable situation was made by this Court when the Federal Government, after condemning a lock and dam, sought to pay only for the tangible property taken, without recognizing the established value of a franchise issued by a State to exact tolls for the use of the canal and lock. In requiring recognition of the latter value, the Court said:
“And here it may be noticed that, after taking this property, the government will have the right to exact the same tolls the Navigation Company has been receiving. It would seem strange that if by asserting its right to take the property, the government could strip it largely of its value, destroying all that value which comes from the receipt of tolls, and, having taken the property at this reduced valuation, immediately possess and enjoy all the profits from the collection of the same tolls. In other words, by the contention this element of value exists before and after the taking, and disappears only during the very moment and process of taking. Surely, reasoning which leads to such a result must have some vice, at least the vice of injustice.” Monongahela Navigation Co. v. United States, 148 U. S. 312, 337-338.
While the United States enjoys special rights in relation to navigable streams, such as its navigation servitude, there is no good reason why, when the Government condemns private property for a public use, its condemnee should not receive from the Government the same measure of “just compensation” as from other condemnors. If the property taken is “private property,” the constitutional compensation for it should be the same. That measure includes the “highest and most profitable use for which the property is adaptable . . . to the full extent
“... No precedent has been advanced which suggests that a different measure of compensation should be required where the United States rather than the state is the taker of the property for a public project. Nor has any reason been suggested why as a matter of principle or policy there should be a different measure of compensation in such a case. . . .
“... The United States no more than a state can be excused from paying just compensation measured by the value of the property at the time of the taking merely because it could destroy that value by appropriate legislation or regulation.” United States ex rel. T. V. A. v. Powelson, 319 U. S. 266, 278, 284. See also, United States v. Cress, 243 U. S. 316, 319, 326-327, 329-330.
The Government contends, however, that since it need not pay for appropriating the water in the stream, it should not be required to pay for any value in the fast lands that is predicated upon the riparian location of such lands, or their special value in relation to the use of that water. In this connection, the issues decided and the statements made by Justice Lurton for a unanimous Court in United States v. Chandler-Dunbar Co., 229 U. S. 53, are helpful. The Chandler case was a condemnation proceeding brought by the United States under a special Act of Congress relating to all the land and other property between the St. Mary‘s Falls Ship Canal at Sault Sainte Marie, Michigan, and the international boundary to the north. The United States “took” this land and property so as to improve navigation in these highly navigable waters. It exercised plenary control over the entire river
1. The District Court allowed Chandler $550,000 for the water rights. Chandler, however, established no vested right to such water under state law and this Court disallowed the entire claim. It said:
“... Unless . . . the water power rights asserted by the Chandler-Dunbar Company are determined to be private property the court below was not authorized to award compensation for such rights.
“... Ownership of a private stream wholly upon the lands of an individual is conceivable; but that the running water in a great navigable stream is capable of private ownership is inconceivable.” Id., at 69.
That conclusion is not questioned.
2. In fixing compensation to Chandler for its strip of eight acres of fast land, the District Court allowed for “use for canal and lock purposes, an additional value of $25,000,” and for a smaller area consisting of two other parcels of fast land for “its special value for canal and lock purposes an additional sum of $10,000.” Id., at 75.
“. . . That this land had a prospective value for the purpose of constructing a canal and lock parallel with those in use had passed beyond the region of the purely conjectural or speculative. That one or more additional parallel canals and locks would be needed to meet the increasing demands of lake traffic was an immediate probability. This land was the only land available for the purpose. It included all the land between the canals in use and the bank of the river. Although it is not proper to estimate land condemned for public purposes by the public necessities or its worth to the public for such purpose, it is proper to consider the fact that the property is so situated that it will probably be desired and available for such a purpose. Lewis on Eminent Domain, § 707. Boom Co. v. Patterson, 98 U. S. 403, 408; Shoemaker v. United States, 147 U. S. 282; Young v. Harrison, 17 Georgia, 30; Alloway v. Nashville, 88 Tennessee, 510; Sargent v. Merrimac, 196 Massachusetts, 171.” (Emphasis supplied.) Id., at 76-77.
Justice Lurton then reviewed and quoted at length from the opinions in Boom Co. v. Patterson, supra, and Shoemaker v. United States, supra.11
3. In fixing the compensation for the same eight acres and the smaller area, the District Court also made a basic allowance of $20,000 for the value of the strip “for all general purposes, like residences, or hotels, factory sites, disconnected with water power etc.,” and $10,000 in relation to the smaller area for “general wharfage, dock and warehouse purposes.” Id., at 74, 75. This Court upheld both, thereby further demonstrating that the location of land is a proper element to be considered in determining “just compensation.”
