Court Opinion

ID: 9419352
Source: CourtListenerOpinion
Date Created: 2023-08-02 22:48:59.552881+00
Date Added: 2024-06-11T16:42:05.903892
License: Public Domain

Me. Justice Jackson,
dissenting:
The Chief Justice, Me. Justice Robeets, Me. Justice Feankfuetee and I understand the Court to hold that property physically adaptable to power purposes, taken by the Federal Government for power purposes among others, is to be valued as worthless for power purposes as matter of law because its projected development might be defeated if the State should revoke the power of eminent domain admittedly possessed by the owner at the time of the taking. We think it denies proper effect to state law and policy in effect at the time of taking.
Unless this decision overrules the law as stated by Mr. Justice Brandéis for a unanimous Court, flowing streams are natural resources owned and governed by the States, and the rights of their grantees and of riparian owners are settled by the local law which is conclusive on us. Port of Seattle v. Oregon & Washington R. Co., 255 U. S. 56; St. Anthony Falls Water Power Co. v. St. Paul Water Comm’rs, 168 U. S. 349; Shively v. Bowlby, 152 U. S. 1; cf. United States v. Oregon, 295 U. S. 1, 6-7. The States have assumed this to be their right and have written into their laws and constitutions various systems of control and development deemed suitable to their respective climates, industries or economies.1
*287The Hiwassee River, therefore, is a resource of the State of North Carolina. To obtain the advantage of its latent energy that State by special act of its Legislature created *288a corporation and gave it extensive powers including the right of eminent domain.2 The corporation acquired, partly by purchase and partly by condemnation, the dam sites, bed of the stream, riparian lands and key properties necessary to the development. The right to acquire by condemnation any additional lands needed was never repealed or withdrawn but on the other hand was confirmed by the state courts in a series of litigations.3 There is no finding or evidence that forfeiture, repeal or impairment of these rights has been considered or threatened by the State or is even remotely probable, even if legally possible.
Under its paramount powers over navigation the Federal Government has elected to take this resource out of the control of the State and away from the grantee corporation which is subject to State taxing and regulatory power. This it may do, but only upon making just compensation. But the Court holds that compensation must be computed as if the State had refused to grant what it has granted or had withdrawn what it has given no indication of withdrawing. By thus cancelling for the purpose *289the power of eminent domain, it holds as a matter of law that the project was not feasible to execute and that the lands assembled for power purposes, admittedly physically adaptable to the use and taken by the Government for that purpose, have no power utilization value. This seems to us not easily reconciled with the respect due to local law in a matter of the kind.
Determination of the value of property, particularly as affected by a prospective use, always involves some element of prophecy and some estimation of probabilities. No court that we know of has ever proposed, and we do not propose, to value the power of eminent domain either separately or as an ingredient of property taken. Its existence should be considered only for the purpose of determining the most advantageous probable usefulness of the property as it affects its value. The legal principles governing the solution of the fact questions are laid down in Olson v. United States, 292 U. S. 246. Of course any uncertainty or limitation as to the right to condemn property or evidence of probable impairment, forfeiture, or withdrawal of it would be weighed with other evidence in arriving at a judgment as to the feasibility of the project and value of the property. This Court has said that a possibility of exercise by a governing body of its power to make changes affecting values is a proper subject for consideration in fixing values. Reichelderfer v. Quinn, 287 U. S. 315, 323. But never until now has it held that the law requires present values to be determined as if legally possible, but factually improbable, changes have already taken place.
New properties are so immune from the effects of governmental authority that some action may not be envisioned which would devalue them. One of the items taken by the Federal Government in this case from respondent and out of control of the State was a going concern, an electric generating plant and distributing system. Since both parties accepted the award made for *290this plant it is no longer an issue, but is illustrative of the legal problem raised by the Court’s opinion. Doubtless the State Government had power to make many innovations detrimental to its success and to impose burdens that would detract from its value and perhaps had reserved powers to annul its corporate or special franchises. But we would not suppose that such hypothetical destruction of property values could be invoked to minimize compensation payable on a taking any more than hypothetical accretions to its rights through state action, possible but never accomplished, could increase such compensation. In many cases the beneficial use and hence the value of abutting property may be decreased if public authority closes or obstructs a public street or canal, or changes the grade of a street, or the location of a county seat.4 *291But in all such cases the compensation payable should be the value of the property at the time of taking, allowing for any influence that these contingencies might exert, which would depend upon their probability.
No previous decision of this Court supports or authorizes disregard of a presently existing state right of eminent domain in a federal taking of property. In McGovern v. New York, 229 U. S. 363, and New York v. Sage, 239 U. S. 57, the condemnation was by an agency of the State and the condemnees did not have and showed no probability of obtaining such power from the State.
Even less relevant to the question now before us is Sears v. Akron, 246 U. S. 242. It was not a condemnation case at all but a suit in equity to enjoin the City from construction of a dam and reservoir and diversion of river water. The City did not propose to take any property of the company through which plaintiff as a mortgage creditor derived any rights he asserted. In fact the company did not own any property included in the project, although shortly before commencement of the suit, but after the City’s development was practically completed, it acquired two small parcels some distance below the City’s dam. But the company’s charter gave it a right of eminent domain and, although it had taken no step to do so, it claimed the right to expropriate the same property the City was taking. It sought to enjoin the City upon the ground that its unexercised right to take this property was an indefeasible property right which was being defeated and rendered valueless because the City was ahead of it in preempting properties which the company might want to acquire under its power. The State of Ohio had retained power to "revoke any such right to appropriate property until it had been acted upon by acquiring the property authorized to be taken.” Id. at 250. The State of course had revoked the power to the extent that it had authorized the City, its own instrumentality, to take the property. But Jus*292tice Brandéis pointed out that “Nor are we called upon to determine to what extent the commencement of the acquisition of needed property in preparation for the power development, or even actual commencement of construction, would have vested in the company the right to complete the development.” Ibid. The decision is now relied upon to establish the point it expressly reserved. Moreover, the Ohio company had tried to use its power of condemnation, and Ohio courts had held its charter did not authorize it to take lands essential to its project. Cuyahoga River Power Co. v. Northern Realty Co., 244 U. S. 300. In the case now before us the North Carolina courts had held the power given by that State to this company was complete and prior to every other at the very location involved here.5
These cases do not decide what would have been respondent’s rights if North Carolina, rather than the United States, had instituted the present condemnation proceedings, thereby expressing her unwillingness to have the respondent carry the proj ect through to completion. They are wholly inapposite to the question we are called upon to decide, which is whether North Carolina’s expressed and undoubted willingness that the respondent should do so, and to that end should exercise her sovereign power of eminent domain, may be considered along with all other facts bearing upon the question of the prospects of completion.
The Government and the Court have taken a contrary position to the one now announced when the shoe was on the other foot. In United States v. River Rouge Co., 269 U. S. 411, the Government sought to deduct from the value of property condemned the benefits conferred by the improvement upon the severed property. The owner denied that these benefits should be considered because his enjoyment of them would be terminable by the Gov*293ernment at any time. The Court sustained credit for the benefits, pointing out that “there was nothing in the evidence indicating any probability that the Government would at any time abrogate or curtail this right in any respect.” Id. at 420.
We think the same rule should apply against as for the Government, and that the property in question was entitled to the benefits at the time being extended by State authority in the absence of evidence of probability that they would be abrogated or curtailed. We do not think that because the power of eminent domain may have been revocable by the State it follows as matter of law that it must be treated as nonexistent, and we dissent from a reversal based on such grounds.

