Court Opinion

ID: 9653050
Source: CourtListenerOpinion
Date Created: 2023-08-23 17:37:49.098406+00
Date Added: 2024-06-11T18:12:56.125072
License: Public Domain

BOOTH, Circuit Judge
(dissenting).
With great reluctance I find myself unable to agree with the opinion of the majority of the court. The main issue in the eases is thus clearly stated in the majority opinion: “The issue is whether the use of these properties for flowage purposes is such a use as, under the circumstances here, can be considered as an element of that value for which compensation must be made.”
Two incidental questions are discussed in the majority opinion. I shall pass them by, as I do not think they are of decisive importance.
The crucial question is, in my judgment, whether the use of the land for reservoir or flowage purposes is a proper element to be considered in determining the compensation to be made in the condemnation proceedings.
The majority opinion contains the following : “Appellants press strongly the faet that this use at the time of and for years prior to the taking in this condemnation was an actual existing use. That is true. Was the use here of the character and within the proper intendment of the decisions or, outside of *33those decisions, is it logically to be regarded as a nse which would influence market value of these lands ? The decisions above cited as to actual use at the time of taking (and there are many others from various courts) all have to do with a use by the owner which would pass to a buyer of the land and of which the owner is deprived by the taking. The actual use here is through an unlawful trespass. Secombe v. Milwaukee= & St. Paul Railroad Co., 23 Wall. 108, 118, 23 L. Ed. 67. This trespass established the physical adaptability of the lands for this flowage for power purposes. What effect had the establishment of such fact upon the sales valuei of the lands which would influence a seller and buyer of such at the time of this taking? For more than thirty years, these lands had borne the burden of this trespass to their detriment without hope of redress. There was no such hope because this trespass was occasioned by works erected in the outlet of the lake within a foreign territory by a foreign company acting under authority of the foreign government. During that entire time there could exist no value to the owner or to a prospective buyer in this use of flowage. It was a positive reducer of value.. It rendered part of the land unfit for any purpose to the owner or such a buyer. Nor was there any hope of compensation for continued usage which could possibly have added to the sales value of the land. It was a peculiar and unfortunate situation where the landowner was helpless. There was no demand for this use by anyone who would or could be made to compensate him therefor. It had been appropriated under circumstances which were beyond his power to remedy. Then there came a change. Opening the matter by the general Treaty of 1909, the government sought to cure this unjust situation by the Convention of 1925. This it did by assuring the levels of the lake (the measure of intrusion upon the lands) and by voluntarily assuming to pay compensation therefor. It was not until the Convention of 1925 that there was any possibility of the landowner receiving any compensation for this taking of his land.”
I cannot agree with some of the ultimate facts and legal conclusions contained in the foregoing statement of the situation, and cannot agree with the conclusion of the majority opinion that flowage use should be excluded from an estimation of sales value of the lands.
The situation, as I think the record discloses, at the time of the present condemnmtion proceedings in 1929 was substantially as follows:
(1) Both the building of the Rollerway Dam in 1887 and the building of the Norman Dam in 1895-1898 had produced trespasses by flowage upon the' lands here involved. These trespasses were committed either by private parties or by private parties jointly with the Canadian government. They continued down to the time of the present condemnation proceedings. These trespasses are conceded in the majority opinion; and it is further conceded that these trespasses established the physical adaptability of the lands for flowage purposes.
The adaptability for flowage use may not be an element of value; but the adaptability when utilized for such flowage use! may contribute to the land a very material element of value.
In the cases at bar we have the adaptability. We also have the utilization of the adaptability. Both are conceded.
(2) But it is argued in the majority opinion, if I understand it, that the utilization of the adaptability does not contribute to the land any element of value because the utilization was a trespass and there was no hope of recovery for the trespass. This, I think, is erroneous.
As early as 1895, complaints were made by the owners of lands in the United States bordering on the lake that their lands were being overflowed as the result of the dams mentioned. These complaints were made to the United States government, but they were not brought to the attention of the Canadian government. A fair inference from the record is that the reason for this inaction was not because the trespass which was being committed was one for which' there was no redress, but because the United States engineers were of the opinion that the flooding complained of was produced not by the dams mentioned, but by natural causes. In other words, the United States engineers labored under a mistaken belief as to the correct location of the high-water mark of the Lake of the Woods in its natural state. The complaints of the landowners, however, continued, and attorneys were employed; but it was not until the International Joint Commission made its final report on the- Lake of the Woods in 1917 that it was conclusively proven that the landowners were right and the United States engineers were wrong, and that the Rollerway Dam and the Norman Dam had raised the level of the lake several feet above its level in its natural state.
