Court Opinion

ID: 6887069
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:31:24.195327+00
Date Added: 2024-06-11T16:05:44.516852
License: Public Domain

WALLER, Circuit Judge
(concurring in part and dissenting in part).
*934I dissent only to that portion of the opinion which holds that the petitioner was not entitled to include in the “actual, legitimate cost” of the project the money paid the State of Alabama for 106 acres of land.
It is conceded that the petitioner was required to have the 106 acres because same would be flooded by waters created by the dam. It is conceded that there was no fraud nor collusion in the acquisition of these lands from the State, and although it appears from the testimony that the. price of $1,000 per acre was entirely out of proportion to the market value of the land in question, nevertheless, $1,000 an acre represents the actual cost of the land and there is nothing illegitimate in the transaction whereby a public utility pays to the State of its creation more than the actual market value of lands which it was required to have and which, in the exercise of its business judgment, it preferred to acquire by purchase rather than the doubtful, long-drawn-out and expensive process of condemnation — conceding that the right of the Power Company to condemn State lands or to sue the State without its consent exists.
It should be borne in mind that the petitioner here was operating and trying to do business under dual sovereignties. It should not be forgotten that good business judgment required it at least to exercise every reasonably possible means of doing business amicably with the State of its domicile and its creation. It should not be forgotten that its properties in the State of Alabama were subject to taxation. It should not be forgotten that the State of Alabama still had such powers over the corporation as were not preempted by the scope of Congressional legislation and power. It appears without dispute that the then Governor of Alabama considered its site available and appropriate for the generation of hydro-electric power for the use of other properties of the State of Alabama in that vicinity. Neither the Commission nor the Court should lose sight of the fact that a public utility of the nature of the petitioner is expected to undertake to create and maintain good will in the State and to conduct its business in harmony with the State, and its agencies, in which it does business, and it is a matter of common practice for corporations of the size and character of the petitioner to make concessions to the building of good will, not only with the local and State officials, but with the citizens of the community and to incur a legitimate and justifiable expense to that end. The failure of other and similar corporations to establish and maintain such a policy, but on the contrary to ignore it, is one of the reasons why stringent legislation was necessarily enacted for their regulation. Even though we conceded that the Federal Power Commission and this Court has the right to conclude that the Governor of the State of Alabama was high-jacking the petitioner, nevertheless, there is no proof in the record that payment of the sum demanded by the State under the circumstances was not the exercise of prudent judgment, and certainly the price paid was actual and legitimate.
I do not think that either the Commission or the Court should lose sight of the fact that, in this particular, the petitioner was between the State and Federal Governments — the upper and nether millstones, if you please. The expenditure was admittedly made in good faith and in the exercise of what the management thought was prudent business. It seems to me that the Court should be concerned not so much with the amount of the expenditure as its actuality and legitimacy. The price paid was not a donation to charity but was the consideration paid for property which the Company had to have. The fact that its judgment was misguided in the manner, or method, of acquisition does not render the expenditure illegal.
I concur in the statement of Commissioners Draper and Manley in reference to this feature of the case wherein they say:
“With regard to the item representing the amount paid to the State of Alabama for two parcels of land within the reservoir area, the evidence shows unequivocally that the State demanded and the Company paid $1,000 per acre for land which was indispensable to the project.
“It has always been my position that •the best evidence of the actual cost of anything is the price which was demanded and paid therefor, in the absence of fraud, collusion, etc. And in determining the actual cost, it is my belief that we should not be concerned with value unless there is doubt as to the good faith of the transaction under scrutiny or indication of *935flagrant lack of good business judgment. Neither of these two elements is present here. In fact, the evidence shows that the Company made long-continued efforts to bring about a reduction in the price asked, but to no avail, and that the possibility of a condemnation suit was carefully weighed and rejected because of the inadvisability of undertaking an adversary proceeding against the State in which the Company was domiciled and under whose laws it was doing business.” (Emphasis added.)
The Court remanded the case for a determination of the price for which the lands could have been acquired in condemnation. I know of no way to determine that fact except by a proceeding in condemnation which certainly could not be maintained now. It seems to me that what the verdict of a jury or commissioners might have been in a condemnation suit is entirely unpredictable. The old saying that “You can’t tell when a mule will kick, how a jury will decide, and whom a woman will marry”, is applicable.
I concur in the other conclusions of the Court and dissent in the above particular only.