 Typical provisions from state constitutions are:
California, Article XIV, § 3: “. . . Riparian rights in a stream or water course attach to, but to no more than so much of the flow *287thereof as may be required or used consistently with this section, for the purposes for which such lands are, or may be made adaptable, in view of such reasonable and beneficial uses; provided, however, that nothing herein contained shall be construed as depriving any riparian owner of the reasonable use of water of the stream to which his land is riparian under reasonable methods of diversion and use, or of depriving any appropriator of water to which he is lawfully entitled. . . .”
Colorado, Article XVI, § 6: “The right to divert the unappropriated waters of any natural stream to beneficial uses shall never be denied. Priority of appropriation shall give the better right as between those using the water for the same purpose; but when the waters of any natural stream are not sufficient for the service of all those desiring the use of the same, those using the water for domestic purposes shall have the preference over those claiming for any other purpose, and those using the water for agricultural purposes shall have preference over those using the same for manufacturing purposes.”
North Dakota, Article XVII, § 210: “All flowing streams and natural water courses shall forever remain the property of the state for mining, irrigating and manufacturing purposes.”
Rhode Island, Article I, § 17: “The people shall continue to enjoy and freely exercise all the rights of fishery, and the privileges of the shore, to which they have been heretofore entitled under the charter and usages of this state. But no new right is intended to be granted, nor any existing right impaired, by this declaration.”
Utah, Article XVII, § 1: “All existing rights to the use of any of the waters in this State for any useful or beneficial purpose, are hereby recognized and confirmed.”
Washington, Article XVII, § 1: “The State of Washington asserts its ownership to the beds and shores of all navigable waters in the state up to and including the line of ordinary high tide in waters where the tide ebbs and flows, and up to and including the line of ordinary high water within the banks of all navigable rivers and lakes: Provided, that this section shall not be construed so as to debar any person from asserting his claim to vested rights in the courts of the state.”.
Article XXI, § 1: “The use of the waters of this state for irrigation, mining, and manufacturing purposes shall be deemed a public use.”
Wisconsin, Article XXI, § 1: “The state shall have concurrent juris*288diction on all rivers and lakes bordering on this state so far as such rivers or lakes shall form a common boundary to the state and any other state or territory now or hereafter to be formed, and bounded by the same; and the river Mississippi and the navigable waters leading into the Mississippi and St. Lawrence, and the carrying places between the same, shall be common highways and forever free, as well to the inhabitants of the state as to the citizens of the United States, without any tax, impost or duty therefor.”
See also Kaukauna Water Power Co. v. Green Bay Canal Co., 142 U. S. 254, 272; cf. International Paper Co. v. United States, 282 U. S. 399.