*34The fundamental fact upon which a claim for damages' hy reason of flowage must rest was thus established after about twenty-twoi years of trespass had elapsed.
This finding of the International Joint Commission did not create a causa of action in behalf of the landowners; it simply furnished proof of one of the facts to establish such cause of action.
The cause of action existed long prior to the Treaties of 1909 and of 1925; and the cause of action was of recognized value long before the condemnation proceedings were begun. This is shown by the record.
Article 2 of the Treaty of 1909 (36 Stat. 2448, 2449) provides that: “Any interference with or diversion from their natural channel of such waters on either side of the boundary, resulting in any injury on the other side of the boundary, shall give rise to the same rights and entitle the injured parties to the same legal remedies as if such injury 'took place in the country where such diversion or interference occurs.”
The International Joint Commission also recognized the value of the flowage use. In its .report it said: “Maintaining the lake at a low level is clearly uneconomical, even from the viewpoint of the agricultural interests; and when the other interests involved are considered, it becomes apparent that, looking to the uses that will procure the best results, riparian lands are more valuable for flowage purposes than for agricultural purposes.”
Article 9 of the Treaty of 1925 (44 Stat. 2108, 2110) recognized that the cause of action for trespass by past overflow was not of chimerical value. That article provided: “The United States and the Dominion of Canada shall each on its own side of the boundary assume responsibility for any damage or injury which may have heretofore resulted to it or to its inhabitants from the fluctuations of the level of Lake of the Woods or of the outflow therefrom.”
Article 10 of said treaty provided (page 2111): “The Governments of the United States and Canada shall each he released from responsibility for any claims or expenses arising in the territory of the other in connection with the matters provided for in Articles VII, VIII, and IS.”
And the act to carry into effect the provisions of the Treaty of 1925 (44 Stat. 617) contained the following: “See. 3. The Secretary of War is hereby authorized and directed to cause to he investigated, as soon as practicable, all claims for damages caused, prior to the acquisition of flowage easements under this Act, to the inhabitants of the United States hy fluctuation of the water levels of the Lake of the Woods due to artificial obstructions in outlets of said lake, and after due notice and opportunity for hearing, shall ascertain and determine the loss or injury, if any, that may have been sustained by the respective claimants and to report to Congress for its consideration the amount or amounts he may find to be equitably due such claimants. * * * ”
It is thus apparent that a flowage use value of the lands in controversy existed long prior to the Treaty of 1925, and that such flowage use value was finally recognized by both the United States and the Canadian governments; and that such flowage use value was actual and not chimerical and that it existed prior to and independently of any condemnation proceedings.
(3) Nor was the situation of the landowner as to recovery of such flowage use value as damages from the trespassers one of mere hopeless speculation. Were this the ease, it would be a reproach to both governments concerned. On the contrary, it is, in, my opinion, a reasonable and safe conclusion that once the facts were established, the landowner could get compensation in damages in the courts of Canada, if the trespass had been committed by private parties; and probably could obtain compensation by petition of right, if the flowage use had been taken by authority of the Canadian government (see Halsbury’s Laws of England, vol. 1, p. 17, pars. 21, 22, 23, and 24; and vol. 10, pp. 26-30; also vol. 2 D. L. R. [1928], p. 625, annotation “Petition of Right” by Arthur S. Bourinot); and certainly he could obtain redress through diplomatic action between the two governments.
Such, substantially, was the situation, in my judgment, when the present condemnation proceedings were brought.
The amendatory act of Congress for carrying into effect the provisions of the Treaty of 1925 (45 Stat. 431) provides that condemnation proceedings shall be “in accordance with the constitutional provisions of the State of Minnesota.”
Section 13 of article 1 of the Constitution of the State of Minnesota provides: “Private propei*ty for public use — Private property shall not be taken, destroyed or damaged for public use, without just compensation therefor first paid or secured.”
What constitutes “private property” within the meaning of the state Constitution *35has been passed upon many times by the Minnesota State Supreme Court.
In Adams v. Chicago, Burlington & Northern R. Co., 39 Minn. 286, page 290; 39 N. W. 629, 631,1L. R. A. 493,12 Am. St. Rep. 644, the court, in discussing the constitutional provision, said: “All property, whatever its character, comes within its protection. It is hardly necessary to say that any right or interest in land in the nature of an easement is property, as much so as a lien upon it by mortgage, judgment, or under mechanic’s lien laws. If a man is deprived of his property for the purpose of any enterprise of public use, it must be a taking, even though the right of which he is deprived is not and cannot be employed in the public use."