4. On the other hand, the District Court approved one other element of “additional value” in relation to these land areas which this Court rejected. In valuing the eight acres, the District Court allowed an “additional value” of $20,000 for “use as factory site in connection with the development of 6,500 horse power, either as a single site or for several factories to use the surplus of 6,500 horse power not now used in the city.” Id., at 74-75. Likewise, in valuing the smaller area, the District Court allowed an additional value of $5,000 in “connec-
The Court‘s reasons for rejecting these particular values in the Chandler case, as expressly stated by Justice Lurton, lend no such support to the Government‘s position in the instant case. He said:
“... These ‘additional’ values were based upon the erroneous hypothesis that that company [Chandler-Dunbar] had a private property interest in the water power of the river, not possibly needed now or in the future for purposes of navigation, and that that excess or surplus water was capable, by some extension of their works already in the river, of producing 6,500 horse power.
“Having decided that the Chandler-Dunbar Company as riparian owners had no such vested property right in the water power inherent in the falls and rapids of the river, and no right to place in the river the works essential to any practical use of the flow of the river, the Government cannot be justly required to pay for an element of value which did not inhere in these parcels as upland.” Id., at 75-76.
In other words, the rejected values were not part of the fair market value of the land for any assured use. They sought to recognize a value in the fast land for factory sites which were conditioned upon there being excess water in the stream not needed by the Government for
To accept the Government‘s position in the instant case would, in effect, extend its navigation servitude far above and beyond the high-water mark of the Savannah River. In the face of decisions uniformly limiting that servitude to the bed of the stream, the Government would take 4,700 acres of private property for a public use, substantially without compensation therefor. This would enforce the Government‘s right of condemnation, while repudiating its constitutional obligation to pay for the private property taken.
The justice of sustaining the interpretation placed on the
“... The question presented is not whether the United States has the power to condemn and appropriate this property of the Monongahela Company, for that is conceded, but how much it must pay as compensation therefor. Obviously, this question, as all others which run along the line of the extent of the protection the individual has under the Constitution against the demands of the government, is of importance; for in any society the fulness and sufficiency of the securities which surround the individ-
ual in the use and enjoyment of his property constitute one of the most certain tests of the character and value of the government. The first ten amendments to the Constitution, adopted as they were soon after the adoption of the Constitution, are in the nature of a bill of rights, and were adopted in order to quiet the apprehension of many, that without some such declaration of rights the government would assume, and might be held to possess, the power to trespass upon those rights of persons and property which by the Declaration of Independence were affirmed to be unalienable rights.
“... And in this there is a natural equity which commends it to every one. It in no wise detracts from the power of the public to take whatever may be necessary for its uses; while, on the other hand, it prevents the public from loading upon one individual more than his just share of the burdens of government, and says that when he surrenders to the public something more and different from that which is exacted from other members of the public, a full and just equivalent shall be returned to him.”
For the foregoing reasons, the judgment of the Court of Appeals should be affirmed.
Notes
“... But, I do not understand that the condemnee by its answers claims to have any private property right in the ‘water power capacity’ or the ‘raw water’ of the river; neither has it built, nor does it own, any structures in the stream for which it claims compensation. On the contrary, its claim is limited to the fair market value of its fast lands, based upon ‘the most profitable use to which the land can probably be put in the reasonably near future.‘” United States v. 1532.63 Acres of Land, 86 F. Supp. 467, 476.
“... It is common knowledge that public service corporations and others having that power [of condemnation] frequently are actual or potential competitors, not only for tracts held in single ownership but also for rights of way, locations, sites and other areas requiring the union of numerous parcels held by different owners. And, to the extent that probable demand by prospective purchasers or condemnors affects market value, it is to be taken into account.” 292 U. S., at 256.
See United States ex rel. T. V. A. v. Powelson, supra, at 275; and also Grand River Dam Authority v. Grand-Hydro, 335 U. S. 359; United States v. Miller, 317 U. S. 369; McCandless v. United States, 298 U. S. 342; City of New York v. Sage, 239 U. S. 57; Boom Co. v. Patterson, 98 U. S. 403, 407-408.
“... By reason of their geographical location, these lands and other property rights of Twin City had a peculiar value for water power purposes . . . .
“... all the witnesses, in the main, had taken the steam plant comparison method as one of the principal bases for arriving at the water power value of the property of Twin City . . . . In that connection, we wish to make it clear that the figure arrived at by the so-called ‘steam plant comparison method’ [$1,600,000], was not taken as an absolute guide, or basis, but was used as one of the principal bases, together with numerous other factors considered by these expert witnesses....”
“... ‘the market value of the land includes its value for any use to which it may be put, and all the uses to which it is adapted, and not merely the condition in which it is at the present time, and the use to which it is now applied by the owner; . . . that if, by reason of its location, its surroundings, its natural advantages, its artificial improvement or its intrinsic character, it is peculiarly adapted to some particular use-e. g., to the use of a public park-all the circumstances which make up this adaptability may be shown, and the fact of such adaptation may be taken into consideration in estimating the compensation.‘” 229 U. S., at 78.