 Private Laws of North Carolina, 1909, c. 76, p 185.

 Carolina-Tennessee Power Co. v. Hiawassee River Power Co., 171 N. C. 248, 88 S. E. 349 (1916), 175 N. C. 668, 96 S. E. 99 (1918), 186 N. C. 179, 119 S. E. 213 (1923), 188 N. C. 128, 123 S.E. 312 (1924); Hiawassee River Power Co. v. Carolina-Tennessee Power Co., 252 U. S. 341 (1920), 267 U. S. 586 (1925).

 See examples and citation of cases in Reichelderfer v. Quinn, supra, at 319.
The validity of the principle adopted by the majority opinion may be tested against hypothetical cases such as the following:
1. 0 owns a dock projecting into a navigable stream in State S. The Federal Government may destroy it or require its removal without payment of compensation (United States v. Chicago, M., St. P. & P. R. Co., 312 U. S. 592), but it does not appear likely that it will do so, and the dock is a commercially valuable property. S acquires the dock by condemnation, and seeks to avoid payment by relying upon the power of the Federal Government to destroy its value.
2. O owns a distillery in State S. S acquires it by condemnation, and resists payment by asserting the existence of the Federal Government’s power to enact a prohibition law and thereby destroy or diminish the value of the distillery without the payment of compensation (Hamilton v. Kentucky Distilleries Co., 251 U. S. 146).
3. 0 owns an option upon land owned by State S. The option is revocable at the will of S, but revocation seems unlikely, and the option has commercial value. The Federal Government acquires it by condemnation, but resists payment by relying upon S’s power of revocation.
These cases can be further complicated by supposing that the condemnation is not by the sovereign itself, but by a private corporation vested by it with the power of eminent domain.

 See footnote 3, supra.