This rule has been followed in numerous cases, among them: Minneapolis, St. P., R. & D. Elec. T. Co. v. Searle, 208 F. 122 (C. C. A. 8); Lamm v. Chicago, St. Paul, Mpls. & Omaha Ry. Co., 45 Minn. 71, 47 N. W. 455, 10 L. R. A. 268; Gustafson v. Hamm, 56 Minn. 334, 57 N. W. 1054, 22 L. R. A. 565.
And the courts of Minnesota have been liberal in admitting testimony as to the value of private property taken. Duluth & Winnipeg R. Co. v. West, 51 Minn. 163, 53 N. W. 197; Cedar Rapids, etc., Ry. Co. v. Ryan, 37 Minn. 38, 33 N. W. 6; Russell v. St. Paul, Mpls. & Man. Ry. Co., 33 Minn. 210, 22 N. W. 379; King v. Mpls. Union Ry. Co., 32 Minn. 224, 20 N. W. 135; Sherman v. St. Paul, Mpls. & Man. Ry. Co., 30 Minn. 227, 15 N. W. 239; Colvill v. St. Paul & Chicago Ry. Co., 19 Minn. 283 (Gil. 240); Weaver v. Mississippi & Rum River Boom Co., 28 Minn. 534, 11 N. W. 114.
In the ease last cited, the court, speaking by Justice Mitchell, said: “No principle is more firmly implanted in American constitutional law than that private property shall not be taken for public use without compensation ; and, in view of the fact that the government is, granting so much of its prerogative franchise to private or quasi public corporations in theory for public purposes, but often practically in part for private benefit, the exercise of which involves injury to or the taking of private property, there is no constitutional guaranty that requires to be more zealously guarded against encroachment than the one referred to.”
In the Russell Case the court said (page 213 of 33 Minn., 22 N. W. 379, 380): “Any existing facts which enter into the value of the land in the public and general estimation, and tending to influence the minds of sellers and buyers, may be considered.”
The same liberal rule has been followed by the Supreme Court of the United States. The case of Mississippi & R. River Boom Co. v. Patterson, 98 U. S. 403, 25 L. Ed. 206, is quite pertinent to the cases at bar. In the Patterson Case a boom company sought to condemn three small islands in the Mississippi river so situated with reference to each other and the river bank as to be peculiarly adapted to form a boom a mile in length. The question in the case was whether their adaptability for that purpose gave the property a special value which might be considered. The Supreme Court held that the adaptability of the land for the purposes of a boom was an element which should be considered in estimating the value of the lands condemned, and the court said, relative to the rule for estimating damages (page 408 of 98 U. S., 25 L. Ed. 206): “So many and varied are the circumstances to be taken into account in determining the value of property condemned for public purposes, that it is perhaps impossible to formulate a rule to govern its appraisement in all cases. Exceptional circumstances will modify the most carefully guarded rule; but, as a general thing, we should say that the compensation to the owner is to be estimated by reference to the uses for which the property is suitable, having regard to the existing business or wants of the community, or such»as may be reasonably expected in the immediate future.”
The same liberal tendency in the admission of evidence in condemnation cases is shown in an exhaustive opinion by Judge Gardner of this court in the recent case of Union Electric Light & Power Co. v. Snyder Estate Co. (C. C. A.) 65 F.(2d) 297.
It should be kept clearly in mind that the testimony sought to be introduced in the cases at bar, but excluded, was not offered for the purpose of obtaining damages for past trespass, but solely for the purpose of establishing an existing and established element of value of the land, to be considered by the jury in fixing the compensation for the acquirement of a flowage easement for the future; and, further, that the testimony sought to be introduced, but excluded, was not offered for the purpose of establishing a value of the flowage use which had come into existence by reason of the commencement of the condemnation proceedings. The testimony was proffered for the purpose of establishing the value of a flowage use which had existed *36for many years and which value was claimed to be an important element in the total value of the particular land taken.
In addition to proof of the adaptability of the lands involved for flowage or reservoir use, and of the actual use of said lahds for said purpose for many years, the landowners offered to prove that shore lands similar to those involved had been purchased long prior to the present condemnation proceedings because of their use for storage or reservoir purposes; and that larger prices were paid for such lands for that reason; that the conditions affecting the Lake of the Woods, and existent before the condemnation proceedings were commenced, were such as would naturally affect the market value and market price of shore lands; that the market value and market price of shore lands similar to those involved were in fact affected by their adaptability for use, coupled with actual use for flowage or reservoir purposes; that it was reasonably certain Uiat the interests controlling the power projects below the outlet of the lake would seek to acquire flowage rights had not the Treaty of 1925 been made; that there was competition between Ontario interests and Winnipeg interests in regard to the acquirement and control of the Lake of the Woods reservoir; that such flowage rights had a well-recognized rental value; and the amount of such rental value.
Deeds were offered, but excluded, which conveyed similar lands bordering Lake of the Woods and which contained a reservation in the grantor of any right to past damages by reason of wrongful flowage of said lands.
All of the testimony along the lines mentioned and similar lines was excluded on the grounds that it was too speculative, did not go to the true measure of damages, and on various other similar grounds.
The government contended, among other things, that before flowage or reservoir use of said shore lands could be an element of value of said lands, there would have to be a unification of the many titles to the shore lands and a control of the waters of said lake.
It seems to me that the question is one of fact whether the adaptability for reservoir or flowage purposes coupled with the¡ long-continued actual use for such purposes entered into the value of such lands or not. Whether such element of value would have been greater if the titles to the various parcels had been unified is not material; nor is it material whether or not there should have been logically no element of value in the lands based upon adaptability and use for reservoir purposes until the titles were unified. Unification of the titles may have been somewhat impracticable, but co-operation between the various owners including the United States and Canada (even by acquiescence) as to maintenance of lake levels was not impossible, but an established fact, even though the exact extent of the co-operation was not definitely fixed.
The question whether the adaptability, coupled with the actual use, did in fact enter into the value of the lands was, in my opinion, for the jury, and the question should have been submitted under proper instructions.
There is no point raised as to the sufficiency of the offers to prove; and the charge of the court was explicit. It read: “In computing the fair market value, both before and after the imposition of the easement, you will take into consideration all of the uses for which the property was available on May 4th, 1929, and May 5th, 1929, and determine what use it was most valuable for, and base your award thereon; but you will not make an award based on any claim for reservoir value. I have held that under the law the value of these lands could not be based upon, the use of the lake and its shores for reservoir purposes. It is, as I understand it, conceded that the only other use for which these lands are suited, with the exception perhaps of Mr. Olson’s tract, is for agricultural purposes, or purposes relating to agriculture, so that it is for those purposes that you are to value these lands.”
The offers to prove, the rulings thereon, and the charge of the court were all made pursuant to an agreement by court and counsel that the crucial question should be raised and embodied in the record by offers to prove and by charge of the court, as the clearest and most concise way of presenting the question to the appellate court.
The rulings of the court on the offers to prove and the charge of the court were, it seems to me, contrary to the spirit, if not to the express provisions, of the Treaty of 1925 and the act of Congress for carrying it into effect.
The treaty provides (article 9, supra): “The United States and the Dominion of Canada shall each on its own side of the boundary assume responsibility for any damage or injury which may have heretofore resulted to it or to its inhabitants from the fluctuations of the level of Lake of the Woods or of the outflow therefrom.”
The statute above quoted (44 Stat. 617) *37provides for an ascertainment of damages to the landowners by reason of flowage prior to the treaty.
The rulings of the court on the offers to prove and the charge of the court, however, held in effect that as a matter of law there could be no such damages.
The cases of United States v. Chandler-Dunbar, etc., Co., 229 U. S. 53, 33 S. Ct. 667, 57 L. Ed. 1063; McGovern v. New York, 229 U. S. 363, 33 S. Ct. 876, 57 L. Ed. 1228, 46 L. R. A. (N. S.) 391; and New York v. Sage, 239 U. S. 57, 36 S. Ct. 25, 60 L. Ed. 143, relied upon by the appellee, lend support rather to the contentions of appellants in the cases at bar, when Comparison is made between the facts disclosed in those cases and the facts disclosed in the eases at bar.
In the Chandler-Dunbar Case, the court said (page 76 of 229 U. S., 33 S. Ct. 667, 677, 57 L. Ed. 1063) : “The exception taken to the inclusion as an element of value of the availability of these parcels of land for lock and canal purposes must be overruled. 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.” Citing the case of Boom Co. v. Patterson, supra.
In the McGovern Case there had been no prior actual use of the land for a reservoir site (the purpose for which the land was being condemned) and the court held that the landowner could not recover as damages for the taking of his land any part of the enhanced value thereof due to the condemnation proceeding.
In the Sage Case there had been no prior actual use of the land for a reservoir site (the purpose for which the land was being condemned) and the court followed the holding in the McGovern Case.
In the eases at bar it was conceded that at the time of the condemnation proceedings and for many years prior, the lands sought to be taken had an- actual as distinguished from a potential use for flowage or reservoir purposes; and the offers to prove tended to show that this actual use at the time of:ihel condemnation proceedings and for years pri- or thereto had a value; and the offers to prove tended also to show that at the time of the condemnation proceedings and for years prior thereto this use value was an element entering into the value of the lands here involved.
’ For the reasons outlined above, I am of the opinion that the proffered evidence along the above-mentioned lines should have been received, and that the charge of the court, above quoted, was erroneous.
.1 think the judgments should be reversed.